Extra Ordinary Meeting

 

 

Meeting Date:     Tuesday, 15 May, 2018

Location:            Council Chambers, City Administrative Building, Bridge Road, Nowra

Time:                   4.30pm

 

Membership (Quorum - 7)

All Councillors

 

 

 

Please note: Council’s Code of Meeting Practice permits the electronic recording and broadcast of the proceedings of meetings of the Council which are open to the public. Your attendance at this meeting is taken as consent to the possibility that your image and/or voice may be recorded and broadcast to the public.

 

 

Agenda

 

1.    Apologies / Leave of Absence

2.    Declarations of Interest

3.    Notices of Motion / Questions on Notice

CL18.105..... Rescission Motion - CL18.84 - Foreshore Reserves..................................... 1

CL18.106..... Notice of Motion - Foreshore Reserves......................................................... 2

CL18.107..... Rescission Motion - CL18.95 - Request for Funding Support - Broughton Vale / Berry Rural Fire Station - Site Works....................................................................... 3

CL18.108..... Notice of Motion - Request for Funding Support - Broughton Vale / Berry Rural Fire Station - Site Works........................................................................................ 4

4.    Reports

CL18.109..... Amendment to POL16/202 Revenue Pensioner Rates and Charges - Arrears and Interest............................................................................................................ 5                    

 

 


 

 Extra Ordinary Meeting – Tuesday 15 May 2018

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CL18.105   Rescission Motion - CL18.84 - Foreshore Reserves

 

HPERM Ref:       D18/141117

 

Submitted by:    Clr Nina Cheyne

Clr Kaye Gartner

Clr John Levett   

Purpose / Summary

The following Rescission Motion, of which due notice has been given, is submitted for Council’s consideration.

 

Recommendation

That Council rescind the Motion relating to Item CL18.84 of the Council Meeting held on 24 April 2018.

 

 

Background

The following resolution was adopted at the Council Meeting held Tuesday 24 April 2018 (MIN18.294).

That Council recognises the social and economic benefits that greater activation of many of our foreshore reserves delivers to the overall prosperity of our city. With this in mind Council affirms that it is philosophically committed to ensuring that our foreshore reserves are both well-maintained and ideally suited to an increased and sustainable level of passive recreation. Community members should be encouraged to actively participate in this new and exciting “unlocking“ of our foreshore areas by:

1.  Registering in an “on-line“ format to mow and maintain designated foreshore areas. (to be set up by staff)

2.  Donation of appropriate outdoor furniture be encouraged through service clubs, community groups and inspired individuals.

3.  Provide a much greater opportunity for both local residents and visitors to our city, to gain an absolutely stimulating appreciation of the foreshore vistas on offer in the fabulous Shoalhaven.

4.  A briefing be provided to Councillors and a possible review of the Park Management Policy

 

 


 

 Extra Ordinary Meeting – Tuesday 15 May 2018

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CL18.106   Notice of Motion - Foreshore Reserves

 

HPERM Ref:       D18/141164

 

Submitted by:    Clr Nina Cheyne

Clr Kaye Gartner

Clr John Levett   

Purpose / Summary

The following Notice of Motion, of which due notice has been given, is submitted for Council’s consideration.

 

Recommendation

That Council continue to manage foreshore reserves in accordance with existing policies that are in line with the CSP & Our Coast Our Lifestyle, ie. to protect vegetation and habitat, particulary salt marsh communities.

 

 

Note by the General Manager

This Notice of Motion will be dealt with if the preseding Rescission Motion is carried.

 


 

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CL18.107   Rescission Motion - CL18.95 - Request for Funding Support - Broughton Vale / Berry Rural Fire Station - Site Works

 

HPERM Ref:       D18/141350

 

Submitted by:    Clr Mitchell Pakes

Clr Greg Watson

Clr Andrew Guile   

Purpose / Summary

The following Rescission Motion, of which due notice has been given, is submitted for Council’s consideration.

 

Recommendation

That Council rescind the Motion relating to Item CL18.95 of the Council Meeting held on Tuesday 24 April 2018.

 

 

Background

The following resolution was adopted at the Council Meeting held Tuesday 24 April 2018 (MIN18.314).

That Council advises the District Manager, Shoalhaven RFS that Council is unable to fund the estimated $400,000 (exc GST) additional cost of the Berry & Broughton Vale Rural Fire Service Station.

 

 


 

 Extra Ordinary Meeting – Tuesday 15 May 2018

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CL18.108   Notice of Motion - Request for Funding Support - Broughton Vale / Berry Rural Fire Station - Site Works

 

HPERM Ref:       D18/141366

 

Submitted by:    Clr Mitchell Pakes

Clr Greg Watson

Clr Andrew Guile   

Purpose / Summary

The following Notice of Motion, of which due notice has been given, is submitted for Council’s consideration.

 

Recommendation

That Council advises the District Manager, Shoalhaven RFS that Council will fund the estimated $400,000 (exc GST) additional cost of the Berry & Broughton Vale Rural Fire Service Station, via a specific allocation in the 2018-2019 financial year.

 

 

 

Note by the General Manager

This Notice of Motion will be dealt with if the preseding Rescission Motion is carried.

  


 

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CL18.109   Amendment to POL16/202 Revenue Pensioner Rates and Charges - Arrears and Interest

 

HPERM Ref:       D18/151327

 

Group:                Finance Corporate & Community Services Group 

Section:              Finance 

Attachments:     1.  Proposed POL16/202 Revenue Pensioner Rates and Charges - Arrears and Interest

2.  Proposed Amendments to Revenue Hardship Policy   

Purpose / Summary

POL16/202 Revenue – Pensioner Rates and Charges – Arrears and Interest allows an interest free period to eligible pensioners with no arrears provided they pay their current rates and charges before the end of May each year.  It will not be possible to replicate Council’s policy in the new corporate business system. An alternative to the “interest free period” provision is proposed.

Recommendation  

That Council:

1.    Agree to the removal of the Interest Free Period provision from POL16/202 Revenue – Pensioner Rates and Charges – Arrears and Interest, effective 1 July 2018

2.    Adopt the amended policy POL16/202 Revenue – Pensioner Rates and Charges – Arrears and Interest

3.    Adopt the expanded hardship assistance policy, POL16/200 Revenue Hardship Policy, attached to this Report

 

 

Options

1.    Resolve as recommended and adopt the amended policies.

Implications: Additional support will be provided to eligible pensioner rate accounts who are experiencing hardship.

 

2.    Adopt the amended POL16/202 Revenue – Pensioner Rates and Charges – Arrears and Interest policy and the “no disadvantage” alternative to compensate for the removal of the Interest Free Period.

Implications: Rather than providing relief only to eligible pensioners experiencing hardship, all eligible pensioners will receive a benefit resulting in an additional cost to Council that is unfunded.

 

3.    Not adopt the recommended changes and resolve to adopt another approach.

Implications: This option may result in a greater cost to Council that is unfunded.

 

4.    Not adopt the recommended changes and continue with the extended grace period for eligible pensioner accounts.

Implications: This option has an extreme risk of transactional error occurring with rate accounts. This is due to manual processing “work arounds” being required prior to each interest processing run completed after each instalment payment date has passed and such will necessitate the manipulation of system generated data. The additional workload in processing concession adjustments between billing periods will require additional resourcing to ensure entitlements are accurately applied. Such an option should not be adopted without first referring to the Risk & Audit committee for comment.

 

Background

In 2000, Council adopted a policy allowing eligible pensioners an interest free period should they not pay their rates by the due date(s) but pay any arrears before the end of May each financial year: POL16/202 Pensioner Rates and Charges – Arrears and Interest. The definition of eligible pensioners can be found in POL16/202.

The approach adopted toward eligible pensioners contrasts with that taken to general residential ratepayers. To prevent interest being raised, the latter must pay their rates in full by 31 August each year or opt to pay their rates by the due date for each of four instalments (31 August; 30 November; 28 February; 31 May).

The interest free period is currently accommodated within Council’s existing Fujitsu rates system as a result of customised changes to that system. However, it will not be possible to replicate Council’s policy in the new corporate business system without significant manual workarounds. Any workarounds have attendant resource implications associated with extract, transform and load (ETL) processes and introduce the risk of error at each stage of that process.

Given that the OneCouncil solution from TechnologyOne is not able to split due dates for specific rate account groups, an analysis was performed to determine the number of eligible pensioners who take advantage of the interest free period, the financial implications of the policy and any income derived from overdue interest charges.

Analysis

For the 2016/17 rating period, of the 57,090 rateable assessments, there were 10,844 eligible pensioners (18.9% of the total) comprising:

1.   76% of eligible pensioners who pay within normal payment terms

2.   Approximately 2,000 eligible pensioners (18% - 19%) who take advantage of the interest free period

3.   605 eligible pensioners (5.6%) who had not made a payment by the end of May. These pensioners obtain no benefit from the interest free period and are either pensioners who became eligible prior to 1 July 2015 and can defer their rates or are potential hardship cases whose account accrues interest on outstanding rates and charges

To illustrate the impact, the situation of four hypothetical eligible pensioners is presented below:

Based on the 2016/17 average residential rate of $1,027 and pensioner concession of $250, each hypothetical pensioner has the following payment patterns:

However, the estimate of foregone income resulting from the application of the interest free period differs between quarters as a result of changes to the number of pensioners eligible for the concession in that quarter and the take-up rate of the interest free period. In addition, payment can occur at any time over the interest free period but the analysis only applies as at the due date for each instalment. In accordance with section 566(3) of the Act, the maximum rate of interest payable on overdue rates and charges was 7.5% per annum in 2016/17 (simple interest calculated on a daily basis).

For 2016/17, the analysis shows:

Instalment 1

Instalment 2

Instalment 3

Total owing

$481,433.85

$536,596.81

$623,928.68

Assessments

2,085

1,977

2,015

Interest days for the quarter

91

90

92

Estimated interest

$9,002.15

$9,923.37

$11,794.82

Estimated interest per pensioner

$4.32

$5.02

$5.85

 

In contrast to the hypothetical scenarios, the foregone interest can range from about $5 to just over $15, rather than the $21.83 shown for Pensioner C.

The interest earned from eligible pensioners who did not pay their rates by the due date(s) and did not pay any arrears before the end of May was $2,024 in 2016/17 for the first three instalments.

In considering the removal of the interest free period, there are three main considerations:

1.   Providing support to pensioners experiencing hardship

2.   Maintaining assistance to pensioners currently taking advantage of the interest free period

3.   Administrative efficiency

These considerations are the basis of the alternatives presented below.

Alternatives

Implementing a new corporate business system has presented Council an opportunity to review the effectiveness of previously adopted practices. The above analysis shows that the interest free period benefits a relatively small percentage of ratepayers (approximately 3.5% of all rateable assessments).

With the implementation of the new corporate business system, it is proposed to remove the interest free period and apply the same process to eligible pensioners as to other ratepayers; that is, interest will accrue to accounts if payment is not received in full by 31 August each year or by the due date for each of the quarterly instalments.

As an offset for this change, three alternatives are proposed. The first two are based on greater weight being given to one or other of the first two considerations noted above. The third alternative was suggested at the Ordinary Meeting of Council on 24 April 2018.

1.   Expanded hardship assistance

The current interest free provision does not distinguish between eligible pensioners who need additional time to pay their rates and charges and those who choose to delay payment of their rates to the last possible date without penalty. Nor does the provision support those eligible pensioners unable to pay their rates by the end of May and, thereby, incur interest on arrears.

Councillors would be aware of the provisions of POL16/200 Revenue Hardship Policy. Council whereby full or partial accrued interest on rates and charges can be written off under Section 567 (c) of the Local Government Act 1993. Assistance under the Hardship Policy is available to all ratepayers for the current rating period. In practice, the interest waiver is, generally, between three (3) to six (6) months, but may extend to twelve (12) months. In any event, the person(s) experiencing hardship is required to meet an agreed payment plan and interest is only waived at the end of each financial year if the agreed payment plan is adhered to.

Use of the hardship policy, in lieu of the interest free period, is a feasible option. POL16/200 Revenue Hardship Policy could be amended to include the following provisions:

·    Details of the Hardship Policy and an Application for Hardship Relief form will be sent to eligible pensioners with the 4th Instalment Notice

·    If a pensioner can show they are experiencing hardship, then any interest accrued on their rates and charges for that rating year will be waived at the end of each financial year, on the condition of compliance with an agreed payment plan.

·    Arrangements for regular payments on the account are put in place for affected pensioners

·    Community-based support options to help with financial counselling are provided

2.   “No disadvantage”

The maximum foregone amount of interest for each eligible pensioner who takes advantage of the interest free period can range from about $5 to just over $15, and the total cost to Council is estimated at $30,720 in 2016/17.

Given it is not possible to estimate the average or modal outcome for eligible pensioners using the interest free period, the mid-point of $10 is suggested as the level of a voluntary rebate to the cohort of all eligible pensioners, funded 100% by Council. This rebate is in addition to the maximum rebate of $250 available to eligible pensioners on their rates/domestic waste bill under Section 575 of the Local Government Act 1993, funded 45% by councils and 55% by the State Government. The additional cost of this option to Council is estimated to be $78,000, resulting in a total cost to Council of $108,720.

Council would be aware that there has been no increase to the rebate available under Section 575 of the Local Government Act for many years and, therefore, an additional Council rebate is considered a positive outcome for pensioner account holders.


 

 

3.   Indefinite interest waiver

At Council’s Ordinary Meeting on 24 April 2018, it was proposed to adopt an indefinite interest free period for all eligible pensioners and to introduce an incentive for early paymenmt of rates.

The impact of these three alternatives on the situation of hypothetical pensioners C and D was explored at the Councillor Briefing held on 26 April 2018. The following tables show the impact on the hypothetical pensioner together with the total cost to Council of adopting the alternative.

Note that Alternative 3 does not include the impact of any early payment discount.

The overall analysis and the modelling of the hypothetical scenarios suggest that the best outcome for pensioners experiencing hardship, at the least cost to Council, is provided by Alternative 1: Expanded hardship assistance.

Community Engagement

It is proposed to remove the interest free period for eligible pensioners as indicated in this report. Council is able to include inserts with each quarterly instalment notice to ratepayers and it is intended to undertake an information campaign over the next two billing quarters to highlight the changed arrangements. If the recommendation is adopted by Council, details about the revised Revenue Hardship Policy will be included in the Neighbourhood News.

 

Policy Implications

It will be necessary to adopt the amended POL16/202 Revenue – Pensioner Rates and Charges – Arrears and Interest attached to this report. Depending on the Option supported by Council, it may also be necessary to adopt the amended POL16/200 Revenue Hardship Policy, also attached to this report.

 

Financial Implications

If all the pensioners currently utilising the interest free period successfully applied for hardship consideration, the result would be cost neutral. If each instalment were paid on the due date, then using a 3% interest rate suggests a potential net benefit to Council of approximately $12,000 using the amounts included in this report.

The proposed removal of the interest free period may generate additional interest income from unpaid accounts. Under Alternative 2, this has been offset by the introduction of a voluntary rebate to all eligible pensioners. The net additional cost of this option to Council is estimated to be $78,000, resulting in a total cost to Council of $108,720. This is not funded in Council’s 2018/19 budget and is not part of the Long Term Financial Plan.

If Council opts to provide additional financial relief to pensioner ratepayers, another expenditure item will need to be be reduced to offset that cost.

Alternative 3: Indefinite interest waiver results in the greatest cost to Council. This alternative is also not funded in Council’s 2018/19 budget, nor is it part of the Long Term Financial Plan. Its adoption would create a strong financial incentive for eligible pensioners to not pay rates by the due dates and would impact the pattern of Council’s cash receipts.


 

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Local Government Amendment (governance & planning) act 2016

Chapter 3, Section 8A  Guiding principles for councils

(1)       Exercise of functions generally

The following general principles apply to the exercise of functions by councils:

(a)     Councils should provide strong and effective representation, leadership, planning and decision-making.

(b)     Councils should carry out functions in a way that provides the best possible value for residents and ratepayers.

(c)     Councils should plan strategically, using the integrated planning and reporting framework, for the provision of effective and efficient services and regulation to meet the diverse needs of the local community.

(d)     Councils should apply the integrated planning and reporting framework in carrying out their functions so as to achieve desired outcomes and continuous improvements.

(e)     Councils should work co-operatively with other councils and the State government to achieve desired outcomes for the local community.

(f)      Councils should manage lands and other assets so that current and future local community needs can be met in an affordable way.

(g)     Councils should work with others to secure appropriate services for local community needs.

(h)     Councils should act fairly, ethically and without bias in the interests of the local community.

(i)      Councils should be responsible employers and provide a consultative and supportive working environment for staff.

(2)     Decision-making

The following principles apply to decision-making by councils (subject to any other applicable law):

(a)     Councils should recognise diverse local community needs and interests.

(b)     Councils should consider social justice principles.

(c)     Councils should consider the long term and cumulative effects of actions on future generations.

(d)     Councils should consider the principles of ecologically sustainable development.

(e)     Council decision-making should be transparent and decision-makers are to be accountable for decisions and omissions.

(3)     Community participation

Councils should actively engage with their local communities, through the use of the integrated planning and reporting framework and other measures.

 

Chapter 3, Section 8B  Principles of sound financial management

The following principles of sound financial management apply to councils:

(a)   Council spending should be responsible and sustainable, aligning general revenue and expenses.

(b)   Councils should invest in responsible and sustainable infrastructure for the benefit of the local community.

(c)   Councils should have effective financial and asset management, including sound policies and processes for the following:

(i)      performance management and reporting,

(ii)      asset maintenance and enhancement,

(iii)     funding decisions,

(iv)     risk management practices.

(d)   Councils should have regard to achieving intergenerational equity, including ensuring the following:

(i)      policy decisions are made after considering their financial effects on future generations,

(ii)     the current generation funds the cost of its services

 

 

Chapter 3, 8C  Integrated planning and reporting principles that apply to councils

The following principles for strategic planning apply to the development of the integrated planning and reporting framework by councils:

(a)   Councils should identify and prioritise key local community needs and aspirations and consider regional priorities.

(b)   Councils should identify strategic goals to meet those needs and aspirations.

(c)   Councils should develop activities, and prioritise actions, to work towards the strategic goals.

(d)   Councils should ensure that the strategic goals and activities to work towards them may be achieved within council resources.

(e)   Councils should regularly review and evaluate progress towards achieving strategic goals.

(f)    Councils should maintain an integrated approach to planning, delivering, monitoring and reporting on strategic goals.

(g)   Councils should collaborate with others to maximise achievement of strategic goals.

(h)   Councils should manage risks to the local community or area or to the council effectively and proactively.

(i)    Councils should make appropriate evidence-based adaptations to meet changing needs and circumstances.