Guide to the Budget 2011-2012

Budget2011-2012

Guide to the Budget

Budget2011-2012

www.gladstone.qld.gov.au Page 2

Budget OverviewFrom the MayorI am pleased to present my first and this Council’s fourth budget.

This budget is a conservative budget which seeks to minimise rate increases while still providing the necessary infrastructure and services to effectively manage the pressures of growth being experienced in this region. Council believes that both the Federal and State governments should be providing more assistance to this region. My Council will continue to press them in this regard.

General Rates

This budget will be the first under the State Governments new ‘site valuation’ methodology. This has seen huge valuation increases in some areas and valuation decreases in others. The only way Council can mitigate the impact of these charges is to maintain the existing rate cap of 10% for rural and residential properties and a 15% cap for business and light industrial properties. We continue to deliver in this regard.

In this budget Council has recognised the plight of high valuation residential properties who have continued to face large valuation increases by introducing a banding system for valuations over $650,000. This predominantly includes waterfront properties in Gladstone, Boyne Island, Tannum Sands, Agnes Water and Seventeen Seventy.

The CPI for the last 12 months has been 3.8%. The local government cost index for this period was 4.2%. The alarming prediction is that this index will be approximately 7.5% for the ensuing financial year due to the increased Statewide demand for reconstruction resources because of the disasters at the beginning of the year.

General rate revenue generated from the residential sector will increase by 2.8% next year. 17% of property owners (4529 properties) will receive a rate reduction. A further 19.5% (5192 properties) will receive an increase of less than the CPI of 3.8%. The balance will have varying increases but the maximum is capped at 10%. The rate cap will no longer be applied to bulk residential development properties that receive the 40% State reduction in valuations as this is considered to be double dipping.

General rate revenue from the rural sector will increase by 2.8% next year. Rural properties have been moved into a separate rate category due to the fact that residential properties are assessed on ‘site value’ whereas rural properties remain on ‘unimproved value’.

General rate revenue from the business and light industry sector will increase by 2.8% next year as well. Due to fluctuations in valuations 48% or (593 properties) will have a rate decrease whilst the maximum increase has been capped at 15%.

“This budget is a conservative

budget which seeks to minimise rate increases while still providing the necessary infrastructure

and services to effectively manage

the pressures of growth being

experienced in this region.”

Budget2011-2012


General rate revenue from major industry will increase by just over $3 million or 44% largely due to the fact that land titles have now been issued for the major LNG properties which makes these properties rateable.

The major emphasis in terms of expenditure will be to deliver approximately $50 million in flood damage repairs on our roads. That will be our main focus.

Refuse Charges

Council has successfully negotiated a new 10 year contract with JJ Richards for the continuation of the two bin system throughout the region. Consequently there will be NO increase in the current charge of $255 per service.

Sewerage Services

Domestic sewerage charges for the 2011-2012 year will see charges in Gladstone, Boyne/Tannum and Calliope increase by $1 per week. In line with Council’s 10 year phase in of parity pricing for access charges for all sewerage schemes, the charge at Agnes Water / Seventeen Seventy has not been increased.

The AEC Group produce comparative data in relation to water and waste water charges in the State. The data in the most recent publication titled “Water and Wastewater Price Benchmarking Charge Queensland Service Providers 2010-2011” provides that the State average charge for sewerage will be $592.20. This compares favourably to the proposed charge of $404.10 (net) for the Gladstone Scheme and $516.60 (net) for the Calliope and Boyne/Tannum Scheme. The charge for the smaller Agnes Water/Seventeen Seventy Scheme of $786.60 (net) is above the State average but has not increased in this budget.

Water Services

Domestic water access charges for the 2011-2012 year will see charges increase by 50 cents per week in the Lake Awoonga Scheme, 65 cents per week in the Miriam Vale/Bororen Scheme and 25 cents per week in the Agnes Water/Seventeen Seventy Scheme.

The consumption charge in the Miriam Vale/Bororen and the Agnes Water/Seventeen Seventy Schemes remain unchanged consistent with the policy of moving to parity pricing over a 10

year period.

The price for water in the Lake Awoonga treated water supply will increase from $1.50 per kilolitre to $1.95 per kilolitre which continues to reflect the overall cost of water to Council. The water price is set by the Gladstone Area Water Board under a pricing mechanism which has been independently reviewed by the Queensland Competition Authority.

Again the AEC has advised that the State average total water charge (access and consumption) for a 200kl service is $627.80 and $1017.90 for a 400kl service. Our net figures for 2011-2012 are as follows:

Scheme Consumption Base

(in kilolitres)

Total Charge $ (net)

Lake Awoonga 200 649.20400 1039.20

Miriam Vale / Bororen 200 1035.70400 1735.70

Agnes Water / Seventeen Seventy

200 1084.90

400 1772.90

Whilst charges in the two smaller water schemes are well above the State average these charges have only increased marginally above the 2010-2011 charge as the parity pricing policy gains momentum. The 400 kl total price in the Miriam Vale / Bororen Scheme increases by 1.8% and the corresponding figure for the Agnes Water/Seventeen Seventy Scheme is only 0.7 of 1%.

I will leave it to my Councillors to release key features within each of their respective portfolios. I commend this budget to you.

Gail SellersMayor of Gladstone Regional Council

6 July 2011

Budget2011-2012


Operating v Capital Budget - What’s The Difference?

Council’s Budget is best considered in two parts:

The Operating Budget

The “operating budget” is the money required for operating and maintaining existing services and infrastructure, such as roads, water, sewerage and parks. This includes the day-to-day running of the many community and recreation facilities, including Council’s libraries, administration centres, art gallery, community advisory service, pools and entertainment centre.

The Capital Budget

The “capital budget” is the money allocated to providing new infrastructure or adding new components to existing infrastructure. Examples of capital projects include building new parks, roads, bridges and transport facilities; new community centres; or adding new components to existing parks, buildings or water and sewerage networks.

$201 millionTOTAL OPERATING BUDGET

$125 millionTOTAL CAPITAL BUDGET

This is a conservative budget that seeks to minimise rate increases while still providing the necessary infrastructure and services to effectively manage the pressures of growth being experienced in this region.

Budget2011-2012


Where Does The Money Come From?The bulk of Council’s operating budget revenue is generated through general rates and service charges. General rates are essentially a tax on property and are based on the unimproved or site value of land. Service charges are levied on properties that receive a specific service.

Garbage Collection

Maintenance, repair and upgrading of the water network.

Water Access Charge

Water Consumption Charge

Sewerage Charge

Fees & Charges

Per kilolitre charge for water consumed.

SERVICES THAT COUNCIL PROVIDES AND LEVIES A CHARGE ON RATES NOTICES INCLUDE:

OTHER SOURCES OF INCOME INCLUDE:

These are fees and charges that Council imposes for pro-viding other services to customers, such as development application fees, animal registration costs, licence fees, facility entrance charges and the like.

Grants & Subsidies

This is generally funding from other sectors of Government (State and Federal).

Recoverable Works

These are works that Council undertakes on behalf of oth-ers and recovers the costs. For example, the Main Roads Department pays Council to do maintenance work on some main roads in the region.

Interest

Interest earned on money invested.

Transfers from Reserve Funds

Money that has been put aside in previous years to fund new or replacement infrastructure.

Loan Funding

Money borrowed from external parties.

REVENUE SOURCES2011-2012 OPERATING BUDGET

REVENUE SOURCES2011-2012 CAPITAL BUDGET

The charts show the source of Council’s operating and capital budget revenue

Operating Grants & Contributions 6%

Interest 3%

Fees & Charges

16%

Rates & Service Charges 62%

Recoverable Works 13%

Transfer from Reserves 29%

External Capital Grants & Subisidies 47%

Loan Funding 24%

Budget2011-2012


Of the $125 million capital works program proposed for the 2011-2012 year,$30 million will be funded through loan borrowings.

$60 million of this year’s capital works program (47%) will be funded from external contributions and capital grants.

The reason that Council borrows money for investment in capital projects is to ensure the cost of long term infrastructure is shared by all users over the period of its life. It would be unfair to ask current ratepayers to completely fund infrastructure which will be used by future generations.

Delivery of significant infrastructure across the region is being partly funded from direct corporate contributors, as well as partnerships between Council, and State and Federal Governments.

Budget2011-2012


Where Will The Money Go?

EXPENDITURE BY DEPARTMENT

Council’s business is divided into departments. Each department is provided with a Budget allocation to maintain and operate existing infrastructure and services within their department and for new capital projects. Listed below are Council’s departments and a brief description of their major areas of responsibility.

Department DescriptionInfrastructure Services Roads, water, sewerage, drainage, footpaths and car parksDevelopment Services Town planning, subdivision, buildingCommunity Services Community facilities, human and social services and arts and cultural programs, including the

Gladstone Community Advisory Service, Discovery Coast Community Health Service Gladstone, Entertainment Centre, Council’s community events program, Gladstone Regional Libraries, community centres, the Gladstone Regional Art Gallery and Museum, performing and visual arts activities, economic development and community relations activities

Parks and Recreation Parks, aquatic centre and pools, sporting facilities, conservation, open space management and cemeteries

Environment and Regulation Public Health and Local Law Services including, garbage collection and disposal, local law and animal control, immunisation programs, rural land protection, mosquito control programs, licensing and monitoring of food premises and other environmentally relevant activities

Corporate Services Airport operations and corporate administration including human resources, asset and fleet management, mapping, records management, workplace health and safety and customer service functions

Finance Finance and procurement services which includes rating, store operations, financial reporting, investment and money management; disaster and risk management planning

Executive Services Elected members, office of the CEO, civic protocol activities, governance, internal audit, business improvement and legal services

Council’s operational and capital budget expenditure by department is shown on the next page:

Budget2011-2012


Expenditure By DepartmentWhere the Money is Being Spent Operationally

Capital Expenditure Analysis 2011-12 Budget

Finance 9%

Office of the CEO 1%

Corporate Services 12%

Debt Repayments 10%

Transfer to Reserves 8%

Planning & Development 4%

Parks & Recreation 7%

Sewerage 7%

Community Services 6%

Environment & Regulation 6%

Roads & Drainage Network 19%

Water 11%

Corporate 8%

Fleet 3%Airpor t 5%

Parks & Recreation 8%

Environment & Regulation 2%

Community Services 5%

Roads & Drainage Network 14%

Water 18%

Sewerage 37%

Budget2011-2012


GRC budget 2011-2012

$27.4 MILLION

Airport


$114.5 MILLION

Water and Sewerage


$9 MILLION Development Services

(Planning and Development)


$52.5 MILLION

Corporate Services (Fleet, IT, Customer Service, Executive)


$66.9 MILLION

Roads, Drainage, Footpaths, Bridges

Budget at a GlanceHow money is spent (includes Capital Works)


$10.8 MILLION Waste Services


$20.8 MILLION

Community Services

(Libraries, Entertainment Centre,

Economic Development, Community

Advisory Services)


$32.0 MILLION

Parks & Environment (Mowing, playgrounds, upgrades, beach protection, aquatic facilities,

regulatory services)

Budget2011-2012


GENERAL RATESIn developing this Budget, Council was very aware of the following factors:• The budget is the first under the State Government’s new “site valuation” methodology

where some properties have experienced significant valuation increases, especially in Gladstone, Boyne Island, Agnes Water and Seventeen Seventy.

• The cost pressures placed on the community in the current economic environment. • The prediction that the local government cost index will rise from 4.2% last financial

year to 7.5% in the ensuing financial year as a result of the costs associated with natural disasters of summer 2010-2011.

General rate revenue from the residential sector will increase by 2.8% next year. A total of 17 per cent of property owners will receive a rate reduction. A further 19.5% will receive an increase of less than the CPI of 3.8%. The balance will have varying increases but the maximum is capped at 10 per cent. The rate cap will no longer be applied to bulk residential development properties that receive a 40% State reduction in valuations as this is considered to be double-dipping.

*2.8%

GENERAL RATE REVENUE

So What’s The Effect On Rates?

GARBAGE COLLECTION CHARGEDomestic garbage collection charges for the two bin system remains at $255 throughout the region in 2011/2012.

* Properties that are subject to the rate cap may experience a greater increase in general rates up to the maximum of the rate cap which is 10% for rural and residential properties and 15% for busi-ness, commercial and light industrial properties.

SEWERAGESewerage charges will increase across the board by $1 per week (except for Seventeen Seventy and Agnes Water) as follows:

Service Area 2010-2011 Rate 2011-2012 Rate

Gladstone $397 $449

Boyne/Tannum/Calliope $522 $574

1770/Agnes Water $874 $874

=

=

No change

No change

$1per week($52 per annum)

$1per week($52 per annum)

GARBAGE COLLECTION CHARGE

1770/AGNES WATER

GLADSTONE

BOYNE/TANNUM/CALLIOPE

Budget2011-2012


SCHEME 2010-2011 Rate 2011-2012 Rate

Lake Awoonga $262 $288

Miriam Vale/Bororen $339 $373

1770/Agnes Water $438 $441

WATER CHARGES

WATER ACCESS CHARGE (operation, maintenance and upgrading of the network)

The water access charge will increase by a maximum of 60 cents per week in the respective schemes as follows:

WATER CONSUMPTION CHARGE(per kilolitre charge for water consumed)

To reflect the cost of water charged by the Gladstone Area Water Board, under a pricing mechanism independently received by the Queensland Competition Authority the overall cost of water with the Lake Awoonga Scheme increases from $1.50 to $1.95 per 1000 litres, representing an increase of 45¢ per kilolitre. Gladstone Regional Council will pass on this charge to its consumers. The water consumption charges in the smaller Council operated schemes will remain as per previous year.

SCHEME 2010-2011 Rate 2011-2012 Rate

Lake Awoonga $1.50/kl $1.95/kl

Miriam Vale/Bororen $3.50/kl $3.50/kl

1770/Agnes Water $3.44/kl $3.44/kl

54¢per week($28 per annum)

45¢per kilolitre



LAKE AWOONGA SCHEME

LAKE AWOONGA SCHEME

MIRIAM VALE/BOROREN SCHEME

MIRIAM VALE/BOROREN SCHEME

1770/AGNES WATER SCHEME

1770/AGNES WATER SCHEME

==

No change

No change

Budget2011-2012


What’s Been Funded? - Highlights 2011-12Airport• $6.13m to finalise the Gladstone Airport Reconstruction Project, including terminal building work; installation of an instru-

ment landing system; re-positioning and extending the baggage carousel and the installation of new chairs in the departures lounge.

Community Services• $4m addition of a flat floor as part of Gladstone Entertainment Centre (first stage).• $3.26m operating costs and purchase of new equipment for Gladstone Regional Libraries.• $2m to progress Stage 1 of the Philip Street precinct.• $1.04m for the Discovery Coast Community Health Service (including $821,000 Federal Government grants).• $1.1m Gladstone Art Gallery and Museum operations costs, exhibitions and collections.• $670,000 for the GLNG housing program (fully funded by GLNG).• $347,000 for Council’s Community Grants Program.• $250,000 for construction of a roof/awning at the front of Gladstone City Library .• $155,000 Gladstone Home Library Service.• $145,000 Tenant Advice and Advocacy Service (TAAS) (funded by the State Government).• $118,000 Community Arts and Cultural Projects.

Corporate Services• $4m to progress a residential development at Tannum Sands.• $267,000 (including $160,000 carried over from last year) for CCTV upgrade and expansion.• $150,000 for the completion of the Gladstone-Calliope fibre optic link.• Implementation of a Storage Area Network to enhance Council’s IT security, availability and flexibility.• Development of an online mapping system for residents to access via the internet.• $100,000 (funded by the State Government) for a local government joint venture retention strategy.• $210,000 for consultants to conduct visual and structured inspections of sealed roads; a ground penetrating radar survey of

roads; and asset valuations as part of Council’s asset management program.• $780,000 to continue the Mount Larcom and Agnes Water Rural Transaction Centre services.

Environment & Regulation• $7m for waste management.• $1.6m Benaraby Landfill expansion.• $1.2m Rural Lands Protection (declared pest control).• $1m for Local Laws (animal control).• $300,000 for Environment and Sustainability (environmental protection initiatives).• $230,000 for vector control (mosquito/flies).• $75,000 for the influenza immunisation program.

Finance & Governance• $705,000 for Council’s pensioner rebate on general rates.• $450,000 towards the installation and upgrading of a flood warning network in the Boyne River and Baffle Creek.• $290,000 for the continued support of the SES and Rural Fire operations at levels consistent with 2010/2011, along with a

$20,000 commitment to support the local rescue helicopter service.• Differential rating system reviewed with more categories included.

Budget2011-2012


Infrastructure Services• $30m allocation (including $25m LNG funding) for the provision of a sewer service to LNG projects on Curtis Island.• $10.2m towards the finalisation of the Agnes Water Integrated Water Scheme.• $8m Flood Restoration Works on behalf of the Department of Transport and Main Roads.• $6.6m for the Kirkwood Road/Gladstone-Benaraby Road intersection upgrade on behalf of Department of Transport and

Main Roads.• $3.7m for the Dixon Drive extension.• $2.2m for the Port Curtis Way/Power Station intersection upgrade on behalf of Department of Transport and Main Roads.• $1m for stormwater drainage network and sewer main inspection video filming.• $235,000 for Miriam Vale Water Treatment plant design and preliminary works.

Parks & Recreation• $1.5m (carry over from previous budget) for new pool filter and interactive children’s water play park at Gladstone Aquatic

Centre.• $472,000 towards the progression of Stage One of the Memorial Park development in Gladstone.• $320,000 for Stages One (a) and (b) of a new cemetery at Calliope.• $250,000 for the development of a playground at Kathleen Shanahan Park.• $122,000 for the concept design and construction of a new playground at Wyndham Park, Boyne Island.• $197,000 towards the design and construction of Stage One Barney Point Redevelopment.• $170,000 for maintenance and capital works including new Visitor Centre signage, building upgrades and landscaping at

Tondoon Botanic Gardens.• $117,000 for lifesavers at Tannum Sands and Agnes Water beaches during the week at Christmas and holiday periods.• $100,000 to extend T Section at Port Curtis Lawn Cemetery in Gladstone.• $82,000 for a water and sewerage upgrade at Lions Park, Miriam Vale.• $75,000 to develop a master plan for Chapman Park and an equestrian complex at Calliope.• $70,000 to upgrade waste treatment on the south side of the Calliope River Day Use Area.• $65,000 for Nagoorin Skate Park.• $30,000 to construct an entrance road to Springs Beach, Agnes Water.• $30,000 to upgrade trails along the Round Gladstone Trail.• Upgrade pathways in parks and improve walk/cycleway signage.

Planning & Development Services• Application fee increases to reduce statutory planning deficit from $1.5 million in 2010-2011 to an expected $78,000 in

2011-2012.• Progression of a new land use planning scheme for the region including $1.3m to conduct modelling of all of Council’s

major infrastructure networks; $100,000 for Priority Infrastructure Plans; and $385,000 for a series of studies.• Operational expenditure to ensure that the community’s interests are taken into account in relation to projects of state signifi-

cance (eg. - LNG projects).

Budget2011-2012


Documents

Guide to the Budget 2011-2012