Minutes of Finance Committee - Wednesday, 11 August 2021

Finance Committee 5 11 August 2021

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 ⇩

Committee Recommendation

F2108/037 Moved Councillor G Henley, seconded Councillor P Cronin

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.

CARRIED 5/0

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 23 11 August 2021

10.26am: At this time, Mr Archer left the meeting.

10.28am: At this time, Mr Archer re-entered the meeting.

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 ⇩

Committee Recommendation

F2108/038 Moved Councillor S Riccelli, seconded Councillor J Barrett-Lennard

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 1996.

CARRIED 5/0

OFFICER RECOMMENDATION

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. 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 will 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 overspend to budget of $32K come 30 June.
B9611	Smiths Beach New Public Toilet	2,456	200,000	197,544	98.8%	200,000
Project commencement delayed due to changes 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 carry-over 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 come 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 totalling $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; and

· $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 31 May 2021. This was mainly due to the processing of the year-end reserve recoups.

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 RECIEVED)		$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

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.