Agenda of Ordinary Meeting - Monday, 6 May 2024

Ordinary Meeting – Monday 06 May 2024

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CL24.117 Financial Sustainability Monthly Report

HPERM Ref: D24/165758

Department: Financial Sustainability

Approver: Robyn Stevens, Chief Executive Officer

Reason for Report

The purpose of this report is to adopt the recommendations tabled in the Financial Sustainability workshops and report the status of the Financial Sustainability project.

Recommendation

That Council:

1. Endorse placing the BLERF showground upgrades projects (Kangaroo Valley, Milton, Berry and Nowra) construction on pause until Council’s financial position improves (unfunded $7.6 million)

2. Receive an update on matters discussed in the April 2024 financial sustainability workshops, including 2024/25 budget and service planning workstreams.

Options

1. Adopt the recommendation as proposed.

Implications: Council staff will communicate decisions with impacted community groups and key project stakeholders.

2. Adopt an alternative recommendation.

Implications: The financial benefits identified in this report may be reduced and lessen the positive impact on Council’s financial sustainability issues.

Background

In November 2023, AEC provided a report (CL23.420) to Council on its financial sustainability. In this report, Council was informed that the general fund net operating position has been in a deficit position over the past eight years and there is a structural deficit to fund recurrent expenditure of $25-35 million per annum. AEC made 27 recommendations, including an SRV, and that all had to be implemented to ensure Council’s financial sustainability.

In January 2024, Council resolved under MIN24.44 not to proceed with an application for a special rate variation with IPART. A special rate variation is considered to be a necessary step in improving Council’s financial position. Instead, Council resolved to pursue all other recommendations in the AEC report as well as additional actions to improve financial sustainability.

The Financial Sustainability project has been established to coordinate Financial Sustainability actions and initiatives in response to MIN23.667, MIN24.44 and from report CL23.420 – AEC Financial Sustainability review from November 2023. The project commenced in February 2024 and has 3 major workstreams:

1. Asset and Project Management

2. Financial Management

3. Service Planning

The Financial Sustainability project will report to Council monthly on all matters relating to Council’s financial sustainability that were tabled in the November 20 and January 29 Ordinary meetings. This report will provide:

· Summary of work undertaken in the period, including items workshopped with Councillors.

· Status of project workstreams.

· Recommendations to Council to support the improvement of Council’s financial position.

Recommendations may call for projects to be paused until Council’s financial position improves. This means that projects will be reconsidered by Council at a point in time where Council has met the defined measures of financial sustainability:

· Maintain Council’s unrestricted cash reserve at $15 million.

· Achieve and maintain an operating surplus of at least 4%.

· Met the asset renewal ratio of 85%.

Paused projects are retained on the capital projects list, managed by the enterprise project management office, for prioritisation by Council when funding becomes available.

Internal Consultations

A fortnightly workshop schedule has been agreed with Councillors, with the first workshop occurring on the 20 February 2024. The workshops are exploring all financial sustainability items raised in MIN23.667, MIN24.44 and the recommendations from the AEC report CL23.420.

The workshops held to date include:

Workshop	Agenda	Report to Council
Workshop 1 – 20 February	Budget parameters Strategic projects review	CL24.68
Workshop 2 – 5 March	Community donations program Outdoor dining annual fees Strategic projects review	CL24.68
Workshop 3 – 12 March	2024/25 budget workshop 1	CL24.95
Workshop 4 – 19 March	Excess and under-utilised assets Use of consultants and contractors Strategic projects review	CL24.95
Workshop 5 – 4 April	2024/25 budget workshop 2	Included in this report
Workshop 6 – 16 April	Service planning Strategic projects review	Included in this report

Over the next month, Financial Sustainability workshops are scheduled on 30 April (Asset Management Plans and Bereavement Services business overview) and 14 May (Sports fees and charges model and Family Day Care business overview).

Workshop 5 overview – 4 April

The Mayor and 10 Councillors were present at the 4 April workshop, with apologies received from Cr Watson and Cr D’Ath.

The agenda for this workshop included:

· 2024/25 proposed water and waste services pricing.

· 2024/25 final general fund operational result.

· 2024/25 first capital budget discussion.

Workshop 5 – summary of financial sustainability items discussed

1. Councillor responsibilities

At the start of the workshop, Councillors were reminded over their responsibility to manage Council’s significant finances on behalf of their communities as follows:

· The responsibility and accountability for the financial management of a Council rests with the governing body.

· Council signs off the strategic plan, annual budget, and financial statements.

· Managing Council’s money and assets to meet current and future needs.

2. 2024/25 water and waste services pricing

During the workshop, Councillors were reminded that Shoalhaven Water has been in a deficit position for the past 3 financial years. It was discussed that Water fees and charges should be set to enable a breakeven position in financial year 2024/25. Councillors were presented with a summary of Shoalhaven Water fees and charges compared with 7 other NSW Water Utilities which included other Council owned water providers. Based on current pricing, Shoalhaven Water’s was the cheapest average household bill (155kL), but this is producing an unsustainable deficit. Proposed pricing to enable Shoalhaven Water to break even still kept Shoalhaven Water’s pricing competitive with the other NSW Water Utilities (3^rd cheapest).

Waste fees and charges are proposed to increase by 7.5% (from CL24.41 budget parameters and strategies 2024/25). The budget discussion showed that the waste fund is tracking for a modest cash surplus in 2024/25.

3. 2024/25 general fund budget discussion

Councillors were shown the updated general fund 2024/25 budget, including a breakdown of materials and contracts budgets for 2024/25 by directorate and department and a comparison to what was spent in 2022/23. Materials and contracts have been reviewed as part of the 2024/25 budget preparation and adjustments have been made to ensure that materials and contracts spend is budgeted in the correct department budget moving forward and is also correct based on the actual requirement. An example of this is legal costs in Development Services, where the budget has increased to match historical actuals. Other departments have received a reduction in materials and contracts budget. An example of this is in Strategic Planning, where high actuals in 2022/23 (COVID contributions) have meant that a reduced budget is required in 2024/25.

4. 2024/25 first capital budget discussion

The Chief Financial Officer summarised the general fund operational budget position based on the application of agreed 2024/25 budget parameters. After considering income and expenses, the available cash for capital projects is minimum and will not enable Council to meet its critical capital activity in 2024/25 without intervention. During the workshop, funding options to increase cash for essential capital projects was discussed. This is considered necessary to operate in 2024/25 but is not sustainable for future years. Further context is provided in the Draft Delivery Program Operational Plan and Budget 2024-25 report that will be discussed at the 6 May 2024 Ordinary meeting – see capital works program section.

Workshop 6 overview – 16 April

The Mayor and 10 Councillors were present at the 16 April workshop, with apologies received from Cr Watson and Cr D’Ath. Audit, Risk and Improvement Committee (ARIC) members John Gordon and Peter McLean were also present for this workshop.

The agenda for this workshop included:

· Presentation from ARIC

· Service planning

· Strategic projects review

Workshop 6 – summary of financial sustainability items discussed

1. Presentation from Audit, Risk and Improvement Committee (ARIC) members

ARIC committee members John Gordon and Peter McLean presented to the financial sustainability workshop attendees. This was an opportunity for the independent ARIC committee members to brief Councillors on their thoughts about Council’s financial issues, including the AEC report, and actions being taken through the Financial Sustainability project.

2. Service planning

Councillors were briefed on the current status of the service planning workstream in the workshop. Under service planning, the following scope items were identified through the AEC report and relevant resolutions from MIN23.667 and MIN24.44:

· Define Council Productivity and Efficiency Improvement Plan and track the delivery of the agreed actions (includes AEC list)

· Agree comprehensive calendar of service reviews

· Review non-core services

· Continue work on the service planning framework, by documenting and reviewing service levels

· Define and measure key productivity and efficiency metrics to benchmark with comparable Councils and complete trend analysis as part of budget process

· Complete legal team service review

· Complete Holiday Haven service review

· Complete Bereavement Services review

· Complete asset custodian review

· Review all of Council's commercial undertakings and define expected return on capital

· Review of corporate functions, focused on areas with largest cost base

· Get involved page to continue tracking financial sustainability initiatives

A detailed project and workstream status will be reported to Council as part of the Quarterly Productivity and Efficiency report in June 2024.

Council’s service review methodology is:

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Service reviews have been categorised under the following categories:

· Major commercial business model review (may require seed funding for specialist consultant to support service review).

· Minor internal business model review (review insourcing versus outsourcing of relevant internal service).

· Internal process and structure review (consider current service levels, team structure and processes for identified departments).

· Business process improvement (service reviews identified for completion through Council’s formal Business Improvement Program as per Office of Local Government Integrated Planning & Reporting Framework requirements).

Major commercial business model reviews

4 major business model reviews have been identified as a priority for completion:

· Bereavement Services

· Holiday Haven

· Family Day Care

· Shoalhaven Entertainment Centre

These service reviews are currently in scope definition and are expected to commence from July 2024 once seed funding is available to resource the reviews. This budget has been requested in the 2024/25 budget process.

The order of reviews will be confirmed once the scoping is complete. Councillors will be consulted on the scope of the reviews in May and June as part of the financial sustainability workshops. Each business will present an overview of the business and recommend scope of the review for discussion with Councillors. Bereavement Services is on the agenda for the 30 April workshop.

Minor internal business model reviews

2 minor internal business model reviews have commenced in March 2024. The first is for legal services. Legal services are currently provided through a hybrid insource/outsource arrangement. The outsource costs associated with litigation have increased due to increased legal activity particularly through the Land and Environment Court. This review will consider what is the right mix of insource and outsource legal services in the future.

The second review is of Council’s model for workers compensation insurance. Council is self-insured for workers compensation and costs are increasing in this space. This review will consider if the self-insurance model is optimal in the future.

Internal process and structure reviews

6 areas of Council have been flagged by Councillors as the focus to complete internal process and structure reviews:

· Asset custodian model – in progress

· Customer experience – in scope definition

· Communications and media – in scope definition

· Tourism and economic development – in scope definition

· Fleet – in progress

· Visitor centre – in progress

Councillors will be briefed on the outcomes of these reviews through the financial sustainability workshops.

Business process improvement reviews

There are 2 business process improvement reviews agreed for completion in 2024:

· Holiday Haven – complete

· Library Services – not started

The agreed scope of the Holiday Haven business improvement review was:

a. Asset Reporting

- Identify opportunities to develop robust reporting capabilities.

- Analyse operating maintenance system maturity and practices

- Analyse asset data quality and maturity

b. Marketing

- Identify opportunities to improve mid-week occupancy

- Analyse current strategies, resources, and agreements

6 recommendations from the Holiday Haven business improvement review have been endorsed and are scheduled for implementation in the coming 12 months. The implementation of these recommendations will be tracked in Council’s initiative register.

Other efficiency ideas – from staff

The Shoalhaven Leadership Team (SLT) have been tasked to find cost savings or revenue generating initiatives within their department to complement the efficiencies that will be realised from the defined service review programme. This is a whole of Council approach to finding financial sustainability and is in recognition that finding efficiencies at a department level will be needed to achieve a savings target.

3. BLERF showground upgrade projects

Project summary	Bushfire Local Economic Recovery Funding (BLERF) Resilience Improvements for four Shoalhaven Showgrounds (Kangaroo Valley, Nowra, Milton and Berry)
Total project cost	Estimated at $11.5 million (partially funded – 4 showgrounds)
Funding source	$3,835,367 BLERF Grant $3,700,000 Loan 23/24 – loan to be drawn down prior to 30 June 2024. $4,000,000 unfunded
Status	External PM & design consultant engaged. Concepts being developed with schematic cost estimates provided of $11.5 million. Variation submitted to grant fund for an extension of time and a reduction in scope (Option 2). Funding body is unlikely to approve the reduced scope and extension of timeframe for construction.
Impact if ‘on hold’	Require negotiations with grant administrator Risk of grant funding may need to be returned Existing contracts with PM/design lead may lead to renegotiating/exit costs.
Increase in Operational Costs	Maintenance & depreciation costs TBC Increase in income forecasted for Milton with the approval of additional camping sites.
% renewal	80% new, 20% renewal
Staff recommendation	Place projects on hold and progress all 4 sites to DA approval only. Return grant funding. Reduce proposed loan borrowings (loan will cover spend to date and DA approval costs only)

Financial Implications

By adopting the recommendations in this report, the following financial implications will be realised:

· Return grant funding for BLERF Showground upgrade projects.

· Reduced loan to be drawn down, reducing future interest payable.

Risk Implications

Pausing projects

There may be reputational risks to Council associated with the recommendations in this project to pause projects and programs. The consequence to these decisions may be a loss of trust with key community stakeholders. However, other community members may recognise Council’s diligence in making sound financial decisions that improve our long-term financial sustainability, which would have a positive reputational impact.

Return of grant funds may impact the ability to receive future grant funding.

Service planning

The delivery of initiatives under service planning will achieve a cost benefit to Council and will support the financial sustainability objective. The timeframe to recognise benefits is yet to be determined and can only be reported once the service reviews are completed, and agreed recommendations implemented. Achieved savings, and impact to Council’s financial position, will be reported quarterly in the Productivity and Efficiency report.

Ordinary Meeting – Monday 06 May 2024

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CL24.118 Draft Delivery Program Operational Plan and Budget 2024-25 - Public Exhibition

HPERM Ref: D24/109532

Department: Corporate Performance & Reporting

Approver: Robyn Stevens, Chief Executive Officer

Attachments: 1. Draft Delivery Program Operational Plan and Budget 2024-25 - Exhibition (councillors information folder) ⇨

2. Draft Fees and Charges 2024-25 - Part 1 - Exhibition (councillors information folder) ⇨

3. Draft Fees and Charges 2024-25 - Part 2 - Exhibition (councillors information folder) ⇨

Reason for Report

The purpose of this report is to provide the elected Council with the Draft Delivery Program and Operational Plan (DPOP), Draft Budget and Draft Fees and Charges for the 2024/25 financial year, and to seek the endorsement of Council to place these documents on public exhibition in accordance with legislative requirements.

Recommendation

That Council:

1. Endorse the Draft 2024/25 Delivery Program and Operational Plan, Draft Budget, Draft Fees and Charges (including the proposed funding strategy for the delivery of general fund capital works) for the purpose of placing on public exhibition for a period of 28 days.

2. Maintain the previous 2023/24 rating structure, comprising both base and ad valorem amounts which is a commonly used ratings structure that results in bringing the higher and lower values closer together and in effect spreads the burden across the board to all ratepayers.

3. In accordance with Section 566(3) of the Local Government Act, 1993, and Council’s policy POL22/88 Revenue – Overdue Interest Rate endorse the rate of interest payable on overdue rates and charges for the period 1 July 2024 to 30 June 2025 (inclusive) to be the maximum 10.5% per annum as determined by the Minister of Local Government.

4. Note that interest charges will continue to be waived for ratepayers that are experiencing financial hardship and they can apply for financial assistance under Council’s Hardship Policy.

5. Approve the Minister’s allowable limit of a 4.5% rate peg increase in 2024/25 to the notional yield as permitted by Section 511 of the Local Government Act, 1993.

6. Receive a report on feedback from the community on the Draft 2024/25 Delivery Program Operational Plan and Budget following the public exhibition period.

Options

1. Council resolves to place the Draft DPOP, Budget and Fees and Charges for 2024/25, on public exhibition for 28 days inclusive as recommended.

Implications: The documents will be placed on public exhibition as presented in the report with a report back to a Council in June with details of submissions received including any community feedback on the Draft DPOP.

2. Council defers a decision in respect of the Draft DPOP, Budget and Fees and Charges for 2024/25 being placed on public exhibition pending either further information being provided, or the documents being amended.

Implications: A delay in placing the Draft DPOP on public exhibition could result in Council not adopting the DPOP and Budget prior to 30 June 2024, as required by legislation. Any delay beyond 30 June 2024 could delay the routine levy of the 2024/25 annual rates and charges. A late issue of Rates Notices will have detrimental impacts on Council’s cash flow.

Background

In accordance with the Integrated Planning and Reporting (IP&R) requirements in the NSW Local Government Act, Council has adopted a Delivery Program for the period 2022-2026. The Delivery Program inclusive of the draft Operational Plan and Budget for 2024/25, is presented to Council for endorsement for public exhibition and community feedback.

The adoption of a high-level budget strategy and economic parameters by Council enables staff to prepare the draft budget with an improved level of confidence that the draft budget, when discussed at budget workshops and ultimately presented formally for consideration, will meet Council’s expectations. It is also considered that the adoption of a high-level budget strategy and economic parameters by Council makes the budget preparation more transparent and efficient with strategic priorities and budget constraints being identified in advance.

Council adopted the 2024/25 budget strategies and economic parameters on Monday 26 February 2024.

Table 1 - The Strategic Budget Principles are outlined below:

Adopted Budget Strategy/Parameter	Achieved
The budget will not result in an unrestricted cash deficit.	P
Prioritise funding in the following order: i. Provide sufficient funding for all continuing services ii. Continue Council’s commitment to asset renewal iii. Continue a program of capital improvements to address historic budget shortfalls	P
Maintain or improve Council’s financial and asset management performance indicators reported in the annual financial statements.	Partly*
Maintain an adequate working funds balance.	P
Minimise carry forwards through substantial completion and long-term planning of the capital works program	P
Rates are increased by 4.5%	P
User fees and charges are increased by a minimum of 7.5%	P
Salaries and wages are increased by 3.5%, plus bonus payable, as per the Local Government (State) Award	P
Superannuation guarantee is to be increased from 11% to 11.5% in line with legislated increases	P
Materials and other expenditures increase by a maximum of 5%	P
The capital works program is reduced in order to assist in the management of Council’s financial sustainability challenges and to ensure there is no reduction in Council’s unrestricted cash balance	P
Borrowing for capital works is limited to those projects identified for loan borrowings in the AEC Financial Sustainability Review. No other loan borrowings are to be taken out unless a funding source is identified for the ongoing repayments or principal and interest.	P
Should the need arise during the year for additional borrowings, the following options will be considered: i. Internal borrowing opportunities ii. Asset rationalisation	P
Repairs to Council’s Road Network be a primary focus of the initial draft of the Capital Works Program.	P
Budget Workshops be scheduled with all Councillors in the preparation of the draft 2024/25 budget which will include consideration of any recommended re-prioritisation of capital works projects listed in the current Delivery Program and Operational Plan.	P

Notes:

*A number of indicators are forecasting a deterioration due to the need to a reduction in available funds for capital works.

Council Priorities

The Delivery Program details what activities Council intends to undertake to achieve the key priorities outlined in the Community Strategic Plan 2032. These priorities are grouped under the themes of:

· Resilient, safe, accessible, and inclusive communities.

· Sustainable, liveable environments.

· Thriving local economies that meet community needs.

· Effective, responsible and authentic leadership.

Each of the themes and key priorities that have been identified by the community have been allocated 4-year objectives (54 in total) in the Delivery Program, and 1-year actions in the Operational Plan. The combined DPOP outlines these objectives and the actions, projects and services Council will deliver in the 2024/25 financial year.

2024/25 Projects and Initiatives

Full details on Council’s planned projects and initiatives are included in Attachment 1 – Draft Delivery Program Operation Plan & Budget 2024/25.

There are numerous new initiatives programmed for 2024/25 including:

· Coordinate delivery of the Financial Sustainability Project to address the recommendations outlined in the 2023 financial review across key pillars of Asset and Project Management, Financial Management and Service Planning

· Establish an Enterprise Project Management Office to oversee and support project governance through management of the corporate Project Management Framework and assess project readiness for inclusion in capital budgets

· Establish the Maritime Commercial Services Unit, identify key assets and determine future actions and performance measures

· Manage Council's Flood Alert Network

· Develop planning controls and character statements to manage the contribution new development makes to neighbourhood or local character, including contemporary development and heritage controls for Berry

· Preparation of a new local infrastructure contributions scheme and governance framework

· Maintain Council's Key Projects Advocacy Document as a living prospectus to drive government investment

· Ensure effective and efficient recording of water consumption through continuation of water meter replacement program

· Increase the community awareness of the Shoalhaven Water financial support program and provide additional support and training to all key agencies that administer the Payment Assistance Scheme on behalf of Shoalhaven Water

Council Draft Capital works program includes:

· Boxsells Bridge – Meroo Meadow, Murrays Bridge – Conjola, Smarts Bridge – Croobyar (all grant funded)

· Local Roads Upgrade Program (Stage 1 Federal Government $40M grant funding)

· George Evans Road – Yalwal Interchange

· East Nowra Sub-Arterial – Detailed Design and Early Works (grant dependent)

· Shared User Paths including Matron Porter Drive, Murramarang Road – Shelly Beach / Kioloa, Old Southern Road (all grant funded)

· Waste Facilities West Nowra - Materials Recovery Facility, Waste Education Centre

· Shoalhaven Water - Water and Sewer capital works including the Bamarang to Milton Water Trunk stage 2, Huskisson Vincentia Sewer Pumping Station upgrade and South Nowra Surcharge Sewer Main package 2

Council’s Natural Disaster Reconstruction Team will continue delivery of infrastructure recovery works from the numerous significant weather events that have impacted the Shoalhaven since 2020. Progress in delivery of these works can be found on Council’s website through the following master page: Natural Disaster Reconstruction Works. Planned Natural Disaster projects are not currently captured in Council’s 2024/25 draft capital works program (which is discussed later in this report). Natural Disaster projects will be added to the capital program after public exhibition, and will be endorsed as part of the final adoption of the Delivery Program Operation Plan & Budget 2024/25.

Performance measures

Performance measures against each Operational Plan action have been included to ensure that Council continues to be accountable against the objectives that have been set and to better manage community expectations. These measures can be targets, benchmarks or milestones. Performance against the adopted DPOP Actions and measures are reported to Council and the community on a quarterly basis.

Statement of Revenue Policy

Rating Structure and 2024/25 Rates Increase

Council has resolved to maintain the same approach to rating used in the previous 2023/24 year, structured on an ad valorem basis using land values issued by the Valuer General in accordance with Section 497 of the NSW Local Government Act 1993, subject to base amounts for ordinary and special rates. The use of a base amount brings the higher and lower land values closer together and in effect spreads the burden across the board to all ratepayers.

Permissible increases in rates revenue are determined by the Independent Pricing & Regulatory Tribunal (IPART) through two distinct processes; the industry standard rate peg and/or a council Special Variation. Following recent review of the rate peg methodology, IPART now considers changes to base costs for council groups, Emergency Services Levy (ESL) contributions, and population growth, in determining the annual rate peg for each council. IPART has determined a rate peg of 4.5% for Shoalhaven for 2024/25.

Whilst Council officers pursued an application for a Special Rate Variation to be applied from 1 July 2024, this was not endorsed by the Council.

The proposed rating structure for 2024/25 has a flat base amount of $761, with the exception of the Residential – Non-Urban category that has a base of $50, the Farmland category which has a base of $1,022, and the Farmland – Dairy category which has a base amount of $1,142.

Business – Ordinary category does not have a base amount and is subject to an ad valorem rate in the dollar levied on the value of the property supplied by the Valuer General of NSW.

Business – Ordinary rates are levied on parcels of land held by the Crown and categorised as Business Ordinary (i.e., Crown leases such as permissive occupancies, jetties, slipways, moorings, pastoral leases, etc.).

The following rates are proposed for 2024/25 in respect of each category of ordinary rates levied by Council:

· Residential: Will be levied a base amount of $761 and an ad valorem rate of 0.09908 cents in the $ for Ordinary Residential Rates and a base amount of $50 and an ad valorem rate of 0.09908 cents in the $ for Residential Non-Urban Rates.

· Farmland: The rates for Farmland will be levied a base amount of $1,022 and an ad valorem rate of 0.07480 cents in the $. The rates for Farmland – Dairy will be levied a base amount of $1,142 and an ad valorem rate of 0.03980 cents in the $.

· Business: All sub-categories will utilise the same base amount of $761, excluding Business (Ordinary – Business category), where no base amount is applied given the type of properties within this category. However, different ad valorem rates have been applied, depending upon the level of service provided in each area. An ad valorem rate for Nowra CBD business rates is 0.51580 cents in the $, Business Ordinary 0.19932, Business Commercial/Industrial 0.17330, Business – Major Retail Centre – Nowra 0.72930 and Business – Major Retail Centre – Vincentia 0.35130.

Note: The proposed 2024/25 rates and charges shown in the preceding section are subject to immaterial change between draft exhibition and final Council adoption of the DPOP for 2024/25. This potential for immaterial change relates to the daily addition of new properties (subdivision and consolidation), and daily changes to property land values, changes in categorisation, and rateability.

Draft Fees & Charges 2024/25 are included as Attachment 2 (Part 1) and Attachment 3 (Part 2).

Interest on Overdue Rates & Charges

Council’s current policy POL22/88 is to adopt the maximum permissible interest rate for each year on overdue rates, charged on a simple interest basis. This is consistent with the policy of the other local councils in the region.

The Minister for Local Government has announced the maximum rate of interest payable on overdue rates and charges for the period 1 July 2024 to 30 June 2025 at 10.5% per annum. Interest charges will be waived for ratepayers that experience financial hardship and can apply for financial assistance under the Council Hardship Policy.

2024/25 Water and Sewer Fees and Charges

The 2024/25 water and sewer (wastewater) pricing is derived in accordance with the Local Government Act 1993; in compliance with the NSW Government Water Supply, Sewerage and Liquid Trade Waste Pricing Guidelines and Council Policy 22/129. These documents are publicly available.

The water and sewer availability charges are levied in accordance with Sections 501 and 552 of the Local Government Act, to provide access to facilities for the supply of water and sewerage services. In 2024/25, the water availability charge for a residential connection (20mm) has increased to $145 ($57 increase) per annum, the sewer availability charge will increase to $1,028 ($72 increase) per annum.

The two-part tariff for water charges will continue (usage and availability). In 2024/25 the treated water usage charge will increase from $2.00 to $2.50/kL.

The impact of these price increases on customers have been modelled using a residential customer’s average water consumption of 155kL per year. Based on the average water consumption the total increase in this customer’s annual water and sewer account would be $206.50 for the full year.

Further information regarding Water and Sewer Fees and Charges can be found in Attachment 2 (Part 1).

2024/25 Domestic Waste Management Charges

Under section 496 of the Local Government Act 1993, Council must make and levy an annual charge for providing domestic waste management services. Under section 504 of the Act, income from the charge must not exceed the reasonable cost to the Council of providing those services. A standard 120L Domestic Waste Management Charge service is proposed to increase 7.9% from $468 to $505 in 2024/25.

Further information regarding Domestic Waste Management Charges can be in Attachment 2 (Part 1).

Budget Summary

Not dissimilar to many other NSW councils, Council has experienced a growing gap between operating revenue and operating expenditure. The growth in the cost base of current services provided has exceeded the growth in revenue. This has placed Council in a difficult financial position.

A bottom-up budget process was adopted in building the FY2024/25 operational and capital budgets. This approach provides a realistic budget that is reflective of the cost incurred to deliver our current services at the current agreed service level. It also ensures all costs required to meet legislative requirements are adequately budgeted for. This results in a draft 2024/25 operating deficit which is larger than Council’s previous budget however, is in line with the historical actual results achieved by Council.

Whilst the severity of Council’s current financial position is well documented, the FY2024/25 budget further reinforces the need for financial intervention. The current lack of available cash will continue to be a major concern throughout FY2024/25 and Council will continue to struggle with its aged infrastructure. This lack of investment in asset renewal has led to a significant deterioration in the condition of Council’s assets and has created infrastructure backlog issues. Council’s current financial position does not allow for Council to actively deal with its backlog of infrastructure, nor the adequate funding of asset renewals moving forward.

In the 2008 audited financial statements, all of council infrastructure assets were rated as either category 1 or 2, category 1 being assets of excellent condition requiring normal maintenance and category 2 being assets in good condition requiring only minor maintenance work. As reported in the recently adopted 30 June 2023 financial statements, 51.3% of Council’s assets by value are rated in category 1 and 2, with 48.7% of assets now reported in categories 3 (satisfactory) to 5 (very poor).

More information pertaining to Council’s limited cash and its impact on capital budgets is discussed later in this report.

Management of Council’s cash position will continue to require considerable effort from Finance staff, diverting these resources from other financial responsibilities. Further, as the conditions of assets continues to deteriorate and funding needs to be diverted to increased reactive maintenance, the community will have a worse experience from poorer quality infrastructure and reduced service over time.

Council’s dedicated Financial Sustainability Review project team will continue to coordinate financial sustainability actions and initiatives in response to previous Council resolutions and those noted in the November 2023 AEC Financial Sustainability review, with the aim of returning Council into a financially sustainable position. As operational savings are identified through the Financial Sustainability Review project, and these savings are resolved by Council and ready for implementation, the operating budget will be revised at each Quarterly Budget Review process with the savings being quarantined with the expectation they are used to rebuild Council’s unrestricted cash position, assist in funding future capital works, or assist with the repayment of Council borrowings.

Table 2: Income Statement by Fund

	($‘000)
	General Fund	Water Fund	Sewer Fund	Consol.
Income from Continuing Operations	337,022	46,012	64,866	373,214
Expenses from Continuing Operations	335,347	44,027	54,600	361,204
Net Operating Result	1,675	1,985	10,266	12,010
Net Operating Results Before Capital	(25,291)	345	8,241	(18,621)
Net Cash Movement	(20,088)	3,125	870	(16,093)
Net Reserve Movement	(20,119)	3,125	870	(16,124)
Net Unrestricted Cash Movement	31	0	0	31

The proposed Draft 2024/25 Budget includes a capital expenditure of $111.4M across General, Water and Sewer funds along with the $361.2M of operating expenditure required to provide the essential services to our community which brings the next year’s consolidated budget to $472.6M.

Table 3: Capital and Operating Budget by Fund

	($‘000)
	General Fund	Water Fund	Sewer Fund	Consol.
Capital Budget	76,767	14,385	20,225	111,377
Operating Budget	335,347	44,027	54,600	361,204
Total Budget	412,114	58,412	74,825	472,581

The budget was prepared based on the principles of prudent financial management and fiscal discipline. It is a balanced budget meaning that the budgeted general fund operational and capital expenditures do not exceed the general revenue and available internal and external restrictions of the Council and conforms to the requirement for generally no cash deficit budgeting.

Table 4: Draft 2024/25 Budget (provisionally balanced)

	2024/25 Budget ($'000)
	General Fund	Water Fund	Sewer Fund	Consol.*
Rates & Annual Charges	129,346	8,669	55,143	193,158
User Charges and Fees	71,701	30,673	4,839	107,213
Interest and Investment Revenue	5,904	1,851	722	8,477
Other Revenues	4,967	105	19	5,091
Internal Revenue	69,494	3,074	2,118	0
Grants and Contributions provided for Operating Purposes	22,545	0	0	22,545
Grants and Contributions provided for Capital Purposes	26,966	1,640	2,025	30,631
Net Gains from the disposal of assets	6,099	0	0	6,099
Total Income	337,022	46,012	64,866	373,214
Employee Benefits and On-Costs	101,977	12,520	12,222	126,543
Borrowing Costs	4,767	0	2,907	7,674
Materials and Contracts	85,951	9,399	14,439	109,420
Depreciation and Amortisation	64,553	15,144	17,523	97,220
Other Expenses	20,249	59	39	20,347
Internal Expenses	57,850	6,905	7,470	0
Total Expenses	335,347	44,027	54,600	361,204
Net Operating Results	1,675	1,985	10,266	12,010
Net Surplus/(Deficit) before Capital	-25,291	345	8,241	-18,621
Other Cash Adjustments
Capital Expenditure	-76,767	-14,385	-20,225	-111,377
New Borrowings	3,751	0	0	3,751
Loan Principal Repayments	-26,165	0	-5,045	-30,782
Net Gains from the disposal of assets	-6,099	0	0	-6,099
Proceeds from the disposal of assets	18,965	120	100	19,185
Receipt of Internal Loan Repayment	0	428	0	0
Depreciation Adjustment	64,553	15,144	17,523	97,220
Dividend Paid to General Fund		-167	-1,749	0
Net Cash Outflow	-20,088	3,125	870	-16,093
Reserve Movements
Net Transfers from Reserves	20,119	-3,125	-870	16,124
General Fund Net Cash Movement	31	0	0	31

*Note: Consolidated results include interfund adjustments not listed in the table.

Capital Works Program

On completion of the operational budget, Council had $1.4M available in unrestricted general fund cash to contribute towards its general fund (excludes Water and Sewer Funds) capital program. This amount will continue to deteriorate as rises in expenditure (inflation) continue to grow at a faster rate than increases in revenue (rate peg). Originally Council had $900k in unrestricted general fund cash to contribute to general fund capital projects however, during the budget workshop with Councillors it was proposed that the Tourism and Economic Development Budget be permanently reduced by $500k in order to allocate this money to capital. The draft budget has been prepared on this basis.

Council’s Enterprise Project Management Office (ePMO) received requests for critical capital projects requiring $29.3M in unrestricted general fund cash contributions, representing a shortfall in available cash of $27.9M.

The ePMO performed a thorough review of all requests and focused on those outstanding capital works projects that have commenced and will be incomplete by 30 June 2024 (carry forwards), and projects not yet commenced but need to be delivered in FY2024/25 due to funding deed or other contractual obligations.

This resulted in a proposed total capital works program of $111M (General Fund $66.7M, ShoalWater and Waste $44.6M) and includes a general fund unrestricted cash contribution of $17.9M.

The critical capital works have been categorised into Categories 1, 2 and 3. These are defined as follows:

· Category 1 - Essential works required to meet minimum road renewals, urgent renewals of other asset types and critical grant co-contributions. “Required to keep the lights on”.

· Category 2 - Next most urgent renewals to meet Council’s basic obligations, fund other secured grant co-contributions and provide for urgent reactive capital works.

· Category 3 - Still urgent renewals including some more commercially focussed projects and compliance attainment.

Excluding Shoalhaven Water (Water and Sewer) and Waste funded projects, the proposed general fund capital program is $66.7M. This is broken up by:

Category	Total project cost	General fund Unrestricted cash contribution
1	$56,346,190	$9,267,343
2	$4,892,183	$4,348,589
3	$4,993,782	$4,274,045
Total	$66,732,154	$17,889,976

It is proposed to fund the $17.9M general fund unrestricted cash capital requests through the following mechanisms:

· $1.4M available in unrestricted general fund cash.

· $5.2M of council’s projected 2024/25 Special Rate Variation (SRV) Program (approved in 2018/19) is to be made available to fund all capital works. $4.7M will go to funding road and building renewals which are the capital projects the SRV was approved to be spent on. The remaining $500K has been allocated to bridge renewal projects. Bridge renewal projects were not noted in the original SRV application, however they are closely related to the road renewal works and staff deem it appropriate that the remaining SRV be allocated to capital works closely aligned with its original purpose.

· $5.5M in current unspent loan funds (previously drawn down to fund the Sanctuary Point Library design) being repurposed whilst a decision on the final scope of this project is determined. Future borrowings for completion of the Sanctuary Point Library are already included in Council’s Long Term Financial Plan (most recent draft was placed on public exhibition in December 2023 and presented to Council in January 2024 – (however not endorsed).

· $5.375M of proceeds from land sales (budgeting for $15M in proceeds from land sales – remaining $9.625M will go towards paying of Council loans).

· $400K in uncommitted capital previously allocated to the Nowra CBD Committee (in FY2023/24) will be carried forward and repurposed due to there being no ePMO approved projects identified by this committee for FY2024/25.

In addition, as there are no Nowra CBD Committee projects that have been verified by Council’s ePMO there will be no additional capital allocation to this Committee in FY2024/25.

There was a further $11.4M in general fund unrestricted cash capital requests that have not been included in the categories above but were still considered to be priorities for FY2024/25 by the organisation. Due to funding limitations, these will need to be funded in FY2025/26. Council’s financial position will need to drastically improve in FY2025/26 in order to provide funding to complete these outstanding works, the FY2025/26 recurrent capital expenditure (for example, roads reseals) and any further works that arise between now and 30 June 2025.

Due to the funding constraints documented throughout this report, it is unlikely there will be unrestricted general fund cash to commit to capital in FY2025/26, and onwards, unless a Special Rate Variation (SRV) is adopted. Therefore, Council has only presented a 1 year capital program in the FY2024/25 delivery program operational plan as there is no certainty around the future of the capital works program at this time.

Work on the proposed 2025/26 Long Term Financial Plan is underway, and the need to address Council’s funding issues is the top priority of Council staff. Council’s dedicated Financial Sustainability project team will continue to coordinate Financial Sustainability actions and initiatives in response to previous Council resolutions and those noted in the AEC Financial Sustainability review, with the aim of returning Council into a financially sustainable position. However, it is the opinion of Council officers that an application for a SRV will be required in FY2025/26 in addition to the outcomes achieved through the Financial Stationarity Review.

The proposed 2025/26 Long Term Financial Plan will be presented to Council later this calendar year.

Table 5 below shows the total capital works by program and indicates the proposed funding sources for the capital program.

Table 5: Total Capital Works by Program

Capital Program	$’000
Roads and Transport	22,795
Strategic Roads & Bridges	8,500
Open Space, Sport, and Recreation	1,325
Buildings and Property	12,399
Internal Corporate Services	4,134
Waste and Recycling Program	10,035
Bridges	7,661
Commercial Undertakings	5,828
Environmental Management	1,210
Community and Culture	563
Stormwater	712
Waterways Infrastructure	1,605
Total General Fund	76,767
Water and Sewer Capital Works	34,610
Total Capital Program	111,377

It is important to note that the capital works program for 2024/25 will be adjusted throughout 2024/25 having regard to:

I. Carry forward and Revotes which are to be determined in conjunction with the March and June 2024 Budget Reviews.

II. Outcomes from the comprehensive review of Council’s Long-Term Financial Plan to be undertaken in the first quarter of 2024/25.

Budget Details – General Fund

The Operating Result for 2024/25, excluding capital grants, is a deficit of ($25.3M). With the inclusion of capital grants, the net operating result is a surplus of $1.6M. There is no net impact on the cash flow result for unrestricted general fund, that is, the budget is provisionally balanced as previously stated.

Key drivers of the 2024/25 operating results:

· Increase in income due to anticipated assets sales

· Increase in net employee operating costs – whilst the gross employment costs have increased in line with the Local Government Award, Council has budgeted for a reduction in the amount of employee costs that are recovered through grant funded projects and capital works

· Increase in depreciation costs due to the forecast increase in assets values resulting for the 30 June 2024 revaluation process

· Increase in loan repayments and interest due to the approved 2023/24 general funded loans

· Increase in maintenance budgets to address historical shortfalls in building maintenance and compliance, as well as parks maintenance

Council has reduced its reliance on borrowing in FY2024/25, only budgeting to borrow loans that were included in its draft Long Term Financial Plan, which was reported to Council, but not endorsed in January 2024. The future loans budgeted for in the long term financial plan include:

· Material Recovery Facility (Waste Fund)

· Waste Education Centre (Waste Fund)

· Sanctuary Point Library (Unrestricted general fund cash)

Borrowings are proposed for the Materials Recovery Facility and Waste Education Centre in the FY2024/25 budget. No borrowings are proposed to be drawn down in relation to the Sanctuary Point Library. Due to a change in project scope, construction will not commence on the library in FY2024/25 and therefore loan borrowings will not be needed until future years. There is currently no change in the amount anticipated to be borrowed for the library, only the timing of the loan drawn down (will occur in FY2025/26 or later).

Budget Details – Shoalhaven Water

The Operating Result for the Water Fund for 2024/25, excluding capital grants, is a surplus of $345K. When capital grants and contributions are included, the net operating result is a surplus of $2.0M. Key drivers of the 2024/25 operating results:

· Increase in revenue due the proposed increase in annual and user charges (noted earlier in this report)

· Increase in employee costs as per the award

· Increase in depreciation expense due to the forecast increase in assets values resulting for the 30 June 2024 revaluation process

· Increase in operating costs on capital projects – demolition and removal of asbestos

· The Operating Result of Sewer Fund for 2024/25, excluding capital grants, is a surplus of $8.2M. When capital grants are included, the net operating result is a surplus of $10.2M. Key drivers of the 2024/25 operating results:

· Increase in depreciation expense due to the forecast increase in assets values resulting for the 30 June 2024 revaluation process

· A significant increase in haulage due to standards changing of how to dispose of biosolids

The Shoalhaven Water Directorate capital expenditure of $34.6M has been allocated in the Draft Budget for 2024/25. The total includes the following significant projects/programs:

Water Fund:

· Bamarang to Milton Water Trunk stage 2 - $1.8M

· Water mains replacement program - $4.3M

Sewer Fund:

· Huskisson Vincentia Sewer Pumping Station upgrade - $2.1M

· South Nowra Surcharge Main package 2 - $5.6M

· Erowal Bay sewer protection - $0.8M

No new loans are proposed for either Water or Sewer Fund.

Key Performance Indicators

The key performance indicators are set by the Office of Local Government to measure financial performance and suitability of local councils across NSW. The projected 2024/25 indicators for each of the funds as well as consolidated funds for Shoalhaven City Council is outlined below.

It was documented throughout the AEC Financial Sustainability review that Council was not meeting the required OLG targets, and that in order to return to a financially sustainable position and meet these required targets, a SRV would be required.

The tables 6 and 7 below highlight that Council is continuing to not meet the OLG targets in 2024/25.

Table 6: Financial Performance Indicators

	Description	Calculation	Target	Fund	2023/24
Operating Performance Ratio	Measures Council's achievement of containing operating expenditure within operating revenue	Total continuing revenue (excl Cap Grants & Contributions) -	Greater than 0%	Consolidated	-7.4%
		Operating Expenses		General	-10.3%
		Total continuing revenue		Water	0.8%
		(excl Cap Grants & Contributions)		Sewer	13.1%
Own Source Operating Revenue Ratio	Measures fiscal flexibility. It is the degree of reliance on external funding sources such as operating grants and contributions	Total continuing operating revenue (less ALL grants and Contributions)	Greater than 60%	Consolidated	85.5%
				General	85.0%
		Total continuing operating revenue		Water	96.4%
				Sewer	96.9%
Unrestricted Current Ratio	To assess the adequacy of working capital & its ability to term for the unrestricted activities of Council	Current assets less all external restrictions	Greater than 1.5	Consolidated	1.21
				General	1.21
		Current liabilities less specific purpose liabilities		Water	5.14
				Sewer	1.82
Debt Service Cover Ratio	Measures the availability of operating cash to service debt including interest, principal and lease payments	Operating result before capital excluding EBITDA	Greater than 2.0	Consolidated	2.68
				General	1.94
		Principal Repayments + Borrowing Interest Costs		Water	No Debt
				Sewer	3.49
Rates, Annual Charges, Interest and Extra Charges Outstanding Percentage	To assess the impact of uncollected rates and annual charges on liquidity and the adequacy of recovery efforts	Rates, annual and extra charges outstanding	Less than 10%	Consolidated	6.2%
				General	4.9%
		Rates, annual & extra charges collectible		Water	9.6%
				Sewer	8.5%

Cash Expense Cover Ratio	To assess the number of months a Council can continue paying for its immediate expenses without additional cash inflow	12* Current year's cash and cash equivalents plus all term deposits	Greater than 3 months	Consolidated	4.99
				General	2.94
		Payments from cash flow of operating and financing activities		Water	15.73
				Sewer	3.15

Table 7: Infrastructure Asset Performance Indicators

	Description	Calculation	Target	Fund	2024/25
Infrastructure Renewal Ratio	To assess the rate at which these assets are being renewed relative to the rate at which they are depreciating	Asset Renewals	Greater than 100%	Consolidated	55.89%
				General	48.04%
		Depreciation,		Water	76.74%
		amortisation, and impairment		Sewer	64.10%
Infrastructure Backlog Ratio	The ratio shows what proportion the backlog is against the total value of a Council's infrastructure	Estimated cost to bring assets to a satisfactory standard	Less than 2%	Consolidated	TBA
				General	TBA
		Net carrying amount of infrastructure assets		Water	TBA
				Sewer	TBA
Asset Maintenance Ratio	Compares budget vs required annual asset maintenance. A ratio above 1.0 indicated Council is investing enough funds to stop infrastructure backlog growing	Actual asset maintenance	Greater than 1x	Consolidated	TBA
				General	TBA
		Required asset maintenance		Water	TBA
				Sewer	TBA

TBA: Council is not in a position to provide estimates of these required benchmarks due to asset management planning not currently being mature enough to provide these estimates confidently. The required asset maintenance is in excess of the current budgeted maintenance.

Comments on the indicators that do not meet the benchmark are as follows:

Operating Performance Ratio Greater than 0%:

The budgeted ratios for general fund and water fund are below the benchmark, though water is only just below the benchmark. The actual ratios for these benchmarks for the years ended 30 June 2023, and 2022 were below zero and the budgeted benchmark for these ratios for the year ended 30 June 2024 is also below zero. Without increasing operating income or reducing operating expenditure, these benchmarks will continue to be below zero.

Unrestricted Current Ratio Greater than 1.5

General Fund has an Unrestricted Current Ratio below 1.5 due to cash anticipated to be spent on capital works projects reducing our anticipated cash balance, combined with a reduction in estimated grant funding arising from councils revised grants policy.

Debt Service Cover Ratio greater than 2.0

General fund ratio is below zero because of the decision to voluntarily pay debt down next year increasing value of principal repayments that will be made in 2025.

Cash Expense Cover Ratio Greater than 3 months

Cash payments from operating, investing and financing activities from general fund are greater than normal due to the anticipated repayment of additional debt in 2025.

Infrastructure Renewal Ratio, 100%

The budgeted expenditure on asset renewal for General, Water, and Sewer fund does not meet or exceed the anticipated relevant depreciation, amortisation and impairment for those funds. This is a consequence of the General Fund, Water Fund, and Sewer Fund having insufficient anticipated cash to commit to the projects required to meet its obligations under this benchmark.

Councillor Engagement

Councillors have had the opportunity to participate in a number of briefings and workshops throughout the preparation of the Draft 2024/25 DPOP. These workshops included our fortnightly Financial Sustainability Workshops, as well as 3 additional workshop sessions dedicated to the preparation of the draft budget. The full schedule is shown below in Table 8.

Table 8: Councillor Engagement Schedule

Description	Date
Financial Sustainability workshop 1	Tuesday, 20 February 2024
Financial Sustainability workshop 2	Tuesday, 5 March 2024
Financial Sustainability workshop 3	Tuesday, 19 March 2024
Councillor Budget Workshop 1 – General Fund	Tuesday, 12 March 2024
Councillor Budget Workshop 2 – Water and Sewer Fund	Thursday, 21 March 2024
Councillor Budget Workshop 3 – All Funds	Thursday, 4 April 2024
Councillor Budget Workshop 4 – Capital program	Thursday, 11 April 2024
Fees and Charges: provided by email	Friday, 1 March 2024
Fees and Charges: provided by email	Wednesday, 17 April 2024

As is normal practice, the results from the Councillor engagement are represented in the combined documents presented in this report with a recommendation that they be placed on public exhibition for community engagement and feedback.

Community Engagement

A community engagement plan has been prepared to ensure that the Community can be informed about the contents of the Draft Delivery Program and Operational Plan, Budget, and Fees & Charges. These engagement activities include the following:

· Information at Council facilities with QR code link directing to more information.

· Online feedback form on Council's Get Involved page.

· Social media posts to raise awareness and drive traffic to the Get Involved page.

· Media releases and communications to key groups such as Advisory Committees, Community Consultative Bodies and Community Groups.

The exhibition will also be promoted at scheduled community engagement sessions occurring throughout the 28-day period. Submissions will be able to be provided to Council online through our engagement webpage, via email or in written form.

Conclusion

A draft 2024/25 Delivery Program and Operational Plan, Draft Budget, Draft Fees and Charges has been prepared and are recommended to be placed on public exhibition for a period of 28 days.

The Delivery Program and Operational Plan, Draft Budget, Draft Fees and Charges (the documents) represent a considered approach to sustainable and affordable budgeting. Under the current budgetary constraints facing the Council, this is extremely difficult.

Councillors and staff are now wanting to hear from the Community what its views are on the proposed budget and to that end, a 28 exhibition is proposed to enable comment to be received.

Ordinary Meeting – Monday 06 May 2024

Page 0

CL24.121 Report Back - Notice of Motion - Bomaderry Lions - Storage Access - Thurgate Oval Bomaderry

HPERM Ref: D24/109477

Department: Building Services

Approver: Carey McIntyre, Director - City Services

Attachments: 1. Thurgate Oval - Latest Building Concept, Bomaderry Lions Club March 2024 ⇩

2. Thurgate Oval - Bomaderry Lions Club Building Modification - Estimate of Costs April 2024 ⇩

Reason for Report

The reason for this report is to provide a response to the Notice of Motion requested by Council at the Ordinary Meeting held on 26 February 2024 (CL24.52).

Recommendation

That Council Receive the report regarding the Bomaderry Lions proposal for storage access at Thurgate Oval.

Options

1. That Council receive the report regarding the Bomaderry Lions proposal for storage access at Thurgate Oval.

Implications: Response to the Notice of Motion and the Bomaderry Lions proposal for storage access at Thurgate Oval is received.

2. That Council does not receive the report regarding the Bomaderry Lions proposal for storage access at Thurgate Oval.

Implications: Nil

Background

Brief history- Lions club requesting a site from Council.

The Bomaderry Lions Club (BLC) have a strong history in supporting our local community. Council has been approached on several occasions to assist the BLC by providing accommodation to support their operations.

BLC was unsuccessful in an EOI application to lease the old Rural Fire Station located at 177 Illaroo Road in 2021.

At the Ordinary Meeting of the Council of 26 October 2021, it was resolved:

RESOLVED (Clr Gash / Clr Findley) MIN21.785C

That Council:

1. Approve the Veterans MC South Coast Chapter Incorporated (VMC) for the use and occupation of 177-179 Illaroo Road, North Nowra for a term of ten (10) years at a commencing rental of $510 per annum with Council. Subject to any formal approval process

2. Endorse a budget to Building Services for an amount of $12,000 per annum for outgoings and repairs in order to maintain the property during the term of the lease.

3. Delegate approval to the CEO for the execution of relevant documentation required for this resolution to occur.

4. Authorise the CEO (Director City Services) to continue investigating suitable premises for occupation by the Bomaderry Lions Club Inc. Noting that the Lions Club currently have an informal arrangement for storage amongst their members.

CARRIED

Building Services staff was authorised by the City Services Director to investigate premises suitable for the BLC to occupy. Several meetings have been held between Council Staff and members of the BLC to determine their needs.

At the Ordinary Meeting of the Council on 26 February 2024, it was resolved that:

RESOLVED (Clr Copley / Clr White) MIN24.95

1. That Council receive a full report on the Bomaderry Lions proposal for storage access at Thurgate Oval.

BLC Accommodation needs

The Bomaderry Lions Club has expressed its requirements for sole tenure of a secure building in the Bomaderry local area. The building ideally would be sized to accommodate the following:

Needs

· Caravan storage (caravan dimensions 2700W x 9500L x 3200H)

· Tow vehicle storage.

· An area and power supply suitable for freezers/ fridges.

· A hot water service.

· A sink (to wash up catering equipment).

· Shelving to store catering and event type equipment and when not in use.

· A location to wash the caravan and tow vehicle.

· The building should be suitable to access the site safely (i.e. not on main road with high traffic flow).

Wants

· A separate space within the building where meetings could take place.

Potential Sites

Although there are limited Council owned sites/ buildings in the Bomaderry local area, Council investigated the following sites before they were deemed unsuitable.

· 4 McIntyre Way, Bomaderry – Council depot / operational site.

· 76 Railway Street, Bomaderry – Vacant land, Shoalwater asset.

· 5 Birriley Street, Bomaderry – Heritage restrictions of the site.

Preferred Site

Council is the owner of a building located on Lot 21 Sec 27 DP2886, Bomaderry, known as Thurgate Oval (Figure 1). This building was identified by Council officers as a potential site for BLC; provided modifications are undertaken, it would meet most of its requirements.

This building is an old changeroom facility including two toilets located on the western side of Thurgate Oval. The building is accessed via an off-street gravel road into a carpark (trafficable by caravan). This building was damaged by fire approximately seven years ago and has been left vacant since being repaired. This building has been subject to consistent vandalism over recent years.

A bird's eye view of a golf course

Description automatically generated

Figure 1- Thurgate Oval change room Building

The existing building in its current form meets all ‘needs’ of the BLC except for the secure undercover storage area for the caravan and tow vehicle. Some initial design work was completed by Council staff to consider options to house the caravan, tow vehicle and a separate meeting space; however, this was deemed unaffordable by both parties.

The BLC have since revised its need to have a separate meeting space within the building; thereby, reducing the building footprint from the initial design. The revised criteria can be satisfied by removing the internal walls, raising the roof height to achieve an eave height of 4200mm, extending the building footprint towards the gravel access road by 1500mm and installing two roller doors in the front of the building to cater for the caravan and tow vehicle access and storage. Attachment 1 is a concept plan provided by BLC which illustrates intended modification required to the building.

Financial implications of proposal

The BLC understands the current financial situation that Council is experiencing. In a bid to secure the preferred site for their sole tenure, the BLC has requested some funding support from Council. Although not designed and costed, the BLC has proposed to fully fund the modifications to the building via grants and donations. Council has been requested to provide some financial support by funding Development Application (DA) related fees and waste/ dumping costs during construction. Attachment 2 provides a summary of expected project related costs and funding responsibilities.

BLC Leasing expectations.

Assuming that this site is approved for lease and BLC are selected as the preferred organisation to tenant this building, the BLC have the following expectations:

· Entering a long-term lease.

· Paying a low rent.

· No responsibility for managing access to the Public Amenities (currently closed) within the building footprint.

· Continued maintenance of the building funded by Council.

· BLC will take out required insurances and pay outgoings.

Any negotiations regarding the lease will be managed by Councils Property Department via a lease agreement.

External Consultations

A local Development Planner has provided advice confirming that the BLC proposal is permissible under the planning provisions that apply to the land.

Community Consultations

Although there has not been any community consultation, there is potential that several community organisations could be interested in leasing this building from Council.

Notification of the development will be consistent with any approval process and the requirement for public exhibition of the proposal.

Policy Implications

If a decision was made by Council to lease this building, an Expression of Interest process will need to be undertaken by staff to ensure that all community organisations have equal opportunity to apply to lease this building.

All applications will be assessed against an evaluation criterion and the preferred candidate reported to Council.

Financial Implications

The BLC have indicated that if successful, they will be responsible for most of the DA preparation costs. BLC have confirmed that they would be responsible for raising the required funds to complete all modifications to the building without any further financial or in-kind contribution from Council. Council’s requested contribution to fund development works would be approximately $15,000 as detailed in Attachment 2.

The modification works would need to comply to National Construction Code requirements.

In addition to Councils contribution towards the building works, there would be ongoing cost to Council for the life of this agreement and occupancy.

The additional yearly costs are estimated (only) as follows.

· Rental Subsidy (based on 90% of $10,000 market rent) say $9,000

· Building Maintenance (reactive / programmed) say $7,500

$16,500 p.a.

Note: The market rent has been estimated based on market rates sourced from operators of similarly sized storage facilities. Applicable rental subsidy will be determined through assessment using the rental subsidy calculation.

If Council resolved to reopen and maintain the public amenities within the same building the costs to council to provide this service annually will be in the order of $6,400 p.a.

Risk Implications

Building Risks

BLC have indicated that it is reliant on the support of grants and the local community to fund and complete building modification works. BLC will need to ensure that all workers/ contractors are insured adequately and hold the required licences to work on site. A builder engaged by BLC will need to be appointed as the Principal Contractor and be responsible for the site during construction.

Were the site to be used for BLC purposes, Council should stipulate that all works shall be estimated by a quantity surveyor and ensure that work can only commence when all of the works are fully funded. There is a risk that cost overruns in the construction phase may result in a prolonged “Construction Site” duration, resulting in higher risk of vandalism and public pressure for Council to complete the build.

Consideration needs to be given to the construction methodology. A Council staff member should be appointed and attend the Project Control Group (PCG) meetings. Council staff will also request and review all site-specific construction documentation to ensure all risks are mitigated throughout the construction.

BLC intend to complete modifications to the building that prevents the building being returned to the original use without substantial cost. Although this building is currently vacant, consideration should be given to the future long-term use of this building to prevent costs to Council.

The public amenities, located within the same building footprint are currently closed permanently due to repeated vandalism and public health and safety concerns which occurs during all hours of the day.

Although the BLC is interested in accessing and using the public amenities for their members, they have expressed that they are not interested in being responsible for the daily opening and closing these facilities.

The increased surveillance provided to this site by the BLC is expected to be ineffective if these facilities were to be reopened to the public. These facilities will remain closed to the public unless an agreement can be made between BLC and Council.

Bomaderry Community Inc. representing users of Bomaderry Dog Bowl have expressed a need to open the public amenities for park users. This is an extenuating consideration in relation to this building.

EOI Process

Any Expression of Interest must follow an adopted process to ensure that the Council conforms to Local Government General Regulations 2021- Part 7 Tendering.

Tenderer	Location
Brown Environmental Earthworks Planning Pty Ltd	Swansea Heads
CBK Constructions Pty Ltd	Gerringong
Cleary Bros (Bombo) Pty Ltd	Port Kembla
Coastwide Civil Pty Ltd	Albion Park
Denrith Pty Ltd t/a DivallsEarthmoving and Bulk Haulage	Goulburn
Rec Group Australia (Grassit Pty Ltd)	Melbourne Vic
Mauger Earthworks Pty Ltd	Southern Highlands
McMahon Services Australia Pty Ltd	Alexandria
MGN Civil Pty Ltd	Hemmant QLD
Unicivil (NSW) Pty Ltd	Fairy Meadow

Ordinary Meeting – Monday 06 May 2024

Page 0

CL24.127 Adoption of the Open Coast and Jervis Bay Coastal Management Program

HPERM Ref: D24/124909

Department: Environmental Services

Approver: James Ruprai, Director - City Development

Attachments: 1. Stage 4 Report - Final Draft CMP Open Coast and Jervis Bay (under separate cover) ⇨

2. Open Coast and Jervis Bay CMP - Public Exhibition Response to Submissions Document (under separate cover) ⇨

Reason for Report

To present to Council the Open Coast and Jervis Bay Coastal Management Program (CMP). The CMP is being presented to Council for adoption and for subsequent CMP certification by the NSW Government Minister for Local Government.

Recommendation

That Council:

1. Adopt the Open Coast and Jervis Bay Coastal Management Program (CMP) and the CMP be submitted to the Minister for Local Government for certification.

2. Note resourcing requirements encompassed by the plan and its actions (Stage 5 implementation), with capital and operational allocations to be determined via budget processes, and the reliance on grant funding for delivery.

Options

1. As recommended.

Implications: Council’s adoption of the CMP will support the finalisation and certification of this document, and subsequent implementation by Council. This CMP provides an integrated and strategic approach to the management of the Shoalhaven open coastline and Jervis Bay area (CMP Study Area) consistent with the objectives of the Coastal Management Act 2016 (NSW) and has integrated community feedback following substantial consultation. Once certified, Council can proceed with the implementation of the identified management actions to ensure the comprehensive, risk-based management and mitigation of coastal hazards within the CMP Study Area can occur to meet the needs of the community.

2. Not adopt, or, seek further modification to the Open Coast and Jervis Bay CMP.

Implications: Additional modifications to the CMP, if significant, would require further public exhibition and reporting back to the Coastal Management Program Advisory Committee’s and Council. Under such a scenario, additional Council and consultant time and budget would be required for the project team to complete this work, which would delay the implementation of high priority management actions to address coastal hazards. This will also place further demands on community members who have already provided significant input into the development of this CMP. This project has been funded by the NSW Department of Planning and Environment’s (DPE, now the Department of Climate Change, Energy, the Environment and Water – DCCEEW) Coast and Estuaries Grants Program with a one-third contribution by Council. Applications for additional funding, if significant, may not be successful and is dependent on available funding allocations from the State Government and Council.

Background

In accordance with the Coastal Management Act 2016 (NSW) (CM Act), local councils are to prepare Coastal Management Programs (CMPs) to meet legislative obligations. The CMP covers and applies to the coastal zone of the Shoalhaven Open Coast and Jervis Bay – as legally defined in the CM Act and the State Environmental Planning Policy (Resilience and Hazards) 2021 (RH SEPP). The Study Area spans from Shoalhaven Heads in the north, to North Durras Beach in the south, and includes Jervis Bay to ensure a consistent and holistic management approach across the entire open coastline of the Shoalhaven Local Government Area (LGA).

Coastal Management Programs consider measures and outcomes to manage natural resources critical to lifestyle and economy, educate communities, and manage and respond to costal changes over time. The Shoalhaven comprises 165km of coastline, with over 100km being under the management of Council. This coastline plays a key factor in tourism and tourism related economies, community amenity and overall lifestyle that residents of the region enjoy.

The Open Coast and Jervis Bay CMP has been developed in accordance with the CM Act and the staged process for developing and implementing a CMP, as detailed in the NSW Coastal Management Manual. The stages completed to support this CMP include the preparation of:

· Stage 1 – Shoalhaven CMP Scoping Study: This included a review of relevant background information, a first-pass risk assessment, a data gap analysis, and formulation of a plan for the development of the suite of CMPs covering the Shoalhaven’s coastline and estuaries.

· Stage 2 – Shoalhaven Open Coast and Jervis Bay CMP Stage 2 – Risks, Vulnerabilities and Opportunities: This included a detailed assessment of the various threats and risks affecting the environmental, social, cultural, and economic assets and values of the coastline.

· Stage 3 – Shoalhaven Open Coast and Jervis Bay CMP Stage 3 Summary Report: This included stakeholder engagement and options analysis to identify and prioritise coastal management actions that can effectively address issues and risks, take advantage of new opportunities, and give effect to the objectives of the CM Act.

· Stage 4 – Coastal Management Program for the Shoalhaven Open Coast and Jervis Bay: This included the preparation of a draft CMP for public exhibition and the finalisation of the CMP following the exhibition. This document outlines the identified management actions and business plan for their implementation over a 10-year period. It is this document that is being presented to Council for adoption.

The CMP comprises a program of integrated management actions that are intended to address key issues, and harness new opportunities for the management of the Shoalhaven coastal zone. It outlines specific actions that are to be implemented over a forward 10-year management timeframe under seven overarching strategies for managing the coast, which include:

· Governance and Management

· Community and Stakeholder Engagement

· Land Use Planning and Adaptation

· Protection of the Coastal Environment

· Protection of Cultural Heritage

· Asset Management

· Emergency Planning and Response

These overarching strategies are also supplemented by four Local Area Action Plans that detail management actions to be implemented at specific locations throughout the CMP Study Area. The Local Area Action Plans are as follows:

· Northern Local Government Area (LGA) (Shoalhaven Heads to Currarong Beach)

· Jervis Bay Area (Callala Bay to Hyams Beach)

· Central LGA (Cudmirrah Beach to Ulladulla Harbour)

· Southern LGA (Rennies Beach to Durras Beach)

This has resulted in the development of a total of 116 management actions to be delivered through Stage 5 (Implementation) of the CMP over the next 10-years.

A Business Plan has been developed which outlines the key components of the funding strategy for the CMP to implement the management actions, including the cost of proposed actions, proposed cost-sharing arrangements, and other potential funding mechanisms. Delivery of the CMP is estimated to cost $45 Million (2023 dollars) over 10 years, with approximately $15 Million of this funding coming from Council.

Sustainable funding and financing arrangements for management actions will be established in consultation with key stakeholders. Funding for management actions may be gained from various sources, including competitive State Government grant programs, Council’s internal funds, and local third parties.

The CMP document was presented to the Northern, Central and Southern CMP Advisory Committees to gain their support and endorsement before the CMP was presented to Council. The combined Committee meeting was held on 15 April 2024 and all Committees unanimously carried the recommendation that the CMP be presented to Council for adoption, and subsequent submission to the NSW Minister for Local Government for certification.

The CMP is now being presented to Council to request their adoption. Following this, the CMP is required to be submitted to the Minister for Local Government for certification before Council can commence Stage 5 (Implementation) of the CMP.

Internal Consultations

Throughout Stages 1-4 of the CMP development, internal consultation was carried out within Council. This included consultations across and within Council Directorates to obtain feedback on the existing coastal hazards, risks, and opportunities within the Shoalhaven LGA, as well as the development and implementation of proposed management actions. For actions that involve the construction of new or upgrade of existing Council assets, asset custodians were consulted with to ensure integrated and consistent delivery of works across Council. Internal consultations will be ongoing throughout the implementation of the CMP.

External Consultations

Throughout Stages 1-4 of the CMP development, external consultation was carried with a range of representatives from State Government Agencies, adjacent local Councils and Non-Government Organisations. These included:

· NSW Department of Planning and Environment – Environment and Heritage (DPE, now the Department of Climate Change, Energy, the Environment and Water (DCCEEW)), and Crown Lands

· NSW Department of Primary Industries (DPI) – Fisheries (including the Jervis Bay Marine Park).

· Transport for NSW (TfNSW)

· National Parks and Wildlife Service (NPWS)

· State Emergency Services (SES)

· Local Land Services (LLS)

· Eurobodalla Council

· Kiama Council

· Jerrinja Local Aboriginal Land Council (LALC)

· Jerrinja Tribal Group

· Ulladulla LALC

Consultations were undertaken to obtain feedback on the existing coastal hazards, risks, and opportunities within the Shoalhaven LGA, as well as the development and implementation of proposed management actions. Throughout this process, external entities provided information to support Council in developing a CMP that meets statutory obligations for the management of the coastal zone within the CMP Study Area. Council is currently seeking letters of support from the relevant NSW State Government agencies listed above, for submission of the CMP for certification by the Minster for Local Government. To date, all agencies have expressed in principle support for the CMP.

The management actions within the CMP identify where these external entities have been identified as a ‘supporting partner’ in the implementation of the management actions. Council will continue to engage with these entities throughout the implementation of the CMP.

Community Consultations

A detailed Stakeholder and Community Engagement Strategy was developed as part of the CMP, outlining the timing, content, and engagement methods to be utilised for all community and stakeholder engagement activities. This strategy has been implemented progressively through each stage of the CMP. The engagement strategy was developed in line with CMP Engagement Guidelines developed by the NSW State Government (DCCEEW), the Shoalhaven City Council Community Engagement Strategy, and the use of the International Association for Public Participation (IAP2) guidelines. This included engagement with Traditional Owner Groups, local communities, and public authorities through a range of methods – including workshops, drop-in sessions, surveys, and one-on-one meetings.

The draft CMP was on public exhibition from 30 November 2023 to 2 February 2024 to obtain final stakeholder feedback on the proposed management actions included in the draft CMP. Council is required under the CM Act to publicly exhibit the draft CMP for a period of at least 28 days. The draft CMP was placed on public exhibition from 29 November 2023 until 2 February 2024 – a total of 66 calendar days (over 9 weeks). The public exhibition process was comprised of:

· Provision of the document electronically on the Shoalhaven City Council Get Involved webpage for the project: https://getinvolved.shoalhaven.nsw.gov.au/open-coast-and-jervis-bay-cmp, and the Documents on Exhibition section of the Council website.

· A series of community information sessions held across the Shoalhaven LGA during December 2023.

Other engagement methods deployed during the Public Exhibition Period included the distribution of pamphlets, Get Involved page posts and updates, direct emails to Council community and stakeholder participation lists – and the creation of an ‘explainer video’ summarising the CMP outcomes. As part of the public exhibition, Council also hosted a meeting for all CMP Advisory Committee Members on the 14 December 2023 from 10:00 am to 12:00 pm. This informal meeting provided CMP Advisory Committee Members the opportunity to discuss the draft CMP document with Council and an opportunity to ask questions about this document before providing feedback.

The following summarises the engagement achieved throughout the public exhibition process:

· 63 Online submissions on the draft CMP through the Get Involved page.

· 27 email submissions on the draft CMP.

· 55 attendees to the community information sessions.

Following the public exhibition period, the draft CMP has been updated based on the submissions received. A response to submissions (RTS) document has also been prepared and is available as an appendix to the final CMP outlining how each submission has been considered in the finalisation of the CMP document.

The CMP document and RTS document were presented to the Northern, Central and Southern Coastal Management Program Advisory Committees to gain their support and endorsement before the CMP was presented to Council. The combined committee meeting was held on 15 April 2024 and all committees unanimously carried the recommendation that the CMP be presented to Council for adoption, and subsequent submission to the NSW Minister for Local Government for certification.

Policy Implications

The CMP has been prepared in accordance with the NSW Coastal Management Framework, which is governed by the CM Act. Council has prepared the CMP in accordance with relevant legislation, environmental planning instruments and statutory guidelines applicable to the coastal zone within the CMP Study Area. Furthermore, as part of the CMP development process, DCCEEW is required to confirm that the CMP satisfies the objectives of the CM Act and the mandatory requirements for a CMP as set out in the Coastal Management Manual. DCCEEW has indicated in principle support for the draft CMP and are currently reviewing the final CMP to confirm that it meets the objectives of the CM Act and mandatory requirements for a CMP.

The CMP has also been prepared in line with existing Council Policies for the management of the foreshore and coastal environment including, but not limited to, Council’s Tree Management Policy (Public Land) (POL21/51), Vegetation Vandalism Prevention Policy (POL22/24), and the Foreshore Reserves Policy (POL19/76).

The CMP is considered a ‘living document’ that is to be reviewed and updated continually throughout its lifecycle. A strategic review of the CMP should occur at least once every ten years to assess the effectiveness of the CMP in achieving its objectives and to incorporate changes considering new information, legislative and policy changes, and improved understanding of the local coastal processes.

Following the certification of the CMP, existing Resolutions from Council Meetings relating to coastal management that have been actioned by Council will be superseded, with the CMP to become the overarching strategy for the management of the coastal zone within the Shoalhaven. As outlined above, the CMP has been developed considering Council’s statutory obligations for coastal management as outlined with the CM Act, Council’s existing policies relevant to the coastal environment, best practice coastal management as documented within State Government guidelines and literature, as well as the outcomes of extensive consultation with the community and State Government agencies over the preceding years. Subsequently, the CMP will be the primary mechanism for Council to manage the coastal zone of the Shoalhaven Open Coast and Jervis Bay region in an integrated and holistic approach.

Financial Implications

The CMP has been prepared by Council with funding assistance received from NSW DPE (now DCCEEW) through a Coast and Estuaries Planning Stream Grant. This grant funding has provided a two-thirds contribution from the State Government for the completion of the CMP.

Following the certification of the CMP, Council will be eligible to apply for grant funding for the implementation of management actions through the DCCEEW Coast and Estuaries Implementation Stream Grants. This funding has been specifically created to provide a two-to-one funding ratio for actions within a certified CMP. This grant funding program is contestable, prioritised to Council applications with certified CMPs and subject to State Government funding priorities and allocations. However, the availability of these funding opportunities provides a clear indication of the financial benefits a certified CMP provides to Council for the implementation of the management actions identified through the CMP.

In preparing the CMP, it has been recognised that for Council to implement and deliver the identified management actions, additional resourcing is likely to be required. Management Action S1.02 of the CMP has been developed to respond to this and set outs for Council to “Establish two new Full Time Equivalent (FTE) Coast & Estuary Officer roles within Council”. The Business Plan within the CMP has assigned this management action an expected cost of $2.4 million over the 10-year lifecycle of the CMP to ensure that internal capability is maintained to oversee and carry out strategic actions. This operational funding (and any capital project allocations) will be decided on through standard budget processes, accounting for whole of organisational resourcing requirements and capability.

Staff resourcing and associated Council budgets for the Open Coast and Jervis Bay CMP implementation is vital to ensure the delivery of Stage 5 in line with the business plan. This is paramount given the significant increase in workload requirements for Council staff. Furthermore, it must be acknowledged that current resources are working on the development of high priority estuary CMPs to meet stakeholder expectations. Additional resources will enable the efficient and complementary implementation and continued development of all CMPs throughout the LGA.

Risk Implications

Consideration of Risk in the CMP process

A First Pass Risk Assessment was completed in the Stage 1 Scoping Study for the Shoalhaven CMPs. This provided a high-level assessment the various issues, vulnerabilities, and opportunities affecting the Shoalhaven Open Coast and Jervis Bay. The risk assessment was further refined in Stage 2 of the CMP and included an updated and detailed risk assessment of coastal hazards. This involved identifying and assessing risks and benefits to environmental, social, and economic values across the coastline, with the aim of informing the development of management options in Stages 3 and 4.

The risk-based framework applied in Stage 2 was consistent with those applied in Council’s existing coastal hazard risk assessment, and the CMP Stage 1 Scoping Study, as well as Council’s organisational Risk Management Framework. This framework is also broadly consistent with the framework applied in the NSW Marine Estate Threat and Risk Assessment (TARA), and the following national standards and guidelines:

· International Standards Organisation (ISO) 31000: 2018 Risk management – Principles and guidelines, provides principles, framework, and a process for managing risk.

· Australian Standard (AS) 5334:2013 Climate change adaptation for settlements and infrastructure – a risk-based approach.

The key risk and threats identified in the Stage 2 risk assessment included:

· Coastal hazard risks to land, property, assets, and infrastructure – including risks posed by the coastal hazards defined in the CM Act. The Shoalhaven LGA coastline has a long history of experiencing severe coastal hazard impacts, with the greatest impacts felt by coastal erosion and coastal inundation generated by ‘East Coast Lows’.

· Social, cultural, and environmental risks. These include risks to environmental values and biodiversity, social and recreational amenity (and public safety), as well as risks to both tangible and intangible cultural heritage values.

As required by the CM Act, the key risks and threats have been considered over a range of timeframes, including the present day, as well as future planning horizons 20 years, 50 years, and 100 years – to account for future climate changes impacts, and the impacts of population growth and future development on the coastal zone. The nature and severity of these risks varies widely across the Study Area. To adequately inform the derivation and assessment of management options, these risks were also assessed at a local level on a beach-by-beach basis.

Risk of not adopting the recommendations of this report

Additional modifications to the draft CMP, if significant, would require further public exhibition of the draft document and reporting back to the CMP Advisory Committee’s and Council. Under such a scenario, additional time and budget would be required for the project team to complete this work, which would delay the implementation of high priority management actions to address coastal hazards. This will also place further demands on community members who have already provided significant input into the development of this CMP. This project has been funded by the NSW DPE Coast and Estuary Grants Program with a one-third contribution by Council. Applications for additional funding, if significant, may not be successful and is dependent on available funding allocations from the State Government and Council.

Ordinary Meeting – Monday 06 May 2024

Page 0

CL24.128 Connection to Town Sewerage System - 30 Pulman Street Berry - DA23/1329

HPERM Ref: D24/158350

Department: Water Asset Planning & Development

Approver: Brenden Logue, Water Business Services Manager

Reason for Report

Council is in receipt of an application for the alterations and additions to a dwelling house development at Lot 211 DP 1124317 No. 30 Pulman Street Berry. The applicant is seeking approval to connect the proposed dwelling (under DA23/1329) and ancillary structures to the Council’s sewerage system. The lot is zoned RU1 (Primary Production) and R2 (Low-Density Residential) and as such must be considered by the Council following assessment under its Non-Urban Wastewater Connection Policy (POL 22/135).

Recommendation

That Council approve the connection of DA23/1329 to the Berry Sewerage Scheme by a pressure sewer system subject to the applicant complying with all conditions specified in the Shoalhaven Water Development Notice for the development.

Options

1. Adopt the recommendation.

Implications: This is recommended as there is sufficient capacity in the Berry Sewerage Scheme and the proposal is considered a minor development.

2. Council may choose not to permit the development to connect to the town sewerage scheme.

Implications: The applicant will continue to manage their effluent via on-site sewage management and in accordance with the “Report – Statement of Environmental Effects (rev.A) – 30 Pulman Street Berry Lot 211 DP 11224317” and “Report – Effluent Disposal – 30 Pulman Street Berry – Lot 211 DP 11224317” by the applicant’s consultant (Cowman Stoddart).

Background

The subject property is located at the southern end of Pulman Street BERRY and has upon it a primary dwelling (which is an item of Environmental Heritage), detached workshop, pool, and pool retreat.

Other development approvals over the property include:

· DA16/1402 – Detached Pool Retreat.

· DA16/1394 – In Ground Swimming Pool.

· DA04/3954 – Home Activity.

Council received a Development Application DA23/1329 for proposed dwelling alterations and additions on 4 May 2023.

The applicant engaged the services of a consultant to investigate and design of the on-site sewage disposal for the proposed development. The findings in the “Report – Statement of Environmental Effects (rev.A) – 30 Pulman Street Berry Lot 211 DP 11224317” and “Report – Effluent Disposal – 30 Pulman Street Berry – Lot 211 DP 11224317” by Cowman Stoddart show that there is sufficient land area as required to support on-site sewage management system, however, due to the disposal area being flood prone this would necessitate an elevated mound of 1.0m in height, with an additional distribution bed having a height of 0.3m being above this mound. The mound is to have a length of 25.5m and a width of 20.0m, and be constructed of imported topsoil.

The report outlines that a pressure sewer servicing option is possible due to the lots proximity to the reticulated sewerage system and such a connection would be the most environmentally acceptable option, which is supported by Council's Environmental Services Section.

Pressure Sewer Servicing

Shoalhaven Water has considered the findings of the report and proposes that the property (under the Development Application DA23/1329) be connected to the Berry Sewerage Scheme by a council-owned and maintained Pressure Sewer System as the most appropriate sewer strategy. Detailed assessment can be found below under Policy Implications.

A pressure sewer design will provide a connection to the Berry Sewerage Scheme. The design and construction work would include:

· the on-site pressure sewer unit, boundary kit, and control panel (these works are carried out by Shoalhaven Water), and

· approximately 90 metres of 40mm diameter HDPE sewer rising main (from the end of the existing Council-owned sewer rising main in front of No. 17 Pulman Street, extending in a southerly direction along Pulman St to the subject property). This work would be carried out by the developer, and

· interconnection works to the Council-owned rising main (near No. 17 Pulman Street). This work involves both the developer and Shoalhaven Water.

All works are at the developer’s cost. In addition, the developer will need to obtain written approval for works within the road reserve of Pulman Street from Council.

A aerial view of a green area

Description automatically generated

Community Consultations

Local property owners will be notified as part of the proposed activities within the road reserve as part of the Section 138 Approval.

Policy Implications

Assessment under the Non-Urban Wastewater Connection Policy (POL22/135):

Council’s policy provides for non-urban zoned properties to connect to the town sewerage system subject to compliance with Section 3.3 Criteria for Determination of an Application for a Property to Connect to Council’s Sewerage System, which states:

“Connection to Council’s sewerage system will only be made available to rural properties upon written application in the following circumstances:

· Where capacity exists in the existing system, and

· Where the current levels of service can be provided, and

· Where the property is paying the wastewater availability charge.

Properties not paying the wastewater availability charge will only be considered for connection to Council’s sewerage system if it is not possible to manage wastewater by on site treatment. Approval in this situation is subject to Council resolution.”

Assessment under each of these criteria is outlined below:

1. Where capacity exists in the existing system

The proposed development (DA23/1329) is for the alterations and additions to a dwelling house which will result in a total of 5 bedrooms (with ensuites). The calculated loading by the development is 1.0 Equivalent Tenements (ET). The town sewerage system does have the capacity to support the proposed developments now and into the future.

2. Where the current levels of service can be provided

Current services are normally provided by gravity means. However, a gravity connection is not possible as the subject property is located too far from and below the existing gravity sewer system. In this instance, the development (DA23/1329) is to be serviced by a pressure sewer system in accordance with Shoalhaven Water’s requirements. Current levels of service via pressure sewer can be provided.

3. Where the property is paying the wastewater availability charge

The property is not paying the wastewater availability charge.

Properties not paying the wastewater availability charge will only be considered for connection to Council’s sewerage system if it is not possible to manage wastewater by on-site treatment. Approval in this situation is subject to Council resolution.

The report outlines that a pressure sewer servicing option is possible due the lots proximity to the reticulated sewerage system and such a connection would be the most environmentally acceptable option and is supported by Council's Environmental Services Section.

Financial Implications

There is no negative financial implication to Council. If approval is granted Council would benefit by way of the sewer availability charge. All costs associated with connection to the sewer main will be charged to the developer.

The development will be levied the Section 64 (Sewerage) Charge by way of a condition under the Shoalhaven Water Development Notice for DA23/1329. The development would be levied based on a loading of 1.0 equivalent tenements (ETs). The calculated Section 64 Sewerage Contribution is $8,339.00 (2023/24). However, after applying the Water and Sewerage Headworks Charges (Section 64 Contributions) – Assistance for Developments policy the amount payable is $2,084.75 (2023/24) for the development.

Risk Implications

There are no new risk implications to Shoalhaven Water’s role in maintaining the new pressure sewer main and pressure sewer unit on the property.

Loan #	Project	Loan Amount	Total Interest over Life of the Loan	Funding Source
Loan #	Project	$	$	$
1	Materials Recovery Facility	1,831,600	531,236	Waste Fund
1	Waste Education Centre	1,919,200	556,643	Waste Fund
	Total Funded by Waste Fund:	3,750,800	1,087,879
2	SEC compliance works	628,000	182,145	General Fund
2	Shoalhaven Community and Recreational Precinct projects (Northern and Artie Smith)	4,500,000	1,305,177	General Fund
2	Building improvements (Depot and Civic Centre improvement works)	1,965,000	569,927	General Fund
2	Sustainable Tourism	2,739,912	794,682	General Fund
2	Showground Buildings (reduced due to BLERF changes)	1,550,000	449,561	General Fund
2	Various (minor building works, road upgrade)	722,288	209,492	General Fund
	Total Funded by General Fund:	12,105,200	3,510,984
	Total	15,856,000	4,598,863