FAQ

Council’s rating revenue is regulated under “rate pegging”. IPART sets a rate peg which limits the amount by which councils can increase their rate revenue from one year to the next. For many years, the rate peg limit has not kept pace with the spiralling increases to costs for councils in NSW to deliver vital community services.

After IPART announces the rate peg for the upcoming year, councils can then have a conversation with the community as to whether the increase is sufficient to continue to deliver the existing range and standard of services available, whilst also ensuring there is sufficient funds to maintain and renew infrastructure. If they feel the increase is insufficient, Council can request an increase above the rate peg limit. These increases are known as a Special Rate Variation (SRV).

Applications for increases above the rate peg limit are assessed by IPART. IPART has stringent criteria which a Council must meet before approving any application. This includes extensive community consultation and clearly showing to the community the impact of the proposal on ratepayers.

In summary, Council has developed three scenarios for the community to consider when thinking about the maintenance and renewal of infrastructure in coming years.

Scenario 1: Deteriorate (Rate Peg)

Our assets would continue to decline and more assets would fall into the poor condition category. The focus would be on managing risk, including the possible closure and removal of unsafe assets. Our ability to look after our environment would diminish.

No Special Rate Variation. Rates would increase by the annual rate peg amount of an estimated 2.5% per year. Over the four year period this is a cumulative increase of 10.4%.

This option would provide no additional funding other than the rate peg increase of an estimated 2.5% which does not reflect the increasing cost of Council operations to serve our community. Broader service reductions maybe required to fund emergency works.

Scenario 2: Maintain

We would stabilise the deterioration of our community assets. We would be able to fund most of the required asset renewal and maintenance and continue to look after our environment.

Special Rate Variation of 7.75% each year for three years and 10.65% in the fourth year. This includes the estimated 2.5% rate peg. Over the four year period this is a cumulative increase of 38.4%. At the end of the four year period the Special Rate Variation increases would be built into the rate base.

This option would generate $74.7 million over 10 years and would allow an additional spend of:

-  $45.5 million on roads, road drainage, footpaths and shared pathways;

-  $9.3 million on stormwater drainage;

-  $15.8 million on buildings;

-  $4.1 million on parks and open spaces.

Scenario 3: Improve

We would improve the quality of our community assets by being able to fund the required asset renewal and maintenance. We would continue to look after our environment and be able to undertake some new work to fill essential asset gaps.

Special Rate Variation of 9.25% each year for three years and 12.15% in the fourth year. This includes the annual estimated 2.5% rate peg. Over the four year period this is a cumulative increase of 46.2%. At the end of the four year period the Special Rate Variation increases would be built into the rate base.

This option would generate $98.4 million over 10 years and would allow an additional spend of:

-  $51.6 million on roads, road drainage, footpaths and shared pathways;

-  $26.9 million on stormwater drainage;

-  $15.8 million on buildings;

Each scenario has varying impacts on our assets and service quality. Click on the fact sheet link for further information. 

Council wanted to undertake a considered and measured community engagement approach. Phases 1 and 2 focussed on seeking community feedback on the proposal before we proceeded further with each stage. Specifically, Phase 1 sought to get community feedback on our asset management approach, while Phase 2 sought community feedback on broad options including the funding levels by asset type. Information gathered during the first two phases was used to inform Phase 3 which provides the detail in the form of a revised Delivery Program, Long Term Financial Plan and draft Strategic Asset Management Plan.

Council applies a considered process in order to prioritise its capital works program. The prioritisation process is guided by Council policies and application of a stringent set of criteria.

Each project is assessed on an individual basis and subjected to specific criteria such as:

·  Existing condition

·  Risk mitigation

·  Usage rates

·  Projected future growth

·  Drainage issues

·  Whether the asset is in a flood or fire zone.

The increase in rates (in terms of dollars) will vary for residents across the shire. The reason for this is that Council uses the land value of properties throughout the shire to determine the level of rates each property owner should pay.

In other words, land value determines how Council’s total rate income will be collected from each property owner. To allow residents to understand the  impact of each of these scenarios, a number of tables which show the proposed rate increases based on land value ranges have been provided in the Financial Information fact sheet which provides an overview of the impact of each option based on land value ranges.

Council construction works have to adhere with strict conditions which can inflate costs. Factors that must be considered and can have an impact on the cost of works include:

• Safety requirements - Council works are generally conducted in public places and therefore steps must be taken to ensure that any potential risk is addressed and minimised. This includes insurances and risk cover requirements
• Australian Standards – Council must comply with the Australian Standards for construction and maintenance. We must also comply with a range of other standards such as ensuring accessibility to as many constituents as possible.
• Environmental requirements must be complied with e.g. If a protected species is identified within the work site, plans may need to be altered which can add cost
• Costs of materials and disposal of material has significantly increased in recent years
• Location of works e.g. if the work site is isolated establishment costs can be high.

Wingecarribee Shire Council examines community attitudes and perceptions towards current and future services and facilities by undertaking research every two years.

Key objectives of the research include:

• Assess and establish the community's priorities and satisfaction in relation to Council activities, services and facilities
• Identify the community's overall level of satisfaction with Council's performance
• To identify the community's level of satisfaction with regards to contact they have had with Council staff
• To identify trends and benchmark results against the research conducted previously

Take a look around this website. We have provided fact sheets and links to help the community understand the challenges being faced by Council. If you have a particular question you'd like answered please use the 'ask a question' page to send it in or call us on (02) 4868 0888.

Information Kiosks and Displays

The draft documents can be viewed at the Civic Centre and libraries from 11 December to 1 February 2015. A display is also set up in the foyer gallery space at the Civic Centre.

Two information kiosks have also been arranged for you to informally chat with staff. If we are unable to answer your question on the day we will take down your details and get back to you via phone or email.

• Wednesday 20 January 2016 | 4pm to 6pm at Mittagong Visitor Welcome Centre, 62-70 Main Street, Mittagong

• Wednesday 27 January 2016 | 4pm to 6pm at the Civic Centre, Elizabeth Street, Moss Vale

Wingecarribee Shire Council has not been identified for amalgamation with another Council. IPART has made a recommendation to the State Government that based on our Fit for the Future improvement Proposal, we have sufficient ‘scale and capacity’ to continue as stand-alone entity. The State Government’s confirmation of the IPART recommendation is expected late December 2015.

Further information about the NSW Government's 'Fit for the Future' reform program can be found at www.fitforthefuture.nsw.gov.au or view information previously shared by Wingecarribee Shire Council at www.yoursaywingecarribee.com.au/fit-for-the-future

Levies are a common way for Councils to obtain additional funding for specific projects. Environment Levies have been used by many Councils over the years including Blue Mountains, Ku-ring-gai, Hornsby, Penrith and Pittwater.

Wingecarribee Shire Council's Environment Levy has been in place since 1 July 2000. It was granted to enable us to deal with crucial environmental issues within the Shire including:

• river health
• restoration of wetlands, riparian zones and bushlands reserves
• biodiversity conservation,
• conservation of endangered species and ecological communities
• urban environmental sustainability.

The funds were also approved to enable Council to maximize its opportunity to gain external grant funding from agencies such as the Hawkesbury Nepean Catchment Management Authority, Environmental Trust and the Federal Governments "Caring for Our Country" program. Grant funding applications usually require the applicant to contribute an equal amount of money (matching funding) to the project and the additional funds provided by the Environment Levy allow us to do this.

Councils considering a rate increase must comply with the requirements set out in IPART guidelines, including a notification confirming their "intention to apply" while they continue with consultation. Wingecarribee Shire Council has confirmed this intention and has now notified IPART. The actual application (due in February 2016) cannot be submitted until Council makes a formal resolution to do so. Council will make this decision at its 10 February 2016 meeting.

Council is complying with timeframes as established by IPART.

We acknowledge exhibiting the draft Delivery Program 2013-17 (Revised December 2015), draft Long Term Financial Plan 2016-2026 and draft Strategic Asset Management Plan 2016-2026over the holiday period is not optimal, but we were required to do so in order to meet IPART’s February deadline. To compensate we have extended this exhibition period to over 50 days (11 December 2015 to 1 February 2016).

Council has been actively consulting with our local community ever since the idea of a rate increase was first flagged early in 2015. A number of staged consultations have occurred including a telephone survey about Assets and the recent special rate variation surveys.

Many residents have asked us how we compare to other councils in terms of the average residential rate bill. While we don’t necessarily believe this is always a good measure of “value” as the range and quality of services in each local government area varies, the current average residential rate bill for Wingecarribee residents is the second lowest when compared to a number of our adjoining councils. The current average rate for Wingecarribee residents is $1,278, which is $98 less than Wollondilly, $54 less than Wollongong and $36 less than Camden. The following graph provides a regional comparison.

Since August 2015, two of the three community engagement phases for the ‘Investing in our

Future’ project have been completed. The first phase involved an asset management survey and results from this were used to prepare detailed financial modelling and develop three funding and asset management options.

Following the development of the three ‘Investing in our Future’ scenarios, Phase 2 of the community engagement program commenced in October 2015. The results of the surveys completed during this phase indicated that the community was supportive of some level of rate increase to at least maintain assets.

In short, the feedback from each phase of engagement has helped drive subsequent engagement activities and decision making.

Further information can be found in the report to Council on 9 December 2015 as well as Appendix 1 – Investing in our Future Community Engagement Report, December 2015.

Council is committed to implementing its Improvement Proposal, which includes the proposed Special Rate Variation, and meeting the benchmarks set by the NSW State Government under the Fit for the Future reform agenda.

If a special rate variation was not approved by IPART then Wingecarribee Shire Council would not meet the criteria set by the NSW Government to be deemed ‘fit for the future’. Council would need to seek guidance from the NSW Government as to how they wish us to proceed.

The short answer is ‘yes’, however there is no guarantee that it will be included or moved forward. Please make a submission so it can be assessed by the Asset Management team.

The capital works programs included in the Strategic Asset Management Plan are subject to change in terms of addition and deletion of projects, change of project scope and change of delivery year. Changes may be required for various reasons including changes in available grant/development funds/requirements, changes in forecast income, changes in risks or community priorities of projects, identification of new high risk/priority projects and significant changes in cost of construction. The renewal works programs are based on the best available condition and other relevant data at present. Any changes made to the program will be outlined in Council’s Annual Operational Plan & Budget.

The Local Government Act requires councils to fund water and sewer as separate functions. This is the reason why water and sewer rates and user charges are invoiced separately to your Council rates.

The proposed Special Rate Variation is for General Operations only. As this increase does not apply to water and sewer rates and user charges, they have been excluded from these documents.

The mandatory $250 rebate (set by the NSW State Government) is the level which Council currently offers. This rebate is not indexed in line with future rate increases.

Council has not factored in any additional increase in this rebate for pensioners within its proposed Special Rate Variation.

Council acknowledges that any rate increase may adversely impact some community members. Council has mechanisms in place to assist ratepayers should they incur difficulty in keeping up with their rates payments, including a Financial Hardship Policy.

Visit www.wsc.nsw.gov.au/services/rates for more information.

Residential development will result in additional rate income for Council. However, development also results in a greater demand on the services provided by Council. New developments also result in additional infrastructure, such as roads, footpaths and open space, which Council will be responsible for.

Council will need to use any additional income from new developments to offset the increased costs in providing these services and maintaining this additional infrastructure.

Council's cash and investments for its general fund operations as at June 2015 was $52million. $18.2million relates to externally restricted assets such as developer contributions and unexpended grants. $28.7 million relates to work Council has already committed to undertake, employee leave entitlements and replacement of major plant and equipment. Taking into account these restrictions, Council's unrestricted balance (working capital) was $5.1million. Working Capital is required to ensure Council has sufficient liquidity to fund it operations. It also acts a buffer for any unforseen/unplanned emergency events which may need to be funded through the budget.

The investment losses identified due to the write down of CDO’s was $11.6million. The write down of these investments were funded as follows:

·  General Fund (Entrepreneurial Fund)  $5.586M

·  Water Augmentation Fund  $3.533M

·  Sewer Augmentation Fund  $2.487M

Council incurred expenditure of $725K in undertaking legal proceedings against Lehman Brothers. These costs were recouped in the 2013/14 financial year.

Council is yet to determine the total amount of investment losses which will be recovered as a result of its successful legal action. It is expected this figure will be known during the first half 2016.

A significant amount of Council’s rate income is used to fund essential infrastructure services (Maintenance and Renewal) which are used by residents every day. This includes roads, footpaths, drainage and community facilities. It is often forgotten that residents use the majority of these service every day.

In addition to these essential infrastructure services, Council provides many community based programs and services to a wide range of users across the shire. These services are funded either through user charges, general rate income, or in some cases a combination of both user charges and general rate income. Where services are subsidised through general rate income, it is on the basis that Council plays an important role in ensuring access and participation to ALL residents for the use of these community based programs and services.

Council rates are calculated based on the value of your land, as determined by the NSW Valuer General. Updated land values are provided to Council every three years. A general revaluation is due to effect land valuations to properties throughout the Shire from 1 July 2016. Any significant fluctuation in your land valuations will also have an impact on the amount of rates you pay.

Council made a submission to the NSW State Government outlining how it is 'Fit for the Future'. The submission can be read on IPART's website.

October 2015 - Council engaged Micromex Research to conduct a telephone survey of a representative sample of local residents. At the same time, submissions and online surveys were sought from residents and ratepayers.

November 2015 - Community feedback was collated into a report for Council to consider on 9 December 2015.

December 2015 - Council decided to notify IPART of its intention to apply for a rate increase and to embark on a further round of community engagement before making a final decision to apply for an SRV.  

December2015 - January 2016 - Based on its December 9 decision, Council began a third round of consultation on December 11. Round 3 of consultation is focussed on seeking feedback on the revised Delivery Program, draft Long Term Financial plan and draft Strategic Asset Management Plan.

February 2016 - Council will consider whether to formally apply to IPART for a special rate variation.

IF COUNCIL DECIDES TO SEEK A RATE INCREASE - After assessing community feedback, an application would then be submitted to IPART in February 2016. In May 2016 IPART would notify Council of its decision and if approved, the rate increase would be included in the first rates notice issued in July 2016.

IF COUNCIL DECIDES NOT TO SEEK A RATE INCREASE - Some difficult decisions would need to be made about reducing services, maintenance and facilities. No application would be made to IPART.