Financial sustainability

Overview

Council is taking a number of actions to address the significant financial challenges it currently faces.

An independent review of Council’s financial position in 2023 identified that Council needed to increase revenue and decrease costs through a number of measures to be able to sustain and continue its program of works and services needed now and into the future to meet community needs.

In January 2024, Councillors resolved not to proceed with an application to the Independent Pricing and Regulatory Tribunal (IPART) for a proposed Special Rate Variation and to focus on maintaining strict budgeting measures, improving asset management planning practices and increasing revenue through immediate sales of underperforming property and assets (Minutes from 29 January 2024 Ordinary Meeting - CL24.41: Application to Lodge a Special Rate Variation).

These initiatives are being regularly workshopped with Councillors and reported to the Council on a monthly basis for urgent decisions to be made by Council.

Contributing factors

Many factors have contributed to making Council’s financial position unsustainable:

  • the impacts of the COVID pandemic and 13 consecutive natural disasters during the last five years has significantly depleted revenue and increased operational costs. The net cost of the disasters, including subsidies and waivers on fees and charges, reduced the unrestricted cash (cash that is readily available to spend) position by $14.6 million
  • millions of dollars in grant-funded improvements in the wake of fires and floods means we need to put more away each year to save for maintenance and renewal/depreciation costs
  • community expectations are that maintenance and replacement of assets like roads, bridges and community facilities should be improved above current levels, requiring greater investment
  • rising cost of materials, labour and contractors
  • increase in interest expense due to increase in loan borrowings
  • sustained lower-than-average residential and business rates (in comparison to other local government areas)
  • rate pegging – the IPART restricts how much councils can typically increase rates by, and in recent years rate rises haven’t kept up with inflation
  • cost shifting by NSW Government and Australian Government forcing Council to assume responsibility for infrastructure, services and regulatory functions without providing sufficient supporting funding

Actions we are taking

Council is taking a number of actions to improve our financial position.

View the following sections for more details on these actions and any decisions that have been made so far.

Cutting costs

There’s a number of actions being taken to reduce the forecast annual structural deficit of $25 million to $35 million. Some of these include:

Changing the timing of capital works program

The construction of new buildings and facilities such as libraries, parks and playgrounds are being reviewed to determine if it is feasible to proceed with them in the next financial year or if they need to be re-phased to a future date.

Reports will be presented to the Council (the Councillors) for consideration at Council meetings.

We’re currently investigating:

Decisions so far:

Recruitment

The process of recruitment is being strategically managed by Council’s Executive Team to determine the urgency and necessity of filling vacant positions and extend vacancies wherever possible to reduce wages costs.

Grant applications

Applications for grants are being considered against the resourcing capacity of the organisation including the number of staff, program management and order of priority against other current projects and tasks as well as long term financial implications to maintain and operate any new facilities.

Increasing revenue

Sale of underperforming or excess assets and land

A process to identify Council-owned properties and assets that are underperforming as public facilities and places is being worked through.

At present, Council manages a property portfolio exceeding 3,100 lots including operational, community, and Crown Land. Of these, 1,700 are classified as operational land.

There is a process to work through to enable sale of land. Operational land can be sold, however suitable community land will require reclassification and Crown Land would require ministerial consent to sell.

Money from the sale of any assets would be used to improve the balance of unrestricted cash to be drawn on as required and saved for emergencies and disaster events.

Decisions so far:

Review of fees and charges

Fees and charges are being reviewed as part of setting the budget for 2024-25 to ensure they reflect cost of services provided. Some of these services include hall hire, compliance and administrative charges, entry to aquatics and gym facilities.

Updated fees and charges will be presented for public review as part of the 2024-25 annual budget documents in May 2024.

Decisions so far:

Business improvement measures

Strategic service planning

Work is continuing to review the levels of discretionary service against community need and costs.

Information gathered through community surveys will be considered when determining any service changes.

Project management framework

Since February 2023, Council has been establishing a Project Management Office to set strict budget controls and parameters for projects to ensure they are efficient and enduring.

Financial governance

New systems are being put in place to improve and enable strict controls on the budget process.

Some of these activities include setting strict budget measures and the establishment of a project management framework with milestone checkpoints to meet budget criteria.

Decisions so far:

Councillor workshops

Councillors made the decision, resolved at its meeting on 29 January 2024, to hold workshops on financial measures, setting the capital works budget and disposal of assets (Minutes from 29 January 2024 Ordinary Meeting - CL24.41: Application to Lodge a Special Rate Variation).

Currently staff and Councillors are discussing and working through proposals to reduce expenditure and increase revenue.

Decisions from these workshops will be made at the ordinary (regular) Council meetings. Minutes (written recordings) of these meetings will be available on the Agendas & Minutes page.

Property sales program

Council’s financial sustainability improvement program required a review of Council-owned property that could be sold to assist with its financial situation.

As a result, investigations have been done across Council’s land portfolio to identify land for immediate sale and those to be further investigated for potential sale or maintained for future strategic land use.

These will be displayed in a map and categorised as:

  • isolated and underutilised land (for sale)
  • potentially strategic land proposed for master planning (not for sale)
  • underperforming community facilities (pending investigation)

Multiple sites that are operational and community land require further investigation, rezoning and reclassification.

Have your say

Click on the map pins to learn more about specific locations. Each map pin is linked to a page with the full details about that property, as well as a link to our Get Involved page where you can provide feedback about any of the listed properties.

Feedback about each site will be considered as part of Council’s investigation and deliberations to determine if the sale of properties will proceed.

Please note: The map will be updated with more information following the decisions of Council.

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Frequently asked questions

Why is Council selling any of its properties?

The sale of Council-owned properties is one of the actions being taken to improve its current financial situation.

While it won’t reduce the long-term forecast structural deficit of $25-$35 million annually, the funds raised from the sale of properties will be used to pay down its borrowings, which will have a gradual impact over time.

How were the properties chosen as suitable for sale, selected from the 3,100 properties Council manages and maintains?

The properties that are for sale or being investigated for potential sale have been selected through an analysis of its land register.

This includes considering the following:

  • the history and background of the land
  • if the land being actively used for a specific purpose
  • if there are planning constraints that would prevent the use and/or development of the land
  • if the sale of the land would lead to a better use of the land by the private sector

While many are land lots that are in residential places, others are buildings that are beyond their useful life and would require significant capital outlay to bring the facility back to current standards.

What evidence is Council relying on when it says that a property is being ‘underutilised’?

Depending on the site in question, it typically means that the land has been zoned to allow for a higher or better use than what it is currently accommodating.

For instance, if the land is zoned residential and is not reserved for open space then this would be better utilised by the private sector to meet the demand for housing stock.

The process in this instance would include checking that the land is not identified within any open space and recreation strategic plan and ensuring that the land is not being actively used as open space by the community.

Have the neighbouring properties of these sites been notified of the possible sale?

Landowners are not required to notify neighbours of their intention to sell, however Council is undertaking community consultation - which makes its intention to sell properties available to everybody, including neighbouring property owners.

To be a part of the consultation, please head to our Get Involved page.

What’s the difference between land that’s classified as community and operational?

Community land includes parks, reserves or sports grounds and is dedicated for public use.

Operational land has no special restrictions other than those that apply to any piece of land.

Who will value the properties and negotiate their sale?

Land valuations will be done by professional property valuers and property sales will be managed by independent real estate agents who will engage in a competitive sales campaign to ensure the best sale price.

How will properties be sold – by auction or listed sale?

Properties will be sold either through a competitive sales and marketing campaign to ensure the best sale price or, in the case of direct sales with a proposed buy, properties are sold for no less than the market value, which will be determined by an independent valuer.

Are the sales of properties open to foreign investment?

Council’s sales process will adhere to all the relevant state and federal legislation, including the Foreign Investment Review Board (FIRB).

How are the implications of any future redevelopment of any of the parcels being considered?

Any development or redevelopment on any of the land parcels will require a development application (DA) as normal. 

A DA is a formal request for consent to execute proposed development. This could include change of use of land, subdividing land, carrying out work on a building, and landscaping amongst other things.

The approval of any DA is subject to a range of criteria including provision of parking and traffic management.  

For some of the properties, conditions of sale have been included and therefore approval would be subject to the conditions of sale being met. 


What's next

During March, the annual budget 2024-25 will be drafted and brought to Council to place it on public exhibition in May.

The budget will include the updated fees and charges, rates as well as the works and services planned for the year.