C-1

C Special schedules

Requirements

Councils must prepare the following special schedules:

Schedule 1 – Net cost of services

Schedule 2(a) – Statement long term debt

Schedule 2(b) – Statement of internal loans

Schedule 3 – Water supply operations

Schedule 4 – Water supply - net assets committed

Schedule 5 – Sewerage service operations

Schedule 6 – Sewerage service - net assets committed

Schedule 7 – Report on Infrastructure Assets

Schedule 8 – Financial projections

Schedule 9 Permissible Income

Schedule 1-7 and 9 must be submitted to the Office by no later than the close of business 31st of October.

The special schedules have been designed to meet the requirements of special purpose users such as the NSW Grants Commission, the Australian Bureau of Statistics (ABS), the NSW Office of Water (NOW) and the Office of Local Government (OLG). The financial data is collected for various uses including the allocation of Financial Assistance Grants, incorporation in national statistics, monitoring of loan approvals, allocation of borrowing rights and monitoring of financial activities of specific services.

Schedule 1 is required by the Grants Commission and must be provided after eliminating all internal transactions such as rates raised by the general fund on water and sewerage functions and administration costs charged by one function in servicing another. Data from this schedule is also used by ABS.

Councils should be aware that several line items (swimming pools, aerodromes and street lighting) within Special Schedule 1 play a significant role in the calculation of a Council’s grant allocation. Accordingly, councils should ensure that this data is accurate and is correctly transposed into the annual electronic Financial Data Collection Return. Otherwise, the grant allocation could be adversely affected.

Schedule 1 must be prepared on a consolidated basis “net of internal transactions”.

Schedule 2 (a) and (b) is required by the OLG, for monitoring loan allocations and their use.

Schedules 3 to 6 inclusive are collected by the OLG primarily on behalf of NOW. The financial information specifically relates to water and sewerage services and must be provided on a gross basis - inclusive of internal receipts and charges. Some guidelines to assist in the completion of special schedules 3 & 5 follow special schedule 6.

Schedules 3 to 6 must be prepared on a gross basis inclusive of internal transactions.

C-2

Schedule 7 - The Report on Infrastructure Assets provides information on a council’s assets in addition to that contained in Note 9 - Infrastructure, Property, Plant and Equipment. The nature of the information in the Report on Infrastructure Assets is related to the condition, maintenance and renewal of infrastructure assets.

The format of SS7 is mandatory. Detailed commentary has been provided to assist councils in completing the Schedule.

Included within the commentary is information on the auditing of infrastructure asset information. Councils should read this along with Circulars on this topic to familiarise themselves with the process.

Schedule 8 has been removed from the Financial Statements. Financial trend data will be collected via the Financial Data Return.

Schedule 9 - The purpose of Special Schedule 9 is to report the permissible income for the previous year and for the forward year. The permissible income is calculated in accordance with the rate-peg limit and/or other adjustments in accordance with the Act and appropriate approvals by IPART or the Minister. SS9 calculates any excess or catch-up results from the forward looking permissible income and the carry forward total amount. The data in SS9 is derived from Schedule 3 in the Special Schedule 9 Permissible Income Workpapers. This Schedule is required to be audited in conjunction with the Financial Statements and the necessary audit report included.

C-3

NSW Council

Special schedules for the year ended 2015

Contents

Page Special Schedules (Not Audited)

Special Schedule No. 1 Net cost of services C-4

Special Schedule No. 2(a) Statement of long-term debt (all purpose) C-7

Special Schedule No. 2(b) Statement of internal loans (Section 410(3) LGA 1993) C-8

Special Schedule No. 3 Water Supply Income Statement C-9

Special Schedule No. 4 Water Supply – Statement of Financial Position C-12

Special Schedule No. 5 Sewerage Income Statement C-13

Special Schedule No. 6 Sewerage service – Statement of Financial Position C-17

Special Schedule No. 7 Report on Infrastructure Assets C-18

Special Schedule No. 8 Financial Projections C-23

Special Schedule No. 9 Permissible Income Calculation C-24

C-4

NSW Council

Special Schedule No. 1 Net cost of services for the year ended 2015 $’000

Function or Activity

Expenses from

continuing operations

Income from continuing operations

(non capital)

Income from continuing operations

(capital) Net cost of

services

$'000 $'000 $'000 $'000

Governance

Administration

Public Order & Safety

Fire Service Levy, Fire protection, Emergency services

Beach Control

Enforcement of Regs

Animal Control

Other

Total Public Order & Safety

Health

Environment

Noxious Plants and Insect/Vermin control

Other Environmental Protection

Solid Waste Management

Street Cleaning

Drainage

Stormwater Management

Total Environment

Community Services & Education

Administration & Education

Social protection (welfare)

Aged Persons and Disabled

Children’s Services

Total Community Services & Education

Housing & Community Amenities

Public Cemeteries

Public Conveniences

Street Lighting

Town Planning

Other Community Amenities

Total Housing & Community Amenities

Water Supplies

Sewerage Services

C-5

Net cost of services (continued)

Function or Activity

Expenses from

continuing operations

Income from continuing operations

(non capital)

Income from continuing operations

(capital) Net cost of

services

$'000 $'000 $'000 $'000

Recreation & Culture

Public Libraries

Museums

Art Galleries

Community Centres and Halls

Performing Arts Venues

Other Performing Arts

Other Cultural Services

Sporting Grounds and Venues

Swimming Pools

Parks & Gardens (Lakes)

Other Sport & Recreation

Total Recreation & Culture

Fuel & Energy

Agriculture

Mining, Manufacturing & Construction

Building Control

Other Mining, Manufacturing & Construction

Total Mining, Manufacturing & Construction

Transport & Communication

Urban Roads (UR) - Local

Urban Roads - Regional

Sealed Rural Roads (SRR) - Local

Sealed Rural Roads (SRR) - Regional

Unsealed Rural Roads (URR) - Local

Unsealed Rural Roads (URR) - Regional

Bridges on UR - Local

Bridges on SRR - Local

Bridges on URR - Local

Bridges on Regional Roads

Parking Areas

Footpaths

Aerodromes

Other Transport & Communication

Total Transport & Communication

Economic Affairs

Camping Areas and Caravan Parks

Other Economic Affairs

Total Economic Affairs

Totals – Functions

General Purpose Revenues(2)

Share of interests in joint ventures and associates using the equity method(1)

Net operating result for the year(1)

Notes: (1) As reported on the Income statement. (2) The definition of general purpose income for the purposes of disclosure in Note 2 (a) is the aggregation of specific income i tems disclosed

in Note 3 viz., ordinary rates, general purpose untied grants, interest on (overdue rates and annual charges, internally restricted assets and general council cash and investments) and ex-gratia rates.

C-6

Commentary – Special Schedule 1

Special Schedule 1 is required by the ABS and the Grants Commission and must be provided after eliminating all internal transactions such as rates raised by the general fund on water and sewerage functions and administration costs charged by one function in servicing another.

Council should be aware that the Schedule has been amended and several line items have been moved and grouped, but still play an important role in the calculation of a Council’s grant allocation. Councils should ensure this schedule is completed accurately as follows:

Function/Activity

Governance - costs relating to the Council’s role as a component of democratic government including elections, members fees and expenses, subscriptions to local authority associations, meetings of council and policy making committees, public disclosure (e.g. GIPA) and legislative compliance

Administration – includes corporate support and other support services, engineering works and any council policy compliance. Health –includes Immunisation, food control. Health centres and other Environment – includes noxious plants and insect vermin control, other environmental protection, solid waste management include domestic waste other waste management, other sanitation and garbage, street cleaning, drainage and stormwater management Community Services and Education – Administration and education , social protection (welfare), migrant, aboriginal and other community services and administration, youth services, does not include accommodation, aged persons and disabled, children’s’ services including family day care, child care, other family and children Housing and Community Amenities – Public cemeteries, public conveniences, street lighting, town planning, other community amenities including housing development, accommodation for family and children, aged, disabled, migrants and aboriginal persons Water – water services Sewerage – sewer services Recreation & Culture – Public libraries, museums, art galleries, community centres and halls including public halls, performing arts venues, other cultural services, sporting grounds and venues, swimming pools, parks, gardens, lakes, other sport and recreation Fuel & Energy – includes gas supplies Agriculture – Admin of agricultural services, supervision and regulation of the agricultural industry, operation of flood control and irrigation systems, operation of support services to farmers including vet services, pest control services, crop inspection and crop grading services Mining, Manufacturing & Construction – Building control, quarries & pits, mineral resources, abattoirs and other Transport and Communication – Urban local, urban regional, sealed, unsealed roads, bridges, footpaths, parking areas, aerodromes, other transport and communication Economic Affairs – camping areas and caravan parks, tourism & area promotion, industrial development promotion, saleyards & markets, real estate development, commercial nurseries and other business undertakings

C-7

NSW Council

Special Schedule No. 2(a) Statement of long-term debt (all purpose) for the year ended 2015

($’000)

Classification of debt

Principal outstanding at beginning of

year(1) New loans

raised during the

year(2)

Debt redemption during the

year(3)

Transfers to sinking funds

Interest applicable

for year

Principal outstanding at end of year

Current Non-current Total From

revenue Sinking funds Current(4)

Non-current(5) Total

Loans (by source)

Commonwealth Government

Treasury Corporation

Other State Government

Public Subscription

Financial Institutions

Other

Total loans

Other long term debt

Ratepayers’ Advances

Government Advances

Finance Leases

Deferred payment

Total long term debt

Exclude: Internal Loans and refinancing of loans except for any additional borrowings. Please check that for each debt line category: Principal Outstanding (previous year) + New Loans Raised – Debt Redemption = Principal Outstanding (current year).

(1) Show same values as reported for last year’s closing balances. If values are different, please provide reason for variation. (2) Values should agree with Proceeds from Loans and Other Borrowings shown on the Cash Flow Statement (Financing Activities). (3) Values should agree with Reduction of Loans and Other Liabilities shown on the Cash Flow Statement (Financing Activities).

(4) Total should agree with Current Liabilities – Borrowings (Statement of Financial Position). (5) Total should agree with Non-Current Liabilities – Borrowings (Statement of Financial Position).

Note:

This Schedule is to be completed on the same basis as in previous years. Discounts or premiums recognised on initial loan raising and unwinding of those discounts or premiums is excluded.

C-8

NSW Council

Special Schedule No. 2(b) Statement of internal loans (Section 410(3) LGA 1993) for the year ended 2015 ($’000)

Summary of internal loans

Borrower (by purpose) Amount originally raised

Total repaid during the year Principal and interest

Principal outstanding At end of year

General

Water

Sewerage

Domestic Waste Management

Other

Totals

The summary of internal loans (see above) represents the total of Councils’ internal loans categorised according to the purpose of the borrower. Councils must also provide details of each individual internal loan, including identification of the borrower and lender (by purpose), in the format provided below and attach to this schedule.

Details of Individual Internal Loans

Borrower (by purpose)

Lender (by purpose)

Date of Minister’s approval Date raised

Term Years

Dates of maturity

Rate of interest

Amount originally

raised

Total repaid during the year Principal and

interest

Principal outstanding at

end of year

Totals

C-9

NSW Council

Special Schedule No. 3 Water Supply Income Statement (Gross including Internal Transactions) for the year ended 2015 ($’000) 2015 2014

A Expenses and Income Expenses

1 Management expenses

a. Administration

b. Engineering and Supervision

2 Operation and Maintenance

- Dams and Weirs

a. Operation expenses

b. Maintenance expenses

- Mains

c. Operation expenses

d. Maintenance expenses

- Reservoirs

e. Operation expenses

f. Maintenance expenses

- Pumping Stations

g. Operation expenses (excluding energy costs)

h. Energy costs

i. Maintenance expenses

- Treatment

j. Operation expenses (excluding chemical costs)

k. Chemical costs

l. Maintenance expenses

- Other

m. Operation expenses

n. Maintenance expenses

o. Purchase of water

3. Depreciation

a. System assets

b. Plant and equipment

4. Miscellaneous expenses

a. Interest expenses

b. Revaluation decrements

c. Other expenses

d. Impairment system assets

e. Impairment plant and equipment

f. Aboriginal Communities Water & Sewerage Program

5. Total expenses

Income

6. Residential charges a. Access (including rates)

b. Usage charges

7. Non-residential charges

a. Access (including rates)

b. Usage charges

8. Extra charges

9. Interest income

10. Other income

10a Aboriginal Communities Water and Sewerage Program

11. Grants

a. Grants for acquisition of assets

b. Grants for pensioner rebates

c. Other grants

C-10

NSW Council

Special Schedule No. 3 (continued)

Water Supply Income Statement (Gross including Internal Transactions) for the year ended 2015 $’000 2015 2014

A Expenses and Income (continued)

Income

12. Contributions

a. Developer charges

b. Developer provided assets

c. Other contributions

13. Total income

14. Gain or loss on disposal of assets

15. Operating result

15a. Operating result (less grants for acquisition of assets)

B Capital transactions

Non-operating expenditures

16. Acquisition of Fixed Assets

a. New assets for Improved Standards

b. New assets for Growth

c. Renewals

d. Plant and equipment

17. Repayment of debt

a. Loans

b. Advances

c. Finance leases

18. Transfer to sinking fund

19. Totals

Non-operating funds employed

20. Proceeds from disposal of assets

21. Borrowing utilised

a. Loans

b. Advances

c. Finance leases

22. Transfer from sinking fund

23. Totals

C Rates and charges

24. Number of assessments

a. Residential (occupied)

b. Residential (unoccupied ie vacant lot)

c. Non-residential (occupied)

d. Non-residential (unoccupied ie vacant lot)

25. Number of ETs for which developer charges were received ET

26. Total amount of pensioner rebates $

C-11

NSW Council

Special Schedule No. 3 (continued)

Water Supply – Cross-subsidies

as at 30 June 2015 $’000 Yes No Amount

D Best practice annual charges and developer charges#

27. Annual charges

a. Does Council have best-practice water supply annual charges and usage charges*?

If Yes, go to 28a.

If No, please report if council has removed land value from access charges (ie rates)?

* Such charges for both residential customers and non-residential customers comply with section 3.2 of Water Supply, Sewerage and Trade Waste Pricing Guidelines, NSW Office of Water, December, 2002. Such charges do not involved significant cross-subsidies.

b. Cross-subsidy from residential customers using less than allowance (page 25 of Guidelines)

c. Cross-subsidy to non-residential customers (page 24 of Guidelines)

d. Cross-subsidy to large connections in unmetered supplies (page 26 of Guidelines)

28. Developer charges

a. Has council completed a water supply Development Servicing** Plan?

b. Total cross-subsidy in water supply developer charges for 2014/15 (page 47 of Guidelines)

** In accordance with page 9 of Developer Charges Guidelines for Water Supply, Sewerage and Stormwater, NSW Office of Water, December, 2002.

29. Disclosure of cross-subsidies

Total of cross-subsidies (27b +27c + 27d + 28b)

# Councils which have not yet implemented best practice water supply pricing should disclose cross-subsidies in items 27b, 27c and 27d above.

However, disclosure of cross-subsidies is not required where a Council has implemented best practice pricing and is phasing in such pricing over a period of three years.

C-12

NSW Council

Special Schedule No. 4 Water Supply – Statement of Financial Position (Gross including Internal Transactions) as at 30 June 2015 $’000 Current Non current Total

ASSETS

30. Cash and investments

a. Developer charges

b. Special purpose grants

c. Accrued leave

d. Unexpended loans

e. Sinking fund

f. Other

31. Receivables

a. Specific purpose grants

b. Rates and charges

c. User charges

d. Other

32. Inventories

33. Property, plant and equipment

a. System assets

b. Plant and equipment

34. Other assets

35. Total assets

LIABILITIES

36. Bank overdraft

37. Creditors

38. Borrowings

a. Loans

b. Advances

c. Finance leases

39. Provisions

a. Tax equivalents

b. Dividend

c. Other

40. Total liabilities

41. Net assets committed

EQUITY

42. Accumulated surplus

43. Asset revaluation reserve

44. Total equity

Note to system assets:

45. Current replacement cost of system assets

46. Accumulated current cost depreciation of system assets

47. Written down current cost of system assets

C-13

NSW Council

Special Schedule No. 5 Sewerage Income Statement (Gross including Internal Transactions) as at 30 June 2015 ($’000) 2015 2014

A Expenses and Income Expenses

1. Management expenses

a. Administration

b. Engineering and Supervision

2. Operations and Maintenance Expenses

- Mains

a. Operation expenses

b. Maintenance expenses

- Pumping Stations

c. Operation expenses (excluding energy costs)

d. Energy costs

e. Maintenance expenses

- Treatment

f. Operation expenses (excluding chemical, energy, effluent and biosolids management costs)

g. Chemical costs

h. Energy costs

i. Effluent management

j. Biosolids management

k. Maintenance expenses

- Other

l. Operation expenses

m. Maintenance expenses

3. Depreciation

a. System assets

b. Plant and equipment

4. Miscellaneous

a. Interest expenses

b. Revaluation decrements

c. Other expenses

d. Impairment of system assets

e. Impairment of plant and equipment

f. Aboriginal Communities Water and Sewerage Program

5. Total expenses

Income

6. Residential charges (including rates)

7. Non-residential charges

a. Access (including rates)

b. Usage charges

8. Trade Waste Charges

a. Annual fees

b. Usage fees

c. Excess mass charges

d. Re-inspection fees

9. Extra charges

10. Interest income

11. Other income

11a. Aboriginal Communities Water and Sewerage Program

12. Grants

a. Grants for acquisition of assets

b. Grants for pensioner rebates

c. Other grants

C-14

NSW Council

Special Schedule No. 5 (continued)

Sewerage Income Statement (Gross including Internal Transactions) as at 30 June 2015 $’000

2015 2014

A Expenses and Income (continued)

Income

13. Contributions

a. Developer charges

b. Developer provided assets

c. Other contributions

14. Total income

15. Gain or loss on disposal of assets

16. Operating result

16a. Operating result (less grants for acquisition of assets)

B Capital transactions

Non-operating expenditures

17. Acquisition of Fixed Assets

a. New assets for Improved Standards

b. New assets for Growth

c. Renewals

d. Plant and equipment

18. Repayment of debt

a. Loans

b. Advances

c. Finance leases

19. Transfer to sinking fund

20. Totals

Non-operating funds employed

21. Proceeds from disposal of assets

22. Borrowing utilised

a. Loans

b. Advances

c. Finance leases

23. Transfer from sinking fund

24. Totals

C Rates and charges

25. Number of assessments

a. Residential (occupied)

b. Residential (unoccupied ie vacant lot)

c. Non-residential (occupied)

d. Non-residential (unoccupied ie vacant lot)

26. Number of ETs for which developer charges were received ET

27. Total amount of pensioner rebates $

C-15

NSW Council

Special Schedule No. 5 (continued)

Sewerage – Cross-subsidies

as at 30 June 2015 $’000

Yes No Amount

D Best practice annual charges and developer charges#

28. Annual charges

a. Does Council have best-practice sewerage annual charges, usage charges and trade waste fees and charges*?

If Yes, go to 29a.

If No, please report if council has removed land value from access charges (ie rates)?

* Such charges for both residential customers and non-residential customers comply with sections 4.2 and 4.3 of Water Supply, Sewerage and Trade Waste Pricing Guidelines, NSW Office of Water, December, 2002. Such charges do not involved significant cross-subsidies.

b. Cross-subsidy to non-residential customers (page 45 of Guidelines)

c. Cross-subsidy to trade waste discharges (page 46 of Guidelines)

29. Developer charges

a. Has council completed a sewerage Development Servicing** Plan?

b. Total cross-subsidy in sewerage developer charges for 2014/15 (page 47 of Guidelines)

** In accordance with page 9 of Developer Charges Guidelines for Water Supply, Sewerage and Stormwater, NSW Office of Water, December, 2002.

30. Disclosure of cross-subsidies

Total of cross-subsidies (28b +28c + 29b)

# Councils which have not yet implemented best practice sewerage pricing and liquid trade waste pricing should disclose cross-subsidies in items 28b and 28c above.

However, disclosure of cross-subsidies is not required where a Council has implemented best practice sewerage and liquid trade waste pricing and is phasing in such pricing over a period of three years.

C-16

Notes to Special Schedules 3 and 5 Administration(1) (item 1a of Special Schedules 3 and 5) comprises the following:

Administration staff:

Salaries and allowance

Travelling expenses

Accrual of leave entitlements

Employment overheads.

Meter reading.

Bad and doubtful debts.

Other administrative/corporate support services. Engineering and supervision(1) (item 1b of Special Schedules 3 and 5) comprises the following:

Engineering staff:

Salaries and allowance

Travelling expenses

Accrual of leave entitlements

Employment overheads.

Other technical and supervision staff:

Salaries and allowance

Travelling expenses

Accrual of leave entitlements

Employment overheads. Operation expenses (item 2 of Special Schedules 3 and 5) comprise the day to day operational expenses

excluding maintenance expenses.

Maintenance expenses (item 2 of Special Schedules 3 and 5) comprise the day to day repair and maintenance expenses. (Refer to Section 5 of the Local Government Asset Accounting Manual regarding capitalisation principles and the distinction between capital and maintenance expenditure).

Other expenses (item 4c of Special Schedules 3 and 5) include all expenses not recorded elsewhere.

Impairment losses (items 4d and 4e of Special Schedules 3 and 5) are to be used when the carrying amount of

an asset exceeds its recoverable amount (refer to page D-31).

Aboriginal Communities Water and Sewerage Program (item 4f of Special Schedules 3 and 5) is to be used when operation and maintenance work has been undertaken on behalf of the Aboriginal Communities Water and Sewerage Program. Similarly, income for item 11a of Special Schedule 3 and item 12a of Special Schedule 5 are for services provided to the Aboriginal Communities Water and Sewerage Program and is not part of Council’s water supply and sewerage revenue.

Revaluation decrements (item 4b of Special Schedules 3 and 5) is to be used when infrastructure assets have

decreased in fair value.

Residential charges (2) (items 6a, 6b and item 6 of Special Schedules 3 and 5 respectively) include all income from residential charges. Item 6 of Schedule 3 should be separated into 6a Access Charges (including rates if applicable) and 6b User Charges. Exclude non-residential charges.

Non-residential charges(2) (items 7a, 7b of Special Schedules 3 and 5) include all income from non-residential charges separated into 7a Access Charges (including rates if applicable) and 7b User Charges. Exclude residential charges.

Trade waste charges (item 8 of Special Schedule 5) include all income from trade waste charges separated into

8a Annual Fees, 8b Usage Charges, 8c Excess Mass Charges and 8d Re-inspection Fees.

Other income (items 10 and 11 of Special Schedules 3 and 5 respectively) include all income not recorded

elsewhere.

Other contributions (items 12c and 13c of Special Schedules 3 and 5 respectively) include capital contributions for water supply or sewerage services received by Council under Section 565 of the Local Government Act. Notes:

(1) Administration and engineering costs for the development of capital works projects should be reported as part of the capital cost of the project and not as part of the recurrent expenditure (ie. in item 16 for water supply and item 17 for sewerage, and not in items 1a and 1b).

(2) To enable accurate reporting of residential revenue from usage charges, it is essential for councils to accurately separate their residential (item 6) and non-residential (item 7) charges

C-17

NSW Council

Special Schedule No. 6 Sewerage service – Statement of Financial Position (Gross including Internal Transactions) as at 30 June 2015 $’000 Current Non current Total

Assets

31. Cash and investments

a. Developer charges

b. Special purpose grants

c. Accrued leave

d. Unexpended loans

e. Sinking fund

f. Other

32. Receivables

a. Specific purpose grants

b. Rates and charges

c. User charges

d. Other

33. Inventories

34. Property, plant and equipment

a. System assets

b. Plant and equipment

35. Other assets

36. Total assets

Liabilities

37. Bank overdraft

38. Creditors

39. Borrowings

a. Loans

b. Advances

c. Finance leases

40. Provisions

a. Tax equivalents

b. Dividend

c. Other

41. Total liabilities

42. Net assets committed

Equity

43. Accumulated surplus

44. Asset revaluation reserve

45. Total equity

Note to system assets:

46. Current replacement cost of system assets

47. Accumulated current cost depreciation of system assets

48. Written down current cost of system assets

C-18

NSW Council

Special Schedule No. 7 Report on Infrastructure Assets as at 30 June 2015

Asset class Asset category

Estimated cost to

bring to a satisfactory standard

Required

annual maintenance

2014/15

Actual maintenance

Written Down

Value $ (WDV)

Assets in Condition as a % of WDV*

$’000 $’000 $’000 1 2 3 4 5

Buildings Council Offices/

Administration Centres

Council Works Depot

Council Public Halls

Libraries

Cultural Facilities

Other Buildings

Specialised Buildings

Sub total

Other Structures Other Structures

Sub total

Roads Sealed Roads Surface

Sealed Roads Structure

Unsealed Roads

Bridges

Footpaths

Cycle ways

Kerb and Gutter

Other Road Assets

Sub total

Water Supply Network Dams/Weirs

Mains

Reservoirs

Pumping Station/s

Treatment

Buildings

Other

Sub total

C-19

Special Schedule No. 7: Report on Infrastructure Assets as at 30 June 2015 (continued)

Asset class Asset category

Estimated cost to bring to a

satisfactory standard

Required annual

maintenance

2014/15 Actual

maintenance

Written Down Value $

(WDV)

Assets in Condition as a % of WDV*

$’000 $’000 $’000 1 2 3 4 5

Sewerage Network Mains

Pumping Station/s

Treatment

Buildings

Other

Sub total

Stormwater Drainage Retarding Basins

Outfalls

Stormwater Conduits

Inlet and Junction Pits

Head Walls

Outfall Structures

Stormwater Converters

Other

Sub total

Open Space/Recreational Assets

Swimming Pools

Other Open Space/ Recreational Assets

Sub total

Other Infrastructure Assets

Sub total

Total classes Total – all assets

*In accordance with Note 9. Note:- Written Down Value must be disclosed

Infrastructure Asset Condition Assessment

Level Condition Description

1 Excellent No work required (normal maintenance)

2 Good Only minor maintenance work required

3 Average Maintenance work required

4 Poor Renewal required

5 Very poor Urgent renewal/upgrading required

C-20

NSW Council

Special Schedule No. 7: Report on Infrastructure Assets as at 30 June 2015 Infrastructure Asset Performance Indicators – Consolidated

$’000 Amounts Current

year indicators 2014 2015

Building and infrastructure renewals ratio

Asset renewals (building, infrastructure and other structures) $

Depreciation, amortisation and impairment (building, infrastructure and other structures) $

Infrastructure backlog

Estimated cost to bring assets to a satisfactory condition $

Total value * of infrastructure, building, other structures and depreciable land improvement assets

$

Asset maintenance ratio

Actual asset maintenance $

Required asset maintenance $

Capital expenditure ratio

Annual capital expenditure $

Annual depreciation $

Infrastructure Asset Performance Indicators – General, Water & Sewer Funds

*Written down value

Current year $’000 General Water Sewer

Building and infrastructure renewals ratio

Asset renewals (building, infrastructure and other structures)

Depreciation, amortisation and impairment (building, infrastructure and other structures)

Infrastructure backlog

Estimated cost to bring assets to a satisfactory condition

Total value* of infrastructure, building, other structures and depreciable land improvement assets

Asset maintenance ratio

Actual asset maintenance

Required asset maintenance

Capital expenditure ratio

Annual capital expenditure

Annual depreciation

C-21

Commentary – Report on Infrastructure Assets

DLG The Report on Infrastructure Assets provides information on a council’s assets in addition to that contained in Note 9 Infrastructure, Property, Plant and Equipment. The nature of the information in the Report on Infrastructure Assets is related to the condition, maintenance and renewal of infrastructure assets.

Asset Condition Asset condition assessment is the process of continuous or periodic inspection, assessment, measurement and interpretation of the data to indicate the condition of a specific asset so as to determine the need for some preventative or remedial action.

Councils are strongly encouraged to use the asset condition rankings as set out in the Asset Condition Assessment table in the Integrated Planning and Reporting Manual for local government in NSW. Asset conditions are assessed using a scale of one to five. Assets in condition one are considered to be excellent and that there is no work required (other than normal maintenance) while assets in condition five are considered to be very poor with urgent renewal or upgrading being required. Asset condition should be based on up to date asset condition assessments rather than an engineering estimates.

WDV is the written down value of the assets. The WDV $ column which the condition assessments are to be made against is mandatory & cannot be changed to any other “base” figure. Should a Council want to publish condition assessments against “GBV $” then they should publish a second SS7 within the Special Schedules.

Estimated cost to bring to a satisfactory standard (BTS). Satisfactory is defined as “satisfying expectations or needs, leaving no room for complaint, causing satisfaction, adequate”1. The estimated cost to bring assets to a satisfactory standard is the amount of money that is required to be spent on an asset to ensure that it is in a satisfactory standard. This should not include any planned enhancements.

Unless Council has undertaken consultation with their community and has agreed to a level of service from councils assets the BTS should be measured against the second condition rating of Good as stated in the Integrated Planning and Reporting Manual for local government in NSW.

Renewal is defined by the IIMM as “works to upgrade, refurbish or replace existing facilities with facilities of equivalent capacity or performance capability”.

Enhancement means to “heighten, intensify or improve the facilities”.

Required annual maintenance is “what should be spent to maintain assets in a satisfactory standard”.

Actual maintenance Actual maintenance, previously referred to as current annual maintenance is what has been spent in the current year to maintain the assets (This figure should be sourced from Note 4). This may be higher or lower than the required annual maintenance due to the timing of when the maintenance actually occurs.

For further information, councils should consult the Integrated Planning and Reporting Guidelines and Manual for local government in NSW located on the Office of Local Government’s website (www.olg.nsw.gov.au).

Asset Classes It should be noted that within the Buildings asset class ‘Other Buildings’ Category may include assets such as childcare centres, aged care facilities and multi-purpose centres for example. Cultural Facilities may include assets such as museums, art galleries and entertainment centres. ’Other Structures’ is designed for the following types of infrastructure assets: statues, fences, monuments, clock towers and so on. ‘Open Space/Recreational Assets’ may include assets such as swimming pools (but not including buildings, plant & equipment, car parks etc. that are associated with the swimming pool), playground equipment, BBQ’s and outdoor fitness facilities. ‘Other infrastructure’ may include jetties, boat ramps, sea/rock/retaining walls etc. The Asset Classes & Asset Categories as listed in SS7 are MANDATORY. If Councils want to add more line items to SS7, then they must be sub-categories (or individual assets) of the listed Asset Categories.

Infrastructure Asset Performance Indicators. The Office of Local Government requires a minimum number of prescribed indicators in relation to infrastructure asset management, to be presented as follows:

1. Building and infrastructure renewal ratio Purpose:- To assess the rate at which these assets are being renewed against the rate at which they are

depreciating. The benchmark is greater than 100%.

Asset renewals (building, infrastructure and other structures) Depreciation, amortisation and impairment (building, infrastructure and other structures) (Expressed as a ratio)

2. Infrastructure backlog ratio Purpose:- This ratio shows what proportion the backlog is against the total value of a Council’s infrastructure. The benchmark is less than 2%.

Estimated cost to bring assets to a satisfactory condition Total value* of infrastructure, building, other structures and depreciable land improvement assets

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3. Asset maintenance ratio Purpose:- This ratio compares actual versus required annual asset maintenance. A ratio of above 1.0

indicates that the Council is investing enough funds within the year to stop the Infrastructure Backlog from growing. The benchmark is greater than1.0.

Actual asset maintenance__

Required asset maintenance 4. Capital expenditure ratio

Purpose:- This indicates the extent to which a Council is forecasting to expand its asset base with capital expenditure spent on both new assets, and replacement and renewal of existing assets. The benchmark is greater than 1.1. The calculation is based on Note 9 and the balance sheet i.e. building, infrastructure and other structures additions less WDV of disposals over annual depreciation

Annual capital expenditure Annual depreciation

Infrastructure Asset Performance Indicators by Fund General Fund refers to all Council activities except Water and Sewer. Where Councils do not have Water and Sewer Funds this is not required.

1. The Australian Concise Oxford Dictionary of Current English * Written down value

Auditing Infrastructure Asset Information.

The Local Government Infrastructure Audit undertaken by the Office of Local Government recommended that: • “clearly defined and specific asset management measurement parameters to be developed with the local government sector” and for • “aspects of asset management to be subjected to an audit. Audit parameters to be developed to ensure a level of assurance that asset management information is reliable”

A commitment was made during the release of the Local Government Code of Accounting Practice and Financial Reporting Code update 22 that the infrastructure asset information of councils would be audited in 2015.

A three stage approach has been developed to meet the requirement of auditing infrastructure asset information. The approach has been developed taking into account the requirements of councils in the Fit for the Future program, the need for a review of Special Schedule 7 to occur and the importance of infrastructure assets in the delivery of services and making sure the auditing process is appropriate. Stage one Local Government auditors will be required to check the systems and processes councils have in place for capturing, recording and reporting councils’ asset information. The purpose of this is to test how prepared councils are for an audit. The Office of Local Government will issue a circular to all councils and auditors with the format and a list of questions that should be used to inform the auditor, council and the OLG of how well prepared councils are for an audit. The councils will also be able to use this document to assess if there are any areas that need improving. Stage one will be conducted during the audit of the 2014/15 financial reports, that is, July to October 2015. Stage two This stage involves reviewing the Report on Infrastructure Assets (SS7) and also the information contained within the Integrated Planning and Reporting Manual and Guidelines. It has been recognised by the industry and the Office that more information needs to be available to councils related to SS7, together with a more consistent approach to calculating the cost to bring assets to a satisfactory standard. The plan for this stage is to prepare an updated SS7 and to release it to the industry for comment in the second half of 2015. A review of the IP& R asset management information should also take place at the same time to ensure there is consistency between the two.

Stage three Stage three involves auditing the information contained within SS7. The OLG will work with the NSW Audit Office and the LG Auditor’s Association of NSW to develop an audit framework. The audit will be conducted on the information reported as at 30 June 2016.

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NSW Council

Special Schedule No. 8 Financial projections

Special Schedule 8 data is now being collected in the Financial Data Return.

Councils are not required to submit a blank Special Schedule 8

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Special Schedule 9 – Permissible Income for General Rates

Notes: 1. The Notional General Income will not reconcile with rate income in the financial statements in the corresponding year.

The statements are reported on an accrual accounting basis which include amounts that relate to prior years' rates income.

2. Adjustments account for changes in the number of assessments and any increase or decrease in land value occurring during the year. The adjustments are called "supplementary valuations" as defined in the Valuation of Land Act 1916.

3. The Special Variation Percentage is inclusive of the Rate Peg percentage and where applicable crown land adjustment. 4. Valuation objections are unexpected changes in land values as a result of land owners successfully objecting to the land

value issued by the Valuer-General. Councils can claim the value of the income lost due to valuation objections in any single year.

5. Unused catch-up amounts will be deducted if they are not caught up within 2 years. Usually councils will have a nominal carry forward figure. These amounts can be adjusted for in setting the rates in a future year.

6. Carry forward amounts which are in excess (an amount that exceeds the permissible income) require Ministerial approval by order published in the NSW Government Gazette in accordance with section 512 of the Local Government Act 1993. The OLG will extract these amounts from councils’ Special Schedule 9 in the Financial Data Return (FDR) to administer

this process. Please check data is transferred accurately to the Special Schedule 9 of the Financial Statements and FDR.

2014/15 Calculation

2015/16 Calculation

$’000 $’000 Notional General Income Calculation(1)

Last Year Notional Income Yield $ $ Plus/minus adjustments (2) $ $ Notional General Income $ $

Permissible Income Calculation Special Variation (3) % % OR Rate peg % % OR Crown land adjustment incl rate peg % %

Less expiring special variations amount $ $ Plus special variation amount $ $ OR Plus rate peg amount $ $ OR Plus crown land adjustment and rate peg amount $ $

Sub total $ $

Plus or minus last year’s Carry Forward Total $ $ Less Valuation Objections claimed in previous year $ $

Sub total $ $

Total Permissible Income $ $

Less Notional Income yield $ $

Catch up or (excess) result $ $

Plus income lost due to valuation objections claimed (4) $ $ Less unused catch up (5) $ $

Carry forward to next year $ $

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Special Schedule 9 – Sample Auditors Report

SELECT COUNCIL NAME

SPECIAL SCHEDULE NO. 9

1 INDEPENDENT AUDITORS' REPORT

REPORT ON SPECIAL SCHEDULE NO. 9

We have audited the accompanying special purpose financial statement comprising the reconciliation of total permissible general income (Special Schedule No. 9) of Select Council Name for the year ending 30 June 2016. Responsibility of Council for Special Schedule No. 9

The Council is responsible for the preparation and fair presentation of Special Schedule No. 9 in accordance with the Local Government Code of Accounting Practice and Financial Reporting (Guidelines) Update No. 22. This responsibility includes the maintenance of adequate accounting records and internal controls designed to prevent and detect fraud and error; designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of Special Schedule No. 9 that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditors’ Responsibility

Our responsibility is to express an opinion on Special Schedule No. 9 based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether Special Schedule No. 9 is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in Special Schedule No. 9. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of Special Schedule No. 9, whether due to fraud or error. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of Special Schedule No. 9.

Because of the inherent limitations of an audit, together with the inherent limitations of internal control, there is an unavoidable risk that some material misstatements may not be detected, even though the audit is properly planned and performed in accordance with Australian Auditing Standards.

In making our risk assessments, we consider internal controls relevant to the entity’s preparation of Special Schedule No. 9 in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence

In conducting our audit, we followed applicable independence requirements of Australian professional ethical pronouncements.

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Audit Opinion

In our opinion, Special Schedule No. 9 of Select Council Name for 2015/16 is properly drawn up in accordance with the requirements of the Office of Local Government and in accordance with the books and records of the Council. Basis of Accounting

Without modifying our opinion, we advise that this schedule has been prepared for distribution to the Office of Local Government for the purposes of confirming that Council’s reconciliation of Council’s total permissible general income is presented fairly. As a result, the schedule may not be suitable for another purpose. (FIRM NAME) (PARTNER NAME) Partner Dated at Sydney this XXth day of Xxxxxxx 2015

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COMMENTARY – Permissible income for general rates

Under the provisions of the Local Government Act 1993, all councils are required to calculate the annual permissible rates income based on the adjusted notional general income from the previous year.

Special Schedule 9 has been developed to improve reporting and accountability to the community. The addition of SS9 to the Financial Statements and Financial Data Return also streamlines both the external audit process and councils’ annual reporting process.

As part of this process councils will first complete the ‘Special Schedule 9 Permissible Income Workpapers’ to calculate the annual Permissible Income. The General Manager and Responsible Accounting Officer must sign the Statement of Compliance (included in the Workpapers) confirming that the calculation complies with the Act. A summary of the calculation is then transferred to SS9 in the Financial Statements and Financial Data Return.

The signed Statement of Compliance is submitted to the Auditors together with the Workpapers and Financial Statements. The Auditor completes a Compliance Checklist for the Permissible Income calculation and signs the Independent Auditors’ Report. The Checklist is returned to council and the Auditor’s Report is lodged as part of the Financial Statements.

Councils must comply with Chapter 15 of the Act which includes compliance with the maximum Permissible general income for a year within the rate-peg limit and any approved variations to the rate-peg that may be applied.

When councils calculate rates above the permissible amount, the rates go into an ‘Excess’ result, which is a contravention of the Act.

Under section 512, councils with excess results require an exemption by the Minister to validate the rates, which is published in the ‘New South Wales Government Gazette’. The OLG will capture council’s excess results for reporting to the Minister through the Financial Statements and Financial Data Return process.

SS9 is forward looking and also calculates the total amount available (starting point) to calculate the following year’s rates.