Planning for a sustainable future

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Council is facing significant financial challenges in the immediate and long term if we are going to meet the community expectations on service delivery and maintain or improve major assets like roads, bridges and community facilities.

Currently, there is an annual shortfall of $25 million to $35 million for Council to continue to provide maintenance and services across the City and restore reserves which will enable us to respond in an emergency event.

We will be taking a number of actions to sustain and improve operations and increase revenue and efficiencies to close the gap on income and expenses. This includes the preparation of an updated Resourcing Strategy which is on public exhibition.

What has caused the financial issues?

Many factors have contributed to making Council’s financial position unsustainable.

  • The impacts of consecutive natural disasters and the COVID pandemic during the last five years has significantly depleted revenue and increased operational costs. The net cost of the disasters, including subsidies and waivers on fees and charges, reduced the unrestricted cash position by $14.6 million.
  • Rising cost of materials, labour and contractors.
  • Increased expense of interest rates to loan borrowings.
  • Sustained lower than average residential and business rates.
  • Rate Pegging – the NSW Government restricts how much councils can typically increase rates by, and in recent years rate rises haven’t kept up with inflation.
  • Millions in grant funded improvements post fires and floods means we need to put more away each year to save for maintenance and renewal – depreciation costs.
  • Community expectations are that maintenance and replacement of assets like roads, bridges and community facilities should be improved on current levels, requiring greater investment.
  • Cost shifting by state and federal government forcing council to assume responsibility for infrastructure, services and regulatory functions without providing sufficient supporting funding.

How can we fix this?

There’s a range of initiatives that Council can implement to generate more income and improve operations to ensure we are sustainable in the long term.

We’ve also updated our suite of Resourcing Strategy documents which are now on public exhibition.

To increase revenue, options for a Special Rate Variation are being considered as well as a review of fees and charges and sale of assets.

As an organisation, Council is embarking on productivity and efficiency improvements over the short and long term. These include strategic planning improvements, strategic asset management planning, service level reviews and additional governance and financial controls.


What is a Special Rate Variation (SRV)?

Since 1977 Council rate revenue and certain other Council revenues have been regulated in NSW under an arrangement known as 'rate pegging'. Each year the NSW Government, through its rate-pegging policy, determines the percentage figure that councils can increase their general rate income. If councils want to apply for a larger increase they need to make a Special Rate Variation application.

What’s the rate increase being proposed?

There are two options being considered that would achieve financial sustainability over varying timeframes and then remain as the rating level. The increase would only apply to the General Fund (property rate) on your rates notice, and not the total bill amount.

What options are Council considering?

The application would be for a permanent increase of the amount reached in the first year of Option 1, or at the end of the third year in Option 2. Basically, once the SRV amount is reached, the rates will increase by the rate peg on top of the SRV increase each year after that.

The Special Rates Variation Fact Sheet provides a breakdown of the total impact for Farmland, Business and Residential rates.

What will Council be doing to reduce costs?

The organisation is implementing a number of initiatives to meet a minimum target of $3 million in efficiency savings during the next four years. These include:

  • Implementing asset management improvements identified in the Financial Sustainability Review including the establishment of a project management office and project management framework.
  • Strategically review and update asset management plans and asset condition data, commencing with road assets in early 2024.
  • Detailed service review program which will assess service levels, investigate and implement improvements to the way we deliver for our community.
  • Council will soon commence additional community engagement to obtain input on the service areas which could be reduced or increased in order to address financial sustainability.

Updated Resourcing Strategy

The Resourcing Strategy outlines how Council will manage its finance, assets and people to achieve the community's vision and goals. The updated draft components of the strategy currently on exhibition are:

  • Workforce Management Planning Strategy – planning for the workforce needed to deliver services to our community
  • Asset Management Strategy – how we manage the assets (like buildings and infrastructure) that Council owns
  • Information Communication Technology Strategy – making sure Council’s systems and technologies provide exceptional customer service
  • Long Term Financial Plan 2024-2034 - outlines how Council aims to provide services and infrastructure over the long term while ensuring financial sustainability for current and future generations
  • Council has made changes to our Resourcing Strategy based on the recommendations coming out of Financial Sustainability Review and the special rate variation scenarios. The Draft Resourcing Strategy is currently on exhibition and you can provide a submission using the TAB below.

Summary documents outline the key points of each of these documents.

Have a say

Thank you for your input. This consultation is now closed.

Council will decide in late January 2024 whether to apply to the Independent Pricing and Regulatory Tribunal (IPART) for the SRV and which option to apply for.

Next steps

A report will go to the Council meeting in late January 2024 to review the research, financial modelling and community feedback.

If Council decide to make an application for an SRV the application will be submitted in February 2024.

Council is facing significant financial challenges in the immediate and long term if we are going to meet the community expectations on service delivery and maintain or improve major assets like roads, bridges and community facilities.

Currently, there is an annual shortfall of $25 million to $35 million for Council to continue to provide maintenance and services across the City and restore reserves which will enable us to respond in an emergency event.

We will be taking a number of actions to sustain and improve operations and increase revenue and efficiencies to close the gap on income and expenses. This includes the preparation of an updated Resourcing Strategy which is on public exhibition.

What has caused the financial issues?

Many factors have contributed to making Council’s financial position unsustainable.

  • The impacts of consecutive natural disasters and the COVID pandemic during the last five years has significantly depleted revenue and increased operational costs. The net cost of the disasters, including subsidies and waivers on fees and charges, reduced the unrestricted cash position by $14.6 million.
  • Rising cost of materials, labour and contractors.
  • Increased expense of interest rates to loan borrowings.
  • Sustained lower than average residential and business rates.
  • Rate Pegging – the NSW Government restricts how much councils can typically increase rates by, and in recent years rate rises haven’t kept up with inflation.
  • Millions in grant funded improvements post fires and floods means we need to put more away each year to save for maintenance and renewal – depreciation costs.
  • Community expectations are that maintenance and replacement of assets like roads, bridges and community facilities should be improved on current levels, requiring greater investment.
  • Cost shifting by state and federal government forcing council to assume responsibility for infrastructure, services and regulatory functions without providing sufficient supporting funding.

How can we fix this?

There’s a range of initiatives that Council can implement to generate more income and improve operations to ensure we are sustainable in the long term.

We’ve also updated our suite of Resourcing Strategy documents which are now on public exhibition.

To increase revenue, options for a Special Rate Variation are being considered as well as a review of fees and charges and sale of assets.

As an organisation, Council is embarking on productivity and efficiency improvements over the short and long term. These include strategic planning improvements, strategic asset management planning, service level reviews and additional governance and financial controls.


What is a Special Rate Variation (SRV)?

Since 1977 Council rate revenue and certain other Council revenues have been regulated in NSW under an arrangement known as 'rate pegging'. Each year the NSW Government, through its rate-pegging policy, determines the percentage figure that councils can increase their general rate income. If councils want to apply for a larger increase they need to make a Special Rate Variation application.

What’s the rate increase being proposed?

There are two options being considered that would achieve financial sustainability over varying timeframes and then remain as the rating level. The increase would only apply to the General Fund (property rate) on your rates notice, and not the total bill amount.

What options are Council considering?

The application would be for a permanent increase of the amount reached in the first year of Option 1, or at the end of the third year in Option 2. Basically, once the SRV amount is reached, the rates will increase by the rate peg on top of the SRV increase each year after that.

The Special Rates Variation Fact Sheet provides a breakdown of the total impact for Farmland, Business and Residential rates.

What will Council be doing to reduce costs?

The organisation is implementing a number of initiatives to meet a minimum target of $3 million in efficiency savings during the next four years. These include:

  • Implementing asset management improvements identified in the Financial Sustainability Review including the establishment of a project management office and project management framework.
  • Strategically review and update asset management plans and asset condition data, commencing with road assets in early 2024.
  • Detailed service review program which will assess service levels, investigate and implement improvements to the way we deliver for our community.
  • Council will soon commence additional community engagement to obtain input on the service areas which could be reduced or increased in order to address financial sustainability.

Updated Resourcing Strategy

The Resourcing Strategy outlines how Council will manage its finance, assets and people to achieve the community's vision and goals. The updated draft components of the strategy currently on exhibition are:

  • Workforce Management Planning Strategy – planning for the workforce needed to deliver services to our community
  • Asset Management Strategy – how we manage the assets (like buildings and infrastructure) that Council owns
  • Information Communication Technology Strategy – making sure Council’s systems and technologies provide exceptional customer service
  • Long Term Financial Plan 2024-2034 - outlines how Council aims to provide services and infrastructure over the long term while ensuring financial sustainability for current and future generations
  • Council has made changes to our Resourcing Strategy based on the recommendations coming out of Financial Sustainability Review and the special rate variation scenarios. The Draft Resourcing Strategy is currently on exhibition and you can provide a submission using the TAB below.

Summary documents outline the key points of each of these documents.

Have a say

Thank you for your input. This consultation is now closed.

Council will decide in late January 2024 whether to apply to the Independent Pricing and Regulatory Tribunal (IPART) for the SRV and which option to apply for.

Next steps

A report will go to the Council meeting in late January 2024 to review the research, financial modelling and community feedback.

If Council decide to make an application for an SRV the application will be submitted in February 2024.

  • Thank you for your feedback. The consultation period is now closed.

    Council invites the community to provide feedback on our Financial Sustainability Review or Draft Resourcing Strategy.

    Please view the draft documents in the 'Document Library' on this web page prior to providing your submission. 

    Please upload your submission/s below by 5pm Wednesday 24 January 2024

    You can also provide your feedback by:

    Emailing council@shoalhaven.nsw.gov.au 2541 

    Post to CEO, Shoalhaven City Council, PO Box 42, Nowra 2541.

    Take Survey
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  • CLOSED: This survey has concluded.

    Council has decided to prepare for an application to IPART for a Special Rate Variation (SRV) – an increase in rates for 2024-25 above the regulatory amount set by the Independent Pricing and Regulatory Tribunal (IPART). Council will be making a decision before 5 February 2024 to formally apply for the SRV. To inform Council’s decision, please take the time to read the background materials and complete the online survey below.

    The survey closes at 5pm, Wednesday 24 January 2024.

    To provide feedback on the Financial Management Review and Draft Resourcing Strategy, please make a submission through the Make a Submission Form on this web page.

    Take Survey
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Page last updated: 31 Jan 2024, 04:13 PM