COB-RGB

 

 

 

 

 

Special Council Agenda

 

 

 

27 July 2020

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

special council MEETING NOTICE AND AGENDA – 27 July 2020

 

 

 

TO:                  THE MAYOR AND COUNCILLORS

 

NOTICE is given that a meeting of the Special Council will be held in the Council Chambers, Administration Building, Southern Drive, Busselton on Monday, 27 July 2020, commencing at 5.30pm.

 

Your attendance is respectfully requested.

 

 

DISCLAIMER

Statements or decisions made at Council meetings or briefings should not be relied on (or acted upon) by an applicant or any other person or entity until subsequent written notification has been given by or received from the City of Busselton. Without derogating from the generality of the above, approval of planning applications and building permits and acceptance of tenders and quotations will only become effective once written notice to that effect has been given to relevant parties. The City of Busselton expressly disclaims any liability for any loss arising from any person or body relying on any statement or decision made during a Council meeting or briefing.

 

 

 

Mike Archer

 

CHIEF EXECUTIVE OFFICER

 

24 July 2020


CITY OF BUSSELTON

Agenda FOR THE Special Council MEETING TO BE HELD ON 27 July 2020

TABLE OF CONTENTS

 

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Attendance, Apologies & Leave Of Absence. 4

2....... PUrpose Of Meeting.. 4

3....... Public Question Time. 4

4....... Disclosure Of Interests. 4

5....... Presentations By Parties With An Interest. 4

6....... Finance and Corporate Services Report. 5

6.1          ADOPTION OF 2020/21 ANNUAL BUDGET. 5

7....... Closure. 144

 


Special Council                                                                       4                                                                          27 July 2020

 

1.               Attendance, Apologies & Leave Of Absence 

Apologies

 

Approved Leave of Absence

 

Nil

 

2.               PUrpose Of Meeting

 

3.               Public Question Time 

 

4.               Disclosure Of Interests

Conflicts of Interest are dealt with in the Local Government Act, Rules of Conduct Regulations and the Administration Regulations.  Members must declare any potential conflict of interest they have in a matter on the Council Agenda.

 

5.               Presentations By Parties With An Interest


Special Council                                                                       5                                                                          27 July 2020

6.               Finance and Corporate Services Report

6.1             ADOPTION OF 2020/21 ANNUAL BUDGET

STRATEGIC GOAL

6. LEADERSHIP Visionary, collaborative, accountable

STRATEGIC OBJECTIVE

6.1 Governance systems, process and practices are responsible, ethical and transparent.

SUBJECT INDEX

Budget Planning and Reporting

BUSINESS UNIT

Financial Services

REPORTING OFFICER

Manager Financial Services - Paul Sheridan

AUTHORISING OFFICER

Director Finance and Corporate Services - Tony Nottle

NATURE OF DECISION

Executive: substantial direction setting, including adopting strategies, plans and policies (excluding local planning policies), tenders, setting and amending budgets, funding, donations and sponsorships, reviewing committee recommendations

VOTING REQUIREMENT

Absolute Majority

ATTACHMENTS

Attachment a   Annual Budget 2020-21

Attachment b    Changes & Additions to Reserve Names & Purposes  

 

OFFICER RECOMMENDATION 1

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

1.       That the Council pursuant to the provisions of section 6.2 of the Local Government Act 1995 and Part 3 of the Local Government (Financial Management) Regulations 1996 adopts the 2020/21 Annual Budget as per Attachment A for the City of Busselton, which incorporates the following:

 

·    Statement of Comprehensive Income by Nature or Type                       

·    Statement of Comprehensive Income by Program                                    

·    Statement of Cash Flows                                                                                      

·    Rate Setting Statement by Program                                                                

·    Notes to and Forming Part of the Budget

·    Schedule of Capital Projects and Initiatives

 

OFFICER RECOMMENDATION 2

SIMPLE MAJORITY REQUIRED

 

That Council:

1.       Notes that the loan facility for the Busselton Performing Arts and Convention Centre as indicated in Note 6 on page 30 of the 2020/21 budget documentation is in accordance with Council resolution #C2006/066 (borrowing up to $17 million) and it is estimated to draw down up to $7.5 million in the 2020/21 financial year; and

 

2.       Notes that the raising of this loan will be subject to a further decision of Council after it has considered the tenders for construction at a future ordinary Council meeting.

OFFICER RECOMMENDATION 3

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

That Council:

 

1.     For the purpose of yielding the deficiency disclosed by the Municipal Budget 2020-21 adopted above, Council pursuant to sections 6.32, 6.33, 6.34 and 6.35 of the Local Government Act 1995 impose the following differential, specified area, general and minimum rates on Gross Rental and Unimproved Values.

 

Noting that the rates and values have been maintained at 2019/20 values ($0 increase) in response to the COVID-19 pandemic and the Local Government (COVID-19 Response) Order 2020.

 

Description

Rate in

the $

Minimum Payment  $

Zone Groups (GRV)

 

 

Residential

0.098490

1,375

Residential – Vacant Land

0.098490

1,375

Residential Holiday Homes

0.108339

1,430

Industrial

0.113732

1,375

Industrial – Vacant Land

0.113732

1,375

Commercial

0.113732

1,375

Commercial – Vacant Land

0.113732

1,375

 

 

 

Land Use Groups (UV)

 

 

Primary Production

0.004404

1,375

UV Rural

0.004455

1,500

UV Commercial

0.008037

1,375

 

 

 

Specified Area Rates

 

 

Port Geographe

0.015719

Nil

Provence GRV

0.014462

Nil

Provence UV

0.000143

Nil

Vasse GRV

0.018385

Nil

 

2.       Adopt the rate payment instalment options and associated annual fees in accordance with section 6.45 (3) of the Local Government Act 1995, as follows*:

 

a)         Bi-Monthly $18.00

b)        Monthly $20.00

c)         Fortnightly $25.00

d)        Weekly $30.00

 

3.    Adopts a per annum interest rate on rates paid by instalments in accordance with section 6.45 (3) of the Local Government Act 1995*:

 

a)         Bi-Monthly 5.5%

b)        Monthly 5.5%

c)         Fortnightly 5.5%

d)        Weekly 5.5%

 

4.    Adopts an interest rate of 8.0% per annum on all outstanding rates in accordance with section 6.51 (1) of the Local Government Act 1995*, noting that the interest rates have been reduced from 2019/20 values (3% decrease) in response to the COVID-19 pandemic and the Local Government (COVID-19 Response) Order 2020.

 

5.    In accordance with regulation 64(2) of the Local Government (Financial Management) Regulations 1996, adopts the following Instalment options to be available:

 

 

Full payment and 1st instalment due date

4th September 2020

2nd instalment due date

4th November 2020

3rd instalment due date

4th January 2021

4th instalment due date

4th March 2021

Weekly direct debit first and last instalment dates

4th September 2020 to 4th June 2021

Fortnightly direct debit first and last instalment dates

4th September 2020 to 28th May 2021

Monthly direct debit first and last instalment dates

4th September 2020 to 4th June 2021

 

Noting additional payment methods have been established to assist ratepayers in response to the COVID-19 pandemic and the Local Government (COVID-19 Response) Order 2020.

 

6.    Adopts the following annual Refuse Collection and Recycling charges for the City of Busselton for the 2020/2021 financial year, noting that the charges have been maintained at 2019/20 values ($0 increase) in response to the COVID-19 pandemic and the Local Government (COVID-19 Response) Order 2020:

 

a)         Commercial Waste Charges                                    $169.00

b)        Domestic Waste Charges                                         $169.00

c)         Recycling Collection Charge - Domestic             $82.00

d)        Commercial Recycling Collection Charge          $82.00

 

7.    In accordance with section 66(1) and section 66(3) of the Waste Avoidance and Resource Recovery Act 2007, applies the minimum payment provisions of section 6.35 of the Local Government Act 1995, and adopts a Waste Infrastructure Rate as follows noting that the charges have been maintained at 2019/20 values ($0 increase) in response to the COVID-19 pandemic and the Local Government (COVID-19 Response) Order 2020:

 

a)         GRV General Properties – Rate in the dollar: 0.001 Cents, minimum $49

b)        UV General Properties – Rate in the dollar: 0.0004 Cents, minimum $49

 

8.    Pursuant to section 6.11 of the Local Government Act 1995, Council adopt the reserves and reserve fund budget contained at note 7 of the budget including amendment of the Reserve Names and Purposes as indicated in Attachment B including the establishment of three new reserves being:

a)         Debt Default Reserve

Purpose: To provide for potential default on debts owing to the City, particularly in relation negative economic circumstances caused by a declared state of emergency (such as COVID-19).

b)        Marketing & Area Promotion Reserve

Purpose: To fund the City’s contributions and expenditure on tourism, marketing, area promotion and events activities as a result of MERG funding allocations.

c)         LED Street Lighting Replacement Program Reserve

Purpose: To provide funds for the on-going replacement of street lighting throughout the district with LED capacity.

 

9.    Adopts the Councillors fees and allowances as follows, noting that the fees and allowances have been maintained at 2019/20 values ($0 increase) in response to the COVID-19 pandemic and the Local Government (COVID-19 Response) Order 2020:

 

a)         Councillor Annual Sitting Fees $29,910

b)        Mayor Annual Sitting Fee $41,788

c)         Mayor’s Allowance $80,129

d)        Deputy Mayor’s Allowance $20,032

e)        Telecommunications and Information Technology Allowance $3,500.

 

10.  Reaffirms the adoption of its Schedule of Fees and Charges for the 2020/2021 financial year, as amended and comprised within the 2020/2021 Draft Annual Budget document, with the addition of new fees being for noting that all previous fees and charges listed in the 2019/20 Annual Budget remain unchanged:

 

a)    Note added to clarify that the charge for an “All Day” booking of one of the Hire Facilities (e.g. Undalup Room or High Street Hall) will be capped at 8 hours;

 

b)    A “Membership Cancellation Administration fee” in the amount of $25 was included for both the GLC and NCC. The fee is included in membership contracts but had not been included in the List of Fees and Charges; and

 

c)    Fees have been included in the ArtGeo section for the City of Busselton Art Award Entry; Market Stall and Heritage Tours. These fees are in place but had not been included in the List of Fees and Charges.

 

11.  Pursuant to regulation 34(5) of the Local Government (Financial Management) Regulations, the Council adopts a material variance reporting threshold with respect to financial activity statement reporting for the 2020/2021 financial year as follows:

 

a)    Variances equal to or greater than 10% of the year to date budget amount as detailed in the Income Statement by Nature and Type/ Statement of Financial Activity report, however variances due to timing differences and/or seasonal adjustments are to be reported only if not to do so would present an incomplete picture of the financial performance for a particular period; and

 

b)    Reporting of variances only applies for amounts greater than $25,000.

 

*These items are also subject to the Local Government (COVID-19 Response) Order 2020 and the City of Busselton COVID-19 Financial Hardship Policy.

 

EXECUTIVE SUMMARY

This report requests the Council to formally consider the attached budget papers in order to adopt the 2020/2021 Draft Municipal Budget (the Budget). In addition, Council is also requested to consider the Budget in conjunction with the impacts of the Local Government (COVID-19 Response) Ministerial Order 2020.

 


 

BACKGROUND

Pursuant to section 6.2 of the Local Government Act 1995 (the Act), a local government is to prepare and adopt an annual budget between 1 June and 31 August each year, or such extended time as the Minister allows.

 

Staff commenced the preparation of the Budget in January 2020 and have provided Elected Members, staff, residents and electors the opportunity to have input into the Budget through the development of the informing documents including the Long Term Financial Plan (LTFP), 4 year Corporate Business Plan (CBP) the Strategic Community Plan and various workshops associated with the development of these documents. Council developed the Budget through a series of workshops in June 2020, as well as drawing on the extensive work carried out with the development of the LTFP and the workshops held in March and April of 2020.

 

The COVID-19 pandemic has already had an impact on the original projections and assumptions that were applied to the LTFP. Therefore this Budget will form the base of a revised LTFP into the near future.

 

At Council’s special meeting held on 1 April 2020, consideration was given to the City’s response to COVID-19. As a result, Council resolved (C2004/104):

 

              …Endorse the following principles to guide the Chief Executive Officer when preparing the 2020/21 Annual Budget:

(a)       Not increasing rates for the 2020/21 financial year;

(b)       Introduction of weekly, fortnightly and monthly payment options for rates payments;

(c)       Reviewing salaries and wages growth;

(d)       Reviewing of capital works program of non-essential priority works;

(e)       Reducing interest and payment charges to rates billing and collection;

(f)        Relaxing terms and conditions on payment arrangements on a case by case basis;

(g)       Assuming a significant reduction in revenue from fees and charges;

(h)       Assuming an increase in the non-payment of rates;

(i)        Consideration of service level requirements and its impact on operational expenditure;

(j)        Consideration of new borrowings to assist with capital works and liquidity;

(k)       Consideration of revised 20/21 Community Bids funding package;

(l)        Consideration of a revised 2020/21 marketing and events sponsorship package

(m)     Consideration of the repurposing of the unallocated and unspent funds from the 2019/20 marketing and events budgets generated through the Industrial and Commercial Differential Rate;

(n)       Consideration of the utilisation of the City’s existing cash reserves for business continuity; and

(o)       Seeking to apply for Federal and State Government grants that may provide opportunities for employment creation and capital/operating works funding.

 

Council also endorsed a Financial Hardship Policy based on the model policy of the Western Australian Local Government Association (WALGA). The Budget has been prepared considering the above resolution of Council and the current Ministerial Orders.

OFFICER COMMENT

The Budget as presented for consideration is reflective of the documents workshopped with Council during June 2020, and incorporates amendments determined during that process.

 

A key component of the Budget development process is the reference to the City’s LTFP. While the current iteration of the LTFP was prepared prior to COVID-19, it still forms the majority of the capital projects in accordance with other informing documents including:

 

·    Community Strategic Plan

·    Corporate Business Plan

·    Sport and Recreation Facilities Strategic Plan

·    Asset Management Plans

·    Master Plans (Busselton Foreshore, Meelup Regional Park etc.)

·    Workforce Plan

·    Other Council adopted strategies.

 

In accordance with Council’s resolution (C2004/104) made on 1 April 2020, the Budget is presented to Council as a balanced budget with the following measures in place:

 

1.   A freezing of rates in the dollar and charges at 2019/20 levels

2.   Freezing City of Busselton fees and charges at 2019/20 levels

3.   Reducing instalment and penalty interest on rates as per the Ministerial Orders

4.   Establishment of a $500,000 Debt Default Reserve

5.   Relief and waiver provision for tenants affected by COVID-19

 

The Budget has continued to be amended subsequent to the workshops, to reflect matters that have arisen during the intervening period.  Whilst these amendments could have been deferred from inclusion in the Budget and raised for consideration as part of this report, it is felt that presenting the Council with a complete and balanced budget is a preferable option. This has been the process in the past.

 

Municipal Fund Net Surplus 2019/20

The City finished the 2019/20 financial year with an unaudited budget surplus figure of $473,794, representing approximately 0.3% of total expenditure less transfers to reserves. Given the impact of COVID-19 on the City of Busselton as well as a number of significant storm events throughout 2019/20 this is a remarkable end of year result. This is predominately a reflection of the methodology applied to quarantine certain funding sources into reserves to reduce the impacts on the municipal fund.

 

Rates

An original rate increase of 2.75% was initially proposed for year 1 of the LTFP, and was included in the very first iteration of the Budget. However, as a result of the fallout of COVID-19 and the Ministerial Orders, a 0% rates increase is now proposed.

 

The Budget predicts an amount of $52,759,360 will be raised via rates.

 


 

Differential Rates

In accordance with an Order set by the Minister for Local Government; Heritage; Culture & the Arts, Local Governments that resolve to set differential general rates and minimum payments at a level no higher than that imposed in 2019/20, will not be required to advertise their differential rates or consider submissions in accordance with section 6.36 of the Local Government Act 1995.

 

Council is proposing that the 2020/21 financial year differential rates in the dollar and minimum payments will be no higher than those imposed for the 2019/20 financial year.

 

Revaluations

The standard annual revaluation of Unimproved Valuations (UV) has been completed by Landgate Valuation Services (LVS) and will be effective from the 1st July 2020. There are no significant UV valuation changes evident.

 

Both UV and Gross Rental Valuations (GRV) determine the distribution of total rate burden between Ratepayers.  Whilst Council can control the total amount of rates to be collected, it is unable to determine what an individual property valuation will be and therefore what rate amount it will contribute.

 

Where a property’s UV valuation has increased then the overall rate increase will usually be above the proposed 0% increase. Conversely where a properties UV valuation has decreased then the overall rate increase will usually be below the proposed 0% increase.

 

Further valuation information can be obtained at www.landgate.wa.gov.au/valuations.

 

 


 

Waste Charges

There is to be no increases in waste charges and have been maintained at the following levels:

 

Charge Type

2019/2020

2020/2021

Increment

Refuse Removal Commercial

 $          169

 $          169

 $             0

Refuse Removal Domestic

 $          169

 $          169

 $             0

Recycling Fees - Domestic

 $             82

 $             82

 $             0

Recycling Fees  - Commercial

 $             82

 $             82

 $             0

 

Waste Avoidance and Resource Recovery Act Charges (WARR Act)

There has been no increase in the WARR Act charge.  It remains at $49.

 

Loan Borrowings

The Budget includes $7.7M in proposed new borrowing, for the following purposes:

 

ð Community Groups Self Supporting Loans  ($200K)

Self-Supporting Loans amounting to $200k have been included in the Budget for provision of loan funding to other community groups, enabling them to borrow funds at lower interest rates through support of the City.  Liability for the repayment of the loans remains with the community group. These loans are considered on request.

 

ð Busselton Performing Arts Convention Centre (the BPACC) ($7.5M)

Per council resolution C2006/006, council endorsed as a funding strategy the entering into of a loan facility of up to $17M over a 20 year term.  This facility will be applied for with the Western Australian Treasury Corporation, however the drawdown in the 2020/21 financial year will be for $7.5M only as this is the expected amount required in 2020/21. The City will access a liquidity loan facility to only draw down what is required.

 

The process for applying for the loan for the BPACC will not commence until after the Council has considered tender documentation and confirms the required amount. To assist Council with clarity and understanding, officers request Council note that there is an additional process to be undertaken when considering the tenders for the BPACC before any application is made for the loan funds.

 

New Reserves

The City has significant cash reserves that total in excess of $45.8M and restricted cash assets of $6.3M. Three new reserves have been added to the Budget:

a)         Debt Default Reserve

Purpose: To provide for potential default on debts owing to the City, particularly in relation to negative economic circumstances caused by a declared state of emergency (such as COVID-19).

b)        Marketing & Area Promotion Reserve

Purpose: To fund the City’s contributions and expenditure on tourism, marketing, area promotion and events activities as a result of MERG funding allocations.

c)         LED Street Lighting Replacement Program Reserve

Purpose: To provide funds for the on-going replacement of street lighting throughout the district with LED capacity.

 

Additionally, some minor changes have been made to the names and purposes of a small number of the Reserves and these have been incorporated into the Budget.

 

These are also highlighted in a marked up version of the reserves and reserve purposes in Attachment B.

 

Variance Reporting Threshold – 2020/2021 Financial Year

Whilst not directly relevant to the Budget adoption, regulation 34(5) of the Local Government (Financial Management) Regulations requires that in each year, a local government adopts a percentage or value, calculated in accordance with Accounting Standard AASB 1031 - Materiality, to be used for reporting material variances.

 

It is preferable that the Council determines this percentage or value as part of its annual budget adoption process, such that this reporting threshold is known prior to the compilation of the initial Statement of Financial Activity report each financial year.   

 

Accounting Standard AASB 1031 states that:

 

general purpose financial reporting involves making decisions about the information to be included in general purpose financial reports and how it is presented. In making these judgements, considerations of materiality play an essential part. This is because the inclusion of information which is not material or the exclusion of information which is material may impair the usefulness of the information provided to users.   

 

The Standard also suggests quantitative thresholds in the consideration of the materiality of variances, as follows:

 

a)      An amount which is equal to or greater than ten percent (10%) of the appropriate base amount may be presumed to be material unless there is evidence or convincing argument to the contrary; and

 

b)  An amount which is equal to or less than five percent (5%) of the appropriate base amount may be presumed not to be material unless there is evidence or convincing argument to the contrary.

 

The Council has historically adopted a combined [+/- 10%] and [+/- $25K] variance reporting threshold, with reportable variances resulting from timing differences and/or seasonal adjustments to be reported only if it is required in order to present an complete picture of the financial performance for a particular period.

 

It is considered that a reporting threshold is reasonable, and ensures that the Council remains fully informed of the City’s financial performance on a month-by-month basis. Consequently, this report recommends that the currently adopted variance reporting threshold and methodology be readopted in respect of the 2020/2021 financial year.  

 

2020/2021 Annual Budget – Highlights

The Budget as presented for adoption reflects a balanced position as at 30 June 2020, and comprises all of the amendments and additions as detailed in this report. The following provides a synopsis of relevant budget highlights:

 


 

Total expenditure is in the order of $138.5M including approximately $54.4M in capital expenditure and includes the following capital expenditure items:

 

Infrastructure

$33.9M

Land and Buildings

$17.5M

Plant and Equipment

$2.5M

Furniture and Office Equipment

$0.5M

      TOTAL

$54.4M

 

 

 

As illustrated in the detailed listing of the capital acquisitions and construction projects provided within the attached budget document, the Budget includes a wide range of capital projects, which will benefit the City’s ratepayers. This is in addition to recurrent operational funding allocations to support a wide range of community services and initiatives.

 

It is therefore considered that the Budget reflects value for money, whilst also being attentive to the desires and aspirations of the community, as reflected in the Council’s Strategic Community Plan 2017 (Review 2019).                 

 

Fees and Charges

To enable the Council’s Schedule of Fees and Charges to become effective from the commencement of the financial year, the Schedule is required to be adopted in advance of 30 June each year.

 

At its meeting of 10 June 2020, the Council adopted its Schedule of Fees and Charges for the 2020/2021 financial year.

 

Pursuant to Section 6.19 of the Act, local public notice was given and the Schedule of Fees and Charges came into effect from 1 July 2020.

 

Since this time several minor changes / additions have been made to the Schedule of Fees and Charges as follows:

 

·    Note added to clarify that the charge for an “All Day” booking of one of the Hire Facilities (eg Undalup Room or High Street Hall) will be capped at 8 hours;

 

·    A “Membership Cancellation Administration fee” in the amount of $25 was included for both the GLC and NCC. The fee is included in membership contracts but had not been included in the List of Fees and Charges; and

 

·    Fees have been included in the ArtGeo section for the City of Busselton Art Award Entry; Market Stall and Heritage Tours. These fees are in place but had not been included in the List of Fees and Charges.

 

Ministerial Orders

As mentioned above, the Budget has been developed with consideration of the Ministerial Orders. The Budget has addressed these Orders applicable to the Budget process as follows:

 

Clause 7.  Section 6.2 modified (local government to prepare annual budget)

 

(1)    Section 6.2(2) is modified as set out in this clause in relation to the preparation of the 2020/21 annual budget of a local government.

 

(2)  The reference to the contents of the plan for the future of the district made in accordance with section 5.56 is replaced with a reference to the consequences of the COVID-19 pandemic.

 

 

 

The Budget includes provision for reduction in interest, instalments, a 0% rate increase, assistance programs and the establishment of a Debt Default Reserve which considers the impact of COVID-19. This is in addition to the measures already endorsed by Council at its Special Meeting held on 1 April 2020.


 

Clause 8.  Section 6.13 modified (interest on money owing to local governments)

 

(1)    Section 6.13 is modified as set out in this clause in relation to a resolution of a local government under section 6.13(1) that is to be included in its 2020/21 annual budget.

 

(2)  The resolution –

(a)    cannot require a person who is considered by the local government to be suffering financial hardship as a consequence of the COVID-19 pandemic to pay interest; and

(b)    is to specify that the requirement to pay interest does not apply to a person who is considered by the local government to be suffering financial hardship as a consequence of the COVID- 19 pandemic.

 

(3)  The rate of interest that may be set by the local government under section 6.13 in its 2020/21 annual budget is not to exceed 8%.

 

(4)  Subclause (3) applies despite regulation 19A of the Local Government (Financial Management) Regulations 1996.

 

 

 

 

The Council has previously adopted and reconfirmed an amended COVID-19 Financial Hardship Policy.

 

 

The Budget makes provision for a decreased revenue in interest earned to cater for  amount for interest received for cater for those that are eligible under the Financial Hardship Policy.

 

 

 

 

 

The Budget includes interest payments being set at the threshold in clause 8(3).

 

Clause 9.  Section 6.33 modified (differential general rates)

 

(1)    In this clause — relevant rate, of a local government, means a proposed differential general rate of the local government that under section 6.33(3) cannot be imposed without the approval of the Minister.

 

(2)    Section 6.33(3) is modified as set out in this clause in relation to a relevant rate of a local government if—

(a)    as a consequence of the COVID-19 pandemic, the local government resolves (whether before or after commencement day) that no proposed differential general rate of the local government will exceed the corresponding differential general rate that was imposed by the local government in the 2019/20 financial year; and

(b)    the local government obtained the Minister's approval under section 6.33(3) to impose in the 2019/20 financial year a differential general rate corresponding to the relevant rate.

 

(3)  The local government is not required to obtain the approval of the Minister under section 6.33(3) to impose the relevant rate.

 

 

 

This clause is not relevant to the City of Busselton as it does not have any differential rate greater than twice the differential rate.


 

Clause 10.  Section 6.34 modified (limit on revenue or income from general rates)

 

(1)  Section 6.34(b) is modified as set out in this clause in relation to the 2020/21 annual budget of a local government.

 

(2)  The reference to 90% is replaced with a reference to 80%.

 

 

 

 

This Clause is not relevant to the City as the Budget has been presented as a balanced budget. This means that the percentage of rates that is proposed to be yielded against the Budget deficiency is at 100%

Clause 11.  Section 6.35 modified (minimum payment)

 

(1)        In this clause — relevant minimum payment, of a local government, means a proposed minimum payment of the local government that under section 6.35(5) cannot be imposed without the approval of the Minister.

 

(2)     Section 6.35(5) is modified as set out in this clause in relation to a relevant minimum payment of a local government if—

(a)    as a consequence of the COVID-19 pandemic, the local government resolves (whether before or after commencement day) that –

                                                  i.          no proposed differential general rate of the local government will exceed the corresponding differential general rate that was imposed by the local government in the 2019/20 financial year; and

                                                ii.          no proposed minimum payment of the local government will exceed the corresponding minimum payment that was imposed by the local government in the 2019/20 financial year; and

(b)    the local government obtained the Minister's approval under section 6.35(5) to impose in the 2019/20 financial year a minimum payment corresponding to the relevant minimum payment.

 

(3)     The local government is not required to obtain the approval of the Minister under section 6.35(5) to impose the relevant minimum payment.

 

 

 

This Clause does not apply to the City of Busselton as it was not required to obtain the Ministerial approval in 2019/20 for the imposition of any minimum payments.


 

Clause 12.  Section 6.36 modified (local government to give notice of certain rates)

 

(1)    Section 6.36 is modified as set out in this clause in relation to a local government if, as a consequence of the COVID-19 pandemic, the local government resolves (whether before or after commencement day) that –

(a)    no proposed differential general rate of the local government will exceed the corresponding differential general rate that was imposed by the local government in the 2019/20 financial year; and

(b)    no proposed minimum payment of the local government of the kind referred to in section 6.36(1) will exceed the corresponding minimum payment that was imposed by the local government in the 2019/20 financial year.

 

(2)    The requirements in section 6.36(1) to (4) do not apply to the local government and are replaced with the requirements in subclauses (3) and (4).

 

(3)    The local government must publish on the local government's official website details of each proposed differential general rate and each proposed minimum payment of the local government.

 

(4)    The details referred to in subclause (3) must be published by the local government within 10 days after the later of the following –

(a)  the day on which the local government makes the resolution referred to in subclause (1);

(b) commencement day.

 

 

 

 

As the Budget proposes to freeze the differential rates at the same level as the 2019/20 financial year, advertising was not required to give notice of its intention to levy differential rates.

Clause 13.  Section 6.45 modified (options for payment of rates or service charges)

 

(1)    In this clause — financial hardship policy, in relation to a local government, means a policy addressing the manner in which the local government will deal with financial hardship that may be suffered by ratepayers and other persons who are required to make payments to the local government.

 

(2)    Section 6.45 is modified as set out in this clause in relation to payment by instalments of a rate or service charge imposed by a local government in the 2020/21 financial year.

 

(3)    The local government cannot impose an additional charge (including an amount by way of interest) under section 6.45(3) in respect of payment by instalments made by an excluded person.

 

(4)    If the local government has not adopted a financial hardship policy, the maximum rate of interest that may be imposed by the local government under section 6.45(3) is 3%.

 

(5)    Subclause (4) applies despite regulation 68 of the Local Government (Financial Management) Regulations 1996.

 

 

 

 

The City of Busselton already has an adopted COVID 19 Financial Hardship Policy. Therefore the following has been modelled into the Budget as follows:

 

A charge will not be imposed on residents who have clearly demonstrated they are an “excluded person” and been approved for financial hardship in accordance with Council Policy.

 

In all other cases an interest rate of 5.5% applies.

Clause 14.  Section 6.51 modified (accrual of interest on overdue rates or service charges)

 

(1)    Section 6.51 is modified as set out in this clause in relation to a resolution made under section 6.5 1(1) by a local government at the time of imposing a rate or service charge for the 2020/21 financial year.

 

(2)    The resolution –

(a)    cannot impose interest in respect of a rate or service charge payable by an excluded person; and

(b)    is to specify that the imposition of interest does not apply in respect of a rate or service charge payable by an excluded person.

 

(3)    The rate of interest that may be set by the local government under section 6.51 is not to exceed 8%.

 

(4)    Subclause (3) applies despite regulation 70 of the Local Government (Financial Management) Regulations 1996.

 

 

 

The City has an adopted COVID-19 Financial Hardship Policy.

 

A charge will not be imposed on residents who have clearly demonstrated they are an “excluded person” and been approved for financial hardship in accordance with Council Policy.

 

In all other cases an interest rate of 8% applies.

Statutory Environment

As part of the annual budget development process, a local government must have regard for numerous requirements under the Act and associated Regulations. These include, but are not limited to, the following provisions:  

 

§ Adoption of Annual Budget

Section 6.2 of the Act and Part 3 of the Local Government (Financial Management) Regulations detail the form and manner in which an annual budget is to be presented to the Council for formal consideration.

 

§ Reserve Accounts

Section 6.11 of the Act provides guidance in respect of reserve accounts and also outlines the processes required should a local government determine to amend the purpose of a reserve.

 

§ Power to Borrow

Sections 6.20 and 6.21 of the Act refer to a local government's power to borrow and the administrative requirements associated therewith.


 

§ Notice of Imposing Differential Rates

Section 6.36 of the Act details the requirement for a local government to give local public notice of its intention to impose differential rates in the dollar and associated minimum payments in any year. The local public notice is to provide details of each differential rate in the dollar and associated minimum payment and must also invite public submissions to the proposal, for a period of not less than 21 days.

 

§ Adoption of Fees and Charges

Sections 6.16 – 6.19 of the Act refer to the imposition, setting the level of, and associated administrative matters pertaining to fees and charges. The requirement to review fees and charges on an annual basis is detailed within Regulation 5 of the Local Government (Financial Management) Regulations. The Fees and Chargers were adopted by Council in June 2020 and advertised to enable them to apply from 1 July 2020.

Relevant Plans and Policies

The Budget has been guided by the Council’s Strategic Community Plan 2017 (Review 2019) and Corporate Business Plan, along with associated informing plans (Long Term Financial Plan, Workforce Plan and Asset Management Plans). This is in addition to the range of other plans and policies which underpin specific components of the overall annual budget.

Financial Implications

The budget adopted by the Council will determine the financial operations of the City of Busselton for the 2020/2021 financial year.

Stakeholder Consultation

In its development, the Budget has been the subject of specific workshops convened with Council. Community groups and other not for profit organisations have also been invited to apply for funding allocations as part of the City’s ongoing sponsorship related programs. Throughout the year, members of the public have also been invited to make submissions on a range of proposed projects and activities impacting on the Budget.

Risk Assessment

The Budget has been informed by the Council’s Strategic Community Plan 2017 (Review 2019), and more particularly the underpinning Corporate Business Plan, Long Term Financial Plan, Workforce Plan and Asset Management Plans. The integration with these plans assists to address the risks associated with the adoption of the Budget, mainly that the City has the financial capacity to deliver the programs, projects and ongoing services as identified in the budget papers without causing any detrition in its financial base, and that the programs, projects and services align to the strategic goals and objectives set by Council.

Options

As an alternative to the proposed recommendation the Council could:

1.    The Council may determine to amend the Budget as presented for adoption. 

2.    The Council may also determine to amend the recommended variance reporting threshold in respect of the statutory Statement of Financial Activity Statement reporting.


 

CONCLUSION

In accordance with the principles expressed in the Long Term Financial Plan and relevant Council Policies, the Budget has been drafted with a long term view of the needs of the City and its residents in mind.  As illustrated in this report, the Budget includes a significant level of capital projects which will be of benefit to the City’s ratepayers. Many of these projects are aligned with Council’s Strategic Community Plan 2017 (Review 2019), and as such reflect the aspirations of the community.

 

It is therefore recommended that the Council adopts the Budget as presented.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

The Budget will become effective immediately consequent to adoption by the Council.

 


Special Council

27

27 July 2020

6.1

Attachment a

Annual Budget 2020-21

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 





 



 


 


 


 


 


 



 


 



 



 


 


 


 


 


 


 


 


 


 


 


 


 





 


 


 


 


 


 


 


 


 


 


 


 


 


 



 


 


 


 


 


 



 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Special Council

143

27 July 2020

6.1

Attachment b

Changes & Additions to Reserve Names & Purposes

 


 


 


 


 


 

  


Special Council                                                                       144                                                                     27 July 2020

7.               Closure