Environmental Sustainability Policy Committee
Agenda
3 March 2022
Notice is hereby given, in accordance with the provisions of the Local Government Act 1993 that an Environmental Sustainability Policy Committee meeting of ORANGE CITY COUNCIL will be held in the Council Chamber, Civic Centre, Byng Street, Orange on Thursday, 3 March 2022.
David Waddell
Chief Executive Officer
For apologies please contact Administration on 6393 8106.
Environmental Sustainability Policy Committee 3 March 2022
2.1 IPART Review of Local Government Domestic Waste Management Charges
1 Introduction
1.1 Declaration of pecuniary interests, significant non-pecuniary interests and less than significant non-pecuniary interests
The provisions of Chapter 14 of the Local Government Act, 1993 (the Act) regulate the way in which Councillors and designated staff of Council conduct themselves to ensure that there is no conflict between their private interests and their public role.
The Act prescribes that where a member of Council (or a Committee of Council) has a direct or indirect financial (pecuniary) interest in a matter to be considered at a meeting of the Council (or Committee), that interest must be disclosed as soon as practicable after the start of the meeting and the reasons given for declaring such interest.
As members are aware, the provisions of the Local Government Act restrict any member who has declared a pecuniary interest in any matter from participating in the discussion or voting on that matter, and requires that member to vacate the Chamber.
Council’s Code of Conduct provides that if members have a non-pecuniary conflict of interest, the nature of the conflict must be disclosed. The Code of Conduct also provides for a number of ways in which a member may manage non pecuniary conflicts of interest.
|
Recommendation It is recommended that Committee Members now disclose any conflicts of interest in matters under consideration by the Environmental Sustainability Policy Committee at this meeting. |
RECORD NUMBER: 2022/153
AUTHOR: Wayne Davis, Manager Waste Services and Technical Support
EXECUTIVE Summary
In 2010 the Minister for Local Government delegated to IPART the function of approving special rate variations and minimum rates, and the function of varying annual domestic waste management charges. IPART has released its draft report to seek feedback from stakeholders on its draft decisions on the regulation of domestic waste management charges levied by NSW local Councils (see attached report).
IPART is seeking feedback on specific questions in the draft report to inform its decisions for the final report with submissions due 29 April 2022 (changed from 25 March 2022). IPART will also hold a public hearing on 7 June 2022 after it has considered all submissions.
Link To Delivery/OPerational Plan
The recommendation in this report relates to the Delivery/Operational Plan strategy “17.2 Collaborate - Ensure financial stability and support efficient ongoing operation”.
Financial Implications
Limiting all Councils to a general cap figure on setting domestic waste management charges could have serious impact on ability to maintain current levels of service.
Policy and Governance Implications
Potential additional regulation of how Council sets its domestic waste management charges may incur further need to respond to IPART to justify Council’s service level needs which are not directly comparable with other local government managed waste operations. This will result in further strain on Council’s resources and potential delays whilst duplicating the existing advertising requirements that facilitate community input into proposed fees and charges prior to adoption.
|
That Council resolves to make a submission to IPART responding to the draft recommendations report objecting to benchmarking domestic waste management charges however, the provision of clear and unambiguous pricing principles are supported and should be included within the NSW Office of Local Government Council Rating and Revenue Raising Manual as this will provide sufficient guidance to all Councils when setting Domestic Waste Management charges to arrive at costs that provide services that result in best value for ratepayers. |
further considerations
Consideration has been given to the recommendation’s impact on Council’s service delivery; image and reputation; political; environmental; health and safety; employees; stakeholders and project management; and no further implications or risks have been identified.
SUPPORTING INFORMATION
Councils provide a range of domestic waste management services to their constituents ranging from kerbside collection, drop off facilities and periodic clean-up services. Orange City Council’s services extend to additional operations such as operating a waste baling and inert waste transfer facility, composting operation and various other waste processing initiatives such as organics, scrap metal, construction and demolition waste processing, community recycling centre and Recovery Shop operation. Not all Councils can offer this range of service to their constituents.
Domestic waste management costs have been independently audited as required by the Office of Local Government each year and IPART reviewed 2017-18 and 2018-19 Council’s data as part of the 2019-20 Local Government Cost Index (LGCI) survey. This last review found relatively large increases in Domestic Waste Management charges in recent years, with variations across Councils and between similar Councils.
Throughout the consultation processes, Local Government has been advising IPART of these necessary increases being mainly attributable to external cost drivers outside of Local Government control. Unfortunately, within the waste industry where Councils need to engage service providers to either undertake collection, processing and marketing of collected product, it will always be a matter of being a price taker of the most affordable means of performing that service in order to obtain value for money. Going to tender allows Councils to explore the market, seek alternative options whilst delivering on core objectives in a fair and open manner. This allows scrutiny and public input to resulting fees and charges deemed necessary to fulfil the service requirements.
In recent years we have felt the impact of China Sword, whereby, stringent limitations on volume and quality of product with next-to-impossible minimum contamination levels for supplied commodities were forced upon western countries by China and other Asian markets and this has resulted in severe processing limitations and resultant increases in on-shore processing costs by the very limited recycling industries available to local Councils. This highlighted the lack of investment in waste recycling and disposal infrastructure within Australia, and couple this with State Government waste levy increases but without additional funding to Councils to assist with recycling and there being very few alternative recycling markets and processors within our country, then increased costs to Councils are unavoidable which need to be passed on to the local consumer.
Notwithstanding these factors, IPART propose to publish annually a “benchmark” waste peg with intention to provide guidance to ratepayers and Councils on how much the reasonable cost of providing domestic waste management services should change year to year. Councils would be expected to explain to IPART any variance above the benchmark figure and all increases and explanation would be published in an annual report. The ultimate position may lead to Councils being required to adhere to a binding domestic waste management waste peg. A binding waste peg benchmark figure is not allowing for variation between Councils’ number and type of services provided, changes in the marketplace for receipt and processing of recyclables and other waste streams, impacts of landfill levy and available associated funding allocation to Councils and diminishing landfill capacity.
Within the IPART draft report, it is stated that they have considered the responses of stakeholders to their Discussion Paper and the broader issues that were raised however, their delegated powers cannot respond to many of the issues raised and that they can only set an annual limit on the extent to which Councils’ domestic waste management charges may be varied. This is alarming to say the least for local Councils as it suggests that limited hearing of relevant factors were taken into consideration in arriving at the conclusion that the overall best fit is to average an annual limit on the extent to which Councils’ domestic waste management charges may be varied. The most sensible conclusion to this review should be to provide guidance to Councils on accepted pricing principles in setting domestic waste charges.
Councils are obliged to advertise their proposed fees and charges under the Local Government Act and in line with the Integrated Planning and Reporting framework thereby allowing full disclosure and transparency of levels of service and costs to its constituents. Local factors, external market forces and EPA licence and operating conditions will all influence actual costs that are not readily benchmarked between Councils and suggesting to the community that all Councils should be comparable does not present a true reflection of the local conditions.
1 Draft Report - IPART - Review of Domestic Waste Management Charges - 13 December 2021 (for InfoCouncil), D22/7177⇩
Attachment 1 Draft Report - IPART - Review of Domestic Waste Management Charges - 13 December 2021 (for InfoCouncil)
