Council’s budget and plan for financial improvements go on exhibition
Published on 30 April 2024
The Kempsey community will have a fresh opportunity to assess Council’s financial plans over the coming month.
Kempsey Shire Council has placed their planning and reporting suite of documents for the coming financial year on exhibition and will be meeting with community groups to discuss them before considering them for adoption in June.
Director Corporate and Commercial, Stephen Mitchell says the commitment from Council to save money that was made consistently during the Special Rate Variation (SRV) investigation process, has been formalised in these documents.
“Ongoing financial sustainability is front and centre in these documents, with clear outcomes and targets set as part of a new Financial Sustainability Program that is included in the revised 10-year Long Term Financial Plan,” said Mr Mitchell.
“The capital expenditure program contained in these plans is very large. This will be reviewed by staff, taking into account the input we receive from the community, prior to the final documents being returned to council in June. We are determined to make sure that the projects we commit to are achievable.”
The exhibition of the plans is taking place while Council’s SRV application remains under consideration by the Independent Pricing and Regulatory Tribunal (IPART). Council have applied for permission to raise rates by a total of 42.7% over three years, though this increase only applies to property rates, not the whole bill.
If approved, the first-year increase will be 7.9%. This is lower than the 15% increases proposed for years 2 and 3 and gives Council time to find savings and efficiencies that will hopefully make it unnecessary to put rates up by the 15% proposed in years 2 and 3.
A 12 month plan
Included in the suite is the Operational Plan, Council’s equivalent of the annual budget statement. This outlines 165 specific actions for the coming financial year, the vast majority of which are annual programs of work, or services, that are delivered on an ongoing basis.
“More than 100 of the actions we have committed to are the ongoing business of local government, from maintaining sports fields to repairing roads,” said Mr Mitchell.
“Another 49 are multi-year projects, that is large capital expenditure projects that take 2 or more years to deliver. This means there are actually only 12 new projects identified for delivery in this financial year, many of which are grant-funded.”
Key projects planned for delivery during the 2024-25 financial year include:
Environment projects
- Central Kempsey Wastewater Treatment Plant
- Stuarts Point Sewerage Scheme
- Water Treatment Plants at Willawarrin, Steuart McIntyre Dam and Crescent Head
- Riverside Park foreshore and riverbank stabilisation
- Crescent Head Public Domain Plan
Economy
- Kempsey Regional Saleyards redevelopment
- Road and bridge damage rectification caused by natural disasters
- Sealing of Maria River Road
- Five Headlands Coastal Experience
- Renovation of South West Rocks Library
Community
- Build community resilience through the implementation of the Resilience Canopy Program to help develop a strong, connected, and prepared community
- Verge/Eden Street Sports complex pavilion
- Kemp Street Sporting complex and Service Clubs Park
- Lloyd Park revitalisation
- Implementation of the Arts & Culture Plan
Leadership
- Implement financial sustainability strategies, initiatives and actions as detailed within the adopted Long Term Financial Plan
- Design, review and implement rating structures to ensure rating remains fair and equitable, across and within the residential, farmland, business urban and business other rating categories
- Deliver Local Government Election in September 2024
- Coordinate the State of the Shire Report, a review of the Community Strategic Plan and development of a new 4-Year Delivery Program
- Deliver the organisational cultural refocus program
Making tough financial decisions
The 10-year Long Term Financial Plan (LTFP) includes a new Financial Sustainability Plan. This is how Council will find the savings to deliver on their strong commitment to addressing our financial challenges irrespective of the IPART decision on SRV application.
This is a detailed plan that outlines 24 initiatives that will be delivered through 46 actions. These were informed by the work done in the SRV investigation and particularly takes into consideration the feedback received from community.
The Financial Sustainability Program contains specific targets and outcomes and requires staff to publicly report on progress towards meeting each target quarterly through Council meetings.
Council has been implementing the initial Financial Sustainability Program since it was adopted in 2019. It focused on system and process improvements, understanding and managing risks, and better management of Council assets, as well as the identification of a variety of cost savings initiatives.
The new plan focuses on areas that have now been identified as having the most beneficial financial impacts. This includes a plan to deliver identified cost savings of $5 million over the next ten years, seeking further increased efficiencies in every departmental operational and staffing budget, asset management and service delivery initiatives as well as streamlining, and improving processes to ensure that best value, effectiveness, and efficiency for the community are being achieved.
In addition, Council will also continue to advocate to other levels of government for improved and increased funding for the local government sector to lessen the burden on the community.
The actions within the Financial Sustainability Program are designed to be implemented whether the SRV application is approved or not. If the SRV application is approved, the focus of the Financial Sustainability Program will then be on reaching a position where Council does not need to implement the maximum permitted rate increases in the 2025-26 and 2026-27 financial years.
What is the plan if the SRV is rejected?
Council’s application for an SRV is currently before the Independent Price and Regulatory Tribunal, with a decision expected in May.
The plans have been made on the assumption the application will be successful, resulting in a modest operating surplus over the next ten years.
The LTFP also contains modelling for Council’s finances should the SRV application be unsuccessful. The impact will be an $80 million deficit over next ten years.
As such if the SRV application is unsuccessful, an additional important body of work would then be required over the next financial year. This would include a review and likely reduction of service levels and asset maintenance schedules to ensure the organisation remains financially sustainable.
This could see numerous services reduced or ceased completely, staff reductions and assets being kept beyond their estimated useful life, involving increased associated risks.
Increased engagement
The strong community advocacy on the SRV has prompted Council to undertake additional community engagement during the exhibition period.
Senior staff will make presentations to key community and rate payer groups while the documents are on public exhibition to ensure maximum awareness of Council’s draft plans and budget and listen to the feedback.
The documents are also all available to be viewed online at www.ksc.pub/budget2024 and printed copies are available to view at Council’s Customer Service Centre and libraries.
All community members are invited to make a written submission during the exhibition which closes on Sunday 19 May 2024. Submissions can be made via:
Online: www.ksc.pub/budget2024
Email: ksc@kempsey.nsw.gov.au
Post: PO Box 3078, West Kempsey, NSW 2440
In person: 22 Tozer Street, West Kempsey NSW 2440