MUNICIPAL ASSOCIATION OF VICTORIA (MAV) STATE COUNCIL

Transcription

Wangaratta Rural City Council – Ordinary Meeting
18 September 2012
ATTACHMENT
MUNICIPAL ASSOCIATION OF VICTORIA (MAV) STATE
COUNCIL MOTIONS
Refer Item 11.2.1.1
MAV State Council Meeting – 20 September 2012
To submit a motion for consideration by State Council on 20 September 2012, please complete
this form and email to State Council, not later than 23 August 2012. Please note, deadlines are
strictly observed.
MOTION
VICTORIAN STATE BUDGET CUTS TO COMMUNITY SERVICES
Submitted by: Rural City of Wangaratta
MOTION:
The MAV voice its concern to the Victorian State Government over budget cuts to essential
community services and lobby for the funding to be reinstated.
RATIONALE:
The Victorian State Government handed down its 2012 budget in May. It is now becoming
apparent that there have been a number of cuts to funding which will have a significant impact on
the delivery of local community services. In the long term these budget cuts will have an impact on
community wellbeing and potentially the future budget allocations for some services provided by
local government.
The services where advice of cuts have been received to date include:
• Intensive case management
• Homelessness program for youth
• Health promotion programs
• Home and Community Care
The services targeted by these cuts are not high profile across the general community and
therefore not easily identified. However, it will only be after some time has passed that the
community will notice the difference if funding is not restored. This is likely to be evident in the
following ways:
1. A reduction in services and the development of waiting lists;
2. Lack of opportunities to address youth homelessness, which is already a significant issue in
regional and rural Victoria;
3. An increase in the need for acute care; and
4. No support or early intervention for young people considered to be of high risk.
*Note: Motions must be submitted by one council but may be supported by other councils. The council
submitting the motion will need to supply written confirmation from any council(s) listed as supporting the
motion. All relevant background information in support of the motion should be included in the space
provided for the rationale and not in attachments. The motion and rationale should be no longer than one
page.
1
strictly observed.
MOTION
FLOOD RECOVERY AND CLEAN UP GRANTS
MOTION:
That the MAV seek to correct a decision of the Federal Government whereby flood recovery and
clean up grants are awarded to affected landholders based on municipal boundaries thereby
excluding similar flood affected communities in neighbouring “non eligible” councils.
RATIONALE:
In the floods of February/March 2012 the Federal Government made a decision to not extend the
$25,000 clean up and recovery grants under Category C of the National Disaster Relief and
Recovery arrangements to flood affected communities in the Rural City of Wangaratta. There
seems to be no reason to exclude the communities of the Rural City of Wangaratta who are
serevely impacted by the same floods and in the same way as other eligible communities in
neighboring flood affected municipalities.
The flood did not observe municipal boundaries. It seems patently unjust to exclude affected
communities simply along municipal lines. In the absence of any explanation the outcome is
anomalous and unfair. It is seen as such by both the State Government and the Hume Region
Local Government Network who have made representations in support of Council’s position.
Council believes that as a matter of fairness and equity landholders should be eligible to claim
recovery grants on merit. This would avoid the current unfortunate situation where they are made
available to their neighbours, in some cases across the road but residing in the adjacent approved
municipality. In doing so it would be consistent with the way eligibility criteria has been applied by
the Commonwealth Government in previous emergency events including the Victorian floods of
2011 and the 2009 Black Saturday bushfires.
page.
2
strictly observed.
MOTION
FIRE SERVICE LEVY
MOTION:
That the MAV continue to oppose the collection of a Fire Service Levy by local government.
RATIONALE:
It is inappropriate for local government to be the collection agency for a State imposed Fire
Services Levy for a number of reasons:
•
The levy is State imposed and therefore should be administered by a State authority.
•
As the imposition and administration of land tax is a matter for the State, the infrastructure
is already partly in place to administer the FSL.
•
Residents and ratepayers will associate the levy with their local council and tend to
consider it a municipal rather than State impost. This will restrict a council’s ability to
explain its own rate position and is not desirable from a local government perspective.
•
The burden for debt collection and exposure to bad debts will fall to councils.
•
The necessity to implement 79 individual council systems across the state will result in
duplication of resouces and inconsistency in application.
•
The support required from the state to assist with implementation and administration will be
inefficiently consumed by each council replicating systems development and collection
procedures.
•
There will be difficulty in developing a formula to adequately compensate councils for the
additional administrative costs associated with the levy, whereas if the SRO is the
collection agency, the actual costs incurred can be recovered from the levy itself.
•
Considerable expense will be incurred to implement the system both to upgrade systems
and train local government staff.
•
Prioritisation of the levy in relation to council rates and garbage charges is problematic,
potentially difficult and may impact on debt recovery and debt collection strategies.
page.
3
18 September 2012
ATTACHMENT
2011/2012 REVALUATION OF NON-CURRENT ASSETS,
FINANCIAL REPORT, STANDARD STATEMENTS AND
PERFORMANCE STATEMENT
Refer Item 11.2.2.2
ANNUAL FINANCIAL REPORT
For the Year Ended 30 June 2012
Financial Report
Table of Contents
FINANCIAL REPORT
Page
Financial Statements
Comprehensive Income Statement
1
Balance Sheet
2
Statement of Changes in Equity
3
Cash Flow Statement
4
Notes to Financial Statements
5
Introduction
Note 1
Significant accounting policies
5
Note 2
Rates and charges
11
Note 3
Statutory fees and fines
11
Note 4
User fees
11
Note 5
Grants
11
Note 6
Contributions
11
Note 7
Profit on disposal of assets
12
Note 8
Other income
13
Note 9
Employee benefits
18
Note 10
Materials and services
19
Note 11
Bad and doubtful debts
19
Note 12
Depreciation and amortisation
19
Note 13
Finance costs
20
Note 14
Other expenses
20
Note 15
Investments in associates
20
Note 16
Cash and cash equivalents
21
Note 17
Trade and other receivables
21
Note 18
Financial assets
21
Note 19
Inventories
21
Note 20
Non current assets classified as held for sale
21
Note 21
Other assets
21
Note 22
Property, infrastructure, plant and equipment
22
Note 23
Investment property
27
Note 24
Intangible assets
27
Note 25
Trade and other payables
27
Note 26
Trust funds and deposits
27
Note 27
Provisions
28
Note 28
Interest bearing loans and borrowings
29
Note 29
Reserves
30
Note 30
Adjustments directly to equity
31
Note 31
Reconciliation of cash flows from operating activities to surplus or deficit
31
Note 32
Reconciliation of cash and cash equivalents
31
Note 33
Financing arrangements
31
Note 34
Non-cash financing and investing activities
31
Note 35
Restricted assets
31
Note 36
Superannuation
32
Note 37
Commitments
33
Note 38
Operating leases
34
Note 39
Contingent liabilities and contingent assets
34
Note 40
Financial instruments
35
Note 41
Auditors' remuneration
39
Note 42
Events occurring after balance date
39
Note 43
Related party transactions
40
Note 44
Interest in joint venture
41
Note 45
Revenue, expenses and assets by functions/activities
41
Note 46
Financial ratios (Performance indicators)
43
Note 47
Capital expenditure
45
Note 48
Special committees and other activities
45
Certification of the Financial Report
46
WANGARATTA RURAL CITY COUNCIL
Comprehensive Income Statement
For the year ended 30 June 2012
Note
2012
$
2011
$
Income
Rates and charges
User fees
Contributions - cash
Contributions - non-monetary assets
Grants - recurrent
Grants - non-recurrent
Reimbursements
Net gain/(loss) on disposal of property, infrastucture,
plant and equipment
Other income
Share of net profits/(losses) of associates and joint
ventures accounted for by the equity method
3
4
5
6(a)
6(b)
7
7
8
21,889,961
599,997
5,852,460
314,679
178,922
15,867,549
4,694,835
5,982,117
20,444,047
593,835
5,831,296
272,075
1,800,100
13,907,277
2,380,644
4,948,884
9
10
186,072
795,148
1,016,900
795,682
11
(67,106)
Total income
(8,270)
56,294,634
51,982,470
22,840,820
21,121,681
10,750,039
623,375
8,737
19,419,004
18,126,187
9,437,685
651,202
35,597
55,344,652
47,669,675
949,982
4,312,795
Expenses
Employee benefits
Finance costs
Other expenses
12
13
14
15
16
Total expenses
Surplus/(Deficit)
Other comprehensive income
Fair value adjustment for financial assets at fair value
Net asset revaluation increment/(decrement)
18
30
12,542
13,311,378
17,548
16,324,003
Share of other comprehensive income of associates
and joint ventures accounted for by the equity method
11
2,303
10,721
14,276,205
20,665,067
Comprehensive result
The above comprehensive income statement shoud be read in conjunction with the accompanying notes
Balance Sheet
As at 30 June 2012
Note
2012
$
2011
$
Assets
Current assets
Inventories
Other assets
Non-current assets classified as held for sale
19
20
21
22
23
16,412,801
5,677,555
65,902
306,256
1,296,052
14,949,553
4,817,830
78,090
332,286
1,296,052
23,758,566
21,473,811
20
24
51,475
10,000
148,301
10,000
11
25
824,445
355,266,028
889,248
339,274,571
Total non-current assets
356,151,948
340,322,120
Total assets
379,910,514
361,795,931
5,955,401
630,971
5,569,334
1,598,997
3,625,141
432,734
4,626,521
1,606,875
13,754,703
10,291,271
10,088,677
7,004,085
9,185,837
7,531,980
Total non-current liabilities
17,092,762
16,717,817
Total liabilities
30,847,465
27,009,088
349,063,049
334,786,843
133,994,203
215,068,846
133,672,839
201,114,005
349,063,049
334,786,844
Total current assets
Non-current assets
Financial assets
Investment in associates accounted for by using the equity
method
Liabilities
Current liabilities
Provisions
Interest-bearing loans and borrowings
26
27
28
29
Total current liabilities
Non-current liabilities
Provisions
Interest-bearing loans and borrowings
28
29
Net assets
Equity
Accumulated surplus
Reserves
30
Total Equity
The above balance sheet shoud be read in conjunction with the accompanying notes
Statement of Changes in Equity
2012
Note
Balance at the beginning of the
financial year
Gain (losses) from remeasuring available-for- sale
financial assets to fair value taken to Reserve
18
and joint ventures accounted for by the equity
method
Total
Accumulated
Surplus
2012
$
2012
$
Asset
Revaluation
Reserve
2012
$
Other
Reserves
2012
$
334,786,844
133,672,839
196,096,960
5,017,045
14,261,360
949,982
13,311,378
-
12,542
12,542
-
-
2,303
2,303
-
-
Transfers to other reserves
30(b)
-
(2,431,778)
-
2,431,778
Transfers from other reserves
30(b)
-
1,788,315
-
(1,788,315)
Impairment losses on revalued assets
-
Balance at the end of the financial year
349,063,049
2011
Balance at the beginning of the
financial year
Gain (losses) from remeasuring available-for-sale
financial assets to fair value recognised during the
year
18
and joint ventures accounted for by the equity
method
-
133,994,203
209,408,338
Total
Accumulated
Surplus
2011
$
2011
$
Asset
Revaluation
Reserve
2011
$
5,660,508
Other
Reserves
2011
$
317,882,136
130,517,925
183,533,316
3,830,895
20,636,798
4,312,795
16,324,003
-
17,548
17,548
-
-
10,721
10,721
-
-
Transfers to other reserves
30(b)
-
(3,456,878)
-
3,456,878
Transfers from other reserves
30(b)
-
2,270,728
-
(2,270,728)
Impairment losses on revalued assets
Balance at the end of the financial year
(3,760,359)
334,786,844
The above statement of changes in equity should be read in conjunction with the accompanying notes.
(3,760,359)
133,672,839
196,096,960
5,017,045
Cash Flow Statement
Note
2012
Inflows/
(Outflows)
$
2011
Inflows/
(Outflows)
$
Cash flows from operating activities
Rates
User charges and other fines (inclusive of GST)
Contributions (inclusive of GST)
Grants (inclusive of GST)
Reimbursements (inclusive of GST)
Interest
Other receipts (inclusive of GST)
Net GST refund
Payments to suppliers (inclusive of GST)
Payments to employees (including redundancies)
(18,589,733)
(21,995,149)
20,338,897
593,835
5,188,822
299,282
16,792,251
5,443,772
784,121
12,717
1,356,758
(20,794,885)
(19,280,271)
32
14,674,995
10,735,299
45
9
18
(12,284,811)
266,671
12,542
(8,219,758)
1,332,282
17,548
(12,005,598)
(6,869,928)
Proceeds from interest bearing loans and borrowings
Finance costs
Finance lease payments
Repayment of interest bearing loans and borrowings
1,070,862
(623,375)
(1,606,635)
1,000,000
(651,202)
(1,499,762)
Net cash used in financing activities
(1,159,148)
(1,150,964)
1,510,249
2,714,407
14,949,553
12,235,146
16,459,802
14,949,553
Net cash provided by operating activities
21,888,975
599,997
5,116,577
314,679
20,562,384
5,982,117
766,379
28,769
Cash flows from investing activities
Payments for property, infrastructure, plant and equipment
Proceeds from sale of property, infrastructure, plant and equipment
Payments for other financial assets
Net cash used in investing activities
Cash flows from financing activities
Net increase (decrease) in cash & cash equivalents
Cash & cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the year
33
Financing arrangements
34
Restrictions on cash assets
35
The above cash flow statement should be read in conjunction with the accompanying notes.
Notes to the Financial Report
Introduction
(a)
The Wangaratta Rural City Council was established by an Order of the Governor in Council on 18 November 1994 and is a body corporate. The
Council's main office is located at 62-68 Ovens Street, Wangaratta.
(b)
Our Mission:
We will provide the leadership necessary to:
- ensure the long term financial security of the Council;
- deliver quality Council services;
- facilitate a growing and sustainable economy and employment base;
- promote a cohesive, dynamic Rural City of Wangaratta community;
- maintain open communication and consultation; and
- preserve and enhance our heritage and the environment.
External Auditor:
Internal Auditor :
Solicitors:
Bankers:
Website Address:
Auditor General of Victoria
Johnsons MME, Chartered Accountants, Albury
McSwiney's - Wangaratta, Maddocks - Melbourne
Westpac Banking Corporation
www.wangaratta.vic.gov.au
This financial report is a general purpose financial report that consists of a Comprehensive Income Statement, Balance Sheet, Statement of
Changes in Equity, Cash Flow Statement, and notes accompanying these financial statements. The general purpose financial report complies with
Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board, the Local Government Act
1989 and the Local Government (Financial and Reporting) Regulations 2004.
1 Significant accounting policies
(a) Basis of accounting
This financial report has been prepared on the accrual and going concern bases.
This financial report has been prepared under the historical cost convention, except where specifically stated in note 1(h), 1(j), 1(l), 1(t), 1(w), 1(x)
and 1(y).
Unless otherwise stated, all accounting policies are consistent with those applied in the prior year. Where appropriate, comparative figures have
been amended to accord with current presentation, and disclosure made of any material changes to comparatives.
All entities controlled by Council that have material assets or liabilities, such as Special Committees of Management, have been included in this
financial report. All transactions between these entities and the Council have been eliminated in full. Details of entities not included in this financial
report based on their materiality are detailed in note 31.
(b) Revenue recognition
Rates, grants and contributions
Rates, grants and contributions (including developer contributions) are recognised as revenues when the Council obtains control over the assets
comprising these receipts.
Control over assets acquired from rates is obtained at the commencement of the rating year as it is an enforceable debt linked to the rateable
property or, where earlier, upon receipt of the rates.
A provision for doubtful debts on rates has not been established as unpaid rates represents a charge against the rateable property that will be
recovered when the property is next sold.
Control over granted assets is normally obtained upon their receipt (or acquittal) or upon earlier notification that a grant has been secured, and are
valued at their fair value at the date of transfer.
Income is recognised when the Council obtains control of the contribution or the right to receive the contribution, it is probable that the economic
benefits comprising the contribution will flow to the Council and the amount of the contribution can be measured reliably.
Where grants or contributions recognised as revenues during the financial year were obtained on condition that they be expended in a particular
manner or used over a particular period, and those conditions were undischarged at balance date, the unused grant or contribution is disclosed in
note 7(b). The note also discloses the amount of unused grant or contribution from prior years that was expended on Council's operations during the
current year.
A liability is recognised in respect of revenue that is reciprocal in nature to the extent that the requisite service has not been provided at balance date.
User fees and fines
User fees and fines (including parking fees and fines) are recognised as revenue when the service has been provided, the payment is received, or
when the penalty has been applied, whichever first occurs.
A provision for doubtful debts is recognised when collection in full is no longer probable.
Sale of property, plant and equipment, infrastructure
The profit or loss on sale of an asset is determined when control of the asset has irrevocably passed to the buyer.
Receivables are carried at amortised cost using the effective interest rate method. A provision for doubtful debts is recognised when there is
objective evidence that an impairment loss has occurred.
1 Significant accounting policies (cont.)
Rental
Rents are recognised as revenue when the payment is due, or the payment is received, whichever first occurs. Rental payments received in
advance are recognised as a prepayment until they are due.
Interest
Interest is recognised progressively as it is earned.
Dividends
Dividend revenue is recognised when the Council's right to receive payment is established.
(c) Trade and other receivables
Receivables are carried at amortised cost using the effective interest rate method. A provision for doubtful debts is recognised when there is
objective evidence that an impairment has occurred.
Inventories
Inventories held for distribution are measured at cost adjusted when applicable for any loss of service potential. Other inventories are measured at
the lower of cost and net realisable value.
(d) Depreciation and amortisation of property, plant and equipment and infrastructure.
All non-current assets having limited useful lives are systematically depreciated over their useful lives to the Council in a manner which reflects
consumption of the service potential embodied in those assets. Estimates of remaining useful lives and residual values are made on a regular basis
with major asset classes reassessed annually. Depreciation rates and methods are reviewed annually.
Where infrastructure assets have separate identifiable components that are subject to regular replacement, these components are assigned distinct
useful lives and residual values and a separate depreciation rate is determined for each component.
Artworks are not depreciated.
Straight line depreciation is charged based on the residual useful life as determined each year.
Major depreciation periods used are listed below and are consistent with the prior year unless otherwise stated:
Period
Property
Land
Land improvements
Land fill assets
Buildings
20-90 Years
1-7 Years
20-90 Years
Plant and equipment
Plant and equipment
Furniture and fittings
5-20 Years
2-33 Years
Infrastructure
Roads
- Footpaths
- Kerbing
- Pavement
- Surface
- Formation
Bike paths
Bridges
Parks and gardens
Drainage
87 Years
79 Years
19-77 Years
13 Years
200 Years
15-200 Years
50-80 Years
10-100 Years
60-100 Years
(e) Repairs and maintenance
Routine maintenance, repair costs and minor renewal costs are expensed as incurred. Where the repair relates to the replacement of a component
of an asset and the cost exceeds the capitalisation threshold the cost is capitalised and depreciated. The carrying value of the replaced asset is
expensed.
(f) Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred, except where they are capitalised as part of a qualifying
asset constructed by Council. Except where specific borrowings are obtained for the purpose of specific asset acquisition, the weighted average
interest rate applicable to borrowings at balance date, excluding borrowings associated with superannuation, is used to determine the borrowing
costs to be capitalised.
Borrowing costs include interest on bank overdrafts, interest on borrowings, and finance lease charges.
(g) Recognition and measurement of assets
Acquisition
The purchase method of accounting is used for all acquisitions of assets, being the fair value of assets provided as consideration at the date of
acquisition plus any incidental costs attributable to the acquisition. Fair value is the amount for which the asset could be exchanged between
knowledgeable willing parties in an arm's length transaction.
Where assets are constructed by Council, cost includes all materials used in construction, direct labour, borrowing costs incurred during construction
and an appropriate share of directly attributable variable and fixed overheads.
The following classes of assets have been recognised in Note 25. In accordance with Council's policy, the threshold limits detailed below have been
applied when recognising assets within an applicable asset class and unless otherwise stated are consistent with the prior year:
Property
Land
Land
Land under roads
Land improvements
Landfill assets
Buildings
Plant and equipment
Plant and equipment
(g) Recognition and measurement of assets (cont.)
Infrastructure
Roads
- Footpaths
- Kerbing
- Pavement
- Surface
- Formation
Bike paths
Bridges
Parks and gardens
Drainage
Threshold
$
10,000
10,000
10,000
10,000
10,000
1,800
500
Threshold
$
10,000
10,000
10,000
10,000
10,000
10,000
5,000
5,000
5,000
Revaluation
Subsequent to the initial recognition of assets, non-current physical assets, other than plant and equipment and furniture and fittings, are measured
at their fair value, being the amount for which the assets could be exchanged between knowledgeable willing parties in an arm's length transaction.
At balance date, the Council reviewed the carrying value of the individual classes of assets measured at fair value to ensure that each asset
materially approximated its fair value. Where the carrying value materially differed from the fair value at balance date the class of asset was
revalued.
In addition, Council undertakes a formal revaluation of land, buildings and infrastructure assets on a regular basis ranging from 1 to 3 years. The
valuation is performed either by experienced council officers or independent experts.
Where the assets are revalued, the revaluation increments are credited directly to the asset revaluation surplus except to the extent that an
increment reverses a prior year decrement for that class of asset that had been recognised as an expense in which case the increment is recognised
as revenue up to the amount of the expense. Revaluation decrements are recognised as an expense except where prior increments are included in
the asset revaluation surplus for that class of asset in which case the decrement is taken to the reserve to the extent of the remaining increments.
Within the same class of assets, revaluation increments and decrements within the year are offset.
Land under roads
Land under roads acquired after 30 June 2008 is brought to account using the fair value basis. Council does not recognise land under roads that it
controlled prior to that period in its financial report.
Inventories
Inventories are measured at the lower of cost and net realisable value.
(h) Cash and cash equivalents
For the purposes of the cash flow statement, cash and cash equivalents include cash on hand, deposits at call, and other highly liquid investments
with original maturities of three months or less, net of outstanding bank overdrafts.
(i) Investments
Investments (non-financial), other than investments in associates, are measured at cost.
(j) Accounting for investments in associates
Council's investment in associates is accounted for by the equity method as the Council has the ability to influence rather than control the operations
of the entities. The investment is initially recorded at the cost of acquisition and adjusted thereafter for post-acquisition changes in the Council's
share of the net assets of the entities. The Council's share of the financial result of the entities is recognised in the comprehensive income statement.
(k) Tender deposits
Amounts received as tender deposits and retention amounts controlled by Council are recognised as Trust funds until they are returned or forfeited
(refer note 27).
(l) Employee benefits
Wages and Salaries
Liabilities for wages and salaries and rostered days off are recognised and measured as the amount unpaid at balance date and include appropriate
oncosts such as workers compensation and payroll costs.
Annual Leave
Annual leave entitlements are accrued on a pro rata basis in respect of services provided by employees up to balance date. Annual leave expected
to be paid within 12 months is measured at nominal value based on the amount, including appropriate oncosts, expected to be paid when settled.
Annual leave expected to be paid later than one year has been measured at the present value of the estimated future cash outflows to be made for
these accrued entitlements. Commonwealth bond rates are used for discounting future cash flows.
Long Service Leave
Long service leave entitlements payable are assessed at balance date having regard to expected employee remuneration rates on settlement,
employment related oncosts and other factors including accumulated years of employment, on settlement, and experience of employee departure
per year of service. Long service leave expected to be paid within 12 months is measured at a nominal value based on the amount expected to be
paid when settled. Long service leave expected to be paid later than one year has been measured at the present value of the estimated future cash
outflows to be made for these accrued entitlements. Commonwealth bond rates are used for discounting future cash flows.
Classification of employee benefits
An employee benefit liability is classified as a current liability if the Council does not have an unconditional right to defer settlement of the liability for
at least 12 months after the end of the period. This would include all annual leave and unconditional long service leave entitlements.
Superannuation
The superannuation expense for the reporting year is the amount of statutory contribution the Council makes to the superannuation plan which
provides benefits to its employees together with any movements (favourable/unfavourable) in the position of any defined benefits schemes. Details of
those arrangements are set out in Note 36.
(m) Leases
Finance leases
Leases of assets where substantially all the risks and rewards incidental to ownership of the asset, are transferred to the Council are classified as
finance leases. Finance leases are capitalised, recording an asset and a liability at the lower of fair value of the asset and the present value of the
minimum lease payments, including any guaranteed residual value. Lease payments are allocated between the reduction of the lease liability and
the interest expense. Leased assets are depreciated on a straight line basis over their estimated useful lives to the Council where it is likely that the
Council will obtain ownership of the asset or over the term of the lease, whichever is the shorter. Leased assets are currently being amortised over a
7 year period. Refer Note 29 for finance lease commitments.
Operating leases
Lease payments for operating leases are required by the accounting standard to be recognised on a straight line basis, rather than expensed in the
years in which they are incurred.
(n) Allocation between current and non-current
In the determination of whether an asset or liability is current or non-current, consideration is given to the time when each asset or liability is expected
to be settled. The asset or liability is classified as current if it is expected to be settled within the next 12 months, being the Council's operational
cycle, or if the Council does not have an unconditional right to defer settlement of a liability for at least 12 months after the reporting date.
(o) Agreements equally proportionately unperformed
The Council does not recognise assets and liabilities arising from agreements that are equally proportionately unperformed in the balance sheet.
Such agreements are recognised on an 'as incurred' basis.
(p) Web site costs
Costs in relation to websites are charged as an expense in the period in which they are incurred.
(q) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the
Australian Taxation Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the
expense. Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are represented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which
are disclosed as operating cash flows.
(r) Impairment of assets
At each reporting date, the Council reviews the carrying value of its assets to determine whether there is any indication that these assets have been
impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in
use, is compared to the asset's carrying value. Any excess of the asset's carrying value over its recoverable amount is expensed to the income
statement, unless the asset is carried at the revalued amount in which case, the impairment loss is recognised directly against the revaluation
surplus in respect of the same class of asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that
same class of asset.
(s) Rounding
Unless otherwise stated, amounts in the financial report have been rounded to the nearest dollar.
(t) Non-current assets held for sale
A non-current asset held for sale (including disposal groups) is measured at the lower of its carrying amount and fair value less costs to sell, and are
not subject to depreciation. Non current assets, disposal groups and related liabilities assets are treated as current and classified as held for sale if
their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when
the sale is highly probable and the asset's sale (or disposal group sale) is expected to be completed within 12 months from the date of classification.
(u) Contingent assets and contingent liabilities and commitments
Contingent assets and contingent liabilities are not recognised in the Balance Sheet, but are disclosed by way of a note and, if quantifiable, are
measured at nominal value. Contingent assets and liabilities are presented inclusive of GST receivable or payable respectively.
Commitments are not recognised in the Balance Sheet. Commitments are disclosed at their nominal value and inclusive of the GST payable.
2 Pending Accounting Standards
The following Australian Accounting Standards have been issued or amended and are applicable to the Council but are not yet effective. They have not been
adopted in preparation of the financial statements at reporting date.
Standard / Interpretation
Summary
Applicable for annual reporting
periods beginning or ending on
These standards are applicable retrospectively and amend the Applicable for annual reporting
AASB 9 Financial Instruments and AASB 2009-11
Amendments to Australian Accounting Standards arising from classification and measurement of financial assets. Council has periods commencing on or after 1
AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, not yet determined the potential impact on the financial
January 2013.
128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & statements. Specific changes include:
12]
Impact on Local Government
financial statements
These changed are expected to
provide some simplification in the
accounting for and disclosure of
financial instruments
*simplifying the classifications of financial assets into those
carried at amortised cost and those carried at fair value;
*removing the tainting rules associated with held-to-maturity
assets;
*simplifying the requirements for embedded derivatives;
*removing the requirements to separate and fair value
embedded derivatives for financial assets carried at amortised
cost;
*allowing an irrevocable election on initial recognition to present
gains and losses on investments in equity instruments that are
not held for trading in other comprehensive income. Dividends
in respect of these investments that are a return on investment
can be recognised in profit or loss and there is no impairment or
recycling on disposal of the instrument; and
*reclassifying financial assets where there is a change in an
entity's business model as they are initially classified based on:
a. the objective of the entity's business model for managing the
financial or b. the characteristics of the contractual cash flows.
AASB 2011-3 Amendments to Australian Accounting
Standards - Orderly Adoption of Changes to the ABS GFS
Manual and Related Amendments
These standards are aimed at limiting certain recognition and
measurement options to align with GFS, and supplemented by
additional disclosures.
Key Characteristics of the Public Sector with Potential
implications for Financial Reporting
These standards detail with numerous non-urgent but necessary Applicable for annual reporting These amendments are not
changes to accounting standards arising from the IASB's annual periods commencing on or after 1 expected to impact Council.
improvements project.
January 2011.
Amendments to Australian Accounting Standards - Financial
Instruments: Disclosures, Recognition and Measurement
[AASB 7, 139]
These standards detail the proposed changes to be made to the Applicable for annual reporting
recognition, disclosure and measurement of impairment of
periods commencing on or after
financial instruments.
1 July 2011 but before 1 July
2012.
These amendments are not
expected to impact Council
AASB 2010-9: Amendments to Australian Accounting
Standards - Additional Exemptions for First-time Adopters
[AASB 1]
These amendments specify requirements for entities using the Applicable for annual reporting
full cost method in place of the retrospective application of
periods commencing on or after
Australian Accounting Standards for oil and gas assets, and
1 January 2011.
exempt entities with existing leasing contracts from reassessing
the classification of those contracts in accordance with
Interpretation 4 when the application of their previous accounting
policies would have given the same outcome.
AASB 2010-10: Amendments to Australian Accounting
Standards - Classification of Rights Issues [AASB 132]
These amendments clarify that rights, options or warrants to
Applicable for annual reporting
acquire a fixed number of an entity's own equity instrument for a periods commencing on or after
fixed amount in any currency are equity instruments if the entity 1 January 2011.
offers the rights, options or warrants pro-rata to all existing
owners of the same class of its own non derivative equity
instruments.
Applicable for annual reporting These amendments are not
periods commencing on or after 1 expected to impact Council
January 2011.
3 Rates and charges
Council uses Capital Improved Value (CIV) as the basis of valuation of all
properties within the municipal district. The CIV of a property is its total market
value of land plus building and other improvements.
The valuation base used to calculate general rates for 2011/2012 was
$4,207,968,000 (2010/2011 $4,110,227,000).
The 2011/2012 residential rate in the CIV dollar was 0.004138 (2010/2011,
0.004271)
General
Rural
Rural residential
Commercial/industrial
Cultural and recreational
Garbage
Recycling
Supplementary rates and rate adjustments
2012
$
2011
$
7,858,152
4,545,553
2,953,132
2,858,002
22,650
2,616,758
936,288
99,426
7,343,061
4,301,464
2,772,951
2,654,100
21,573
2,327,414
896,879
126,605
21,889,961
20,444,047
Animal Registrations
Infringements and costs
PERIN court recoveries
Election fees
Health fees
Town planning fees
Building fees
Land information certificates
175,175
145,048
19,461
93,036
128,835
21,550
16,892
183,264
132,884
5,776
86,125
133,278
32,790
19,718
Total statutory fees and fines
599,997
593,835
Aged and disability services
Building fees
Cemetery
Children's services
Enforcement
Engineering fees
External private works
Landfill and transfer station charges
Livestock exchange fees
Packaged Care
Performing arts and culture
Recreation facility hire
Rental properties
Tourism
Valuation fees/supplementary charges
Other
665,743
166,193
299,914
742,446
340,422
97,312
79,728
1,474,787
450,468
58,127
549,079
90,339
470,302
67,685
36,373
263,542
670,833
231,043
280,760
817,158
333,746
63,181
166,444
1,404,035
455,669
77,057
535,047
67,652
458,557
52,379
34,255
183,480
Total user fees
5,852,460
5,831,296
Total rates and charges
The date of the latest general revaluation of land for rating purposes within the
municipal district was 1 January, 2010, and the valuation first applied to the
rating period commencing 1 July 2010.
The date of the previous general revaluation of land for rating purposes within
the municipal district was 1 January 2008, and the valuation first applied to the
rating year commencing 1 July 2008.
4 Statutory fees and fines
5 User fees
(a)
(b)
Ageing analysis of contractual receivables
Please refer to Note 40 for the ageing analysis of contractual receivables.
6 Contributions
2012
$
2011
$
(a) Cash
Community facility upgrades
Developeer contributions
Economic development initiatives
Environmental enhancement
Labour market programs
Intake and assessment
Recreational land
Street trees
Swimming pools
Traffic management
Tourism
Other
71,801
10,000
500
26,965
127,859
36,364
1,600
39,590
64,025
17,300
119,332
15,000
2,500
15,250
158
17,000
21,510
Total
314,679
272,075
(b) Non-monetary assets
As a result of the provision of infrastructure requirements for new subdivisions,
Council has acquired the following assets constructed by developers during
the financial year
Bikepaths
Drainage
Footpaths
Kerbing
Road seal and substructure
613
178,309
54,033
337,635
299,300
1,109,132
Total
178,922
1,800,100
Total contributions
493,601
2,072,175
Federally Funded Grants
State Funded Grants
10,607,176
9,955,208
8,811,166
7,476,755
Total
20,562,384
16,287,921
1,231,036
593,441
986,328
1,716,064
2,042,371
140,000
24,822
674,564
80,705
219,190
254,244
2,713,605
5,191,179
1,194,385
546,169
1,078,745
1,589,660
1,982,698
125,000
35,820
60,000
762,607
229,022
160,410
2,089,473
4,053,288
15,867,549
13,907,277
7 Grants
(a) Grants were received in respect of the following:
Summary of Grants
Recurrent
Aged and disability
Child care centre
Commonwealth Government - Roads to recovery
Community Support North East - Commonwealth funded programs
Community Support North East - DHS funded programs
Culture and recreation
Development
Emergency
Family day care
Kindergarten
Maternal and child health
Other
Victoria Grants Commission - local roads
Victoria Grants Commission - unallocated
Total recurrent
7 Grants (cont.)
Non-recurrent
2012
$
2011
$
Children's services centre
Community facilities
Community Support North East
Cultural development
Economic development
Emergency and fire
Environmental enhancement
Global Skills project
Infrastructure development
Major Projects
Other
Planning Strategies
Regional Forums
Tourism projects
Transport
310,754
65,708
32,225
32,000
121,100
2,000,000
260,000
36,906
90,000
150,000
45,000
1,551,142
20,000
1,184,992
Total non-recurrent
4,694,835
2,380,644
20,562,384
16,287,921
Total grant revenues
200,000
387,956
129,313
60,000
58,200
15,000
170,000
56,000
99,183
(b) Conditions on grants
Grants recognised as revenue during the year that were obtained on condition that they
be expended in a specified manner that had not occurred at balance date were:
Arts Victoria Local Partnerships
Bus shelter construction
Bushfire Advisory Service
Carboor Hall upgrade - stage 2
Cemetery sewerage treatment plant
Children's service centre - stage 2
Comfort station redevleopment
Commonwealth Government - Roads to Recovery
Flood Recovery Community Infrastructre
MAV Flood Recovery Fund
Glenrowan Recreation Reserve hall ceiling
HP Barr sustainability and econ living precinct
Home and Community Care client capital improvements
Home and Community Care sustainable households
Home and Community Care respite initiatives
Hume Alliance
Hume Region tracks and trails
Izard's Bridge replacement
Ovens River/Faithful street precinct development
Provincial Victoria
Regional Growth plan
Rural Skills Connect Phase II
Showgrounds redevelopment project
Showgrounds to CBD cycle connection
South Wangaratta equine centre - cross country course
Structure plans - Glenrowan, Milawa and Oxley
Tarrawingee hall upgrade
Tarrawingee Recreation Reserve bore
Tertiary assistance
Town planning - Heritage advisor
Whitfield Swinburne Pavillion redevelopment
30,000
199,800
82,866
32,094
15,743
50,000
35,108
49,437
62,297
182,102
12,373
100,000
30,000
7,500
1,107,387
2,123,340
24,045
23,688
11,148
46,590
7,825
181,602
302,676
8,000
133,484
37,328
39,186
52,832
8,974
449,275
124,677
50,859
39,131
6,000
532,449
1,033,536
-
4,144,092
3,089,260
(b) Conditions on grants (cont.)
2012
$
2011
$
(23,688)
(11,148)
(46,590)
(7,825)
(181,602)
(302,676)
(8,000)
(133,484)
(37,328)
(39,186)
(52,832)
(8,974)
(449,275)
(124,677)
(50,859)
(39,131)
(6,000)
(532,449)
(1,033,536)
(59,000)
(49,775)
(28,000)
(509,683)
(983,131)
(3,089,260)
(1,771,413)
1,054,832
1,317,847
AFL Game expenses
Flood and emergency restoration
State Revenue Office - valuation contract
Office accommodation fit out - Department of Justice
Joint roadworks with adjoining Council
Planned Activity Group
Other
101,749
5,809,613
14,971
39,199
16,585
4,772,024
14,637
109,488
14,641
38,094
Total reimbursements
5,982,117
4,948,884
Grants which were recognised as revenue in prior years and were expended
during the current year in the manner specified by the grantor were:
Arts Victoria Local Partnerships
Bus shelter construction
Carboor Hall upgrade - stage 2
Centre for medical excellence
Cemetery sewerage treatment plant
Children's service centre - stage 2
Commonwealth Government - Roads to recovery
Glenrowan Recreation Reserve hall ceiling
HP Barr sustainability and econ living precinct
Home and Community Care client capital improvements
Home and Community Care sustainable households
Home and Community Care respite initiatives
Moyhu netball court
Murmungee Bushfire Recovery - fencing
Rural Skills Connect Phase II
Showgrounds redevelopment project
Showgrounds to CBD cycle connection
South Wangaratta equine centre - cross country course
Tarrawingee hall upgrade
Tarrawingee Recreation Reserve bore
Town planning - Heritage advisor
Net increase (decrease) in restricted assets resulting from grant revenues for
the year:
(57,540)
(23,000)
(16,284)
(45,000)
8 Reimbursements
Conditions on reimbursements
Reimbursements recognised as revenue during the year that were obtained on condition that they
be expended in a specified manner that had not occurred at balance date were:
Flood and emergency restoration
1,370,868
1,370,868
-
9 Net gain/(loss) on disposal of property, infrastructure, plant and equipment
Proceeds/(expenditure) on sale of assets
Assets for resale - note 23
Land at valuation 2009
Plant and equipment
Written down value of assets disposed
Assets for resale - note 23
Land at valuation 2009
Land improvements
Plant and equipment
(12,895)
279,566
760,412
571,870
266,671
1,332,282
80,599
153,404
161,978
80,599
315,382
186,072
1,016,900
Interest
Other
766,379
28,769
784,121
11,561
Total other income
795,148
795,682
Total
10 Other income
11 Investment in associates
2012
$
2011
$
Investments in associates accounted for by the equity method are:
824,445
889,248
573,125
(67,106)
506,019
581,395
(8,270)
573,125
65,703
2,303
68,006
54,982
10,721
65,703
Movement in carrying value of High Country Library
Carrying value of investment at start of year
953,861
951,410
Share of surplus(deficit) for year
Share of asset revaluation
Movement in carrying value
(67,106)
2,303
(64,803)
Carrying value of investment at end of year
889,058
953,861
Council's share of members capital
250,420
250,420
Council's Share of total Equity
824,445
889,248
24,903
24,903
24,165
3,973
28,138
Wages and Salaries
Annual leave and long service leave
Workcover
Superannuation
Superannuation - additional call*
Other employee benefits
14,295,502
2,281,417
501,779
1,464,799
3,218,147
1,079,176
13,941,521
1,938,008
460,973
1,391,984
600,862
1,085,656
Total employee benefits
22,840,820
19,419,004
- High Country Library Corporation
Background
High Country Library Corporation was established on the 8th August, 1996.
The Wangaratta Rural City Council's share of audited assets and liabilities
committed to this Corporation is 43%. They are included in the balance sheet
as a non-current investment, and are represented as follows:Council's share of accumulated surplus(deficit)
Council's share of accumulated surplus(deficit) at start of year
Reported surplus(deficit) for year
Council's share of accumulated surplus(deficit) at end of year
Council's share of asset revaluation reserve
Council's share of asset revaluation reserve at start of year
Transfers (to) from reserves
Council's share of asset revaluation reserve at end of year
Council's share of expenditure commitments
Operating commitments
Operating lease commitments
(8,270)
10,721
2,451
12 Employee benefits
*during the period Council was required to make an additional contribution to Vision Super
to meet our obligations in relation to members of the defined benefit plan.
13 Materials and services
Other materials and services
Packaged care brokerage
Contract payments
Utilities
Building maintenance
Consultants
Insurance
Printing and stationery
Telephone
Advertising and promotion
Postage
Plant and equipment maintenance
2012
$
2011
$
7,582,622
1,788,057
8,698,822
715,172
130,200
1,076,393
328,012
259,048
211,880
211,671
93,602
26,202
8,008,803
1,961,895
5,529,028
537,881
107,317
990,705
176,970
242,249
215,889
235,732
108,261
11,457
21,121,681
18,126,187
319,500
1,280,033
329,377
462,742
1,354,413
1,384,292
1,423,479
352,072
1,436,994
239,495
3,421,079
861,533
624,149
194,896
305,794
180,016
253,280
179,794
3,037,968
783,337
624,239
194,289
305,026
170,156
300,838
168,932
10,750,039
9,437,685
Interest - Borrowings
623,375
651,202
Total finance costs
623,375
651,202
Voters roll
New industry rate assistance
Flood recovery
2,715
6,022
-
2,667
9,582
23,348
Total other expenses
8,737
35,597
Total materials and services
14 Depreciation
Depreciation
Property
Land
Land improvements
Landfill assets
Buildings
Buildings
Plant and equipment
Plant and equipment
Infrastructure
Gravel roads and substructure
Bridges
Kerbing
Drainage
Footpaths
Bike paths
Parks and gardens
Total depreciation
15 Finance costs
16 Other expenses
17 Natural disasters - Floods 2010 and 2012
2012
2011
$
$
5,292,897
379,132
3,443,331
387,611
3,443,331
5,672,029
7,274,273
17 (a) Actual expenditure
As a result of floods of the in 2010 and 2012 Council has incurred the following expenditure.
Infrastructure assets repairs - 2010 Floods
Infrastructure assets capital expenditure -2010 Floods
Infrastructure assets repairs - 2012 Floods
17 (b) Impairment of infrastructure assets
As a result of floods of the in September 2010 and December 2010 Council has recognised the
following impairment of assets.
Kerbing
BikePaths
-
833,152
2,765,752
65,619
95,834
Total impairment losses due to natural disaster Refer Note 25
-
3,760,357
18 Impairment of financial assets
Council held marketable investments titled 'floating rate notes'. These investments were
acquired at a cost of $2,500,000. These investments have been valued at their current market
price and a reduction in value recognised as impairment for the 2009 financial year. During the
2012 financial year these investments were sold and the reduction in impaired value is
recognised accordingly.
12,542
Financial Assets
17,548
12,542
17,548
Cash on hand
Cash at bank
Money market call account
Floating Rate Notes
Term deposits
7,400
320,640
3,876,182
12,208,579
6,600
332,109
2,808,937
487,457
11,314,450
Total cash and cash equivalents
16,412,801
14,949,553
3,140,976
4,144,092
5,660,509
630,971
3,823,629
3,089,260
3,830,895
432,734
13,576,548
11,176,518
2,836,253
3,773,035
19 Cash and cash equivalents
Council's cash and cash equivalents are subject to a number of internal and
external restrictions that limit amounts available for discretionary or future use.
These include:
- Long service leave obligations as prescribed by the Local Government Act
- Grants (Note 7)
- Reserve funds allocated for specific future purposes (Note 30)
- Trust funds and deposits (Note 27)
Restricted Funds
Total unrestricted cash and cash equivalents
20 Trade and other receivables
2012
$
2011
$
Current
Rate and garbage receivables
Government grants
Other debtors
Net GST receivable
Parking and animal infringement debtors
Less provision for doubtful debts - parking infringements
Interest on rates and garbage receivable and investments
Loans and advances to community organisations
1,325,603
341,359
3,541,005
216,325
24,280
(62,545)
254,500
37,028
1,324,617
259,168
2,600,518
397,064
34,486
(54,397)
237,648
18,726
Total
5,677,555
4,817,830
Non-current
Loans and advances to community organisations at Council valuation
51,475
148,301
Total
51,475
148,301
5,729,030
4,966,131
Total trade and other receivables
21 Inventories
Inventories for distribution
65,902
78,090
Total inventories
65,902
78,090
Prepayments
306,256
332,286
Total other assets
306,256
332,286
22 Other assets
23 Non-current assets classified as held for sale
Balance at start of year
Transfer from property plant and equipment.
Less assets disposed.
1,296,052
-
1,449,456
(153,404)
Total assets held for sale
1,296,052
1,296,052
10,000
10,000
46,369,937
18,480,259
33,820,490
16,045,122
27,889,678
17,775,368
24 Financial assets
Non-current
Municipal Association Purchasing Scheme (MAPS) shares at council valuation
2000.
25 Property, infrastructure, plant and equipment
Summary
At cost
Less accumulated depreciation
At fair value as at 30 June 2012
At council valuation 2003
Total
355,018,567
(128,017,556)
136,460,751
475,964,792
(52,738,079) (171,533,530)
25,653,467
25,653,467
(10,711,236)
(10,411,689)
5,527,705
5,527,705
(4,073,335)
(3,949,882)
256,066
248,339
327,376,350
321,499,202
355,266,028
339,274,571
25 Property, infrastructure, plant and equipment (cont.)
Property:
Land
At cost
Total land
2012
$
2011
$
31,620,701
16,198
31,636,899
31,620,701
31,620,701
20,722,450
12,207,890
20,722,450
11,889,450
8,514,560
8,833,000
Land improvements
At cost
939,075
1,060
938,015
Total land improvements
-
9,452,575
8,833,000
14,943,961
7,539,455
13,896,367
6,259,422
7,404,506
7,636,945
84,117,600
40,530,189
84,117,600
39,180,300
43,587,411
44,937,300
Landfill assets
At cost
Total landfill assets
Buildings
At cost
4,045,942
4,524
-
4,041,418
-
Total buildings
47,628,829
44,937,300
Total property
96,122,809
93,027,947
Valuation of land (excluding land under roads) and buildings was undertaken
in 2011 by a qualified independent valuer - Valpac Pty Ltd. The valuation of
buildings is at fair value based on current replacement cost less accumulated
depreciation at the date of valuation. The valuation of land is at fair value,
being market value based on highest and best use permitted by relevant land
planning provisions. All freehold land reserved for public open space is valued
at a discount of % percent to market value based on legal precedents.
Plant and equipment:
Plant and equipment
At cost
2012
$
2011
$
13,041,541
8,045,712
12,913,863
7,316,867
4,995,829
5,596,996
700,000
700,000
700,000
700,000
Leased plant and equipment
At cost
Less accumulated amortisation
-
-
At cost
Art collection at council valuation of recoverable value 2003
Total plant and equipment
3,636,659
1,971,078
3,332,972
1,619,006
1,665,581
1,713,966
256,066
248,339
6,917,476
7,559,301
Valuation of council's art collection is based on council's estimate of
recoverable value.
Infrastructure:
At council valuation of fair value 2012
Less Accumulated depreciation
At cost
221,076,985
91,313,888
-
129,763,097
-
-
209,758,597
83,615,789
-
126,142,808
2,710,864
3,314
2,707,550
132,470,647
126,142,808
At cost
44,491,684
8,219,275
-
36,272,409
-
-
42,823,097
9,792,593
-
33,030,504
402,990
313
402,677
36,675,086
33,030,504
Bridges
At cost
53,417,973
14,110,830
-
39,307,143
-
-
52,211,787
13,765,454
-
38,446,333
248,064
162
-
247,902
-
39,555,045
38,446,333
Infrastructure: (cont.)
Kerbing
At cost
2012
$
2011
$
16,136,750
6,484,650
-
9,652,100
-
-
15,666,748
6,101,014
-
9,565,734
108,529
134
108,395
-
9,760,495
9,565,734
25,653,467
10,711,236
25,653,467
10,411,689
14,942,231
15,241,778
802,078
21,392
573,185
15,145
780,686
15,722,917
558,040
15,799,818
Drainage
At cost
Footpaths
At cost
10,743,317
4,341,583
-
6,401,734
-
-
10,460,873
4,047,751
-
6,413,122
-
167,836
325
167,511
6,569,245
6,413,122
Bike paths
At cost
9,151,858
3,547,330
-
5,604,528
-
-
8,582,939
3,141,179
-
5,441,760
1,251,545
1,766
1,249,779
-
6,854,307
5,441,760
5,527,705
4,073,335
5,527,705
3,949,882
1,454,370
1,577,823
974,727
191,024
864,119
134,682
Parks and gardens
At Council valuation of fair value 2005
At cost
Total infrastructure
783,703
729,437
2,238,073
2,307,260
249,845,814
237,147,339
Infrastructure: (cont.)
2012 and 2011 valuation of infrastructure assets has been determined in
accordance with council valuation undertaken by Tony Raven - Manager
Business Planning, Bachelor of Forest Science. The valuation is at a fair
value based on replacement cost less accumulated depreciation as at the date
of valuation.
2009 valuation of property assets was undertaken by independent valuer Valpac Pty Ltd. The valuation is at a fair value based on replacement cost
less accumulated depreciation as at the date of valuation.
2012
2011
$
$
45,760
63,243
186,330
17,775
273,306
501,442
141,350
260,571
890,152
12,267
22,672
481,149
4,708
1,594
55,735
639,375
137,136
144,269
41,079
2,379,929
1,539,984
355,266,028
339,274,571
Materials and contracts
Employee costs
Accrued expenses
5,747,838
144,039
63,524
3,475,837
100,720
48,584
Total
5,955,401
3,625,141
Retention contract deposits
Refundable subdivision securities
Refundable crossings deposits
Refundable relocate dwellings
Other
204,425
204,352
19,924
32,767
169,503
169,751
154,604
19,924
31,766
56,689
Total
630,971
432,734
2008 valuation of infrastructure assets has been determined in accordance
with council valuation undertaken by Russell Smith - Manager - Assets,
Diploma of Engineering (Civil). The valuation is at a fair value based on
replacement cost less accumulated depreciation as at the date of valuation.
2005 valuation of infrastructure assets has been determined in accordance
with a council valuation undertaken by Peter Waite, Director - Engineering and
Operations. The valuation is at a fair value based on replacement cost less
accumulated depreciation as at the date of valuation.
Works in progress
Bike paths at cost
Bridges at cost
Buildings at cost
Drainage at cost
Footpaths at cost
Kerbing at cost
Land improvements at cost
Parks and gardens at cost
Road seal and substructure at cost
Gravel roads and substructure at cost
Landfill asset at cost
Total property, infrastructure, plant and equipment
26 Trade and other payables
27 Trust funds and deposits
25 Property, infrastructure, plant and equipment, (cont.)
2012
Balance at
beginning of
financial year
Acquisition of
assets
$
$
Revaluation
increments
(decrements)
(note 30)
$
Assets
recognised/ Depreciation and
contributed
amortisation
(note 14)
$
$
Transfers from
assets under
construction
Transfers to
non current
assets
classified as
held for sale
WDV of
disposals
$
$
$
Impairment
losses due to Balance at end
natural
of financial
disaster*
year
(note 17 b)
$
$
Property
Land
Land improvements
Landfill assets
Buildings
31,620,701
8,833,000
7,636,945
44,937,301
16,197
624,436
3,567,270
-
1,047,594
-
319,500
1,280,033
1,354,413
314,639
478,672
-
-
-
31,636,898
9,452,575
7,404,506
47,628,830
Total property
93,027,947
4,207,903
-
1,047,594
2,953,946
793,311
-
-
-
96,122,809
Plant and equipment
5,596,996
1,962,305
902,912
311,414
-
-
1,423,479
352,072
-
-
80,599
-
-
4,995,830
1,921,647
7,559,301
1,214,326
-
-
1,775,551
-
-
80,599
-
6,917,477
Bridges
Kerbing
Drainage
Footpaths
Bikepaths
Parks and gardens
126,142,808
33,030,506
38,446,333
9,565,734
15,799,818
6,413,122
5,441,760
2,307,260
2,589,658
402,990
225,392
108,529
224,183
167,836
1,249,211
109,352
6,859,745
4,103,122
1,484,797
281,129
168,303
414,282
-
178,309
-
3,421,079
861,533
624,149
194,896
305,793
180,016
253,280
179,794
121,206
22,672
4,708
2,334
1,255
-
-
-
132,470,647
36,675,085
39,555,045
9,760,496
15,722,916
6,569,245
6,854,307
2,238,073
237,147,341
5,077,151
13,311,378
178,309
6,020,541
152,175
-
-
-
249,845,813
12,267
22,672
481,149
4,708
1,594
55,735
639,375
137,136
144,269
41,079
35,827
63,243
183,853
16,181
217,571
176,706
5,469
237,508
849,073
-
-
-
(2,334)
(22,672)
(478,672)
(4,708)
(314,639)
(1,255)
(121,206)
-
-
-
-
45,760
63,243
186,330
17,775
273,306
501,442
141,350
260,571
890,152
1,539,984
1,785,431
-
-
-
(945,486)
-
-
-
2,379,929
339,274,573
12,284,811
-
80,599
-
355,266,028
Plant and Equipment
Infrastructure
Works in Progress
Bikepaths
Bridges
Buildings
Drainage
Footpaths
Kerbing
Land improvements
Parks and gardens
Landfill
Total work in progress
Total property, infrastructure,
plant and equipment
* Refer to Note 17
13,311,378
1,225,903
10,750,038
-
25 Property, infrastructure, plant and equipment, (cont.)
2011
Balance at
beginning of
financial year
Acquisition of
assets
$
$
Revaluation
increments
(decrements)
(note 30)
$
Assets
recognised/ Depreciation and
contributed
amortisation
(note 14)
$
$
Transfers from
assets under
construction
Transfers to
non current
assets
classified as
held for sale
WDV of
disposals
$
$
$
Impairment
losses due to Balance at end
natural
of financial
disaster
year
(note 17 b)
$
$
Property
Land
Land improvements
Landfill assets
Buildings
27,498,800
8,845,330
2,657,244
45,834,969
2,548
384,661
1,157,794
4,119,353
(277,466)
(371,782)
(1,257,298)
5,814,225
-
329,377
462,742
1,384,292
209,852
586,128
-
-
-
31,620,701
8,833,000
7,636,945
44,937,301
Total property
84,836,343
1,545,003
2,212,807
5,814,225
2,176,411
795,980
-
-
-
93,027,947
Plant and equipment
5,241,465
1,978,043
1,954,503
223,757
-
-
1,436,994
239,495
-
-
161,978
-
-
5,596,996
1,962,305
7,219,508
2,178,260
-
-
1,676,489
-
-
161,978
-
7,559,301
Bridges
Kerbing
Drainage
Footpaths
Bikepaths
Parks and gardens
115,377,739
32,857,055
38,786,262
9,204,580
16,068,557
5,631,737
5,788,233
2,294,100
1,701,855
232,572
508,843
11,833
36,287
199,462
419,178
140,514
10,989,393
3,456,228
(158,914)
244,310
400,676
(820,497)
-
1,109,132
299,300
337,635
54,033
-
3,037,968
783,337
624,239
194,289
305,026
170,156
300,838
168,932
835,809
33,742
13,768
397,485
41,578
-
-
833,152
2,765,754
65,619
95,834
-
126,142,808
33,030,506
38,446,333
9,565,734
15,799,818
6,413,122
5,441,760
2,307,260
226,008,263
3,250,544
14,111,196
1,800,100
5,584,785
1,322,382
-
-
3,760,359
237,147,341
403,458
650,257
185
15,164
337,036
112,493
841,865
33,742
18,195
6,294
22,672
417,019
4,523
199
55,735
512,191
66,221
138,213
22,884
-
-
-
(397,485)
(586,127)
(13,769)
(209,852)
(41,578)
(835,809)
(33,742)
-
-
-
-
12,267
22,672
481,149
4,708
1,594
55,735
639,375
137,136
144,269
41,079
2,412,395
1,245,951
-
-
-
(2,118,362)
-
-
-
1,539,984
320,476,509
8,219,758
Plant and Equipment
Infrastructure
Works in Progress
Bikepaths
Bridges
Buildings
Drainage
Footpaths
Kerbing
Land improvements
Parks and gardens
Landfill assets
Total work in progress
Total property, infrastructure,
plant and equipment
16,324,003
7,614,325
9,437,685
-
-
161,978
3,760,359
339,274,573
28 Provisions
Annual
Leave
2012
$
Balance at beginning of financial year 2,118,524
Additional provisions
1,485,980
Amounts used
(1,341,461)
Increase in the discounted
amount arising because of time
and the effect of any change in
the discount rate
Balance at end of financial year
2,263,043
Long Service
Leave
$
2,735,007
796,123
(145,148)
Other
employee
$
357,019
667,098
(661,701)
Landfill
rehabilitation
$
8,600,474
999,982
(1,498)
Total
$
13,811,024
3,949,183
(2,149,808)
3,385,982
362,416
9,598,958
15,610,399
2011
$
Balance at beginning of financial year 1,822,067
Additional provisions
1,457,460
Amounts used
(1,161,003)
Increase in the discounted
amount arising because of time
and the effect of any change in
the discount rate
Balance at end of financial year
2,118,524
$
2,409,330
540,822
(215,145)
$
321,957
685,763
(650,701)
$
3,306,046
5,814,225
(519,797)
$
7,859,400
8,498,270
(2,546,646)
2,735,007
357,019
8,600,474
13,811,024
2012
$
5,569,334
10,088,677
2011
$
4,626,521
9,185,837
Aggregate carrying amount of provisions:
Current
Non-current
(a) Employee benefits
Current (i)
Annual leave
Long service leave
Rostered Day Off
Time Accrued
Non-current (ii)
Long service leave
Aggregate carrying amount of employee benefits:
Current
Non-current
15,658,011
13,812,358
2,263,043
2,896,263
238,444
123,972
2,118,524
2,100,534
226,337
132,016
5,521,722
4,577,411
489,719
634,473
489,719
634,473
5,521,722
489,719
4,577,411
634,473
6,011,441
5,211,884
The following assumptions were adopted in measuring the present value of employee benefits:
Weighted average increase in employee costs
Weighted average discount rates
Weighted average settlement period
4.13%
3.06%
12
All annual leave and the long service leave entitlements representing 7 or more years
of continuing service:
- short-term employee benefits, that fall due within 12 months after the end of
the period measured at nominal value
4,796,440
- other long-term employee benefits that do not fall due within 12 months after
the end of the period measured at present value
725,282
5,521,722
4.60%
5.28%
12
4,089,175
488,236
4,577,411
28 Provisions (cont.)
(ii) Non-current
Long service leave representing less than 7 year of continuous service
measured at present value
2012
$
2011
$
489,719
634,473
47,612
49,110
Non-current
Landfill rehabilitation
9,598,958
8,551,364
Total
9,646,570
8,600,474
1,598,997
-
1,606,875
-
1,598,997
1,606,875
7,004,085
7,531,980
7,004,085
7,531,980
8,603,082
9,138,855
Not later than one year
Later than one year and not later than five years
Later than five years
1,598,997
4,991,403
2,012,682
1,606,875
5,266,286
2,265,694
Total
8,603,082
9,138,855
Aggregate carrying amount of interest bearing loans and borrowings:
Current
Non-current
1,598,997
7,004,085
1,606,875
7,531,980
Total interest bearing loans and borrowings
8,603,082
9,138,855
(b) Provision for landfill rehabilitation
Under legislation, Council is obligated to restore Bowser and other closed rural
landfill sites to a particular standard. Current engineering projections indicate
that the current Bowser landfill cells will continue operating until 2026 and
restoration work is expected to be undertaken progressively as cells are
closed. The forecast life of the Bowser landfill site is based on current
estimates of remaining capacity and the forecast rate of infill. The provision
for landfill restoration has been calculated based on the present value of the
expected cost of works to be undertaken. The expected cost of works has
been estimated based on current understanding of work required to reinstate
the site to a suitable standard and budgeted costs for that work. Accordingly,
the estimation of the provision required is dependent on the accuracy of the
forecast timing of the work, work required and related costs. Council does not
expect to receive reimbursement from a third party.
Current
Landfill rehabilitation
29 Interest bearing loans and borrowings
Current
Borrowings - secured
Finance leases - secured
Non-current
Borrowings - secured
Total
The maturity profile of Council's borrowings is:
Finance leases
Council has no obligation under finance leases.
30 Reserves
(a) Asset revaluation reserves
Balance at
beginning of
Impairment
reporting
Increment due to natural
period (decrement)
disaster
$
$
Balance at
end of
reporting
period
$
2012
Property
Land
Land improvements
Buildings
Infrastructure
Bridges
Kerbing
Drainage
Footpaths
Bike paths
Parks and gardens
Total asset revaluation reserves
25,598,691
2,754,102
3,675,552
-
-
25,598,691
2,754,102
3,675,552
32,028,345
-
-
32,028,345
94,270,343
29,136,646
25,561,024
1,999,156
8,057,971
1,564,080
1,899,474
1,579,921
6,859,745
4,103,122
1,484,797
281,129
168,303
414,282
-
-
101,130,088
33,239,768
27,045,821
2,280,285
8,057,971
1,732,383
2,313,756
1,579,921
164,068,615
13,311,378
-
177,379,993
196,096,960
13,311,378
-
209,408,338
21,479,338
3,403,350
4,932,850
4,119,353
(649,248)
(1,257,298)
-
25,598,691
2,754,102
3,675,552
29,815,538
2,212,807
-
32,028,345
84,114,102
28,446,172
25,785,557
1,754,846
8,057,971
1,163,404
2,815,805
1,579,921
10,989,393
3,456,228
(158,914)
244,310
400,676
(820,497)
-
(833,152)
(2,765,754)
(65,619)
153,717,778
14,111,196
(3,760,359)
164,068,615
183,533,316
16,324,003
(3,760,359)
196,096,960
2011
Property
Land
Land improvements
Buildings
Infrastructure
Bridges
Kerbing
Drainage
Footpaths
Bike paths
Parks and gardens
Total asset revaluation reserves
(95,834)
94,270,343
29,136,646
25,561,024
1,999,156
8,057,971
1,564,080
1,899,474
1,579,921
30 Reserves (cont)
Balance at
Transfer
beginning of
from
reporting accumulated
period
surplus
$
$
Transfer to
accumulated
surplus
$
Balance at
end of
reporting
period
$
(b) Other reserves
2012
Reserve for Barry Court area Improvement
Reserve for Cemetery
Reserve for childrens services
Reserve for CivicNET
Reserve for developers' contributions
Reserve for developers' contribution for
recreation
Reserve for vehicle PAG ADASS
Reserve for CSNE integration
Reserve for HACC
Reserve for industrial land
Reserve for insurance excess
Reserve for performing arts centre
Reserve for replacement of plant
Reserve for replacement of plant - CSNE
Reserve for regional playground
Reserve for landfill capital works
Reserve for livestock selling complex
Reserve for waste operations
3,636
147,123
50,000
5,624
228,524
10,000
125,270
30,000
5,624
24,500
3,636
21,853
20,000
214,024
300,922
40,000
316,365
74,000
937,644
37,921
784,199
226,866
103,000
1,509,672
130,000
121,550
77,609
12,200
67,576
1,455,913
44,468
734,012
30,000
-
72,274
24,295
3,402
245,870
6,921
67,576
418,957
26,775
654,914
25,000
56,937
306,257
40,000
292,070
70,598
691,774
43,200
1,821,155
244,559
103,000
1,588,770
135,000
64,613
Total other reserves
5,017,046
2,431,778
1,788,315
5,660,509
2011
Reserve for Barry Court area Improvement
Reserve for Cemetery
Reserve for childrens services
Reserve for CivicNET
Reserve for developers' contributions
Reserve for developers' contribution for recreation
Reserve for vehicle PAG ADASS
Reserve for CSNE integration
Reserve for HACC
Reserve for industrial land
Reserve for insurance excess
Reserve for performing arts centre
Reserve for replacement of plant
Reserve for replacement of plant - CSNE
Reserve for regional playground
Reserve for landfill capital works
Reserve for livestock selling complex
Reserve for waste operations
3,636
34,227
207,274
300,372
40,000
583,343
74,000
191,049
20,000
7,673
485,096
182,398
103,000
1,324,225
60,000
214,603
147,123
50,000
21,250
550
28,603
-
760,412
20,000
61,201
1,491,032
44,468
790,842
70,000
-
266,978
13,817
2,079
68,874
1,191,929
605,395
93,053
-
3,636
147,123
50,000
5,624
228,524
300,922
40,000
316,365
74,000
937,644
37,921
784,199
226,866
103,000
1,509,672
130,000
121,550
Total other reserves
3,830,896
3,456,878
2,270,728
5,017,046
The Reserves for developers contributions will, upon completion of developments, be utilised to develop
recreation and other facilities for residents in the respective development areas.
31 Special committees and other activities
The assets and liabilities of the following committees and trusts have not been included in this financial report based on their
materiality:
The Wangaratta Showgrounds Special Committee
Murray to Mountains Rail Trail Committee
Special Committees of Council in relation to Public Halls and Recreation Reserves
The operations of the Wangaratta Cemetery have been consolidated into these financial statements
32 Reconciliation of cash flows from operating activities to surplus (deficit)
2012
$
(Profit)/Loss on sale of property, plant and equipment. Refer Note 9
Finance Costs
Share of High Country Library Corporation surplus. Refer note 11
Available for sale revaluation reserve loss recognised
Impairment of financial assets
Fair value adjustments for assets available for sale
Net asset revaluation increment/(decrement)
Change in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in prepayments
(Increase)/decrease in inventories
Increase/(decrease) in trade and other payables
Increase/(decrease) in trust funds and deposits
Recognition of Landfill rehabilitation
Increase/(decrease) in provisions
2011
$
14,276,205
20,665,067
10,750,039
(186,072)
623,375
(178,922)
64,803
(12,542)
(13,311,378)
9,437,685
(1,016,900)
651,202
(1,800,100)
(2,451)
(17,548)
(16,324,003)
(762,899)
26,030
12,188
2,330,260
198,237
(999,982)
1,845,653
(1,046,588)
(172,746)
351
219,426
3,170
(5,814,225)
5,952,959
14,674,995
10,735,299
16,412,801
-
14,949,553
-
16,412,801
14,949,553
Bank Overdraft
Used at balance date
400,000
-
400,000
-
Unused at balance date
400,000
400,000
8,496,762
7,916,039
7,603,930
7,345,623
16,412,801
14,949,553
33 Reconciliation of cash and cash equivalents
Cash and cash equivalents. Refer Note 19
Less bank overdraft
34 Financing arrangements
35 Restricted assets
Council has cash and cash equivalents that are subject to restrictions. As at
the reporting date, Council had legislative restrictions in relation to employee
entitlements (Long Service Leave) and reserve funds (developer
contributions).
Unrestricted
Subject to external restrictions (i)
(i) The following restrictions have been imposed by regulations or other externally imposed requirements:
Long service leave *
Trust monies. Refer Note 27
Grants. Refer Note 7(b).
*
Restricted asset for long service leave is based on the Local Government
(LSL) Regulations 2002 and does not necessarily equate to the LSL liability
disclosed in Note 28(a) due to a different basis of calculation prescribed by the
regulation.
3,140,976
630,971
4,144,092
3,823,629
432,734
3,089,260
7,916,039
7,345,623
36 Superannuation
Council has Contributions to the following funds:
Fund
2012
$
Defined benefits fund
Employer contributions to Local Authorities Superannuation Fund (Vision
Super)
Employer contributions payable to Local Authorities Superannuation Fund
(Vision Super) at reporting date
218,982
3,218,146
Accumulation funds
Employer contributions to Local Authorities Superannuation Fund (Vision
Super)
Employer contributions to other superannuation funds
2011
$
781,324
-
3,437,128
781,324
1,245,817
15,502
1,196,849
14,585
1,261,319
1,211,434
37 Commitments
The Council has entered into the following commitments
Later than 1 Later than 2
year and not
years and
Not later
later than 2
not later
than 1 year
years than 5 years
2012
$
$
$
Operating
Contribution to library
517,431
Flood and emergency
restoration
Interest on borrowings
575,400
467,574
830,294
Management of pools
355,610
contract
436,296
Cleaning of Wang.Govt.Centre
Total
Capital
Bowser Landfill Cell 8 - Design
and Construction
Country Roads and Bridges
initiative
Izards Bridge Replacement
Whitfield Swinburne Pavillion
Showgrounds to CBD cycle
connection
Showgounds upgrade
Roads to Recovery
Total
1,884,737
467,574
830,294
Later than 5
years
$
253,070
253,070
420,508
Total
$
517,431
2,126,338
355,610
436,296
3,435,675
420,508
150,463
148,894
49,266
-
-
-
150,463
148,894
49,266
242,346
298,723
-
-
-
242,346
298,723
1,310,200
-
-
-
1,310,200
2011
Operating
Contribution to library
Flood and emergency
restoration
Interest on borrowings
Management of pools
contract
Cleaning of Wang.Govt.Centre
Transfer Station Recycling
Recycling / green waste
RSPCA Agreement
Total
Not later
than 1 year
$
484,205
4,576,574
623,902
350,622
424,921
6,460,224
Later than 1 Later than 2
year and not
years and
later than 2
not later
years than 5 years
$
$
516,267
516,267
Later than 5
years
$
959,373
-
309,227
-
959,373
309,227
Total
$
484,205
4,576,574
2,408,769
350,622
424,921
8,245,091
Capital
Cemetery sewerage treatment
plant
Childrens service centre stage
Community Facilities upgrades
HP Barr Sustainability & Eco
Showgrounds to CBD cycle
Showgounds upgrade
7,825
200,000
147,000
170,000
127,000
740,000
-
-
-
200,000
147,000
170,000
127,000
740,000
Roads to Recovery
302,676
-
-
-
302,676
1,694,501
-
-
-
1,694,501
Total
7,825
38 Operating lease commitments
2012
$
2011
$
(a) Operating lease commitments
At the reporting date, the Council had the following obligations under noncancellable operating leases for the lease of IT equipment, postal equipment,
and photocopiers for use within Council activities. (These obligations are not
recognised as liabilities).
Due:
122,881
135,811
-
100,603
92,311
-
258,692
192,914
(b) Operating lease receivables
During the 2007 financial year, Council entered into commercial property
leases for office floor space contained within its council building - The
Wangaratta Government Centre. This floor space is rented under operating
leases which contain non-cancellable lease terms of between 5 and 10 years.
All leases include a CPI based revision of the rental charge annually and
market reviews at the commencement of each new lease term.
Future minimum rentals receivable under non-cancellable operating leases are as follows:
Due:
370,367
1,407,508
659,281
362,571
1,462,565
664,484
2,437,156
2,489,620
39 Contingent liabilities and contingent assets
The Council is presently involved in several confidential legal matters, which are being conducted through Council's solicitors.
As these matters are yet to be finalised, and the financial outcomes are unable to be reliably estimated, no allowance for
these contingencies has been made in the financial report.
Council has obligations under a defined benefit superannuation scheme that may result in the need to make additional
contributions to the scheme to ensure that the liabilities of the fund are covered by the assets of the fund. As a result of the
increased volatility in financial markets the likelihood of making such contributions in future periods has increased. At this
point in time it is not known if additional contributions will be required, their timing or potential amount.
Council has an obligation to rehabilitate landfill sites and has provided for known future costs as a provision for landfill
remediation. Council is unable to guarantee that the amount provided will be sufficient to cover the full future costs of
rehabilitation.
40 Financial instruments
(a) Accounting policy, terms and conditions
recognised financial instruments
Note
Accounting policy
Terms and conditions
Cash on hand and at bank and
money market call account are
valued at face value.
On call deposits returned a floating interest rate of
3.50% (4.50% in 2010/2011). The interest rate at
balance date was 3.50% (4.50% in 2011/2012)
Interest is recognised as it
accrues.
Funds returned fixed interest rate of between
5.10% (5.83% in 2010/2011), and 6.37% (6.40% in
2010/2011) net of fees
Financial assets
19
19
Other Debtors
Investments and bills are valued
at cost.
Investments are held to maximise
interest returns of surplus cash.
20
Receivables are carried at
General debtors are unsecured and arrears attract
nominal amounts due less any
an interest rate of 10.50% (10.50% in 2010/2011).
provision for doubtful debts. A
Credit terms are based on 30 days.
provision for doubtful debts is
recognised when there is
objective evidence that an
impairment loss has occurred.
Collectability of overdue accounts
is assessed on an ongoing basis.
26
Interest bearing
loans and
borrowings
29
Liabilities are recognised for
amounts to be paid in the future
for goods and services provided
to Council as at balance date
whether or not invoices have
been received.
Loans are carried at their
principal amounts, which
represent the present value of
future cash flows associated with
servicing the debt. Interest is
accrued over the period it
becomes due and recognised as
part of payables.
Finance leases
29
Financial liabilities
General creditors are unsecured, not subject to
interest charges and are normally settled within 30
days of invoice receipt.
Borrowings are secured by way of mortgages over
the general rates of Council. The weighted
average interest rate on borrowings is 7.11%
(6.40% in 2010/2011).
Finance leases are accounted for As at balance date, the Council has no finance
lease.
at their principal amount with
lease payments discounted to
present value using the interest
rate implicit in the lease.
40 Financial instruments (cont)
(b) Interest rate risk
The exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both recognised
and unrecognised, at balance date are as follows:
2012
Fixed interest maturing in:
Floating
Over 1 to 5
More than 5
interest rate 1 year or less
years
years
$
$
$
$
Non-interest
bearing
$
Total
$
Financial assets
Other financial assets
Receivables
Other assets
3,876,182
-
12,208,579
-
51,475
-
-
328,040
5,729,030
-
16,412,801
5,780,505
-
Total financial assets
3,876,182
12,208,579
51,475
-
6,057,070
22,193,306
5,955,401
630,971
5,955,401
630,971
Weighted average interest rate
Interest bearing loans and
borrowings
Total financial liabilities
3.50%
2011
1.38%
-
-
-
-
-
1,598,997
4,991,403
2,012,682
-
8,603,082
-
1,598,997
4,991,403
2,012,682
6,586,372
15,189,454
Net financial assets (liabilities)
6.13%
6.49%
7.65%
8.37%
(4,939,928)
(2,012,682)
(529,302)
Fixed interest maturing in:
Floating
Over 1 to 5
More than 5
interest rate 1 year or less
years
years
$
$
$
$
Non-interest
bearing
$
3,876,182
10,609,582
7,003,852
Total
$
Financial assets
Receivables
Other assets
2,808,937
-
11,801,907
1,337,152
-
148,301
-
-
338,709
3,628,979
-
14,949,553
5,114,432
-
Total financial assets
2,808,937
13,139,059
148,301
-
3,967,688
20,063,985
3,625,141
432,734
3,625,141
432,734
Interest bearing loans and
borrowings
Total financial liabilities
4.50%
0.96%
-
-
-
-
-
1,606,875
5,266,286
2,265,694
-
9,138,855
-
1,606,875
5,266,286
2,265,694
4,057,875
13,196,730
Net financial assets (liabilities)
6.53%
6.52%
2,808,937
11,532,184
7.72%
7.73%
(5,117,985)
(2,265,694)
(90,187)
6,867,255
40 Financial instruments (cont.)
(c) Net fair values
The aggregate net fair values of financial assets and financial liabilities, both recognised and unrecognised, at balance date
are as follows:
Financial instruments
Financial assets
Receivables
Other assets
Payables
Interest Bearing Liabilities
Total carrying amount as
per Balance Sheet
2012
2011
$
$
Aggregate net fair value
2012
2011
$
$
16,412,801
5,780,505
-
14,949,553
5,114,432
-
16,412,801
5,780,505
-
14,949,553
5,114,432
-
22,193,306
20,063,985
22,193,306
20,063,985
5,955,401
630,971
8,603,082
3,625,141
432,734
9,138,855
5,955,401
630,971
8,603,082
3,625,141
432,734
9,138,855
15,189,454
13,196,730
15,189,454
13,196,730
(d) Credit risk
The maximum exposure to credit risk at balance date in relation to each class of recognised financial asset is
represented by the carrying amount of those assets as indicated in the Balance Sheet.
(e) Risks and mitigation
The risks associated with our main financial instruments and our policies for minimising these risks are detailed below.
Market risk
Market risk is the risk that the fair value or future cash flows of your financial instruments will fluctuate because
of changes in market prices. The Council's exposures to market risk are primarily through interest rate risk with
only insignificant exposure to other price risks and no exposure to foreign currency risk. Components of market
risk to which we are exposed are discussed below.
Interest rate risk
Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the
instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing
financial assets and liabilities that we use. Non derivative interest bearing assets are predominantly short term
liquid assets. Our interest rate liability risk arises primarily from long term loans and borrowings at fixed rates
which exposes us to fair value interest rate risk.
Our loan borrowings are sourced from major Australian banks by a tender process. Finance leases are sourced
from major Australian financial institutions. Overdrafts are arranged with major Australian banks. We manage
interest rate risk on our net debt portfolio by:
- ensuring access to diverse sources of funding;
- reducing risks of refinancing by managing in accordance with target maturity profiles; and
- setting prudential limits on interest repayments as a percentage of rate revenue.
We manage the interest rate exposure on our debt portfolio by appropriate budgeting strategies and obtaining
approval for borrowings from the Department of Planning and Community Development each year.
Investment of surplus funds is made with approved financial institutions under the Local Government Act 1989.
We manage interest rate risk by adopting an investment policy that ensures:
- conformity with State and Federal regulations and standards,
- capital protection,
- appropriate liquidity,
- diversification by credit rating, financial institution and investment product,
- monitoring of return on investment,
- benchmarking of returns and comparison with budget.
Maturity will be staggered to provide for interest rate variations and to minimise interest rate risk.
Credit risk
Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and
cause us to make a financial loss. We have exposure to credit risk on all financial assets included in our
balance sheet. To help manage this risk:
- we have a policy for establishing credit limits for the entities we deal with;
- we may require collateral where appropriate; and
- we only invest surplus funds with financial institutions which have a recognised credit rating specified in our
investment policy.
Trade and other receivables consist of a large number of customers, spread across the consumer, business
and government sectors. Credit risk associated with the Council's financial assets is minimal because the main
debtor is the Victorian Government. Apart from the Victorian Government we do not have any significant credit
risk exposure to a single customer or groups of customers. Ongoing credit evaluation is performed on the
financial condition of our customers and, where appropriate, an allowance for doubtful debts is raised.
We may also be subject to credit risk for transactions which are not included in the balance sheet, such as
when we provide a guarantee for another party. Details of our contingent liabilities are disclosed in note 39.
Movement in Provision for Doubtful Debts
Balance at the beginning of the year
New Provisions recognised during the year
Amounts already provided for and written off as uncollectable
Amounts provided for but recovered during the year
Balance at end of year
2012
$
54,397
8,148
62,545
2011
$
51,935
2,462
54,397
Ageing of Trade and Other Receivables
At balance date other debtors representing financial assets were past due but not impaired. These amounts relate to a
number of independent customers for whom there is no recent history of default. The ageing of the Council's Trade &
Other Receivables was:
Current (not yet due)
Past due by up to 30 days
Past due between 31 and 180 days
Past due by more than 1 year
Total Trade & Other Receivables
5,264,267
128,488
191,025
37,562
118,918
5,740,260
4,494,086
85,261
222,856
2,541
215,784
5,020,528
Ageing of individually impaired Trade and Other Receivables
At balance date, other debtors representing financial assets with a nominal value of $62,545 (2011 $54,397) were
impaired. The amount of the provision raised against these debtors was $62,545 (2011 $54,397). The individually
impaired debtors relate to general and sundry debtors and have been impaired as a result of their doubtful collection.
Many of the long outstanding past due amounts have been lodged with Council's debt collectors or are on payment
arrangements.
The ageing of Trade and Other Receivables that have been individually determined as impaired at reporting date was:
Current (not yet due)
Past due by up to 30 days
Past due by more than 1 year
Total Trade & Other Receivables
4,066
11,269
47,210
62,545
6,396
762
47,239
54,397
Liquidity risk
Liquidity risk includes the risk that, as a result of our operational liquidity requirements:
- we will not have sufficient funds to settle a transaction on the date;
- we will be forced to sell financial assets at a value which is less than what they are worth; or
- we may be unable to settle or recover a financial assets at all.
To help reduce these risks we:
- have a liquidity policy which targets a minimum and average level of cash and cash equivalents to be maintained;
- have readily accessible standby facilities and other funding arrangements in place;
- have a liquidity portfolio structure that requires surplus funds to be invested within various bands of liquid instruments;
- monitor budget to actual performance on a regular basis; and
- set limits on borrowings relating to the percentage of loans to rate revenue and percentage of loan principal
repayments to rate revenue.
The Councils exposure to liquidity risk is deemed insignificant based on prior periods' data and current assessment of risk.
The table below lists the contractual maturities for Financial Liabilities
These amounts represent undiscounted gross payments including both principal and interest amounts
2012 6 mths
6-12
or less
months
$
$
Trade and other
5,955,401
payables
Trust funds and
deposits
Interest-bearing
loans and
borrowings
Total financial
liabilities
5,955,401
1-2
years
$
2-5
years
$
-
>5
years
$
Contracted
Cash Flow
$
-
169,503
32,767
428,701
2,174,397
1,979,477
3,152,975
2,343,900
2,012,244
3,581,676
-
3,625,141
2,287,466
2,064,932
3,821,903
5,955,401
630,971
630,971
3,422,571
10,729,420
10,729,420
3,422,571
17,315,792
17,315,792
-
2011 6 mths
6-12
1-2
2-5
>5
or less
months
years
years
years
$
$
$
$
$
Trade and other
3,625,141
payables
Trust funds and
56,689
31,766
344,279
deposits
Interest-bearing
loans and
2,230,777
2,033,166
3,477,624
3,806,057
borrowings
Total financial
liabilities
5,955,401
Carrying
Amount
$
3,806,057
Contracted
Cash Flow
$
3,625,141
Carrying
Amount
$
3,625,141
432,734
432,734
11,547,624
11,547,624
15,605,499
15,605,499
(f) Sensitivity disclosure analysis
Taking into account past performance, future expectations, economic forecasts, and management's knowledge
and experience of the financial markets, the Council believes the following movements are 'reasonably
possible' over the next 12 months (Base rates are sourced from Reserve Bank of Australia):
- A parallel shift of +1% and -2% in market interest rates (AUD) from year-end rates of 4.4%.
The table below discloses the impact on net operating result and equity for each category of financial
instruments held by the Council at year-end, if the above movements were to occur.
Interest rate risk
Market risk exposure
2012
Financial
Financial liabilities:
Interest-bearing loans and
borrowings
2011
Financial
assets:
Financial liabilities:
Interest-bearing loans and
borrowings
Carrying
amount
subject to
interest
-2%
$
+1%
200 basis points
Profit
Equity
$
$
16,084,761
-
(321,695)
-
8,603,082
86,031
$
(321,695)
-
-
100 basis points
Profit
Equity
$
$
160,848
-
(172,062)
160,848
-
-
$
$
$
$
14,610,844
-
(292,217)
-
(292,217)
-
146,108
-
146,108
-
9,138,855
91,389
41 Auditor's remuneration
-
(182,777)
2012
$
Audit fee to conduct external audit - Victorian Auditor-General
Internal Audit Fees - Johnsons MME
61,424
36,700
98,124
42 Related parties transactions
(a) Responsible persons
Names of persons holding the position of a Responsible Person at Council during the year are:
Councillors
Councillor
Councillor
Councillor
Councillor
Councillor
Councillor
Councillor
Roberto Paino
Anthony Griffiths
Ron Webb
Rozi Parisotto
Doug McPhie
Lauren McCully
Lisa McInerney
Chief Executive Officer
CEO
Acting CEO
Acting CEO
Doug Sharp
Ruth Tai
Ray Park
Mayor (1/12/11 - 30/6/12)
Mayor (1/7/11 - 30/11/11)
(31/10/11 - 7/11/11)
(24/12/11 - 15/1/12
2011
$
42,845
39,373
82,218
42 Related parties transactions (cont.)
(b) Remuneration of responsible persons
The number of Responsible Officers, whose total remuneration from Council
and any related entities fall within the following bands:
Income range:
$0 - $9,999
$10,000 - $19,999
$20,000 - $29,999
$30,000 - $39,999
$40,000 - $49,999
$50,000 - $59,999
$60,000 - $69,999
$230,000 - $239,999
$260,000 - $269,000
Total remuneration for the reporting period for Responsible Persons included
2012
No.
5
1
1
1
8
2011
No.
1
6
1
1
9
$448,349
$477,700
(c) No retirement benefits were paid by Council to a Responsible Person.
(d) No loans have been made, guaranteed or secured by the Council to a Responsible Person of the Council
during the reporting year.
(e) Other Transactions
No transactions other than remuneration payments or the reimbursement of approved expenses were entered
into by Council with Responsible Persons, or Related Parties of such Responsible Persons during the reporting
year.
(f) Senior officer remuneration
A senior officer other than a Responsible Person, is an officer of Council who has management responsibilities
and reports directly to the Chief Executive Officer or whose total annual remuneration exceeds $127,000.
The numbers of senior officers, other than Responsible Persons, are shown below in their relevant income
bands:
2012
2011
Income range:
No.
No.
Less than $127,000
1
2
$127,000 - $129,999
$130,000 - $139,999
1
1
$140,000 - $149,999
1
1
$170,000 - $179,999
2
1
$190,000 - $199,999
1
1
$260,000 - $269,999
1
1
7
Total remuneration for the reporting period for Senior Officers included above:
$1,183,322
7
$1,135,352
43 Functions/activities of the municipality (cont.)
2012
$
2011
$
(b) Total assets shown in note 44(a) are reconciled with the amounts
shown for assets in the balance sheet as follows:
Current assets
Non-current assets
23,758,566
356,151,948
21,473,811
340,322,120
379,910,514
361,795,931
(c) The activities of the municipality are categorised into the following broad functions:
Executive
This department incorporates Executive Services, Council, economic development, tourism communications,
marketing and events. Council expenditure comprises servicing of Council and its committees and carrying out
the statutory functions of Council. The development function Wangaratta Unlimited.
Sustainability
The Business Services department is responsible for general administration, finance, information services,
human resources, asset planning, environment, building and planning. This department provides a range of
strategic, operational, financial and payroll services to business units, and to the Council as a whole.
Community Wellbeing
The Human and Cultural Services department is responsible for the provision of services such as employee
relations, library services, maternal and child health, childcare, homecare, aged care, family day care, cultural
development, library services, community and social planning.
Infrastructure and technical services
The Infrastructure and Planning department is responsible for road construction and maintenance, bridges,
depots, swimming pools, design, drainage and traffic management. The engineering unit is responsible for the
provision of waste minimisation and landfill, street sweeping, parks and gardens.
44 Financial ratios (Performance indicators)
2012
$
2012
%
2011
$
2011
%
2011
$
2011
%
(a) Debt Servicing Ratio (to identify the
capacity of Council to service its outstanding
debt)
Debt Servicing Costs
Total Revenue
623,375
1.11%
56,294,634
651,202
1.25%
51,982,470
613,240
1.38%
44,576,609
Debt servicing costs refer to the payment of interest on loan borrowings,
finance lease and bank overdraft.
The ratio expresses the amount of interest paid as a percentage of Council's
total revenue.
(b) Debt commitment ratio (to identify
Council's debt redemption strategy)
Debt servicing and redemption costs 2,230,010
2,150,964
10.19%
Rate revenue
21,889,961
2,265,910
10.52%
20,444,047
The strategy involves the payment of loan principal and interest, finance lease
principal and interest.
The ratio express the percentage of rate revenue utilised to pay interest and
redeem debt principal
12.57%
18,032,206
43 Functions/activities of the municipality
(a) Revenues, expenses and assets by function/activity
Details of these functions/activities are set out in Note 43(c)
2012
Function/Activity
Assets attributed to
Total Expenses Surplus (Deficit) from Functions/Activities
Ordinary Activities
$
$
$
Revenue
Grants
$
Revenue
Other
$
Revenue
Total
$
530,350
188,770
719,120
2,827,192
(2,108,072)
Sustainability
4,638,441
24,590,561
29,229,002
19,028,824
10,200,178
23,820,041
Community Wellbeing
7,346,896
7,390,589
14,737,485
19,753,592
(5,016,107)
824,445
Infrastructure Services
8,046,697
3,562,330
11,609,027
13,735,044
(2,126,017)
355,266,028
20,562,384
35,732,250
56,294,634
55,344,652
949,982
379,910,514
Executive Services
Total
-
2011
Revenue
Grants
$
Revenue
Other
$
Revenue
Total
$
Executive Services
134,200
114,301
248,501
2,396,059
(2,147,558)
Business Services
4,243,589
25,536,556
29,780,145
14,217,777
15,562,368
Human & Cultural Services
7,501,285
8,151,341
15,652,626
17,137,750
(1,485,124)
Infrastructure Services
4,408,847
1,892,351
6,301,198
13,918,091
(7,616,893)
339,426,571
Total
16,287,921
35,694,550
51,982,470
4,312,793
361,947,932
Function/Activity
Total Expenses Surplus (Deficit) from
Ordinary Activities
$
$
47,669,677
Assets
$
21,632,113
889,248
44 Financial ratios (Performance indicators) (cont.)
2012
$
2012
%
2011
$
2011
%
2010
$
2010
%
(c) Revenue Ratio (to identify Council's
dependence on non-rate income)
Rate Revenue
21,889,961
Total Revenue
56,294,634
38.88%
20,444,047
39.33%
51,982,470
18,032,206
40.45%
44,576,609
The level of Council's reliance on rate revenue is determined by assessing
rate revenue as a proportion of the total revenue of Council.
(d) Debt Exposure Ratio (to identify Council's
exposure to debt)
Total Indebtedness
Total Realisable Assets
30,847,465
25.43%
121,324,216
27,009,088
22.93%
117,775,332
21,333,296
20.07%
106,293,756
For the purposes of the calculation of financial ratios, realisable assets are
those assets which can be sold and which are not subject to any restriction on
realisation or use.
Any liability represented by a restricted asset (note 35) is excluded from total
indebtedness.
The following assets are excluded from total assts when calculating Council's
realisable assets:
land and buildings on Crown land; restricted assets; heritage assets; total
infrastructure assets; and Council's investment in associate.
This ratio enables assessment of Council's solvency and exposure to debt.
Total indebtedness refers to the total liabilities of Council. Total liabilities are
compared to total realisable assets which are all Council assets not subject to
any restriction and are able to be realised. The ratio expresses the multiple of
total liabilities for each dollar of realisable assets.
(e) Working Capital Ratio (to
assess Council's ability to meet
current commitments)
Current Assets
23,758,566
Current Liabilities
13,754,703
172.73%
21,473,811
208.66%
10,291,271
17,675,099
172.50%
10,246,183
The ratio expresses the level of current assets
the Council has available to meet its current
liabilities.
(f) Adjusted Working Capital
Ratio (to assess Council's
ability to meet current
commitments)
Current Assets
23,758,566
Current Liabilities
13,029,421
182.35%
21,473,811
9,803,035
The ratio expresses the level of current assets the Council has available to
meet its current liabilities.
Current liabilities have been reduced to reflect the long service leave that is
shown as a current liability because Council does not have an unconditional
right to defer settlement of the liability for at least twelve months after the
reporting date, but is not likely to fall due within 12 months after the end of the
period.
219.05%
17,675,099
9,741,577
181.44%
45 Capital expenditure
Capital expenditure areas
Note
Land
Land improvements
Landfill assets
Buildings
Plant and equipment
Bridges
Kerbing
Drainage
Footpaths
Bike paths
Parks and gardens
Total capital works
Represented by:
Renewal
Upgrade
Expansion
New assets
(a)
(b)
(c)
Total capital works
2012
$
16,197
801,142
849,073
3,751,123
902,912
311,414
2,827,166
402,990
288,635
326,100
224,183
184,017
1,285,038
114,821
2011
$
2,548
896,852
22,884
1,574,813
1,954,503
223,757
1,840,068
232,572
531,515
67,568
40,810
199,661
425,472
206,735
12,284,811
8,219,758
5,031,765
1,211,816
0
6,041,230
4,794,606
1,543,863
20,838
1,860,451
12,284,811
8,219,758
12,284,811
178,922
1,047,594
13,311,378
(10,750,039)
(80,599)
-
8,219,758
1,800,100
5,814,225
16,324,003
(9,437,685)
(161,978)
(3,760,359)
-
15,992,067
18,798,064
Property, infrastructure, plant and equipment movement
The movement between the previous year and the current year
in property, plant and equipment, infrastructure as shown in the
Balance Sheet links to the net of the following items:
Total capital works
Recognition of rehabilitation of landfill
Asset revaluation movement
Depreciation/amortisation
Written down value of assets sold
Impairment losses due to natural disaster
Recognition of previously unrecognised assets
Transfers of non current assets classified as held for sale
Net movement in property, infrastructure, plant and equipment
6(b)
28(b)
30(a)
14
25
17
25
25
25
(a) Renewal
Expenditure on an existing asset which returns the service potential or the life of the asset up to that which it
had originally. It is periodically required expenditure, relatively large (material) in value compared with the value
of the components or sub-components of the asset being renewed. As it reinstates existing service potential, it
has no impact on revenue, but may reduce future operating and maintenance expenditure if completed at the
optimum time.
(b) Upgrade
Expenditure which enhances an existing asset to provide a higher level of service or expenditure that will
increase the life of the asset beyond that which it had originally. Upgrade expenditure is discretional and often
does not result in additional revenue unless direct user charges apply. It will increase operating and
maintenance expenditure in the future because of the increase in the Council's asset base.
(c) Expansion
Expenditure which extends an existing asset, at the same standard as is currently enjoyed by residents, to a
new group of user. It is discretional expenditure which increases future operating and maintenance costs,
because it increases Council's asset base, but may be associated with additional revenue from the new user
group.
46 Events occurring after balance date
No matters have occurred after balance date that warrant disclosure in this report.
47 Correction of errors
The following errors are not considered material in relation to either the balance sheet or comprehensive income statement.
47 (a) Incorrect Valuation of Buildings
As a part of the depreciation calculation for 2012 it was found that the 2011 totals for were
Buildings
47 (a)
Omitted
property
assets
(74,000)
(77,000)
(151,000)
47 Correction of errors (cont.)
The impact of this action on 2011 comparative figures is as follows:
47 (a)
Duplication of
Adjusted
building
2011
assets
Balance
2011 Balance
Balance sheet:
Buildings
45,088,300
(151,000) 44,937,300
Asset revaluation reserve
196,247,960
(151,000) 196,096,960
Total
correction of
errors
(74,000)
(77,000)
(151,000)
FINANCIAL REPORT
CERTIFICATION OF THE FINANCIAL REPORT
In my opinion, the accompanying financial statements have been prepared in accordance with the Local
Government Act 1989, the Local Government (Finance and Reporting) Regulations 2004 , Australian
Accounting Standards and other mandatory professional reporting requirements.
Ruth Kneebone B.Com., A.C.A.
Principal Accounting Officer
September 2012
Wangaratta
In our opinion the accompanying financial statements present fairly the financial transactions of the
Wangaratta Rural City Council for the year ended 30 June, 2011 and the financial position of the Council as
at that date.
As at the date of signing, we are not aware of any circumstances which would render any particulars in
the financial statements to be misleading or inaccurate.
We have been authorised by the Council on 18 September 2012 to certify the financial statements in their
final form.
Cr Roberto Paino
Mayor
September 2012
Wangaratta
Cr Anthony Griffiths
Councillor
September 2012
Wangaratta
Doug Sharp
September 2012
Wangaratta
STANDARD STATEMENTS
2011 - 2012
Introduction to the Standard Statements
Basis of preparation of Standard Statements
Council is required to prepare and include audited Standard Statements within its Annual
Report.
These statements and supporting notes form a special purpose financial report prepared to
meet the requirements of the Local Government Act 1989 and Local Government (Finance
and Reporting) Regulations 2004.
The Standard Statements have been prepared on accounting bases consistent with those
used for the General Purpose Financial Reports and the Budget. The results reported in
these statements are consistent with those reported in the General Purpose Financial
Report.
The Standard Statements are not a substitute for the General Purpose Financial Report,
which are included in the Annual Report. They have not been prepared in accordance with
all Australian Accounting Standards or other authoritative professional pronouncements.
The Standard Statements compare Council's financial plan, expressed through its budget,
with actual performance. The Local Government Act 1989 requires explanation of any
material variances. The Council adopted a materiality threshold of 10% and $200,000.
Explanations have not been provided for variations below the materiality threshold unless
the variance is considered to be material because of its nature.
The budget figures included in the Standard Statements are those adopted by Council on 19
July 2011. The budget was based on assumptions that were relevant at the time of
adoption of the budget. The Council set guidelines and parameters for revenue and
expense targets in this budget in order to meet Council's business plan and financial
performance targets for both the short and long term. The budget did not reflect any
changes to equity resulting from asset revaluations as their impacts were not considered
predictable.
Detailed information on the actual financial results are contained in the General Purpose
Financial Report. The detailed budget can be obtained by contacting Council or through
Council's website. The Standard Statements must be read with reference to these
documents.
Standard Income Statement
Income
Actual
$
$'000
Budget
$
$'000
Variance
$
$'000
Variance Notes
%
Rates and charges
User fees
Contributions - Cash
Grants - recurrent
Grants - non-recurrent
Reimbursements
Other revenue
21,890
600
5,852
315
179
15,868
4,695
5,982
795
21,826
617
6,098
227
14,203
5,661
2,984
628
64
(17)
(246)
88
179
1,665
(966)
2,998
167
0.3
(2.8)
(4.0)
38.6
100.0
11.7
(17.1)
100.5
26.6
Total income
56,176
52,244
3,932
7.5
Employee benefits
Finance costs
Other expenses
22,841
21,122
10,750
623
9
18,842
19,730
10,150
629
20
(3,999)
(1,392)
(600)
6
11
(21.2)
(7.1)
(5.9)
0.9
56.3
Total expenses
55,345
49,371
(5,974)
(12.1)
186
199
(13)
(6.5)
(117)
(234.2)
(2,042)
(65.4)
1
2
3
4
Expenses
Net gain/(loss) on sale/disposal of property,
infrastucture, plant and equipment
Share of other comprehensive income of
associates and joint ventures accounted for
by the equity method
Surplus (deficit) for the period
(67)
950
50
3,122
5
6
Standard Balance Sheet
As at 30 June 2012
Assets
Current assets
Actual
$
$'000
Budget
$
$'000
Variance
$
$'000
8,653
1,925
(20)
Variance Notes
%
Other current assets
16,413
5,678
1,668
7,760
3,753
1,688
111.5
51.3
(1.2)
Total current assets
23,759
13,201
51
10
182
10
(131)
-
(71.7)
-
824
355,266
910
313,340
(86)
41,926
(9.4)
13.4
Total non-current assets
356,152
314,442
41,710
Total assets
379,911
327,643
52,268
Payables
Provisions
Interest bearing liabilities
5,955
631
5,569
1,599
2,895
600
4,982
1,619
3,060
31
587
(20)
Total current liabilities
13,755
10,096
3,659
Provisions
Interest Bearing Liabilities
10,089
7,004
9,797
7,004
292
0
Total non-current liabilities
17,093
16,801
292
Total liabilities
30,847
26,897
3,950
349,063
300,746
48,317
Accumulated Surplus
Asset Revaluation Reserve
Reserves
133,994
209,408
5,661
135,016
162,150
3,580
(1,022)
47,258
2,081
Total equity
349,063
300,746
48,317
7
8
10,558
Non-current assets
Receivables
Financial assets
Investment in associates accounted for by using the
equity method
9
Liabilities
Current liabilities
105.7
5.2
11.8
(1.2)
10
11
Non-current liabilities
Net assets
3.0
0.0
Equity
The accompanying notes form part of these standard statements
(0.8)
29.1
58.1
9
12
Standard Cash Flow Statement
For the period ended 30 June 2012
Actual
$'000
Budget
$'000
Variance Variance Notes
$'000
%
21,889
600
5,117
315
20,562
5,982
766
29
(18,590)
(21,995)
21,826
617
5,799
299
19,864
2,984
624
231
(18,392)
(20,035)
14,675
13,817
Payments for property, infrastructure, plant and equipment
Proceeds from sale of assets
Payments for investments
(12,285)
267
13
(16,265)
1,399
-
3,980
(1,132)
13
Net cash used in investing activities
(12,006)
(14,866)
2,860
Proceeds from borrowings
Finance costs
Repayment of borrowings
1,071
(623)
(1,607)
1,071
(629)
(1,603)
(0)
6
(4)
(0.0)
(0.9)
0.2
Net cash used in financing activities
(1,159)
(1,161)
2
(0.2)
Net increase (decrease) in cash held
Cash at the beginning of the year
1,510
14,950
(2,210)
9,970
3,720
4,980
Cash and cash equivalents at the end of year
16,460
7,760
8,700
Cash flows from operating activities
Rates
User fees (inclusive of GST)
Contributions (inclusive of GST)
Grants (inclusive of GST)
Reimbursements (inclusive of GST)
Interest
Other receipts
Net GST refund
Payments to suppliers (inclusive of GST)
Payments to employees (including reduncancies)
63
(17)
(682)
16
698
2,998
142
(202)
(198)
(1,960)
858
0.3
(2.8)
(11.8)
5.2
3.5
100.0
22.8
(87.5)
100.0
1.1
9.8
13
2
3
13
6
6.2
Cash flows from investing activities
(24.5) 14-17
(80.9)
100
19.2
Cash flows from financing activities
168.3
49.9
Reconciliation of Operating Result and Net Cash Flows from Operating Activities
for the year ending 30th June 2010
Net surplus (deficit) from operations
950
3,122
(2,172)
(69.6)
600
(3,308)
(6)
179
48
5,145
5.9
(106.0)
(0.9)
100.0
(96.0)
(163.0)
(Profit) loss on sale of property, plant and equipment
Finance costs
Share of High Country Library Corporation surplus
Net movement in current assets and liabilities
10,750
(186)
623
179
(2)
1,989
10,150
3,122
629
(50)
(3,156)
Net Cash inflow (outflow) from operating activities
14,675
13,817
858
4
1
Standard Statement of Capital Works
Actual
Budget
Variance
$'000
$'000
$'000
289
3,751
224
311
16
849
801
115
903
5,025
310
1,975
212
300
200
331
4,293
167
2,664
5,813
(21)
1,776
12
11
(184)
518
(3,492)
(52)
(1,761)
(788)
12,285
16,265
(3,980)
5,032
1,212
6,041
7,158
2,451
6,656
(2,126)
(1,239)
(615)
12,285
16,265
(3,980)
12,285
13,311
179
1,048
(10,750)
(81)
16,265
(10,150)
(1,200)
(3,980)
13,311
179
1,048
(600)
1,119
15,992
4,915
11,077
Variance Notes
%
Capital Works Areas
Bridges
Buildings
Drainage
Land
Landfill assets
Land improvements
Parks, gardens and recreation
Plant and equipment
Roads and infrastructure
Total capital works
(6.9)
89.9
5.7
3.8
(91.9)
156.5
(81.3)
(31.2)
(66.1)
(13.6)
14
15
16
17
18
Represented by :Renewal
Upgrade
Expansion
New assets
Total Capital Works
(29.7)
(50.6)
(9.2)
Property, infrastucture, plant and equipment movement
reconciliation worksheet
The movement between the previous year and the
current year in property, infrastructure, plant and
equipment and as shown in the Balance Sheet links
to the net of the following items:
Total capital works
Asset revaluation movement
Recognition of rehabilitation of landfill
Written down value of assets sold
Net movement in property, infrastructure, plant
and equipment
(24.5)
100.0
100.0
5.9
(93.3)
9
1
19
20
Notes to the Standard Statements
for the year ended 30 June 2012
1
New infrastructure assets are recognised as subdivisions reach practical completion. During 2011/12 this included
the estate at 116 Factory Road Milawa. These assets, constructed by developers, are not included in Council's
budget.
2
50% of 2012/13 Victorian Grants Commission funding was received in advance during 2011/12.
3
Budgeted project funding application not successful - Ovens River/Faithful St precinct project funding not received
totalling $2.5M. This is offset by $1M of Country Roads and Bridge Initiative funding for 2012/13 being recognised in
2011/12. Also $200K was received for the Comfort Station redevelopment
4
Reimbursements for the 2010 and 2012 flood events totalling $5.7M have been received during the 2011/12 financial
year.
5
Defined benefits superannuation call of $3.2M has impacted employee costs, also significant employee costs and
overtime was incurred during the 2012 flood event.
6
Defined benefits superannuation call of $175K has impacted on High Country Library Corporation surplus.
7
Cash and cash equivalents are greater than budget due to capital works that will be carried forward to the 2012/13
financial year. Additionally reimbursements of 1.37M were received in advance for works not yet conducted for 2012
flood restoration
8
Sundry Debtors include $1M of Country Roads and Bridge Initiative funding for 2012/13. Other receivables include
reimbursement by the Victorian Department of Treasury and Finance for flood emergency and restoration works.
9
Significant asset revaluations are represented by an increase of 13.3 million in Infrastructure. This movement was
not known at budget preparation.
10
Defined benefits superannuation call of $3.2M has impacted payables.
11
Current provisions have been impacted by a $800K increase in the provision for Long Service Leave. This increase
has been calculated by applying new legislation in 2011/12.
12
The deferral of plant replacement items of $1.2M, Murrell Street Redevelopment of $742K and other projects have
decreased the amount transferred from reserves.
13
Budget framed exclusive of GST.
14
Building projects carried forward from 2010/11 include the Children's services centre - $424K and the Wangaratta
showgrounds redevelopment - $2.2M
15
Bowser Landfill Cell 8 construction carried forward from 2010/11.
16
Ovens River/Faithful St precinct project funding not received for expenditure totalling $2.78M.
17
Significant plant and equipment purchases carried forward to 2012/13.
18
Significant asset revaluations are represented by an increase in the Asset Revaluation Reserve of $14.1M. This
movement was not known at budget preparation.
19
Non-current provisions have been impacted by a $1.05M increase in the provision for landfill rehabilitation. This
increase has been calculated by applying current rehabilitation costs the remaining landfills to be rehabilitated.
20
No land sales during 2012/13.
STANDARD STATEMENTS
CERTIFICATION OF STANDARD STATEMENTS
In my opinion the accompanying standard statements have been prepared on accounting bases
consistent with the financial statements and in accordance with the Local Government Act 1989
and the Local Government (Finance and Reporting) Regulations 2004.
Principal Accounting Officer
Ruth Kneebone
September 2012
Wangaratta
In our opinion the accompanying standard statements have been prepared on accounting bases
consistent with the financial statements and in accordance with the Local Government act 1989
and the Local Government (Finance and Reporting) Regulations 2004.
As at the date of signing, we are not aware of any circumstances which would render any
particulars in the standard statements to be misleading or inaccurate.
We have been authorised by the Council on 18 September 2012, to certify the standard
statements in their final form.
Mayor
Roberto Paino
Councillor
Anthony Griffiths
Doug Sharp
September 2012
Wangaratta
September 2012
Wangaratta
September 2012
Wangaratta
PERFORMANCE STATEMENT
For the year ending 30 June 2012
Under Section 127 of the Local Government Act 1989, Council’s 2010 - 2011 Annual Budget included a list of separately identified
Key Strategic Activities that Council would undertake in the 2011 - 2012 financial year.
The list of Key Strategic Activities includes performance targets and measures and is presented under Council’s seven Key Result
Areas as outlined in the 2009 - 2013 Council Plan:
•
•
•
•
•
•
•
Governance;
Arts, Culture and Heritage;
Community Wellbeing;
Infrastructure and Planning;
Economic Development and Tourism;
Environmental Sustainability; and
Sport and Recreation.
The extent to which Council has achieved the Key Strategic Activities has been assessed through an independent audit process.
** In response to feedback from local councils, Local Government Victoria introduced methodological and content changes to the
Community Satisfaction Survey in 2012 to provide the sector with more reliable and meaningful results to inform decision making
and support strategic planning. The survey provides core questions as well as optional questions which councils can pick and
choose from depending on their particular information and reporting needs. Councils are also able to include their own tailored
questions and sampling requirements.
Methodological improvements to the Community Satisfaction Survey in 2012 included increasing the sample size from the previous
minimum of 350 respondents per municipality up to 400 respondents and ensuring that the sample reflects the demographic
composition of a municipality. The survey also allows for respondents to be "residents over 18 years of age" instead of restricting
respondents to "head of household". These changes together with revisions to the performance scale and scoring have improved
the useability of the survey.
For these reasons, direct comparison with previous Community Satisfaction Survey results is not possible. Rather, this year’s
results should be seen as a benchmark, one of the reasons being that the survey is now conducted as a representative random
probability survey of residents aged 18 years or over in local Councils, whereas previously it was conducted as a ‘head of
household’ survey.
Comparisons can be made to the overall State-wide result and Council’s relevant group - Regional Centres. Tracking comparisons
will be possible in future years.
The following section details Council’s audited performance against the Key Strategic Activities.
Key Strategic Activity
Performance Measure
How Data is
reported
Performance
Target
Actual
11/12
Comment
Governance
To engage the community
in a strategic approach to
decision-making and the
development of the Rural
City of Wangaratta.
Community
Satisfaction Survey
Local
Government
Community
Satisfaction
Survey
Community
Engagement
63%
N/A
To take a whole-ofgovernment approach to
the development and
wellbeing of the Rural City
of Wangaratta.
Community
Satisfaction Survey
Local
Government
Community
Satisfaction
Survey
Advocacy
67%
N/A
** Direct comparison
with previous
Community Satisfaction
Survey results is not
possible. Community
Consultation and
Engagement
58%
with previous
possible. Lobbying on
Behalf of the
(a)
To focus on corebusiness and
non-core
business.
(b)
To act as an
advocate and
facilitator in other
functions.
To minimise risk as a way
of providing a safer public
and work place
environment.
To invest in and deploy
proven Information
Management Systems to
ensure effective access to
information and services.
Performance Measure
How Data is
reported
Performance
Target
Actual
11/12
Comment
Community
58%
with previous
possible. Contact
Customer Service
72%
with previous
possible. Overall
Performance 66%
Community
Satisfaction Survey
Local
Government
Community
Satisfaction
Survey
Customer
Contact 76%
N/A
Community
Satisfaction Survey
Local
Government
Community
Satisfaction
Survey
Overall
Performance
68%
N/A
Civic Mutual Plus
Target
Civic Mutual
Plus Report
85%
81%
Target not achieved.
Council Website
transactions
Macquarie Bank
Report
10%
increase
Target achieved
Council Website hits
www.wangaratta
.vic.gov.au
statistics
10% increase
Visitor Information
Centre Website hits
www.visitwanga
ratta.com.au
statistics
Budget
Comparison
Report
10% increase
2179
(21.3%
increase)
From 24,768 in
October 2011
to 28,666 in
June 2012
(16% increase)
95,720
(31% increase)
Victorian Auditor
General’s
Report
Low Risk
Rating
Local
Government
Community
Satisfaction
Survey
Community
Engagement
63%
To operate specific
undertakings on a
business basis with
sufficient funding to meet
agreed community benefit.
Operate within selfcontained business
unit budget
To provide responsible
financial practices
ensuring Council’s
ongoing financial viability.
To apply a triple bottom
line approach to the
assessment of new
initiatives.
Victorian Auditor
General’s Overall
Sustainability Risk
Rating
Community
Satisfaction Survey
Operate
within budget
Specific
Council
undertakings
have operated
within selfcontained
business unit
budget
Low risk
Target achieved
Target achieved
Target achieved
Target achieved
N/A
with previous
possible. Community
Consultation and
Engagement
58%
32
Target achieved
Arts, Culture and Heritage
To provide a diverse visual
arts experience and
opportunities for local and
regional communities and
Exhibits provided
Exhibition
Program
22
How Data is
reported
Performance
Target
Actual
11/12
Community
Satisfaction Survey
Local
Government
Community
Satisfaction
Survey
Community
Engagement
63%
N/A
Community
Satisfaction Survey
Local
Government
Community
Satisfaction
Survey
Community
Engagement
63%
N/A
To establish the
Wangaratta Performing
Arts Centre as a high
quality, and accessible
facility.
To integrate public art,
design and cultural
features into the planning
of capital works projects
and public space
developments throughout
the Rural City of
Wangaratta.
To establish a
preservation program for
cultural and built heritage.
Total number of
events per month as
a % of total bookable
spaces
Wangaratta
Performing Arts
Centre Report
New measure
38%
Community
Satisfaction Survey
Local
Government
Community
Satisfaction
Survey
Appearance
of Public
Areas 74%
N/A
with previous
possible.
Appearance of Public
Areas 78%
Community
Satisfaction Survey
Local
Government
Community
Satisfaction
Survey
Community
Engagement
63%
N/A
To promote the library
service as a community
information resource that
is accessible and
responsive to community
need.
Number of visits
High Country
Library
Corporation
Report
Increase by
2.5%
135,635
with previous
possible. Community
Consultation and
Engagement
58%
Target not achieved
visitors by the Wangaratta
exhibitions Gallery.
To promote the benefits of
a culturally, linguistically
and religiously diverse
society and the social,
cultural and economic
opportunities this provides.
To facilitate arts and
cultural events and
festivals.
Performance Measure
(3.2%
decrease)
Comment
with previous
possible.
Community
Consultation and
Engagement
58%
with previous
possible. Community
Consultation and
Engagement
58%
Target achieved
Community Wellbeing
To support our community
to be resilient.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Community
Resilience.
75%
. Survey
question not
undertaken in
2012
To foster and encourage:
• community spirit;
• volunteerism; and
• community
leadership.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Health and
Human
Services 75%
Survey
question not
undertaken in
2012
with previous
possible
with previous
possible.
Performance Measure
How Data is
reported
Performance
Target
Actual
11/12
Comment
To promote a high level of
community safety.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Enforcement
of By Laws
69%
N/A
To support communities in
times of crisis.
Drought Strategy
Review of Drought
Strategy
95%
To ensure the provision of
affordable, accessible and
high quality children’s
services.
To support the
development of integrated
health provision to
maximise the health and
wellbeing outcomes for the
community
Wangaratta
Community
Childcare Centre
places
Community
Satisfaction Survey
Childcare Centre
utilisation data
95% of
actions
achieved
96% utilised
with previous
possible. Enforcement
of By Laws 73%
Target achieved
89%
Target not achieved
Local Government
Community
Satisfaction
Survey
Advocacy
67%
N/A
To support families, older
people and people with
disabilities to actively
engage and participate in
their community.
To promote and support
youth leadership by
engaging young people
and strengthening their
involvement in the
community.
To work with education
providers to enhance
opportunities for life-long
learning
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Health and
Human
Services 75%
Survey
question not
undertaken in
2012
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Health and
Human
Services 75%
Survey
question not
undertaken in
2012
with previous
Behalf of the
Community
56%
with previous
possible.
with previous
possible.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Advocacy
67%
N/A
with previous
Behalf of the
Community
56%
with previous
possible. Condition of
local streets and
footpaths 61%
with previous
possible. Traffic
Management 61%
Parking Facilities 51%
with previous
Infrastructure and Planning
To implement asset
management systems that
ensure the sustainability of
our community assets.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Local Roads
and
Footpaths
58%
N/A
To investigate and
implement infrastructure
opportunities that support
community aspirations
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Traffic
Management
and Parking
Facilities 59%
N/A
Community
Satisfaction Survey
Local Government
Community
Advocacy
67%
N/A
Performance Measure
How Data is
reported
Performance
Target
Actual
11/12
Satisfaction
Survey
To undertake a strategic
approach to land use
planning to provide
balanced outcomes for
growth, existing land use,
environment, heritage and
community aspirations
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Recreational
Facilities 74%
N/A
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Appearance
of Public
Areas 74%
N/A
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Town
Planning
Policy and
Approvals
59%
Survey
question not
undertaken in
2012
Comment
Behalf of the
Community
56%
with previous
possible. Recreational
Facilities
76%
with previous
possible. Appearance
of Public Areas
78%
with previous
possible.
Economic Development and Tourism
To define and market the
liveability and lifestyle
attributes of the Rural City
of Wangaratta as a
preferred location to live,
work and invest.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Economic
Development
66%
N/A
To reinvigorate the inner
urban areas of Wangaratta
to maximize their potential.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Economic
Development
66%
N/A
To promote a strong and
vibrant business
community of a diverse
range of small, medium
and large enterprises
capitalising on the key
competitive strengths of
our region
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Economic
Development
66%
N/A
To enhance the
sustainability of the
Wangaratta workforce
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Economic
Development
66%
N/A
with previous
possible.
Business and
community
development and
tourism 69%
with previous
possible. Business and
community
development and
tourism 69%
with previous
possible.
Business and
community
development and
tourism 69%
with previous
Performance Measure
How Data is
reported
Performance
Target
Actual
11/12
Survey
In conjunction with
relevant stakeholders, to
realise the sustainable
agricultural production
potential of the Ovens and
King Valleys region as a
future food bowl.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Economic
Development
66%
N/A
To support and encourage
a sustainable, innovative
and resilient tourism
sector.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Economic
Development
66%
N/A
To prepare for a carbon
constrained economy
through developing
greenhouse friendly
economic initiatives and
capitalising on related
opportunities.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Advocacy
67%
N/A
To further progress
Wangaratta as the leading
retail and service centre in
North East Victoria.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Economic
Development
66%
N/A
Comment
possible.
Business and
community
development and
tourism 69%
with previous
community
development and
tourism 69%
with previous
community
development and
tourism 69%
with previous
Behalf of the
Community
56%
with previous
community
development and
tourism 69%
Environmental Sustainability
To responsibly manage
the local environment.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Appearance
of Public
Areas 74%
N/A
with previous
possible. Appearance
of Public Areas
78% To enhance community
understanding of
conservation values and
provide opportunities to
experience and contribute
to the environment.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Recreational
Facilities 74%
N/A
To reduce impact of
Council’s activities and
provide leadership in
sustainability by
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Community
Engagement
63%
with previous
Facilities
76%
with previous
N/A
Performance Measure
How Data is
reported
Performance
Target
Actual
11/12
demonstrating best
practice
To develop initiatives for
the community to reduce
resource use and waste to
achieve sustainable living.
Assist the community to
proactively respond to
climate change
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Waste
Management
74%
N/A
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Survey
question not
undertaken in
2012
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Town
Planning
Policy and
Approvals
59%
Town
Planning
Policy and
Approvals
59%
Survey
question not
undertaken in
2012
Comment
possible.
Environmental
Sustainability 66%
with previous
possible.
Environmental
Sustainability 66%
with previous
possible.
with previous
possible.
Sport and Recreation
To undertake a planned
approach to maintaining
and improving quality and
accessible recreation and
sporting facilities and
programs.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Recreational
Facilities 74%
N/A
To encourage the greater
use of recreation facilities
including formal sports
facilities, open spaces,
shared paths and aquatic
centres.
Community
Satisfaction Survey
Local Government
Community
Satisfaction
Survey
Recreational
Facilities 74%
N/A
with previous
Facilities
76%
with previous
Facilities
76%
18 September 2012
ATTACHMENT
LOCAL AUTHORITIES SUPERANNUATION FUND DEFINED
BENEFIT PLAN
Refer Item 11.2.2.4
Doc ID 444722 Printed from Infovision EDMS at : 01:21PM on Fri 03 Aug 2012
VISION )SUPER
YOUR INDUSTRY SUPER FUND
LOCAL AUTHORITIES SUPERANNUATION FUND
DEFINED BENEFIT PLAN
Background Briefing
June 2012
Vision Super Pty Ltd
Trustee of the Local Authorities Superannuation Fund
ABN: 50 082 924 561
Australian Financial Services Licence No: 225054
RSE Licence No: L0000239
1
Doc ID 444722 Printed from Infovision EDMS at : 01:21 PM on Fri 03 Aug 2012
Local Authorities Superannuation Fund
Pensions & Defined Benefit Plan
Background Briefing
Page 2
VISION0SUPER
Introduction
This is a background briefing for Authorities who employ members of the LASF defined
benefit plan and/or, previously employed any person who currently receives, (or their
spouse currently receives), a lifetime pension under the LASF pension plan.
LASF was established by, and operated under Victorian legislation until 1998 when the
Local Authorities Superannuation Act was repealed. At the time of its repeal, special
legislation was enacted requiring all Authorities to maintain their contributory obligations to
the Fund.
This Background Briefing outlines:
•
The differences between accumulation, pension and defined benefit plans;
•
The funding of the pension and defined benefit plans; and
•
The methodology for apportioning any unfunded liability.
The differences between accumulation, defined benefit and plans
The majority of Australian super schemes are accumulation plans. In accumulation plans the
member's retirement benefit is based on the amount of contributions made to their account,
plus investment earnings, less fees and tax. Unless an industrial or contractual agreement
provides otherwise, employers generally only pay compulsory Superannuation Guarantee
contributions for their employees (currently 9% of salary). The member receives no
undertaking or guarantee as to the level of retirement benefit he or she will receive. The
member bears all of the investment risk.
Unlike accumulation plans, the lump sum retirement benefit for a defined benefit member is
based on a formula that takes into account years of membership, a benefit multiple and
salary at retirement. The application of this formula results in a defined benefit member's
retirement benefit being defined in advance. In defined benefit plans, the sponsoring
employers bear all of the investment risk.
LASF Defined benefit members who commenced prior to 25 May 1988 have an on-going
right to choose to take up to half of their lump sum benefit as a pension. The pension is
payable for life, indexed to CPI. On death of a pensioner, their surviving spouse is generally
entitled to a reduced (two-thirds) pension.
Funding of LASF pension and defined benefit plan
Prior to the closure of the plan in 1993 the plan was funded as follows:
Member Contribution
6% of salary
Employer Contribution
13.25% of salary
The first actuarial investigation carried out after the legislated benefit improvements in 1989
showed an unfunded liability of $410 million. The trustee at the time (LASB) developed and
2
Background Briefing
Page 3
VISION*SUPER
implemented a plan to achieve full funding by 2007. This required an employer contribution
rate equal to 13.25% of employees' salaries comprising 9.25% to meet ongoing liabilities
plus a 4% surcharge to eliminate the unfunded liability. The 1992 actuarial review showed
that the plan was working well as the unfunded liability had reduced to $314 million.
In 1993 the State Government, concerned about growing unfunded liabilities in the State
scheme for public servants, conducted a review of all public sector schemes, including
LASF. As a result, all public sector funds other than two notable exceptions were closed to
new members on 31 December 1993. The LASB defined benefit plan was closed even
though it was not funded directly by the State and its unfunded liability was reducing.
From 1 January 1994 all new employees of local authorities joined a standard accumulation
plan, LASPLAN (now known as Super Saver). As previously explained, accumulation plans
do not provide members with the promise of future benefits based on years of service, so no
issue of surplus or unfunded liability arises with Super Saver accounts.
The 1995 actuarial review showed that the unfunded liability had further decreased to
$217 million but, with the reduced salary base and no new members, the target for fully
funding the liabilities had to be moved from 2007 to 2012. The alternative would have been
to increase the employer contribution rate.
At the same time, the State Government was reforming local government by amalgamations
and requiring external compulsory competitive tendering of traditional council services.
These reforms lead to widespread redundancies in local government and had a major
impact on LASF. By the time of the next actuarial review the unfunded liability had increased
from $217 million to $321 million. The previous funding plan was no longer relevant and a
new strategy for funding future benefits had become necessary.
In 1997 a special Working Party comprising local government and water industry
representatives was convened to formulate an equitable basis for funding the defined
benefit liabilities. The Working Party's recommendations were adopted by LASB and
subsequently endorsed by the State government.
The new funding arrangements included:
A lump sum contribution to pay the (then) $321 million unfunded liability, apportioned
between Authorities and payable over a maximum 10-year period. This replaced the
4% surcharge.
The ongoing employer contribution rate to fund the benefits of existing members was
reduced from 13.25% to 9.25%.
A retrenchment increment to meet the costs of retrenchments. This was payable by
each Authority depending upon their individual experience.
On 30 June 1998 the State Government repealed the LAS Act. From 1 July 1998 LASF
became a "regulated fund" under Commonwealth legislation; the Superannuation Industry
(Supervision) Act 1993. Under the Act, actuarial investigations are required at least every
3 years. Since 1998 the following factors contributed to fluctuations in the financial position
of the Plan:
•
Closed, defined benefit plans become more volatile over time. No new members join
3
Background Briefing
Page 4
VISION*SUPER
the plan and the salary base on which contributions are based declines as working
members progressively retire.
•
As membership drops, so plans become more susceptible to changes in salary growth,
inflation, investment returns and membership demographics.
•
The lack of surplus from the years prior to becoming a regulated fund means there
were no reserves to draw upon when the Plan suffered adverse experience.
Fluctuations in the financial condition of closed defined benefit plans are common. They
explain the volatility in the condition of the LASF Defined Benefit Plan that has occurred.
•
In 2002 there was an unfunded liability of $127 million; largely caused by a downturn in
share markets following the collapse of internet companies (the "dot.com bubble") and
the terrorist attacks in the USA.
•
By 2005 the Plan had a (small) $23 million surplus.
•
In December 2008, the Plan was again adequately funded. However, a downturn in
the markets during the global financial crisis (between 31 December and the
completion of the actuarial review) resulted in an "actuarial shortfall" of $71 million.
The Trustee obtained regulator (APRA) approval to establish a 5-year funding plan,
designed to bring the Plan back to a satisfactory financial position by 2013. The underlying
intention of the 5-year funding plan was to buy time for authorities; in the expectation that
markets would recover from the global financial crisis and that a call could be avoided.
Unfortunately, more difficulties surfaced in the world's global markets and the expected
recovery did not eventuate. As a result of this:
•
In June 2010 the Actuary recommended that the $71 million outstanding in 2008 be
called.
•
In December 2011 there was an unfunded liability of $453 million. The size of the
shortfall was largely attributable to two factors; depressed investment performance
relative to salary growth coupled with changed assumptions about the expected future
experience of the Plan.
Mindful of the potential financial impact on authorities, Vision Super was able to convince the
regulator of the need for a longer term 15 year funding plan, rather than the normal
regulatory requirement of a 5-year funding plan.
Vision Super is a complying, regulated, superannuation fund within the meaning of the
Superannuation Industry (Supervision) Act 1993. One of the requirements of a complying
superannuation fund with defined benefits is that the Trustee must carry out an actuarial
investigation at least once every 3 years. The purpose of an actuarial investigation is to
assess the financial position of the fund and to determine whether current funding
arrangements are adequate.
Assessing the financial position of a defined benefit plan involves the actuary making a
comparison between the assets of the fund and the estimate of the total liabilities for present
and past members, including pensioners. Establishing the appropriate funding level involves
the actuary making assumptions about various economic, financial and demographic factors
over the life of the current membership. The assumptions include:
4
Background Briefing
Page 5
VISION*SUPER
•
The rate of inflation,
•
The rate of salary increases amongst defined benefit members,
•
The return on investments,
•
Pensioner mortality rates,
•
The incidence of:
Resignations
Retirements, and
Death and Disability claims.
The financial performance of the plan is thus dependent upon the performance of, and
interrelationship between a complex set of financial, economic and demographic factors.
Depending upon the actual experience of the plans relative to assumptions over each threeyear period, the actuarial review will show the pension and defined benefit plans to be in
either surplus or deficit.
Many of the factors impacting a defined benefit plan's performance are beyond a trustee's
control. It is also important to understand that whether a plan is in surplus or deficit can
depend upon whether the plan has been in surplus during a sustained period of growth in
investment markets. Where this has occurred, plans have generally been able to build an
investment surplus that allows the solvency of the plan to be maintained during periods of
adverse performance. Given its past funding history, this luxury has not been available to
Vision Super.
Furthermore, as a closed defined benefit plan in which the total membership salary base is
decreasing, increasing the employer contribution rate during periods of adverse financial or
demographic experience, does not normally provide the Trustee with an adequate funding
solution. Recognising this problem in 1997, the State Government amended the LASF Act
to give the Trustee the power to make lump surn funding calls. This power is included in the
current Authority Agreement.
Methodology for apportioning Unfunded Liabilities
The methodology for apportioning pension and active member lump sum funding calls has
been consistently applied since its origination in 1997 when LASF was under State
legislation.
In summary, the methodology provides for two components:
Pre-30 June 1993 Component:
•
Unfunded lifetime pension liabilities are apportioned to each Authority on the basis of
their individual share of the Plan's total defined benefit salaries as at 30 June 1993;
•
The unfunded liabilities for active members' pre-30 June 1993 membership is
apportioned in the same way; and,
5
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E3ackground Briefing
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VISION )SUPER
Post-30 June 1993 Component:
• The unfunded liabilities for active members' post-30 June 1993 service is apportioned
to each Authority on the basis of their individual share of the Plan's total defined
benefit salaries at 31 December 2011 (the date of the actuarial investigation).
Example:
At 31 December 2011 there were 4,971 active members of the LASF Defined Benefit Plan.
Their combined service period was split 25.15% prior to 30 June 1993 and 74.85%
thereafter.
At 31 December 2011, the Plan's pension liability was $359.9m, while the plan's active
member liability was $1,516.4m. Pension and active member liabilities totalled $1,879.3m
Organisation A's share of the Plan's total defined benefit salaries at 30 June 1993 was 1%.
By 31 December 2011, their share had fallen to 0.75%. Therefore:
$
Organisation A's share of the pension unfunded liability
Organisation As share of the acts members' pre 30 June 1993 service
$
Organisation A's share of the ache members post 30 June 1993 service)
Calculation description
868,809 72
$
920,799.00
$1,516.4m I $1,876.3m
2,055,293.46
359.9m I $1,876.3m
$453.0m
1.00%
$453.0m * 1.00%
25.15%
$1,516.4m /$1,876.3m • $453.0m ' 0.75%
74.85%
Organisation As share of the plan's unfunded liability (excl cont tax)
payable on 1 July2013
Contribution tax payable on 1 July 2013
$
3,844,902.18
$
678,512.15
15% of total amount paid on 1 July 2C 13 being $4.523m
Organisation A's share of the plan's unfunded liability (incl cont tax)
payable on 1 July2013
$ 4,5231414.33
Conclusion
The defined benefits plan and lifetime pensions are benefits that were afforded to staff of
local authorities at a time when such benefits were common for Commonwealth, State and
local government employees. While this is no longer the case, authorities are required to
maintain their contributory obligations which existed when LASF was governed by the
Local Authorities Superannuation Act.
This paper has hopefully given you an understanding of the complex history and issues
involved.
6
18 September 2012
ATTACHMENT
WANGARATTA SALEYARDS ECONOMIC IMPACT STUDY
Refer Item 11.2.2.5
Economic Impact and Cost
Benefit Analysis of the
Wangaratta Saleyards
Rural City of Wangaratta
Final Report
August, 2012
Economic Impact and Cost Benefit Analysis of the Wangaratta Saleyards
Final Report
Document Control
Job ID:
16380
Job Name:
Economic Impact and Cost Benefit Analysis of the Wangaratta
Saleyards
Client:
Client Contact:
Tony Raven
Project
Manager:
Sarah-Jane Conroy
Email:
Sarah-jane.conroy@aecgroupltd.com
Telephone:
(07) 3831 0577
Document
Name:
AEC Report- EIA and CBA of the Wangaratta Saleyards FINAL
REPORT.docx
Last Saved:
16/8/2012 3:49 PM
Version
Date
Reviewed
Approved
Draft v1.0
29 June, 2012
SJC
ARP
Draft v1.1
24th July, 2012
SJC
ARP
FINAL REPORT
16th August, 2012
SJC
ARP
Disclaimer:
Whilst all care and diligence have been exercised in the preparation of this report, AEC Group Limited does not
warrant the accuracy of the information contained within and accepts no liability for any loss or damage that
may be suffered as a result of reliance on this information, whether or not there has been any error, omission
or negligence on the part of AEC Group Limited or their employees. Any forecasts or projections used in the
analysis can be affected by a number of unforeseen variables, and as such no warranty is given that a
particular set of results will in fact be achieved.
i
Final Report
Executive Summary
Background
The Wangaratta saleyards are strategically located in proximity to the Wangaratta and
Alpine Valley's agri-food hub, which is a major cattle production area that contains a
number of downstream suppliers such as Wangaratta abattoirs, butchers and other meat
processing businesses. In 2010-11, Wangaratta recorded a throughput of 47,500 cattle,
this was over 20% higher than three years ago and is in contrast to declining saleyard
throughput trends experienced across Victoria over the period.
Despite the ageing of the current facility, the Wangaratta saleyard currently holds a
competitive edge in the market place and is known as a boutique selling centre, which
attracts high quality stock. In order for Wangaratta to continue to remain competitive in
the livestock selling market Council is currently considering a range of future options for
the facility including the future upgrade of the facility, which would include the provision
of a roof, flooring and other associated infrastructure.
Purpose of Report
To inform decision making and potential investment options for the saleyard, the Rural
City of Wangaratta is seeking to understand the relative benefits and costs associated
with future development options, as well as the broader economic impacts to the
Wangaratta economy associated with the saleyard activity.
Future options for consideration include:

Option 1: Business as usual (the saleyards continue to operate in their current form);

Option 2: Withdraw from the saleyard business (The Rural City of Wangaratta ceases
running the saleyards); and

Option 3: Upgrade the Wangaratta saleyards (improve the existing facility thus
increasing competitiveness relative to existing saleyards).
This report provides the results of an Economic Impact Assessment and Cost Benefit
Analysis. A Competitive Neutrality Assessment is also undertaken to assist Council
in meeting their investment obligations under State legislation.
Future Market Scenarios
Option 1: Business as Usual
No significant capital investment or upgrade at the saleyard site. Wangaratta saleyard
continues to achieve 4.8% of the Victoria livestock selling market share over the next five
years. After this point, the age of the facility and decline of competitive position results in
market leakage estimated at 0.1% per annum. This option will eventually result in
market failure over the long term.
Option 2: Saleyard Closure
The saleyard closes and Wangaratta saleyard stakeholders must either chose an
alternative selling method (over the hooks, direct, other) or send their stock to an
alternative saleyard centre. The most likely alternative selling centre for Wangaratta
stakeholders was identified as Wodonga.
Option 3: Future Upgrade
Capital investment of $3.6 million is made for the improvement of the existing yards
including flooring and a roof over the facility. Improvements are expected to attract
additional stock to market for the following market demand scenarios:

Medium Market Demand Scenario (3a): maintains a market share of 5.0% of the
Victoria cattle selling market (sold via saleyards). This market share is maintained
over the next 20 years.
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Final Report

High Market Demand Scenario (3b): The saleyard attracts a market share of
5.0% of the Victoria cattle selling market (sold via saleyards). Over time market
share increases to 5.7% of the livestock selling market due to the attraction of
additional markets and stock from other selling centres such as Benalla, Wodonga
and stock from south eastern markets (Myrtleford and surrounding districts).
Economic Impact Assessment
The Wangaratta saleyard is a key asset for the Wangaratta regional economy and
generates a hub for economic activity and employment.
The facility is estimated to contribute $9.9 million in direct output to the regional
economy each year.
The current economic activity (direct and flow-on) generated by the Wangaratta saleyard
in the City of Wangaratta is approximately:

$14.5 million in output

$7.3 million in gross value added

$4.7 million in wages and salaries paid to households

95 full time equivalent (FTE1) employees
In the context of the broader Wangaratta economy, the Wangaratta saleyard contributes
to 0.5% of gross regional product and 0.7% of regional employment.
If the saleyard were closed, this economic activity would be lost from the
economy each year.
By comparison, if the saleyard were upgraded then future economic activity has the
potential to increase, over and on top of the current contribution, by:

$3.1 million and $5.5 million in output

$1.6 million and $2.8 million in gross value added

$1.1 million and $1.9 million in incomes

20 and 36 employees
The above increases are dependent on the upgrade being undertaken and the
associated level of throughput achieved in the future.
Cost Benefit Analysis
The cost benefit analysis was undertaken across a range of financial, social and
environmental costs. Results highlight that compared to the continuation of the existing
operation ('business as usual'), upgrading the saleyard is the most desirable option for
both the Wangaratta and broader Victoria economy when a discount rate of 7% is used.
Upgrade of the saleyard is expected to have a future Net Present Value (NPV) of benefits
of:

Between $0.6 million and $3.8 million to the Wangaratta economy

Between $1.0 million and $4.8 million to the Victoria economy.
Upgrade of the saleyard is expected to have a future Benefit Cost Ratio (BCR) of:

Between 1.2 and 2.0 to the Wangaratta economy

Between 1.3 and 2.3 to the Victoria economy.
1
Where one FTE is equivalent to one person working full time for a period of one year.
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Final Report
Competitve Neutrality Assessment
To achieve competitive neutrality position, the analysis found that current pricing
structures will not be sufficient to recoup operational and capital costs without
subsidisation from council. In order to remain competitively neutral this means that
Council will need to consider future changes to facility pricing to ensure that costs can be
recouped effectively.
The sensitivity analysis around price showed that increasing average fees to $8 per head
would not be sufficient to achieve a competitive neutrality position. By comparison an
average of $12 per head in fees will be more appropriate in ensuring that this position is
achieved in the future.
Selling centre fees of approximately $12 are anticipated to be in the upper end of the
current market. However, as smaller centres rationalize and the industry consolidates to
larger regional selling centres it is reasonable to expect fees to increase (i.e. the lower
quite often Council subsidised facilities will withdraw from the market).
Summary of Findings
The Wangaratta saleyard generates significant economic activity within the broader
economy - contributing to approximately 0.5% of gross regional product and 0.7% of
regional employment. Any future upgrade of the facility is expected to increase these
economic benefits through the increase of fees and commissions generated by the facility
and also through the increased expenditure to the region due to increased saleyard
visitation to the facility and associated spending in the Wangaratta economy.
Future development of the saleyard will have a number of financial, economic and social
benefits that will benefit the Wangaratta and broader Victoria economy and have been
found to outweigh the costs of the capital investment.
However, despite these benefits if Council is to remain a competitive neutrality position in
the future, the future pricing structure of the saleyard will need to be critically reviewed.
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Final Report
Table of Contents
DOCUMENT CONTROL.......................................................................................... I
EXECUTIVE SUMMARY ........................................................................................ II
TABLE OF CONTENTS........................................................................................... V
1.
INTRODUCTION .......................................................................................... 1
1.1
INTRODUCTION ................................................................................................ 1
1.2
SCOPE & OBJECTIVE .......................................................................................... 1
2.
REGIONAL CONTEXT ................................................................................... 2
2.1
OVERVIEW ...................................................................................................... 2
2.2
HISTORICAL SALEYARD THROUGHPUT ....................................................................... 2
2.3
SALEYARD INDUSTRY TRENDS ................................................................................ 4
2.3.1 INDUSTRY EXPECTATIONS .......................................................................... 4
2.4
KEY STAKEHOLDER FEEDBACK ............................................................................... 5
2.4.1 STAKEHOLDER VIEWS - OPTION 1: BUSINESS AS USUAL ...................................... 5
2.4.2 STAKEHOLDER VIEWS - OPTION 2: SALEYARD CLOSURE ....................................... 6
2.4.3 STAKEHOLDER VIEWS - OPTION 3: FUTURE UPGRADE OF THE SALEYARD .................... 6
3.
SALEYARD OPTIONS & DEMAND SCENARIOS .............................................. 7
3.1
FUTURE MARKET DEMAND - OPTION 1 'BUSINESS AS USUAL' ........................................... 7
3.2
FUTURE MARKET DEMAND - 'FUTURE UPGRADE' ........................................................... 8
4.
ECONOMIC DRIVERS ................................................................................... 9
4.1
OPERATING CHARACTERISTICS ............................................................................... 9
4.1.1 REVENUES ............................................................................................ 9
4.1.2 COSTS .............................................................................................. 10
4.2
OTHER TURNOVER GENERATED AT THE SALEYARD ....................................................... 11
4.3
SELLER & BUYER TRENDS .................................................................................. 12
4.3.1 LOCATIONAL TRENDS ............................................................................. 12
4.3.2 NUMBER OF SALEYARD USERS & SPENDING TRENDS ......................................... 14
5.
NON-ECONOMIC DRIVERS FOR CONSIDERATION...................................... 16
5.1
ENVIRONMENTAL ............................................................................................. 16
5.1.1 COST OF CARBON EMISSIONS FROM INCREASED TRAVEL IN THE FUTURE SALEYARD
CLOSURE SCENARIO .............................................................................. 16
5.1.2 BENEFITS OF IMPROVED SALEYARD DESIGN .................................................... 17
5.2
SOCIAL ....................................................................................................... 18
5.2.1 INCOMES ........................................................................................... 18
5.2.2 COSTS OF TIME FROM TRAVEL ................................................................... 18
6.
ECONOMIC IMPACT ASSESSMENT ............................................................. 20
6.1
SUMMARY OF DRIVERS ...................................................................................... 20
6.2
ECONOMIC IMPACT ASSESSMENT .......................................................................... 21
6.2.1 CURRENT ECONOMIC ACTIVITY (2012) ........................................................ 21
6.2.2 FUTURE ECONOMIC ACTIVITY SCENARIOS (2021-22) ....................................... 23
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Final Report
6.3
SUMMARY ..................................................................................................... 24
7.
COST BENEFIT ANALYSIS .......................................................................... 25
7.1
SCOPE AND BOUNDARY OF THE COST BENEFIT ANALYSIS ............................................... 25
7.2
MODEL DRIVERS ............................................................................................. 25
7.3
COST BENEFIT ANALYSIS ................................................................................... 26
7.3.1 PRESENT VALUE OF COSTS ....................................................................... 26
7.3.2 PRESENT VALUE OF BENEFITS .................................................................... 28
7.3.3 NET PRESENT VALUE .............................................................................. 29
8.
COMPETITIVE NEUTRALITY ASSESSMENT ................................................. 31
8.1
BACKGROUND ................................................................................................ 31
8.2
VICTORIAN GOVERNMENT GUIDELINES AND POLICIES .................................................. 31
8.3
COMPETITIVE NEUTRALITY APPLICATION TO THE WANGARATTA SALEYARDS .......................... 32
8.4
ASSESSMENT OF FULL COST RECOVERY................................................................... 33
8.4.1 CURRENT FULL COST POSITION ................................................................. 33
8.4.2 REQUIRED INCREASES TO ENSURE ONGOING COST RECOVERY AND COMPETITIVE
NEUTRALITY ........................................................................................ 34
8.5
SENSITIVITY ANALYSIS ..................................................................................... 36
8.5.1 THROUGHPUT SENSITIVITY ....................................................................... 36
8.5.2 PRICE INCREASE SENSITIVITY ................................................................... 37
8.5.3 PROPOSED YARD MAINTENANCE COST SAVING RESULTING FROM UPGRADE ............... 38
9.
KEY FINDINGS .......................................................................................... 40
9.1
ECONOMIC IMPACT ASSESSMENT .......................................................................... 40
9.2
COST BENEFIT ANALYSIS ................................................................................... 40
9.3
COMPETITIVE NEUTRALITY .................................................................................. 40
REFERENCES ..................................................................................................... 42
APPENDIX A: SALEYARD FEES & CHARGES ....................................................... 43
APPENDIX B: TECHNICAL METHODOLOGY......................................................... 45
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Final Report
1.
Introduction
1.1
Introduction
The Wangaratta saleyard is a council owned and operated saleyard in northeast Victoria.
In 2011, the saleyard processed approximately 47,500 cattle, making the Wangaratta
saleyard one of the top ten Victorian saleyards for cattle selling. As a boutique selling
centre, the Wangaratta saleyard is known for its high quality stock and good
management. This reputation continues to grow the market, evidenced by increasing
stock selling trends of 21% since 2008 despite a decline in stock throughput across other
cattle selling centres in Victoria over the period.
Like any agricultural area the Wangaratta saleyard is considered to be an important
business in the region, playing a significant part in Wangaratta’s production supply chain.
The Wangaratta saleyards are strategically located in proximity to the Wangaratta and
Alpine Valley's agri-food hub, major cattle production areas and downstream suppliers
such as Wangaratta abattoirs, butchers and other meat processing businesses.
Despite being a growing selling centre, the Wangaratta saleyard infrastructure is aging
and this may impact the competitive position of the selling centre in the future. This has
driven Council and agricultural stakeholders to review the options for the future
development of the saleyard.
1.2
Scope & Objective
The objective of this assessment is to examine the economic impacts of the Wangaratta
saleyards to the Rural City of Wangaratta’s economy. This will be conducted using two
techniques, an economic impact assessment model and cost benefit analysis model.
The Rural City of Wangaratta has identified three future options for the Wangaratta
saleyards, these are:

Option 1: Business as usual (the saleyards continue to operate in their current form);

Option 2: Withdraw from the saleyard business (The Rural City of Wangaratta ceases
running the saleyards); and

Option 3: Upgrade the Wangaratta saleyards (improve the existing facility thus
increasing competitiveness relative to existing saleyards).
The assessment also examines the competitive neutrality of the facility.
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Final Report
2.
Regional Context
2.1
Overview
The Wangaratta saleyard is located within the Rural City of Wangaratta, in northern
Victoria. In 2011, the Wangaratta Local Government Area (LGA) recorded a total
residential population of 29,018 people with 14,275 of these employed.
The Wangaratta LGA was estimated to generate Gross Regional Product (GRP) of $1.5
billion in the 2010-11 financial year (AECgroup).
Figure 2.1 provides preliminary GRP estimates for the Wangaratta LGA. Within the
Wangaratta LGA, the industries which were the largest contributors to GRP in 2010-11
were:

Manufacturing ($210.1 million in Gross Value Add)

Healthcare and social assistance ($158.0 million in Gross Value Add)

Construction ($122.4 million in Gross Value Add)
Agriculture is fourth largest sector of the Wangaratta economy generating
$121.4 million in industry value add in 2010-11.
$1,600
4.0%
$1,400
3.0%
$1,200
2.0%
$1,000
1.0%
$800
0.0%
$600
-1.0%
$400
-2.0%
$200
-3.0%
Annual GRP Growth
Gross Regional Product ($M)
Figure 2.1: Preliminary Wangaratta LGA Gross Regional Product Estimates (2010-11)
$0
-4.0%
2006-07
2007-08
2008-09
2009-10
2010-11
Gross Regional Product
Wangaratta Annual GRP Growth
Ovans-Murray SD Annual GRP Growth
Victoria Annual GRP Growth
Note: GRP figures are reported in chain volume
Source: AECgroup
2.2
Historical Saleyard Throughput
The Wangaratta saleyard had a total of 47,497 cattle of cattle pass through the facility in
2010-11. This was an increase of 11.8% compared to 2009-10. Figure 2.2 shows that the
Wangaratta saleyard has experienced increasing throughput since 2007-08 - up 21.1%,
or an additional 8,279 cattle compared to 2010-11.
This is in contrast to many other livestock selling centres in Victoria which experienced
declining stock trends over the period.
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Final Report
70,000
20.0%
60,000
15.0%
50,000
10.0%
40,000
5.0%
30,000
0.0%
20,000
-5.0%
10,000
-10.0%
0
-15.0%
Annual Change in Cattle Throughput
Cattle Throughput
Figure 2.2 Wangaratta Saleyards Cattle Throughput (2007-08 to 2010-11)
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Cattle Throughput
Annual Change Cattle in Throughput
Source: MLA (2012)
Recent increases in stock throughput over the period have been largely driven by:

Good saleyard infrastructure: Despite the ageing of existing infrastructure at
Wangaratta saleyard, the infrastructure is largely of good design for the period in
which it was built. Many stakeholders agree that the yards are in good order despite
the age of the facility.

Proactive agents and saleyard management team: The agents and management
team are a key strength of the facility and promote the sale attracting buyers, sellers
and stock to market. Stock are shown and sold in individual vendor lots, which is
preferred by most vendors.

Strategic location: Wangaratta is strategically located within the centre of a key
agri-food production district. Wangaratta forms a centre for an established meat and
meat product processing hub whereby the saleyards are strategically located in
proximity to these downstream users (abattoirs, butchers, feed lots). Wangaratta's
key saleyard competitor is Wodonga saleyard (67 kilometres north east of
Wangaratta).

Reputation as boutique selling centre with high quality stock: Despite being a
smaller market, when compared to other selling centres such as Wodonga,
Wangaratta has a reputation for attraction of high quality and premium stock, which
continues to draw buyers and vendors to sale. Any future upgrade of the saleyard will
strengthen Wangaratta's competitive edge in the existing livestock selling market.
Future Market Expectations
Despite a historically strong performance at the Wangaratta saleyard the existing
infrastructure is becoming old and out of date with many features (e.g. a lack of a
roof and soft floor) being detrimental the competitiveness of the facility in the current
livestock selling market.
Future upgrade of the facility would ultimately increase the competitive edge and
ability of the Wangaratta saleyard to continue to attract cattle to the selling centre,
with the potential to increase future market share.
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Final Report
2.3
Saleyard Industry Trends
2.3.1
Industry Expectations
Significant restructuring has occurred in the Australian saleyard sector over the past 10
years, in response to numerous changes specific to the agricultural sector as well as
wider trends, including:

Selling patterns: As with many other sales transactions, traditional selling patterns
are eroded by new transaction methods. Alternative stock selling methods, which do
not involve saleyards, are becoming more common. However, the highly variable
nature of the product means the livestock being sold must still be inspected and a
market value established.

Rationalisation of Saleyards: Traditionally saleyards serviced local catchments, but
in recent years there has been a movement towards larger regional facilities, capable
of processing large volumes of stock. These large regional selling facilities have larger
catchments than smaller saleyards, and in many cases can drive a ‘healthier’ market
(numbers and prices).

Animal Husbandry: Animal welfare standards are increasingly formalised and
saleyards agents and operators now have an increased duty of care for livestock in
their possession.

Occupational Health & Safety: Across Australian industry there is now a greater
emphasis on occupational health and safety. Practices which were widespread in
saleyards a decade ago are being phased out in favour of standards based, quality
assured processes and controls.

Environmental Controls: Appropriate environmental management practices have
become a much greater priority for saleyards operators and the level of control is
likely to continue to increase.

National Competition Policy: Traditionally saleyards were owned and operated by
local governments. The economic and social contribution these facilities can make to
local economies led many local governments to subsidise operations, which maintains
prices at a level below the full cost of service provision. This creates a barrier to
entry for competitors. Federal Government reforms initiated in the 1990’s increased
pressure on local governments to adopt more transparent financial reporting
practices. All subsidies paid to local government business operations must now be
reported and where appropriate local governments compete on a ‘level playing field’
with private sector competitors.
Implications for Wangaratta
Given the saleyard industry trends which are occurring within Australia, the Wangaratta
saleyard must continue to change with the industry. The existing Wangaratta saleyard
facility is in fair condition, however, it too must evolve in order to remain competitive
within the future livestock selling market.
Movement of the Wangaratta saleyard towards improved soft flooring, provision of a roof, a
reasonable emphasis on occupational health and safety, a solid livestock base and good
environmental controls, will likely allow the Wangaratta saleyard to remain competitive
selling facility.
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Final Report
2.4
Key Stakeholder Feedback
Key stakeholders were engaged throughout the project including livestock agents,
producers, agri-businesses and rural supplies retailers, local transport companies,
employees.
Stakeholders generally indicated that the Wangaratta saleyard is an important asset to
the regional cattle production supply chain. The saleyard also generates significant flow
on benefits to the Rural City of Wangaratta, including spending of producers and
transporters in the local Wangaratta economy.
The Wangaratta saleyard provides producers with a local livestock selling option, rather
than being required to travel to Wodonga or Shepparton saleyards.
2.4.1
Stakeholder Views - Option 1: Business as Usual
What would happen if the facility stays the way it is?
Stakeholders believe that, should the Wangaratta facilities continue to operate as they
are, with no capital investment, then there will be very little change to the market over
the short to medium term.
Stakeholders identified that the proposed saleyard at Barnawatha could pose as a
potential threat to Wangaratta if the project proceeds. However, several stakeholders felt
that Wangaratta will continue to offer good service and a competitive price compared to
any new facility.
Stakeholder consultation highlighted the existing Wangaratta saleyard is considered to be
a very good facility, with stakeholders identifying that the saleyard is "a good set-up, well
maintained and professionally run". Stakeholders are currently satisfied with the level of
service offering; however, improvements into the future would be required to stay
competitive against newer saleyards.
Key issues and concerns raised by stakeholders during the consultation phase included:

Future competition: The uncertainty relating to the potential new saleyard at
Barnawatha. There were mixed thoughts as to the future of this facility and if it would
go ahead or not. Several stakeholders expressed concern that if Barnawatha opens
there would be a large draw of cattle from the Wangaratta saleyards to the new
Barnawatha facility.

Increasing emphasis on animal welfare: Stakeholders indicated that producers
frequently bypass saleyards with poor animal welfare standards in favour of other
facilities with better animal welfare controls. Given the movement towards better
conditions for livestock in saleyards, stakeholders indicated that the best way for a
saleyard to stay strong was to remain at the front and provide the best conditions
possible for livestock.

Improvement of existing offering (provision of roof and improved soft floor):
Although the overall response to the saleyards was positive, stakeholders identified
several potential improvements, which were required. The chip flooring which is
currently down is good when it is not raining, however, as the current facility is not
roofed the existing chip flooring turns to mud when it rains. This creates considerable
issues for both livestock owners and management of the saleyard. To remain
competitive n the future the provision of a roof and improved flooring for the facility
is a key requirement.
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Final Report
2.4.2
Stakeholder Views - Option 2: Saleyard Closure
What do stakeholders think of the 'saleyard closure' scenario?
Closure of the Wangaratta saleyard was considered, by stakeholders, to be a bad decision
as many local businesses would be affected from the closure. Local transport operators
indicated they would potentially lose business as producers required to go to other
saleyards. Producers would also be affected, particularly by increased stock
transportation fees to alternative selling centres.
Buyers indicated that the closure of the saleyard would not impact them as they would
simply go to another facility to purchase their livestock.
2.4.3
Stakeholder Views - Option 3: Future Upgrade of the Saleyard
How would a redeveloped facility impact Wangaratta?
Stakeholder feedback indicated that redeveloping the facility could potentially result in
additional livestock numbers and increased livestock selling market share within the
context of the broader Victoria livestock selling market. Buyers indicated that should the
facility be redeveloped and that the additional livestock be supplied then they would
purchase more from the facility. Stakeholders also identified that redeveloping the facility
could capture livestock currently travelling through Wangaratta destined for Wodonga.
Several stakeholders once again noted the potential new saleyard at Barnawatha, but
also identified many people were not happy with the Wodonga saleyard as it has been
neglected and not maintained, therefore there was additional opportunity to capture
livestock from disgruntled users.
Stakeholders identified the following main considerations to be taken for the saleyard
redevelopment:
Redevelopment
Benefits
Development of roof for
the comfort of livestock
and patrons
Roofing the facility would make the saleyards adequate no matter what the weather
conditions. Roofing would also increase the animal welfare standards of the
saleyard.
Loading and unloading
ramps
Increasing the number of loading and unloading ramps could assist in the flow of
livestock. Stakeholders identified there were several bottlenecks in the facility, the
addition of new ramps, as well as reconditioning the existing ramps.
Redevelopment of local
traffic flows
Stakeholders identified the existing facility is difficult to get to, requiring access
through the main street of town. Stakeholders suggested potentially developing a
bypass or ring road so vehicles do not need to travel through the centre of the town.
This would service not only the saleyard, but also reduce the number of heavy
vehicles passing through Wangaratta
Overall, stakeholder consultation findings confirmed that the Wangaratta saleyards has a
place in the future of Wangaratta's broader cattle production supply chain - either
continuing under its existing operating conditions (Option 1) or with future upgrade of
the site (Option 3). Any future redevelopment of the saleyard is highly likely to capture
additional market share from surrounding areas.
The proposed Barnawatha saleyard development could pose as a potential threat in the
future. However, Wangaratta currently provides a competitive service and price to
saleyard users.
6
Final Report
3.
Saleyard Options & Demand Scenarios
Future market demand scenarios have been developed for the future saleyard options
being considered:

Option 1: Business as usual

Option 2: Withdraw from the saleyard business

Option 3: Future upgrade the Wangaratta saleyards
Option 2 'Saleyard Closure' would result in any existing market share held by Wangaratta
saleyard being distributed to other selling centres or being sold by alternative selling
methods.
For Option 1 'Business as Usual' and Option 3 'Future Upgrade' varying market demand
scenarios have been developed to reflect the likely saleyard throughputs with each
saleyard offering. These future market demand scenarios are highlighted below.
Future Market Demand - Option 1 'Business as Usual'
Historically the Wangaratta saleyard has experienced increasing market share over the
past five years averaging approximately 4.8% of the total livestock market that are sold
through saleyards in Victoria in 2010-11. It is expected that if the saleyard were to
continue 'business as usual' then the saleyard would continue to draw 4.8% of the
Victoria saleyard market over the years to 2014-15.
If the saleyard were to have no upgrade or significant capital maintenance it is expected
that Wangaratta saleyard's market share would deteriorate by 0.1% per annum for the
remainder of the life of the saleyard.
Figure 3.1: Future Wangaratta Saleyard Throughput - 'Business as Usual'
60,000
Saleyard Throughput (Head of Cattle)
50,000
40,000
30,000
20,000
10,000
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
3.1
Historical
Projected - 'Business as Usual' (Option 1)
Source: ABARE (2012), ABS (2012), MLA (2012), AECgroup
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Final Report
Future Market Demand - 'Future Upgrade'
Future upgrade of the saleyard would increase the competitiveness of the Wangaratta
saleyard in the livestock selling market. Two market demand scenario's were developed
around the expected competitive position of the saleyard if the upgrade were to occur.
These were:

Medium Market Demand Scenario (Option 3a): The facility is upgraded and the
Wangaratta saleyard maintains a market share of 5.0% of the Victoria cattle selling
market (sold via saleyards). This market share is maintained over the next 20 years.

High Market Demand Scenario (Option 3b): The facility is upgraded and the
Wangaratta saleyard initially maintains a market share of 5.0% of the Victoria cattle
selling market (sold via saleyards). Over time market share increases to 5.7% of the
livestock selling market due to the attraction of additional markets and stock from
other selling centres such as Benalla, Wodonga and stock from south eastern markets
(Myrtleford and surrounding districts).
Figure 3.2 shows expected future demand associated with each of the future market
demand scenarios. The Medium Market Demand Scenario is expected to the be the most
achievable and is considered to be the baseline demand of stock throughput at the facility
if the saleyard upgrade is to proceed.
Figure 3.2: Future Wangaratta Saleyard Throughput - 'WITH Future Upgrade'
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
Saleyard Throughput (Head of Cattle)
3.2
Historical
Projected - 'Future Upgrade' (Medium Demand Scenario) (Option 3a)
Projected - 'Future Upgrade' (High Demand Scenario) (Option 3b)
Source: ABARE (2012), ABS (2012), MLA (2012), AEC group
8
Final Report
4.
Economic Drivers
To undertake the cost benefit analysis, economic impact assessment and competitive
neutrality assessment a range of operational drivers have been used. The economic
drivers are outlined in the chapter below.
For the cost benefit analysis a range of environmental and social benefits and costs that
are associated with each of the three options have also been considered. Social and
Environmental drivers are outlined in Chapter 5.
4.1
Operating Characteristics
The saleyard operating revenues and costs are detailed below.
4.1.1
Revenues
The Wangaratta saleyard draws its revenues by charging a range of fees for use of the
saleyards. These revenues are outlined in the table below. The current charging schedule
can be found in Appendix A.
Table 4.1: Wangaratta Saleyard Revenues 2008-09 to 2010-11
Revenue Stream
2008-09
Proceeds on sale of assets
2009-10
2010-11
$0
$0
$1,127
User fees - ear tags
$2,182
$2,730
$2,684
User fees - hire of facilities
$3,318
$2,188
$3,328
User fees - holding paddock
$1,578
$2,833
$4,151
User fees - livestock agents
$58,300
$60,625
$63,440
User fees - live weight scales
$92,430
$87,703
$108,865
User fees - private weighing
$20,555
$25,787
$25,607
User fees - truck wash
$6,512
$4,589
$4,384
User fees - water standpipe
$5,847
$4,235
$2,003
User fees - yard
Total Turnover
Average $ per Head
$213,066
$204,269
$243,099
$403,788
$394,958
$458,688
$9.21
$9.30
$9.66
Source: Wangaratta City Council
How will these revenues change in the future?
If the average revenues per head remained at 2011-12 levels of $9.66 per head future annual
revenues for each future saleyard scenario are shown in the table below.
Table 4.2: Wangaratta Saleyard Revenues, Historical & Projected
Historical
Total Turnover
Average $ per Head
Future - 2021-22
2008-09
2009-10
2010-11
'Business As
Usual'
Saleyard Upgrade:
Medium Scenario
Saleyard Upgrade:
High Scenario
$403,788
$394,958
$458,688
$457,418
$557,143
$634,401
$9.21
$9.30
$9.66
$9.66
$9.66
$9.66
Note: The above future scenarios assumes no change to pricing structure.
Source: Wangaratta City Council, AECgroup
9
Final Report
4.1.2
Costs
Annual operating costs at the saleyard for 2008-09 to 2010-11 are shown in the table
below.
Table 4.3: Wangaratta Saleyard Revenues 2008-09 to 2010-11
Operating Costs
2008-09
2009-10
2010-11
$4,264
$4,079
$7,398
Facility maintenance & utilities
$80,646
$54,782
$95,672
Finance fee
$22,250
$23,000
$23,590
$4,882
$5,000
$5,532
$11,157
$9,000
$6,593
Insurance
$5,500
$4,248
$3,400
Interest & loan redemption
$8,388
$8,373
$0
$172,261
$170,849
$192,468
$1,413
$3,828
$3,990
Management fee
$14,800
$14,400
$15,000
Plant hire
$11,377
$10,010
$10,573
Total Costs
Advertising and promotion
HR fee
Information Services fee
Labour
Licences, Memberships, Subscriptions
Postage
$100
$100
$100
Printing & Stationery
$1,380
$921
$1,204
Software licences & maintenance
$6,474
$5,700
$5,946
Telephone
$3,736
$4,231
$4,685
$348,627
$318,521
$376,150
Average - Facility Maintenance & Utilities - Yards
$0.73
$1.01
$1.10
Average - Facility Maintenance & Utilities - Other
$1.11
$0.28
$0.91
Average - Labour Cost
$3.93
$4.02
$4.05
Average - Other Costs
$2.18
$2.19
$1.85
$7.95
$7.50
$7.92
Total
Average $ per Head
Average $ per Head Total
How would these costs change in the future?
Facility Maintenance & Utilities Costs - Yards
Upgrade of the saleyard at Wangaratta would have significant cost savings for yard maintenance. At
present a significant amount is spent on wood chip materials which need to be replaced frequently.
Roofing the facility would reduce general expenditure and wear and tear on the yards. Consultation
with management indicated that for every dollar spent on yard maintenance per head the upgrade has
the potential to save 40 cents per head in yard maintenance costs. Maintenance costs are directly
linked with throughput volumes. Future cost projections are shown in Table 4.4.
Facility Maintenance & Utilities Costs - Other
It is not expected that the ratio of other maintenance costs to livestock throughput will change with the
proposed upgrade. However, increased throughput of stock in the Future Upgrade Medium and High
demand scenarios will increase general facility maintenance costs.
Labour Costs
The current saleyard facility utilises significant amounts of labour each week to clean wood chips from
the yard facility. It is estimated that roofing the facility could result in a cost saving of 0.5 FTE to the
saleyard. This could mean that valuable staff time could be used elsewhere in maintaining the
operation.
Other Costs
It is expected that all other costs will remain at fixed rates.
10
Final Report
Table 4.4: Wangaratta Saleyard Costs, 2021-22
Costs
Current
2010-11
Future - 2021-22
'Business As
Usual'
Saleyard Upgrade:
Medium Scenario
Saleyard Upgrade:
High Scenario
$53,518
$39,112
$44,535
Costs
Facility Maintenance & Utilities - Yards
Facility Maintenance & Utilities - Other
Labour Cost
Other Costs
$52,262
$43,410
$29,639
$36,100
$41,106
$199,866
$195,001
$211,124
$240,400
$80,613
$80,642
$80,642
$80,642
$376,150
$358,800
$366,978
$406,684
Average - Facility Maintenance &
Utilities - Yards
$1.10
$1.13
$0.68
$0.68
Average - Facility Maintenance &
Utilities - Other
$0.91
$0.63
$0.63
$0.63
Average - Labour Cost
$4.21
$4.12
$3.66
$3.66
Average - Other Costs
$1.70
$1.70
$1.40
$1.23
$7.95
$7.58
$6.36
$6.19
Total
Average $ per Head Cattle
Average $ per Head Total
4.2
Other Turnover Generated at the Saleyard
Other economic activity at the saleyard is defined as the agents fees and commissions
and other sales made at the site (e.g. sales made at the canteen).
Agents Commissions
Agents commissions at the saleyards average around 5.5% of the value of stock
throughput at the Wangaratta saleyard. In 2011-12 this was estimated to be
approximately $2.1 million in commissions.
How will agents' commissions change in the future?
In 2010-11 agents' commissions averaged around $44.30 per head of cattle sold at the
Wangaratta saleyard. Future commission projected commissions based upon this average fee per
head are shown in the table below.
Table 4.5: Wangaratta Saleyard Agents Commissions, Historical & Projected
Current
2010-11
Agents Commissions ($'M)
Rate (%)
Average $/head
Future - 2021-22
'Business As Usual'
Saleyard Upgrade:
Medium Scenario
Saleyard Upgrade:
High Scenario
$2.1
$2.1
$2.6
$2.9
5.5%
5.5%
5.5%
5.5%
$44.30
$44.30
$44.30
$44.30
Note: Commissions taken are based on the value of stock sold not on the number sold. For the purposes of this analysis the average $/head for
the current year has been used. This may vary significantly in future years.
Other Economic Activity at the Site
The saleyard also has a canteen which is open on sale days and services any other
functions or training days that occur at the saleyard. Annual turnover of the canteen is
estimated to be $40,000 per annum.
11
Final Report
How other revenues at the saleyard change in the future?
In 2010-11, average takings at the canteen was $0.84 per head of cattle sold. The number of
cattle sold is directly related to the number of saleyard visitors that attend the sale and spend
money at the canteen. The table below shows how future canteen revenues may change if the
average canteen revenues per head of cattle sold were to remain constant over the next 10
years.
Table 4.6: Wangaratta Saleyard Agents Canteen Sales, Historical & Projected
Current
2010-11
'Business As Usual'
Saleyard Upgrade:
Medium Scenario
Future - 2021-22
Saleyard Upgrade:
High Scenario
Annual turnover
$40,000
$39,889
$48,586
$55,323
Average $/head
$0.84
$0.84
$0.84
$0.84
4.3
Seller & Buyer Trends
4.3.1
Locational Trends
Wangaratta is a unique selling centre as it well positioned in a district that has a large
number of abattoirs, feedlots and downstream meat processors and local retailers (e.g.
butchers and small goods processors).
Analysis of 2011-12, vendor and buyer data shows that almost 63% of all stock sold at
the Wangaratta saleyard come from within the Wangaratta LGA and 30% are sold to local
buyers (comprised of producers, feedlots, abattoirs and butchers). A further 25% of stock
sold come from the surrounding districts of Benalla, Indigo, Mansfield, Alpine, Moira and
Shepparton with almost 11% of stock throughput sold back into these areas.
Table 4.7: Locational Buyer & Seller Trends, 2011-12
Location/Area
Stock Sold From:
Stock Bought By:
No. of Cattle
% of total
No. of Cattle
% of total
29,001
62.9%
14,012
30.4%
Benalla
6,959
15.1%
1,886
4.1%
Indigo
2,208
4.8%
1,043
2.3%
Mansfield
1,364
3.0%
581
1.3%
Murrindindi
734
1.6%
312
0.7%
Strathbogie
588
1.3%
274
0.6%
Alpine
515
1.1%
229
0.5%
Moira
232
0.5%
1,060
2.3%
Shepparton
208
0.5%
289
0.6%
Campese
165
0.4%
1,965
4.3%
Mitchell
145
0.3%
3,894
8.4%
Towong
26
0.1%
232
0.5%
Bendigo
17
0.0%
1,966
4.3%
0
0.0%
1,629
3.5%
Other
3,958
8.6%
16,750
36.3%
Total
46,120
100.0%
46,120
100.0%
Wangaratta LGA
Wodonga
12
Final Report
What would it mean for livestock producers if the saleyard closed?
The majority of stakeholders indicated that Wangaratta's key saleyard competitor is Wodonga
saleyard. If Wangaratta saleyard was no longer a stock selling option for current users then many
would send their stock to Wodonga.
Wodonga is 67.5 kilometres north east of Wangaratta, approximately 50 minutes drive. 63% of
stock are sold from within the Wangaratta local government area. A further 24% are of stock sold
come from the areas to the North-West, West and Southern areas and would have to be
transported through Wangaratta to get to the Wodonga saleyard.
With a minimum of 93% of stock travelling through Wangaratta to get to Wodonga saleyards this
would add significantly to producer transport costs.
Table 4.8: Additional Livestock Transport Costs to Producers if the Wangaratta Saleyard were
Closed
Number of
Cattle
Transported
% of
Wangaratta
Market
Average
$ per Load
Additional
Cost
to Producers
Per Annum
Wangaratta LGA
29,001
62.9%
$330
$638,022
Other stock that will travel through
Wangaratta
10,927
23.7%
$330
$240,394
39,928
86.6%
$330
$878,416
Total Stock transported at additional
cost
Note: It is assumed that on average livestock producers use small rigid trucks with a carrying capacity of 14 to 16 head of cattle and that the
average cost would be $330 per load from Wangaratta to Wodonga. The above table assumes that stock are transported to sale in full loads.
What would it mean for livestock buyers if the saleyard closed?
30.4% of Wangaratta's saleyard stock are bought by local producers, abattoirs and butchers of
the Wangaratta LGA. A further 27% of stock are bought back by surrounding local government
areas, which would have to be transported back through Wangaratta is Wodonga were the only
selling option.
Over 10% of stock are also transported to southern markets/processing facilities near Melbourne
(and would also pass back through Wangaratta). Closure of Wangaratta would add significant
costs to producers if they had to transport their stock from Wodonga (when compared to
Wangaratta livestock transport costs).
Table 4.9: Additional Livestock Transport Costs to Buyers if the Wangaratta Saleyard were Closed
Number of
Cattle
Transported
% of
Wangaratta
market
Average $
per Load
Additional Cost to
Producers Per Annum
Wangaratta LGA
14,012
30.4%
$330
$308,265
Other stock that will travel through
Wangaratta (from surrounding LGA's)
12,454
27.0%
$330
$273,991
Stock Travelling to Southern Markets
Total Stock transported at
additional cost
5,113
11.1%
$330
$112,481
31,579
68.5%
$330
$694,736
Note: It is assumed that on average livestock producers use small rigid trucks with a carrying capacity of 14 to 16 head of cattle and that the
average cost would be $330 per load from Wangaratta to Wodonga. The above table assumes that stock are transported to sale in full loads.
13
Final Report
4.3.2
Number of Saleyard Users & Spending Trends
In 2011-12 there were a total of 1,852 individual vendors 2 that sold through the saleyard
averaging at approximately 24.9 head per vendor each year. 46.4% of this stock was
resold back to producers and feedlots. 50% of stock was sold to abattoirs, 1.5% to local
butchers and the remainder to stock agents.
In 2010-11, there were an estimated 1,908 saleyard users3.
The Wangaratta saleyard has around 18 regular buyers that purchase directly out the
saleyard for meat processing purposes (abattoir, butcher). On average this means there
are approximately 1,926 individual saleyard buyers and sellers associated with the
Wangaratta saleyard (excludes agents and employees of the saleyard).
Consultation with the saleyard manager indicted that on average a general saleday
attracts approximately 70 visitors per sale during the year4 and up to 150 saleday visitors
for each special sale held5.
On average this equates to a total of 3.2 visits6 to a sale by Wangaratta saleyard's buyers
and sellers each year.
Each visitor to the Wangaratta saleyard has the potential to undertake other spending
and economic activity in Wangaratta due to their trip to the sale. This spending has the
potential to go elsewhere if the saleyard were closed with many stakeholders indicating
that Wodonga would be their alternative service centre if they were travelling there for
the sale.
Estimates of visitor spending that are attributable to the current economic activity of the
sale are shown below.
Visitor Spending - Retail
Consultation with key retailers indicated that saledays are significantly busier days of
trade, particularly for general farm suppliers and machinery and equipment retailers.
Consultation indicated that over a year approximately $7.0 million in retail trade is
undertaken in Wangaratta as a direct result of the saleday activity.
Visitor Spending - Food Services
Consultation with stakeholders indicated that on average $20 is spent per person per sale
on general food services in Wangaratta City or at the saleyard canteen. Over the annual
sale cycle this equates to a total of $123,800 spent in the food services sector
(approximately $40,000 at the saleyard and the remainder elsewhere in Wangaratta).
Visitor Spending - Transport & Transport Support Services
Consultation with livestock transport businesses and associated transport, parts and
repair businesses indicated that $264,500 in business activity in Wangaratta is due
directly to the saleyard activity.
2
Determined by individual vendor codes from sales data for the year ended March 2012.
3
In 2010-11 47,497 head of cattle sold through the saleyard. At an average of 24.9 head sold per vendor this
equates to 1,908 vendors.
4
64 general sales and 18 private sales held each year on average.
5
A total of 3 special sales held during the year.
6
It should be noted that this is an average. Some buyers may visit every week, others may not visit at all. Saleday
visitors also comprise people who attend the sale to take a look and not engage in business activity at the
saleyard.
14
Final Report
How would saleday spending change in Wangaratta in the future?
In 2010-11, total of $9.9 million was spent by saleyard users on general farm supplies,
machinery and equipment, transport, parts and repairs and food and accommodation. On
average this equates to $3,823 spent per saleyard user in 2010-11. If this average is applied to
expected future saleyard scenarios then spending by 2021-22 is expected to:

Remain relatively unchanged in the business as usual scenario at $9.9 million

Increase to $12.0 million in the saleyard upgrade (medium scenario)

Increase to $13.7 million in the saleyard upgrade (high scenario)
Table 4.10: Wangaratta Saleday Visitor Spending
Current
2010-11
Future - 2021-22
'Business As
Usual'
Saleyard Upgrade:
Medium Scenario
Saleyard Upgrade:
High Scenario
General Farm Supplies ($'M)
$7.0
$6.9
$8.4
$9.6
Machinery & Equipment ($'M)
$0.1
$0.1
$0.1
$0.1
Transport, Parts & Repairs ($'M)
$0.2
$0.2
$0.2
$0.3
Food & accommodation ($'M)
$0.1
$0.1
$0.2
$0.2
Total ($'M)
$9.9
$9.9
$12.0
$13.7
No. Saleyard Users (No.)
1,908
1,902
2,317
2,638
Average Expenditure per
Saleyard User ($/User)
$3,823.36
$3,823.36
$3,823.36
$3,823.36
Source: AECgroup
If the saleyard were closed, this spending would be lost from the Wangaratta economy.
15
Final Report
5.
Non-Economic Drivers for Consideration
Within the Cost Benefit Analysis environmental and social benefits and costs were also
considered for each of the future scenarios. These are detailed below.
5.1
Environmental
Environmental benefits and costs considered within the saleyard analysis include:
Business as Usual:

No environmental benefits/costs from the current situation
Future Saleyard Closure:

Costs of carbon emissions from additional livestock transport activity that would
bypass Wangaratta travelling to and from Wodonga saleyards
Future Saleyard Upgrade:
5.1.1

Benefits of improved saleyard design and fit-out with energy saving technologies e.g.
solar panels and water recycling technology

Benefits of reduced carbon emissions due to livestock, buyers and sellers being
retained in the catchment compared to the 'business as usual' scenario.
Cost of Carbon Emissions From Increased Travel in the Future Saleyard Closure
Scenario
The cost of carbon emissions in the saleyard closure scenario has been calculated
considering that if the Wangaratta saleyard closed then this stock would be transferred to
the Wodonga livestock selling market. Table 4.8 and Table 4.9 show that 86.6% of stock
currently sold at Wangaratta would travel through Wangaratta to the Wodonga market
and 68.5% would travel back through Wangaratta after sale.
Carbon emissions have been calculated for the 67.8 km trip for livestock trucks travelling
to the alternative market over the year. It is estimated that the average truck would
have double the emissions of an average car (444 g carbon per kilometre) and would
carry an average of 15 head of cattle per truck load. Other key assumptions shown in
the table below.
Table 5.1: Data for Carbon Emission Evaluation
Indicator
Data
Cost of Carbon ($/tonne)
2011 - 2013
$23.00
2013-14
$24.15
2014-15 and beyond
$25.36
Vehicle Emissions
Average Carbon Emissions per Km - Car (g/km)
Average Carbon Emissions per Km - Truck (g/km)
Distance Wangaratta
to Wodonga (km)
222
444
67.8
Source: Australian Government (2011a), Australian Government (2011b), DIT (2012)
Table 5.1 shows the total cost of carbon by 2021-22 if the saleyard were to
close would be $2,183 to Wangaratta resident saleyard users and a total of
$3,629 to Victoria each year.
16
Final Report
Table 5.2: Carbon Emission Evaluation, 2010-11 to 2021-22
Stock Origin & Destinations
2010-11
2021-22
Additional
Distance
Travelled
(km)
Tonnes of
Carbon
Emitted
Cost
($)
Additional
Distance
Travelled
(km)
Tonnes of
Carbon
Emitted
Cost
($)
131,085
58.2
$1,339
130,722
58.0
$1,472
49,390
21.9
$504
49,253
21.9
$555
180,475
80.1
$1,843
179,975
79.9
$2,026
Wangaratta LGA
63,334
28.1
$647
63,159
28.0
$711
Other stock travelling through Wangaratta
(surrounding LGA's)
56,293
25.0
$575
56,137
24.9
$632
Stock travelling to Southern Markets
23,110
10.3
$236
23,046
10.2
$259
142,737
63.4
$1,458
142,342
63.2
$1,603
Wangaratta LGA
194,419
86.3
$1,985
193,881
86.1
$2,183
Other stock travelling through Wangaratta
(from surrounding LGA's and southern markets)
128,792
57.2
$1,315
128,436
57.0
$1,446
323,211
143.5
$3,301
322,317
143.1
$3,629
Travel to Wodonga Saleyard
Wangaratta LGA
Other stock that will travel through Wangaratta
Total Transport- Carbon Cost
Travel from Wodonga Saleyard
Total Transport- Carbon Cost
TOTAL STOCK TRAVEL COSTS
TOTAL
Note: The above distance travelled considers both transport of stock and individual saleday visitors.
Source: Australian Government (2011a), Australian Government (2011b), DIT (2012), AEC group
If the Wangaratta saleyard closed then the environmental cost by 2021-22 will
be $2,183 in the Rural City of Wangaratta catchment and an additional $1,446
in environmental costs to broader Victoria equating to a total cost of $3,629 per
annum in Victoria.
How would the proposed future saleyard upgrade impact carbon future carbon
emissions?
In the business as usual scenario declining stock trends over time mean that there would be some
'leakage' of livestock, buyers and sellers to an alternative selling centre e.g. Wodonga, if the
saleyard is not upgraded. This means that if an upgrade occurs at the saleyard and the market is
retained within Wangaratta then there will be some environmental benefits that result from the
upgrade from reduced carbon emissions from livestock and saleyard user transport. It is estimated
that the value of future carbon emission benefits will range from:

$145 to $1,683 per annum in a Medium Market Demand Scenario

$236 to $2,296 per annum in a High Market Demand Scenario
5.1.2
Benefits of Improved Saleyard Design
There is the potential to invest in energy saving technology in the construction of the new
saleyard design. One of these technological improvements is the fit-out of the new
saleyard roof with solar panels.
The proposed roof design is 15,461 square metres which could be used for solar panel
installation.
It is assumed that one square metre of solar panels (150 to 160 watts) will produce
approximately 1kwh of electricity per day (Solar Panels Melbourne, 2012). Over a year
this equates to 360kwh per solar panel. The proposed saleyard roof area would have the
capacity to produce 5.6 million kWh of electricity each year. In Victoria (which uses
brown coal for its electricity production) this equates to a total carbon saving of 4,600
tonnes7 (Victoria conversion factor of 1.21 kg CO2 emitted/kWh).
7
Victoria conversion factor of 1.21 kg CO2 emitted/kWh. (DCCEE, 2012)
17
Final Report
At the current carbon value of $23 per tonne this equates to $105,799 per
annum in benefits to environment that result directly from the improved
saleyard design. These benefits are attributable to both the Wangaratta
catchment and broader Victoria as a whole if the saleyard were to accommodate
solar panels in the upgrade.
5.2
Social
Social benefits and costs considered within the saleyard analysis include:
Business as Usual:

No social benefits/costs from the current situation
Future Saleyard Closure:

Loss of incomes to Wangaratta employees

Costs of travel time to farmers to travel the additional distance to Wodonga if they
have to pass through Wangaratta to attend this alternative selling centre
Future Saleyard Upgrade:
5.2.1

Increase in incomes to Wangaratta employees

Benefits of reduced cost of travel time due to buyers and sellers being retained in the
catchment compared to the 'business as usual' scenario.
Incomes
Incomes are assessed within the Economic Impact Assessment. Refer to Chapter 0.
5.2.2
Costs of Time from Travel
As discussed previously, if the Wangaratta saleyard closed then many buyers and sellers
would have to travel through Wangaratta to go to the Wodonga saleyard. This would
increase travel time by 50 minutes each way for saleyard users.
The social cost of travel time is typically valued at between 25% and 50% of the average
wage per hour travelled. For the purpose of this study a nominal figure of $8 per hour
was used to assess the social cost of time for saleyard users (VTPI, 2012).
Over a year 85 sales are held with 86.6% of saleday visitors travelling from within or
through Wangaratta to sale. It is estimated that a total of 5,359 saleyard visitor trips
would be made to Wodonga that would pass through Wangaratta, equating to a total
additional travel time of 8,932 hours per annum to and from sale. This would come at
a social cost to saleyard users for their time spent travelling of $72,255 each by
2021-22.
Table 5.3: Social Costs to Saleyard Users - Travel Time Costs to Alternative Selling Centre
(Wodonga)
2010-11
2021-22
Total
Visitor
Trips
Total
Additional
hours
travelled
(return)
Total
Social
Cost
($ per
Annum)
Total
Visitor
Trips
Total
Additional
hours
travelled
(return)
Total
Social
Cost
($ per
Annum)
No. Trips from Wangaratta LGA To Wodonga
3,892
6,487
$51,898
3,882
6,469
$51,755
No. Trips to Saleyard that travel through Wangaratta
1,467
2,444
$19,554
1,463
2,438
$19,500
Total Trips To Wodonga (Through Wangaratta)
5,359
8,932
$71,453
5,344
8,907
$71,255
Note: The above table considers additional hours of travel by saleyard vendors and buyers - not livestock transport businesses as
the cost of their time is already factored into the cost of transporting livestock (refer to Chapter 4).
If the Wangaratta saleyard closed then the social cost by 2021-22 will be
$51,755 to the Rural City of Wangaratta and an additional $31,907 in social
costs to the broader Victoria economy equating to a total cost of $71,255 per
annum to Victoria.
18
Final Report
How would the proposed future saleyard upgrade impact future travel time by saleyard
users?
In the business as usual scenario declining stock trends over time mean that there would be some
'leakage' of livestock, buyers and sellers to an alternative selling centre e.g. Wodonga, if the
saleyard is not upgraded. This means that if an upgrade occurs at the saleyard and the market is
retained within Wangaratta then there will be some social benefits that result from the upgrade
from reduced time spent travelling by saleyard users to alternative selling centres. It is estimated
that the social value of future travel benefits will range from:

$1,191 to $24,003 per annum in a Medium Market Demand Scenario

$1,857 to $32,744 per annum in a High Market Demand Scenario
19
Final Report
6.
This economic impact assessment provides an estimate of direct and indirect (flow-on)
economic activity in the Rural City of Wangaratta economy that result directly from
saleyard activity. This chapter provides a summary of the drivers (outlined in detail in
Chapter 4) and the modelling results of the economic impact assessment.
6.1
Summary of Drivers
Economic activity driven by the Wangaratta saleyard is defined by the turnover and
business activity created by users of the facility rather than the actual trade occurring at
the facility. Economic activity is not driven by the value of the stock sold, which is
assumed to be of a similar value to the vendor if sold in a different location, but by the
discretionary expenditure made by users of the facility (e.g. buyers, sellers, agents) and
the operational turnover of the facility itself.
The key drivers of the economic impact assessment are defined as the following:


Economic activity that occurs directly at the site:
o
Turnover of the saleyard
o
Agents commissions derived from livestock sales
o
Discretionary visitor expenditure at the saleyard (e.g. food and drink purchases,
wholesale trade, etc)
Economic activity that occurs in Rural City of Wangaratta as a direct result of saleyard
users visiting the saleyard (visitor spend). This activity would not occur if the
saleyard was closed due to saleyard users choosing to spend money at alternative
service centres (e.g. Wodonga). This includes spending of local livestock transport
businesses in the local economy and major farm purchases made as appropriate.
These drivers are described in detail in Chapter 4 for each of the Saleyard Scenarios and
summarised in the table below.
Table 6.1: Summary of Drivers, Direct Economic Activity Associated with the Wangaratta
Saleyards
Current
Direct
Economic
Activity
'Business as
Usual Scenario'
Future Direct Economic Activity (2021-22)
'Future Upgrade'
Medium Scenario
'Future Upgrade'
High Scenario
Saleyard Turnover
$0.5
$0.5
$0.6
$0.6
Agents Commissions
$2.1
$2.1
$2.5
$2.9
General Farm Supplies
$7.0
$6.9
$8.4
$9.6
Machinery & Equipment
$0.1
$0.1
$0.1
$0.1
Transport, Parts & Repairs
$0.2
$0.2
$0.2
$0.3
Food & accommodation
$0.1
$0.1
$0.2
$0.2
Total
$9.9
$9.9
$12.0
$13.7
Visitor Spending
Note: Visitor spending includes spending on site at the saleyard and in the Wangaratta Business Centre.
20
Final Report
6.2
The economic impact assessment considers:

The current economic contribution (direct and indirect) to the Wangaratta
economy by those associated with the Wangaratta saleyard (this is equivalent to the
subsequent economic loss if the facility were to close)

Option 1: Business as Usual: The economic contribution (direct and indirect) to the
Wangaratta economy if the Wangaratta saleyard facilities continued operating as they
are with no capital reinvestment.

Option 3a: Future Upgrade (Medium Market Demand Scenario): The economic
contribution (direct and indirect) to the Wangaratta economy if the Wangaratta
saleyard facilities were upgraded and continued to maintain its existing market share.

Option 3b: Future Upgrade (High Market Demand Scenario): The economic
contribution (direct and indirect) to the Wangaratta economy if the Wangaratta
saleyard facilities were upgraded and continued to gain additional market share from
the livestock selling market.
Input-output modelling describes economic activity through the examination of four types
of impacts:
6.2.1

Output: Refers to the gross value of goods and services transacted, including the
costs of goods and services used in the development and provision of the final
product. Output typically overstates the economic impacts as it counts all goods and
services used in one stage of production as an input to later stages of production,
hence counting their contribution more than once;

Value added: Refers to the value of output after deducting the cost of goods and
services inputs in the production process. Value added defines the true net
contribution and is subsequently the preferred measure for assessing economic
impacts;

Income: Measures the level of wages and salaries paid to employees of the industry
under consideration and to other industries benefiting from the Project; and

Employment: Refers to the part-time and full-time employment positions generated
by the economic shock, both directly and indirectly through flow-on activity, and is
expressed in terms of full time equivalent (FTE) positions.
Current Economic Activity (2012)
The table below outlines the direct and flow-on (indirect) impacts associated with the
existing Wangaratta saleyard operations. Direct impacts relate to the goods and services
purchased as a result of the Wangaratta saleyard operations. Flow-on, or indirect,
impacts include Type I impacts which are the impacts associated with the purchases
made to support the direct impacts. Type II impacts have been excluded from the
assessment which represent the consumption induced effects brought about by the
purchases of Type I impacts. Please refer to Appendix B for more explanation of Type I
verse Type II impacts.
Table 6.2: Economic Activity of the Wangaratta Saleyard (Current)
Impact
Output
($M)
GVA
($M)
Income
($M)
Employment
(FTE)
Direct Impact
$9.9
$5.3
$3.6
77
Indirect Impact (Type I)8
$4.6
$2.0
$1.2
18
$14.5
$7.3
$4.7
95
Total Impacts
Source: AECgroup
8
Indirect impacts include Type I only. Type II impacts (the reinvestment of incomes in the economy) have been
excluded as Type II are commonly said to overstate associated impacts of a project. Please refer to Appendix A for
the description of Type I and Type II impacts.
21
Final Report
The current economic activity generated by the Wangaratta saleyard in the City of
Wangaratta is approximately:

$14.5 million in output, including:
o
o

$7.3 million in gross value added, including:
o
o

$5.3 million in direct activity from Wangaratta saleyard operations;
$2.0 million in production induced support activity.
$4.7 million in wages and salaries paid to households, including:
o
o

$4.6 million in production induced support activity (indirect type I impacts) as a
result of demand for goods and services to support operational activities.
$1.2 million in production induced support activity.
95 full time equivalent (FTE9) employees, including:
o
o
77 FTE employees through direct activity from Wangaratta saleyard operations;
18 FTE employees through in production induced support activity.
Figure 6.1 shows the retail trade and wholesale trade sectors receive the largest benefit
(in terms of gross value add) as a result of the Wangaratta saleyard, driven primarily by
the direct spend of visitors in the Rural City of Wangaratta.
Figure 6.1: Gross Value Add as a Result of the Wangaratta Saleyard
Retail trade
Wholesale trade
Transport, postal and warehousing
Professional, scientific and technical services
Administrative and support services
Manufacturing
Financial and insurance services
Rental, hiring and real estate services
Information media and telecommunications
Agriculture, forestry and fishing
Accommodation and food services
Other services
Construction
Public administration and safety
Electricity, gas, water and waste services
Education and training
Arts and recreation services
Health care and social assistance
Mining
Ownership of dwellings
Direct
$0.0
$1.0
$2.0
Indirect (Type I)
$3.0
$4.0
$5.0
Gross Regional Product ($'M)
Note: Excludes Type II Impacts.
Source: AECgroup
Figure 6.2 shows the breakdown of full time employment supported as a result of the
Wangaratta saleyard's existing operation. The retail trade sector receives the greatest
employment benefit followed by the wholesale trade sector.
9
22
Final Report
Figure 6.2: Employment as a Result of the Wangaratta Saleyard
Retail trade
Wholesale trade
Professional, scientific and technical services
Manufacturing
Transport, postal and warehousing
Administrative and support services
Other services
Accommodation and food services
Agriculture, forestry and fishing
Construction
Rental, hiring and real estate services
Information media and telecommunications
Financial and insurance services
Public administration and safety
Education and training
Electricity, gas, water and waste services
Arts and recreation services
Health care and social assistance
Mining
Ownership of dwellings
Direct
0
20
Indirect (Type I)
40
60
80
Employment (No. FTE's)
Note: Excludes Type II Impacts.
Source: AECgroup
If the Wangaratta saleyard were to close, the total economic activity generated
by the current facility would be reduced to zero. As a result this analysis
represents the potential economic loss should the facility close.
6.2.2
Future Economic Activity Scenarios (2021-22)
Option 1: 'Business As Usual' Economic Activity
The business as usual scenario shows that economic activity resulting from the
Wangaratta saleyard would remain largely unchanged if it were to continue as it is. While
there would be slight declines in stock numbers at the facility over a ten year period,
impacts upon spending and activity in the local activity are expected to be marginal when
compared with the current economic activity of the saleyard.
Table 6.3: Economic Activity of the Wangaratta Saleyard - Business as Usual Scenario
2021-22
Impact
Output
($M)
GVA
($M)
Income
($M)
Employment
(FTE)
Direct Impact
$9.9
$5.3
$3.6
77
Indirect Impact (Type I)10
$4.6
$2.0
$1.2
18
$14.4
$7.3
$4.7
95
Total Impacts
Source: AECgroup
Option 3a & Option 3b: Future Redevelopment Scenario's (Medium & High
Market Demand)
If the saleyard were upgraded then this would increase the competitive position of the
saleyard. This would attract additional stock throughput and increase associated saleyard
economic activity over the next 10 years when compared to the 'Business as Usual
Scenario'.
10
Indirect impacts include Type I only. Type II impacts (the reinvestment of incomes in the economy) have been
excluded as Type II are commonly said to overstate associated impacts of a project. Please refer to Appendix A for
the description of Type I and Type II impacts.
23
Final Report
By 2021-22, future economic activity generated by the Wangaratta saleyard in the City of
Wangaratta is estimated to be approximately:


Medium Market Demand Scenario (3a)
o
$17.6 million in output ($12.0 million direct and $5.6 million in flow on impacts)
o
$8.9 million in value-add ($6.4 million direct and $2.5 million in flow on impacts)
o
$5.8 million in incomes($4.3 million direct and $1.4 million in flow on impacts)
o
115 jobs (93 direct and 22 flow on)
High Market Demand Scenario (3b)
o
$20.0 million in output ($13.7 million direct and $6.3 million in flow on impacts)
o
$10.1 million in value-add ($7.3 million direct and $2.8 million in flow on impacts)
o
$6.6 million in incomes($4.9 million direct and $1.6 million in flow on impacts)
o
131 jobs (106 direct and 25 flow on)
Table 6.4: Economic Activity of the Wangaratta Saleyard - Future Saleyard Upgrade
(Medium Demand Scenario) 2021-22
Impact
Output
($M)
GVA
($M)
Income
($M)
Employment
(FTE)
$12.0
$6.4
$4.3
93
$5.6
$2.5
$1.4
22
$17.6
$8.9
$5.8
115
$13.7
$7.3
$4.9
106
$6.3
$2.8
$1.6
25
$20.0
$10.1
$6.6
131
Direct Impact
Indirect Impact (Type I)(a)
Total Impacts
Direct Impact
Indirect Impact (Type I)(a)
Total Impacts
Note: (a) Indirect impacts include Type I only. Type II impacts (the reinvestment of incomes in the economy) have been excluded
as Type II are commonly said to overstate associated impacts of a project. Please refer to Appendix A for the description of Type I
and Type II impacts.
Source: AECgroup
6.3
Summary
In the context of the broader Wangaratta economy, the Wangaratta saleyard currently
contributes $7.3 million in value add - 0.5% of the region's Gross Regional Product. This
is equivalent to 6.0% of agriculture or 3.5% of manufacturing industry value add in the
Rural City of Wangaratta.
If the Wangaratta saleyard were closed then this economic activity would be lost from the
regional economy.
In contrast, the 'business as usual scenario' shows that economic activity is likely to
remain unchanged over a 10 year period.
Future upgrade of the facility has the potential to increase regional economic activity by:
Additional Economic Activity








$1.6 million in value add
$1.3 million in incomes
29 employees
$2.8 million in value add
$1.9 million in incomes
36 employees
Source: AECgroup
24
Final Report
7.
7.1
Scope and Boundary of the Cost Benefit Analysis
The Cost Benefit Analysis (CBA) undertaken in this report examines the anticipated
benefits and costs of upgrading the Wangaratta saleyards from two perspectives: the
Wangaratta Local Government Area (LGA) and the broader economy of Victoria.
To appropriately conduct a CBA, three alternative scenarios are developed, which are
compared to the Option 1- 'Business as Usual Scenario'. These three scenarios are the
benefits and costs associated with:

Option 2: Saleyard Closure Compared to Option 1: Business as Usual

Option 3a: Future Upgrade (Medium Demand Scenario) Compared to Option 1:
Business as Usual

Option 3b: Future Upgrade (High Demand Scenario) Compared to Option 1: Business
as Usual
Key assumptions behind the development of the CBA model include:

The economic planning period applied is 8 weeks of construction for the saleyard
upgrade and 20 years of operation, in consideration of the impact of discounting on
values beyond this time scale;

It is assumed the project has no impact on other proposed and potential projects and
developments elsewhere in Wangaratta or Victoria over the period; and

All values are expressed in 2012 dollars.
Decision Criteria:
The Net Present Value (NPV) will be the primary decision criteria for the CBA, which is
supported by a Benefit Cost Ratio (BCR). The NPV of a project expresses the difference
between the present value of future benefits and present value of future costs, that is:
NPV = Present Value (Benefits) – Present Value (Costs). The BCR of a project is
calculated by dividing the present value of benefits by the present value of costs.
Where the CBA results in a:
7.2

Positive NPV and BCR above 1: the upgrade of the Wangaratta saleyard will be
deemed as being desirable.

NPV equal to zero and BCR of 1: the upgrade of the Wangaratta saleyard will be
deemed as being neutral (that is, neither desirable nor undesirable).

Negative NPV and BCR of less than 1: the upgrade of the Wangaratta saleyard will be
deemed undesirable.
Model Drivers
Economic drivers are detailed in Chapter 4. Environmental and social drivers used in the
assessment are detailed in Chapter 5.
These drivers were developed comparing the following benefits and costs with the
'Business as Usual' Scenario:
25
Final Report
Table 7.1: Identified Benefits & Costs in each Future Saleyard Scenario
Benefit/Cost
Saleyard Closure
Future Upgrade
- Medium Scenario
Future Upgrade
- High Scenario
Costs
Economic:
 Loss of incomes
 Loss of operating revenues
 Increased livestock transport
costs to sale
Environmental:
 Cost of carbon emissions due
to increased travel to
alternative selling centre
Social:
 Increased cost of travel time
to saleyard attendees
Economic:
 Capital costs
 Increase in operational costs
(due to increased throughput)
 Increase cost of incomes (due
to increased throughput and
associated labour requirement)
Environmental:
 None quantified/ identified
Social:
Economic:
 Capital costs
 Increase in operational costs
(due to increased throughput)
 Increase cost of incomes (due
to increased throughput and
associated labour requirement)
Environmental:
Social:
Benefits
Economic:
 No future operating costs
Environmental:
Social:
Economic:
 Reduction in
operating/maintenance costs
 Increased future operating
revenues
 Increased future incomes
 Reduced travel cost to other
livestock selling centres
Environmental:
 Reduced carbon emissions from
transport to livestock selling
centres
 Environmental benefit from
improved saleyard design.
Social:
 Reduced cost in travel time
(social cost to producer)
Economic:
 Reduction in
operating/maintenance costs
 Increased future operating
revenues
 Increased future incomes
 Reduced travel cost to other
livestock selling centres
Environmental:
 Reduced carbon emissions from
transport to livestock selling
centres
 Environmental benefit from
improved saleyard design.
Social:
 Reduced cost in travel time
(social cost to producer)
Source: AECgroup
7.3
7.3.1
Present Value of Costs
Table 7.2 outlines the present value of the identified costs associated the three scenarios
of: Saleyard Closure (S2), Future Upgrade - Medium Demand Scenario (S3a) and Future
Upgrade - Medium Demand Scenario (S3b) when compared with the Business as Usual
Scenario (S1). Discount rates of 4.5%, 7.0% and 9.5% have been used.
The present value of total costs (at a discount rate of 7.0%) are expected to be:

$17.9 million in costs to both Wangaratta and Victoria economies if the saleyard were
to close.

Between $3.6 million and $3.8 million in costs to the Wangaratta economy if the
saleyard were upgraded.

$3.8 million in costs to the Victoria economy if the saleyard were upgraded.
Loss of revenues and increased livestock transport costs are the largest costs to the
economy if the saleyard is closed, with transport costs have the largest impacts upon the
broader Victoria economy ($17.1 million).
In the saleyard upgrade scenarios, the largest cost is the cost of capital ($3.6 million).
26
Final Report
Table 7.2. Present Value of Costs ($2012 Million)
Cost
Present Value ($ Million) – Discount Rate
4.5%
7.0%
9.5%
$5.8
$4.9
$4.2
S2: SALEYARD CLOSURE COMPARED WITH S1: BUSINESS AS USUAL
COSTS TO WANGARATTA
Loss of Saleyard revenue
Increased Livestock Transport Costs
$12.3
$10.3
$8.8
Cost of carbon emissions from increased travel
$0.0
$0.0
$0.0
Social cost of travel time for saleyard users
$0.7
$0.6
$0.5
Loss of Incomes
$2.5
$2.1
$1.8
TOTAL COSTS
$21.4
$17.9
$15.3
COSTS TO VICTORIA
Loss of Saleyard revenue
$0.0
$0.0
$0.0
$20.5
$17.1
$14.6
Cost of carbon emissions from increased travel
$0.0
$0.0
$0.0
Social cost of travel time for saleyard users
$0.9
$0.8
$0.7
Loss of Incomes
$0.0
$0.0
$0.0
TOTAL COSTS
$21.5
$17.9
$15.3
Increased Livestock Transport Costs
S3a: FUTURE UPGRADE (MEDIUM SCENARIO) COMPARED WITH S1: BUSINESS AS USUAL
COSTS TO WANGARATTA
Capital Cost
$3.6
$3.6
$3.6
Increase in Operational Costs
$0.2
$0.2
$0.1
Increases in Cost of Incomes
$0.1
$0.1
$0.1
TOTAL COSTS
$3.9
$3.8
$3.8
Capital Cost
$3.6
$3.6
$3.6
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
TOTAL COSTS
$3.6
$3.6
$3.6
COSTS TO VICTORIA
S3b: FUTURE UPGRADE (HIGH SCENARIO) COMPARED WITH S1: BUSINESS AS USUAL
COSTS TO WANGARATTA
Capital Cost
$3.6
$3.6
$3.6
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
TOTAL COSTS
$3.6
$3.6
$3.6
Capital Cost
$3.6
$3.6
$3.6
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
TOTAL COSTS
$3.6
$3.6
$3.6
COSTS TO VICTORIA
Note: Some totals may not sum due to rounding.
Source: AECgroup
27
Final Report
7.3.2
Present Value of Benefits
Table 7.3 outlines the present value of the identified benefits associated the three
scenarios of: Saleyard Closure (S2), Future Upgrade - Medium Demand Scenario (S3a)
and Future Upgrade - Medium Demand Scenario (S3b) when compared with the Business
as Usual Scenario (S1). Discount rates of 4.5%, 7.0% and 9.5% have been used.
The present value of total benefits (at a discount rate of 7.0%) are expected to be:
Saleyard Closure:

$3.9 million in benefits to both Wangaratta economies if the saleyard were to close.

$0.9 million in benefits to both Victoria economies if the saleyard were to close.
Saleyard Upgrade:

Between $5.1 million and $7.4 million in benefits to the Wangaratta economy if the
saleyard were upgraded

Between $5.1 million and $8.4 million in benefits to the Victoria economy if the
saleyard were upgraded
If the saleyard is upgraded the largest benefits are attributed to reduced
livestock transport costs and environmental benefits of the saleyard design.
Table 7.3. Present Value of Benefits ($2012 Million)
BENEFITS
4.5%
7.0%
9.5%
BENEFITS TO WANGARATTA
No Wangaratta Saleyard Operating Costs
$4.7
$3.9
$3.3
TOTAL BENEFITS
$4.7
$3.9
$3.3
BENEFITS TO VICTORIA
No Wangaratta Saleyard Operating Costs
$1.1
$0.9
$0.7
TOTAL BENEFITS
$1.1
$0.9
$0.7
Reduction in costs due to efficiencies gained in upgrade
$0.8
$0.6
$0.5
Saleyard Revenues
$0.0
$0.0
$0.0
Incomes paid (employment)
$0.0
$0.0
$0.0
Environmental Benefit of Saleyard Design (Solar Panels)
$1.4
$1.1
$1.0
Reduced livestock transport cost
$4.3
$3.2
$2.5
Reduced carbon costs associated with reduced transport
$0.0
$0.0
$0.0
Reduced time spent travelling by stakeholders (social benefit)
$0.2
$0.1
$0.1
TOTAL BENEFITS
$6.6
$5.1
$4.1
$0.8
$0.6
$0.4
Saleyard Revenues
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$1.4
$1.1
$1.0
$4.3
$3.3
$2.5
$0.0
$0.0
$0.0
$0.2
$0.1
$0.1
TOTAL BENEFITS
$6.6
$5.1
$4.1
28
Final Report
BENEFITS
4.5%
7.0%
9.5%
$0.6
$0.4
$0.3
Saleyard Revenues
$2.1
$1.7
$1.3
$0.6
$0.4
$0.3
$1.4
$1.1
$1.0
$4.5
$3.5
$2.8
$0.0
$0.0
$0.0
$0.2
$0.2
$0.2
TOTAL BENEFITS
$9.5
$7.4
$6.0
$1.3
$1.0
$0.8
Saleyard Revenues
$0.0
$0.0
$0.0
$0.0
$0.0
$0.0
$1.4
$1.1
$1.0
$7.5
$5.9
$4.7
$0.0
$0.0
$0.0
TOTAL BENEFITS
$0.3
$0.3
$0.2
$10.6
$8.4
$6.7
Source: AECgroup
7.3.3
Net Present Value
Assuming a discount rate of 7.0%, the NPV of the saleyard upgrade is estimated to be
between:

$0.6 million and $3.8 million to the Wangaratta economy

$1.0 million and $4.8 million to the Victoria economy
From the perspective of the Victoria economy the BCR ranges between 1.3 and 2.3
implying a return in present value terms of between $1.30 and $2.30 for every dollar
cost. This variance is dependent upon the number of stock that the new facility attracts
(medium verse high market demand scenario).
By comparison, saleyard closure has a BCR of 0 for Victoria, highlighting no return to the
broader Victoria economy.
Table 7.4. Net Present Value ($2012 Million)
NPV
Discount Rate
4.5%
7.0%
9.5%
$17.9
$15.3
$21.4
$4.7
$3.9
$3.3
Net Present Value
-$16.7
-$14.0
-$11.9
Benefit Cost Ratio
0.2
0.2
0.2
$21.5
$17.9
$15.3
$1.1
$0.9
$0.7
Net Present Value
-$20.4
-$17.1
-$14.6
Benefit Cost Ratio
0.0
0.0
0.0
29
Final Report
NPV
Discount Rate
4.5%
7.0%
9.5%
$3.9
$3.8
$3.8
$5.7
$4.5
$3.6
Net Present Value
$1.8
$0.6
-$0.2
Benefit Cost Ratio
1.5
1.2
0.9
$3.6
$3.6
$3.6
$5.9
$4.6
$3.6
Net Present Value
$2.3
$1.0
$0.0
Benefit Cost Ratio
1.6
1.3
1.0
$3.6
$3.6
$3.6
$9.5
$7.4
$6.0
Net Present Value
$5.8
$3.8
$2.3
Benefit Cost Ratio
2.6
2.0
1.6
$3.6
$3.6
$3.6
$10.6
$8.4
$6.7
Net Present Value
$7.0
$4.8
$3.1
Benefit Cost Ratio
2.9
2.3
1.9
Source: AECgroup
The CBA identifies upgrade of the Wangaratta saleyard would be highly desirable with
the benefits outweighing the costs at a discount rate of 7% from the perspective of both
Wangaratta and Victoria economies.
By comparison the saleyard closure scenario is undesirable by the standards of the
current analysis.
30
Final Report
8.
Competitive Neutrality Assessment
8.1
Background
Competitive neutrality reforms are designed to ensure that, where appropriate, local
government business activities set prices on the same basis as the private sector by
making adjustments for the advantages and disadvantages of public ownership. Setting
prices on the same cost base as the private sector involves the recovery of the following
cost items:

Direct and indirect costs (e.g. wages, materials, consumables, superannuation);

Administration and management costs;

Return of capital/depreciation;

Return on capital/assets
equipment);

Incorporation of tax equivalents such as Council rates, land tax, payroll tax, FBT and
taxes on business profits;

Adjustments for other advantages and disadvantages of public sector ownership; and

Non-commercial activities directed by government (e.g. provision of public
recreational facilities) are funded separately through Community Service Obligation
(CSO) payments.
(resources,
infrastructure,
land,
buildings,
plant,
Full cost pricing in simple terms means that, on average, prices should fully recover all
the relevant costs of supplying a product or service and total revenue received by the
business should equal the sum of:
a) Efficient operating expenses;
b) A return of capital (i.e. depreciation expense); and
c)
A return on capital (i.e. cost of debt plus return on equity invested in the business).
Full cost pricing is achieved if the total expected revenue from all sources, including
subsidies and community service obligations (CSOs), is sufficient to meet expected total
costs as defined above.
The identification of the revenue requirement under full cost pricing principles provides
Councils with the necessary information upon which to make decisions regarding the cost
base or revenue strategy to ensure an appropriate return is made on business
investments (i.e. to maximise community value from those investments).
8.2
Victorian Government Guidelines and Policies
The Department of Planning and Community Development provides guidance to local
governments (via policies and guidelines) on National Competition Policy (NCP) and its
broader implications for Council business activities (including the application of
competitive neutrality to business activities).
Generally, competitive neutrality is applied when a local government deems that a
business it operates has a significant influence in the market it operates. Significant
influence is relative to the market in which the business operates and includes the size of
the market share held as well as the competitive impact on the market in which it
operates (currently and into the future).
The department does not actively regulate the application of competitive neutrality by
local governments, rather it is the council’s responsibility to determine if their business
activities fall within the scope of the competitive neutrality policy.
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Final Report
8.3
Competitive Neutrality Application to the Wangaratta
Saleyards
For the purposes of this study Council wishes to apply competitive neutrality principles to
the Wangaratta saleyards for the purposes of determining the full cost position of the
business given it operates in a competitive regional environment. In reviewing Councils
current approach to budgeting and reporting for the Saleyards the following ‘building
block’ components were used to determine the full cost pricing position of the business
currently and moving forward (based on available information):
Table 8.1: Full Cost Pricing Building Blocks Applied
Component
Description
Efficient Operating Costs
 Current budgeted operating costs of the business including salaries and wages
and materials and services were assumed to be efficient for the purposes of the
exercise
Corporate Overheads
 Internal corporate charges applied by Council to the business including charges
from Management, Finance, Human Resources and Information Services
 Corporate overhead charges were calculated at approximately 15% of business
operating costs which is in line with industry benchmarks
Competitive Neutrality Costs
 Adjustments for advantages and disadvantages of Council ownership of the
Saleyards including adjustments for payroll tax, superannuation, workers
compensation, Council general rates and also land tax
Return of Capital
 Depreciation costs incurred by the Saleyards with respect to the current value of
existing assets and infrastructure
Return on Capital
 Expected return on the assets and infrastructure invested in the Saleyards
commensurate with the business Weighted Average Cost of Capital (WACC)
Source: AECgroup
The following general modelling assumptions and competitive neutrality adjustments
were applied / used to undertake the full cost pricing assessment for the Saleyards
business activity.
Table 8.2: General FCP Model Assumptions
Component
Assumption
Cost Inflation (applied to opex and other revenues)
Assumed Revaluation Gain on Assets (regulatory level)
Opening Value of Contributed Assets (as a % of total asset value)
3.0%
2.5%
39.3%
Assumed Depreciation Rate on New Capital Works
2.0%
Growth in Non Yard Fee Revenues Due to Price Effects
3.0%
Growth in Yard Fee Revenues Due to Price Effects
3.0%
Increase in Employee Costs (excluding growth effects) - %
4.0%
Increase in Other Materials & Services Costs (excluding growth effects) - %
3.0%
Increase in Corporate Overheads (excluding growth effects) - %
3.0%
Increase in Competitive Neutrality Costs (excluding growth effects) - %
4.0%
Inflation on Asset Values, Depreciation, Capital Works and Land - %
5.0%
Saleyards Upgrade - Yard Maintenance Saving
40%
Source: AECgroup
Table 8.3: Competitive Neutrality Adjustments
Component
Adjustment
Applied
Comment
Superannuation
2012 - 2013
 Council’s current superannuation rates and the standard
industry rate of 9%
Workers Compensation
2012 - $4,142
 Councils 2011/12 workers compensation rate is
approximately 2.57%
 The Workcover Industry Classification rate A01440 SheepBeef Cattle Farming 2011/12 4.698%
 Upward adjustment of 2.13% applied
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Final Report
Component
Adjustment
Applied
Payroll Tax
2012 - $0
Comment
 The State Revenue Office payroll tax threshold is currently
$550,000
 The total Saleyards total payroll / taxable wages is
currently below the threshold. As a result no payroll tax
adjustment was required
General Rates
2012 - $6,764
 General rates based on the current utilised value of the
Saleyards land ($1,160,250)
 Commercial / industrial general rate category applied
(0.5830 cents in the $ for 2012)
 5% index applied to land value for forward general rate
equivalent calculations
Land Tax
2012 - $4,257
 The State Revenue Office land tax thresholds utilised
 Land tax calculations based on the current utilised value
of the Saleyards land ($1,160,250)
 5% index applied to land value for forward land tax
equivalent calculations
Depreciation
2012 - $151,733
 Depreciation expense based on current 2012 Saleyards
depreciation including the depreciation of expected new
works depending on the scenario applied (i.e. roof
upgrade in 2013)
 5% index also applied to depreciation forecasts from 2013
onwards
Return on Capital
2012 - $140,731
 Weighted Average Cost of Capital of 7.21% applied
 Current value to the asset base adjusted to remove initial
subsidy received in 1978 from the State Government for
the construction of the Saleyards (consistent with
regulatory principles)
 Working capital allowance allowed in return calculation
also in accordance with regulatory principles
Source: AECgroup
8.4
Assessment of Full Cost Recovery
8.4.1
Current Full Cost Position
The tables and graphs below provide an estimate of the saleyard’s full cost recovery
position over the next 5 years under three separate scenarios as follows:

Scenario 1- Business as usual;

Scenario 3a - Saleyards are upgraded – market share maintained; and

Scenario 3b - Saleyards are upgraded – market share is increased.
It is important to highlight that under all three scenarios modeled, the application of
competitive neutrality principles to the business cost base results in significant full cost
recovery shortfalls (assuming current pricing levels and forecasted cattle throughput
numbers under each scenario). It would be expected that significant price increases
above inflation would be required for yard fees and /or significant increases in cattle
throughput to move towards full cost recovery in the medium term.
Table 8.4: Scenario 1 Full Cost Recovery Assessment, 2012-2016
CURRENT REVENUE vs FULL COST
Operating Expenses
Corporate Overheads
Competitive Neutrality
Depreciation
Return on Capital
Estimated Full Cost
Actual Revenue Received
Surplus/(Shortfall) from Full Cost - $
$
$
$
$
$
$
$
-$
2012
341,634
51,300
15,163
151,773
140,731
700,601
440,000
260,601
$
$
$
$
$
$
$
-$
2013
424,700
53,000
17,788
159,605
136,717
791,811
458,050
333,761
$
$
$
$
$
$
$
-$
2014
440,145
54,590
18,500
167,573
134,559
815,367
556,605
258,762
$
$
$
$
$
$
$
-$
2015
456,162
56,228
19,240
175,939
131,748
839,315
570,807
268,508
$
$
$
$
$
$
$
-$
2016
472,771
57,915
20,009
184,722
128,537
863,955
577,733
286,222
Notes: Return on capital is only targeted on Saleyard assets that have been funded by Council cash or borrowing, with any subsidies excluded
from the calculation.
Source: AECgroup
33
Final Report
Table 8.5: Scenario 3a Full Cost Recovery Assessment, 2012-2016
Operating Expenses
Corporate Overheads
Depreciation
Return on Capital
Estimated Full Cost
$
$
$
$
$
$
$
-$
2012
341,634
51,300
15,163
151,773
140,731
700,601
440,000
260,601
$
$
$
$
$
$
$
-$
2013
369,025
53,000
17,788
195,605
223,602
859,020
458,050
400,970
2014
2015
2016
$
387,388 $
401,541 $
416,220
$
54,590 $
56,228 $
57,915
$
18,500 $
19,240 $
20,009
$
240,473 $
250,661 $
261,313
$
311,535 $
309,035 $
306,044
$ 1,012,486 $ 1,036,705 $ 1,061,501
$
571,327 $
585,866 $
600,764
-$ 441,159 -$ 450,839 -$ 460,737
Source: AECgroup
Table 8.6: Scenario 3b Full Cost Recovery Assessment, 2012-2016
Operating Expenses
Corporate Overheads
Depreciation
Return on Capital
Estimated Full Cost
$
$
$
$
$
$
$
-$
2012
341,634
51,300
15,163
151,773
140,731
700,601
440,000
260,601
$
$
$
$
$
$
$
-$
2013
355,664
53,000
17,788
195,605
223,602
845,659
458,050
387,609
$
$
$
$
$
$
$
-$
2014
369,532
54,590
18,500
240,473
311,634
994,729
598,980
395,749
2015
2016
$
401,276 $
415,941
$
56,228 $
57,915
$
19,240 $
20,009
$
250,661 $
261,313
$
309,234 $
306,248
$ 1,036,638 $ 1,061,426
$
640,943 $
657,493
-$ 395,695 -$ 403,933
Source: AECgroup
Figure 8.1: Saleyards Cost Recovery Position 2012 - 2016
$1,200
$1,000
($'000)
$800
$600
$400
$200
$2012
2013
Estimated Full Cost
2014
2015
2016
Source: AECgroup
8.4.2
Required Increases to Ensure Ongoing Cost Recovery and Competitive
Neutrality
Based on available information on current and anticipated expenditure levels the
following graphs outline the required cumulative average increase required in yard fees
or throughput volume to achieve ongoing cost recovery and competitive neutrality
compliance for the business:
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Final Report
Figure 8.2: Required Cumulative Yard fee Price Increases
$9.00
$8.00
Average Yard Fee
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
2012
2013
Scenario 1
2014
2015
Scenario 3a
Scenario 3b
2016
Source: AECgroup
Figure 8.3: Required Cumulative Throughput Increases
80,000
70,000
Required Throughput
60,000
50,000
40,000
30,000
20,000
10,000
2012
2013
Scenario 1
2014
2015
Scenario 3a
Scenario 3b
2016
Source: AECgroup
Table 8.7: Required Average Price or Volume Increases Scenario 1
Year
Average Price
Increase
Throughput
Increase
2012
$5.21
40,158
2013
$6.39
49,934
2014
$4.91
38,713
2015
$5.13
40,171
2016
$5.62
42,822
Note: Price Increase required after allowance of 3% annual increase to current average yard fee
Assumes other revenues remain constant with 3% price increase applied also
Source: AECgroup
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Final Report
Table 8.8: Required Average Price or Volume Increases Scenario 3a
Year
Average Price
Increase
Throughput
Increase
2012
$5.21
40,158
2013
$7.37
59,989
2014
$8.03
66,002
2015
$8.26
67,450
2016
$8.50
68,931
Source: AECgroup
Table 8.9: Required Average Price or Volume Increases Scenario 3b
Year
Average Price
Increase
Throughput
Increase
2012
$5.21
40,158
2013
$6.97
57,990
2014
$6.70
59,208
2015
$6.32
59,200
2016
$6.49
60,432
Source: AECgroup
8.5
Sensitivity Analysis
Sensitivity analysis was applied to the following key inputs under each operating scenario
to determine the impact on the full cost recovery position of the business:
Table 8.10: Sensitivity Analysis Variables
Variable
Throughput
Price Increases
Projected Upgrade Yard Maintenance
Saving
Sensitivity Applied
<10%
>10%
$10 average yard fee
$8 average yard fee
0%
20%
Source: AECgroup
8.5.1
Throughput Sensitivity
Saleyard throughput is a key driver of yard fee revenues. To test the impact of
throughput variability on the full cost position a sensitivity of +/- 10% was applied to the
base throughput under each scenario. The graphs below illustrate that while throughput
increases of 10% marginally improve the full cost recovery shortfall they are nowhere
near the increases required to reach cost recovery in the absence of significant price
increases.
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Final Report
Figure 8.4: Sensitivity – Scenario 1
Figure 8.5: Sensitivity – Scenario 3a
$-
$-
-$50,000
-$100,000
-$100,000
-$200,000
-$150,000
-$200,000
-$300,000
-$250,000
-$400,000
-$300,000
-$500,000
-$350,000
-$400,000
-$600,000
2014
2015
Scenario 1 - Base Position
2016
2017
2014
Scenario 1 - Throughput <10%
2015
Scenario 3a - Base Position
Scenario 1 - Throughput >10%
2016
2017
Scenario 3a - Throughput <10%
Scenario 3a - Throughput >10%
Source: Source: AECgroup
Source: Source: AECgroup
Figure 8.6: Sensitivity – Scenario 3b
$-
-$50,000
-$100,000
-$150,000
-$200,000
-$250,000
-$300,000
-$350,000
-$400,000
-$450,000
-$500,000
2014
2015
Scenario 3b - Base Position
2016
2017
Scenario 3b - Throughput <10%
Scenario 3b - Throughput >10%
Source: AECgroup
8.5.2
Price Increase Sensitivity
Increases in the current average yard fee were applied to test the magnitude of the
resultant improvement on the full cost recovery position of the business. For the
purposes of the analysis it was assumed that the average yard fee was increased to $8
and $12 (excl GST) respectively.
Figure 8.7: $8 Sensitivity – Scenario 1
Figure 8.8: $8 Sensitivity – Scenario 3a
$-
$-
-$50,000
-$100,000
-$100,000
-$200,000
-$150,000
-$300,000
-$200,000
-$400,000
-$250,000
-$500,000
-$300,000
-$600,000
-$350,000
2014
2015
Source: AECgroup
2016
2017
Scenario 1 - Price $8
2014
2015
2016
2017
Scenario 3a - Price $8
Source: AECgroup
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Final Report
Figure 8.9: $8 Sensitivity – Scenario 3b
$-
Under all scenarios an increase in
the average yard fee immediately to
$8 does not arrest the degradation
of the full cost recovery position
over time (even in the event
increased market share is obtained
under scenario 3b)
-$50,000
-$100,000
-$150,000
-$200,000
-$250,000
-$300,000
-$350,000
-$400,000
-$450,000
-$500,000
2014
2015
2016
2017
Scenario 3b - Price $8
Source: AECgroup
Figure 8.10: $12 Sensitivity – Scenario 1
$100,000
Figure 8.11: $12 Sensitivity – Scenario 3a
$-
$50,000
-$100,000
$-$50,000
-$200,000
-$100,000
-$300,000
-$150,000
-$200,000
-$400,000
-$250,000
-$500,000
-$300,000
-$350,000
-$600,000
2014
2015
2016
2017
Scenario 1 - Price $12
Source: AECgroup
2014
2015
2016
2017
Scenario 3a - Price $12
Source: AECgroup
Figure 8.12: $12 Sensitivity – Scenario 3b
$-
-$50,000
-$100,000
-$150,000
-$200,000
-$250,000
-$300,000
-$350,000
-$400,000
-$450,000
-$500,000
2014
2015
2016
2017
Scenario 3b - Price $12
An increase in the average yard fee
to $12 immediately has a significant
positive impact on the full cost
position of the Saleyards under each
scenario. The impact is observed
most under Scenario 1 (i.e. no
capital upgrade), as the business is
not having to recover additional
capital costs (depreciation, return
on capital) through its revenue
base, allowing full cost recovery to
be achieved
Source: AECgroup
8.5.3
Proposed Yard Maintenance Cost Saving Resulting From Upgrade
Council expects to realise yard maintenance savings (modelled at 40% of current yard
maintenance costs) should the proposed infrastructure upgrade proceed (i.e. Scenarios
3a and 3b). Sensitivities were applied to this assumption assuming that no savings are
realised, and only 20% savings are realised on the applicable yard maintenance costs
(assumed to be natural account 535 in the Saleyards expenditure budget).
Under the no saving sensitivity full cost recovery shortfalls increase by 5.4% ($24k) and
6% ($25k) respectively for Scenarios 3a and 3b. The 20% saving of yard maintenance
costs scenario results in average cost recovery shortfalls decreasing to 2.7% and 3%
respectively (approximately $12k). The impacts surrounding this sensitivity are not
considered major given that yard maintenance costs only represent approximately 14%
of total business expenditure.
38
Final Report
Figure 8.13: Yard Sensitivity – Scenario 3a
Figure 8.14: Yard Sensitivity – Scenario 3b
-$410,000
-$410,000
-$420,000
-$420,000
-$430,000
-$430,000
-$440,000
-$440,000
-$450,000
-$450,000
-$460,000
-$460,000
-$470,000
-$470,000
-$480,000
-$480,000
-$490,000
-$490,000
-$500,000
-$500,000
2014
Source: AECgroup
2015
2016
Scenario 3a - No Saving
2017
Scenario 3a - 20% Saving
2014
2015
2016
Scenario 3a - No Saving
2017
Scenario 3a - 20% Saving
Source: AECgroup
39
Final Report
9.
Key Findings
9.1
The current economic activity generated by the Wangaratta saleyard in the City of
Wangaratta is approximately:


$7.3 million in gross value added

$4.7 million in wages and salaries paid to households

95 full time equivalent (FTE11) employees
In the context of the broader Wangaratta economy, the Wangaratta saleyard contributes
to 0.5% of gross regional product and 0.7% of regional employment.
If the saleyard were closed, this economic activity would be lost from the
economy each year.
By comparison, if the saleyard were upgraded then future economic activity has the
potential to increase by:

$3.1 million and $5.5 million in output

$1.6 million and $2.8 million in gross value added

$1.1 million and $1.9 million in incomes

20 and 36 employees
The above increases are dependent on the upgrade being undertaken and the
associated level of throughput achieved in the future.
9.2
The cost benefit analysis was undertaken across a range
environmental costs. Results highlighted that compared to
existing operation 'business as usual', upgrading the saleyard is
for both the Wangaratta and broader Victoria economy when
used.
of financial, social and
the continuation of the
the most desirable option
a discount rate of 7% is
Upgrade of the saleyard is expected to have a future net present value of benefits of:

Between $0.6 million and $3.8 million to the Wangaratta economy

Between $1.0 million and $4.8 million to the Victoria economy.
Upgrade of the saleyard is expected to have a future Benefit Cost Ratio (BCR) of:

Between 1.2 and 2.0 to the Wangaratta economy

Between 1.3 and 2.3 to the Victoria economy.
In contrast, closure of the saleyard has a deleterious effect with an expected net present
value of:
9.3

-$14.0 million to the Wangaratta economy

-$17.0 million to the Victoria economy.
To achieve competitive neutrality position, the analysis found that current pricing
structures will not be sufficient to recoup operational and capital costs without
subsidisation from council. In order to remain competitively neutral this means that
11
40
Final Report
Council will need to seriously consider future changes to facility pricing to ensure that
costs can be recouped effectively.
The sensitivity analysis around price showed that increasing average fees to $8 per head
would not be sufficient to achieve a competitive neutrality position. By comparison if an
average of $12 per head in fees will be more appropriate in ensuring that this position is
achieved in the future.
41
Final Report
References
ABARE (2012). Australian Agricultural Commodities Production Tables - Excel Data File
(March 2012). Australian Bureau of Agriculture Resources and Environment
(ABARE)
ABS (2012). Historical Agricultural Commodities by State. Cat. No. 7.1240. Australian
Bureau of Statistics, Canberra.
Australian Government (2011a). Emission Standards for Cars. Available at:
http://www.alp.org.au/getattachment/97cd68c5-087f-4ff8-b1d5ee2aadae31c9/emission-standards-for-cars/. Last accessed :16 June 2012
Australian Government (2011b). Securing a clean energy future, Commonwealth of
Australia. Available at: http://www.cleanenergyfuture.gov.au/wpcontent/uploads/2011/07/Consolidated-Final.pdf. Last viewed 15 September
2011.
DCCEE (2012). Technical Guidelines for the estimation of greenhouse gas emissions by
facilities in Australia. Department of Climate Change and Energy Efficiency
(DCCEE), July 2012.
DIT (2012). Vehicle Emissions Standards. Department of Infrastructure and Transport
(DIT). Available from:
http://www.infrastructure.gov.au/roads/environment/emission/index.aspx. Last
accessed:16 June 2012.
MLA (2012). Victoria Saleyard Annual Throughput Figures. Meat and Livestock Australia.
Available upon request.
Solar
Panels Melbourne (2012). Solar Panels Melbourne. Available
http://solarpanelsmelbournev.com.au/. Last accessed: 16 June 2012.
from:
VTPI (2012). Transportation Cost and Benefit Analysis II – Travel Time Costs. Victorian
Transport Policy Institute, Melbourne.
42
Final Report
Appendix A: Saleyard Fees & Charges
Fee
Description:
WANGARATTA LIVESTOCK EXCHANGE CHARGES
Fees Set By:
Council
Details of Fees:
Current
Fees/Charges
Proposed
Fees/Charges
AGENTS FEES
Agents Sale Fee (includes special sales- CATTLE)
$153.00
$158.00
Agents Throughput Fee (weekly sale - CATTLE)
(Fee divided by stock numbers per agent)
$530.00
$546.00
Agents Special Sale Throughput Fee (store sale –
CATTLE)
(Fee divided by stock numbers per agent)
$920.00
$948.00
YARD DUES (Prime sales)
Bobby Calves
Yard Dues
$1.70
$1.80
Young Cattle
Yard Dues
$6.40
$6.60
Export
Yard Dues
$6.40
$6.60
Dairy’s
Yard Dues
$6.40
$6.60
Cows
Yard Dues
$6.40
$6.60
Cows & Calves
Yard Dues
$7.40
$7.70
Bulls
Yard Dues
There are currently no throughput fees or agent store
fees for sheep sales.
$10.40
$10.80
Sheep or Lambs
Yard Dues
$0.55
$0.60
Horses
Yard Dues
$9.40
$9.70
$2.00
$2.10
YARD DUES (Store sales)
Young cattle
$5.90
$6.10
Cows
$5.90
$6.10
Cows & calves
$6.70
$7.00
Bulls
$8.20
$8.50
WEIGHING FEES (Private and Express)
Singles
$5.90
$6.10
2 to 5
$2.90
$3.00
6 & Over
$1.90
$2.00
Weigh Fees – Bulls
$6.00
$6.20
$106.10
$110.0
HOLDING FEES (Per head, per day)
Holding Paddock Charges – Sheep
$0.40
$0.50
Holding Paddock Charges – Cattle
$0.93
$1.00
Holding Paddock Charges – Cow & Calf
$1.13
$1.20
Express cattle
Yard Dues
(Includes receival of cattle (evening prior to sale))
Private Weigh – Scale Opening:
Weekend & Public Holidays
[after 7.30am only] (Fee divided by number of Agents)
Normal trading days prior to 7:30am
(By appointment only – A fee may be applicable for this
service)
Weighing fees per head will also be applicable as above
43
Final Report
Fee
Description:
WANGARATTA LIVESTOCK EXCHANGE CHARGES
Fees Set By:
Council
Current
Fees/Charges
Proposed
Fees/Charges
Community groups
$64.00
$66.00
Commercial users
$166.00
$171.00
Canteen Weekend Hire Fee (per day).
$255.00
$263.00
Trans Shipment Cattle (per head)
$1.86
$2.00
Crush Use
$1.86
$2.00
Post-Breeder Ear Tag (each- applied by Agent)
$12.40
$12.80
Post Breeder Ear Tag (each – applied by Council)
$26.80
$28.00
$1.00
$3.00
OTHER FEES
Canteen Hire (per day-not all days available due to
sales etc)
Truck wash (per 7 minutes)
Fees include GST.
44
Final Report
Appendix B: Technical Methodology
IO Model Methodology
IO Model Overview
Input-Output analysis demonstrates inter-industry relationships in an economy, depicting
how the output of one industry is purchased by other industries, households, the
government and external parties (i.e., exports), as well as expenditure on other factors of
production such as labour, capital and imports. Input-Output analysis shows the direct and
indirect (flow-on) effects of one sector on other sectors and the general economy. As such,
Input-Output modelling can be used to demonstrate the economic contribution of a sector
on the overall economy and how much the economy relies on this sector or to examine a
change in final demand of any one sector and the resultant change in activity of its
supporting sectors.
The economic contribution can be traced through the economic system via:

Direct impacts: Represent the first round of effects from direct operational
expenditure on goods and services; and

Flow-on impacts: Comprise the second and subsequent round effects of increased
purchases by suppliers in response to increased sales.
These effects can be identified through the examination of four types of impacts:

Output: Refers to the gross value of goods and services transacted, including the costs
of goods and services used in the development and provision of the final product.
Output typically overstate the economic impacts as it counts all goods and services
used in one stage of production as an input to later stages of production, hence
counting their contribution more than once;

Value added: Refers to the value of output after deducting the cost of goods and
services inputs in the production process. Value added defines the true net contribution
and is subsequently the preferred measure for assessing economic impacts;

Income: Measures the level of wages and salaries paid to employees of the industry
under consideration and to other industries benefiting from the project; and

Employment: Refers to the part-time and full-time employment positions generated
by the economic shock, both directly and indirectly through flow-on activity, and is
expressed in terms of full time equivalent positions.
Input-output multipliers can be derived from open (Type I) Input-Output models or
closed (Type II) models. Open models show the direct effects of spending in a particular
industry as well as the indirect or flow-on (industrial support) effects of additional
activities undertaken by industries increasing their activity in response to the direct
spending. An open model has been used in this assessment.
Closed models re-circulate the labour income earned as a result of the initial spending
through other industry and commodity groups to estimate consumption induced effects
(or impacts from increased household consumption). Closed models are generally
considered to overstate the impact of a stimulus to an economy.
IO Modelling Assumptions
The key assumptions and limitations of input output analysis include:

The inputs purchased by each industry are a function only of the level of output of that
industry. The input function is generally assumed linear and homogenous of degree one
(which implies constant returns to scale and no substitution between inputs);

Each commodity (or group of commodities) is supplied by a single industry or sector of
production. This implies that there is only one method used to produce each commodity
and that each sector has only one primary output;

The total effect of carrying on several types of production is the sum of the separate
effects. This rules out external economies and diseconomies and is known simply as the
additivity assumption. This generally does not reflect real world operations;
45
Final Report

The system is in equilibrium at given prices. This is not the case in an economic system
subject to external influences; and

In the static input-output model, there are no capacity constraints so that the supply of
each good is perfectly elastic. Each industry can supply whatever quantity is demanded
of it and there are no capital restrictions. This assumption would come into play
depending upon the magnitude of the changes in quantities demanded.
Despite these limitations, Input-Output techniques provide a solid approach for taking
account of the inter-relationships between the various sectors of the economy in the shortterm and provide useful insight into the quantum of final demand for goods and services,
both directly and indirectly, likely to be generated by the project.
Wangaratta Model Development
The Input-Output model and multipliers used in this study has been derived from subregional transaction tables developed specifically for this project. The process of
developing a sub-regional transaction table involves the development of regional
estimates of gross production and the development of purchasing patterns based on a
parent table, in this case the 2007-08 Australian transaction table (Australian Bureau of
Statistics, 2011a).
Estimates of gross production (by industry) in the project study area were developed
based on the percent contribution to employment (by place of work) of the study area to
the Australian economy and applied to Australian gross output identified in the 2007-08
Australian table.
Industry purchasing patterns within the Wangaratta LGA were estimated using a process
of cross industry location quotients and demand-supply pool production functions, as
described in West (1993).
Where appropriate, values were rebased from 2007-08 (as used in the Australian national
IO transaction tables) to 2010-11 values using the Consumer Price Index (Australian
Bureau of Statistics, 2010b).
There are two key limitations of developing a sub-regional transaction table using the
approach described above, in addition to the general limitations of Input-Output Analysis:

This process assumes that the sub-region has similar technology and demand/
consumption patterns as the parent (Australia) table (e.g., the ratio of employee
compensation to employees for each industry is held constant); and

Intra-regional cross-industry purchasing patterns for a given sector vary from the
national tables depending on the prominence of the sector in the regional economy
compared to its input sectors. Typically, sectors that are more prominent in the
region (compared to the national economy) will be assessed as purchasing a higher
proportion of imports from input sectors than at the national level, and vice versa.
Despite these limitations, the process of “regionalising” a parent table provides a useful
tool for understanding the potential impacts of a stimulus at a sub-regional level where
more robust information on purchasing patterns is unavailable.
46
Final Report
Cost Benefit Analysis and Competitive Neutrality
Overview
A Cost Benefit Analysis (CBA) framework is utilised in this analysis to identify if the
benefits delivered by the proposed development of the RILF Hub are anticipated to
outweigh the costs of the development.
CBA is an analytical tool that identifies and attempts to quantify the relative costs and
benefits of a project and converts available data into manageable and comparable
information units. CBA uses a discounted cash flow (DCF) framework and applies this
framework across the entire range of benefits and costs that may accrue as a result of a
project to a community or group of stakeholders. The strength of the method is that it
provides a framework for analysing complex and sometimes confusing data in a logical
and consistent way.
CBA assesses the impact of a development by comparing the ‘with’ and ‘without’
scenarios, and is useful in assessing the net benefits accruing to society as a whole as a
result of a project. The CBA method considers the effect of real resource costs and
benefits, and excludes, for example, taxes and subsidies, which are regarded as transfer
payments from one part of the economy to another.
A detailed overview of the steps undertaken in the CBA process is discussed below, and is
consistent with accepted CBA methodologies as outlined in Campbell and Brown (2003),
Sinden and Thampapillai (1995), Australian Government Department of Finance and
Administration (2006) and Queensland Government Department of Infrastructure and
Planning (2008c).
Step 1: Define the Scope and Boundary
To enable a robust determination of the net benefits of undertaking a given project, it is
necessary to specify base case and alternative case scenarios. The base case scenario
represents the ‘without project’ scenario and the alternative or ‘with project’ scenario
examines the impact with the project in place.
The base case (without) scenario is represented by line NB1 (bc) over time T1 to T2 in the
figure below. The investment in the project at time T1 is likely to generate a benefit,
which is represented by line NB2 (bd). Therefore the net benefit flowing from investment
in the project is identified by calculating the area (bcd) between NB1 and NB2.
Figure B.1. With and Without Scenarios
Benefit
NB2
d
NB1
c
b
a
T1
T2
Time
Source: AECgroup
Step 2: Identify Costs and Benefits
A comprehensive quantitative specification of the benefits and costs included in the
evaluation and their various timings is required and includes a clear outline of all major
underlying assumptions. These impacts, both positive and negative, are then tabulated
and where possible valued in dollar terms.
47
Final Report
Some impacts may not be quantifiable. Where this occurs the impacts and their
respective magnitudes will be examined qualitatively for consideration in the overall
analysis.
Financing costs are not included in a CBA. As a method of project appraisal, CBA
examines a project’s profitability independently of the terms on which debt finance is
arranged. This does not mean, however, that the cost of capital is not considered in
CBA, as the capital expenses are included in the year in which the transaction occurs,
and the discount rate (discussed below in Step 5) should be selected to provide a good
indication of the opportunity cost of funds, as determined by the capital market.
Step 3: Quantify and Value Costs and Benefits
CBA attempts to measure the value of all costs and benefits that are expected to result
from the activity in economic terms. It includes estimating costs and benefits that are
‘unpriced’ and not the subject of normal market transactions but which nevertheless
entail the use of real resources. These attributes are referred to as ‘non-market’ goods or
impacts. In each of these cases, quantification of the effects in money terms is an
important part of the evaluation.
However, projects frequently have non-market impacts that are difficult to quantify. Where
the impact does not have a readily identifiable dollar value, proxies and other measures
should be developed as these issues represent real costs and benefits. Some commonly
utilised techniques for valuing non-market impacts are outlined in Table B.1.
Table B.1. Valuation Techniques
Type of
Valuation
Valuation
Technique
Description
Stated
Preference
Valuation
Contingent
Valuation
(CVM)
This technique uses a simulated or hypothetical market to directly assess the
willingness to pay (WTP) or the willingness to accept compensation (WTAC) for a
particular environmental outcome. The survey-based approach can be used to
measure both use and non-use values, and is generally applied in assessing a dollar
value to a change in or preservation of environmental quality.
Choice
Modelling
(CM)
Similar to CVM, choice modelling (CM) utilises stated preferences of respondents to
rank or rate different scenarios. Respondents must choose between specific options
presented to them. CM can produce independent values for the specific attributes of
an environmental program.
Revealed
Preference
Valuation
(surrogate
market based)
Hedonic
Pricing
Hedonic pricing employs the use of surrogate markets to value environmental quality.
Property and labour markets are widely used for this technique.
Travel Cost
This valuation technique is based on the assumption that demand for an asset is
revealed by a willingness to spend money and time travelling to the particular site. It
is also assumed that expenditure is higher for travel to more valuable sites. This
methodology is best used in assessing amenity or recreational value.
Revealed
Preference
Valuation
(market
based)
Factor of
Production
The factor of production technique is limited to assets that are used in the production
process of goods and services within the market, as it uses the direct value in
production as an indicator of the environmental worth.
Producer/
Consumer
surplus
This technique is a calculation of both producer and consumer surplus.
Defensive
Expenditure
This valuation technique is based on expenditure that is made on behalf of the public
or specific industry in prevention or counteraction of environmental damage (such as
pollution).
One commonly used method of approximating values for non-market impacts is ‘benefit
transfer’. Benefit transfer (BT) means taking already calculated values from previously
conducted studies and applying them to different study sites and situations. In light of
the significant costs and technical skills needed in using the methodologies outlined in the
table above, for many policy makers utilising BT techniques can provide an adequate
solution.
Context is extremely important when deciding which values to transfer and from where.
Factors such as population, number of households, and regional characteristics should be
considered when undertaking benefit transfer. For example, as population density
increases over time, individual households may value nearby open space and parks more
48
Final Report
highly. Other factors to be considered include, depending on the location of the original
study, utilising foreign exchange rates, demographic data, and respective inflation rates.
Benefit transfer should only be regarded as an approximation. Transferring values from
similar regions with similar markets is important, and results can be misleading if values
are transferred between countries that have starkly different economies (for example a
benefit transfer from the Solomon Islands to Vancouver would likely have only limited
applicability). However, sometimes only an indicative value for environmental assets is
all that is required.
Step 4: Tabulate Annual Costs and Benefits
All identified and quantified benefits and costs are tabulated to identify where and how
often they occur. Tabulation provides an easy method for checking that all the issues and
outcomes identified have been addressed and provides a picture of the flow of costs,
benefits and their sources.
Step 5: Calculate the Net Benefit in Dollar Terms
As costs and benefits are specified over time it is necessary to reduce the stream of
benefits and costs to present values. The present value concept is based on the time
value of money – the idea that a dollar received today is worth more than a dollar to be
received in the future. The present value of a cash flow is the equivalent value of the
future cashflow should the entire cashflow be received today. The time value of money is
determined by the given discount rate to enable the comparison of options by a common
measure.
The selection of appropriate discount rates is of particular importance because they apply
to much of the decision criteria and consequently the interpretation of results. The
higher the discount rate, the less weight or importance is placed on future cash flows.
The choice of discount rates should reflect the weighted average cost of capital (WACC).
For this analysis, a base discount rate of 7.0% has been used to represent the minimum
commercial rate of return. As all values used in the CBA are in real terms, the discount
rate does not incorporate inflation (i.e., it is a real discount rate, as opposed to a nominal
discount rate).
To assess the sensitivity of the project to the discount rate used, one discount rate either
side of the base discount rate (7.0%) has also been examined (4.5% and 9.5%).
The formula for determining the present value is:
PV 
FVn
(1  r )n
Where:
PV = present value today
FV = future value n periods from now
r = discount rate per period
n = number of periods
Extending this to a series of cash flows the present value is calculated as:
PV 
FV1
1
(1  r )

FV2
2
(1  r )

FVn
(1  r )n
Once the stream of costs and benefits have been reduced to their present values the Net
Present Value (NPV) can be calculated as the difference between the present value of
benefits and present value of costs. If the present value of benefits is greater than the
present value of costs then the option or project would have a net economic benefit.
In addition to the NPV, the internal rate of return (IRR) and benefit-cost ratio (BCR) can
provide useful information regarding the attractiveness of a project. The IRR provides an
estimate of the discount rate at which the NPV of the project equals zero, i.e., it
represents the maximum WACC at which the project would be deemed desirable.
49
Final Report
However, in terms of whether a project is considered desirable or not, the IRR and BCR
will always return the same result as the NPV decision criterion.
Step 6: Senstivity Analysis
Sensitivity analysis allows for the testing of the key assumptions and the identification of
the critical variables within the analysis to gain greater insight into the drivers to the case
being examined.
A series of Monte Carlo analyses has been conducted in order to test the sensitivity of the
model outputs to changes in key variables. Monte Carlo simulation is a computerised
technique that provides decision-makers with a range of possible outcomes and the
probabilities they will occur for any choice of action. Monte Carlo simulation works by
building models of possible results by substituting a range of values – the probability
distribution – for any factor that has inherent uncertainty. It then calculates results over
and over, each time using a different set of random values from the probability functions.
The outputs from Monte Carlo simulation are distributions of possible outcome values.
During a Monte Carlo simulation, values are sampled at random from the input
probability distributions. Each set of samples is called an iteration, and the resulting
outcome from that sample is recorded. Monte Carlo simulation does this hundreds or
thousands of times, and the result is a probability distribution of possible outcomes. In
this way, Monte Carlo simulation provides a comprehensive view of what may happen. It
describes what could happen and how likely it is to happen.
50
Economics, Planning & Development
Business Strategy & Finance
Community Research & Strategy
Design, Marketing & Advertising
Information & Knowledge Management
E aec@aecgroupltd.com
W www.aecgroupltd.com
ABN 84 087 828 902
18 September 2012
ATTACHMENT
NORTH EAST REGIONAL CATCHMENT STRATEGY
Refer Item 11.2.2.6
NORTH EAST REGIONAL CATCHMENT STRATEGY
Issues
Particular issues of most concern to Council are :
Relationship with other regional planning
The RCS needs to refer to and coordinate with other regional plans such as
the Hume Strategy for Sustainable Communities, the Regional Growth Plan,
and emergency planning. There are insufficient links to these key plans.
1. Relevance to Council Planning Schemes
The format of the Draft RCS does not allow for relevant sections to be
considered for incorporation in the Planning Scheme. In its current format it
may be too general to be suitable as a referral document.
2. Strategic Liaison with local Government
Liaison with partners will be key to possible alignment of actions to serve
both partner and RCS purposes. Regular liaison between NECMA Board
and Council at executive level is needed to realise synergies between the
strategic and operational plans of partners
3. Accessibility of the RCS
The document is complex and difficult to read and needs to be clearer to be
suitable and accessible to all readers.
Further issues are:
4. Coordination and Monitoring of the Regional Catchment Strategy
There are 102 management measures in the draft RCS, although some
repeat for the 5 landscapes. There is a range of contributions the different
partners could make. Without planning, a partner could by chance have a
corporate action that contributes to an RCS measure. With planning, a
partner could design a program to meet corporate objectives while having
synergy with RCS objectives. Either way the implementation of the RCS
could be patchy and ad hoc, given the range of partners and differing
corporate responsibilities. Monitoring any action to show contribution to
objectives and targets will require NECMA resources, sustained planning
and liaison with partners. The proposed Monitoring, Evaluation and
Reporting (MER) Plan will be crucial to this effort, but State government
budget cuts could severely compromise progress of the RCS. The MER Plan
needs to clearly identify resources needed for the management measures
requiring coordination, collaboration and partnerships .
5. Engaging partners in actions
There can be synergies between partner actions and the RCS that can
contribute to RCS implementation. However aligning partner and RCS
objectives can be difficult. Council’s environment manager attempted to
identify synergies with the 2004 RCS. Since this RCS was based on asset
1
condition, this was difficult, and all north east Councils faced this issue. This
represented a lost opportunity to incorporate the program outcomes of local
Councils in RCS outcomes. Greater inclusion of the community dimension in
the ecosocial landscapes may generate synergies. However partners need
to understand the RCS during their own strategic planning if this is to result
in a defined contribution to catchment targets. Conversely, adaptation of the
RCS measures may allow greater cooperation with partners.
6. Learning from past experience
The draft RCS includes a headline “we need to look back to go forward”
The structure and development of the draft RCS has drawn on the overall
issues raised in review of the 2004 RCS. It would be useful for readers to
also know how the work of the last RCS affected catchment condition, and
what challenges the NECMA and partners face to improve the successful
implementation of the RCS.
7. Including local Council contributions
It was difficult for local Councils to relate their projects and programs within
the structure of the 2004 RCS. There are 2 main reasons for this:
•
Local Councils’ natural resource management does not use an asset
based approach. This makes it difficult for Councils to compare local
programs with regional objectives. Councils could be assisted by
NECMA to consider an asset based approach if this would benefit
overall natural resource management outcomes; and
•
The RCS geographic management areas have not corresponded with
municipal boundaries, making it hard for both Councils and their
communities to place programs in the RCS context. If management
areas coincide it may improve chances for local programs to contribute
to RCS implementation, while RCS monitoring data may inform local
programs.
These issues should be discussed and further considered by NECMA and
Council partners during the renewal of the RCS.
8. Timely development of Plans identified in the draft RCS
Partners will need more information on goals and targets to judge whether
local programs and projects link to and advance the objectives of the RCS.
The draft RCS proposes the development and review of detailed Plans
relating to soil health, river health, biodiversity, floodplain management, flood
response, climate change response and catchment monitoring. These will be
important tools in the coordination of actions by partners. There are no
timelines shown for the RCS management measures, and many will be
ongoing. However, it is important that these Plans be completed in a timely
manner with timelines adopted in the Plan. As noted in the draft RCS (part 2
preamble), these Plans could also incorporate many of the other
management measures to improve overall coordination. If necessary,
partners should join with NECMA to advocate for government funding to
develop key Plans.
2
9. Specific Comments
a)
The draft RCS uses a number of headlines to set the themes and
mood of the document. One headline used several times is “the
combination of lifestyle blocks, farming and bush means the
landscape is very rich and diverse – able to bounce back”. The
context of this headline is not clear. It also seems at odds with the
impacts of stressors identified in the RCS and the need for
sustained management to conserve and enhance the condition of
the catchment.
b)
The management measures are based on the CMA supporting
other agencies ……….. In many cases more detail on aims or
implementation is provided to clarify meaning. This approach
should be applied to clarify all such measures.
c)
Objective 10 Active community participation in the integrated
management and protection of natural resources aims to ‘develop
and deliver a suite of targeted community education, awareness
and extension programs’. This recommendation could be
extended to form a Community Participation Plan to develop and
formalise this program. This Plan could also include other
participation measures proposed in section 10 to improve
coordination during the life of the RCS. This would also give
community participation similar standing to the environmental
Plans recommended in the RCS.
d)
Measure 2.1 recommends a review of the River Health Strategy
and development of a Regional Waterway Strategy. This
recognises local community needs and the multiple value of
waterways to the community. Local councils should be included
as an implementation partner.
e)
Measures 2.7 – 2.10 relate to floodplain management and
drainage. It is important that planning includes the impacts of
climate change and the intensification of rain events and flooding.
As the regional floodplain manager, NECMA should develop
information about the impacts of climate change to refine flood
mapping for planning overlays and drainage planning.
f)
Measure 2.3 “develop and implement schemes for the use,
protection and enhancement of land and waterways” should
include land managers as a partner.
g)
Measure 3.6 “support the development and implementation of
Roadside Vegetation Plans” should include NECMA, DSE and
DPI as partners with the current listing of VicRoads and local
councils.
3
h)
Measures 6.3 and 6.4 relating to community and government
partnerships in management of remnant vegetation and
management of invasive weeds should include local councils as a
partner.
4
18 September 2012
ATTACHMENT
PROPOSED NEW PLANNING ZONES
Refer Item 11.2.2.7
Municipal Association of Victoria
Draft Submission – New Zones
Draft MAV Submission – New Zones – September 2012.docx
September 2012
© Copyrightt Municipal A
Association
n of Victoria, 2012.
The Municipa
al Association of Victoria is the ownerr of the copyrright in the pu
ublication Dra
aft MAV
S
Submission
– New Zoness – September 2012.docxx.
No part of thiis publication
N
n may be rep
produced, sto
ored or transm
mitted in anyy form or by a
any means
w
without
the p
prior permissiion in writing from the Mu
unicipal Association of Vicctoria.
All requests tto reproduce
A
e, store or transmit materiial contained in the publiccation should
d be
a
addressed
to
o Liz Johnsto
one on 03 966
67 5585 or ljo
ohnstone@m
mav.asn.au
The MAV can
n provide thiss publication in an alterna
ative format u
upon requestt, including la
arge print,
B
Braille
and audio.
This docume
ent has been prepared byy the MAV exxecutive as a working drafft for circulatiion to
members forr feedback. Early
m
E
commen
nts on the pro
roposed chan
nges were cirrculated to co
ouncils and
p
preliminary
d
discussions w
with memberss held. Severral draft coun
ncil submissio
ons have info
ormed this
s
submission.
Draft MAV Submission – New Zones – Septemberr 2012.docx has been pre
D
epared by the
e
M
Municipal
Asssociation of Victoria (MAV) for discusssion with me
ember counciils and, togetther with
M
Member
feed
dback will be considered at the MAV B
Board meetin
ng on 7 Septe
ember, and a final
s
submission
lo
odged by 21 September 2012.
The MAV is tthe statutory peak body fo
for local gove
ernment in Viictoria, repressenting all 79
9
m
municipalities
s.
While this pa
aper aims to broadly
b
reflect the views of local gove
ernment in Viictoria, it does not
p
purport
to refflect the exacct views of in
ndividual coun
ncils.
2
Drafft MAV Submisssion – New Z
Zones – September 2012.do
ocx: Septembe
er 2012
Table of Conte
ents
Executivve Summarry
1 Intrroduction .................................................................................................................................. 5
2 Ove
erview ...................................................................................................................................... 6
2.1. Asssessment ag
gainst strate
egic policy o
objectives a
and direction
ns ............................................... 6
2.2. Hig
ghlights and lowlights off the change
es proposed
d .................................................................. 10
2.3. Imp
plementation
n options an
nd approach
h ..................................................................................... 13
3 Dettailed analyysis of Propo
osed Zone C
Changes......................................................................... 14
3.1 Ressidential Zones ..................................................................................................................... 14
3.2 Rura
al Zones ................................................................................................................................ 18
3.3 Com
mmercial Zo
ones.................................................................................................................... 22
3.4 Indu
ustrial Zoness ......................................................................................................................... 23
3.4 Industrial Zone
es ........................................................................ Error! Boo
okmark nott defined.
4. Imple
ementation IIssues ................................................................................................................. 25
4.1 Fina
alisation of provisions .......................................................................................................... 25
4.2 Proccess to impllement ................................................................................................................ 25
3
ocx: Septembe
er 2012
Process
s for finalis
sation
Mondayy 27 August
– circulated to councils
Wednessday 5 Septtember
- Feedback from counccils due by cclose of business..
Please ssend feedba
ack to Liz Johnstone
ljohnsto
one@mav.assn.au
Friday 7 Septembe
er
M
MAV Board considers d
draft submisssion and m
member feed
dback
21 Septtember
S
Submission due
4
ocx: Septembe
er 2012
1
In
ntroductiion
The Min
nister for Pla
anning has announced reformed zzones for Vicctoria to sim
mplify require
ements,
allow co
onsideration
n of a broader range of activities an
nd to encou
urage and be
etter manag
ge growth.
AV and coun
ncils have ca
alled for stro
onger plann
ning provisio
ons to enable easier an
nd more
The MA
certain implementa
i
ation of policcy. Some ele
ements of th
he changess proposed, however, a
are far
reaching
g, and likelyy to have ne
egative conssequences if applied un
nilaterally accross the Sttate.
This sub
bmission foccuses on th
he the strate
egic context and policy objectives rrelevant to tthe
nd identifica
changess; an assessment of the changes proposed
p
an
ation of key issues and possible
responsses and a diiscussion off implementtation option
ns and apprroach.
Councilss are makin
ng detailed individual su
ubmissions and providing feedbacck about the
implicattions of the p
hanges for ttheir counciil. There is a strong view that the full
proposed ch
consequ
uences of a
all changes p
proposed must
m
be prop
perly considered before
e the new orr
amende
ed zones are
e included in Victoria Planning
P
Pro
ovisions (VP
PP).
Backgrround
Two mo
onths have b
been allowe
ed for publicc comment o
on the propo
osed chang
ges. The upccoming
council election and
d caretaker period have
e reduced th
he time ava
ailable for m
many councills. To
assist th
hem the MA
AV held an in
nformation ssession and
d circulated an analysiss of the changes and
early co
omments.
Concern
ns raised byy Councils at
a the inform
mation session include:
•
Limited consultation
L
T processs to develop
The
p and test th
he residential zones wa
as appropria
ate and yet has not
b
been
underrtaken for the other zone reform arreas, leading
g to insufficient time forr councils
t engage a
to
and ascertaiin community views and fully asse
ess implications.
•
Evidence ba
E
ase
A supporting evidence base and sstrategic justtification has not been provided byy the
D
Department
t of Planning
g and Comm
munity Deve
elopment (D
DPCD).
•
IImpact asse
essment
M
Many
eleme
ents are like
ely to create
e significant workload and
a have unintended
c
consequenc
ces, underm
mining existiing policy an
nd strategicc work at a S
State and lo
ocal level.
•
Lack of deta
L
ail
T
There
rema
ains a generral lack of in
nformation a
about how submissionss will be considered,
a
areas
of dissagreement resolved, p
provisions fin
nalised and how they w
will be imple
emented.
The MA
AV Board Pla
anning Com
mmittee has discussed the propose
ed changes and the pre
eliminary
informattion sent to councils. C
Councils havve shared ea
arly thoughtts and draftss of their ow
wn council
submisssions with th
he MAV.
5
ocx: Septembe
er 2012
2
O
Overview
This secction of the submission
n considers tthe changess in three pa
arts:
•
•
•
tthe strategicc context an
nd policy ob
bjectives mo
ost relevant to the changes
a assessm
an
ment of the cchanges pro
oposed, iden
ntification of key issuess and respo
onses
d
discussion
o
of implemen
ntation optio
ons and app
proach.
A more detailed analysis of the
e changes b
between the
e new and e
existing zone
es (purpose
e,
e, table of u
uses, develo
opment provvisions, app
plication requirements a
and decision
n
structure
guidelin
nes) has bee
en undertakken and is in
ncluded in a
as an appen
ndix to this ssubmission. Our
focus is on the mosst substantia
al changes, changes prrovoking a rrange of vie
ews and those
changess where the
e likely consequences w
will be signifficant over ttime and wh
hich are of cconcern.
sessment a
against stra
ategic polic
cy objectiv
ves and dire
ections
2.1. Ass
What ha
ave Counc
cils called fo
for?
The new
w format pla
anning syste
em has effectively been
n under reviiew and refo
orm since itss
introducction almostt twenty yea
ars ago, and
d despite this, planning has becom
me more com
mplex,
more co
ontested and
d more costtly.
A majorr impedimen
nt to achieviing more ce
ertainty and confidence in the syste
em is that th
he
significa
ant, and gro
owing, invesstment in strrategic plann
ning by councils and th
he State hass not
resulted
d in fewer pe
ermit triggerrs and simp
pler assessm
ment pathwa
ays. At the ssame time, the costs
of strate
egic planning and the onerous
o
stra
ategic justificcation required, has me
eant some ssmaller
councilss with reaso
onably stable
e land use a
and develop
pment have neither the
e resources nor need
to make
e significant investmentt in strategicc planning, h
however the
eir schemess present ch
hallenges
for some
e land owne
ers in the co
ontext of the
e VPP and S
State Policyy.
For stra
ategic planniing (includin
ng local poliicy) to be efffectively implemented it requires
applicattion through
h objective rules and tessts, that is greater
g
levels of controls in zone schedules
and ove
erlays, consistent with tthe Develop
pment Assesssment Foru
um’s leading practice m
model.
For som
me councils presented w
with land usse anomalie
es, greater d
discretion is sought. This
presentss a tension and challen
nges any sta
ate-wide ressponse.
e councils have calle
ed for a refo
orm of zone provisions and expand
ded capacityy to
To this end
impleme
ent local policy and tailor controls tto local nee
eds through local sched
dules; suppo
ort,
through mechanism
ms such as tthe flying–ssquad and fo
or the State strategic w
work (regiona
al growth
plans fo
or example) to update a
and remedy any obviou
us anomalies in (rural) p
planning sch
hemes.
mes to be efffective, rob
bust and eassily understo
ood by userrs of the pla
anning
The ability of schem
a
ca
annot happe
en with the current volu
ume and the
e time
system, and provide for local autonomy
and cosst taken to a
amend schemes. They are in a perrpetual state
e of ‘catch u
up’ and no-o
one
knows w
what the finiished produ
uct should lo
ook like. Unttil the need for amendm
ments, and tthe
amendm
ment processs itself is re
esolved, con
ntemporary planning ch
hallenges w
will not be ad
ddressed,
and sim
mply opening
g up section
n 2, ignores more funda
amental con
ncerns.
6
ocx: Septembe
er 2012
The MA
AV considerss that the prroposed cha
anges are a
an effort to respond
r
to tthese calls, however
the chan
nges are no
ot policy neu
utral; they undermine a
aspects of bo
oth State an
nd local poliicy and
instead of ‘catching
g up’ and am
mending the
e tools to be
etter implem
ment existing
g policy, the changes
are likely to lead to:
•
•
•
•
more strategic work be
m
eing required
d at a local level
m
more
permits being con
ntested at th
he Victorian
n Civil and A
Administrativve Tribunal
m
more
ad-ho
oc developm
ment and con
nsequential pressure fo
or ad-hoc in
nfrastructure
e and
s
service
provvision
l
less
certainty
Also, the
e burden fa
alling to coun
ncils to use the new pro
ovisions as intended co
ould be sign
nificant,
depende
ent upon the implemen
ntation pathw
ways identiffied and the
e final provissions themsselves.
A strate
egic justification and narrative to exxplain the zo
one change
es has not been provide
ed, and
the proccess that ha
as informed them is nott clear. An a
analysis of o
options and impacts wo
ould also
have be
een useful to
o councils. N
Nor has anyy clarity bee
en offered about how th
hey may be
es more diffficult. The
impleme
ented, making an assessment of th
hem againsst stated policy objective
MAV ha
as addresse
ed this as follows:
di the Gove
ernment co
ommit to in
n its ‘Plan fo
for Planning
g’?
What did
Prior to the State election the C
Coalition ma
ade severall relevant co
ommitmentss in its Plan for
Planning
g. They com
mmitted to ‘R
Rebuild con
nfidence in tthe planning
g system wiith more cerrtainty and
clearer rrules’ and to
o provide co
ouncils with the ability tto alter land
d uses within
n the zones based on
circumsstance, in co
onsultation w
with the com
mmunity, to provide mo
ore certaintyy. However, rather
than allo
owing local use variatio
ons, the proposed chan
nges increasse discretionary uses in
n all
zones.
an for Planniing also spe
ecifically com
mmitted to reviewing
r
all planning zzones and schedules
s
The Pla
to ensurre they are ffunctioning in their inte
ended mann
ner. Special mention wa
as made of the
Green W
Wedge Zone
es and the F
Farming Zones.
A Liberaal Nationalss Coalition G
Governmen
nt will: REVIEW OF ZONE USSAGES Conductt a full review
w of Victoria’s planning zzones to ensure they are
e functioningg correctly an
nd their schedulees are still reelevant. The Liberal Natio
onals Coalitio
on will review
w planning zo
ones to ensu
ure that their usees and definittions are still relevant and enable cou
uncils to provvide an adequate reflection of the planningg aspirations of all Victorians. GREEN W
WEDGES Conductt an audit of Green Wedgge land use w
with input from local cou
uncils and co
ommunities, to determin
ne whether tthe current lland use schedules in each municipality are the m
most approp
priate for Green W
Wedge land; aand Allow m
ministerial disscretion to p
permit any go
overnment, C
Catholic or n
non‐
governm
ment school tto build and operate an e
educational facility within land zoneed as Green W
Wedge. Possible land use con
nsiderations may include allowing religious facilities, eco‐hostels or wineries on land that is sm
maller than the current m
minimum lot size required
d, seeking to use our Green Wedges aas space 7
ocx: Septembe
er 2012
for the eeducation, heealth and wellness of our community whilst preseerving the chaaracter of Grreen Wedge laand FARM ZO
ONES Allow reegional counccils the flexib
bility to alterr land use within farmingg zones to prrotect primee farmland for agricculture whilee respecting tthe rights off landholderss. Under a Liberal Nation
nals Coalition
n Governm
ment local co
ouncils will bee given the fllexibility to review the op
peration of th
heir farm zon
nes and in particulaar whether th
he 40‐hectarre minimum ssubdivision rrule is approp
priate acrosss all non‐township areas of their municipality. As part o
of an overhau
ul of Victoriaa’s planning ssystem, regio
onal councils will be allow
wed to examiine and alter land use within farming zones. Councils should have the ability to
o deliver a zo
one that bestt suits their mu
unicipality’s ccurrent and ffuture requirements. The Liberal Nationalss Coalition fu
ully supports the need to protect Victo
oria’s prime agricultural lland for agricultu
ural purposess, but simply changing the name from
m rural zones to farm zones has not prrotected agricultu
ural land as w
was originallyy intended. Farm zon
nes should acchieve the right balance of farmers’ rrights and lan
nd protection
n to ensure tthat all premium
m farming lan
nd is identifieed and protected. The key to any refo
orm of Victorria’s farm zon
nes is achieving the right balance betweeen the need
d to preservee good‐qualitty agriculturaal land and reespecting the reaso
onable rightss of landhold
ders. Source – A
A Plan for Pla
anning di the Gove
ernment ag
gree to in th
heir accepttance of the
e Victorian
n Planning System
S
What did
Ministe
erial Adviso
ory Committtee recomm
mendation
ns?
While so
ome of the kkey recomm
mendations are being a
actioned, such as the de
evelopmentt of a new
metropo
olitan strateg
gy, introducction of code
e assessme
ent processe
es and fees review, the
ere are a
significa
ant number of recomme
endations needing morre work to be progresse
ed.
They foccus on the n
need to reviiew the perm
mit and ame
endment pro
ocesses to make them more
efficientt and also to
o review the
e operation of
o some asp
pects of planning schem
mes, such as
a how
local po
olicy and pla
anning overlays work.
The Min
nisterial Advvisory Comm
mittee recog
gnised that the
t amendm
ment processs required a
significa
ant focus an
nd identified many area
as where imp
provementss were nece
essary. Theyy also
identifie
ed the need to review th
he ‘current b
balance in th
he system tthat favourss flexibility an
nd
perform
mance-based
d controls to
oo heavily, tto provide fo
or greater ce
ertainty’1.
Given th
he importan
nce of a stra
ategic and spatially expressed visio
on for Victorria (in development),
the need
d to reconsider the role
e of the MSS
S and structture and purpose VPP..
1
Victoria
an Planning S
System Minissterial Adviso
ory Committe
ee initial repo
ort Part 9.5.3
http://ww
ww.dpcd.vic.g
gov.au/__datta/assets/pdf_
f_file/0015/10
05252/VPSM
MAC-INITIAL--REPORT-Final_15.12.1
11_.pdf
8
ocx: Septembe
er 2012
To revie
ew zones, in
n the absence of the strrategic purp
pose or visio
on being agreed, and w
without a
resolved
d view abou
ut how the ssystem shou
uld work raisses the posssibility that tthe changess will add
to some
e of the systtemic proble
ems and nott improve th
he operation
n of the systtem.
It is of cconcern thatt the reformed zones will
w increase the need fo
or more strategic work a
and
planning
g scheme a
amendmentss, prior to identifying an
nd implemen
nting the changes nece
essary to
make th
he amendme
ent processs efficient an
nd effective..
The MA
AV has previiously argue
ed that the ‘‘next genera
ation’ planning system should redu
uce the
need for amendme
ents and those amendm
ments should
d improve ccertainty and
d reduce the
e need for
permit triggers.
The ability of schem
mes to be efffective, rob
bust and eassily understo
ood by userrs of the pla
anning
system, and provide for local autonomy
a
ca
annot happe
en with the current volu
ume and the
e time
and cosst taken to a
amend schemes. They are in a perrpetual state
e of ‘catch u
up’ and there
e is no
authorita
ative view a
about what tthe finished product should look likke.
anges that ccreate more section 2 u
uses work against the kkey findings and
The cha
recomm
mendation off the Ministe
erial Advisory Committe
ee.
dvance the
e State Gov
vernment d
desire to ‘cu
ut red tape’ and their
Do the changes ad
respons
se to the V
VCEC Locall Governme
ent Regulattion Inquiry
y 2and othe
er relevant reviews?
The creation of more section 2 uses enab
bles a broad
der range off application
ns to be app
plied for
and asssessed. Both
h the VCEC
C inquiry and
d relevant P
Productivity Commission Inquiries into
benchm
marking of pllanning systtems and Lo
ocal Govern
nment as a regulator (o
of which planning is a
major pa
art) suggest that the strategic plan
nning processs is critical to creating simpler, few
wer
permit rrequirementts and more
e certainty fo
or users of tthe planning
g system.
More se
ection 1 perm
mit not requ
uired uses, and
a the rem
moval or varyying of som
me restrictive
e or non
‘value-a
adding’ provvisions is supported in principle,
p
an
nd assists in
n reducing re
egulatory bu
urdens.
To some
e extent the
e Residentia
al Zones and
d some of th
he proposed changes to
t Rural Zon
nes will
assist in
n providing tthe certaintyy expressed
d in the disccussion paper on the re
eformed zon
nes, which
states, ““These reformed zoness will enable
e the plannin
ng system tto act as an economic llever and
provide new ways ffor commun
nities to achieve a balan
nce betwee
en defined areas of futu
ure growth
and neig
ghbourhood
ds where ch
haracter is im
mportant to protect.”
2
Victorian Competition
n and Efficie
ency Commisssion (VCEC
C) ‘Local Go
overnment fo
or a Better
quiry into Stre
eamlining Lo
ocal Governm
ment Regulattion Report’ August
A
2012
Victoria: Inq
9
ocx: Septembe
er 2012
2.2. Hig
ghlights and
d lowlights
s of the cha
anges prop
posed
This secction provides an overvview of the cchanges and the key arreas identifiied of conce
ern. In
summarry the chang
ges propose
ed are to:
Delete nine existing zones
Create five
e new zones
A
Amend 12 existting zones
Ressidential Ressidential 1 Zone Ressidential 2 Zone Ressidential 3 Zone Prio
ority Developmen
nt Zone Com
mmercial Bussiness 1 Zone Bussiness 2 Zone Bussiness 3 Zone Bussiness 4 Zone Bussiness 5 Zone Residential
Growth Zone Residential G
General Resiidential Zone Neighbourho
ood Residential Zone Commercial
Commercial 1 Zone Commercial 2 Zone R
Residential LLow Density Resid
dential Zone M
Mixed Use Zone TTownship Zone IIndustrial Industrial 1 Zone Industrial 2 Zone Industrial 3 Zone R
Rural R
Rural Living Zone G
Green Wedge Zon
ne G
Green Wedge A zo
one R
Rural Conservatio
on Zone FFarming Zone R
Rural Activity Zone ntial Zones
s
Residen
• The
T replace
ement of the
e Residentia
al 1, 2 and 3 zones with
h new zoness (Growth, G
General
a Neighb
and
bourhood) ass a conceptt is not new,, and has be
een the bassis for wide
c
consultation
n by the previous Gove
ernment.
• The
T intent a
and clearly d
distinct purp
poses are usseful, and g
generally understood an
nd
s
supported.
T
The zones reinforce
r
se
ettlement an
nd density hierarchies a
and should be
b more
e
effective
in driving grow
wth in identified areas and
a guiding or limiting cchange in other
a
areas
• The
T MAV ha
as long prop
posed that ResCode
R
sh
hould also b
be varied to clearly align with the
z
zone
purposse, create a market inccentive in terms of differentiated yie
eld and redu
uce the
c
cost
and tim
me for counccils to do furrther strateg
gic work to a
amend loca
al scheduless. This
a
approach,
w
which would
d include a different
d
‘deffault’ sched
dule to each new zone, could
t
tailor
the Ne
eighbourhoo
od Residenttial Zone so
o that the ne
eed for a rurral ResCode
e is also
a
addressed.
• There
T
has been
b
no evid
dence proviided in the p
package of materials to
o show whether this
p
proposal
wa
as assessed
d, why it is n
not being pu
ut forward, a
and how having the sam
me
b
building
envvelope acrosss all reside
ential zoness, and leavin
ng significan
nt work to co
ouncils to
t
tailor
local schedules
s
p
provides
and
d clear markket signals o
or is an effe
ective or efficcient
i
implementa
ation strateg
gy.
• The
T proposed changess introduce more
m
as of rright and pe
ermit require
ed non-resid
dential
u
uses
proxim
mate to commercial areas which may cause co
oncern to re
esidents and
d
u
undermine
a
activity centtres. This bllurs the orig
ginal intent o
of the reform
m to these zzones
a
and,
in som
me cases will lead to lan
nd use plann
ning conflictts.
• Height
H
restrrictions speccified in the schedule must
m
be exte
ended to cover non-ressidential
b
buildings.
10
ocx: Septembe
er 2012
•
•
Given the im
G
mportance o
of landscapiing in reside
ential setting
gs, some fle
exibility to guide
l
landscaping
g outcomes should be cconsidered.
T change
The
es to the thre
ee existing zones: Low
w Density Re
esidential Zo
one, Mixed Use
Z
Zone
and T
Township Zo
one are generally accep
ptable howe
ever some cconfusion in terms of
t relationsship of the L
the
LDRZ to the
e Rural Livin
ng Zone is created.
c
The rele
evant sectio
on of the MA
AV Submisssion to the N
New Residen
ntial Zones in April 200
09 is
below.
The MAV
V recognises that for som
me councils, ssuch as in thee inner city o
or some town
nship areas, tthe default schedulees may need to be varied, but without this approaach, all counccils would ulttimately need to prepare variations to
o one or more schedule to
o one or more zones. It is much more effecctive and effiicient to varyy and align ReesCode stand
dards with th
he clearly diffferent zone purrposes. The MAV
V recommends further diiscussion with councils an
nd other stakkeholders reggarding the d
default provision
ns, but a useful starting p
point would b
be: Open spaace* Site coverage* Setbacks** Limited cchange 60‐80 sqm 40% As predom
minant in areea Incremental 40 sqm (4x5 m) 60% as per ResCode Substanttial 20 sqm directly ffronting PPTN 80% no fro
ont or side (3
30% boundary) where *suggestiions to highligght clear distinnctions are posssible and shoould be discusssed. While ReesCode proviides for variaation to the o
open space sttandard, the objective to
o Clause 55.0
04 – 4 does not correelate to neighbourhood ccharacter or landscape. Iff the schedulle is to provid
de for variatiion in open spaace to address neighbourrhood characcter then thee objective neeeds to addrress this. Zones
Rural Z
• The
T proposed changess to the rura
al zones intro
oduce more
e varied use
es to all rura
al zones
a generally relax perrmit requirem
and
ments. Exem
mpting som
me farming re
elated usess from a
p
permit
is we
elcomed as is the reducced restriction for altera
ations and extensions
e
tto
d
dwelling
and
d farm build
dings.
• However,
H
th
he changes collectivelyy reduce the
e clarity of purpose of each zone and blur
t distinctio
the
on between
n zones. The
e expansion
n of the secttion 2 uses across the zones in
p
particular
ad
dds to this u
uncertainty.
• While
W
the ob
bjective of rretaining population is ssupported, u
urbanisation
n is an interrnational
t
trend
and other strateg
gies to addre
ess this wou
uld be more
e effective. Itt remains ne
ecessary
f rural stra
for
ategies to be
e clear about where dw
wellings are encouraged, where they can be
s
serviced
and where risk of fire and
d flood haza
ard are minim
mised.
• Giving
G
effecct to councils’ rural strategies will b
be more diffficult with the
e proposed changes.
11
ocx: Septembe
er 2012
•
•
•
•
For those co
F
ouncils experiencing grrowth, havin
ng tourism a
activity, or h
high levels o
of land
u change
use
e, allowing a
additional no
on-rural rela
ated uses in the rural zo
ones will:
- increase
e diversity o
of uses and fragmentatiion of rural lland which may put pro
oductive
agricultu
ural land at risk
- have a ssubstantial iimpact on w
workload
- undermine the ability to use cle
early distincct zones to g
give effect to
o strategic work
w
- lead to m
more ad hocc developm
ment patternss adding to councils inffrastructure and
service gap
- comprom
mise, over ttime, settlem
ment breakss which is in
nconsistent w
with State p
policy and
the apprroach of the
e regional grrowth plann
ning
S
Some
relaxation of tourism, rural industry and
d small business uses m
may be app
propriate
b making fewer uses prohibited a
but
and more uses discretiionary may have uninte
ended
i
impacts,
as may removving the prohibition on d
different typ
pes of accom
mmodation and
s
schools.
This may have
e upward prressure on rrates and co
onstrain a fa
armer’s ability to
e
expand
and
d undertake agriculture in the Farm
ming Zone and Green wedge
w
areass.
A residentia
al village and retirement village sho
ould remain
n prohibited as they are
e clearly
i
inconsistent
t with the pu
urposes of rrural zones.
M
Many
counccils are conccerned that the remova
al of the mandatory requirement fo
or a
s
section
173 agreementt will result in land excissions and undermine th
he zoning purpose.
C
Coupled
witth the reducction in the m
minimum lot size for su
ubdivision an
nd construcction of a
s
single
dwellling (from eiight to two h
hectares) re
esidential usses in rural areas
a
will in
ncrease,
a the outccome will be
and
e similar to that provide
ed for by a L
Low Densityy Residentia
al Zone.
oversupply of rural livin
T
This
could rresult in an o
ng zoned lan
nd if the new
w provisionss are
a
applied
retro
ospectively.
ercial Zone
es
Comme
• The
T principlle of consolidating the Business
B
1,, Business 2 and Business 5 zoness to
c
create
more
e vibrant ‘mu
ulti-use’ are
eas is more reflective off current thinking aroun
nd
c
commercial
centres in larger citiess. However the
t changess proposed undermine the retail
h
hierarchy
an
nd fail to reccognise the significant differences in floor area across esstablished
and town ce
n
neighbourho
ood, major a
entres.
• The
T thinking
g behind pe
ermitting 200
00m2 superm
markets nee
eds further consideratio
on. This is
a significantt floor area for most council areas,, and there is concern tthat such
d
developmen
nt will be dirrected awayy from key ccommercial centres and
d undermine
e the
s
significant
w
work councils have don
ne on structu
ure planning
g for their main
m
streets and
centres.
c
commercial
• A new zone
e for this purrpose, with retention off some of the easing zo
ones may m
more
e
effectively
a
achieve this objective
• There
T
is a d
disconnectio
on, between
n the objective of the Co
ommercial 1 zone and the
c
controls.
Th
he objective is ‘To creatte vibrant mixed
m
use co
ommercial ccentres for rretail,
o
office,
busin
ness, enterttainment and
d high denssity residen
ntial uses’ is weakened while
s
single
dwelllings and du
ual occupan
ncies are inccluded as-off-right in the
e zone and there will
r
remain
a ba
arrier to achieving high density residential use
es.
• The
T consolidation of the Business 3 and 4 zon
nes is gene
erally supported.
• The
T deletion
n of the Prio
ority Develo
opment Zone
e is supportted. The Acttivity centre
e zone
a Compre
and
ehensive de
evelopment zone can a
adequately ccater for keyy commercial centres
a significa
and
ant redevelo
opment site
es.
12
ocx: Septembe
er 2012
•
The logic be
T
ehind permiitting ‘accom
mmodation’ in these are
eas is not understood when
w
‘
‘dwellings’
rremain a pro
ohibited use
e.
Industrrial Zones
• The
T remova
al of office flloor space rrestrictions iin the Indusstrial 1, 2 an
nd 3 zones is
g
generally
su
upported. Th
he way indu
ustries now operate is ssignificantlyy different to
o
p
previously
a this cha
and
ange makess the zones more contemporary.
• Again
A
the as-of-right su
upermarketss up to 2000
0m2 in the In
ndustrial 3 zzone require
es
r
reconsidera
ation as abo
ove, and ma
ay undermine the industtrial uses.
plementatio
on options and appro
oach
2.3. Imp
The Sta
ate Governm
ment indicates that once
e feedback on the new
w zones is re
eceived and the
zones a
are finalised, Councils will
w have 12 months to cconsider an
nd apply to cconvert their existing
residenttial zones to
o the new G
Growth, General and Ne
eighbourhoo
od Residenttial Zones.
The new
w Commerccial zones, cchanges to tthe remainin
ng Residenttial zones, R
Rural zoness and
Industria
al zones willl be finalise
ed by the Sta
ate Governm
ment and th
hen effective
e immediate
ely
through their inclussion into all Victorian
V
Planning Schemes.
Should the changes proceed in
n their curre
ent form, the
e implication
ns are far-re
eaching, and
significa
ant policy wo
ork would need
n
to be d
done by councils to mod
derate their impact.
As well as this workk for Counccils to update
e their Loca
al Planning P
Policy Fram
mework (LPP
PF),
significa
ant work ma
ay also be re
equired to u
update policies and app
ply the new Residential zones as
well. To
o implement the Schedu
ules to the zones
z
it is envisaged
e
th
hat Planning
g Scheme
Amendm
ments will b
be required, which will ta
ake significa
ant time and
d resourcess for Councils to
prepare
e and exhibitt. Many cou
uncils will ne
eed assistan
nce to update their LPP
PF to addresss
inconsisstencies bettween policiies and zones and to re
educe the confusion forr applicantss, that
these ch
hanges mayy cause.
Given earlier
e
discusssion aboutt the importa
ance of gettting the policy right and
d then havin
ng the
provisio
ons to give ccertainty to u
users of the
e planning system and for
f effective
e implementtation, the
consequ
uences of th
he current p
proposals ap
ppear to ressult in both:
- exissting policy b
being potentially underm
mined by ne
ew, more op
pen provisio
ons, and
- more local policcy work bein
ng required to moderate
e the impacct of more open provisio
ons.
This is u
untenable a
and works ag
gainst state
ed governme
ent policy ob
bjectives an
nd is inconsistent
with a policy
p
based
d approach tto planning.
It is imp
portant for th
he MAV to w
work with co
ouncils and DPCD to esstablish an effective
e
impleme
entation pro
ogram.
Resourcce requirem
ments to varyy the schedules to the new Reside
ential zones, for examp
ple, could
be signiificantly redu
uced if the M
Minister pro
ovided defau
ult schedule
es varying R
ResCode as a starting
point.
13
ocx: Septembe
er 2012
3
D
Detailed a
analysis of Propo
osed Zon
ne Chang
ges
Please n
note this se
ection is stilll a bit rough and not complete
3.1 Res
sidential Zo
ones
Residentiial Growth Zo
one (new) ‐ (th
his would geneerally be used in areas curreently Residenttial 2, although Res2 not widely ussed as third paarty notice is rremoved.) Purpose Clarification o
of terms • TTo provide med
dium‐density housing at inccreased densitties. ‘medium den
nsity’ and • TTo manage devvelopment to achieve the objectives speccified in a increased den
nsities requireed scchedule to thiis zone There are atttributes /character vaalued to suppo
ort higher growth, perhaps preferred future characterr as purpose? Section 1
1 Enables a range of previously secction 2 uses w
within 100m an
nd on the 100m proxim
mity to ommercial / mixed use zonee: commercial aareas likely to same street as a co
impact amenity in • Food and Drinkk premises (otther than convvenience restaaurant, residential arreas m2 hotel and tavern) up to 100m
Need to clariffy how 100m is Office (other th
han a medical centre) up to
o 250m2 • O
determined aand if it appliees • Shop (other than adult sex b
book shop and
d bottle shop) up to to main roads only (or locaal 100m2 roads /side sttreets) Mediccal Centre up tto 250m2 Office, Place of worship an
nd medical centre hours could
d Amen
nds conditionss for existing u
uses : be conditioneed to reduce • B
Bed and breakffast – up to 10
0 persons (from 6) amenity impaacts. • P
Place of worship – up to 250
0m2 (from 180
0m2) Section 2
2 Shop (other than ad
dult sex booksshop, bottle sh
hop and conveenience Some retail leeakage likely
shop) is now a secttion 2 use if lo
ocated within 100m of a com
mmercial / mixed
d Use Zone, an
nd with the same street fron
ntage as the laand within the co
ommercial zon
ne or mixed usse zone ng use with ch
hanged condittions Existin
1. Co
onvenience sh
hop – no longeer with any flo
oor area limit ((only if as off right (if the aas of right provvisions can’t b
be met) – provvided it is w
within 100m, and with the saame street fro
ontage, of a co
ommercial zo
one / mixed usse zone Section 3
3 other retail uses aree prohibited, eexcept for com
mmunity markket, food and drink premises, plant nursery and shop Exemptio
on No exxemption from
m the notice reequirements o
of Section 52(1
1)(a), (b) support from notiice and (d
d), the decisio
on requiremen
nts of Section 6
64(1), (2) and (3) and the reeview rights off Section 82(1) of the Act. (eexcept for sub
bdivision) Constructt & extend on
ne dwelling on a 14
Permiit threshold reeduced from ggenerally 300 tto 80sqm (can’tt be varied) Confused as iintent is not more single d
dwellings on smaller lots. W
Will catch a lo
ot Drafft MAV Submisssion – New Z
ocx: Septembe
er 2012
lot Maximum
m building height requirem
ment Decision and on applicatio
guidelinees of matters Unless varied in sch
hedule: Not applicablle to non‐
2. maximum building heigh
ht 12.5 metres (slope adjusted 13.5m) residential usses Cross reference to C
Clause 54 and
d 55 (subdivisio
on to clause 5
56) For 4 or more storeys to Claause 52.35. The likely effects, iff any, on adjoiining land, including noise leevels, trafficc, the hours off delivery and despatch of ggood and mateerials, hourss of operation and light spill, solar access and glare. Any o
other application requiremeents specified iin a schedule to this zone. If in th
he opinion of the responsib
ble authority an application requirrement is not relevant to th
he evaluation, the responsib
ble autho
ority may waivve or reduce th
he requiremen
nt. Can local deccision guidelines in line with lo
ocal policy General residential zzone (new) (compares most with Residential 1 zone) Purpose Section 1
1 Section 2
2 Constructt & extend on
ne dwelling on a lot Maximum
m building height Decision and applicatio
on guidelinees 4
TTo manage devvelopment to achieve the neighbourhood
d character o
objectives speccified in a scheedule to this zzone. 5 TTo encourage rresidential devvelopment thaat respects the neighbourhood
d character. As per Residential G
Growth Zones
Additiional uses ‐ as for Residenttial Growth Zo
one
Permiit threshold reeduced from ggenerally 300 tto 200sqm
Can vaary in schedulle to 500m2 Unless varied in sch
hedule: 3. Clause 54 and 55. n’t apply to deevelopment off four or moree storeys, and Doesn
appliccations for a reesidential buillding can be m
made Cross reference to C
Clause 54 and
d 55 (subdivisio
on to clause 5
56) For 4 or more storeys to Claause 52.35. And aas above Reduced focu
us on housing diversity Presumes cleear NC objectives No buildings and works controls for ss.1 uses impacting on ‐ desired character outcomes ‐ carparking p
permit won’t include built form issues an
nd detriment may add to d
Reduced ameenity consideration
ns (eg places o
of worship sociaal or recreational aactivities), (medical centtre lighting, hours, car parks) OK ResCode objeectives will alsso need rtailorin
ng Potential loophole
15
ocx: Septembe
er 2012
Neighbo
ourhood resid
dential zonee (new) comp
pares with th
he Residentiaal 3 zone and areas underr a Neighbourhood charracter overlayy. Purpose Section 1
1 Section 2
2 Section 3
3 Constructt & extend on
ne dwelling on a lot Number o
of dwellingss on a lot Maximum
m building height Decision and on applicatio
guidelinees 6
TTo manage neighbourhoods where there are limited o
opportunities ffor increased rresidential devvelopment du
ue to id
dentified neighbourhood ch
haracter, envirronmental or landscape characteristics. 7 TTo ensure deveelopment is co
onsistent with
h the objectivees specified in
n a schedule to
o the zone. 8 TTo ensure that developmentt respects the neighbourhoo
od character of th
he area mises (other than convenien
nce • Enables Food aand Drink prem
n) within 100m
m and on the same street reestaurant, hottel and tavern
as a commerciaal / mixed usee zone • M
Medical Centree up to 250m2
2 Amen
nds conditionss for existing u
uses : • B
Bed and breakffast – up to 10
0 persons (from 6) • P
Place of worship – up to 250
0m2 (from 180
0m2) No ch
hange
office (other than m
medical centree) and shop (o
other than con
nvenience shop) remain prohibited Saleyaard omitted Permiit threshold reemains generaally 300sqm
Can vaary in schedulle (up and dow
wn) Stronger worrding
Clear objectivve of limiting growth Likely to be reestrictive in terms of how
w widely applied it cou
uld be. he number speecified in a sch
hedule to this zone. The Must not exceed th
numb
ber specified m
must not be less than two. (default is 2) Minimum sub
bdivision area
Unless varied in sch
hedule: 9m (slope adjusted 10m)
Potential loophole
Cross reference to C
Clause 54 and
d 55 (subdivisio
on to clause 5
56) Not fo
or 4 stories And aas above Recognising landscape setting as keyy part of character, ap
pplications could show eexisting trees, canopy/root zones, nearbyy off‐site trees Is this trigger size appropriate? Low den
nsity residenttial zone (am
mended) Purpose Section 1
1 Section 2
2 Section 3
3 16
9
•
•
•
No change Medical centtre up to 250m
m2 Bed and breaakfast – up to 10 persons (frrom 6) No buildings and works triggger for a secttion one use, other than the dwelling provisions Refeerence to takeeaway food prremises removved and condition requ
uiring adjoinin
ng or access to
o a road in a Road Zone officce (other than
n medical centtre) and shop (other than co
onvenience shop
p), remain pro
ohibited uses
ocx: Septembe
er 2012
Subdivision Perm
mit is required
d to subdividee land
• To at least th
he area specified in the scheedule to the zo
one • 0.4 hectare fo
or each lot wh
here reticulateed sewerage iss not connected with connected
d reticulated ssewerage • 0.2 hectare w
Reduction of the minimum
m d lot size OK wiith reticulated
sewerage. (also require all‐ weather legal access, minimum building setbacks) may reduce Smaller lots m
utility of using Rural Living to contain settlement growth and transition to more intensivve uses Mixed use zone (amended) Purpose 10 To provide fo
or housing at h
higher densitiees.
11 To facilitate tthe use, development and rredevelopmen
nt of land in accordance w
with the objecctives specified
d in a schedulee to this zone. development tthat respects tthe 12 To encouragee residential d
neighbourhood character o
of the area. • Food and Drink premises (all categories)) up to 150m2
2 • Medical centtre up to 250m
m2 • Office (other than a medical centre) up tto 250m2 • Shop (other tthan adult sexx book shop) u
up to 150m2 (aalso includes trade supplies) Ameends condition
ns for existingg uses: • Bed and breaakfast – up to 10 persons (frrom 6) 50m2 (from 18
80m2) • Place of worsship – up to 25
Use for industry aand warehousing can speciffy additional application uirements in sschedule requ
officce (other than
n medical centtre) and shop (other than co
onvenience shop
p) remain prohibited Exem
mpt from notiice NB ‐‐ schedule can
n specify otherr applications also exempt ffrom notiice and review
w Perm
mit threshold reduced from
m generally 300
0 to 80sqm
(can
n’t be varied) OK Buildingss on lots that abut Use for industry aand warehousse
• Whether com
mpatible with adjoining and nearby land u
uses. • For non‐resid
dential uses, th
he proposed h
hours of operaation, noise and any otheer likely off‐sitee amenity imp
pacts. • The objectivees & other deccision guidelin
nes specified in
n schedule consstruction and extension of single dwellin
ngs and two o
or more dweellings, constrruction on com
mmon propertty and residen
ntial buildings nes specified in
n schedule • The objectivees & other deccision guidelin
Any buildings or w
works constructed on a lot tthat abuts land which is in a General Resid
dential Zone, R
Residential Grrowth Zone, Consideration
n for non‐
residential usses of the proposed hou
urs of operation, no
oise and any other likely o
off‐site amenity impaacts should bee common acro
oss all residential zo
ones How is ‘boundary’ defined? 17
ocx: Septembe
er 2012
Section 1
1 Section 2
2 Section 3
3 Subdivision Constructt and extend on
ne dwelling on a lot Decision guidelinees for: Will restrict aability to consider sitin
ng and amenity impaacts another residentiaal zone (new
w clause) Applicatio
on requirem
ments building aand works Neigghbourhood R
Residential Zon
ne or Townshiip Zone must meet the requ
uirements of C
Clauses 55.04‐‐1, 55.04‐2, 55
5.04‐3, 55.04‐5 and 55.0
04‐6 along thaat boundary. Are there oth
her elements of cl. 54 & 55
5 to include? …must be accomp
panied by the following info
o, as appropriaate:
A sitte analysis and
d descriptive sstatement exp
plaining how tthe prop
posal respond
ds to the site aand its contextt. Plan
ns drawn to sccale and dimen
nsioned which
h show layout;; siting; elevvation; access;; setbacks; veggetation etc ‐ Different worrding to the three new residential zones Should be consistent 3.2 Rurral Zones
Farm Zone (amended) Purpose Section 1
1 Add
ds: To retain po
opulation to ssupport rural ccommunities
Supporting population retentio
on in rural areaas is a key objective of more relevant iin other rural zonings the Rural Living Sttrategy and m
mary objective and may wheere supportingg agriculture iss not the prim
confflict with otheer purposes off this zone such as retention
n of prod
ductive agricu
ultural land Rem
moves: To prottect and enhance natural reesources and tthe biod
diversity of thee area Agriiculture should
d also consideer these factorrs Ameends condition
ns for existingg uses:
• Bed and breaakfast – up to 10 persons (frrom 6) Add
ditional as‐of‐rright uses: • Primary prod
duce sales; • Rural industrry (other than Abattoir and sawmill) • Rural store Potentially in
n conflict with the other fun
ndamental purposes outtlined for the farming zonee. Could put upw
ward pressure on rrates. Better included in Low Density Resid
dential and Rural Living ZZone OK Council viewss are mixed ass are potential impacts. Other zones ssuch as RAZ can be more diversified, and these usees can be aligned to agriculture in the FZ Conflicts with
h Purpose (retaain productivee agricultural laand) Will impact o
on townships which could o
otherwise attract and seervice these uses. Accommodattion does not meet the FZ p
purpose, but could expand
d Group Accommodattion linked to agricultural u
use? RAZ better pllaced for broader varieety of uses. Warehouse, TTrade supplies and Industry may
Section 2
2 Add
ditional uses previously proh
hibited:
• Accommodattion (except dependent perrsons unit and dwelling, Group accom
mmodation, Host farm and residential ho
otel) • Industry (other than Rural industry and ttransfer statio
on) • Landscape gaardening supp
plies • Trade suppliees • Warehouse (other than Ru
ural store); Add
ditional uses sp
pecified: Abattoir, Market, P
Primary and SSecondary Scho
ool, Restauran
nt, Sawmill w includes anyy use not in section 1 or 3. Now
Section 3
3 Furtther prohibited uses: Amuseement parlour, Brothel, Childcare centtre, Cinema baased entertain
nment facility,, Education ceentre 18
ocx: Septembe
er 2012
(oth
her than Primaary and Secondary school), Nightclub, Offfice.
Subdivision Applicatio
on requirem
ments building aand works conflict with protection of agricultural laand. Each
h lot must be at least the arrea specified ffor the land in a schedule Minimum lot size OK
to th
his zone (default 40 H) Need to link d
dwelling to Rem
moval of mand
datory requirement for a s.1
173 agreemen
nt to purpose of zo
one restrict future sub
bdivision applications. (agriculture) &
& SPPF (limit new housing in rural areas) Retain mandaatory s.173 agreement provisions Buildings and worrks Why is a perm
mit required Perm
mit trigger forr alterations an
nd extensionss to existing dw
wellings or on larger lotss? a bu
uilding increassed from 50 to
o 100 square m
metres floor area. Rural Acctivity Zone ((amended) Purpose No cchange Section 1
1 Ameends condition
• Bed and breaakfast – up to 10 persons (frrom 6) ditional permittted uses: Add
• Primary prod
duce sales; • Rural industrry (other than Abattoir and sawmill) • Rural store Uses removed fro
om being speccified as perm
mit required bu
ut still uire a permit: Backpackers’ lodge, Camping and caravaan park, requ
Com
mmunity markket, Equestrian
n supplies, Gro
oup accommo
odation, Host farm, Hotel, Landscape gaardening supplies, Manufactturing oduce sales, Residential hottel, Restaurantt, Retail salees, Primary pro
mises (other than Primary p
produce sales,, Rural industrry, Store, prem
Win
nery Add
ds retail and landscape garden supplies an
nd any use not in section 1 orr 3. Is g
guidance need
ded on type and location of rretail or what is com
mpatible with a
agriculture ? Rem
move Accomm
modation and R
Retail Premisees from section
n 3
OK Additional usses as of right supported Section 2
2 Section 3
3 Ok as many u
uses are accommodatted by default (ie not speciffied in section 1 or 3, and th
herefore a section 2 use) Some councills feel other uses should rremain prohibited Accommodattion OK
Views on retaail more mixed May lead to ffragmentation
n of farming lan
nd Retain mand
datory s.173 agreement OK Subdivision Rem
moval of mand
173 agreemen
nt to restrict future sub
bdivision applications. extend on
ne dwelling on a lot Perm
mit trigger forr alterations an
nd extensionss to existing dw
wellings or a bu
uilding increassed from 50 to
o 100 square m
metres floor area. 19
ocx: Septembe
er 2012
Rural Livving Zone Purpose Section 1
1 Section 2
2 Subdivision No cchange Ameends condition
• Bed and breaakfast – up to 10 persons (frrom 6) ditional permittted uses: Add
• Primary prod
duce sales; • Rural industrry (other than Abattoir and sawmill) • Rural store Acco
ommodation Prim
mary or Second
dary School w
within the Ruraal Zones. Reduce the minim
mum lot size fo
or subdivision and construcction of a om eight hecttares to two heectares. Council can singgle dwelling fro
scheedule 2 or 8 haa as preferred
d. moval of mand
173 agreemen
nt to Rem
restrict future sub
bdivision applications. OK OK, but exclu
ude residential village and reetirement village Schools betteer in townships May assist future residential grrowth in agricultural areas to be contained witthin or immediately adjacent to existing small towns and villages. May add to servicing challenges uction in Support redu
minimum lot size but need
d to be able to schedule up and down May encouraage more applications iin hazard areas or areaas not identified forr growth. Rural Co
onservations Zone Purpose Minor change • To conserve tthe values speecified in the aa schedule to tthis zone. Section 1
1 Ameends condition
• Bed and breaakfast – up to 10 persons (frrom 6) Add
ditional uses previously proh
hibited
• Accommodattion (other thaan Bed and brreakfast, depeendent persons unit and dwelling)) ding • Animal board
• Market • Landscape gaardening supp
plies • Leisure and rrecreation (oth
her than Informal outdoor rrecreation and Motor raacing track) • Market ditional uses sp
pecified: Add
Section 2
2 20
This zone sho
ould be able to be applied
d across Victoria OK OK Schools, Landscape gaarden suppliess and animal boarding caused some concerns duee to conservation objectives
Retain some conditions on
n Drafft MAV Submisssion – New Z
ocx: Septembe
er 2012
Section 3
3 uses Subdivision Applicatio
on requirem
ments building aand works • Abattoir • Primary and SSecondary Sch
hool • Restaurant • Sawmill Now
w includes anyy use not in section 1 or 3.
Uses previously specified as req
quiring a perm
mit: mmodation; • Group accom
• Host farm; • Plant Nurseryy Resttaurant condittions removed
d restaurant paatron numbers / lin
nk to use Add
ditional uses prohibited: Am
musement parlour, Brothel, C
Childcare centtre, Cinema baased entertain
nment facility,, Education ceentre (oth
her than Primaary school and
d Secondary scchool), Motor racing tracck, Office, Retaail premises (o
other than Lan
ndscape gardeening supp
plies, market, primary produce sales and restaurant), R
Rice grow
wing, Transport terminal Rem
moval of mand
173 agreemen
nt to restrict future sub
bdivision applications. OK May lead to ‘‘serial excisions’ and
d so s.173 agreem
ment provisions should be retained. Would it be h
helpful to add application reequirements to the RCZ. Townshiip Zone Purpose Section 2
2 uses Section 3
3 uses Subdivision Inclu
udes:
To eencourage residential development that rrespects the neigghbourhood character of the area. To m
manage resideential development to achieeve the neighb
bourhood charracter objectivves specified in a schedule tto this zone. To aallow educatio
onal, recreatio
onal, religious, community aand a limitted range of o
other non‐residential uses to serve local ccommunity needs in appropriiate locations.. hbourhood chaaracter objecttive in schedule Can include neigh
Inclu
udes:
• Medical centtre up to 250 ssqm 0 sqm • Place of Worship up to 250
moves mentio
on of must nott exceed 1200 sq and the sitte must Rem
adjo
oin, or have acccess to, a road in a Road Zo
one has been removed No cchange of con
nsequence
No cchange 21
ocx: Septembe
er 2012
Section 1
1 uses What about b
boutique small scale in
ndustrial uses such as a miccro brewery?
Create abilityy to set a subdivision lo
ot size in the schedule 3.3 Com
mmercial Z
Zones
Commerrcial 1 (new) Purpose Section 1
1 • To
o create vibran
nt mixed use ccommercial ceentres for retaail, office, bu
usiness, enterttainment and high density rresidential usees. • combine the existing Busin
ness 1 Zone, Business 2 Zone and Business 5 Zo
one. • remove perm
mit requiremen
nts for all Acco
ommodation (other than a Corrective iinstitution). • remove perm
mit requiremen
nts for all retaail uses (excep
pt for Adult sex bookshop
p). ntre and Office. • remove the cconditions for Education cen
• remove the p
permit requireement for Exhibition centre
Section 2
2 Section 3
3 Uses don’t lin
ne up with purpose Move accommodation to section 2 Too many usees in section1? dential village Prohibit resid
and retiremeent village as nt with not consisten
Commercial ZZones. reduces capaacity of councils to im
mplement existing strategic planning policy Undermines retail hierarchy oning for Is separate zo
bulky goods ttype retailing required? Accommodattion should bee moved into section 2 or exceptions crreated (residential village and retirement viillage could bee considered not appropriate) Commerrcial 2 (new) Purpose Section 1
1 •
•
•
•
•
•
22
Uses don’t lin
ne up with purpose Prohibit resid
dential village combine the existing Busin
ness 3 Zone an
nd Business 4 Zone. and retiremeent village as remove the p
permit requireement for Cineema, Cinema‐based nt with not consisten
entertainmen
nt facility, Foo
od and drink premises, Restricted Commercial ZZones. retail premisees and Trade ssupplies. The condition
ns association remove the m
maximum floo
or area restricttion for an Offfice. with Industry
y and make Accommodation (oth
her than Dwelling that will ccontinue to Warehouses are less be a prohibited use) a perm
mit required u
use. restrictive in C2 than exempt small‐scale superm
markets and asssociated shop
ps from a ng B4 within existin
permit requirrement. Largeer supermarkeets and stand aalone Policy guidan
nce is required
d shops requiree a permit. to understan
d when a Removal of the reference tto the buffer zzones required
d by 52.10 Shop or Supeermarket for industry aand warehousse could createe issues Drafft MAV Submisssion – New Z
ocx: Septembe
er 2012
Section 2
2 Section 3
3 Industry aand Warehou
use The conditions asssociation with
h Industry and
d Warehouses are less restrictive in C2 th
han within exiisting B4 should be permit
only option to
o limit a supermarket 'as of right' to 2000m2 w
would be usingg the C2Z which then makes industrial an as of right use. ustrial Zone
es
3.4 Indu
Industriaal 1 Purpose Section 1
1 Section 2
2 The Industrial 1 Zone provides for manufactu
uring industryy, the storrage and distriibution of goo
ods associated uses in a man
nner that does not affect th
he safety and aamenity of loccal communitiies. • Changes to th
he existing Ind
dustrial 1 Zonee propose to rremove the maximum flo
oor space areaa restriction fo
or Office. Allows councils to
o set maximum
m floor area fo
or office. Previously restricted to 500 sqm provvides for manu
ufacturing ind
dustry, the storage and distrribution of goods associated uses in a man
nner that doess not affect the safety and amenity of lo
ocal communitties rem
moves the maxximum floor sp
pace area restriction for Offfice
Allows councils to
o set maximum
m floor area fo
or office. Previously restricted to 500 sqm NEEDS CHECK
KING AND COMPLETION
N provvides for indusstries and asso
ociated uses in specific areaas where speccial considerattion of the natture and impaacts of industrrial uses is requ
uired or to avo
oid inter indusstry conflict. • remove the m
maximum floo
or space area rrestriction for Office • exempt small‐scale superm
markets (up to
o 2000m) and associated shops (500sq
qm) from a peermit requirem
ment. Some councills have raised concerns regaarding supermarketss being allowed in IZ3
3 and the implications ffor existing retail hierarchy. Industriaal 2 Purpose Section 1
1 Section 2
2 Industriaal 3 Purpose Section 1
1 23
May undermine the purpose of th
he Industrial zoning of thee land May negativeely impact existing retail areas,; retail hierarchy and encourage out‐of‐centree trading. Change is con
nsidered Drafft MAV Submisssion – New Z
ocx: Septembe
er 2012
Section 2
2 inappropriatee Section 3
3 Allows councils to
o set maximum
m floor area fo
or office. Previously restricted to 500 sqm Proh
hibits supermaarkets if leasable floor areas exceeds 200
00sqm
24
ocx: Septembe
er 2012
4. Imp
plementa
ation Issu
ues
4.1 Finalisation o
of provision
ns
Through
hout this sub
bmission a number of iissues have
e been identtified about the provisio
ons
themsellves. We co
onsider a nu
umber of the
ese to be strraightforwarrd and easily remedied, such as
providin
ng for greate
er control off the height and form off non-reside
ential uses in
n the reside
ential
zones th
hat have character obje
ectives. Oth
her changess however, ssuch as with
hin the prop
posed
commerrcial zones may require
e greater efffort to ensurre a workab
ble solution across all V
Victorian
council types.
It is no lionger adeq
quate to sim
mply have a metropolita
an and rural distinction. Many ‘metrropolitan’
councilss have distin
nctly rural atttributes and
d vice vesa. Whether th
he concernss and anom
malies are
addresssed, and the
e resultant zzones having clear purrposes and aligned provvisions, dire
ectly
affects implementa
ation pathwa
ays and app
proaches.
It is clea
ar that each suite of zon
nes requiress a differentt process fo
or finalisation as well ass for
impleme
entation.
Key are
eas for discu
ussion and tto be addresssed are:
- Re
esidential
o Non-re
esidential usses are too broad given
n they are not subject to
o height resstrictions
o ResCo
ode not varie
ed, causing significant further workk
-
Co
ommercial
o The retail hierarch
hy is compro
omised and this questio
on needs to
o be resolved
o Impactts greatest in areas nott the focus of
o the Produ
uctivity Com
mmission’s
recomm
mendationss (small town
n, main stre
eet, outer su
uburb)
-
Ru
ural
o Impactts vary wide
ely across co
ouncils
Green wed
dge and perri-urban imp
pacts of sign
nificant conccern
areas losin
ng populatio
on are likely to have ad-hoc infrastructure / service
demands tto support a
ad-hoc deve
elopment
o Zone p
purposes arre confused and not in alignment
a
w
with provisio
ons
o Minimu
um lot size a concern in
n many area
as with haza
ard or with d
developmen
nt
pressu
ures.
A simple
e three step
p process ca
an be initiate
ed to finalisse the provissions:
• Agree
A
on th
he purpose a
and objectivves for the zones
z
• Ensure
E
theyy are comprrehensive ye
et do not ovverlap / confflict (Mutually exclusive
e and
c
comprehens
sively exhau
ustive)
• Align
A
provissions to give
e effect to th
he purpose a
and zone ob
bjectives
cess to imp
plement
4.2 Proc
Residen
ntial
The ben
nefits of the changes prroposed are
e likely to be
e greater forr metropolita
an areas un
nder
pressure
e for develo
opment that is inconsisttent with loccal policy an
nd community expectattions.
Many co
ouncils have
e done sign
nificant and ffinely resolvved strategic work, lead
ding to houssing
25
ocx: Septembe
er 2012
strategie
es, neighbo
ourhood cha
aracter and heritage stu
udies, and th
he identifica
ation of whe
ere and
how diffferent areass should gro
ow. Local po
olicy content must migrate across.
O
and
d schedule ccontrols rela
ating to heig
ghts they sh
hould be
Where ccouncils havve existing Overlay
translate
ed directly into the sche
edules in ne
ew zones so
o as much a
as is possible, other overlay
controlss (DDO, HO
O, NCO etc) can be rem
moved, and w
where this iss not possib
ble, the overlays
amende
ed or simpliffied to ensure clearer a
and less com
mplex schem
mes for the community.
Tailoring
g scheduless to different areas is sttrongly supp
ported, and could also include loca
alised
objectives and deciision guidelines.
A Ministterial Practicce note is re
equired so tthat the prim
mary weightt is given to this detail, w
when
available, by counccils, and at V
VCAT.
ould involve
e a ‘test run’’ of applying
g the new zo
ones, with a view to thrree
The wayy forward co
pathwayys.
Scheme we
ell resolved w
with heritag
ge, characte
er and housiing strategie
es complete
e and
1. S
i
incorporated
d
o Dire
ect applicatio
on of the thrree zones (a
as appropria
ate) with va
ariations to schedules
s
, rem
moval of ove
erlay contro
ols as appropriate
o Stan
nding Panel to deal with
h property o
owners seekking review as affected
2. S
Scheme poorly resolve
ed and little local policy or studies u
undertaken / little development
p
pressure
/ cchange
o Conservative Direct
D
transla
ation to Gen
neral Reside
ential (Neigh
hbourhood
resid
dential in ma
any rural urrban areas)
3. W
Work underrway to deve
elop local policy, revise
e scheme
o New
w zones not applied unttil this work is complete
e. Progressivve and facilitated
apprroach with D
DPCD over say a 2 yea
ar period.
Having all councils needing to step throug
gh a conservvative transslation say to
o the Generral
residenttial zone is n
not supported, and sim
mply addis time, cost an
nd confusion
n.
ercial
Comme
There iss a fundame
ental need to resolve th
he proviosnss first, deterrmine the prreferred reta
ail
hierarch
hy and then refine the zones
z
propo
osed to com
mplement the
e existing se
ettlement hiierarchy.
Once do
one then dirrect applications can prroceed through introduction to the VPP.
Failing tthis, there a process for both the n
new and old zones to co
o-exist in the VPP, with
h a longer
time for the transitio
on to ccur a
as significan
nt local varia
ations to ma
ake the new
w zones workk will be
required
d by councils.
Rural
As for th
he commerccial zones, w
without satissfactory ressolution of th
he zone pro
ovisions, succh as for
lot size and some other
o
permitt required usses, the imp
plementation processess will be lon
nger with
an addittional burde
en facing co
ouncils for more
m
strategic work.
26
ocx: Septembe
er 2012
18 September 2012
ATTACHMENT
WANGARATTA ART GALLERY COLLECTION POLICY
Refer Item 11.2.3.1
Wangaratta Art Gallery
Collection Policy
August 2012
1
Wangaratta Art Gallery
Wangaratta Art Gallery Collection Policy 2012
¾
¾
¾
¾
¾
¾
¾
Background
The Extent of the Collection
Collection Content and Guidelines
Procedures for Selection and Acquisition of Art Works
Gifts, Bequests, Donations to the Collection
Acquisitions Process
De-accessioning Process
Background
The Wangaratta Art Gallery's Collection of works of art (including all items of
decorative art or craft within this description) began to be assembled on a casual
unrecorded basis after the establishment of the Gallery in 1987.
Works were acquired primarily through donation and/or through acquisition after
funded projects instigated by the Gallery. This led to the accumulation of a relatively
small representation of works (principally photographs) by artists practicing in the
region whether they were professional or amateurs. In 2004 the Gallery Collection
Policy was approved by the Rural city of Wangaratta Council and since then works
have been acquired into the collection on a regular basis.
The ‘content’ referred to in this document provide restrictions relating to the types of
art to be collected.
The ‘guidelines’, referred to in this document provide parameters for the
development of a permanent and significant visual art collection and to ensure that
the Gallery is positioned as a centre of excellence with regard to its collections.
The term, 'works of art', for the purpose of this policy, includes any item of visual
art, decorative art, craft or design made using traditional processes or any art which
is produced using the processes of contemporary electronic technology.
The Gallery is perceived as having a distinctive role within the region as a public art
gallery for temporary exhibitions. The continued establishment of a permanent Public
Gallery Art Collection, that reflects the collection rationales of other similar
institutions, operates to enhance the role of the Gallery within the region and State,
offering opportunities for bequests, donations and gifted items potentially benefiting
from the Tax Incentive Scheme and the Federal Government’s Cultural Gifts
Program.
It should be noted that the Wangaratta Art Gallery Collection is separate from the
Rural City of Wangaratta Collection and the Public Art Collection.
The Extent of the Collection
2
The Wangaratta Art Gallery Collection includes all works of art currently in the
possession of the Wangaratta Art Gallery that have been accessioned into the
collection.
Gallery management acknowledges the need to assist with, and offer advice in the
care and maintenance of art works held by the Rural City of Wangaratta Art
Collection [a separate collection from the Wangaratta Art Gallery Collection], its
Public Art Collection [also separate] and other works situated within its various
departments.
Items from the Rural City of Wangaratta Art Collection can only be accessioned to
the Wangaratta Art Gallery Collection if inclusion occurs through a formalised process
of selection, recommendation and acquisition by the Gallery Director with opinion
sought from a panel of community visual arts experts.
Works of art in the Rural City of Wangaratta, which are not officially part of the
Wangaratta Art Gallery Collection: including: public art/sculptures/installations,
historical or contemporary art, as well as paintings, items of decorative art and craft,
and ephemera are not subject to these policy guidelines.
Content and Guidelines
Content
The Wangaratta Art Gallery Collection shall be comprised of original works of art and
craft of excellent standard and quality.
The Collection content will be comprised of:
i. Textiles, Fibre, [including indigenous fibre and textile art and objects], art
objects made of Wood, and Small Sculpture of highest significance by regional,
state, national living and deceased artists which reflects contemporary trends
and interests.
ii. Two and three dimensional images and objects including works on paper, which
reflect general interest relating to the local landscape and the social history of
the north-east of Victoria region, including themes of wildlife, flora, heritage
and environment.
iii. A Collection of north-east Victorian regional visual art and craft of highest
significance and contemporary in nature, in any media, including painting,
printmaking, drawing, sculpture, textiles, fibre, digital and electronic media,
wood, ceramic, glass and precious and base metals.
iv. Two and three-dimensional images and objects of highest significance by
regional, state, national living and deceased artists, whose work reflects
contemporary trends and interests.
3
Key Guidelines
Guidelines relating to the collecting of art:
¾ The policy stipulates the acquisition and maintenance of works of art considered
of high significance in terms of content, subject matter and execution.
¾ A specific emphasis should also exist on the acquisition of key historical and
contemporary works which depict/document aspects of the natural and manmade environment of north-east Victoria - early indigenous art, heritage,
landscape, flora and fauna.
¾ The Wangaratta Art Gallery Collection is to be representative of historical and
contemporary art from Australia, particular attention should be directed towards
the collection area of contemporary textile and fibre art [including indigenous
textile and fibre art], works of art/craft created with wood, and small sculpture.
¾ Irrespective of subject matter the Wangaratta Art Gallery Collection should also
acquire the work of significant artists’ resident, or working in north-east Victoria.
The above guidelines refer to all works of art in any medium that exists now or in the
future until such time as this policy is revised/rewritten.
Photography and cinematography, film, video taping, DVD [digital video disc]
recording or the results of computer generated images and trans-media works of art
are also valid acquisition categories.
Procedure for Selection, Acceptance and Registration of Works of Art
¾ Irrespective of the manner of acquisition, (by bequest, donation, purchase etc.),
art works intended for the Wangaratta Art Gallery Collection will be acquired
following initial selection by the Gallery Director as per Council delegation.
¾ Works of art recommended to proceed to the acquisition process via direct
purchase, donation of funds for purchase, or gifted items shall be represented
by:
- The actual item in question, or
- Accurate photographs, digital imagery or transparencies of the item.
¾ The Gallery Director is to prepare supporting documentation for all acquisitions
referring to the policy guidelines.
¾ The following ‘significance’ criteria should be referred to in order to produce
some semblance of objectivity in the acquisition of works:
-
Relevance to the Gallery Collection via this Policy;
General aesthetic merit indicated by quality of technique and execution,
composition, statement and content;
Historical value, either in terms of maker or subject matter;
The reputation of the artist in local, regional, or national terms (note:
refers only to recognition of production not 'moral' reputation);
4
-
-
-
-
The condition of the work. Poor condition with potential conservation
expenses may outweigh the above values (unless additional funding is
accessible);
The relevance of the work/s to existing items in the Wangaratta Art
Gallery Collection, (e.g. a work may augment historical documentation or
an artist's development);
Purchase cost. If funds exist to enable purchase of a work considered
highly relevant to the Gallery Art Collection then price should not be seen
as a deterrent to the purchase; and
Unacceptable conditions of display or acknowledgement will lead to the
rejection of a potential acquisition.
¾ The Gallery Director will establish a panel to provide expert advice on the
appropriateness of acquisitions. Following the acquisitions process and
recommendations from the expert panel the Gallery Director will make the final
decision and if appropriate proceed with the acquisition.
¾ Payment for the work of art with funds allocated from appropriate accounts is
made, the previous owners should acknowledge payment, and then the item is to
be registered:
-
in the Art Collection registration book;
in the Art Collection electronic data base; and
via a paper profile which should then be established to hold the results of
further research into the provenance, etc. of the item or details of the
continuing career of the artist for reference.
¾ The item should then be digitally photographed and appropriately filed, in hard
and soft copy.
¾ The image of the work of art will have a condition report to provide information
for any possible future conservation work that may be required. This report will
be included in the relevant paper file.
Gifts, Bequests, Donations
¾ Gifts, bequests of works of art for the Wangaratta Art Gallery Collection or
monetary donations assisting in the purchase of works for the collection should
be encouraged.
¾ Gifts, bequests and works purchased with donated funds will be considered
under the acquisition criteria
¾ Gifts, bequests or funds offered for the purchase of works for the Wangaratta Art
Gallery Collection will not be accepted under the following conditions:
-
-
That the work to be acquired will be permanently on display;
That the work to be acquired will be on display at specific times;
That the work to be acquired will be displayed or stored in perpetuity
within a designated space occupied by the Wangaratta Art Gallery when
the work was acquired;
That the work to be acquired is not permitted to be a component in a
touring exhibition organised by the Gallery or any other organisation
unless the condition of the work makes this inadvisable; and
5
-
That the work to be acquired is to be loaned to another organisation not
approved by the Gallery Director.
¾ Potential donors of works of art or money for the purchase of works should be
made aware of the existence of the Gallery Art Collection De-accessioning
segment of this policy.
¾ The Gallery holds Tax Deductible Gift Recipient Status with the Australian
Taxation Office.
6
Acquisitions Process
¾
¾
¾
¾
¾
Scope
Selection/Nomination of Works of Works of Art for Acquisition
Expert Panel Membership
Acquisition Meetings
Recording and Care of Acquisitions
Scope
All acquisitions of works of art to the Wangaratta Art Gallery Collection are to be
subject to the acquisition process outlined in this document.
Selection/Nomination of Works of Art for Acquisition
I.
The Gallery Director will select/nominate works for acquisition into the
collection and present to a panel of expert community members (the ‘panel’)
with appropriate art related qualifications to provide an opinion on the
selected work(s) to the Gallery Director.
II.
The acquisition of art will relate to, and adhere to, the content of the
Wangaratta Art Gallery Collection Policy Key Guidelines (as outlined in this
document).
III.
The Gallery Director will not deviate from the Wangaratta Art Gallery
Collection Policy in the selection/nomination and approval of works of art for
collection.
IV.
The ‘panel’ may also be required to give their expert opinion to the Gallery
Director about the de-accession of collection items as per the de-accessioning
segment of this policy. The Gallery Director also has delegated authority to
make the final decision regarding all proposed items for de-accession.
Expert Panel Membership
Membership of the ‘panel’ is to be made up of professional practicing artists and
visual arts professionals made up of the following:
1 member from the “Friends of the Gallery Association Incorporated”;
1 member from the Rural City of Wangaratta “Arts, Culture and Heritage Advisory
Committee”, and
5 community representatives.
Members will be selected on relevant and extensive experience, knowledge and
qualifications relating to the visual arts. (i.e. Visual or Fine Art Degree, History of Art
Degree, or recognised professional practicing visual artist).
7
The panel will be appointed for a four years period from the date of commencement.
Nominations to the ‘panel’ will be called for via an advertisement placed in relevant
newspapers. The Friends of the Gallery and the Arts Culture and Heritage Advisory
Committee will nominate one qualified representative from each committee.
Acquisition Meetings
The panel shall meet (4) four times a year or as required.
Recording and Care of Acquisitions
Upon the acquiring of a Work of Art, the Gallery Director will be ultimately
responsible for the cataloguing, care, conservation and storage of said work as per
Wangaratta Art Gallery Collection Policy Guidelines.
8
De-accessioning Process
¾
¾
¾
¾
Scope
De-accessioning
De-accessioning Gifts
Expert Group Membership
Scope
The de-accessioning of works of art from the Wangaratta Art Gallery collection is to
be subject to a de-accessioning process outlined herein.
De-accessioning (removing works of art from the collection)
¾ Works in the Wangaratta Art Gallery Collection may be de-accessioned following
a final decision of the Gallery Director and an opinion sought from the ‘panel’ of
experts (refer above).
¾ The aim of de-accessioning is to maintain a Gallery Art Collection of the highest
possible quality by cautiously disposing of works which:
-
fall outside the Collection guidelines and criteria;
are of little or no historical significance;
are of little aesthetic value;
are of no value to research relating to the Wangaratta Art Gallery
Collection;
are not useful for the education programs of the Gallery; and
have fallen into disrepair.
¾ The issue of restricted display or storage space is not accepted as being within
the criteria for de-accessioning consideration.
¾ De-accessioning will not be a means of raising funds for any activity in the
Gallery's program other than for additional acquisitions for the Wangaratta Art
Gallery Collection.
¾ The agent through which the work is to be disposed should be clearly indicated
in the proposal. The agent should be encouraged to maintain confidentiality.
¾ When a work has been de-accessioned, details are to be recorded in the expert
‘panel’ meeting minutes. These records will be available for inspection by
appointment by any person.
De-accessioning Gifts
¾ Where the Wangaratta Art Gallery has received gifts deemed as inappropriate to
the Wangaratta Art Gallery Collection, the Gallery Director may dispose of the
works under the following conditions:
-
The approval of the donor is obtained;
If the donor is deceased, approval should be obtained from his/her
executors if possible; and
9
-
Any income derived from the disposal of gifts must be used to purchase a
work or works in lieu of the original gift. The original donor's generosity
must continue to be acknowledged with the replacement of former
Wangaratta Art Gallery Collection items with works bearing suitable text
(eg. 'Purchased from the ……..Fund'). The acknowledgement of past
donors should guard against the discouragement of prospective
donations.
When de-accessioning becomes contentious, the proposal for disposal should be
deferred or abandoned.
Members of staff of the Wangaratta Art Gallery as employees of Council, Councillors
or Officers of the Rural City of Wangaratta Council or members of their families, shall
not be permitted to acquire de-accessioned collection works of art or items, nor
benefit financially from de-accessioning in any form.
Glossary of Terms
Ephemera
-
High Significance -
non-permanent material;
lasting for only a short time;
transitory; and
short lived.
the best available work in the artist’s oeuvre
(i.e. body of work);
reputation and history of the artist and his/her work;
is of consequence or importance;
the state or quality of being significant;
has or expresses meaning; and
is notable or momentous.
Wangaratta Art Gallery Collection
- works of art collected through the guidelines of this
policy.
Rural City of Wangaratta Collection
- works of art that are not part of the Wangaratta Art
Gallery collection that are owned by the Rural City
Council.
Public Art Collection
- works of art in external environments, such as outdoor
sculpture.
10
18 September 2012
ATTACHMENT
YOUTH COUNCIL ACTION PLAN 2012/2013
Refer Item 11.2.3.2
R l Cityy of Wanga
Rural
W
aratta
a
Youtth Co
ouncill
Acttion Plan
P
20
012/1
13
Rural City of Wangara
atta
PO Box 23
38
WANGARA
ATTA VIC 3676
Phone (03) 5722 0819
9
Youth Council Action Plan 2012/13
Page 2
Rural City of Wangaratta Vision,
Mission and Values
Our Vision
The Rural City of Wangaratta “the Ultimate in Liveability”.
Our Mission
We will provide the leadership necessary to:
• Ensure the long term financial security of the Council;
• Deliver quality Council services;
• Facilitate a growing and sustainable economy and employment base;
• Promote a cohesive, dynamic Rural City of Wangaratta Community;
• Maintain open communication and consultation;
• Preserve and enhance our heritage and the environment.
Our Values
Excellence:
We aim to achieve the highest standard in everything we do.
Trust:
We have confidence in the ability and commitment of others and ourselves.
Respect:
We see all people as being valuable acknowledging individuality, opinions, needs and
abilities.
Openness:
We foster community engagement in our decision making process and encourage honest
communication in all dealings.
Fairness:
We treat all colleagues and customers fairly and consistently. We promote equality and
ensure resources are allocated according to need.
Enjoyment:
We promote a harmonious and productive workplace by celebrating achievement in an
environment where everyone feels they belong.
Rural City of Wangaratta Youth Council
Page 3
Youth Councillors
2012-2013
Name
Representing
Bella Currie
Wangaratta High School
Sofia Kennedy
Corinne Antonoff
Elizabeth Hindle
Max Dewez
Melinda Suter
Galen College
Amy Faithfull
Galen College
Zoe Stinson
Galen College
Mary Watter
Galen College
Hazel Vaughan
Galen College
Emily Bettio
Galen College
Jessica Long
Cathedral College
Council Support
Councillor Portfolio Holder
Community Wellbeing Portfolio
Council
Katy Hawkins
Community/Youth Development
Officer
Page 4
Youth Council Vision
The purpose of the Rural City of Wangaratta Youth Council is to be passionate and
motivated leaders united under a common goal.
We aim to benefit the youth of Wangaratta by addressing the issues outlined in the Youth
Survey. We will achieve this through running events and activities to benefit and educate
young people in our community.
We aspire to have a lasting positive impact within the community through effective
communication, being approachable and achieving our goals.
We will do this with a sense of:
• Appreciation and respect for the community and their needs
• Teamwork, understanding and trust for each other
• Awareness of the results of our actions.
• Determination to support, respect and consult with young people.
We will work alongside Senior Council to achieve ‘The Ultimate in Liveability’ within the
Rural City of Wangaratta.
Mission Statements
Communication
We will provide opportunities to communicate with young people in the community and
ensure that their voices drive Youth Council actions.
Leadership Development
We will strive to be responsible role models within the community, taking on tasks and
challenges while also encouraging leadership in others.
Community & the Environment
We will promote active community participation by generating awareness of community
issues whilst being environmentally conscious in all Youth Council initiatives.
Entertainment
We will provide activities and events as a form of entertainment for youth in a safe and
enjoyable atmosphere. In doing this we will offer opportunities for our young talent.
Page 5
Key Result Areas
The Key Result Areas are the projects that the Youth Council will undertake in order achieve the
outcomes of its Vision and Mission Statements.
Communication
Item
Responsibility/Resources
Timelines
Proposed
Funding
Needs
Local Radio
Youth Councillors
3NE/Edge FM Wangaratta
Fortnightly
$0
Articles in the Wangaratta
Bi-Monthly
$0
Chronicle
Youth Councillors
Community/Youth
Development Officer
Wangaratta Chronicle
SCOPE Youth Council
Youth Councillors
Quarterly
$400
Youth Council Facebook Page
Youth Councillors
Fortnightly
$0
Marketing and promotion
Youth Councillors
Community/Youth
Development Officer
Ongoing
$600
School newsletters
Youth Councillors
Ongoing
$0
newsletter
Misc.
$200
Communications Total
$1200
Page 6
Item
2012/13 Youth Council Induction
2012/13 Youth Councillors
Facilitator
Officer
June 2012
$1900
Meet and Greet with Senior
Councillors
Youth Councillors
Councillors
Officer
June 2012
$300
Youth Council Meetings and
travel to meetings
Youth Councillors
Officer
Ongoing
$700
National Young Leaders Day
Youth Councillors
Officer
November
2012
$800
Youth Council Challenge &
Afternoon Tea with Staff
Youth Councillors
Council Staff
December
2012
$100
Support Creative Youth
Committee Meetings
Officer
Ongoing
$0
General Youth Leadership
Development
Youth Councillors
Officer
Other local young people
July 2012
to
June 2013
$2500
Leadership Conferences
Youth Councillors
Officer
Ongoing
$2120
Final Meeting /Presentation by
Youth Council
Youth Councillors
Officer
Councillors
Parents & guests
June 2013
$1200
Leadership Development Total
Timelines Proposed
Funding
Needs
$9620
Page 7
Item
Timelines
Proposed
Funding
Needs
Community
Involvement/Sponsorships etc
Youth Councillors
Ongoing
$800
Printing Youth Contact Card
Youth Councillors
Service Providers
Community/Youth
Development Officer
Youth Councillors
September
2012
$1500
October 2012
$50
Children’s Week Celebrations
(Volunteering at BBQ)
Printed Shirts for Youth
Councillors for events
Youth Councillors
Community/Youth
Development Officer
October 2012
$480
Wangaratta Youth Awards
November
2012
$4315
Sport and Recreation Advisory
Committee
Youth Councillors
Community/Youth
Development Officer
Youth Council
Representatives
Ongoing
$0
North East Regional Youth Affairs
Network (NERYAN)
Youth Council
Representatives
Ongoing
$0
Wangaratta Youth Service
Providers Network (WYSPN)
Youth Council
Representatives
WYSPN Committee
Members
Youth Councillors
Bluelight Committee
Ongoing
$0
Ongoing
$0
January
2013
$800
April 2013
$80
Blue Light Committee and Youth
Group
Summer in the Parks
(Youth Focused Events)
Anzac Day Wreath
Youth Councillors
Community/Youth
Development Officer
Youth Councillors
Community & the Environment Total
$8025
Page 8
Entertainment/Recreation
Item
Responsibility/
Resources
Timelines
Proposed
Funding
Needs
Contribute and support Youth
Festival During Wangaratta
Jazz Festival
Youth Councillors
Community/Youth
Development Officer
November
2012
$2000
Provide activities during school
holidays
Community/Youth
Development Officer
September
2012 and
January 2013
$1400
Wangaratta Australia Day
Committee (Youth Component)
Youth Council
Representatives
January 2013
$0
Entertainment Total
$3400
National Youth Week
Item
Responsibility/
Resources
Timelines
Proposed
Funding
Needs
National Youth Week –Youth
Festival
All
Apply for Victorian
Communities Grant
Investigate additional funding
source
April 2013
$2000
National Youth Week Total
$2000
Page 9
Anticipated Expenditure
Totals
Mission Statement Area
Totals
Communications
$ 1,200
$9,620
$ 8,025
Entertainment & Recreation
$ 3,400
National Youth Week
$ 2,000
GRAND TOTAL
$24 245

MUNICIPAL ASSOCIATION OF VICTORIA (MAV) STATE COUNCIL

Transcription

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