![Budget Breakdown and Q and A](/getmedia/d58c8e5e-29b1-4559-8837-9357dc32b3fe/News_-Budget-3.png)
Where does the Shire get its income?
Our operating income for 2024/25 is estimated to be $45 million. Around two thirds (65%) of the Shire’s operating revenue comes from rates, which are our landowners’ contribution and investment in our community assets, services and facilities.
We also derive 28% of our income from fees and charges for a range of services including kerbside waste collection, recreation centre use and swimming lessons, animal registrations and planning services.
Smaller sources of operational funding include grants and investment interest
What are the Shire’s main areas of expenditure?
Our annual operating expenditure is around $52.9 million, with an additional $19.5 million allocated for capital works to renew, upgrade and expand our community’s assets.
To deliver services to our community the largest component of our costs is staffing ($21.2 million) and materials and contractors ($12.425 million). We also maintain community assets valued at more than $386 million, resulting in a budgeted depreciation expense of $14.8 million.
Expenses are more than income. Does this mean we won’t breakeven?
We’re constantly planning for the future and our 2024/25 Budget is part of a ten-year Long Term Financial Plan.
When we know we have big projects coming up we create ‘reserves’, which are like savings.
In years when we need to, we draw down on these reserves which also helps us to avoid big rate spikes in the costlier years. We currently have around $27 million in various reserves allocated for specific projects.
Over the next 12 months we’re expecting to draw down $8.6 million which includes numerous projects including
- renewal of internal roads and drainage at Turner Holiday Park
- completion of the Flinders Bay to Cape Leeuwin shared path in Augusta, and
- scheduled renewal of a number of playgrounds throughout the region.
Employee costs are a big expense. Why are they so much and why have they increased?
We’re predominantly a service organisation which means the largest component of our operating costs is staff.
We pay for the staff that run the recreation centres, libraries and performing arts centre, the rangers who patrol our beaches and public open space, the teams of staff who maintain our roads, parks and reserves, and the staff who oversee planning, building and environmental health services.
Our staff costs including wages and superannuation, are expected to increase by almost $3 million ($2.938m/+15.4%) this year for a few reasons:
- Our growing population is increasing demand for our services - Our permanent resident population has increased by 26% between 2016 and 2023. We also seeing an increase in tourists and our seasonal transient population which supports our hospitality, wine and agricultural industries. A larger temporary and permanent population means we need more staff to continue to deliver our services and maintain our facilities.
- Our Recreation Centre is open again and patronage has doubled - Our investment in the Margaret River Rec centre has been highly valued by our community and patronage has almost doubled compared to historical figures. To service this increased demand, we’re recruiting more staff for the centre. We’ve also employed more staff to run our community swim lesson program, which is already generating more money for the community.
- We created some new positions to achieve community goals - (i)To safeguard our environment, we’ll be hiring two Natural Area Officers who will be dedicated to maintaining and protecting natural vegetation on Shire reserves. (ii) Our IT systems are clunky and outdated, which hinders how quickly and efficiently we can service and engage with our community. To oversee a major upgrade of our systems we’ll employ a project manager.
- We’ve increased wages - Our staff are members of our community experiencing the same cost of living increases affecting us all. We are currently finalising the Shire’s Industrial Agreement and have made provision for 4.5% wage increase.
- Superannuation contributions have increased - The Federal government has increased compulsory super contributions from 11% to 11.5% effective from 1 July 2024.
How does Council decide where to invest?
Our budget process started in April and the Shire’s Strategic Community Plan 2040 was used to shape our Annual Budget and the associated Corporate Business Plan 2024-2028.
Our Strategic Community Plan 2040 outlines what our residents have told us is most important to them, which includes protecting our unique environment and having facilities and infrastructure that support healthy and active lifestyles.
Since April we’ve undertaken regular workshops between councillors and shire staff to determine the minimum level investment we need from rates to deliver the projects our community wants, and what projects should be undertaken this year or in the future. To find out more about the projects in your town go to this news story.