COB-RGB

 

 

 

 

Finance Committee
Agenda

 

 

 

12 May 2021

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

MEETING NOTICE AND AGENDA – 12 May 2021

 

 

 

TO:                  THE MAYOR AND COUNCILLORS

 

 

NOTICE is given that a meeting of the Finance Committee will be held in the Committee Room, Administration Building, Southern Drive, Busselton on Wednesday, 12 May 2021, commencing at 10.00am.

 

The attendance of Committee Members is respectfully requested.

 

 

DISCLAIMER

Statements or decisions made at Council meetings or briefings should not be relied on (or acted upon) by an applicant or any other person or entity until subsequent written notification has been given by or received from the City of Busselton. Without derogating from the generality of the above, approval of planning applications and building permits and acceptance of tenders and quotations will only become effective once written notice to that effect has been given to relevant parties. The City of Busselton expressly disclaims any liability for any loss arising from any person or body relying on any statement or decision made during a Council meeting or briefing.

 

 

 

Mike Archer

 

CHIEF EXECUTIVE OFFICER

 

7 May 2021


CITY OF BUSSELTON

Agenda FOR THE Finance Committee MEETING TO BE HELD ON 12 May 2021

TABLE OF CONTENTS

 

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Declaration of Opening, ACKNOWLEDGEMENT OF COUNTRY 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 April 2021. 4

6....... Reports. 5

6.1          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 MARCH 2021. 5

6.2          LIST OF PAYMENTS MADE - MARCH 2021. 46

6.3          APPLICATION FOR RATE EXEMPTION - WARATAH SUPPORT CENTRE (SOUTH WEST) INC. 59

6.4          BUDGET AMENDMENT REQUEST - LEGAL SERVICES. 67

7....... General Discussion Items. 70

8....... Next Meeting Date. 70

9....... Closure. 70

 


Finance Committee                                                             4                                                                         12 May 2021

 

1.               Declaration of Opening, ACKNOWLEDGEMENT OF COUNTRY 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 April 2021

Recommendation

That the Minutes of the Finance Committee Meeting held 14 April 2021 be confirmed as a true and correct record.

 


Finance Committee                                                             5                                                                                     12 May 2021

6.               Reports

6.1             FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 MARCH 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 - March 2021

Attachment b    Investment Report - March 2021  

 

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 31 March 2021, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations 1996.

 

EXECUTIVE SUMMARY

Pursuant to Section 6.4 of the Local Government Act 1995 (the Act) and Regulation 34(4) of the Local Government (Financial Management) Regulations 1996 (the Regulations), a local government is to prepare, on a monthly basis, a statement of financial activity that reports on the City’s financial performance in relation to its adopted / amended budget.

 

This report has been compiled to fulfil the statutory reporting requirements of the Act and associated Regulations, whilst also providing the Council with an overview of the City’s financial performance on a year to date basis for the period ending 31 March 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 31 March 2021

The Statement of Financial Activity (FAS) for the year to date (YTD) as at 31 March 2021 shows an overall Net Current Position of $13.3M as opposed to the amended budget of $1.3M. This represents a positive variance of $12M YTD.  This variance increased by $4.3M from $7.7M at the end of February.  

 

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

 

2.92%

2,064,268

1,170,630

1.    Operating Grants, Subsidies and Contributions

4,324,325

3,188,070

4,782,445

35.64%

1,136,255

830,730

2.    Other Revenue

412,105

303,379

424,730

35.84%

108,726

(22,197)

 

 

 

 

 

 

 

Expenses from Ordinary Activities

 

6.95%

4,146,411

135,068

3.    Materials & Contracts

(10,152,445)

(13,224,908)

(18,067,582)

23.23%

3,072,463

69,046

4.    Other Expenditure

(1,755,413)

(2,969,736)

(5,236,779)

40.89%

1,214,323

105,797

 

 

 

 

 

 

 

5.    Non-Operating Grants, Subsidies and Contributions

5,017,021

9,417,856

34,437,199

(46.73%)

(4,400,835)

(20,476)

 

 

 

 

 

 

 

Capital Revenue & (Expenditure)

 

16.23%

5,946,024

1,662,481

6.    Land & Buildings

(3,037,740)

(5,648,417)

(17,454,059)

46.22%

2,610,677

1,833,118

Plant & Equipment

(878,385)

(2,401,258)

(2,510,340)

63.42%

1,522,873

46,954

Furniture & Equipment

(257,637)

(451,088)

(461,088)

42.89%

193,451

(28,217)

Infrastructure

(12,535,858)

(25,115,765)

(40,057,700)

50.09%

12,579,907

1,419,456

7.    Proceeds from Sale of Assets

285,040

581,500

581,500

(50.98%)

(296,460)

66,646

8.    Proceeds from New Loans

0

7,700,000

7,700,000

(100.00%)

(7,700,000)

0

9.    Repayment of Capital Lease

(459,675)

(391,424)

(521,900)

(17.44%)

(68,251)

(123,029)

10.  Advances to Community Groups

0

(200,000)

(200,000)

100.00%

200,000

0

11.  Transfer to Restricted Assets

(5,155,488)

(41,256)

(62,750)

(12396.34%)

(5,114,232)

(1,948,610)

12.  Transfer from Restricted Assets

2,295,526

200,000

2,807,074

1047.76%

2,095,526

625,305

 


Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is $2.1M, or 2.92%, ahead of budget YTD.  The only material variance items contributing to this are:

 

1.     Operating Grants, Subsidies and Contributions

 

Ahead of YTD budget by $1.1M, or 35.64%, 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

$

Finance and Corporate Services

1,369,797

1,331,745

38,052

2.78%

10,962

10510

Governance Support Services – State Government Operating Grants

 -

15,300

(15,300)

(100.00%)

(1,700)

Each year the City takes on a disability trainee.  At the time of setting the budget it is not known where this person may be placed, so the reimbursement from the state government is budgeted in this area.  The trainee was actually placed at the GLC, with all associated actual wage costs and reimbursements allocated to this area.

10152

Other General Purpose Funding – Financial Assistance Grants

1,068,089

1,046,161

21,928

2.05%

 -

Actual grants received are slightly higher than originally budgeted.  The Grants Commission always advises the exact amounts to be received well after budget adoption.

10200

Financial Services – Reimbursements – Insurance

130,721

104,365

26,356

20.16%

7,915

The second instalment of the LGIS Contributions Assistance Package was due to be received in November, but instead a credit note received from LGIS was offset against scheme policies that were due for payment in early December, at their instruction.

10522

Occupational Health & Safety – Reimbursement – Wellness Program

5,280

18,747

(13,467)

(255.06%)

(2,083)

Due to COVID restrictions in the first half of the financial year a number of programs were either not able to proceed or were undersubscribed.  With the relaxing of restrictions and returning confidence, staff participation in the various Wellness activities has increased, however it is unlikely that the full budget will be achieved by year end. 

Community and Commercial Services

237,491

222,689

14,802

6.23%

8,687

10530

Community Services Administration – State Government Operating Grants

50,000

40,503

9,497

18.99%

(4,167)

The Rio Tinto COVID Relief & Recovery Grant was invoiced in total in August, however the budget was spread evenly over 12 months.

10540

Recreation Administration – State Government Operating Grants

1,736

15,003

(13,267)

(764.05%)

(1,667)

There have been delays in receiving grant deeds from the relevant State Government department.  The applications that have been approved are expected to derive approximately $30K by the end of May 2021, which is in excess of the total amount budgeted for the year of $20K.


 

10530

Community Services Administration – Parenting Leave Reimbursements

14,655

 -

14,655

100.00%

13,570

Parenting leave reimbursement was not planned at the time of the development of the 20/21 budget.

10630

Economic and Business Development Administration – Parenting Leave Reimbursements

9,059

 -

9,059

100.00%

 -

Parenting leave reimbursement was not planned at the time of the development of the 20/21 budget.

Planning and Development Services

842,146

928,192

(86,046)

(10.22%)

(46,894)

10820

Strategic Planning – State Government Grants

 -

37,500

(37,500)

(100.00%)

 -

The variation from Strategic Planning budget (Grant $37,500) is due to the total grant ($75,000) being acquitted in two instalments: a 50% payment was received some time ago on achievement of certain project milestones to that stage in the preparation of the ‘Coastal Adaptation Strategy’ or CHRMAP, ‘Coastal Hazard Risk Management and Adaptation Plan’. The final 50% is due to be paid to the City upon Government endorsement of the final CHRMAP. Preparation of this complicated and comprehensive document has been set back several times over the past 2 years due to project requirements concerning financial modelling and Government Working Group reviews et al. As such, the City has received approval to extend the anticipated completion date for the project (this has occurred several times) until September 2021 (and it may require even longer). At the moment, it is expected to report on the draft CHRMAP to OCM 24 February, then, if approved, put out for public information/comment for 2-3 months. Then will need to be finalised etc. The $37,500 final grant payment will therefore not be paid until FY 21/22.

10830

Environmental Management Administration – State Government Grants

18,780

 -

18,780

100.00%

 -

Grant received in two lots in September and December, however it was budgeted to be received in June.

10925

Preventative Services – CLAG – State Government Grants

32,038

44,370

(12,332)

(38.49%)

 -

The Department of Health contribution to the mosquito program was less than expected.

10940

Fire Prevention DFES – Contributions

21,203

59,916

(38,713)

(182.58%)

 -

The $21K received relates to the last quarter of the 19/20 year. The half yearly reconciliation (for quarters 1 & 2 of the 20/21 year), of the CESM role with DFES remains outstanding and is in progress. 

Engineering and Works Services

1,873,891

705,444

1,168,447

62.35%

823,770

11160

Busselton Jetty – Insurance Recovered

13,770

 -

13,770

100.00%

 -

Payout on a claim for storm damage to Railway House.

11162

Busselton Jetty - Underwater Observatory – Reimbursement of Utilities Charges

10,472

 -

10,472

100.00%

3,600

The City recoups both electricity and sewer service charges from Busselton Jetty Inc.  Due to an administrative oversight this item has not been budgeted, however there is a nil impact on the municipal net current position due to this income being put into the Jetty reserve.  This offsets the costs which are also put into the reserve.

11300

Sanitation Waste Services  Administration – Parenting Leave Reimbursements

10,856

 -

10,856

100.00%

10,856

Parenting leave reimbursement was not planned at the time of the development of the 20/21 budget.


 

11301

Regional Waste Management Administration – Reimbursements

47,958

16,497

31,461

65.60%

(1,833)

The contributions to the 2020/21 Southwest Regional Waste Group Project were received from 10 participating local governments in November, totalling $48K. Only $22K was budgeted for the year, and this was spread over 12 months.

11501

Operations Services Works – Insurance Reimbursements

200,613

45,900

154,713

77.12%

24,679

Workers compensation claims totalling $201K have been received YTD. This is by nature very difficult to predict. $61K was budgeted for the year, spread evenly over 12 months.

B1401 & B9610

Old Butter Factory – Insurance Reimbursements

149,415

 -

149,415

100.00%

 -

Conservation and fire damage works now completed.  Insurance claim has now been approved and paid.  Not budgeted as additional works were required for structural and fire compliance that had not been scoped at commencement of the works.  Not unusual for conservation projects of this nature.  Net impact after insurance claims is estimated at approximately ($30K).

M9999

Road Maintenance Bal Of Budget – Insurance Reimbursements

778,013

 -

778,013

100.00%

778,013

Storm damage claims from the storm events in May 2020.

 

2.      Other Revenue

Ahead of YTD budget by $109K, or 35.84%, 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

42,022

4,815

37,207

772.73%

10,204

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

9,346

 -

9,346

100.00%

110

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.

10630

Economic and Business Development Administration – LSL Contributions from other LG’s

9,738

 -

9,738

100.00%

9,738

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.

Planning and Development Services

179,397

105,561

73,836

69.95%

(3,409)

10925

Preventative Services –

CLAG – Sundry Income

77,316

3,060

74,256

2426.68%

(321)

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

28,146

45,000

(16,854)

(37.45%)

(3,416)

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

161,968

165,900

(3,932)

(2.37%)

(28,165)

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

18,747

(16,278)

(86.83%)

(2,083)

EWS (Dunsborough depot crew and admin staff) check the metre on a quarterly basis and then inform Finance what needs to be invoiced to Dunsborough & Districts Water Cartage.  Due to administrative staff being on long service leave over January and February, this process was overlooked.  Billing should largely catch up to budget for YTD April figures.

G0030

Busselton Transfer Station – Sale of Scrap Materials

51,507

59,955

(8,448)

(14.09%)

(29,990)

There was an initial spike in sales compared to the timing of the budget, and better than predicted prices received for scrap metal. However, as predicted this has slowed somewhat as the financial year has progressed.

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $4.1M, or 6.95%, less than expected when compared to the budget YTD as at March. The following individual expense line items on the face of the financial statement have YTD variances that meet the material reporting thresholds:

 

3.      Materials and Contracts

Better than budget by $3.1M, or 23.23%. 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

1,600,471

1,773,220

172,749

9.7%

108,177

10151

Rates Administration

175,435

250,553

75,118

30.0%

26,272

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

37,124

61,303

24,179

39.4%

5,593

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

987,126

998,177

11,051

1.1%

76,478

·   Software licences – Although no licence costs were incurred in March, creating a large positive swing in the variance, the City’s licences still 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 continued to use Landgate. This will be adjusted for next budget.

10360

Customer Services

18,428

35,524

17,096

48.1%

1,712

·   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

89,321

46,035

(43,286)

(94.0%)

4,558

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

30,560

47,017

16,457

35.0%

(6,326)

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

66,780

106,209

39,429

37.1%

(5,456)

Lower than expected maintenance costs to the end of the reporting period.  Less reactive maintenance for FY to date.

Community and Commercial Services

980,408

1,698,103

717,696

42.3%

(31,854)

10380

Busselton Library

44,126

90,261

46,135

51.1%

5,460

·    Non-capital 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. Purchase Order has been raised which will fully expend $17,574 remaining in this line.

·    Contractors (Inc Contract staff) - $8,000 underspend to offset $8,000 grant income not received (Be Connected Grant).

·    Entity Specific Consumables – The coffee machine has been disposed of, which means that there will be no expenditure, and no offset income.

10381

Dunsborough Library

16,882

26,972

10,090

37.4%

0

·     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

9,140

37,592

28,452

75.7%

3,233

The City’s application to the State Government for the 2021 & 2022 Every Club grants was successful. Grant deeds have been received and executed. It is envisaged that $15K of the $30K rthat has been invoiced will need to be rolled into next FY to fund the new Community and Recreation service trainee and the remaining $15K will be expended on delivering the program through workshops.

10541

Recreation Planning

1,850

116,416

114,566

98.4%

26,264

Timing of expenditure was awaiting the outcomes of external grant applications. As of 28 February, grant deeds have now been finalised; the scope has been agreed with the preferred consultant. It is that a total of $70k will be finalised prior to EOFY.

10590

Naturaliste Community Centre

37,859

75,480

37,621

49.8%

3,209

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.

10591

Geographe Leisure Centre

223,310

282,518

59,208

21.0%

(11,277)

This is the same as the factors listed above for the NCC. Expenditure will increase over the next couple of months as works that have been on hold due to material shortage and contractor unavailability to commence.

10600

Busselton Jetty Tourist Park

350,732

435,762

85,030

19.5%

(33,324)

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

18,100

70,118

52,018

74.2%

(1,858)

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%

 -

Payment to Surf Lifesaving WA delayed.  As at 31 March, awaiting signed Deed of Service.

Expected expenditure is now due in Q4.

11151

Airport Operations

152,284

250,112

97,828

39.1%

(37,368)

The budget variance YTD includes the key allocations of:

·   security screening of $45K not spent;

·   contractors - $40K 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 $4K;

o   apron lighting repairs of approximately $3K;

o   general grounds maintenance and improvements of approximately $12K

B1361

YCAB (Youth Precinct Foreshore)

24,415

42,651

18,236

42.8%

2,646

Operating grants forecast were not available as planned and therefore associated expenditure has not occurred. Alternative funding was sourced to run a program in Dunsborough which commenced in February and March.  Full invoicing for these activities has not as yet been received, and is also not expected to come in as high as what was originally forecast based on the grant funding.


 

Planning and Development Services

814,054

1,578,218

764,164

48.4%

162,688

10810

Statutory Planning

15,469

25,533

10,064

39.4%

37

Not possible to predict when consultancy services will be required in advance.  In this case, funds have been committed (heritage and traffic advice) but invoices not received.   

10820

Strategic Planning

153,648

181,818

28,170

15.5%

(3,753)

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

246,225

450,415

204,190

45.3%

90,445

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

30,425

29,586

97.2%

4,310

There is an error in the timing of the YTD budget.  The full year for contractors is only $5K, however YTD shows $20K, as a budget credit of $15K was processed in June.  The YTD variance for this whole area is actually $14,586.   The reasons for this $14K underspend include the contractor allocation of $5K to implement audit outcomes being done in house, plus very minimal pre-summer assessments of sound level meters, revealing little to no faults requiring repair, due to 2020 COVID event cancellations.

10922

Preventative Services – Mosquitoes

18,774

35,090

16,316

46.5%

3,173

Spring and Autumn burning mitigation programs now complete with all expenses currently being reconciled. Mechanical mitigation program of approximately $80,000 commence on Monday 3rd May with invoicing for works completed expected to be received in the month of May. All funds expected to be spent by end of FY.

10925

Preventative Services – CLAG

119,098

57,747

(61,351)

(106.2%)

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

39,299

407,916

368,617

90.4%

43,041

Spring and Autumn burning mitigation programs now complete with all expenses currently being reconciled. Mechanical mitigation program of approximately $80,000 commence on Monday 3rd May with invoicing for works completed expected to be received in the month of May. All funds expected to be spent by end of FY.

10942

Bushfire Risk Management Planning – DFES

155

10,422

10,267

98.5%

1,158

To be fully reconciled prior to the EOFY.

11170

Meelup Regional Park

56,763

148,523

91,760

61.8%

27,997

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 April 2021, due to initial request for services not attracting a suitable service provider.

B1010-B1028

Bushfire Brigades – Various

89,151

114,426

25,275

22.1%

(9,447)

Emergency operations dependant. YTD actuals vs budget will vary according to emergency operational requirements, and are inherently difficult to predict.


 

Engineering and Works Services

6,754,783

8,169,721

1,414,939

17.3%

(169,286)

12600

Street & Drain Cleaning

182,514

328,302

145,788

44.4%

33,091

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

139,487

283,500

144,013

50.8%

(9,102)

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

19,710

135,909

116,199

85.5%

13,905

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

1,015,363

1,065,807

50,444

4.7%

(17,413)

The year to date underspend variance associated with Building Maintenance decreased by $17K in March from February. 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

902,648

1,305,818

403,170

30.9%

(52,428)

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 $403K expenditure variances for YTD March 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

1,490,135

2,001,156

511,021

25.5%

(34)

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.

·   Approximately $80K in relation to the timing and processing of the monthly recycle (yellow top) bin invoices i.e. the March service costs will be processed into April.

·   · Approximately $20K in relation to the timing and processing of the monthly Cleanaway General Waste disposal invoice. The March service costs will be processed into April.    


 

Various

Roads Maintenance

821,734

292,546

(529,188)

(180.9%)

(71,222)

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

1,078,373

1,376,410

298,038

21.7%

(33,311)

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.  Actual costs incurred in March totalled $212K against a monthly budget of $165K reducing the YTD variance by net $47k. 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 $292K of committed costs representing planned expenditure to occur in future periods – this will significantly reduce the underspend variance once invoices from suppliers are receipted.

5280

Transport - Fleet Management

1,088,997

1,355,901

266,904

19.7%

(35,122)

Fuel and Oil was underspent by $168k YTD accounting for 68% of the Fleet YTD variance. The March invoice estimated to be in the order $85k will be processed into April and will cancel out 50% of the favourable Fuel and Oil variance; this said an end of year surplus is anticipated but will be less than was anticipated in the mid-year budget review as the fuel price has been on the rise. Fuel consumption across the City is now at its highest level as many large Civil works projects are now underway.  Tyre purchases are overspent by $4k YTD however replacement parts/tooling/contractor costs are underspent YTD.  The budget for these items is spread evenly across the year, however spending is generally more cyclical in nature peaking in the busier spring/summer/autumn months of the year.

 

4.    Other Expenditure

$1.2M, or 40.9%, 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

47,490

84,723

37,233

43.9%

9,870

10001

Office of the CEO

46,677

84,723

38,046

44.9%

10,426

The underspend is actually $28K and relates to donations contributions and subsidies budget ($10K), CapeROC budget ($13K) and the CEO Discretionary Budget ($5K).  An end of month system roll-over issue created a $10K underspend error that was rectified in April.

Finance and Corporate Services

573,991

683,533

109,542

16.0%

(1,347)

10000

Members of Council

350,559

410,838

60,279

14.7%

953

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

57,952

86,668

28,716

33.1%

(2,247)

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

862,055

1,878,766

1,016,711

54.1%

116,709

10530

Events & Cultural Services Administration (formerly Community Services Administration)

427,984

577,557

149,573

25.9%

40,794

Invoices from Royal Lifesaving have not yet been received for services rendered YTD.

10532

BPACC Operations

11,668

40,000

28,332

70.8%

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.

10548

Half Iron Man

 -

55,000

55,000

100.0%

55,000

The event was originally budgeted for March, however it will be held in early May at which time the sponsorship and promotional budget will be spent.

10550

Forrest Rally

 -

12,500

12,500

100.0%

 -

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.

10591

Geographe Leisure Centre

21,898

31,621

9,723

30.7%

(530)

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 March there was $4K committed, pending invoices, with the remaining budget to be utilised towards the EOFY.

10625

Art Geo Administration

7,608

20,448

12,840

62.8%

(2,543)

Underspend is offset by additional wages due to in house production of marketing, promotional and interpretation work.

10630

Economic and Business Development Administration

3,440

22,738

19,298

84.9%

703

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

80,172

19,150

23.9%

8,908

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 variance at year end.

11151

Airport Operations

76

420,637

420,561

100.0%

6,552

Relates to marketing activities for RPT services which have not commenced due to COVID.


 

Planning and Development Services

137,670

140,580

2,910

2.1%

9,830

10805

Planning Administration

29,148

45,000

15,852

35.2%

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

13,185

11,635

88.2%

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

134,207

182,134

47,927

26.3%

(29,265)

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 was expected late March, after which the invoice should be forthcoming. 

G0042

BTS External Restoration Works

51,153

37,503

(13,650)

(36.4%)

(29,290)

There was an unforeseen cost increase in groundwater monitoring due to a laboratory error by our third party contractor.

The round of testing conducted in November included the sampling of over 50 groundwater bores, many of which reported “anomalous results”.  The contractor concluded that the lab had made errors in mis-labelling samples, which required re-sampling.

Although the lab did not charge us for additional testing due to their error, the City incurred extra costs when it had to re-engage the contractor to re-test several dozen bores in January.

The Cities legal department is investigating whether compensation from the contractor can be pursued.

 

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%)

-

R0288

Locke Estate –

Leaseholder Contributions

46,678

56,000

(9,322)

(16.6%)

-

Community and Commercial Services

 -

38,851

(38,851)

(100.0%)

-

C6025

Installation of Bird Netting – State Capital Grant

 -

38,851

(38,851)

(100.0%)

-

Planning and Development Services

10,592

 -

10,592

100.0%

 -

10980

Other Law, Order & Public Safety – Donated Assets

8,231

 -

8,231

100.0%

8,231


 

B1025

Yallingup Coastal Bushfire Brigade – Donated Assets

10,592

 -

10,592

100.0%

 -

C3223

Dunsborough Non-Potable Water Network – Federal Capital Grant

483,655

 -

483,655

100.0%

483,655

Engineering and Works Services

4,467,864

9,323,005

(4,855,141)

(52.1%)

(512,362)

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%)

 -

B9999

Donated Buildings (Micro-Brewery Public Toilets)

110,000

 -

110,000

100.0%

110,000

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

 -

240,003

(240,003)

(100.0%)

(26,667)

S0005

Ludlow Hithergreen Road - Second Coat Seal –

Main Roads Capital Grant

180,000

337,500

(157,500)

(46.7%)

(37,500)

S0048

Bussell Highway – Developer Cont. Utilised

200,000

375,003

(175,003)

(46.7%)

(41,667)

S0070

Peel & Queen Street Roundabout Service Relocation –

Developer Cont. Utilised

120,000

800,000

(680,000)

(85.0%)

(250,000)

S0073

Gale Road Rural Reconstruction –

Federal Capital Grant

515,811

1,029,366

(513,555)

(49.9%)

(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

688,143

765,951

(77,808)

(10.2%)

(33,260)

S0076

Kaloorup Road (Stage 1) – Main Roads Direct Grant

106,800

 -

106,800

100.0%

 -

T0020

Capel Tutunup Road –

RTR Capital Grant

 -

1,070,046

(1,070,046)

(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%

 -

 

6.    Capital Expenditure

As at 31 March 2021, there is an underspend variance of 50.3%, or $16.9M, in total capital expenditure, with YTD actual at $16.7M against the YTD amended budget of $33.6M. A portion of this positive underspend variance is offset by the negative variance in Non-Operating Grants, Contributions & Subsidies discussed above, with the remainder offset by the 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
$

Variance
YTD
%

Change in Variance Current Month

$

Land

 -

75,000

75,000

100.0%

25,000

10610

Property Services Administration

 -

75,000

75,000

100.0%

25,000

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

3,037,740

5,573,417

2,535,677

45.5%

1,808,118

B9516

Busselton Library Upgrade

588,304

603,000

14,696

2.4%

(3,729)

Library works completed. Balance of funds to be directed to fit-out items.

B9300/1/2

Aged Housing Capital Improvements

51,489

156,400

104,911

67.1%

11,600

Budgeted works were proposed to separate power and drainage servicing Winderlup Court and Winderlup Villas.  Whilst the power requirements are not triggered until the new conditional land title lots are created, the intention was to progress with this anyway.  The procurement process has elicited one quotation only which, even if acceptable is unlikely to generate an invoice payable in the current financial year.  As such the budgeted funds will be carried over in reserve to be utilised once appropriate contractual arrangements can be made.

B9407

Busselton Senior Citizens

625,483

738,128

112,645

15.3%

 -

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.  The tender to perform these works has now been awarded and are expected to be completed by the end of the financial year.

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

1,344,284

3,276,087

1,931,803

59.0%

1,805,431

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

110,167

368,739

258,572

70.1%

(8,612)

Carried over works from the prior year. Works have now been completed with reconciliation of the final progress claims expected to be completed in May.  Payment should follow shortly thereafter and is expected to fully utilise this budget.

B9606

King Street Toilets

47,781

34,524

(13,257)

(38.4%)

3,836

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 $13K YTD variance is attributable to timing and will clear closer to 30 June.

B9607

General Buildings Asset Renewal Allocation (Various Buildings)

100,598

112,500

11,902

10.6%

(8,114)

This budget was assigned for various Capital works as identified as per the City’s Building Asset Management Plan. $20.6k was outlaid in the month of March reducing the YTD budget by a further $8k. There is a further $30k in committed costs representing either works completed but yet to be invoices or works that have been scheduled but are yet to be completed. All of this budget is anticipated to be utilised come June 30.  

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%)

 -

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

81

140,000

139,919

99.9%

(81)

A review of consultants work to date has been undertaken and Council has endorsed a grant application to the state government for this site.  If the application is accepted (response expected in June), budgeted expenditure will be carried forward into the 21/522 budget year.  If not, much of this budget will be spent by the end of this 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

 -

32,103

32,103

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

878,385

2,401,258

1,522,873

63.4%

46,954

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.  Suitable specifications have now been developed and quotes are being sought, however the new equipment is not expected to be delivered until August 2021.  As such these budgeted funds will remain in reserve and be relisted to be drawn in the 21/22 budget.

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

212,328

39,463

18.6%

23,592

The YTD variance relates to the baggage handling system, the under spend of $39K will be taken up by commitments of $42K for works which have now been completed but will not yet invoiced.

11162

Busselton Jetty - Underwater Observatory

17,523

 -

(17,523)

(100.0%)

-

In February there was $17.5K in unplanned expenditure for an Uninterrupted Power Supply (UPS) for the Underwater Observatory (UWO) lift. This will be funded from the Jetty Reserve.

11401

Transport – Workshop

10,410

30,000

19,590

65.3%

 -

The delivery of hardware for upgrades to the repeater at the communications tower are to be delivered in April.  Installation of these will be dependent upon receiving Telstra approvals.

11402

Plant Purchases (P10)

321,201

1,420,000

1,098,799

77.4%

 -

Underspend variances to budget YTD are due to:

·    The new generators at DWF pond and cell that are expected to be ordered in April, with delivery in May;

·    The waste manager’s new replacement vehicle yet to be ordered/delivered;

·    A waste truck side loader that has been ordered, but delivery/payment is not expected until July (this underspend saving will be a carry-forward purchase from the Plant Reserve in the 21/22 budget);

·    Delays in receiving the invoice for the new wheel loader;

·    The waste compactor semi-trailer purchase has been deferred indefinitely pending development of the new waste plan.

11403

Plant Purchases (P11)

46,995

197,500

150,505

76.2%

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 with delivery expected in April.

11407

P&E - P&G Smart Technologies

 -

74,997

74,997

100.0%

8,333

The 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 now expected in April. 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’s on-going impacts overseas.

Furniture & Office Equipment

257,637

451,088

193,451

42.9%

(28,217)

10250

Information & Communication Technology Services

211,802

407,088

195,286

48.0%

(20,142)

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

12,535,858

25,115,765

12,579,907

50.1%

1,419,456

Various

Roads

7,537,368

12,254,997

4,717,629

38.5%

331,865

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 (expected completion April), 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

 -

1,082,997

1,082,997

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

954,545

1,425,927

471,382

33.1%

155,160

Car Park projects are generally progressing well although there is a $471K 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 (expected completion April).

Various

Footpaths & Cycleways

240,827

1,109,365

868,538

78.3%

74,121

The YTD variance associated with Footpath & Cycleway projects grew by a further $74k to the end of March. This is primarily attributable to the Buayanyup Drain Shared Path project that is yet to commence which represents 55% or $475K of the YTD variance. An extension to the 50% Regional Bike Network grant associated with this project has been secured if the project is to span into the 2022 financial year. There have been added complexities associated with this project. The Bussell Highway Footpath Sections and the Dunsborough Centennial Park Projects contribute a further $217k combined towards the YTD variance respectively where the budget for the aforementioned projects has been earmarked and reassigned to cover additional Queen Street Paving works that are categorised separately under Townscape projects.

Various

Parks, Gardens & Reserves

3,600,339

8,441,045

4,840,706

57.3%

754,094

64% or $3.109m of the YTD variance in this category is attributable to only the four projects listed below;

1.    Dunsborough Lakes Sporting Precinct (Stage 1); Civil works to begin soon but much of the budget to be carried over and added to Stage 2.

2.    Craig Street Groyne and Sea Wall; works currently under way with progress claims anticipated in April.

3.    Site Rehabilitation – Busselton; works postponed in lieu of the site settling, survey and levelling.

4.    Mitchell Park Upgrade; works always planned to commence after Easter holiday period.

Further to the above, in excess of $1m of the YTD variance is attributable to the numerous Public Open Space upgrade projects using Cash in Lieu of Public Open Space contributions spread throughout the City; these works have gone out to Market for formal pricing but will not be done until the new year and thus will represent carry overs.      

Various

Drainage

8,220

75,569

67,349

89.1%

(1,045)

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 financial year.


 

Various

Regional Airport & Industrial Park Infrastructure

194,559

725,865

531,306

73.2%

(15,071)

Bird netting has now been completed and invoices approved for payment and the car park works have been completed but not paid at the time of this report.  The most significant part of the underspend relates to noise amelioration works which is funded from grant funds held in reserve.  This will be partially invoiced by the end of the financial year, but depending on construction timelines, the rest will need to remain on the Airport development budget for future noise amelioration.  Unspent funds will therefore remain in the reserve.

 

7.    Proceeds From Sale of Assets

YTD proceeds from sale of assets is $296K behind budget due to delays in delivery of acquisitions, and the associated transfer to auction of the vehicles being replaced. 

 

Also, aside from a significantly reduced capital replacement program in both light vehicles and heavy plant items, many existing items of plant that were due to be replaced have been retained in service to maintain operational requirements.

 

8.    Proceeds From New Loans

$7.5M of the budgeted proceeds of $7.7M are related to the planned drawdown on the construction loan for the BPACC. This project has been deferred in consultation with the Federal Government.  Construction is now planned to commence in July 2021.  Grant funding will start to be acquitted in the second half of 2021, as will the drawdown on the borrowing facility. 

 

The remaining $200K of the variance is offset by advances to community groups which have not occurred at this point in time.

 

9.    Repayment of Capital Lease

The budget was being finalised during the first COVID lockdown. As such, the timing was not set as accurately as it could have. The timing difference YTD will rectify by the end of June.

 

10.  Advances to Community Groups

No applications have been approved to date.  The $200K positive variance is offset by the non-receipt of the associated loans funds that the City would receive for these on-lending purposes.

 

11.  Transfer to Restricted Assets

There is a YTD variance in transfers to restricted assets of $5.1M more than amended budget.

 

At the time of budgeting it is not possible to predict what grants will be received in what timeframe, nor when they will be spent and hence potentially transferred to restricted assets beforehand.  The following grants, totaling $2.3M, have been received and transferred to restricted assets for which there is no budgeted transfer and full acquittal completed:

·    Grant funding received from Federal Government for “Drought Communities Program” of $500K (attributable to CC C3223 Dunsborough Non-Potable Water Network), was received in September and another $200K received in March.  Budget projected allocation was in June as was the anticipated expenditure, hence no necessity to budget for a transfer to restricted assets;

·    $841K of the $1.6M grant for the Dunsborough Lakes Sporting Fields Development was received in March;

·    $855K 3rd instalment of the annual Roads to Recovery Grant allocation that has not been fully acquitted by YTD March.

 

Developer contributions, deposits and bonds are inherently hard to predict and budget for. An annual amount of $63K spread evenly over 12 months was budgeted, however over $2.8M has been received  YTD, the bulk of which are for road works bonds ($2.3M).

 

12.  Transfer from Restricted Assets

YTD there has been $2.3M transferred from restricted assets into the Municipal Account. This was mainly attributable to refunds of road work bonds of $1.4M, refund of hall deposits of $26K, Busselton Jetty Tourist Park deposit refunds of $344K, $484K spent from the 1st $500K tranche of the Dunsborough Non-Potable Water Network grant, and other sundry refunds of $46K.

The variance to YTD budget for these items is due to majority of the transfers being forecast to occur in June.

Investment Report

As at 31st March 2021 the value of the City’s invested funds totalled $82.29M up from $81.29M as at 28th February 2021. 

 

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) increased by $1.0M to $7.0M.  

 

During the month of March six term deposits totalling the amount of $20.0M matured. Existing deposits were renewed for a further 121 days at 0.36% on average.

 

The official cash rate remains steady for the month of March at 0.10%.  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 March 2021 are provided below to ensure there is appropriate oversight and awareness.

 

Date

Payee

Description

$ Amount

4/03/2021

SHELTER BREWING CO - HOSPITALITY

SOD TURNING - HILTON HOTEL DEVELOPMENT

247.50

6/03/2021

QANTAS AIRFARES PERTH - GERALDTON

ATTENDANCE AT TOURISM COUNCIL WA REGIONAL TOURISM CONFERENCE 3 - 5 MAY 21 -GRANT HENLEY

414.44

16/03/2021

AUST INSTITUTE OF COMPANY DIRECTORS

COMPANY DIRECTOR COURSE - 31 MAY 21 - NAOMI SEARLE

7,823.00

17/03/2021

VIRGIN AIRFARES- BROOME - PERTH

BME - PER -21 JUNE 2021 - MIKE ARCHER & KYM SULLIVAN

844.56

18/03/2021

VIRGIN AIRFARE PERTH - BROOME

ATTENDANCE AT RCAWA MEETING 19 JUNE 21 - GRANT HENLEY

422.28

19/03/2021

HERTZ CAR HIRE BROOME

CAR HIRE - 17 - 20 JUNE 21-  RCAWA MEETING - MIKE ARCHER & GRANT HENLEY

       499.28

 

 

TOTAL

$9,751.78

*Funding from CEO’s professional development allowance.

 


Statutory Environment

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

Relevant Plans and Policies

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

Financial Implications

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

Stakeholder Consultation

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

Risk Assessment

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

Options

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

CONCLUSION

Budget timings remain affected by the impacts of COVID-19 and are gradually being re-aligned. As at 31 March 2021, the City’s net current position stands at $13.3M. The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.  


Finance Committee

43

12 May 2021

6.1

Attachment a

Financial Activity Statement - March 2021

 



















Finance Committee

45

12 May 2021

6.1

Attachment b

Investment Report - March 2021

 


Finance Committee                                                             47                                                                      12 May 2021

6.2             LIST OF PAYMENTS MADE - MARCH 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 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 is simply for information purposes and noting

VOTING REQUIREMENT

Simple Majority

ATTACHMENTS

Attachment a   List of Payments - March 2021  

 

OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers M118689 – M118737, EF077862 – EF078629, T7548 – T7550, DD004413 – DD004446, together totalling $8,843,082.68.

 

EXECUTIVE SUMMARY

This report provides details of payments made from the City’s bank accounts for the month of March 2021, 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, 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 March 2021 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 March 2021 is presented for information.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

58

12 May 2021

6.2

Attachment a

List of Payments - March 2021

 












Finance Committee                                                             61                                                                      12 May 2021

6.3             APPLICATION FOR RATE EXEMPTION - WARATAH SUPPORT CENTRE (SOUTH WEST) 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 Statutory Declaration  

 

OFFICER RECOMMENDATION

That the Council:

1.         Grant a rate exemption to Waratah Support Centre (South West) Inc. on 24 Kent Street, Busselton, effective 1 July 2020, under section 6.26(2)(g) of the Local Government Act 1995; and

2.         Agree that this rate exemption is to continue where Waratah Support Centre (South West) 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 Waratah Support Centre (South West) Inc. (WSC) for rate exemption on a leased property at 24 Kent Street, Busselton. This property was occupied by WSC in June 2014 and is used to deliver free specialised and therapeutic intervention, counselling and support services to people who have experienced sexual assault and/or abuse and/or family domestic violence. These services are provided free to the community without the need for any user to be a WSC member.

This report recommends that exemption be granted effective from 1 July 2020 and not retrospectively due to the application only having been lodged this financial year. Granting of rate exemption would be in accordance with section 6.26(2)(g) of the Local Government Act 1995.

BACKGROUND

The property at 24 Kent Street Busselton was occupied by WSC in June 2014 so as to provide free specialised and therapeutic intervention, counselling and support services to people who have experienced sexual assault and/or abuse and/or family domestic violence. Funding to provide these services is almost totally derived from government grants with WSC being a not-for-profit benevolent institution with a deductible gift receipt status.

 

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 specialised and therapeutic intervention, counselling and support services provided by WSC are charitable in nature and as such the property at 24 Kent Street, Busselton would be 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 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 purpose remains in place.

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 1 July 2020 would see an estimated $3,667 reduction to Councils 2020/21 rating income.

 

This rating income reduction would be approximately $3,758 for future financial years where 24 Kent Street, Busselton continues to be leased by WSC and used for providing the free services as per their rate exemption application.

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.

 

However, if Council choses to decline the rate exemption application then staffing and/or legal costs may be incurred should WSC 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 24 Kent Street, Busselton whilst leased by WSC and used by them to deliver free specialised and therapeutic intervention, counselling and support services to people who have experienced sexual assault and/or abuse and/or family domestic violence would be eligible for rate exemption under section 6.26(2)(g) of the Act.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

If the rate exemption on 24 Kent Street, Busselton is granted then it would be effective from 1 July 2020 due to the application only having been lodged this financial year and will be implemented within 1 to 2 weeks of Councils decision.  


Finance Committee

66

12 May 2021

6.3

Attachment a

Rate Exemption Application With Statutory Declaration

 






Finance Committee                                                             69                                                                      12 May 2021

6.4             BUDGET AMENDMENT REQUEST - LEGAL SERVICES

STRATEGIC GOAL

6. LEADERSHIP Visionary, collaborative, accountable

STRATEGIC OBJECTIVE

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

SUBJECT INDEX

Budget Planning and Reporting

BUSINESS UNIT

Legal and Property Services

REPORTING OFFICER

Manager Legal and Property Services - Ben Whitehill

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

Nil

 

OFFICER RECOMMENDATION

That the Council:

1.         Endorse the requested budget amendments outlined in this report, transferring $80,000 from the Legal Expenses Reserve to the Municipal Account.

2.         The net budget amendment, as outlined within this report and in accordance with section 6.8(1) of the Local Government Act 1995, results in a nil impact on the 2020/21 annual operating budget and a nil impact on the budgeted net current position.

EXECUTIVE SUMMARY

This report seeks Council approval of a budget amendment as detailed in this report. Adoption of the officer recommendation will result in a nil impact to the City’s budgeted operating result and nil impact on the net current position.

BACKGROUND

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

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

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

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

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

OFFICER COMMENT

Council adopted its 2020/2021 Municipal Budget on Monday 27 July 2020 with a balanced budget position. Since then, officers have identified areas within the budget that require reconsideration or adjustment. It is good management practice to revise the adopted budget when it’s known that circumstances have changed. To ensure this is the case, budgets are reviewed on a monthly basis.

 


Amendments to the budget are categorised into the three key types as listed below:

 

1.         Adjustments impacting the budget balance or net position of the City; relatively uncommon type.

2.         Adjustments with no impact on the budget balance; most common amendment type.

3.         Adjustments to transfer budget between capital and operating undertakings; relatively uncommon type.

The adjustments that are required for this budget amendment are of the type 2 category above. The below commentary outlines the details of the required amendment.

Legal expenses this financial year have exceeded the budget allocation of $50,000. Current expenditure as at 3 May 2020 is $108,343 with further commitments of $26,690 though many of these may not be realised this financial year.

The significant legal expenses already incurred this financial year are summarised below:

 

Summary of expense

Approximate expense incurred

Comment

External legal advice and representation for extractive industry compliance actions

$30,000

The City has obtained a successful prosecution in one extractive industry prosecution with the other matter continuing.

External legal advice and representation defending an application for judicial review in the Supreme Court

$30,000

The Supreme Court matter found in the City’s favour and the City has a costs order which should see a not insignificant portion of the City’s costs returned either later this financial year or next financial year.

External legal advice about Busselton Performing Arts and Convention Centre (BPACC) – competition law, construction contract and other items

$20,000

External specialist advice sought in response to potential competition law concerns raised. Advice on construction contract terms.

External legal advice relating to potential contamination claims

$12,000

Ongoing specialist legal advice about potential contamination claims.

The payment of costs inclusive excesses for professional indemnity claims

$10,000

$5,000 costs inclusive excess for two potential professional indemnity claims defended by LGIS.

Some of these significant items are one off project related matters (BPACC advice) or atypical (Supreme Court judicial review matter). The City also notified LGIS of an unusually high number of potential professional indemnity claims, four this financial year, two of which the excesses have been invoiced and paid.

To cover a shortfall in the Legal Expenses budget officers recommended that $80,000 is transferred from the Legal Expenses Reserve. Any unspent funds will be returned the Legal Expenses Reserve.

Factors that will impact the level of expenditure over the final two months include whether the outstanding extractive compliance action progresses, whether further specialist legal advice is required for the BPACC construction contract and whether LGIS invoices the City for two excesses for outstanding potential professional indemnity claims.

Statutory Environment

Section 6.8 of the Local Government Act 1995 refers to expenditure from the Municipal fund that is not included in the annual budget. Any adjustments to a budget allocation must be made by an absolute majority decision of the Council. Additionally, where no budget allocation exists, expenditure is not to be incurred until such time as it is authorised in advance, by an absolute majority decision of the Council.

Relevant Plans and Policies

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

Financial Implications

A summary of the financial implications of these recommendations is shown in the table below.  The City has a Legal Expenses Reserve which is intended to cover legal expenses over and above the budgeted amount.

 

Reference Item #

Description

Net Increase in Revenue

Net Additional Expenditure

Net Impact on Operational Budget

Net Impact on Cash

Net Impact on Reserves

1

Increase to Legal Expenses

-

$80,000

-

($80,000)

-

2

Transfer from Legal Expenses Reserve

$80,000

-

-

-

($80,000)

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

CONCLUSION

Council’s approval is sought to amend the budget as per the details contained in this report.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

If the officer recommendation is endorsed, the budget amendment will be processed within a month of being approved.


Finance Committee                                                             70                                                                      12 May 2021

7.               General Discussion Items

 

8.               Next Meeting Date

 

9.               Closure