COB-RGB

 

 

 

 

 

Finance Committee Agenda

 

 

 

17 May 2018

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

MEETING NOTICE AND AGENDA – 17 May 2018

 

 

 

TO:                  THE MAYOR AND COUNCILLORS

 

 

NOTICE is given that a meeting of the Finance Committee will be held in the Committee Room, Administration Building, Southern Drive, Busselton on Thursday, 17 May 2018, commencing at 9.30am.

 

The attendance of Committee Members is respectfully requested.

 

 

 

Disclaimer

Statements or decisions made at Council meetings or briefings should not be relied on (or acted upon) by an applicant or any other person or entity until subsequent written notification has been given by or received from the City of Busselton. Without derogating from the generality of the above, approval of planning applications and building permits and acceptance of tenders and quotations will only become effective once written notice to that effect has been given to relevant parties. The City of Busselton expressly disclaims any liability for any loss arising from any person or body relying on any statement or decision made during a Council meeting or briefing.

 

 

 

Mike Archer

 

CHIEF EXECUTIVE OFFICER

 

11 May 2018


CITY OF BUSSELTON

Agenda FOR THE Finance Committee MEETING TO BE HELD ON 17 May 2018

TABLE OF CONTENTS

 

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Declaration of Opening and Announcement of Visitors. 4

2....... Attendance. 4

3....... Public Question Time. 4

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

5....... Confirmation Of Minutes. 4

5.1          Minutes of the Finance Committee Meeting held 19 April 2018. 4

6....... Reports. 5

6.1          FINANCIAL ACTIVITY STATEMENTS - PERIOD ENDING 30 APRIL 2018. 5

6.2          LIST OF PAYMENTS MADE APRIL 2018. 31

6.3          BUDGET AMENDMENT REQUEST. 52

6.4          APPLICATION FOR EXEMPTION FROM RATING - LAMP INCORPORATED.. 61

6.5          DONATIONS/CONTRIBUTIONS AND SUBSIDIES FUND - APRIL 2018. 65

7....... General Discussion Items. 67

8....... Next Meeting Date. 67

9....... Closure. 67

 


Finance Committee                                                             4                                                                         17 May 2018

 

1.               Declaration of Opening and Announcement of Visitors

2.               Attendance 

Apologies

Cr Henley

 

3.               Public Question Time 

4.               Disclosure Of Interests

5.               Confirmation Of Minutes

5.1             Minutes of the Finance Committee Meeting held 19 April 2018

Recommendation

That the Minutes of the Finance Committee Meeting held 19 April 2018 be confirmed as a true and correct record.

 


Finance Committee                                                             6                                                                         17 May 2018

6.               Reports

6.1             FINANCIAL ACTIVITY STATEMENTS - PERIOD ENDING 30 APRIL 2018

SUBJECT INDEX:

Budget Planning and Reporting

STRATEGIC OBJECTIVE:

Governance systems, process and practices are responsible, ethical and transparent.

BUSINESS UNIT:

Finance and Corporate Services

ACTIVITY UNIT:

Financial Services

REPORTING OFFICER:

Manager Financial Services - Kim Dolzadelli

AUTHORISING OFFICER:

Director Finance and Corporate Services  - Tony Nottle

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Attachment a   Statement of Financial Activity - Period Ending 30 April 2018

Attachment b    Investment Report - Period Ending 30 April 2018  

  

PRÉCIS

 

Pursuant to Section 6.4 of the Local Government Act (‘the Act’) and Regulation 34(4) of the Local Government (Financial Management) Regulations (‘the Regulations’), a local government is to prepare, on a monthly basis, a statement of financial activity that reports on the City’s financial performance in relation to its adopted/amended budget.

 

This report has been compiled to fulfil the statutory reporting requirements of the Act and associated Regulations, whilst also providing the Council with an overview of the City’s financial performance on a year to date basis for the period ending 30 April 2018.

 

BACKGROUND

 

The Regulations detail the form and manner in which financial activity statements are to be presented to the Council on a monthly basis; and are to include the following:

 

§   Annual budget estimates

§   Budget estimates to the end of the month in which the statement relates

§   Actual amounts of revenue and expenditure to the end of the month in which the statement relates

§   Material variances between budget estimates and actual revenue/ expenditure/ (including an explanation of any material variances)

§   The net current assets at the end of the month to which the statement relates (including an explanation of the composition of the net current position)

 

Additionally, and pursuant to Regulation 34(5) of the Regulations, a local government is required to adopt a material variance reporting threshold in each financial year. At its meeting of 26 July 2017, the Council adopted (C1707/163) the following material variance reporting threshold for the 2017/18 financial year:

 

“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 2017/18 financial year as follows:

 

·    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; and

·    Reporting of variances only applies for amounts greater than $25,000.”

 

STATUTORY ENVIRONMENT

 

Section 6.4 of the Local Government Act and Regulation 34 of the Local Government (Financial Management) Regulations detail the form and manner in which a local government is to prepare financial activity statements.

 

RELEVANT PLANS AND POLICIES

 

NA.

 

FINANCIAL IMPLICATIONS

 

Any financial implications are detailed within the context of this report.

 

Long-term Financial Plan Implications

 

Any financial implications are detailed within the context of this report.

 

STRATEGIC COMMUNITY OBJECTIVES

 

This matter principally aligns with Key Goal Area 6 of the Strategic Community Plan 2017 and more specifically Community Objective 6.1 - ‘Governance systems, process and practices are responsible, ethical and transparent’. Ensure the City's long term financial planning delivers the community goals and aspirations in a sustainable and affordable manner

 

RISK ASSESSMENT

 

Risk assessments have been previously completed in relation to a number of ‘higher level’ financial matters, including timely and accurate financial reporting to enable the Council to make fully informed financial decisions. The completion of the monthly Financial Activity Statement report is a control that assists in addressing this risk.

 

CONSULTATION

 

NA.

 

OFFICER COMMENT

 

In order to fulfil statutory reporting requirements, and to provide the Council with a synopsis of the City’s overall financial performance on a full year basis, the following financial reports are attached here to:

 

§   Statement of Financial Activity

This report provides details of the City’s operating revenues and expenditures on a year to date basis, by nature and type (i.e. description). The report has been further extrapolated to include details of non-cash adjustments and capital revenues and expenditures, to identify the City’s net current position; which reconciles with that reflected in the associated Net Current Position report.

 

§   Net Current Position

This report provides details of the composition of the net current asset position on a full year basis, and reconciles with the net current position as per the Statement of Financial Activity.

 

 

 

 

§   Capital Acquisition Report

This report provides full year budget performance (by line item) in respect of the following capital expenditure activities: 

·   Land and Buildings

·   Plant and Equipment

·   Furniture and Equipment

·   Infrastructure

 

§   Reserve Movements Report

This report provides summary details of transfers to and from reserve funds, and also associated interest earnings on reserve funds, on a full year basis.

 

Additional reports and/or charts are also provided as required to further supplement the information comprised within the statutory financial reports.

 

COMMENTS ON FINANCIAL ACTIVITY TO 30 APRIL 2018

 

The Statement of Financial Activity for the period ending 30 April 2018 shows a better than expected Net Current Position “Surplus” of $14.24M being $27.75M more than Year to Date Budget.

 

The following summarises the major variances in accordance with Council’s adopted material variance reporting threshold that collectively make up the above difference:

 

 

2017/2018
Actual

2017/2018
Amended
Budget YTD

2017/2018
Amended
Budget

2017/18
YTD Bud Variance

2017/18
YTD Bud  Variance

Revenue from Ordinary Activities

64,610,237

63,202,572

66,421,049

2.23%

1,407,665

Expenses from Ordinary Activities

(54,745,726)

(57,365,943)

(68,674,825)

4.57%

2,620,217

 

 

 

 

 

 

Non-Operating Grants, Subsidies and Contributions

12,868,526

21,488,948

43,655,339

-40.12%

(8,620,422)

Profit on Asset Disposals

48,793

16,100

22,400

203.06%

32,693

Loss on Asset Disposals

(640,882)

(5,250)

(6,252)

-12107.28%

(635,632)

 

 

 

 

 

 

Capital Revenue & (Expenditure)

 

 

 

 

 

Land & Buildings

(3,781,813)

(14,675,002)

(16,636,693)

74.23%

10,893,189

Plant & Equipment

(1,486,504)

(4,102,820)

(4,279,400)

63.77%

2,616,316

Furniture & Equipment

(441,989)

(763,581)

(830,212)

42.12%

321,592

Infrastructure

(34,306,344)

(48,316,044)

(60,684,321)

29.00%

14,009,700

Proceeds from Sale of Assets

297,911

612,850

635,150

-51.39%

(314,939)

Proceeds from New Loans

6,960,000

10,110,000

10,110,000

-31.16%

(3,150,000)

Advances to Community Groups

(110,000)

(260,000)

(260,000)

57.69%

150,000

Transfer to Restricted Assets

(2,393,927)

(513,501)

(625,751)

-366.20%

(1,880,426)

Transfer from Restricted Assets

17,701,712

15,354,556

27,808,739

15.29%

2,347,156

Transfer to Reserves

(10,598,281)

(13,372,783)

(16,285,572)

20.75%

2,774,502

Transfer from Reserves

4,185,307

1,146,659

19,921,964

265.00%

3,038,648

 

 

 

 

 

Operating Revenue:

 

Revenue from ordinary activities is $1.4M more than expected when compared to Year to Date (YTD) Budget with the following items meeting the material variance reporting threshold set by Council for the 2017/2018 Financial Year.

 

 

2017/2018
Actual

2017/2018
Amended
Budget YTD

2017/2018
Amended
Budget

2017/18
YTD Bud Variance

2017/18
YTD Bud  Variance

 

$

$

$

%

$

Revenue from Ordinary Activities

 

 

 

Operating Grants, Subsidies and Contributions

2,967,528

2,436,807

3,637,258

21.78%

530,721

Other Revenue

449,274

328,755

426,167

36.66%

120,519

Interest Earnings

2,134,655

1,885,830

2,262,996

13.19%

248,825

 

The items predominately impacting the above “Operating Grants, Subsidies and Contributions” are Busselton Jetty contributions of $383K which is offset with YTD Actual spend on Contractors, Financial Services Insurance Recovered $50K which is offset by insurance claim expenses, Environmental Management Operating Grants and Subsidies $51k which is offset by increased project expenditure and Airport Operation Operating Grant for the Airline Engagement Project of  $57K which is offset with project expenditure.

 

The items predominately impacting the above “Other Revenue” performance is Sale of Scrap Material $104K.

 

Interest earnings on Reserves and Restricted funds are currently ahead of YTD Budget in the amount of $305k with $101k in Rate Instalment and Late Payment interest currently ahead of YTD Budget. Rate Instalment interest is a timing difference only and it is also expected that Interest earnings on Reserves and Restricted funds will reduce in the coming months as funds are further drawn down to finance Capital projects contained within the City’s 2017/2018 Budget.

 

Interest on Municipal Funds are behind YTD Budget by the amount of $158k and it is expected that this variation will become a permanent variation; this will however be offset with other positive Revenue outcomes.

 

The Officer notes that the above positive performance of “Operating Grants and Subsidies“, “Other Revenue” and “Interest Earnings” is added to by a positive collective performance of $507K for Rates, and Fees and Charges; these items fall below the Material Variance reporting thresholds.  These variations are considered to be that of a timing difference with the exception of Rate Revenue ($202K) which is expected to be a permanent variation.

 

 

 

 

 

 

 

 

 

 

 

Interim Rates:

Officers continue to monitor Interim Rating Income levels and present the following information noting that the YTD Budget has already been achieved;

 

 

 

Operating Expenditure:

Expenditure from ordinary activities, excluding depreciation, is $2.26M less than expected when compared to YTD Budget with the following items meeting the material variance reporting threshold set by Council for the 2017/2018 Financial Year.

 

 

2017/2018
Actual

2017/2018
Amended
Budget YTD

2017/2018
Amended
Budget

2017/18
YTD Bud Variance

2017/18
YTD Bud  Variance

 

$

$

$

%

$

Expenses from Ordinary Activities

 

Materials & Contracts

(11,921,643)

(13,964,471)

(16,914,999)

14.63%

2,042,828

Allocations

1,398,541

1,595,436

1,996,270

12.34%

(196,895)

 

 

 

 

 

 

 

 

 

 

 

 

 

Materials and Contracts:

The main items affected are listed below, at this stage these variances are considered to be that of a timing nature:

 

 

Note:  ** These items are offset by savings in employee costs.

 

Allocations:

Allocations are running $197k under YTD Budget; these items are an internal allocation of administrative costs from the Finance and Corporate Services division.

 

The Officer further notes that the above combined performance of “Materials and Contracts” and “Allocations” is added to by a positive collective performance of $1.13M for Employee Costs, Utilities, Insurances and Other Expenditure.

 

 

 

 

Non-Operating Grants, Subsidies and Contributions:

Non-Operating Grants, Subsidies and Contributions are less than YTD Budget by $8.62M with the main item impacting on the above result is the timing of the receipt of “Airport Development - Project Grant” with a current negative result of $8.38M; this is a timing difference in nature and effectively Municipal Funds are currently being utilised to offset the level of current expenditure for this project.

 

Other items impacting Non-Operating Grants, Subsidies and Contributions are as follows:

 

 

Capital Expenditure

As at 30 April 2018, there is a variance of -41.03% or -$27.48M in total capital expenditure with YTD Actual at -$40.01M against a YTD Budget of -$67.86M; with the table below showing those categories exceeding the 10% material variance threshold.   The Airport Development makes up for $12.24M or 44% of the overall variance which also assists in explaining the above current YTD shortfall in Non-Operating Grants.

 

 

 

 

 

 

 

Other items impacting Capital Expenditure are as follows:

 

 

 

 

 

The attachments to this report include detailed listings of the following capital expenditure (project) items, to assist in reviewing specific variances.

 

Investment Report

Pursuant to the Council’s Investment Policy, a report is to be provided to the Council on a monthly basis, detailing the investment portfolio in terms of performance and counterparty percentage exposure of total portfolio. The report is also to provide details of investment income earned against budget, whilst confirming compliance of the portfolio with legislative and policy limits.

 

As at 30th April 2018, the value of the City’s invested funds totalled $77.64M, down from $79.87M as at 31st March. The decrease is attributed to the use of funds on the Airport Redevelopment Project and for general operating purposes.

 

During the month of April five term deposits held with three different institutions totalling $16.0M matured. All were renewed for a further 109 days at 2.50% (on average).

 

Additionally two deposit held with two institutions totalling $7.0M in Airport Redevelopment Funds matured. Funds totalling $4.5M were withdrawn and amount of $2.5M was reinvested for a period of 61 days at a rate of 2.1%.  An amount of $1.0M was repurposed in a funding source exchange necessitated by Investment Policy 218 exposure limit restrictions. The Funds withdrawn are required to meet ongoing Airport project expenses. The remaining funds were only reinvested for a short period as they are likely needed in a time frame shorter than the normal reinvestment period.

 

The balance of the 11am account (an intermediary account which offers immediate access to the funds compared to the term deposits and a higher rate of return compared to the cheque account) decreased by $2.25M with the funds being required for operational purposes. The balance of the Airport Development ANZ cash account increased by $4.51M, as funds were transferred in from the closed fixed term deposits.  The RBA left official rates on hold during April and May. Future movements remain uncertain at this point, although the next movement is likely to be up.


 

 

Chief Executive Officer – Corporate Credit Card

Details of monthly (March-April) transactions made on the Chief Executive Officer’s corporate credit card are provided below to ensure there is appropriate oversight and awareness of credit card transactions made.

 

Date

Amount

Payee

Description

26-Mar-18

$161.60

Citadines

Mayor Accommodation Heritage Awards

09-Apr-18

$413.00

The Manna Hahndorf

Accommodation  LGCOG EAA Meeting C Lombard

 

*Funds debited against CEO Annual Professional Development Allowance as per employment Contract Agreement

+ Allocated against CEO Hospitality Expenses Allowance

 

CONCLUSION

 

As at 30 April 2018, the City’s financial performance is considered satisfactory.

 

OFFICER RECOMMENDATION

 

That the Council receives the statutory financial activity statement reports for the period ending 30 April 2018, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations.

 


Finance Committee

28

17 May 2018

6.1

Attachment a

Statement of Financial Activity - Period Ending 30 April 2018

 


 


 


 


 

 

 


 


 


 


 


 


 


 



Finance Committee

30

17 May 2018

6.1

Attachment b

Investment Report - Period Ending 30 April 2018

 


Finance Committee                                                             32                                                                      17 May 2018

6.2             LIST OF PAYMENTS MADE APRIL 2018

SUBJECT INDEX:

Financial Operations

STRATEGIC OBJECTIVE:

Governance systems, process and practices are responsible, ethical and transparent.

BUSINESS UNIT:

Finance and Corporate Services

ACTIVITY UNIT:

Financial Services

REPORTING OFFICER:

Manager Financial Services - Kim Dolzadelli

AUTHORISING OFFICER:

Director Finance and Corporate Services  - Tony Nottle

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Attachment a   List of Payments - Period Ended 30 April 2018  

  

PRÉCIS

 

This report provides details of payments made from the City’s bank accounts for the month of April 2018, for noting by the Council and recording in the Council Minutes.

 

BACKGROUND

 

The Local Government (Financial Management) Regulations require that when the Council has delegated authority to the Chief Executive Officer to make payments from the City’s bank accounts, that a list of payments made is prepared each month for presentation to, and noting by, Council.

 

STATUTORY ENVIRONMENT

 

Section 6.10 of the Local Government Act and more specifically, Regulation 13 of the Local Government (Financial Management) Regulations, refer to the requirement for a listing of payments made each month to be presented to the Council.

 

RELEVANT PLANS AND POLICIES

 

NA.

 

FINANCIAL IMPLICATIONS

 

NA.

 

Long-term Financial Plan Implications

 

NA.

 

STRATEGIC COMMUNITY OBJECTIVES

 

Key Goal Area 6 – ‘Leadership’ of the City’s Strategic Community Plan 2017 and more specifically Community Objective 6.1 – ‘Governance systems, process and practices are responsible, ethical and transparent’

 

RISK ASSESSMENT

 

NA.

 

CONSULTATION

 

NA.

 

OFFICER COMMENT

 

In accordance with regular custom, the list of payments made for the month of April 2018 is presented for information.

 

CONCLUSION

 

NA.

 

OPTIONS

 

NA.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

NA.

 

OFFICER RECOMMENDATION

 

That the Council notes payment of voucher numbers M115499 – M115634, EF057960 – EF058530 T007390 – T007392, and DD003432 – DD003452; together totalling $7,380,197.09.

 

 


Finance Committee

51

17 May 2018

6.2

Attachment a

List of Payments - Period Ended 30 April 2018

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Finance Committee                                                             60                                                                      17 May 2018

6.3             BUDGET AMENDMENT REQUEST

SUBJECT INDEX:

Budget Planning and Reporting

STRATEGIC OBJECTIVE:

Governance systems, process and practices are responsible, ethical and transparent.

BUSINESS UNIT:

Finance and Corporate Services

ACTIVITY UNIT:

Finance and Corporate Services

REPORTING OFFICER:

Manager Financial Services - Kim Dolzadelli

AUTHORISING OFFICER:

Director Finance and Corporate Services  - Tony Nottle

VOTING REQUIREMENT:

Absolute Majority

ATTACHMENTS:

Nil

  

PRÉCIS

 

This report seeks recommendation of the Finance Committee to Council for the approval of budget amendments as detailed in this report.  Adoption of the Officers recommendation will result in no change to the City’s current Amended Budgeted Surplus Position of $0.

 

BACKGROUND

 

Council adopted its 2017/2018 Municipal Budget on Wednesday, 26 July 2017 with a balanced Budget position.

 

Since this time Council has been advised of certain funding changes that have impacted the original Budget and Council is now being asked to consider Budget Amendments for the following Key Areas/Projects:

 

1.    “Purchase of Hangar Buildings – Busselton Margaret River Airport”

 

BACKGROUND

 

At its meeting held 28 March 2018 Council consider Item 17.1 with respect to “PURCHASE OF HANGAR BUILDINGS: BUSSELTON MARGARET RIVER AIRPORT”.  The purpose of the item was for Council to consider a proposed agreement for the purchase of two hangar buildings and continuing lease arrangements for those buildings between the City of Busselton and hangar owners (and their members) at the Busselton-Margaret River Airport.

 

The following decision of Council was carried by Absolute Majority:

 

“COUNCIL DECISION AND AMENDED OFFICER RECOMMENDATION

C1803/066              Moved Councillor P Carter, seconded Deputy Mayor   McCallum

 

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

That the Council:

 

1.    Authorises the Chief Executive Officer to enter into a contract to purchase the Hangar Building from Busselton Hangar Owners Pty Ltd as trustee for the Busselton Hangar Owners’ Unit Trust up to the figure outlined in the officers report on page 6;

 

2.    Authorises the Chief Executive Officer to enter into a contract to purchase the Hangar Building from Geographe Hangar Owners’ Group Inc up to the figure outlined in the officers report on page 6;

 

3.    Authorises the Chief Executive Officer to advertise an intended disposition of the disposition of land by way of lease as outlined in this report and invite public submissions in accordance with Section 3.58(3) of the Local Government Act 1995;

 

4.    Delegates to the Chief Executive Officer the power and authority to consider submissions received pursuant to resolution 3 and, subject to not receiving any adverse submissions, to discharge of the Council’s duties under Section 3.58(3) and to complete the land exchange contract;

 

      5.      The transaction be subject to a budget amendment report following the purchases being                      finalised; and

 

6.      Delegates the CEO the power and authority to vary the existing leases to allow an extension          of the BHO and GHO leases on a monthly basis until 31 March 2019 at the latest.

 

CARRIED 9/0”

 

In accordance with point “5.” of the above resolution a formal Budget Amendment is now being sought.

 

PLANNED EXPENDITURE ITEMS

 

Purchase of two hangar buildings.

 

Officers propose that the 2017/2018 Adopted Budget be amended to reflect the following funding changes, shown in Table 1.

 

Table 1:

Cost Code

Description

Current Budget

Change

Proposed Amended Budget

Revenue

 

 

 

 

Reserve Transfer

Airport Reserve

0

-550,000

-550,000

Expenditure

 

 

 

 

341-B9718-3125-0000

Airport Hangar Purchases

0

550,000

550,000

 

 

 

 

 

Net Total

0

0

0

 

PROPOSED OUTCOME

Formal Amendment to Budget for the purchase of two hangar buildings.

 

 

2.    “Be Connected: Activation Grant”

 

BACKGROUND

 

The City was successful in receiving $3,000 in grant funding from Good Things Foundation to help fund the Libraries’ Be Connected Digital Literacy Program for seniors. In 2017/18 the City will receive two up-front payments of $1,500, one each for Busselton and Dunsborough Libraries. Funding will be received in May 2018. These grants have a contract start date of 1st May 2018 and will run for 10 months, with acquittal 28th February 2019.

 

PLANNED EXPENDITURE ITEMS

 

Per library, $500 will be expended in May 2018. The remaining $1,000 per library will be expended in 2018/19, spread evenly over the period July to December 2018.

 

The 2018/2019 Expenditure items will be carried forward into the 2018/2019 Budget.

 

The following amendments shown below in Table 2 are being sought for approval.

 

Table 2:

 

Cost Code

Description

Current Budget

Change

Proposed Amended Budget

Expenditure

 

 

 

 

233-10380-3280-9821

Busselton Library – Contractors (including Staff)

6,000

1,500

7,500

233-10381-3280-9821

Dunsborough Library - Contractors (including Staff)

0

1,500

1,500

233-10380--9821

Busselton Library - Grant Funding

0

-1,500

-1,500

233-10381-1239-9821

Dunsborough Library - Grant Funding

0

-1,500

-1,500

Net Total

6,000

0

6,000

 

PROPOSED OUTCOME

 

Be Connected is an Australian Government initiative aimed at increasing the confidence, skills and online safety of older Australians in using digital technology. With our libraries offering an increasing range of services and resources online and with more and more government services moving online, many seniors are missing out on the benefits of the digital world. This grant will assist our libraries to offer one-on-one and small group training to older Australians who have minimal or no engagement with digital technology, with an aim of increasing functional levels of digital inclusion within our community.

 

 

3.    “Marketing and Events Reference Group Outcomes”

 

BACKGROUND

 

At its meeting held 28 March 2018 Council considered Item 13.5 with respect to “MARKETING AND EVENTS REFERENCE GROUP OUTCOMES”. The purpose of the item for Council to consider Recommendations of the Marketing and Events Reference Group (MERG) was held on Wednesday 22 November 2017.

 

 

 

 

 

 

 

 

 

 

 

The following decision of Council was carried by Absolute Majority:

 

“COUNCIL DECISION AND OFFICER RECOMMENDATION

C1712/001              Moved Councillor P Carter, seconded Deputy Mayor J McCallum

 

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

That Council;

 

1.   As part of Round 2 of the Events Sponsorship Programme endorses the funding allocation towards the following events to be funded from the 2017/2018 Differential Rate Events Budget:

 

Event

Requested

Officer Recommendation

Yallingup Malibu Classic

2017/18 $3,000

2018/19 $3,000

2019/20 $3,000

 

2017/18 $2,500

2018/19 $2,250

2019/20 $2,000

South West Yoga Fest

2017/18 $5,000  

 

2017/18 $2,000

 

Taj’s Small Fries Yallingup

2017/18 $15,000

2018/19 $15,000

2019/20 $15,000

2017/18 $10,000

2018/19 $9,000

2019/20 $8,000

Busselton Junior Open Tennis

2017/18 $3,000

 

2017/18 $1,500

 

Busselton Open Tennis

2017/18 $3,000

 

2017/18 $1,500

 

Busselton Pride

2017/18 $3,000

(+ $500 in-kind traffic management)

 

2017/18 $2,000

(+ $500 in-kind traffic management)

Yalambi Show Jumping Classic

2017/18 $8,000

2017/18 $2,000

 

Wheelbite 2018

2017/18 $3,500

2018/19 $3,500

2019/20 $3,500

2017/18 $3,000

2018/19 $2,750

2019/20 $2,500

British Auto Classic

2017/18 $500

2017/18 $0*

Undalup Djeran Youth Week Event

2017/18 $8,000

2017/18 $3,000

West Cape Classic Car Rally

2017/18 $5,000

 

2017/18 $0

Margaret River Readers & Writers Festival (Busselton events)

2017/18 $10,000

2017/18 $5,000

Cabin Fever 2018

2018/19 $10,000

2018/19 $10,000

TOTALS

2017/18 $67,500

2018/19 $31,500

2019/20 $21,500 

2017/18 $33,000

2018/19 $24,000

2019/20 $12,500   

 

2.         As part of Round 2 of the Events Sponsorship Programme endorses the funding     allocation towards the following events to be funded from the 2017/18 Municipal     Events Budget:

 

Event

Requested

Officer Recommendation

Busselton Fringe Festival

2017/18 $10,000

2018/19 $20,000

2017/18 $10,000

2018/19 $20,000

Busselton Youth & Community Activities Building Opening Event

2017/18 $10,000

2017/18 $10,000

TOTALS          

2017/18 $20,000

2018/19 $20,000

2017/18 $20,000

2018/19 $20,000

 

3.         As part of the Events Sponsorship Programme endorses the funding allocation       towards the following events to be funded from the 2017/18 Differential Rates Marketing Budget:

 

Event

Requested

Officer Recommendation

SuperFoiler Grand Prix

2017/18 $50,000

2017/18 $45,000 (cash)

$5,000 (in kind)

 

Busselton Fringe Festival

2017/18 $10,000

2017/18 $10,000

TOTALS

2017/18 $60,000

2017/18 $55,000 (cash)

$5,000 (in kind)

 

 

 

4.         Endorses the re-allocation of $5,000 funding previously allocated to Port Geographe         Aquatic Sports to the Geographe Bay Yacht Club, for the running of the 2018          Geographe Bay Race Week.

 

5.            Allocates up to $75k cash towards See Picture’s Go Karts film proposal to be funded from the        2017/18 Differential Rates Marketing Budget and up to $50k in-kind support to be funded                from existing in-kind event budget allocations contained within the 2017/18 adopted budget.

 

CARRIED 8/0

Reason:            The City has received a proposal from See Pictures for a film production to be based in Busselton.  The proposal was tabled at a special meeting of the City’s Marketing and Events Reference Group where unanimous support was provided to fund the film based on the Officer recommendation.  The use of marketing funds generated from the Differential Rates budget was seen as an effective way in which the City of Busselton can be promoted potentially to an international market.”

PLANNED EXPENDITURE ITEMS

 

To give effect to the resolution above a formal Budget Amendment is now being sought, with the following amendments shown below in Table 3 being sought for approval.

 

 

Table 3:

Cost Code

Description

Current Budget

Change

Proposed Amended Budget

Expenditure

 

 

 

 

541-10556-3280

EWS – Go Karts Film Project

0

50,000

50,000

333-10530-3623

Comm. Services Administration Marketing & Promotion

0

130,000

130,000

333-10530-3641

Comm. Services Administration Events Sponsorship (Muni)

0

20,000

20,000

Revenue

 

 

 

 

Transfer to Reserve

Airport Marketing Reserve

-300,000

200,000

-100,000

Net Total

-300,000

400,000

100,000

 

PROPOSED OUTCOME

 

To give effect to resolution above a formal Budget Amendment is now being sought.

 

4.    GLC Gym Equipment Leases”

 

BACKGROUND

 

In December 2014 Geographe Leisure Centre (GLC) was extended and the gym was relocated into a purpose built much larger area at the front of the centre. The relocation of the gym included a fit out of fixtures, audio and some extra fitness equipment over the next 15 months.  This equipment and fit out was procured by entering into 3 separate lease agreements with All Leasing. The below table illustrates the details of each of the 3 lease agreements  together with the current termination costs as well as the current cost to buy out some minor pieces of equipment and items that will not be returned at the end of the lease periods.

 

Lease

Description

Start Date

End Date

Termination cost (ex GST)

Equipment buyout cost (ex GST)

E6N0157842

Main Cardio & Some Pin Loaded Equipment

3/12/2014

1/01/2019

$14,438.54

      N/A

E6N0158174

Strength - Mainly Plates, Bars and other Light Free Weight Equipment

10/03/2015

1/07/2020

$5,537.84

$1,865.45

E6N0158066

Fit out of Mirrors, Flooring and Audio Equipment & some Cardio

6/02/2015

1/04/2020

$32,838.37

$1,775.37

 


 

Cardiovascular equipment (e.g. treadmills, bikes, cross trainers) particularly with the amount of usage at GLC typically last between 4 and 5 years before the cost of maintenance and machines out of order due to maintenance increases dramatically. As technology improves the functionality and customer expectations increase and machines 4 to 5 years old are now somewhat outdated. The current equipment at GLC is now over four (4) years old and some pieces of cardio equipment are currently continuously out of order and in need of repair. Constantly out of order and outdated equipment leads to customer dissatisfaction along with increased maintenance costs and inhibits our ability to attract and retain members.

 

The GLC net operating position to the end of March is $250,534 below budget due to well performing revenue streams totalling approximately $110,988 above budget, of which $98,914 is from memberships revenue. Well controlled expenses are currently at $139,546 below budget. This net operating position is likely to decrease with the commencement of some plant maintenance and some equipment purchases and the unbudgeted effect of the outdoor pool closure. We are expecting our EOFY closing position to still be significantly below budget estimated at between $60k and $80k below forecast net operating.

 

The current membership revenue performance is as a result of the introduction and implementation of a systemised sales process, sales and lead tracking and more recently a focus on retention, however out of service and out dated gym equipment has the ability to compromise this performance into the future in an increasingly competitive market.

 

PLANNED EXPENDITURE ITEMS

 

Payout the 3 leases at a total cost of $52,814.75. All of the cardio equipment and some pin loaded machines on lease will be returned and a number of items will be retained such as the flooring, mirrors, audio equipment and minor weights equipment at a payout cost of $3,640.82. Total planned expenditure will be $56,455.57.

 

This action will enable the GLC to increase retention levels, maintain customer satisfaction levels, and keep up with the competition in a competitive market leading to increased membership revenue and a more sustainable centre.

 

The following amendments shown below in Table 4 are being sought for approval.

 

Table 4:

 

Cost Code

Description

Current Budget

Change

Proposed Amended Budget

Expenditure

 

 

 

 

336-10591-3381

GLC - Lease of Equipment

60,750

56,500

117,250

Revenue

 

 

 

 

336-10591-1641

GLC – Membership Income

-627,001

-56,500

-683,501

Net Total

566,251

0

566,251

 

PROPOSED OUTCOME

 

Installing new up to date fully functional gym equipment with a service/maintenance plan will assist the GLC in the attraction of new members and the retention of existing members.  It will align the centres leasing arrangements and assist the centre achieve projected budget for the 2018/19 Financial Year and future years.

 

STATUTORY ENVIRONMENT

 

Section 6.8 of the Local Government Act refers to expenditure from the municipal fund that is not included in the annual budget. In the context of this report, where no budget allocation exists, expenditure is not to be incurred until such time as it is authorised in advance, by an absolute majority decision of the Council.

 

RELEVANT PLANS AND POLICIES

 

There are multiple plans and policies that support the proposed Budget Amendments.

 

FINANCIAL IMPLICATIONS

 

Budget amendments being sought will result in no change to Council’s Budget Surplus position of $0. 

 

Long-term Financial Plan Implications

 

NA.

 

STRATEGIC COMMUNITY OBJECTIVES

 

This matter principally aligns with Key Goal Area 6 – ‘Leadership’ and more specifically Community Objective 6.1 - governance systems processes and practices are responsible, ethical and transparent.

 

RISK ASSESSMENT

 

There is a risk to the City, as there is with all projects undertaken, that the final cost could exceed budget. If this looks to be the case Council will be notified so a suitable offset / project scope back can be identified.

 

CONSULTATION

 

NA.

 

OFFICER COMMENT

 

The Officer commends the requested Budget Amendment to the Finance Committee for consideration and recommendation to Council.

 

CONCLUSION

 

Council’s approval is sought to amend the budget as per the details contained in this report. Upon approval the proposed works will be planned, organised and completed.

 

OPTIONS

 

The Council could decide not to go ahead with any or all of the proposed budget amendment requests.

 

 

 

 

 

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

Should the Officer Recommendation be endorsed, the associated budget amendment will be processed within a month of being approved.

 

 

OFFICER RECOMMENDATION

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

That Council endorse the Requested Budget Amendments contained within this report, resulting in no change to an Amended Budgeted Surplus Position of $0.

 


Finance Committee                                                             64                                                                      17 May 2018

6.4             APPLICATION FOR EXEMPTION FROM RATING - LAMP INCORPORATED

SUBJECT INDEX:

Exemptions and Appeals (Rates)

STRATEGIC OBJECTIVE:

Governance systems, process and practices are responsible, ethical and transparent.

BUSINESS UNIT:

Financial Services

ACTIVITY UNIT:

Rates

REPORTING OFFICER:

Rates Coordinator - David Whitfield

AUTHORISING OFFICER:

Director Finance and Corporate Services  - Tony Nottle

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Nil

  

PRÉCIS

 

An application for an exemption from rating has been received from Lamp Incorporated. On the basis of the application this report recommends that the request for exemption be granted.

 

BACKGROUND

 

The Lamp Incorporated organisation is a not for profit/charitable group using their leased premises at 226 Bussell Highway West Busselton for the purposes of delivering psychological group support, one on one counselling, youth outreach and in-home services for people suffering from mental health issues.

 

The Annual Information Statement 2017 as lodged with the Australian Charities and Not for Profits Commission (ACNC) details the organisations activities and outcomes as:

 

“A community support service for people with Mental Health issues, their families and carers. Lamp activities cover a diverse range of community settings including supporting people with severe and persistent mental illness to live independently, to live in their homes, provide education, training and advocacy for carers and families, work with youth in crisis, self-harm and suicide prevention, homelessness, indigenous and family mental health support, work with school and juvenile justice systems providing early intervention for young people at risk. Lamp works with an individualised recovery model and the supports services it offers allows people with mental illness to optimise their lifestyle choices and become active and welcome members of communities.”

 

Documentation provided as part of the application includes:

 

·    Application for Rate Exemption (Standard Application Form)

·    Constitution and Rules for Lamp Inc

·    Australian Charities and Not for Profits Commission (ACNC) Registration Summary

·    ACNC Annual Information Statement 2017

·    Australian Tax Office Notice of Endorsement for Charity Tax Concessions

·    Lamp Inc Financial Report Year Ending 30 June 2017

 

Principal funding is provided by grants through such organisations as:

 

·    Disability Services Commission

·    Department of Child Protection

·    Mental Health Commission

·    Department of Health D2D Living Community Program

·    Department of Social Services

STATUTORY ENVIRONMENT

 

Section 6.26 of the Local Government Act 1995 provides broad definitions for rateable and non-rateable land. Moreover, Section 6.26 (2) (g) states that land is not rateable if it is “used exclusively for charitable purposes”.

 

RELEVANT PLANS AND POLICIES

 

NA.

 

FINANCIAL IMPLICATIONS

 

The rates levied for 226 Bussell Hwy, West Busselton, totalled $3,572 for the 2017/18 financial year. Approving the application for rate exemption from the date of application (28 March 2018) would equate to a reduction of approximately $900 for 2017/2018 period, and the loss of the full years equivalent in future years.

 

Long-term Financial Plan Implications

 

As per the above, noting the amount to be forgone, this will not have a significant implication on the City’s Long Term Financial Plan.

 

STRATEGIC COMMUNITY OBJECTIVES

 

This matter principally aligns with Key Goal Area 6 – ‘Leadership’ and more specifically Community Objective 6.1 - governance systems processes and practices are responsible, ethical and transparent.

 

RISK ASSESSMENT

 

There are no risks identified of a medium or greater level associated with the Officers recommendation. If Council chose to not approve the application for rate exemption there is a risk that it may be required to defend its decision if the matter were to be appealed by the applicant to the State Administrative Tribunal and, potentially as a result, incurring legal costs.

 

CONSULTATION

 

NA.

 

OFFICER COMMENT

 

In accordance with Section 6.26 (2) (g) of the Local Government Act, which states that land is not rateable if it is land used exclusively for charitable purposes, the application need only be considered in two parts – these being firstly; is the use itself “charitable”?, and secondly if the use is considered to indeed be charitable then; is the property being used exclusively for such use?

 

In considering the first part i.e. is the operations of Lamp Incorporated considered to be a charitable use, legal opinions have been consistent in defining a charitable purpose; as follows:

 


 

“The expression “charitable purposes” may be satisfied if the land is exclusively for one of the following purposes:

 

1.            The relief of poverty;

2.            The advancement of education;

3.            The advancement of religion; and

4.            Other purposes beneficial to the community.”

 

The services provided by Lamp Incorporated are, apart from a small once off membership fee of $60.00 for insurance purposes, provided free of charge and the provision of those services to those suffering from mental health issues within the community would meet the requirements of the legal definition #4 “other purposes beneficial to the community”.

 

In considering the second part i.e. ‘is the property being exclusively used for a charitable purpose’ then firstly, it is recognised that the property is being leased by Lamp Incorporated from the Department of Housing. This is a common situation for a number of charitable organisations both here in the City of Busselton and with other local governments in WA. Legal advice has previously confirmed that this does not jeopardise the application with respect to exemption from rating.

 

Further, at this point attention is drawn to the findings of a 2002 Land Valuation Tribunal hearing (Southern Cross Aged Care Inc v The City of Fremantle) in which the following was stated:

 

“11. The statutory provision (Section 6.26 (2) (g) - Local Government Act 1995) does not make it necessary to decide by whom the use of the land is made. The question is for what purpose is the land used.

 

12. Accordingly the correct approach when determining exemption applications is to focus upon the actual use of the land. In other words whether a use is charitable will depend on essentially upon the nature of the activities that are being conducted upon the land in question.”

 

The property has been inspected and together with the application documentation is confirmed as being solely being used by Lamp Incorporated for purposes related to providing services for mental health. In this light the property is being used exclusively for a charitable purpose.

 

In terms of the current usage of the property there are no known compliance issues.

 

Should this application for exemption from rating be successful, the applicant will subsequently be advised that if the usage of the property should alter such that the requirements for eligibility for rate exemption are no longer met, then the rate exemption will be cancelled and rates and charges will become applicable from the date of such change.

 

CONCLUSION

 

The details provided by Lamp Incorporated, including application documentation and an onsite inspection, together with reference to previous legal advice and similar rate exemption applications to Council, it is considered that the use of the property located at 226 Bussell Highway West Busselton by Lamp Incorporated is an exclusive charitable use.

 

OPTIONS

 

The Council may decline the application for rate exemption on the basis that it considers that Lamp Incorporated is not providing a charitable purpose to the community or that such charitable use is not considered an exclusive use of the property.

Should the application be declined for either of the above reasons Lamp Incorporated has the option to appeal the matter via the State Administrative Tribunal. This action result will require Council to defend its position and may incur further legal costs as a result.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

The proposed effective date for the commencement of the exemption from rating, if approved, would be the lodgement date of the application, being 28 March 2018.

 

OFFICER RECOMMENDATION

 

That the Council in accordance with Section 6.26 (2)(g) of the Local Government Act 1995 declare 226 Bussell Hwy, West Busselton, as leased by the Lamp Incorporation be declared exempt from rating on the basis that the property is used exclusively for a charitable purpose, with the effective date being the date of application, namely, 28 March 2018.

 

 


Finance Committee                                                             66                                                                      17 May 2018

6.5             DONATIONS/CONTRIBUTIONS AND SUBSIDIES FUND - APRIL 2018

SUBJECT INDEX:

Donations/Contributions

STRATEGIC OBJECTIVE:

Governance systems, process and practices are responsible, ethical and transparent.

BUSINESS UNIT:

Governance Services

ACTIVITY UNIT:

Governance Services

REPORTING OFFICER:

Executive Assistant to Council - Katie Banks

Community Development Officer - Naomi Davey

AUTHORISING OFFICER:

Chief Executive Officer - Mike Archer

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Nil

  

PRÉCIS

 

This report provides an overview of the Donations and Contributions that have been allocated and are considered of relevance to members of the Finance Committee, and also the Council.

 

FINANCIAL IMPLICATIONS

 

The annual budget allowance for the Donations, Contributions and Subsidies Fund (Sponsorship Fund) is $40,000.

 

·    Total expenditure prior to this report is $18,099.94

 

·    Current Balance Available is $21,900.06

 

·    In April 2018 there were 6 applications received for sponsorship totalling $2,240.10

 

·    The balance available for future donations is $19,659.96

 

App. No.

Recipient

Purpose

Amount

77/1718

South West Cycle Club for Delirium 24 Hour Rd Race

Seeking funds to assist with covering the extra costs associated with traffic management as the closure of Marine Tce was recommended following the 2017 event.

In its 3rd year of being held in Busselton, the race receives strong participation from Busselton cyclists and is a very popular event on the WA cycling calendar.

 The event was held at Barnard Park and members of the public were encouraged to participate as onlookers. 

$750.00

78/1718

Paige Newhill (Tennis Coach for  Dunsborough Tennis Club)

Seeking financial assistance to cover the cost of accommodation required for tennis students competing in the CBH Country Championships in Mt Lawley 27-29 April 2018. The application was not supported due to not meeting the funding guidelines i.e. a formal selection process is not applicable for the event.

$0.00

79/1718

Tuart Forest Restoration Group

Seeking funds to assist with covering costs associated with organising the Ludlow Settlement Centenary Celebration to be held on 13 May 2018. Funding was provided to cover the cost of banners to promote the event. Entry to the event is free of charge, being held at the Ludlow settlement, located within the Busselton and Capel boundaries.

$340.00

80/1718

Zonta Club of Dunsborough

Seeking funds to cover the cost of venue hire to host the Bridge Day Fundraiser being held on 23 June 2018 at the St Georges Family Centre. The competition is open to the public. Funds raised from the event are divided between Zonta's Ignite Program and Scholarships of Excellence for Year 11 girls from the 5 high schools within the municipality ($500 per student).

$426.50

81/1718

Dunsborough and District ANZAC Service (Organised by Brian Linaker & Phil Gifford)

Seeking funds to cover the cost of hiring a PA system for the community ANZAC Day service which now attracts over 1000 attendees.

$523.60

82/1718

Maddison Johnston-Walker

Selected to represent WA at the Georgina Hope National Swimming Championships in Sydney 21-28 April 2018. Funds to assist with associated travel expenses.

$200.00

 

 

OFFICER RECOMMENDATION

 

That the donations and sponsorships for the month of April 2018 be noted.

 

  


Finance Committee                                                             67                                                                      17 May 2018

7.               General Discussion Items 

   7.1  Confidential – Procurement in Relation to Shape Management

 

                      7.2    Confidential – Capital Works Project

8.               Next Meeting Date

                   Thursday, 21 June 2018

9.               Closure