4 July 2007


Dear Councillor,

In pursuance of the provisions of the Local Government Act, 1993 and the Regulations thereunder, notice is hereby given that a POLICY REVIEW COMMITTEE MEETING of Penrith City Council is to be held in the Passadena Room, Civic Centre, 601 High Street, Penrith on Monday 9 July 2007 at 7:30pm.

Attention is directed to the statement accompanying this notice of the business proposed to be transacted at the meeting.

Yours Faithfully



Alan Travers

General Manager




1.           APOLOGIES


2.           LEAVE OF ABSENCE

Leave of absence has been granted to:

Councillor Jim Aitken OAM - 3 July 2007 to 10 July 2007 inclusive.

Councillor Mark Davies - 2 July 2007 to 16 July 2007 inclusive.



Policy Review Committee Meeting - 4 June 2007.



Pecuniary Interest (The Act requires Councillors who declare a pecuniary interest in an item to leave the meeting during discussion of that item)

Non-Pecuniary Interest




6.           MAYORAL MINUTES


7.           NOTICES OF MOTION






10.         URGENT REPORTS (to be dealt with in the master program to which the item relates)







Monday 9 July 2007


table of contents







meeting calendar



confirmation of minutes



master program reports










February 2007 - December 2007


























Ordinary Meetings

7.30 pm























Policy Review Committee

7.30 pm
























#    Meetings at which the Management Plan ¼ly  reviews are presented.

^     Election of Mayor/Deputy Mayor [only business]

#+  General Manager’s presentation – half year and end of year review

@   Strategic Program progress reports [only business]

v   Meeting at which the Draft Management Plan is adopted for exhibition

ü    Meeting at which the 2006/2007 Annual Statements are presented

*     Meeting at which the Management Plan for 2007/2008 is adopted



-                 Council’s Ordinary Meetings are held on a three-week cycle where practicable.

-                 Extraordinary Meetings are held as required.

-                 Policy Review Meetings are held on a three-week cycle where practicable.

-                 Members of the public are invited to observe meetings of the Council (Ordinary and Policy Review Committee).  All meetings start at 7:30pm.

-                 Should you wish to address Council, please contact the Public Officer, Glenn McCarthy on 47327649













His Worship the Mayor Councillor Pat Sheehy AM, Councillors Jim Aitken OAM, David Bradbury, Kevin Crameri OAM (arrived 7:37pm), Greg Davies (arrived 7:38pm), Mark Davies, Jackie Greenow, Garry Rumble, Steve Simat and John Thain.



PRC 46  RESOLVED on the MOTION of Councillor Jackie Greenow seconded Councillor Garry Rumble that apologies be accepted from Councillor Susan Page.



Leave of Absence was previously granted to Councillor Lexie Cettolin for the period 21 May 2007 to 25 June 2007 inclusive.

Leave of Absence was previously granted to Councillor Karen McKeown for the period 25 May 2007 to 26 June 2007 inclusive.

Leave of Absence was previously granted to Councillor Kaylene Allison for the period 26 May 2007 to 1 July 2007 inclusive.

Leave of Absence was previously granted to Councillor Ross Fowler for the period 2 June 2007 to 17 June 2007 inclusive.

Councillor Kevin Crameri OAM arrived, the time being 7:37pm.


CONFIRMATION OF MINUTES - Policy Review Committee Meeting - 21 May 2007

PRC 47  RESOLVED on the MOTION of Councillor Garry Rumble seconded Councillor Mark Davies that the minutes of the Policy Review Committee Meeting of 21 May 2007 be confirmed.



 There were no declarations of interest.




The City in its Broader Context


Councillor Greg Davies arrived, the time being 7:38pm.


1        Status of National Growth Area Alliance                                                                          

PRC 48  RESOLVED on the MOTION of Councillor Greg Davies seconded Councillor Jackie Greenow


1.     The information contained in the report on Status of National Growth Area Alliance be received.

2.     The Mayor represent Council in discussions with the Mayors of the other National Growth Area Alliance Councils in Western Sydney to consider infrastructure priorities to support urban growth and their advocacy to Government.

3.     A further report outlining proposed regional and local communication strategies be presented to the next available Policy Review meeting.



The City as a Social Place


2        Penrith Open Space Action Plan and Penrith City Local Open Space Development Contributions Plan                                                                                                              

PRC 49  RESOLVED on the MOTION of Councillor Greg Davies seconded Councillor Kevin Crameri OAM


1.     The information contained in the report on Penrith Open Space Action Plan and Penrith City Local Open Space Development Contributions Plan be received.

2.     Council endorse the Penrith Open Space Action Plan as attached to this report.

3.     Council approve the Penrith City Local Open Space Development Contributions Plan as attached to this report, and repeal the existing Development Contributions Plan for Open Space in Existing Residential Areas (1997).

4.     The balance of Section 94 funds at the end of the 2006/07 financial year relating to the Development Contributions Plan for Open Space in Existing Residential Areas (1997) be transferred to the Penrith City Local Open Space Development Contributions Plan.

5.     Public notice of Council’s decision be placed in a local newspaper.

6.     Those persons who made submissions be advised of Council’s decision.

7.     Council seek Government grant opportunities under the NSW Sport and Recreation Capital Assistance Program (CAP) and the Regional Sports Facility Program (RSFP) for improving open space areas in the City.



The City In Its Environment


3        Review of Council's On-site Sewage Management Strategy                                          

PRC 50  RESOLVED on the MOTION of Councillor Jim Aitken OAM seconded Councillor Garry Rumble


1.     The information contained in the report on the Review of Council's On-site Sewage Management Strategy be received.

2.     The amended “On-site Wastewater Management Policy” be adopted by Council.

3.     The name of the Policy be re-considered with the aim to focus more on water re-use management rather than ‘wastewater’ management.



Leadership and Organisation


4        Council Scholarship - University of Western Sydney                                                       

PRC 51  RESOLVED on the MOTION of Councillor Jim Aitken OAM seconded Councillor Steve Simat


1.     The information contained in the report on Council Scholarship - University of Western Sydney be received.

2.     The revised selection criteria and amount of the scholarship offered through the University of Western Sydney be endorsed.

3.     Council congratulate Miss Alicia Parata on her receipt of the scholarship, and mention be given of this in the Mayoral Message column in the local media.



There being no further business the Chairperson declared the meeting closed the time being 8:17pm.



Item                                                                                                                                       Page



The City in its Broader Context




9        Status of National Growth Area Alliance


The City as a Social Place


1        UWS Nepean Campus Masterplan


2        Food Safety Program


The City In Its Environment


3        Western Sydney Regional Illegal Dumping Squad


The City as an Economy


4        Framework for a review of options for delivering Economic Development and Employment services in the City


Leadership and Organisation


5        Enterprise Risk Management


6        Asset Management Planning For NSW Local Government


7        Local Government Revenue Raising Capacity


8        Service Specification Program








The City in its Broader Context


Item                                                                                                                                       Page




9        Status of National Growth Area Alliance









The City as a Social Place


Item                                                                                                                                       Page


1        UWS Nepean Campus Masterplan


2        Food Safety Program



Policy Review Committee Meeting

9 July 2007

The City as a Social Place



The City as a Social Place




UWS Nepean Campus Masterplan   


Compiled by:                Natasha Baker, Senior Environmental Planner

Authorised by:             Roger Nethercote, Environmental Planning Manager   

Strategic Program Term Achievement: Cohesive communities are formed based on sustainable, safe and satisfying living and working environments.

Critical Action: Prepare and implement plans (based on Council's Sustainability Blueprint for new Release Areas) for each new release area that deliver quality, sustainable living and working environments..


Presenters:                   Rhonda Hawkins - Deputy Vice Chancellor Corporate Services - University of Western Sydney

                                      Professor Kevin Sproats - Pro-Vice Chancellor Campus Development - University of Western Sydney    


To introduce a presentation to the Council of the UWS Nepean Campus Masterplan process which will be provided by the University Representatives, and provide information about the relationship of the adopted WELL Precinct strategy and Concept Plan to the University Campus.  The report recommends that the information be received.



The Werrington Enterprise Living and Learning (WELL) Precinct is an area of approximately 645 hectares, bounded by the Western Railway and the Victoria Street/ Shaw Park precinct to the north, French Street/ O’Connell Street, the UWS Kingswood Campus and Kingswood residential area to the west, Caddens Road and the M4 motorway to the south, and the Claremont Meadows residential area and Werrington Road to the east. 


The Precinct is of strategic importance within both Penrith City and the broader region, given its scale, proximity to established urban development and infrastructure, tertiary institutions, and the prospect of new transport linkages.


With the University of Western Sydney (UWS) being the major landowner, and one of the project partners in the planning and future development within the WELL precinct, it is prudent that any future plans intended for the University educational sites are consistent with the principles and objectives of the WELL Precinct Strategy and the adopted refined Concept Plan. The University is developing a masterplan for its Nepean Campus, which identifies a preferred approach to the future development of its sites within the WELL Precinct. University representatives will be making a presentation on this process at the meeting.

WELL Precinct Strategy

The planning for the Werrington Enterprise Living and Learning (WELL) Precinct has been underway since 2002, encompassing the development of a WELL Precinct Strategy.  Council, at its meeting of 1 November 2004, adopted the principles of the WELL Precinct Strategy and endorsed it as the principal policy basis for advancing the planning and landuse decision making for the Precinct, including the sub-precincts and future development of the University landholdings. 


The WELL Precinct Strategy outlines a clear framework within which the area’s potential can evolve into realisable quality, and sustainable urban outcomes for our City and the Region.  It provides specific instruction and guidance for Council, landowners and Government agencies as the basis for future landuse planning and development decisions within the Precinct and establishes the principal arrangements, which need to be embodied in those proposals.  The Strategy initiative provides an important blueprint for the realisation of future opportunities and synergies between the various activities.


The WELL Precinct Strategy identified key objectives for the planning of the Precinct which includes:


·    Seeking creation of quality working, living and learning environments, delivering a viable, vital community, energised by the interactions and synergies of adjacent education, living and employment opportunities.

·    Incorporating principles of sustainability into the Precinct Strategy, and incorporating principles of sustainability into the planning and design of the Precinct’s built environment

·    Encouraging the development of innovative housing to support the needs of the facilities and the local community, ass to the viability of public transport systems, and contribute to the vibrancy and safety of the area

·    Ensuring high quality public transport access to these facilities an the surrounding areas, aimed at reducing growth in car use.

·    Identification and establishment of a Precinct Centre conveniently located to optimise synergies between existing and proposed communities, education and enterprise activities. The Centre will provide shopping, entertainment and social services to the surrounding community.


The University is the central element to the WELL Precinct, and the WELL Strategy recognises this by identifying key precinct opportunities relating to the University lands which include:


·    the presence of the University within the precinct, representing prestige value in the attraction of businesses to the Precinct;

·    University resources presenting opportunity to spark and foster new enterprise and employment opportunities,

·    provisions for community and commercial art space, studio facilities and business support by co-locating a Creative Enterprise Precinct within its South Werrington Campus, which will provide excellent opportunities for creative industries,  businesses and enterprise, and the learning and teaching disciplines, to collaborate on commercial and community arts based projects,

·    co-locate expanded campus sports facilities, with those demanded by new urban development and create a quality sporting sub-precinct;

·    increasing opportunities to create synergies through greater integration with the larger teaching and learning community;

·    develop opportunities for shared use Campus facilities by local communities in their Campus planning; and

·    opportunities for housing choice and affordability for students of the University.


The WELL Strategy includes an Implementation Strategy which provides strategies for exploring the above opportunities, and pursuing objectives and identified key outcomes and actions for the Precinct. The WELL Precinct Strategy seeks to bring together a range of partners, in order to combine a series of independent actions, occurring or potentially occurring under independent charters, at different times and paces. Some of these activities include UWS involved in the master panning of their campus, Landcom wishing to advance planning of the Caddens Release Area and TAFE exploring their opportunities available from inclusion in the WELL Precinct.


The WELL Precinct Strategy is now in the implementation phase of the Strategy with the Precinct-wide Studies outcomes enabling land use activities within the WELL Precinct to be more clearly defined and integrated.  This process has generated, as contemplated by the adopted WELL Precinct Strategy, the opportunity for further evolution and refinements to the endorsed WELL Concept Plan.  Further implementation of the WELL Strategy has seen Council resolving to move forward with the detailed planning to support the rezoning of Caddens including the Precinct Centre and South Werrington Urban Village sub precincts, which are now well advanced.


The other strategies for pursuing the WELL project objectives is the UWS developing a masterplan for its Nepean Campus, which is consistent with the principles of the WELL Strategy and the adopted WELL Concept Plan. The other element to mention is that the rezoning of the lands in the WELL Precinct, including UWS, are intended to be subject of subsequent planning phases which would be included in relevant chapters of the Citywide Local Plan.

WELL Concept Plan

The recently completed Precinct-wide Studies provides detailed information on likely housing and population yields, areas available for employment and economic development, and clear definition of areas for riparian and conservation corridors as well as active open space areas, enabling further evolution of the adopted WELL Concept Plan.


As a result, a Refined Concept Plan for the WELL Precinct has been prepared which more clearly delineates the land use activities within, and connectivity across, the Precinct.   The Refined Concept Plan is consistent with the identification of the major land use precincts in the adopted WELL Strategy, and their general spatial distribution in the Precinct. 


The refined Concept Plan builds on the version adopted by Council with the WELL Precinct Strategy and in effect retains the same general disposition of land use arrangements originally contemplated and provides greater definition to the areas and edges of each of those principal land uses identified.


The Refined WELL Concept Plan was adopted by Council in October 2006 (attached to this report), and informs appropriate land use directions, and provides the basis for the preparation of draft LEPs and DCPs for the sub-precincts which are now well underway for the Caddens/Precinct Centre Release Area (listed on the State Government’s Metropolitan Development Program) and the South Werrington Urban Village, both of which were identified in the WELL Precinct Strategy as having urban development potential.


The WELL Concept plan as adopted by Council has identified potential landuse opportunities on each of the UWS Nepean campuses, which include:


·    Kingswood Campus – predominately education space with small opportunity for residential land uses to integrate the campus with the Kingswood community and the Caddens Release Area;

·    South Werrington Campus – educational space with the opportunity for employment uses focussing on Creative Arts, with opportunity for residential land uses to integrate the campus with the Claremont Meadows community and the Caddens Release Area;

·    North Werrington Campus - employment potential due to its significant address for higher order employment in Western Sydney, taking advantage of the attractive attributes the Precinct can offer to businesses and investors. This campus has been identified as having potential for a High Technology Business Park to create synergies with courses offered at the University. Part of the Northern campus is included in the South Werrington Urban Village Release Area which includes employment and residential opportunities.


The WELL Concept Plan is not intended to be a zoning plan.  Rather, it provides the basis upon which the sub-precinct draft LEPs, DCPs and other future development in the Precinct are to be prepared, and is also intended to provide a more specific level of understanding for the community, in terms of the extent and nature of development intended to be established within the WELL Precinct over time.


Implicit in the advancement of the LEPs and DCPs, and any other future land development in the Precinct, is that they conform to the principles of the adopted WELL Precinct Strategy and the refined WELL Concept Plan.


UWS Masterplan

Extending from the adopted WELL Strategy 2004, the key outcomes to precinct-wide urban structure was that the UWS Campus planning be informed by the principles of the Strategy and the adopted Concept Plan.


Council officers have been afforded an opportunity to participate with UWS in its development of a masterplan for the Nepean campus, and have assisted the University in its more detailed thinking on the implementation of the WELL Precinct Strategy principles insofar as they relate to the University land holdings. The Masterplan presented tonight is generally consistent with the principles of the WELL Strategy and adopted WELL Concept Plan.


The University of Western Sydney has advised that it operates a diverse and geographically dispersed network of campuses and Medical School clinical facilities at Campbelltown and Liverpool.  The University has taken a two-pronged approach to development of the campus network:


1.      To locate and organise academic programs and research activities across the campus network to assure the quality of the student experience and the engagement and impact of research and to respond to student demand and the changing demography of the Region in the most effective and cost-efficient way; and


2.      To develop campus land assets to provide resources for the strategic development of the University with the intention that the income derived will be directed towards its strategic investment plans and capital development priorities.


As part of the campus strategy the University has prepared a masterplan for the Penrith campus.  The University engaged the services of consultants with significant experience in planning and design of university campuses and educational facilities.


The masterplanning process involved identification of a desirable campus footprint with sufficient capacity for significant student growth and future academic needs.  The campus footprint is large enough to accommodate more than three times the current campus student population.


Shaped through consultation with University staff and students and in concert with the WELL Precinct planning process, the campus masterplan is a strategic framework for the future growth of the campus and will guide planning for new infrastructure for the benefit of students and the community.   


The key diagrams of the campus masterplan will be available for viewing on the University’s website in the coming weeks. The master plan has been developed in consultation with Council officers. The Board of Trustees have recently endorsed the plan as a UWS strategic structure. Manidis Roberts Pty Ltd has been engaged by the University to manage ongoing community consultation.


Next Steps

The next steps in implementing the WELL Strategy:


1.   Report to Council the draft WELL wide Section 94 plan for public exhibition, this will be reported shortly to Council.

2.   Continue to work with the University to consider opportunities on its campuses, particularly those which would see the advancement of additional employment creation.

3.   Continue to engage with the University with its Masterplan process.

4.   Report back to Council when the draft LEP, DCP and Section 94 plan for Caddens release and South Werrington Urban Village come forward later in the year.

5.   Continue to inform the community as planning advances in the WELL Precinct such as keeping up-to-date information on Council’s website and further consulting with the community by way of a public exhibition when draft plans come forward for the release areas within WELL.



The University is fundamental to the WELL Precinct, as it aims to be an established, internationally recognised centre for education, learning and research. Changing approaches to education recognise that learning is a life long process that no longer needs to occur solely in the traditional, institutionalised classroom environment. This opens up opportunities for teaching and learning environments to become better integrated with the whole community, with existing and new businesses and development opportunities. The UWS Nepean Campus offers excellent opportunities to begin realising this vision.


The adopted WELL Precinct Strategy and Concept Plan have outlined a clear framework within which the area’s potential can evolve into quality, sustainable urban outcomes for our City and the Region. The UWS has advanced the WELL Strategy by developing a masterplan that conforms to the principles of the Strategy and adopted Concept Plan.




That the information contained in the report on UWS Nepean Campus Masterplan be received.




1. View

Adopted WELL Concept Plan 2006

1 Page



Policy Review Committee Meeting

9 July 2007

Appendix 1 - Adopted WELL Concept Plan 2006





Policy Review Committee Meeting

9 July 2007

The City as a Social Place



The City as a Social Place




Food Safety Program   


Compiled by:                Graham Pares, Environmental Health Coordinator

Authorised by:             Wayne Mitchell, Environmental Health Manager   

Strategic Program Term Achievement: Strategies are in place to respond to the social and health needs of the community.

Critical Action: Develop and implement a healthy strategy for the City that will guide planning and strategies that embrace healthy outcomes.



To provide an update on Council's Food Safety Program and the proposed enhanced program for 2007-08.  The report recommends that the information be received and that a further report be prepared upon commencement of the Food Regulation Partnership, committing to the provision of the nominated Category C service level



Traditionally, local government has played a key role in protecting health and promoting hygienic conditions and standards within the community, including a key focus on regulating and promoting food safety. Until a change in legislation in 1989, local government had the ability, through the Local Government Act, to register food premises and to effectively regulate the conditions within these premises.  With the removal of that ability, the mandate for the role of local government in the regulation of food safety was unclear, and the degree to which councils undertook this role differed significantly. In addition, the legislative basis of food safety enforcement differed across the States, presenting a problem for food businesses that operated on a national scale.


In 1995, State and Territory health ministers requested the Australia New Zealand Food Authority develop national and uniform food safety standards for Australia. This resulted in the development of the Food Safety Standards and, in New South Wales (NSW), the establishment of the NSW Food Authority. The NSW Food Authority is a state government agency that was formed by the merging of SafeFood NSW and the food regulatory activities of the NSW Health Department. As Australia’s first integrated food regulation agency, the NSW Food Authority is responsible for food safety across the entire food industry, from primary production to point of sale. It has been recognised that both the NSW Food Authority and local government play significant roles in food regulation, and to provide the best food regulation system in NSW, a strong and genuine partnership is essential.


Council considered a report in May 2005, outlining the proposed direction that the NSW Food Authority was pursuing, in defining a role for local government in the regulation of food safety.  This role was being prepared as part of the NSW Food Regulation Partnership, a process of defining the partnership role between the NSW Food Authority and local government in securing a safe food supply.  Three options were available to Council for the service level that they could provide in a food safety program, as outlined in the following table.

Proposed Partnership Service Level – Local Government

Category A

·    Food premises approvals

·    Emergency response

·    Urgent food recalls


Category B

·    Category A, plus

·    For retail food service businesses (excepting those businesses for which a Food Safety Scheme applies)

·    Premises inspections (to determine compliance with Food Safety Standards 3.1.1, 3.2.2 and 3.2.3 and basic Food Standards matters, in addition to taking samples as appropriate)

·    Investigation of complaints (including single cases of food borne illness)

·    Enforcement action (including serving notices, orders and taking court action)


Category C

Category A & B, plus

·    Any other role negotiated directly between councils and the NSW Food Authority, for example (but not limited to):

·    Premises inspections of manufacturers



Category A was proposed to be the base minimum role for all councils.  Accompanying this role was the introduction of appropriate funding measures to sufficiently resource the service level provided.


From the release of this proposed partnership in 2005, the Food Authority has undertaken extensive consultation with local government to outline the service obligations commensurate with commitment to the particular service levels.  The purpose of this consultation was to enable Council to determine the service level it would be capable of delivering prior to the introduction of the legislation necessary to formalise the partnership process.  The legislation would include provisions for:

·    The nomination by Council of an appropriate service level

·    The range of fees and charges that would be available to effectively fund a food safety program at that service level

·    A standard schedule of inspection frequencies

·    Standard protocols for investigation and annual reporting on the program

Council’s Preparation for the Partnership

The Food Safety Program is delivered as a significant component of Council’s adopted specification for Health Services.  Given the recognition of Penrith as a Regional City, within the context of the Metropolitan Strategy, during the review of all services, there was a focus on shifting service levels to “best practice” or leading examples of service delivery within the particular program area.  With the knowledge of the proposed service level options within the NSW Food Regulation Partnership, the recent service level review was used as an opportunity to move towards delivering a service level appropriate for a Regional City, for the 2006/07 Food Safety program.  In advance of the proposed Food Regulation Partnership, there was a desire to improve the program to a position whereby Council could deliver the service within the proposed Category C partnership level, which is the highest service level available.


This review of the program included the introduction of a new ‘evidence-based’ inspection tool that was closely aligned to the Food Safety Standards, which could be utilised to both improve the assessment of premises, and to better inform food business proprietors as to the areas of non-compliance.  The Australian Food Safety and Assessment (AFSA) inspection system was tested and determined to be the best tool.  This inspection system was developed by the Australia Institute of Environmental Health and is considered to be ‘best-practice’.  Alterations were also made to the database used for recording inspection results, allowing greater analysis to guide areas of food operations to focus in on the following program period.


The decision to utilise this tool has increased the time spent within a food premises, as it requires a greater understanding of the workflow within the business.  It also provides a greater protection level for food safety by identifying areas of serious non-compliance.  The enforcement process for Council officers has been amended to adjust to the new tool, with the identification of serious non-compliance as the trigger for the commencement of a range of actions should the circumstances warrant it.


There are 519 different food premises presently registered as operating within the City, with the following table detailing the breakdown by type of outlet:















Mixed Business






Service Station






Specialist Low risk


Mobile Food vehicles



In addition to these premises, periodic surveillance is carried out at festivals and promotion and marketing events where food is handled for sale.  All premises registered at the commencement of the program have been inspected in the 2006/07 year. 


Inspection Component of Food Safety

The major component of the Food Safety program is the annual inspection that is conducted at each premises.  The purpose of the inspection is to assess compliance with the operating requirements of the Food Safety Standards.  The Food Safety Standards define the manner in which food premises are permitted to be maintained or operated so as to minimise the potential for the sale of unfit or unsafe food.  These Standards are adopted under the provisions of the Food Act 2003 and apply to all food premises operating within the State.


During the course of the inspection, the condition of the premises and the food handling practices are observed or information is collected through conversations with the food business proprietor.  Compliance is recorded in 9 key areas of the business operation:


·    Food receival

·    Storage

·    Processing

·    Display

·    Packaging

·    Transportation and Distribution

·    Recalls/Food Disposal

·    Health, Hygiene and Knowledge

·    Premises and Hygiene


 Inspection results are classified as Pass or Fail, based upon the identification of areas of non-compliance during the inspection.  One hundred and eighty six (186) premises (36%) were identified as failing to comply with all relevant safe food handling practices at the first inspection.  The following table indicates the areas in which the non-compliances were detected. 


Area of non compliance

No of premises

Food receival










Transportation and Distribution


Recalls/ Food Disposal


Health, Hygiene and Knowledge


Premises and Hygiene



If non-compliance is determined to be serious then an enforcement process is undertaken as outlined below.  All other premises where non-compliance is recorded are addressed through a process of reinspection after a designated period of time to determine if the matter has been rectified of the 156 premises with an initial inspection result of non-compliance have upon reinspection required no further enforcement. 


A rating of serious non-compliance is applied when the particular matter is such that the production of safe food is at risk.  Of the 186 failed premises, 30 were deemed to have serious non-compliances relating to cleanliness or construction of the premises.  An Improvement Notice, under Section 58 of the Food Act, is issued when premises are considered to be in an unclean or unsanitary condition.  The Improvement Notice is a pre-cursor to the service of a Prohibition Notice.  A Prohibition Notice may be served if an Improvement Notice is not complied with, within the defined time period, and may require the cessation of food production on the premises. Improvement Notices have been issued to 30 food businesses during this program period for unclean premises, where the evidence indicates a decline in previous standards of cleanliness, not long-term poor practices. In some cases, food premises voluntary ceased trading to ensure that the necessary improvements were achieved within the time period provided.  Inspections of these premises after the service of the Improvement Notice indicated the required works were completed satisfactorily.


A Penalty Notice is issued when food is handled in a manner that is not compliant with the requirements of the Food Safety Standards, and the matter has been previously brought to the attention of the food business proprietor.  They may be served in conjunction with an Improvement Notice, or separately in respect of a food handling practice, and involve penalties of $330 or  $660 for individuals and $660 or $1100 for corporations, depending upon the individual offence. Twenty (20) penalty notices have been issued during the period for the offences of not complying with the Food Safety Standards, handling food in a manner likely to render it unsafe and handling food in a manner likely to render it unsuitable for consumption.


Prosecutions under the Food Act 2003 will be commenced, when sufficient evidence exists that the condition of the premises and/or the food handling practices of the business have placed the community at significant risk, or if the proprietor has previously been notified of the same serious non-compliance matter. No proceedings for a prosecution have been commenced in the 2006/07 program period, however with the consistency in the food safety program established through the use of the AFSA tool this year, any second breaches detected for a food premises will result in the collection of evidence to support the commencement of legal proceedings under the Food Act 2003.


Overall, there has been a noted response from food proprietors during this period, indicating that they better understand their obligations under the Food Safety Standards.  To assist in increasing awareness of food safety obligations, the information available to the general community, and specifically the food businesses, through Council’s website, has been upgraded, and the first in a series of regular newsletters for food businesses are being printed to be sent out with a food training package “I’m Alert”, a copy of which has been provided to Councillors.  There is a commitment to increasing the range of support material that is available for food businesses, to assist them in improving their food safety handling techniques, the end benefit of which will be a safer food supply in Penrith.


The summary of inspection results provided in this report is being further analysed to better focus the education initiatives undertaken in the 2007-08 program and a report will be sent to the NSW Food Authority to bring to their attention the findings of the 2006-07 program.

Discussion - Food Regulation Partnership

As mentioned previously, it was anticipated the formal introduction of the Food Regulation Partnership through introduction of the relevant legislation was to occur in time for the commencement of the 2007-08 program.  The legislation was not introduced and its commencement has subsequently been delayed, with information indicating that it is not likely until later in the year.  Upon formal commencement of the Partnership, it is expected that Council will be required to formally commit to a Memorandum of Understanding detailing the service level that it is intending to provide.  A further report will be tendered to Council at that time, proposing a commitment to the Category C level, the highest service level available.


The NSW Food Authority has provided draft documentation, outlining the general requirements for councils to consider when they commit to a particular service level, and mandatory protocols needing to be followed for matters such as single-case food borne illness and food safety emergency response.  The information outlines draft reporting protocols required to be submitted annually, detailing the outcomes of the food safety program conducted and the enhanced service that may be provided.  It also details a recommended inspection schedule for food businesses, and a maximum fee structure including administration and inspection fees becoming available within the proposed legislation.


Preparation for the 2007-08 Food Safety program has included a revamp of practices and processes to enable a transition to the top service level (Category C) at the time of the Partnership introduction.  It has included consideration of additional resources and an extension of the skill base of existing staff to undertake additional work such as food sampling.  We will be participating in a food sampling survey of bakery products to be coordinated by the NSW Food Authority in September to determine the bacterial quality of some of the products sold within the City.  Skill development within this area will enable us to undertake periodic independent sampling surveys of both bacterial quality and food composition of food products produced in the City.  The resource commitment necessary to deliver the enhanced program was considered, during the recent service review, and is included in the budget and management plan for 07/08.  Preparation for this enhanced program has commenced, and includes the provision of targeted food handler training and regular food quality sampling surveys.


Committing to the highest service level (Category C) will require a greater resource commitment than previously provided, however early changes that have been gradually introduced to the program have offset the impact. The steady building of a professional relationship with food business proprietors will enable additional tasks such as food sampling to be undertaken with their support, and will enable proprietors to better understand the potential impact that they may have through poor food handling practice.  An anticipated flow-on effect of undertaking the highest service level will be the placement of Council as a preferred place of employment for environmental health professional staff offering them a range of experiences.


The Food Authority provides a high level of support, which is expected to continue throughout the introduction and implementation of the new Partnership.


As a recognised Regional City, it is incumbent upon us to provide a service level in food safety that not only provides the highest levels of safety for the community, but that enhances the ability for food businesses to produce safe and suitable food for consumption.  The changes to the Food Safety Program during 2006/07 have improved the quality of service provided in this regulatory function area.  They have also enabled Council to strategically align itself to work in partnership with the NSW Food Authority at the highest level.





1.   That the information contained in the report on Food Safety Program be received.

2.   A further report be prepared for Council upon commencement of the Food Regulation Partnership legislation.



There are no attachments for this report.






The City In Its Environment


Item                                                                                                                                       Page


3        Western Sydney Regional Illegal Dumping Squad



Policy Review Committee Meeting

9 July 2007

The City in its Environment



The City in its Environment




Western Sydney Regional Illegal Dumping Squad   


Compiled by:                Barry Ryan, Waste and Community Protection Manager

Authorised by:             Barry Ryan, Waste and Community Protection Manager   

Strategic Program Term Achievement: Waste to landfill and indiscriminate dumping are significantly reduced and resource recovery is optimised.

Critical Action: Develop and progressively implement a waste strategy that complements the State Government’s Waste Avoidance and Resource Recovery Strategy.


Presenters:                   Barry Ryan, Laurie Cafarella, Stephen Gillis - Penrith City Council - Western Sydney Regional Illegal Dumping Squad    


To provide Councillors with an update and background on recent activities undertaken by the Western Sydney Regional Illegal Dumping Squad.  The report recommends that the information be received.



The Western Sydney Regional Illegal Dumping  (RID) Squad consists of officers employed by one Council to provide a deterrent to illegal dumping across a number of Local Government areas (LGA’s).


The Western Sydney RID Squad was formed in 1999, as a response to the growing problem of the illegal dumping of waste.  Current members of the Strategic Alliance include Bankstown, Baulkham Hills, Fairfield, Holroyd, Liverpool and Penrith Councils and the Department of Environment and Climate Change. 


The Department of Environment and Climate Change is a significant partner in the project providing $45,000 in funding per Council per annum.


Penrith City Council is the current Project Manager of the Western Sydney RID Squad.

Current Situation

The Western Sydney RID Squad is unique in that staff employed by one council operate across the six local government areas, providing a service that would otherwise not be able to be afforded by a single local community.


Project staff can operate individually, in pairs, or as a team, to tackle specific waste dumping issues in an area, thereby providing a service to the community that otherwise would not be able to be provided by an individual council.


In mid 2006, the Western Sydney Regional Illegal Dumping Squad was highly commended in the efficiency improvement category at the National Awards for Local Government, run by the Australian Government’s Department of Transport and Regional Services.

This category was chosen, as it best reflects the contribution of the Squad to reducing the cost of providing regulatory services to project member councils in Western Sydney, while maintaining the standard of those services.


The Western Sydney RID Squad is a deterrent program, utilising an autonomous team of specialised investigation officers, targeting the illegal disposal of waste throughout Western Sydney. It consists of an alliance of six councils and the NSW government. Bankstown, Baulkham Hills, Fairfield, Holroyd, Liverpool and Penrith City Councils and the Department of Environment and Climate Change are alliance members. Liverpool Council Joined the squad in July 2006.


Significant outcomes of the RID Squad project include:


·    It has provided member councils with a significant resource without all the inherent costs;

·    Each council is provided with the ability (which occurs during specific operations) to target a specific area or /issue with all staff of the Squad;

·    The community has benefited from the reduction of illegal dumping;

·    The community has also benefited through cost savings derived from the sharing of RID project and staff resources;

·    Illegally dumped waste that has been successfully tracked to a responsible person or company is required to be removed by that person or company, thereby saving the community the costs of removal and disposal of the waste;

·    The RID Squad have issued a total of over $1,000,000 in fines since the commencement of operation.


The nature of illegally dumped waste in the Penrith Local Government Area has changed considerably over the past 5 years. Whilst there are fewer incidents of the illegal dumping of significant amounts of waste, there are still a considerable number of incidents on a minor scale, i.e. 0.5-5 tonnes of waste, particularly in bushland areas.


Some strategies have further reduced this level of dumping, including the placement of gates on fire trails, fencing of some areas, and increased enforcement.


Various strategies are used by the staff of the RID squad, including aerial surveillance using helicopters.


A presentation will be made to provide Council with an overview of the RID Squad, and recent incidents investigated, including results from aerial surveillance in March 2007.




That the information contained in the report on the Western Sydney Regional Illegal Dumping Squad be received.



There are no attachments for this report.

The City as an Economy


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4        Framework for a review of options for delivering Economic Development and Employment services in the City



Policy Review Committee Meeting

9 July 2007

The City as an Economy



The City as an Economy




Framework for a review of options for delivering Economic Development and Employment services in the City   


Compiled by:                Bijai Kumar, Local Economic Development Program Manager

Authorised by:             Bijai Kumar, Local Economic Development Program Manager   

Strategic Program Term Achievement: The City’s business community, learning institutions and training institutions are working in an integrated way to strengthen and develop the City’s local economic base.

Critical Action: Work with appropriate economic partners on developing mutual understanding and support for a common agenda for action.



To suggest to Council a framework for the review of options available in the delivery of economic development and employment services.The report recommends the establishment of a Councillor Working Party to conduct such a review and that representatives of the PVEDC be invited to join the working party in an advisory capacity.  The report further recommends that Council consider the merits of including the two Centre Associations as part of the review.



At the Policy Review Committee meeting of 30 April, Council requested a report outlining an approach to further investigating the options available to Council for delivering its economic and employment development services.


Over the past nine months Council has had the opportunity through Briefings and Policy Review Committee meetings to consider the outcomes of the research and investigations undertaken by the Glenmore Park Stage 2 landowners group (LOG) in preparing an Employment Development Strategy. As a result Council agreed at its Policy Review Committee meeting of 30 April to accept an offer of $1.6 million from the LOG, to be formalised via a planning agreement, to develop initiatives to create jobs not able to be delivered by the development itself. The offer for a financial contribution from the LOG is underpinned by a sectoral based investment strategy developed by Professor Ed Blakely and the Policy Research Centre (PRC) at Sydney University which provides some directions on how these jobs could be secured.


At this stage any approach to conducting a review would have, in the main, considered Council’s internal economic development functions and the role and functions of the Penrith Valley Economic Development Corporation. The Board of the PVEDC has been consulted on the directions proposed by Council and has advised that while there are concerns with regards to the proposal the Board is supportive of further investigations. The Corporation’s CEO has recently resigned and the Board has taken a decision to appoint an acting CEO who is also a Board member, pending the outcomes of the review.


Current Situation

I:       Framework for Delivering Economic and Employment Services


In his investigations, Professor Blakely took the opportunity to explore the mechanisms which would suit a city like Penrith to maximise the outcomes from this new stream of funding in combination with the resources Council currently invests in economic development activities. His findings suggested that the City would benefit significantly from further rationalisation of the current structure, with a strong recommendation for the creation of a single entity that could act like any company, have significant entrepreneurial flair and be accountable to Council through a performance agreement targeting job creation.


The PRC objective in evaluating a new structure was to create institutional frameworks that are entrepreneurial and self contained as well as accountable. Their recommended approach was to develop a new company which will act like any company with the right to bid on business to seek and attract jobs in Penrith and any other areas prescribed by its charter such as Blue Mountains and Western Sydney. Professor Blakely spoke highly of the Wagga Wagga City model.


The delivery of economic development and employment services has increasingly become a core business for local governments in Australia with Councils such as Parramatta City and Wollongong City currently examining different models for their cities. There are a number of similar models which deserve consideration in any review including Wagga Wagga, Cairns and Brisbane.


The most appropriate framework for conducting the review is through a working party of Council with representatives of the PVEDC invited to join the working party in an advisory capacity. The first meeting of the working party would need to consider and agree on both a terms of reference and the timeframe for the review.


II:     The City and Town Centre Associations


At Council’s Policy Review Committee meeting of 28 May 2007 a report was requested concerning opportunities which exist for a rationalisation of the economic development activities of Council with those of the funded organisations such as the PVEDC, Penrith City Centre Association, and the St Marys equivalent. As a decision was taken by Council to consider this matter, it was felt prudent that the Associations be advised and consulted on the suggested approach by Council and to obtain their responses as with the PVEDC.


The Associations have discussed the matter with their respective Committees and Council staff and have provided written submissions, on their views on the proposal to include them in the review. Both Associations welcome and are fully supportive of the review involving the PVEDC and Council’s EDD and are cognisant of the ancillary roles they play in economic development efforts for the City. However, the Associations do not consider that their role in economic development and employment is as prevalent as those of the PVEDC and EDD and while they would welcome the opportunity to participate in any consultation process, they submit that the review should in the first instance cover the roles and functions of the PVEDC and EDD.


The Associations have since their inception become a key part of the business districts’ urban fabric, responsible for a number of innovative programs to support retail trade and complement Council in its efforts to create more vibrant, safe and supportive town and city centres. The strength of the Associations come with the diversity of its membership and the commitment made largely by a number of volunteers to how well the city and town centres perform. The activities of the Associations are funded through a special sub-category rate on the businesses in the two centres, raising $324,508  for the Penrith City Centre and $208,439 for the St Marys Town Centre for the 2007-08 financial year.


Research on how various city authorities in the US, UK and Canada are partnering with property owners and businesses in city centres and business districts has revealed the phenomenon of the “Business Improvement District” or “BID”. The growing popularity of BIDs has prompted several organisations responsible for small business development and city centre management in USA and UK, such as the New York Department of Small Business Services and the Office of the Deputy Prime Minister in UK to develop guidelines, approaches and statutory frameworks to promote, establish and manage BIDs.


A BID is defined as a public/private partnership in which property and business owners elect to make a collective contribution to the maintenance, development and promotion of their commercial district and is modelled on the shared maintenance program of many suburban shopping centres. BIDs deliver a range of supplemental services in coordination with municipal services and invest in the long term economic development of their business districts. The range of services that come under the broad definition of “supplemental or improvement” include the following:


·    maintenance (cleaning and graffiti management)

·    public safety and hospitality ( public safety officers and visitor assistance)

·    business development (business mix improvement and vacancy reduction)

·    marketing (special events, holiday decorations, district public relations)

·    capital improvements (improved streetlights, directional street signage, custom trash receptacles)

·    landscaping (planting trees/flowers)

·    community services (fundraising, charitable events, homeless and youth services).


Research work undertaken to evaluate the performance of BIDs in the US has demonstrated some tangible benefits that include cleaner, safer and more attractive business districts; steady and reliable funding sources for supplemental services and programs; the ability to respond quickly to changing needs of the business community; the potential to increase property values, improve sales and decrease commercial vacancy rates; vastly improved night time economies and attendant benefits to safety and security; and districts that are better able to compete with nearby retail and business centres.


BIDs provide a new, more contemporary model for local authorities to partner with property owners and businesses to create vibrant local economies and meet the objectives of job creation and business growth in the city with special focus on the creation and strengthening of night economies which in itself presents a major challenge for both Penrith and St Marys. The Penrith City Cultural Development Action Plan has made reference for the need to “strengthen the City’s night time economy and enhance the cosmopolitan feel of St Marys and Penrith CBD” and research is proposed to further explore this subject.


Penrith’s regional city status and vision for Penrith City Centre and St Marys Town Centre (as articulated in the Penrith City Centre Plan and the St Marys Town Centre Strategy) will create new challenges, such as the creation of 10,000 jobs in the Penrith City Centre, for Council and its partners, including the City and Town Centre Associations. The concept of BID provides Council with an opportunity, as part of this review process, to assess the merits of the concept in the context of Penrith’s business districts and to explore a fresh approach in the delivery of essential city services.


While there is some validity in considering an approach that includes the Associations in the review the concerns expressed by the Centre Associations and their special relationships with their constituencies in delivering town and city centre programs can not be disregarded and merits consideration by Council. While we believe that the timing for a wider review may be appropriate it would be more expedient and less complex to commence the review by looking at the functions and roles of the PVEDC and Council’s own economic development functions.


The investigations undertaken by Professor Ed Blakely in developing an employment development strategy to meet the jobs shortfall in Glenmore Park Stage 2 development has presented Council with a major opportunity to review how it delivers its economic development and employment services. Prof Blakely has demonstrated that the current structure in the form of Council’s own Economic Development Department (EDD) and the independent PVEDC has shortcomings and needs streamlining. It has resulted in some duplication of effort and our inability to clearly communicate to businesses and our partners on the roles and functions of the two entities. This in the long term can be counterproductive and adversely affect our efforts in attracting investment and growing the City’s businesses. The current structure has also limited funding at levels which preclude funding for major projects and ongoing programs critical to the meaningful delivery of Council’s economic program.


The recurrent funding commitment to the PVEDC and EDD, approximately $710,000, and the stream of funding forming part of the GPS2 Employment Development Strategy ($1.6 million) will provide the critical mass so vital for the delivery of Council’s economic and employment development programs. The mechanism through which these funds will be invested to achieve the best outcome for Council and the community will need to consider the strengths and weaknesses of the current structure and the merits of a number of models outlined in the report as well as a range of local conditions and challenges we face as a regional City.


As part of this challenge the appeal of the popular Business Improvement District model to meet the future “place” needs for City and Town Centres has merit and provides Council with the opportunity to explore a fresh approach in planning and delivering essential city services. Any step in this direction would need to recognise the views and concerns of the Centre Associations and the important role their members play in implementing a range of initiatives to keep the Centres attractive and the retail businesses viable as well as the complexity of involving the Associations as part of review with the PVEDC and the EDD.


The report confirms that the review should at this stage consider the roles and functions of Council’s Economic Development Department and the PVEDC given their primary focus on economic development and job creation with the Centre Associations participating in an advisory capacity.





1.     The information contained in the report on the Framework for a review of options for delivering Economic Development and Employment services in the City be received.

2.     A Working Party comprising all interested and available Councillors be established to undertake a review of options available to Council to deliver citywide economic development and employment services covering the roles and functions of Council’s Economic Development Department and the PVEDC.

3.     Council invite representatives of the PVEDC to join the Councillor working party in an advisory capacity.

4.     Council invite representatives of the Centre Associations to participate in the review in an advisory capacity.



There are no attachments for this report.








The City Supported by Infrastructure



There were no reports under this Master Program when the Business Paper was compiled






Leadership and Organisation


Item                                                                                                                                       Page


5        Enterprise Risk Management


6        Asset Management Planning For NSW Local Government


7        Local Government Revenue Raising Capacity


8        Service Specification Program



Policy Review Committee Meeting

9 July 2007

Leadership and Organisation



Leadership and Organisation




Enterprise Risk Management   


Compiled by:                Ken Muir, Risk Management Co-ordinator

Authorised by:             Barry Husking, Chief Financial Officer   

Strategic Program Term Achievement: A contemporary system of risk management and internal control is operating.

Critical Action: Develop and implement an enterprise risk management policy and plan including integrated risk management, compliance and internal control systems that identify, assess, monitor and manage risks throughout the organisation.


Presenters:                   Ken Muir - Penrith City Council - Enterprise Risk Management    


To provide Council with an update on the status and planned development of enterprise risk management activities and policy. The report recommends that an enterprise risk management policy be adopted.



Risk Management

Risk management is defined as “processes and structures that are directed towards the effective management of potential opportunities and adverse affects”[1]. “Risk management is recognised as an integral part of good management practice. To be most effective, risk management should become part of an organisation’s philosophy, practices and business plans rather than be viewed as a separate program. When this is achieved, risk management becomes the responsibility of everyone in the organisation.”[2]


Risk management is a process consisting of well defined steps which, taken in sequence, support better decision making by contributing a greater insight into risks and their impacts.


The basic objectives of a risk management program within an organisation are to:


·    Provide appropriate protection of its people, assets, financial/commercial position and business operations in order to maintain the business and its net worth;

·    Contribute to satisfactory legal compliance, corporate governance and due diligence;

·    Assist with quality improvement of services;

·    Protect the reputation, credibility and status of the organisation;

·    Enhance public and credit confidence in the organisation.


Enterprise Risk Management

Enterprise risk management refers to the application of risk management programs throughout an enterprise/entity, that is, risk management programs are implemented at all levels of the enterprise. The implementation and co-ordination of risk management programs is more effective when risk management programs are integrated into existing systems and processes and are not treated as add on programs.


Integrated risk management is where risk management processes are used in planning, coordinating, implementing and monitoring activities in all services to achieve service and corporate goals. No activities of any service area should undermine the stability and/or potential growth of the whole organisation.

Risk Management Guidance

Australian Standard AS/NZS 4360 acts a guide to managing risks[3]. AS/NZ 4360 sets out how risk management involves managing to achieve an appropriate balance between realising opportunities for gains while minimising adverse impacts. It is an integral part of good management practice. It is an iterative process that promotes and supports continuous improvement in decision-making and performance. Risk management involves establishing an appropriate infrastructure and culture that systematically applies a management process, and communicates the risks associated with activities that enable organisations to minimise losses and maximise gains.


Other contemporary and authoritative sources[4] for implementing risk management and governance include the Australian Stock Exchange (ASX), the Committee of Sponsoring Organisations (COSO) of the Treadway Commission (UK) and the Public Company Accounting Reform & Investor Protection Act 2002 US (commonly referred to as Sabanes-Oxley or SOX).


The ASX guidelines have been written for public companies but are equally applicable to government organisations ,and have been recognised by the NSW Treasury, NSW Audit Office and the Department of Local Government.


The ASX Corporate Governance Council developed a set of practice principles to promote and restore investor confidence.  The principles are based on international best practice, and Principle 7 specifically refers to the recognition and management of risk.


The ASX Group 100, representing the “top” 100 companies publicly listed on the ASX, has published plain English guides for the ASX principles.  A table outlining key issues and guidance notes is attached as Appendix 1.

Risk Management Framework

Managing risks is a discipline of living with risk, and of finding the most pragmatic ways of coping with risks across the whole of the organisation, including its controlled entities. The fundamental objectives of risk management are:

·    reducing fear of the unknown and the unexpected;

·    minimising the pain of adversity;

·    creating confidence in the future.


To achieve this, an organisation needs a framework for risk management and reinforcement of a culture where there is a formal, systematic approach to identifying, managing and monitoring risk.  The framework and culture acknowledges that the management of risk involves making decisions that comply with statutory requirements and are consistent with the community’s values and ethics. The underlying principles for establishing a risk management framework are in general [5] that:


·    Risk management should not be restricted to insurance[6] or auditable risks;

·    Risk management needs to address whole-of-business risk;

·    Risk management systems must report the emergence of new risks and the impact on existing risks of changing business conditions;

·    The entire management team needs to take responsibility for the identification and assessment of risk rather than delegating it to a risk manager or internal audit;

·    Acceptable levels of risk need to be defined – some activities will be more tolerable to risk-taking than others;

·    Risk management systems need to be capable of reporting risks that fall outside acceptable criteria;

·    Risk management policies should be developed and communicated throughout the organisation;

·    Effective risk analysis needs appropriate staff participation to be tailored to the specific requirements of each activity.

Strategic Alliances

Council has demonstrated its commitment to achieving best practice risk management, and since 1989 has operated in a strategic alliance known as Westpool comprising of the Councils of Blacktown, Blue Mountains, Fairfield, Hawkesbury, Liverpool and Parramatta to:


·    Promote best practice enterprise risk management;

·    Reduce the impact of risk exposures and;

·    Maximise resources available to support the core services provided by member councils to their constituents.


Westpool’s approach to enterprise risk management is:


·    explicit in its strategic plan

·    exemplified by reduced risk exposure through a reduction in claims and

·    exemplified by its financial strategy which has ensured that all liabilities are funded with a prudential margin of 20% and the Pool now has an equity growing in excess of $5 million.


In June 2007 Westpool sent a study tour group to the USA to the 28th Annual Public Risk and Insurance Managers Association (PRIMA) conference in Boston. Penrith’s implementation of enterprise risk management was integral to the presentation made by the study tour group.

Enterprise Risk Management Plan

Council’s enterprise risk management plan is iterative and has been evolving since 2001. The focus of Council’s risk management has been to embed risk management practices and culture across all services and has therefore not been restricted to insurance.  The underlying principles and guidelines are outlined in the risk management manual. They provide insight into the background of the Council’s risk management framework and are in keeping with risk management guidance. The objective of the plan is to provide assurance that a sound system of risk management is operating at all levels, including controlled entities, and in all service areas.


Key elements of the ERM plan have been the development of a risk management framework and culture through the:


·    identification, assessment and improvement of controls on risks,

·    recognition  and enhancement of  existing knowledge and systems,

·    improvement of communication relating to risk

·    monitoring of improvements

Current Situation

Council has been developing enterprise risk management within its existing activities by improving on its risk management framework and culture to improve its decision making processes. Council’s ERM policy reflects contemporary practice with a framework based on:


1.   Risk profiling;

2.   Service Risk assessments;

3.   Major capital works risk assessments;

4.   Business continuity planning;

5.   Risk Transfer and Insurance;

6.   Internal audit;

7.   External risk review and benchmarking.


An enterprise risk management policy is appended to this report, and is recommended for adoption.

1. Risk Profiling Program (measuring and continuously  improving “how we deliver services”)

Risk profiling was introduced in 2001 and is used as a tool for identifying gaps, benchmarking and measuring knowledge and currency of Council’s major operational systems.  Profiling provides assurance that operational risks have been identified, evaluated and minimised through the implementation of pragmatic controls and reviewed.


Profiling aims at measuring key aspects of risk control systems, identifying key aspects of best practice systems and identifying gaps.  Gaps in internal controls affect performance in a variety of ways, primarily because of their potential positive or negative impact on Council’s objectives. There are a number of risks:


·    Operational and project system risks are issues affecting the “on site/face to face” actual provision of service.  Examples include site safety and contract specifications.

·    Departmental or service area system risks are issues that affect a more generic delivery of services. Examples include road reserve maintenance and development assessments.

·    Corporate system risks are issues that affect the achievement of, or decision making related to, whole of organisation objectives. Examples include intranet, project planning, strategic planning, business continuity planning, and the scope and priorities of internal infrastructure support.


The level of risk is escalated depending on the need to co-ordinate management activities and risk controls.


The first profile became the platform for further analysis, evaluation and the development of risk controls based on the prioritisation of risks according to the context of each service delivery manager, departmental manager and the organisation.  Managers developed Risk Control Improvement Plans (RCIPs) for systematic improvement of their internal controls, as appropriate to their need and capacity, to improve the management of their activities. Cross-departmental issues are referred to the Governance Unit for consideration. The profile assessments are repeated to measure the progress of risk management improvements and update assurance as to the strengths of operational risk control systems.


Occupational Health, Safety and Injury Management (OHSIM) were excluded from the profile program because OHSIM systems were being updated. The tools and methods used for profiling will be used in assessing the currency of the OHSIM system with the conversion to a self insurance model.


There is a common council-wide profile, focusing on internal controls, Operational Risk Profile 1 (ORP1), which sets out a route for the efficient risk management of council.  ORP1 is applicable to all service areas, and managers are able demonstrate that:


·    processes are documented, logical and systematic;

·    processes  are current and according to current standards;

·    there are systems to support the efficient delivery of service ;and

·    staff are trained to deliver the services they provide.


The ORP1 is combined with specific activity profiles that focus on individual services.


The profile program was repeated and expanded in 2004 and managers continue to develop and implement improvements.


The outcome of the profile program is to provide a platform for managers to review the systems used to deliver services and provide assurance that they are as efficient as possible. Specific areas of potential high risk are identified and these are project managed.

2. Service Risk Assessment Program (SRA) (risk ranking the services provided)

The profile program focuses on the risks associated with internal control system and does not attempt to assess the risk associated with what is done.  Particular aspects of the internal control profile raised the issues relating to cost benefit analysis of service delivery. The evolution of the profiling program alluded to services areas that may have low risk activities but have highly developed internal control systems. Further improvement on those service risk controls may need to be discretionary only as the risks do not materially affect Council’s viability or strategic or management plans. 


It is important that Council’s strategic goals are being met by services that are delivered efficiently, effectively and within Councils appetite for risk taking and practical management of risks. It is therefore important to determine how much risk council is prepared to accept and self manage as part of its normal operations.  Or what is Council’s appetite for risk? 


Council has developed a program that assesses the risks associated with activities identified through service specifications.  Each risk associated with service specification activities is measured in terms of likelihood and consequence to derive two categories: enterprise risk rate and controlled risk rate. Enterprise risk rate is the measure of exposure across Council when there is no endeavour to minimise a risk and controlled risk is the measure of risks when there has been an endeavour to reduce the likelihood and consequence. These two measures help managers to focus their efforts on controlling their risks.


The outcomes of the SRA are:


1.   activities can be ranked according to risks within

a.   service areas

b.   departments ( where  services are grouped)

c.   across Council

2.   activities are ranked according to uncontrolled risks to determine critical activities

3.   activities are ranked according to controlled risks to determine adequacy of current controls

4.   Council can determine its risk appetite

5.   the creation of a risk register and platform for regular review of  activities and risks


The process and results of risk ranking adds value to overall service reviews and the annual allocation of resources to minimise risks in line with agreed levels of service.


OHSIM implications for employees were exclude from the first SRA because:


·    of the impending changes that will result from the conversion to a self insurance model and

·    inclusion would have made the initial assessment unwieldy. The SRA process can be incorporated into OHSIM self insurance systems.

3. Major Capital Works Project Management

The model to be used for managing risks associated with major capital works projects is based on the NSW Total Asset Management System and incorporates features of the Victorian Government’s “Partnerships for Victoria.” This model identifies and assists project managers to assess risks that are likely to develop from the initiating process through implementation and maintenance to the disposal stages of the capital asset.


It was noted on the Westpool study tour in June 2006 that a number of UK Local Authorities have integrated risk assessments into annual project funding plans. 

4. Business Continuity

Organisations need a plan to ensure that they can ride out the impact of a major disruption to their services. This plan is often referred to as a disaster recovery plan or business recovery plan but a business continuity plan (BCP) is a more appropriate description of such a plan as it manages the risks associated with disruptive events. For a BCP to be effective it must be communicated to key personnel and reviewed and tested to ensure that the plan is current and adequate. A viable BCP helps reduce insurance exposures.


The BCP outlines service responses to major disruptions to Council’s major assets and provision of services.  The BCP is separate to but complementary to local and regional disaster plans and is subject to regular review.

5. Insurance Programs

Insurance programs are a method of obtaining financial support when and if there are adverse events. While 80% of an organisation’s risks are not insurable it is essential that the 20% gap is adequately covered. Insurance is reviewed regularly to ensure that cover is both adequate and cost effective. Alternate methods of risk transfer are used wherever possible and Council continues, through Westpool and United Independent Pools, to explore methods of smoothing the volatility of insurance market trends, lobbying for legislative protection and improving risk management. The risk management team ensures that:


·    claims are managed effectively and efficiently

·    Claims analysis and benchmarking are used to identify the frequency and consequences of adverse events in order to invest in defusing emerging risks and to support the application of the Service Risk Assessment program.


The Risk Management Co-ordinator is:


·    pursuing the possibility of benchmarking Council’s full cost of insurable risk within NSW Local Government and similar sized organisations and

·    involved in the conversion of OHSIM systems to a self insurance model so as to compare the benefits from the general works compensation general fund with the benefits of self insurance.

6. Internal Audit 

The role of Risk Managers is complemented by the Internal Auditors who are seen by leading practice organisations as having the role of:


·    focusing on financial control and compliance areas, and on control activities and monitoring of these areas. Internal audit makes an attempt to focus on the key areas of the organisation

·    acting on behalf of senior management in reviewing the system of governance and  also focusing  on operational areas  including  risk assessment  with particular focus on the organisation's critical success factors.

·    focusing on key risk areas with regards to strategic objectives

·    adopting a "facilitating" approach to customer service and thereby sharing information on best practice, assisting with development of self-assessment programs, assisting where conflicts of interest arise in self assessments and soliciting and responding to customer feedback.


As part of the Internal Audit Program, internal audits verify that the information provided through the risk profile self assessment program is accurate and that there is compliance and focus on efficiency and effectiveness of operations.

7. External Review & Benchmarking

External reviews and systems audits complement the overall risk management strategy and can be used as benchmarks.


External reviews and audits are conducted to assess the condition of particular services and risks.  These reviews may be used to verify compliance with standards and legislation and may be annual or ad hoc. Some recent external risk reviews examples include the risk assessment of council’s IT structure,   workers compensation premium discount  assessment, the condition of playground equipment, the efficiency of the development application system and the purchasing system.


An in-house program has been developed, based on ASX principle 7, to assess the status of our risk management programs. This program has been promoted in risk management magazines and through the NSW Risk Management Institute of Australasia. The program has been made available for use by other organisations through the Westpool website. The program has received positive feedback from risk management practitioners in the Queensland Department of Public Works and NT Gas.


MetroPool has developed a risk management benchmarking tool based on elements of the 2001 profile. Westpool is trialling an accreditation program to be use as a risk management benchmarking tool. 


These tools and external assessments complement our profiling program and can be used to benchmark our risk management system and culture.


Council’s enterprise risk management framework and culture continues to evolve at all levels in all services. The framework is dependent on the interaction, efficiency and effectiveness of information, service delivery, communication and training. These elements are supported through the continuous improvement cycle that is generated through Risk Profiling and Risk Control Improvement Plans and the service risk priorities identified through the Service Risk Assessments.  Simultaneously, Council has been improving its occupational health & safety and injury management systems, business continuity plans, and its insurance programs.


Council is integrating risk management into all services and activities and does not focus on insurable risk alone.


Council’s risk management framework supports strategic, financial and operational levels with continuous buy-in by CMT, managers and staff.


The adoption of the enterprise risk management policy will support the evolution of the risk management framework and culture.


By continued implementation of this plan, Council will have assurance that it has a sound and robust system of enterprise risk management and internal control that is integrated into its systems and culture.





1.     The information contained in the report on Enterprise Risk Management be received

2.     The Enterprise Risk Management Policy be adopted.



1. View

Key issues for implementing ASX Principle 7

1 Page


2. View

Enterprise Risk Management Policy

2 Pages



Policy Review Committee Meeting

9 July 2007

Appendix 1 - Key issues for implementing ASX Principle 7





Key issues identified in implementing

ASX Principle 7 “recognising and managing risk”


Key Issues

ASX Group 100 Guidance Notes

Formal framework for managing risk

Have your own framework but The Committee of Sponsoring Organizations of the Treadway Commission COSO model is a broadly accepted example on which to base a model

Breadth of control

Oversight of risk management policies should encompass operational, financial reporting and compliance risks. The CEO/CFO certification should focus on financial reporting risks and controls and such other risks and controls specified by the Board

Layers of control

All layers should be included in a way that is appropriate to the circumstances of the company

Level of assurance

A reasonable level of assurance should be obtained from testing. Examples include external auditor statements and  improvements in operational risk profiles particularly in identified key areas

Period of coverage

Include the entire reporting period up to and including the date of signing the annual report.

Corporate reach

Include entities such as subsidiaries, associates and joint ventures, in the scope of Principle 7 compliance activities

Operating efficiently & effectively

“operating efficiently and effectively” should focus on design and operating effectiveness and does not require a specific cost-benefit assessment.

Reporting templates

Samples are provided  and include “the company is required to disclose in its annual report the extent of its compliance with the Principles.

The directors have implemented internal control processes for identifying, evaluating, and managing significant risks to the achievement of  objectives. These internal control processes cover financial, operational and compliance risks.”





Policy Review Committee Meeting

9 July 2007

Appendix 2 - Enterprise Risk Management Policy







Enterprise Risk Management

Policy No:       

Adopted by Council:


Minute No:         



File No:              

Relevant Legislation: (if applicable)      


Responsible Department:

Financial Services


 Policy Statement:       


This policy seeks to highlight the commitment shown by the Penrith City Council and its Corporate Management Team to a risk managed culture, by ensuring that every member and employee of the Council has regard for the management of risks in the decision making process and everyday work situations.


The Council provides a diverse range of services to the community and visitors to the area. It is essential that council protects and sustains its ability to continue to provide these services by ensuring that its staff and assets, both tangible and intangible, are protected against loss and damage. The very nature of the services provided presents a vast potential for loss or opportunity that, if not controlled, will greatly affect Council’s ability to discharge its responsibilities to the community and its employees.


It is the responsibility of all members and employees to have regard for risk in the carrying out of their duties, recognising that such risk, if uncontrolled, can result in a drain on resources that could better be directed to front line service provision, and to the meeting of the Council’s objectives.


It is the responsibility of every department and service delivery area to implement a sound risk management strategy. Managers have the responsibility and accountability for managing the risks to which their area is exposed.


Council supports the philosophy that recognises that any reduction in injury, illness, loss or damage benefits the whole community.


Council acknowledges the Australian Standard AS/NZS 4360 and the introduction of the ASX Corporate Governance Council’s “Principles of Good Corporate Governance and Best Practice Recommendations” , which includes Principle 7: “Recognise and Manage Risk”, as guides and important elements in establishing good corporate governance practices in Australia.


Council recognises that Risk Management is essential for the efficient delivery of its services to the community ensuring safe and accessible public facilities to minimise injuries and losses to the community. Council acknowledges the implementation and coordination of risk management programs is more effective when risk management programs are integrated into existing systems and processes and are not treated as add on programs, and consequently adopts a strategy of enterprise risk management where risk management programs are implemented at all levels within Council.


To maintain this culture, Council will ensure there is a sound, robust and integrated system of risk management and internal control in all services that:

        strives for best practice

        is designed in the context of the council environment and council’s culture

        manages risks to a level that is as low as reasonably practical and

        is an integral part of Council’s ongoing management and governance process.


This policy is supported by the Council’s guidelines and practices for managing risks.




Policy Review Committee Meeting

9 July 2007

Leadership and Organisation



Leadership and Organisation




Asset Management Planning For NSW Local Government   


Compiled by:                Mark Andrews, Strategic & Management Planning Coordinator

Andrew Moore, Financial Accountant

Authorised by:             Ross Kingsley, Corporate Development Manager

Vicki O’Kelly, Financial Services Manager   

Strategic Program Term Achievement: A commonly shared long-term vision for the City underpins strategic collaboration and community engagement.

Critical Action: Prepare, implement and review Strategic Plans and processes.



To provide an overview of the Asset Management Planning for NSW Local Government position paper recently issued by the Department of Local Government.  The report recommends that a submission be made to the Department of Local Government in the terms outlined in the report.



The Asset Management Planning for NSW Local Government position paper was released for public comment in May 2007, and submissions close on 13 July 2007. A copy of the Position paper is included in the attachments to tonight’s business paper. A copy of the joint media release from local government peak industry organisations welcoming the position paper is also included in the attachments.

The paper is the third in a series of papers released by the Department of Local Government (DLG) since late 2006, designed to promote a new direction for local government focussed on developing a strong sustainable local government sector. Council considered a report on the first two papers, at the Policy Review Committee meeting on 19 February 2007. They were:

·    A New Direction for Local Government Position Paper. The paper sets out a context for ongoing reform by the local government sector. It sets out a direction of connectedness and innovation and invites comments on specific proposals to further advance this direction.

·    Planning a Sustainable Future, an options paper on integrated planning and reporting for NSW local councils. The paper proposes a more strategic direction for councils, through the preparation of ‘community strategic plans’ and delivery programs (this model is very much in keeping with this Council’s well-established approach to strategic management).

Asset Management Planning for NSW Local Government builds on a proposal contained in the first of these discussion papers (A New Direction for Local Government – A Position Paper), and has been structured to integrate with option 3, contained in the second discussion paper Planning a Sustainable Future - Integrated Planning and Reporting for NSW Local Councils. Option 3 was generally supported by Council. The model contains the following key elements:

1.   10 year (minimum) Community Strategic Plan + financial strategy
~ requiring key sustainability principles as a foundation
(adopted with community support, reviewed by each new Council)

2.   4 year Delivery Program + detailed budget program
(adopted by a Council for its term)

3.   Annual Operational Plan + authorised budget

At this point in time we understand that the DLG proposes to continue consultation and refinement of proposed changes until January 2008. Amendments to legislation would occur in the 2008 budget session of Parliament, with implementation staged during the 2008-2012 council term. Council will be advised of the Department’s formal advice when it is received.

The Asset Management paper explores the development of a new asset management framework for NSW councils. It promotes a planning process intended to assist local government with the sustainable management of community assets. It considers current asset management practices in NSW, and other jurisdictions, and their possible application in NSW. It is also consistent with the National Framework for Local Government Financial Sustainability.

Response to the Position Paper Recommendations

The recommendations and proposed Council comments are as follows:

1.   Strategic long term asset management and financial plans be included as essential components of an integrated planning and reporting framework across NSW local government.


The model being proposed at figure 1 of the Position paper is not fundamentally unlike Council’s current process with more formalisation and expansion. It proposes the introduction of a 10 year “Community Strategic Plan” that is supported by a Long Term Financial Plan (LTFP) and an Asset Management Strategy.  Penrith City Council currently maintains a ten year LTFP that is reported and updated through the quarterly review process.  The introduction of the asset renewal component of the AREAS program provides a ten year complement to existing Asset Management Strategies.  Therefore while Council has in place many of the elements recommended an industry wide approach to an integrated planning and reporting framework is welcomed.


2.   Legislative amendments requiring long-term strategic asset management planning be introduced into the Local Government Act 1993.


As mentioned above Council is already actively involved in long term strategic asset management planning, including the consideration of whole of life costing.  What is being proposed is in part a requirement of Council’s Special Rate variation of 2006.


3.   Councils adopt asset management planning systems and practices that are consistent with the Local Government Financial Sustainability Frameworks and, where applicable and practical, the International Infrastructure Management Manual.


The recommendation requires Council to demonstrate how its Asset Portfolio will meet the service delivery needs of the community into the future.  It is proposed that this would be demonstrated through:

             An Asset Management policy that would be developed from a State developed Asset Management Policy.  The policy would establish the objectives for service delivery, integrate asset management planning with Corporate and Financial Planning, assign accountability for service delivery and consider whole of life costing, service levels and financing options.

             Asset Management Strategies that support the implementation of the Asset Management Policy and ensure future service delivery to the community.

             An Asset Management Delivery Plan that is integrated with Council’s 4 year delivery program.  This plan should be modelled on the approach advocated in the International Infrastructure Management Manual.  The manual advocates the concept of Total Asset Management, as an integrated part of all organisational activities, and Lifecycle Asset Management where decisions are made based on costs associated with all stages of an asset’s life.

The mandating of a uniform industry wide framework for strategic asset management planning is supported.


4.   A basic (core) approach to asset management planning be the agreed minimum level for all NSW councils.


The report recommends for a first step that all Councils implement a basic or core approach to asset management planning. This would require the collection of the best available information and random condition/performance sampling, a simple risk assessment to identify critical assets, identifying existing service levels, and an assessment of future asset maintenance cashflows required to meet current service delivery (whole of life costing).

It should be acknowledged that this recommendation is aimed at ensuring that all Councils across NSW have a minimum approach to Asset Management. Council’s current approach to Asset Management surpasses this recommendation but future identified improvement opportunities will be implemented.


5.   An asset management improvement program be implemented to progressively raise asset management planning to a level appropriate for each council.


Penrith City Council has over recent years, and most recently through the Asset Renewal Component of the AREAS program shown, an increased commitment to asset management.  This increased commitment is seen as a strength by Standard and Poors during their rating review.

6.   Legislative amendments requiring ten year financial planning be introduced into the Local Government Act 1993.


As mentioned above Council has already established the practice of 10 year LTFP and reporting through the Management Plan process. The expansion of this as a mandatory and uniform industry approach would be welcome. It should be noted that ten year financial projections are currently required to be published in the Financial Statements. While DLG states that the position paper is consistent with the State Plan, it will be important for any legislative amendments to link with the State Plan and budgetary processes.


7.   An industry wide capacity building program, including a range of training, tools, templates and guidelines, be introduced.


The first steps in this area have already begun with the introduction of additional asset management indicators into the 2006-07 Financial Statements.  The new indicators include a measure of asset renewal that has been voluntarily included in the appendix to Penrith City Council’s financial statements for the past 4 years. The industry wide capacity building program, including a range of training, tools, templates and guidelines is aimed to be achieved through the NSW Infrastructure Task Force.

As was stated in council’s submissions to the two previous papers in the reform process, commitment from the State Government to resourcing the intended programs to build the strategic and asset management capacity of local government will be vital to the success of these reforms.


Overall the position paper for Asset Management Planning for NSW Local Government provides, through the papers recommended actions and the NSW Infrastructure Task Force, a clear way forward for an industry wide approach to future asset management. The aim is to provide a clear framework for a uniform industry wide approach to asset management planning that will result in future long term improvements.  A further report will be provided following the outcome of the consultation process.  A copy of the submission will be provided to the Local Government and Shires Association and WSROC.




1.     The information contained in the report on Asset Management Planning For NSW Local Government be received.

2.     A submission be made to the NSW Department of Local Government based on the commentary in the report supporting the recommendations of the Asset Management Planning for NSW Local Government position paper.




Asset Management Planning for NSW Local Government

27 Pages



Joint Media Release - Asset Management Planning

1 Page



Policy Review Committee Meeting

9 July 2007

Leadership and Organisation



Leadership and Organisation




Local Government Revenue Raising Capacity   


Compiled by:                Vicki O’Kelly, Financial Services Manager

Stuart Benzie, Rates Administration Officer

Authorised by:             Vicki O’Kelly, Financial Services Manager   

Strategic Program Term Achievement: Council provides adequate resources to deliver its program and has introduced measures to increase its capacity.

Critical Action: Develop annual and longer-term resource plans aligned to the Strategic Program and service specifications.



To advise Council of a submission made to the Productivity Commission's inquiry into local government revenue raising capacity.  The report recommends that the submission to the Productivity Commission's inquiry  into Local Government Revenue Raising Capacity be endorsed.



The Productivity Commission has been asked to assess local government revenue raising capacity.  The Terms of Reference are included below.  A copy of the Issues paper was circulated to all Councillors on 31 May 2007.  The closing date for submissions was 6 July 2007 and a submission has been lodged subject to Council approval.

Scope of the Inquiry

The terms of reference and some information about the scope of the exercise are reproduced below.  The Inquiry will limit its assessment to local governments “own-source revenues”. The commission considers own-source revenue to include revenue from council rates sales of goods and services, interest income and other income.  It does not include “grants and subsidies”.  Nor will the commission investigate the scope for local governments to borrow.


Terms of Reference

The Productivity Commission is requested to undertake a research study assessing local government revenue.


In undertaking the study the Commission is to examine the capacity of local government to raise revenue including:

·    The capacity of different types of councils (e.g. capital city, metropolitan, regional, rural, remote and indigenous) to raise revenue and the factors contributing to capacity and variability in capacity over time.

·    The impacts on individuals, organisations and businesses of the various taxes, user charges and other revenue sources available to local government, and

·    The impact of any State regulatory limits on the revenue raising capacity of councils.


In undertaking the study the Commission is not to investigate the scope for local governments to borrow.


The Commission is required to provide both a draft and a final report, with the final report due within twelve months of receipt of this reference.


The Issues paper states that “The terms of reference for the study, in essence, require the commission to assess the capacity of local governments to raise revenue from the various sources available to them; to examine the impact of State Government regulatory limits on the ability of local governments to fully utilise some of their revenue sources; and to assess the impact on various sections of these communities of the use by local governments of the various revenue raising instruments available to them.”


The Commission has identified that “Local governments draw on a variety of revenue sources to finance their activities. The major revenue components for local governments across Australia in 2005-06 were:

·    council rates (37.3 per cent of local government revenue)

·    sales of goods and services, which include fees and charges imposed on services (28.9 per cent)

·    other income, which includes developer contributions and fines (19.0 per cent)

·    grants and subsidies from other tiers of government(12.1 per cent)

·    interest income (2.7 per cent).”


According to the Australian Bureau of Statistics (ABS), total revenue for the sector increased from $13.4 billion to $23.9 billion between 1996-97 and 2005-06, representing an average annual growth rate of 6.6 per cent. Over the same period, expenditure rose from $11.0 billion to $20.4 billion, representing an average annual growth rate of about 7.0 per cent (figure 1).


Local governments are facing the issue of balancing the available funds with the increasing expectations of the community and aging infrastructure.


Issues and questions identified in the Issues paper are:



·    trends in local government revenue

·    capacity to raise own-source revenues


State and government regulatory constraints

·    Land rating and valuation methods

·    Rate pegging

·    Concessions and exemptions

·    Setting fees and charges


Impacts on individuals, organisations and businesses

·    Council rates

·    Sales of goods and services

·    Developer charges and contributions

·    Fines and other pecuniary penalties

·    Interest income


Factors influencing expenditure and revenue raising

·    Operational efficiency of local governments

·    Service levels and pricing

·    Financial and asset management skills


Both the Australian Local Government Association (ALGA) and the Local Government and Shires Association (LGSA) will be making submissions.  The submission from the LGSA draws heavily on the findings of the Independent Inquiry into the Financial Sustainability of Local Government (Percy Allan Inquiry).  We believe that the submission from the ALGA will give a national perspective and will focus on the levels of the Financial Assistance Grants and other grants.


After discussions with Shaun McBride of the LGSA it was decided to focus our submission on some of the more specific issues that aren’t addressed in the submissions made by the ALGA and the LGSA. 

Penrith City Council’s Submission

The substance of the submission made to the Inquiry is made up as follows:


Rate Pegging


The revenue raising capacities of NSW councils are significantly restricted by the current rate pegging system. NSW is the only state in which rate pegging is imposed and its effects are being felt by many councils.


Under the current legislative framework the NSW State Government sets a limit on the total amount of income a council can raise from rates. A council must not make rates and charges for a year that produces general income above the notional general income of the council from the previous year, plus the percentage variation allowed by the Minister for Local Government. The notional general income is the amount that would have been derived if the same rates and charges used in the previous year were applied to council’s new rating base the following year.


The notional yield calculation is a complex process that fails to correlate rate income variations with rising costs faced by councils. Council’s operating expenses, service costs and infrastructure maintenance costs should be considered when setting rate pegging limits. For example, award wage increases over the past three years have seen wages rise by 4% (2004-05), 3.5% (2005-06) and 3% (2006-07) while Ministerial rate increases have been set at 3.5%, 3.5% and 3.6% respectively. While it may be argued that these rate increases were commensurate with wage rises, they did not compensate for other factors such as the rising costs of infrastructure maintenance. To fund such works or projects, councils are reliant on special rate increases that may only be applied following a successful application to the Minister for Local Government.


It is also worth noting that the NSW Local Government Act 1993 requires councils to include a 3 year budget in the Management Plan however under the current rate-pegging system rate variations are announced on an annual basis making preparation of the management plan difficult. As stated in Council’s submission to the NSW Department of Local Government recent reform papers, the current system is not well adapted to the need for effective and integrated long term financial planning.


Differential Rates


In regard to the application of NSW rating legislation, councils are unreasonably restricted in their ability to apply differential rating methods. The NSW Local Government Act 1993 sets out the conditions under which properties are to be categorised for rating purposes. Properties are to be categorised as Residential, Farmland, Business or Mining. A Council may determine a sub-category for one or more of these categories under the following criteria:

(a)     For the category “farmland” – according to intensity of land use, the irrigability of the land or economic factors affecting the land.

(b)     For the category “residential” – according to whether the land is rural residential land or is within a centre of population.

(c)     For the category of “mining” – according to the kind of mining involved.

(d)     For the category “business” – according to a centre of activity.


Should a council wish to make a separate rate for certain types of properties that better reflects their demand on council resources or allows for greater flexibility in the application of rating principles, the options available are limited. For example, it is very difficult for councils to rate commercial and industrial properties separately as the legislation only allows business sub-categories to be created according to “centre of activity”.


Pension Rebates


Another issue of concern is council’s limited capacity to assist eligible pensioners. The maximum pension rebate amount for rates and charges is currently $250. Councils receive reimbursements of 50% from the State Government and 5% from the Federal Government, leaving the balance of 45% to be funded by council.


The total rebate amount of $250 has been fixed for many years. Penrith City Council is finding that many pensioners are struggling to pay their rates and domestic waste charges as the cost of living continues to increase. Penrith City Council is concerned that pensioners are not receiving increased benefits in line with the cost of living. Councils do not have the financial capacity to provide further assistance to pensioners.  Penrith City Council’s position is that pensioner rebates should be increased and full funding of the subsidy should come from Federal and State Governments. Perhaps a system that adjusts the mandatory rebate according to CPI changes or more appropriately, rate increases, would be more suitable.

Developer Contributions

The Inquiry raises a number of questions regarding the extent that developer contributions are employed, the legislated constraints and the most appropriate way to recover the costs of new and upgraded assets.  An excerpt from a submission made by Penrith City Council to the New South Wales Department of Infrastructure, Planning and Natural Resources Section 94 Contributions and Development Levies Taskforce in 2003 is below.


While the role of Section 94 is to provide funding of infrastructure for new development, it is not permitted to contribute toward recurrent costs, including the maintenance of these assets. Therefore Council is required to meet the maintenance costs of an increasing asset base via rates revenue. Additional rate income from new properties in developing areas assists in meeting these costs.


A number of NSW Councils have experienced problems maintaining realistic values in their contributions plans over time. This is particularly relevant for Councils with new release areas in Western Sydney. The increasing value of land in this area has been at such a rapid rate that difficulties are being encountered in effectively managing appropriate contributions levels which remain reflective of the market. Funds collected over time therefore may not match the cost of land acquisition obligations. Shortfalls in Section 94 plans can occur as a result, particularly where the multiplicity of ownerships either delays or complicates acquisition programs.


While methods such as CPI are utilised to moderate the impacts of inflation, it is clear the issue of land cost has such an impact as to make this method ineffective as a comprehensive application …


Other mechanisms which might be of advantage to consider include:

·    Exploring opportunities for inter-section 94 fund borrowings to respond to pressing infrastructure priorities over time within an LGA;

·    Special government loan borrowing programs to assist early delivery of infrastructure, particularly to kick-start new urban areas;

·    To separately deal with major land transfers related to negotiated biodiversity conservation outcomes and other environmental imperatives as a precursor to the rezoning process.


Penrith City Council is a rapidly growing council and has been identified by the New South Wales state government as one of the regional cities.  Forecasts predict a population growth of 20,000 over the next twenty years.  As a growth council there are a number of developer contributions plans in operation. Income of $5m and expenditure of $7.8m of developer contributions is included in the 2007-08 council budget.  This income is integral to enable council to adequately supply, or facilitate supply of the infrastructure required by new residents to the city.


Council advocates the use of Developer Agreements as an option to deliver required public facilities and services in developing areas where there is a single ownership/developer interest as it enables development contributions to be obtained from planning (developer) agreements without limiting Section 94. The contributions so sought may be used for, or applied towards, any public purpose, including the funding of recurrent expenditure and monitoring the impacts of development.


While there have been recent reforms in Section 94 legislation there is still no legislative ability to capture the increased value of land that results form rezoning to allow new development.  Council sees “value capture” as an equitable and practical method of funding, paid by the major beneficiary of the rezoning that can be directed to construction of new infrastructure.


The LGSA submission will include reference to a number of research papers on the topic of developer contributions produced for the Percy Allan Inquiry including the paper prepared by Professor Brian Dollery from the School of Economics at the University of New England.

Infrastructure Backlog

The Percy Allan inquiry identified an infrastructure funding backlog of $6.3 billion across the State. Penrith City Council has identified the problem of maintaining infrastructure to satisfactory standards and has made a commitment to provide increased levels of funding for asset renewal over a number of years.  In 2006 Council was successful in an application for a Special Rate Variation of 5.2% above the allowable Ministerial rate rise to fund, in part, asset renewal.  To provide adequate funding for infrastructure renewal without such an increase would mean a wholesale review of, and cuts to services that the community relies on council to provide.

Ability to reduce unit costs of operations

Limits on the capacity to raise “own- source” revenues can be offset by more efficient operations and the Productivity Commission has raised questions regarding local governments ability to reduce the unit costs of operations.


Council’s comprehensive service specification program actively assists in identifying and reviewing the unit costs of operations. Opportunities for resource sharing with other local government authorities are considered and Council has had considerable success with joint tenders achieving significantly lower costs for some major expense items including telecommunications along with significant savings expected as a result of the recent asphalt tender.

Ability to adequately plan for the future

A greater commitment is needed from the State Government to a longer term funding arrangement for Council programs.  Council’s management spends an inordinate amount of time lobbying for the continuation of funding for various programs and projects (roads, community services etc); time which could be better spent on planning and delivering those same programs in a more structured way if the certainty of future funding was present.  Similarly, State Government commitment to approval for Council’s longer-term borrowings would provide more certainty about Council’s capacity to deliver programs.  Any guidelines that the State Government may wish to set to enable this to happen could be dependent upon Council’s meeting certain financial benchmarks, a strong credit rating for example.

Financial and Asset management skills

An area of concern raised in the issues paper was the need to identify the extent of difficulties in attracting and retaining suitably qualified experts in financial and asset management.  There are increasing difficulties in attracting high calibre staff. As a regional city Penrith has the advantage of a large pool of suitably qualified people to draw upon but the proximity to Sydney increases the competition for these staff. 


The Inquiry has specific terms of reference and has received a number of submissions from local governments associations, local government authorities and individuals.  The draft report will be released in October 2007 and the final report is scheduled for April 2008.  Further reports will be made to Council following the release of the reports.





1.     The information contained in the report on Local Government Revenue Raising Capacity be received

2.     The submission to the Local Government Revenue Raising Capacity inquiry be endorsed.



There are no attachments for this report.

Policy Review Committee Meeting

9 July 2007

Leadership and Organisation



Leadership and Organisation




Service Specification Program   


Compiled by:                Michael Rudd, Services Development Officer

Authorised by:             Ross Kingsley, Corporate Development Manager   

Strategic Program Term Achievement: Services and programs that Council provides are determined based on equity, customer requirements, community benefits and best value.

Critical Action: All services are provided to adopted service levels.



To provide Council with the draft Development Engineering Service Specification  (Environmental Planning Manager) for consideration.  The report recommends that this service be adopted.



Council established the Service Specification Program in 2002-03 in order to:

1.       Comprehensively analyse and document all services and the present level of service provided (stage 1 of the Program)

2.       Enable Council in a fully informed manner to review and where appropriate adjust service levels to better meet the needs of the community and align to Council’s strategy (stage 2).


Documentation of Council’s external and internal services began four years ago, with significant benefits to the efficient and effective management of the organisation. To date, 54 consolidated Service Specifications have been formally adopted, with an additional specification presented tonight for Council’s consideration. A further body of specifications will be progressively reported to Council, in coming months, in order to complete the stage 1 program within the current year.


Council has approved the inclusion of key information from the service specifications in its 2007-08 Management Plan.


Stage 2 of the program, Review and Adjustment of Service Levels, has already been undertaken by Council in selected key areas.  Important decisions have been taken by Council, flowing on from these reviews, which have been reflected in the 2005-06 and 2006-07 Management Plans. 


A more comprehensive review of all service levels has now commenced, with the initial results being brought to Council in the context of the 2007-08 Management Plan and budget development. The service review process also identifies areas of service improvement which should be made within existing means and a number of such improvements have been included in the 2007-08 Management Plan.

Assessment of Draft Service Specification

Prior to their reporting to Council, all draft specifications undergo a rigorous process of validation and assessment, leading to approval by the Corporate Management Team. The aim is to ensure that each specification accurately communicates the existing levels of service and activities that the service provides, in terms of quantity, quality and cost to Council.  Once adopted by Council, this specification will be used as the basis for testing service performance and for service review, including any changes to services levels, calls for additional resourcing, or for changes in priority setting within an existing service.

Summary of Key Information

The draft service specification is included in the attachment to tonight’s business paper.

As previously agreed, it is intended to make specifications for all services in Council’s 2007-08 Management Plan available for the public through Council’s website as linked documents. This approach is currently being developed.

To assist in Council’s consideration of the draft specification submitted tonight, an executive summary is provided as part of this report.

This summary contains:

1.       Service Description

2.       Link to Strategic Program

3.       Service Objectives

4.       Scope of Work

5.       Key Performance Indicators

6.       Service Funding

7.       Service Summary Chart.


Summary of the Development Engineering Service

1. Service Description

The Development Engineering service provides a certification, compliance and advice service for engineering works and civil infrastructure in the Penrith Local Government Area.

2. Link to Strategic Program

Issue 15

New Release Areas

TA 15.4 – Timely delivery of services to new release areas is being secured

CA 15.4A.-.Prepare and implement services and infrastructure delivery plans for each new release area that ensures that the early establishment of services and facilities match community needs

Issue: 26

Civil Infrastructure Management

TA 26.1 - An asset management strategy is in operation for civil infrastructure that optimises its use and maintains it agreed standards fit for its contemporary purpose.

CA 26.1A - An Asset Management Strategy for Civil Assets is developed, maintained and implemented.

CA 26.1B - New drainage infrastructure is designed and constructed to meet agreed capacity standards.

3. Service Objectives


·     Provide Engineering advice and input into Policy Development and Release Area Planning to support the timely delivery of release areas.

·     Coordinate, monitor and review Section 94 developer contributions plans, meeting Council's statutory obligations.

·     Ensure that Development Engineering inputs into the development approvals and planning policy meeting legislative requirements, minimising Council’s exposure to risk.

·     Ensure compliance with Council’s adopted engineering standards and specifications and conditions of consent prior to issue of Subdivision Certificates, Occupation Certificates and Construction Certificates.

·     Review contemporary engineering standards to ensure civil infrastructure meets agreed Council standards and fit for contemporary purpose.


4. Scope of Work


Key activities include:

§ Engineering Construction Certificate (CC) Assessment. 115 pa

§ Engineering Referrals Assessment – 550 pa

§ Post Development Application Determination  700 inspections pa

§ Occupation and Subdivision Certificate Referrals - 100 pa

§ Developer Contributions Coordination - 15 Plans monitored

§ Input to Release Area Planning - 10 release areas.

§ Engineering Standards and Policy Review and Development

Recent projects include:

-     Claremont Meadows Release Area

-     Glenmore Park Release Area

-     Erskine Business Park


These release areas are planned to deliver over 13,500 new dwellings over the next 15 years and will play a significant role in providing housing and employment lands across Penrith.


5. KPI’s

Key Performance Indicators

Key Performance Indicators

2004-05 Actual

2005-06 Actual

2006-07 Target

% of Construction Certificates issued in 28 days






6.      Service Funding


The 2006 – 2007 budget for the Development Engineering Service is $ 372,694. This amount includes all operating costs.  This amount does not include capital costs unless otherwise noted.



2006-2007 Budget

Employee Costs




Vehicle Costs


Consultancy (ie section 94)


Net Cost of the Service

$ 372,694


7.      Service Summary Chart





1.     The information contained in the report on Service Specification Program be received

2.     The specification for the Development Engineering Service be adopted




Draft Development Engineering Service Specification

35 Pages



Urgent Reports






Item                                                                                                                                       Page


9        Status of National Growth Area Alliance



Policy Review Committee Meeting - Urgent Report

9 July 2007

The City in its Broader Context



The City in its Broader Context




Status of National Growth Area Alliance   


Compiled by:                Paul Battersby, Senior Environmental Planner

Authorised by:             Roger Nethercote, Environmental Planning Manager   

Strategic Program Term Achievement: Agreement has been reached with State Government agencies to provide mutually agreed services and facilities to the City consistent with its growing requirements.

Critical Action: Determine and prioritise the services and facilities needed to allow the City to perform its metropolitan and regional roles.



To inform Council of the status of the National Growth Area Alliance. The report recommends that Council continue to participate in the Alliance and the Mayor be authorised to represent Council in implementing Alliance initiatives.



Council resolved at the Policy Review Committee meeting of 19 February 2007 to participate in the National Growth Area Alliance.


The National Growth Areas Alliance has been formed to represent the interests of more than thirty fast growing metropolitan fringe councils across Australia.  The Alliance’s formation was motivated by the lack of Federal Government recognition and infrastructure funding programs to support councils across Australia that are, or are expected to, experience high levels of population growth.  The principal role of the Growth Area Alliance is to highlight the pressing needs of growth areas and to advocate increased Federal and State Government interest and resources to these areas. The national theme of the Alliance is a campaign around ‘Funding the Gap’.


SGS Economic and Planning Consultants and Australian Social and Recreation Research Pty Ltd have been engaged to undertake national research and prepare a cornerstone advocacy document for the Alliance to take to Government.


The quantitative component of the research has been completed and the key results are:


·    Alliance participants represent 22.6% of the Australian population.  This will increase as a proportion to over 25% over the next 15 years;

·    55% of Australia’s population growth over the last 5 years has been accommodated in Alliance LGAs;

·    50% of all future growth in population over the next 15 years will be accommodated in Alliance LGAs;

·    In 2001, Alliance participants housed 21% of the nation’s population but  had only 13.6% of the jobs;

·    A lower ratio of community service / education / health jobs per capita of 1:20 in Alliance LGAs, when compared to the national average of 1:14;

·    Lower levels of Commonwealth spending in Alliance LGAs, when compared to the National average, e.g. despite our current population proportion of 22.6%, Alliance LGAs receive only

- 12.3% Financial Assistance Grants funding

- 16.9% Stronger Families and Communities Strategy funding

- 10.9% Roads to Recovery funding

- 14.9% Strategic Regional Program funding.


It should be noted that these statistics are aggregated from the thirty councils across Australia and may not necessarily therefore represent individual councils’ circumstances.


The qualitative element of the research is being finalised, involving Australian Social and Recreational Research Pty Ltd (ASR) in conjunction with SGS Economics.  They are interviewing a number of General Managers from Growth Area Alliance Councils from each State, to provide further insight into the quantitative research highlighted above. 

Current Status

The Alliance intends to conduct a national campaign at three levels namely, Federal, State and Local.  Such an integrated and coordinated approach ensures consistency of message, whilst localisation will assist in generating community understanding, interest and regional awareness.


In this regard, Council, at the Policy Review Committee meeting of 4 June 2007, resolved that:


“1.       The information contained in the report on Status of National Growth Area Alliance be received.

  2.        The Mayor represent Council in discussions with the Mayors of the other National Growth Area Alliance Councils in Western Sydney to consider infrastructure priorities to support urban growth and their advocacy to Government.

  3.        A further report outlining proposed regional and local communication strategies be presented to the next available Policy Review meeting.”


The Mayor, General Manager, and Director City Strategy attended a meeting of Western Sydney and South Western Sydney Growth Councils (namely Baulkham Hills, Blacktown, Camden, Campbelltown and Liverpool) at Liverpool City Council, on Friday 29 June 2007. The meeting was arranged to determine the most appropriate strategic response to highlighting Western Sydney infrastructure requirements to support further growth. Some Council representatives expressed concern at the lack of formal structure around the Alliance, and the timing of the campaign in the lead up to the Federal election. Blacktown Council have indicated they are only willing to participate at senior staff level. These concerns question whether the Alliance is in a position to advance the matter at this time.


The 2006 Census indicates that the population of the six Western Sydney councils (Baulkham Hills, Blacktown, Camden, Campbelltown, Liverpool and Penrith) represents 25% of the Sydney Region (including Gosford/Wyong) population.  This is expected to increase to 29% by 2022.


Council has raised on a number of occasions to State Government issues such as the need for expanded swimming pool facilities, commercial and commuter car parking, Regional and State road improvements, community service assistance, children’s services support, district level recreation facilities, and environmental improvements to the Nepean River.  The future growth slated for Penrith in the State Government’s Metropolitan Strategy including the established areas and commercial centres will place further demands on these and other facilities in the City. 


It is reasonable to expect funding support as a consequence of Penrith accommodating its share of the nation’s population growth.  . 


To facilitate a media campaign, the Alliance has requested member Council’s to identify infrastructure delivery issues and difficulties being experienced and likely to be experienced in coming years as urban growth continues in response to the nation’s population growth. 


In this regard, we are advancing the development of a Penrith Regional City Infrastructure Strategy which will highlight existing backlog areas and identify major new infrastructure, including civil, social, community and environmental requirements to support Penrith’s growth as a major centre in outer Western Sydney.


It is proposed that the Alliance Secretariat, Whittlesea Council in Victoria, with the Consultants CPR and SGS facilitate approaches to the Federal Government at a national level and this is expected to commence in late July/early August.  Further details of this are expected shortly.


It is also suggested that each council determine its own approach to the candidates in the forthcoming Federal election to highlight individual LGA issues of relevance.  There is also the option for Councils to pursue other local initiatives including public meetings, distribution of material to community groups and other local interests.  The extent to which this is taken up would depend upon the reaction of the local candidates to the issues outlined above.


To date the Director ~ City Strategy has had the opportunity to discuss the Alliance agenda with representatives of the Federal Member for Lindsay and with the Labor Party candidate for that seat. It is suggested that subject to Council’s decision tonight, that further discussions led by the Mayor continue with the local candidates.


The Director ~ City Strategy has also held discussions with representatives of the Urban Development Institute of Australia and the Penrith Chamber of Commerce about the Alliance’s agenda.  These organisations have expressed a willingness to work with Council to assist in conveying an appropriate message to the Federal Government and Federal Opposition.


There is merit in Council continuing to participate in the National Growth Area Alliance ‘Fund the Gap’ campaign. The campaign advocates for increased Federal and State Government support to equitably address the infrastructure needs of past and expected population growth in the City.  The Federal Government should play a greater role than it historically has in funding the infrastructure requirements of urban development, particularly in areas where current State Budgets and developer funding mechanisms have proven to be inadequate.


It is suggested that the Mayor be authorised to represent Council in implementing the Alliance initiatives.  This would include meetings with the local candidates and representing Council in any discussions at State or Federal level.





1.     The information contained in the report on Status of National Growth Area Alliance be received

2.     Council continue to participate in the National Growth Area Alliance

3.     The Mayor be authorised to represent Council in implementing the National Growth Area Alliance initiatives

4.     Council inform the other Western Sydney Councils involved in the Alliance of its decision.



There are no attachments for this report.





Date of Meeting:          Monday 9 July 2007

Master Program:          Leadership and Organisation

Issue:                            Leadership

Report Title:                Asset Management Planning For NSW Local Government

Attachments:                Asset Management Planning for NSW Local Government

                                      Joint Media Release - Asset Management Planning

Policy Review Committee Meeting

9 July 2007

Attachment 1 - Asset Management Planning for NSW Local Government





Policy Review Committee Meeting

9 July 2007

Attachment 2 - Joint Media Release - Asset Management Planning









Date of Meeting:          Monday 9 July 2007

Master Program:          Leadership and Organisation

Issue:                            Program Selection and Delivery

Report Title:                Service Specification Program

Attachments:                Draft Development Engineering Service Specification

Policy Review Committee Meeting

9 July 2007

Attachment 1 - Draft Development Engineering Service Specification






[1] Ref AS/NZS 4360

[2] CPA Australia members handbook 2004

[3] A  new international standard for risk management (ISO31000) is to be released, as a draft, in July-August 2007. The draft ISO31000 is based on AS/NZ4360.

[4] The Westpool-MetroPool study tour of the UK, in 2006, provided opportunities to continue networking with Local Authorities and the Society of Local Authority Chief Executives (SOLACE). SOLACE is a representative body for senior strategic managers working in the UK pubic sector promoting effective local government.

TP[5]PT Barrett, Pat, (Auditor-General of Australia) The compatibility of risk management and the survival of accountability in the public sector environment, ARIMA National Conference Nov 2000


[6] 80% of risks faced by organisations are NOT insurable – “Chanceor Choice”, SOLACE