COB-RGB

 

 

 

COUNCIL AGENDA

 

Supplementary Items

 

 

 

29 July 2020

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

SUPPLEMENTARY Items FOR THE Council MEETING TO BE HELD ON 29 July 2020

TABLE OF CONTENTS

 

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

8....... Confirmation and Receipt Of Minutes. 132

Committee Meetings. 132

8.2          Minutes of the Finance Committee Meeting held 22 July 2020. 132

12..... Reports of Committee. 133

12.1        Finance Committee - 22/07/2020 - LIST OF PAYMENTS MADE - MAY 2020. 133

12.2        Finance Committee - 22/07/2020 - FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 MAY 2020. 144

 


Supplementary Items                                                         133                                                                     29 July 2020

8.               Confirmation and Receipt Of Minutes 

Committee Meetings

8.2             Minutes of the Finance Committee Meeting held 22 July 2020

Recommendation

That the Minutes of the Finance Committee Meeting held 22 July 2020 be noted.

 


 

12.             Reports of Committee

12.1           Finance Committee - 22/07/2020 - LIST OF PAYMENTS MADE - MAY 2020

STRATEGIC GOAL

6. LEADERSHIP Visionary, collaborative, accountable

STRATEGIC OBJECTIVE

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 May 2020  

 

This item was considered by the Finance Committee at its meeting on 22 July 2020, the recommendations from which have been included in this report.

COMMITTEE RECOMMENDATION AND OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers M118050 – M118093, EF071672 – EF072197, T007512 – T007516, DD004120 – DD004138 together totalling $8,039,827.05

EXECUTIVE SUMMARY

This report provides details of payments made from the City’s bank accounts for the month of May 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 May 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 May 2020 is presented for information.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Supplementary Items

135

29 July 2020

12.1

Attachment a

List of Payments May 2020

 


 


 


 


 


 


 


 


 


Supplementary Items                                                         146                                                                     29 July 2020

12.2           Finance Committee - 22/07/2020 - FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 MAY 2020

STRATEGIC GOAL

6. LEADERSHIP Visionary, collaborative, accountable

STRATEGIC OBJECTIVE

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

SUBJECT INDEX

Financial Services

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 May 2020

Attachment b    Financial Activity Statement May 2020  

 

This item was considered by the Finance Committee at its meeting on 22 July 2020, the recommendations from which have been included in this report.

 

Officer Recommendation

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

 

COMMITTEE RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 31 May 2020, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations, noting that the commentary in the Officer’s report relating to “Allocations” and “Non-Operating Grants, Subsidies and Contributions” was not required as these items did not exceed Council’s variance reporting threshold, and the Reserve Movements Report should refer to 31 May 2020.

 

Reasons:       Officers identified that the commentary in the Officer’s report relating to “Allocations” and “Non-Operating Grants, Subsidies and Contributions” was not required as these items did not exceed Council’s variance reporting threshold and the Reserve Movements Report should refer to 31 May 2020, not the month of March.

 

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 May 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 May 2020

The Statement of Financial Activity (FAS), for the year to date as at 31 May 2020 shows an overall Net Current Position of $5.4M as opposed to the amended budget of ($18.7M), a positive difference of $24.1M. 

 

The following summarises the major YTD cash variances that appear on the face of the FAS, which in accordance with Council’s adopted material variance reporting threshold, 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

1.96%

1,432,511

1.    Operating Grants, Subsidies and Contributions

5,825,092

3,585,602

4,977,647

62.46%

2,239,490

2.    Other Revenue

399,320

468,163

551,510

(14.70%)

(68,843)

 

 

 

 

 

Expenses from Ordinary Activities

 

 

6.09%

4,452,281

3.    Materials & Contracts

(14,942,291)

(17,223,662)

(19,058,249)

13.25%

2,281,371

4.    Other Expenditure

(2,471,011)

(3,088,995)

(4,995,811)

20.01%

617,984

 

 

 

 

 

 

Capital Revenue & (Expenditure)

 

 

37.31%

18,525,911

5.    Land & Buildings

(4,332,126)

(8,021,652)

(8,861,113)

45.99%

3,689,526

Plant & Equipment

(3,506,045)

(4,840,850)

(4,885,350)

27.57%

1,334,805

Furniture & Equipment

(635,312)

(1,024,718)

(1,113,069)

38.00%

389,406

Infrastructure

(15,955,641)

(32,475,366)

(38,328,246)

50.87%

16,519,725

6.    Proceeds from Sale of Assets

3,219,882

703,550

3,409,080

357.66%

2,516,332

7.    Transfer to Restricted Assets

(646,151)

(55,099)

(60,100)

(1072.71%)

(591,052)

8.    Transfer from Restricted Assets

2,151,179

3,522

6,319,121

100.00%

2,147,657

9.    Transfer from Reserves

9,292,139

15,180,665

35,648,783

(38.79%)

(5,888,526)

 


 

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, which represents a variance increase of $730K in May.  The following YTD items meet the material variance reporting thresholds:

 

1.    Operating Grants, Subsidies and Contributions are $2.2M (net) better than YTD amended budget, with $1.2M of this relating to May. The YTD variance is mainly due to the following:

·    Grants Commission (10152), YTD $1M, with a positive variance change of $1.158M in the month of May –

i.                     Special Grants Bridges ($184K) YTD, ($26K) in May - $124K is still to come in relation to Bussell Hwy Bridge 0241.  The remaining variance relates to budgeting misallocations where the grants were actually supposed to be main roads direct funding.

ii.                   General Purpose Grants $408K, all in May – this relates to the 20/21 Financial Assistance Grants (FAGS), being received in advance.  This will be restricted in the Untied Grants Reserve in the year end reserve reconciliation process.

iii.                 Local Roads Grants $800K, all in May – FAGS received in advance per above.  Not budgeted, as advice from Grants Commission was that the practice of prepayment in previous years was going to cease.

·    Insurance Reimbursements (10200), $84K YTD, ($54K) in May – mainly due to the LGIS scheme member credit refund of $127K;

·    Legal Fees Reimbursements (10500), ($71K) YTD, ($6K) in May – YTD position largely due to a 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 no amendment to remove this budgeted revenue item in 19/20 will be done;

·    Human Resources Reimbursements (10521), $50K YTD, no change in May - $33K 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), $51K YTD, no change in may – received December but budgeted in June;

·    Strategic Planning Operating Grants & Subsidies (10820), ($34K) YTD, ($3K) in May – This is remaining grant funding for the CAS project which will not be finalized until later in the year.  The remaining activities for the project will be carried over into the next budget;

·    Environmental Management Administration (10830), $232K YTD, no change in May. $170K grant received for the Revitalizing Geographe Waterways Phase 2 project earlier than budgeted, plus unbudgeted amounts of $40K for Lower Vasse River Collaborative Project from Regional Estuaries Initiatives, and $20K for Strategic Weed Action for Biodiversity Protection from Department of Primary Industries;

·    Protective burning and firebreaks reserve (10931), $166K YTD, no change in May. This variance relates to receiving 50% grant awarded to the City under the mitigation activity fund (Emergency Services Levy), which was not budgeted.  Details of the cost codes for a budget amendment have not been finalised.  Any remaining amount will be restricted at year end and used to offset any budgeted activity in the 20/21 year;

·    Preventative Services CLAG Contribution (10925), ($29K) YTD, no change in May. Offset by budgeted expenditure that has not occurred, to the same amount;

·    Fire Prevention DFES Contribution & Prior Period Adjustments (10940), $15K YTD, ($6K) in May – timing difference due to prior period adjustments for late receipted contributions;

·    Engineering Services Administration Other Operating Grant (11101), $28K YTD, all arising in May – beach monitoring grant budgeted to be received in June;

·    Wonnerup South Rd Bridge Slk 2.3 (A3440), $32K YTD, no change in May. Emergency funding received from Main Roads for repairs undertaken;

·    Pre-Primary Building & Surrounds (B1503), $30K YTD, no change in May – Grant was budgeted to be received in June 2020, but was received in November 2019;

·    Busselton Jetty Contributions (11160), $35K YTD, no change in May – bi-annual contribution more than budgeted;

·    Regional Waste Management Administration (11301), ($37K) YTD, ($5K) in May – Invoices have not been fully raised per the budget.  Waste officers are investigating, with additional invoicing pending for the June accounts;

·    Operations Services Works Reimbursements (11501), $32K YTD, $7K in May – Workers compensation reimbursement for wages paid;

·    Reimbursements Old Butter Factory (B1401 & B9610), $371K YTD, no change in May – Timing difference due to difficulties in predicting when LGIS would process the claims;

·    Storm Damage Insurance Renewal (C2527), $74K YTD, $37K in May – insurance claim for damage to King Street steps and ramp received.  Half received in February, balance in May after finalization of claim.

 

2.    Other Revenue is ($69K) YTD worse than budget, and increase of ($19K) in May.  The main contributing variances are outlined in the table below:

 

Cost Code

Cost Code Description / GL Activity

Variance Increment Current Month

$

Variance
YTD
$

10100

Finance & Corporate Services Support - LSL contribution not received from other LG (Offset by officer not taking LSL this FY)

-

(26,000)

10510

Governance Support Services (LSL contribution received from other LG.  Not related to above)

-

14,745

10591

Geographe Leisure Centre (LSL contribution not received from other LG)

-

(13,599)

10970

Parking Control

(5,116)

(49,760)

G0030

Busselton Transfer Station

(3,173)

50,325

G0031

Dunsborough Waste Facility

(8,323)

(38,196)

 

Expenses from Ordinary Activities

YTD expenditure from ordinary activities is $4.5M or 6.1% less than expected when compared to the amended YTD budget.  This variance fell by $43K in May.  The following YTD variance items meet the material reporting thresholds:


 

3.    Materials and Contracts better than amended budget YTD by $2.3M (a reduction of $331K in May)

 

The main contributing items are listed below, most of which being heavily influenced by the slow down in activity caused by the COVID-19 shutdowns and restrictions over March and April, with slight increase in:

 

Cost Code

Cost Code Description / GL Activity

Variance Increment Current Month

$

Variance
YTD
$

Finance and Corporate Services

148,655

311,773

10250

Information & Communication Technology Services

113,388

110,567

10500

Legal and Compliance Services

(906)

61,755

10616

Winderlup Villas Aged Housing

260

27,051

Community and Commercial Services

30,471

480,533

10380

Busselton Library

(1,429)

68,890

10590

Naturaliste Community Centre

5,529

33,940

10591

Geographe Leisure Centre

23,838

58,096

10600

Busselton Jetty Tourist Park

(34,916)

82,808

10625

Art Geo Administration

4,067

34,702

10630

Property and Business Development

(935)

28,672

10900

Cultural Planning

(6,473)

49,158

11151

Airport Operations

40,215

59,055

Planning and Development Services

(53,313)

652,594

10820

Strategic Planning

(883)

184,628

10830

Environmental Management Administration

(21,812)

160,147

10850

Implement Management Plans Other

3,179

85,001

10925

Preventative Services - CLAG

7,375

30,993

11170

Meelup Regional Park

9,475

109,155

Engineering and Works Services

(501,869)

750,731

Various

Busselton Jetty Maintenance

(91,545)

370,346

12621

Urban-Tree Pruning

3,719

(61,239)

Various

Other Infrastructure Maintenance

(417,291)

147,288

Various

Waste services

(35,264)

204,420

Various

Road Maintenance

30,177

(191,464)

Various

Reserve Maintenance

95,353

251,373

 


 

4.    Other Expenditure $618K under the amended YTD budget (a $2K reduction in May):

 

The main contributing items are listed below:

 

Cost Code

Cost Code Description / GL Activity

Variance Increment Current Month

$

Variance
YTD
$

Finance and Corporate Services

(38,785)

205,394

10000

Members of Council

9,154

144,976

10200

Financial Services

10,000

29,850

10700

Public Relations

(7,637)

28,944

Community and Commercial Services

(8,931)

215,446

10530

Community Services Administration

(61,152)

108,794

10548

Half Iron

46,200

46,200

Engineering and Works Services

35,819

163,984

11160

Busselton Jetty

27,083

97,913

B1223

Micro Brewery - Public Ablution

-

60,000

 

5.    Allocations

In addition to administration based allocations which clear each month, this category also includes plant and overhead related allocations. Due to the nature of these line items, the activity reflects as a net offset against operating expenditure, in recognition of those expenses that are of a capital nature (and need to be recognised accordingly). It should be noted that performance in the category has no direct impact on the closing position.

 

Non-Operating Grants, Subsidies and Contributions

6.    Non-Operating Grants, Subsidies and Contributions are below budget by $498M (with a $68K improvement on this variance in May), with the main items impacting on this being the timing of the receipt of funding.  This has been exacerbated by the delays in completing capital projects due to the COVID-19 shutdowns and restrictions over March and April.  This is largely offset with less than anticipated capital expenditure at the same time, where works have not been completed in connection with the funding.  The extent to which the works remain incomplete will represent a positive impact on net position, and the remaining funding will be carried forward in reserves to be spent in future periods in order to complete the projects.

 

Cost Code

Cost Code Description

Variance Increment Current Month

$

Variance
YTD

$

Finance and Corporate Services

(85,361)

(468,676)

10239

Contributions (Program 11) - Community Facilities

(72,717)

(713,748)

10239

Contributions (Program 12) – Works

(4,169)

106,727

10250

Information & Communication Technology Services – Capital Grants (Federal)

-

144,956

Community and Commercial Services

-

65,858

C6025

Installation of Bird Netting – Capital Grant (Federal)

-

(92,620)

C6099

Airport Development – Capital Grant (Federal)

-

151,478

 

Planning and Development Services

(184,041)

(982,151)

B1013

Dunsborough Bushfire Brigade – Donated Assets

(178,300)

(178,300)

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 (State)

(5,741)

(63,151)

Engineering and Works Services

336,940

887,164

B9407

Busselton Senior Citizens – Contributions

104,465

215,765

C1512

Port Geographe Boat Ramp Renewal Works – Capital Grant (State)

(13,750)

46,750

C3020

Donated Assets Parks, Gardens & Reserves

-

329,133

C3113

Busselton Tennis Club – Infrastructure – Contribution

-

80,000

C3122

Rails to Trails - Continuation of Implementation Plan – Capital Grant (Lotteries Commission)

-

(300,000)

C3186

Lou Weston Oval – Courts – Contributions

200,000

(35,000)

C3210

McBride Park - POS Upgrade – Contributions

-

(32,538)

C3211

Tulloh St (Geographe Bay Road) - POS Upgrade – Contributions

-

(90,332)

C3213

Cabarita Road - POS Upgrade – Contributions

-

(100,000)

C3214

Kingsford Road - POS Upgrade – Contributions

-

(150,653)

C3215

Monash Way - POS Upgrade – Contributions

-

(167,174)

C3216

Wagon Road - POS Upgrade

(167,174)

(167,174)

C3217

Limestone Quarry - POS Upgrade

(167,174)

(167,174)

C3218

Dolphin Road - POS Upgrade

(91,000)

(91,000)

F0019

College Avenue – Capital Grant (State)

-

144,000

S0035

Strelly Street / Barlee Street Roundabout – MR Capital Grant

(1,355)

29,673

S0051

Causeway Road / Rosemary Drive Roundabout – MR Capital Grant

275,000

225,000

S0069

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

(8,333)

(91,663)

S0070

Peel & Queen Street Roundabout Service Relocation – MR Capital Grant

(41,667)

(258,337)

S0071

Ludlow-Hithergreen Road Safety Improvements – Fed Capital grant

-

461,200

S0072

Kaloorup Road - Reconstruct and Seal Shoulders – MR Capital Grant

-

100,000

S0324

Georgette Street - Reconstruction & Kerbs – MR Capital Grant

-

67,000

T0019

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

(52,045)

52,040

T0085

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

(33,785)

(33,785)

T0086

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

(123,175)

123,175

V0002

Eastern Link - Busselton Traffic Study – Capital Grant (Federal)

350,000

750,000

W0231

Carey Street - Asphalt Overlay & Kerb – MR Capital Grant

(67,000)

(67,000)

Capital Expenditure

7.    As at 31 May 2020, there is an underspend variance of 47.3% or $21.9M in total capital expenditure, with YTD actual at $24.4M against the YTD amended budget of $46.3M.  This variance increased by $1.3M in May.  The attachments to this report include detailed listings of all capital expenditure (project) items, however the main areas of YTD variance are summarised as follows:

 

Cost Code

Cost Code Description

Variance Increment Current Month

$

Variance
YTD

$

Land

(4,609)

(75,917)

10370

Busselton Cemetery

-

(71,308)

Buildings

297,624

3,765,444

B9516

Busselton Library Upgrade

(447)

244,413

B9109

Hithergreen Building Renovations

5,741

63,151

B9300/1/2

Aged Housing Capital Improvements (Winderlup, Harris Rd)

-

139,904

B9407

Busselton Senior Citizens

14,599

837,509

B9556

NCC Upgrade

-

41,665

B9591

Performing Arts Convention Centre

(242,524)

70,621

B9596

GLC Building Improvements

312,008

661,777

B9606

King Street Toilets

28,502

118,344

B9609

GLC Stadium Expansion

42,500

42,500

B9610

Old Butter Factory

102,429

38,675

B9716 & B9717

Airport Terminals

28,441

1,394,555

B9808

Busselton Jetty Tourist Park Upgrade

(2,679)

134,223

Plant & Equipment

(244,160)

1,334,805

11156

Airport Development Operations

(224,821)

117,308

11402

Plant Purchases (P10)

-

854,970

11403

Plant Purchases (P11)

-

150,146

11407

P&E - P&G Smart Technologies

-

150,000

Furniture & Office Equipment

(185,346)

389,406

10250

Information & Communication Technology Services

(204,425)

156,201

10591

Geographe Leisure Centre

2,750

25,250

10625

Art Geo Administration

-

(35,000)

11156

Airport Development Operations

25,279

209,253

Infrastructure By Class

1,478,894

16,519,725

 

Roads

903,892

3,252,322

 

Bridges

62,000

434,000

 

Car Parks

(249,804)

1,074,059

 

Footpaths & Cycleways

3,147

380,843

 

Parks, Gardens & Reserves

781,354

9,529,042

 

Drainage

(42,949)

71,056

 

Regional Airport & Industrial Park Infrastructure

21,253

1,778,402

 

In the main, many of these projects have yet to be completed and represent a timing difference.  Due to the COVID-19 crisis, and the two major storm events in May, many projects have also been deferred and will be relisted for completion in next year’s budget.

 

Proceeds from Sale of Assets

8.    There is a variance for the proceeds from sale of assets of $2.5M (an increase of $156K in May), mainly due to difficulty in predicting timing for the settlement of the sale of the old library building land, creating a timing difference against budget.

 

Transfer to Restricted Assets

9.    There is a YTD variance in transfers to restricted assets of $591K more than amended budget (no change in May). The reasons for this are as follows:

·    Interest earned on government grants of $37K 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 $350K were received in relation to the next stage of the Dunsborough Lakes development;

·    Transfer of $156K representing contribution by developers, including $125K from the sale of the old library land as agreed with the developers;

·    Net transfers to deposits and bonds of $49K 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 Restricted Assets

10.  There is a YTD variance in transfers from restricted assets of $2.1M more than amended budget ($472K increase in May).   The main reason for this is as follows:

·    Transfer from Roadwork Bonds of $849K as opposed to a budget of $0;

·    Refunds of $27K in deposits for venue hire;

·    Refunds of $12K of Jetty berthing deposits;

·    $34K of other miscellaneous refunds of bonds & deposits;

·    $500K reimbursement to muni of remaining loan funds for the tennis club project;

·    $253K of transfers related to partially completed roadworks projects;

·    In May:

i.                     $140K use of federal capital grants for the CCTV;

ii.                   $14K use of grants for  the Womens Change Facility at Bovell;

iii.                 $21K use of grants for sand re-nourishment;

iv.                 $28K use of grants for Broadwater Beach coastal works;

v.                   $247K for completion of the Old Butter Factory insurance works.

These funds do not have a budget allocation as they dependant of external third parties and are not able to be reliably measured.

 

Transfer from Reserves

11.  There is a YTD variance for transfer from reserves of $5.9M less than amended budget (this increased by $1.1M in May). The reasons for this are as follows:

·    100 – Airport Infrastructure Renewal Reserve ($169K) – Only partial work for installation of bird netting has been done and the car park resealing has not been completed;

·    136 – Airport Marketing & Incentive Reserve ($1.4M) – Being deferred until next financial year;

·    143 – Airport Noise Mitigation Reserve ($870K) – project deferred until 20/21 budget

·    106 – Building Asset Renewal Reserve $220K – early recoup related to partially completed works;

·    407 – Busselton Library Building Reserve $20K – partial recoup for the extension works;

·    408 – Busselton Jetty Tourist Park Reserve ($172K) – upgrade works only partially complete;

·    409 – Geographe Leisure Centre Building Reserve ($270K) – Project B9596 for general building improvements;

·    331 – Joint Venture Aged Housing Reserve $40K – works partially completed earlier than expected;

·    411 – Civic & Administration Building Reserve $38K – works partially completed earlier than expected;

·    110 – Jetty Maintenance Reserve ($495K) – only partially recouped, as works only partially 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;  

·    115 – Plant Replacement Reserve ($638K) – timing difference associated with recoupment for purchase of new plant;

·    137 – Major Traffic Improvements Reserve $367K – Project V0002 for the Eastern Link Project is on-going.  Approximately $1.7M has been spent, of which $400K grant funding has been received and $1M transferred to Muni;

·    132 – CBD Enhancement Reserve ($436K) – mainly due to incomplete townscape upgrade works;

·    127 – New Infrastructure Development Reserve ($123K) – This reserve is funding 10 projects at the moment, some of which are still incomplete;

·    133 – Valuation & Corporate Expenses Reserve ($12K) – the transfer to cover the $97K bill from the Electoral Commission happened in March;

·    123 - Port Geographe Waterways Management Reserve (SAR) ($327K) – Annual deed agreement not yet requested to be paid;

·    Due to cash flow requirements partially completed works were recouped from the following reserves:

i.                     223 – Road Asset Renewal Reserve $1.4M;

ii.                   224 – Footpaths & Cycleways Reserve $317K;

iii.                 225 – Parks & Garden Reserve $126K;

iv.                 302 – Community Facilities City District $415K;

v.                   303 – Community Facilities Busselton $44K;

vi.                 309 – Community Facilities Vasse $59K;

vii.                122 - Port Geographe Development Reserve $364K;

viii.              126 - Provence Landscape Maintenance Reserve (SAR) $64K;

ix.                  128 - Vasse Newtown Landscape Maintenance Reserve (SAR) $101K;

x.                   321 - Busselton Area Drainage and Waterways Improvement Reserve $35K;

xi.                  102 - Coastal and Climate Adaptation Reserve $256K;

xii.                145 - Energy Sustainability Reserve $177K;

xiii.              146 - Cemetery Reserve $185K;

xiv.              In May:

1.       106 – Building Asset Renewal Reserve $135K;

2.       123 – Port Geographe Waterways Management Reserve $320K;

3.       102 – Coastal & Climate Adaptation Reserve $60K (for works at Broadwater);

4.       121 – Waste Management Facility & Plant Reserve $600K (for the compactor rebuild);

·    121 – Waste Management Facility and Plant Reserve ($3.82M) – The works for the Transfer station plus the site rehabilitation jobs that have not progressed, are the biggest cause of this variance.  It is forecast that these jobs will be deferred until next financial year.

 

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 May 2020, the value of the City’s invested funds totalled $77.99M, up from $76.99M as at 30 April 2020. The increase is due a $3.0M transfer from the 11AM account and a closure of a term deposit for $2.0M.

 

During the month of May four term deposits totalling the amount of $14.0M matured. One deposit was closed totalling $2.0M to provide funds for standard operations. Remaining deposits were renewed for a further 110 days at 0.85% 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) has increased by $3.0M with funds to be held temporarily until required for standard operations. 

 

The Airport Development accounts remain steady.

 

The official cash rate in May remains steady at 0.25%. This will have a strong impact on the City’s interest earnings for the foreseeable future. Further drops are unlikely at this stage.

 

Chief Executive Officer – Corporate Credit Card

There were no transactions made on the Chief Executive Officer’s corporate credit card during May 2020.

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 May 2020, the City’s financial performance, although displaying a positive net current position, is still considered at risk of not meeting operational budget expectations by the end of the financial year due to the downturn in operational activity brought on by the COVID-19 global pandemic.  This risk has been somewhat mitigated over the later part of May and early part of June due to an uptick in activity resulting from relaxed restrictions.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.

 


Supplementary Items

157

29 July 2020

12.2

Attachment a

Investment Report May 2020

 


Supplementary Items

167

29 July 2020

12.2

Attachment b

Financial Activity Statement May 2020