Ordinary Council Meeting

 

  BUSINESS PAPER

 

 

 

 

 

 

 

 

 

 

 

Tuesday 26 May 2015

 

 

 

 

 

 

 

 

 

Administrative Centre 30 Frances Street Randwick 2031

Telephone: 1300 722 542

Fax: 02 9319 1510

 council@randwick.nsw.gov.au

www.randwick.nsw.gov.au


 

 

 

 

 

 

 

 

 

 

 

 


Ordinary Council                                                                                                          26 May 2015

 

 

 

 

 

 

 

 

 

 

 

 

 


Ordinary Council Meeting

 

Notice is hereby given that an Ordinary Council Meeting of the Council of the City of Randwick will be held in the Council Chamber, First Floor, 90 Avoca Street, Randwick on Tuesday, 26 May 2015 at 6:00pm

 

 

Prayer and Acknowledgement of the local indigenous people

Prayer

Almighty God,

We humbly beseech you to bestow your blessings upon this Council and to direct and prosper our deliberations to the advancement of your glory and the true welfare of the people of Randwick and Australia.

Amen”

Acknowledgement of the local indigenous people

I would like to acknowledge that we are here today on the land of the Bidjigal people of the Dharwahal Nation.  The Bidjigal people are the traditional owners and custodians of this land and form part of the wider aboriginal nations of the Sydney area.  On behalf of Randwick City Council I would also like to acknowledge and pay my respects to the Elders both past and present.”

 

Apologies/Granting of Leave of Absences 

Confirmation of the Minutes  

Ordinary Council Meeting - 28 April 2015

Declarations of Pecuniary and Non-Pecuniary Interests

Address of Council by Members of the Public

Privacy warning;

In respect to Privacy & Personal Information Protection Act, members of the public are advised that the proceedings of this meeting will be recorded for the purposes of clause 69 of Council’s Code of Meeting Practice.

Mayoral Minutes

Mayoral Minutes, if any, will be distributed on the night of the meeting.

Urgent Business

Director City Planning Reports

Nil

 

 

 

General Manager's Reports

GM10/15   Randwick City Council Fit for the Future - Options Analysis...... 1

Director City Services Reports

Nil

Director Governance & Financial Services Reports

Nil  

Petitions

Motion Pursuant to Notice

NM23/15   Notice of Motion from Cr Stevenson - Preparation of Council Improvement Proposal........................................................ 53   

Notice of Rescission Motions

Nil  

 

 

 

…………………………………………………….

Ray Brownlee

General Manager

 


Ordinary Council                                                                                                          26 May 2015

 

 

General Manager's Report No. GM10/15

 

 

Subject:                  Randwick City Council Fit for the Future - Options Analysis

Folder No:               F2014/00635

Author:                    Anne Warner, Manager Corporate Performance     

 

Introduction

 

This report responds to the resolution of Council at its Ordinary Council meeting held 25 November 2014. Council resolved:

 

“(Mayor, Cr T Seng) that:

 

1. Council establishes a working party consisting of the Mayor, a representative of

the ALP Councillors, a representative of the Greens Councillors, a representative

of the Independent Councillors, and the General Manager, to undertake the

necessary due diligence to enable Council to respond in accordance with the ‘Fit

for the Future’ templates, due June 2015;

 

2. Council advises the United Services Union that it is supportive of the Union’s

objective of ensuring the protection of Council employees’ conditions and the

request for the establishment of a peak committee of representatives from

Council’s management and the relevant Unions to consult on the development of

Council’s response to the NSW Government’s ‘Fit for the Future’ policy;

 

3. Outcomes of the working party’s due diligence be reported back to Council; and

 

4. Council consults with the local community by way of a plebiscite or other means

to determine our community’s view on amalgamations.”

 

Local government reform in NSW has been at the forefront of the industry since the ‘Destination 2036’ conference held at Dubbo in August 2011. From this conference the Independent Local Government Review Panel (ILGRP) was formed to examine options for local government in NSW.

 

The ILGRP, chaired by Professor Graham Sansom, finalised its review of local government with its ‘Revitalising Local Government’ report in October 2013.

The recommendation from the Independent Local Government Review Panel for Randwick City Council is as follows:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Councils

Options (preferred option in bold)

Rationale

 

Botany Bay, Randwick, Sydney, Waverley, Woollahra

 

Amalgamate or

• Combine as strong Joint Organisation

 

• Projected 2031 population 669,400

• Close functional interaction and economic/social links between these councils

• Need for high-level strategic capacity to promote and support Sydney’s ongoing development as Australia’s premier global city

• Scope to bring together Sydney’s international icons and key infrastructure under a single council, and to make better use of the strong rating base of these councils

 

Source: Independent Local Government Review Panel, Report, ‘Revitalising Local Government’, October 2013, p104.

 

In October 2014 the NSW State Government released their ‘Fit for the Future’ program, to guide councils in the process of reform and amalgamations and to highlight the relevant support and incentives available. The NSW State Government also advised that the option of combining as a Joint Organisation was no longer available for Metropolitan Councils.

 

The NSW State Government’s ‘Fit for the Future’ program, states that the ILGRP’s recommendation for mergers should be the starting point for all proposals. As such the NSW State Government’s default position for Randwick City Council is the Global City merger proposal (Randwick, Botany Bay, Waverley, Woollahra, Sydney).

 

The NSW Government’s ‘Fit for the Future’ guidelines also state that each council must address the issue of scale as a priority. Scale is broadly understood to be the size of a Local Government Area based on its population. For the purposes of community engagement and analysis, a minimum population of 200,000 is considered as meeting the requirements. The rationale for this number can be found in the following table.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Scale – NSW State Government ‘Fit for the Future’ program

The NSW Government’s ‘Fit for the Future’ guidelines state that each council must address the issue of scale as a priority. This is supported by the view of the Independent Pricing and Regulatory Tribunal (IPART) that scale and capacity is a threshold issue.

 

The ‘scale’ or minimum population figure has not yet been clearly identified by the NSW State Government.

 

In its final report ‘Revitalising Local Government’, The Independent Local Government Review Panel (ILGRP) did not recommend a merger or boundary change for the following six metropolitan councils: Bankstown, Blacktown, Campbelltown, Penrith, Sutherland and The Hills. These councils all have populations close to or over 200,000 (2014), suggesting the threshold for a merged council’s population should exceed this figure.

 

The minimum figure of 250,000 residents has been referenced by the NSW State Government in their ‘Fit for the Future’ presentations where 3 million dollars will be allocated to a merged council in addition to the 10.5 million dollars, for every 50,000 residents over a population of 250,000 people.

 

Population references have been made by independent research companies Grant Thornton, in their report commissioned by Waverley Council and Morrison Low, in their report commissioned into the Inner west councils (that the scale of an amalgamated council should exceed 250,000 residents by 2031). Furthermore, an analysis of the Fit for the Future program by Dollery and Kelly, suggests that a mean population figure for merged councils in the Greater Sydney area would be 260,000 people.

 

Sources:

1.   Independent Pricing and Regulatory Tribunal, ‘Review of criteria for fit for the future’, Sept 2014, p2.

2.   Independent Local Government Review Panel, Revitalising Local Government, Oct 2013, p105-6

3.   NSW State Government Fit for the Future Guidelines and Presentations, October/November 2013

4.   Grant Thornton, ‘Waverley Council Technical Assistance FFTF’, March 2015, p7.

5.   Morrison Low, Fit for the Future – ‘Shared Modelling Report for the Communities of the Inner West’, Feb 2015, p7.

6.   Dollery and Kelly, ‘Up to the Job? An analysis of the NSW Government’s Fit for the Future Local Government Reform Policy Package’, Feb 2015, p20.

 

As resolved by Council on 25 March, 2014: ‘Council is opposed to the amalgamation of Randwick City Council’.

 

As per Council’s subsequent Resolution from 25 November 2014, Randwick City Council has assessed alternative options for amalgamation to ensure it has undertaken its due diligence relative to local government reform.

 

A status report on the due diligence being undertaken by Council’s Fit for the Future Working Party was provided at the Ordinary Council Meeting of 24 February 2015.

 

A significant recent development in local government reform has been the State Government’s appointment of the Independent Pricing and Regulatory Tribunal (IPART) to act as the Expert Advisory Panel to review council Fit for the Future submissions. On 27 April 2015 IPART released their Methodology for Assessment of Council Fit for the Future Proposals Consultation Paper, the implications of which are detailed throughout this report.

 

 

 


Issues

 

Randwick City Council is a leader in Local Government, with a strong strategic capacity and a clear vision to build a sense of community. Council is financially strong; has quality political and managerial leadership; an effective asset management program as well as having a dedicated, motivated and engaged workforce. Council has zero debt, has spent a record amount on capital works in recent years, and is a capable partner for both State and Federal Government agencies. The following table provides a snapshot of Randwick Council’s performance. 

 

 

Randwick City Council – A high performing organisation

 

Financial management

-      Randwick Council meets all the Fit for the Future financial, asset and efficiency benchmarks now and into the future, with the exception of the debt service ratio. However if the Council had just $1 of debt it would also meet this ratio. 

-      The Council's financial position has been assessed as "sound" by both NSW TCorp and our independent auditor, with TCorp stating the Council's outlook is "positive".

-      This result is supported by the independent audits of Council’s annual report on the condition of public buildings and infrastructure assets (Special Schedule 7) and an assurance report on the Long Term Financial Plan (LTFP).

Delivering for the community

-      Council is a leader in community engagement, having undertaken extensive consultations on a variety of issues in the community through a number of methods including social media and focus groups. This level of engagement and provision of quality services to the community is reflected in 95% of residents indicating they are ‘somewhat satisfied’ to ‘very satisfied’ with the performance of Council.

-      Council has the strategic capacity to be a capable partner for State and Federal agencies as well as regional organisations such as SSROC. An example of this is demonstrated in the collaboration with State Government in the planning of the CBD and South East Light Rail (CSELR) and further demonstrated by Council allocating $68M for the Light Rail support plan.

-      Council has delivered on many of the initiatives in the Randwick City Plan, ranging from substantial energy and water savings to the establishment of new community centres. The details of which can be found in the Annual Reports.

-      Organisational reviews reflect the knowledge, creativity and innovation within the organisation such as the Integrated Mobility of Works System (IMOWS) and the MyRandwick application which are part of Council’s broader online initiative.

Asset management

-      Randwick City Council has an effective asset management program, as custodian of 1.4 billion dollars’ worth of assets. In 2013, Council's infrastructure management was assessed as "very strong" by the Office of Local Government, being one of only five councils to receive the highest rating in NSW.

-      In the last five years Randwick City Council has spent $110 million on upgrading roads, footpaths, parks, drains and community buildings across the City. In this period Council has reduced its infrastructure backlog to $7M. Council has allocated $370M in the Long Term Financial Plan for community infrastructure works over the next 10 years.

-      Randwick City Council was the first council in NSW to have its “Special Schedule 7” – condition of its public buildings and infrastructure assets independently audited.

Workforce capabilities

-      Randwick City Council has a dedicated, motivated and engaged team of staff that drives innovation and moves the organisation forward. Council’s workforce provides the highest levels of service to the community in-line with the corporate vision and community strategic plan. The Randwick City Council team is an award winning workforce, recognised by both Government and private industry bodies.

-      The Randwick City Councillors are of a high calibre and have a strong commitment to industry participation and professional development.

-      Council attracts high performing staff and has an employer of choice focus which is benchmarked against private industry using the Aon Hewitt Best Employer survey. Council scored 76 per cent in the 2014 survey, which was a significant achievement and only just below the best employer’s private sector benchmark of 82 per cent.

-      Council is at the forefront of learning and development activities, tailoring opportunities to the anticipated needs of the business and resourcing the function through high levels of investment.

Achievements and awards

-      Randwick City Council is an award winning organisation and leader in local government. Over the past 8 years Council has been awarded more than 80 awards for the provision of services, programs and facilities to the community, as well as recognition for the dedication and professional excellence displayed by council staff.

-      Council was also the recipient of the AR Bluett Memorial Award for Local Government in 2006, which is considered the highest accolade in the industry for a single council.

“Grant Thornton advised Waverley Council that in terms of amalgamating with Randwick, this is ‘the strongest option for Waverley’, with Randwick being a ‘strongly attractive option as part of any combination, but more so when it is not diluted by any other council.”

Source: Grant Thornton, Waverley Council – Technical Assistance FFTF, March 2015, p28

 

Despite Randwick City Council’s strong performance, the State Government has consistently indicated that ‘no change is not an option’, which has been re-enforced through IPART’s proposed Assessment Methodology. Based on IPARTs methodology, it would not be possible for Randwick City Council to be able to lodge a stand-alone submission and be assessed as Fit for the Future. The details of which are outlined in this report.

 

To ensure that Randwick City Council has undertaken its due diligence relative to local government reform an analysis of options has been undertaken and is underpinned by one of the largest single community consultations in the history of Council.

 

The options as set out in the following table have been examined through the perspectives of: community profile; strategic planning; facilities and services; Councillor representation; community engagement; financial context; rates; workforce; risk analysis; and social impact.

 

Merger option

Council/s

Population

(ERP 2013)*

Option One

Randwick (no change)

142,310

Option Two

Randwick and Botany

185,602

Option Three

Randwick and Waverley

213,016

Option Four

Randwick, Waverley and Botany

256,308

Option Five

Randwick, Waverley and Woollahra

270,693

Option Six

Randwick, Waverley, Botany and Woollahra

313,985

Option Seven

Randwick, Waverley, Woollahra, Botany and Sydney

(Global City)

505,903

Source: *profile.id.com.au, Estimated Residential Population (ERP), 2013.

 

The key findings from the analysis of the seven options are outlined in Randwick City Council’s Options Analysis (Attachment 1) and Appendices (Attachments 2, 3 and 4). An overview of the contents of the Options Analysis suite is provided in the following table.


 

Randwick City Council – ‘Fit for the Future’ Options Analysis

Randwick City Council has undertaken a significant amount of research, financial modelling and evaluation to develop its Options Analysis documentation, consisting of the overarching ‘Options Analysis’ Paper and Appendices. The process conducted by Council and the information contained in the documents are industry leading and affirms Council’s position as a leader in local government and the community. The documentation consists of:

 

The Options Analysis Paper – Overarching document

-      Executive summary

-      Introduction and overview of the study area

-      Key Findings - Community profile, Strategic planning, Facilities and Services, Councillor representation, Community engagement, Financial context, Rates, Workforce, Risk Analysis, and Social Impact Statement

Appendix A – Community profile and Strategic planning

Appendix A contains strategic observations and analysis on the community and demographic profile of the local government areas of Randwick, Botany Bay, Waverley, Woollahra and City of Sydney. The strategic planning section discusses the Global City concept, the Planning Policy framework and a Merger Options Analysis.

 

Appendix B – Community engagement

This appendix outlines the relevant community engagement activities and context and outlines the results of the: Community Survey; Telephone Survey, Community Information Stalls; and Community Focus Groups.

Appendix C – Financial context

This appendix analyses the financial position of Randwick City Council along with Botany Bay, Waverley, Woollahra and the City of Sydney Councils. It also includes financial modelling of the six merger options as well as the forecast cost of the various mergers.

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Community views

 

In response to the State Government’s Fit for the Future program released in late 2014 Randwick City Council has undertaken one of its largest single community consultations in the history of the Council.

 

As per previous resolutions of Council (on 25 November 2014 and 9 December 2014), the possibility of holding a plebiscite was also pursued.

 

Randwick Council’s plan to hold a plebiscite on the issue of council amalgamations hit a roadblock with the NSW Electoral Commission’s refusal to release the electoral role.

 

Whilst Council staff have been investigating the running of a plebiscite since late 2014, they were advised by the Electoral Commission recently that Council’s planned poll does not meet the purposes under which the Commission can release the roll of voters.

 

Council explored alternative options to the electoral roll, and this was discussed with Councillors at two Councillor Briefing sessions, however no viable solutions were found given the tight time constraints of the Fit for the Future process as well as the potential data integrity issues with other sources of data.

Whilst it has not been possible to hold a plebiscite, Council has attained substantial and statistically valid feedback from residents, ratepayers and local businesses in response to the NSW State Government’s Fit for the Future program.

 

The following infographic illustrates the various ways Randwick Council sought the views of residents, ratepayers and local businesses. The community engagement program has been extensive and as shown below, more than 8,000 residents and ratepayers have so far taken part through a reply-paid survey, online survey, telephone surveys, focus groups and pop-up information stalls at local parks, beaches and shopping centres.

 

 

 

The Community Survey and Information Pack presented the benefits and costs of seven options. We received 6,446 valid survey responses.

 

Key findings include:

 

·      There is a high level of satisfaction with services and facilities provided by Randwick City Council and a concern that a global city council will result in a loss of local identity and less say in the area.

·      More people associate with the eastern suburbs (39%) than their suburb (31%) or the City of Randwick (26%).

 

·      There is an outright rejection of the global city concept. This is significantly the least preferred outcome.

·      In three separate questions in the survey, a consistent 49% of respondents indicated they preferred no change while the remaining 51% preferred a level of merger.

·      If amalgamations must occur, 90% would prefer an eastern suburbs council model and only 5% would prefer the larger global city council model (5% are unsure).

 

Your 1st preference (community survey)

 

If amalgamations must occur, which would you prefer? (community survey)

 

1st, 2nd & 3rd preferences - telephone and community survey

 

 

 

 


Distributed preferences – options most likely to meet IPART and Fit for the Future requirements (community survey)+

 

Refer to Randwick Council’s Options Analysis for a detailed outline of all the relevant community engagement activities undertaken and the corresponding results.

 

Options Analysis snapshot

 

The following table provides a snapshot of the 7 options, examined through a number of different perspectives, such as the cost of amalgamation alongside the value of increased/new services over 10 years.

 

 

 


 

Merger options involving Randwick City’s immediate eastern suburbs neighbours (Waverley, Botany and Woollahra) have been found to provide opportunities to deliver more services or increased levels of services to the community, even after funding amalgamation costs, repaying operational debt, eliminating the backlog of works required on roads, footpaths, drainage, buildings, and in parks and beaches and increasing expenditure on assets to meet the ‘Fit for the Future’ benchmarks. Each option would still deliver all capital works projects outlined in each council’s current ten year Long Term Financial Plan and maintain existing service levels. No increase in total rates collected or new debt is required. Financial modelling has taken into account an amalgamation grant offered by the State Government of $10.5m plus $3m for every 50,000 people over a population of 250,000 up to $22.5m.

The IPART require the Council to consider the ILGRP’s Global City recommendation first and provide a “sound argument supported by robust information” to demonstrate this (IPART, Methodology for Assessment of Council Fit for the Future Proposals, April 2015, p22). Council has carefully considered the Global City option and has found greater risk and complexity due to different service requirements when compared to eastern suburbs councils. This may result in such diseconomies of scale (with the new council being so large, complex and delivering different levels of service) that inefficiency begins to exceed any merger savings and increases costs.

 

Workforce

 

Council promotes an informed and engaged workforce, and as such has been proactively engaging with staff for a number of years on Local Government Reform.

 

A recently conducted voluntary staff survey, of which 327 people responded, has assisted Council to identify the views of staff in relation to the NSW State Government’s ‘Fit for the Future’ program. Key findings from the survey showed that in terms of first preferences: 67% of the staff respondents said their first preference was no change (i.e. for Randwick to stand alone); 28% said their first preference was one of the eastern suburbs options; and only 5% said their first preference was the global city option. In terms of second preference, 95% of staff respondents chose one of the eastern suburbs options, with the Randwick and Waverley combination being the highest (40%).

 

Randwick Council established a Fit for the Future working group which consists of representatives from the peak industry unions and senior management. Council has also developed a Memorandum of Understanding (MOU) with the three peak industry unions to provide employment protections for the workforce that exceed those currently available under section 354F of the NSW Local Government Act 1993. The MOU extends the employment protections available under the Act from three years to five years. 

 

It is proposed that a pre-condition of any merger is that the merger partners agree to accept the enhanced employment protections of 5 years contained within the Memorandum of Understanding (MOU) between Randwick City Council and the Unions. (see Attachment 6).

 

Next steps

 

The Premier, Mike Baird MP, appointed IPART to assess the Fit for the Future proposals of NSW councils, and to prepare a report to the Minister for Local Government by mid-October with a recommendation on whether each council is Fit for the Future.

 

The IPART’s proposed Methodology for Assessment of Council Fit for the Future Proposals states that only one type of proposal (i.e. Merger or Improvement) can be submitted. The due date for submissions is 30 June 2015.  In accordance with IPART’s proposed methodology, if a council does not submit a proposal it is deemed ‘not fit’.

 

The three submission pathways for metropolitan councils, where the ILGRP recommended a change, will be examined in-turn and include:

 

1.  A proposal consistent with the ILGRP’s preferred option (Global City);

2.  No structural change (i.e. stand-alone); and,

3.  A merger option broadly consistent with the objectives of the ILGRP preferred option.

The following diagram highlights IPART’s assessment approach and the basis on which it will determine the rating for Randwick and all other councils.

 

 

Source: IPART, Methodology for Assessment of Council Fit for the Future Proposals - Public Forum Presentation, Sydney, 11 May 2015, Page 6

 

1. A proposal consistent with the ILGRP’s preferred option

 

The Global City option (Randwick, Waverley, Woollahra, Botany, Sydney) is the ILGRP’s preferred option for Randwick City Council. This option is unsupported by our community and our research and is in-consistent with the formal position of Council.

 

In accordance with IPART’s proposed assessment criteria, the Council has explored the Panel’s recommended ‘Global City’ amalgamation and can demonstrate a sound assessment of this option based on robust and consistent data (limited by what was made available to us by the four councils) and financial assumptions validated by an Assurance Report from our external auditor. The findings of this analysis are covered extensively in the attached Options Analysis.

 

There is a clear distinction between the City of Sydney and the Eastern Suburbs councils. The City of Sydney is a major metropolitan employment centre and is recognised as a significant stakeholder in Australia’s economy. The City of Sydney has a strong level of investment in regional and state projects. Costs in areas such as street cleaning, transport and events are significantly higher than those of the Eastern Suburbs councils as they provide services for the one million workers, visitors and residents in the city on any one day.

 

One of the most significant distinctions is that the Eastern Suburbs community do not identify themselves as part of the City of Sydney. The level of acceptance that they are part of the Eastern Suburbs with its way of life of beaches, parklands etc. is particularly strong.

In addition, The City of Sydney has raised concerns that a Global City amalgamation “could potentially have significant financial ramifications” for the major projects planned over the next decade (City of Sydney, Resourcing Strategy 2014, p4). In their submission to the ILGRP the council stated:

 

·      “We have a publicly endorsed strategic plan with a funded 10-year infrastructure program to implement it. We provide leadership at the metropolitan, national and international levels. Our major events and festivals are open for visitors Sydney wide and draw tourists internationally. We invest in regional and state projects such as light rail, urban renewal and cycleways.” (p5)

·      …”Faced with the demands of amalgamation, the City of Sydney would not be able to deliver on commitments in our publicly endorsed Sustainable Sydney 2030 program. Future projects for the global city would be risked by an amalgamation aimed at “sharing the revenue base of the Sydney CBD across a much wider area”” (p45)

- City of Sydney, Future Directions for NSW Local Government – Twenty Essential Steps: Submission to the Independent Local Government Review Panel, July 2013.

 

2. No structural change (i.e. stand-alone)

 

According to IPART’s proposed criteria, this pathway is only viable when it can be clearly demonstrated that the option is superior to the (ILGRP’s) merger option in terms of strategic capacity. Key elements of strategic capacity, as defined by the ILGRP and referenced by IPART, include:

 

 

As already identified in this report, Randwick Council is a high performing organisation with significant strategic capacity. Despite our financial and strategic capacity, Randwick could not be considered to be deemed superior to the Global City option when using the ILGRP’s Key elements of Strategic Capacity. This can be demonstrated through the following three examples.

 

 

 

Key Element of Strategic Capacity: More robust revenue base and increased discretionary spending

 

·      The ‘Global City’ council would generate $985m in revenue, compared to $134m currently raised by Randwick.

 

2013-14  Income ($ millions)

Key Element of Strategic Capacity: Scope to undertake new functions and major projects

 

·      Randwick is projected to spend $141m over the next four years on capital works (2015 to 2018).

·      Based on the sum of each council’s projections, a Global City council would spend $1.4 billion on capital expenditure over the next four years.

 

Capital expenditure – 2014-15 to 2017-18 projections ($ millions)

 

Key Element of Strategic Capacity: Resources to cope with complex and unexpected change

 

·      Based on the sum of each council’s cash on 30 June 2014, the Global City Council would have $766m in the bank whilst Randwick would have $58m.

 

Cash held on 30 June 2014 ($millions)

 

 

As per IPART’s criteria, the option for no structural change (i.e. stand-alone) is not a viable pathway for Randwick, even though it is strongly supported by our community and is in-line with the formal position of Council.

 

3. A merger option broadly consistent with the objectives of the ILGRP preferred option

 

According to IPART’s criteria a council may be assessed as ‘Fit for the Future’ if it presents a merger option broadly consistent with the ILGRP recommendation to merge councils (i.e. with two or three rather than four councils), supported by a sound argument. Importantly, IPART have determined that under this pathway the proposal does NOT have to be demonstrated as superior to the (ILGRP’s) merger option in terms of strategic capacity.

 

In determining what options may be broadly consistent, Option One is excluded as it is the no structural change pathway and Option Seven is excluded, as it is the ILGRP’s preferred option.

 

Merger option

Council/s

Population

(ERP 2013)*

Option One

Randwick (no change)

142,310

Option Two

Randwick and Botany

185,602

Option Three

Randwick and Waverley

213,016

Option Four

Randwick, Waverley and Botany

256,308

Option Five

Randwick, Waverley and Woollahra

270,693

Option Six

Randwick, Waverley, Botany and Woollahra

313,985

Option Seven

Randwick, Waverley, Woollahra, Botany and Sydney

(Global City)

 

505,903

Source: *profile.id.com.au, Estimated Residential Population (ERP), 2013.

 

Under this pathway, the risk of being assessed as not broadly consistent as per IPART’s criterion and therefore not fit for the future; increases as the population number decreases.

 

In terms of assessing this pathway, IPART has stated in its proposed methodology that it will examine whether the council first considered the ILGRP’s preferred option for scale and capacity; and that it intends to examine any proposal’s consistency with the broader regional and state-wide objectives of the ILGRP’s preferred option, including economic, transport, regional planning and equity objectives. For Metropolitan areas, IPART considers this to be:

 

-      Create high capacity councils that can better represent and serve their local communities on metropolitan issues, and be true partners of State and federal agencies

 

-      Establish a more equitable pattern of local government across the metropolitan area, taking into account planned development

 

-      Underpin Sydney’s status as a global city, and

 

-      Support implementation of the Metropolitan Strategy, especially the planning and development of major centres and the preparation and implementation of sub-regional Delivery Plans.

 

Given IPART’s statement, it is of significance that in their final report the ILGRP stated that "The Panel's view is that on balance, looking ahead to the mid-21st Century when Sydney's population will reach about 7 million, having about 15-18 councils is appropriate."

 

In considering its recommendations for the Sydney metropolitan area, the ILGRP was particularly concerned about the councils in the eastern half of Sydney, stating:

 

·      “local government is fragmented (especially in the eastern half of the region) and lacks credibility as a significant player and partner in metropolitan planning and management. There are simply too many voices striving to be heard, and there also tends to be a ‘lowest common denominator’ effect that undermines the efforts and standing of those councils that do have the resources and initiative to play a strategic role...

·      “Without changes to council boundaries there will be an increasingly severe imbalance in the structures of local government between eastern and western Sydney: by 2031 the 28 councils east of Parramatta will have average populations of 108,800, whilst the 13 to the west will average 212,900.” (ILGRP, Revitalising Local Government, Oct 2013, p98)

 

The ILGRP’s recommendations for the Sydney Metropolitan area proposed a number of amalgamations and boundary adjustments. These are illustrated in the following map.

 

Preferred merger options for Sydney Metropolitan Councils

 

Source: ILGRP, Revitalising Local Government, Oct 2013, p107

 

The population of Greater Sydney is currently 4.8 million people (ABS Estimated resident population as at 30 June 2014) with council populations ranging from 14,689 (Hunters Hill) to 332,424 (Blacktown). The amalgamations proposed by the ILGRP would result in a reduction in the number of councils in Sydney from 41 to 18 councils with an average population of 267,000 people.

 

Furthermore, IPART considers that a demonstration of sufficient scale may include: an appropriate minimum population size (a specific number is not stated); or, a target number of councils in the metropolitan area; or a future plan of the council to achieve scale in the medium to longer term (i.e. Sydney fringe councils).

 

The IPART considers scale and capacity to be the threshold criterion for all proposal types and only if these criterion are satisfied should the other criteria (sustainability; effective infrastructure and service management; efficiency) be addressed.

The following decision-tree summarises the potential ‘Fit for the Future’ response pathways for Randwick City Council and the likely outcomes. The NSW State Government’s default position for Randwick is the Global City, as recommended by the ILGRP, hence why it follows on from a not fit result in the decision-tree.

 

The page numbers in the decision-tree refer to IPART’s Methodology for Assessment of Council Fit for the Future Proposals Consultation Paper, which is publicly available on their website.

 

As per the decision-tree, a significant risk for Council is that if we are determined as 'not fit' (either by not submitting a proposal or by in-adequately addressing the criterion) then the current default position for Randwick City is the Global City (Randwick, Waverley, Woollahra, Botany, Sydney).

 

The IPART has indicated in their proposed methodology for assessment, that if they determine a rating of ‘not fit’ for a council, this would be accompanied by an explanation and potentially a recommendation.

 

In determining the Fit for the Future position of Council all the relevant risks must be weighed-up, including those associated with the different merger options. A broad assessment of these risks is detailed in Council’s Options Analysis.

 

The IPART has indicated that when assessing council proposals they will examine what alternative mechanisms have been considered by a council before developing proposals premised on the social and community context being an argument against the ILGRP’s preferred option. The ILGRP identified that maintaining local representation and identity is possible within larger council areas through the use of mechanisms such as Community Boards and new approaches to place management, community engagement and customer service. 

 

The State Government has advised it will provide a total of “$13 million to support Councillors that lead the transition to a new council” (Minister for Local Government, The Hon Paul Toole MP, Ministerial Circular 15-03 - Delivering Local Government Reform, 20 April 2015, https://www.olg.nsw.gov.au/sites/default/files/M15-03.pdf). It is expected the role of the Local Transition Committee will include establishing the new council’s governance structure (number of wards, number of councillors, election of mayor, etc.). Being part of a Local Transition Committee provides the greatest opportunity to have a say in shaping future governance arrangements.

 

Timeline

 

The IPART is inviting submissions in response to its Consultation Paper until 25 May 2015, with a view to releasing its final Assessment Methodology in early June.

 

Although Council will be lodging a submission in response to the Consultation Paper, a decision on the Fit for the Future position of Council is required in the meantime. A direction is required from Council in order to prepare a proposal for submission by 30 June. Should IPART’s final Paper materially differ to its Consultation Paper, regarding the option to stand-alone, an urgent report could be put to Council for deliberation.

 

 

THE URGENCY OF A DIRECTION FROM COUNCIL

 

This report to Council was originally scheduled for April, however it was postponed until May to accommodate relevant information becoming available to the industry and subsequent key briefings for our Councillors.

 

It is not possible however to wait until IPART have released their final Assessment Methodology prior to Council making their decision on the Fit for the Future direction for Randwick City Council.

 

The IPART propose to release their Final Assessment Methodology by the end of the first week of June (by 5 June). In the event that Council was to wait for 5 June, it would take several days to analyse the content and prepare a Report to Council. It is estimated that the earliest that an Extra-Ordinary meeting of Council could be held, with the three working days’ notice required, would be Friday 12 June.

 

Assuming Council made a decision on Friday 12 June, it is not a realistic expectation that a sound business case could be prepared in time to lodge a submission by 30 June. Especially when comparing to the substantially longer time it took to prepare the Options Analysis Paper. In addition, should Council decide to pursue a merger option it must be considered that Randwick Council will not just be relying on our own processes and data validation, but will need to rely on other councils. A merger proposal will therefore take substantially more time to prepare than a stand-alone proposal.

 

Should IPART release a Final Assessment Methodology that is so materially different and contrary to their current position, that Randwick could mount a case to stand-alone and be assessed as Fit for the Future, then an urgent report could be put to Council for deliberation. They key difference being that Council would be able to prepare a ‘no structural change’ submission more efficiently than a merger proposal. This is driven by the availability and familiarity of Randwick data and information to Randwick staff, as opposed to the data and information of any other council as previously stated.

 

In the event that Council does not provide direction to staff at this time, then it is unlikely that anything other than a stand-alone submission could be prepared within the required timeframe.

 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


The IPART intends to publicly exhibit council submissions during July and make its recommendations to State Government by mid-October, 2015.

 

The NSW State Government has indicated in its timeline that the September 2016 local government elections will be based on new council boundaries.

 

Relationship to City Plan

 

The relationship with the City Plan is as follows:

 

Outcome:  1a: Council has a long term vision based on sustainability.

Direction:  1a.2 Ensure sound long term financial strategies underpin the Council's asset management policies and strategic vision.

Outcome:  1b: Council is a leader in the delivery of social, financial and operational activities.

Direction:  1b.1 Demonstrate best practice and leadership in local government.

 

Financial impact statement

 

The financial impact of the various merger options has been detailed in the attached Options Analysis and also in the attached Appendix C: Financial context.

 

Conclusion

 

Randwick City Council is a high performing organisation as is evident through the results of external reviews such as a 95% community satisfaction rating, as well as high level ratings in terms of our financial position, asset management and employee engagement. Our strong performance is also reflected in the attainment of over 80 awards, public and private sector, over the last eight years.

 

It is critical to understand however, that the drivers for local government reform in NSW extend beyond our individual council and are relative to the performance of the industry as a whole as well as the future planning for broad geographic areas such as Metropolitan Sydney.

 

The NSW State Government’s ‘Fit for the Future’ program, states that the Independent Local Government Review Panel’s (ILGRP) recommendation for mergers should be the starting point for all proposals. As such the NSW State Government’s default position for Randwick City Council is the Global City merger proposal (Randwick, Botany Bay, Waverley, Woollahra, Sydney).

 

The State Government has appointed the Independent Pricing and Regulatory Tribunal (IPART) to act as the Expert Advisory Panel to review council Fit for the Future submissions, which are due by June 30, 2015.

 

The IPART have indicated that they will examine whether the council first considered the ILGRP’s preferred option for scale and capacity; and that they intend to examine any proposal’s consistency with the broader objectives of the ILGRP’s preferred option. In their final report the ILGRP stated that "The Panel's view is that on balance, looking ahead to the mid-21st Century when Sydney's population will reach about 7 million, having about 15-18 councils is appropriate."

 

The IPART considers scale and capacity to be the threshold criterion for all proposal types and only if these criterion are satisfied should the other criteria (sustainability; effective infrastructure and service management; efficiency) be addressed.

 

Randwick City Council has assessed alternative options for amalgamation to ensure it has undertaken its due diligence relative to local government reform, in accordance with the Council resolution from the 25th November 2014.

 

The analysis was structured through a range of perspectives including financial context and community sentiment. The key findings from the assessment are outlined in the attached Randwick City Council Fit for the Future – Options Analysis.

 

The three submission pathways for metropolitan councils, where the ILGRP recommended a change, include: A proposal consistent with the ILGRP’s preferred option; No structural change (i.e. stand-alone); and, A merger option broadly consistent with the objectives of the ILGRP preferred option.

 

The first pathway, the ILGRP’s Global City recommendation for Randwick City is unsupported by our community and Council. Randwick Council has explored the Panel’s recommended ‘Global City’ amalgamation and can demonstrate a sound assessment of this option based on robust analysis. The findings of this analysis are covered extensively in the attached Options Analysis and do not support the ILGRP’s recommendation.

 

The second pathway of standing-alone, whilst strongly supported by our community and Council, is not a viable pathway in terms of being assessed as Fit for the Future as per IPARTs criteria. It is not possible for Randwick Council to be deemed superior to the Global City option when using the ILGRP’s Key elements of Strategic Capacity (such as a more robust revenue base and increased discretionary spending). Pursuing either of these options exposes a significant risk for Council in that if we are determined as ‘not fit’ then the current default position is the Global City.

 

The third submission pathway is a merger option broadly consistent with the ILGRP recommendation to merge councils (i.e. with two or three rather than four councils), supported by a sound argument. Under this pathway, the risk of being assessed as not fit for the future increases as the population number decreases.

 

Direction from the Council is required in order to prepare a proposal within the required timeframe (due 30 June, 2015). The IPART will in-turn publicly exhibit council submissions during July and make its recommendations to State Government by mid-November.

 

Recommendation

That:

 

1.        Council considers the attached Randwick City Council Fit for the Future Options Analysis and determines the Fit for the Future position of Council.

 

2.        In the event of Council resolving to progress a merger, a pre-condition of any merger is that the merger partners agree to accept the enhanced employment protections of 5 years contained within the Memorandum of Understanding (MOU) between Randwick City Council and the Unions.

 

3.     The General Manager be given delegated authority to sign the MOU with the Unions.

 

 

Attachments:

 

Use this link to view the attachments below on Randwick City’s Future page

 

1.

Randwick City Council Fit for the Future – Options Analysis

 

2.

APPENDIX A: Community profile and Strategic planning

 

3.

APPENDIX B: Community engagement

 

4.

APPENDIX C: Financial context

 

5.View

Memorandum of Understanding

 

6.View

Methodology for Assessment of Council Fit for the Future Proposals, Public Forum Presentation, IPART, 11 May 2015

 

  


Memorandum of Understanding

Attachment 5

 

 







Methodology for Assessment of Council Fit for the Future Proposals, Public Forum Presentation, IPART, 11 May 2015

Attachment 6

 

 

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


  


Ordinary Council                                                                                                          26 May 2015

 

 

Motion Pursuant to Notice No. NM23/15

 

 

Subject:                  Notice of Motion from Cr Stevenson - Preparation of Council Improvement Proposal

Folder No:               F2014/00288

Submitted by:         Councillor Stevenson, Central Ward     

 

 

That Council engage Independent Consultants to prepare a Council Improvement proposal (T2) to satisfy the IPART assessment criteria as an stand alone Council for consideration by residents and Council prior to considering any merger proposals.