Securing our Future

Average residential and business rate increase each year over 7 years: 3% rate cap only.

3% is the expected rate cap to be set annually by IPART. If the actual percentage set by IPART is lower in the 7 years, then further reductions in spending will be required.

This option will see a dramatic difference in community infrastructure and services over the next 7 years. With income restricted by the rate peg, Council will need to make some big changes to meet rising costs and achieve a balanced budget.

Average residential and business rate increase each year over 7 years: 3% rate cap only. 3% is the expected rate cap to be set annually by IPART. If the actual percentage set by IPART is lower in the 7 years, then further reductions in spending will be required.

This option will see a dramatic difference in community infrastructure and services over the next 7 years. With income restricted by the rate peg, Council will need to make some big changes to meet rising costs and achieve a balanced budget.

Reduction in maintenance of our City's assets and infrastructure

$20.8M will be saved over 7 years through a major reduction in city infrastructure maintenance. Without regular maintenance, the quality of our infrastructure and environment will decline over time, and more expensive reactive and emergency work may be needed.

Consequences could include:

• Longer response times for requests for graffiti removal, tree lopping, and vandalism repairs.
• Less frequent mowing, weed removal and spraying, gutter cleaning, and litter collection. This would result in a reduction in standards for users. For example, the grass in our parks and playing fields could be longer. Our wetlands could also become choked with weeds and litter.
• Safety and environmental hazards may increase, for example trip hazards, unsafe trees, bushfire hazards, and soil erosion.

Roads and drainage works reduced

With $24.1M less budgeted for roadworks, such as kerb, guttering, and resealing, the quality of our roads will decline to a 'fair' condition within 10 years.

The budget for replacement of failed drainage systems and flood mitigation measures will reduce by $3.9M over 7 years. This will make it harder for our drainage system to cope with major flooding events.

Reduction in environmental programs and works

The Sustainability Levy will not be extended beyond 2014. As a result there could be a decline in the quality of our lake, coastline, and bushland. Vegetation maintenance programs for our foreshore reserves and for bushfire engagement will be affected. Environmental works and programs, such as lake water quality programs, will reduce significantly, as will programs to minimise pollution, waste generation, and resource consumption.

Closure of major community facilities

To save money, Council will need to close a number of major facilities. In 2012/13 the Lake Macquarie Performing Arts Centre and 2 pools will close. One pool will be put out to contract for management. Libraries will be open for reduced hours initially, then 5 libraries will close between 2013/14 and 2014/15. This will save $24M over 7 years.

Reduced construction and maintenance of footpaths, cycleways, and traffic facilities

Our construction program for new footpaths, cycleways, and traffic facilities will reduce by $4M over the 7 years. In addition, no new boat ramps or jetties will be constructed, saving $2.3M over 7 years.

Reductions in service levels across the City and loss of 123 Council staff

Staffing reductions across all areas of Council will occur, saving $42.6M over 7 years. With reduced staffing, response times for service requests and turnaround times for processing development applications will be longer.

The Economic Development Department would be disbanded, including closure of the Visitor Information Centre at Swansea. One staff position would be created to assist employment generating development proponents with site identification and approval processes, with a second position created to assist in facilitating events that attract visitors to the City. This would effectively reduce staffing for Economic Development from 7.4 to 2 full time equivalent staff.

Under Option 1 only about 77% (8,500 of the 11,000) service requests we receive each year will be completed. Requests that will be delayed or not carried out include footpath repairs, road patching, and graffiti removal.

Limited new capital projects

New capital expenditure over the 7 years will be limited to $240M. While Glendale Transport Interchange and the Lake Macquarie Waste Strategy will be funded, town centre upgrades for Cardiff, Charlestown, Belmont, Toronto, Morisset, Warners Bay, Glendale, Swansea and Mount Hutton will not go ahead under Option 1.

Financial Outcomes

Council will continue to experience an operating deficit over the 7-year period. The current $15.8M operating deficit would reduce to $8.5M by 2018/19. Council's maintenance and infrastructure backlog will increase significantly.

7.7% average residential rate increase each year (including 3% rate cap)
9.9% average business rate increase each year (including 3% rate cap)

This option will see Council services stay largely the same as they are now, with minimal improvements or upgrades. However, the increase in income will not be enough to maintain the condition of all our City assets and infrastructure, and the quality of our roads will continue to decline, then hold in the 'good' range.

7.7% average residential rate increase each year (including 3% rate cap)
9.9% average business rate increase each year (including 3% rate cap)

This option will see Council services stay largely the same as they are now, with minimal improvements or upgrades. However, the increase in income will not be enough to maintain the condition of all our City assets and infrastructure, and the quality of our roads will continue to decline, then hold in the 'good' range.

Funding maintained for maintenance of our City's assets and infrastructure

Under this option, the maintenance of the City's infrastructure will continue to be funded at current levels for the next 3 years.

In 2015/16 the annual maintenance program will increase by approximately $1.5M per year until 2018/19. This will add a total of $6M to infrastructure maintenance over the next 7 years. This increased spending will only keep pace with inflation and an increase in the number of assets we have to maintain. Requests for footpath repairs, road patching, weed removal, plumbing repairs, and signage replacement can continue to be responded to in a timely manner.

Road condition declines

Option 2 does not provide funds to stop the declining quality of our roads. Although an additional $16M will be allocated over 7 years, this funding will only keep pace with rising cost increases. This means that the average condition of our roads will continue to decline for the next few years, but will then hold in the 'good' range.

Drainage maintained

Current funding for replacement of failed drainage will be maintained, enabling Council to replace approximately 30% of drainage that fails.

Environmental programs and works maintained

Sustainability works and programs will continue beyond 2014/15, when the Sustainability Levy finishes. Continuing programs include bushland and foreshore rehabilitation projects, and lake water quality improvement programs.

Read more about the Sustainability Levy and current environmental programs.

Community facilities remain open

Rate increases under Option 2 will allow Council to keep the Lake Macquarie Performing Arts Centre and pools open. Libraries will remain open in the short term; however, funding levels have been set at the same amount as 2011/2012 budget. This means that as costs increase over time, levels of service and stock will need to decrease to ensure the service can be provided within the budget available.

Consequently, reductions in opening hours, staff, book stock, and service points will be considered. Lake Macquarie Art Gallery will have all internal lights changed to meet new environmental legislation at a cost of $82,150.

Sporting and recreation facilities –minimal improvements

Our pools will not be upgraded to standards reflected in Council's Pool Service Delivery Model. For example, the proposed water play zone at Speers Point will not be delivered under Option 2.

Our pools will have resuscitation equipment and disability hoists upgraded at a cost of $140,200 over 7 years.

Current staffing levels maintained and frontline staff increased

While Council will continue to find efficiencies in the way we operate, current levels of staff will be maintained across all areas of Council. Maintaining staff levels means we can continue to respond in a timely manner to the 11,000 maintenance requests we receive each year.

Current Economic Development staffing will be retained. With the right levels of staff, we intend to maintain our current turnaround times for processing development applications. In addition, Ranger staffing will be increased, including weekend shifts and after hours services. Additional Ranger patrols on weekends will improve response times to requests, and patrols and enforcement activities will be increased during normal hours. The community will benefit from increased monitoring and enforcement of public health and environmental standards.

New capital projects

Total new capital expenditure over the 7 years will be $269M. Town centres will not be upgraded under Option 2. The Glendale Transport Interchange and the Lake Macquarie Waste Strategy will be funded.

Financial

Council will continue to experience an operating deficit until 2016/17, with an expected surplus of up to $5M in 2018/19. The City's infrastructure backlog of $67M will only be partially addressed. Increased funding for roads, for example, only maintains roads at a 'good' condition in the future due to increasing costs.

9.8% average residential rate increase (including 3% rate cap)
12.8% average business rate increase each year (including 3% rate cap)

Under this option the community will see much of their vision as outlined in the 10 Year Community Plan come to life. Option 3 is designed to deliver on priorities identified through community consultation, and is based on what people have said they want to see more of, or wish to see maintained or improved. The increased funding will allow Council to improve levels of service to the community and support an additional program of works for roads, pools, libraries, sports centres, parks and playgrounds, and upgrades to town centres.

9.8% average residential rate increase (including 3% rate cap)
12.8% average business rate increase each year (including 3% rate cap)

Under this option the community will see much of their vision as outlined in the 10 Year Community Plan come to life. Option 3 is designed to deliver on priorities identified through community consultation, and is based on what people have said they want to see more of, or wish to see maintained or improved. The increased funding will allow Council to improve levels of service to the community and support an additional program of works for roads, pools, libraries, sports centres, parks and playgrounds, and upgrades to town centres.

Improvements in maintenance of our City's assets and infrastructure

Funds will be injected into infrastructure renewal and maintenance across the City, with an additional $15M over the 7-year period.

This will significantly improve the standard of maintenance and overall appearance of the City. Response times for maintenance requests will be reduced including vandalism repairs, pothole patching, and drainage clearing.

Regular services such as litter removal, street sweeping, and toilet cleaning will be conducted more frequently.

This amount allows for an increase in the number of assets in the City over 7 years and recognises that maintenance costs and community expectations change over time.

Roads and drainage improve

Under Option 3, the condition of our roads is expected to reach the 'very good' range within the next 10 years through a program of targeted renewal. This will be achieved through a $42M investment over the next 7 years in programs for road reconstruction and resurfacing.

Funding will be available to upgrade drainage infrastructure and replace drainage that fails.

Environmental programs and works maintained

Sustainability works and programs will continue beyond 2014/15, when the Sustainability Levy finishes.

Read more about the Sustainability Levy and current environmental programs. (link to sustainability levy content)

Existing community facilities upgraded and new facilities built

Rate increases under Option 3 will allow Council to keep the Lake Macquarie Performing Arts Centre and pools open. Council will also implement recommendations from the Library Service Delivery Model, which proposes 2 new libraries at Morisset and Glendale, costing $7.4M.

Lake Macquarie Art Gallery will be extended to incorporate seminar rooms and the sculpture park will be extended in the gallery grounds.

The community will also benefit from:

• Rathmines Community Hall kitchen upgrade
• Renovation of Lambton Colliery, Redhead Community Buildings
• Refurbishment of the Sugar Valley Neighbourhood Centre
• A new amenity block at Warners Bay foreshore

Sporting and recreation facilities improved

Under Option 3, $20.4M will be provided over 7 years to redevelop our pools according to recommendations in Council's Pool Service Delivery Model. This includes redevelopment of Charlestown Pool and a new water play zone at Speers Point.

Our sport and recreation facilities will be improved and extended across the City:

Sportsground improvements to playing surfaces, lighting, amenities, and car parks across the City ($6M over 7 years)
Additional sporting fields at Edgeworth (funded in part by developer contributions) ($5.3M)
Continued implementation of:

• Cameron Park Master Plan – Sports Fields and Parks (funded in part by developer contributions) ($7.6M over 5 years)
• Speers Point Park Master Plan ($1.1M over 4 years)
• Toronto Foreshore Master Plan including new play equipment

New Youth and Aboriginal Programs

Additional youth and Aboriginal programs will be delivered in partnership with relevant organisations. Current staffing maintained and frontline staffing increased

Current staffing levels will be maintained and in addition, Ranger staffing will be increased as per Option 2.

New capital projects

New capital expenditure over the 7 years will increase to $326M, and includes the works detailed above.

In addition a program to upgrade town centres will be developed. $7M will be allocated over 7 years for upgrades in 9 locations: Cardiff, Charlestown, Belmont, Toronto Morisset, Warners Bay, Glendale, Swansea and Mount Hutton.

The Glendale Transport Interchange and the Lake Macquarie Waste Strategy will be funded.

Financial

Council will continue to experience a small operating deficit until 2016/17, with a surplus of up to $7M in 2018/19 projected. Option 3 addresses the $67M infrastructure backlog with roads ($30M backlog) improved and funding for future drainage renewals are provided.

The funding options were developed based on our 10 Year Community Plan, as well as input gathered through the Securing our Future consultation. Securing our Future is a 6-month community engagement process to raise awareness and consult the community about Council's financial sustainability. Between July and September this year, more than 400 people attended forums held across the City.

Council's consultation website www.haveyoursaylakemac.com.au was also used to gather community feedback through an online forum. Input was also sought from a community working group of 24 randomly selected yet demographically representative residents across all wards.

Forum participants were asked to identify which Council assets and services they valued most and would prioritise for future funding. Our roads and cycleways, domestic and commercial waste collection, environmental programs – especially lake and foreshore management, libraries, and park facilities were shown to be highly valued.

Results of the community engagement informed development of the three options Council is now presenting to the community for consideration.

To achieve financial sustainability and manage the community's infrastructure, we either need to increase our income by increasing rates, or reduce our expenditure by decreasing the level of services we provide to our community.

If NSW councils want to increase rates beyond the rate peg amount they have to apply to IPART for a special rate variation, and in doing so must demonstrate extensive consultation and significant support from the community.

Securing our Future is a 6-month consultation process Council is conducting with a view to making an application to IPART in 2012. Applications close on 24 February 2012 for rate increases commencing in the 2012/13 financial year.

You can find out more about Council's financial management by downloading our information sheets on Services, Revenue and Expenditure, Sustainability, Efficiency and Enterprise, and Assets.