Supplementary Agenda of Ordinary Council Meeting

Corporate and Community Division

Date of Meeting: 18/04/2012

ITEM 5

CC16/12 - Draft Operational Plan for 2012/13 - Includes Budget, Fees Charges and Rating Structure - Adoption of Draft for Public Exhibition

Additional information with CHANGE to Recommendation

Since the finalisation of Executive Manager’s Report No. CC16/12, a Fact Sheet has been received from the Independent Pricing and Regulatory Tribunal (IPART) titled “Existing special variations and the carbon price advance and withdrawals”. A copy of that document is attached.

IPART has indicated that the purpose of the Fact Sheet is to explain how councils with existing special rate variation approvals may apply to have their special variations amended to incorporate the expected effects of the introduction of a carbon price from 1 July 2012. Approval of such applications would bring those councils into line with other councils across NSW in the way that IPART have set the rate peg for 2012/13, and the adjustments to the rate peg in subsequent years. If Council supports the making of an application for the relevant amendments to the special rate variation, IPART recommends that Council indicate to its community through the draft Operational Plan for 2012/13 that it is “taking up the arrangement to reflect the equitable treatment being offered to all councils by the regulator”.

It is noted that the financial information in the draft Operational Plan for 2012/13 attached to Executive Manager’s Report No. CC16/12 was calculated on an estimated 6% increase on the income received by Council in 2011/12. This was in line with the special rate variation approved for Council by IPART on 24 June 2011 (and which covered the years 2011/12, 2012/13 and 2013/14).

Effectively, IPART’s Fact Sheet provides an opportunity for 18 councils across the State (including Hornsby) to apply to modify their approved special variation percentage for the coming years. For Hornsby, this would result in an addition of 0.4% to its special rate variation for 2012/13, a reduction of 0.1% in its special rate variation for 2013/14 and a reduction of 0.3% in the rate peg allowance it will have access to for 2014/15. (N.B. If Council chooses not to apply for the increase for 2012/13, it would still be subject to the reduction to the special rate variation for 2013/14 and the reduction to the rate peg for 2014/15)

Assuming that Council is supportive of making application to IPART for the increase in its special rate variation for 2012/13, it is necessary for the financial information contained in the attachment to Executive Manager’s Report No. CC16/12 to be amended prior to the document being placed on public exhibition. In this regard, it is noted that the further 0.4% increase to Council’s income to offset the effects of a carbon tax will result in the draft 2012/13 budget showing a surplus of $261,344. Such surplus will be able to be applied to relevant areas of the Budget as part of quarterly reviews during 2012/13.

To reflect the above, the changes that will need to be made prior to exhibition of the draft Operational Plan attached to Executive Manager’s Report No. CC16/12 will be to the financial information on the following pages:

· Page 8 - Financial Overview Summary

· Page 90 - Financial Services Branch budgeted income

· Page 110 - Annual consolidated financial budget for the Council

· Page 112 to 115 - Council’s rating statement

As a consequence, the recommendation in respect of Executive Manager’s Report No. CC16/12 should be amended to read:

THAT:

1. The contents of Executive Manager’s Report No. CC16/12 and Late Items Memo No. LM3/12 be received and noted.

2. In line with the Independent Pricing and Regulatory Tribunal (IPART) publication “Existing special variations and the carbon price advance and withdrawals”, Council make application to IPART to increase its special rate variation percentage increase for 2012/13 by 0.4% from 6.0% to 6.4%.

3. Council note that IPART’s approval of the application referred to in 2 above will ensure that Council is treated in the same manner as all other councils across NSW in respect of receiving an allowance in its rate increase for 2012/13 to cover the expected impact of the introduction of a carbon price from 1 July 2012.

4. Subject to the inclusion of relevant amendments to financial information as a consequence of the application referred to in 2 above, Council adopt for public exhibition and make available for public comment from 19 April to 18 May 2012, the documents attached to Executive Manager’s Report No. CC16/12 (i.e. the draft Operational Plan for 2012/13 which includes the draft Budget, Fees and Charges and Rating Structure).

5. Council note that the rating information contained in the draft Operational Plan for 2012/13 will be based on IPART’s approval of a 6.4% special rate variation increase for Council for 2012/13.

6. Following the public exhibition period, and before 30 June 2012, a further report be prepared for Council’s consideration which provides details of any submissions received and recommends the adoption of a final Operational Plan for 2012/13 which includes the Budget, Fees and Charges and Rating Structure.

RECOMMENDATION

THAT:

1. Council adopt for public exhibition and make available for public comment from 19 April to 18 May 2012, the draft Operational Plan for 2012/13 which includes the draft Budget, Fees and Charges and Rating Structure.

2. Council note that the rating information contained in the draft Operational Plan for 2012/13 is based on the Independent Pricing and Regulatory Tribunal’s approval of a 6% increase for Council for 2012/13.

3. Following the public exhibition period, and before 30 June 2012, a further report be prepared which provides details of any submissions received and recommends the adoption of a final Operational Plan for 2012/13 which includes the Budget, Fees and Charges and Rating Structure.

1.View

IPART Fact Sheet - Existing Special Variations and the Carbon Price Advance and Withdrawals - 30 March 2012

File Reference: F2011/01357

Document Number: D01898342