COB-RGB

 

 

 

 

Finance Committee Agenda

 

 

 

11 August 2021

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

MEETING NOTICE AND AGENDA – 11 August 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, 11 August 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

 

6 August 2021


CITY OF BUSSELTON

Agenda FOR THE Finance Committee MEETING TO BE HELD ON 11 August 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 21 July 2021. 4

6....... Reports. 5

6.1          LIST OF PAYMENTS MADE - JUNE 2021. 5

6.2          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 JUNE 2021. 23

7....... General Discussion Items. 61

8....... Next Meeting Date. 61

9....... Closure. 61

 


Finance Committee                                                             4                                                                    11 August 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 21 July 2021

Recommendation

That the Minutes of the Finance Committee Meeting held 21 July 2021 be confirmed as a true and correct record.

 


Finance Committee                                                             6                                                                    11 August 2021

6.               Reports

6.1             LIST OF PAYMENTS MADE - JUNE 2021

STRATEGIC THEME

LEADERSHIP - A Council that connects with the community and is accountable in its decision making.

STRATEGIC PRIORITY

4.2 Deliver governance systems that facilitate open, ethical and transparent decision making.

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 - June 2021  

 

OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers M118826 – M118860, EF079829 – EF080582, T7563 – T7565, DD004509 – DD004559, as well as payroll payments, together totalling $10,084,386.60.

 

EXECUTIVE SUMMARY

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

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

8

11 August 2021

6.1

Attachment a

List of Payments - June 2021

 

















Finance Committee                                                             39                                                                 11 August 2021

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

STRATEGIC THEME

LEADERSHIP - A Council that connects with the community and is accountable in its decision making.

STRATEGIC PRIORITY

4.2 Deliver governance systems that facilitate open, ethical and transparent decision making.

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   Investment Report - June 2021

Attachment b    Financial Activity Statement - June 2021  

 

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 30 June 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 June 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 can be provided as required to further supplement the information comprised within the statutory financial reports.

Comments on Financial Activity to 30 June 2021

The Statement of Financial Activity (FAS) for the year to date (YTD) shows an overall Net Current Position of $2.45M as opposed to the amended budget of $643K. This represents a positive variance of $1.8M YTD.  This variance represents a decrease of $15.3M from $17.1M at the end of May.  

 

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

 

4.18%

3,155,707

517,837

1.    Operating Grants, Subsidies and Contributions

6,903,317

4,782,445

4,782,445

44.35%

2,120,872

546,641

2.    Other Revenue

551,450

424,730

424,730

29.84%

126,720

(89,254)

3.    Interest Earnings

870,759

1,046,684

1,046,684

(16.81%)

(175,925)

(20,582)

Expenses from Ordinary Activities

 

4.12%

3,386,233

(1,148,221)

4.    Other Expenditure

(2,599,852)

(5,236,779)

(5,236,779)

50.35%

2,636,927

1,583,138

5.    Non-Operating Grants, Subsidies and Contributions

20,309,932

34,487,199

34,487,199

(41.11%)

(14,177,267)

(5,546,267)

Capital Revenue & (Expenditure)

 

8.96%

3,449,143

(10,375,149)

6.    Land & Buildings

(3,568,495)

(17,454,059)

(17,454,059)

79.55%

13,885,564

8,159,622

Plant & Equipment

(1,324,192)

(2,510,340)

(2,510,340)

47.25%

1,186,148

(52,902)

Infrastructure

(22,065,182)

(40,406,675)

(40,406,675)

45.39%

18,341,493

3,117,518

7.    Proceeds from Sale of Assets

647,517

581,500

581,500

11.35%

66,017

307,762

8.    Proceeds from New Loans

110,000

7,700,000

7,700,000

(98.57%)

(7,590,000)

110,000

9.    Advances to Community Groups

(110,000)

(200,000)

(200,000)

45.00%

90,000

(110,000)

10.  Transfer to Restricted Assets

(9,067,466)

(62,750)

(62,750)

(14350.14%)

(9,004,716)

(3,602,103)

11.  Transfer from Restricted Assets

7,252,387

2,807,074

2,807,074

158.36%

4,445,313

3,406,156

12.  Transfer to Reserves

(23,719,860)

(20,025,834)

(20,025,834)

(18.45%)

(3,694,026)

(3,717,696)

13.  Transfer from Reserves

20,781,683

35,200,476

35,200,476

(40.96%)

(14,418,794)

(17,985,610)


Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is $3.2M, or 4.2%, ahead of budget YTD.  The material variance items contributing to this include:

 

1.     Operating Grants, Subsidies and Contributions

Ahead of YTD budget by $2.1M, or 44.4%, 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

2,765,290

1,737,490

1,027,800

37.17%

980,253

10510

Governance Support Services – State Government Operating Grants

 -

20,400

(20,400)

(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

2,369,264

1,394,881

974,383

41.13%

945,145

Actual grants received are higher than originally budgeted due to the prepayment of approximately half of the 21/22 year grant.  It is never known at the time of budgeting whether or not the commission will prepay any portion, so a normal full year is always budgeted. The prepaid portion is transferred to reserves and budgeted to be drawn down during the 21/22 financial year.  As such, although revenue appears to be significantly higher than budget, due to the restriction of the prepaid component the net impact on the year- end Net Current Position is nil.

10151

Rates Administration – Reimbursements – Legal Fees

61,845

31,600

30,245

48.90%

17,386

There has been a much higher than expected requirement for debt recovery services in relation to overdue rates.  Legal costs for this process are reimbursed by the ratepayers involved. 

10200

Financial Services – Reimbursements

122,650

104,900

17,750

14.47%

(4,093)

The surplus to budget at year end is due to $8.4K more in insurance reimbursements, which are inherently difficult to predict, plus a miscellaneous reimbursement of $11.4K from the ANZ Bank for overcharged merchant fees.

10500

Legal and Compliance Services - Reimbursements

36,311

5,750

30,561

84.16%

22,165

Higher than expected income in this area is due to legal settlements in the City’s favour.  This is not an area that can be forecast with a great deal of accuracy at time of preparing the budget.

10522

Occupational Health & Safety – Reimbursement – Wellness Program

7,160

25,000

(17,840)

(249.16%)

(2,087)

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

354,735

254,100

100,635

28.37%

(3,634)

11151

Airport Operations – Contributions

123,000

50,000

73,000

59.35%

22,000

More contributions toward airport marketing have been received from neighbouring local governments and organisations such as the MRBTA 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

1,299,346

1,329,470

(30,124)

(2.32%)

(16,717)

10820

Strategic Planning – State Government Grants

22,500

37,500

(15,000)

(66.67%)

 -

The variation from Strategic Planning budget (Grant $37,500) is due to the total grant ($75,000) being acquitted in three instalments: the first 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 second payment (30%) was received in May 2021 following adoption of the draft CHRMAP for advertising by the Council (OCM 24 February 2021). The final payment of 20% is due once Council adopts 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 31 March 2022. The $15,000 final grant payment will therefore not be paid until FY 21/22.

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.

Engineering and Works Services

2,483,946

1,461,385

1,022,561

41.17%

(413,261)

S0076

Kaloorup Road (Stage 1) – Main Roads Operating Grant

 -

267,000

(267,000)

(100.00%)

 -

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.  This has happened with most of the revenue being recognised ($92K carried over), however this is actually a Non-Operating Capital Grant with the budget being incorrectly allocated against operational grants.

W0267

Road Safety Signage Infrastructure – Federal Operating Grant

75,117

97,985

(22,868)

(100.00%)

(22,868)

These works were not completed by the end of the financial year.  $23K in relation to the grant funded portion has been carried over.

11160

Busselton Jetty – Contributions

842,772

859,400

(16,628)

(100.00%)

(429,700)

Contributions from BJINC slightly less than budgeted.  The final amount to be received is not known until after year end review of the jetty financials, which is well after the budget is set.


 

11162

Busselton Jetty - Underwater Observatory – Reimbursement of Utilities Charges

25,969

 -

25,969

100.00%

1,726

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.  YTD also contains an insurance re-imbursement of $14K for damage to the UPS during storm events in May 2020.

11300

Sanitation Waste Services  Administration – Parenting Leave Reimbursements

13,570

 -

13,570

100.00%

 -

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

11301

Regional Waste Management Administration – Reimbursements

105,919

22,000

83,919

79.23%

8,163

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

253,793

61,200

192,593

75.89%

(5,013)

Workers compensation claims totalling $254K 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 were completed during the year with the insurance claim being 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. This is 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

780,201

 -

780,201

100.00%

2,188

Storm damage claims from the storm events in May 2020.

 

2.      Other Revenue

Ahead of YTD budget by $127K, or 30%, 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

50,961

33,450

17,511

52.35%

(8,574)

10200

Financial Services – Sundry Income

12,573

200

12,373

6186.34%

(9,400)

Due to workload issues and a change in staff in Planning, there was a delay in on-payment of development application fees to the Department of Planning for fees received from applicants in May. This had not occurred by the end of June but is expected to have been actioned by the end of July.  There was also an unreconciled portion of an overpayment from LGIS for $2K.


 

Community and Commercial Services

40,811

24,550

16,261

66.24%

(26,666)

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

205,367

145,530

59,837

41.12%

(12,246)

10925

Preventative Services –

CLAG – Sundry Income

83,203

4,080

79,123

1939.30%

(331)

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

32,903

60,000

(27,097)

(45.16%)

(3,632)

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

254,311

221,200

33,111

14.97%

(41,767)

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 & G0031

Busselton & Dunsborough  Transfer Station – Sale of Scrap Materials

210,812

196,050

14,762

7.53%

(41,158)

The pricing 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 $176K, or 16.8%, behind budget YTD June due to the significantly lower than forecast interest rates, as a result of the COVID pandemic induced economic downturn. The current low interest rate environment has reduced the City’s income in both the current budget period and future years.

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $3.4M, or 4.1%, less than expected when compared to the budget YTD as at June. The only expense line item on the face of the financial statement that has a YTD variance that meet the material reporting threshold is Other Expenditure.


 

4.    Other Expenditure

$2.6M, or 50.3%, 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

72,279

108,000

35,721

33.1%

3,872

10001

Office of the CEO

71,708

108,000

36,292

33.6%

3,373

The underspend relates to donations contributions and subsidies budget ($8K), CapeROC budget ($20K) and the CEO Discretionary Budget ($8K).

Finance and Corporate Services

851,624

1,114,770

263,146

23.6%

121,836

10000

Members of Council

513,363

550,800

37,437

6.8%

(28,339)

Timing variances exist in relation to the payment of elected member allowances and reimbursements. The main contributors being the elected members training budget underspent by $23K, and no expenditure against the Council Contingency Holding account with a YTD budget of $14K.

10151

Rates Administration

94,102

109,300

15,198

13.9%

(3,306)

Budget variances are due to interim valuation invoices still to be received.

10200

Financial Services

 -

40,900

40,900

100.0%

40,900

The valuation of the City’s Land & Buildings was deferred until the 21/22 financial year to align all asset valuations to the 5 year cycle per the LG Act.  It was also not possible to conduct the valuations in 20/21 year due to COVID related limitations on the availability of valuation consultants in the required timeframe.

10221/27/

28/29/30

Finance & Borrowing Prog 04/11/12/13/14

106,663

231,320

124,657

53.9%

115,660

Notification of the second bi-annual payment of the indicative guarantee for the City’s borrowings through the WA Treasury Corporation, was not received by the end of June.  This has will be therefore be processed in July.

10700

Public Relations

88,713

126,850

38,137

30.1%

(2,423)

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

1,160,011

3,441,809

2,281,798

66.3%

1,274,576

10530

Events & Cultural Services Administration (formerly Community Services Administration)

528,322

751,100

222,778

29.7%

57,824

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

12,018

50,000

37,982

76.0%

(350)

Low cost marketing materials have been developed to date and until final decisions are made regarding the project tenders, no large investments in event attraction will be made.

10547

Iron Man

65

200,000

199,935

100.0%

(65)

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 be completed until later in the calendar year, so will be carried over to the 21/22 budget.

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.

10630

Economic and Business Development Administration

3,440

55,000

51,560

93.7%

15,654

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 relates to cruise ship visitor servicing ($38K), which due to the effects of COVID-19 will not be spent this financial year.

10634

Business Support Program

83,030

106,892

23,862

22.3%

(1,605)

An amount of $19K was not allocated from the total annual budget by year end.

11151

Airport Operations

5,394

1,660,267

1,654,873

99.7%

1,239,408

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


 

Planning and Development Services

161,904

175,000

13,096

7.5%

7,838

10805

Planning Administration

29,148

60,000

30,852

51.4%

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

4,673

17,600

12,927

73.4%

616

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

354,035

397,200

43,165

10.9%

175,016

B1205

Centennial Park – Toilets

76

200,100

200,024

100.0%

200,000

The City’s contribution to the development of the toilets and Café/Kiosk at Centennial Park did not occur in 20/21.  This has been re-listed to proceed in the 21/22 budget.

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 have been forthcoming.  This has been carried over to be paid as part of the 21/22 budget, funded from the year end surplus. 

G0042

BTS External Restoration Works

267,038

50,000

(217,038)

(434.1%)

(24,996)

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.

In May, a legal settlement payout that was made in November 2020 was re-allocated from capital per advice from the Office of Auditor General, as these costs are not capital in nature.

 


 

5.   Non-Operating Grants, Subsidies & Contributions

The negative variance of $14.2M is mainly due to the items in the table below. It should be noted that apart from the Locke Estate Contributions variance (due to COVID hardship deferral relief), and the Donated Assets items, any negative variance in this area will approximately correlate to an offsetting positive underspend variance in a capital project tied to these funding sources. This can be seen in the section below that outlines the capital expenditure variances.

Revenue Code

Revenue Code Description

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Variance
YTD
%

Change in Variance Current Month

$

Finance and Corporate Services

46,678

77,370

(30,692)

(39.7%)

(17,370)

10250

Information & Communication Technology Services – Grants Utilised

 -

17,370

(17,370)

(100.0%)

(17,370)

R0288

Locke Estate –

Leaseholder Contributions

46,678

60,000

(13,322)

(22.2%)

 -

Community and Commercial Services

473,919

1,006,261

(532,342)

(52.9%)

(649,530)

10380

Busselton Library – Grants Utilised

 -

10,000

(10,000)

(100.0%)

(10,000)

10541

Recreation Planning –Grants Utilised

 -

100,000

(100,000)

(100.0%)

(100,000)

11156

Airport Development Operations – Grants Utilised

199,403

188,100

11,303

6.0%

11,303

B9717

Airport Construction, Existing Terminal Upgrade – Grants Utilised

3,416

42,800

(39,384)

(92.0%)

(39,384)

C6025

Installation of Bird Netting – State Capital Grant

28,270

38,851

(10,581)

(27.2%)

(53,769)

C6026

Airport Car Park Reseal – Grants Utilised

75,127

6,700

68,427

1021.3%

68,427

C6087

Airport Construction Stage 2, Landside Civils & Services Inf – Grants Utilised

11,382

 -

11,382

100.0%

11,382

C6099

Airport Development - Project Expenses – Grants Utilised

65,048

520,850

(455,802)

(87.5%)

(455,802)

Planning and Development Services

535,421

1,282,200

(746,779)

(58.2%)

(1,249,258)

10830

Environmental Management Administration – Grants Utilised

 -

185,000

(185,000)

(100.0%)

(185,000)

B1025

Yallingup Coastal Bushfire Brigade – Donated Assets

10,592

 -

10,592

100.0%

 -

B1029

Busselton SES – Donated Assets

 -

97,200

(97,200)

(100.0%)

(97,200)

C3223

Dunsborough Non-Potable Water Network –

Federal Capital Grant

516,597

1,000,000

(483,403)

(48.3%)

(967,058)

Engineering and Works Services

19,253,915

32,121,368

(12,867,453)

(40.1%)

(3,630,108)

11101

Environmental Services Administration – Grants Utilised

 -

30,000

(30,000)

(100.0%)

(30,000)

A0014

Bussell Highway - 0241 – Grants Utilised

 -

744,000

(744,000)

(100.0%)

(744,000)

A0022

Yallingup Beach Road Bridge - 3347 –

Federal Capital Grant

 -

700,000

(700,000)

(100.0%)

(700,000)

A0023

Kaloorup Road Bridge – 3381 – Donated Asset

 -

1,074,000

(1,074,000)

(100.0%)

(138,000)

A0024

Boallia Road Bridge – 4854 – Donated Asset

 -

1,147,000

(1,147,000)

(100.0%)

(138,000)

A0025

Tuart Drive Bridge 0238 – Federal Capital Grant

 -

2,670,330

(2,670,330)

(100.0%)

(2,500,000)

B9407

Busselton Senior Citizens – Developer Cont. Utilised

626,400

738,128

(111,728)

(15.1%)

(544,555)

B9591

Performing Arts Convention Centre – Federal Capital Grant

175,000

5,350,000

(5,175,000)

(96.7%)

 -

B9999

Donated Buildings (Micro-Brewery Public Toilets)

110,000

 -

110,000

100.0%

 -

C0050

Forth Street Groyne Carpark - Formalise and Seal – Developer Cont. Utilised

1,151

12,480

(11,329)

(90.8%)

(11,329)

C0051

Vasse Oval Gravel Car Parking - Dawson (Eastern Side) – Developer Cont. Utilised

228,137

200,000

28,137

14.1%

28,137

C0059

Dunsborough Yacht Club Carpark – Developer Cont.

127,641

160,000

(32,359)

(20.2%)

(92,359)

C1753

Eagle Bay Viewing Platform – Developer Cont. Utilised

 -

95,458

(95,458)

(100.0%)

(95,458)

C2527

Storm Damage Renewal of Infrastructure – Developer Cont. Utilised

594

37,090

(36,496)

(98.4%)

(36,496)

C3020

Donated Assets Parks, Gardens & Reserves

1,956,797

1,500,000

456,797

30.5%

456,797

C3116

Dawson Park (McIntyre St POS) – Developer Cont. Utilised

5,259

159,467

(154,208)

(96.7%)

(76,741)

C3166

Vasse River Foreshore - Bridge to Bridge – Developer Cont. Utilised

11,966

28,000

(16,034)

(57.3%)

(16,034)

C3211

Tulloh St (Geographe Bay Road) - POS Upgrade – Developer Cont. Utilised

2,101

90,332

(88,231)

(97.7%)

(88,231)

C3213

Cabarita Road - POS Upgrade – Developer Cont. Utilised

 -

28,141

(28,141)

(100.0%)

(28,141)


 

C3214

Kingsford Road - POS Upgrade – Developer Cont. Utilised

5,242

154,375

(149,133)

(96.6%)

(149,133)

C3215

Monash Way - POS Upgrade – Developer Cont. Utilised

5,541

167,174

(161,633)

(96.7%)

(161,633)

C3216

Wagon Road - POS Upgrade – Developer Cont. Utilised

5,541

167,174

(161,633)

(96.7%)

(161,633)

C3217

Limestone Quarry - POS Upgrade – Developer Cont. Utilised

5,541

167,174

(161,633)

(96.7%)

(161,633)

C3218

Dolphin Road - POS Upgrade – Developer Cont. Utilised

4,879

91,000

(86,121)

(94.6%)

(86,121)

C3219

Kingfish/ Costello - POS Upgrade – Developer Cont. Utilised

4,689

91,000

(86,311)

(94.8%)

(86,311)

C3220

Quindalup Old Tennis Courts Site - POS Upgrade – Developer Cont. Utilised

4,591

53,283

(48,692)

(91.4%)

(48,692)

C3225

Dunsborough Lakes Sporting Precinct (Stage 1) – Developer Cont. Utilised

 -

1,338,000

(1,338,000)

(100.0%)

(1,338,000)

C3238

Vasse River - General Upgrade – Developer Cont. Utilised

 -

100,000

(100,000)

(100.0%)

(100,000)

C6099

Airport Development - Project Expenses – Grants Utilised

 -

(140,000)

140,000

(100.0%)

140,000

D0009

Busselton LIA - Geocatch Drain Partnership WSUD Improvements – Grants Utilised

17,626

30,000

(12,374)

(41.2%)

(12,374)

D2000

Donated Assets Drainage

2,804,822

1,500,000

1,304,822

87.0%

1,304,822

F0101

Yalyalup Pump Track & Temporary Toilet – Developer Cont. Utilised

 -

150,000

(150,000)

(100.0%)

(150,000)

F1003

Donated Assets Footpaths & Cycleways

816,606

500,000

316,606

63.3%

316,606

F1022

Buayanyup Drain Shared Path – State Capital Grant

59,589

320,000

(260,411)

(81.4%)

32,926

S0048

Bussell Highway – Developer Cont. Utilised

302,935

640,516

(337,581)

(52.7%)

(79,244)

S0070

Peel & Queen Street Roundabout Service Relocation –

Developer Cont. Utilised

392,989

800,000

(407,011)

(50.9%)

72,989

S0072

Kaloorup Road - Reconstruct and Seal Shoulders – Developer Cont. Utilised

200,000

250,000

(50,000)

(20.0%)

(150,000)


 

S0073

Gale Road Rural Reconstruction –

Federal Capital Grant

991,837

1,372,500

(380,663)

(27.7%)

361,640

S0074

Causeway Road Duplication –

Developer Cont. Utilised

1,439,713

1,000,000

439,713

44.0%

(60,287)

S0076

Kaloorup Road (Stage 1) – Main Roads Direct Grant

174,954

 -

174,954

100.0%

68,154

T0019

Wonnerup South Road - Reconstruct and Widening (narrow seal) –

RTR Capital Grant

418,081

448,000

(29,919)

(6.7%)

(29,919)

T0020

Capel Tutunup Road –

RTR Capital Grant

1,163,486

1,426,750

(263,264)

(18.5%)

1,044,570

W0030

Donated Roads

3,666,283

3,000,000

666,283

22.2%

666,283

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

18,039

6,582

11,457

174.1%

(543)

W0265

Seascape Rise - Road Safety Upgrade –

Developer Cont. Utilised

 -

235,000

(235,000)

(100.0%)

(235,000)

 

6.    Capital Expenditure

As at 30 June 2021, there is an underspend variance of 54.9%, or $33.4M, in total capital expenditure, with YTD actual at $27.4M against the YTD amended budget of $60.8M. A large 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 and Restricted Assets 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

4,029

150,000

145,971

97.3%

71,921

10610

Property Services Administration

4,029

150,000

145,971

97.3%

71,921

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

3,564,466

17,304,059

13,739,593

79.4%

8,087,701

B9516

Busselton Library Upgrade

555,092

608,000

52,908

8.7%

5,000

Library works completed. Balance of funds to be directed to fit-out items as a carry over in the 21/22 budget.


 

B9300/1/2

Aged Housing Capital Improvements

64,128

192,000

127,872

66.6%

12,400

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.

B9402

Busselton Waste Transfer Station  - Buildings

18,206

 -

(18,206)

(100.0%)

 -

A requirement arose for a 2.4 x 2.4 Transportable Ablution Block, and savings were identified in the budget for infrastructure that could be utilised for these purposes. This overspend variance will be offset by the identified underspends in infrastructure.

B9407

Busselton Senior Citizens

626,400

738,128

111,728

15.1%

 -

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, however will need to be carried over and completed in the 21/22 financial year.

B9534

Community Resource Centre

36,100

50,000

13,900

27.8%

19,650

The replacement and upgrade of the entire carpeting cam in significantly under budget.

B9556

NCC Upgrade

43,355

130,000

86,645

66.7%

87,957

Work is still underway re-defining the scope of works required.  As this was not clear by year end, funds will not be carried over. A budget amendment may be sought at later date if further re-scoped works are required.

B9558

Churchill Park -  Change Room Refurbishment

32,673

21,000

(11,673)

(55.6%)

(32,673)

Roof sheeting and guttering renewal works were more than expected.

B9591

Performing Arts Convention Centre

1,522,792

14,246,200

12,723,408

89.3%

7,705,294

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 pending final Council decision on the tenders and community surveys. Project will be carried over and re-listed in the 21/22 budget.

B9596

GLC Building Improvements

330,355

491,657

161,302

32.8%

(226,836)

Scheduled building works (some of which were carried over from the 19/20 FY), have been completed. The positive variance to budget is largely due this area also incorrectly containing the budget for Infrastructure capital works at the GLC.

B9605

Energy Efficiency Initiatives (Various Buildings

21,217

103,000

81,783

79.4%

88,726

The $21K expended in the year was associated with the installation of LED lighting at the High Street Hall. $81K of this budget was unspent at 30 June, thus this amount was carried over into the 2022 financial year. Works were planned to replace the existing lighting at the Busselton Library with LSD’s, due to the availability of contractors this was delayed by two weeks with works completed in July. These works valued at $74,000 have subsequently been paid in July 2021.    


 

B9607

General Buildings Asset Renewal Allocation (Various Buildings)

84,565

150,000

65,435

43.6%

40,857

This budget was assigned for various Capital works as identified as per the City’s Building Asset Management Plan. Some items of expenditure have been for undertaking maintenance as opposed to Capital renewal works. To this end, $44K in costs incurred have been moved back and recorded against Operations in the June period. These major maintenance works will still be funded from the Building Reserve, however an under-expended position to budget will result against this item.

B9608

Demolition Allocation

(Various Buildings)

 -

25,000

25,000

100.0%

12,500

Funds were initially allocated to partial demolition of the Weld Theatre by the end of the financial year, in preparation for its integration with the BPACC. Final Council decision on this project is now pending due to further review of tenders and community surveys.

B9610

Old Butter Factory

131,811

 -

(131,811)

(100.0%)

145,623

Conservation and fire damage works were completed early in the financial year. A journal for $145K representing costs associated with the Wood Turners relocation to the Old Butter Factory site was processed in May and hence the end of month $277K unfavourable variance; this JNL has since been reversed back out in June bringing the variance back to its original $131K. An insurance claim reimbursement totalling $99.4K offsets the true costs of $131K leaving a net over spend to budget of $32K as at 30 June. 

B9611

Smiths Beach New Public Toilet

2,456

200,000

197,544

98.8%

200,000

Project commencement delayed due to change s to the project scope as a result of potential changes to size of the toilet facilities (yet to be resolved) and investigations into the capacity of the existing septic system/upgrade to an ATU system to accommodate these changes. We have also encountered long lead times with consultancy and environmental applications / approvals. This underspend surplus has been carried forward to fund the relist of this project in the 21/22 budget.

B9612

Churchill Park

Renew Sports Lights

11,791

140,000

128,209

91.6%

(11,610)

A review of consultants work to date has been undertaken. Remaining budgeted expenditure carried forward, with $73K State Government Grant Funding added to complete the Sports Lights Upgrade in 21/22.

B9711

Busselton Airport – Building

 -

15,000

15,000

100.0%

 -

Small capital works projects that were planned to be completed either prior to Jetstar flights commencing or by the end of the financial year, were not able to proceed due to other priorities. The majority of these projects have been re-budgeted to occur in the 21/22 financial year, before the Jetstar flights commence.

B9717

Airport Construction - Existing Terminal Upgrade

5,704

42,800

37,096

86.7%

1,275

Invoicing in relation to the retention monies owing to Pindan for works completed has not been received.  As a result, this budget will be carried over.

B9809

Busselton Jetty Tourist Park Compliance Works

7,421

80,000

72,579

90.7%

36,179

Compliance electrical works were not able to be completed by the end of the financial year due to competing priorities.  Unspent funds remain in the reserve, with a portion relisted in the 21/22 budget.


 

Plant & Equipment

1,324,192

2,510,340

1,186,148

47.3%

(52,902)

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

283,100

83,697

29.6%

23,588

All baggage handling system invoices have been invoiced and paid. The remaining funds will be included in the outstanding Airport Development Reserve funding balance.  Some funds were utilised to purchase the CCTV for the carparking as well.

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%

 -

The hardware for upgrades to the repeater at the communications tower has been delivered.  Installation of these will be dependent upon receiving Telstra approvals, which is being worked through by Property and Leasing, but will take place in 21/22 FY.

11402

Plant Purchases (P10)

657,839

1,420,000

762,161

53.7%

(61,379)

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);

·        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)

52,990

205,000

152,010

74.2%

(3,495)

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)

8,923

114,000

105,077

92.2%

 -

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

11407

P&E - P&G Smart Technologies

11,041

100,000

88,959

89.0%

(2,704)

Two weather stations were supplied and installed worth $52K, however this was incorrectly allocated as an operational expense.  As such, the underspend variance has been returned to the reserve from which it was meant to be funded.


 

Furniture & Office Equipment

492,196

461,088

(31,108)

(6.7%)

(39,309)

10250

Information & Communication Technology Services

321,786

407,088

85,302

21.0%

(59,683)

Project delays meant key projects including the phone line migration and online payments portal will not be completed until the 21/22 financial year. Hardware supply delays have affected delivery times along with some adjustments to the capital replacement forecast have reduced capital spend.

10380

Busselton Library

39,329

 -

(39,329)

(100.0%)

(39,329)

Cost savings realised on the building upgrade project were used to fit-out the children’s play area.

10591

Geographe Leisure Centre

73,700

20,000

(53,700)

(268.5%)

(2,320)

New pool covers costing $51.6K were purchased as a result of the positive underspend on the building upgrade works.

11156

Airport Development Operations

17,622

 -

(17,622)

(100.0%)

(17,622)

CCTV installation for the airport carpark. Budget was not split correctly – all included under Plant & Equipment, where there has been a significant underspend due to COVID related delays in commencement of Jetstar flights.

Infrastructure By Class

 

 

 

 

 

Various

Roads

13,326,324

15,170,848

1,844,524

12.2%

(1,524,264)

Only 12% representing $1.844m of the $15.170m in Road Capital works were unspent at 30 June.  33% or $610K of this was attributable to the Peel  / Queen street roundabout works that are scheduled to commence early in Financial Year 2022; this budget will be carried over.  24% or $447K of the unspent budget was attributable to complex staged works on Bussell Highway; this will also be carried over into 2022. Some projects went over budget while others countered by coming in under budget.  

Various

Bridges

4,872

6,399,989

6,395,117

99.9%

2,096,500

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.  All 5 bridge projects will represent carry overs. 

Various

Car Parks

1,452,017

1,855,535

403,518

21.7%

(82,655)

Car Park projects finished the year $403K underspent. 72% of this variance is attributable solely to the Car Parking associated with the Barnard East Development with the majority of construction to occur in 2022. This budget will be carried over.

Various

Footpaths & Cycleways

508,782

1,739,745

1,230,963

70.8%

244,870

Footpath projects finished the year a significant $1.230M underspent to budget. This was primarily attributable to the Buayanyup Drain Shared Path project that commenced in June and represents 42% or $521K of the end of  year variance; this budget has been carried over.

Contributing a further $250K in combined under expenditure to budget were the Yalyalup Pump Track & Temporary Toilet project that has since been cancelled and the Dunsborough Centennial Park Footpath Project where its budget was notionally re-assigned to cover additional Queen Street Paving costs. This budget has been relisted into 2022.


 

Various

Parks, Gardens & Reserves

6,489,876

13,888,161

7,398,286

53.3%

1,891,110

$7.398M of the $13.888M in Parks related projects remained underspent to budget as at 30 June. The majority of unspent budget has been carried over into 2022.

The Dunsborough Lakes Sporting Precinct (Stage 1) budget was the largest project contributing to the underspent position at $2.117M, or 28.6%, of the variance.

Following this was the  Dunsborough Non-Potable Water Network project underspent by $1.483M representing 20% of the year end variance.

Waste Capital also categorised into this area was under expended by $1.2M while the collective of Public Open Space playground projects accounted for a further $973K of the unspent budget.  

Various

Drainage

50,854

95,744

44,890

46.9%

(10,577)

There were only three small drainage related projects on budget for the 2021 financial year.  These projects collectively came in under budget by $44.8K.

Various

Regional Airport & Industrial Park Infrastructure

232,458

1,256,653

1,024,195

81.5%

502,534

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 was be partially invoiced by the end of the financial year, but due to construction timelines, the rest will remain on the Airport development budget for future noise amelioration. Unspent funds will therefore remain in the reserve to fund the carry over portions of the projects.

 

7.    Proceeds From Sale of Assets

YTD proceeds from sale of assets is $66K 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. The tender process has been completed and Council is now reviewing its options regarding this project.  No drawdown is expected this financial year. 

 

The remaining $90K of the variance is offset by advances to community groups which did not occur.

 

9.    Advances to Community Groups

Only one application was received for $110K by the end of the year. This was to the Busselton Golf Club for the construction of a new maintenance and machinery storage shed. The $90K positive variance is offset by the non-receipt of the associated loans funds that the City would receive for these on-lending purposes.


 

10.  Transfer to Restricted Assets

There is a YTD variance in transfers to restricted assets of $9M 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 (or unspent portions thereof). The following grants, totalling $5.2M, have been received and transferred to restricted assets for which there was no budgeted transfer:

·        Grant funding received from Federal Government for “Drought Communities Program” of $700K (attributable to CC C3223 Dunsborough Non-Potable Water Network);

·        $1M of Local roads & Community Infrastructure grants, for the Dunsborough Lakes Sporting Fields Development;

·        $2.2M of the annual Roads to Recovery Grant allocation;

·        $243K from the Department of Transport for the Buayanyup Drain Shared Path project;

·        $98K from the Roads Safety Innovation Fund;

·        $120K in Regional Roads Grants;

·        $132K in Blackspot Roads funding;

·        $341K in Financial Assistance Grants for specific bridge projects; and

·        $385K for various community and commercial services specific activities including CSRFF.

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 $3.8M has been received YTD, the bulk of which are for road works bonds ($2.6M).

 

11.  Transfer from Restricted Assets

YTD there has been $7.2M transferred from restricted assets into the Municipal Account. This was mainly attributable to:

·        Acquittal or usage of the grants mentioned above totaling $4.5M;

·        Refunds of road work bonds of $1.5M;

·        Refund of hall deposits of $30K;

·        Busselton Jetty Tourist Park deposit refunds of $395K;

·        $650K used of Cash-in-Lieu of POS and Developer Contributions;

·        $130K of town planning bonds; and

·        Other sundry refunds of $66K.

 

The variance to YTD budget for these items is due to the inherent difficulty in predicting the quantum and timing of the use or expenditure of government grants and the various Developer Contributions and Cash-in-Lieu of POS.


 

12.  Transfer to Reserves

$3.7M more than budget was transferred to reserves by the end of June.  This was due to the following items:

·        $777K more than expected net profit from Airport Operations, plus $82K leftover in the MERG Reserve, transferred to the Airport Marketing & Incentive Reserve;

·        $331K more than expected net profit from the Busselton Jetty Tourist Park, transferred to its reserve;

·        $89K more than expected surplus from the Aged Housing properties, transferred to both the joint venture and City controlled reserves;

·        $188K more than expected was received from the sale of vehicles and plant, which is all transferred to the Plant Replacement Reserve;

·        $300K more than budget required to be transferred to the Long Service Leave Reserve after year end reconciliations were completed;

·        $311K more than budgeted for developer contributions transferred to the various Communities Facilities Reserves;

·        $38K more to the Coastal & Climate Adaptation Reserve;

·        $45K less to the Cemetery Reserve;

·        $279K more to the Waste Reserve largely due to an actual net operating surplus compared to a  budgeted loss;

·        $1.3M in prepaid Financial Assistance Grants transferred to the Prepaid Grants Reserve.

 

13.  Transfer from Reserves

YTD there has been $20.2M transferred from reserves into the Municipal Account, compared to a budget of $35.2M. The $15M discrepancy is caused by non-completion of many reserve funded activities, capital projects or acquisitions, with the biggest contributors being:

·        Airline marketing program - $1.2M;

·        Airport noise mitigation projects - $752K;

·        Various City building capital works - $1.08M;

·        Jetty maintenance & capital works - $336K;

·        Various road asset & traffic improvement capital works - $1,229K;

·        Various footpath & cycleway capital works - $619K;

·        Various other infrastructure & drainage works - $212K;

·        Various parks & gardens works - $658K;

·        Less new plant & vehicles purchased than budgeted - $284K;

·        $468K due to the delay in Mitchell Park Upgrade project;

·        $1.84M due to delays in the Dunsborough Lakes Sporting Precinct (stage 1) project;

·        Car parking projects - $553K;

·        Delays in commencement of the ERP Upgrade project plus in-house resourcing of some of the earlier scoping and design work - $208K;

·        Delays in the Rating Review project and deferment of the Land & Building valuations - $141K;

·        $158K less for drainage and waterways improvement activities;

·        Coastal & climate adaptation, and Energy Sustainability initiatives (including the Dunsborough Non-potable Water project) - $1.3M;

·        $2M from the Waste Reserve, mainly due to delays in replacement of a variety of operating plant & equipment.

Investment Report

As at 30 June 2021, the value of the City’s invested funds totalled $77.4M down from $80.3M as at 31st May 2021.  This was mainly due to the processing of the year end reserve re-coups.

 

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 from $7.0M to $9.5M.    

 

During the month of June six term deposits totalling the amount of $18M matured. Two deposits were closed totalling $5.0M to provide funds for standard operations.  Remaining deposits were renewed for a further 137 days at 0.41% on average.

 

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

 

Date

Payee

Description

$ Amount

9/06/21

AIRPORT SECURITY PARKING PERTH

PARKING WHILE IN BROOME – RCAWA

M. ARCHER

$117.16

9/06/21

THE FLOWER PLACE

STAFF LEAVING GIFT

$60.00

10/06/21

AIRPORT SECURITY PARKING PERTH

PARKING WHILE IN BROOME – RCAWA

G. HENLEY

$75.75

18/06/21

DIVERS TAVERN CABLE BEACH

DINNER –RCAWA

($28.00 REIMBURSED)

$79.00

21/06/21

VIRGIN AUST

SEAT CHARGE-

(DUPLICATE CHARGE – CREDIT RECEIVED)

$55.00

22/06/21

HERTZ AUST

BROOME CAR HIRE –ADDITIONAL KMS

($55.00 REIMBURSED)

$67.75

 

 

TOTAL

$454.66

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 June 2021, the City’s net current position stands at $2.45M. The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.

 


Finance Committee

46

11 August 2021

6.2

Attachment a

Investment Report - June 2021

 


Finance Committee

48

11 August 2021

6.2

Attachment b

Financial Activity Statement - June 2021

 















Finance Committee                                                             61                                                                 11 August 2021

7.               General Discussion Items

Nil

 

8.               Next Meeting Date

 

9.               Closure