Supplementary Agenda of Council Meeting

Council Meeting

27 October 2020

Item No: C1020(2) Item 15

Subject: Mayoral Minute: Arts Forum

From: The Mayor, Councillor Darcy Byrne

Motion:

THAT Council writes to the NSW Arts Minister, the NSW Minister for Jobs, Investment, and Tourism, and the NSW Minister for Planning and Public Spaces requesting the following actions identified through the Arts Forum that Council convened:

1. That arts infrastructure be included in a Government stimulus plan with a whole of Sydney focus;

2. State Government funding to assist small to medium enterprises, which have been unfunded to date;

3. State Government funding to expand the existing arts funding grants, which are administered by local Councils;

4. Assist with planning and DCP challenges to help with the adaptive use of empty shopfronts for the arts sector;

5. Provide more State Government funding to multicultural arts; and

6. Work with Councils to develop a Public Art Strategy.

Background

The Mayoral Regional Arts and Creative Forum took place via Zoom on 6 August 2020.

Attendees included Inner West Mayor Darcy Byrne; Jess Scully - Deputy Lord Mayor, City of Sydney; Simon Fox - Group Manager - Community, Library and Aquatic Services, Burwood Council; Alicia Talbot - Manager Arts and Cultural Development, City of Blacktown; Stephanie Kelly - Manager, Place Management, City of Canada Bay; Tanya Goldberg – Executive Manager – Communications, Culture and Events, Waverley Council.

Some of the issues raised for the arts industry included:

· Support for the arts and creative sector has been less than those in other industries with similar or lower economic and social contribution to society.

· Councils have been trying to support the local artists and creatives while working on their local recovery plans simultaneously.

· Uncertainty regarding the timeline and process for reopening arts venues is making planning and investment impossible.

· City of Sydney completed a Community COVID Plan (economy-wide) which showed that the theatre, live music, festival organisers, etc., suffered a 53% drop in arts operators within first two weeks of shutdown and they are likely to be last sector to reopen.

· There was interest in creating a Creative Economy Taskforce as an avenue for local government to approach State Government, so a united voice is more likely to be considered.

· Would like to see Councils could be provided with money for small grants they could administer to the local arts and cultural sector that would be welcomed.

ATTACHMENTS

Nil.

Council Meeting

27 October 2020

Item No: C1020(2) Item 16

Subject: Mayoral Minute: King George Park and WestConnex

From: The Mayor, Councillor Darcy Byrne

Motion:

THAT Council:

1. Notes the $2.875 million Council received for the compulsory acquisition of 2,285sqm of land at King George Park (See media release below in background);

2. Dedicates this $2.875 million to improving the recreational facilities at King George Park and the public amenities in the neighbouring streets – Byrne St, Manning St, Clubb St, Toelle St, Callan St, Springside St, McCleer St and Moodie St - which have been significantly affected by the construction of WestConnex Stage 3B;

3. Notes the list of priorities of sporting organisations that use King George Park for the sporting ground (See background below);

4. Sends a letter from the Mayor to residents of the streets listed above asking for their priorities for improvements of public amenities in the area, which will be reported to Council at an Ordinary meeting in October; and

5. Consults with Balmain Little Athletics, Leichhardt Saints and Leichhardt Juniors Rugby League Club on their priorities and, following this consultation, tables a list of priority works at King George Park and the streets listed above that could be funded by the $2.875 million at an Ordinary meeting in November.

Background

On Friday, 18 September I held a meeting with representatives from three sports clubs that are long-term users of King George Park - Balmain Little Athletics, Leichhardt Saints and Leichhardt Juniors Rugby League Club.

The clubs had identified number of improvements to the ground that they believed would be beneficial for all users, including:

· Improvement to the quality of the ground’s surface, which would include new turf and laser levelling

· New changerooms are urgently needed, especially for women and girls

· Additional storage on-site

· Addressing the possibility of increasing capacity in the car parking at the ground

Council media release of Monday 24 August 2020

Win for Council and the community in King George Park negotiations

Transport for NSW (TfNSW) will compensate Inner West Council and the local community $2.875 million for the compulsory acquisition of 2,285sqm of land at King George Park.

As well, Council has successfully negotiated that 72% of the acquired land will be returned to Council by December 2025.

King George Park is one of the Inner West’s most popular sporting grounds used throughout the sporting year by thousands of local football juniors.

The Park is part of a wider recreational Bay Run precinct, patronised by huge numbers of people each day.

In January 2020, TfNSW compulsorily acquired the land to be used for the WestConnex M4-M5 Link project.

TfNSW also acquired a construction lease of 800sqm in the same area. This will also be eventually returned to Council.

As well as successfully seeking adequate compensation, Council negotiated that TfNSW reinstate the land to the pre-acquisition condition.

TfNSW will also pay all of Council’s legal and other costs associated with the litigation.

“We’ve fought hard to win compensation for the community and this funding will go straight back into the neighbourhood, said Inner West Mayor Darcy Byrne.

“The impacts from WestConnex on residents around King George Park have been horrendous, so improving their quality of life is the priority now.”

Inner West Council has one of the lowest proportions of public open space per person in Sydney.

Council’s legal experts had always argued that every metre of public open space is highly valuable and that the amount of compensation to be paid to Council should reflect that value rather than the nominal amount that TfNSW’s experts recommended.

The State Government’s WestConnex project has disproportionately disadvantaged Inner West residents through compulsory acquisitions, destruction of neighbourhoods, pollution, noise, dust, fumes and odour.

Council encourages all residents to register justifiable complaints.

All registered complaints are required to be investigated.

For more information about the WestConnex project and Council’s actions to advocate for residents and mitigate the impacts of construction and delivery of the WestConnex project, go to www.innerwest.nsw.gov.au/WestConnex

ATTACHMENTS

Nil.

Council Meeting

27 October 2020

Item No: C1020(2) Item 18

Subject: Mayoral Minute: WestConnex Independent Property Impact Assessment Panel

From: The Mayor, Councillor Darcy Byrne

Motion:

THAT Council:

1. Notes the motion establishing a Council service to provide independent dilapidation reports for local property owners affected by tunnelling and construction for the WestConnex project, which was adopted at the 24 April 2018 Ordinary meeting;

2. Notes the advice provided by Council officers that the dilapidation service has been discontinued and that Council has written to Transport for NSW requesting that a Council representative be an observer on its Independent Property Impact Assessment Panel (See below and Attachment 1);

3. Provides a report on which Council representative is observing the panel’s operation, how frequently it has met and what their assessment is about the fairness and effectiveness of the panel process, which is to be reported to the next Ordinary Council meeting; and

4. Notes Council’s acceptance of Sat Scan Pty Ltd’s offer for the provision of high-level radar-based satellite imagery for areas along the WestConnex toll road route that fall within the Local Government Area for Inner West Council at the 25 August Council meeting.

Background

On 28 July 2020, in response to an inquiry about proposed WestConnex blasting in Annandale, I received advice from Council officers (see below) that Council’s independent dilapidation reports for property owners affected by tunneling and construction for WestConnex had been discontinued.

“Council no longer offers the service. Please see attached memo [Briefing Note to Councillors on 17 December 2019] that addresses this issue.”

ATTACHMENTS

1.⇩

Briefing Note to Councillors on 17 December 2019

Council Meeting

27 October 2020

Item No: C1020(2) Item 19

Subject: Financial Statements 2019/20

Prepared By: Daryl Jackson - Chief Financial Officer

Authorised By: Elizabeth Richardson - Acting Chief Executive Officer

RECOMMENDATION

THAT Council:

1. Receives and note the report; and

2. Endorse the Financial Statements to be placed on public exhibition with a view of tabling the final report at the November 2020 Council meeting.

DISCUSSION

Council is required to prepare Financial Statements in accordance with the Local Government Act and Regulations, Local Government Code of Accounting Practice and Australian Accounting Standards. At its August meeting, Council resolved to release its statements for audit. The financial reporting period for the 2019/20 Financial Statements is 1July 2019 to 30 June 2020.

The 2019/20 Financial Statements are required (by legislation) to be endorsed by Council and then placed on public exhibition.

Income Statement and Balance Sheet.

Key points to note are:

· Council’s Income Statement for the year discloses that the Net Operating Result from Continuing Operations was a surplus of $82.0m in contrast to an original budget surplus of $32.4m.

· Council’s surplus of $82.0m is largely attributed to the gain on the Sale of Investment Land (Tempe Land) of $49.4m. The total proceeds from the sale of Tempe Land received from Transport for NSW have been placed in a restricted reserve to be used for the purchase of a similar investment.

· This result includes lost income from the impact of COVID-19 ($16.2m) mainly driven by reduced User Fees from Hall Hire, Sportsfields, LPAC and Child Care Centres.

· Efficiency Savings of $18.3m were realised.

· By removing the $49.4m gain from the sale of Tempe lands, and the $11 million surplus in Resource Recovery (because it is restricted for use on that service only), Council’s ‘normalised’ result is a deficit of $14.5 million.

Analysis of 2019/20 Financial Result

Council’s Balance Sheet discloses Net Assets of $2.46 billion, primarily made up of Infrastructure related assets of $2.22 billion. A breakdown of infrastructure assets can be found in the capital schedule known as Note 10(a).

Council’s cash position sees it hold $321.0m in cash and investments. The following is a breakdown by Reserve –

As part of this process, Council has funded its Employee Leave Entitlement at 48% of the estimated provision. (Previously funded at approximately 100% of the total Employee Leave Entitlement).

Local Government Industry Indicators

The Local Government indicators (summarised below) are determined by in the Code of Accounting Practice. The indicators allow for inter council comparisons to be consistently made across the local government sector. The indicators are as follows –

Operating Performance Ratio

The purpose of the Operating Performance Ratio is to measure Council’s achievement of containing operating expenses with operating revenue.

Council’s Operating Performance Ratio was 0.38% which is better than the benchmark of zero. This was a reduction based on last year’s ratio of 0.46%.

Own Source Operating Revenue Ratio

The purpose of this ratio is to measure fiscal flexibility. The ratio highlights the degree of reliance on external funding sources such as operating grants & contributions.

Council’s Own Source Operating Revenue Ratio is better than the benchmark of 60% which means that it has low reliance on grants to fund operating expenditure. This ratio has decreased in comparison to the 18/19 result as Council received lower State Government grants in the 19/20 financial year compared to the previous financial year.

Unrestricted Current Ratio

The purpose of this ratio is to assess the adequacy of working capital and its ability to satisfy obligations in the short term for the unrestricted activities of Council.

Council’s Unrestricted Current Ratio is better than the benchmark of >1.5x. This benchmark will be used in the development in Council’s Long-term Financial Plan to ensure that Council is financially sustainable and able to meet its ongoing short-term financial obligations (payroll and creditors).

Debt Service Coverage Ratio

This ratio measures the availability of operating cash to service debt including interest, principle and lease payments.

Council’s Debt Service Ratio is better than the benchmark of >2x and is capable of servicing its existing loan obligations as they are secured against rates income and factored into the budget.

Rates, Annual Charges, Interest and Extra Charges Outstanding Percentage

The ratio helps assess the impact of uncollected rates and annual charges on Council’s liquidity and the adequacy of recovery efforts.

Council’s Outstanding Rates and Annual Charges is worse than the benchmark of <5%. This is mainly driven by reduced debit collection under the COVID-19 directive not to lodge outstanding debt with the debt collection agency as well as no debt recovery action is taken against eligible pensioners.

Cash Expense Cover Ratio

This liquidity ratio indicates the number of months a Council can continue paying for its immediate expenses without additional cash inflow.

Council’s Cash Expense Cover Ratio is better than the benchmark of >3 months. However, this will reduce once investment land has been purchased to replace the Tempe Land sold to Transport of NSW. This indicator will also be impacted by the COVID-19 Rates Financial Hardship Deferral Program in place depending on the ratepayer’s ability to repay their outstanding balances in line with their individual Repayment Agreement.

This will continue to be monitored throughout the 2020/21 financial year and in Council’s Long Term Financial Plan.

Council Infrastructure Industry Indicators

Council’s Infrastructure assets indicators (found in Special Schedules – Report on Infrastructure Assets) as a summary of Council’s infrastructure conditions for the financial year. This Special Schedule is not audited by the Audit Office in 2019/20.

A summary of the indicators show that Council needs to continue to spend money on renewals at a rate as assets continue to depreciate but still has a backlog of approximately $140m that needs to be addressed. Working funds have been allocated over the Long Term Financial Plan to address part of this backlog. However, the infrastructure backlog of $140m exceeds the total available working funds for Council to reduce the backlog below the benchmark of <2%. The renewal ratio of 34.56% is expected to be back to well above benchmark for the 20/21 Financial year as significant asset expenditure on the Ashfield Aquatic Centre, Dawn Fraser Baths and Haberfield Library is finalised.

This indicator will be reviewed on an ongoing basis as a part of the Long Term Financial Plan and Asset Management Plans process. If we continue to have an operating deficit, the asset renewal backlog will not be reduced.

Next Steps

To ensure compliance with legislation the following steps need to occur:

- Council endorses the financial reports and signs the accounts (31 October 2020);

- Council receives the Audit report from the Audit Office to be incorporated in the Financial Statements and then submitted to the Office of Local Government by 31 October 2020;

- Council places its Financial Statements on public exhibition for public comment;

- Council endorses the final report in November 2020, noting any comments from the public exhibition period.

FINANCIAL IMPLICATIONS

There are no net financial implications of this report. It is noted that general funds have been allocated to fund Council’s infrastructure shortfall over the Council’s Long-Term Financial Plans.

The Audit, Risk and Improvement Committee have had a briefing with Audit Office and Council officers to discuss the conduct of the audit and Council’s financial position.

ATTACHMENTS

1.⇩	Draft 2019/20 Inner West Council Financial Statements
2.⇩	Audit, Risk and Improvement Committee Minutes 21 October 2020