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REPORT 

and 

DETERMINATION 

of 

THE LOCAL GOVERNMENT REMUNERATION TRIBUNAL 

under 

SECTIONS 239 AND 241 

of the 

LOCAL GOVERNMENT ACT 1993 

29 April 2009 EXECUTIVE SUMMARY

The Tribunal is required to report to the Minister by 1 May each year as to its determinations of categories and the maximum and minimum amounts of fees to be paid during the following year to mayors, councillors, and chairpersons and members of county councils.

Categories: As forecast in the 2008 Report, the Tribunal has undertaken a fundamental review of the categories of Councillor and Mayoral officers in accordance with section 239 of the Act.

The Tribunal’s review has had regard to issues raised in submissions received from the Local Government and Shires Associations ("Associations") and individual Councils, as well as advice received from the Department of Local Government. The Tribunal also considered the findings of previous reviews and considered the relative merits of a number of alternate models.

After considering all these factors the Tribunal finds that there is no strong case to significantly alter the current categories of Councillor and Mayoral offices or to move individual Councils between categories.

While the groupings remain unchanged, the Tribunal has applied descriptive titles for each of the categories. The descriptive titles for the categories are as follows:

Fees: The Tribunal has also reviewed the minimum and maximum fees applicable to each category.

The Tribunal has had regard to submissions received and to comments made by the Associations and individual Councils with respect to the level of fees. The Tribunal has also considered broader issues facing local government at this time, including the potential impact of State Government planning reforms and the challenges posed by the global economic downturn and its likely impact upon local communities.

Having regard to these factors and after taking the views of the Assessors into account the Tribunal considers that an increase of 2.5 per cent in the fees for Councillors and Mayors is appropriate for the current year and so determines.

The Tribunal’s findings in respect of this review are outlined in detail in the main body of the report. The Tribunal’s determination provides the categories of Councillors and Mayoral offices and the range of fees effective from 1 July 2009.

LOCAL GOVERNMENT REMUNERATION TRIBUNAL

2009 ANNUAL REVIEW

REPORT

BACKGROUND

1. Pursuant to Section 241 of the Local Government Act 1993 (the Act) the Local Government Remuneration Tribunal hereby determines in each category of Council, the maximum and minimum amount of fees to be paid to Mayors and Councillors of Councils, as well as chairpersons and members of County Councils.
2. On 26 November 2008 the Tribunal wrote to all Mayors advising of the commencement of the 2009 annual review. In respect of this review the Tribunal advised Councils that in addition to reviewing the minimum and maximum fee levels it would undertake a fundamental review of the categories. Section 239 of the Act requires the Tribunal to determine the categories of Councils and Mayoral offices at least once every 3 years.
3. The Tribunal last undertook a fundamental review of the categories of councils in 2006. As a result of that review the former categories of 4 and 5 were merged to form a new category 4. The background and findings of that review can be found in the 2006 Report and Determination.

2009 REVIEW OF CATEGORIES

4. Section 239 of the Act requires the Tribunal to determine categories for councils and mayoral offices for the purpose of determining fees, and Section 240 of the Act requires the Tribunal to determine categories according to the following matters:

“240 (1)

• the size of areas
• the physical terrain of areas
• the population of areas and the distribution of the population
• the nature and volume of business dealt with by each Council
• the nature and extent of the development of areas
• the diversity of communities served
• the regional, national and international significance of the Council
• such matters as the Remuneration Tribunal considers relevant to the provision of efficient and effective local government
• such other matters as may be prescribed by the regulations. “

5. Prior to undertaking its review of categories the Tribunal, as is its normal practice, invited submissions from Mayors. For the current review the Tribunal requested that any submissions made should address the following matters.
   • Should the existing categories be reduced/expanded and if so on what basis.
   • Whether the current categorisation is appropriate for your Council. If not, where you consider it should be categorised and on what basis you consider this re-categorisation should be granted.
   • Significant changes in the role and responsibilities of Councillors and Mayors since 2006.
   • Other matters you may wish the Tribunal to consider as part of this review.
6. The Tribunal also wrote to the Presidents of the Local Government and Shires Associations (LGSA) in similar terms, and subsequently met with the President of the Shires Association and Deputy President of the Local Government Association. The Tribunal wishes to place on record its appreciation to the President and Deputy President for meeting with the Tribunal.

SUBMISSIONS RECEIVED

7. In response to this review the Tribunal received 25 submissions from individual Councils, two combined submissions and a submission from the Local Government and Shires Association. The key points from those submissions are summarised below.

Category 1A

8. Penrith supports the current system of categorisation for Councils. The Council considers it appropriate to reclassify Penrith from 1A to S2 in view of the Council’s indentified regional planning and service delivery role and its need to put in place policies and programs that transcend the traditional local government boundaries.

Category 1

9. The Tribunal has received a number of individual submissions and a combined submission on behalf of Bankstown, Baulkham Hills, Fairfield, Gosford, Hornsby, Lake Macquarie and Sutherland Councils.
10. The combined submission largely seeks recategorisation to either 1A or S2 or the creation of a new category for this group. It argues that the nature of change for these Councillors and Mayors has been substantial with greater obligations imposed by legislation, compliance and reporting requirements, community expectations, increased reporting and other complexities attaching to the functions of Council.
11. Individual submissions have been received from Gosford, Randwick, Sutherland, The Hills Shire, Willoughby and Wyong Councils. All Councils in this group have sought recategorisation into either categories 1A or S2.
12. Randwick City Council has sought recategorisation into Category 1A on the basis of the complexity of its environment and operations that distinguish it from other Category 1 Councils, these include high population density, large non-resident population and facilities of State importance.
13. Wyong has sought recategorisation to either 1A or S2 on the basis of its regional responsibilities and in particular the operation of a separate Water Authority (with Gosford City Council) and responsibilities associated with this in regard to workload for Councillors.
14. Willoughby also seeks regional recognition to the same status as Parramatta (S2). A number of factors impacting upon the Council area, including increased budget, population growth, visitor numbers, and the impact of the upgrade of the Chatswood Transport Interchange, require additional time and effort from the Mayor and Councillors for setting the policies and direction for the Council.

Category 2

15. Auburn, Burwood, Canterbury, Holroyd and Kogarah Councils have all sought recategorisation to Category 1.
16. The submission from Auburn has argued that there are significant demands placed upon Councillors, much of which stems from the needs of constituents of a multi-cultural and socio-economically diverse community. In that respect the demands placed upon Councillors in Auburn may be greater than others in Category 2 and sufficient to differentiate them from this group.
17. Burwood and Holroyd Councils argue that the Tribunal should recognise their regional focus. Burwood has argued that an over emphasis on geographic size and resident population results in Burwood being categorized with its more suburban neighbours rather than amongst its regional centre peers of Hurstville and Bankstown. Similarly, Holroyd has argued that it is now a centre of regional significance and has grown in much the same way as Hurstville, North Sydney and Willoughby grew into regionally dominant local government areas. In addition, Holroyd has argued that Councillors are now required to have broader skills to enable them to address issues such as climate change and changing development trends and community needs.
18. The submission from Canterbury argues that based on the criteria as outlined in section 240 of the Act the Council is more appropriately grouped in Category 1. The submission also requests that the Tribunal consider alternate existing models for categorising Councils, including the ALGA classification scheme.
19. The submission from Kogarah Council also seeks recategorisation to Category 1 on the basis of the growth and importance of Kogarah Town Centre and the impact this has had on the role and functions of Councillors and the Council.

Category 3

20. Submissions have been received from the following Councils in category 3: Cessnock, Hawkesbury, Kempsey, Lismore, Shoalhaven and Tamworth Regional.
21. Tamworth Regional, Shoalhaven City and Hawkesbury Councils support the creation of a new category of larger Category 3 Councils or Regional Councils.
22. Tamworth Regional has argued that a case exists to create a new Category for large rural regional Councils. Such a group should reflect the level of responsibility, accountability, services and facilities provided and functions discharged by the Council.
23. Shoalhaven has argued that a case exists to differentiate the smaller Councils in category 3 from the larger Councils like Shoalhaven. Shoalhaven has also suggested an alternative category structure which would provides for a base level of remuneration together with additional incremental payments based upon the level of Council responsibility ie water/sewerage, population density etc.
24. Submissions received from Cessnock and Lismore have not sought change to the current categories but seek to increase fees in recognition of increased workload.

Category 4

25. Submissions from Councils in this group were received from Forbes, Moree Plains, Temora, Upper Lachlan, Glen Innes Severn and a combined submission from the Western Division Group of the Shires Association representing the Councils of Balranald, Bogan, Bourke, Brewarrina, Carrathool, Central Darling, Cobar, Hay, Lachlan, Moree Plains, Walgett, Wentworth and Broken Hill City.
26. Glen Innes Severn and Forbes Councils have supported a remuneration model which would provide levels of fees consistent with fees payable by interstate jurisdictions (QLD and VIC).
27. Upper Lachlan has argued for recategorisation to category 3 on the basis of population and the large number of communities within the Council area.
28. The combined submission from the Western Division Group of the Shires Association has sought to recategorise these Councils into category 3. The submission argues that no matter how small the Local Government areas may be in population size or rate base, there remains a very high demand on the services of Councillors and Mayors, most notably on the Mayors themselves.
29. The submission from the Local Government and Shires Association (the Associations) argues that a number of Councils in category 3 should be reviewed by the Tribunal and placed in category 1. Recategorisation is said to be justified for these Councils on the basis of population, population growth, expenditure and revenue.
30. In addition, the Associations have reiterated their long held position that the maximum fees payable to Mayors and Councillors should be substantially increased in order to adequately remunerate Councillors for their roles and responsibilities.
31. As in previous submissions the Associations have argued that Mayoral and Councillor remuneration should be set as a percentage to MPs remuneration.

The following arguments are provided to show congruence in roles:

• Mayors undertake activities in representing the interests of their constituents;
• Mayors attend State, Commonwealth and Local Government functions;
• Mayors participate in the activities of recognized political parties, including participation in national, State and regional conferences, branch meetings, electorate Councils meetings, executive meetings and committee meetings;
• Mayors are elected by their communities;
• as with MPs, the community has access to Mayors who receive petitions, complaints and the like.

CATEGORISATION - FINDINGS

32. Underpinning any categorisation scheme, including that developed by the Tribunal, is the basic premise that Councils in each category have a large number of features in common. This is not straightforward as each Council has challenges and issues which are unique.
33. Councils face a broad and diverse range of issues which reflect the differing needs of their communities and the ability of Councils to serve those needs. For example, some Councils face challenges associated with providing services for tourists and/or a large non-resident daily workforce while other Councils have high proportions of disadvantaged, elderly or non-English-speaking residents. Some Councils are experiencing population growth of more than 2% per annum while others have falling populations. Some are facing the challenges associated with development in high density urban areas and others have scattered populations and long distances. Some have inherited ageing infrastructure and others have low incomes.
34. As each Council is different, there will often be anomalies between Councils in different categories while ever there is a requirement to "categorise" them. The Tribunal recognises this explicitly by providing for a fee structure that overlaps between the categories.
35. In its 1995 review the Tribunal established the features of Councils in each of the categories determined. The categories were developed after extensive consultations with Councils throughout the State as well as consideration of local government schemes existing elsewhere at the time. Since then the Tribunal has comprehensively reviewed the categories on a number of occasions and made changes where necessary, including the introduction of new categories S4 in 1999, 1A in 2002 and the merger of categories 4 and 5 in 2006
36. The Tribunal does and will continue to consider recategorisation. But unless there are to be very large numbers of categories, and fine distinctions to be made among different groupings, there will always be room for differences of view on the relative roles and responsibilities of various Councils.
37. There are presently seven categories of Councils and (apart from the City of Sydney) four levels of remuneration. In the absence of any major change in the structure of Local Government in NSW (as has occurred in Victoria and Queensland) there is no apparent merit in attempting to break those categories up into a greater number of categories or subcategories and making fine distinctions between the relative levels of remuneration - bearing in mind that the only legislative purpose of categorisation is to determine remuneration.
38. In reviewing the existing model of categorisation the Tribunal has given extensive consideration to a number of alternatives. A number of submissions requested that the Tribunal have regard to alternative categorisation models such as that used by the NSW Local Government Grants Commission and developed by the Australian Local Government Association (ALGA).
39. Classification schemes are developed for particular purposes and no two schemes are identical. The classification scheme developed for the ALGA has a purpose different from the categorisation required of the Tribunal under the NSW Local Government Act 1993. The categories as developed by the Tribunal are for the sole purpose of setting fees. Had Parliament wanted the Tribunal to adopt an existing scheme the legislation would have reflected that requirement.
40. In considering the relative merits of the alternate models for the purposes of this review the Tribunal examined a large amount of statistical and demographic material, including population and financial data, indices of diversity and socio-economic status, and indicators of regional significance.
41. The Tribunal has also had regard to the findings of previous reviews and the issues raised by the Associations and individual Councils, as well as advice received from the Department of Local Government.
42. After considering all these factors the Tribunal finds that there is no strong case to significantly alter the current categories of Councillor and Mayoral offices.
43. While the groupings will remain unchanged, the Tribunal has applied descriptive titles for each of the categories. The existing system of numbering the categories creates the perception of a ranking system which is not appropriate and which does not adequately indicate the nature of the differences between the various groups.
44. The descriptive titles for the categories are as follows:

45. The characteristics of Councils categorised into each of these groups are outlined in detail in Appendix A.
46. The Tribunal will again review categories of Councils as part of the 2012 review. Until then the Tribunal would not expect to move Councils within categories unless there is a significant change in the roles and responsibilities of particular Councils.

REVIEW OF FEES

47. As stated in prior determinations, the Tribunal does not consider that poor performance, perceived or otherwise, by a small number of Councils and/or Councillors is representative of local government across the State. The Tribunal is well aware that many Councils are doing an excellent job in and for their communities. The Tribunal would wish to acknowledge this, but its legislated role is limited to determining fees. As outlined in previous determinations and confirmed by the review the Tribunal has conducted for this year, the Tribunal does not consider it either appropriate or practicable to factor in a measure reflecting performance when determining an overall adjustment in fees.
48. The Tribunal has had regard to the submissions received and to comments made by the Associations in regard to the level of fees. Suggestions that fees be set as a percentage of the salary of a Member of Parliament are not supported. The reasons for this have been outlined in previous determinations.
49. A number of submissions have sought an adjustment in fees to reflect the increasing amount of time Councillors are spending on Council business. As the NSW Local Government Act 1993 provides for a high level of delegation to Council staff, the amount of time devoted to local government is largely within the discretion of Councils themselves. And an increase in time spent does not of itself necessarily indicate any change in the roles and responsibilities of Councillors.
50. Technological advances such as the widespread use of the internet, email and mobile telecommunications mean that members of the public have greater access than ever to their elected representatives. And as matters become more complex and legislation specifies more responsibilities, Councillors and Mayors need to have broader and deeper skills, knowledge and experience than may have been expected in the past. The Tribunal is aware that the Department of Local Government, in association with the LGSA, has provided extensive training for Councillors and Mayors to assist in addressing these issues. While these developments undoubtedly place additional demands upon Councillors and Mayors, the demands are not unique to local government but apply throughout all areas of responsibility in society and in workplaces.
51. The Tribunal notes that despite the additional demands, the number of people seeking election to local government continues to increase. During 2008, 4410 persons nominated for election to local government. This is an increase of 28% over the 3,428 persons who nominated for election in 2004.
52. The Tribunal is aware that there are also broader issues facing local government in NSW at the present time - in particular, the impact of State government planning reforms. These reforms will result in a range of Council development and planning responsibilities being transferred to either the Planning Assessment Commission or to Joint Regional Planning Panels. While these changes are still to be fully realised, the Tribunal will monitor over the coming year the likely impact of planning reforms on Councillor roles and responsibilities.
53. The Tribunal is also aware that the global economic downturn poses significant challenges to local government. The downturn in economic activity has affected and will continue to affect all levels of government including local government. The Tribunal will also monitor how Councils manage these challenges. To offset the likely impact on local communities, Councils across Australia have received grants under the Federal Government Community Infrastructure Program to assist Councils to build and renew local infrastructure. The Tribunal notes that Councils in NSW have already received $85 million and will be eligible for a share of a further $500 million to be distributed to Councils and Shires across Australia. These grants will pose challenges to Councils given the timeframes imposed to complete grant related projects.
54. Having regard to these factors and after taking the views of the Assessors into account the Tribunal considers that an increase of 2.5 per cent in the fees for Councillors and Mayors is appropriate for the current year and so determines. An increase greater than this amount would be excessive given the current state of the global economy and local economies as indicated by recent key economic indicators and wage movements across the public and private sectors.

Local Government Remuneration Tribunal

Helen Wright
Dated: 29 April 2009

DETERMINATION PURSUANT TO SECTION 239 OF CATEGORIES OF COUNCILS AND COUNTY COUNCILS EFFECTIVE FROM 1 JULY 2009

TOTAL GENERAL PURPOSE COUNCILS 152

Category - County Councils Water (5)

Category - County Councils Other (9)

TOTAL COUNTY COUNCILS 14

DETERMINATION PURSUANT TO SECTION 241 OF FEES FOR COUNCILLORS AND MAYORS

Pursuant to s.241 of the Local Government Act 1993, the annual fees to be paid in each of the categories to Councillors, Mayors, members and chairpersons of County Councils effective on and from 1 July 2009 are determined as follows:

*This fee must be paid in addition to the fee paid to the Mayor/Chairperson as a Councillor/Member (s.249(2)).

Local Government Remuneration Tribunal

Helen Wright
Dated: 29 April 2009

• APPENDIX A

CATEGORIES OF COUNCILS AND MAYORAL OFFICES

Principal City
It is appropriate that the Tribunal retain a separate category for the City of Sydney in recognition of its role as the commercial, cultural, entertainment and ceremonial centre of the City and State. Sydney City Council will be classified as Principal City for this purpose.

Major City
This category includes the large cities of Newcastle City Council, Wollongong City Council and Parramatta City Council.

These Councils are metropolitan in nature with major industrial areas, major residential, commercial and tourism activities and significant education and health care facilities. They may be differentiated from those described as Metropolitan Major and Metropolitan Centres on the basis of their significant regional focus.

Newcastle City Council provides regional services to residents across the Hunter and the Mid North Coast. The Newcastle Port Corporation, which is one of the world's largest coal export ports, is located within the Council area. Ventures such as these, which have a broader State and national focus, impact upon the operations of the Council.

Similarly Wollongong City Council provides regional services to the South Coast region which is an area of significant growth. The City also contains the steel works and the Port Kembla Port Corporation. Traditionally a commodities good port, the port is currently undergoing major expansion that will see general and bulk cargoes, containers and vehicle handling become increasingly more important.

Parramatta City Council provides a broad range of regional services across the Sydney Metropolitan area with a significant transport hub and hospital and educational facilities. Parramatta is also considered as an alternative CBD for metropolitan Sydney with a number of large public and private sector organisations relocating their head offices to this location.

Metropolitan Major
Blacktown City Council and Penrith City Council are classified as Metropolitan Major. These Councils have a residential population greater than 250,000 or have another special feature of section 240 which the Tribunal considers distinguishes them from other Metropolitan Councils.

Blacktown City Council has the greatest population of all Councils in NSW, with a current population in excess of 280,000. As articulated in the 2001 Report and Determination the Tribunal accepts that such a significant population imposes additional burdens of responsibility on Councillors and Mayors and justifies recognition for remuneration purposes.

The Tribunal recategorised Penrith City Council into the same category as Blacktown City Council in 2002. While Penrith does not have a population greater than 250,000, it provides significant regional services to greater western Sydney, residents of the Blue Mountains and Nepean districts and to residents of the Central West of NSW. The Tribunal’s review finds that the unique characteristics of Penrith City Council continue to warrant its inclusion within the category of Metropolitan Major for remuneration purposes. The extent of regional servicing is considered to be greater than those services provided by other Metropolitan Councils.

Metropolitan Centre
These Councils are typically large multi-purpose organisations which serve as regional centres for the interests of a wider number of residents.

They are characterised by large populations, such as Sutherland Shire Council with a population in excess of 200,000, and large revenues, such as Wyong City Council with a total operating revenue in excess of $200 million per annum. Council business may include significant infrastructure and support for commercial and retail facilities such as Ryde, Willoughby and North Sydney Councils. A number of Councils in this group have high levels of population growth and urban residential development such as The Hills Shire Council. Councils in this category including Randwick City Council also host significant sports/recreation/cultural facilities and major educational and/or health facilities.

The breadth of these operations impacts upon the role and responsibilities of Councillors and Mayors and warrants recognition for remuneration purposes.

Metropolitan
The remaining metropolitan Councils have smaller populations and in some cases smaller areas than other Councils in the metropolitan region. The scale or diversity of operations is less than for the Councils classified as Metropolitan Centres. While a number of the Councils display characteristics similar to those of Councils categorised as Metropolitan Centres, such as high population densities, the primary activities of these Councils would be expected to be:

• The design and maintenance of public works
• Waste and environmental services
• Upkeep of parks and reserves
• Approval of building and development applications
• Monitoring of services such as building control, health, food etc.
• Strategic planning, child care, community development
• Provision of facilities such as public halls and swimming pools

Other issues for these Councils include environmental issues, ageing infrastructure and urban consolidation, with such activities having neither the scale nor diversity of operation of Metropolitan Centres.

Rural Regional
Characteristics of these Councils are regionalism and growth. The major town centres of regional Council areas are important centres of commerce, trade, work and recreation for thousands of people in and outside the local government area which these towns serve.

This category includes the large rural centres of Wagga Wagga, Tamworth, Armidale, Orange, Albury, Dubbo and Bathurst. These Councils generally have a significant urban population existing alongside their traditional farming sector, and are surrounded by smaller towns and villages. These large rural centres often contain a regional airport and provide significant educational, health, sport and recreational facilities for communities throughout their region. In addition, a number attract large visitor numbers to established tourism ventures, such as the Western Plains Zoo, or events, including the Tamworth Country Music Festival and Bathurst Motor races.

This category also contains the large Councils located on or close to the coast. These Councils have high levels of population, including Tweed, Shoalhaven, Port-Macquarie Hastings, Coffs Harbour and Blue Mountains Councils and significant population growth, including Maitland, Tweed and Queanbeyan Councils. These factors impact upon the planning responsibilities of these Councils which are reflected in the high number of development applications, specifically in Tweed, Shoalhaven, Coffs Harbour and Clarence Valley Councils. Several of these areas also provide significant regional services including regional airports and recreation and tourist facilities.

These factors impact upon the roles and responsibilities of Councillors and Mayors and are reflected in the range of remuneration provided for this group.

Rural
These Councils have many of the features of Rural Regional Councils but have smaller populations and are less likely to have a regional focus. They may have one or two significant townships combined with a considerable rural population.

The activities of rural Councils are predominantly concerned with a broad range of community services including the provision of road services and the maintenance of roads, bridge maintenance, weed eradication, rubbish collection and the maintenance of public conveniences and recreational grounds.

In addition, they are often engaged in tourism promotion on a significant scale and are often involved in industrial development and planning and environment matters.

Categories of County Councils, Chairperson and Member Offices

County Councils Water
These County Councils provide water and/or sewerage functions. While a number of councils provide water and/or sewerage services to their local communities, the joint approach by County Councils in planning and installing large water reticulation and sewerage systems requires additional time and energy of those Councillors who are prepared to accept these additional responsibilities.

County Councils Other
These County Councils are those involved in noxious weed eradication or flood plain management.

County Councils involved in noxious weed eradication are specified as a Local Control Authority under the Noxious Weeds Act 1993. These County Councils are formed to administer, control and eradicate declared noxious weeds.
There is currently one County Council responsible for Flood Plain Management – Richmond River County Council.