Finance Committee Agenda

 

 

 

12 August 2020

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

MEETING NOTICE AND AGENDA – 12 August 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, 12 August 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

 

7 August 2020


CITY OF BUSSELTON

Agenda FOR THE Finance Committee MEETING TO BE HELD ON 12 August 2020

TABLE OF CONTENTS

 

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Declaration of Opening and Announcement of Visitors. 2

2....... Attendance. 2

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

4....... Disclosure Of Interests. 2

5....... Confirmation Of Minutes. 2

5.1          Minutes of the Finance Committee Meeting held 22 July 2020. 2

6....... Reports. 2

6.1          LIST OF PAYMENTS MADE - JUNE 2020. 2

6.2          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 JUNE 2020. 2

6.3          BUDGET AMENDMENT REQUEST / REVIEW - COMMUNITY AND COMMERCIAL SERVICES - AUGUST 2020. 2

6.4          BUDGET AMENDMENT REQUEST / REVIEW - ENGINEERING AND WORKS SERVICES - AUGUST 2020. 2

7....... General Discussion Items. 2

8....... Next Meeting Date. 2

9....... Closure. 2

 


Finance Committee                                                             4                                                                    12 August 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 22 July 2020

Recommendation

That the Minutes of the Finance Committee Meeting held 22 July 2020 be confirmed as true and correct.

 


Finance Committee                                                             6                                                                    12 August 2020

6.               Reports

6.1             LIST OF PAYMENTS MADE - JUNE 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 June 2020  

 

OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers M118094 – M118180, EF072198 – EF072889, T007517 – T007522, DD004139 – DD004176 together totalling $10,584,333.61.

 

EXECUTIVE SUMMARY

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

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

8

12 August 2020

6.1

Attachment a

List of Payments June 2020

 


 


 


 


 


 


 


 


 


 


 


Finance Committee                                                             24                                                                 12 August 2020

6.2             FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 JUNE 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 June 2020

Attachment b    Financial Activity Statement June 2020  

 

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 30 June 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 30 June 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 30 June 2020

The Statement of Financial Activity (FAS), for the year to date as at 30 June 2020 shows an overall Net Current Position of $474K as opposed to the amended budget of $0.  This represents a change in the variance to budget in June of ($23.6M).  This swing is due to the year-end reconciliations of all the movements in the reserve accounts.  The bulk of the final transfers to muni relating to completed projects are budgeted in the June month, thus creating the positive variance at the beginning of the financial year that gradually declines throughout the year, and resolves closer to budget by the end of June.

 

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.  Each numbered item in the table is explained further:

 

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

(0.86%)

(648,241)

1.    Operating Grants, Subsidies and Contributions

5,664,503

4,977,647

4,977,647

13.80%

686,856

2.    Other Revenue

424,730

551,510

551,510

(22.99%)

(126,780)

3.    Interest Earnings

1,584,122

1,955,000

1,955,000

(18.97%)

(370,878)

 

 

 

 

 

Expenses from Ordinary Activities

 

 

5.25%

4,283,656

4.    Materials & Contracts

(16,858,209)

(19,029,198)

(19,029,198)

11.41%

2,170,989

5.    Other Expenditure

(3,095,799)

(5,024,862)

(5,024,862)

38.39%

1,929,063

 

 

 

 

 

 

6.    Non-Operating Grants, Subsidies and Contributions

18,529,803

24,388,690

24,388,690

(24.02%)

(5,858,887)

 

 

 

 

 

Capital Revenue & (Expenditure)

 

 

3.46%

1,153,505

7.    Land & Buildings

(5,121,934)

(8,861,113)

(8,861,113)

42.20%

3,739,179

Plant & Equipment

(4,016,401)

(4,885,350)

(4,885,350)

17.79%

868,949

Furniture & Equipment

(757,384)

(1,113,069)

(1,113,069)

31.96%

355,685

Infrastructure

(20,123,173)

(38,578,246)

(38,578,246)

47.84%

18,455,073

8.    Proceeds from Sale of Assets

3,221,003

3,409,080

3,409,080

(5.52%)

(188,077)

9.    Transfer to Restricted Assets

(2,442,913)

(60,100)

(60,100)

(3964.75%)

(2,382,813)

10.  Transfer from Restricted Assets

5,114,249

6,319,121

6,319,121

100.00%

(1,204,872)

11.  Transfer from Reserves

18,888,814

35,898,783

35,898,783

(47.38%)

(17,009,969)

 


 

Revenue from Ordinary Activities

Year to date (YTD) actual income from ordinary activities is ($648K) less than expected when compared to the YTD amended budget, which represents a reversal of the positive variance at the end of May by $2M in June.  Although actual revenue did increase by $326K in June, the budgeted YTD revenue increased by $2.4M. The following YTD items meet the material variance reporting thresholds:

 

1.    Operating Grants, Subsidies and Contributions are $687K (net) better than YTD amended budget, with a reduction of the May positive YTD variance by ($1.6M) in June. The YTD variance is now mainly due to the following:

·    Grants Commission (10152), YTD $528K, with a negative variance change of ($496K) in the month of June –

i.                     Special Grants Bridges ($680K) YTD, ($496K) in June - $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), $96K YTD, $12K in June – mainly due to the LGIS scheme member credit refund of $127K;

·    Legal Fees Reimbursements (10500), ($78K) YTD, ($7K) in June – 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), ($46K) YTD, a negative variance change of ($95K) in June - $37K due to conference and training reimbursements not budgeted for sufficiently and ($62K) because of only $19K received in workers comp reimbursements compared to $81K budgeted;

·    Geographe Leisure Centre Reimbursements (11591), $27K YTD related to parental leave payments, a $5K increase in June, all unbudgeted;

·    Strategic Planning Operating Grants & Subsidies (10820), ($38K) YTD, ($3K) in June – 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), ($123K) YTD, a change of ($355K) in June – actuals decreased by $185K due to application of the new accounting standard on revenue recognition.  Although received, this amount had not been spent for the purposes pf the grant, so had to be set aside as a liability (prepaid revenue). At the same time the YTD budget increased by $170K in anticipation of this grant activity being completed by the end of June;

·    Protective burning and firebreaks reserve (10931), $166K YTD, no change in June – This variance relates to receiving 50% grant awarded to the City under the mitigation activity fund (Emergency Services Levy), which was not budgeted.  No amounts were required to be restricted at year end and to related activity carried over and budgeted in the 20/21 year;

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

·    Busselton Jetty Contributions (11160), $69K YTD, $35K increase in June – bi-annual contribution more than budgeted;

·    Regional Waste Management Administration (11301), ($32K) YTD, $5K in June – Due to historical confusion between previous and new incoming management, the income expected to be invoiced for the South West Regional Waste Group was not budgeted correctly.  This has been rectified for the 20/21 budget;

·    Operations Services Works Reimbursements (11501), $29K YTD, ($4K) in June – Workers compensation reimbursement for wages paid.  Inherently difficult to budget accurately.

 

2.    Other Revenue is ($127K) YTD worse than budget, an increase of ($58K) in June.  The main contributing variances are outlined in the table below:

 

Revenue Code

Revenue Code Description / GL Activity

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Change in Variance Current Month

$

10100

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

-

26,000

(26,000)

(26,000)

10510

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

14,745

-

14,745

14,745

10591

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

-

18,130

(18,130)

(4,531)

10970

Parking Control

35,751

92,250

(56,499)

(6,739)

G0030

Busselton Transfer Station

177,866

138,170

39,696

(10,629)

G0031

Dunsborough Waste Facility

57,749

103,900

(46,151)

(7,955)

 

3.    Interest Earnings for the year at $1.58M is $371K less than the budget for the year of $1.96M.  This is predominantly due to the effect of the adjustment to interest earned on reserve funds in light of new accounting standard 1058 - Revenue Recognition.  $196K of actual interest earned was taken off and moved to prepaid income in the balance sheet, per the standard.

 

Expenses from Ordinary Activities

YTD expenditure from ordinary activities is $4.3M or 5.2% less than expected when compared to the amended YTD budget. This variance fell by $167K in June. The following individual expense line items on the face of the financial statement have YTD variances that meet the material reporting thresholds:


 

4.    Materials and Contracts better than amended budget YTD by $2.2M or 11.4% (a variance reduction of $110K in June)

 

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 activity over May and June:

 

Cost Code

Cost Code Description / GL Activity

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Change in Variance Current Month

$

Finance and Corporate Services

1,891,809

2,741,120

849,312

537,538

10250

Information & Communication Technology Services

1,197,334

1,854,210

656,876

546,309

10500

Legal and Compliance Services

52,538

106,300

53,762

(7,993)

Community and Commercial Services

1,465,401

2,121,303

655,902

175,370

10380

Busselton Library

99,444

160,130

60,686

(8,203)

10541

Recreation Planning

5,328

50,000

44,672

23,490

10590

Naturaliste Community Centre

45,773

83,770

37,997

4,057

10591

Geographe Leisure Centre

329,633

463,580

133,947

75,852

10600

Busselton Jetty Tourist Park

509,730

549,110

39,380

(43,428)

10625

Art Geo Administration

27,530

66,500

38,970

4,268

10630

Property and Business Development

43,575

87,174

43,599

14,927

10900

Cultural Planning

(16,047)

63,010

79,057

29,899

11151

Airport Operations

169,830

297,900

128,070

69,015

Planning and Development Services

1,243,744

1,657,743

413,999

(238,595)

10820

Strategic Planning

134,835

327,728

192,893

8,266

10830

Environmental Management Administration

244,884

351,210

106,326

(53,821)

10925

Preventative Services - CLAG

51,332

89,700

38,368

7,375

10931

Protective Burning & Firebreaks-Reserves

160,760

58,900

(101,860)

(98,850)

11170

Meelup Regional Park

113,446

221,400

107,954

(1,202)

Engineering and Works Services

10,498,794

10,578,332

79,538

(671,193)

Various

Busselton Jetty Maintenance

519,704

933,885

414,181

43,835

12620

Rural-Tree Pruning

185,806

195,000

9,194

16,250

12621

Urban-Tree Pruning

225,469

158,000

(67,469)

(6,230)

Various

Bridges

203,912

210,000

6,088

(14,730)

Various

Buildings

1,663,749

1,456,564

(207,185)

(228,003)

Various

Other Infrastructure Maintenance

2,384,560

2,346,493

(38,067)

(180,782)

Various

Waste services

2,706,847

2,723,340

16,493

(187,927)

Various

Road Maintenance

1,012,238

726,000

(286,238)

(94,773)

Various

Reserve Maintenance

1,596,510

1,829,050

232,540

(18,833)

 


 

5.    Other Expenditure is $1.9M under the amended YTD budget.  This represents a $1.3M increase in the positive variance in June:

 

The main contributing items are listed below:

 

Cost Code

Cost Code Description / GL Activity

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Change in Variance Current Month

$

Executive Services

81,372

117,780

36,408

17,114

10001

Office of the CEO

81,699

117,780

36,081

16,453

Finance and Corporate Services

1,114,111

1,345,581

231,470

26,076

10000

Members of Council

579,685

720,399

140,714

(4,263)

10200

Financial Services

150

40,000

39,850

10,000

10700

Public Relations

108,943

155,800

46,857

17,913

Community and Commercial Services

1,550,141

3,079,435

1,529,294

1,313,848

10530

Community Services Administration

541,338

621,240

79,902

(28,892)

11151

Airport Operations

287

1,425,500

1,425,213

1,418,075

11156

Airport Development Operations

116,248

0

(116,248)

(116,248)

Planning and Development Services

170,623

136,806

(33,817)

(46,401)

10931

Protective Burning & Firebreaks-Reserves

33,281

2,520

(30,761)

(30,965)

Engineering and Works Services

180,835

345,260

164,426

441

11160

Busselton Jetty

0

100,000

100,000

2,087

B1223

Micro Brewery - Public Ablution

60,000

120,000

60,000

0

 

Non-Operating Grants, Subsidies and Contributions

6.    Non-Operating Grants, Subsidies and Contributions are below budget by $5.9M (with a $5.3M negative movement in this variance in June).  This was mainly due to the timing of the actual receipt and/or budgeted timing of funding. 

 

This has been exacerbated by the delays in completing capital projects due to the COVID-19 shutdowns and restrictions, and 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. 

 

It should also be noted that actual grants revenue that had been booked YTD, was reduced by $3M in June as a result of the year end adjustment associated with adoption of the new accounting standard for revenue recognition i.e. the extent to which activities associated with grants received have not been completed must be deducted back off revenue, and set aside in a prepaid account.  In the ensuing financial year, as these works are completed, the remaining grants will be brought back to account as revenue.


 

The following table presents a list of the main YTD variance areas for budgeted grant or contribution funded activities that were not completed:

Revenue Code

Revenue Code Description / GL Activity

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Change in Variance Current Month

$

Finance and Corporate Services

324,342

1,209,546

(885,204)

(416,528)

10239

Contributions (Program 11) - Community Facilities

0

925,490

(925,490)

(211,742)

10240

Contributions (Program 12) – Works

4,677

53,920

(49,243)

(155,971)

10250

Information & Communication Technology Services – Capital Grants (Federal)

282,630

159,956

122,674

(22,282)

Community and Commercial Services

4,468,008

2,642,100

1,825,908

1,760,050

10380

Busselton Library – Donated Assets

444,808

0

444,808

444,808

C6025

Installation of Bird Netting – Capital Grant (Federal)

53,769

92,620

(38,851)

53,769

C6099

Airport Development – Capital Grant (Federal)

3,936,064

2,544,480

1,391,584

1,240,106

Planning and Development Services

26,690

987,890

(961,200)

20,951

10942

Bushfire Risk Management Planning DFES - Contributions

26,690

0

26,690

26,690

B1013

Dunsborough Bushfire Brigade – Donated Assets

0

178,300

(178,300)

0

B1015

Hithergreen District Bushfire Brigade – Donated Assets

0

465,200

(465,200)

0

B1024

Wilyabrup Bushfire Brigade – Donated Assets

0

178,300

(178,300)

0

B1029

Busselton Branch SES – Donated Assets

0

97,200

(97,200)

0

B9109

Hithergreen Building Renovations – Capital Grant (State)

0

68,890

(68,890)

(5,739)

Engineering and Works Services

13,710,763

19,549,154

(5,838,391)

(6,725,555)

11101

Engineering Services Administration – Contributions

40,909

0

40,909

40,909

A0014

Bussell Highway – 0241 MR Capital Grant

0

248,000

(248,000)

(248,000)

A0022

Yallingup Beach Road Bridge – 3347 – Capital Grant (Federal)

0

700,000

(700,000)

(700,000)

A0023

Kaloorup Road Bridge – 3381 – MR Capital Grant

0

46,000

(46,000)

(46,000)

A0024

Boallia Road Bridge – 4854 – MR Capital Grant

0

46,000

(46,000)

(46,000)

B1025

Yallingup Coastal Bushfire Brigade – Donated Asset

474,654

0

474,654

474,654

B9407

Busselton Senior Citizens – Contributions

332,750

822,600

(489,850)

(705,615)

B9591

Performing Arts Convention Centre – Contributions

491,327

0

491,327

491,327

B9610

Old Butter Factory – Contributions

246,676

0

246,676

246,676

B9999

Donated Buildings

162,909

0

162,909

162,909

C0052

Vasse Kaloorup Oval Carpark Development – Contributions

225,730

150,000

75,730

95,730

C0053

Car Parking - Rear of Hotel Site 1 – Contributions

80,000

0

80,000

80,000

C1512

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

253,088

148,500

104,588

57,838

C2523

Broadwater Beach Coastal Protection Stage 1 of 4 – Contributions

28,355

0

28,355

28,355

C3017

Bovell Park - Upgrade Lighting – Contributions

44,000

0

44,000

44,000

C3020

Donated Assets Parks, Gardens & Reserves

2,053,863

900,000

1,153,863

824,730

C3094

Busselton Foreshore - Stage 3 – Contributions

133,806

0

133,806

133,806

C3116

Dawson Park (Mcintyre St Pos) – Contributions

0

82,000

(82,000)

(82,000)

C3122

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

64,715

300,000

(235,286)

64,715

C3136

Vasse Oval Kaloorup - Grassing of Existing Oval – Contributions

56,766

0

56,766

56,766

C3166

Vasse River Foreshore - Bridge to Bridge – Contributions

37,951

0

37,951

37,951

C3186

Lou Weston Oval – Courts – Contributions

1,295,662

520,000

775,662

810,662

C3208

Barnard East Landscaping – Contributions

0

240,000

(240,000)

(240,000)

C3210

McBride Park - POS Upgrade – Contributions

0

32,538

(32,538)

0

C3211

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

0

90,332

(90,332)

0

C3213

Cabarita Road - POS Upgrade – Contributions

0

100,000

(100,000)

0

C3214

Kingsford Road - POS Upgrade – Contributions

0

150,653

(150,653)

0

C3215

Monash Way - POS Upgrade – Contributions – Contributions

0

167,174

(167,174)

0

C3216

Wagon Road - POS Upgrade – Contributions

0

167,174

(167,174)

0

C3217

Limestone Quarry - POS Upgrade – Contributions

0

167,174

(167,174)

0

C3218

Dolphin Road - POS Upgrade – Contributions

0

91,000

(91,000)

0

C3219

Kingfish/ Costello - POS Upgrade – Contributions

0

91,000

(91,000)

(91,000)

C3220

Quindalup Old Tennis Courts Site - POS Upgrade – Contributions

0

149,587

(149,587)

(149,587)

C3221

Cape Naturalise - POS Upgrade – Contributions

0

167,392

(167,392)

(167,392)

C3222

King St Reserve Park - POS Upgrade – Contributions

0

147,348

(147,348)

(147,348)

D2000

Donated Assets Drainage

273,083

1,600,000

(1,326,917)

(1,326,917)

F1003

Donated Assets Footpaths & Cycleways

224,863

500,000

(275,137)

(275,137)

S0035

Strelly Street / Barlee Street Roundabout – MR Capital Grant

141,128

16,259

124,869

95,196

S0051

Causeway Road / Rosemary Drive Roundabout – MR Capital Grant

406,681

300,000

106,681

(118,319)

S0064

Peel Terrace (Stanley Pl/Cammilleri St Intersection Upgrade) – Contributions

398,912

200,000

198,912

182,249

S0070

Peel & Queen Street Roundabout Service Relocation – MR Capital Grant

0

500,000

(500,000)

(241,663)

S0072

Kaloorup Road - Reconstruct and Seal Shoulders – MR Capital Grant

0

250,000

(250,000)

(350,000)

S0074

Causeway Road Duplication – MR Capital Grant

0

500,000

(500,000)

(500,000)

S0321

Yoongarillup Road - Second Coat Seal – MR Capital Grant

0

51,000

(51,000)

(51,000)

T0085

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

251,729

210,000

41,729

75,514

T0086

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

959,169

1,478,100

(518,931)

(642,106)

W0030

Donated Roads

835,899

4,300,000

(3,464,101)

(3,464,101)

W0067

Ford Road Reconstruct and Asphalt Overlay – Contributions

39,012

0

39,012

39,012

W0094

Fairway Drive - Intersection Works – Contributions

239,694

0

239,694

239,694

W0231

Carey Street - Asphalt Overlay & Kerb – MR Capital Grant

0

67,000

(67,000)

0

W0238

Sutton Way - Asphalt Overlay & Kerb – MR Capital Grant

44,870

0

44,870

44,870

 


 

Capital Expenditure

7.    As at 30 June 2020, there is an underspend variance of 43.8% or $23.4M in total capital expenditure, with YTD actual at $30M against the YTD amended budget of $53.4M.  This variance increased by $1.5M in June.  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 / GL Activity

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Change in Variance Current Month

$

Land

75,917

200,000

124,083

200,000

10370

Busselton Cemetery

71,308

100,000

28,692

100,000

10610

Property Services Administration

4,609

100,000

95,391

100,000

Buildings

5,046,017

8,661,113

3,615,096

(150,348)

B9516

Busselton Library Upgrade

71,566

361,000

289,434

45,022

B9109

Hithergreen Building Renovations

0

68,890

68,890

5,739

B9300/1/2

Aged Housing Capital Improvements (Winderlup, Harris Rd)

49,675

291,000

241,325

101,421

B9407

Busselton Senior Citizens

425,322

1,163,450

738,128

(99,380)

B9596

GLC Building Improvements

387,743

879,400

491,657

(170,120)

B9606

King Street Toilets

153,974

200,000

46,026

(72,317)

B9716 & B9717

Airport Terminals

1,827,302

3,378,000

1,550,698

156,143

B9808

Busselton Jetty Tourist Park Upgrade

95,682

274,610

178,928

44,705

Plant & Equipment

4,016,401

4,885,350

868,949

(465,856)

11156

Airport Development Operations

1,406,160

1,512,350

106,190

(11,118)

11402

Plant Purchases (P10)

1,101,675

1,495,000

393,325

(461,645)

11403

Plant Purchases (P11)

499,247

628,000

128,753

(21,392)

11407

P&E - P&G Smart Technologies

0

150,000

150,000

0

Furniture & Office Equipment

757,384

1,113,069

355,685

(33,720)

10250

Information & Communication Technology Services

580,797

678,842

98,045

(58,157)

10591

Geographe Leisure Centre

5,000

33,000

28,000

2,750

10625

Art Geo Administration

45,000

10,000

(35,000)

0

11156

Airport Development Operations

68,915

300,000

231,085

21,832

Infrastructure By Class

20,123,173

38,578,246

18,455,073

1,935,348

 

Roads

11,471,979

14,292,273

2,820,294

(432,028)

 

Bridges

300,000

1,720,001

1,420,001

986,001

 

Car Parks

819,160

1,793,815

974,654

(99,405)

 

Footpaths & Cycleways

1,507,687

1,591,855

84,169

(296,674)

 

Parks, Gardens & Reserves

4,966,947

16,397,380

11,430,433

1,901,391

 

Drainage

423,620

234,872

(188,748)

(259,804)

 

Regional Airport & Industrial Park Infrastructure

633,779

2,548,049

1,914,270

135,868

 

In the main, many of these projects have yet to be completed 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 ($188K) (a decrease of $2.7M in June due to an increase the YTD budgeted amount), 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 i.e. the sale was budgeted in June.

 

Transfer to Restricted Assets

9.    There is a YTD variance in transfers to restricted assets of $2.4M more than amended budget ($1.8M increase in June). The reasons for this are as follows:

·    Interest earned on government grants of $39K 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;

·    $1.7M was transferred in relation to grants received in advance. These will be recognized as revenue in the following financial year as the works are completed;

·    $400K of contributions to road works were received over the year, of which $350K was in relation to the next stage of the Dunsborough Lakes development.  Only $60K was budgeted for this;

·    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 $85K 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 $1.2M less than amended budget ($3.4M decrease in June).  The main reasons for this is are follows:

·    Contributions to works were $209K less than budgeted;

·    Government grants were underutilised by $1.8M;

·    Sundry restricted items were $25K less than budgeted;

·    Unspent loan funds of $88K;

·    Bonds & deposits of $963K that were not budgeted at all.

 

Transfer from Reserves

11.  There is a YTD variance for transfers from reserves of $17M less than amended budget (this increased by $11.1M in June due to year end reconciliations). The reason for the YTD variances  are works not completed during the year, that were budgeted to have been funded from the various reserves.  The funds remain in the reserve, as the expenditure did not eventuate from the Municipal account.  Below is a summary of the these variances:

 

Reserve Name

Variance to Budgeted Transfer

Airport Infrastructure Renewal Reserve

(127,387)

Airport Marketing and Incentive Reserve

(1,360,230)

Airport Noise Mitigation Reserve

(869,550)

Building Asset Renewal Reserve

(209,872)

Busselton Area Drainage and Waterways Improvement Reserve

(105,059)

Busselton Community Resource Centre Reserve

(1,433)

Busselton Jetty Tourist Park Reserve

(178,274)

Busselton Library Building Reserve

(89,538)

CBD Enhancement Reserve

(553,194)

Cemetery Reserve

(25,200)

City Car Parking and Access Reserve

(337,915)

Civic and Administration Building Reserve

(60,168)

Coastal and Climate Adaptation Reserve

(274,914)

Community Facilities - City District

(516,586)

Community Facilities - Vasse

(314,848)

Election, Valuation and Corporate Expenses Reserve

(52,424)

Energy Sustainability Reserve

(681)

Footpath/ Cycle Ways Reserve

(322,968)

Furniture and Equipment Reserve

(257,784)

Geographe Leisure Centre Building Reserve

(541,657)

Jetty Maintenance Reserve

(2,120,963)

Joint Venture Aged Housing Reserve

(100,237)

Locke Estate Reserve

(8,836)

Long Service Leave Reserve

(300,973)

Major Traffic Improvements Reserve

(639,139)

Naturaliste Community Centre Building Reserve

(12,000)

New Infrastructure Development Reserve

(735,294)

Other Infrastructure (Drainage, Signage, Etc.) Reserve

(231,041)

Parks, Gardens and Reserves Reserve

(823,119)

Plant Replacement Reserve

(155,907)

Port Geographe Development Reserve

(80,974)

Port Geographe Waterways Management Reserve (SAR)

483

Professional Development Reserve

(21,769)

Provence Landscape Maintenance Reserve (SAR)

(117,227)

Public Art Reserve

(41,060)

Road Asset Renewal Reserve

(1,501,710)

Sick Pay Incentive Reserve

(63,457)

Strategic Projects Reserve

(65,129)

Vasse Newtown Landscape Maintenance Reserve (SAR)

(69,298)

Waste Management Facility and Plant Reserve

(3,572,592)

Winderlup Aged Housing Resident Funded Reserve

(120,930)

Workers Compensation and Extended Sick Leave Contingency Res

(28,460)

Youth and Community Activities Building Reserve

(655)

 

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 30 June 2020 the value of the City’s invested funds totalled $70.79M, down from $77.99M as at 31 May 2020. The decrease is due to the withdrawal of funds from Term Deposits and a reduction in the Airport Development balance.

 

During the month of June six term deposits totalling the amount of $14.0M matured. Two deposits were closed and one partially closed totalling $6.0M to provide funds for standard operations. Remaining deposits were renewed for a further 154 days at 0.87% 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 $1.0M with funds to be held temporarily until required for standard operations. 

 

The Airport Development accounts have decreased by $2.1M.  This is due to the recoup of expenses by the City totalling $2.2M.

 

The official cash rate in June 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

Details of transactions made on the Chief Executive Officer’s corporate credit card during June 2020 are provided below to ensure there is appropriate oversight and awareness.

 

Date

$ Amount

Payee

Description

26/6/2020

204.40

Jade Chinese Restaurant

Dinner for Councillors & CEO

 

204.40

 

 

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 30 June 2020, despite the downturn in operational activity brought on by the COVID-19 global pandemic in the last quarter of the financial year, the City achieved a positive net current position of $473K. Many projects and programs of work were deferred, however the City’s financial performance is considered satisfactory.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

32

12 August 2020

6.2

Attachment a

Investment Report June 2020

 


Finance Committee

49

12 August 2020

6.2

Attachment b

Financial Activity Statement June 2020

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 



Finance Committee                                                             52                                                                 12 August 2020

6.3             BUDGET AMENDMENT REQUEST / REVIEW - COMMUNITY AND COMMERCIAL SERVICES - AUGUST 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

Director, Community and Commercial Services - Naomi Searle

AUTHORISING OFFICER

Director, Community and Commercial Services - Naomi Searle

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

Absolute Majority

ATTACHMENTS

Attachment a   CCS Budget Amendment Table August 2020  

 

OFFICER RECOMMENDATION

That the Council endorse the amendment to the 2020/2021 Airport Development Project Budget, being an expense reduction of $140,000, and offset by a reduction in the transfer from restricted asset Government Grant, resulting in an unchanged Municipal budget position. The proposed Budget Amendment is as per Attachment A and in accordance with section 6.8(1) of the Local Government Act 1995.

 

EXECUTIVE SUMMARY

This report seeks Council approval of budget amendments as detailed in this report. Adoption of the Officer Recommendation will result in a net neutral impact on the City’s budgeted net current position.

 

BACKGROUND

In accordance with section 6.8(1) of the Local Government Act 1995, a local government is not to incur expenditure from its municipal fund for an additional purpose except where the expenditure:

·    Is incurred in a financial year before the adoption of the annual budget by the local government;

·    Is authorised in advance by Council resolution - absolute majority required;

·    Is authorised in advance by the Mayor in an emergency.

 

Approval is therefore sought for the budget adjustments detailed in the attachment for the reasons specified.

OFFICER COMMENT

Council adopted its 2020/2021 municipal budget on Monday 27 July 2020 with a balanced budget position. Since then, officers have identified budgets that require adjustment. It is good management practice to revise the adopted budget when it is known that circumstances have changed. In keeping with this practice, budgets are reviewed on a monthly basis. Officers have reviewed the adopted budget for the month of August 2020 and recommend that alterations are made to the budget as per the table at Attachment A.

 


 

As part of the end of financial year budget reconciliation process, it was identified that the 2020/21 Airport Development Project budget was overestimated and as such requires an amendment as identified in the table at Attachment A. The amendments will require a budget expense reduction of $140K which will be offset by a reduction in the transfer from restricted asset Government Grant. 

After making the above adjustments, the municipal budget position remains unchanged.

Statutory Environment

Section 6.8 of the Local Government Act 1995 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

The financial implications of this recommendation are contained within the 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.

 

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.

Options

The Council could decide not to go ahead with the proposed budget amendment request.

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.

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.

 


Finance Committee

53

12 August 2020

6.3

Attachment a

CCS Budget Amendment Table August 2020

 


Finance Committee                                                             55                                                                 12 August 2020

6.4             BUDGET AMENDMENT REQUEST / REVIEW - ENGINEERING AND WORKS SERVICES - AUGUST 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

Strategic Planner - Nick Edwards

AUTHORISING OFFICER

Director, Engineering and Works Services - Oliver Darby

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

Absolute Majority

ATTACHMENTS

Attachment a   EWS Budget Amendment Table August 2020

Attachment b    WAPC Approval Letters  

 

OFFICER RECOMMENDATION

That the Council endorse the amendment to the 2020/2021 budgets for Dawson Park and Cabarita Road Public Open Spaces (POS), resulting in a net budget increase of $5,608 and offset by a net increase in POS Contribution Revenue. The proposed Budget Amendment is as per Attachment A and in accordance with section 6.8(1) of the Local Government Act 1995.

 

EXECUTIVE SUMMARY

This report seeks Council approval of budget amendments as detailed in this report. Adoption of the Officer Recommendation will result in a net neutral impact on the City’s budgeted net current position.

BACKGROUND

In accordance with section 6.8(1) of the Local Government Act 1995 a local government is not to incur expenditure from its municipal fund for an additional purpose except where the expenditure:

·    Is incurred in a financial year before the adoption of the annual budget by the local government;

·    Is authorised in advance by Council resolution - absolute majority required;

·    Is authorised in advance by the Mayor in an emergency.

 

Approval is therefore sought for the budget adjustments detailed in the attachment for the reasons specified.

OFFICER COMMENT

Council adopted its 2019/2020 municipal budget on Monday 27 July 2020 with a balanced budget position. Since then, officers have identified budgets that require adjustment. It is good management practice to revise the adopted budget when it is known that circumstances have changed. In keeping with this practice, budgets are reviewed on a monthly basis. Officers have reviewed the adopted budget for the month of August 2020 and recommend that alterations are made to the budget as per the table at Attachment A.

 

As part of the end of financial year budget reconciliation process, it was identified that the 2020/21 budgets for Dawson Park and Cabarita Road Public Open Spaces (POS) were incorrect and as such require an amendment as identified in the attached table. The amendments will require a net budget expense increase of $5,608 which will be offset by a net increase in POS Contribution Revenue. 

After making the above adjustments, the budget position remains unchanged.

Statutory Environment

Section 6.8 of the Local Government Act 1995 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

The financial implications of this recommendation are contained within the 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.

 

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.

Options

The Council could decide not to go ahead with the proposed budget amendment request.

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.

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.

 


Finance Committee

56

12 August 2020

6.4

Attachment a

EWS Budget Amendment Table August 2020

 


Finance Committee

58

12 August 2020

6.4

Attachment b

WAPC Approval Letters

 


 

 


Finance Committee                                                             59                                                                 12 August 2020

7.               General Discussion Items  

 

8.               Next Meeting Date

 

9.               Closure