COB-RGB

 

 

 

 

 

Finance Committee Agenda

 

 

 

11 March 2020

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

MEETING NOTICE AND AGENDA – 11 March 2020

 

 

 

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 Wednesday, 11 March 2020, commencing at 10.00am.

 

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

 

4 March 2020


CITY OF BUSSELTON

Agenda FOR THE Finance Committee MEETING TO BE HELD ON 11 March 2020

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 12 February 2020. 4

6....... Reports. 5

6.1          LIST OF PAYMENTS MADE - JANUARY 2020. 5

6.2          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 JANUARY 2020. 16

7....... General Discussion Items. 41

8....... Next Meeting Date. 41

9....... Closure. 41

 


Finance Committee                                                             4                                                                     11 March 2020

 

1.               Declaration of Opening and Announcement of Visitors

 

2.               Attendance 

Apologies

 

3.               Public Question Time  

 

4.               Disclosure Of Interests

 

5.               Confirmation Of Minutes

5.1             Minutes of the Finance Committee Meeting held 12 February 2020

Recommendation

That the Minutes of the Finance Committee Meeting held 12 February 2020 be confirmed as a true and correct record.

 


Finance Committee                                                             6                                                                     11 March 2020

6.               Reports

6.1             LIST OF PAYMENTS MADE - JANUARY 2020

STRATEGIC GOAL

STRATEGIC OBJECTIVE

6. LEADERSHIP Visionary, collaborative, accountable

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

SUBJECT INDEX

Financial Operations

BUSINESS UNIT

Financial Services

REPORTING OFFICER

Manager Financial Services - Paul Sheridan

AUTHORISING OFFICER

Director Finance and Corporate Services - Tony Nottle

NATURE OF DECISION

Noting: the item does not require a decision of Council and is simply for information purposes and noting

VOTING REQUIREMENT

Simple Majority

ATTACHMENTS

Attachment a   List of Payments January 2020  

 

OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers M117731 – M117858, EF069187 – EF069710, T007497 – T007500, DD004005 – DD004032 (including DD4002 not included in December 2019) together totalling $6,132,504.27.

EXECUTIVE SUMMARY

This report provides details of payments made from the City’s bank accounts for the month of January 2020, for noting by the Council and recording in the Council Minutes.

 

BACKGROUND

The Local Government (Financial Management) Regulations 1996 (the Regulations) requires 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, the Council.

OFFICER COMMENT

In accordance with regular custom, the list of payments made for the month of January 2020 is presented for information. 

Statutory Environment

Section 6.10 of the Local Government Act 1995 and more specifically, Regulation 13 of the Regulations refer to the requirement for a listing of payments made each month to be presented to the Council.

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter.

Financial Implications

There are no financial implications associated with the officer recommendation.

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

Options

Not applicable.

CONCLUSION

The list of payments made for the month of January 2020 is presented for information.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.

 


Finance Committee

8

11 March 2020

6.1

Attachment a

List of Payments January 2020

 


 


 


 


 


 


 


 


 


Finance Committee                                                             23                                                                  11 March 2020

6.2             FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 JANUARY 2020

STRATEGIC GOAL

STRATEGIC OBJECTIVE

6. LEADERSHIP Visionary, collaborative, accountable

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

SUBJECT INDEX

Budget Planning and Reporting

BUSINESS UNIT

Financial Services

REPORTING OFFICER

Manager Financial Services - Paul Sheridan

AUTHORISING OFFICER

Director Finance and Corporate Services - Tony Nottle

NATURE OF DECISION

Executive: substantial direction setting, including adopting strategies, plans and policies (excluding local planning policies), tenders, setting and amending budgets, funding, donations and sponsorships, reviewing committee recommendations

VOTING REQUIREMENT

Simple Majority

ATTACHMENTS

Attachment a   Investment Report January 2020

Attachment b    Financial Activity Statement January 2020  

 

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 31 January 2020, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations.

EXECUTIVE SUMMARY

Pursuant to Section 6.4 of the Local Government Act 1995 (the Act) and Regulation 34(4) of the Local Government (Financial Management) Regulations 1996 (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 31 January 2020.

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 on 31 July 2019, the Council adopted (C1907/131) the following material variance reporting threshold for the 2019/20 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 2019/20 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.

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 year to date basis, the following financial reports are attached hereto:

 

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 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 31 January 2020

The Statement of Financial Activity for the year to date as at 31 January 2020 shows an overall Net Current Position of $19.2M as opposed to the amended budget of $442K, a positive difference of $18.8M.  The following summarises the major variances in accordance with Council’s adopted material variance reporting threshold that collectively make up the above difference:

 

Description

2019/20
Actual YTD

2019/20
Amended
Budget YTD

2019/20
Amended
Budget

2019/20
YTD Bud Variance

2019/20
YTD Bud Variance

 

$

$

$

%

$

Revenue from Ordinary Activities

 

1.    Operating Grants, Subsidies and Contributions

3,147,987

2,267,897

4,977,647

38.81%

880,090

 

 

 

 

 

 

2.    Non-Operating Grants, Subsidies and Contributions

3,010,037

4,830,961

23,764,690

(37.69%)

(1,820,924)

 

 

 

 

 

 

Capital Revenue & (Expenditure)

 

 

 

 

3.    Land & Buildings

(2,219,614)

(5,764,084)

(8,381,113)

61.49%

3,544,470

Plant & Equipment

(1,249,017)

(3,066,675)

(4,855,350)

59.27%

1,817,658

Furniture & Equipment

(114,499)

(625,366)

(1,113,069)

81.69%

510,867

Infrastructure

(7,859,529)

(18,002,361)

(37,545,346)

56.34%

10,142,832

4.    Proceeds from Sale of Assets

255,155

596,050

3,409,080

(57.19%)

(340,895)

5.    Transfer to Restricted Assets

(451,382)

(35,063)

(60,100)

(1187.35%)

(416,319)

6.    Transfer from Restricted Assets

607,716

0

6,319,121

100.00%

607,716

7.    Transfer from Reserves

1,232,906

1,767,906

34,669,883

(30.26%)

(535,000)

 

Revenue from Ordinary Activities

Year to date (YTD) actual income from ordinary activities is $1.4M more than expected when compared to the YTD amended budget, with the following items meeting the material variance reporting threshold:

 

1.    Operating Grants, Subsidies and Contributions are $880K (net) better than amended budget. This variance is mainly due to the following:

·    Financial Services Reimbursements (10200) - $38K claim payment for storm damage to King St ramps and steps not yet allocated to the correct maintenance costs codes;

·    Legal Fees Reimbursements (10500) ($46K) – budget item included for a fine that was received in the 18/19 financial year.  A budget amendment was processed to move a portion of the fine from retained earnings to a legal reserve, however a further budget amendment to remove this revenue item is still being investigated;

·    Human Resources Reimbursements (10521) $37K - $18K due to conference and training reimbursements not budgeted for sufficiently and $19K received in workers comp reimbursements with all receipts budgeted in June;

·    Contributions to Airport Operations (11151) $49K – received December but budgeted in June;


 

·    Contributions YCAB (B1361) $27K – $4K from City of Kwinana for the youth conference received November, $20K from Rio Tinto received December as part of annual youth trainee sponsorship, and $3K from Lions Club received January.  Budget of $20K in March only;

·    Environmental Management Administration (10830) $172K – grant received for the Revitalizing Geographe Waterways Phase 2 project earlier than forecast;

·    Protective burning and firebreaks reserve (10931) $166K. This variance relates to receiving 50% grant awarded to the City under the mitigation activity fund (Emergency Services Levy) and will be subject to a Council report requesting that the 2019/20 budget be amended to reflect this additional income.  Details of the cost codes for this amendment are being finalised;

·    Bushfire Risk Management Planning Grants (10942) DFES $72K. This variance relates to the payment of grant in full for the bushfire risk planning coordinator position within the City of Busselton. This represents a timing difference between budget allocations (over 12 months), and actual funds received;

·    Preventative Services CLAG (10925) ($48K) – offset by budgeted expenditure that has not occurred, to the same amount;

·    Pre-Primary Building & Surrounds (B1503) $30K – grant was budgeted to be received in June 2020, but was received in November 2019;

·    Regional Waste Management Administration (11301) ($37K) – annual budget of $63K spread over 12 months, but no contributions have actually been invoiced or received YTD;

·    Reimbursements Old Butter Factory (B1401 & B9610) $371K – timing difference due to difficulties in predicting when LGIS would process the claims.  Advice received in January that claims have been processed.

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $2.9M or 6.05% less than expected when compared to the amended YTD budget.  No individual items exceed the variance reporting thresholds.

 

Non-Operating Grants, Subsidies and Contributions

2.    Non-Operating Grants, Subsidies and Contributions are less than budget by $1.8M with the main items impacting on the above result being the timing of the receipt of funding which is also offset with less than anticipated capital expenditure at this time.

 

Cost Code

Cost Code Description

Variance
YTD

Finance and Corporate Services

 (298,800)

10239

Contributions - Community Facilities

(439,330)

10250

Information & Communication Technology Services – Capital Grants Federal

144,956

Community and Commercial Services

524,978

10625

Art Geo Administration – Donated Assets

35,000

C6099

Airport Development - Project Grant

477,978

Planning and Development Services

(780,887)

B1015

Hithergreen District Bushfire Brigade – Donated Assets

(465,200)

B1024

Wilyabrup Bushfire Brigade – Donated Assets

(178,300)

B1029

Busselton Branch SES – Donated Assets

(97,200)

B9109

Hithergreen Building Renovations – Capital Grant

(40,187)

Engineering and Works Services

(1,266,214)

C1512

Port Geographe Boat Ramp Renewal Works – Capital Grant

(96,250)

C3020

Donated Assets Parks, Gardens & Reserves

329,133

C3113

Busselton Tennis Club – Infrastructure – Contribution

80,000

C3168

Busselton Foreshore Jetty Precinct – Capital Grant

(179,795)

C3186

Lou Weston Oval – Courts – Contributions

(235,000)

F0019

College Avenue – MR Capital Grant

144,000

S0035

Strelly Street / Barlee Street Roundabout – MR Capital Grant

35,093

S0051

Causeway Road / Rosemary Drive Roundabout – MR Capital Grant

(266,669)

S0064

Peel Terrace (Stanley Pl/Cammilleri St Intersection Upgrade) – MR Capital Grant

(116,669)

S0069

Peel Terrace (Brown Street Intersection Upgrades) – MR Capital Grant

(58,331)

S0070

Peel & Queen Street Roundabout Service Relocation – MR Capital Grant

(91,669)

S0071

Ludlow-Hithergreen Road Safety Improvements – Fed Capital grant

461,200

S0072

Kaloorup Road - Reconstruct and Seal Shoulders – MR Capital Grant

100,000

T0019

Wonnerup South Road - Reconstruct and Widening (narrow seal) – RTR Capital Grant

(364,315)

T0085

Yoongarillup Road - Reconstruct Intersection at Vasse H/Way – RTR Capital Grant

(122,500)

T0086

Yoongarillup Road - Reconstruct & Widen (Western Section) – RTR Capital Grant

(862,225)

 

Capital Expenditure

3.    As at 31 January 2020, there is an underspend variance of 58.3% or $16M in total capital expenditure with YTD actual at $11.4M against the YTD amended budget of $27.5M.

 

The attachments to this report include detailed listings of all capital expenditure (project) items, however the main areas of variance are summarised as follows:

 

Cost Code

Cost Code Description

Variance
YTD

Land

(71,308)

10370

Busselton Cemetery

(71,308)

Buildings

3,615,778

B9516

Busselton Library Upgrade

297,125

B9109

Hithergreen Building Renovations

40,187

B9300/1/2

Aged Housing Capital Improvements (Winderlup, Harris Rd)

69,179

B9407

Busselton Senior Citizens

598,416

B9556

NCC Upgrade

41,665

B9591

Performing Arts Convention Centre

95,395

B9596

GLC Building Improvements

194,248

B9604

Womens Change Facility Bovell

(34,856)

B9605

Energy Efficiency Initiatives (Various Buildings

(14,520)

B9606

King Street Toilets

66,666

B9610

Old Butter Factory

(141,492)

B9716 & B9717

Airport Terminals

2,434,188

B9808

Busselton Jetty Tourist Park Upgrade

49,089


 

Plant & Equipment

1,817,658

10000

Members of Council

40,000

10250

Information & Communication Technology Services

35,000

11156

Airport Development Operations

599,087

11402

Plant Purchases (P10)

495,000

11403

Plant Purchases (P11)

265,369

11404

Plant Purchases (P12)

320,000

Furniture & Office Equipment

510,867

10250

Information & Communication Technology Services

364,939

11156

Airport Development Operations

162,084

Infrastructure By Class

10,142,832

 

Roads

2,249,326

 

Bridges

186,000

 

Car Parks

792,116

 

Footpaths & Cycleways

402,984

 

Parks, Gardens & Reserves

5,298,549

 

Drainage

86,258

 

Regional Airport & Industrial Park Infrastructure

1,127,598

 

Many of these items of under expenditure e.g. Main Roads construction works, also assists in explaining the above current YTD shortfall in Non-Operating Grants. In the main, many of these projects have yet to be completed and represent a timing difference.

 

Proceeds from Sale of Assets

4.    There is a variance for the proceeds from sale of assets of ($321K), due to timing in the changeover of vehicles and plant.

 

Transfer to Restricted Assets

5.    There is a variance in transfers to restricted assets of $416K more than amended budget. The reasons for this are as follows:

·    Transfer to deposits and bonds of $62K as opposed to a budget of $0. These funds do not have a budget allocation as they are not able to be reliably measured;

·    Interest earned on government grants of $33K transferred to restricted cash, for which there was no budget allocated as it was expected that the grant would have been utilized by this stage;

·    Additional bonds of $321K were received in relation to the next stage of the Dunsborough Lakes development.

 

Transfer from Restricted Assets

6.    There is a variance in transfers from restricted assets of $608K more than amended budget.   The main reason for this is as follows:

·    Transfer from Roadwork Bonds of $547K as opposed to a budget of $0.  These funds do not have a budget allocation as they are not able to be reliably measured.

 

Transfer from Reserves

7.    There is a variance for transfer from reserves of $535K less than amended budget. The reasons for this are as follows:

·    Transfer from Jetty Maintenance Reserve of $425K did not occur due to works not being undertaken on cost code C3497 (part of the Parks, Gardens & Reserves variance shown above), for the following reasons:

                                                                                  i.            The previous expenditure figure was based on the 50 year plan.

                                                                                ii.            The 5 year structural review undertaken in 2019/2020 discovered that the Jetty was in better condition than forecast in the 50 year plan.  Capital works planned for 2020 have been deferred to 2030.

                                                                               iii.            Requests for Tenders issued for maintenance works per the 5 year plan are to be awarded at the Council meeting on 29 January 2020.

                                                                               iv.            As a result, budget figures have been revised for next the 5 financial years to reflect the 5 year plan.

·    Transfer from the Election, Valuation & Corporate Expenses Reserve of $110K that has not occurred to cover the $97K bill from the Electoral Commission and approximately $4K in internal staff costs.  This will appear in the February accounts.

 

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 31 January 2020, the value of the City’s invested funds totalled $77.48M, down from $81.48M as at 31 December 2019. The reduction is due to funds being transferred to the cheque account to meet ongoing normal operating costs.

 

During the month of January three term deposits totalling the amount of $9.0M matured. One was closed, and another partially closed. Those rolled were renewed for a further 151 days at 1.66% on average.

 

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) remained steady.

 

The balance of the Airport Development ANZ and WATC cash accounts remained steady.

 

The RBA announced no rate changes in January and February. Future movements are unknown at this time although further drops are possible in coming months.

 

Chief Executive Officer – Corporate Credit Card

Details of monthly (December to January) 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

03-Jan-20

172.80

EHB Holidings Pty Ltd Busselton

+ Senior Staff Lunch - Esplanade Hotel

10-Jan-20

892.20

Australian Coastal Council

National Forum Perth Registration

14-Jan-20

24.99

Repco

Mats for Car

15-Jan-20

1,000.00

The Salvation Army

Bushfire Disaster Recovery Donation

15-Jan-20

1,000.00

Shout for Good Pty Ltd

Bushfire Disaster Recovery Donation

15-Jan-20

1,000.00

Community Enterprise Foundation

Bushfire Disaster Recovery Donation

15-Jan-20

1,000.00

St Vincent De Paul Society

Bushfire Disaster Recovery Donation

16-Jan-20

95.00

Vasse Flowers

Flower Arrangement - P. Vukelic

16-Jan-20

1,219.00

Eventbrite

*LGCOG Conference Tickets Hobart

20-Jan-20

1,240.80

Booking.com Australia

*LGCOG Conference Hobart Accomodation

20-Jan-20

891.36

Qantas Airways

*LGCOG Conference Flights

20-Jan-20

444.40

Jetstar Air

*LGCOG Conference Flights

21-Jan-20

1,000.00

Redcross.org.au

Bushfire Disaster Recovery Donation

22-Jan-20

687.58

Qantas Airways

*LGCOG Conference Flights

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

+ Allocated against CEO Hospitality Expenses Allowance

Statutory Environment

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

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter.

Financial Implications

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

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

Options

The Statements of Financial Activity are presented in accordance with Section 6.4 of the Act and Regulation 34 of the Regulations and are to be received. Council may wish to make additional resolutions as a result of having received these reports.

 

CONCLUSION

As at 31 January 2020, the City’s financial performance is considered satisfactory.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

24

11 March 2020

6.2

Attachment a

Investment Report January 2020

 


Finance Committee

39

11 March 2020

6.2

Attachment b

Financial Activity Statement January 2020

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Finance Committee                                                             41                                                                  11 March 2020

7.               General Discussion Items  

 

8.               Next Meeting Date

The next meeting will be held on 8 April 2020.

 

9.               Closure