Agenda of Ordinary Meeting - Tuesday, 29 April 2025

Ordinary Meeting – Tuesday 29 April 2025

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CL25.127 Draft Community Strategic Plan 2035, Delivery Program Operational Plan and Budget 2025-26 - Public Exhibition

HPERM Ref: D25/113149

Department: Government Relations, Strategy & Advocacy

Approver: James Ruprai, Acting CEO

Attachments: 1. Draft Community Strategic Plan 2035 - Exhibition (councillors information folder) ⇨

2. Draft Delivery Program Operational Plan 2025-26 - Exhibition (councillors information folder) ⇨

3. Draft Fees and Charges 2025-26 - Part 1 - Exhibition (councillors information folder) ⇨

4. Draft Fees and Charges 2025-26 - Part 2 - Exhibition (councillors information folder) ⇨

5. Community Engagement Report - Draft CSP 2035 (councillors information folder) ⇨

Purpose

The purpose of this report is to present the draft Integrated Planning and Reporting document suite to Council to endorse for a 28 day public exhibition in accordance with legislative requirements.

Summary and Key Points for Consideration

· Each Local Government Area is to have a Community Strategic Plan that has been developed and endorsed by the Council on behalf of its community. Council must review the Community Strategic Plan before 30 June in the year following an ordinary election of Council.

· The current Community Strategic Plan (CSP) 2032 has been reviewed and updated with the draft Community Strategic Plan 2035 being presented to Council for endorsement for public exhibition and invite further community feedback.

· In accordance with the Integrated Planning and Reporting (IP&R) requirements in the NSW Local Government Act, Council has developed a Delivery Program for the period 2025-2029. The Delivery Program inclusive of the draft Operational Plan and Budget for 2025/26, and Fees and Charges, is also presented to Council for endorsement for public exhibition and community feedback.

· The current anticipated General Fund Net Operating Result Before Capital stands at a deficit of $17.3M for the year ended 30 June 2026, which is a $4.4M improvement from the adopted Long Term Financial Plan (LTFP) at the 17 December 2024 meeting (MIN24.690). The Operating Result Before Capital for the Water Fund and Sewer Fund for the year ended 30 June 2026 are surpluses of $5.7M and $15.2M, respectively.

Recommendation

That Council:

1. Endorse the Draft Community Strategic Plan 2035, Draft Delivery Program 2025-29 and 2025/26 Operational Plan, Draft Budget, Draft Fees and Charges with the purpose of placing on public exhibition for a period of 28 days.

2. Maintain the previous 2024/25 rating structure, comprising both base and ad valorem amounts which is a commonly used rating 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 2025 to 30 June 2026 (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 maximum general rates increase for 2025/26 as allowed by the Minister, as per Sections 508A or 506 of the Local Government Act 1993. i.e. either, a permanent 12% special variation or a 3.8% rate-peg (depending on IPARTs decision on Council’s special variation due in May/June 2025).

6. Receive a report on feedback from the community on the Draft Community Strategic Plan 2035 and Draft Delivery Program Operational Plan and Budget 2025/26.

Options

1. Council resolves to place the Draft CSP, DPOP, Budget and Fees and Charges for 2025/26, 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 Council in June with details of submissions received including any community feedback on the Draft CSP, DPOP and Budget.

2. Council defers a decision in respect of the Draft CSP, DPOP, Budget and Fees and Charges for 2025/26 being placed on public exhibition pending either further information being provided, or the documents being amended.

Implications: A delay in placing the Draft CSP and DPOP on public exhibition could result in Council not adopting the CSP, DPOP, and Budget prior to 30 June 2025, as required by legislation. Any delay beyond 30 June 2025 could delay the routine levy of the 2025/26 annual rates and charges. A late issue of Rates Notices will have critical negative impacts on Council’s cash flow.

Background and Supplementary information

In accordance with the Integrated Planning and Reporting (IP&R) requirements in the NSW Local Government Act, Council has drafted and updated Community Strategic Plan 2035 and developed a Delivery Program for the period 2025-2029. The Delivery Program inclusive of the draft Operational Plan and Budget for 2025/26, is presented to Council for endorsement for public exhibition and community feedback.

Community Strategic Plan

The Community Strategic Plan (CSP) is the community’s plan for the Shoalhaven. It has a minimum ten-year timeframe and should reflect the community’s aspirations (needs and wants) for the Shoalhaven. Council’s role in the production of the CSP is to facilitate its development and produce the document. It should be very clear that the CSP is not a Council plan but a community plan. While Council will use the CSP as a guide for creating other plans it is important to note that other State and Federal Agencies will also use the CSP to develop their own strategies and plans for the Shoalhaven.

The current CSP 2032 was endorsed by Council in September 2022 (MIN22.596). This report includes the outcomes of the community engagement activities to date, outlines any updates to the CSP pillars and priorities and presents the Draft Community Strategic Plan - Shoalhaven 2032 to be endorsed for public exhibition.

Building on findings from comprehensive CSP engagements in 2017 and 2021, Council undertook further consultation with the community between November 2024 and March 2025. Due to Council’s engagement on the Special Rate Variation options during November 2024, the primary engagement activity was a survey held during March 2025 on Council’s engagement platform Get Involved.

Overview of engagement numbers:

· 24,483 people reached through social media

· 1,300 video views on social media

· 1,200 visits to the Get Involved project page

· 384 surveys completed

· 49 discussions at pop-up stalls

· 3 stakeholder workshop sessions

Council held workshop sessions with the Community Consultative Committees Executive, Council’s Inclusion and Access Committee and business and community services industry online session. Further engagements will occur with Council’s advisory committees in the refinement of the plan. Another opportunity for community feedback on the draft suite of documents will be during public exhibition in May 2025. The complete Community Engagement Report is included as Attachment 5.

The draft CSP 2035 Pillars and Priorities are as follows:

Pillar 1: Vibrant, safe and active communities

1.1. Community life, civic engagement and community support

1.2. Creativity, culture and lifelong learning

1.3. Active lifestyles

1.4. Safe behaviour and relationships

1.5. Preparedness for disasters and emergencies

Pillar 2: Sustainable environments and liveable communities

2.1. Sustainable management of the natural environment

2.2. Liveable neighbourhoods and sustainable development

2.3. Safe built environment and business operations

Pillar 3: Resilient local economies and enabling infrastructure

3.1. Economic opportunity and diversity

3.2. Transport facilities and services

3.3. Housing for all

Pillar 4: Transparent leadership with good governance

4.1. Financial sustainability

4.2. Transparent leadership

4.3. Effective collaboration and engagement

The Draft Community Strategic Plan 2035 is included as Attachment 1.

Delivery Program 2025-29

The Delivery Program details what activities Council intends to undertake to achieve the key priorities outlined in the CSP 2035. Each of the pillars and priorities identified by the community have been allocated 4-year strategies (25 in total) in the Delivery Program, and 1-year actions in the Operational Plan. The combined Delivery Program Operational Plan (DPOP) outlines the actions, projects and services Council will deliver in the 2025/26 financial year.

2025/26 Projects and Initiatives

Full details on Council’s planned projects and activities are included in Attachment 2 – Draft Delivery Program Operational Plan and Budget 2025/26.

Alongside Council’s core service activities, there are numerous new initiatives programmed for 2025/26 including:

· Coordinate delivery of the agreed financial sustainability initiatives and realise the committed savings in the Sustainable Financial Futures Plan, to achieve the vision of being a financially sustainable organisation.

· Support communities to apply to deliver a community-led project on land owned/managed by Council, in accordance with the Community-Led Projects Policy.

· Undertake required actions to revise suite of Asset Management Plan documents (14 plans finalised by 30 June 2026).

· Formulate and implement the Nowra Key Moves Action Plan to support the rejuvenation of Nowra City Centre.

· Monitor and report on Per- and Polyfluoroalkyl Substances (PFAS) levels in all Shoalhaven Water supplies.

· Develop an Urban Greening Strategy delivered by June 2026.

· Develop a community emissions reduction plan by June 2026.

· Progress project planning for a new Library at Sanctuary Point in line with adopted position of Council.

· Finalise St Georges Basin and the Lower Shoalhaven Floodplain Risk Management Studies and Plans.

· Commence West Nowra Material Recovery Facility by December 2025.

· Finalise the local planning documents to guide the development of the Moss Vale Road North Urban Release Area.

· Develop and implement a combined Tourism and Economic Development strategy.

Key projects included within Council’s Draft Capital works program (12% SRV option) include:

· $38.4M capital budget for roads and transport program including:

· Wool Road, Old Erowal Bay*

· Illaroo Road, North Nowra*

· East Nowra Sub-Arterial design works*

· Murrays Bridge, Conjola*

· Myola Active Transport pathways*

· $56.4M capital budget for water and wastewater program including:

· Bamarang to Milton Water Pipeline Project

· Jervis Bay Territory Pipeline*

· Culburra Wastewater Treatment Plant Upgrades

· Moss Vale Road Urban Release Area water and sewer development

$7.8M capital budget for waste and recycling program including:

· Materials Recovery Facility

· New landfill cell construction

*project includes grant funding

Performance Measures

Performance measures against each Operational Plan action have been included to ensure that Council continues to be accountable against the priorities 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.

Resourcing Strategy

Council has an accompanying Resourcing Strategy 2022-26 (version 2024/25) which was adopted by Council in December 2024. The Resourcing Strategy addresses how Council will implement and resource the Delivery Program through planning for our finances, assets, and workforce. The Resourcing Strategy is an operational document which contains the Workforce Strategy, Asset Management Policy and Strategy, Information and Communication Technology Strategy, and the Long-Term Financial Plan 2025-2034.

A thorough condition assessment of our roads and community buildings is underway and will provide an evidence-based analysis of the amount of money required to fix our assets. Once this is completed, further conversations will be had with the elected Council about what's needed to repair our roads and buildings into the future. A revised Long Term Financial Plan (LTFP) will be prepared and presented to Council in late 2025. The plan will consider the need for future Special Rate Variations.

Budget Parameters

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 2025/26 budget strategies and economic parameters on 28 January 2025 (MIN25.27).

Table 1 - The Strategic Budget Principles are outlined below:

Adopted Budget Strategy/Parameter	Achieved
1. Principal budgeting strategies:
a. The budget will not result in an unrestricted cash deficit.	P
b. 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
c. Maintain or improve Council’s financial and asset management performance indicators reported in the annual financial statements	P
d. Increase Council’s working funds balance	P
e. Minimise carry forwards through substantial completion and long-term planning of the capital works program	P
2. Economic parameters for budgeting:
a. Rates are increased by 12% (including rate peg) assuming Council’s application for a Special Rate Variation (SRV) is approved by IPART. Should the SRV not be approved, the 3.8% rate peg is to be applied.	P
b. User fees and charges are increased by a minimum of 5%	P
c. Salaries and wages are increased by 3%, plus bonus payable, as per the Local Government (State) Award	P
d. Superannuation guarantee is to be increased from 11.5% to 12% in line with legislated increases	P
e. Materials and other expenditures increase by 3%	P
f. The capital works program is appropriately set 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
g. Consistent with Council’s Long Term Financial Plan, no additional loan borrowing borrowings are to be taken out in FY 2025/26	P
h. Should the need arise during the year for additional funding, the following options will be considered: i. Internal borrowing opportunities ii. Asset rationalisation	P
3. Repairs to Council’s Road Network be a primary focus of the initial draft of the Capital Works Program	P
4. Budget Workshops be scheduled with all Councillors in the preparation of the draft 2025/26 budget which will include consideration of any recommended re-prioritisation of capital works projects listed in the current Delivery Program and Operational Plan.	P

Statement of Revenue Policy

Rating Structure and 2025/26 Rates Increase

Council has resolved to maintain the same approach to rating used in the previous 2024/25 year, structured on an ad valorem basis using land values issued by the Valuer General as at 01 July 2022, 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.

The next release of land values for landowners in the Shoalhaven Council area will occur in early 2026 for land values as at 01 July 2025. These land values will be used for rating from the following year, from 01 July 2026.

Council does not propose to review its existing rating structure in 2025/26, as the 2025/26 year may be a special variation rating year, and if so, the rating impacts of the special variation have been demonstrated to the community and to IPART using our existing rating structure. In addition, the second half of the year will see Council receive, upload, and analyse, new 01 July 2025 land valuations.

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, a productivity factor, a population factor for each council and an Emergency Services Levy (ESL) factor, in determining the annual rate peg for each council. IPART has determined a rate peg of 3.8% for Shoalhaven for 2025/26.

In February 2025, following engagement with the community, Council lodged an application with IPART for a 12% Special Rate Variation as a single year permanent increase for 2025/26, in accordance with Council’s resolution of 17 December 2024. IPART is scheduled to advise Council of its decision in May/June 2025.

Giving the timing, the draft Statement of Revenue Policy proposes an either or scenario between the two rates increase scenarios for 2025/26, i.e. a 12% special variation scenario or a 3.8% rate peg scenario. Assuming IPART approves Council’s application for a 12% special variation from 01 July 2025, Council’s 2025/26 ordinary rating structure will include a flat base amount of $840, with the exception of the Residential – Non-Urban category that has a base of $57, the Farmland category which has a base of $1,137, and the Farmland – Dairy Farmers category which has a base amount of $1,281.

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 2025/26 in respect of each category of ordinary rates levied by Council:

· Residential: Will be levied a base amount of $840 and an ad valorem rate of 0.10988 cents in the $ for Ordinary Residential Rates and a base amount of $57 and an ad valorem rate of 0.10988 cents in the $ for Residential Non-Urban Rates.

· Farmland: The rates for Farmland will be levied a base amount of $1,137 and an ad valorem rate of 0.08400 cents in the $. The rates for Farmland – Dairy Farmers will be levied a base amount of $1,281 and an ad valorem rate of 0.04440 cents in the $.

· Business: All sub-categories will utilise the same base amount of $840, 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 0.57940 cents in the $, Business Ordinary 0.22323, Business Commercial/Industrial 0.19460, Business – Major Retail Centre – Nowra 0.81690 and Business – Major Retail Centre – Vincentia 0.39350.

Note: The proposed 2025/26 rates and charges shown in the preceding section are ‘draft’ in that they are subject to immaterial change between draft exhibition and final Council adoption of the DPOP for 2025/26. This potential for immaterial change relates to the daily addition of new properties (including property cancellation, subdivision and consolidation), and daily changes to property land values, changes in categorisation, and rateability.

Draft Fees & Charges 2025/26 are included as Attachment 3 (Part 1) and Attachment 4 (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 determined the maximum rate of interest payable on overdue rates and charges for the period 1 July 2025 to 30 June 2026 to remain unchanged 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.

2025/26 Water and Sewer Fees and Charges

The 2025/26 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 25/13. 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 2025/26, the water availability charge has increased, an example of the increase is a residential connection (20mm) has increased to $173 ($28 increase) per annum, the sewer availability charge for the same residential property will increase to $1,110 ($82 increase) per annum.

The two-part tariff for water charges will continue (usage and availability). In 2025/26 the treated water usage charge will increase from $2.50 to $2.85/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 $164.25 for the full year.

The factors driving these increases are general cost recovery, as well as raising funds required for future capital works projects that have been identified in the Water and Sewer fund long term financial plans. Funding is required for major sewerage treatment plant refurbishments, and the Bamarang to Milton Water Trunk Main Stage 2 project, which will involve significant capital expenditure between now and 2033. It should be noted that the proceeds of these increases are restricted funds of Water Fund and Sewer Fund and cannot be utilised by General Fund.

Further information regarding Water and Sewer Fees and Charges can be found in Attachment 3 (Part 1).

2025/26 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 5.1% from $505 to $531 in 2025/26.

Further information regarding Domestic Waste Management Charges can be in Attachment 3 (Part 1).

Budget Summary

Financial sustainability is a concern for many NSW Councils, including Shoalhaven City Council. The severity of Council’s current financial position is well documented, and the FY2025/26 budget supports Council in working towards improvements in our operating position, ratio performance and liquidity levels.

Over the last 24 months, there have been significant changes made in the organisation to reduce the operating deficit, including an operational restructure, service reviews, changes to fleet vehicle arrangements, property sales and reduction in operating hours of pools, libraries and facilities. To increase revenue, fees and charges have been reviewed to realise costs for services and a special rate variation proposal is under review by IPART, that would take effect from 1 July 2025 if approved. Should the IPART application be unsuccessful, Councils rate increase would reduce from the proposed 12%, to the 3.8% IPART rate peg. Additional tables are included in the Appendix of the Delivery Program Operational Plan to show the budget position if the application is not successful.

The NSW Auditor General released the NSW Audit Office Local Government 2024 annual report in March 2025. This report listed Shoalhaven Council as one of the least liquid councils in NSW. The current lack of available cash will continue to be a concern throughout FY2025/26 however, the proposed operational budget and capital works program responsibly budget for an improvement in Council's cash position. Through the combination of savings achieved through the Sustainable Financial Futures Plan (SFFP) and Council’s property sales program, improvements in Councils liquidity position should be realised at 30 June 2026. With this improved liquidity, Council will be better placed to deal with one of the key problems effecting Council’s cashflow in recent years being the spending required on grant funded projects prior to the receipt of funds from the relevant grant bodies.

A thorough condition assessment of our roads and community buildings is underway and will provide an evidence-based analysis of the amount of money required to fix our assets. Once this is completed, further conversations will be had with the elected council about what's needed to repair our roads and buildings into the future. A revised Long Term Financial Plan (LTFP) will be prepared and presented to Council in late 2025. The plan will consider the need for future Special Rate Variations.

Table 2 below shows that the current anticipated General Fund Net Operating Result Before Capital stands at a deficit of $17.3M for the year ended 30 June 2026. When this figure is compared to the same period in the LTFP endorsed at the 17 December 2024 meeting (MIN24.690), which showed a projected anticipated General Fund Net Operating Result Before Capital deficit of $21.7M, it shows a $4.4M improvement in the anticipated financial result between the endorsed LTFP and the Budget.

Considering that both the LTFP and the budget already incorporated $7M in savings arising from the SFFP, which was communicated through the SRV process to both the community and IPART, the $4.4M is an additional improvement over and above the original SFFP anticipated savings and demonstrates the extent of the cuts that were made to the 2025/26 budget.

Discipline at all levels of Council will be required to ensure that spending does not exceed adopted budget. If new budget priorities are identified, other priorities will need to be removed to ensure Council’s budgeted cash position does not deteriorate. Community and customer may also experience a reduction in service levels as a result of budget saving initiatives.

Table 2: Income Statement by Fund

	2025/26 Budget ($‘000)
	General Fund	Water Fund	Sewer Fund	Consol.
Income from Continuing Operations	362,383	62,463	75,380	416,793
Expenses from Continuing Operations	348,712	45,297	58,186	370,627
Net Operating Result	13,671	17,166	17,194	46,166
Net Operating Results Before Capital	-17,284	5,666	15,169	1,686
Net Cash Movement	339	9,762	-2,148	7,953
Net Reserve Movement	17,619	-9,762	2,148	10,005
Net Unrestricted Cash Movement	17,958	0	0	17,958

The proposed Draft 2025/26 Budget includes a capital expenditure of $135.7M across General, Water and Sewer funds along with the $370.6M of operating expenditure required to provide the essential services to our community, bringing the next year’s consolidated budget to $506.3M.

Table 3: Capital and Operating Budget by Fund

	2025/26 Budget ($‘000)
	General Fund	Water Fund	Sewer Fund	Consol.*
Capital Budget	79,278	24,705	31,672	135,655
Operating Budget	348,712	45,297	58,186	370,627
Total Budget	427,990	70,002	89,858	506,282

The budget was prepared based on the principles of prudent financial management and fiscal discipline. The budgeted general fund operational and capital expenditures do not exceed the general revenue and available internal and external restrictions of the Council and therefore this budget conforms to the requirement of no cash deficit budgeting.

Table 4: Draft 2025/26 Budget

	2025/26 Budget ($'000)
	General Fund	Water Fund	Sewer Fund	Consol.*
Rates & Annual Charges	141,286	9,969	62,555	213,810
User Charges and Fees	80,563	34,225	6,247	121,035
Interest and Investment Revenue	7,822	2,235	1,636	9,828
Other Revenues	4,987	52	15	5,054
Internal Revenue	74,184	4,482	2,902	0
Grants and Contributions provided for Operating Purposes	21,226	0	0	21,226
Grants and Contributions provided for Capital Purposes	30,955	11,500	2,025	44,480
Net Gains from the disposal of assets	1,360	0	0	1,360
Total Income	362,383	62,463	75,380	416,793
Employee Benefits and On-Costs	103,542	11,240	12,990	127,772
Borrowing Costs	4,226	0	2,683	6,909
Materials and Contracts	88,556	9,183	13,704	110,267
Depreciation and Amortisation	69,013	16,982	18,963	104,958
Other Expenses	20,636	0	85	20,721
Internal Expenses	62,739	7,892	9,761	0
Total Expenses	348,712	45,297	58,186	370,627
Net Operating Results	13,671	17,166	17,194	46,166
Net Surplus/(Deficit) before Capital	-17,284	5,666	15,169	1,686
Other Cash Adjustments
Capital Expenditure	-79,278	-24,705	-31,672	-135,655
New Borrowings	0	0	0	0
Proceeds from Borrowings & Advances	0	319	0	0
Loan Principal Repayments	-16,510	0	-5,268	-21,459
Net Gains from the disposal of assets	-1,360	0	0	-1,360
Proceeds from the disposal of assets	14,804	300	200	15,304
Receipt of Internal Loan Repayment	0	0	0	0
Depreciation Adjustment	69,013	16,982	18,963	104,958
Dividend Paid to General Fund	0	-300	-1,565	0
Net Cash Outflow	339	9,762	-2,148	7,953
Reserve Movements
Net Transfers from Reserves	17,619	-9,762	2,148	10,005
General Fund Net Cash Movement	17,958	0	0	17,958

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

Capital Works Program

On completion of the operational budget, Council had $4.86M available in unrestricted general fund cash to contribute towards its general fund (excludes Waste, Water and Sewer Funds) capital program.

Council’s Enterprise Project Management Office (ePMO) received requests for critical capital projects requiring $77.6M in unrestricted general fund cash contributions, representing a shortfall in available cash of $72.8M.

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 2025 (carry forwards), and projects not yet commenced but need to be delivered in FY2025/26 due to funding deed or other contractual obligations.

The Capital works have been categorised into Categories 0, 1, 2 and 3. These are defined as follows:

Category 0

· There is a legal obligation to undertake the work or failure to undertake the work would result in an unacceptable exceedance of Council’s risk appetite.

· Project is required to meet minimum acceptable obligations for a critical service.

Category 1

· Failure to undertake project will result in significantly increased likelihood that minimum levels of service will be compromised, significant increase in operational costs and increased risk of loss of revenue.

Category 2

· Failure to undertake project will likely increase operational costs and not arrest declining service levels.

Category 3

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

With key words defined as per below:

Critical Service – An asset which must be retained at a functional level of service to ensure Council can fulfill its essential obligations, including for example: Council administration, safe access to properties (roads), mitigate against flooding of property (stormwater system & flood levees), waste management.

Risk Appetite – Determined by review of the Council’s Risk Appetite Statement.

Legal Obligation – A Legislative requirement or a contractual commitment that cannot reasonably be amended.

This resulted in a proposed total capital works program of $135.7M (General Fund $71.5M, ShoalWater $56.3M and Waste $7.8M). The program calls for a general fund contribution of $17.9M.

This has been funded as follows:

· $4.86M available in unrestricted general fund cash.

· $5.4M of council’s projected 2018/2019 Special Rate Variation (SRV) Program is to be made available to fund all capital works. $1.15M will go to funding road renewals, $3.8M will go to funding Building Renewals ($356K upgrade/new) which are the capital projects the SRV was approved to be spent on. The remaining $816K has been allocated to Bridge renewal ($459K) and Building upgrade/new ($356K) which were not noted in the original SRV application. However, bridges are closely related to the road renewal works and building upgrade/new is a component of the total project costs and therefore closely related to Building Renewals. Staff deem it appropriate that the remaining SRV be allocated to capital works closely aligned with its original purpose.

· $7.6M of Council’s project 2025/26 Special Rate Variation (SRV) Program (not yet approved by IPART) $6.2M will go to funding roads and transport renewals including roads and pathways, $715K to mechanical service renewals, $440K to building renewals, $187K to stormwater renewals, and $100K to waterways infrastructure renewals.

The total general fund program by category is:

Category	Total project cost	General fund Unrestricted cash contribution	Proposed SRV 2025/26
0	$47,219,970	$1,375,973	$1,255,264
1	$20,242,204	$2,762,358	$5,971,898
2	$1,876,001	$626,001	$325,000
3	$2,136,410	$95,667	$50,400
Total	$71,474,585	$4,859,999	$7,602,562

It should also be noted that no allowance has been made in the 2025/26 Delivery Program Operational Plan for opt in fees for any newly declared natural disaster event. Should an event be declared between now and 30 June 2025 the opt in fee council will need to contribute is $642,870 which would be payable in the 2025/26FY; and for each event declared in the 2025/26FY the opt in fee council will need to contribute is $676,965 per event.

The timing issues surrounding the incurring of expenditure on grant funded projects prior to the receipt of grant funds has had a negative impact on Council’s General fund unrestricted cash in recent years. Of the total $135.6M budgeted capital works program for 2025/26, $43.3M is grant funded. $33.8M of that total grant funded spend relates to general fund projects representing 42.60% of the general fund program. ShoalWater has budgeted spend of $9.5M from grants (16.84% of the ShoalWater program) and Waste has no grant funding.

Whilst Council has entered into tripartite agreements with the NSW government to assist in obtaining funding at spending milestones along the life of natural disaster projects, these agreements do not cover all expenditure incurred in relation to natural disasters. Emergency Works (EW) and Immediate Reconstruction Works (IRW) costs incurred in in the first three months after a disaster event are only reimbursed at the time of final acquittal and therefore any newly declared natural disaster(s) would further create a spend in advance issues until final acquittals were accepted and paid.

Council has presented a 1-year capital program in the 2025/26 delivery program and operational plan because at this stage, a thorough condition assessment of our roads and community buildings has not been completed. Once these assessments are completed, further discussions will be held with the elected Council about what funding is required to renew and repair our infrastructure assets, and this information will be incorporated into a revised Long Term Financial Plan (LTFP) which will be prepared and presented to Council later this calendar year. The LTFP will consider the need for future Special Rate Variations.

Table 5 below shows the total capital works by program.

Table 5: Total Capital Works by Program

Capital Program	$'000
Bridges	5,109
Buildings and Property	6,704
Commercial Undertakings	6,848
Community and Culture	533
Economic Development	387
Environmental Management	1,699
Fire Protection and Emergency Services	1,134
Internal Corporate Services	4,050
Open Space, Sport and Recreation	2,750
Roads and Transport	38,476
Stormwater	3,078
Waterways Infrastructure	707
Waste and Recycling Program	7,803
Total General Fund (including Waste)	79,278
Water and Sewer Services	56,377
Total Capital Program	135,655

It is important to note that the capital works program for 2025/26 will be adjusted throughout 2024/25 having regard to:

· Carry forward and Revotes which are to be determined in conjunction with the March Budget Review and End of Financial Year Review.

Budget Details – General Fund

The Operating Result for 2025/26, excluding capital grants, is a deficit of $17.3M. With the inclusion of capital grants, the net operating result is a surplus of $13.7M. The net unrestricted cash movement for 2025/26 is a surplus of $18.0M, mainly because of land sales and operational savings arising from Council’s SFFP. This favourable cash movement is not proposed to be utilised for operational matters, but rather funding grants spent in advance and unexpected events such as mechanical failure of assets and opt-in fees for Natural Disasters.

Key drivers of the 2025/26 operating results:

· Increase in Rates income subject to the approval of 12% SRV application

· Increase in Interest and Investment income due to higher interest rates

· Decrease 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 due to organisational restructures and critical review of vacant positions as proposed in Council’s SFFP

No new borrowings are proposed to be drawn down for FY2025/26.

Budget Details – Shoalhaven Water

The Operating Result for the Water Fund for 2025/26, excluding capital grants, is a surplus of $5.7M. When capital grants and contributions are included, the net operating result is a surplus of $17.2M. Key drivers of the 2025/26 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 materials to align with expected CPI increase

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

The Operating Result of Sewer Fund for 2025/26, excluding capital grants, is a surplus of $15.2M. When capital grants are included, the net operating result is a surplus of $17.2M. Key drivers of the 2025/26 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 materials to align with expected CPI increase

The Shoalhaven Water Directorate capital expenditure of $56.4M has been allocated in the Draft Budget for 2025/26. The total includes the following significant projects/programs:

Water Fund:

· Bamarang to Milton Water Trunk stage 2 - $2.5M

· Water Mains Replacement Program - $4.2M

· Water Infrastructure Extension to Jervis Bay Territory - $9.5M (External Funding)

· Bamarang Water Treatment Plant Electrical Refurbishment - $1.1M

Sewer Fund:

· South Nowra Surcharge Main package 2 - $2.1M

· Worrigee Road URA Sewer Rising Main – $1.3M

· Culburra Wastewater Treatment Plant Upgrades - $4.4M

· West Nowra URA Sewer Infrastructure - $7.6M

· Ulladulla Wastewater Treatment Plant Upgrades - $3.5M

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

Key Performance Indicators

The key performance indicators are set by the Office of Local Government (OLG) to measure financial performance and sustainability of local councils across NSW. The projected 2025/26 indicators for each of the funds as well as consolidated for Shoalhaven City Council are outlined below.

Table 6 below highlights that Council is budgeted to meet most of the OLG’s Financial Performance targets in 2025/26, except for General Fund Operating Performance Ratio.

Table 6: Financial Performance Indicators

Indicator	Target	Fund	2025/26
Local Government Industry Indicators
Operating Performance Ratio	Greater than 0%	Consolidated	0.1%
		General	-5.7%
		Water	11.1%
		Sewer	20.7%
Own Source Operating Revenue Ratio	Greater than 60%	Consolidated	84.2%
		General	85.6%
		Water	81.6%
		Sewer	97.3%
Unrestricted Current Ratio	Greater than 1.5	Consolidated	1.50
		General	1.50
		Water	17.44
		Sewer	1.52
Debt Service Cover Ratio	Greater than 2.0	Consolidated	5.28
		General	2.63
		Water	No Debt
		Sewer	4.63
Rates, Annual Charges, Interest and Extra Charges Outstanding Percentage	Less than 10%	Consolidated	6.8%
		General	6.1%
		Water	6.4%
		Sewer	8.4%
Cash Expense Cover Ratio	Greater than 3 months	Consolidated	9.16
		General	5.19
		Water	25.74
		Sewer	7.74

Table 7 shows that Council is not anticipated to meet the OLG’s Infrastructure Asset Performance targets.

Table 7: Infrastructure Asset Performance Indicators

Indicator	Target	Fund	2025/26
Infrastructure Asset Performance Indicators
Infrastructure Renewals Ratio	Greater than 100%	Consolidated	66.6%
		General	73.8%
		Water	43.4%
		Sewer	63.1%
Infrastructure Backlog Ratio	Less than 2%	Consolidated	TBA
		General	TBA
		Water	TBA
		Sewer	TBA
Asset Maintenance Ratio	Greater than 1x	Consolidated	TBA
		General	TBA
		Water	TBA
		Sewer	TBA
Cost to bring assets to agreed service level	No Benchmark	Consolidated	TBA
		General	TBA
		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 ratio for general fund is below the benchmark, however, it is an improvement compared to FY2024/25 due to the $7M operational savings as part of Council’s SFFP. It is expected that this ratio will continue to improve as Council progresses further with the proposed SFFP.

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 several briefings and workshops throughout the preparation of the Draft 2025/26 DPOP. The full schedule of briefings is shown below in Table 8.

Table 8: Councillor Engagement Schedule

Description	Date
Councillor Briefing Budget Workshop 1: Capital Carry Forwards & Revotes	Thursday 27 February 2025
Councillor Briefing Budget Workshop 2: Capital Program & MRF Update	Thursday 13 March 2025
Councillor Briefing Budget Workshop 3: Operational Income & Expenditure	Thursday 20 March 2025
Councillor Briefing Budget Workshop 4: Overview & Cash Position	Thursday 27 March 2025
Fees and Charges: hardcopy provided	Thursday 6 March 2025
Department Budget Packs: uploaded to Councillors’ portal	Monday 24 March 2025

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.

Internal Consultations

Development of the draft documents occurred with input from across the management team and internal working group comprising of representatives from each Council Directorate.

External Consultations

Engagement activities have been held with community, business and industry organisations as part of drafting the documents.

Community Consultations

Community consultation activities held to date are outlined in Attachment 5.

A public exhibition community engagement plan has been developed to ensure that the community can be informed about the contents of the Draft CSP, DPOP, Budget, and Fees and Charges. These engagement activities will 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 the Get Involved engagement webpage, via email or in written form.

Policy and Statutory Implications

Placing the draft integrated planning documents on public exhibition will work towards meeting statutory requirements.

Financial Implications

Whilst the improvement in General Fund Operating Results before Capital is positive, the budget does not take into account fundings for future grants spent in advance and unexpected events such as mechanical failure of assets and opt-in fees for Natural Disasters.

The cuts made to the 2025/26 budget will make meeting budget a challenge. The anticipated increase in revenue from the new SRV will be spent on capital renewal projects but this additional funding will still not be enough for Council to meet its obligations in relation to asset renewal targets.

Risk Implications

The CSP, DPOP and Budget must be placed on public exhibition for a 28 day period and be adopted before 30 June 2025 in accordance with legislation. Submissions made by the public in relation to the CSP, DPOP and Budget must be collated and presented to Council for the adoption meeting which is likely to be the Council meeting scheduled for 17 June 2025. Delays in placing the CSP, DPOP and Budget on public exhibition will shorten the time available to compile public submissions prior to the adoption meeting and reduce the time available for consideration of public feedback and potentially delay adoption of the Budget.

Delays in adoption can delay the routine levy of the 2025/26 annual rates and charges which can result in a late issue of Rates Notices that will have detrimental impacts on Council’s cash flow.

Fund	Monthly Revised Budget $	Actual Earned $	Difference $
General	508,553	504,435	-4,118
Water	184,069	190,197	6,128
Sewer	124,979	132,311	7,332
Total	817,601	826,943	9,342

Fund

Monthly Revised Budget
$

Actual Earned
$

Difference
$

General

508,553

504,435

-4,118

Water

184,069

190,197

6,128

Sewer

124,979

132,311

7,332

Total

817,601

826,943

9,342

Fund	Revised Total Annual Budget ¹ $	Actual YTD $	% Achieved
General	5,987,804	4,477,042	74.77%
Water	2,167,263	1,628,067	75.12%
Sewer	1,471,521	1,108,591	75.34%
Total	9,626,589	7,213,699	74.94%

Fund

Revised Total Annual Budget ¹
$

Actual
YTD
$

%
Achieved

General

5,987,804

4,477,042

74.77%

Water

2,167,263

1,628,067

75.12%

Sewer

1,471,521

1,108,591

75.34%

Total

9,626,589

7,213,699

74.94%

Tenderer	Location
Marine & Civil Maintenance Pty Ltd	9/41-43 Higginbotham Rd, Gladesville NSW 2111
City Coast Services Pty Ltd	56 Yalwal Rd South Nowra
Interflow Pty Ltd	17 Winchcombe Court, MITCHELL ACT 2911

Tenderer

Location

Marine & Civil Maintenance Pty Ltd

9/41-43 Higginbotham Rd, Gladesville NSW 2111

City Coast Services Pty Ltd

56 Yalwal Rd South Nowra

Interflow Pty Ltd

17 Winchcombe Court, MITCHELL ACT 2911

Tenderer	Location
Fulton Hogan Industries Pty Ltd	Dapto
CBK Constructions Pty Ltd	Gerringong
Select Civil Pty Ltd	Kembla Grange
JSC Pty Ltd	Mitchell (ACT)

Tenderer

Location

Fulton Hogan Industries Pty Ltd

Dapto

CBK Constructions Pty Ltd

Gerringong

Select Civil Pty Ltd

Kembla Grange

JSC Pty Ltd

Mitchell (ACT)

Ordinary Meeting – Tuesday 29 April 2025

Page 0

CL25.135 Post exhibition report - Planning Proposal for 17 Prince Alfred Street, Berry

HPERM Ref: D25/135764

Department: Strategic Planning

Approver: Lindsay Usher, Acting Director - City Development

Attachments: 1. HMS 8800 HNSW Response ⇩

Purpose:

Report the feedback received from the public exhibition and government agency consultation, and obtain Council’s direction on the finalisation of the Planning Proposal (PP).

Lot Number	Lot SP 93194
Property Address	‘The Berry Inn’, 17 Prince Alfred Street, Berry.
Applicant	Allen Price
Owner	Cooltown Trading Pty Ltd
Current zoning	Partly zoned E1 Local Centre and partly zoned R2 Low Density Residential under the LEP. See Figure 2 below.
Proposed Amendments	Rezone R2 zoned portion of the land to E1 - means whole site would be zoned E1. Remove the current 500 m² mapped minimum lot size to be consistent with the E1 zone (does not prescribe a mapped minimum lot size). Adjust local heritage item 88 (associated with the former CBC building) to accurately reflect the land’s heritage values.

Summary and Key Points for Consideration:

· The proposed rezoning is considered minor, administrative in nature and is supported.

· The PP seeks to resolve the current split zoning of the land on which The Berry Inn is located (17 Prince Alfred Street, Berry).

· When a recently approved subdivision application (DA23/3181) is ultimately completed, the current strata plan will be dissolved, and the land will be two Torrens Title lots. The buildings and uses will then be on separately owned freehold lots.

· The PP was exhibited from 12 February to 14 March 2025 - no community submissions were received.

· Comments received from Heritage NSW were addressed in the report and attachments considered by Council on 12 November 2024, noting that internal heritage advice supports the proposed adjustment to local heritage item 88.

· The proponent has advised that the approved subdivision is unlikely to be completed prior to Council’s deadline for finalising the PP.

· The proposed adjustments to heritage item 88 are proposed to be completed as part of this PP.

· It may be necessary to complete a minor adjustment after the subdivision has been completed to ensure the boundaries align, either as an ‘expedited amendment’ or as part of a future housekeeping amendment.

Recommendation

That Council

1. Finalise the PP as exhibited, including the adjustment to local heritage item 88 in Shoalhaven Local Environmental Plan (LEP) 2014 to ensure it as accurately as possible reflects the land’s heritage values, even though the approved subdivision (DA23/3181) may not be completed within the PP timeframe.

2. Acknowledge that a further minor adjustment (to item 88) to the LEP may be necessary when the subdivision is completed to ensure the boundaries align and the property description is updated as part of a future housekeeping amendment, or if necessary, via an expedited LEP amendment under Section 3.22 of the Environmental Planning & Assessment Act.

Options

1. Finalise the PP as recommended.

Implications:

Finalising the PP will simplify the zoning and associated LEP provisions, better aligning the zoning with the existing approved use/built form and removing any ambiguity created by the current split zoning.

Adjusting the coverage of heritage item 88 as part of the PP will ensure the LEP accurately reflects the land’s heritage values. Heritage protection provisions under Clause 5.10 (Heritage conservation) of the LEP will also not be diminished because the land is in a Heritage Conservation Area (HCA) and is also near other heritage-listed properties.

2. Finalise the PP but not amend local heritage item 88.

Implications: Heritage item 88 will not accurately reflect the land’s actual heritage values. Not recommended.

3. Not finalise the PP

Implications: Part of the land will remain zoned R2 Low Density Residential, which does not reflect the current ongoing use. Not recommended.

Background and Supplementary information

The subject land is part of an existing strata lot (Lot SP 93194) with frontage to Queen Street and Prince Alfred Street, Berry – see Figure 1 & 2 below.

Aerial view of a street intersection

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Figure 1 – subject land (Lot SP 93194)

A map of a neighborhood

Description automatically generated with medium confidence

Figure 2 – current land zoning

The Planning Proposal application was reported to Council on 12 November 2024 (CL24.352). In response, Council resolved (relevant components) as follows:

1. Acknowledge …

2. As a result, support the Planning Proposal (PP-2024-1869) to rezone the land currently zoned R2 Low Density Residential land at 17 Prince Alfred Street, Berry, to E1 Local Centre, and remove the 500 sq metre mapped minimum lot size that currently applies to the R2 land.

3. Support the removal of the land on which The Berry Inn is located from the mapped extent of heritage Item 88 when the approved Torrens Title subdivision has been completed, noting that LEP clause 5.10 (heritage conservation) still applies, as the site is adjacent to other heritage items and do this either as part of this PP or by seeking support from the NSW Department of Planning, Housing and Infrastructure (DPHI) to use section 3.22 (expedited amendments) of the Environmental Planning and Assessment Act (EP&A Act) to resolve the matter efficiently after the amendment has been completed.

4. Submit the PP to the DPHI for initial Gateway determination.

5. Subject to receiving a favourable Gateway determination, exhibit the PP and should there be no significant feedback, finalise the PP without reporting the matter back to Council.

The report, attachments and full Council resolution can be viewed via the following links.

· Link to business paper containing the report (CL24.352)

· Link to attachments

· Link to minutes (MIN24.610)

The NSW Department of Planning, Housing and Infrastructure (DPHI) issued a Gateway determination on 9 January 2025. The Gateway requires the PP and resulting LEP amendment to be completed by 12 September 2025.

Internal Consultations

As summarised in the previous report on this matter, Development Services Section advised:

· Alternative uses can potentially be approved on the R2 land under either Clause 5.3 or Clause 5.10(10) of the LEP

· Rezoning the R2 land to E1 is unlikely to have a significant impact on the planning outcomes for the site. The rezoning is considered to be administrative.

· The heritage features referred to in the State Heritage Inventory for heritage item 88 do not affect the land on which The Berry Inn is located. They do not object to the removal of this land from the mapped extent of Item 88 at the appropriate point, provided the land remains within the Conservation Area in the LEP to assist in retaining the character and appearance of the area.

External Consultations

As a precaution, the PP was referred to Heritage NSW for comment and they responded in writing on 13 February 2025 (Attachment 1) advising that:

· An Aboriginal Cultural Heritage Assessment should be completed if there is any change to the proposed use of the site. Comment: this would be considered at the development assessment stage, noting that the site is already developed and has been used for a range of purposes over several decades.

· Heritage NSW does not have a role in the assessment or approval of impacts to local heritage, unless those impacts are to archaeological sites or relics, which require management under the Heritage Act 1977.

· No impacts on items listed on the State Heritage Register have been identified.

· No impacts on historical archaeology have been identified.

· The LEP map (heritage overlay) should align with the new lot boundary.

· The proximity to nearby heritage items should not be relied upon to provide adequate heritage protection (under cl 5.3). Comment: heritage protection will not be dimimished because the land is part of a heritage conservation area relevant clause is 5.10 (heritage conservation) AND the land adjoins local heritage items. Clause 5.3 (development near zone boundaries) does not relate to heritage protection.

· A Statement of Heritage Impact should be prepared to inform the PP.

Comment: Subsequent advice received from Development Services’ internal heritage advisor stated:

· There have been ongoing separate uses of the subject land; the parking bays and motel elements associated with The Berry Inn do not directly contribute to the significance of the historic CBC building.

· The reference in the Shoalhaven Heritage Inventory entry to trees and fence is believed to be related to the mature trees and older fence surrounding the CBC building, not the proposed Lot 2 area where The Berry Inn is located.

The internal heritage advice raised no objections to removing The Berry Inn land (proposed Lot 2) from item 88 because the main curtilage containing the significant elements of the CBC building will not be affected, provided the land remains part of the conservation area.

Given the above advice and that any development application will have to address clause 5.10 of the LEP, a Statement of Heritage Impact is not required to support the PP, contrary to the suggestion from Heritage NSW.

Community Consultations

The PP was publicly exhibited from 12 February to 14 March 2025 on Council’s website. The following documents were exhibited:

1. PP078 - Explanatory Document - (424kb)

2. PP078 - Planning Proposal - (3,234kb)

3. PP078 - Gateway Determination - (3,278kb)

4. PP078 - Public Notice - (105kb)

Adjoining landowners and the Berry Forum were advised directly.

No submissions were received.

Policy and Statutory Implications

Nil. The PP is considered minor and or administrative nature.

Financial Implications

The PP has been funded by the landowner in accordance with the applicable fees for proponent-initiated PPs.

Risk Implications

There are no significant risk concerns.

Ordinary Meeting – Tuesday 29 April 2025

Page 0

CL25.136 Proposed Draft Chapter N2: Town of Berry - Shoalhaven Development Control Plan (DCP) 2014

HPERM Ref: D25/148865

Department: Strategic Planning

Approver: Lindsay Usher, Acting Director - City Development

Attachments: 1. Draft DCP Chapter N2 - Town of Berry (under separate cover) ⇨

2. Draft Dictionary Amendment (under separate cover) ⇨

3. Draft Supporting Map 1: Berry Town Centre (under separate cover) ⇨

4. Draft Supporting Map 2: Contributory Items in Heritage Conservation Areas (under separate cover) ⇨

Purpose:

The purpose of this report is to present the draft new Shoalhaven DCP 2014 Chapter N2 - Town of Berry and seek Council’s endorsement to place it on formal public exhibition alongside the related Planning Proposal (additional Heritage Conservation Area and Heritage Listings).

Summary and Key Points for Consideration:

On 11 September 2023 Council resolved (MIN23.496) to prioritise the introduction of a new heritage conservation area (Princess Street), new heritage listings and a new draft DCP Chapter for Berry (east of the Princes Highway) as part of Stage 1 of the new Shoalhaven Land Use Planning Scheme.

This report relates to the proposed new resulting draft DCP Chapter.

The Council resolution responded to a request from the Berry Forum in 2022 to strengthen the local character and heritage considerations/protections, stemming from ongoing community concerns about the impact of unsympathetic development in Berry. The Berry Forum submitted a potential DCP chapter and heritage conservation area assessment to Council in support of the request.

Initial community engagement commenced in late 2023 to gather the community’s ideas, themes and priorities to inform the new DCP chapter. Details of the engagement activities undertaken and the results are provided in the Berry DCP Engagement Outcomes Report.

Council considered the community engagement outcomes on 29 July 2024, and resolved (MIN24.396) to proceed with the new draft DCP Chapter, with the work to be undertaken in-house by staff. Councillors most recently received a briefing/update on the work on 13 February 2025 which outlined the overall approach to the draft DCP and its areas of focus.

The proposed draft DCP Chapter and related documents are now presented to Council for consideration prior to it proceeding to formal public exhibition/engagement. The chapter seeks to address the issues important to the community while being clear, concise and applicable where it can have the most effect on the desired future character of Berry. Subject to Council’s endorsement, the draft DCP Chapter will be formally exhibited for community comment.

Recommendation

That Council:

1. Place the draft amendment to Shoalhaven Development Control Plan (DCP) 2014 on public exhibition for at least 28 days as per legislative requirements, concurrently with the heritage Planning Proposal (ideally if possible), comprising the following:

a. Draft new Chapter N2: Town of Berry and supporting maps.

b. Draft amendment to Shoalhaven DCP 2014 Dictionary.

2. Receive a further report following the conclusion of the public exhibition period to consider the feedback received and any resulting proposed amendments to the draft DCP amendment, prior to finalising it.

3. Advise key stakeholders, including (not exclusively) the Berry Forum, Berry Chamber of Commerce and Tourism, Berry & District Historical Society, Development Industry representatives and relevant landowners, of this resolution and the future public exhibition arrangements.

Options

1. As recommended.

Implications: This is the preferred option and will enable Council to continue progressing the draft new DCP Chapter to public exhibition, concurrent with the related heritage Planning Proposal if possible.

Council will receive a further report following the exhibition period to consider the feedback received and any further proposed amendments to the draft DCP Chapter, prior to finalising it.

2. Adopt an alternative recommendation, such as receive a further briefing on the draft DCP Chapter prior to public exhibition.

Implications: This is not the recommended as it will delay the progress and implementation of the new DCP chapter. This would also impact on the resourcing of other components of the New Land Use Planning Scheme which are pending the completion of the Berry character and heritage work.

3. Do not adopt the recommendation.

Implications: Council would not progress any further with the draft new DCP Chapter for Berry. This could be a missed opportunity to improve character and heritage protections for Berry in the DCP and help address the potential adverse impacts of unsympathetic development which is of concern to the Berry community.

Background and Supplementary information

The Berry DCP Engagement Outcomes Report made seven recommendations which have guided the preparation of draft DCP Chapter, as shown in Figure 1 below.

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Figure 1: Recommendations - Engagement Outcomes Report (June 2024)

As noted in the July 2024 report to Council, some matters raised may not be able to be specifically addressed in the DCP but could be considered/progressed through other strategic plans/policies or by other areas within Council, where required/appropriate. The matters not addressed in the draft new DCP chapter are discussed and explained further below.

To ensure the new DCP Chapter is well balanced and consistent with the broader public interest, its preparation has considered the initial community engagement outcomes and also:

· the Berry Forum’s submitted proposed DCP chapter;

· the work supporting the new proposed heritage conservation area;

· State codes, for example Complying Development, that permit residential and other types of development that meets standard, statewide criteria. Note: Complying development does not need to comply with a DCP or consider local character;

· Guidance from NSW Government, Land and Environment Court and other Council’s on certain matters, for example, character statements.

· The need for DCP provisions to be clear, consistent and applicable in development assessments, including ability to stand up in potential court challenges;

· Controls that provide an appropriate degree of flexibility to enable development to respond to different site and area-based constraints and opportunities.

When considering this matter, It is important to recognise the implications of Complying Development on this proposed DCP. Complying Development will continue to be available to people wanting to construct a new dwelling, dual occupancy or alterations/additions in Berry, except in certain limited circumstances e.g. where the land is heritage listed or is within a heritage conservation area. From a sample of 10 recent residential developments in Berry, five were undertaken via a development application and 5 were undertaken via Complying Development. If Council were to potentially implement, what might be considered to be, overly strict DCP controls, it is likely to result in more people considering or using the Complying Development pathway and if so will result in less consideration of local character. As such, the draft DCP seeks a balance between the protection of local character and what is permitted through complying development. Thus some of the proposed draft DCP controls are stricter than the complying development code, some are more relaxed.

Draft DCP Overview and Structure

The draft DCP chapter is organised into eight parts:

· Part 1: Purpose – outlines the overall purpose of the new chapter. In addition to protecting Berry’s character and heritage, it also seeks to reinforce Berry’s role as a rural service centre and enable opportunities for compatible new development.

· Part 2: Application – The chapter will apply to the town centre and residential areas within the historic part of Berry (i.e. Pulman Street and the 1912 Berry Town subdivision), as shown in Figure 1 below. This area is identified as having the most significant character and heritage qualities and is where the draft DCP can have the most effect. It is acknowledged that other parts of Berry have their own character but not all potentially need unique or special DCP controls and there is limited ability for DCP controls to influence development outcomes in some cases. This is discussed further below.

· Part 3: Context – contextual information about Berry and the DCP chapter.

· Part 4: Objectives – outlines the overall chapter objectives for development.

· Part 5: Character – outlines existing and desired future character for the town centre and the relevant residential area, the specific elements or qualities that are to be retained, and how character is to be considered in the design and assessment of new development. The character statements are adapted from Council’s ‘interim’ character statements which were in the initial community engagement survey (85% and 60% of respondents agreed with the existing and desired future character statements respectively).

· Part 6: Berry Town Centre – incorporates/absorbs the existing DCP Chapter N2: Berry Town Centre and its Supporting Map. The existing chapter has been reviewed and updated, with some considerations added for built form, scale, character and the pedestrian environment. The draft Part 6 also recognises opportunities for compatible growth and development in the town centre, including residential accommodation, to enhance activity and economic vitality.

· Part 7: Development in Residential Areas – includes proposed controls addressing built form, scale, site coverage, streetscape, landscaping, trees and vegetation, car parking and access for development in the residential area. The draft controls seek to enable new housing opportunities that complements the existing character.

· Part 8: Heritage Conservation – includes controls to guide development of heritage items and in heritage conservation areas, both within the town centre and the relevant residential area. This part expands on existing heritage provisions in the DCP to help clarify requirements for everyone and also improve the consistency of assessments.

A map of a neighborhood

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Draft DP Chapter N2: Town of Berry

Matters not Included in the Draft DCP Chapter

It is acknowledged that not all the issues, priorities and areas raised in the initial community engagement and/or in the Berry Forum’s suggested DCP Chapter are covered or addressed in the proposed draft DCP Chapter. These matters are explained and discussed below:

Issue/theme/area

Reason not included

· Aboriginal cultural heritage

Is already covered by and addressed in the existing Chapter 2 of the DCP and overarching State legislation/policy. The approach taken in preparing the draft Chapter is not to duplicate provisions that are contained elsewhere. This general approach has been consistently taken during the development of the overall DCP.

Note: a separate review of the existing DCP Chapter 2 provisions is underway, with a view to including more comprehensive guidance for development throughout the City.

· More contemporary residential areas (vicinity of Windsor Dr and Gwenda Ave)

These areas date from the 1970-80s and have contemporary dwellings. They are also less visible on the edge of town. As such, there was considered to be limited need/benefit in this area having specific DCP controls. The draft DCP Chapter focusses on the area with the most significant character/heritage qualities.

· Seniors living developments (e.g. The Arbour, The Grange, Masonic Village)

· Berry Public School

State Codes permit development for these purposes, with limited or no requirement to consider Council’s DCP. As such, any DCP provisions are likely to be of limited or no effect.

Note: Part of the Berry Public School property (1 Clarence Street) is identified as a ‘heritage item’ in the LEP.

· Berry Showground

The showground precinct is identified as a ‘heritage item’ in the LEP and owned by Council, as such, there is already a level of control and protection around future development within it.

Council is also able to undertake development under State Codes that do not require consideration of the DCP.

· Rural zoned land surrounding Berry urban area

The rural surrounds are likely to remain rural/scenic in nature and relatively undeveloped as a result of:

· LEP zoning and minimum lot size – development is largely limited to rural/agricultural and related uses;

· Flooding – flooding from Broughton Creek and tributaries affects much of the land around Berry.

The NSW Exempt and Complying Development Codes also permit a range of rural/agricultural development, including large farm buildings, with no need to consider Council’s DCP. As such, specific DCP controls are likely to have a very limited effect.

· New/upgraded public infrastructure.

State legislation limits what a DCP can reasonably require development to consider/address and requirements are already contained in other existing DCP chapters.

Broader public realm upgrades such as roads, footpaths and drainage networks that service a broader catchment need to be considered and delivered via other mechanisms where appropriate e.g. Councils works program, the Contributions Plan.

· Climate change and environmentally sensitive design (ESD)

These matters are already covered and addressed in other DCP chapters or State legislation/policy (e.g. BASIX, SEPP Sustainable Buildings) or are otherwise considered beyond the scope of this proposed DCP Chapter.

Some parts of the draft chapter however indirectly address some of these matters e.g. landscaping, trees and vegetation.

Internal Consultations

Consultation was undertaken with technical officers in Councils Development Services, Certification and Compliance, Technical Services and Works and Services teams. Feedback from these teams has been incorporated into the draft DCP Chapter.

External Consultations

No consultation with external agencies has been undertaken at this stage

Community Consultations

Initial community engagement was undertaken from December 2023 to June 2024 to gather the community’s ideas, themes and priorities to inform the new DCP chapter. The results are provided in the Berry DCP Engagement Outcomes Report.

If Council resolves as recommended, the draft DCP Chapter and supporting documents will now be formally exhibited for community comment for at least 28 days, in accordance with legislative requirements. It is intended to exhibit the draft DCP Chapter and the Planning Proposal for the Princess Street Heritage Conservation Area concurrently (subject to the Planning Proposal receiving a pending favourable Gateway determination from the NSW Government).

The exhibition will be directly notified to key stakeholders, including but not limited to Berry Forum CCB, Berry and Districts Historical Society, Berry Chamber of Commerce and Tourism, Development Industry representatives and affected landowners.

Policy and Statutory Implications

If the draft DCP Chapter is supported by Council following public exhibition, it would replace the existing Chapter N2 in Shoalhaven DCP 2014.

When the draft DCP and related Planning Proposal are formally exhibited they will then also have more formal status in the development application process.

Financial Implications

The new draft DCP chapter will continue to be progressed/resourced to finalisation ‘in house’ from the Strategic Planning operational budget.

Risk Implications

Not progressing with the draft DCP Chapter discussed in this report would limit Council’s ability to manage unsympathetic development through the assessment process. This would fall short of community expectations and could impact on the existing heritage significance and character of Berry.

If there are concerns regarding the final nature and content of the draft DCP Chapter it may be appropriate to still proceed to exhibit it (and the related Planning Proposal) and for Council (and the community) discuss the any concerns through the remainder of the process and prior to the ultimately finalisation of the DCP Chapter.

Directorate	Name	Designated Position Start Date	Returned
City Services	Craig Horgan	27/01/2025	06/03/2025
City Services	Paul McKenzie	20/01/2025	20/03/2025