Addendum Agenda of Ordinary Meeting

513

Ordinary Meeting 25 May 2016

Chief Financial Officer

CFO 05

Draft Delivery Program and 2016-17 Operational Plan and Budget (including Revenue Pricing Policy)

Strategic Direction	Leading Proactive Council Position Council as an industry leader, delivering best practice and innovation
Key Policy	Long-Term Financial Plan
File Ref	136165.2016
Report By	Vishwa Nadan - Manager Financial Services
Approved By	Gary Grantham - Chief Financial Officer / Director Corporate Services

Executive Summary

Council at its extraordinary meeting on 4 May 2016 considered a report on the Draft Delivery Program and 2016-17 Operational Plan and Budget (including Revenue Pricing Policy).

The resolution from that meeting is shown below (in part) in italics.

“That Council:

6. If Council Officers are unable to provide all additional information as requested in the preceding motion within sufficient time to allow the 2016/17 budget to become operative then the following interim actions should take place;

a. CFO identify;

i. All operating budget items critical for the day to day activities of Council including but not limited to salaries, utilities, fuel, consumables, waste expenses to be advertised in the usual manner to meet 2016/17 Budget deadlines.

ii. All other non-critical expenditure is to be quarantined until all outstanding budget enquiries are resolved, including matters such as unawarded tenders, non-contractual works and hold all unfilled vacancies.

iii. All usual public notifications within this interim will note the outstanding matters to be clarified by Council Officers prior to the final budget confirmation.”

Although Council Officers will be providing the requested information required by CEO 01 Extraordinary Meeting 4 May 2016, an Emergency Budget as requested within 6(a) of the same resolution has been prepared, resulting in an annualised surplus of $5.695m (FFTF $4.681m).

The Emergency Budget is intended to be operational for a limited time until the final budget is approved. The timeframe for the Emergency Budget is unclear; therefore an annualised Emergency Budget was prepared. As non-committed non-critical expenditure has been removed, the outcome of the budget will result in a general decrease in services provided by Council.

RECOMMENDATION

That Council:

1. Approves the Emergency Budget.

2. Delegate to the A/CEO to amend the draft Delivery Program, draft Operational Plan and the draft Revenue Pricing Policy (Schedule of Fees and Charges) that was presented in CFO 05, 27 April 2016 as a result of changes resulting from the approved 2016/17 Budget.

3. Places the draft Delivery Program and Operational Plan including the draft 2016-17 Emergency Budget and Revenue Pricing Policy (Schedule of Fees and Charges) on public exhibition for a period of 28 days to allow for public comments and submissions.

4. Receives a further report after a review of public submissions at the June Council meeting.

REPORT

Although Council Officers will be providing the requested information required by CEO 01, Extraordinary Meeting 4 May 2016, an Emergency Budget as requested by 6(a) within the same resolution has been prepared, that results in an annualised surplus of $5.695m (FFTF $4.681m).

The Emergency Budget is intended to be operational for a limited time only until the final budget is approved. The timeframe for the Emergency Budget is unclear and therefore an annualized Emergency Budget was prepared. As non-committed non-critical expenditure has been removed, the outcome of the budget will result in resources not being fully utilised and a general decrease in services provided by Council.

Attachment 1 provides a comparison of the Emergency Budget compared to the Budget recommended by Management in CFO 05, 27 April 2016 resulting in a surplus of $0.150m (FFTF deficit of $0.864m). The favourable variance of $5.545m (FFTF $5.545m) ($5.695m surplus compared to the previously proposed $0.150m surplus) is represented by a reducing Materials ($4.534m), Legal Costs ($0.139m), Consultants ($1.751m) and Other Expenses ($1.917m). Savings will be achieved by extending intervals between maintenance and offering services. Note; Employee Expenses in the Emergency Budget is an additional $2.797m as Industrial efficiencies will not be pursued.

The additional $40 Domestic Waste charge has been included.

Attachment 2 provides a general overview of reduction of funding to services (both Public and Internal to council).

To provide background for the comparison, Attachment 3 lists the initiatives that were proposed in CFO 05, 27 April 2016 to achieve the targeted budget deficit of $0.888m. Many of the initiatives in the budget are significant requiring considerable process reengineering and lead time for savings to be realised from 1 July 2016.

The 2016-17 Operational Budget has yet to be approved by Council. As such, many of the initiatives listed in Attachment 3 would not be fully implemented from 1 July 2016 which places further pressure on Council’s budget position.

CONSIDERATIONS

Economic and Financial	Further develop a commercial centre that accommodates a variety of employment opportunities. Deliver and maintain a range of transport related infrastructure such as footpaths, bus shelters and bikeways. Encourage and promote businesses to develop in the hospital, health and medical precinct (of the City Centre). Provide efficient parking for the City Centre. Enhance the environmental performance of buildings and homes. Deliver a high quality local road system including provision and maintenance of infrastructure and management of traffic issues. Facilitate economic development. Facilitate the development of new tourism based on local attractions, culture and creative industries. Further develop a commercial centre that accommodates a variety of employment opportunities (in the City Centre). There are no economic and financial considerations.
Environmental and Sustainability	Minimise household and commercial waste. Manage the environmental health of waterways. Manage air, water, noise and chemical pollution. Retain viable opportunities for local food production while managing land use to meet urban growth. Enhance the environmental performance of buildings and homes. Protect, enhance and maintain areas of endangered ecological communities and high quality bushland as part of an attractive mix of land uses. Raise community awareness and support action in relation to environmental issues. Promote an integrated and user friendly public transport service. Support the delivery of a range of transport options. There are no environmental and sustainability considerations.
Social and Cultural	Raise awareness in the community about the available services and facilities. Provide cultural centres and activities for the enjoyment of the arts. Support policies and plans that prevent crime. Preserve and maintain heritage, both landscape and cultural as urban development takes place. Regulate for a mix of housing types that responds to different population groups such as young families and older people. Support community organisations, groups and volunteers to deliver coordinated services to the community. Promote community harmony and address discrimination. Support access and services for people with a disability. Deliver high quality services for children and their families. There are no social and cultural considerations.
Civic Leadership and Governance	Act as an environmental leader in the community. Undertake communication practices with the community and stakeholders across a range of media. Foster neighbourhood pride and a sense of responsibility. Facilitate the development of community leaders. Encourage the community to engage in Council initiatives and actions. Provide information about Council’s services, roles and decision making processes. Deliver services that are customer focused. Operate a well developed governance system that demonstrates accountability, transparency and ethical conduct. Actively advocate for federal and state government support, funding and services. There are no civic leadership and governance considerations.

ATTACHMENTS

1. Budget Comparison View

2. Reduction Funding General Overview View

3. 27 April 2016 Budget Initiatives View

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CFO 05	Draft Delivery Program and 2016-17 Operational Plan and Budget (including Revenue Pricing Policy)
Attachment 1	Budget Comparison

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CFO 05	Draft Delivery Program and 2016-17 Operational Plan and Budget (including Revenue Pricing Policy)
Attachment 2	Reduction Funding General Overview

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CFO 05	Draft Delivery Program and 2016-17 Operational Plan and Budget (including Revenue Pricing Policy)
Attachment 3	27 April 2016 Budget Initiatives