Agenda of Extraordinary Meeting

ITEM 1 - APPLICATIONS FOR LEAVE OF ABSENCE

REPORT IN BRIEF

Reason For Report	To allow tendering of apologies for Councillors not present.
Policy Implications	Nil
Budget Implications	Nil
Area of Responsibility	GOVERNANCE - Procedural
Annexures	Nil
File Number	\My Workspace\Business Paper Report Directory\Working Reports InfoCouncil 2011 - 233035

General Manager's REPORT

A call for apologies is to be made.

Recommendation

THAT any apologies tendered be accepted and the necessary leave of absence be granted.

ITEM 2 - DECLARATIONS OF INTEREST

REPORT IN BRIEF

Reason For Report	To allow an opportunity for Councillors to declare an interest in any items to be determined at this meeting.
Policy Implications	Nil
Budget Implications	Nil
Area of Responsibility	GOVERNANCE - Procedural
Annexures	Nil
File Number	\My Workspace\Business Paper Report Directory\Working Reports InfoCouncil 2011 - 233037

General Manager's REPORT

A call for declarations of interest.

Recommendation

THAT the Declarations of Interest be noted.

ITEM 3 - DECLARATIONS OF POLITICAL DONATIONS

REPORT IN BRIEF

Reason For Report	To allow an opportunity for Councillors to declare any political donations received.
Policy Implications	Nil
Budget Implications	Nil
Area of Responsibility	GOVERNANCE - Procedural
Annexures	Nil
File Number	\My Workspace\Business Paper Report Directory\Working Reports InfoCouncil 2011 - 233039

General Manager's REPORT

A call for Political Donations.

Recommendation

THAT any Political Donations be noted.

ITEM 4 - 2011/12 Draft Management Plan and Budget

REPORT IN BRIEF

Reason For Report	To present the draft management plan and budget for 2011/12 and advise Council of key issues and to recommend its consideration and adoption by Council for public advertisement.
Policy Implications	Consistent with policy implications directions set during this and previous terms at Council
Budget Implications	Council provides the funds for Council projects and authorises work to be carried out. Council should note a reduction of $4.9M in reserves and provision accounts if the proposed budget is adopted.
Area of Responsibility	Governance
Annexures	1. Submission List 2011 2012
File Number	\My Workspace\Business Paper Report Directory\Working Reports InfoCouncil 2011 - 232826

General Manager's REPORT

It is with a great deal of pleasure and satisfaction that I present to Council my report in relation to the 2011/12 Draft Management Plan and accompanying Budget documents.

It is fair to say that because of Council’s sound financial management, it has weathered the Global Financial Crisis and despite increasing costs, a very proactive budget is presented to Council without jeopardising Council’s long term financial stability.

My report is also accompanied by reports from various Council officers highlighting issues in their areas of responsibility.

STRATEGIC PLAN

The Strategic Plan provided will be the last presented in this format, as Council will move to the new format under Integrated Planning and Reporting for 2012/13.

The Strategic Plan has been compiled with input from a vast range of sources reflecting events of the past 12 to 24 months and anticipating future needs. This input includes Council decisions, outcomes from Council workshops, community focus meetings, specific community meetings, input from staff, WBC, directions and changes in legislation from both the State and Federal Government, whilst still being true to Council’s Future Direction Forum held in November 2008.

Council is aware of significant reform that will happen as a result of the Integrated Planning and Reporting requirements. Council is now in the second year of what will be the three year process for the final adoption of Integrated Planning and Reporting. Council is fortunate to have conducted an extensive community engagement survey through its Cabonne Community Plan 2025. This has and will continue to form a key element of Council’s Strategic Plan.

Council should note that the Strategic Plan by its nature, does not and cannot cover in detail, all of Council’s operations. Additional detail is presented in the draft budget and will be further annunciated through items such as Council’s Works Program, Economic Development and Tourism Strategy, Asset Management Plans, Committee considerations, workshops and staff reports etc.

The Strategic Plan includes a number of supporting documents including:-

a. Draft budget 2011/12

b. Draft fees and charges 2011/12

c. Draft 5 year plan 2011/12 to 2015/16

d. Social Plan 2010-2015

e. Environmental considerations

The inputs and consideration in the preparation of the Strategic Plan are many and at times, complicated. Time should be taken to read all the relevant documents in detail.

SPECIFIC COMMENTS IN RELATION TO THE MANAGEMENT PLAN AND BUDGET

The preparation of a Management Plan and Budget is a balance between maintaining services, competing demands, improving services, correctly identifying needs and ensuring the long term financial sustainability of Council.

The Management Plan for 2011/12 seeks to do this. There are some specific comments however that the General Manager would wish to make, as well as comments from the relevant Directors of strategic issues important to their department.

1. Highlights for the coming year

Cabonne Council has, as mentioned in the introduction, been able to weather the Global Financial Crisis and come out the other end in a stronger position than a large number of Local Government Authorities in NSW. Within the constraints of the allowable rate increase, there are a number of highlights which will be pleasing to both Council and the Cabonne community. These include:

1. A record $12.192M spent on roads and transportation (including $1.5M for Bridge construction)

2. $1.9M allocated for the remediation of the Molong gasworks

3. $400,000 allocated to Village Enhancement Programs

4. $275,000 allocated to the Canowindra swimming pool upgrade/refurbishment/construction.

5. $67,000 additional funds allocated to cemeteries

6. $500,000 allocated to IT Systems replacement (NOTE: the joint tender through the WBC Alliance has resulted in savings to Council of an estimated $118,000

7. $15,000 additional special vote for events and promotion

8. $142,000 allocated to Council’s Business Development Assistance Program

9. $471,000 allocated to Eugowra and Molong Floodplain projects ($270,000 to Eugowra and $201,000 to Molong)

10. $ 250,000 allocated to stormwater improvements

11. $40,000 allocated to shade structures across the shire

12. $15,000 additional funds for town entrances and maintenances

13. $150,000 allocated for town improvement works in Canowindra, from the Canowindra Town Improvement Fund

14. $1.4M available for waste management upgrades and rehabilitation from funds are held in reserves, (with a final program and amount to be determined following consideration of the Quadro report and workshop conducted by Council).

15. $500,000 included for survey investigation design for potable water for Cumnock and Yeoval preliminary stages.

16. $100,000 to complete the Local Environmental Plan.

17. $6.4M Allocated to completion of Council’s four towns sewerage scheme for Manildra, Cumnock and Yeoval.

18. $250,000 Molong reservoir

19. $290,000 for other capital upgrades in Cabonne sewerage

20. $285,000 allocated for Local Area Improvements (LAIP) (including $30,000 each for Manildra and Mullion Creek Skate Parks).

2. Allowable Rate Increase

In accordance with IPART’s decision, Council’s rates have been increased by 2.8%. It is difficult to understand this figure in view of increases such as 20% in Electricity, 10% in insurance, previous wage and materials increases.

3. Financial Sustainability

The ongoing financial sustainability of Local Government across Australia has been continually raised over the past few years, with questions being asked about the financial sustainability of many Councils. Cabonne is fortunately not one of those, due to sound decision making by the current and previous Councils and by Councillors and Staff sticking to our long term financial strategies which enable both recurrent expenditures and capital expenditures to be maintained.

Council currently has a low debt/service ratio, however this will change considerably when loans are undertaken for the four towns sewerage scheme, waste management and potable water supplies for Cumnock and Yeoval. It will be important that Council manage this situation in the future and careful consideration is given to it when staff reports are presented.

Financial sustainability does not happen by accident and in 2011/12 and future years it will be more important than ever that Council continue to:

a. Strongly resist the temptation to add to its recurrent expenditures

b. Evaluate services and service levels

c. Stay within budget allocations

d. Identify the source of funds for unallocated or unapproved items

e. Adhere to sound long-term financial planning principles

f. Ensure that it is getting best value out of all expenditure items and seek ways for increased effectiveness and efficiency

g. Be aware of opportunities to examine new revenue sources whilst at the same time evaluating the risk

h. Review existing fees and charges, some of which are historically low compared to other Councils

i. In conjunction with our WBC Alliance partners, continue the pursuit of both financial and in kind savings and the provision of services, noting the WBC’s 2011/13 Management Plan provides for an increased focus on shared services

j. Actively participate in the CENTROC initiatives as well as other initiatives available through Local Government Procurement, Local Government and Shires Assocation and the Australian Local Government Association

Financial Sustainability is linked to a number of matters however recurrent, capital, discretionary and non discretionary financial expenditures as demonstrated in the following matrix provide an excellent tool when Council is faced with decisions which have financial implications.

Financial Implications Matrix

Recurrent

Capital

Discretionary

Non Discretionary

4. Completion of budgeted works

Over the past few years, Council has not always been able to achieve the completion of all budgeted works. Whilst Council’s roads area is generally able to achieve its goals, other areas in the urban services and water and sewer utilities have sometimes been carried over. The Council decision to set up a separate section for Urban Services and Utilities should provide focus in the coming year, however this will be the responsibility of Council’s Works Committee to monitor, particularly in the second half of the 2011/12 year.

5. Reduction in reserve balances

The reduction in reserve balances referred to earlier in this report is $4.889M for 2011/12. Reserve balances that have been built up in some areas for special purposes in preceeding years, will be allocated in 2011/12 and future years. This includes four towns sewerage scheme, waste management, water infrastructure, Molong gasworks etc.

Taken over a full year, the reduction in reserve balances would result in a net loss of investment returns of $288,000. The actual amount in the reduction of reserves will depend upon Council decisions during the year, including any additional funds allocated to reserves and the timing of these expenditures. Council does need to manage its reserves funds carefully, however as income from investments of reserves and other cash flows amount to $1.523M which includes $1.2M income to a General Fund for other services.

6. Economic Development Strategy

During the current year, Council has set up the Cabonne Country Tourism Committee and also the Cabonne Country Tourism Network. Both these committees, along with Councils Small Town Development Group will have input into the preparation of Council’s Economic Development and Tourism Strategy which we will be developed in the coming year.

Input from Councillors will be essential in ensuring that not only are the wishes of the community and interest groups considered, but that Council’s interest and direction is reinforced.

Council’s Economic Development and Tourism Committee directly references the Economic Development Tourism Strategy. The new Integrated Planning and Reporting to come into place in 2012/13 and other sections of Council will adopt similar reporting techniques for their respective areas.

7. Departmental Operating Plans

Subject to the adoption of the Management Plan and Budget, it will then be the responsibility of Council’s individual departments to prepare their departmental operating plans for the General Manager. This enables the General Manager to more closely monitor the key projects and priorities as set by Council. It also has the benefit of engaging staff and providing a relevant focus for them in their Council responsibilities.

The departmental operating plans are also used by the various Directors as a way of preparing reports for both Council and Committees and as part of the Quarterly Management Plan and Budget Review process.

8. Local Environmental Plan

Progress with the Local Environmental Plan, although steady at times, has been achieved despite difficulties with the completion of the draft village strategies for Eugowra and Molong (due to flood plain management issues) continual changes by the Department of Planning and staffing resources.

It is pleasing to note as reported by the Director of Environmental Services that the WBC Alliance has received Acceleration Funding which should materially assist with the completion of Council’s Local Environmental Plan.

It cannot be stressed however that the crunch time is fast arriving when serious and sustained input will be required from Councillors at Council meetings, Committee Meetings and workshops to enable the revised targets to be achieved.

9. Waste Management

Councillors will be participating in a Waste Management Workshop on June Committee Meeting day which will provide strong direction for the future and will lead to the allocation of both reserve funds and possibly loan funds. Consideration of the Quadro report seeks to address the strategic issue of Council’s waste management in the longer term and also operational issues associated with the current landfills and transfer stations, some of which have reached the end of their useful life.

Funds have been allocated in the waste management budget to enable a trial in the Eastern section of the shire in the Lewis Ponds/Byng area. This trial will be essential for gauging the future for wider services. Input from the community and Council will be important as it is highly unlikely that Council will get it 100% right in the first instance.

Cabonne Council is a founding member of NetWaste and Council has seen the benefits in many ways over the years including scrap metal, chemical cleanups, greenwaste, composting and E-Waste.

10. Customer Service

Whilst there has been improvements in Council’s customer service, it is acknowledged that further improvements are necessary. The recent backlog associated with the natural disaster declaration has highlighted some areas of concern.

These are being addressed through temporary staff secondments, additional resources and a review of systems.

It should be noted however, that Council receives some 200,000 items of mail, email and customer service requests per year and despite improvements and best efforts, there is no perfect system due to process, systems or people related issues.

11. Community Focus Meetings

Council has commenced the second round of its community focus meetings with 7 of those identified already completed. Issues raised at the community focus meetings include roads, town maintenance, cemeteries, customer service, village enhancement, Local Environmental Plan, weeds and waste management. All these matters have received attention in the Management Plan through additional expenditures, resources, specific focus or systems improvements. Unfortunately needs and wants are unlimited, however a balance has been attempted in the reports that have been put to Council.

12. Water and Sewer Funds

Council has fully implemented the State Governments Best Practice Guidelines and with the CENTROC Water Alliance, has addressed the State Government’s reform agenda. These will however be ongoing requirements in this area.

Delays with infrastructure upgrades have been unfortunate, however actions now proposed by Council in relation to the Engineering Department restructure should help address this issue.

The flaws in the Infrastructure Australia report concerning water funds have been widely acknowledged in local government, however Council must remain vigilant to ensure the interests of its ratepayers are protected.

The impact of the decrease in water usage has certainly been evident in 2010/11 and it will be interesting to see the “return to normal” that is anticipated in the coming year.

Recognising the need to continue with infrastructure upgrades and maintain reliable service to residents, the increase proposed in both water and sewer services is 3% for the coming year. Water and sewer is one area where Council will need to give focus in the coming years, ensuring that its assets are in adequate condition, operational requirements can continue to be met and the reform agenda proposed by both State and Federal Governments is addressed.

Council cannot rest on its laurels in relation to these two important utilities.

13. Division of Local Government Templates

Those Councillors that attended the recent Division of Local Government (DLG) Training in Molong are aware that the DLG has issued new templates for financial reporting. The draft 11/12 budget has been presented in accordance with the templates and guidelines issued by the Division as this will now be the standard format.

To assist with the transition to the new format, staff have provided a copy of the budget papers in the old format. If Councillors have any queries concerning the new format and its content, please feel free to liaise with the Director of Finance and Corporate Services or the Finance Manager.

14. Cost Shifting

Council has continually expressed frustration and anger at cost shifting from other levels of Government and the draft Management Plan for 2011/12 again highlights the cost to Council ratepayers. These costs fit broadly in two areas:

a. Direct cost shifting, for example through grant reductions. The draft budget shows examples of this for Council’s heritage grants which now have Council’s ratepayers contributing $3 for every $1 received in grant income and $2 received for every $1 in grant income for the two programs.

b. Through regulations and function transfer – eg waste management, staff accreditation, integrated planning and reporting, internal audit etc

Council will need to be very strong in these areas in the future, particularly in relation to reductions in grant income where a service is provided through grants and then the funding is withdrawn. Other areas through regulations and functions are more difficult to avoid, however Council must keep up its campaign in this regard.

15. Staffing Shortages

The staffing shortages in Local Government across Australia have been discussed at length with Council. It particularly applies to areas such as Environmental Services, Engineering and Finance staff.

It is very pleasing in relation to Council’s Environmental Services Section that it will hopefully be moving towards a full complement of staff in the coming year. It must be emphasised however that there will always be movement in the various professional areas.

Council’s commitment to its trainee and apprenticeship program, staff training and staff development is starting to show promise. It has been very pleasing to see many of our trainees and apprentices move up to permanent and more responsible positions within the Council. The General Manager is currently working on a leadership and development program to assist in this regard and it is hoped to have this program implemented early in the coming year.

16. Environmental Sustainability and Climate Change

This area will continue to receive attention from Council, particularly with the emphasis and funding that has been provided by both the Federal and State Governments.

It has been very fortunate that Council has been able to work with its WBC Alliance partners in this regard and also through CENTROC and NetWaste. Although the climate change debate continues and the Federal Governments proposed carbon tax is still subject to finalisation and approval, there is no doubt that Councils and local communities will need to address the issue of environmental sustainability in the future.

The establishment of an Energy Efficiency and Sustainability Team amongst Council staff is starting to show benefits both small and large. A recent example is an estimated $20,000 saving through electricity costs with Council’s Quarry and there are numerous smaller examples being investigated by the team. Council has established a sustainability vote which will be used to fund purchases and upgrades in the future and a percentage of any savings achieved will be returned to this fund so that it becomes self funding.

DIRECTOR OF FINANCE AND CORPORATE SERVICES’ REPORT

The Strategic Plan includes the details of operating income and operating expenditure together with assets and liabilities for each Principal Activity for the 2011/12 year. Similar information has also been provided for the ensuing 4 years.

Under Section 405 of the Local Government Act, it is necessary for Council to give public notice of its Draft Management Plan after it has been adopted and that the Plan be place on Public Exhibition for a period of not less than 28 days for public comment.

It is proposed that the Draft Plan be on exhibition at the following locations:

· Council’s Offices in Molong, Cudal and Canowindra

· Post Offices in Eugowra, Cumnock and Yeoval

· General Store in Cargo

· Business Enterprise Centre, Orange

· Each of the Libraries in Canowindra, Manildra and Molong

· Council’s website

The Librarians will have two copies of the Plan with one being available for overnight loan.

The Draft Plan will be placed on Public Exhibition from Tuesday, 3 May 2011 inviting public submissions. These submissions will close at 5.00pm on Tuesday, 31 May 2011.

Any alterations made as a result of submissions will be included in the Draft Plan, which will then be presented to Council at its June meeting for final adoption.

DIRECTOR ENGINEERING AND TECHNICAL SERVICES’ REPORT

OVERVIEW

The 2011/12 budget for the provision of services and maintenance of Council’s Engineering and Technical Services assets gives full consideration to the 2011-2012 Strategic Plan within the limitations of the budget.

Maintaining council’s assets to a standard and providing a level of service demanded by the Cabonne community has become increasingly more difficult and costly as the assets age and use chances. To provide Council with the confidence that resources are being used effectively and efficiently, asset management plans are being prepared for each asset group. Asset management plans have been completed for Roads, Bridges and Buildings (in its final stages). These plans and future plans are being developed in partnership with Council’s WBC alliance councils.

Roads continue to be Council’s largest asset group with a replacement cost of over $182M, not including bridges and urban infrastructure. Council would recall the Australia wide funding gap for the local road network as being quite substantial and adds to the difficult task for Councils in the maintenance of the local road network.

The RTA Road Maintenance Contract (RMCC) continues to be a major part of Councils operations and generates external revenue of between $2M and $4M annually. Roads to Recovery and the Federal Assistance Grants is anticipated to be consistent for 2011-12. Council continues to submit applications for Black Spot and REPAIR (Regional Road) projects annually.

The Four Towns Sewer reticulation works continues with the Manildra Sewerage Treatment Plant (now completed) and reticulation, 80% completed. The on-property works will continue into 2011-12. This project remains the biggest project for Council with an estimated budget of $17M. Construction of the Yeoval and Cumnock STP and associated work will also commence in 2011-12.

Roads, Bridges and Urban infrastructure

Council’s roads asset includes:

215 kms Regional Roads

1280kms Gravel local roads

667kms Bitumen local roads

220kms State Roads (council maintains under contract to RTA)

Capital Works program (not including routine maintenance)

State roads $1.8M

Regional Roads $0.94M (includes bridges and reseals)

Local roads rural $2.24M (includes, drainage, resheeting and R2R)

Urban infrastructure $0.54M (includes RTA contribution applications)

Engineering Department Restructure – Urban Services and Utilities Section

The creation of an Urban Services and Utilities Section will certainly provide the focus and the responsibility for areas such as parks and gardens, town maintenance, village improvements, water and sewer. Council has acknowledged that these areas have not been given the emphasis they should have in the past which has resulted in some projects and programs being held up.

Subject to the recruitment and appointment of a suitable manager in this section, a much improved performance is anticipated in 2011/12.

There are considerable expenditures in these areas with major projects such as water and sewer upgrades, village enhancement programs and the like being identified and funded in the coming years budget.

Asset Management and Asset Renewal

Council emphasis on Asset Management and Asset Renewal has placed it in a good position to make informed and financially responsible decisions. The benefits will become more obvious in the years ahead.

One of the outcomes of Asset Management is the gathering of quantifiable data which can be used in grant submissions and lobbying Government.

It is unfortunate that the Federal and State Governments are yet to commit to major infrastructure funding (similar to Roads to Recovery Program) as proposed by both the Local Government and Shires Associations and the Australian Local Government Association.

Council is aware that emphasis in the coming years needs to be given to asset renewal and not just the creation or building of new assets.

Local Community Programs

The 2011/12 budget includes $152,000 for round 3 RLCIP. A significant part of this program will carry over from the 2010/11 to the 2011/12 financial year. Delay in announcement of the approved projects has held up the start of these projects. The Budget includes funding for the VEP, LAIP and CIP programs, Council encourages Progress Associations to submit suitable projects for consideration.

Flood mitigation

The 2011/12 budget includes an allocation for flood mitigation works that are consistent with or recommended in adopted flood studies. Flood mitigation works recommended in adopted flood studies provide council with the opportunity to seek additional funds from the State and Federal Government. Assistance is one third Council, one third State and one third Federal for approved projects.

Water and Sewerage Capital Works

Included in the budget is provision for investigation and costing for the provision of a sustainable water supply for Yeoval and Cumnock including treatment to potable standard. The budget also includes carryover capital works projects from 2010/11. The finalisation of the Strategic Integrated Water Cycle Management plan will identify future capital works projects for a sustainable Cabonne water supply. Council is aware that the Australia Infrastructure, water reform model, if implemented would have a significant detrimental effect on council’s operations and budget.

Economic Activities

Caravan Parks, the budget has an allocation of $161.3K for the operation of Council’s three caravan parks. It is noted that with recent management changes and upgrade of facilities, there has been a noticeable improvement in visitation at the parks.

Molong Limestone Quarry, the quarry continues to provide a small profit, improved marketing should improve the profitability of this activity.

Recreational Activities

Swimming pools, the budget provides for the maintenance and approved capital works for councils seven pools. The cost to the budget for 2011-12 is $328.5K.

Parks and reserves and sporting facilities maintained by council have an allocation of $318.8K.

Noxious Weeds

Control of noxious weeds has a net cost to the budget of $155K.

Natural Disaster

The estimated cost for disaster repairs to council’s infrastructure is approximately $3.27M. Approximately $2.27M has been completed in the current financial year. $1M is included in the 2011/12 budget.

Council is aware of the widespread damage across the Shire as a result of the Natural Disaster that was declared. The understanding and patience of ratepayers whilst the RTA approval of funding was sought is certainly appreciated.

Work will now begin in earnest to complete these much needed repairs, which will also be supplemented with routine maintenance in the affected areas.

Plant Replacement

Council continues to own and operate a modern plant fleet and has recently approved the purchase of a pulvi mixer for road rehabilitation works. Through the initiative set up in the late 1980’s, Council’s 10yr replacement program is sustainable and funded by the plant fund and there is no need for external borrowings or leasing.

CONCLUSION

The Engineering and Technical Services Department is Council’s largest department with corresponding largest expenditure responsibilities in the budget.

The volume and complexity of these issues needs to be fully understood by Council and the community, particularly when faced with natural disasters and competing priorities as has recently been experienced. Nevertheless, there is confidence in the future ahead, particularly in view of Council’s ability to still undertake and carry out both capital and maintenance works.

The situation with road funding in NSW and Australia will continue to impact on the ability for Council to maintain and improve its roads in accordance with community demands. It is hoped however, that infrastructure funding from State and Federal Governments may be improved in the future.

Council will continue its emphasis on asset management and asset renewal in the coming year. The benefits of working collaboratively with our WBC Alliance partners is obvious in this regard and will continue in the future.

The budget does contain a number of pleasing aspects including road funding, flood mitigation, village improvements, water and sewer capital works and there is certainly a busy year ahead for the Engineering and Technical Services Department.

The current Council has made significant progress in terms of asset management and asset renewal and a commitment to this path in the future will certainly reap long term benefits for Cabonne ratepayers.

DIRECTOR ENVIRONMENTAL SERVICES’ REPORT

Council’s Environmental Services budget focuses on delivering an adequate level of service to the community with respect to:

· Development assessment and building control

· Strategic Planning

· Statutory Planning

· Environmental Health

· Waste Management

· Cemetery Management

· Animal Control

Many of these areas have a high level of regulatory control, often shaped by State and Federal laws. It is Council’s responsibility to implement and regulate a range of laws, policies and procedures relating to landuse planning and environmental matters. In many instances the functions of the Council’s Environmental Services Department have a significant impact upon the wider community and it remains essential that the community is informed about the nature of environmental law.

As is all too frequently evidenced, community members are unfamiliar with the planning process and are often frustrated by the requirements of Council, regardless of whether the process is instigated by State and Federal laws. The Environmental Services Department is a small component of Council’s staff, yet responsible for a broad range of high profile programs.

In particular the review of the Local Environmental Plan (LEP) for Cabonne remains a key priority with Council and the community. Also of key priority is the strategic planning for the delivery of an environmentally sustainable waste management service. These two issues remain central to the Environmental Services budget for the forthcoming year.

An issue for Council in recent years has been the continued impact of staff shortages within the Environmental Services Department. The industry wide shortage and the inability of Council to secure and retain senior planning and building services staff has placed immense strain on the resources of the department. This in turn impacts on the productivity of the staff and results in prioritising of work programs. Current work loads especially within the health and building area has resulted in certain areas being under resourced, leading to a decline in the ability to adequately monitor areas such as food inspections.

Staffing issues however appear to be stabilising, with the appointment of new planning staff, as well as the utilisation of casual staff appointments to provide additional resources to support Council’s Health and Building function. The allocation of grants funding has enabled Council to utilise a consultant to assist in the review of Council’s 2003 Community Based Heritage Study.

Local Environmental Plan

The LEP review process has continued as an Alliance program with Blayney and Wellington Councils. Village settlement strategies have been prepared following a series of community consultation meetings. While significant progress has been made by the WBC Strategic Planner in progressing this complex task, the expectations of the Council and the community to gain a new LEP have not been realised.

With the recent allocation of additional funding by the Department of Planning under its Acceleration Funding Program, it is envisaged that additional resources will be provided to assist Council with the conversion of the current LEP into the State Government prescribed Standard Instrument LEP and that the new plan may be placed on public exhibition by September 2011. Strategic planning will continue to develop the local planning provisions to be incorporated into the final LEP.

Heritage

The Council facilitates an annual heritage grants program to assist property owners with the maintenance of older buildings. Council also funds an annual Heritage Advisory Service with the ongoing employment of David Scobie as Heritage Advisor. David attends Council one day per month. Both the heritage grants and the heritage advisory service are partially funded by Council and also the NSW Heritage Branch of the Department of Planning. Funding by the Heritage Branch for the Advisory Service has been reduced and now requires Council to allocate funds based on one dollar grant funding to three dollars council funding.

The level of State funding for the Heritage Grants program has also been reduced and is to be based on a one dollar grant funding to a two dollar Council contribution. Both these programs were originally funded on a $ for $ basis. It is proposed within the budget to maintain both programs to their current level of operation thereby requiring a small increase in the funds allocated by Council, yet another example of cost shifting.

Grant funding was secured on a $ for $ basis to undertake a review of the Council’s 2003 Heritage Study. Funding to a maximum of $15,000 was provided by the Heritage Branch to assist Council in the conversion of data into the required State Heritage Inventory format that will be required to support the draft LEP. The Heritage Branch endorsed the appointment of heritage consultant Barbara Hickson to assist Council in undertaking a review of the 2003 data and to prepare statements of significance for each of the 470 nominated heritage items. Council’s Heritage Advisor, David Scobie was instrumental in converting the 2003 data into the required State Heritage Inventory data format. The project is well underway and is on time and within budget.

Waste Management

This remains a priority area for Council. Council has continued to employ the services of Quadro Pty Ltd to prepare comprehensive strategic plans for the future delivery of waste services within the Cabonne area and the management of each of its landfill/transfer station sites. With Cabonne Council’s withdrawal from the Orange City Council regional waste development proposal it is essential that sound strategic planning is put into place to deliver sustainable and environmentally accountable waste management services.

Funding to ensure essential site management and the delivery of waste services has been incorporated into the 2011/12 budget. The budget program includes funding for site rehabilitation at Yeoval and Cargo landfill sites. Budget allocations for this type of work will need to be maintained by Council in the immediate years to come to address Cumnock and Canowindra landfill sites.

The likely development of a series of transfer stations to service the council area, the imminent closure of the smaller landfill sites such as Cargo and the rehabilitation of such sites will continue to draw heavily on Council’s reserves. Provision of additional services to residents located in the eastern area of the shire, if determined by Council after trial and evaluation, will also have a financial impact upon service provision costs.

A review of fees and charges will continue to take place to reflect actual costs are addressed in an equitable user pay system. This may in turn impact upon residents and ratepayers. Maintaining open communication with the wider community remains essential to convey Council’s decisions and management strategies in the area of waste management.

Partnerships with agencies such as Netwaste remain important to the delivery of recycling services. Programs to encourage recycling of waste will continue to be investigated to accommodate community expectations, as well as achieving a reduction in the quantity of material such as batteries and glass going direct to landfill.

Development and building controls

Despite changes in recent years to NSW planning and building controls, particularly the introduction of exempt and complying development legislation, Cabonne has generally maintained income levels generated by fees for development and building assessment and certification. In recent months a program requiring industry accreditation of building surveyors has been implemented. This will require Council to ensure adequate opportunity for staff development training to enable Council’s health and building officers to maintain accreditation levels.

Current staff resources are dedicated to building inspections and development assessment work. There are however resource limitations to the ability to carry out the extensive range of inspections required by legislation. This includes carrying out regular inspection of food premises and businesses, maintenance of a septic tank register and response to specific issues such as noise complaints. In recent years food inspections have been contracted to a consultant. Funding has not been included in 2011/12, however should the Manager of Building and Environment position be filled then this function may be achievable within current budget resources.

Development control and statutory planning processes continue to be carried out by the Environmental Services Department. The lack of appointment of a senior planner has been offset by the appointment of a graduate planner in 2010. The role of senior planner has been carried out as a dual role by the Director of Environmental Services. While not an ideal situation, this arrangement has operated adequately throughout the year. Recently the services of a senior planner have been secured. The position is currently provided on a casual basis however it is envisaged that the officer will join the Environmental Services team as a full time planner within the coming months. Additional planning support has been provided during the year through the WBC Alliance with planning assistance provided as needed by planning staff based at Wellington and Blayney. Council has also utilised the services of a consultant planner to assist with independent assessment of complex development assessments.

Animal Control

Council continues to operate a part time ranger service. This position is under review with a proposal to update process, procedure and licensing requirements. It is essential that a review of the ranger’s services be completed, including a review of facilities such as livestock/animal impounding yards. The diverse settlement pattern of the Cabonne Council area provides a significant challenge to the implementation of an efficient and cost effective ranger’s service.

Cemetery Management

A common issue raised by the wider community is an expectation of increased maintenance of the shire’s 11 cemeteries. During 2010/11 improvements to the cemeteries included introduction of new signage, denominational signage, new columbarium walls at Molong Cemetery, a chain fence to define the beam section of the Molong cemetery and new beams where required. Significant maintenance issues were encountered during December 2010 and January 2011 when heavy rainfalls resulted in extreme vegetation growth as well as triggering substantial subsidence of graves. The level of maintenance work expected by the community could not be provided within the resources available to the cemetery program.

Additional funding has been provided in the forthcoming budget to enable use of additional resources to assist in site maintenance during peak seasonal periods. This funding may assist in developing community based / volunteer programs or to provide additional contract mowing assistance as needed.

Work has commenced on the preparation of management plans for each of the Council’s 11 cemeteries to assist in adequate planning and programming of improvements and maintenance programs. As the cemeteries are also places of environmental heritage, conservation principles are also to be addressed. The management plans will be useful in determining budget requirements for the coming 5 to 10 years.

A program to encourage the conservation and maintenance of historic graves is also proposed to foster community awareness of the historic value of Cabonne’s cemeteries.

Environmental management, climate change and sustainability

Greater emphasis is placed on environmental issues and sustainability. Council is moving to implement policies and programs to foster sustainability and best practise environmental management of its resources. The 2011/12 budget accommodates funding allocations to develop sustainability and environmental management strategies. Funding to assist in the development of programs will be sought along with developing WBC partnership programs as and where practical. During 2011 Council adopted a Netwaste initiative being a Regional Sustainability Action plan. Known as ReSAP the document provides a guideline for Council in environmentally sustainable planning strategies.

Late in 2010 the Molong Gasworks site was listed as a contaminated site. During 2010/11 further environmental work was carried out to determine the program for the remediation of the former Molong Gas Works site. A Remediation Action Plan has been prepared enabling Council to apply for significant funding from the NSW Environment Trust to enable the remediation work to be carried out. Funding has been provided within the 2011/12 budget to facilitate the site remediation program.

State of Environment Report

Cabonne once more participated in the preparation of an annual Regional State of the Environment Report facilitated by the Central West Catchment Management Authority to assess environmental awareness and management across the region.

Priority is given to completing the draft LEP and progressing Council’s waste management strategy. Additional time and resource are to be allocated to increasing the level of presentation of Council’s 11 cemeteries.

The Environmental Services Department is capable of achieving many of the goals set for the department and Council. It is however a small team of staff and realistically it is not possible to adequately service all of the areas of responsibility to an adequate level. This will require out sourcing of some services to consultants, or alternatively recognising that some functions may not be undertaken within the timeframe allocated.

Satisfactory completion of the LEP process will be resource hungry and will require dedicated application by the Environmental Services team to support the Strategic Planner achieve timelines. Considerable time needs to be allocated to community consultation to ensure strategic outcomes reflect community expectations or facilitate a better understanding within the community of the legal processes that influence the LEP process. The assistance offered through the Department of Planning’s Acceleration Funding Program will enable the utilisation of specialist consultants to undertake the required community consultation program.

With Council committed to providing local waste management services the need to review current landfill practise and introduce best practise operation methods will no doubt come at a significant cost to Council. Potential expansion of existing services may impose further cost and environmental matters upon Council. It is essential that sound planning be undertaken to ensure that best practice methods are implemented at the current landfill sites, along with cost effective recycling services to meet the needs of the community and address environmental and economic considerations.

It is also important that in the coming year Council complete its review of the Ranger’s service. This may impact upon future budget allocation as consideration needs to be given to improving the part time service. Review of impounding arrangements will also need to be carried out to ensure an effective service is provided in a manner that satisfies legislative requirements.

FINANCE MANAGER’S REPORT

Council has recently received notification from the Independent Pricing & Regulatory Tribunal (IPART) in regards to the way that Allowable Rate Increases (rate pegging) will be calculated.

Since 1977, certain council revenues have been regulated in New South Wales under an agreement known as “rate pegging”. Rate pegging sets the maximum percentage increase to general revenue to councils.

The rate peg is a percentage amount that is set each year. Previously the rate peg was set by the Minister for Local Government, from 2011/2012 it will be set by IPART. The rate peg percentage for 2010/2011 was 2.6%. The rate peg percentage for 2011/2012 is 2.8%.

Whist the rate peg limit applies to Councils total rate income the rates paid by individual households or businesses may not necessarily go up in line with the rate peg due to such things as Valuation changes subdivisions, rating categories etc Council’s are able to set rate levels for different categories of properties e.g. residential category, business category, rural category.

The Local Government Act 1993 (NSW) makes provisions for council’s to increase revenues above rate peg amounts through the use of a special variation. There are a range of reasons why a council may apply for a special rate variation such as:

Ø Funding new or enhanced community services to meet growing demand in the community

Ø Funding the development and/or maintenance of essential community infrastructure

Ø Funding projects of regional significance

Ø Covering special or unique cost pressures that the council faces

Council should be aware that there is no intention proposed in the draft Budget for 2011/12 for Cabonne to apply for a special rate variation.

SENIOR ACCOUNTING OFFICER’S REPORT

General Overview

The outlook of the economic climate is not as bleak as at the same time of presentation of the current year’s budget. Severe constraint, however, has been placed on Councils’ ability to continue to provide a level of service that is acceptable to ratepayers, because of the allowed increase imposed by the State Government.

Rates have been increased by only 2.8% in this budget; this represents a slight increase of .2% on the allowable increase for the previous 2010/2011 year. With other operational costs, for example fuel, electricity and insurance, increasing, by an average of between 10% and 20%, this impacts considerably on Council’s ability to continue to provide high standard services to their communities.

Waste Collection services have been increased by 3.5% and water and sewerage services have been increase by 3%.

Commitment is shown by Council in the Village Enhancement Program with a total of $400,000 provided here for new programs for the continuing progress in the betterment of village amenities and beautification of the villages and towns.

As well, $150,000 has been allocated from the Canowindra Town Improvement Fund for special projects in the town.

Over $4.16 million in submissions were presented to the Draft Budget Meeting and approximately $2.64 million in value were accepted to be entered in the Draft Budget, to be funded by Reserves or Provision Accounts or the Budget or by grant funding, if possible.

A Submission List is attached to this report detailing the submissions that were presented to the initial staff Draft Budget Meeting.

Administration

Salaries are to be increased on the 1^st of July 2011 by 2.15%, in line with changes to the 2010 Local Government (State) Award. The next increase will apply on the1st of July 2012 and will be 3.25%.

The Local Government Superannuation Scheme has revised the methodology of calculating the premium of those members of the retirement scheme, thus reducing the cost of Superannuation for Council. Whilst they advise that they still have a deficit because of the Superannuation Holiday granted in past years, their investment performance rate has improved.

Council’s reserves and provision accounts have reduced to $23,765,145 in this budget with an overall reduction of $4,889,275. As the balance of the reserve and provision accounts is an estimate, at this time, the figures may change according to the actual result of the budget as at the 30^th of June 2011.

Public Order & Safety

Bushfire Service, Animal Control and Emergency Services are covered in this area.

The contribution to the RFS is set in this budget at $156,287, however there may be some variation to that amount considering recent events with the funding of Bushfire Sheds.

At this stage no funding from the Rural Fire Service for bushfire control hazard reduction has been noted in this budget, however, it is expected that a contribution will be made during the 2011/2012 year and that will be noted in the Quarterly Budget Review.

Health

This activity is relative to Administration and Inspection, Health Centres and Food control. No major changes in this area. Some of the activities previously held in this area have been moved to a new Heading of Environment.

Environment

A new Activity defined in this budget, contains items previously located in the areas of Health and Housing & Community Services, Vermin control, Noxious Weeds, Waste Service including Domestic waste, Street Cleaning, Urban Stormwater Drainage and Environmental Protection.

Domestic waste and other waste charges have been increased by 3.5%. This has been necessary as the expense involved in the collection and disposal of waste has, and is, increasing considerably.

The control of noxious weeds will have a net cost of $154,988, including $100,653 grant funding for the control of invasive species.

$471,000 has been allocated in total to Eugowra and Molong Floodplain projects and an additional $250,000 allocated to Stormwater Improvements

Community Services & Education

Over $1.431 million is to be spent in this area and covers Child Care, including Family Day Care and After School Hours Care Programs, Aged Care, under Home and Community Care, Community Visitors Scheme and the various Transport Programs.

The village and towns continue to receive many benefits from this area and is especially beneficial for the elderly, children and families.

Housing & Community Services

Housing, Town Planning, Cemeteries and Public Conveniences are included in this activity.

Cemeteries have been allocated an additional $67,000 made up of $20,000 in maintenance expenses, plus $47,000 in funding for the purchase of new equipment and the upgrade of fencing and cemetery beautification projects in the new year’s budget.

Water Supplies

The charges in this area have been increased by 3%. During the current year the increase in rainfall has drastically reduced the income Council sought for water usage. This situation is difficult to predict but could continue into the 2011/2012 budget year.

New works and assets in this area total in excess of $1.198 million and include $500,000 for a concept investigation into the supply of potable water for Cumnock and Yeoval water supplies.

Sewerage Services

Sewerage Services have also been increased by 3%.

In the Small Town Sewerage area in excess of $3.3 million and $3.1 million have been allocated for the Yeoval and Cumnock Sewerage schemes, respectively. Loan funds will be required during this year and will be approximately $2.4 million.

In the Cabonne Sewerage Fund almost $300,000 has been allocated for new acquisitions and improvements to existing equipment. Reserve funding will be utilised for this purpose.

Recreation & Culture

This activity covers Public Libraries, Museums, Public Halls Swimming Pools Sporting Grounds, Parks & Gardens and LAIP and CIP Projects.

Asset purchases or renewals in this area amount to $800,700 and include the Canowindra Swimming Pool $275,000 and $285,000 to be spent on LAIP Projects. The Canowindra Town Improvement Fund has allocated $150,000 for additional special projects in the town and $18,000 is to be spent on Public Halls. Shade Structures for Council’s playground areas have been included in this budget, an amount of $40,000 is noted. $15,000 has been included for the landscaping of the Canowindra Skate Park.

Further, a total of total of $1.352 million in expenditure within this activity is noted.

Mining Manufacturing & Construction

This Activity relates to Council’s Quarry and Building Control. No major changes in these areas are noted.

Transport & Communication

The RTA will provide funding of $500k for RMCC Routine, $1 million for ordered works, to be allocated to reseals, $650K and $350K for heavy patching in addition $803K for shoulder widening has been allocated for specific projects.

The Block Grant will distribute $700K to various regional road maintenance areas and includes Nyrang Repair rehab, Mogong intersection, Cargo Road and Cumnock Rail crossing.

The Road to Recovery funding has been allocated to Gundong Road and Gaskill Street.

FAG grant funding of in excess of $1.5 million has been allocated to various projects, including the improvement of rural culverts $400,000, $140,000 to new urban sealing and Sullivans Road seal causeway $100,000.

$110,000 has been allocated to Cycleways with the Roads and Traffic Authority to provide funding. $200,000 has been allocated to be funded from FAG and Reserve for footpath construction.

In the Bridge Construction area $1.5 million has been allocated from Council’s reserve and include $850,000 for Cotton’s Bridge and $400,000 for Longs Corners Bridge at Tom’s Waterhole.

In total the Transport and Communication area will receive $12.192 million made up of $7.4 million in general road expenditure, and a further $4.792 million which has been allocated to renewal and construction of new and existing assets.

Economic Affairs

The Molong Gasworks remediation work is noted in this area with an estimated $1.9 million in expenditure. Part will be covered by grant funding of $475,000 and the remainder will come for the Provision account specifically set aside for this project. This project was initially in the current year’s budget but has not and is not likely to be completed by the 30^th of June.

$400,000 has been assigned to Village Enhancement Projects and expenditure of $523,135 has been allocated to Tourism and Economic Development areas.

General Purpose Income

Interest has been based on an average rate of 5.9% for the coming year.

Advice received indicates that when the Government Guarantee is lifted in October or November this year, investors will be forced back to the major Banks and lower interest rates may result. The expected income to be received in this area, after distribution to other funds is $1,194,395.

The income expected in General Rates is $8,650,493, this includes the 2.8% as advised by the Department of Local Government.

Financial Assistance Grants in operational funding represents $2,229,050 and a further $1,645,000 has been allocated from FAG for the Local Road Program, Footpath construction and Pedestrian Access.

Recommendation

THAT Council:

1. Adopt the Draft Strategic Plan presented with any changes suggested by Council.

2. Adopt the Draft Budget subject to variations approved by Council.

3. Adopt the Fees and Charges for 2011/12 as presented.

4. Adopt the Five Year Financial Plan as presented.

5. Adopt the Social Plan as presented.

6. Adopt the Draft Budget Summary and AAS27 format.

7. Publicly exhibit the 2011/12 Draft Management Plan at each Council Office, Branch Library and other locations throughout the Shire for a period of 28 days, and that a copy of the Plan be made available on a reduced cost basis of $15.00 per copy, with sections of the plan being photocopied at a reduced rate of 15 cents per page.

8. That an interest rate of the maximum allowable percentage allowed the Department of Local Government for the 2011/2012 period is charged on arrears of Rates and Charges.

9. Make an additional copy available for overnight borrowing at additional locations where exhibited, as per the libraries.