Draft budget Q&A session - 4 May 2020

The running time of this video is approximately 60 minutes. The Q&A part of the session starts from 21 minutes or you can view questions and answers below. Due to a technical issue during the session, the original video recording of the presentation has been replaced for the purpose of providing a better quality presentation. The Q&A part is a live recording from the online session on 4 May 2020 and has not been altered in any way.

Draft Budget Q&A session - 18 May 2020

The running time of this video is one hour and 12 minutes. The Q&A part of the session starts from 48 minutes.

Q&As from online budget sessions

Questions from the online sessions have been categorised into the themes listed below. More questions will be added over the next few days.To view questions under each theme, click the down arrow.

How is the council going to cut costs so that there will not be a rate increase this year?

We are preparing, at this stage, for an increase in rates revenue by two per cent, which is within the Victorian Government’s rates cap increase. That means the budget, at this stage, has an extra $2.7 million in additional revenue from this two per cent overall increase. The intention is for this additional revenue to be targeted to support those who need it most.

Will rates be up for the business and local community?

There is no change to how rates are calculated. If the rate is struck at a two per cent increase, it is shared across residential and commercial properties based on their value as at 1 January 2020 and as a percentage of all properties in the City.

Has the federal government come the party to cover Council run childcare costs to enable free childcare to all and maintaining staff levels during the crisis?

We have submitted applications citing extraordinary circumstances for our four Council-run childcare centres, but have not received any funding as yet. We don’t know how much we would receive if our application is successful. Council is excluded from Job keeper which has assisted many centres to remain viable. The Municipal Association of Victoria (MAV) is advocating to federal and state governments to fund this shortfall.

Children’s Centre Improvements have been deferred while their market uncertainty> What is meant by market uncertainty and what in-house work is to be continued. Has Council applied for the Early Childhood Education and Care Relief package? Will this enable Council run centres to remain open and offer free childcare?

The capital program for children’s centres has been put on hold this year. Council is looking at an overall strategy for these assets, some of which are nearing the end of their life. While improvements have been deferred for a year, those relating to safety would be exempted. The assumed market uncertainty related to factors surrounding the provision of child care services; for example, how many survive the pandemic crisis, whether there will be a permanent change in the way government funds child care centres, whether permits for new child care centres proceed and future demand for child care.

Will the business case process for children’s centres still continue?

There will be a proposal made to the 20 May Council meeting that it is deferred.

Will Council assure us that important services, particularly childcare, Maternal & Child Health care, libraries and homeless support will continue?

There is no plan to discontinue any of these services. Council is facing some pressure resulting from missing some federal funding for child care and is trying to remedy this with the state and federal governments.

What is the council’s approach to supporting the arts organisations and independent arts practitioners in the COPP municipality? Most other councils have announced quick response grants and additional funding - will COPP be offering any support?

Council last week approved a rescue package - details will be available this or next week. The package includes three things:

  • St Kilda Film Festival to go ahead online in May, due to pandemic. Free ‘entry’ but donations will be sought for aligned charities. Going online will be a reduced cost to Council
  • Grants aimed at supporting artists and small art organisations. The grants will be available in three streams: the broad arts, artists with disability and First Nations artists.

3D exhibition tool to allow Council to show online exhibitions held at The Gallery at the St Kilda Town Hall, and elsewhere, free of charge. This is already available at Linden Gallery

In the package, over $200,000 is for the film festival with $130,000 allocated for grants and $20,000 for 3D galleries.

Government has a major role in economic stimulus right now; CoPP has implemented an important package so far, but what's ahead in investing to upgrade the city's physical infrastructure, its retail strips, arts and tourism industries?

A draft portfolio relating to investment in infrastructure will be in the draft Budget for consultation.

In terms of other relief, the recommendation that Council increase rates within the rates cap allows us to target some, all or more of this revenue into assisting the economy and mitigating some of the social impacts.

This is an economic, health and social crisis. Ideas will go to Council over the next few weeks and the business forum on 2 June is another opportunity for ideas to be provided.

Over the next financial year, there will be an extensive quarterly review process. If more income is identified, we can put more resources into assisting our community. This will be a “see-saw” recovery for many sectors in the community.­

What initiatives or funding will be made available to landlords or tenants of businesses not located in a shopping strip, to either generate interest in their premises or business, find a tenant or even promotions grant, that will allow us to leverage our location and not be unfairly discriminated against?

Council provides support that supplements support to businesses from the state and federal governments. This means we target our business support relative to Council’s role.

Statistics show the sectors most impacted by the pandemic include professional, scientific and technical services, accommodation and food services, administrative and sport services, and art and recreation services.

Modelling on the June quarter shows our gross regional output is likely to be down by bout 24 per cent compared to greater Victoria, which is around 17.1 per cent. There is also a 14.9 per cent fall in local jobs and a 13.8 per cent drop in employed residents.

Councillors will be briefed about additional support we can provide to all Port Phillip businesses.

Council will also be holding a business forum on Tuesday 2 June. This will provide another opportunity for all businesses to provide input into the draft Budget.

What steps are being taken towards carbon neutrality?

Council has already moved to 100% renewable electricity use and will offset remaining emissions from gas and vehicle use, in order to achieve zero net emissions in next financial year (20/21).

How does the Council plan to further support their commitment to Sustainability, the environment and the building of Community resilience in the Budget to mitigate some of the hurting and desire for connection which our community will be needing post-Covid?

Council will continue delivering the Act and Adapt Sustainable Environment Strategy and Don’t Waste It Strategy in 20/21, including community education and support programs that aid community resilience and the response to the Climate Emergency. Due to COVID-19 budget constraints some projects have been deferred to the 2021/22 financial year, and community programs will be reprioritised to focus on essential elements of the COVID recovery.

Council will also continue to provide annual funding to the Port Phillip EcoCentre who provide a range of community and volunteer programs. Council will continue to advocate to the Victorian Government for partnership funding to enable the EcoCentre to be rebuilt and expanded.

Given the budget pressure - How will council plan to remain committed to achieve major water sensitive outcomes, (such as water harvesting reuse and flood mitigation), to manage the known risks and costs of climate change for residents and community assets?

Council remains committed to achieving a range of water sensitive city outcomes in accordance with the Act and Adapt Sustainable Environment Strategy 2018-28 and the Council Plan and is intending to deliver the following in next financial year:

  • Design of at least 5 water sensitive urban design (WSUD) systems to improve stormwater quality, with construction to occur in the following financial years
  • Strategic planning projects to identify further solutions for reducing hard surfaces and increasing stormwater retention and vegetation on private land, including progressing an update to environmentally sustainable design (ESD) standards for new developments
  • Continue feasibility assessments for potential stormwater harvesting schemes
  • Continue investing in improvements to our drainage systems and flood modelling
  • Continue investing in our irrigation systems and buildings to improve water efficiency

Officers will also continue to work with key stakeholders to progress water sensitive city solutions at the regional level, including with Melbourne Water, Victorian Government, South East Water and other councils to:

  • Review and deliver the Metropolitan Flood Strategy, deliver the Healthy Waterways Strategy and Port Phillip Bay Environmental Management Plan
  • Progress flood mitigation and stormwater harvesting solutions for Elster Creek Catchment
  • Progress the Coastal Hazard Assessment for Port Phillip Bay to better understand and plan for the impacts of climate change on our Bay and coastline
  • Progress water sensitive city planning in Fishermans Bend, including flood mitigation, planning for recycled water use and
  • Increase community preparedness for extreme weather events and maintain the Municipal Flood Emergency Plan and Local Flood Guides for key areas
  • Participate in regional Integrated Water Management forums and Victorian Government working groups to collaboratively plan to reduce flood impacts in our catchments, clarify stormwater responsibilities across all levels of government and review planning assessment tools for Water Sensitive Urban design

How much $$ are allocated to community safety issues and what is the breakdown and amounts of items that those funds go to?

Community safety covers an enormous range of areas including public health, needle and syringe exchange, tree and root removal and local laws officers. These account for about $19 million in the draft Budget.

The breakdown is difficult to precisely quantify, as so much of Council’s work relates to community safety. Our Community Safety Plan outlines Council’s plan for community safety. The following areas of Council all provide community safety responses: local laws and animal management, community safety officers, emergency management, school crossing supervisors, street and beach services, family violence support through families programs, public lighting, security (including cameras and security for events), transport safety engineering, housing and homelessness programs, some aspects of placemaking, tree roots maintenance, public health (including needle and syringe exchange and vaccination), maternal and child health, hostile vehicle mitigation and graffiti removal.

How clear will it be in the forthcoming budget proposals that the City of Port Phillip is seriously committed to establishing targets for more social and community housing which sustains inclusiveness and improves affordability and housing access for residents unable to meet private housing market costs from their own resources?

There is no change to Council’s In Our Backyard (IOB) policy of 920 new units of social housing being provided over 10 years. The ability to achieve this depends on state government investment.

We seek a 1:4 ratio in spending for IOB projects – with every $1 provided by Council resulting in a $4 contribution by the Victorian Government.

We understand the Victorian Government has announced extra social housing funding for areas including Balaclava, and we hope additional stimulus funding may become available later on.

What percentage of the budget is being allocated to social housing? And what’s the total amount? It’s my opinion that this should be state funded.

Under In Our Backyard, $500,000 is allocated to the social housing growth fund each year under. This represents approximately 0.29 % of budget expenditure.

It is hard to provide an exact answer on the percentage of state social housing in St Kilda as the government has not provided social housing figures by former local government areas (St Kilda, Sth Melbourne and Port Melbourne) since 2003. In 2018, there were 4,205 social housing units in the City of Port Phillip and this includes Director of Housing units and Community Housing unit. This comprises 6.9% of the entire social housing stock for Victoria.

What percentage of the state’s social Housing is based in St Kilda, including rentals in private apartments, St Kilda hostels and the serviced apartments on Barkly?

In 2003 there were 1,248 social housing units in St Kilda, 1,282 in South Melbourne and 694 in Port Melbourne. We can estimate that there have been roughly 360 additional units built in St Kilda since then; based on this estimate, there are about 1600 units in St Kilda or about 2% of Victoria’s social housing stock.

Private rentals, hostels and serviced apartments are not included in any counts of social housing.

When the City of Port Phillip Libraries are allowed to reopen, will Middle Park Library also reopen?

Until we hear what restrictions will be imposed by the Victorian Government when libraries are allowed to open, we're unable to confirm which branches will re-open and when. Obviously the need for social distancing will likely make our larger branches easier to operate initially.

Are plans being developed to close Middle Park Library as a staffed library with the lending of books as its core activity?

No plans are underway to close Middle Park Library at this stage. The future of each of our libraries will be covered in our Library Action Plan which we're hoping to bring to a Council meeting shortly after the branches re-open before inviting the community to give their feedback via community consultation.

Are Council staff having discussions with third parties to repurpose the space now occupied by Middle Park Library?

No discussions about repurposing the Middle Park Library space are taking place.

Has the Council considered inclusion of any improvements for the badly damaged footpaths, or for the eyesore median strip and traffic light island at the southern end of Queens Road, which is a gateway to the City of Port Phillip?

All footpath replacements are based on their condition, and Queens Road footpaths are not scheduled for replacement next year.

The traffic island is the responsibility of the Department of Transport.

Are any funds allocated to fixing and improving the lighting in the streets around the St Kilda Botanical Gardens - in particular, Tennyson Street between Blessington and Dickens streets?

There is funding to start the process of replacing street lights, including in these areas, for 2021/22 and 2022/23. This is part of Council’s Act and Adapt Environmental Sustainability Strategy.

What provision has been made for ongoing support for programs and events for seniors in Port Phillip? Also, is there going to be support for the Linking Neighbours program and Seniors Writing Festival?

Planning for these programs will be in the draft Budget to be considered by Council. COVID-19 has presented some issues for our some of our programs and festivals, such as the Seniors’ Festival, may have to be modified because of social distancing restrictions due to COVID-19. Council will be looking at providing the Seniors Festival online, if this becomes necessary.

Will Council continue to develop and increase bicycle lanes?

Move, Connect Live is Council’s integrated transport strategy. The strategy includes implementing a proposed network of protected bike lanes to improve safety and access for cyclists. This work will be progressively developed over the next 10 years in consultation with the community and key stakeholders. Council is also currently assessing what potential temporary improvements can be made to the pedestrian and cycle network in response to Covid 19 impacts to journey to work movements.

Will Council take this opportunity to improve bike paths and walking areas, which would cost little, improve the public amenity of the area and attract tourism again, adding to revenue?

It has been a silver lining, seeing so many people enjoying our wonderful public spaces. The draft Budget includes renewals and upgrades, including the Garden City path upgrade in Port Melbourne.

The public can provide feedback and ideas during community consultation on the draft Budget from mid-June.

What action is Council taking to reduce spending on consultants / reducing the number of senior staff or their remuneration and will consultants be doing the Budget consultation?

Council is already moving any work to current staff wherever possible to ensure minimal use of external consultants. The CEO has already responded to media questions about his, and other senior staffs’, remuneration. There are no current plans to make any changes to their remuneration. The cost base of the organisation is always being reviewed.

Development of the Budget will be the sole work of Council officers, working with the Executive team. Councillors are being briefed throughout this process and there will be community consultation before the draft Budget returns to the Council Chamber on 19 August for adoption.

Given significant falls in revenue can be expected in the Apr-Jun / Jul-Sept quarters and diminished revenue Oct-Dec can the Council indicate:
- Estimate of the revenue loss over the periods
- What actions have been taken to reduce expenditures to date
- What principles will underline the budget preparation e.g. costs (deferring capital works; restructuring hours / employee numbers; tolerance for and caps to borrowing, contract renegotiation etc), revenue (penalty increases, rates increases etc.)

Revenue impacts on the organisation are being reviewed weekly. By doing this (through looking at parking revenue, for example), Council has been able to change its language and the estimated revenue shortfall, previously thought to be $40 million. The shortfall has now been reduced to an estimated $32 million and significant cost savings have also been targeted. Savings are also starting to come from Council asking major contractors to assist it at this time. We are seeing some co-operation from contractors and it’s fair to say there will be a detailed review over the next six weeks.

What impact has COVID-19 had on Council's financial standing? How will this impact Council priorities in the next year?

Despite the significant financial shock, our 10-year financial outlook sees us aiming to be in the low risk financial stability / sustainability measurements set by the Victorian Auditor General’s Office (VAGO) by the end of that decade. So, while there is short-term shock, prudent financial management over the next 10 years will see a focus on maintaining our financial stability. While it is possible for Council to borrow up to $70 million, that is not the intention, unless borrowings are required, for example, for managing inter-generational assets.

Given budget commitments already in train will the Council be able to provide information ahead of time to allow for an understanding of what has been canvassed? what is cast in stone? and what may be cut?

Yes. If the updated 10-year outlook is endorsed by Council on 6 May, Council will undertake targeted engagement on a small number of proposed service level reductions and proposed reductions in projects prior to releasing the draft Budget. In the meantime, officers will work with Councillors in workshops over the next month to get to a position that takes into account feedback from the targeted engagement, where a draft Budget can go for community consultation.

Formal community engagement on the draft Budget will take place over 28 days following Council endorsement of the draft Budget on 17 June, and will include focus groups for each neighbourhood, an online survey and online submission form. It will be an opportunity for the community to be quite active in providing feedback on the draft Budget in an number of ways.

How many vacant positions exist in the Council: we understand there may be 160-180 vacant roles. How many of these vacant positions are non-essential as defined as providing critical services to the community rather than writing reports. Has Council received complaints about a decline in services since these positions became vacant? Has the Council imposed a freeze on recruitment until the budget revenue shortfall is addressed?

Every position has been reviewed. A reduction or discontinuance in some services due to the pandemic has led to some staff members not being fully productive, and Council is working to redeploy some of those staff members. As part of the ongoing budget process, we can review all vacancies, and we have de-established some roles.

A major shock in service delivery is likely to impact our community. There is an understanding of the impact and that our community is being patient as we change our services. For example, our rates evaluation team is operating a call centre from their own homes. They are taking calls from distressed ratepayers. When they get the financial hardship off their chests, the calls are respectful and people understand the impact of the pandemic on our Council.

Can you confirm if the $18 million parking fines is included as COVID19 shortfall or is the parking fine budget shortfall separate, adding to the budget blow out?

Any revenue implications from the Ombudsman’s report on parking infringements had already been factored into the draft budget position.

Are you postponing CAPEX works that are not OHS or of a high risk nature (this will put a significant amount of money back in the budget), specifically for sustainability related initiatives?

Councillors have reviewed all capital and operating projects over the last three to four weeks. As part of the COVID-19 response, Councillors are currently undertaking an extensive review of all costs and strategically reprioritising expenditure based on the following principles, including:

  • reprioritisation must be effective in providing the intended relief and increasing community capacity to withstand and recover from the pandemic and other future shocks
  • reprioritisation should be targeted towards those who need it most and not duplicate support provided by others
  • Council must ensure financial sustainability
  • reprioritisation of activities and services should be aligned to the Council Plan priorities, transparent, defensible, and distributed fairly based on the role of Council, support available from others, risk, and cost.

The updated 10-year financial outlook includes a reduction in expenditure of $16.5m related to capital and operating projects based on applying these principles.

Port Phillip spends a large portion of the budget on staff costs. Why does council require so many staff, compared to neighbouring Bayside, which has just over half the number of staff?

While Council has many services in common with other municipalities, such as libraries, a range of other factors should be considered when making comparisons, including each council’s individual operations, assets and their condition, geography, demographic mix, service priorities, operating models (in-house or contracted services) and population level and growth.

For example, Council owns and operates five child care centres (accounting for about 85 staff), bringing its street and beach cleaning services in-house, employing about 45 officers to support parking enforcement and running small teams for South Melbourne Market and major festivals. Adventure playgrounds, which used to attract federal funding, are now funded by Council.

These services alone, involving over 200 staff, are not necessarily provided by other councils.

What criteria did Council use to decide which services would be affected, and did it include impact on the disadvantaged members of the community compared to a cost of less than a fifth of one percent of the shortfall?

The funding agreement for South Port Community Legal Service expires on 30 June, which requires officers to reassess whether the funding should continue. In the context of developing budget proposals to address the significant shortfall in income this year, Council officers applied six key principles - Principle 2 is that Council would address specific gaps in support rather than duplicate or substitute support from others.

Generally, community legal centres are funded by state and federal governments, with the only local government support being in the form of office accommodation. There are also other options for clients to receive these services in Port Phillip, through other community legal services and Legal Aid centres that operate within the city.

Does the language employed “several service reduction proposals” mean an end of funding for Southport Community Legal Service or a reduction, and if so to what level?

We are consulting on discontinuing funding for South Port Community Legal Service. However, Council will continue to provide premises for South Port Community Legal Service, which is in line with the type of support that some other local governments provide to community legal services.

Why isn't Council prepared to borrow at a time when interest rates are so low?

Our financial strategy (adopted three and a half years ago by the current Council) is that borrowings are appropriate for situations such as strategic acquisitions or to underpin infrastructure investment; for example, in Fishermans Bend. It is not seen as being prudent to borrow money to shore up a short-term operational budget issue.

If the Council elections proceed at the end of the year, the new Council can review their economic policy.

What role can Council play in stimulus locally given the high rates of unemployment likely post Covid-19? Will Council follow a Keynesian model of economic management in these extraordinary times?

Council, along with state and federal governments, has a role in stimulating economies. We will support the community when they regenerate their businesses, especially when they start up. We have provided a $2.5 million emergency rescue package as a first step. It is likely a review will be required.

Council’s placemaking team will continue to work with businesses, including in Fitzroy, Bay and Acland streets. The proposed $2.7 million in additional revenue from a two per cent rate. Increase gives Councillors a little bit more ammunition to provide support to play a strategic and key role in helping business return.

Will you stop community grants until the $40 million debt is recouped?

The budget is not struck yet; that is up to Council. Officers’ initial recommendation is to reduce some community grants amounts to assist the recovery work. Any bid will have to be checked against priorities. It is ultimately up to Council if the grants are reconfigured.

Given that the charter of the Audit and Risk committee includes an "oversight over, amongst other issues, management of financial and other risks", we presume that the Committee has already reported to Council on this significant risk to the Councils budget, can residents obtain a copy of the Audit Committee's report on the budget issue confronting Council. If not, what did it say?

Given the role of the Audit and Risk Committee, how can residents contact the Committee direct as the way to do this is not apparent on the website?

The Audit and Risk Committee meetings are confidential and are not distributed publicly. However, a summary of what the Audit Committee discusses is summarised and reported back to Council. For example, a summary of the 25 February Audit and Risk Committee meeting is going to Council on Wednesday, 6 May for Council endorsement. This meeting took place on the cusp of when the pandemic broke out so much of what is referred to will be dealt with at the next meeting.

The most recent Audit and Risk Committee took place on 5 May 2020 and a summary of what was discussed is expected to be reported to Council at the 3 June Council meeting.

Can we see the draft Budget now?

The draft Budget isn’t available yet, as it is still being developed. It is expected that the draft Budget will be endorsed by Council on 17 June and made available on our website soon after for community feedback.

In the current climate, how can Council justify retaining the 2% staff salary increase on 1 July 2020 and still expect the ratepayers to afford to pay for this along with their own on-going daily bills?

Council is required by law to abide by the Enterprise Agreement, which includes a two per cent salary increase from 1 July. Council has no intention of breaking the law.

This requirement does not apply to managers on employment contracts. We need to honour these contracts, which can be renegotiated, but a better plan is to achieve savings through staff cuts.

The CEO, Executive Leadership Team and senior managers have decided that the increase they were seeking for the next financial year (from 1 July) will go back to the community.

In this time of impending high unemployment, what efforts are council making to protect jobs of council employees?

Council exists to serve the public - not to employ public servants - so Council needs to deliver value for a reprioritised Council Plan. There has already been discussion tonight about staff reductions. The Enterprise Agreement and industrial relations law must be abided by as part of this process.

What percentage of the budget is going to be used on “global issues” such as climate change & nuclear weapons etc vs local area amenities?

One of the biggest “global issues” we’re currently facing is the COVID-19 response. A significant part of the 2020/21 Budget will be responding to the pandemic, which means it is too early yet to narrow down a percentage as the draft Budget is still being formulated.