- Long Term Financial Plan (LTFP)
- Asset Management Strategy
- Workforce Management Strategy
- projected income statement, balance sheet, cash flow statement and equity statement;
- planning assumptions used to develop the plan;
- sensitivity analysis - highlights factors/assumptions most likely to affect the plan;
- financial modelling for three different scenarios; and
- methods of monitoring financial performance.
- 7 May 2018 - Council resolved to place the Draft Resourcing Strategy 2018-2028 on public exhibition for 28 days, with a further report be prepared at the end of the closing period for submissions.
- 25 June 2018 - Following public exhibition which ran from 10 May to 7 June 2018, the Council resolved to adopt the Resourcing Strategy 2018-2028, inclusive of Scenario 3 as the preferred Financial Scenario (which included a 7% per annum SRV (inclusive of the rate peg) for 5 years duration.
- 29 October 2018 - Council endorsed the public exhibition of amendments to Scenarios 2 and 3 the Resourcing Strategy, inclusive of reduced SRV duration, from 7 to 5 years, which was exhibited from 1 November 2018 to 16 January 2019; and that the engagement outcomes be reported to the first Council meeting of 2019, for Council to determine whether to proceed with submitting an application to IPART for a SRV and minimum rate increase effective from 2019/20.
- 29 January 2019 - Council readopted the Resourcing Strategy inclusive of preferred Scenario 3, and resolved to proceed with applying to IPART for a combined SRV and minimum rate increase, in accordance with preferred Scenario 3, of 7% per annum for five years effective from 2019/20.
- 13 May 2019 - IPART announced partial approval of Council’s 2019/20 SRV application, granting three years duration effective from 1 July 2019. The determination report is available from IPART's website.
- On-street parking $3,805,000;
- Property rental $1,090,000;
- Off-street parking $852,000;
- North Sydney Olympic Pool fees $584,000;
- Parking fines (net of processing costs) $394,000;
- Outdoor Seating rental fees $390,000;
- North Sydney Oval Function Centre takings $326,000;
- Parks Hire fees $266,000; and
- Shop Inspection fees $105,000.
- $28 million of borrowings (an increase of $7.5m from the previous version of the LTFP);
- $14.9 million from Council’s Olympic Pool Redevelopment Reserve (including the 2019/20 budget allocation);
- $10 million Federal Government contribution (committed); and
- $5 million State Government contribution/grant funding (confirmed).
- an increase in developer contributions revenue $3 million to $5 million in 2020/21 and a reduction from $5 million to $4 million for the remainder of the Resourcing Strategy;
- a $957,000 increase in revenue arising from the introduction of new fees for Development Application Compliance and Fire Safety Compliance;
- an increase in revenue from the Domestic Waste Management charge of $779,000 to reflect the $4 increase in the charge per service (the previous version of the strategy assumed no increase in the charge);
- a $452,000 increase in revenue from advertising on Council infrastructure based on actual historical trends;
- a $288,000 increase in revenue from New Year’s Eve ticket sales;
- a $324,000 increase in costs associated with New Year’s Eve; and
- a reduction of $500,00 in election costs due to the postponement of the 2020 Council election to 2021.
What is the Resourcing Strategy?
Section 403 of the Local Government Act 1993 requires all councils to have a long-term Resourcing Strategy (minimum of 10 years) to achieve the objectives established by the Community Strategic Plan.
The Resourcing Strategy consist of three inter-related components:
As its name suggests, each of the elements of Council’s Resourcing Strategy plays a role in resourcing the achievement of the North Sydney Council Delivery Program 2018/19-2021/22 (and annual Operational Plan), as well as Council’s other strategic plans developed to support the achievement of the North Sydney Community Strategic Plan 2018-2028.
The LTFP must include the following statutory requirements:
Why has the Long Term Financial Plan been updated?
Councils are required to update the Long Term Financial Plan component of its Resourcing Strategy annually, as part of the development of the Operational Plan & Budget; and it must be reviewed in detail as part of the four yearly review of the Community Strategic Plan, with the latter to commence in September 2021 after the next local government elections.
Why has only Scenario 3 been updated?
Scenarios 1 and 2 of the original Long Term Financial Plan have been superseded, as the Council resolved on 25 June 2018 to operate under Scenario 3, inclusive of a Special Rate Variation (SRV).
Scenario 3 has therefore become the base case, and sensitivity modelling has now been included around this preferred scenario.
Refer to the related FAQ: Has COVID-19 impacted Council's financial position? for further details of the revised sensitivity modelling.
When was the Special Rate Variation approved?
The following provide a summary of the related Council resolutions and community engagement concerning the proposal to apply for and SRV and its approval by IPART:
Has COVID-19 impacted Council's financial position?
The COVID-19 pandemic has impacted Council’s revenue in the final four months of 2019/20. Operating revenue for the year was forecast to fall by $6.6 million (approximately 5%).
As reported to Council, this has necessitated a $7.9 million reduction to forecast revenue for the year compared to that originally allowed for in the previous version of the Resourcing Strategy. The revenue streams most significantly impacted are:
To partially mitigate the impact on revenue, funding allocated to the capital expenditure program in 2020/21 has been reduced by $3.8 million - refer to the Draft 2020/21 Operational Plan & Budget (also on exhibition) for more information.
Scenario 3A of the exhibited plan (formerly Scenario 3) assumes that the pandemic will continue to impact operating revenue for the first half of 2020/21 before returning to normal in the second half of the year. Appendix 2 of the exhibited plan, assumes under Scenario 3A that the impact of COVID-19 continues until the end of December 2020, forecasting a net operating surplus of $2.6 million for 2020/21. Excluding capital grants and contributions, a deficit of $2.4 million is forecast.
Two additional scenarios (referred to as 3B and 3C) have been modelled to ascertain the financial impact of the pandemic lasting for a shorter or longer period than that assumed under Scenario 3A.
Scenario 3B, takes an optimistic approach and assumes that the financial impact of the pandemic will continue only until the end of the September quarter of 2020/21. Should the impact of COVID-19 last only until the end of September 2020, as assumed under Scenario 3B, the net operating surplus is forecast to improve to $6.3 million. Excluding capital grants and contributions, a surplus of $1.2 million is forecast. This scenario would increase the level of funds available for capital projects in subsequent years of the plan.
Scenario 3C, takes a more conservative approach and assumes that the financial impact of the pandemic will continue for the whole of 2020/21. Should the impact of COVID-19 last for the entire 2020/21 financial year, as assumed under Scenario 3C, the net operating result is forecast to deteriorate to a deficit of $4.8 million. Excluding capital grants and contributions, a deficit of $9.9 million is forecast. This scenario would significantly reduce the amount of funds available for capital projects in subsequent years of the plan.
How much will the NSOP complex redevelopment cost?
Council was advised at its meeting of 26 August 2019 of the proposed breakdown of the funding sources for the NSOP complex redevelopment; and resolved that the Long Term Financial Plan (LTFP) be updated incorporating a total budget of $57.9 million.
Accordingly, the updated LTFP includes an allocation of this amount for the project, funded from:
In February 2020 it was proposed that the loan be obtained through the NSW Treasury Corporation (TCorp) or a major bank. Loan options have been obtained and were reported separately to Council (via Item GF06). On 22 June 2020, the Council (in adopting the Minutes of the Governance & Finance Committee held 1 June 2020) resolved that a further report be provided to the Council in due course.
The LTFP has been modelled on the assumption that borrowings will be at 2.6% per annum, fixed for 20 years with semi-annual repayments.
What other amendments to the Resourcing Strategy were required compared to the original?
In addition to the amendments arising from the financial impact of the pandemic, other amendments have been made to the 2020/21 budget and forward estimates. Those that have the most significant impact on the Resourcing Strategy are:
The NSW local government industry financial indicators disclosed in the Resourcing Strategy have been updated to reflect 2018/19 actual results and amended projections for the remaining life of the LTFP.