We have adjusted the 2023–24 surplus result by $7.64 million as this relates to capital grants and open space contributions.

We have adjusted the 2022–23 deficit result by $19.59 million as this relates to capital grants and open space contributions.

Our 2023–24 Budget focuses on investing in high-quality, sustainable and inclusive community services and facilities.  

This includes:

• $20.46 million over 3 years for the Kew Library redevelopment, which is due to be completed in 2025–26
• $431,329 for the Glenferrie Oval precinct, which will include demolishing the Ferguson Stand and creating new public open space  
• $27.45 million over 4 years to upgrade the Michael Tuck Stand, which is due to be completed in 2026–27
• $8.13 million for several sportsground pavilion renewals at Willsmere Park, Canterbury Sportsground, Lynden Park and Ferndale Park. 

Investments into preserving and increasing green space

We are investing in our sportsgrounds, which includes:

• $2.11 million for ground reconstructions
• $1 million for the playing surface at Dorothy Laver West Reserve 
• $2.09 million for the redevelopment of Ferndale Park Pavilion.

We understand there is limited open space in our community for recreation. We will invest $800,000 each year into our Open Space Acquisition Fund, which allows us to purchase additional open space when there is an opportunity.

Investments into sustainability

We have committed $1 million to continue delivering a range of initiatives to reduce Council's emissions and meet other climate-related targets in our Climate Action Plan.

We are also investing:

• $230,000 to continue our Biodiversity Strategy to expand and maintain our significant biodiversity sites
• $255,000 to continue reducing waste sent to landfill by expanding our FOGO service to commercial and food businesses
• $275,000 to install solar lights along paths in parks and other outdoor community spaces.

Investments into maintaining our infrastructure

We will invest:

• $5.2 million for drainage renewal
• $2.4 million for footpath and cycleway renewal
• $13.8 million for road renewal
• $10.5 million for 7 other community building renewal works and minor works across many other properties we manage.

Investments into services 

We will invest:

• $10.3 million to provide library services 7 days a week
• $9.4 million on health and wellbeing services, including immunisation, youth and recreation services
• $20.9 million for parks and gardens, biodiversity and street trees maintenance
• $3.7 million on arts and cultural services and events
• $12.7 million for planning, development and building controls
• $12.4 million for maintenance of the city’s infrastructure, including buildings, drainage, footpaths, roads and shopping centres.

We will support a program of health and wellbeing activities for those with disproportionately poorer health outcomes, such as LGBTQIA+ communities, young people and others experiencing social isolation and loneliness. This will include bi-annual community roundtables to hear the voices of LGBTQIA+ communities, and to plan and Introduction 3 deliver practical outcomes to support inclusion through programs, projects and activities, $90,000 has been allocated.

External influences

Victorian Government

The Victorian Government influence on our budget includes: 

• the Victorian Government’s rate cap increase of 3.5%
• the Victorian Government waste levy is expected to increase by 2.68% or $3.37 per tonne from $125.90 to $129.27 per tonne in 2023–24. The waste levy changes are part of the Victorian Government’s Recycling Victoria package. This is a 10-year action plan to encourage more recycling and reduce waste going to landfill
• the Victorian Government announced changes to the Workers Compensation system due to the scheme’s financial losses. As a result, the Victorian Government has increased average premiums from 1.27% of remuneration to 1.80% of remuneration, resulting in an average 42% increase in all Victorian Workers Compensation premiums
• the Fire Services Property Levy that we collect for the Victorian Government
• ongoing cost shifting. This happens when a local government provides a service to the community on behalf of the Victorian or Australian Government. Over time, the cost for providing the service goes up, but the funding a local government receives doesn’t match it.

Grant funding

We will receive $3.24 million for capital works grant funding from the Australian Government. 

This includes: 

• $2.05 million for Walmer Street Bridge upgrades
• $593,811 for the Local Roads and Community Infrastructure (LRCI) Program. This program will deliver priority road and community infrastructure projects
• $593,811 for Roads to Recovery Program funding covering roads pavement renewal works.

Internal influences

Internal influences on our budget include projects that aren’t finished or haven’t started yet. This can be because of planning issues, weather delays or a longer consultation with the community. 

Employee costs are another internal influence. These are mostly driven by Council’s Enterprise Agreement. We have included an annual increase of 3% for all costs related to employees, such as wages, Work Cover and superannuation. In 2023–24 the compulsory Superannuation Guarantee Scheme (SGC) will also increase from 10.50% to 11.00%.

Waste collection costs will also increase in 2023–24 by roughly 5.6%. This is linked directly to the cost of providing the waste services.

In this section, we list the 7 themes of the Boroondara Community Plan and the services that fall under each of these themes. We detail the amount that each service costs, the amount we will make in revenue and the total net cost of that service.

Theme 1 – Community, Services and Facilities

Library Services

Expenditure: $10,330,000

Revenue: –$1,262,000

Net cost: $9,068,000

Theme 2 – Parks and Green Spaces

Theme 3 – The Environment

Waste and Recycling

Expenditure: $27,410,000

Revenue: –$1,553,000

Net cost: $25,857,000

Theme 4 – Neighbourhood Character and Heritage

Theme 5 – Moving Around

Theme 6 – Local Economy

Theme 7 – Governance and Leadership

Summary of our financial position

This summary provides important information about our:

• operating result
• services we deliver to the community
• cash and investments
• Capital Works Program. 

The following graphs show the 2022–23 forecast actual, which is marked with an F before the date.

The graphs also show the budget for 2023–24, 2024–25, 2025–26 and 2026–27. These are marked with a B before the date. 

Our financial statements include projections for the 4 years ending 30 June 2027. 

They are prepared in line with the Local Government Act 2020 and the Local Government (Planning and Reporting) Regulations 2020. 

Find out about our current and projected performance for services, finance and sustainability. 

We are required to report on our performance against a common set of indicators. These indicators are in Schedule 4 of the Local Government (Planning and Reporting) Regulations 2020. They give a useful analysis of our financial position and performance. 

For example, we looked at the satisfaction level of our community with how Council makes and implements decisions. We measured this satisfaction level by asking our community for a rating out of 100 for our consultation and engagement efforts.

We also looked at performance against other indicators, such as:

• decision making
• participation
• waste diversion
• health and safety
• loans and borrowings
• level of debt
• population
• disadvantage
• workforce turnover.

We will report results against these indicators in the Performance Statement of our Annual Report.

We provide a range of services to the Boroondara community. To pay for these services, we either charge a fee to use them or we apply a levy.

Our Pricing Policy makes sure that we set fees in line with activities to support community objectives. These are activities that we wouldn't normally do, however, the Victorian or Australian Government has requested and funded them to meet a certain objective. 

When we set fees and charges, we think about: 

• people’s ability to pay
• equity in how services are subsidised
• community service obligations
• legal or service agreement limitations, such as building permits or statutory planning fees
• results from benchmarking of similar services.

Our fees and charges also might change throughout the 2023–24 year. However, if fees are set by the Victorian Government, we aren’t able to change them. 

Waste management fees

We charge waste management fees to pay for:

• the waste to landfill service
• the food organics and green organics waste service 
• the recycling service
• hard-waste collection
• operating the Riversdale Road Transfer Station
• post closure management of the Clayton Landfill
• delivering street sweeping services
• public place waste and recycling services
• bin renewal 
• disposing of electronic waste.

We also charge waste management fees to pay for waste collection at:

• public parks
• gardens
• sportsgrounds
• community buildings. 

In our 2023–24 Budget, we are proposing an average increase of 5.6% for waste charges in Boroondara, which factors in the Victorian Government waste levy. This levy is part of the Victorian Government's Recycling Victoria package, which is a 10-year action plan to encourage more recycling and reduce waste to landfill.

The Victorian Government waste levy is $129.27 per tonne in 2023–24. 

Waste bin charges for 2023–24

Rate percentage increases

The Local Government Act 2020 requires us to have a Revenue and Rating Plan. This is a plan for how we will generate income to deliver the Council Plan, programs and services, and capital works commitments for the next 4 years.

Our rates and charges are an important source of revenue. They make up 77% of the total revenue we receive each year. 

The Minister for Local Government announced that the average property rate cap for 2023–24 will rise by 3.5%. We won’t be asking for any changes to this rate cap. 

Future years are estimated using the Department of Treasury and Finance forecasts of the consumer price index. However, we are taking a conservative approach to the rate cap and set this at 2.5% for future years.

Forecast of our rates and charges

The table below is an overview of our rates and charges. It shows what we forecast in 2022–23 compared to the actual 2023–24 budget. 

Rates and property value

The Valuer General of Victoria took over the rateable property general valuation process on 1 July 2018. It also changed this process to happen every year instead of every 2 years. 

Under the Local Government Act 1989, local governments can increase rate revenue through valuations of properties. The Valuer General of Victoria works out and certifies the Capital Improved Value (CIV) of properties. We then use the CIV to work out the rates. 

The way rates are charged is the same for residential and business properties. 

In 2023–24, we found that the value of property across Boroondara has increased by 1.80%. This includes a 1.61% increase in value for residential properties and a 4.67% increase in value for non-residential properties compared to the last financial year.

We also found out there will be an increase in the rate in the dollar paid by ratepayers. This will be an increase from 0.12653020 cents in the dollar to 0.12864561 cents in the dollar. 

A property in Boroondara at the median residential valuation in 2022 was valued at $1,500,000 with a general rate of $1,897.96. The new median valuation for 2023, according to the Valuer General of Victoria, is $1,600,000 and now attracts a general rate of $2,058.33. This is an increase in 2023–24 of $160.38 per year or $3.08 per week. 

It’s important to note that when a revaluation is carried out, the total rate revenue that we receive doesn’t change. We don’t make any extra revenue. 

A revaluation can change how the rates between properties are allocated. If the value of a property is higher than the average value for other properties, that property receives a higher rate increase compared to the general rate increase for other properties. 

However, if the value of a property changes to become less than average, that property receives a lower rate increase compared to the general rate increase for other properties. 

The following tables summarise the valuation changes between the 2022 and 2023 general revaluations for all property types including analysis by suburb.

All property types

Analysis by suburbs – all property types 

Operating grants 

Operating grants from the Victorian and Australian Government help us deliver services to ratepayers. Operating grants can be either:

• recurrent, meaning they are received each year
• non-recurrent, meaning they are once off or short term. 

For 2023–24, we have budgeted an increase of 14.8% or $1.71 million, compared to the 2022–23 forecast. This is due to a:

• $3.68 million increase in recurrent operating grants. This is mainly because the Victorian Local Government Grants Commission (VLGGC) brought forward 75% or $3.93 million of the 2022–23 allocation to the 2021-22 financial year, compared to a full year allocation in 2023–24
• partial offset of non-recurrent operating grants decreased by $1.97 million, mainly due to less grant funding opportunities in 2023–24.

After adjusting for the Victorian Local Government Grants Commission, the total for operating grants is expected to decrease by 18.3%. The decrease in operating grants and subsidies shows that the trend of grant income is not keeping up with the spending required to deliver services to the community. As a result, there is an increasing financial burden on Council and our ratepayers.

Capital grants

Capital grants from the Victorian and Australian Government and community sources help us fund the Capital Works Program. 
The amount of capital grants we receive each year can change a lot depending on the type of works in the Capital Works Program. 

Capital grants can be either:

• recurrent, meaning they are received each year
• non-recurrent, meaning they are once off or short term. 

For 2023–24, we have budgeted for capital grants funding of $3.24 million. This is a decrease in capital grant funding of $11.15 million compared to 2022–23.

The largest grants for 2023–24 include:

• $2.05 million from the Australian Government for Walmer Street bridge works
• $593,811 from the Australian Government Local Road and Community Infrastructure Program for Willsmere Park Pavilion and Lynden Park Pavilion
• $593,811 from the Australian Government Roads to Recovery Program covering roads pavement renewal works.   
   

Where Capital Works Program funding comes from

Our Capital Works Program totals $80.60 million. This is made up of:

• $67.09 million from Council operations (funded by rates) 
• $3.24 million from external grants and contributions 
• $4.72 million from asset sales 
• $5.55 million from Council cash (carried forward works from 2022–23).

How we will spend the Capital Works Program funding

The funding for each project group is a forecasted amount for the 2023–24 year. The actual amount we spend could be more or less than this. 

Detailed list of capital works

The capital works projects are grouped by class and include:

• new works for 2023–24
• works carried forward from the 2022–23 year.

Our Priority Projects program provides funding for short-term projects or pilot initiatives. This allows us to deliver on important issues for the community, while making sure that project funding doesn’t become part of the recurrent operating budget. It is another example of our commitment to financial sustainability, transparency and accountability.

In 2023–24, we have planned Priority Projects for the coming year and provided details for projects over the next 3 years. 

The Priority Projects budget for 2023–24 includes projects that support all of our strategic objectives.

These projects include:

• implementing the Urban Biodiversity Strategy
• investigation and design of the Box Hill to Hawthorn Strategic Cycling Corridor.

Borrowings history

During the 2012–13 financial year, we borrowed $29 million to fund major building works. The borrowings were at a fixed interest rate for 10 years and we were due to repay this in full in 2022–23. However, during the 2022–23 financial year, we reviewed our existing loan portfolio and refinanced the rest of this loan for another 10 years. 

We expect to repay all existing borrowings by 2033.

Existing borrowings

During the 2022–23 year, we made $25.91 million in principal repayments on existing borrowings. This means that on 30 June 2023, our total borrowings will be $85.33 million. The projected cost of servicing these borrowings is $8.12 million during 2023–24.

Future borrowing strategy

Our borrowing strategy is to pay off existing debt over time so that we can look at new borrowings for significant infrastructure projects for the community. This strategy allows us to invest in new infrastructure while paying off our debts.

We will look at different borrowing strategies for each area of planned borrowings as they become due.

Future proposed borrowings 

The following table sets out our future proposed borrowings, based on our forecast position on 30 June 2023. 

Statement of borrowings 

Lease of land

Under section 115 of the Local Government Act 2020, we have the power to lease any land to any person for a term of 50 years or less. However, this is still subject to any other act and where section 116 of the Local Government Act 2020 applies. If we lease any land to any person subject to any exceptions, reservations, covenants and conditions, it must comply with this section.

We must include any proposal to lease land in a financial year in the budget, where the lease is for one year or more and:

• the rent for any period of the lease is $100,000 or more a year
• the current market rental value of the land is $100,000 or more a year
• for 10 years or more.

If we propose to lease land (subject to the 3 criteria noted above) and that was not included as a proposal in the budget, we must complete a community engagement process in line with our community engagement policy before entering into the lease.

The proposed community leases set out in the table are in line with our Council Assets – Leasing and Licensing Policy 2017 and our Boroondara Community Plan 2021–31.

Our in-house Senior Valuer provides us with market rental valuations. All rentals proposed to be charged are in line with our Council Assets – Leasing and Licensing Policy.

This property will operate as headspace Hawthorn and will provide early intervention, care and services for young people aged from 12 to 25 years.

These services will include: 

• mental health support
• physical health support
• vocational support
• drug and alcohol support services.