hume city council annual budget 2011/2012 · hume city council annual budget 2011/2012. ... the...

www.hume.vic.gov.au

HUME CITY COUNCILANNUAL BUDGET 2011/2012

CONTENTS Mayors Introduction .............................................................................................................. 1 Chief Executive Officers Summary ....................................................................................... 4 Budget Processes ............................................................................................................... 11 Overview 1. Linkage to the Council Plan ....................................................................................... 12 2. Activities, initiatives and key strategic activities .......................................................... 15 3. Budget influences ...................................................................................................... 29 Budget Analysis 4. Analysis of operating budget ...................................................................................... 32 5. Analysis of budgeted cash position ............................................................................ 38 6. Analysis of capital budget .......................................................................................... 41 7. Analysis of budgeted financial position ....................................................................... 47 Long Term Strategies 8. Strategic Resource Plan and key financial indicators ................................................. 50 9. Rating strategy ........................................................................................................... 54 10. Other strategies ......................................................................................................... 57 Appendices Appendix A - Budgeted Standard Statements ...................................................................... 62 Appendix B - Statutory Disclosures ...................................................................................... 67 Appendix C - Capital Works Program ................................................................................... 72 Appendix D - Key Strategic Activities ................................................................................... 85 Appendix E - Schedule of Fees and Charges ....................................................................... 90

Mayors Introduction It gives me great pleasure to present the 2011/12 Budget to the community of Hume City Council. Hume City continues to be a growing municipality and Council acknowledges the need to fund new community initiatives to meet the expectations of its expanding population. Results of Councils Resident Surveys were analysed, along with feedback from Councillors, ward meetings, community and key stakeholder forums to determine what the communitys priorities were for the coming year and beyond. Councils long-term financial strategy is based around having a 5% rate increase to provide for growth in services (delivered meals, leisure facilities, waste collection, local laws, preschools, etc) and the provision of capital works (roads, pools, recreation, etc).

Councils rate increase for 2011/12 is 6.2% comprising 4.95% for Councils ongoing operations, 0.75% for the increase in the landfill levy payable to the Environment Protection Authority Victoria and 0.5% for a future call on the Defined Benefits Superannuation Fund, which is beyond the control of Council. Council is strongly opposed to collecting levies from ratepayers to pass onto another level of Government. Unfortunately this has been imposed on Council by the State Government. The 2011/12 Budget includes total operating income of $198.14 million and operating expenditure of $154.88 million, generating an operating surplus of $43.26 million. The 2011/12 Capital Works program includes $44.96 million of new works. Over the next four years, total new works is projected to be $196.62 million. Councils commitment to sustainable development and growth continues through this Budget, with many projects to commence or continue that will benefit the whole community. The highlights of the new capital works program are as follows: Roads ($9.51 million) including the construction of a duplicate lane along Grand

Boulevard from Royal Park Way to Explorers Place, a single carriageway in each direction on Aitken Boulevard from Candelbark Drive to Fairways Boulevard, reconstruction of a bridge at Settlement Road in Sunbury, upgrade to Moore Road in Sunbury and local road resurfacing throughout the City;

Footpaths and Drainage Infrastructure ($5.07 million) including footpath rehabilitation works and the upgrade of drainage infrastructure throughout parts of the City, the construction of a footpath on Somerton Road from the Hume Highway to the Railway and the Connecting Craigieburn Walking and Cycling paths construction;

Major Leisure Facilities ($8.73 million) including the commencement of the redevelopment of the Broadmeadows Leisure Centre including a 50 metre pool and the commencement of construction works for a two court basketball stadium extension at Boardman Stadium in Sunbury;

Parks and Reserves ($7.26 million) including the conversion of four tennis courts to plexi-cushion at the Sunbury Lawn Tennis Club, construction of a soccer field at the Barrymore Rd Recreation Reserve, stage 1 implementation of the John Ilhan Memorial Reserve Master Plan, upgrading Anderson Reserve in Broadmeadows and the playground renewal program across the City;

Community Facilities ($2.49 million) including the upgrading of the Seabrook Reserve Pavilion in Broadmeadows, provision for the annual Greenhouse Action Plan program, commencement of the Southern Hume Community Centre and an extension to the Craigieburn Road early childhood centre;

Page 1

Waste Management ($1.07 million) including new garbage, organic and recycling bins and rehabilitation works at Councils landfill sites including implementation of the Bolinda Road Master Plan in Campbellfield;

Town Activity Centres ($0.46 million) including bronze cricket statues in Sunbury, continued work on the Sunbury Town Centre redevelopment and Barry Road Shopping Centre improvements; and

Civic/Corporate ($10.37 million) including the continuation of the Craigieburn Library and Learning Centre, conversion of street lighting to T5 environmental lighting, information technology, library materials and the scheduled replacement of Councils fleet.

The proposed budget also includes a number of new initiatives that will add to the extensive services already provided by Council. The major additions this year include: Initiatives to improve the amenity and appearance of the City including:

Waste and Organics Operations additional funding will enhance Council's waste and organic bins collection process.

Rear Loader Operator and Labourer these additions will ensure that litter bins in high profile shopping precincts, active sporting facilities and passive open space and parks will be able to be serviced seven days per week.

Mechanical Street Sweeper and Operations these additions will increase the annual sweeping kilometres by 25% and allow quicker response times.

Landscape Architect this position will coordinate the implementation phases of public realm and open space capital improvement projects.

Parks Administration Traineeship Program this will enable local youth to train in administrative support and create a career path into the workforce.

Additional Staff Mowing Resources this will allow Council to keep pace with growth. Over the past decade open space has increased to in excess of 1,400 hectares.

Tree Establishment Team Leader this position will ensure that trees are planted to specification and that each tree receives the maintenance required to get the tree established over the trees early years.

Certificated Gardener this position will help the delivery of greater landscape maintenance outcomes across the City.

The allocation of funding to maintain new parks and sub-divisions acquired in previous years.

Initiatives to cater for the continued growth and to help plan and utilise the Citys assets including:

Property Development Officer this position will assist with the growth pressures whilst increasing the skill base and improving flexibility to deal with development projects.

Subdivisional Checking Engineer and Supervisions Officer - these positions are required to meet service demands with increased subdivisional developments proposed across the City for residential, industrial and commercial developments and the extension of the urban growth boundary.

Hume Transport Model - undertake extensive transport and land use modelling and scenario testing using the Melbourne Integrated Transport Model for Hume.

Strategic Land Use Planner this position will focus both on growth area planning and the planning and renewal of existing areas.

Growth Area Planner this position will enable Council to monitor and manage the increasing amount of development contributions being received and expended by Council.

Page 2

Initiatives to support the Citys youth and arts including:

Youth Counselling and Support Service - a new service targeting young people who may be vulnerable and potentially 'at risk' within the Hume community.

Moving Forward - Youth Engagement Program a position to assist with young people who are highly disengaged from their school, home and community.

Arts Encouragement and Awards Program this program aims to increase local participation in the arts and support the professional practice of artists in Hume.

Additional staffing resources to address Childcare Regulation National reforms for under three's - early childhood services are currently the subject of a significant national reform agenda and an additional five staff are required to meet the reform guidelines.

Initiatives to enhance the Citys library services including:

Extended Library Operating Hours Council has allocated funding to allow an additional 16 hours per week for members and residents to access services provided at the Broadmeadows and Craigieburn libraries.

The Global Learning Centre in Craigieburn will open during the 2011/12 financial year and additional staff and resources are required to commence the new facility.

Initiatives to improve Customer Service including:

Council Wide Customer Focus Strategy - the strategy is customer centric and will ensure that Council integrates its entire range of business functions around satisfying the needs of its customers while containing costs, leveraging technology and embracing a customer focussed culture.

Customer Service Business Support Officer this position will enable specialised service in lodgements regarding statutory planning, infrastructure planning, building and local laws.

The budget delivers an additional $5.38 million towards the provision of day to day Council services including pre-schools, child care, aged services and leisure services across the municipality. Residents and other interested members of the community are welcome to view and make comments and submissions on the budget. The 2011/12 Budget continues the principles of prudent and sustainable long-term financial management and has been developed through a rigorous process of consultation and review and Council endorses it as financially responsible. Cr Helen Patsikatheodorou Mayor

Page 3

Chief Executive Officers Summary Council has prepared a Budget for the 2011/12 financial year which seeks to balance the demand for services and infrastructure with the communitys capacity to pay. The 2011/12 Budget presented in this report has been developed through a rigorous process of consultation and review with Councillors, Council officers and the Hume community. It will deliver improved services, increased maintenance and an upgrade of Council owned assets and infrastructure. Key budget information is provided below about the rate increase, operating result, service levels, financial position, cash and investments, capital works, financial sustainability and strategic objectives of the Council. 1. Rates

5.00 4.95

0.50

4.00

5.00 0.75

1.78

0

1

2

3

4

5

6

7

8

2008/09 2009/10 F 2010/11 B 2011/12

Year

% R

ate

incr

ease

6.20

6.78

F = Forecast B = Budget It is proposed that general rates increase by 6.2% for the 2011/12 year. Councils long-term financial strategy of applying a 5% rate increase to fund increases to services and new works has been achieved. Council has applied a 4.95% rate increase in the 2011/12 financial year. On top of the 4.95% increase, Council is required to collect a landfill levy on behalf of the Victorian Government and this has resulted in an additional 0.75% increase. Also an additional 0.5% has been added to allow for a future defined benefits superannuation call payable to Vision Super. Rates collected are expected to be $107.95 million and includes rates in lieu of $8.55 million and $1.6 million generated from supplementary rates. The level of total rates also reflects an expected growth rate of approximately 2.5-3%. This rate increase is in line with Councils rating strategy and will go towards maintaining service levels, meeting the cost of a number of internal and external influences affecting the operating budget and towards capital works to address the asset renewal needs of the City. The rate increase for the 2010/11 year was 6.78%.

Page 4

2. Operating result

43.37 43.26

40.01

54.69

25

30

35

40

45

50

55

60

2008/09 2009/10 F 2010/11 B 2011/12

Year

Ope

ratin

g re

sult

$M

The expected operating result for the 2011/12 year is a surplus of $43.26 million which is a decrease of $0.11 million over the forecast result for 2010/11. The underlying result, which excludes items such as capital grants and contributions and developer contributed assets is a surplus of $14.66 million. This is an increase of $9.2 million over 2010/11. (The forecast operating result for the 2010/11 year is a surplus of $43.37 million).

Page 5

3. Services

84.11

66.79

71.16

78.73

40

45

50

55

60

65

70

75

80

85

90

2008/09 2009/10 F 2010/11 B 2011/12

Year

Net

cos

t $M

The net cost of services delivered to the community for the 2011/12 year is expected to be $84.11 million which is an increase of $5.38 million over the 2010/11 forecast. A key factor influencing the development of the 2011/12 budget has been information compiled through consultation with key stakeholders including: community satisfaction surveys; a telephone survey; ward meetings and issues arising from resident and other stakeholder requests and feedback. The information tells us that, while there is a relatively high level of satisfaction with most services provided by Council, there are some areas requiring additional attention. For the 2011/12 year, service levels have been maintained and a number of new activities and initiatives proposed. (The forecast net cost for the 2010/11 year is $78.73 million).

Page 6

4. Financial position

1,662

1,4841,528

1,316

1,000

1,100

1,200

1,300

1,400

1,500

1,600

1,700

1,800

2008/09 2009/10 F 2010/11 B 2011/12

Year

Rat

epay

ers'

equ

ity $

M

29.75

4.54

24.37

31.13

-

5

10

15

20

25

30

35

2008/09 2009/10 F 2010/11 B 2011/12

Year

Wor

king

cap

ital $

M

The financial position is expected to improve with ratepayers equity (net worth) to increase by $134 million to $1,662 million. This increase is due to a strong recurrent surplus which is as a result of strong financial management, continued growth within the City, the revaluation of Council owned land and buildings and Councils commitment to renew and provide quality infrastructure. Working capital (net current assets) will decrease by $19.83 million to $4.54 million as at 30 June 2012. This is mainly due to the carried forward component of the 2010/11 capital works program and an extensive program for 2011/12. The reduction in cash and investments is in line with Council's Strategic Resource Plan.

Page 7

5. Cash and investments

45.37 43.73

40.14

21.49

10

15

20

25

30

35

40

45

50

2008/09 2009/10 F 2010/11 B 2011/12

Year

Cas

h on

han

d $M

Cash and investments are expected to decrease by $18.65 million during the year to $21.49 million as at 30 June 2012. This is mainly due to the carried forward component of the 2010/11 capital works program and an extensive program for 2011/12. The reduction in cash and investments is in line with Council's Strategic Resource Plan. (Cash and investments are forecast to be $40.14 million as at 30 June 2011). 6. Capital works

44.96

20.0148.04

41.02

35.32

10

20

30

40

50

60

70

2008/09 2009/10 F 2010/11 B 2011/12

Year

Cap

ital w

orks

$M

64.97

Page 8

The capital works program for the 2011/12 year is expected to be $64.97 million of which $20.01 million relates to projects which will be carried forward from the 2010/11 year. The carried forward component is fully funded from the 2010/11 budget. Of the $64.97 million in capital funding required, $36.54 million will come from Council operations, $4.07 million from external capital grants, $0.86 million from the sale of plant, $3.5 million from a new loan and the balance (including the carried forward component) of $20 million from unrestricted cash and investments. The 2011/12 budget has been prepared with the future social, environmental and economic sustainability of the City in mind. Council acknowledges the need to fund new community and organisational initiatives to meet the expectations of its rapidly growing population. The program has been set and prioritised based on a rigorous process of consultation that has enabled Council to assess needs and develop sound business cases for each project. This years program includes a number of major projects including continuing with construction of the Craigieburn Library and Learning Centre, the commencement of the redevelopment of the Broadmeadows Leisure Centre including a 50 metre pool, the Boardman Stadium two court extension, a duplicate lane along Grand Boulevard from Royal Park Way to Explorers Place, stage 1 implementation of the John Ilhan Memorial Reserve Master Plan, commencement of the Southern Hume Community Centre and the conversion of street lighting to T5 environmental lighting. Capital works is projected to be $48.04 million for the 2010/11 year. 7. Financial sustainability

5.46

13.14

14.10

11.34

14.66

5

7

9

11

13

15

17

F 2010/11 B 2011/12 2012/13 2013/14 2014/15

YEAR

Und

erly

ing

surp

lus

$M

A high level Strategic Resource Plan for the years 2011/12 to 2014/15 has been developed to assist Council in adopting a budget within a longer term prudent financial framework. The key objective of the Plan is financial sustainability in the medium to long-term, while still achieving the Councils strategic objectives as specified in the Council Plan. The Plan projects that Council's operating result will be in excess of $40 million per annum over this period and the underlying result is a steady surplus over the four year period. The increase in the underlying surplus in 2011/12 is largely due to an effort to keep increases in expenditure in line with CPI increases, growth in rates and user fees and charges and the receipt of developer contributions. Developer contributions in 2011/12 are expected to increase by 136% or $3.1 million and is mainly due to contributions expected for Precinct Structure Plans in Greenvale and Craigieburn.

Page 9

8. Strategic objectives

27.4

2.63.4

9.2

2.4

36.5

24.6

2.6

10.3

5.4

9.9

3.6

27.6

2.5 2.8

37.5

2.3

11.0

25.8

6.1

05

1015202530354045

Acco

untab

le Le

aders

hip

Econ

omy

Trans

port

Learn

ing

Socia

l Inclu

sion

Healt

h, Sa

fety &

Well

being

Arts,

Leisu

re &

Recre

ation

Appe

aranc

e of th

e City

Asse

t Man

agem

ent

Natur

al En

viron

ment

Strategic Objectives

Expe

nditu

re $

M

2010/11 Forecast2011/12 Budget

The Annual Budget includes a range of activities and initiatives to be funded that will contribute to achieving the strategic objectives specified in the Council Plan. The above graph shows the level of funding allocated in the Budget to achieve the strategic objectives as set out in the Council Plan for the 2011/12 year. This budget has been developed through a rigorous process of consultation and review and management endorses it as financially responsible. More detailed budget information is available throughout this document. Domenic Isola Chief Executive Officer

Page 10

Budget Processes This section lists the budget processes to be undertaken in order to adopt the Budget in accordance with the Act and Regulations. The preparation of the budget begins with Officers preparing the operating and capital components of the annual budget during February and March. A draft consolidated budget is then prepared and various iterations are considered by Council at informal briefings during April and May. A proposed budget is prepared in accordance with the Act and submitted to Council in May for approval in principle. Council is then required to give public notice that it intends to adopt the budget. It must give 28 days notice of its intention to adopt the proposed budget and make the budget available for inspection at its offices and on its web site. A person has a right to make a submission on any proposal contained in the Budget and any submission must be considered before adoption of the budget by Council. To assist persons to understand the budget and make a submission if they wish, Council officers undertake a community engagement process including public information sessions, focus groups and other techniques. The final step is for Council to adopt the budget after receiving and considering any submissions from interested parties. The budget is required to be adopted and a copy submitted to the Minister by 31 August each year. The key dates for the Budget process are summarised below:

Budget process Timing 1. Officers prepare operating and capital budgets February/March 2. Council considers draft budgets at informal briefings April 27 May 2 3. Proposed budget submitted to Council for approval May 16 4. Public notice advising intention to adopt budget May 18 5. Budget available for public inspection and comment May 18 6. Community engagement process undertaken May/June 7. Submissions period closes (28 days) June 15 8. Submissions considered by a Council Committee June 20 9. Budget and submissions presented to Council for adoption June 27

10. Copy of adopted budget submitted to the Minister for Local Government June 30

Page 11

1. Linkage to the Council Plan This section describes how the Annual Budget links to the achievement of the Council Plan within an overall planning framework. This framework guides the Council in identifying community needs and aspirations over the long-term (Hume City Plan 2030), medium-term (Council Plan) and short-term (Annual Budget) and then holding itself accountable (Audited Statements). 1.1 Strategic planning framework The Strategic Resource Plan, included in the Council Plan summarises the financial and non-financial impacts of the objectives and strategies and determines the sustainability of these objectives and strategies. The Annual Budget is then framed within the Strategic Resource Plan, taking into account the activities and initiatives included in the Annual Budget which contribute to achieving the strategic objectives specified in the Council Plan. The diagram below depicts the strategic planning framework of Council.

Page 12

1.2 Our purpose VISION Hume City Council will be recognised as a leader in achieving social, environmental and economic outcomes with a common goal of connecting our proud community and celebrating the diversity of Hume. MISSION To enhance the social, economic and environmental prosperity of our community through vision, leadership, excellence and inclusion. PRINCIPLES The Council Plan is predicated on the following principles: Social Justice; Partnerships; Financial accountability and transparency; Economic prosperity; and Environmental sustainability. WE VALUE Our Citizens We will promote democratic representation and genuinely engage our citizens to promote a sense of belonging within a healthy, safe, strong and diverse community. We will lead the way to identify community needs and best practice service delivery models and advocate for an integrated approach to service provision. Our services and facilities will be high quality and we will pursue efficiency and continuous improvement through customer focus and innovation. Our Staff We will demonstrate this by encouraging, supporting and developing our employees to achieve service excellence and a sense of unity, pride and fulfilment. Partnerships with the Federal and State Governments We will work together to achieve the equitable provision of services and infrastructure to meet current and future community needs. Our Community Organisations We will work in partnership with them to build community wellbeing, resilience and capacity.

Page 13

1.3 Strategic objectives The Council delivers activities and initiatives under 37 major service categories. Each contributes to the achievement of one of the ten Strategic Objectives as set out in the Council Plan for the years 2009-13 (incorporating the Strategic Resource Plan 2011 2015). The following table lists the Councils four themes and the ten Strategic Objectives as described in the Council Plan.

Theme Description

1. Council Leadership

Hume demonstrates strong leadership through fostering accountability, developing partnerships in the community with residents and business and maintaining active relationships with all levels of Government to achieve improved outcomes for the Hume community.

1. Strategic Objective - Accountable Leadership

2. Prosperity of the City

Hume will be a strong, diversified thriving business centre of northern Melbourne. This can be achieved by the provision of effective infrastructure networks, attracting significant and emerging industries, promoting business investment, whilst supporting existing industries and enabling residents to take up a range of employment opportunities.

2. Strategic Objective - Economy 3. Strategic Objective - Transport 4. Strategic Objective - Learning

3. Community

Wellbeing Hume will be characterised as a strong and cohesive community where residents have equitable access to services and are supported to take up opportunities to actively participate in community life and realise their full potential.

5. Strategic Objective - Social Inclusion 6. Strategic Objective - Health, Safety and Wellbeing 7. Strategic Objective - Arts, Leisure and Recreation

4. Appearance of the

City & Environment

Hume endeavours to enhance community pride by resourcing services to deliver a clean appearance of the City with appropriately maintained infrastructure and a well preserved and protected natural environment.

8. Strategic Objective - Appearance of the City 9. Strategic Objective - Asset Management 10. Strategic Objective - Natural Environment

Page 14

2. Activities, initiatives and key strategic activities This section provides a description of the activities and initiatives to be funded in the Budget for the 2011/12 year and how these will contribute to achieving the strategic objectives specified in the Council Plan as set out in Section 1. It also includes a number of key strategic activities and performance targets and measures in relation to these. The relationship between these components of the Budget and the Council Plan is shown below. 2.1 Strategic Objective 1: Accountable Leadership To operate with integrity and openness in providing the highest level of representation and advocacy for the community. The activities and initiatives for each service category and key strategic activities are described below.

Activity Description Expenditure

Net Cost $'000

(Revenue)

Councillors and Chief Executive

This area includes the Mayor, Councillors, Chief Executive Officer and associated support which cannot be attributed to the direct service provision areas.

1,102

1,102 _ (0)

City Governance & Information Directorate

This area includes the City Governance and Information director, GIS and associated support which cannot be attributed to the direct service provision areas.

671

671 (0)

Customer Service This service provides a customer interface for an increasing number of service units and a wide range of transactions. The service is delivered through three customer service centres with call centre functionality.

2,537

2,537 (0)

Finance & Property Development

This service predominantly provides financial based services to both internal and external customers including the management of Councils finances, payment of salaries and wages to Council employees, procurement and contracting of services,

4,438

1,660 (2,778)

Budget

Activities Initiatives

Key Strategic Activities

Council Plan

Strategic Objective

Strategic Objective

Strategic Objective

Strategic Objective Performance

Measures/ Targets

Performance Statement

Medium term planning (4 Years)

Short term planning (12 Months)

Activities

Activities

Activities

Initiatives

Initiatives

Initiatives

Budget

Activities

Council Plan

Measures/

Performance Statement



Page 15


Net Cost $'000

(Revenue)

raising and collection of rates and charges. This service is also responsible for the maintenance of land and property leases and licences, and the valuation of properties throughout the municipality.

Corporate Services This service provides statutory and corporate support services to Council, including coordination of business papers for meetings of the Council and its committees, maintenance of statutory registers and the conduct of the Council election. It is also responsible for the provision of document and information management support services to Council, including compliance with statutory obligations under freedom of information, public records and information privacy legislation.

4,019

3,847 (172)

Information Services This service provides, supports and maintains reliable and cost effective communications and computing systems, facilities and infrastructure to Council staff enabling them to deliver services in a smart, productive and efficient way.

2,903

2,903 (0)

Human Resources This service develops and implements strategies, policies and procedures through the provision of human resource and industrial relations services. The service also assists managers to determine and progress toward future structures, capability and cultures in their service units.

2,052

1,801 (251)

Organisation Planning & Improvement

Organisation Planning and Improvement coordinates the Council Plan process and manages Councils internet and intranet sites.

399

399 (0)

Research The Research Department undertakes a broad range of social research activities, including over 30 community consultations, program evaluations and research projects per year, and continually monitors and undertakes socio-demographic analysis of Humes 167,000 residents for service planning and strategy development.

450

450 (0)

Marketing & Communications

This service is responsible for the management and provision of advice on external communication, in consultation with relevant stakeholders, on behalf of Council.

1,884

1,803 (81)

Services This service is divided into two main operational units. Property Services which prepares long term maintenance management programs for Councils property assets in an integrated and prioritised manner in order to optimise their strategic value and service potential. These include municipal buildings, pavilions and other community buildings. Fleet Services purchases and maintains Council vehicles and plant and equipment to meet functionality and safety needs, to maximise performance and minimise operational costs of the fleet.

13,149

12,505 (644)

Building This service provides statutory building services to the Council community including processing of building permits, emergency management responsibilities, fire safety inspections, audits of swimming pool barriers and investigations of

1,949

(331) (2,280)

Page 16


Net Cost $'000

(Revenue)

complaints and illegal works.

Statutory Planning This service processes all planning applications, provides advice and makes decisions about development proposals which require a planning permit, as well as representing Council at the Victorian Civil and Administrative Tribunal where necessary.

1,942

966 (976)

Initiatives 1) As a result of additional demands on Councils Property Development department, an

additional officer will be added to assist with the growth pressures whilst increasing the skill base and improving flexibility to deal with development projects.

2) An additional officer in Customer Service will enable specialised service in lodgements regarding statutory planning, infrastructure planning, building and local laws.

3) A Council wide Customer Focus Strategy. The strategy is customer centric and will ensure that Council integrates its entire range of business functions around satisfying the needs of its Customers while containing costs, leveraging technology and embracing a Customer Focussed culture.

4) Implement an occupational health and safety management system (OHSMS) in high risk operational areas. Assessment of OHSMS effectiveness ensures ongoing improvements in occupational health and safety to occur, as well as to meet ethical, policy and legislative requirements. Implementing the system will provide a system based approach to eliminating illness and injuries in the workplace.

Key strategic activities

Strategic Activity Performance Measure Performance Target Implement Councils Community Engagement Framework

To increase community satisfaction with Councils level of consultation with the community on local issues

Increase in satisfaction by a mean score of 0.3

Provide clear guidelines and tools for undertaking community engagement activities

Undertake Ward Meetings across all Wards

Guidelines and tools developed

4 ward meetings held

Page 17

2.2 Strategic Objective 2: Economy Provide a proactive and supportive environment to sustain and expand existing businesses in Hume, attract a diversified range of new business investment and create opportunities for residents in Hume to take up employment in these businesses. The activities and initiatives for each service category and key strategic activities are described below. Activities


Net Cost $'000

(Revenue)

City Sustainability Directorate

This area includes the City Sustainability Director and associated support which cannot be attributed to the direct service provision areas.

359

359 (0)

Economic Development

This service assists the organisation to facilitate an environment that is conducive to a sustainable and growing local business sector and provides opportunities for local residents to improve their skill levels and access employment.

1,491

1,401 (90)

Strategic Planning This service manages Councils Planning Scheme as well as the preparation of major policy documents shaping the future of the City. Key works also include the preparation and processing of amendments to the Council Planning Scheme and carrying out research on demographic, urban development, economic and social issues affecting Council.

1,713

72 (1,641)

Initiatives 5) An additional position in the Strategic Planning Department to enable it to focus both on

growth area planning and the planning and renewal of existing areas. The new position will provide strategic planning support to other Council departments particularly CAD and Urban Design and Property Development to undertake policy development and planning scheme amendments that facilitate the implementation of Council strategies.

6) An additional Growth Area Planner will enable Council to monitor and manage the increasing amount of development contributions being received and expended by Council. The position will ensure Council has the necessary governance arrangements in place to effectively monitor, review and report on the receipt of development contributions currently required under Local Structure Plans, Section 173 Agreements, Planning Permits and now Precinct Structure Plans and Development Contribution Plans.

7) To undertake extensive transport and land use modelling and scenario testing using the Melbourne Integrated Transport Model (MITM) for Hume. MITM is a strategic transport model of the Melbourne metropolitan area, incorporating highway and public transport networks. MITM is used to test and assess transport policies and strategies, predict future demands on the transport network, and analyse the potential impacts of road, public transport and land use planning projects.

Page 18


Strategic Activity Performance Measure Performance Target Support economic development, sub divisional activity and employment growth

Influence and negotiate the approval of the Craigieburn Town Centre Development Plan

Achieved Development Plan Approval for the Town Centre

Negotiate Department of Transport Approval of Development Plan

2.3 Strategic Objective 3: Transport Plan, advocate for and provide safe alternative transport networks and options that service existing businesses, business investment and community connectedness. The activities and initiatives for each service category and key strategic activities are described below. Activities


Net Cost $'000

(Revenue)

Central Activities District & Urban Design

Central Activities District and Urban Design supports the regeneration and development of integrated and sustainable urban areas which contribute to quality of life, a sense of place and community pride.

740

740 (0)

Traffic & Civil Design This service provides strategic planning, policy development and day to day management of traffic and transport related issues in Council. The unit also implements Local Area Traffic Management schemes and assist with implementation of the Road Safety Strategy.

1,765

1,754 (11)

Key strategic activities Strategic Activity Performance Measure Performance Target Develop a Parking Precinct Plan for the Sunbury Town Centre

Identify appropriate parking rates and projections for car parking demand

Identify options for additional parking within the Sunbury Town Centre

Completed land use survey of Town Centre

Reviewing current parking rates to project future requirements

Identifying development potential of Town Centre to clarify additional parking options

Page 19

2.4 Strategic Objective 4: Learning Enhance life experience, employment opportunities and contributions to the community by inspiring and facilitating participation of Hume residents in life long learning regardless of age, ability or ethnicity, resulting in reduced disadvantage and improved quality of life. The activities and initiatives for each service category and key strategic activities are described below. Activities


Net Cost $'000

(Revenue)

Public Relations and Learning Directorate

This area includes the Public Relations and Learning Director and associated support which cannot be attributed to the direct service provision areas.

350

350 (0)

Learning Communities

This service provides public library services at six locations and provides a customer focused service that caters for the cultural, educational and recreational needs of residents and provides a focal point for the community where they can meet, relax and enjoy the facilities and services offered.

5,770

4,313 (1,457)

Initiatives 8) The Global Learning Centre in Craigieburn will open during the 2011/12 financial year,

requiring additional staff and resources to commence operating the new facility. 9) Council has allocated funding to allow an additional 16 hours per week for members and

residents to access services provided at the Broadmeadows and Craigieburn libraries.

Page 20


Strategic Activity Performance Measure Performance Target Hume City Multiversity

To establish a Multiversity in Hume City to improve the range of post- secondary education opportunities for local residents Seek commitment from universities

and TAFE Colleges to participate in developing the Multiversity concept

Establish a MOU between interested partner organizations to deliver a mix of higher education courses

Seek funding to establish a part time multiversity coordination secretariat

By December 2011 secure two universities as Multiversity partners By December 2012 secure two additional universities at Multiversity partners By December 2013 secure funding to establish Multiversity coordination functions

2.5 Strategic Objective 5: Social Inclusion To undertake initiatives which increase social, civil and economic participation by individuals and groups in Hume community life to support individual fulfilment whilst strengthening a culturally rich, cohesive and respectful community. The activities and initiatives for each service category and key strategic activities are described below. Activities


Net Cost $'000

(Revenue)

Social Development This service has the responsibility to frame and respond to the challenges of social inclusion that present to Council. It is the responsibility of this service to ensure that issues that arise and situations and trends that develop of a social policy nature are responded to appropriately by Council.

2,310

1,871 (439)

Initiatives 10) The introduction of an Arts Encouragement and Award Program with the aim to increase

local participation in the arts and support the professional practice of artists in Hume. The increased participation in the arts in Hume will increase levels of community engagement, well being and social connectivity. Emerging and established artists would benefit from the support of their artistic endeavours, while also enabling the development of professional networks and industry knowledge leading to sustainable practice.

Page 21

Key strategic activities Strategic Activity Performance Measure Performance Target Supporting Parents Developing Childrens Project

Implement the first years actions of the Project

Programs established: Six school/ community early years hubs in southern Hume Three facilitated culturally and linguistically diverse playgroups Two new integrated mother and child English language learning programs

2.6 Strategic Objective 6: Health, Safety and Wellbeing To plan, provide and/or advocate for services that enable Hume residents of all ages to pursue a healthy and safe lifestyle and that contribute to overall wellbeing. The activities and initiatives for each service category and key strategic activities are described below. Activities


Net Cost $'000

(Revenue)

City Communities Directorate

This area includes the City Communities Director and associated support which cannot be attributed to the direct service provision areas.

1,216

520 (696)

Family & Children Services

This service provides family oriented support services including pre-schools, maternal and child health, counselling and support, family day care, holiday programs and health and safety.

15,707

2,912 (12,795)

Aged Care & Health Services

This service provides a range of services for the aged and disabled including home delivered meals, personal care, transport, dementia care, home maintenance, housing support and senior citizen clubs.

9,905

3,437 (6,468)

School Crossings This service provides staff at school crossings throughout the municipality to ensure that all pedestrians, but mainly school aged children, are able to cross the road safely.

771

594 (177)

Initiatives 11) Early childhood services are currently the subject of a significant national reform

agenda. Whilst it is acknowledged that the reforms will improve the quality of services and enhance early childhood development, there will be additional operational costs to Council. An additional five staff are required to meet the reform guidelines. By 1 January 2012 the ratio of staff to children for under three year olds needs to decrease from one staff for every five children to one staff for every four children.

Page 22


Strategic Activity Performance Measure Performance Target Implementation of Connecting Craigieburn and Sunbury Missing Links walking and cycling pathways

Construction of the Craigieburn/Sunbury link paths

Approximately 7km in length Total costs $1.02m (Craigieburn) and $0.78m (Sunbury), totalling $1.8m

2.7 Strategic Objective 7: Arts, Leisure and Recreation To facilitate opportunities for Hume residents of all ages and abilities to lead an active life through participation in arts, leisure and recreation activities by facilitating and/or providing, programs and support. The activities and initiatives for each service category and key strategic activities are described below. Activities


Net Cost $'000

(Revenue)

Leisure & Youth Services

This service is responsible for the management and use of leisure centres, sporting grounds and pavilions and community centres with meeting, function and activity space. The service provides advice to Council on local leisure needs and assists community groups with funding applications, event management and promotion and issues relating to license agreements with Council.

11,018

4,444 (6,574)

Initiatives 12) A new service targeting young people who may be vulnerable and potentially 'at risk'

within the Hume community. The 'Hume City Youth Counselling and Support Service' will require two specialist staff members trained and experienced in youth counselling. With the continued growth in the number of young people living within Hume the provision of this service is critical as a support service ensuring the successful transition of young people into adulthood.

13) An additional officer to enable the Moving Forward Social Inclusion program to be undertaken. Young people who are highly disengaged from their school, home and community are the target group for the initiative with the aim being to assist them in re engaging with their community and develop their personal and social skills to enhance and sustain their chances of becoming active members of the community. The Moving Forward program is for teenagers who are disengaged from school, education/training or employment.

Page 23


Strategic Activity Performance Measure Performance Target

Completion of two major recreation facility projects

Cost of two projects Capital Works Budget 2011/12

Stage 1 Implementation of the John Ilhan Memorial Reserve Master Plan totalling $3.85m Boardman Stadium budget $1.54m carry forward plus 2011/12, $3.19m totalling $4.73m

2 court extension to Boardman Stadium, Sunbury

100 % complete for 2011/12

Stage 1 Implementation of the John Ilhan Memorial Reserve Master Plan

2.8 Strategic Objective 8: Appearance of the City To undertake programs to enhance a sense of community pride and the cleanliness, maintenance and appearance of public and private land. The activities and initiatives for each service category and key strategic activities are described below.


Net Cost $'000

(Revenue)

Waste & Environmental Services

This service provides kerbside rubbish collections of garbage, hard waste and green waste from all households and some commercial properties in Hume. It also provides street cleaning, drainage pit cleaning and street litter bins throughout Hume.

8,472

8,414 _ (58)

Technical Services This service conducts ongoing maintenance of Councils roads, drains and footpaths.

2,392

2,077 (315)

Local Law Services This service maintains and improves the health and safety of people and animals. It also provides education, regulation and enforcement of general Local Laws and relevant State legislation. This service facilitates the smooth flow of traffic and parking throughout the municipality through the provision of safe, orderly and equitable parking enforcement and education.

2,263

(212) (2,475)

Parks & Open Space

This service is divided into three main operational units. Bushland provides the management of conservation and parkland areas, creeks and other areas of environmental significance. Parks Management provides management and implementation of open space strategies and maintenance programs. Infrastructure Maintenance provides management of all parks and gardens and infrastructure maintenance.

12,672

12,592 _ (80)

Page 24

Initiatives 14) An additional waste compactor and operator will ensure that Council's waste and

organic bins are collected within agreed schedules, timeframes, in accordance with chain of responsibility legislations with the ability to cater for ongoing growth for an additional four years.

15) An additional Rear Loader Operator and Labourer will ensure that litter bins in high profile shopping precincts, active sporting facilities and passive open space and parks will be able to be serviced seven days per week. It is estimate that an additional 96 sites will be visited per week emptying an additional 384 litter bins. Weekend operations will ensure that reactive customer requests and litter bins can be emptied and attendance at special events and festivals can be actioned immediately.

16) Municipal growth and requirements to clean industrial/commercial precincts, VicRoads classified roads and to respond to emergency requirements now requires an additional mechanical road sweeper and operator. The additional sweeper will increase the annual sweeping kilometres by 25% and allow Council to increase sweeping in areas of need providing quicker response times.

17) Hume City Council plants around 5,000 street and reserve trees every year which is a large undertaking given the ongoing current environmental conditions. An additional Tree Establishment Team Leader will organise and manage all aspects of young tree management and establishment. The role would also ensure that trees are planted to specification and that each tree receives the maintenance required to get the tree established over the trees early years.

18) An additional three Mowing staff will allow Council to keep pace with growth. Over the past decade open space has increased to in excess of 1,400 hectares. The additional resources will offer greater flexibility within the turf unit and will ensure each crew has sufficient numbers to operate safely and efficiently and allow for comprehensive utilisation of fleet. This will also give greater support to existing staff in the non-peak period, thereby eliminating the reliance on contractors.

19) An additional certified gardener will allow for the delivery of greater landscape maintenance outcomes across the municipality. The gardener will develop a structured and measurable maintenance program that is proactive. The gardener will also provide greater maintenance consistency across all sites and ensure a safer environment for Hume residents.

20) An administration trainee position will enable local youth to train in administrative support and create a career path into the workforce. The position will provide support to senior staff in the Parks Department.

Key strategic activities Strategic Activity Performance Measure Performance Target Implement the Waste Wise Education Strategy

Conduct kerbside recycling bin inspections to reduce contamination

Increase community participation in waste management programs and initiatives

Increase recovery of materials from schools via recycling and composting

13,000 inspections per annum

Increase participation in community programs by 10%

5 schools per year participating in Resource Smart AuSSi Vic Waste Module

Page 25

2.9 Strategic Objective 9: Asset Management To provide a network of sustainable infrastructure that services the community to prescribed levels. The activities and initiatives for each service category and key strategic activities are described below.


Net Cost $'000

(Revenue)

City Infrastructure Directorate

This area includes the City Infrastructure Director and associated support which cannot be attributed to the direct service provision areas.

526

526 (0)

Subdivisions This service approves and supervises private development activities such as subdivisions and infrastructure associated with unit developments.

927

(290) (1,217)

Engineering & Support Services

This service prepares and conducts capital works planning for Councils main civil infrastructure assets in an integrated and prioritised manner in order to optimise their strategic value and service potential. These include roads, laneways, car parks, foot and bike paths, drains and bridges.

200

200 (0)

Projects & Contracts This service undertakes design, tendering, contract management and supervision of various works within Councils capital works program.

1,111

1,111 (0)

Initiatives 21) Additional funding is required for the ongoing management of subdivisional growth and

management and maintenance of various open space assets within Hume. Included are new trees, parks and reserves, playgrounds, road reserves and traffic treatments, major sports reserves, sports fields and other parks infrastructure.

22) An additional Subdivisions Checking Engineer and Subdivisions Supervisions Officer will provide additional support to the Subdivision department. With increased subdivisional developments proposed across the municipality for residential, industrial and commercial developments and the extension of the urban growth boundary, the additional resources are required to meet all service demands.

23) The addition of a Landscape Architect who will coordinate the implementation phases of public realm and open space capital improvement projects, including the design and construction phases and oversee the design, development and quality control during and post implementation.


Strategic Activity Performance Measure Performance Target Asset Management Plans

Update and adopt Asset Management Plans for the following two asset classes:

Buildings

Drainage

June 2012

Page 26

2.10 Strategic Objective 10: Natural Environment To ensure the protection and enhancement of Humes biodiversity, natural values and ecological systems, and to reduce the environmental impact of the Hume community. This will be undertaken through the adoption of sustainable management practices, systems and infrastructure. The activities and initiatives for each service category and key strategic activities are described below.


Net Cost $'000

(Revenue)

Sustainable Environment

This service develops environmental policies, coordinates and implements environmental projects and works with other services to improve Councils environmental performance. Reducing greenhouse gas emissions within Council operations and the community are a key priority.

1,716

1,602 (114)

Natural Landscape Maintenance

This service provides the management of conservation and parkland areas, creeks and other areas of environmental significance.

972

972 (0)

Landfill This service provides a site for the disposal of waste materials. Council operates a landfill facility at Sunbury and a Resource Recovery Centre at Campbellfield.

7,170

4,037 (3,133)


Strategic Activity Performance Measure Performance Target Commence the bulk changeover of 8,000 80 Watt Mercury Vapour street lights to new T5 technology

Quality Award Contract for Changeover

February 2012

Number of lights changed over in 2011/12

4,000

2.11 Performance statement The Key Strategic Activities (KSAs) detailed in the preceding pages, are summarised again in Appendix D. The KSA's, their performance measures, targets and results are audited at the end of the year and are included in the Performance Statement as required by section 132 of the Act. The Annual Report for 2011/12 will include the audited Performance Statement which is presented to the Minister for Local Government and the local community.

Page 27

2.12 Reconciliation with budgeted operating result Net Cost Strategic Objectives (Revenue) Revenue Expenditure $000 $000 $000 Accountable Leadership 30,313 (7,178) 37,491 Economy 1,832 (1,731) 3,563 Transport 2,494 (11) 2,505 Learning 4,663 (1,457) 6,120 Social Inclusion 1,871 (439) 2,310 Health, Safety and Wellbeing 7,463 (20,137) 27,600 Arts, Leisure and Recreation 4,444 (6,574) 11,018 Appearance of the City 22,871 (2,928) 25,799 Asset Management 1,547 (1,217) 2,764 Natural Environment 6,611 (3,247) 9,858 Total activities and initiatives 84,109 (44,919) 129,028 Other non-attributable (15,353) Deficit before funding sources 68,756 Rates and charges (107,952) Capital grants (4,066) Total funding sources (112,018) Surplus for the year (43,262)

Page 28

3. Budget influences This section sets out the key budget influences arising from the internal and external environment within which the Council operates. 3.1 Snapshot of Hume City Council Hume is located on the urban-rural fringe, 20 kilometres north-west of the centre of Melbourne. Hume was created in 1994 when the Shire of Bulla amalgamated with the majority of the City of Broadmeadows. Hume covers an area of 504 square kilometres and land uses within the municipality are extremely diverse; land uses include established residential areas, industry, vast rural areas, and areas committed for future urban growth. Population In June 2010, the preliminary estimated resident population of Hume was 171,996 people. In the 6 years from 2004 to 2010, the population grew by just over 25,000 people, an average annual growth rate of 2.7%. (Source: Australian Bureau of Statistics, Regional Population Growth, 2011). By 2016, Humes population is expected to exceed 187,000 people, with 63,121 households. (Source id Consulting, Hume Population Forecasts). Age Structure Hume has a relatively young age profile with 31.2% of persons aged less than 20 years, compared to 24.7% for the Melbourne Statistical Division (MSD). Similarly the proportion of persons aged 65 years or more is only 8.5% for Hume, compared to 12.6% for the MSD (Source: Australian Bureau of Statistics, 2009 Estimated Resident Population by Age, Victoria). Births On average, 2,604 babies have been born each year since 2000/01. In the 2009/10 financial year 2,602 babies were born in the municipality (Source: Department of Education and Early Childhood Development: Annual Data Report for Maternal and Child Health 2009/10). Cultural Diversity Almost two thirds (63.9%) of Humes population were born in Australia and 29.2% were born overseas. Slightly less than a quarter of residents (24.9%) were born overseas in a non-English speaking country. The most common overseas countries of birth of Hume residents are Turkey, Iraq, United Kingdom and Italy. Between 2001 and 2006 the proportion of residents born in Iraq has shown the greatest growth, increasing by 1.3%. Over one third (36.2%) of Hume residents speak a language other than English at home, compared to 26.7% for the MSD. The most common languages spoken at home, other than English for residents in Hume are Turkish, Arabic and Italian. The most common languages in the MSD are Italian, Greek, and Chinese languages. (Source: Australian Bureau of Statistics, 2006 Census of Population and Housing). Housing At April 2011, there was an estimated 56,210 residential properties in Hume (Source: Hume City Council rates database, April 2011). According to ABS 2006 Census of Population and Housing data, the majority of occupied private dwellings in Hume City are stand alone houses (87.4%). Semidetached, row, terrace, townhouses and the like account for 7.7% and flats, units or apartments account for 4.1% of private dwellings in Hume. Only 5.3% of private dwellings in Hume are unoccupied, compared to 7.5% in the MSD. (Source: Australian Bureau of Statistics, 2006 Census of Population and Housing). The majority of families living in Hume are couples with children (55.7%) which is higher than the MSD (48.4%). One parent families are also more common in Hume (17.7%) than the MSD (15.4%). Hume City has a lower proportion of families made up of couples without children (25.2%) than the MSD (34.1%). (Source: Australian Bureau of Statistics, 2006 Census of Population and Housing).

Page 29

Education and Occupation More than one third (38.9%) of people aged 20 years and over have completed year 12 or equivalent. This is lower than the MSD where the figure is 50.1%. There is a higher rate of females obtaining year twelve or equivalent (40.0%) than males (37.7%), mirroring the national trend.

More than one third (38.2%) of persons in Hume City aged 25 years and over with a qualification have a Certificate, compared to 26.0% for the MSD. The proportion of persons aged 25 years and over with a qualification in Hume City that have a Bachelor Degree is 16.5% compared to 26.7% for the MSD.

The most common industry of employment for persons aged 15 years and over in Hume City is the manufacturing sector, in which 17.5% of employed persons work. This is higher than the MSD at 12.9%. The second most common industry of employment is retail trade in which 11.7% of Hume Citys 15+ year old employed population works. This is followed by transport, postal and warehousing (9.9%), construction (8.3%) and health care and social assistance (7.9%). The proportion of persons aged 15 years and over in Hume City employed in professional, scientific and technical services is 3.8%, which is lower than the MSD figure of 8.3%. (Source: Australian Bureau of Statistics, 2006 Census of Population and Housing).

As of September 2010, Hume City had an unemployment rate of 10.0%, higher than the metropolitan Melbourne figure of 5.2%. Within Hume, the statistical local area (SLA) of Broadmeadows was experiencing an unemployment figure of 15.9%, compared to 8.5% for the Craigieburn SLA and 4.2% for the Sunbury SLA. (Source: Department of Education, Employment and Workplace Relations, Small Area Labour Markets Australia, September 2010 Quarter). Budget implications As a result of the Citys demographic profile there are a number of budget implications in the short and long term as follows: Cultural and linguistic diversity means that Council needs to use a variety of media in

languages other than English for mass communication with citizens and uses interpreting services for interpersonal communication with citizens. Council also draws on the abilities of its bilingual staff.

Over 17% of ratepayers are entitled to the pensioner rebate. As pensioners are often asset rich but income poor, the adoption of significant rate increases has a real impact on the disposable income of a significant proportion of our community. Council has hardship provisions in place but these can impact on cash balances when large volumes of ratepayers are involved.

The City is experiencing continued growth with an approximate increase of 3% in property numbers annually. The budget implications arise in Council having to cope with replacement and construction of infrastructure such as drains, footpaths and roads to cope with the growing population. These costs cannot be passed on to the developer and are paid for from rates. The rates received from new dwellings do not offset the significant infrastructure costs.

3.2 External influences In preparing the 2011/12 Budget, a number of external influences have been taken into consideration because they are likely to impact significantly on the services delivered by Council in the budget period. These include: Consumer Price Index (CPI) increases on goods and services of 2.7% per annum (ABS

release 25 January 2011). State-wide CPI is forecast to be 2.25% for the 2011/12 year (Victorian Budget Papers 2010/11);

Continuing growth of the municipality at 2.5-3% per annum;

Page 30

The Engineering Construction and Non-Residential Building Indices prepared by Econtech are forecast at 3.2% and 3.5% respectively (MAV Local Government Cost Index Report, 2010);

An allowance for a future defined benefits superannuation call; Increase in Victorian Grants Commission funding; The increasing cost of utility charges, especially electricity for street lighting; The increase to landfill levies payable to the Environment Protection Authority Victoria

(EPA) from $30 to $44 per tonne. Future increases in the landfill levy payable to the EPA are estimated at 0.3% subject to changes in legislation and confirmation of annual tonnages. These amounts will be reconfirmed on an annual basis when annual tonnages become known; and

Prevailing economic conditions which may have an impact on investment interest rates. 3.3 Internal influences As well as external influences, there are also a number of internal influences which are expected to have a significant impact on the preparation of the 2011/12 Budget. These matters have arisen from events occurring in the 2010/11 year resulting in variances between the forecast actual and budgeted results for that year and matters expected to arise in the 2011/12 year. These matters and their financial impact are set out below: The continued program to preserve Councils asset base, with $3.93 million being spent

on the footpath program throughout the City and a further $5.56 million being spent on road asset preservation works;

The continuing investment in libraries in Hume, including a $0.8 million investment in books for branches across the City; and

The implementation of the terms of the EBA which will result in an increase of: 1 July 2011 - 3.75% or $41.25 (whichever is the greater amount); and 1 July 2012 - 3.50% or $38.50 (whichever is the greater amount).

3.4 Budget principles In response to these influences, guidelines were prepared and distributed to all Council officers with budget responsibilities. The guidelines set out the key budget principles upon which the officers were to prepare their budgets. The principles included: Existing fees and charges to be increased at least with CPI or market levels; Grants to be based on confirmed funding levels; New revenue sources to be identified where possible; Service levels to be maintained at 2010/11 levels with an aim to use less resources and

an emphasis on innovation and efficiency; Agency staff and consultants to be minimised; Construction and material costs to increase in line with the Road Maintenance and

Construction Index; New initiatives or new employee proposals which are not cost neutral to be justified

through a business case; Real savings in expenditure and increases in revenue identified in 2010/11 to be

preserved; Operating revenues and expenses arising from completed 2010/11 capital projects to be

included; and No reliance on asset sales to fund works. However, Council will rigorously pursue

capital funding to create opportunities to bring forward capital works or to reduce the net cost to rates.

Page 31

3.5 Legislative requirements Under the Local Government Act 1989 (the Act), Council is required to prepare and adopt an annual budget for each financial year. The budget is required to include certain information about the rates and charges that Council intends to levy as well as a range of other information required by the Local Government (Finance and Reporting) Regulations 2004 (the Regulations) which support the Act. The 2011/12 budget, which is included in this report, is for the year 1 July 2011 to 30 June 2012 and is prepared in accordance with the Act and Regulations. The budget includes standard statements being a budgeted Income Statement, Balance Sheet, Cash Flows and Capital Works. These statements have been prepared for the year ended 30 June 2012 in accordance with Accounting Standards and other mandatory professional reporting requirements and in accordance with the Act and Regulations. It also includes detailed information about the rates and charges to be levied, the capital works program to be undertaken and other financial information, which Council requires in order to make an informed decision about the adoption of the budget. The budget includes consideration of a number of long term strategies to assist Council in considering the Budget in a proper financial management context. These include a Strategic Resource Plan for the years 2011/12 to 2014/15 (section 8), Rating Strategy (section 9) and Other Strategies (section 10) including debt management and asset management. 4. Analysis of operating budget This section analyses the operating budget including expected income and expenses of the Council for the 2011/12 year. 4.1 Budgeted income statement

Forecast Actual Budget Variance

Ref 2010/11 2011/12 $000 $000 $000

Total income 4.2 194,015 198,141 4,126 Total expenses 4.3 150,642 154,879 (4,237) Surplus for the year 43,373 43,262 111 Grants - non-recurrent 4.2.5 14,973 4,066 (10,907) Contributions - non-monetary assets 4.2.7 22,897 24,536 1,639 Net gain on disposal of property, plant, equipment and infrastructure

4.2.9 47 - (47)

Underlying surplus 4.1.1 5,456 14,660 9,204 4.1.1 Underlying Surplus ($9.2 million increase) The underlying result is the net surplus or deficit for the year adjusted for capital contributions, gains or losses on disposal of non-operating assets sold and other once-off adjustments. It is a measure of financial sustainability as it is not impacted by non-recurring or once-off items of revenues and expenses which can often mask the operating result. The underlying result for the 2011/12 year is a surplus of $14.66 million which is an increase of $9.2 million over the 2010/11 year.

Page 32

4.2 Income Forecast Actual Budget Variance Income Types Ref 2010/11 2011/12 $000 $000 $000 Rates and charges 4.2.1 99,974 107,952 7,978 Statutory fees and fines 4.2.2 7,330 6,798 (532) User fees 4.2.3 16,912 17,759 847 Grants - recurrent 4.2.4 26,117 28,762 2,645 Contributions - cash 4.2.5 2,275 5,379 3,104 Other income 4.2.6 3,490 2,889 (601) Net gain on disposal of property, plant, equipment and infrastructure 4.2.7 47 - (47) Contributions - non-monetary assets 4.2.8 22,897 24,536 1,639 Grants - non-recurrent 4.2.9 14,973 4,066 (10,907) Total income 194,015 198,141 4,126

CHANGE 2010/11 - 2011/12

-11,000

-9,000

-7,000

-5,000

-3,000

-1,000

1,000

3,000

5,000

7,000

9,000

Rates andcharges

Statutory feesand fines

User fees Grants -recurrent

Contributions -cash

Other income Net gain ondisposal of

property, plant,equipment andinfrastructure

Contributions -non-monetary

assets

Grants - non-recurrent

Total income

INCOME

$'00

0

Page 33

4.2.1 Rates and charges ($7.98 million increase) It is proposed that general rates be increased by 6.2% (including a 0.75% increase for the additional levy payable to the EPA and 0.5% increase for a Defined Benefits Superannuation Call) in 2011/12 increasing the total amount of rate income to $107.95 million. This includes rates in lieu of $8.55 million, an increase of $0.48 million from 2010/11. Appendix B includes a more detailed analysis of the rates and charges to be levied for 2011/12 and Councils Rating Strategy has been included at section 9. 4.2.2 Statutory fees and fines ($0.53 million decrease) Statutory fees relate mainly to fees and fines levied in accordance with legislation and include animal registrations, Health Act registrations and parking fines. Changes in statutory fees are made in accordance with legislative requirements. Statutory fees and fines are forecast to decrease by 7.3% or $0.53 million compared to 2010/11. This is mainly due to the sale of valuation data to other rating authorities in the 2010/11 year (which occurs every two years) and a reduction in infringements income. A detailed listing of statutory fees is available as part of the budget in Appendix E. 4.2.3 User fees ($0.85 million increase) User fees relate mainly to the recovery of service delivery costs through the charging of fees to users of Councils services. These include use of leisure, entertainment and other community facilities, landfill operations and the provision of human services such as family day care and home help services. In setting the budget, the key principle for determining the level of user charges has been to ensure that increases generally do not exceed CPI increases or market levels. User charges are projected to increase by 5% or $0.85 million over 2010/11. The main areas contributing to the increase are leisure services, $0.34 million due to increased patronage of Council facilities and Council landfills, $0.34 million as a result of an increase in fees for the recoupment of the EPA landfill levy. In addition, Council plans to increase user charges for all areas with at least expected inflationary trends over the budget period to maintain parity of user charges with the costs of service delivery. A detailed listing of fees and charges is available as part of the budget in Appendix E. 4.2.4 Grants recurrent ($2.65 million increase) Recurrent grants include all monies received from State and Federal sources for the purposes of funding the delivery of Councils services to ratepayers and contributions from other parties towards property development costs. Overall, the level of operating grants has increased by 10% or $2.65 million compared to 2010/11 and largely relates to the first instalment of the Victorian Grants Commission (VGC) funding for the 2010/11 year being brought forward and paid in the 2009/10 year. Significant movements in grant funding are summarised below:

Page 34

Forecast Actual Budget Variance Grant Funding Types 2010/11 2011/12 $000 $000 $000 Victorian Grants Commission (VGC) 8,626 11,558 2,932 City Communities 314 696 382 Aged & Disability Services 4,619 4,872 253 Emergency Management & Flood Relief 389 52 (337) Healthy Hume Program 494 - (494)

Increases in specific operating grant funding reflect expected increased demand for these services. The actual year on year increase in VGC funding is budgeted to be $1.36 million based on indicative allocation advice received from the VGC. 4.2.5 Contributions - cash ($3.1 million increase) Contributions - cash are expected to increase by 136% or $3.1 million and mainly due to developer contributions expected for Precinct Structure Plans in Greenvale and Craigieburn. This includes all cash contributions received by Council from developer, State, Federal and community sources. Developer cash contributions primarily relate to monies paid by developers toward community infrastructure and open space as part of planning approvals for property due to the completion of some major projects within Hume. 4.2.6 Other income ($0.6 million decrease) Other revenue includes lease income and interest on investments and rate arrears. Other income is forecast to decrease by 17% or $0.6 million compared to 2010/11. This is mainly due to the reduction in Councils available cash reserves during 2011/12 to fund major capital works projects. 4.2.7 Net gain on disposal of property, plant, equipment & infrastructure ($0.05 million decrease) Proceeds from the sale of Council assets are forecast to be $1.88 million for 2010/11 and relate to the planned cyclical replacement of part of the plant and vehicle fleet and proceeds from the sale of Council land. The written down value of these assets is expected to be $1.84 million. Council has not budgeted for any further sales of land in the future. 4.2.8 Contributions non - monetary assets ($1.64 million increase) Contributions include roads, footpaths, drainage and land contributed by developers as part of the developer contribution scheme. Contributions are expected to increase by 7.2% or $1.64 million. This increase reflects the strong level of development and growth within the municipality.

Page 35

4.2.9 Grants non - recurrent ($10.91 million decrease) Grants non-recurrent include all monies received from State, Federal and community sources for the purposes of funding the capital works program. Overall the level of grants non-recurrent has decreased by 72.8% or $10.91 million compared to 2010/11 due mainly to specific funding for capital works projects. Section 6 - Analysis of Capital Budget includes a more detailed analysis of the Grants non-recurrent expected to be received during the 2011/12 year. 4.3 Expenses Forecast Actual Budget Variance Expenditure Types Ref 2010/11 2011/12 $000 $000 $000 Employee benefits 4.3.1 73,265 78,137 (4,872) Materials and services 4.3.2 47,266 44,727 2,539 Grants, contributions and donations 4.3.3 2,766 3,504 (738) Depreciation and amortisation 4.3.4 22,215 23,891 (1,676) Finance costs 4.3.5 1,548 1,476 72 Other expenses 4.3.6 3,582 3,144 438 Total expenses 150,642 154,879 (4,237)

CHANGE 2010/11 - 2011/12

-4,000

-3,000

-2,000

-1,000

0

1,000

2,000

3,000

4,000

5,000

Employeebenefits

Materials andservices

Grants,contributions

anddonations

Depreciationand

amortisation

Financecosts

Otherexpenses

Totalexpenses

EXPENSES

$'00

0

Page 36

4.3.1 Employee benefits ($4.87 million increase) Employee benefits include all labour related expenditure such as wages and salaries and on-costs such as allowances, leave entitlements, employer superannuation, etc. Employee benefits are forecast to increase by $4.87 million compared to the 2010/11 forecast. This increase relates to five key factors: The implementation of the terms of the EBA which will result in an increase on 1 July

2011 of 3.75% or $41.25 (whichever is the greater amount); Anticipated non-EBA wages growth of 1.6% due mainly to keep pace with the growing

demands in service delivery, maintenance of open space and roads and infrastructure needs. Additional funding will be available to cover some of these costs;

A provision for an expected future defined benefits superannuation call payable to Vision Super;

The inclusion of new positions approved during the new initiative process; and The fulfilment of current unfilled advertised positions. 4.3.2 Materials and services ($2.54 million decrease) Materials and services includes the purchase of consumables, payments to contractors for the provision of services and utility costs. Materials and services are forecast to decrease by 5.37% or $2.54 million compared to 2010/11. Fees payable to the EPA are expected to increase by $0.84 million predominantly due to the increase in landfill levies payable for the disposal of Council waste (gate fees). The EPA levy has increased from $30 per tonne to $44 per tonne. Agency staff expenses are expected to decrease by 70% or $0.9 million and consultants are expected to decrease by 48% or $0.84 million as it is expected that there will be a full compliment of staff next year. Contractors are expected to decrease by 6% or $1.4 million primarily due to the completion of one off projects and converting contracted service to in house staff and favourable procurement contracts. 4.3.3 Grants, contributions and donations ($0.74 million increase) Grants, contributions and donations include contributions to community groups and organisations such as the Metropolitan Fire Brigade and EPA. The increase is mainly due to the increase in landfill levies payable to the EPA for the disposal of waste at Councils landfills. 4.3.4 Depreciation and amortisation ($1.68 million increase) Depreciation is an accounting charge which attempts to measure the usage of Councils property, plant and equipment including infrastructure assets such as roads and drains. The increase of $1.68 million for 2011/12 is due mainly to the completion of the 2011/12 capital works program during the year which includes the Craigieburn Library and Learning Centre, the Broadmeadows Leisure Centre redevelopment, the Boardman Stadium two court extension and the full year effect of depreciation on the 2010/11 capital works program. Refer to section 6 - Analysis of Capital Budget for a more detailed analysis of Councils capital works program for the 2011/12 year. 4.3.5 Finance costs ($0.07 million decrease) Finance costs relate to interest charged by financial institutions on funds borrowed. The reduction in borrowing costs results from the planned reduction in borrowings due to repayment of principal in accordance with loan agreements.

Page 37

4.3.6 Other expenses ($0.44 million decrease) Other expenses relate to operating lease rentals, audit fees, bank charges and Councillor allowances. The reduction in other expenses is due to the buyout of a bin lease in 2010/11. 5. Analysis of budgeted cash position This section analyses the expected cash flows from the operating, investing and financing activities of Council for the 2011/12 year. Budgeting cash flows for Council is a key factor in setting the level of rates and providing a guide to the level of capital expenditure that can be sustained with or without using existing cash reserves. The analysis is based on three main categories of cash flows:

Operating activities Refers to the cash generated or used in the normal service delivery functions of the Council. Cash remaining after paying for the provision of services to the community may be available for investment in capital works, or repayment of debt.

Investing activities Refers to cash generated or used in the enhancement or

creation of infrastructure and other assets. These activities also include the acquisition and sale of other assets such as vehicles, property and equipment.

Financing activities Refers to cash generated or used in the financing of Council

functions and include borrowings from financial institutions and advancing of repayable loans to other organisations. These activities also include repayment of the principal and interest component of loan repayments for the year.

Page 38

5.1 Budgeted cash flow statement

ForecastActual Budget Variance

Ref 2010/11 2011/12$000 $000 $000

Inflows Inflows Inflows(Outflows) (Outflows) (Outflows)

Cash flows from operating activitiesReceipts Rates and charges 99,974 107,952 7,978 Grants - recurrent 26,117 28,762 2,645 Grants - non-recurrent 14,973 4,066 (10,907)User fees 16,509 17,414 905 Statutory fees and fines 7,110 6,572 (538)Interest 3,290 2,889 (401)Contributions 1,593 4,676 3,083 Payments to employees (71,412) (76,457) (5,045)Materials and services (44,451) (45,097) (646)Grants, contributions and donations (2,766) (3,504) (738)Other expenses (3,582) (3,144) 438 Net cash provided by operating activities 5.1.1 47,355 44,129 (3,226)

Cash flows from investing activitiesPayments for property, plant, equipment and infrastructure (48,035) (62,088) (14,053)Proceeds from sales of property, plant, equipment and infrastructure 1,884 859 (1,025)Net cash used in investing activities 5.1.2 (46,151) (61,229) (15,078)

Cash flows from financing activitiesFinance costs (1,348) (1,276) 72 Repayment of interest-bearing loans and borrowings (3,437) (3,773) (336)Proceeds from interest-bearing loans and borrowings - 3,500 3,500 Net cash used in financing activities 5.1.3 (4,785) (1,549) 3,236 Net decrease in cash and cash equivalents (3,581) (18,649) (15,068)Cash and cash equivalents at the beginning of the financial year 43,725 40,144 (3,581)

Cash and cash equivalents at the end of the financial year 5.1.4 40,144 21,495 (18,649)

Source: Appendix A 5.1.1 Operating activities ($3.23 million decrease) Operating activities refer to the cash generated or used in the normal service delivery functions of Council. The decrease in cash provided by operating activities is due mainly to a $10.91 million decrease in grants non-recurrent to help fund the capital works program and an increase in employee benefit payments of $5.05 million due to factors outlined at 4.3.1. This is p

hume city council annual budget 2011/2012 · hume city council annual budget 2011/2012. ... the...

Documents