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Introduction
The NRA, along with some other resident groups and individuals, have expressed deep concerns about the financial direction of our Council for the past 2-3 years. We feel these concerns have not been taken seriously until the Essential Services Commission undertook their work and issued their report reaching similar conclusions.

That said, we note Council has undertaken a number of reviews to address the ESCOSA report including the Rating Strategy Review, consideration of an added gym facility into the Payneham pool complex and associated prudential review, revising the LTFP and adjusting/reducing the capital works program etc. We commend the Council for taking these actions as part of its strategy to improve the financial position over the next 10 years and making them publicly available for community consultation.

However, it must be said the forecasts in the LTFP look good on paper, but rely on the heroic assumption that there will be little to no new capital expenditure over the next 10 years. It is not realistic!

In considering the current Budget and LTFP we submit the following:

Budget 2026/27
Expenditure has increased by 10%, while income has increased by 6%. This imbalance is unacceptable.
The Employee Expense category shows the highest cost increase (average of 10.5% per annum since2022-23). Materials and Contracts also continue to rise about $1M per annum.

The result is an Operating Deficit of $2.12m which is too high and should be reduced
significantly prior to setting rates for 2026/27. Deficits of this order and a further $1.0m in 2027/28 weigh considerably on future budgets and ratepayers. Relying on the positive forecasts in the outer years of the LTFP is notoriously unreliable.

Some suggestions include:

Recurrent Budget Expenses Cost Cutting
Review Employee Expenses and Materials and Contracts line items to deliver significant savings of at least 1%, or some $450,000.
In private enterprise, contracts are frequently renegotiated, so council need to do similar. “No” is not an acceptable response from the CEO & Administration.

A further review of all operating budgets should be undertaken to find further savings.

Operating Projects Cost Cutting
Consider the real benefits to the City’s broad ratepayer base of holding the:

– Tour Down Under – $60,000 (other Councils have questioned the value)
– Gather Round – $100,000 (it is unclear whether this is football related
activities or the Food and Wine Festival or both?)

It could be argued these activities have short term benefits lasting days as opposed to
investing in expanding tree canopy, improving/expanding open space or beautifying the Parade that have benefits lasting decades for the community.

Rates
We generally support the proposals contained in the Rating Strategy Review, however we have some comments/suggestions on the rating proposals for 2026/27.

Average Residential Rate Increase – Tale of Two Cities
Total Residential rate revenue is budgeted to increase by 7%.

However, we are told (ABP p23) the average residential increase is only 5.45%. The reason for this lower figure is because the calculation includes the 27% of minimum properties that subject to no increase in their rates. Consequently, the average rate increase for the other 73% will be significantly higher than 5.45%, it must be over 7%+.
The suggestion that the average rate increase is 5.45% maybe technically correct but is misleading to 73% of residential ratepayers. We believe this distinction should be made transparent to ratepayers in its publicity, unless Council endorses in some form our proposal (below) to phase-in the reduction in the proportion of minimum rated properties.

Minimum Rate
One of the key changes proposed is to reduce the percentage of ratepayers on the
minimum rate to 25%. Legislation requires the number of properties minimum rated to no more than 35% – NPSP is around 32%.

We recommend a more phased approach while the Council is facing large deficits over the next 2 years. If the minimum rate was increased by 3% or $42(lower than the average increase for the bulk of ratepayers and less than current CPI) it would generate approximately $214,000 more rate revenue to contribute to a reduction of the deficit and would still lower the number of ratepayers on the minimum.

This mirrors the phase in approach to the changes in the differential rates for commercial and other non-residential ratepayers.

General Rates
No one wants to increase rates but the consequences of suggesting the deficit will fix itself sometime in the future is not desirable with ongoing higher debt servicing costs.

We therefore propose that all rate categories have an additional 0.5% added to the current proposed rates in the Annual Plan. It is estimated an additional $360,000 rate revenue would result.

Borrowing Levels
We note the very high borrowing levels at $86.3m in 2026/27 and with the Net Financial Liability level at 153.5% which is well beyond the LGA’s maximum guidance level of 100%, noting that all metropolitan Councils are below, and most well below, 100%.

This constrains council from being able to respond to important needs in the community and will cause further disappointment for ratepayers.

The Long Term Financial Plan has pushed out improvement plans for almost 10 years, which is clearly unrealistic and undesirable. not a desired outcome. It should include improvements to valued community assets such as the Norwood Pool and Library.

Gymnasium addition to Payneham Memorial Swimming Centre
Council has proposed to add a gymnasium facility to the Payneham Pool (including
expanded car park provision) at a capital cost of $5.9m based on concept plans. The aim is to generate operating surpluses from the gym that will partially offset the operating deficits from the swimming facility.
We are very concerned about the financial risks associated with this project for the
following reasons:

• It is 100% funded by significant additional borrowings;
• Cost estimates are based on concept designs, not detailed design estimates risking
  cost escalation;
• On current estimates the capital investment will have a payback period of 11 years,
  excluding finance costs and depreciation – these costs need to be factored into the
  LTFP and their inclusion further illustrates the questionable viability of this project.
• The prudential report on the project was very cautionary and highlighted many risks, for example:
  – Potential insolvency of the PMSC operator;
  – High potential for capital cost blow-outs, noting recent inflation due to Iran
  war;
  – Insolvency of the builder or key contractors;
  – Potential operating losses greater than projected due to escalating costs such
  as staffing, energy, utilities etc;
  – Increased borrowing costs due to higher interest rates;
  – Membership demand and revenue may be lower than projected;
  – potential limited ability to increase gym fees due to user affordability or
  market competition;
  – competition from other private gyms, existing or new, or changing fitness
  trends may impact patronage.
  
  We advocate further public consultation (pause point) (also recommended by ESCOSA) once detailed design costs and borrowing impacts are known so the community can be assured the project won’t replicate the history of the Swim Centre Development.
  
  Finally, thank you for the opportunity to put our views and hope there will be opportunities to improve Council’s financial position in the future to provide for the betterment of the City.
  
  Presented by the Norwood Residents Association

By Peter Fairlie-Jones, NRA Committee Member

Most people have little interest in the finances of their local council. Right? That is natural. We elect a group of councillors representing our ward areas and collectively, under the leadership of the Mayor, they oversee and hold to account the Chief Executive and administration. The Council, with advice from the Administration, sets the priorities for managing the city and its services and authorises the budget and rate setting process. People naturally become interested when their rates go up significantly, or they notice service levels deteriorating, or both. Well, this has started to happen at NPSP! The Essential Services Commission of SA (ESCOSA) reviews the financial sustainability of all Councils individually every 4 years. They have just released their advisory report on NPSP Council that concluded that the council is potentially fiscally unsustainable. They highlight the following issues of concern that arise from the Council’s own long term financial plan (10 years):

1. Council is taking on significant debt mainly to fund the Payneham Memorial Swimming Centre which was originally budgeted at $24m but has subsequently blown out to over $60m. As a result, debt is forecast to peak at $106.7m, and the debt ratio will average 145% over the next 10 years (peak166.8%) and far greater than the Local Government Association (LGA) suggested maximum of 100% (NB: No other metro Council exceeds 100% and most are well under)
2. The Payneham Memorial Swimming Centre cost escalation from $24m to over $60m raises concerns about scope and project management, community consultation and financial transparency
3. Forecast rate increases are almost twice the rate of projected CPI over the entire 10-year period (NB: this follows residential rate increases of 8.5% (23/24), 8.5% (24/25) and 9.4% (25/26))
4. Forecast growth in operating expenses is contained at below historical levels, while also servicing increased debt, without explaining how this will be achieved
5. Council risks further cost increases if it has underestimated the $30m cost of the Parade Masterplan, a figure that was estimated in 2020 and has not been updated since.

Further to the rather damning ESCOSA review, it needs to be recognised that during the public consultation for the 2024/25 and 2025/26 budgets in particular, the Norwood Residents Association and St Peter’s Residents Association and various individuals made written submissions and verbal presentations raising concerns regarding Payneham Pool and its impact on rates. However, the concerns were basically ignored.

What is particularly concerning is that, along with the prospect of significantly higher rates throughout the next 10 years, the Council will be in a financial straight jacket that forces it to cut or reduce services, and may be forced to sell assets (Norwood pool, a library perhaps, open space/parkland?) to reduce debt.

The opportunity to improve our city with more open space, provide more tree canopy, improve footpath maintenance, better car parking, traffic management etc will likely suffer.

The Norwood Residents Association would like to see the Council develop a detailed strategy to deal with the debt problem and associated rate increases and, importantly, consult meaningfully with the community on the actions it proposes before decisions are made.

This section is for NRA members and Norwood residents to air their views on local topics and will be included in our newsletter. If you would like to contribute, please email your piece to:  norwoodresassoc@gmail.com.

These items will also be posted here on our website so you can make comments/contribute to the discussion.

To kick things off, former NRA President, Ian Radbone argues that we should be careful what we wish for when we demand more parking.

You want more parking?  Then accept more congestion.

When I was President of the Norwood Residents Association, the two most common complaints I used to hear were both about cars: too much traffic and not enough parking.  I used to respond by asking, “which do you think is worse?” because providing more parking results in more traffic.  It’s what we called a wicked problem when I used to teach public policy.  There’s no ultimate solution.

There’s a practically insatiable demand to drive more, and the more governments do to accommodate that driving, the more driving there is. 

I’m almost 70, and all my life governments have been “upgrading” (that is, widening) roads to cope with congestion.  It improves things for a while, but then it just seems to get worse than before. 

One thing that does discourage driving and encourages people to use other means of getting about, is a lack of parking.  Walking, cycling public transport are all more popular in the CBD because parking costs money.  Where parking in free and plentiful, people drive, at least until congestion gets too bad.  Then they complain about congestion, governments widen the roads, …and on it goes.

For a place like Norwood, the amount of local traffic per day can be calculated by the number of parking spaces and how often that parking space is “turned over” – how many cars use it in any one day.  The formula is:

daily local car trips = number of local car spaces x number of cars that use the space x 2.

So, if an on-street car space is used by a local employee all day it would probably generate only two trips. (Perhaps four if we include the evening.)  If it is on The Parade and has a 15 minute time limit during business hours it might generate sixty or more trips, i.e. more congestion.  It’s funny that the employee parking we complain about actually produces less congestion than customer parking.

The same applies to off-street spaces, of course.  There’s a two-hour time limit on the Council car park in Webbe Street.  Let’s assume it is 50% occupied and that every driver uses it for the full 2 hours, that is it gets turned over four times a day during business hours There are about 240 spaces in that car park, so the number of trips that car park generates would be

240 spaces x 4 turnovers x 50% occupancy x 2 trips, one in, one out = 960 trips

Shorter stays and higher occupancy would mean more trips than this. 

I don’t know how many of those trips would be using the George St/ Parade intersection, but it would be a lot, and I haven’t mentioned the 270 or so spaces owned by the shopping centre, which also have a two hour time limit, so another 1080 trips.  And I haven’t included any afterhours trips, though congestion is not such a problem then.  And then of course there’s the new car parking spaces associated with Coles, which I haven’t counted.

From time to time we hear calls for rate payers to pay for another deck to the Webbe Street car park.  Just remember that if that is done, congestion will be worse.

What can we do about it?  If we really want quiet streets, with lots of people walking and cycling, then actually cutting back on the amount of parking would do it.  But it would require a serious on-street parking regime to strictly enforce on-street parking policies, and that would not be popular with businesses and with many residents.  And The Parade’s economy relies on lots of customers driving here from other suburbs, so local businesses would not be so busy.

Another approach would be to “do an Unley”, that is, chop up streets so that they are accessible to local traffic but not to through traffic.  I live on Theresa Street, which was chopped up like this many years ago.  We don’t have traffic problems, and I can’t imagine my neighbours ever wanting to go back to the old days.  But then try to introduce new closures and opposition arises and nothing happens.  I think Donegal Street is the only other street in Norwood that has been given this treatment.  Are there others?

In the meantime, I avoid (and not add to) the congestion and parking problems by walking and cycling.  If I need a car, I hire one of two Flexicars based in Norwood, or hire a ute from Bunnings in Kent Town. 

Ian Radbone

You can find the July edition of Norwood Matters here.

You can find the June edition of Norwood Matters here.

You can find the May edition of Norwood Matters here.

If Norwood is to thrive as a community and not just a suburb, it needs residents to work together, to represent the residents in dealing with government, to encourage community activities, to build connections between people.  

The Norwood Residents Association has been doing this for 23 years.  

With the demise of local newspapers, our role in informing residents has never been more important.

But with three of our long-standing committee members retiring at the next AGM, including the President and Secretary, our future is in doubt. Our next AGM may be our last.  

If you are interested in helping to keep the NRA going, we’d love to hear from you.

Phone President Ian Radbone, 0402 965 929.

You can find the April edition of Norwood Matters here.

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You can find the March edition of Norwood Matters here.

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