COB-RGB

 

 

 

 

Finance Committee Agenda

 

 

 

9 June 2021

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

MEETING NOTICE AND AGENDA – 9 June 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, 9 June 2021, commencing at 10.00am.

 

The attendance of Committee Members is respectfully requested.

 

 

DISCLAIMER

Statements or decisions made at Committee meetings 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 Committee meeting.

 

 

 

Mike Archer

 

CHIEF EXECUTIVE OFFICER

 

4 June 2021


CITY OF BUSSELTON

Agenda FOR THE Finance Committee MEETING TO BE HELD ON 9 June 2021

TABLE OF CONTENTS

 

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Declaration of Opening, ACKNOWLEDGEMENT OF COUNTRY and Announcement of Visitors. 2

2....... Attendance. 2

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

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

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

5.1          Minutes of the Finance Committee Meeting held 12 May 2021. 2

6....... Reports. 2

6.1          LIST OF PAYMENTS MADE - APRIL 2021. 2

6.2          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 APRIL 2021. 2

6.3          BUDGET AMENDMENT REQUEST - ENGINEERING AND WORKS SERVICES. 2

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

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

9....... Closure. 2

 


Finance Committee                                                             4                                                                           9 June 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 12 May 2021

Recommendation

That the Minutes of the Finance Committee Meeting held 12 May 2021 be confirmed as a true and correct record.

 


Finance Committee                                                             6                                                                           9 June 2021

6.               Reports

6.1             LIST OF PAYMENTS MADE - APRIL 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 - April 2021  

 

OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers M118738 – M118787, EF078630 – EF079165, T7551 – T7558, DD004447 – DD004474, as well as payroll payments, together totalling $7,826,699.05.

 

EXECUTIVE SUMMARY

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

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

8

9 June 2021

6.1

Attachment a

List of Payments - April 2021

 











Finance Committee                                                             40                                                                                     9 June 2021

6.2             FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 APRIL 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 - April 2021

Attachment b    Investment Report - April 2021  

 

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 30 April 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 30 April 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 30 April 2021

The Statement of Financial Activity (FAS) for the year to date (YTD) shows an overall Net Current Position of $8.4M as opposed to the amended budget of ($5.1M). This represents a positive variance of $13.5M YTD.  This variance increased by $1.5M from $12M at the end of March.  

 

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

 

3.66%

2,637,870

573,602

1.    Operating Grants, Subsidies and Contributions

5,047,728

3,616,107

4,782,445

39.59%

1,431,621

295,366

2.    Other Revenue

494,626

320,827

424,730

54.17%

173,799

65,073

3.    Interest Earnings

820,068

932,220

1,046,684

(12.03%)

(112,152)

(34,391)

Expenses from Ordinary Activities

 

7.04%

4,632,341

485,930

4.    Materials & Contracts

(11,349,062)

(14,653,919)

(18,067,582)

22.55%

3,304,856

232,393

5.    Other Expenditure

(1,908,485)

(3,201,780)

(5,236,779)

40.39%

1,293,295

78,972

6.    Non-Operating Grants, Subsidies and Contributions

5,320,021

11,931,958

34,437,199

(55.41%)

(6,611,937)

(2,211,102)

Capital Revenue & (Expenditure)

 

19.91%

8,488,409

2,542,385

7.    Land & Buildings

(3,256,821)

(7,264,733)

(17,454,059)

55.17%

4,007,912

1,397,235

Plant & Equipment

(1,188,999)

(2,437,620)

(2,510,340)

51.22%

1,248,621

(274,252)

Furniture & Equipment

(266,819)

(451,088)

(461,088)

40.85%

184,269

(9,182)

Infrastructure

(15,162,224)

(28,497,110)

(40,057,700)

46.79%

13,334,886

754,980

8.    Proceeds from Sale of Assets

339,756

581,500

581,500

(41.57%)

(241,744)

54,715

9.    Proceeds from New Loans

0

7,700,000

7,700,000

(100.00%)

(7,700,000)

0

10.  Repayment of Capital Lease

(459,640)

(521,901)

(521,900)

11.93%

62,261

130,513

11.  Advances to Community Groups

0

(200,000)

(200,000)

100.00%

200,000

0

12.  Transfer to Restricted Assets

(5,292,020)

(45,840)

(62,750)

(11444.55%)

(5,246,180)

(131,948)

13.  Transfer from Restricted Assets

2,582,482

1,060,917

2,807,074

143.42%

1,521,565

(573,960)

14.  Transfer from Reserves

6,780,943

5,748,307

34,821,501

17.96%

1,032,636

1,338,543


Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is $2.6M, or 3.7%, ahead of budget YTD.  The material variance items contributing to this include:

 

1.     Operating Grants, Subsidies and Contributions

Ahead of YTD budget by $1.4M, or 39.6%, 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

1,392,700

1,345,814

46,885

3.37%

8,834

10510

Governance Support Services – State Government Operating Grants

 -

17,000

(17,000)

(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

133,047

104,550

28,497

21.42%

2,141

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

20,830

(15,550)

(294.51%)

(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

313,243

233,004

80,239

25.62%

65,437

10540

Recreation Administration – State Government Operating Grants

31,736

16,670

15,066

47.47%

28,333

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.

B1361

YCAB (Youth Precinct Foreshore) – State Government Operating Grants

30,138

13,750

16,388

54.38%

9,588

Additional unbudgeted Crime Prevention Grant received from WA Police to run the Choices Program.


 

11151

Airport Operations – Contributions

85,000

50,000

35,000

41.18%

31,000

More contributions toward airport marketing have been received from neighbouring local governments than was originally anticipated.

10530

Events & Cultural Services Administration – Parenting Leave Reimbursements

14,655

 -

14,655

100.00%

 -

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

940,760

1,039,484

(98,724)

(10.49%)

(12,678)

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

79,900

(58,697)

(276.83%)

(19,984)

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

2,401,026

997,805

1,403,221

58.44%

234,773

S0076

Kaloorup Road (Stage 1) – Main Roads Operating Grant

 -

267,000

(267,000)

(100.00%)

(267,000)

Works originally budgeted to be completed by April are forecast to be complete in June, however grant acquittal and invoicing cannot be finalised until all billing has been processed and a final reconciliation of works has been completed and signed off.

11160

Busselton Jetty – Contributions

842,772

429,700

413,072

(100.00%)

421,386

The second half yearly contribution was budgeted to be received in June, however it was received in April.


 

11161

Busselton Jetty – Interpretive Centre – Reimbursements

20,258

 -

20,258

100.00%

17,620

There was an incorrect re-allocation of the insurance reimbursement for damage to the UPS at the underwater observatory in April. This will be corrected in May.

11162

Busselton Jetty - Underwater Observatory – Reimbursement of Utilities Charges

10,472

 -

10,472

100.00%

 -

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

13,570

 -

13,570

100.00%

2,714

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

11301

Regional Waste Management Administration – Reimbursements

95,919

18,330

77,589

80.89%

46,128

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

11501

Operations Services Works – Insurance Reimbursements

225,008

51,000

174,008

77.33%

19,295

Workers compensation claims totalling $225K 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%

 -

Storm damage claims from the storm events in May 2020.

 


 

2.      Other Revenue

Ahead of YTD budget by $174K, or 54.2%, 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

42,817

29,220

13,597

46.53%

11,982

10200

Financial Services – Sundry Income

9,568

180

9,388

5215.56%

9,423

Due to workload issues and a change in staff in Planning, there was a delay in on-payment of a development application fee to the Department of Planning for a fee received from an applicant in April. This will be rectified in June.

Community and Commercial Services

40,143

5,350

34,793

650.34%

(2,414)

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

7,327

 -

7,327

100.00%

(2,018)

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%

 -

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

184,759

117,290

67,469

57.52%

(6,367)

10925

Preventative Services –

CLAG – Sundry Income

77,336

3,400

73,936

2174.59%

(320)

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

30,027

50,000

(19,973)

(39.95%)

(3,119)

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

226,908

168,967

57,941

34.29%

61,873

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.

G0030

Busselton Transfer Station – Sale of Scrap Materials

123,884

87,590

36,294

41.44%

32,614

The process received for scrap metal has been significantly higher than originally forecast.  As such, higher than predicted volumes have also been delivered to the recyclers to take advantage of this pricing.

 

3.      Interest Earnings

Interest earnings is $112K, or 12%, behind budget YTD April due to the much lower than forecast interest rates.

 

The current low interest rate environment will reduce the City’s income in both the current budget period and future years.

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $4.6M, or 7%, less than expected when compared to the budget YTD as at April. The following individual expense line items on the face of the financial statement have YTD variances that meet the material reporting thresholds:

 

4.      Materials and Contracts

Better than budget by $3.3M, or 22.6%. 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

1,709,349

1,961,470

252,121

12.9%

79,372

10151

Rates Administration

189,907

267,170

77,263

28.9%

2,145

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

38,989

68,179

29,190

42.8%

5,011

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

1,041,586

1,128,832

87,246

7.7%

76,196

·        Software licences –The City’s licences still are on track to go over budget this year with the addition of some unplanned software; invoices for this will be processed in June.

·        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.

·        Contractors (Inc Contract Staff) – By end of year there will be a $100,000 underspend due to the budgeted contractor being engaged as an employee. This was originally funded from reserve.

10360

Customer Services

19,535

39,360

19,825

50.4%

2,730

·        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

109,456

51,150

(58,306)

(114.0%)

(15,020)

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. A budget amendment to this effect was endorsed by the Council in May and will be included in the May financial activity statements.

10521

Human Resources & Payroll

30,610

50,130

19,520

38.9%

3,063

The variance is timing related, with consultancy funds related to the organisational staff survey yet to be expended. Procurement is complete with invoicing expected to be processed in May 2021.

10616, 10617 & 10618

Aged Housing

74,170

118,010

43,840

37.1%

4,410

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

Community and Commercial Services

1,122,524

1,850,001

727,477

39.3%

9,781

10380

Busselton Library

51,163

100,377

49,214

49.0%

3,079

·        Non-capital Furniture & Office Equipment – Offsets an overspend in 7743 due to capitalisation of shelving/furniture purchases. (Purchase Order 49449 raised, $6,063 deposit has been paid, with the remaining funds in process of being rolled over into the 2021/22 budget).

·        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

19,695

31,840

12,145

38.1%

2,055

·        Contractors – Currently chasing up annual carpet cleaning with Facilities who have now assumed responsibility for scheduling annual carpet cleaning).

·        Other Computer costs - $1,800 networking costs no longer required.

·        Photocopying – centralised purchases have not been allocated correctly.

·        Library Resources – expenditure has increased and monies will be spent (annual expenditure patterns were delayed due to RFQ process earlier in the year).

10540

Recreation Administration

10,470

40,970

30,500

74.4%

2,048

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 that 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

135,583

133,733

98.6%

19,167

Timing of expenditure was awaiting the outcomes of external grant applications. During February grant deeds were finalised, however the scope of work will not be finalised with the preferred consultant until June. It is estimated that this will absorb approximately $70K of the underspend variance by EOFY.

10590

Naturaliste Community Centre

46,434

82,222

35,788

43.5%

(1,833)

Variance primarily due to line items below being underspent with explanations:

·        Photocopying – $2.25K this budget allowance has been offset by IT as an expense within their budget.

·        Licence Fees - $4.3K underspend, likely to remain at approximately $3.5K by EOFY.

·        Contractors – $9.3K underspend, pending storage works commencing/completion at NCC in June to expend this area.

·        Holiday Program – $7.3K underspend, likely to result in $5K underspend due to reduced program this year.

·        Leisure Program Activities – $1.4K underspend, this will be expended by EOFY.

Overall anticipate an underspend in this area of approximately $11K by EOFY, but will know more once May EOM figures are finalised.

10591

Geographe Leisure Centre

247,642

307,052

59,410

19.3%

201

Variance primarily due to line items below being underspent with explanations:

·    Building Maintenance Services & Contractors – $21K underspend, delay in securing contractors to do works required – will know more once May EOM financials are finalised.

·    Garden Maintenance – $1.1K underspend, invoice timing.

·    Swimming Pool Maintenance/Repairs – $5K underspend likely to remain if no breakdown of equipment in June.

·    Photocopying – $8.5K this budget allowance has been offset by IT as an expense within their budget so will not be expensed.

·    Printing – $2.8K – this will be expended.

·    License Fees – $8.6K underspend, likely to be $4K underspend by EOFY due to cancelled Crossfit licence.

·    Non-Capital Furniture & Office Equipment – $9.6K underspend, pending works likely to expend this by EOFY.

·    Holiday Program – $2.3K underspend, will be expensed for items for July program.

·    Leisure Program Activities – $5.6K underspend, this will be expended by EOFY.

It is anticipated that there will be an overall underspend in these areas by EOFY.

10600

Busselton Jetty Tourist Park

397,694

484,180

86,486

17.9%

1,456

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

33,472

72,020

38,548

53.5%

(13,470)

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%

 -

The payment to Surf Lifesaving WA has been delayed.  The Deed of Service has been finalised and payment is expected in May.

11151

Airport Operations

174,740

267,611

92,871

34.7%

(4,957)

The budget variance YTD includes the key allocations of:

·        security screening of $45K not spent

·        car park design, signage, line marking, repairs and maintenance of approximately $28K

The remainder of the variance relates to commitments for:

·        COVID screens $6,500

·        apron lighting repairs of approximately $3K

·        general grounds maintenance and improvements of approximately $4K

·        technical inspections $5,500

B1361

YCAB (Youth Precinct Foreshore)

33,101

47,390

14,289

30.2%

(3,948)

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

955,057

1,710,042

754,985

44.2%

(9,179)

10810

Statutory Planning

15,576

28,370

12,794

45.1%

2,730

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

156,930

202,020

45,090

22.3%

16,920

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

286,465

468,975

182,510

38.9%

(21,680)

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; and

·        Carbunup reserve contaminated site investigations due May 2021.

10920

Environmental Health Services Administration

1,098

36,883

35,785

97.0%

6,199

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

35,311

16,537

46.8%

221

Spring and Autumn burning mitigation programs now complete with all expenses currently being reconciled. Mechanical mitigation program of approximately $80,000 commenced on Monday 3 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

57,830

(61,268)

(105.9%)

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

83,738

453,240

369,502

81.5%

885

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

11,580

11,425

98.7%

1,158

To be fully reconciled prior to the EOFY.

11170

Meelup Regional Park

70,496

161,549

91,053

56.4%

(707)

Expenditure variance due to timing of awarding Cultural Heritage Assessment (CHA) contract as part of the Meelup Regional Park Management Plan review. Initial request for services did not attract a suitable service provider, delaying the project. Contract for CHA awarded 20 April 2021.

B1010-B1028

Bushfire Brigades – Various

110,050

127,140

17,090

13.4%

(8,185)

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

Engineering and Works Services

7,559,403

9,126,355

1,566,952

17.2%

1,299,670

12600

Street & Drain Cleaning

182,514

364,780

182,266

50.0%

36,478

Year to date expenditure for these services will begin to track back to budget in May and June pursuant to pre-rainy-season drain abduction works that commencing in mid to late April. These works ensure drains are free of debris to mitigate against flooding.  At time of writing this commentary a further $138k in work have already been receipted in May. This leaves $107K in ongoing works to be invoiced in the final month of June with these works ongoing. This budget is anticipated to be fully expended as at 30 June.

12620 & 12621

Rural & Urban Tree Pruning

141,929

315,000

173,071

54.9%

29,059

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

21,819

151,010

129,191

85.6%

12,992

The year to date underspent variance associated with Building Maintenance increased by $86K in April to $136K. Scheduled maintenance activities on various buildings are in progress post the busy Easter holiday period. This is evidenced by the $143K in existing orders that represent either works underway or completed works pending receipt of an invoice from the supplier. This budget is anticipated to be fully expended as at 30 June.  

Various

Building Maintenance

1,047,374

1,184,230

136,856

11.6%

86,413

The year to date underspent variance associated with Building Maintenance increased by $86K in April to $136K. Scheduled maintenance activities on various buildings are in progress post the busy Easter holiday period. This is evidenced by the $143K in existing orders that represent either works underway or completed works pending receipt of an invoice from the supplier. This budget is anticipated to be fully expended as at 30 June.  

Various

Other Infrastructure Maintenance

1,035,408

1,444,249

408,840

28.3%

1,153,328

This category encompasses the consolidation of almost 100 individual Cost Codes representing a unique array of services delivered right 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 $408K YTD expenditure variance to budget at the end of April is mostly attributable to timing with the budget having been evenly spread across the financial year. At the time of writing this comment there are currently $406K in committed costs and a further $142K in costs that have been receipted. $40K of the Boat Ramp Maintenance budget will be utilised to notionally offset construction costs associated with Abbey beach groynes; thus this variance will remain as at 30 June.       

Various

Waste Services

1,754,944

2,219,340

464,396

20.9%

(46,625)

The YTD under expenditure to budget for Waste Services Consolidated is attributable to many factors including the following:

·        $101K under expended variance to budget associated with Contamination Site Contractor costs. Environmental based costs such as testing and monitoring were not known at the time of budget preparation; investigations are ongoing.

·        $100K under expended variance to budget associated with the Dunsborough Waste Site. The green waste stock pile will now be processed in the 2022 financial year contributing to this variance.

·        $97K under expended variance to budget associated with External Waste Disposal being gate house disposal costs at the Cleanaway Dardanup landfill.  Some of this is timing pending the receipt of the April monthly invoice.

·        $62K favourable variance associated with the postponement of the FOGO trail. These funds will net-off against the Waste Reserve with the year-end transfer of funds calculation.


 

Various

Roads Maintenance

889,853

364,780

(525,072)

(143.9%)

4,116

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

1,221,905

1,541,591

319,687

20.7%

21,649

Materials & Contracts costs associated with Public Open Spaces will increase significantly now through to the end of June.  Significant volumes of works began after the Easter public holidays with invoices now starting to flow through to the City. Included in the YTD variance is a one-off non-cash stock adjustment that when excluded drops the YTD variance by $106K.  Of note, there is $356K in committed costs representing either works underway or completed works pending receipt of an invoice from the supplier. At the time of writing this comment a further $163K in invoices had been receipted through in the early weeks of May.

5280

Transport - Fleet Management

1,247,274

1,514,295

267,021

17.6%

117

Fuel and Oil was underspent by $149,683K YTD accounting for 56% of the Fleet YTD variance. 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 underspent by $8,713 YTD and replacement parts/tooling/contractor costs are underspent $108,625 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.

 

5.    Other Expenditure

$1.3M, or 40.4%, 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

64,995

92,470

27,475

29.7%

(9,758)

10001

Office of the CEO

64,182

92,470

28,288

30.6%

(9,758)

The underspend relates to donations contributions and subsidies budget ($10K), CapeROC budget ($13K) and the CEO Discretionary Budget ($5K).

Finance and Corporate Services

629,515

814,899

185,384

22.7%

75,843

10000

Members of Council

391,994

456,950

64,956

14.2%

4,676

Timing variances exist in relation to the payment of elected member allowances and reimbursements.  The main contributors being $23K related to timing variances in payment of sitting fees, the elected members training budget underspent by $16K, and no expenditure against the Council holding account with a YTD budget of $11K.  The timing variances for expense reimbursements are difficult to predict when budgeting. 

10151

Rates Administration

30,845

102,630

71,785

69.9%

68,297

Budget variances are due to an Unimproved Revaluation invoice totalling $55,787 yet to be processed plus interim valuation invoices still to be received.

10700

Public Relations

63,384

95,520

32,136

33.6%

3,420

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

931,217

1,958,244

1,027,028

52.4%

10,316

10530

Events & Cultural Services Administration (formerly Community Services Administration)

436,980

614,415

177,435

28.9%

27,861

Funds currently committed from the 2020/21 events budget through multi-year agreements and Rounds 1 and 2 of the Event Sponsorship Program totals $380,562. In addition, $200,000 is allocated towards the development of an electronic events billboard. This leaves a balance of $205,852 in the 2020/21 events budget for any further event attraction or initiatives. This balance includes funds from cancelled events.

Of the $250,000 allocated to the 2020/21 marketing budget, $120,000 has been allocated to the Airport Marketing Reserve, $50,000 to the Busselton Performing Arts and Convention Centre (BPACC), up to $12,000 had been allocated to update the City’s Events Strategy and up to $5,000 for the update of tourism signage, leaving a balance of $63,000 for any further initiatives. It is recommended that the remaining balance after any further allocations be transferred to the Airport Marketing Reserve.

Of the $40,000 allocated to City run events, a total of $11,684 was spent on seven Sun-Sets on the Bay events in Busselton and Dunsborough. This leaves a balance of $28,316. Pending any further initiatives, the remaining balance at the end of financial year will remain in the Marketing and Area Promotion Reserve. 

10532

BPACC Operations

11,668

45,000

33,332

74.1%

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

27,500

55,000

27,500

50.0%

(27,500)

The event was originally budgeted for March, however it will be held in early May at which time the remaining 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.

10625

Art Geo Administration

9,260

22,220

12,960

58.3%

120

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

23,692

20,252

85.5%

954

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 will not be spent by the end of the financial year.


 

10634

Business Support Program

62,522

89,080

26,558

29.8%

7,408

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

420,689

420,613

100.0%

52

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

Planning and Development Services

145,323

149,366

4,043

2.7%

1,133

10805

Planning Administration

29,148

50,000

20,852

41.7%

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

14,650

13,100

89.4%

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

137,436

186,801

49,365

26.4%

1,438

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

52,753

41,670

(11,083)

(26.6%)

2,567

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 City’s Legal department is investigating whether compensation from the contractor can be pursued.

 


 

6.   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

23,000

38,851

(15,851)

(40.8%)

23,000

10590

Naturaliste Community Centre – Developer Contributions Utilised

23,000

 -

23,000

100.0%

23,000

C6025

Installation of Bird Netting – State Capital Grant

 -

38,851

(38,851)

(100.0%)

 -

Planning and Development Services

502,478

 -

502,478

100.0%

 -

10980

Other Law, Order & Public Safety – Donated Assets

8,231

 -

8,231

100.0%

 -

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%

 -

Engineering and Works Services

4,747,864

11,837,107

(7,089,243)

(59.9%)

(2,234,102)

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

 -

5,175,000

(5,175,000)

(100.0%)

(2,175,000)

B9999

Donated Buildings (Micro-Brewery Public Toilets)

110,000

 -

110,000

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

 -

266,670

(266,670)

(100.0%)

(26,667)

S0005

Ludlow Hithergreen Road - Second Coat Seal –

Main Roads Capital Grant

360,000

375,000

(15,000)

(4.0%)

142,500

S0048

Bussell Highway – Developer Cont. Utilised

200,000

416,670

(216,670)

(52.0%)

(41,667)

S0070

Peel & Queen Street Roundabout Service Relocation –

Developer Cont. Utilised

120,000

800,000

(680,000)

(85.0%)

 -

S0073

Gale Road Rural Reconstruction –

Federal Capital Grant

100,000

 -

100,000

100.0%

100,000

S0074

Causeway Road Duplication –

Developer Cont. Utilised

515,811

1,143,740

(627,929)

(54.9%)

(114,374)

S0075

Local Road and Community Infrastructure Program –

Federal Capital Grant

800,000

300,000

500,000

166.7%

 -

S0076

Kaloorup Road (Stage 1) – Main Roads Direct Grant

688,143

765,951

(77,808)

(10.2%)

 -

T0020

Capel Tutunup Road –

RTR Capital Grant

 -

1,188,940

(1,188,940)

(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%

 -

 

7.    Capital Expenditure

As at 30 April 2021, there is an underspend variance of 48.6%, or $18.8M, in total capital expenditure, with YTD actual at $19.9M against the YTD amended budget of $38.6M. 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%

 -

10610

Property Services Administration

 -

75,000

75,000

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

3,256,821

7,189,733

3,932,912

54.7%

1,397,235

B9516

Busselton Library Upgrade

591,443

603,000

11,557

1.9%

(3,138)

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

B9300/1/2

Aged Housing Capital Improvements

54,914

168,000

113,086

67.3%

8,175

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

1,438,979

4,819,325

3,380,346

70.1%

1,448,543

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

213,831

409,710

195,879

47.8%

(62,694)

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

38,360

(9,421)

(24.6%)

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%.

B9607

General Buildings Asset Renewal Allocation (Various Buildings)

112,058

125,000

12,942

10.4%

1,040

This budget was assigned for various Capital works as identified as per the City’s Building Asset Management Plan. $11.4K was outlaid in the month of April for painting of the High Street Hall. The categorisation of this expenditure likely represents a maintenance activity and thus should not be capitalised yet is contradictory to this it exceeds the City’s $5k capitalisation threshold. To this end, there is some confusion at present by some staff as to what constitutes Capital as opposed to Operations and Maintenance and this impacts upon budgeting. To this end, these cost may be moved back in against operations prior to 30 June. There is a further $30K in committed costs representing either scheduled works to be completed, being completed or completed yet awaiting an invoices from the supplier.

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

181

140,000

139,819

99.9%

(100)

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 21/22 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

 -

35,670

35,670

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

1,188,999

2,437,620

1,248,621

51.2%

(274,252)

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

199,403

235,920

36,517

15.5%

(2,946)

The YTD variance relates to the baggage handling system, the under spend of $37K will be taken up by commitments of $39K 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

19,227

30,000

10,774

35.9%

(8,817)

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)

596,461

1,420,000

823,539

58.0%

(275,260)

Underspend variances to budget YTD are due to:

·        The new generators at DWF pond and cell that were ordered in April, with delivery of one unit in June and the second in July. (carryover listed in the 21/22 budget);

·        The waste manager’s new replacement vehicle to be ordered and delivered in May;

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

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

11403

Plant Purchases (P11)

46,995

200,000

153,005

76.5%

2,500

One ute ordered with delivery delayed until July and one light truck ordered in December, delivery now delayed until July. Both listed as carryovers in the 21/22 budget.

11404

Plant Purchases (P12)

 -

114,000

114,000

100.0%

 -

One light truck ordered with delivery expected in July. Listed as carryover in the 21/22 budget.

11407

P&E - P&G Smart Technologies

 -

83,330

83,330

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, delivered in late April.  Invoice not received from supplier until May.

Furniture & Office Equipment

266,819

451,088

184,269

40.8%

(9,182)

10250

Information & Communication Technology Services

214,921

407,088

192,167

47.2%

(3,119)

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

15,162,224

28,497,110

13,334,886

46.8%

754,980

Various

Roads

9,618,788

13,319,732

3,700,944

27.8%

(1,016,685)

Capital projects with civil works are commonly scheduled to be carried out 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 and is now nearing completion, but is estimated to come in under budget by approx. $400K due to competitive contractor pricing; this is contributing to the current $1.016M YTD 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. Stage 1 Blackspot works out on Kaloorup Road (S0076 $400K) although recently started will not be completed this financial year and thus will represent a partial carry over as at 30 June.


 

Various

Bridges

 -

2,206,993

2,206,993

100.0%

1,123,996

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 requirement for formal notification of completion from Main Roads and of invoices from them. 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

1,116,071

1,567,490

451,419

28.8%

(19,963)

Car Park projects are generally progressing well although there is a $451K under expended variance to budget YTD. 62% of the YTD variance is attributable solely to the Car Parking associated with the Barnard East Development with the majority of construction to occur in 2022. There is $163K in committed costs associated with ongoing car park projects.

Various

Footpaths & Cycleways

251,608

1,212,850

961,242

79.3%

92,704

The YTD variance associated with Footpath & Cycleway projects grew by a further $92.7K to the end of April. This is primarily attributable to the Buayanyup Drain Shared Path project that is soon to commence which represents 54%, or $523K, of the YTD variance. There has been many significant unforeseen complexities associated with this project. An extension to the 50% Regional Bike Network grant associated with this project has been secured; the project will carry over into the 2022 financial year.

Contributing a further $224K in combined under expenditure to budget are the Bussell Highway Footpath Sections Project and the Dunsborough Centennial Park Footpath Project where the budget for these have been earmarked and reassigned to cover additional Queen Street Paving works.

Various

Parks, Gardens & Reserves

3,923,929

9,349,371

5,425,442

58.0%

584,736

68% representing $3.685M 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 the majority 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 May and June.

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

4.         Mitchell Park Upgrade; works commenced but the supplier went into Administration with the majority of this Budget to be carried over.

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; a report based on the Tender for these projects is to be presented to Council soon.

Various

Drainage

30,223

82,294

52,071

63.3%

(15,278)

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

221,605

758,380

536,775

70.8%

5,470

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.

 


 

8.    Proceeds From Sale of Assets

YTD proceeds from sale of assets is $242K 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.

 

9.    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.

 

10.  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.

 

11.  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.

 

12.  Transfer to Restricted Assets

There is a YTD variance in transfers to restricted assets of $5.3M 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, totalling $2.4M, 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 $2.9M has been received YTD, the bulk of which are for road works bonds ($2.4M).


 

13.  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 $1.5M, refund of hall deposits of $26K, Busselton Jetty Tourist Park deposit refunds of $393K, $484K spent from the first $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.

 

14.  Transfer from Reserves

YTD there has been $6.8M transferred from restricted assets into the Municipal Account, compared to a budget of $5.7M. The discrepancy is caused by the earlier than expected completion of many reserve funded capital projects, most notably $882K worth of road works.

Investment Report

As at 30 April 2021, the value of the City’s invested funds totalled $82.2M, being no change from $82.29M as at 31 March 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) remained constant at $7.0M.  

 

During the month of April, six term deposits totalling the amount of $19.0M matured. Existing deposits were renewed for a further 121 days at 0.30% on average.

 

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

 

Date

Payee

Description

$ Amount

2/04/21

QANTAS AIRWAYS

2021 PERTH AIRPORT WA TOURISM CONFERENCE 3-5 MAY 2021 IN GERALDTON - CR K. COX

409.98

6/4/21

THE FLOWER PLACE BUSSELTON

SYMPATHY FLOWERS

80.00

12/04/21

SHELTER BREWING BUSSELTON

CARD USED IN ERROR - EXPENSE FULLY REFUNDED

58.00

22/04/21

ZEST FLOWERS DUNSBOROUGH

ANZAC DAY WREATH

100.00

 

 

TOTAL

$647.98

 

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

As at 30 April 2021, the City’s net current position stands at $8.4M. The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.  


Finance Committee

42

9 June 2021

6.2

Attachment a

Financial Activity Statement - April 2021

 



















Finance Committee

60

9 June 2021

6.2

Attachment b

Investment Report - April 2021

 


Finance Committee                                                             63                                                                        9 June 2021

6.3             BUDGET AMENDMENT REQUEST - ENGINEERING AND WORKS SERVICES

STRATEGIC GOAL

STRATEGIC OBJECTIVE

1. COMMUNITY: Welcoming, friendly, healthy

1.3 A community with access to a range of cultural and art, social and recreational facilities and experiences.

SUBJECT INDEX

Budget Planning and Reporting

BUSINESS UNIT

Engineering Support

REPORTING OFFICER

Director, Engineering and Works Services - Oliver Darby

AUTHORISING OFFICER

Director, Engineering and Works Services - Oliver Darby

NATURE OF DECISION

Executive: substantial direction setting, including adopting strategies, plans and policies (excluding local planning policies), tenders, setting and amending budgets, funding, donations and sponsorships, reviewing committee recommendations

VOTING REQUIREMENT

Absolute Majority

ATTACHMENTS

Nil

 

OFFICER RECOMMENDATION

That the Council endorse the requested budget amendment outlined in this report, recognising the additional income received in grant funding, and the corresponding expenditure budget:

 

Reference

Description

Project Code

Additional External Revenue

Use of Revenue Received in Prior Years

Additional Expenditure / (Reduce Expenditure)

Transfer from Reserves

 

Reserve Impact

Impact on Budget

1

Townscape Works Dunsborough – RAC Grant Hannay Lane

C1026

$50,000

 -

$50,000

-

-

 -

 

The budget amendment is made in accordance with section 6.8(1) of the Local Government Act 1995 and results in a $0 net impact on the 2020/21 annual budget.

 

EXECUTIVE SUMMARY

This report seeks Council approval of budget amendments as detailed in this report. Adoption of the officer recommendation will result in a zero ($0) impact to the City’s budgeted net current position.

BACKGROUND

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

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

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

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

 

Approval is therefore sought for the budget adjustments for the reasons specified.


 

OFFICER COMMENT

Council adopted its 2020/2021 Municipal budget on Monday 27 July 2020 with a balanced budget position. Since then, officers have identified budgets that require adjustment. It is good management practice to revise the adopted budget when it is known that circumstances have changed.

 

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

i.          Adjustments impacting the budget balance or net position of the City: relatively uncommon type.

ii.         Adjustments with no impact on the budget balance: most common amendment type.

iii.        Adjustments to transfer budget between capital and operating undertakings: relatively uncommon type.

 

Officers have reviewed the adopted budget for the month of May 2020 and subsequently recommend alterations to the budget as set out below.

 

i.          Adjustments impacting the budget balance.

This section identifies items which either increase or decrease the 2020/2021 budgeted operating position. There are no budget adjustment items requiring Council’s approval of this type.

 

ii.         Adjustments with no impact on the budget balance.

There is one budget amendment items of this type detailed below. The net effect of this amendment on the net budget position is zero ($0).

  

These adjustments are where new expenses are matched with new grants or contributions, or where reserve offsets are transferred between projects. In some instances, it is where requests are made to draw down additional budget from specific reserves for various reasons, or where expenses are reallocated within business units or between projects to meet revised needs.

 

1.    Townscape Works Dunsborough – RAC Grant                                                             Cost Code C1026

The City has secured an RAC grant totalling $50,000 based on a 50/50 contribution towards the Hannay Lane Revitalisation project.

 

It is recommended that the grant be budgeted and applied against the existing Dunsborough Townscape Project Cost Code C1026. This will correspondingly increase the expenditure budget from $150,000 to $200,000.  The City’s co-contribution of $50,000 has already been assigned.

 

Council’s approval is sought to adjust the budget accordingly. 

 

Net Budget Position

After making the above adjustments, the budget position remains unchanged from budget adoption and the Municipal cash budget position remains the same.

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

The proposed budget amendment is supported by the City’s asset management plan, capital works program and long term financial plan.

 

Financial Implications

A summary of the financial implications of this recommendations is shown in the table below. 

Reference

Description

Project Code

Additional External Revenue

Use of Revenue Received in Prior Years

Additional Expenditure / (Reduce Expenditure)

Transfer from Reserves

 

Reserve Impact

Impact on Budget

1

Townscape Works Dunsborough – RAC Grant Hannay Lane

C1026

$50,000

 -

$50,000

-

-

 -

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.  There are no risks identified of medium or greater level.

Options

The Council could decide not to endorse the proposed budget amendment requests.

CONCLUSION

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

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

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

 


Finance Committee                                                             64                                                                        9 June 2021

7.               General Discussion Items

 

8.               Next Meeting Date

 

9.               Closure