Finance Committee Agenda

 

 

 

11 November 2020

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

MEETING NOTICE AND AGENDA – 11 November 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 November 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

 

5 November 2020


CITY OF BUSSELTON

Agenda FOR THE Finance Committee MEETING TO BE HELD ON 11 November 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 14 October 2020. 4

6....... Reports. 5

6.1          LIST OF PAYMENTS MADE - SEPTEMBER 2020. 5

6.2          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 SEPTEMBER 2020. 15

7....... General Discussion Items. 51

8....... Next Meeting Date. 51

9....... Closure. 51

 


Finance Committee                                                             4                                                            11 November 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 14 October 2020

Recommendation

That the Minutes of the Finance Committee Meeting held 14 October 2020 be confirmed as true and correct.

 


Finance Committee                                                             6                                                            11 November 2020

6.               Reports

6.1             LIST OF PAYMENTS MADE - SEPTEMBER 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 September 2020  

 

OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers M118280 – M118334, EF074004 – EF074590, T7528 – T7530, DD004239 – DD004285 together totalling $32,812,736.17.

 

EXECUTIVE SUMMARY

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

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

8

11 November 2020

6.1

Attachment a

List of Payments September 2020

 









Finance Committee                                                             27                                                             11 November 2020

6.2             FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 SEPTEMBER 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 September 2020

Attachment b    Financial Activity Statement September 2020  

 

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 30 September 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 September 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 27 July 2020, the Council adopted (C2007/071) the following material variance reporting threshold for the 2020/21 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 2020/21 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 only if not to do so would present an incomplete picture of the financial performance for a particular period; 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 September 2020

The Statement of Financial Activity (FAS) for the year to date as at 30 September 2020 shows an overall Net Current Position of $45.1M as opposed to the budget of $38.4M. This represents a positive variance of $1.5M YTD. 

 

The following table summarises the major YTD 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 this lead table is explained further in the report.

 

Description

2020/21
Actual YTD

$

2020/21
Amended
Budget YTD

$

2020/21
Amended
Budget

$

2020/21
YTD Bud Variance

%

2020/21
YTD Bud Variance

$

Change in Variance Current Month

$

Revenue from Ordinary Activities

 

(0.48%)

(302,824)

(37,326)

1.     Interest Earnings

417,396

341,046

1,046,684

22.39%

76,350

27,048

 

 

 

 

 

 

Expenses from Ordinary Activities

 

13.80%

2,841,348

963,828

2.     Materials & Contracts

(2,849,739)

(4,659,812)

(18,710,746)

38.84%

1,810,073

601,112

3.     Utilities

(559,775)

(700,893)

(2,770,956)

20.13%

141,118

52,682

4.     Other Expenditure

(531,300)

(1,124,088)

(5,236,779)

52.73%

592,788

316,404

 

 

 

 

 

 

 

5.    Non-Operating Grants, Subsidies and Contributions

2,360,476

3,112,030

29,904,462

(24.15%)

(751,554)

(789,716)

 

 

 

 

 

 

 

Capital Revenue & (Expenditure)

 

28.61%

3,801,052

509,861

6.     Land & Buildings

(1,363,490)

(1,639,997)

(17,454,059)

16.86%

276,507

(52,205)

Plant & Equipment

(205,528)

(384,086)

(2,510,340)

46.49%

178,558

(25,596)

Furniture & Equipment

(101,303)

(70,755)

(461,088)

(43.17%)

(30,548)

(77,703)

Infrastructure

(2,967,147)

(7,620,541)

(35,785,600)

61.06%

4,653,394

1,780,938

7.     Proceeds from Sale of Assets

121,925

221,500

581,500

(44.95%)

(99,575)

3,018

8.     Repayment of Capital Lease

(236,974)

(130,474)

(521,900)

(81.63%)

(106,500)

(108,123)

9.     Transfer to Restricted Assets

(1,062,473)

(13,752)

(62,750)

(7625.95%)

(1,048,721)

(949,889)

10.  Transfer from Restricted Assets

45,262

0

2,747,074

100.00%

45,262

24,580

11.  Transfer from Reserves

1,421,153

1,621,005

34,768,797

(12.33%)

(199,852)

(1,625)

 


 

Revenue from Ordinary Activities

Actual income from ordinary activities for August YTD is ($303K), or (0.48%), less than YTD budget.  Although overall revenue is under YTD budget, the following YTD item is the only item that meets the material variance reporting thresholds, which is positive:

 

1.    Interest Earnings YTD of $417K actual is $76K better than YTD budget.  This represents budget timing issues as there was nothing budgeted in the July month.  It is believed that the variance will rectify as the year progresses, with possible further reductions in interest rate returns.

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $948K or 13.7% less than expected when compared to the budget YTD as at September.  The following individual expense line items on the face of the financial statement have YTD variances that meet the material reporting thresholds:

 

2.    Materials and Contracts

Better than budget by $1.8M or 38.8%. The table below lists the main variance items that meet the reporting thresholds:

Cost Code

Cost Code Description

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Change in Variance Current Month

$

Comments

Finance and Corporate Services

430,907

571,326

140,419

46,127

 

10250

Information & Communication Technology Services

272,038

334,247

62,209

67,373

Largely due to a lower than expected spend on consultants, caused by lingering delays in various projects due to COVID.  Also, a planned longer term consulting arrangement with a Tech1 specialist has been facilitated via a fixed term employment contract, rather than via consultancy fees.

10521

Human Resources & Payroll

895

28,339

27,444

3,113

Underspend due to misallocation of WALGA membership invoice, and due to other priorities, Consultants have not been utilised to date this year.

 

 

 

 

 

 

 

 

Community and Commercial Services

241,878

585,720

343,842

93,042

 

10541

Recreation Planning

 -

28,499

28,499

4,167

Timing of expenditure is largely due in Q2 & Q3 due to flora/ fauna assessment scheduling and awaiting the outcomes of external grant applications.  Budget timing will be adjusted accordingly.

10591

Geographe Leisure Centre

69,278

97,435

28,157

5,260

The Geographe Leisure Centre was closed due to COVID and upon reopening was subject to phased restrictions which limited the attendance numbers and therefore expenditure associated with our programs and services throughout July and into August and September. To date we are still limited by Phase 4 restrictions and have limited numbers in some activities affecting a slow return to business as usual and therefore planned expenditure.  Business is now picking up and we are likely to see increased expenditure over the next few months in line with budget.

10600

Busselton Jetty Tourist Park

86,100

145,254

59,155

7,284

The majority of this variance cost is the monthly management contract fee ($41,125) for the caravan park which has resulted due to a timing issue with presentation and payment of the invoice. Other expenses falling within Materials & Contracts are related to maintenance which will occur throughout the year.

 

 

 

 

 

11151

Airport Operations

37,029

150,078

113,049

15,509

The budget YTD monthly allocation for Airport Ops of $150k includes the key allocations of:

·    security screening allocations of $45k not spent

·    Contractors - $49k for water tank removal & tree clearing not completed/expended

·    Smaller variances in other cost codes (3224) not expended.

Planning and Development Services

215,901

537,833

321,932

121,369

 

10830

Environmental Management Administration

38,371

150,105

111,734

103,031

Expenditure variance due to the timing of the awarding of Revitalising Geographe Waterways and Weed Action Plan contracts.

10925

Preventative Services – CLAG

20,504

45,249

24,745

(5,421)

CLAG mosquito treatments have just commenced for the season and will soon be reflected in the accounts accordingly.

10931

Protective Burning & Firebreaks-Reserves

7,545

135,972

128,427

44,097

Q2 mitigation well underway, with all spring burns now complete. Invoices for works completed are starting to be received as of 26/10/2020.

11170

Meelup Regional Park

11,293

39,078

27,785

3,252

Reserve maintenance work and pest/weed control contracts have now commenced according to budget.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Engineering and Works Services

1,960,013

2,962,718

1,002,705

340,408

 

12600

Street & Drain Cleaning

75,291

109,434

34,143

4,493

Expenditure timing - large component of this budget provides for a program of pre-winter drainage maintenance that occurs during summer months.

12620 & 12621

Rural & Urban Tree Pruning

27,796

94,500

66,704

16,280

Expenditure timing and reduced expenditure to potentially offset May 2020 storm damage subject to DRFAWA claims.

Various

Bridges

3,337

45,303

41,966

14,277

Expenditure timing and reduced expenditure to potentially offset May 2020 storm damage subject to DRFAWA claims.

Various

Buildings

244,009

355,269

111,260

1,948

The majority of scheduled maintenance activities to Buildings occur in the second half of the financial year; hence the year to date variance to budget (which is spread evenly).

Various

Other Infrastructure Maintenance

144,486

436,812

292,326

100,313

Expenditure attributable to timing with the budget having been evenly spread across the financial year. Material & Contractor costs associated with these areas will gradually increase as year progresses.


 

Various

Waste services

263,645

667,052

403,407

158,316

The larger variances are due to delays processing significantly higher volumes of green waste (and therefor pay), due to more people being at home because of COVID impacts, plus two major storm events.  There were also delays in receiving invoices from various aspects of the recycling contractor. 

 

Additionally, we’ve got a few outstanding invoices that we haven’t paid as we are seeking a discount from the recycling Contractor, Cleanaway. Another contributing factor is that the City suspended the FOGO service due to COVID (i.e. No collection & No Processing costs), for the remainder of the financial year.

Various

Roads Maintenance

577,774

216,702

(361,072)

(41,958)

Costs are largely associated with WANDRRA storm claim from the May 2020 storm events. 3 claims have been submitted to DFES, with 1 further claim required for remaining recovery costs.

Various

Reserve Maintenance

196,839

493,743

296,904

62,384

Costs associated with Public Open Spaces are historically low to the year to date budget in the first few month of any new financial year. These costs will begin to increase as we move towards spring and the busy summer tourism peak period.


 

5280

Transport - Fleet Management

400,185

535,779

135,594

29,545

The variance in fleet is due to both delays in supplier invoicing and the reduced maintenance activities due to lower winter utilisation.  Fuel was underspent by $79,398 YTD due to delays in receiving invoices, lower fuel cost, lower plant utilisation due to winter and less light fleet use due to working from home.  Tyre purchase was underspent by $14,286 YTD, replacement parts/ tooling/contractor costs were underspent by $41,844 YTD.  Budget is spread evenly across the year, however spending is generally more cyclical in nature and peaks in the busier spring/ summer/ autumn months.

3.    Utilities

Costs are $141K under budget. At year ended 30/6 the June street lighting account was booked in June, rather than in the following month when received per normal practice.  Accruals are not done on a monthly basis, so this has the effect of causing actuals to appear to be on average $75K behind budget in relation to street lighting (until the following June, when actuals will catch up to budget).  Coupled with this there have been delays in receiving the accounts for parks & reserves from Synergy, due to system issues at their end (along with a number of other electricity accounts).  With no accruals on a monthly basis, this also causes what appears to be an under spend against the budget.  Pending resolution of the system issues at Synergy, this should largely rectify itself in coming months as the billing cycles re-align.


 

4.    Other Expenditure

$593K under the budget. The main contributing items are listed below:

Cost Code

Cost Code Description

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Change in Variance Current Month

$

Comments

Finance and Corporate Services

117,360

186,905

69,545

10,833

 

10000

Members of Council

89,110

135,418

46,308

8,307

Councillor fees and allowances are paid one month in arrears, apart from June, where there is effectively a double up to ensure the full year figures are correct per YTD budget.  The budget however is allocated to every month, causing a variance in July, which gradually resolves by June.

Community and Commercial Services

352,430

852,521

500,091

320,346

 

10530

Community & Commercial Services Administration

218,519

172,019

(46,500)

(9,357)

The CinefestOZ sponsorship amount of $80k was paid from this account in error and accounts for part of the YTD variance in addition to the annual budget allocation for events and marketing areas being incorrectly allocated over the duration of the year. The budget monthly allocations will be rectified for subsequent months following finalisation of the funding agreements and payment schedules.

10536

School Chaplaincy Programs

41,400

 -

(41,400)

(41,400)

Historically Youthcare invoices the City in the 2nd half of the year, but this year invoiced earlier than budgeted.


 

10567

CinefestOZ

 -

120,000

120,000

 -

YTD variance is due to the CinefestOZ sponsorship amount being incorrectly paid out of 10530 (a request will be made to journal funds from 10530 to this account to correct the error). Further, the sponsorship contract was varied due to change in format as a result of COVID (C2009/110) - $80k paid in 2020/21 with the balance ($38k) carried over to be paid in addition to 2021/22 MYA.

11151

Airport Operations

 -

413,825

413,825

378,553

The budget relates to the Airline Attraction program expenditure for Jetstar RPT flights. This has been COVID affected and subsequent budget timings will be adjusted.

 

5.    Non-Operating Grants, Subsidies & Contributions

The negative variance of $752K is mainly due to the items in the table below.  It should be noted that any variance in this area will approximately correlate to an offsetting variance in a capital project tied to this funding source.  This can be seen in the section below that outlines the capital expenditure variances.

Revenue Code

Revenue Code Description

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Change in Variance Current Month

$

Planning and Development Services

10,592

(17,223)

27,815

27,815

B1025

Yallingup Coastal Bushfire Brigade – Donated Assets

10,592

 -

10,592

10,592

B9109

Hithergreen Building Renovations – State Capital Grant

 -

(17,223)

17,223

17,223

Engineering and Works Services

2,349,884

3,125,253

(775,369)

(2,985,253)

B9407

Busselton Senior Citizens – Developer Cont. Utilised

233,458

162,479

70,979

(162,479)

B9591

Performing Arts Convention Centre – Developer Cont. Utilised

 -

1,000,000

(1,000,000)

(1,000,000)

C0059

Dunsborough Yacht Club Carpark – Developer Cont.

60,000

 -

60,000

 -

C3186

Lou Weston Oval Courts - Developer Cont. Utilised

100,000

 -

100,000

100,000

F1022

Buayanyup Drain Shared Path – State Capital Grant

 -

80,001

(80,001)

(80,001)

S0005

Ludlow Hithergreen Road Second Coat Seal – MR Capital Grant

180,000

112,500

67,500

(112,500)


 

S0048

Bussell Highway - Developer Cont. Utilised

200,000

125,001

74,999

(125,001)

S0073

Gale Road Rural Reconstruction – Federal Capital Grant

379,616

343,122

36,494

(343,122)

S0075

Local Road and Community Infrastructure Program – Federal Capital Grant

480,935

240,468

240,467

(240,468)

T0020

Capel Tutunup Road – RTR Capital Grant

 -

356,682

(356,682)

(356,682)

 

6.    Capital Expenditure

As at 30 September 2020, there is an underspend variance of 52.27% or $5.1M in total capital expenditure, with YTD actual at $4.6M against the YTD amended budget of $9.7M.  Almost all of this positive underspend variance is offset by the negative variance in Non-operating Grants, Contributions & Subsidies discussed above, plus negative variances in Transfers From Reserves related to funds held aside for these projects.  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

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Change in Variance Current Month

$

Comments

Buildings

1,351,390

1,614,997

263,607

(65,105)

 

B9516

Busselton Library Upgrade

249,722

301,000

51,278

11,460

Project was underspent due to mid-June 2020 contract award which occurred later than expected.  Works have been completed in October.

B9407

Busselton Senior Citizens

590,823

549,925

(40,898)

(169,858)

Works completed in September 2020, however the budget was spread over a longer period.

B9591

Performing Arts Convention Centre

422,764

495,838

73,075

58,278

Regional Growth Fund milestones are under review pending funding extension confirmation.  Design contract program extension pending.  Budgeted cash flow is under review on this basis.

B9596

GLC Building Improvements

2,564

122,913

120,349

40,771

Carried over works from the prior year.  Works scheduled to be completed in November 2020.

B9606

King Street Toilets

48,382

11,508

(36,874)

(37,187)

Works completed, however budget has been spread over a longer time period.

B9607

General Buildings Asset Renewal Allocation (Various Building)

5,033

37,500

32,467

7,590

Delays in commencement of numerous jobs caused by COVID and inclement weather. Largely on-track per budget in the ensuing months.

Plant & Equipment

205,528

384,086

178,558

(25,596)

 

10810

Statutory Planning

 -

35,000

35,000

 -

Vehicle not yet ordered – awaiting confirmation of government pricing.  Delays in delivery are due to the high demand currently being experienced by dealers due to the government’s stimulus package in concurrence with supply chain restrictions due to COVID.

10920

Environmental Health Services Administration

 -

35,000

35,000

35,000

Vehicle ordered, not yet delivered.  Reasoning per above.

11156

Airport Development Operations

166,365

70,776

(95,589)

(142,773)

$38K Vehicle ordered – due to be delivered late October/early November. Costs to transfer siren/lights etc. still to come.  Delays due to not being able to discuss changeover issues with the Airport team in order to amend configuration if necessary.  The remaining variance relates to baggage handling equipment installation which has not been fully completed due to COVID related travel restrictions.

11402

Plant Purchases (P10)

 -

40,000

40,000

 -

Generators at DWF pond & cell – not yet replaced.  Site and operations under review.

11403

Plant Purchases (P11)

 -

77,500

77,500

72,500

One vehicle ordered, not yet delivered – reasoning similar to above. One vehicle not yet ordered.

11500

Operations Services Administration

 -

40,000

40,000

 -

Vehicle ordered, not yet delivered – reasoning similar to above.


Furniture & Office Equipment

101,303

70,755

(30,548)

(77,703)

 

10250

Information & Communication Technology Services

101,303

47,755

(53,548)

(80,703)

There was a mis-posting of consulting fees of $86K.  This has been corrected in October.  The variance would have been positive $32K, for the following reason: Alternative solution found for the Fully Qualified Domain Name project that resulted in a lower spend up front, the capital assigned will now include a migration to Exchange Online which was always an option within the initial project. Expect the costs to be drawn in Q4 2020.

Infrastructure By Class

2,967,147

7,620,541

4,653,394

1,780,938

In the first quarter of the financial year a majority of Projects are in the planning and design phase and as such minimal actual expenditure is recorded against them. Further to this Capital Projects with Civil works are commonly scheduled to be carried out later; in the drier summer construction season. The Capital works budgets have been entered based on an even spread method and approach, not on a scheduled timing of works basis.

 

Roads

1,318,999

4,513,255

3,194,256

1,081,040

 

Bridges

34

429,999

429,965

143,333

 

Car Parks

344,556

499,689

155,133

63,697

 

Footpaths & Cycleways

29,470

335,455

305,985

121,124

 

Parks, Gardens & Reserves

1,234,209

1,709,379

475,170

364,207

 

Drainage

 -

35,219

35,219

6,725

 

Regional Airport & Industrial Park Infrastructure

39,879

97,545

57,666

812

 


 

7.    Proceeds From Sale of Assets

YTD proceeds from sale of assets is $103K behind budget due to delays in delivery of acquisitions.  Also, potential income from sales proceeds have been hampered by the pandemic. Aside from a significantly reduced capital replacement program in both light vehicles and heavy plant items, the existing ones that were due to be replaced have been retained in service to maintain operational requirements.

 

8.    Repayment of Capital Lease

Budget was imported quarterly effective July, October, January & April, but actuals processed so far are in July and September and based on that the final two payments are anticipated in December and March, hence budget variance is a timing difference at this time.

 

9.    Transfer to Restricted Assets

There is a YTD variance in transfers to restricted assets of $1.048M more than amended budget. Grant funding received from Federal Government for “Drought Communities Program” of $500k (attributable to CC C3223 Dunsborough Non-Potable Water Network). The funding was received in September whereas budget projected allocation was in June. It was anticipated that the expenditure would be incurred in June, hence the funding timing projections followed.

 

Developer contributions and bonds are inherently hard to predict and budget for.  An annual amount of $50K spread evenly over 12 months was budgeted, however, over $557K has been received YTD September the bulk of which are for road works bonds ($487k).  Also contributing to the variance is $49K in caravan park deposits that is not budgeted for.

 

10.  Transfer from Reserves

There is a YTD variance in Transfers from Reserves of $200K less than amended budget.  The following planned expenditures, funded from reserves, had not yet occurred by the end of September:

§  $41K contribution for the tourist bureau, which has been recouped in October;

§  $15K for the purchase of a Mule for the Busselton Jetty;

§  $20K for purchase of furniture and equipment for the GLC;

§  $76K for purchase of four items of plant and equipment;

§  $11.7K relating to a transfer from the Long Service Leave reserve upon retirement of a long serving employee; and

§  $36K relating to the purchase of generators for waste services.

 

Once these purchases have been made, a subsequent recoup will be processed.

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 September 2020, the value of the City’s invested funds totalled $89.29M, up from $74.79M as at 31 August 2020. The increase is due to the receipt of the first instalments of the annual rating period.


 

The balance of the 11am account (an intermediary account which offers immediate access to the funds compared to the term deposits and a higher rate of return compared to the cheque account) decreased by $11.5M with the funds being converted to Term Deposits during September to increase investment return.

 

The existing 11AM account was closed due a drop in interest rate from 0.2% to 0.05%.  A new 11AM account opened with an interest rate of 0.1%.

 

During the month of September three term deposits totalling the amount of $12.0M matured. Existing deposits were renewed for a further 140 days at 0.76% on average.

The official cash rate in September remains steady at 0.25%. The cash rate is expected to drop with in the near future.  This will have a strong impact on the City’s interest earnings for the foreseeable future.

Chief Executive Officer – Corporate Credit Card

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

 

Date

$ Amount

Payee

Description

3/09/2020

127.50

THE GOOD EGG CAFE BUSSELTON

CITY OF PERTH FINDINGS SEMINAR

11/09/2020

230.53

CROWN METROPOL PERTH BURSWOOD

ACCOMMODATION

18/09/2020

24.50

SANCTUARY GOLF RESORT BUNBURY

CEO MEETING - SEND OFF MEAL

 

382.53

 

 

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

Budget timings remain affected by COVID impacts and are gradually being re-aligned. As at 30 September 2020, the City’s net current position stands at $45.1M.  The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

32

11 November 2020

6.2

Attachment a

Investment Report September 2020

 


Finance Committee

49

11 November 2020

6.2

Attachment b

Financial Activity Statement September 2020

 


















 


Finance Committee                                                             51                                                          11 November 2020

7.               General Discussion Items

 

8.               Next Meeting Date

 

9.               Closure