Please note:  These minutes are yet to be confirmed as a true record of proceedings

CITY OF BUSSELTON

MINUTES FOR THE Special Council MEETING HELD ON 23 July 2015

TABLE OF CONTENTS

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Attendance, Apologies & Leave Of Absence. 2

2....... PUrpose Of Meeting.. 2

3....... Public Question Time. 2

4....... Disclosure Of Interests. 3

5....... Presentations By Parties With An Interest. 3

6....... Reports. 4

6.1          REAFFIRMATION OF THE ADOPTED SCHEDULE OF FEES AND CHARGES - 2015/16 FINANCIAL YEAR. 4

6.2          ADOPTION OF 2015/16 ANNUAL BUDGET. 7

7....... Closure. 17

 


Special Council                                                                       3                                                                                       23 July 2015

MINUTES

 

MINUTES OF A Special Meeting of the Busselton City Council HELD IN the Council Chambers, Administration Building, Southern Drive, Busselton, ON 23 July 2015 AT 5.00pm .

 

1.               Attendance, Apologies & Leave Of Absence 

Presiding Member:

Members:

 

Cr Ian Stubbs           Mayor (until 5.29pm, assumed the chair at 5.31pm)

Cr Tom Tuffin (from 5.29pm until 5.31pm)

 

Cr John McCallum

Cr Tom Tuffin

Cr Gordon Bleechmore

Cr Rob Bennett

Cr Coralie Tarbotton

Cr Jenny Green

Cr Terry Best

 

Officers:

 

Mr Mike Archer, Chief Executive Officer

Mr Oliver Darby, Director, Engineering and Works Services

Mr Paul Needham, Director, Planning and Development Services (from 5.03pm)

Mrs Naomi Searle, Director, Community and Commercial Services

Mr Matthew Smith, Director, Finance and Corporate Services

Miss Lynley Rich, Manager, Governance Services

Mr Ehab Gowegati, Financial Accountant

 

Apologies

 

Nil

 

Approved Leave of Absence

 

                Cr Grant Henley

 

Media:

 

“Busselton-Dunsborough Times”

“Busselton-Dunsborough Mail”

 

Public:

 

Nil

2.               PUrpose Of Meeting

For Council to consider the adoption of the 2015/16 Annual Budget.

3.               Public Question Time 

Nil

4.               Disclosure Of Interests

·         Cr Ian Stubbs in relation to Agenda Item 6.2 of the agenda - Adoption of 2015/16 Annual Budget.

 

Cr Stubbs advised that in accordance with the Local Government (Rules of Conduct) Regulations 2007 his Proximity Interest declaration would be read out immediately before Item 6.2 was discussed.

 

5.03pm At this time The Director, Planning and Development Services entered the meeting.

5.               Presentations By Parties With An Interest

Nil


Special Council                                                                       5                                                                          23 July 2015

6.               Reports

6.1             REAFFIRMATION OF THE ADOPTED SCHEDULE OF FEES AND CHARGES - 2015/16 FINANCIAL YEAR

SUBJECT INDEX:

Financial Operations

STRATEGIC OBJECTIVE:

An organisation that is managed effectively and achieves positive outcomes for the community.

BUSINESS UNIT:

Finance and IT Services

ACTIVITY UNIT:

Finance

REPORTING OFFICER:

Financial Compliance Officer - Jeffrey Corker

AUTHORISING OFFICER:

Director, Finance and Corporate Services - Matthew Smith

VOTING REQUIREMENT:

Absolute Majority

ATTACHMENTS:

Nil

  

 

PRÉCIS

 

In accordance with Regulation 5(2) of the Local Government (Financial Management) Regulations (the ‘Regulations’), a local government is to undertake a review of its fees and charges regularly; and not less than once in every financial year. Whilst the Council has previously adopted its Schedule of Fees and Charges to apply for 2015/16, Section 6.16(3) of the Local Government Act (the ‘Act’) requires a local government to adopt its fees and charges at which time it adopts its annual budget.

 

This report therefore seeks the Council's reaffirmation to the adoption of its Schedule of Fees and Charges for the 2015/16 financial year.

 

 

BACKGROUND

 

To enable the Council’s Schedule of Fees and Charges to become effective from the commencement of the financial year, the Schedule is required to be adopted in advance of 30 June each year. This provides a number of benefits, including:

 

·    It provides consistency in both reviewing and amending fees and charges on an annual basis  

·    It provides sufficient time for associated documentation/ advertising/ signage to be updated in advance of the fees and charges becoming effective

·    It enables any necessary statutory advertising to be undertaken in advance of the fees and charges becoming effective

·    It enables sufficient time for customers to be advised of any changes to existing fees and charges

·    It assists in budget forecasting, insofar as the adopted fees and charges are applicable for the full financial year

 

At its meeting of 22 April 2015, the Council adopted (C1504/104) its Schedule of Fees and Charges for the 2015/16 financial year. Subsequently, at its meeting of 22 July 2015, Council is to adopt a variation to the fees and charges relating to the hire of “Other Halls”.

 

Pursuant to Section 6.19 of the Act, local public notice must be given should fees and charges be adopted outside of the annual budget adoption process. In respect of the Schedule of Fees and Charges adopted on 22 April 2015, public notice was given on 22 May 2015. With regards to the variation of “Other Halls” fees and charges to be adopted on 22 July 2015, they will become effective at which time the Council reaffirms its adopted Schedule of Fees and Charges for the 2015/16 financial year. 

   

STATUTORY ENVIRONMENT

 

Sections 6.16 – 6.19 of the Act refer to the imposition, setting the level of, and associated administrative matters pertaining to fees and charges. The requirement to review fees and charges on an annual basis is detailed within Regulation 5 of the Local Government (Financial Management) Regulations.

 

RELEVANT PLANS AND POLICIES

 

The Council’s currently endorsed Long Term Financial Plan reflects fees and charges revenue increasing by 4.2% annually, based on the 10 year average Local Government Cost Index. This level of increase has guided officers in setting the recommended fees and charges to apply in 2015/16.     

 

FINANCIAL IMPLICATIONS

 

Long-term Financial Plan Implications

 

The 2015/16 draft annual budget is reflective of the fees and charges as previously adopted by the Council.

 

STRATEGIC COMMUNITY OBJECTIVES

 

The schedule of fees and charges adopted by the Council encompasses 'whole of organisation' activities. As such, all Key Goal Areas within the Council’s Strategic Community Plan 2013 are in some way impacted. More specifically however, this matter aligns with Key Goal Area 6 – ‘Open and Collaborative Leadership’ and particularly Community Objective 6.3 - ‘An organisation that is managed effectively and achieves positive outcomes for the community’.

 

RISK ASSESSMENT

 

There are several risks that the Council needs to be mindful of when reviewing its Schedule of Fees and Charges. Firstly, in an effort to assist in recovering costs associated with the provision of services, it is important that, where applicable, fees and charges are increased on an annual basis in line with relevant economic indicators. Should this not occur, the provision of those services is required to be increasingly subsidised by other funding sources. Conversely however, a balance is also required to ensure that fees and charges are maintained at levels so as not to adversely impact on the financial capacity for users to utilise those services, which may otherwise result in a net reduction in revenue. These matters were considered by officers when setting the recommended fees and charges to apply for 2015/16.             

 

CONSULTATION

 

Business Unit Managers are responsible for reviewing fees and charges associated with activities under their control. As part of the review process, consultation may occur with other local government authorities, in addition to a review of prices offered by alternate service providers (pursuant to Section 6.17 of the Act).        

 

OFFICER COMMENT

 

This report is purely for the purposes of finalising the adoption of the City’s Schedule of Fees and Charges for 2015/16 year, noting there have been no changes since the Schedule adopted by the Council at the meeting of 22 April 2015 other than in relation to “Other Hall” as referred to in the Background section of this report.

 

CONCLUSION

 

The Council has previously adopted its Schedule of Fees and Charges for the 2015/16 financial year. The variation to “Other Halls” fees (as subsequently adopted) have now been incorporated within the Schedule of Fees and Charges as is included in the 2015/16 draft annual budget document. It is therefore recommended that the Council reaffirms the adoption of its Schedule of Fees and Charges for 2015/16.

  

OPTIONS

 

The Council may determine to amend its currently adopted Schedule of Fees and Charges.    

 

TIMELINE FOR IMPLEMENTATION OF RECOMMENDATION

 

The Schedule of Fees and Charges as adopted by the Council on 22 April 2015 became effective from and including 1 July 2015.

 

The variation to the “Other Halls” fees and charges as adopted by the Council on 22 July 2015 will become effective immediately following the Council’s decision in respect of this report.

 

Council Decision and Officer Recommendation

C1507/204              Moved Councillor G Bleechmore, seconded Councillor J McCallum

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

That the Council:

 

1.    reaffirms the adoption of its Schedule of Fees and Charges for the 2015/16 financial year, as comprised within the 2015/16 Draft Annual Budget document; and incorporating the variation to the “Other Halls” charges. 

CARRIED 8/0

BY ABSOLUTE MAJORITY

 


Special Council                                                                       7                                                                                       23 July 2015

6.2             ADOPTION OF 2015/16 ANNUAL BUDGET

SUBJECT INDEX:

Budget Planning and Reporting

STRATEGIC OBJECTIVE:

An organisation that is managed effectively and achieves positive outcomes for the community.

BUSINESS UNIT:

Finance and Information Technology

ACTIVITY UNIT:

Finance

REPORTING OFFICER:

Financial Accountant - Ehab Gowegati

Director, Finance and Corporate Services - Matthew Smith

AUTHORISING OFFICER:

Chief Executive Officer - Mike Archer

VOTING REQUIREMENT:

Absolute Majority

ATTACHMENTS:

Attachment a   Schedule of Carryover List

Attachment b    Published Under Separate Cover 2015/16 Annual Budget  

  

                             DISCLOSURE OF INTEREST

Name / Position

Cr Ian Stubbs

Item No. / Subject

6.2 - ADOPTION OF 2015/16 ANNUAL BUDGET

In relation to budget allocation for the resurfacing of Ibis Court, Geographe

Type of Interest

Proximity Interest

Reason

My property which I own and reside in is located in Ibis Court, Geographe

 

PRÉCIS

 

Pursuant to Section 6.2 of the Local Government Act (the ‘Act’), a local government is to prepare and adopt an annual budget on or before 31 August each year, or such extended time as the Minister allows. Consequent to draft budget workshops convened with Elected Members during May and June 2015, and in consideration of other determinations associated with the budget development process, this report now seeks the Council’s formal adoption of its 2015/16 annual budget.

 

 

BACKGROUND

 

Work commenced on the 2015/16 budget early in 2015. During its development, the budget was informed by the Council’s endorsed Long Term Financial Plan and in particular its associated assumptions and parameters. Subsequent to compilation, the draft budget was critically reviewed by Senior Management, prior to its presentation to Elected Members for workshopping purposes.  

 

During May and June 2015, two draft budget workshops were conducted with Councillors, during which time all facets of the draft budget were reviewed and deliberated.  Councillors reviewed the whole operational budget by directorate, with separate sections for Engineering Maintenance and Capital Works, Facilities and Waste and Fleet.  Councillors also reviewed the organsiation’s whole Capital budget which was consistent with the endorsed Long Term Financial Plan.  A separate briefing session was held in relation to the 2015/16 draft budget allocations in accordance with the City’s endorsed Workforce Plan.  The budget presented to Council reflects the outcome of that workshop.

 

Amendments proposed as part of the workshops have subsequently been included in the draft budget. At this time, it was also acknowledged by Councillors that further amendments to the draft budget would more than likely be required prior to the draft budget being presented for formal consideration, particularly in relation to the Airport. Councillors were agreeable for the draft budget to continue to be updated as necessary, albeit on the proviso that the draft budget closing position was not adversely impacted as a result. While a few amendments and additions have been processed subsequent to the May and June 2015 workshops, these have not adversely impacted on the draft budget closing position. A summary of the amendments and additions is provided in the Officer Comment section of this report.  

 

The draft budget presented for adoption reflects a balanced position as at 30 June 2016. A closing surplus position of $756,540 was achieved in relation to 2014/15, noting that $656,800 of that surplus is required for carryover items which are reflected in the draft 2015/16 budget which is being presented to Council.  These are shown listed in Attachment A to this report.  Thus in accordance with Council Resolutions C1303/074, the 2015/16 budget reflects the transfer of $99,740 to the Infrastructure Development Reserve.  Council Resolution C1303/074 requires in part that any budget surplus which is achieved be transferred to the Infrastructure Development Reserve as part of the following year’s budget.      

 

STATUTORY ENVIRONMENT

 

As part of the annual budget development process, a local government must have regard for numerous requirements under the Act and associated Regulations. These include, but are not limited to, the following provisions:  

 

§ Adoption of Annual Budget

Section 6.2 of the Act and Part 3 of the Local Government (Financial Management) Regulations detail the form and manner in which an annual budget is to be presented to the Council for formal consideration.

 

§ Reserve Accounts

Section 6.11 of the Act provides guidance in respect of reserve accounts and also outlines the processes required should a local government determine to amend the purpose of a reserve.

 

§ Power to Borrow

Sections 6.20 and 6.21 of the Act refer to a local government's power to borrow and the administrative requirements associated therewith.

 

§ Notice of Imposing Differential Rates

Section 6.36 of the Act details the requirement for a local government to give local public notice of its intention to impose differential rates in the dollar and associated minimum payments in any year. The local public notice is to provide details of each differential rate in the dollar and associated minimum payment and must also invite public submissions to the proposal, for a period of not less than 21 days.

 

RELEVANT PLANS AND POLICIES

 

The 2015/16 budget has been guided by the Council’s Strategic Community Plan 2013 (Reviewed 2015) and Corporate Business Plan, along with associated informing plans (Long Term Financial Plan, Workforce Plan and Asset Management Plans). This is in addition to the range of other plans and policies which underpin specific components of the overall annual budget.    

 

FINANCIAL IMPLICATIONS

 

The budget adopted by the Council will determine the financial operations of the City of Busselton for the 2015/16 financial year.

 

STRATEGIC COMMUNITY OBJECTIVES

 

The annual budget impacts across all of the Council’s Strategic Community Objectives. However, the process of adopting the annual budget can be principally aligned with Key Goal Area 6 – ‘Open and Collaborative Leadership’ and more specifically Community Objective 6.3 - ‘An organisation that is managed effectively and achieves positive outcomes for the community’.

RISK ASSESSMENT

 

The 2015/16 budget has been informed by the Council’s Strategic Community Plan 2013 (Reviewed 2015), and more particularly the underpinning Corporate Business Plan, Long Term Financial Plan, Workforce Plan and Asset Management Plans. With risk assessments having been conducted on each of these plans, the risks associated with the adoption of the 2015/16 draft budget have largely been addressed.        

 

CONSULTATION

 

In its development, the 2015/16 budget has been the subject of two specific workshops convened with Elected Members. Community groups and other not for profit organisations have also been invited to apply for funding allocations as part of the City’s ongoing sponsorship related programs. Throughout the year, members of the public have also been invited to make submissions on a range of proposed projects and activities impacting on the draft budget. Similarly, members of the public have recently been invited to provide comment in respect of the proposed differential rates in the dollar and associated minimum payments proposed to be imposed in 2015/16. Finally, extensive community consultation was conducted as part of the development of the Council’s Strategic Community Plan 2013 (Reviewed 2015), which has informed the Corporate Business Plan, and subsequently the 2015/16 budget.       

 

OFFICER COMMENT

 

The 2015/16 budget as presented for consideration is reflective of the documents workshopped with Elected Members during May and June 2015, and incorporates any amendments determined during that process. However, the budget has continued to be amended subsequent to the workshops, to reflect matters that have arisen during the intervening period. Whilst these amendments could have been deferred from inclusion in the budget and raised for consideration as part of this report, it is felt that presenting the Council with a complete and balanced budget is a preferable option. Notwithstanding this, it is important that the Council is provided with an overview of the subsequent amendments which are considered to be either material in value, or of specific interest.  

 

The preliminary 2015/16 draft budget presented to Councillors for the workshops in late May and early June 2015 reflected a balanced budget position (no surplus or deficit).  The workshops themselves resulted in some fairly minor changes to the draft budget and at the end of the workshops a balanced budget position was still achieved.  It was acknowledged at the workshops that if there was an announcement regarding airport funding, which has now eventuated, that this would need to be reflected in the 2015/16 budget.  It was also agreed that if there was any savings as a result of this or any other changes to the budget prior to its finalisation, then these would be put towards meeting the potential increase cost to the City associated with the substantial increase to the Government Guarantee Fee on WA Treasury Corporation loans.

 

There have only been a relatively small number of adjustments to the 2015/16 budget since the workshops, albeit there is one adjustment which is of significant financial value.  These adjustments are largely in relation to capital items, most notably the Busselton Regional Airport and the Busselton Foreshore.

 

Busselton Regional Airport

The 2015/16 budget reflects the receipt of $55,933,094 in funding for the redevelopment of Busselton Regional Airport. $45,933,094 is shown as a transfer from a restricted asset account as the money was received in the 2014/15 financial year.  There have been substantial amendments to the Airport Capital budget which reflect the proposed expenditure of this money in accordance with Stages 1b and 2 of the Airport redevelopment project.  The expenditure of this money is all shown under the heading Airport Development in the Capital budget.  Given the changes to the project with the recent announcement of this funding the following items have been deleted from the draft Capital budget as presented at the budget workshops resulting in savings of $165,000 from the Airport Reserve:

1.    Airport Operations relating to electrical switch upgrade - $100,000; and

2.    Busselton Airport Terminal upgrade to the sewer and ATU Waste System - $65,000.

 

A portion of the employee costs of the CEO, Director, Community and Commercial Services, Manager, Governance Services and Manager, Commercial Services have been allocated to the airport project in recognition of the considerable time those staff are likely to spend on the project.  This results in a budget saving of $241,930.  The 2015/16 budget proposes the creation of a new restricted asset account for an Airport Contingency Fund to which this money has been transferred in order to provide for potential contingency costs associated with the Airport redevelopment project as identified in the Airport Business Case.

 

Busselton Foreshore Project

There have been a series of relatively small changes in the actual figures contained in the 2015/16 budget for capital works as part of the next stage of the Busselton Foreshore project.  These changes are to more accurately reflect their progress of works on the foreshore, given the time that has passed since the estimate of that progress was made for the purposes of the draft Capital budget presented to budget workshops.  The line items which have changed are all under Major Project – Busselton Foreshore heading in the Capital budget.  As all of these items are either loan funded, relisted items or grant funded items, these minor changes do not have any impact on any other aspect of the budget.  There is also no change in the overall cost of the project as advised to the Council. 

 

There has also been the addition of approximately $673,000 to the Busselton Foreshore East – Coastal Defenses budget to reflect the fact that the works had not progressed quite as far as anticipated in the 2014/15 financial year.  Similarly there is a small reduction of $8,000 to the Busselton Foreshore East – Promenade budget.  Both of these are in effect re-listed items.  Again all of these line items are contained under the heading Major Projects Busselton Foreshore in the Capital budget.  All of these items are loan funded and the same comments as above apply.

 

Civic Administration Building Project

There has been a small reduction in the amount listed for the Civic and Administration Centre line item in the Capital budget under the heading Major Project – Administration Building.  Rather than listing approximately $10.5 million, the 2015/16 budget now contains a $9 million budget for this line item.  This is seen as a more accurate reflection of the likely progress of this project in 2015/16 financial year, given the stage that the project is at.

 

Lot 40 Vasse Highway

As Councillors have been recently advised, the loan funding to enable the potential purchase Lot 40 Vasse Highway has been added to the budget.  As discussed with Councillors, it is proposed that an interest only loan of $850,000 be taken out for this purpose.  Loan repayments of $30,600 are budgeted for the interest on this loan in the 2015/16 financial year.

 

Increases to Government Guarantee Fee

As discussed at the budget workshops the 20015/16 budget has been adjusted to have all of the costs associated with loans for the Busselton Regional Airport jet refueling facility being funded from the Airport Reserve. Approximately $42,600 of municipal funds became available as a result, which has been applied to various loan accounts in 2015/16 budget to reflect increase costs which are likely as a result of the substantial increase in the Government Guarantee Fee on WA Treasury loans.  As the City now has more accurate information on the likely extent of this fee increase these amounts have been applied to individual loan accounts rather than being kept in a centralised fund as originally suggested at budget workshops. It is proposed to also budget for the remaining amount of approximately $100,000 which would be required to meet the increased borrowing costs and this has been included in the various, relevant loan accounts.  It is proposed to meet this cost by a $100,000 increase in the interim rates budget so that this budget will now total $520,000.  Given that approximately $600,000 was received in interim rates in the 2014/15 year it is not seen as unreasonable to again increase the budgeted estimate of interim rates for the 2015/16 financial year, albeit that there is a level of risk that this amount will not be received as interim rates are a difficult thing to estimate with a high degree of accuracy.

 

Even though it is proposed to budget for payment of the full Government Guarantee Fee as increased recently by the State Government, the City staff will continue to advocate in relation to this issue and also look at other strategies to minimise the City’s borrowing costs.  If there are any savings in this budget then this of course will be reflected in the 2015/16 budget surplus.

 

Civic and Administration Centre Construction Reserve

The 2015/16 budget reflects the allocation of approximately $500,000 to the Civic and Administration Centre Construction Reserve.  This amount reflects the interest earned on this Reserve, which of course contains the remaining proceeds of the loan which was drawn upon in the 2014/15 budget year for the Civic and Administration Building Project.  It was thought most appropriate that the interest earned on these monies be retained in the Reserve Fund to which these monies relate.

 

Advanced payment of financial assistance grants

The City was advised in June 2015 that the Local Governments Grant Commission was intending to pay 50% of the City’s 2015/16 financial assistance grants in the 2014/15 financial year.  The amount received by the City in 2014/15 was $1,109,692 which is made up of $356,172 for the City’s general purpose grant and $753,520 in local road grant.  As these monies were placed in Reserve in 2014/15, they will be shown as a transfer from Reserves in 2015/16 budget.  The amount of the financial assistants grants received does not materially differ from the amounts shown in the draft 2015/16 budget presented at the budget workshops, however, the receipt of the money in 2014/15 does impact on the actuals for that year.

 

Other Minor Adjustments

There has been a small increase of $1,580 in the budgeted amount for Elected Member Travelling Allowances – Council Meetings to reflect a recent Salaries and Allowances Tribunal ruling.  There are other minor changes, mainly being minor adjustments within the road and footpath capital works programs, but none of these have any negative impact on the overall budget provision.

 

Carryover Items

The 2015/16 budget reflects carryover items totaling $656,800 which are detailed in Attachment A to this report.  These items primarily relate to capital works which have been commenced in the 2014/15 year and are carrying over to the 2015/16 financial year.  These items form  a substantial part of the 2014/15 financial year closing surplus of $756,540, and as is always the case have been funded from those surplus monies as they directly contributed to that surplus result.

 

New Reserves

The only new reserve created as part of the 2015/16 budget is the Performing Arts Centre Reserve.  The purpose of the Performing Arts Centre Reserve is “to provide for the planning and construction of a future Performing Arts Centre for the District”.  Currently the Reserve has a $0 balance.  The creation of this reserve was discussed at the budget workshops. 

 

Change in Purpose of Existing Reserves

A small change is being proposed to the wording to the Reserve purpose of the Election, Valuation and Corporate Expenses Reserve.  The current purpose of that reserve is as follows:

 

“To provide funding for Council elections, rating valuations, fair value valuations and other corporate expenses as determined.”

 


 

It is proposed that the wording of the reserve purpose be changed to the following:

 

To provide funding for Council elections, rating valuations, fair value valuations and other legislative and corporate governance requirements.

 

This proposed change provides a clearer guidance in respect of the potential use of the Reserve.  No other changes are proposed to reserves as part of the 2015/16 budget. 

 

Proposed Borrowings

The only new borrowing proposed as part of the 2015/16 budget is the $850,000 interest only loan to potentially purchase Lot 40 Vasse Highway.  A report will be put to the Council in August 2015 regarding whether or not to purchase this land in order to allow for the potential future expansion of Bovell Park.  Provision has been made in the 2015/16 budget for an interest only loan of $850,000 to facilitate this purchase should Council wish to proceed.

 

Rates

The 2015/16 budget has been predicated on a general rate increase of 4.75%, which is 0.5% less than the projected figure in the Council’s endorsed Long Term Financial Plan. The 4.75% comprises a CPI/general operating component of 2.5% (based on the 10 year average CPI), 1% for road asset management plan funding requirements, and 1.25% to assist in the funding of loan repayments associated with the Civic and Administration Centre project.  The 0.5% reduction in the general rate increased proposed as part of the 2015/16 budget is seen as a good outcome, given that many of the City’s operating costs including staff costs, utility costs and insurance expenses have increased by much more than 2.5%.

 

In addition to the general rate increase, the Council has indicated its support for a further increase of 1% (to a total of 9%) in the differential rate for tourism and marketing activities, which is also reflected in the budget.  

 

In confirmation of the above, at its meeting of 4 June 2015, the Finance Committee endorsed (F1506/034) the advertising of its proposed differential rates in the dollar and associated minimum payments to apply for 2015/16; which reflect these rate increases. With respect to advertising, Section 6.36 of the Act requires that where a local government intends to impose differential rates in the dollar and/ or a minimum payment applying to a differential rate category, it is required to give local public notice of this intention. The local public notice is to invite submissions to the proposal for a period of not less than twenty one days. The Council is required to consider any submissions received prior to it formally imposing the proposed differential rates in the dollar and associated minimum payments, with or without modification. The Council is not bound to formally impose the differential rates in the dollar and minimum payments as advertised, if consequent to its budget deliberations and upon consideration of any submissions received, it determines to vary any or all of these.

 

Local public notice was given on 19 June 2015, with submissions required to be provided to the City on or before 10 July 2015. No submissions were received as a result of the public notice period.

 

With regards to specified area rates (SAR’s), the draft budget reflects an increase of 2.5% in the respective rates in the dollar. This is due to the fact that revenue raised under a SAR can only be utilised for funding activities for which the SAR was imposed. As such, the additional 1% (asset management) and 1.25% (Civic and Administration Centre) do not apply in this instance.       

         

Variance Reporting Threshold – 2015/16 Financial Year

Whilst not directly relevant to the budget adoption, Regulation 34(5) of the Local Government (Financial Management) Regulations requires that in each year, a local government adopts a percentage or value, calculated in accordance with Accounting Standard AASB1031 - Materiality, to be used for reporting material variances.

 

It is preferable that the Council determines this percentage or value as part of its annual budget adoption process, such that this reporting threshold is known prior to the compilation of the initial Statement of Financial Activity report each financial year.   

 

Accounting Standard AASB1031 states that; "general purpose financial reporting involves making decisions about the information to be included in general purpose financial reports and how it is presented. In making these judgements, considerations of materiality play an essential part. This is because the inclusion of information which is not material or the exclusion of information which is material may impair the usefulness of the information provided to users".   

 

The Standard also suggests quantitative thresholds in the consideration of the materiality of variances, as follows:

 

a)   An amount which is equal to or greater than ten percent (10%) of the appropriate base amount may be presumed to be material unless there is evidence or convincing argument to the contrary; and

 

b)   An amount which is equal to or less than five percent (5%) of the appropriate base amount may be presumed not to be material unless there is evidence or convincing argument to the contrary.

 

The Council has historically adopted a [+/- 10%] variance reporting threshold, with reportable variances resulting from timing differences and/or seasonal adjustments to be reported on a quarterly basis. It is considered that reporting threshold is reasonable, and ensures that the Council remains fully informed of the City’s financial performance on a month by month basis. Consequently, this report recommends that the currently adopted variance reporting threshold and methodology be readopted in respect of the 2015/16 financial year.  

 

2015/16 Annual Budget - Highlights

The budget as presented for adoption reflects a balanced position as at 30 June 2015, and comprises all of the amendments and additions as detailed in this report. The following provides a synopsis of relevant budget highlights:  

 

§ Total expenditure is in the order of $167 million including approximately $104 million in capital expenditure.

 

§ The capital expenditure allocation includes:

ü $56 million to develop stages 1b and  2 of the Busselton Regional Airport 

ü $12.7 million for the further development of the Busselton Foreshore

ü $6 million in respect of the City’s road network

ü $6 million in sanitation infrastructure and rubbish site development

ü $400,000 in boat-ramp construction and beach restoration

ü $2.2 million in Parks, Gardens and Reserves works

ü $1.3 million in footpath and cycleway construction

ü $600,000 in Townscape works (including $480K for Dunsborough access improvements)

ü $1.2 million in Busselton Jetty related works

ü $9.2 million for the next stage of the Civic and Administration Centre project 

 

§ A general rate increase of 4.75% has been applied (including 1% for road asset management plan funding purposes and 1.25% to assist in funding loan repayments associated with the Civic and Administration Centre).  This is 0.5% less than the forecasted figure in the Long Term Financial Plan.

 

As illustrated above, the 2015/16 draft budget includes a wide range of capital projects, which will benefit the City’s ratepayers. This is in addition to recurrent operational funding allocations to support a wide range of community initiatives. It is therefore considered that the 2016/16 budget reflects excellent value for money, whilst also being attentive to the desires and aspirations of the community, as reflected in the Council’s Strategic Community Plan 2013 (Reviewed 2015).                 

 

CONCLUSION

 

It is considered that the Council’s 2015/16 annual budget is financially prudent.  As illustrated in this report, the budget includes a significant level of capital projects which will be of benefit to the City’s ratepayers. Many of these projects are analogous with Council’s Strategic Community Plan 2013 (Reviewed 2015), and as such reflect the aspirations of the community. The draft budget also reflects the funding requirements as detailed in subsidiary resourcing plans such as the Workforce Plan and the Overall Asset Management Plan.       

 

It is therefore recommended that the Council adopts its 2015/16 draft annual budget as presented.

 

OPTIONS

 

The Council may determine to amend the budget as presented for adoption. 

 

The Council may also determine to amend the recommended variance reporting threshold in respect of the statutory Statement of Financial Activity Statement reporting.

 

TIMELINE FOR IMPLEMENTATION OF RECOMMENDATION

 

The 2015/16 annual budget will become effective immediately consequent to adoption by the Council.

 

Motion

Council Decision

C1507/205              Moved Councillor I Stubbs, seconded Councillor R Bennett

 

That $20,000 be allocated towards a Capital Drainage Upgrade to reduce flooding in Yale Close, Abbey to be funded from the Road Asset Renewal Reserve.

CARRIED 8/0

 

Council Decision and Officer Recommendation

C1507/206              Moved Councillor C Tarbotton, seconded Councillor J Green

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

That the Council adopts its 2015/16 annual budget, subject to the following:

 

1.    That the following general rates, differential rates, specified area rates and minimum payments, along with other charges, impositions and concessions as specified in the Memorandum of Imposing Rates and Charges as is contained within the draft annual budget, and consequent to any alterations made during the course of this meeting, be adopted by the Council for imposition upon all applicable rateable properties within the district of the City of Busselton for the 2015/16 financial year, in accordance with the provisions of the Local Government Act and subject to all necessary pre-requisites and protocols there under

 

 

 

Description

Rate in

the $

Minimum Payment

$

Zone Groups (GRV)

 

 

Residential

8.0266c

$1,058

Residential – Vacant Land

8.0266c

$1,058

Industrial

9.6010c

$1,058

Industrial – Vacant Land

10.5764c

$1,058

Commercial

9.6010c

$1,058

Commercial – Vacant Land

10.5764c

$1,058

 

 

 

Land Use Groups (UV)

 

 

Primary Production

0.3734c

$1,058

UV Rural

0.3469c

$1,058

UV Commercial

0.6807c

$1,058

 

 

 

Specified Area Rates

 

 

Port Geographe

1.2849c

N/A

Provence GRV

1.1954c

N/A

Provence UV

0.0128c

N/A

Vasse GRV

1.5266c

N/A

 

2.    That in accordance with Section 6.2 of the Local Government Act, the Council adopts its 2015/16 annual budget, incorporating:

a)         Any amendments made during the course of this meeting, including associated adjustments as required:

- $20,000 for a Capital Drainage Upgrade to reduce flooding in Yale Close, Abbey to be funded from the Road Asset Renewal Reserve;

-  the exclusion of the budget allocation for the resurfacing of Ibis Court, Geographe.

b)        A Statement of Comprehensive Income to be finalised subsequent to the Council’s determination in respect of item a) above.

c)         A Statement of Cash Flows to be finalised subsequent to the Council’s determination in respect of item a) above.

d)        A Rate Setting Statement to be finalised subsequent to the Council’s determination in respect of item a) above.

 

CARRIED 8/0

by absolute majority

  

 


 

                             DISCLOSURE OF INTEREST

Name / Position

Cr Ian Stubbs

Item No. / Subject

6.2 - ADOPTION OF 2015/16 ANNUAL BUDGET

In relation to budget allocation for the resurfacing of Ibis Court, Geographe

Type of Interest

Proximity Interest

Reason

My property which I own and reside in is located in Ibis Court, Geographe           

 

5.29pm       At this time Councillor Ian Stubbs left the meeting and Councillor Tom Tuffin assumed chairmanship of the meeting.

Motion

Council Decision

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

C1507/207              Moved Councillor J McCallum, seconded Councillor J Green

 

That an $18,000 allocation for the resurfacing of Ibis Court, Geographe is included in the 2015/16 annual budget.

CARRIED 7/0

BY ABSOLUTE MAJORITY

 

5.31pm       At this time Councillor Ian Stubbs returned to the meeting and resumed chairmanship of the meeting.

Motion

Council Decision

C1507/208              Moved Councillor G Bleechmore, seconded Councillor J McCallum

 

That pursuant to Regulation 34(5) of the Local Government (Financial Management) Regulations, the Council adopts a material variance reporting threshold with respect to financial activity statement reporting for the 2015/16 financial year to comprise variances equal to or greater than 10% of the year to date budget amount as detailed in the Income Statement by Nature and Type/ Statement of Financial Activity report, however variances due to timing differences and/ or seasonal adjustments are to be reported on a quarterly basis.

CARRIED 8/0

 

 

 

 

 

 

 

 

 

 

 

 


 

Note:          Council expressed its sincere appreciation to the CEO and all City staff for the presentation of a quality budget.  A special notation was made in relation to the information notes that were included in the draft budget documentation as this assisted the deliberation process significantly.

7.               Closure

The meeting closed at 5.33pm.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THESE MINUTES CONSISTING OF PAGES 1 TO 17 WERE CONFIRMED AS A TRUE AND CORRECT RECORD ON Wednesday, 12 August 2015.

 

 

DATE:_________________              PRESIDING MEMBER:             _________________________