Agenda of Finance Committee - Wednesday, 14 April 2021

Finance Committee 20 14 April 2021

6.2 FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 28 FEBRUARY 2021

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 budgets, strategies, plans and policies (excluding local planning policies); funding, donations and sponsorships; reviewing committee recommendations
VOTING REQUIREMENT	Simple Majority
ATTACHMENTS	Attachment a Financial Activity Statement - YTD February 2021 ⇩ Attachment b Investment Report - February 2021 ⇩

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 28 February 2021, 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 28 February 2021.

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 28 February 2021

The Statement of Financial Activity (FAS) for the year to date (YTD) as at 28 February 2021 shows an overall Net Current Position of $18.3M as opposed to the budget of $10.6M. This represents a positive variance of $7.7M YTD. This variance increased by $2.2M from $5.4M at the end of January.

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				*1.28%*	*893,638*	*259,761*
1. Other Revenue	370,754	239,832	424,730	54.59%	130,922	984

Expenses from Ordinary Activities				*7.54%*	*4,011,343*	*551,842*
2. Materials & Contracts	(8,649,313)	(11,652,730)	(18,067,582)	25.77%	3,003,417	693,606
3. Other Expenditure	(2,656,187)	(5,236,779)	41.73%	1,108,526	45,559	(2,656,187)

4. Non-Operating Grants, Subsidies and Contributions	4,207,926	8,588,286	34,437,199	(51.00%)	(4,380,360)	(677,275)

Capital Revenue & (Expenditure)				*14.12%*	*4,283,544*	*1,411,572*
5. Land & Buildings	(2,899,541)	(3,677,100)	(17,454,059)	21.15%	777,559	(131,693)
Plant & Equipment	(888,978)	(2,364,896)	(2,510,340)	62.41%	1,475,918	318,839
Furniture & Equipment	(221,420)	(443,088)	(461,088)	50.03%	221,668	(19,760)
Infrastructure	(11,126,065)	(22,286,516)	(40,004,996)	50.08%	11,160,451	1,665,453
6. Proceeds from Sale of Assets	218,394	581,500	581,500	(62.44%)	(363,106)	41,753
7. Proceeds from New Loans	0	7,700,000	7,700,000	(100.00%)	(7,700,000)	0
8. Repayment of Capital Lease	(336,646)	(391,424)	(521,900)	13.99%	54,778	(17,494)
9. Advances to Community Groups	0	(200,000)	(200,000)	100.00%	200,000	0
10. Transfer to Restricted Assets	(3,202,294)	(36,672)	(62,750)	(8632.26%)	(3,165,622)	(536,463)
11. Transfer from Restricted Assets	1,570,221	100,000	2,807,074	1470.22%	1,470,221	(54,205)

Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is $894K, or 1.28%, ahead of budget YTD. The only material variance item contributing to this is:

1. Other Revenue

Ahead of YTD budget by $131K, or 54.59%, mainly due to the items listed in the table below:

Revenue Code	Revenue Code Description	Actual YTD $	Amended Budget YTD $	Variance YTD $	Variance YTD %	Change in Variance Current Month $
Community and Commercial Services		*31,283*	*4,280*	*27,003*	*630.90%*	*(4,369)*
10591	Geographe Leisure Centre – LSL Contributions from other LG’s	18,132	-	18,132	100.00%	-
Long Service Leave entitlements accrued can be transferred between local governments. This receipt was budgeted for in June, however it was received earlier than expected.
10625	Art Geo Administration – Sale of Artworks	9,236	-	9,236	100.00%	(5,536)
The distribution of the proceeds of artwork sales on behalf of the artists is done in the month following the sales after the monthly reconciliation process.
Planning and Development Services		*171,077*	*93,832*	*77,245*	*82.32%*	*3,559*
10925	Preventative Services – CLAG – Sundry Income	77,297	2,720	74,577	2741.81%	(326)
Due to the much earlier and more significant onset of the Ross River Virus threat, extra chemical applications were required. Permission was received from the Department of Health to draw extra trust funds for these purposes.
10970	Parking Control – Parking Fines & Costs	26,562	40,000	(13,438)	(33.59%)	(1,096)
Budgeting for this is always done on a simple historical trend basis, and is never a targeted revenue source. It is down on budget due to the enforcement team being temporarily understaffed.
Engineering and Works Services		*140,967*	*116,734*	*24,233*	*20.76%*	*697*
11107	Engineering Services Design – LSL Contributions from other LG’s	14,475	-	14,475	100.00%	-
Long Service Leave entitlements accrued can be transferred between local governments. At the time of budgeting, it was not known that the City would be employing a person for whom a LSL entitlement would be transferred.
12642	NCC Standpipe – Sale of Water	2,470	16,664	(14,195)	(85.18%)	(2,083)
The consumption and associated sale of water from this facility has not been as high as originally forecast.
G0030	Busselton Transfer Station – Sale of Scrap Materials	80,615	59,072	21,543	36.47%	535
There was an initial spike in sales compared to the timing of the budget, and better than predicted prices received for scrap metal. However, it is predicted this will slow somewhat as the financial year progresses.

Expenses from Ordinary Activities

Expenditure from ordinary activities is $4M, or 7.54%, less than expected when compared to the budget YTD as at February. 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 $3M, or 25.77%. The table below lists the main items contributing to this variance:

Cost Code	Cost Code Description	Actual YTD $	Amended Budget YTD $	Variance YTD $	Variance YTD %	Change in Variance Current Month $
Finance and Corporate Services		*1,520,066*	*1,584,638*	*64,572*	*4.1%*	*42,310*
10151	Rates Administration	168,425	217,271	48,846	22.5%	5,805
The variance is predominantly due to the under spend in consultancy. This budget was for the Rating Review Project, funded by reserves. The project has been delayed due to resourcing issues in the Rates team, plus communications with the Minister regarding rates reviews that have changed the scope of the project. Unspent funds will remain carried forward in the reserve to fund the revised project.
10200	Financial Services	35,924	54,510	18,586	34.1%	4,715
Due mainly to a reduction in bank fees that were budgeted at a higher amount, plus none of the consultancy budget has been used YTD. This will potentially be used later in the financial year in relation to adoption of new accounting standards, plus updates to the Long Term Financial Plan model.
10250	Information & Communication Technology Services	952,949	887,522	(65,427)	(7.4%)	43,389
· Software licences – The City’s licences are on track to go over budget this year with the addition of some unplanned software; this should be balanced elsewhere. The payment curve for this is not smooth and the City has recently paid some large invoices including T1. · Photocopying – As mentioned in Customer Service below, the printer costs are routing through this account hence the budget overspend. · GIS costs – It was planned to use a new image provider at a reduced cost, unfortunately they could not provide what was agreed upon and the City continues to use Landgate. This will be adjusted for next budget.
10360	Customer Services	16,304	31,688	15,384	48.5%	1,894
· Photocopying – The Finance team going paperless has had a significant impact on the City’s paper spend, especially for coloured paper. In addition, an arrangement has been made with the Executive Assistants for auditing of the stationery supplies in their departments, so ordering has more closely aligned to needs rather than maintaining large stores. · Computer Consumables – Historically, printer cartridges etc. came from this bucket. With the adoption of more printers using a full supply contract this account is not being utilised. The City still orders some cartridges manually but the number is heavily reduced. This will be reviewed during the upcoming budget considerations for 21/22 to get a better idea of actual spend.
10500	Legal & Compliance Services	88,764	40,920	(47,844)	(116.9%)	(19,767)
Greater than expected spend of external legal representation (largely due to increase in prosecutions/compliance action plus a Supreme Court matter). It was acknowledged when the legal budget was set last year that a transfer from the legal reserve may be required.
10521	Human Resources & Payroll	21,121	43,904	22,783	51.9%	2,416
The variance is timing related, with consultancy funds related to the organisational staff survey yet to be expended. Procurement is currently in progress with expenses expected to be incurred by April 2021.
10616, 10617 & 10618	Aged Housing	49,523	94,408	44,885	47.5%	3,296
Lower than expected maintenance costs to the end of the reporting period. Less reactive maintenance for FY to date.
Community and Commercial Services		*784,469*	*1,534,019*	*749,550*	*48.9%*	*233,299*
10380	Busselton Library	38,083	78,759	40,676	51.6%	(1,331)
· Furniture & Office Equipment - The purchase of new furniture and office equipment (under the capitalisation threshold) has been delayed due to the new renovations and subsequent requirement for furniture and fit-out of the new children’s area. Increased expenditure will occur over the next few months in line with budget. · Library Resources - Spending on Library Resources was delayed whilst tenders were sought for a new “buy local” initiative. A significant number of purchase orders have been raised since November, with items due to be received over the next few months. · Entity Specific Consumables – The coffee machine has been disposed of, which means that there will be no expenditure, and no offset income. · Photocopying – Currently investigating zero expenditure. It appears photocopy paper is not being correctly costed to the library budget before being issued from central stores. This will be rectified in consultation with Customer Service Team.
10381	Dunsborough Library	14,914	25,004	10,090	40.4%	(92)
· Contractors – Carpet cleaning has been rescheduled to occur in March/April 2021. · Other Computer costs - $1,800 networking costs no longer required. · Photocopying – see Busselton explanation. · Library Resources – see Busselton explanation.
10540	Recreation Administration	8,994	34,214	25,220	73.7%	3,378
The City’s application to the State Government for the 2021 & 2022 Every Club grants was successful. As of 28 February, the City is still awaiting the grant deeds which will stipulate conditions/details of grants. It is envisaged that this budget will be spent by year’s end.
10541	Recreation Planning	1,030	89,333	88,303	98.8%	8,333
Timing of expenditure was awaiting the outcomes of external grant applications. As of 28 February, grant deeds have now been finalised; and the scope and quote with preferred consultant is being finalised. The expected expenditure is now due in Q4.
10590	Naturaliste Community Centre	36,079	70,490	34,411	48.8%	630
The Naturaliste Community Centre was closed due to COVID-19 and, upon reopening, was subject to phased restrictions which limited the attendance numbers and therefore expenditure associated with City programs and services throughout the first two quarters. To date, the City is 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 the City is likely to see increased expenditure over the next few months in line with budget.
10591	Geographe Leisure Centre	188,001	258,486	70,485	27.3%	7,419
This is the same as the factors listed above for the NCC.
10600	Busselton Jetty Tourist Park	268,990	387,344	118,354	30.6%	37,300
The variance can be attributed to two outstanding monthly management fee invoices ($41,125 – runs one month in arrears), due to presentation and payment of the invoice. Other expenditure that has not occurred falling within Materials & Contracts are related to non-scheduled maintenance, garden maintenance, purchase of materials, and savings in cleaning materials and disposal of waste fees.

10630	Economic and Business Development Administration	12,716	66,591	53,875	80.9%	6,027
The budget is made up of numerous line items that have been spread throughout the year. The actual timing for these things are inherently difficult to predict, as more often than not they depend on interactions with outside third parties for development opportunities and collaborations. For example, the City budgets for advertising and marketing, but need to wait for relevant opportunities to arise throughout the year that may not necessarily align with budget timing.
10980	Other Law, Order & Public Safety	-	149,792	149,792	100.0%	149,792
Payment to Surf Lifesaving WA delayed. As at 28 February, awaiting signed Deed of Service. Expected expenditure is now due in Q4.
11151	Airport Operations	97,217	232,413	135,196	58.2%	9,541
The budget variance YTD includes the key allocations of: · security screening of $45K not spent; · contractors - $44K for tree clearing not completed/expended; · the remainder of the variance relates to commitments for: o car park design, line marking, repairs and maintenance of approximately $24K; o runway line marking and turn pad design of approximately $8K; o airside fencing and apron lighting repairs of approximately $4K; and o general grounds maintenance and improvements of approximately $10K.
B1361	YCAB (Youth Precinct Foreshore)	22,321	37,912	15,591	41.1%	(96)
Operating grants forecast were not available as planned and therefore associated expenses did not occur. Alternative funding was sourced to run a program in Dunsborough which commenced in February, when expenses to deliver will start to be seen.
Planning and Development Services		*732,363*	*1,333,839*	*601,476*	*45.1%*	*96,404*
10820	Strategic Planning	129,693	161,616	31,923	19.8%	20,202
Estimated revenues (re-zonings, structure plans) and anticipated consultant contracts (for specialised works seen as likely to be needed for scheduled City projects) are often quite difficult to predict as they are subject to third-party intentions and initiatives, or competing demands and task allocation/prioritisation at the City.
10830	Environmental Management Administration	223,685	337,430	113,745	33.7%	(9,601)
Expenditure variance due to: · Timing of Barnard Park East management plans contract, due April 2021, pending completion of upgrade works; · Lower Vasse River sediment removal and groundwater investigations were delayed, now due May 2021; · Carbunup reserve contaminated site investigations due May 2021.
10920	Environmental Health Services Administration	839	26,115	25,276	96.8%	110
YTD budget includes error of $5,000 extra within 3280 (Contractors), Contractor allocation of $5,000 to implement audit outcomes now completed in house. Traditional pre-summer assessment of sound level meters revealed little to no faults requiring repair due to 2020 COVID event cancellations.
10922	Preventative Services – Mosquitoes	18,774	31,917	13,143	41.2%	12,221
$5K allocated to consultancy was meant to be for a review of the City’s Mosquito Strategy, however this was completed in house. This money will now not be utilised this financial year. There is also an $8K underspend in chemicals, however this may be due to a calculation and reconciliation error in relation to trust and reserve funds able to be utilised. This is being investigated and may be rectified in March/April.
10925	Preventative Services – CLAG	119,098	57,664	(61,434)	(106.5%)	83
Due to the much earlier and more significant onset of the Ross River Virus threat, extra chemical applications, transport, etc were required. Permission was received from the Department of Health to draw extra trust funds for these purposes (see positive variance in Other Income section above). Full reconciliation of the CLAG budget will occur by the end of the financial year.
10931	Protective Burning & Firebreaks –Reserves	37,016	362,592	325,576	89.8%	43,934
Mitigation work is heavily weather reliant. Grant funding is provided by State government in a lump sum payment and is not reflective of timing on mitigation expenditure. Implementation of mechanical and chemical programs across the approved grant application treatments commence at the beginning of May. Outstanding payments to Brigades for burning completed in spring has not been made to reflect in YTD; purchase orders have been processed and are outstanding as commitments.
11170	Meelup Regional Park	53,634	117,397	63,763	54.3%	4,487
Expenditure variance due to timing of awarding cultural heritage assessment contract as part of the Meelup Regional Park Management Plan review. This was budgeted to occur in November, but is now planned for mid-March 2021, due to initial request for services not attracting a suitable service provider.
B1010-B1028	Bushfire Brigades – Various	66,990	101,712	34,722	34.1%	11,903
Emergency operations dependant. YTD will vary according to operational requirements.
Engineering and Works Services		*5,610,770*	*7,194,994*	*1,584,224*	*22.0%*	*321,214*
12600	Street & Drain Cleaning	179,127	291,824	112,697	38.6%	17,717
YTD expenditure for these services are tracking at a lower rate than in previous financial years. The majority of drain abduction works will commence prior to the rainy season in the last quarter of the financial year to ensure drains are free of debris to mitigate against flooding. There is also $243K in committed costs associated with future planned and scheduled maintenance of this type. This budget will be fully expended by 30 June.
12620 & 12621	Rural & Urban Tree Pruning	98,885	252,000	153,115	60.8%	18,247
Expenditure for pruning and the removal of dead trees and debris was being withheld to the value of $247K to help offset storm damage clean-up costs incurred in relation to the May 2020 storm. A total of $403K in Contractor based clean-up costs were incurred post 30 June with these costs coded against the individual roads impacted. In February, it was confirmed that the City had secured storm claim reimbursement revenue, thus this budget is now available to be utilised. Contractor availability will now determine if the backlog of works can be completed by 30 June. It is anticipated that all of the annual budget will be utilised.
Various	Bridge Maintenance	18,514	120,808	102,294	84.7%	12,153
Expenditure on Bridge Maintenance activities was also withheld to the value of $105K to help offset May 2020 storm damage related costs. Now that it has been confirmed that the City will secure reimbursement for storm damage, this budget has been reinstated. Contractor availability will now determine if works temporarily put on hold can be completed by 30 June. There are $95K in commitments that represent planned works or works that are currently in the process of being completed.
Various	Building Maintenance	879,527	947,384	67,857	7.2%	(17,319)
The year to date variance associated with Building Maintenance decreased by $17K in February from January. Scheduled maintenance activities on buildings primarily occur in the second half of the financial year outside of peak periods to minimise the impact to users of those facilities. Hence the year to date variance to budget will continue to trend lower to 30 June.
Various	Other Infrastructure Maintenance	719,802	1,170,994	451,192	38.5%	46,494
This category encompasses the consolidation of 84 separate and unique services delivered broadly across the City. It includes things like: event support; boat ramp maintenance; cemetery maintenance; maintenance at the Libraries and GLC; caravan park maintenance; street lighting installation; the foreshores; the CBD’s; cycleways and footpaths, etc. The $451K expenditure variances for February is mostly attributable to timing with the budget having been evenly spread across the financial year. There is also $453K in committed costs that represents works currently being undertaken or works yet to be invoiced. Material & Contractor costs associated with the majority of these areas is forecast to increase closer to the end of the financial year.

Various	Waste Services	1,259,417	1,770,472	511,055	28.9%	92,432
The YTD under expenditure to budget for Waste Services Consolidated is attributable to many factors including the following: · $63K favourable variance associated with the processing of the Green Waste stockpiles. This will occur prior to 30 June based on contractor availability. A Request for Quotation (RFQ) has been issued. · $49K favourable variance associated with the postponement of the FOGO trail. These funds will be retained in the Waste Reserve. · $73K favourable variance associated with contamination site costs where at the time of budget preparation annual costs were unknown; investigations are ongoing. · Approximatley $80K in relation to the timing and processing of the monthly recycle (yellow top) bin invoices i.e. the February service costs will be processed into March. · Approximately $20K in relation to the timing and processing of the monthly Cleanaway General Waste disposal invoice. The February service costs will be processed into March.
Various	Roads Maintenance	678,278	220,312	(457,966)	(207.9%)	39,946
The higher than normal costs are largely associated with storm damage clean-up costs stemming from the May 2020 storm events, where there has been $403K in extraordinary Material & Contractor costs incurred against Road Maintenance. In February, the City was notified that it will be in receipt of reimbursements that effectively cover and offset against this overspend. The Road Maintenance budget is being carefully managed exclusive of storm-related costs that have been reimbursed.
Various	Reserve Maintenance	866,275	1,202,029	335,755	27.9%	38,342
Materials & Contracts costs associated with Public Open Spaces are historically lower in the cooler first months of the financial year – July through to September - with expenditure patterns starting to increase through October to December then spiking through January to April before beginning to moderate lower again after the Easter public holidays. Going against the trend, actual costs incurred in February totalled $127K against a monthly budget of $149K further adding to the favourable position. Included in the YTD variance is a one-off non-cash stock adjustment made against Materials & Contracts reducing expenditure against budget by $106K. Of note, there is $355K of committed costs representing planned expenditure to occur in future periods – this will significantly reduce the underspend variance.
5280	Transport - Fleet Management	895,481	1,197,507	302,026	25.2%	53,264
Fuel was underspent by $175,517 YTD due to delays in processing invoices due to fleet staff absences, lower fuel cost and lower vehicle utilisation. Tyre purchase was underspent by $1,612 YTD, replacement parts/tooling/contractor costs were underspent by $128,121 YTD due to supplier delays in processing invoices. 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. Other Expenditure

$1.1M, or 41.7%, under the budget YTD. The main contributing items are listed below:

Cost Code	Cost Code Description	Actual YTD $	Amended Budget YTD $	Variance YTD $	Variance YTD %	Change in Variance Current Month $
*Executive Services*		*49,612*	*76,976*	*27,364*	*35.5%*	*7,257*
10001	Office of the CEO	49,356	76,976	27,620	35.9%	7,513
Underspends exist in the donations contributions and subsidies budget ($8K), CapeROC budget ($6K) and the CEO Discretionary Budget ($13K).
*Finance and Corporate Services*		*509,287*	*620,176*	*110,889*	*17.9%*	*16,294*
10000	Members of Council	304,733	364,060	59,327	16.3%	7,597
Timing variances exist in relation to the payment of elected member allowances and reimbursements. The bulk of this ($30K) is related to timing variances in payment of sitting fees. The remainder is related to underspends in the elected members training budget ($14K), no expenditure against the Council holding account ($8K), and timing variances for expense reimbursements which are difficult to predict when budgeting.
10700	Public Relations	46,853	77,816	30,963	39.8%	7,989
The underspend variance is related to a reduced payment to BASSCA this year given COVID-19 and no school exchanges, the cancelling of the Mayoral Breakfast and a reduced spend associated with functions such as the launch of Jetstar flights.
*Community and Commercial Services*		*751,834*	*1,651,836*	*900,002*	*54.5%*	*19,069*
10530	Community Services Administration	367,475	476,254	108,780	22.8%	(17,324)
Invoices from Royal Lifesaving have not yet been received for services rendered YTD.
10532	BPACC Operations	11,668	35,000	23,332	66.7%	5,000
Low cost marketing materials have been developed to date and until construction is secured under the tender no large investments in event attraction are likely to be made.
10547	Iron Man	-	200,000	200,000	100.0%	-
Ironman has been cancelled for this year and hence the funds will not be expended. Council have resolved (C2012/159 – 9 December 2020) to utilise the remaining budget towards an electronic billboard, however this will not likely be completed until closer to the end of the financial year.
10550	Forrest Rally	-	12,500	12,500	100.0%	12,500
Forrest Rally organisers have advised that the event will not be proceeding from 2020/2021 onwards, therefore these funds will not be expended.
10567	CinefestOZ	80,000	120,000	40,000	33.3%	-
YTD variance is due to the sponsorship contract being varied due to a 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 Market Yield Adjustment.
10625	Art Geo Administration	3,294	18,676	15,382	82.4%	128
Underspend is offset by additional wages due to in house production of marketing, promotional and interpretation work.
10591	Geographe Leisure Centre	19,599	29,852	10,253	34.3%	3,194
The underspend variance is a combination of delayed advertising promotions for membership sales due to COVID and the delay in invoices being processed against purchase orders raised late last year for adverts. As of February, there was $9K committed, pending invoices, with the remaining budget to be utilised towards the EOFY.

10630	Economic and Business Development Administration	2,440	21,035	18,595	88.4%	1,932
The budget is made up of numerous line items that have been spread throughout the year. The actual timing for these things are inherently difficult to predict, including valuations as more often than not they depend on interactions with outside third parties for development opportunities and collaborations. For example, the City budgets for marketing and promotions, but need to wait for relevant opportunities to arise throughout the year that may not necessarily align with budget timing. It should be noted that a large portion of the total annual budget ($55K) relates to cruise ship visitor servicing ($38K), which due to the effects of COVID-19 is unlikely to be spent by the end of the financial year.
10634	Business Support Program	61,022	71,264	10,242	14.4%	(3,592)
There are a number of grants that are being finalised by applicants. Once these have been completed, then the City will pay out the grant funds. There is also an amount of $19K that has not been allocated from the total annual budget that will be reflected in the YTD variance.
11151	Airport Operations	76	414,085	414,009	100.0%	52
Relates to marketing activities for RPT services which have not commenced due to COVID.
*Planning and Development Services*		*137,028*	*130,107*	*(6,921)*	*(5.3%)*	*(22,250)*
10805	Planning Administration	29,148	40,000	10,852	27.1%	5,000
This variance relates to the façade refurbishment program which is not likely to have any additional projects / work costed to it this financial year as the City has not run the program as per normal because of unusually high workloads caused by the building stimulus.
10931	Protective Burning & Firebreaks-Reserves	1,550	11,720	10,170	86.8%	1,465
Due to the limited seasonal burning opportunities, the budget for catering for the crews has not been spent as expected YTD.
10942	Bushfire Risk Management Planning – DFES	23,466	-	(23,466)	(100.0%)	-
This represents repayment of unspent 19/20 BRMP grant funds.
*Engineering and Works Services*		*99,899*	*177,092*	*77,193*	*43.6%*	*2,983*
B1223	Micro Brewery - Public Ablution	60,000	120,000	60,000	50.0%	-
The City’s fund contribution to the construction of these ablutions is due to be paid upon receipt of invoice from the company. Final inspection of the toilet facilities is expected in late March, after which the invoice should be forthcoming.
G0042	BTS External Restoration Works	17,696	33,336	15,640	46.9%	4,033
Awaiting the latest invoice(s) associated with the latest round of groundwater sampling.

5. Non-Operating Grants, Subsidies & Contributions

The negative variance of $4.4M is mainly due to the items in the table below. It should be noted that apart from the first two items in the table (the Locke Estate Contributions variance is due to COVID hardship deferral relief), any negative variance in this area will approximately correlate to an offsetting variance in a capital project tied to these funding sources. This can be seen in the section below that outlines the capital expenditure variances. The positive variances generally relate to budget timing, i.e. the funds are usually brought to account during the end of financial year reconciliation process, so hence are budgeted in June.

Revenue Code	Revenue Code Description	Actual YTD $	Amended Budget YTD $	Variance YTD $	Variance YTD %	Change in Variance Current Month $
*Finance and Corporate Services*		*46,678*	*56,000*	*(9,322)*	*(16.6%)*	*10,678*
R0288	Locke Estate – Leaseholder Contributions	46,678	56,000	(9,322)	(16.6%)	10,678
*Community and Commercial Services*		-	*38,851*	*(38,851)*	(100.0%)	*(38,851)*
C6025	Installation of Bird Netting – State Capital Grant	-	38,851	(38,851)	(100.0%)	(38,851)
*Planning and Development Services*		*10,592*	-	*10,592*	*100.0%*	-
B1025	Yallingup Coastal Bushfire Brigade – Donated Assets	10,592	-	10,592	100.0%	-
*Engineering and Works Services*		*4,150,656*	*8,493,435*	*(4,342,779)*	*(51.1%)*	*(649,102)*
A0025	Tuart Drive Bridge 0238 – Federal Capital Grant	-	170,330	(170,330)	(100.0%)	-
B9407	Busselton Senior Citizens – Developer Cont. Utilised	595,306	162,479	432,827	266.4%	-
B9591	Performing Arts Convention Centre – Developer Cont. Utilised	-	3,000,000	(3,000,000)	(100.0%)	-
C0059	Dunsborough Yacht Club Carpark – Developer Cont.	60,000	-	60,000	100.0%	-
C1026	Townscape Works Dunsborough – State Capital Grant	10,000	-	10,000	100.0%	-
C3116	Dawson Park (McIntyre St POS) – Developer Cont.	-	77,467	(77,467)	(100.0%)	-
F1002	Dual Use Path - Dunsborough to Busselton – State Capital Grant	64,000	-	64,000	100.0%	-
F1022	Buayanyup Drain Shared Path – State Capital Grant	-	213,336	(213,336)	(100.0%)	(26,667)
S0005	Ludlow Hithergreen Road - Second Coat Seal – Main Roads Capital Grant	180,000	300,000	(120,000)	(40.0%)	(37,500)
S0048	Bussell Highway – Developer Cont. Utilised	200,000	333,336	(133,336)	(40.0%)	(41,667)
S0070	Peel & Queen Street Roundabout Service Relocation – Developer Cont. Utilised	120,000	550,000	(430,000)	(78.2%)	(310,000)

Date	Payee	Description	$ Amount
1/02/2021	PEARLE OF CABLE BEACH -ACCOMODATION DEPOSIT	RCAWA MEETING BROOME- 17-20 JUNE 21 - MIKE ARCHER	790.21
4/02/2021	VIRGIN AUSTRALIA	FLIGHT TO BROOME - RCAWA JUNE -GRANT HENLEY	3.22
4/02/2021	VIRGIN AUSTRALIA	FLIGHT TO BROOME -RCAWA JUNE -GRANT HENLEY	314.00
4/02/2021	PEARLE OF CABLE BEACH - ACCOMODATION DEPOSIT	RCAWA MEETING BROOME -17-19 JUNE 21 - GRANT HENLEY	634.59
11/02/2021	WESTERN GROWERS	ELECTORS MEETING 8/02/21 - CATERING	495.00
15/02/2021	THAI LEMONGRASS	DINNER - COUNCIL MEETING 10/02/21	400.00
19/02/2021	DUXTON HOTEL	ACCOMMODATION MIKE ARCHER - RCAWA MEETING- PERTH 18/02/21	238.00
19/02/2021	W CHURCHILL PERTH	RCAWA MEETING 18/02/21 - MIKE ARCHER -FOOD & BEVERAGE	52.00
22/02/2021	THE FLOWER PLACE BUSSELTON	FOR EXCELLENT PRESENTATION OF 150 YEARS LOCAL GOVT IN WA EVENT	100.00
23/02/2021	AUST INST.COMPANY DIRECTORS	*RENEWAL OF MEMBERSHIP – MIKE ARCHER	605.00
			3,632.02

Finance Committee 53 14 April 2021

6.3 ADOPTION OF THE 2021/22 LIST OF FEES AND CHARGES

STRATEGIC GOAL	6. LEADERSHIP Visionary, collaborative, accountable
STRATEGIC OBJECTIVE	6.1 Governance systems, process and practices are responsible, ethical and transparent.
SUBJECT INDEX	Fees and Charges
BUSINESS UNIT	Finance and Corporate Services
REPORTING OFFICER	Finance Coordinator - Jeffrey Corker
AUTHORISING OFFICER	Director Finance and Corporate Services - Tony Nottle
NATURE OF DECISION	Executive: Substantial direction setting, including adopting budgets, strategies, plans and policies (excluding local planning policies); funding, donations and sponsorships; reviewing committee recommendations
VOTING REQUIREMENT	Absolute Majority
ATTACHMENTS	Attachment a Draft List of Fees and Charges for the 2021-22 Financial Year ⇩

OFFICER RECOMMENDATION

That the Council endorses the Fees and Charges as detailed in the “Schedule of Fees and Charges - 2021/22” as per Attachment A – Draft Schedule of Fees and Charges, effective from and including 1 July 2021.

EXECUTIVE SUMMARY

In accordance with Regulation 5(2) of the Local Government (Financial Management) Regulations, a local government is to undertake a review of its fees and charges regularly, and not less than once in every financial year. This report provides Council with a recommended Schedule of Fees and Charges to apply for the financial year commencing on 1 July 2021.

BACKGROUND

Each year, the City sets its fees and charges with the view of implementing any changes as of 1 July in any given year. City officers have reviewed each section of the fees and charges and have highlighted any areas of change, or reasons why no changes have occurred in comparison to the existing adopted listing.

As part of the annual review of the fees and charges, officers take into account matters including the cost to provide a service, market conditions and needs of the community. These inform the recommendations that will be made to the Council. These fees and charges recommended are in accordance with recent planning and discussions relating to the City’s Long Term Financial Plan.

When Council adopts an annual budget, it may also set its fees and charges that will be imposed during a financial year. In order for the 2021/22 schedule of fees and charges to be effective from the commencement of the new financial year, the Council is required to adopt its schedule in advance of 30 June 2021, such that any statutory public notice periods (including gazettals where required) can be complied with.

OFFICER COMMENT

The 2021/22 Draft Schedule of Fees and Charges has been guided by a 2% general escalation over currently adopted fees and charges. Notwithstanding this, in some limited instances, this principle is not appropriate, with other factors also requiring consideration. The following provides an overview, by Directorate, of noteworthy instances where an increase has not been applied, whilst also discussing, where relevant, newly proposed fees and charges.

Planning and Development Services

Health Related Fees

· Noise Monitoring Fees

These fees have not been increased due to the maximum statutory fee for the Regulation 18 process being $1,000. In order to retain the graduated approach to the fee structure, it is recommended that all fees within this section remain the same.

Town Planning Related Fees

· Provision of Written Advice

This fee has not been increased as it is statutory fee listed under the Planning and Development Regulations at $73 and cannot have an increment increase applied.

Engineering & Works Services

Waste Disposal and Sanitation Fees

· General

A number of fees have been increased above the 2% rate, primarily at the Busselton Facility, to make the charges consistent with those of the Dunsborough Waste Facility. This ensures fairness and equity across the sites.

· Disposal of Tyres

The charges for the disposal of tyres have increased, some very significantly. This has been necessitated by the charges levied by the sole remaining contractor able to appropriately recycle the material.

· Unsorted Mixed Waste including Recyclables (not containing Asbestos)

A new category has been made to provide clarity, with the wording altered accordingly.

· Other Commercial Waste – Dunsborough Only

The charges for the disposal of Liquid Waste / Sewerage has been increased by more than 2% as a disincentive to discourage the use of the Liquid Waste Ponds, therefore prolonging the life of the existing facility.

Finance & Corporate Services

Administration / Miscellaneous Fees

· City of Busselton License Plates

No change to price required, customers expect a historical $450 price.

Rates & Finance Charges

· Rates / Property Related Matters

Some wording amended so that it better matches the nature of the fee.

· Financial Transactions

Fee on Rejected Payments – the wording has been clarified and the amount reduced to $15. The value being charged by the City’s bank on the EasyRate payments is less than expected and the previously adopted fee is now considered unreasonable, therefore officers have recommended a reduction.

Cemetery Fees

· General

All cemetery fees have been kept at 2020/21 levels. City of Busselton charges are above the average for similar councils and cover all costs associated with the works. Additionally, given the current global climate and pandemic, it is considered improper to increase fees relating to burials etc.

Community & Commercial Services

Events & Casual Ground Hire

· Community Use of Sports Grounds

Change of description to “Community Usage – per full day (excluding schools within the City of Busselton)”. The City only offer free use for local schools, not schools outside of the City of Busselton. This was not previously reflected clearly in the list of fees and charges.

Events – Equipment Hire & Signage

· Hire of Electronic Events Billboard (per 2 week period)

Current large and event signage fees will be replaced with a new electronic events billboard fee when the billboard is installed and operating. The cost is higher than current charges as hirers will no longer have the additional costs to display using skins. Two week blocks of hire would be the most efficient way of administering the fee.

· Foreshore Kiosk Permit – Busselton Foreshore

A new fee “Application for Kiosk Permit renewal” has been introduced for existing permit holders to renew their permit and not have to pay the full fee associated with an application for a new permit.

ArtGeo Cultural Complex

· Complex and Exhibition Hire General

A number of fees are proposed not to be increased. All ArtGeo Complex fees were thoroughly reviewed and adjusted for the current financial year. The impact of COVID-19 on the creative industry has affected hire demand and ability. The forthcoming Busselton Performing Arts and Convention Centre build could also have an effect on generating engagement and use throughout the precinct.

The “Railway Hall per week” fee has been renamed to “Ballaarat Room” to reflect the change in name.

· Commission Rate on Art Sales

The Resident artist commission fee of 10% is to be removed as it is insufficient to cover costs to administer it. Resident artists will be subject to the commission fees of rostered artists.

· Commission Rates on Exhibition and Art Sales

The wording is to be changed to be inclusive of GST (not exclusive). This seems to be an historical error, as both these commissions have always been processed on the sale which is inclusive of GST.

· Ballaarat Room Exhibition Hire

The previous separate category of fees associated with the Ballaraat Room has been removed as they are now included within the ArtGeo Cultural Complex Hire fees.

Library Charges

· General

The colour printing charge will be reduced to $1 from $2. High numbers of complaints from customers are indicating this price is now considered too high. Print costs have reduced since this fee was first introduced as new printers are much more economical. Benchmarking with other libraries and the limited number of local retailers showed $1 per colour print is now the most common rate. As this service is highly used by low income earners or those receiving benefits, a reduction in price makes this service more affordable for those in need.

· Sale of Discarded Local Stock

All previous sub-categories of Discarded Local Stock, along with their individual pricing, have been amalgamated into a single line with the price at the point of sale to be determined depending upon prevailing market conditions. Book sales are held throughout the year and each sale is different depending on the level of stock for sale at the time. Greater flexibility to vary pricing subject to stock availability and condition is required. A market rate would also be more equitable with markets and book stores selling second hand books, videos and CDs.

Busselton-Margaret River Regional Airport

· General

o Passenger Facilitation Fee for Open & Closed Charter Flights utilising the terminal building (per departing passenger) increased from $20 excluding GST to $22 excluding GST (+10%) due to not being increased for 5 years.

o All Aircraft landing fees have not been increased by 2%. This is to encourage BMRA usage for categories of aircraft. Comparison against WA regional airport landing fees shows that BMRA fees are in line with other WA regional airports.

o The “General Aviation hardstand parking only” fee has been increased by 10% due to market value charged at other regional airports in WA.

o Car Parking Fees for both the Public Car Park and FIFO charges have not been increased, as these fees were reviewed and new charges implemented in February 2020.

o The “Lost parking validation ticket” fee has been increased by 17.65% due to an increased number of patrons using the car park for longer periods of time finding it cheaper to claim a lost ticket than to pay the correct fee for the parking period.

o The “Car park frequent user swipe card refundable fee” (fully refundable) was introduced for FIFO patrons to use a swipe card system and receive a lower fixed daily parking rate due to being frequent users of the car park.

o The “Airport reporting officer after hours call out” fee has been increased by 10.39% due to increased staffing costs and market rate charged at other regional airports in WA.

o The “Airport reporting officer airside assistance /escort” fee has been increased by 16.28% due to the market value charged at other regional airports in WA.

Busselton Jetty Tourist Park

· General

o The “Extra Child per night” and “Extra Adult per night” fees have been increased by $1 each (rather than the 2% CPI incremental amount) representing a 4.76% and 7.14% increase respectively.

o The overnight and weekly rates for the Basic Cabins have not been increased by the full 2% CPI rate due to the ageing condition of the cabins.

o The overnight and weekly rates for Non-basic cabins have been increased by in excess of the 2% CPI rate due to market comparisons. A GST listing error contained solely within the spreadsheet for these two categories has been corrected.

o Linen hire charges have been increased by greater than the 2% CPI rate to reflect increases in charges from contractors.

o The “Additional charge for electricity use for caravan air conditioners” has increased from $12 to $14 per day to reflect increases in electricity prices.

Hire Facilities – All

· Facility Hire Bonds

Bond amounts to remain unchanged as considered reasonable.

· Undalup Room

A new fee of $80.00 to hire the new 3-panel stage is proposed. Current local event hirers charge $150 to hire a stage.

· Miscellaneous Facility Fees

A new fee is included for the Marking out of Services. Bookings who request to erect bouncy castles, tents or marquees on a public open space / reserve require a staff member from the City Irrigation Team to mark out underground reticulation & power/water services in the location of the structure to ensure pegs do not damage pipes. The City has not charged for the service in the past and suggest to charge $50.00 per booking.

· Churchill Park Hall

The Community Group, Commercial/Private and Registered Charity hourly hire fees have been amended to align with existing fees at High Street Hall. The fees at Churchill Park Hall were slightly higher for no reason, so these will now be the same hourly rate as High Street Hall.

· Ground / Court Hire

The fee for “Extraordinary Cleaning as required or by arrangement” has been listed to ensure clarity that it can be charged to users of these particular Hire Facilities.

· Variety of Hire facilities

The fees for a variety of Hire facilities including High Street Hall, Yallingup Hall, Yoongarillup Hall, the Undalup Function Room, Busselton Community Resource Centre, Busselton Youth and Community Activity Building, Ground Hire, Court hire and the Outdoor Exercise Sites have not been increased. COVID-19 has impacted hire rates and the usage of these facilities. With a large part of venue hire being through community groups, any increase would be detrimental to all parties. Venue bookings have just started to increase again and fees will be reviewed in next year’s budget.

Geographe Leisure Centre

· Swimming Pool – Local regular not for profit user groups

No increase to $5 fee is recommended. Restricted lane space availability and rebuilding relationships with user groups, who have communicated issues with current fees for lane hire. An increase to this fee would create further financial issues for clubs at this time.

· Personal/Group Training

Some changes to wording has been made and three new charges included as follows:

o PT School program entry per student (minimum 8 students session) $8.00

o Boot camp – cost per session/term based (minimum 6 people) $11.00

o Personal Training – 1 hour session with Trainer (1 on1) $65.00

· Sports Stadium – Casual Basketball

No increase to fees are recommended as the majority of users are youths and we want to encourage them to participate.

· Crèche/Activity Room – Vacation Care Program

The increase approved for the Vacation Care Program fee to $77 was not applied in 20/21 due to COVID-19. It would not be appropriate to increase this fee further again this financial year, but instead it is recommended that it remain at $77. This fee has been benchmarked against other programs and is comparable.

· Full Membership – Membership Cancellation Administration fee

No increase is recommended so as to remain as stated on terms and conditions on membership application and forms.

Naturaliste Community Centre

· Group Fitness - Membership Cancellation Administration fee

No increase is recommended so as to remain as stated on terms and conditions on membership application and forms.

· Stadium – Casual Basketball

No increase to fees are recommended as the majority users are youth and we want to encourage them to participate.

· Multi-Purpose Activity Room (Half)

Listed fees for the “Hire of the Ceiling Projector” have been amended to one flat rate only.

· Vacation Care Program

· Stage Hire

No fee increase is recommended as it is generally hired for fundraising events and there are no overheads associated with the hire.

· NCC Grounds Hire

Removal of fees associated with Community and Commercial class and casual use per hour as they provided unnecessary complexity to the fee structure.

Statutory Environment

Sections 6.16 to 6.19 of the Local Government Act 1995 (the Act) refer to the imposition, setting the level of, and associated administrative matters pertaining to fees and charges. The requirement to review fees and charges on an annual basis is detailed within Regulation 5 of the Local Government (Financial Management) Regulations.

Section 6.16 of the Act states that a local government may impose and recover a fee or charge for any goods or services it provides or proposes to provide, other than a service for which a service charge is imposed.

Section 6.17 of the Act further states that in determining the amount of a fee or charge for goods and services, a local government is to take in to consideration the following factors:

a) The cost to the local government of providing the service or goods;

b) The importance of the service or goods to the community; and

c) The price at which the service or goods could be provided by an alternative provider.

Section 6.18 of the Act clarifies that, if the amount of any fee or charge is determined under another written law, then a local government may not charge a fee that is inconsistent with that law.

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter, other than the Long Term Financial Plan which is discussed in the subsequent Financial Implications section.

Financial Implications

Whilst revenue from fees and charges includes items that the Council has no authority to amend (statutory charges set by external bodies), it is important that, where possible, controllable fees and charges are appropriately indexed on an annual basis, to assist in offsetting the increasing costs of providing associated services. This may include increases beyond normal indexation in particular cases, in line with section 6.17 of the Act.

The Council’s current Long Term Financial Plan reflected an annual increase in Fees and Charges revenue of 2.0%. This will be reflected in the 2021/22 budget and included in future revisions and development of the Long Term Financial Plan.

Stakeholder Consultation

Business Unit Managers are responsible for reviewing fees and charges associated with activities under their control. As part of the review process, consultation may occur with other local government authorities, in addition to a review of prices offered by alternate service providers (pursuant to section 6.17 of the Act).

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

Council may recommend amendments to the Draft Schedule of Fees and Charges as it deems appropriate.

CONCLUSION

As part of the annual review of fees and charges, the currently adopted fees and charges have been reviewed in line with the requirements of the Local Government Act 1995 and other relevant legislation as applicable. Consequently, it is recommended that Council endorses the Draft Schedule of Fees and Charges for 2021/22 as proposed.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Consequent to adoption by the Council, the Schedule of Fees and Charges for 2020/21 will become effective from and including 1 July 2021.

Finance Committee 97 14 April 2021

6.4 APPLICATION FOR RATE EXEMPTION - RELATIONSHIPS AUSTRALIA WA INC

STRATEGIC GOAL	6. LEADERSHIP Visionary, collaborative, accountable
STRATEGIC OBJECTIVE	6.1 Governance systems, process and practices are responsible, ethical and transparent.
SUBJECT INDEX	Exemptions & Appeals (Rates)
BUSINESS UNIT	Finance and Corporate Services
REPORTING OFFICER	Rates Coordinator - David Nicholson
AUTHORISING OFFICER	Director Finance and Corporate Services - Tony Nottle
NATURE OF DECISION	Executive: Substantial direction setting, including adopting budgets, strategies, plans and policies (excluding local planning policies); funding, donations and sponsorships; reviewing committee recommendations
VOTING REQUIREMENT	Absolute Majority
ATTACHMENTS	Attachment a Rate Exemption Application With Letter ⇩ Attachment b Rate Exemption Application Statutory Declaration ⇩

OFFICER RECOMMENDATION

That the Council:

1. Grant rate exemption to Relationships Australia WA Inc. on 93 Duchess Street, Busselton, effective 9 November 2020 under section 6.26(2)(g) of the Local Government Act 1995; and

2. Agree that this rate exemption is to continue where Relationships Australia WA Inc. confirm in writing by 30 April annually that they continue to lease and use the property for the purposes stated in the application.

EXECUTIVE SUMMARY

An application has been received from Relationships Australia WA Inc. (RAWA) for rate exemption on a leased property at 93 Duchess Street, Busselton. This property is being used by RAWA to deliver 4Families Support Service, a mental health and family support service and Bunbury Family Relationships Centre outreach programs. On the basis of the application, this report recommends that the application for exemption be granted effective from 9 November 2020, when RAWA occupied the property in accordance with section 6.26(2)(g) of the Local Government Act 1995.

BACKGROUND

RAWA is a not-for-profit benevolent institution with deductible gift receipt status. The vast majority of RAWA income is from Commonwealth and State government grants so as to provide community services. The 4Families Support (4Families) and Bunbury Family Relationships Centre outreach programs were provided from 3/71 Kent Street Busselton until 6 November 2020 when RAWA vacated the property. Council has previously granted a rate exemption for RAWA at 3/71 Kent Street, Busselton, due to the free programs being provided from the property and the organisation’s charitable status. At its meeting held on 8 May 2019, Council resolved to:

1. Approve Relationships Australia (WA) Inc. application for rate exemption under section 6.26(2)(g) of the Local Government Act 1995, “land used exclusively for charitable purposes”, for 3/71 Kent Street Busselton effective from the 1^st July 2018;

2. Agree that this rate exemption is to continue where Relationships Australia (WA) Inc. confirm in writing by the 30^th April of each year that it remains the lessee of the property and that the properties use is the same as stated in the rate exemption application;

3. Request that the South West Zone representative put a motion to the South West Zone of WALGA for lobbying of the State Government to consider the removal of rate exemptions for charitable organisations under the Local Government Act or that an alternative position to implement a rebate scheme similar to the Pensioners and Seniors Rebate Scheme be considered.

These programs are now being conducted from 93 Duchess Street, Busselton, effective from 9 November 2020, being the date that RAWA occupied the property.

4Families

4Families is a free service that provides a range of services to families and carers, which aim to reduce family stress and enable children and young people to reach their full potential.

The services provided by 4Families are:

• counselling and emotional support

• information and referrals

• home-based family support

• workshops, seminars and groups

• community development activities

• support for grandparents and carers

The focus is on prevention and early intervention by addressing issues that affect the mental and emotional wellbeing of children and young people.

Where families and carers require more assistance, RAWA will actively work with other services including schools, community organisations, Centrelink and mental health services.

Bunbury Family Relationships Centre

• The Busselton service is the outreach service for the Bunbury Family Relationships Centre.

• It provides information about family relationships at all stages - forming new relationships, overcoming relationship difficulties or dealing with separation and also referring other services that can help.

• For parents experiencing separation, the centre helps the parents to focus on the children's needs and help decide what to do next.

• RAWA can also provide joint sessions with the other parent or family members to help with parenting arrangements.

RAWA provides information, referrals and individual sessions free of charge. RAWA also provides one hour of family dispute resolution sessions free of charge (up to four hours where interpreters are used) and may charge fees after this depending on circumstances. Members of the public are able to drop in or phone the centre for information about programs and services available in the local area that can help strengthen family relationships.

Engagement with Western Australian Local Government Association (WALGA)

Following a Council resolution made in May 2019, the Mayor raised this issue with the South West Zone of WALGA (SWZ) at its meeting in May 2019. The SWZ supported the City of Busselton’s view unanimously and resolved as follows:

That the SWZ:

1. Request that WALGA continue to lobby the State Government to consider the removal of rate exemptions for charitable organisations under the Local Government Act 1994 and that an alternative position may be implementing a rebate similar to the Pensioners and Seniors Rebate Scheme.

In response to the SWZ’s resolution, WALGA advised that the SWZ’s position is consistent with the following long-held sector position that:

1. There is a need to amend the Local Government Act to clarify that Independent Living Units should only be exempt from rates where they qualify under the Commonwealth Aged Care Act 1997; and

2. Either:

a. amend the charitable organisations section of the Local Government Act 1995 to eliminate exemptions for commercial (non-charitable) business activities of charitable organisations; or

b. establish a compensatory fund for Local Governments, similar to the pensioner discount provisions, if the State Government believes charitable organisations remain exempt from payment of Local Government rates.

WALGA also added to its submission to the State Government following the consultation on phase 2 of the review of the Local Government Act:

Request that a broad review be conducted into the justification and fairness of all rating exemption categories currently prescribed under Section 6.26 of the Local Government Act.

WALGA are continuing to advocate for this position.

OFFICER COMMENT

Section 6.26 of the Act states that all land is rateable except in certain circumstances. Section 6.26(2)(g) states that “land used exclusively for charitable purposes” is not rateable.

It is considered that the free 4Families and Bunbury Family Relationships Centre programs provided by RAWA are charitable in nature and therefore the property at 93 Duchess Street, Busselton, is eligible for rate exemption under section 6.26(2)(g) of the Act.

No physical inspection of the property has been carried out, as the statutory declaration provided on the property’s use (at Attachment B) is considered sufficient.

WALGA’s advocacy position has not changed in relation to this issue and continues to push for meaningful legislative change in this area. Until then, however, the current approach to rate exemptions due to charitable status is still applicable.

Statutory Environment

Section 6.26(2)(g) of the Act specifically states that land used exclusively for charitable purposes is not rateable.

Relevant Plans and Policies

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

Financial Implications

Granting rate exemption effective 9 November 2020 would see an estimated $3,035 reduction to Council’s 2020/2021 rating income.

This would be offset with an estimated $3,265 in rating income from 3/71 Kent Street, Busselton, due to RAWA vacating this property and its rate exemption entitlements being removed.

Rating income from 93 Duchess Street, Busselton, would reduce by approximately $4,850 for future financial years where it continues to be leased by RAWA and used for providing the free programs as per the rate exemption application, subject to Council’s resolution.

Stakeholder Consultation

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

Risk Assessment

However, if Council choses to decline the rate exemption application, then staffing and/or legal costs may be incurred should RAWA request the State Administrative Tribunal review the decision.

Options

As an alternative to the proposed recommendation, the Council could decline the rate exemption application on the basis that it considers the property to be rateable under the Act. As stated above, this is not recommended based on the risks associated with declining the application.

CONCLUSION

It is considered that the property at 93 Duchess Street, Busselton, whilst leased by RAWA and used to provide free 4Families and Bunbury Family Relationships Centre programs to the community, is eligible for rate exemption under section 6.26(2)(g) of the Act.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

If granted, the rate exemption on 93 Duchess Street, Busselton, would be effective as of 9 November 2020, being the date when RAWA first occupied the property, and this will be implemented within 1 to 2 weeks of Council’s decision.

S0073	Gale Road Rural Reconstruction – Federal Capital Grant	515,811	914,992	(399,181)	(43.6%)	(114,374)
S0074	Causeway Road Duplication – Developer Cont. Utilised	800,000	300,000	500,000	166.7%	-
S0075	Local Road and Community Infrastructure Program – Federal Capital Grant	480,935	525,483	(44,548)	(8.5%)	-
S0076	Kaloorup Road (Stage 1) – Main Roads Direct Grant	106,800	-	106,800	100.0%	-
T0020	Capel Tutunup Road – RTR Capital Grant	-	951,152	(951,152)	(100.0%)	(118,894)
W0067	Ford Road Reconstruct and Asphalt Overlay – Main Roads Direct Grant	10,875	-	10,875	100.0%	-
W0121	Geographe Bay Road Quindalup – Developer Cont. Utilised	12,000	-	12,000	100.0%	-

Cost Code		Cost Code Description	Actual YTD $	Amended Budget YTD $		Variance YTD $	Variance YTD %	Change in Variance Current Month $
*Land*			-	*50,000*		*50,000*	*100.0%*	-
10610		Property Services Administration	-	50,000		50,000	100.0%	-
The budget represents funds allocated for costs associated with potential strategic land purchases in the City of Busselton. To date, there have been no expenses incurred, as potential transactions have not progressed beyond informal discussions.
*Buildings*			*2,899,541*	*3,627,100*		*727,559*	*20.1%*	*(131,693)*
B9516		Busselton Library Upgrade	584,575	603,000		18,425	3.1%	(98)
Library works completed. Balance of funds to be directed to fit-out items.
B9300/1/2		Aged Housing Capital Improvements	51,489	144,800		93,311	64.4%	9,985
Works proposed are to separate power and drainage servicing Winderlup Court and Winderlup Villas. The power requirements will not be triggered until the new conditional land title lot is created, but plans are in place to obtain quotes now and carry out the works in anticipation of the creation of the lots.
B9407		Busselton Senior Citizens	625,483	738,128		112,645	15.3%	(5,150)
Works were completed in September. The savings against budget are being reviewed for potential use on roof replacement and carpark works. Works have been re-scoped based on preliminary estimates to reduce costs of roof replacement.
B9534		Community Resource Centre	11,315	-		(11,315)	(100.0%)	(3,475)
$11.3K in Capital costs have been incurred against the Community Resource Centre YTD. The $50,000 Capital budget for this facility was loaded into June as works had not been scheduled and thus this is a timing variance only. Some costs incurred have been found to be under the Capitalisation threshold and are thus required to be written off in the year in which they have been incurred, to this end a Journal will be processed in March to reallocate these costs accordingly.
B9558		Churchill Park - Change Room Refurbishment	-	21,000		21,000	100.0%	-
Works are scheduled to be completed before the end of the financial year. Procurement for roof sheeting is currently underway.
B9591		Performing Arts Convention Centre	1,276,477	1,402,848		126,372	9.0%	(176,035)
Regional Growth Fund milestones are under review pending funding extension confirmation. Design contract program extension pending. Budgeted cash flow has been reviewed, with works now scheduled for commencement in June 2021.
B9596		GLC Building Improvements	60,584	327,768		267,184	81.5%	37,738
Carried over works from the prior year. Works have been rescheduled and have been forecast to be completed in March 2021 to minimise impact to GLC operations.
B9606		King Street Toilets	47,781	30,688		(17,093)	(55.7%)	5,116
Stage 1 works completed. Minor additional works undertaken in this period to improve accessibility to new viewing platform. The proportion of the project carried over from prior years is now completed and is overspent compared to the total budget by $3,035, representing 6%. The YTD budget represents an even spread over the financial year and thus the $17K YTD variance is attributable to timing and will clear closer to 30 June.
B9607	General Buildings Asset Renewal Allocation (Various Buildings)		79,984	100,000	20,016		20.0%	(1,250)
This budget was assigned for various Capital works as identified as per the City’s Building Asset Management Plan. To date, $28k has been outlaid for much needed roofing, ceiling, lighting and water filtration renewal works at the Yoongarillup Hall. A further $14k has been spend on resolving an issue regarding Dunsborough Sports field lighting. Some costs incurred have been identified as maintenance; under the Accounting Standards capitalisation threshold and thus will be reallocated to appropriate Operational accounts accordingly. Some costs incurred are also not categories correctly as being in relation to Building Infrastructure and will also be moved so as not to contravene the rules governing the Building Reserve and its purpose statement. It is still anticipated that the majority of this budget allocation will be utilised for Building Renewal works as at 30 June.
B9608	Demolition Allocation (Various Buildings)		2,011	12,500	10,489		83.9%	-
Funds have been allocated to partial demolition of the Weld Theatre by the end of the financial year, in preparation for its integration with the BPACC.
B9610	Old Butter Factory		131,549	-	(131,549)		(100.0%)	(1,280)
Conservation and fire damage works now completed. Insurance claim has now been approved, with the final position estimated to be ($30K), with savings being identified in other areas to account for this variance.
B9612	Churchill Park Renew Sports Lights		-	140,000	140,000		100.0%	-
A review of consultants work to date is being undertaken, with a decision to be made Feb/March with Council if this site is the subject of a grant application to the State Government. If yes, application to be submitted and funds to be carried forward; if not, funds to be spent this financial year.
B9711	Busselton Airport – Building		-	15,000	15,000		100.0%	-
Small capital works projects to be completed either prior to Jetstar flights commencing or by the end of the financial year.

B9717	Airport Construction - Existing Terminal Upgrade	-	28,536	28,536	100.0%		3,567
As per above.
B9809	Busselton Jetty Tourist Park Compliance Works	3,600	40,000	36,400	91.0%		-
Compliance electrical works to be completed by the end of the financial year.
*Plant & Equipment*		*888,978*	*2,364,896*	*1,475,918*	*62.4%*		*318,839*
10372	Dunsborough Cemetery	-	20,000	20,000	100.0%		-
The budget is for maintenance trailers for the cemetery, both for grave shoring equipment and watering equipment, as well as fencing and turf upgrades. The delay in procurement of these items is due to current workloads of relevant staff and other projects taking a higher priority to date.
11106	Street Lighting Installations	17,300	-	(17,300)	(100.0%)		-
The expenditure represents a storage container for the lighting equipment. The budget for the whole activity has been entered against one operational line incorrectly, rather than being split according to operational maintenance, capital upgrade, and one-off asset purchases such as this.
11156	Airport Development Operations	172,865	188,736	15,871	8.4%		23,592
The YTD variances for 11156 was for the baggage handling system, the under spend of $15,871 will be taken up by commitments of $42,192 for works still to be completed.
11160	Busselton Jetty	29,977	15,000	(14,977)	(99.8%)		(17,523)
In February there was $17.5K in unplanned expenditure for an Uninterrupted Power Supply (UPS) for the Underwater Observatory (UWO) lift. This has resulted in the variance to budget for the Jetty. This cost will be reassigned via a journal against the UWO Cost Code in March. This will be funded from the Jetty Reserve.
11401	Transport – Workshop	10,410	30,000	19,590	65.3%		-
Delivery of upgrades to repeater at communications tower still in progress.
11402	Plant Purchases (P10)	321,201	1,420,000	1,098,799	77.4%		300,000
Generators at DWF pond and cell – not yet replaced. Site and operations under review. Manager’s vehicle also yet to be ordered/delivered. Waste truck side loader ordered, delivery expected in July. Wheel loader delivered, invoice still to be received. Waste compactor semi-trailer purchase deferred indefinitely pending waste plan.
11403	Plant Purchases (P11)	46,995	195,000	148,005	75.9%		2,500
One vehicle ordered with delivery expected in April and one light truck ordered in December, delivery now expected in June.
11404	Plant Purchases (P12)	-	114,000	114,000	100.0%		-
One light truck ordered with delivery expected in July; concrete scarifier ordered, delivery expected in April.
11407	P&E - P&G Smart Technologies	-	66,664	66,664		100.0%	8,333
Annual scope of the project is currently being finalised and delivery will follow in the last quarter of 20/21.
11500	Operations Services Administration	-	40,000	40,000		100.0%	-
Vehicle ordered in October, delivery expected in March. 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.
B1025	Yallingup Coastal Bushfire Brigade	10,592	-	(10,592)		(100.0%)	-
Unbudgeted donated asset (offsetting revenue shown above – no actual cash outlay).

*Furniture & Office Equipment*		*221,420*	*443,088*	*221,668*	*50.0%*	*(19,760)*
10250	Information & Communication Technology Services	191,660	407,088	215,428	52.9%	-
Whilst variance is currently high the budgeted amount is planned for expenditure. Some of the delayed projects (COVID impacts include consultancy availability, hardware supply chain and additional unplanned IT work) have been accelerated in the new year including the hardware refresh, phone line migration, single label domain, website builds and online payments. It is expected that the projects will make up time and currently do not plan for any carry overs.
*Infrastructure By Class*		*11,126,065*	*22,286,516*	*11,160,451*	*50.1%*	*1,665,453*
Various	Roads	6,425,098	10,810,862	4,385,764	40.6%	896,119
Capital projects with civil works are commonly scheduled to be carried out later in the financial year, in the drier summer/autumn 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. Major civil road construction works are now underway in numerous locations across the City. The large rural Gale Road project ($1.437m) has commenced but is estimated to come in under budget by approx. $300k due to competitive contractor pricing; contributing to the current variance. There will be a material underspent associated with the Peel & Queen Street Roundabout project (S0070) valued at $1.2m. Service relocation works are scheduled to comment after Easter on the Peel Terrace roundabout with stage 2 works at the Albert Street intersection to be completed in the following financial year.
Various	Bridges	-	962,664	962,664	100.0%	120,333
Although Bridge renewal works will be done on both the Bussell Highway and Yallingup Beach Road bridges this financial year it is unlikely any expenditure will be recorded due to the timing on receipt of invoices received from Main Roads. Main Roads carry out these works on behalf of the City. Works on the Kaloorup, Boallia Road and Tuart Drive Bridges are now scheduled to commence in the 2022 Financial year. To this end an under expended variance to budget totalling $6.4M is anticipated come 30 June. All 5 bridge projects will represent carry overs.
Various	Car Parks	943,142	1,259,364	316,222	25.1%	127,385
Car Park projects are generally progressing well although there is a $316k under expended variance to budget YTD. Half of the YTD variance is attributable solely to the Car Parking associated with the Barnard East Development. This project is currently out to Tender. A further 131k of the variance is associated with the Vasse Oval Gravel Car Parking area yet to be constructed out at Vasse Dawson.
Various	Footpaths & Cycleways	203,463	997,880	794,417	79.6%	106,583
The YTD variance associated with Footpath & Cycleway projects is primarily attributable to the Buayanyup Drain Shared Path project accounting for 53% or $424K of the YTD variance. The Bussell Highway Footpath Sections and the Dunsborough Centennial Park Projects contribute a further $143K and $100K towards the YTD variance respectively. The funds for the aforementioned projects have been earmarked to cover additional Queen Street Paving works that are categorised separately as Townscape projects.
Various	Parks, Gardens & Reserves	3,406,939	7,493,552	4,086,613	54.5%	388,942
$1.07M or 26% of the YTD variance is attributable to the Dunsborough Lakes Sporting Precinct (Stage 1) project that is yet to get underway. The water network consisting of the bore, storage tanks and pipelines to supply the new facility continues to progress to plan. A further 28% or $1.1M of the YTD variance is attributable to upgrades of various parks across the City being funded from Cash in lieu of Public Open Space contributions. These projects will go out to market for contractor delivery as a consolidated package. Sanitation waste infrastructure which also falls under the “various” capital category contributes $582K to the YTD variance. A number of projects for a variety of reasons will represent carry overs or project relists into 2022.
Various	Drainage	450	68,844	68,394	99.3%	6,275
There are only three small drainage related projects on budget this financial year. Both the Glenmeer Ramble and Chugg Road Drainage Upgrade projects are scheduled to commence in the last quarter of the FY.

Finance Committee		8		14 April 2021
6.1	Attachment a		List of Payments - February 2021

Finance Committee		52		14 April 2021
6.2	Attachment b		Investment Report - February 2021

STRATEGIC GOAL	1. COMMUNITY: Welcoming, friendly, healthy
STRATEGIC OBJECTIVE	1.3 A community with access to a range of cultural and art, social and recreational facilities and experiences.
SUBJECT INDEX	Busselton Golf Club Inc. Self Supporting Loan
BUSINESS UNIT	Community and Recreation
REPORTING OFFICER	Senior Sport and Recreation Project Officer - Brendan McNally
AUTHORISING OFFICER	Director, Community and Commercial Services - Naomi Searle
NATURE OF DECISION	Executive: Substantial direction setting, including adopting budgets, strategies, plans and policies (excluding local planning policies); funding, donations and sponsorships; reviewing committee recommendations
VOTING REQUIREMENT	Simple Majority
ATTACHMENTS	Attachment a Busselton Golf Club Strategic Plan Summary ⇩