AGENDA

Extraordinary Council Meeting Thursday, 13 May 2021

I hereby give notice that an Extraordinary Meeting of Council will be held on:

Date: Thursday, 13 May 2021

Time: 11:00 am Location: Council Chambers Administration Office 52 Perricoota Road, Moama

Terry Dodds Chief Executive Officer

MURRAY RIVER COUNCIL Extraordinary Council Meeting Agenda 13 May 2021

Order Of Business

1 OPENING MEETING ...... 4 2 ACKNOWLEDGEMENT OF COUNTRY ...... 4 3 APOLOGIES & APPLICATIONS FOR A LEAVE OF ABSENCE ...... 4 4 DISCLOSURES OF INTERESTS ...... 4 5 REPORTS TO COUNCIL ...... 4 5.1 Chief Executive Officers Report and Supplementary Matters ...... 5 5.1.1 Referendum Question to be agreed upon for 2021 Election on removal of Wards within Murray River Council ...... 5 5.2 Director Shared Services Report and Supplementary Matters ...... 7 5.2.1 Four Year Delivery Program, 2021/2022 Operational Plan & Budget; and 2021/22 to 2030/31 Long Term Financial Plan ...... 7 5.2.2 2021/22 Revenue Policy ...... 44 5.2.3 Murray River Energy Review Report ...... 49 5.3 Director Operations and Major Projects Report and Supplementary Matters ...... 51 Nil 5.4 Director Planning and Environment Report and Supplementary Matters ...... 51 Nil 5.5 Director Customer and Community Services Report and Supplementary Matters ...... 51 5.6 Correspondence Report ...... 51 Nil 5.7 Sundry Delegates Report ...... 51 Nil 6 BIRTHS AND CONDOLENCES ...... 51 7 CLOSE OF MEETING ...... 51

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1 OPENING MEETING

2 ACKNOWLEDGEMENT OF COUNTRY

3 APOLOGIES & APPLICATIONS FOR A LEAVE OF ABSENCE

4 DISCLOSURES OF INTERESTS

5 REPORTS TO COUNCIL

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5.1 CHIEF EXECUTIVE OFFICERS REPORT AND SUPPLEMENTARY MATTERS

5.1.1 REFERENDUM QUESTION TO BE AGREED UPON FOR 2021 ELECTION ON REMOVAL OF WARDS WITHIN MURRAY RIVER COUNCIL

File Number: - Author: Lindy Leyonhjelm, Executive Assistant Authoriser: Terry Dodds, Chief Executive Officer

RECOMMENDATION That Council agree to the wording for Yes/No referendum questions for the 2021 Elections in September in regard to the removal of Wards within Murray River Council.

BACKGROUND At the 24 September 2019 Ordinary Council Meeting, Councillors resolved the following: That Murray River Council makes a submission to the NSW Electoral Commission to eliminate ward boundaries and become an undivided Local Government Area for the Local Government Election 2020 by the closing date of 9 December 2019. NSW Electoral Commission have confirmed that they have received the submission and require a Yes/No referendum question/s to be included in the September 2021 no later than 30 June 2021.

DISCUSSION Some suggested questions that can be put forward is: 1. Do you wish to remove the three wards currently in place (Moama, Greater & Greater Murray) within Murray River Council to become an undivided Local Government Area?

2. Currently there are three wards within Murray River Council, would you like to see it become an undivided Local Government area and remove these wards?

3. Murray River Council operates under three wards currently, would you like to see these removed to become an undivided Local Government Area?

STRATEGIC IMPLICATIONS 5 - Strategic Theme 5: Leadership and Governance 5.3 - Communication and collaboration identifies and meets community needs 5.3.1 - Council clearly identifies and promotes simple, effective communication, consultation and participation for community

BUDGETARY IMPLICATIONS Type here

POLICY IMPLICATIONS Nil.

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LEGISLATIVE IMPLICATIONS

RISK ANALYSIS • What can happen? Type here • How can it happen? Type here • What are the consequences of the event happening? Type here • What is the likelihood of the event happening? Type here • Adequacy of existing controls? Type here • Treatment options to mitigate the risk? Type here

CONCLUSION Type here

ATTACHMENTS Nil

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5.2 DIRECTOR SHARED SERVICES REPORT AND SUPPLEMENTARY MATTERS

5.2.1 FOUR YEAR DELIVERY PROGRAM, 2021/2022 OPERATIONAL PLAN & BUDGET; AND 2021/22 TO 2030/31 LONG TERM FINANCIAL PLAN

File Number: - Author: Kris Kershaw, Assistant Manager Finance Authoriser: Terry Dodds, Chief Executive Officer

RECOMMENDATION That the Council: 1. Consider the four (4) public submissions to the 2021/2022 Operational Plan & Budget. 2. Adopts the Draft Four Year Delivery Program, 2021/22 Operational Plan & Budget and 2021/22 to 2030/31 Long Term Financial Plan after consideration has been given to the public submissions received to the 2021/2022 Operational Plan & Budget. 3. Place the Draft Four Year Delivery Program, 2021/22 Operational Plan & Budget and 2021/22 to 2030/31 Long Term Financial Plan on public exhibition for a period of 28 days.

BACKGROUND As part of the Integrated Planning and Reporting Framework (IP&R), Council is required to draft and present the Four-Year Delivery Program, the 2021/22 Operational Plan & Budget and the 2021/22 to 2030/31 Long-Term Financial Plan. The budget process has resulted in a revised Four-Year Delivery Program whereby goals and strategies have been reviewed and updated to reflect Council’s current operational requirements. The review has been completed in the context of Council’s Community Strategic Plan (CSP). The Operational Plan & Budget outlines how Council will fund and resource the goals and strategies for 2021/22 financial year. This plan not only provides financial information, but also provides actions against the goals and strategies for 2021/22 and how Council will achieve them. The Operational Plan also provides analysis of certain financial ratios back against local government industry benchmarks. The Long-Term Financial Plan has been compiled to show how Council will operate financially over the next ten years. The plan outlines the assumptions behind the financial data and presents an income statement, balance sheet and cashflow analysis. The Long-Term Financial Plan also provides sensitive analysis on how a proposed change or situation impacts Council’s budget over the long term, based on specified assumptions.

DISCUSSION The 2021/22 Operational Plan & Budget shows an Operating Surplus of $9,278,297, but an overall draft deficit of ($839,514) once capital expenditure, reserve movements, loan borrowings and other movements are factored in. The Four-Year Delivery Program, the 2021/22 Operational Plan & Budget and the 2021/22 to 2030/31 Long-Term Financial Plan will be presented to Council at the workshop on the 10 May 2021.

Budget Deficit Explained The budget has been cut down from the initial start point of ($10.2 million) deficit down to the proposed ($839,514). The original start point was based on all proposed capital works been included, including the “must do” and “nice-have” projects. This start point highlights an overall revenue

Item 5.2.1 Page 7 MURRAY RIVER COUNCIL Extraordinary Council Meeting Agenda 13 May 2021 shortfall that Council is faced with and hence the reason why Council is currently working through a service review program. The proposed 2021/22 year budget is one that is considered a holding budget, and this is until such time that the current service review work, including asset management plans, are completed and received by Council. It is expected that the 2nd quarter budget review (July to December period) will encompass the service review outcomes, and this will then be built into the 2022/23 budget onwards. Revenue streams continue to be squeezed with interest rates on investments been budgeted around 0.40% and rate pegging only increasing by 2.00% for the 2021/22 year. The question around future grant funding opportunities is also an unknown factor. Council staff will always pursue grant funding opportunities. To put this into context, employee salaries under the Local Government State Award 2020 increase by 2.00%, CPI or (Consumer Price Index) has been budgeted as 2.00% on materials and contracts, however Council’s workers compensation premium has been budgeted to increase by 9.55% and all other insurances to increase by 10.00% (estimated). To provide some explanation around the ($839,514) budget deficit for 2021/22 year, the following expenditure items are one-off budget implications for the 2021/22 year budget that are funded by Council own source:

One-Off Budgeted Programs/ Projects - Operational 2021/22 Budgeted Cost Council election expense 130,000 Strategy/ Masterplans/ Concept Plans/ Service Reviews 668,290 Moama and Barham stormwater analysis 165,000 Total 963,290

One-Off Budgeted Programs/ Projects - Capital Expenditure Budgeted Cost Heavy Patch and Reseal program 1,256,250 Gravel Resheeting program 555,555 Urban Roads program 1,045,978 Kerb and Gutter program 285,270 Stormwater drainage program 296,770 Information Technology asset upgrade/ software 536,300 Playground equipment program 107,500 Security and compliance upgrade/ installation - Shirewide 165,000 Total 4,248,623

If Council wishes to achieve a balanced budget for 2021/22, the following options could be considered:

1. Increase the proposed loan borrowings from $800,000 to $1,640,000 total. This option would result in higher loan principal and interest repayments which would need to be built into the Long-Term Financial Plan Operating result. 2. Reduce capital works proposed in the 2021/22 budget from $34,522,412 down to at least $33,682,898. Council does not have sufficient unrestricted external or internal reserves available to drawdown against to cover the deficit. The reserves have been reviewed as part of preparing the budget and movements have already been considered in the proposed budget.

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Capital Works Program The 2021/22 Operational Plan includes a total capital works program of $34,522,412. Some of the larger projects include: Top 11 Asset Works Programs Budgeted Cost Plant Fund Replacement 3,562,000 Shirewide Landfill Strategy 2,601,792 Moama Pre-School Development 2,000,000 Shirewide Technology 1 Project 1,928,550 Town Levees - 1,634,000 Retirement Village Expansion (Units) 1,600,000 Bridge Frasers Road/Murrain Yarrien Creek Bridge 1,600,000 Bridge Tooranie Road/ Yarrien Creek Bridge 1,300,000 Shirewide Reseals and Heavy Patching 1,256,250 Bridge - Frasers Road/Murrain Yarrien Creek Bridge 900,000 Shirewide Install LED Street Lights 800,000

A full capital expenditure listing is available in both the 2020/21 Operational Plan and 2020/21 to 2029/30 Long Term Financial Plan documents.

Financial Ratios The 2020/21 Operational Plan provides ratio information in relation to local government industry benchmarks. Council meets five (5) of the seven (7) ratios identified in the Operational Plan. The two ratios where Council doesn’t meet are the Operating Performance and Own Source Revenue. The Operating Performance ratio shows the ability to contain operating expenditure within operating revenue. This excludes capital revenue. One of the reasons why Council has a (14.59%) ratio is because depreciation expense increased by $3.3 million in 2018/19 year when compared to the 2017/18 actual as a result of the asset revaluation process conducted that year (budget for 2020/21 depreciation is $17,280,620 which is approximately a 28.50% increase on 2017/18 actual). The other ratio not achieved is the Own Source Revenue ratio. This ratio measures fiscal flexibility – the degree of reliance on external funding. A percentage under 60% means that Council relies on grant funding for operational budget purposes. This ratio is actually quite hard for most rural and small regional Councils to meet. In order to achieve this ratio, Council would need to see a large increase in its rating revenue or in fees and charges or an additional revenue stream. It should also be noted that Council has more than enough capacity to borrow funds if required. The Debt Service Cover ratio, which measures the number of times discretionary revenue can be used to repay loans, shows 14.48 times when compared to the industry benchmark of 2 times.

Ratio for Consolidated Council Benchmark 2021/22 Operating Performance > 0% (14.59%) Unrestricted Current Ratio > 1.5:1 2.43 Own Source Revenue >60% 46.59% Debt Servicing Cover Ratio > 2x 14.48 Rates and Annual Charges Outstanding < 10% 8.57% Cash Expense Cover Ratio > 3 Mths 14.83 Building and Infrastructure Renewal Ratio > 100% 143% Per Capita Operating Expenditure Contstant or Declining $4,235

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Community Submissions In preparation for the 2021/22 budget, Council undertook a community advertising process to ask the community for budget submissions. Council received four (4) submissions which are detailed as follows:

1. – Request for footpath and kerb & gutter around town Council’s 2021/22 budget includes $190,060 to install new footpaths in Mathoura, as well as $54,060 bike path for Mathoura to Picnic Point. 2. Professional art gallery run by an experienced curator This submission not included in the proposed 2021/22 budget. Council would need to consider all options in relation to this request. 3. Mathoura – Issue around unavailability of land for sale, raw water access, kerb and gutter needed around town and tourism advertising not including Mathoura Some of this request has been discussed by Council in previous meetings.

4. Drinking water stations at each public park in the Shire The proposed 2021/22 budget does not include any installation of drinking water stations. Such a proposal would need to be costed and based around park utilisation. It would not be unreasonable to expect cost to be around $3,000 to $5,000 per installation – factoring purchase of water station and installation as a guide.

STRATEGIC IMPLICATIONS 5 - Strategic Theme 5: Leadership and Governance 5.1 - An effective, efficient and progressive Council that provides leadership to the community 5.1.2 - Council acts in a financially responsible manner to ensure delivery of safe and sustainable services to the community

BUDGETARY IMPLICATIONS The budget has a draft deficit of ($839,514) which will result in a reduction in Council’s working capital.

POLICY IMPLICATIONS Nil.

LEGISLATIVE IMPLICATIONS Local Government Act 1993 (s) 402 - 406

RISK ANALYSIS • What can happen? The risks associated with this document includes: Financial; Reputation; and Non-compliance with legislative requirements. The risk assessment/rating process reveals the following risk ratings before and after control measures are implemented. Residual Risk After Adoption Likelihood Possible Unlikely Consequence Moderate Minor

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Risk Rating Medium Low

• How can it happen? Inadequate planning and budgeting. • What are the consequences of the event happening? Refer above. • What is the likelihood of the event happening? Refer above. • Adequacy of existing controls? Adequate. • Treatment options to mitigate the risk? Preparation of a fit for purpose Delivery Program, Operational Plan & Budget and Long-Term Financial Plan. Also, tracking various financial ratios to ensure they meet local government benchmarks.

CONCLUSION These documents set clear direction for the Council moving forward. The Delivery Program has been reviewed and updated to reflect the current goals and strategies of Council. The Operational Plan & Budget communicates to the community and other stakeholders how Council will achieve the Delivery Program goals/strategies and the Long-Term Financial Plan provides the community with an understanding of how Council will operate financially over the next ten years.

ATTACHMENTS 1. 2018-2022 Delivery Program - Revised (under separate cover) 2. 2021-2022 Annual Operational Plan ⇩ 3. 2021-2022 to 2024-2025 Four Year Capital Works Plan ⇩ 4. 2021-2022 to 2030-2031 Long Term Financial Plan - Draft (under separate cover)

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5.2.2 2021/22 REVENUE POLICY

File Number: - Author: Kris Kershaw, Assistant Manager Finance Authoriser: Terry Dodds, Chief Executive Officer

RECOMMENDATION 1. That Murray River Council makes and levies the following Ordinary rates in accordance with s.515, s.516 and s.518 of the Local Government Act 1993, as amended, for the 2021/2022 financial year being the 2.00% rate pegging limit increase on the 2020/2021 notional yield plus $0 of catch-up. Ordinary Rates No. of Ad Valorem Base Category: Farmland Minimum Rate Yield Assessments (Cents in $) Amount Farmland 1,811 $0.004747937 $277.55 Nil $5,401,200 Sub-Total 1,811 Nil $5,401,200

Category: No. of Ad Valorem Base Minimum Rate Yield Residential Assessments (Cents in $) Amount Residential Urban 3,397 $0.004747937 $277.55 Nil $2,545,319 Residential Non-Urban 1,912 $0.004747937 $277.55 Nil $2,441,509 Sub-Total 5,309 Nil $4,986,828

No. of Ad Valorem Base Category: Business Minimum Rate Yield Assessments (Cents in $) Amount Business Urban 377 $0.004747937 $277.55 Nil $337,059 Business Non-Urban 694 $0.004747937 $277.55 Nil $642,078 Sub-Total 1,071 Nil $979,137

Net Total 8,191 $11,367,165

2. That Murray River Council makes and levies the following Waste Management charges in accordance with s.496 and s.501(1) of the Local Government Act 1993, as amended, for the 2021/2022 financial year. Waste Management Charges – Greater Murray & Moama Areas Charge Domestic Service Occupied premises – Mathoura/Moama (140L waste & 240L recycle bins) $266.35 Green waste (Service entitled premises – fortnightly pick up) $97.17 Green waste (Pensioners and units) $54.60 Bunnaloo $266.35 $266.35 Additional waste 140L bin $153.86 Additional waste 240L bin $112.48 Rural waste (fortnightly pick up 240L waste & 240L recycle bins) $266.35 Commercial Service Occupied premises – Mathoura/Moama (140L waste & 240L recycle bins) $266.35 Additional waste 140L bin $153.86 Additional waste 240L bin $251.54 Additional recycle 240L bin $112.48 Access Charge Vacant properties – Unoccupied domestic waste charge $54.60 Vacant properties – Unoccupied commercial waste charge $54.60

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Waste Management Charges – Greater Wakool Area Charge Domestic Service WMS dual – standard service (120L waste & 240L recycle bins) $368.98 WMS dual – standard larger service (both 240L waste & recycle bins) $403.48 Additional dual - standard service (120L waste & 240L recycle bins) $368.98 Additional dual - standard larger service (120L waste & 240L recycle bins) $403.48 Additional waste 240L bin $283.37 Additional waste 120L bin $159.76 Additional recycle 240L bin $209.22 Access Charge Vacant properties – Unoccupied DWMS charge $50.14 Commercial Service WMS single – standard service (240L waste) $283.37 WMS dual – standard service (120L waste & 240L recycle bins) $368.98 WMS dual – standard larger service (both 240L waste & recycle bins) $403.48 Additional dual - standard service (120L waste & 240L recycle bins) $368.98 Additional dual - standard larger service (both 240L waste & recycle bins) $403.48 Additional waste 240L bin $283.37 Additional waste 120L bin $159.76 Additional recycle 240L bin $209.22

3. That Murray River Council makes and levies the following Water Supply charges in accordance with s.404(1) of the Local Government Act 1993, as amended, for the 2021/2022 financial year. Water Supply Charges – Shirewide Connections Charge Filtered Water Access Charges - Metered Connection Size – 20mm $302.09 Connection Size – 25mm $472.02 Connection Size – 32mm $773.35 Connection Size – 40mm $1,208.36 Connection Size – 50mm $1,888.06 Connection Size – 63mm $2,997.49 Connection Size – 75mm $4,248.14 Connection Size – 80mm $4,833.44 Connection Size – 100mm $7,552.25 Connection Size – 150mm $16,992.56 Raw Water Access Charges - Metered Connection Size – 20mm $114.07 Connection Size – 25mm $178.23 Connection Size – 32mm $292.02 Connection Size – 40mm $456.28 Connection Size – 50mm $712.94 Connection Size – 63mm $1,131.86 Connection Size – 75mm $1,604.11 Connection Size – 80mm $1,825.12 Connection Size – 100mm $2,851.75 Connection Size – 150mm $6,416.44 Water Supply Usage Charges Filtered Residential with Dual Supply =< 600 kilolitres $1.077 per kL Filtered Residential with Dual Supply > 600 kilolitres $1.620 per kL Filtered Residential with Single Supply =< 1,000 kilolitres $1.077 per kL Filtered Residential with Single Supply > 1,000 kilolitres $1.620 per kL Non-Residential $1.077 per kL North Barham Rural Pipeline (up to agreed allocation) $1.077 per kL North Barham Rural Pipeline (in excess of agreed allocation) $1.620 per kL

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Raw (untreated) Water – Permanent water restrictions apply $0.811 per kL Raw (untreated) Water – Stage 2 & 3 water restrictions apply $1.041 per kL Raw (untreated) Water – Stage 4 water restrictions apply $1.057 per kL

4. That Murray River Council makes and levies the following Sewerage charges in accordance with s.404(1) of the Local Government Act 199 for the 2021/2022 financial year. Sewerage Charges – Shirewide Connections Charge Residential Access Charges Connected $449.99 Unconnected (vacant land) $389.65 Connected (capital paid) $362.55 Business Access Charges Connection size - 20mm $323.81 Connection size - 25mm $505.14 Connection size - 32mm $828.93 Connection size - 40mm $1,295.23 Connection size - 50mm $2,023.80 Connection size - 63mm $3,212.16 Connection size - 75mm $4,552.71 Connection size - 80mm $5,180.91 Connection size - 100mm $8,095.16 Connection size - 150mm $18,214.10 Business Consumption Charge Consumption charge – per kilolitre $0.613 per kL Other Council owned retirement villages $229.22 Caravan Parks Not Connected to Water Supply $4,866.72 Septic Tank Pumpout Charge $74.16 Houseboats Occupied Mooring $49.85 Murray Downs Passenger Vessels Occupied Mooring 0-20 Persons $97.42 Murray Downs Passenger Vessels Occupied Mooring 21-50 Persons $146.16 Murray Downs Passenger Vessels Occupied Mooring 51-75 Persons $188.21 Murray Downs Passenger Vessels Occupied Mooring 76-100 Persons $239.11 Murray Downs Passenger Vessels Occupied Mooring 101-130 Persons $280.05

5. That Murray River Council makes and levies the following Stormwater Management charges in accordance with s.496A of the Local Government Act 1993 for the 2021/2022 financial year. Stormwater Drainage Charges – Greater Murray & Moama Areas Mathoura and Moama Charge Residential Non Strata – per assessment $25.00 Residential Strata – per assessment $12.50 Business Non Strata - per 350sqm or part thereof of the total assessment area. $25.00 Capped to a maximum of $400 Business Strata - per 350sqm or part thereof of the total assessment area. $12.50 Capped to a maximum of $200

Stormwater Drainage Charges – Greater Wakool Area Barham and Moulamein Residential Service Charge – Barham & Moulamein $25.00 Business – Lots with an area < 1,200sqm $25.00 Business – Lots with an area greater than 1,201 and below 5,000sqm $100.00 Business – Lots with an area greater than 5,001 and below 10,000sqm $375.00 Business – Lots with an area between 5,001 to 10,000sqm $725.00

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6. That the 6.00% maximum interest rate payable on overdue rates and charges, in accordance with s.563(3) of the Local Government Act 1993, as amended, determined by the Minister of Local Government is adopted for the 2021/2022 financial year. 7. That Murray River Council adopt the draft 2021/22 Fees and Charges, as specified in the Revenue Policy. 8. That Murray River Council approves the placement of the 2021/22 Revenue Policy, including Rates, Annual Charges and other Fees and Charges, on public exhibition for a period of 28 days.

BACKGROUND Council is required to prepare and adopt a Revenue Policy, which outlines the proposed 2021/22 rates, annual charges, and fees and charges. The Revenue Policy is required to be advertised for a period of 28 days before Council can do a final adoption. The Revenue Policy will be advertised along with Council’s Four-Year Delivery Program, 2021/22 Operational Plan & Budget and the Ten- Year Long Term Financial Plan.

DISCUSSION Under section 405 of the Local Government Act 1993, Council is required to adopt a Revenue Policy for the following financial year by 30 June each year. As part of the 2021/22 budget process, a water and sewer annual charges harmonisation process was undertaken with the aim of merging the former and Councils water and sewer structures into a single water and sewer structure. Waste annual charge has also commenced harmonisation of its charges. However, this process is expected to take up to three years (2021/22 to 2023/24) to align due to the large differences in charges between the two former shire councils. Movements in overall rates and annual charges are as follows; • Rates have been increased by the rate peg of 2.00%. • Water annual charges have been increased by 2.00%. • Sewer annual charges have been increased by 3.00%. • Waste annual charges have been increased by 8.50%. • Stormwater annual charges remain unchanged.

A review of fees and charges has seen, on average, an increase of between 2.00% to 3.00%. Some fees have not increased at all and this can be due for reasons mainly relating to affordability or statutory. Fees and charges are a combination of statutory, partial cost recovery and full cost recovery: • Statutory fees are set by government legislation and cannot be amended by Council. • Partial cost recovery fees are those fees where every resident can access the service and Council only charges a partial fee to enable fair, affordable and equitable access for all residents. • Full cost recovery fees are charged at the cost to Council and are based on a user pays system.

STRATEGIC IMPLICATIONS 5 - Strategic Theme 5: Leadership and Governance 5.1 - An effective, efficient and progressive Council that provides leadership to the community

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5.1.2 - Council acts in a financially responsible manner to ensure delivery of safe and sustainable services to the community

BUDGETARY IMPLICATIONS The adoption of the 2021/22 Revenue Policy, including rates, annual charges and fees and charges allows Council to levy rates and annual charges in accordance with budget expectations.

POLICY IMPLICATIONS Nil

LEGISLATIVE IMPLICATIONS Local Government Act Sections (404,494,496,501,515,516,518, 533 – 535)

RISK ANALYSIS • What can happen? The risks associated with the adoption of the rates and annual charges includes: Financial; Reputation; and Non-compliance with legislative requirements. The risk assessment/rating process reveals the following risk ratings before and after control measures are implemented. Residual Risk After Adoption Likelihood Likely Unlikely Consequence Moderate Minor Risk Rating Medium Low

• How can it happen? Refer above • What are the consequences of the event happening? Refer above • What is the likelihood of the event happening? Refer above • Adequacy of existing controls? Adequate. • Treatment options to mitigate the risk? Preparation of a fit for purpose operating plan and budget.

CONCLUSION The 2021/22 Revenue Policy, including rates, annual charges and fees and charges is required to be adopted by resolution of the Council prior to 30 June 2021.

ATTACHMENTS 1. 2021-2022 Revenue Policy Including Fees and Charges (under separate cover)

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5.2.3 MURRAY RIVER ENERGY REVIEW REPORT

File Number: - Author: Sandra Gordon, Manager Risk Authoriser: Terry Dodds, Chief Executive Officer

RECOMMENDATION That: In the Audit & Risk Committee’s opinion, there is sufficient evidence from Centium’s report of seriously important, outstanding questions to warrant referral to ICAC & NSW Police as authorities with the power to investigate thoroughly the MRE development, in particular the flow of MRC loan moneys to end beneficiaries.

BACKGROUND In November 2017, the then CEO of Murray River Council was approached by the proponent to transfer the ethanol plant project from to Murray River Council. The chronology in the Centium report details the key events and dates that relate to the MRE project.

DISCUSSION At the August Council Meeting, on the recommendation of the Audit & Risk Committee, MRC resolved that a review of the MRE economic development proposal be undertaken. A Terms of Reference was developed and went out to tender. Centium was the successful tenderer. The draft review report was received by Council on the 27 April 2021. The Audit & Risk Committee met on the 30 April 2021, with Centium, to consider the report. The draft minutes of that meeting will be provided. Council also sought an opinion from Maddocks on the potential risks of legal action, in particular defamation, if the contents of the report are published in any way.

STRATEGIC IMPLICATIONS 4 - Strategic Theme 4: Economic Growth 4.1 - Encourage and support economic development across a range of sectors 4.1.3 - Identify new opportunities and actively encourage investment in agriculture, agribusiness, value added manufacturing, alternate and renewable energy, health, wellbeing, aged care, and education

BUDGETARY IMPLICATIONS Although council has a First Mortgage as security for the loan, the process of securing the return of the funds will not commence until 10 May and will be subject to legal processes. Legal costs for action/s.

POLICY IMPLICATIONS Many of Council’s policies should be considered and reviewed in relation to the MRE review report. In particular: - Economic Development Assistance Policy - Business Ethics Policy

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MURRAY RIVER COUNCIL Extraordinary Council Meeting Agenda 13 May 2021

- Code of Conduct Policy - Media Relations Policy

LEGISLATIVE IMPLICATIONS Potential breach of: - Local Government Act 1993 Investment Order - Independent Commission Against Corruption Act 1988 (ICAC) - Local Government Act 1993 No 30 – particularly Section 356(2)

RISK ANALYSIS • What can happen? As listed in the Centium report – the risks to Council are considerable – page 40 outlines legal risks, reputational risks, regulatory risks added to the financial risks. • How can it happen? Not following good governance procedures – undertaking a business case, getting outside probity checks, recognised processes for payments etc. • What are the consequences of the event happening? As listed above – legal, reputational, regulatory, and financial consequences • What is the likelihood of the event happening? If procedures and processes are not aligned to best practice, high. • Adequacy of existing controls? Inadequate • Treatment options to mitigate the risk? Consider and action the recommendations of the Centium report. Seek advice from a Probity Advisor to install procedures within the Project Management Framework. Compliance with findings of the (about to commence) Section 430 Investigation. Review the high-level ‘gateway’ processes such that they align with the Local Government Act Other treatments as determined during the above procedural reviews.

CONCLUSION Council consider/action the recommendations detailed in the Centium report and that of the Audit and Risk Committee. That Council should heed the advice received from Maddocks Lawyers in regard to the considerable risks to Council if this report is released publicly. ATTACHMENTS to be handed out at meeting: 1. Centium Report - MRE 2. Audit & Risk Committee Minutes - Extraordinary Meeting Held on the 30 April 2021 3. Email - Maddocks - Legal Advice

ATTACHMENTS Nil

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MURRAY RIVER COUNCIL Extraordinary Council Meeting Agenda 13 May 2021

5.3 DIRECTOR OPERATIONS AND MAJOR PROJECTS REPORT AND SUPPLEMENTARY MATTERS

Nil

5.4 DIRECTOR PLANNING AND ENVIRONMENT REPORT AND SUPPLEMENTARY MATTERS

Nil

5.5 DIRECTOR CUSTOMER AND COMMUNITY SERVICES REPORT AND SUPPLEMENTARY MATTERS

5.6 CORRESPONDENCE REPORT

Nil

5.7 SUNDRY DELEGATES REPORT

Nil

6 BIRTHS AND CONDOLENCES

7 CLOSE OF MEETING

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