NSW DEPARTME N T OF LOCA NSW DEPARTMENT OF LOCAL GOVERNMENT ANNUAL REPORT 2005–06 L GOVER N ME N T · ANNU A L REPO hjhiV^cVWaZ X]Vc\Z R T 2005–06 hjhiV^cVWaZ X]Vc\Z hjhiV^cVWaZ X]Vc\Z hjhiV^cVWaZ hjhiV^cVWaZOur charter To foster a strong and sustainable local X]Vc\Z governmentX]Vc\Z sector that meets changing community needs. Our values As a department we value… l Effective communication—We will consult and collaborate with each other and our stakeholders. l Fairness and equity—We will be open and honest and respectful of those we deal with. l Leadership—We will lead by example and encourage continuous improvement. l People—We will recognise, support and encourage effective working partnerships. l Integrity—We will behave in an ethical manner. About the NSW Department of Local Government The NSW Department of Local Government's role is to provide a policy and legislative framework for the local government sector. hjhiV^cVWaZ We are principally a policy and regulatory agency, acting as a central agency for local government with a key role in managing the relationship between councils and the state government. We are responsible for the overall legal, management X]Vc\Z and financial framework of the local government sector. Our operating relationships are with state organisations, councils and peak organisations that represent councils and their various constituent interests. This includes the Local Government and Shires Associations (LGSA) which are the main representatives of councils in both political and employer arrangements, as well as the various professional organisations and unions that represent groups of local government employees. 2005–06 focus l Reforming local government l Advising government l Building relationships and communicating effectively l Driving success hjhiV^cVWaZ X]Vc\Z hjhiV^cVWaZ X]Vc\Z hjhiV^cVWaZ X]Vc\Z Operating environment Contents Local government is a $6 billion industry DIRECTOR GENERAL’S FOREWORd 2 in NSW and councils collect $2 billion in FIVE YEAR STATISTICS 4 rates. Efficient councils are essential for the wellbeing of ratepayers and residents OUR KEY ACHIEVEMENTS FOR 2005–06 5 hjhiV^cVWaZ hjhiV^cVWaZacross NSW. OUR PERFORMANCE IN 2005–06 21 There are currently 152 general purpose OUR PEOPLE AND OUR RESOURCES 69 councils and 14 county councils in NSW. OUR FINANCIAL MANAGEMENT 107 While councils are largely autonomous X]Vc\Z X]Vc\Zbodies, accountable to their electors, INDEX 164 they are subject to state control in certain NSW COUNCILS 166 areas of their administration. They are governed by the Local Government Act 1993 and also administer a large number of provisions in other legislation. Principal legislation l Local Government Act 1993—sets the framework for the system of local government in NSW l Companion Animals Act 1998— provides for responsible pet ownership Letter of submission October 2006 The Hon. Kerry Hickey MP Available resources Minister for Local Government Dear Minister At 30 June 2006, we had: I am pleased to present the annual report of the Department of Local Government for the year ended June 2006 in accordance l 64 equivalent full time staff (66 as at with the Annual Reports (Departments) Act 1985. 30 June 2005) The annual report includes the operations of the NSW Local Government Boundaries Commission, the NSW Local Government Grants Commission and the Local Government l processed 1107 complaints about Pecuniary Interest and Disciplinary Tribunal, all of which were established under the Local Government Act 1993. The Tribunal councils (1105 during 2004–05) reports separately on matters determined during the year. Yours sincerely l undertaken 1 investigation (into Kyogle Council) and 2 public inquiries (into Tweed Shire Council Garry Payne hjhiV^cVWaZ and Brewarrina Shire Council). Director General X]Vc\Z hjhiV^cVWaZ X]Vc\Z hjhiV^cVWaZ X]Vc\Z Director General’s foreword This year we have continued to work hard to promote a strong and sustainable local government sector and encourage positive improvements in councils across New South Wales. We have also been involved in a range of initiatives at a state and federal level. Reforming and advising In 2005–06 we completed a further nineteen promoting better practice reviews and provided practical advice to councils on a range of governance, financial and regulatory issues. The reviews have been well received by the sector and are providing valuable intelligence on council performance. Another key emphasis has been encouraging councils to plan strategically to meet future challenges such as asset management, financial viability, the ageing population, skills shortages and environmental issues. We have continued to monitor and support the 22 new councils created as a result of the local government reform program, and encouraged them to improve the level and range of services they provide. We are also considering a range of cooperative models of local government, including strategic alliances and resource sharing, and hosted a conference in May 2006 to encourage councils to explore these models. I am confident that the local government reform program is providing positive benefits to local communities. Making legislative changes This year we introduced new legislation to more effectively manage a range of issues affecting local government such as pecuniary interests, the valuation of land and water rights, waste removal and dangerous dogs. The amendments to the Companion Animals Act give councils and the courts stronger powers and penalties to help minimise the risk that restricted and dangerous dogs pose to members of our community, especially children. As part of our response to the recommendations of the Tweed Shire Council public inquiry, we have prepared standard contracts for general managers and senior staff and implemented new mechanisms to deal with any serious misbehaviour by councillors. Promoting change through education Our Safe Pets Out There or SPOT program has been developed in partnership with a number of key companion animal organisations. It is a national first, both in terms of the program itself and the level of cooperation between stakeholders. It will teach young children about animal welfare, safe behaviour around dogs and responsible pet ownership, and should be delivered to every 5–7 year old school child in NSW over the next three years. We have also started to prepare a compulsory councillor training program to be delivered to all new councillors after the next local government elections in 2008. This program was initiated in response to a key recommendation of the public inquiry into Brewarrina Shire Council, completed in December 2005. NSW Department of Local Government Developing our staff Training our staff on core aspects of working for government has continued to be an important focus this year, as well as the development of a project to improve the quality and turn around time of our correspondence. We also completed our management development program. Next year we plan to conduct an internal governance ‘health check’ of statutory requirements and best practice, commence a leadership development program for staff interested in entering management roles in future, and implement our correspondence project to make sure we communicate more effectively with all our stakeholders. Planning for the future In 2006–07 we will continue to promote performance improvement in all councils throughout the state to help them to better meet the changing needs of their communities. Some key areas we plan to work on are investigating incentives for the structural reform of councils, encouraging councils to work on long term financial planning and asset management, reviewing the Swimming Pools Act, conducting an audit of pecuniary interest returns and issuing guidelines on councillor expenses. I am confident that these and the many other initiatives we have planned for 2006–07 will help to achieve sustainable changes in the local government sector. I would like to thank my staff for their hard work and support this year and look forward to working with them to meet the challenges of the year ahead. Garry Payne AM Director General About this report Our theme for this year’s annual report is sustainable change. In the first section of the report we outline some of our achievements in 2005–06 in four key areas—reform, public private partnerships, companion animals, and investigations and inquiries. In the next section, we report on our performance against our four corporate objectives under the following headings—reforming local government, advising local government, building relationships and communicating effectively, and driving success. We then explain the work we have done developing our people and managing our resources. The final section of the report includes our audited financial statements. hjhiV^cVWaZ X]Vc\Z hjhiV^cVWaZ hjhiV^cVWaZ X]Vc\Z X]Vc\Z hjhiV^cVWaZ X]Vc\Z Annual Report 2005–06 hjhiV^cVWaZ X]Vc\Z hjhiV^cVWaZ X]Vc\Z Five year statistics 001–02 00–0 00–0 00–05 005–06 Local government sector characteristics Councils (number) 173 172 153 152 152 Councillors (number) 1743 1758 1755 1482 1518 County Councils (number) 20 20 16 14 14 Financial assistance grants million ($) 452 471 484 500 520 total council entitlements Pensioner rebate payments made to councils million ($) 72 74 73 73 73 Rating Rate peg limit (%) 2.8 3.3 3.6 3.5 3.5 Applications for special variations received (number) 27 30 23 25 46 Applications for special variations (number) 10 14 14 22 31 approved as submitted Investigations