MAYORS 2014-15 BUDGET ADDRESS - IN FULL My fellow Councillors, members of the public and officers of Council, as Mayor of Hinchinbrook Shire Council, it is my duty today to table for Council’s consideration and adoption, the 2014-2015 Hinchinbrook Shire Council Budget. As Mayor, I am required by the Queensland Local Government Act 2009 to prepare and present the Budget to Council. My strong, ongoing preference has been to prepare this Budget in consultation with my fellow Councillors. Accordingly this Budget has been prepared following numerous budget meetings and after much discussion between myself, Councillors and officers of Council. I believe that this proposed Budget provides a good balance between: a) the need to maintain our community assets and infrastructure b) Council’s delivery of services and programs to the community c) Council’s wider role in the development of the Shire and d) the ability of our community to pay for such services, assets and programs. The challenges Council faces during the next 12 months are not dissimilar to those faced during the last 12 months. These challenges include having a static population base and a local economy that is under a fair degree of stress. Thankfully, during 2013-2014 we avoided a repeat of any large scale natural disasters that have impacted our Shire in recent years. Accordingly, we hope to finalise all existing NDRRA related work during the coming financial year. Like Councils everywhere Hinchinbrook Shire is burdened with ever increasing costs and demands. Financially, we are not in a position where we can afford to not increase rates. However, the proposed 2014-2015 Budget includes some specific measures that have been implemented to help ratepayers navigate these tough times. I will now highlight some significant aspects of the 2014-2015 income and expenditure. With regards to rates income, the proposed 2014-2015 Budget incorporates four key changes from the 2013-2014 Budget. The first two of these are significant changes to our rating structure and should provide tangible benefits to the community. Firstly, the 15% discount that was previously available to ratepayers who paid by certain ‘due dates’ will, in 2014-2015, be automatically given to all ratepayers. This means that the discount will not be lost by individual ratepayers who pay their rates after the due date has passed. Secondly, instead of sending out rates notices once a year for a full year’s rates, the rates notices will now be halved and sent out twice a year. It is planned to send the first notice in late July, early August, with a due date of 30 September 2014. The second rates notice will be sent in late January, early February, with a due date of 31 March 2015. Both of these initiatives have been specifically designed to alleviate the pressure some ratepayers feel around August - September each year. Removing the time sensitive aspect of the discount and splitting the amount into two payment periods will provide some relief for numerous ratepayers who live on limited fixed incomes, or who experience ebbs and flows in their farm and business incomes. These two initiatives came from discussions Council held with stakeholder groups in the lead up to the 2014-2015 Budget being formulated. It is a direct response to concerns raised through these forums that Council has taken the positive step to respond to the needs of our community. So essentially a ratepayer will now receive two rates notices, one due at the end of September and one due at the end of March. Together these two notices will combine to be the full rates payable for any given year. So instead of having to pay 100% of their rates bill by 30 September, the ratepayer will be paying 50% or half their bill in September and the other half in March of the following year. While providing a positive outcome for individual ratepayers, both of these initiatives come at a cost to Council. In 2013-2014 Council received over $200k in ‘discounts foregone’ from ratepayers who did not take advantage of the discount. Now that the discount is applied to everyone this amount will not be received by Council. When Council collected over 80% of rates income by 30 September each year the Council benefited from a positive cash flow situation from October onwards. This generated interest income for Council. Under the new arrangements some of this interest will be lost as only half the rates income will be received by 1 October each year. Councillors have weighed up the positives and negatives of the existing situation and have come to the conclusion that Council’s loss under the new arrangements is a gain worth having for individual ratepayers. The third change relates to the level of rates charged. In 2014-2015 there will be an across the board 5% increase in net rates. The need to maintain services and respond to existing and arising needs and wants, means that it is hard to see how Council can avoid a rates increase each year. While there is a 5% rates increase being applied there is only a 3.7% increase in rates income as a whole. This is because Council is now guaranteeing the discount for all ratepayers. Because of this and the splitting of the payment of rates into two periods, the interest income received by Council will be reduced by over $200k in 2014-2015. Another change in 2014-2015 is to bring forward the date at which interest starts to be charged on overdue rates accounts. These dates are now 1 October and 1 April. As has been the case in past years interest will be charged on a daily rate using an annual rate of interest of 11% (that is the equivalent of 0.03% per day, and applies on a compounding basis). These changes are significant so what does this all mean to a family household who had a $2,000 rates notice in 2013-2014… If in 2013-2014 they had paid their rates on, say, 15 October they would have paid $2,000. Had they paid on 29 September, in the discount period, they would have paid $1,700. The same family in 2014-2015 will now be paying $1785. They will pay half the rates notice, $892.50 by the end of September. Should they however, make the payment after 30 September, say like last year on 15 October, the charge will be around $4 higher as 11% interest will be charged from 1 October. The penalty for late payment is significantly less under the new system ($4) than it was in 2013-2014 when the family would have lost the 15% discount amount, being $300. The family will then pay the second half of their rates, another $892.50 by the end of March in the next year. With regards to 2014-2015 income, we expect to receive over $9m from NDRRA in ‘catch up’ payments for work already done in 2013-2014. This year the Federal Government has chosen to freeze assistance funding to all local governments in Australia. So, in real terms, our income from this source has dropped by about $100k. This has resulted in our rates increase being around 10% higher than it would otherwise have been. So in a nutshell that is the income side of 2014-2015 Budget. Now some points as to how Council will be spending money in 2014-2015. The 2014-2015 Budget proposes to spend $10.34m on capital projects during the year. This figure does not include any expenditure associated with NDRRA works. We expect to finance this through around $6.34m of income earned during 2014-2015 and around $4m from money we have in the bank. After our three community roundtable meetings and presentations to the Council from stakeholder organisations we have identified some hero projects to address more than just the existing roads, water and sewerage services. Town water to Forrest Beach has long been discussed by Council as a project that would deliver economic growth opportunities to that community. With the double win of securing potable water supplies to Forrest Beach in prolonged periods of drought, Council has committed to a two year project to deliver reticulated water to Forrest Beach. Phase one will be executed in 2014-2015 with an investment of $1.3m. The second phase, another $1.3m investment, will be allowed for the in 2015-2016 Budget. Over two years this $2.6m investment will support future development opportunities at Forrest Beach enabling that community to unlock some of its full potential as a desirable residential environment and wonderful holiday destination. In our discussions with the community it has been confirmed that our recreational fishing environment continues to be one of the major lifestyle and tourism drawcards to this region. With that top of mind Council are investing $200k in the Dungeness facility. Available car and boat parking spaces will be extended and we will reinstate the much loved fishing platform. Not to forget Taylors Beach boat ramp, Council will be investing $100k in access management at that facility to improve access for larger boats wishing to launch from Taylors Beach. In addition $100k will be spent at Taylors Beach repairing the beachside retaining wall. The development of tourism in Hinchinbrook is seen as some of the solution to our mono economy. In support of this, Council will be renewing the toilets in our premier central Ingham green space - Rotary Park and replacing the toilets in the car park behind Council with a more centrally located CBD facility. In total this is a $250k investment in crucial visitor and community infrastructure. Still on the tourism agenda Council is funding an additional $50k for the TYTO events program. Council has also committed to establishing a conference and events officer position squarely aimed at activating the TYTO precinct further from a meetings, conference attraction and weddings perspective. There is $20k earmarked for the completion of tourism signage to the beaches. While still on the economic development agenda Council will employ a senior economic development and tourism officer to work on further development opportunities. The Ingham CBD is recognised as the retail and commercial hub of our community. With this in mind Council has allocated $330k for the Ingham CBD Main Street Strategy Refresh and stage one of actions resulting from that process. Plus there is $10k for a much needed jolt of Christmas cheer by way of the purchase of seasonal decorations for the CBD. Council has met the request of the Herbert River Improvement Trust to increase the level of funding provided to the Trust from $220k to $231k as well as continuing to support the Lower Herbert Water Management Authority and the Herbert Resource Information Centre. Other key projects budgeted for 2014-2015 are: · $1.15m to various sewerage works · $805k on various water services works · $100k for Halifax Macrossan Street kerb and channel · $150k for Gorton Street Trebonne to widen the seal · $50k for Kehls Road seal upgrade · $100k for kerb and channel replacement at Gardiner Street near the Southern Cross Shopping Centre · $100k for improvements to the bus stop and intersection at Exelbys Road · $200k for Wallaman Falls Road · $122k for Mt Fox Road upgrades · $240k for Hawkins Creek Road upgrades · $600k for Lannercost Extension Road Bridge works · $50k to various footpath works · $100k for drainage improvements to Herbert Street We can only maintain this level of capital project expenditure in future years by regularly increasing rates and carefully managing our operational expenses. Opportunities to create new sources of income are limited. We need to get to a position where we can fund each year’s capital expenditure from that year’s rates income. Our forward projections show this being achieved by 2020-2021. Current reserves are sufficient for this to occur over this period. A key message is that future increases in our income need to exceed future increases in our expenditure to stay as a viable, functioning Council. Hinchinbrook is not unique in this respect; all Councils walk a fine line between adequate investment, service level delivery and income generation. A significant amount of work goes into bringing the Budget together. This year, more than ever, as we have struggled with decision making to bring about meaningful change to our rating regime, to intensify our investment focus and still control our expenditure levels. It is a demanding and onerous process. I extend my heartfelt thanks to the Councillors for their patience and commitment to the task, and to our staff who have spent many hours reviewing, refining and revising aspects of the Budget. I commend the 2014-2015 Hinchinbrook Shire Council Budget to you and formally move for its adoption. Councillor R Bow - MAYOR 8 July 201
Posted on: Tue, 08 Jul 2014 05:43:53 +0000
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