How did we get here?
Like many government and non-government organisations, the last two years of COVID-19 impacts have taken their toll. Income from our holiday parks, childcare centres and the Newcastle Airport was cut, while at the same time, construction, transport and insurance costs have continued to increase. These impacts are further exacerbated by the natural disasters over the last couple of years.
Our budget forecasts have identified a shortfall of $80 million in 10 years time. It's important we take steps now to ensure we are financially sustainable in the long term. This may include reducing service delivery, increasing fees and charges, a rate increase or investigating new revenue streams – it’s all on the table.
Port Stephens has one of the lowest rate bases in the region. A special rate variation is an option but if our community wants to keep rates low, we need to understand what services you’re prepared to see reduced into the future. With a new Council in place, it’s time to look at how we do business – where can we increase our income, find savings and strike a balance between the needs of our community and our financial sustainability.
In this meeting Council discussed how financial sustainability has been achieved through a range of strategies, including the Long Term Financial Plan, prior to 2020. Due to the impacts of the COVID-19 pandemic, Council's financial position has been affected and new strategies would need to be adopted to continue to provide a financially sustainable future.
The result of this meeting was that Council would support the key actions for continued financial sustainability as stated in the report, endorse the establishment of the Prosperity Fund and that Council would receive a report within 6 months to endorse associated governance processes for the Prosperity Fund.
View the reports and recommendations here.
- We have saved $1 million by cutting back and tightening our budgets
- A one-off 10% increase to fees and charges
- Agreement to a further roll-out of paid parking
- Potential land assets for sale have been identified
- Locking in Council loans at record low-interest rates
- Identifying increase income from developer contributions
- Deferring non mandatory projects and not taking on any additional debt
At it's meeting on 28 June 2022, Council endorsed the Communications and Engagement Plan - Our Funded Future and approved to commence an engagement process with the community, discussing the financial sustainability of Council over the next 10 years. Options for the community to consider include the prospect of submitting a Special Rate Variation to the Independent Pricing and Regulatory Tribunal (IPART) for consideration for the 2023-2024 financial year.
- 28 June 2022 Ordinary Council Agenda (PDF 8.3 MB)
- 28 June 2022 Ordinary Council Agenda – Supplementary information (PDF 1.9 MB)
- Long Term Financial Plan 2022 to 2032 (extracted from Resourcing Strategy) (PDF 2.3 MB)
- Media Release, 29 June 2022: Port Stephens Council commits to driving long term financial sustainability
On 18 July 2022 we commenced our conversations with the community seeking input into a number of non rate income and rate income options that could turn our financial position around and help us decided how we move forward.
Non-rate income options included increasing fees and charges, continuing to seek grant funding, selling underperforming assets and looking at other options for revenue. We also have five rate increase options ranging from a 26% to 45% overall rate increase, either in a single year or over a number of years. We also put forward the option to continue under the current scenario where income continues to increase each year by the 2.5% rate peg – but this option would mean reduced services in the future.
A number of channels were available for the community to have their say including an online survey, Facebook Live event and a number of community information sessions both face to face and online.
The engagement program closed on 8 August 2022. We had a community awareness reach of 116,313 and participation of 7948. A number of key themes came out of community input across all engagement opportunities including the online survey comments, Facebook live event, community information sessions, special interest group presentations and Council interactions. These themes include:
- Level of understanding of complex local government financial matters: This included understanding rates in general, rating inequities, rate valuations and the ‘rate pie’, developer contributions and how that differs from rating income, and state legislation requirements.
- Efficiency and cost containment: This included cutting costs and looking at internal savings and the lack of trust in council financial management and modelling.
- Affordability: This included financial hardship and economic factors, especially for fixed income rate payers.
- Service levels: This included opposing service level priorities for example people want more services but are unwilling to pay for more.
At it's Council meeting on 23 August 2022, Council noted the outcomes of the community engagement and endorses to develop the engagement plan for the next phase of the discussion. They also endorsed to develop revised Integrated Planning and Reporting documents, including Special Rate Variation options, to incorporate feedback gained from the community whilst balancing Councils financial sustainability for further engagement with the community.
- 23 August 2022 Ordinary Council Agenda (PDF 4.2MB)
- 23 August 2022 Ordinary Council Agenda - Attachments under sperate report (PDF 23.7MB)
- 23 August 2022 Ordinary Council Minutes (PDF 17.0 MB)
At its meeting on 13 September 2022, Council endorsed to place the draft Integrated Planning and Reporting documents on public exhibition for a period of 28 days. The draft documents shows 2 options for a Special Rate Variation and include:
- Delivery Program 2022 to 2026, incorporating the Operational Plan 2023 to 2024
- Resourcing Strategy 2023 to 2033 incorporating the Workforce Management Strategy 2022 to 2026
- Long Term Financial Plan 2023 to 2033
- Strategic Asset Management Plan 2023 to 2033
View the draft Integrated Planning & Reporting documents on public exhibition.
View the two rate rise options.
Have your say
Find out how to share your thoughts on the draft integrated planning documents and the two rate rise options.