Integrated Planning and Reporting (IP&R) documents 2026

AUTHOR: Scott Maunder, Chief Executive Officer

EXECUTIVE SUMMARY

In accordance with the Integrated Planning and Reporting requirements set out in the Local Government Act 1993, this report presents:

1. Draft Operational Plan 2026/2027 including Delivery Program 2025-2029

2. Draft Asset Management Strategy 2026/2027 (2027-2046)

3. Draft Long Term Financial Plan 2026/2027 (2027-2036)

4. Draft Workforce Management Strategy 2026/2027 (2027-2030)

5. Draft Budget 2026/2027

6. Draft Fees and Charges 2026/2027

7. Draft Strategic Policy ST27 - Statement of Revenue

8. Draft Strategic Policy ST28 - Asset Management.

If approved for public exhibition by the Council, the attached drafts will be published for community feedback and response for 28 days. This is the period set out in the Act in which Councillors and the community can put forward new initiatives and changes to priorities.

The 2026/2027 year delivers a budget which Council believes is a realistic responsible budget that is both representative of the services demanded of and delivered by Council to support our community and businesses whilst focusing on the completion of major projects and core community infrastructure.

As Council moves into the second year of the Operational Plan under the four-year Delivery Program period, we will have the opportunity to deliver more projects, provide key asset renewals and deliver on Council’s ‘business as usual’ activities. Council is entering a period of renewal, with a strong focus on delivering excellent customer service while identifying opportunities for improvement, rationalisation, and, where appropriate, expanded service provision. The Executive Team - comprising Council’s two new Directors alongside the newly appointed Chief Financial Officer - will be pivotal during this time, fostering an environment of opportunity, collaboration, and growth.

I anticipate that this will bring new ideas and approaches for Council to consider.

Council will complete both the Orange Sports Precinct and the Orange Conservatorium and Planetarium this year and move into operation of those facilities which is reflected in the draft budget.

We are also focusing on key infrastructure and renewal of assets across our footpath, roads and water and sewer network. This is designed to meet the current need whilst ensuring we have the appropriate infrastructure in place for the city’s future growth.

Before depreciation and amortisation Council is proposing a general fund operating budget surplus of $14.4M, a water fund operating surplus of $7.4M and a sewer fund operating surplus of $8M. After depreciation and amortisation, the proposed budgets are $2.5M deficit, $1.68M surplus and $3.42M surplus respectively, with a combined result of $2.6M surplus.

Council continues to meet the three key performance ratios:

• Operating Performance;
• Own Source Operating Revenue; and
• Debt Service Cover Ratio.

The budget proposes to increase the rates to residents and businesses by the rate peg of 3.0% which represents an increase to the typical residential ratepayer of $98.12 per year, or $1.89 per week.

Recognising that residents and businesses are already facing significant cost-of-living hardship exacerbated by the recent increase in fuel costs, the alternative of not increasing rates, however, would be to deprive the community of the services that a viable local Council can offer.

Council too is facing sustainability challenges:

• Staff pay rises budgeted at 3.5% noting that the award is currently under negotiation;
• Ageing Council assets will require maintenance; and
• Ongoing project cost increases due to the impact of inflation.

Council is focused on completing its major capital projects with other projects, such as new water and sewer infrastructure that will underpin the City’s growth.

The Draft Budget 2026/2027 has been developed through consultation with the community via the Community Strategic Plan, with Councillors, and with Managers and Directors via a budget review process.

Significant projects included in the next financial year include:

• Sporting Precinct development $75M*
• Gosling Creek Dam Investigation $7M*
• Orange Regional Conservatorium $33.5M*
• Molong Road Sewer Servicing $6M*
• East Orange Water Harvesting Storm Water Harvesting $6M*
• East Orange Servicing $5M*
• Roads Program $3.8M
• Fleet and Plant replacement $2.9M
• Spring Hill & Lucknow Sewer $2.3M
• Cargo Road Sewer Servicing $ 2.2M
• Smart Meters – Water $1.8M
• Water Mains Renewal $1M
• Footpath Rehabilitation & Construction $650K
  *spend over multiple years

LINK TO DELIVERY/OPERATIONAL PLAN

The recommendation in this report relates to the Delivery/Operational Plan strategy “15.1 Provide representative, responsible and accountable community governance”.

FINANCIAL IMPLICATIONS

The proposed Operational Plan identifies the operational and subsequent budgetary impacts arising in the delivery of the levels of service proposed. The financial implications of this investment are significant and ambitious. The finance team, with the Chief Executive Officer and Executive Leadership Team, have modelled the proposed program of works so Council can continue its operational programs whilst at the same time committing significant capital funds and delivering a balanced budget.

POLICY AND GOVERNANCE IMPLICATIONS

The Local Government Act 1993 requires Council to exhibit the documents for a minimum of 28 days. It is proposed to exhibit the plans for 28 days from 22 April 2026. Following exhibition, it is intended that community submissions and the documents will be brought back to Council for consideration.

RECOMMENDATION

That Council resolves to place on public exhibition for a minimum of 28 days the following documents:

1. Draft Operational Plan 2026/2027 including Delivery Program 2025-2029
2. Draft Asset Management Strategy 2026/2027 (2027-2046)
3. Draft Long Term Financial Plan 2026/2027 (2027-2036)
4. Draft Workforce Management Strategy 2026/2027 (2027-2030)
5. Draft Budget 2026/2027
6. Draft Fees and Charges 2026/2027
7. Draft Strategic Policy ST27 - Statement of Revenue
8. Draft Strategic Policy ST28 - Asset Management.

SUPPORTING INFORMATION

Since 2012, all NSW Councils have been required to prepare a suite of documents under the Integrated Planning and Reporting (IP&R) framework outlined in the Local Government Act and its Regulations.

In accordance with the Integrated Planning and Reporting requirements set out in the Local Government Act 1993, this report presents the draft IP&R suite of documents which have been reviewed and updated. The documents are recommended for public exhibition for a minimum of 28 days.

At the conclusion of the exhibition period Council will be presented with any submissions and any amendments to these documents to be considered at a subsequent Council meeting.

A review of each of the Plans and Strategy’s has been undertaken with a focus on developing clear and concise actions and performance measures to allow the community to better understand Council’s activities over the life of the Plans.

Overview

The Community Strategic Plan 2025-2035 outlines the Council’s role in the delivery of each priority, described using the following values:

1. Live

We value encouraging healthy lifestyles, community pride, and a sense of belonging. We strive to maintain a safe, caring, and connected community, with active participation supported by enhanced cultural and recreational facilities and inclusive services for all residents. Our beautiful parks, gardens, and natural assets make Orange a desirable place to live, work and play.

2. Preserve

We value preserving the unique natural, cultural, social, and historical aspects of our community while recognising the need for growth and development. We are committed to sustainability by promoting renewable energy, reducing waste, and protecting our natural resources. We also prioritise infrastructure to support a growing city, including roads, footpaths, parking and a vibrant CBD.

3. Prosper

We value providing positive choices for investment, employment, and study. We aim to strengthen and diversify our economy by targeting new and innovative industries, as well as fostering our existing strengths such as medical services, mining, local food and wine production, and tourism. We encourage engagement between Council, local businesses and industry.

4. Collaborate

We value forging a collaborative community that engages in open and ongoing decision-making. We support developing future leaders and community groups to deliver services and programs. We look to Council for leadership, guidance, and responsible governance. Each value outlines strategic objectives based on community feedback, envisages where we want to be, how we will get there, Council’s role, essential partners and collaborators and measures to track progress.

Delivery Program (four year)

The delivery Program details specific individual projects and activities that will be undertaken during the Council term to achieve the commitments made in the Community Strategic Plan.

Operational Plan (one year)

The Operational Plan details specific individual projects and activities that will be undertaken in the next year to achieve the commitments made in the Delivery Program.

The Operational Plan includes the Council’s detailed annual budget, along with the Council’s Statement of Revenue Policy, which includes the proposed rates, fees and charges for that financial year.

2026/2027 Operating Position

The draft Operational Plan proposes a consolidated operating surplus (before capital) of $2.60m for 2026-2027 financial year.

The distribution across the funds is as follows with the table also showing the draft operating positions in the subsequent three years:

2026/2027 Capital Budget

The capital budget proposes to deliver a combined total of projects of $78.5m in the 2026-2027 financial year. Over the next four years a total capital spend of $211M is proposed.

This expenditure is distributed across the funds and the expenditure levels over the subsequent three years are also shown:

2026/2027 Rates

IPART have set the Rate peg at 3.0% for the 2026-2027 financial year. The overall impact of this increase on an average assessment is an increase of $1.89 per week or $98.12 per annum

Please note the above totals do not include water or non-residential sewer charges which are billed separately.

Proposed increases in water and sewer fees and charges are shown below and are based on long term financial models that ensure future capital needs and operating costs can continue to be met.

Pensioners receive a statutory reduction of $250 off their General Rates & $87.50 off both water and sewer charges. Council also offers a voluntary rebate of either ten per cent (pensioners prior to 2006) or five per cent of rates and charges. The additional voluntary rebate costs Council approximately $470,000 per annum.

2026-2027 Financial Ratios

Operating Performance Ratio

The operating performance ratio measures how well Council contains its expenditure within its operating revenue. The benchmark set by the OLG is greater than zero per cent. Council meets this ratio for 2026-2027.

Own Source Ratio

The own source revenue ratio measures the Council’s ability to be self-supporting and the degree to which it does not rely on external funding sources such as operating grants and contributions. The benchmark set by the OLG is greater than 60 per cent. Council meets this benchmark for 2026-2027.

Debt Service Cover Ratio

The purpose of this ratio is to measure the availability of operating cash to service debt including interest and principal repayments. The benchmark set by the OLG is greater than 2.00. Council has the ability to meet this benchmark for the 2026-2027 year.

2026/2027 Long Term Financial Plan (2027-2036)

The Long Term Financial Plan (LTFP) forms part of the Resourcing Strategy which provides the financial plans and forecasts for the next 10 years. The LTFP is based on a set of assumptions which is used to forecast council’s long term financial position. The LTFP is attached to the report.

2026/2027 Workforce Management Strategy (2027-2030)

The Workforce Management Strategy has been developed to build on the strong Workforce Management Plans prepared in prior years and should be read in conjunction with the Council’s Operational Plan and Delivery Program. It is developed using the concepts found in the research and analysis completed and includes summaries of the plans created in response to the high-level challenges affecting the workforce of Orange City Council. The ongoing focus of the Workforce Management Strategy is ensuring Orange City Council has the right people, with the right skills, doing the right jobs, at the right time. This requires having systems in place to attract, develop and support staff to allow Council to deliver services and infrastructure to our community. This strategy also links with the key initiatives of the NSW Local Government Workforce Strategy. The Workforce Management Strategy is attached to this report.

2026/2027 Asset Management Strategy (2027-2046)

The Asset Management Strategy is presented at a high level to provide key information that can be used in the determination of levels of service and funding required. A high-level review of Council’s Asset Management policies, practices and systems has been completed in conjunction with the development of this strategy to provide a strategic direction and guidance for improving asset management planning and performance. Council is responsible for infrastructure and other assets that have a fair value of approximately 2.2 billion dollars as of 30 June 2026. The Asset Management Strategy is attached to this report.

2026/2027 Statement of Revenue Policy

It is a requirement to incorporate into Council’s operational plan a Statement of Revenue Policy. The objectives of the Revenue Policy are to meet statutory requirements, to establish the total revenue required to fund Councils’ activities and to identify the revenue sources available to Council. The Statement of Revenue Policy is attached to this report.

2026/2027 Asset Management Policy

It is a requirement to incorporate into Council’s operational plan an Asset Management Policy. The objective of the Asset Management Policy is for Council to have set guidelines for implementing a consistent asset management process throughout the Orange City Council local government area to ensure that Council is able to provide quality infrastructure to the community. The Asset Management Policy is attached to this report.