The Local Government Act 2020 establishes Overarching Governance Principles (s 9) that must be given effect through the performance of a Council’s role, with some having specific reference to the integrated strategic planning and reporting framework include:

• priority to be given to achieving the best outcomes for the municipal community including future generations.
• economic, social, and environmental sustainability (including climate change risk) is to be promoted.
• the community is to be engaged in strategic planning and strategic decision making.
• innovation and continuous improvement are to be pursued.
• collaboration with other Councils and statutory bodies is to be pursued.
• ongoing financial viability of the Council is to be ensured.
• regional, state, and national plans are to be taken into account.
• transparency of decisions and actions is to be ensured.

Strategic planning principles (s 89) require councils to:

• adopt an integrated approach to planning monitoring and performance reporting.
• ensure strategic planning addresses the Community Vision.
• consider the resources needed for effective implementation.
• identify and address the risks to effective implementation.
• provide for ongoing monitoring of progress and regular reviews to identify and address changing circumstances.

Financial management principles (s 101) require councils to:

• manage finances in accordance with financial policies and strategic plans.
• monitor and manage financial risks prudently.
• provide stability and predictability in the financial impact of decisions.
• explain the financial operations and financial position by keeping appropriate records.

Service performance principles (s 106) require councils to:

• plan and deliver services according to the Service Performance Principles.
• provide services in an equitable manner and be responsive to diverse needs.
• ensure services are accessible to intended target groups.
• establish quality and cost standards to provide good value.
• continuously improve services in response to performance monitoring.
• include fair and effective processes for considering and responding to complaints.

The Council must prepare and adopt a budget for each financial year and the subsequent three financial years.

It is to be a ‘rolling’ Budget with an outlook of at least four-years.

The Budget must:

• give effect to the Council Plan.
• contain financial statements in the form required by the regulations (and accounting standards).
• provide a general description of services and initiatives to be funded.
• identify major initiatives from the Council Plan that will be priorities for each financial year for services funded in the budget, the prescribed indicators, and measures of service performance.
• total rate income and information on differential or fixed components of rates.
• a statement on whether Council intends to apply for an increase or variation to the rate cap.

The four-year budget will outline how resources will be allocated across initiatives, programs, services, and capital works, as well as financing and debt redemption/servicing. It also provides a comprehensive outline of all income to be derived from rates, fees and charges, grants, and other revenue.

It should include both the ‘ongoing’ services and programs as well as the new strategies and initiatives flowing from the Council Plan.

The Council must prepare and adopt a revised budget if rates are to be varied or to undertake borrowing not previously approved or to make material changes that should be the subject of community engagement.

Financial and operational modelling feeding into the Budget should consider the long-term implications of decisions by Council. Council’s strategic risk register should link to the Budget.

The Budget is required to be adopted by 30 June each year or any other date fixed by the Minister.

Key components of the proposed 2025/26 Budget which has been provided under separate cover and is available for download from the Council’s website, are discussed below.

The budgeted operating result is a surplus of $3.979 million. The surplus is primarily due to the receipt of $5.940 million in capital grant income. Modest surpluses are projected in 2026/27: $491,000; 2027/28: $474,000; and 2028/29: $310,000.

Based on an increase of 3 per cent in line with the Victorian Government’s Rate Capping system, Rates and Charges are budgeted to raise $24.013 million a $939,000 increase from the 2024/25 forecast.

The Victorian Government’s rate capping system establishes limits by which Victorian councils can increase rates in a year without seeking an exemption from the Minister for Local Government.

The Minister has set the maximum percentage increase in average rates for the 2025/26 financial year at 3 per cent. The Council has not sought a rate cap exemption.

It is recommended that the full 3 per cent rate cap be applied in 2025/26 to:

• Ensure the organisation’s ongoing long-term financial sustainability. The Council’s longterm financial sustainability needs to be closely monitored. A $610,000 underlying deficit is budgeted for 2025/26 with modest underlying surpluses budgeted for the remaining four years.
• The Council’s financial sustainability continues to be heavily reliant on grant funding from other levels of document and a 3 per cent increase will not cover all cost increases, particularly those associated with capital works, incurred by local government.
• Cater for a growing municipality that requires new infrastructure, programs and services.

In the 2024/25 financial year, general rates and the Municipal Charge are forecast to raise $18.047 million. In 2025/26 revenue from general rates and the Municipal Charge will increase by $750,000 to $18.798 million.

In 2024/25, it is forecast that Waste Service charges will raise $4.534 million. In 2025/26 it is budgeted for Waste Service charges to raise $4.711 million an increase of $176,000.

Assumptions in the Financial Plan 2023-2032 include a 5 per cent increase in service charges, however, it is recommended that Waste Service charges increase by 3 per cent in line with the State Government’s rate cap.

The increase is intended to cover costs associated with escalating waste and recycling regulations and standards, and rising rehabilitation and cell construction costs.

Operating grants totaling $7.621 million are budgeted to be received in 2025/26.

Full receipt of the Council’s Financial Assistance Grant allocation ($5.614 million) is budgeted to be received in 2025/26.

The Council’s year-end cash position is detailed in the table below:

Year (30 June)	2026	2027	2028	2029
Cash and cash equivalents	$24.900m	$25.481m	$26.290m	$28.655m

No new borrowings are budgeted for in 2025/26 or projected in the following three years.

Over the past decade, the Council has made a concerted effort to reduce borrowings.

Interest-bearing loans and liabilities totaled $6.950 million at 30 June 2015. The proposed 2025/26 Budget projects borrowings of $1.290 million as at 30 June 2026

The 2024/25 Budget included allocations to the development of several Council-funded key strategies that will not be completed this financial year. It is proposed that allocations for these strategies be included in the proposed 2025/26 Budget as detailed in the table below:

Strategy/Plan	2024/25 Budget	2024/25 Spend	Proposed 2025/26 Allocation
Barkly Street Precinct Master Plan	$100,000	$0	$100,000
Churchill Recreation Reserve Masterplan	$100,000	$0	$100,000
Benalla Station Precinct – Benalla CBD Precinct Plan	$50,000	$0	$50,000
Benalla Planning Scheme Review	$60,000	$0	$40,000

Adjusted underlying results in the proposed 2025/26 Budget are detailed in the table below. The underlying results comprise adjusted underlying revenue less total expenditure.

Year	2026	2027	2028	2029
Underlying Result Surplus/(Deficit)	($610,000)	$234,000	$217,000	$61,000

The adjusted underlying deficit of $610,000 in the 2025/26 financial year is primarily due to the removal of $4.380 million of non-recurrent capital grants.

Future underlying results may be positively impacted by the following factors:

• Additional revenue in lieu of rates due to increasing income from solar farms. The proposed 2025/26 Budget includes revenue in lieu of rates of $426,000. It is estimated that by the end of the forecast period (FY 2028/29) solar farm income will exceed $2 million.
• A review of organisational review following the appointment of a new CEO.
• Adoption of a new Benalla Landfill and Resource Recovery Centre Masterplan. Once it is adopted, implementation of the new masterplan should result in a decrease in costs. An operational review of the Benalla Landfill and Resource Recovery Centre to identify costs savings will also be conducted in 2025/26.

Capital works total $12.629 million in 2025/26. Key areas of expenditure include:

• Roads $4.178 million
• Property and Buildings $2.268 million
• Waste Management $2.226 million
• Plant and Equipment $1.331 million
• Recreational, leisure and community facilities $1 million
• Drainage $718,000.

New asset expenditure is $3.370 million, asset renewal $8.259 million and asset upgrade $1 million. Capital works are funded by grants $5.940 million and Council cash $6.689 million.

Fees and Charges for 2025/26 have been reviewed in line with a proposed 3 per cent increase in line with the rate cap. However, for practical purposes some fees have been rounded to the nearest dollar.

An exception is domestic customer charges at the Benalla Transfer Station. It is recommended for the second consecutive year that no increases be applied.

The proposed zero increase in 2025/26 offsets the significant increase incurred by customers when volume-based charging was introduced in 2022/23.

Please note that some legislated fees have not yet been finalised.

User fees are budgeted to raise $2.973 million in the 2025/26 financial year. Benalla Landfill and Resource Recovery Centre Waste Management Services income decreases by $754,000 due to the cessation of two municipal waste disposal contracts at 30 June 2025.