Finance Committee Agenda

 

 

 

10 November 2021

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

MEETING NOTICE AND AGENDA – 10 November 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, 10 November 2021, commencing at 10.30am.

 

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

 

1 November 2021


CITY OF BUSSELTON

Agenda FOR THE Finance Committee MEETING TO BE HELD ON 10 November 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....... ELECTION OF PRESIDING MEMBER AND DEPUTY PRESIDING MEMBER. 4

4....... Public Question Time. 4

5....... Disclosure Of Interests. 4

6....... Confirmation Of Minutes. 4

6.1          Minutes of the Finance Committee Meeting held 13 October 2021. 4

7....... Reports. 5

7.1          LIST OF PAYMENTS MADE - SEPTEMBER 2021. 5

7.2          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 SEPTEMBER 2021. 15

8....... General Discussion Items. 46

9....... Next Meeting Date. 46

10..... Closure. 46

 


Finance Committee                                                             4                                                            10 November 2021

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

 

2.               Attendance 

Apologies

 

3.               ELECTION OF PRESIDING MEMBER AND DEPUTY PRESIDING MEMBER

3.1             Ms Sarah Pierson, Acting Director Finance and Corporate Services, will conduct the nomination and voting to elect a Presiding Member of the Finance Committee in accordance with section 5.12 of the Local Government Act 1995.

 

3.2             The elected Presiding Member will conduct the nomination and voting to elect a Deputy Presiding Member of the Finance Committee in accordance with section 5.12 of the Local Government Act 1995.

 

4.               Public Question Time

 

5.               Disclosure Of Interests

 

6.               Confirmation Of Minutes

6.1             Minutes of the Finance Committee Meeting held 13 October 2021

Recommendation

That the Minutes of the Finance Committee Meeting held 13 October 2021 be confirmed as a true and correct record.

 


Finance Committee                                                             6                                                            10 November 2021

7.               Reports

7.1             LIST OF PAYMENTS MADE - SEPTEMBER 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 - September 2021  

 

OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers M118922 – M118970, EF081893 – EF082494, T7572 – T7574, DD004591 – DD004628, as well as payroll payments, together totalling $28,520,356.08

 

EXECUTIVE SUMMARY

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

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

8

10 November 2021

7.1

Attachment a

List of Payments - September 2021

 




Finance Committee                                                             15                                                          10 November 2021

7.2             FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 SEPTEMBER 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

Manager Governance and Corporate Services - Sarah Pierson

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 - September 2021

Attachment b    Loan Schedule - September 2021

Attachment c    Financial Activity Statement - September 2021  

 

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 30 September 2021, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations 1996.

 

EXECUTIVE SUMMARY

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

 

This report has been compiled to fulfil the statutory reporting requirements of the Act and associated Regulations, whilst also providing the Council with an overview of the City’s financial performance on a year to date basis, for the period ending 30 September 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 26 July 2021, the Council adopted (C2107/140) the following material variance reporting threshold for the 2021/22 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 September 2021

The Statement of Financial Activity (FAS) for the year to date (YTD) shows an overall Net Current Position of $48M as opposed to the budget of $39M. This represents a positive variance of $9M YTD.

 

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

2021/22
Actual YTD

$

2021/22
Amended
Budget YTD

$

2021/22
Amended
Budget

$

2021/22
YTD Bud Variance

%

2021/22
YTD Bud Variance

$

Change in Variance Current Month

$

Revenue from Ordinary Activities

 

0.81%

528,501

520,572

1.    Other Revenue

153,615

31,375

414,950

389.61%

122,240

42,050

2.    Interest Earnings

312,828

149,280

609,250

109.56%

163,548

85,567

Expenses from Ordinary Activities

 

12.81%

2,717,604

567,626

3.    Materials & Contracts

(2,967,723)

(4,266,623)

(20,245,296)

30.44%

1,298,900

159,455

4.    Other Expenditure

(650,103)

(1,565,260)

(9,685,100)

58.47%

915,157

340,308

5.    Non-Operating Grants, Subsidies and Contributions

703,230

6,105,480

34,850,687

(88.48%)

(5,402,250)

(1,475,021)

Capital Revenue & (Expenditure)

 

49.88%

9,788,177

2,901,912

6.    Land & Buildings

(148,069)

(5,598,429)

(22,802,632)

97.36%

5,450,360

1,654,641

Plant & Equipment

(452,278)

(138,000)

(2,870,000)

(227.74%)

(314,278)

(391,997)

Furniture & Equipment

(82,777)

(295,950)

(828,800)

72.03%

213,173

(9,420)

Infrastructure

(2,877,830)

(8,988,375)

(38,537,750)

67.98%

6,110,544

1,344,837

7.    Proceeds from Sale of Assets

0

71,500

776,071

(100.00%)

(71,500)

(20,000)

8.    Total Loan Repayments – Principal

(614,430)

(731,069)

(3,839,418)

15.95%

116,639

116,640

9.    Transfer to Restricted Assets

(2,669,786)

0

(21,740)

(100.00%)

(2,669,786)

(181,546)

10.  Transfer from Restricted Assets

894,473

0

1,735,682

100.00%

894,473

345,502


Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is very close to budget at only 0.81% ahead YTD.  There are however some material variance items that contribute to this.

                                   

1.      Other Revenue

Ahead of YTD budget by $122K, or 389.6%, mainly due to the items listed in the table below:

Revenue Code

Revenue Code Description

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Variance
YTD
%

Change in Variance Current Month

$

Engineering and Works Services

111,350

2,384

108,966

4570.73%

23,644

G0030 & G0031

Busselton & Dunsborough  Transfer Station – Sale of Scrap Materials

108,511

2,384

106,127

4451.62%

20,872

The budget for the receipt of income relating to the sale of scrap materials (metal in particular) has not been aligned effectively with actual receipts. This should rectify somewhat as the year progresses.  It should also be noted that the prices received for scrap metal have been extremely favourable – up to $220/tonne, compared to $110-$140/tonne during 2020.

 

2.      Interest Earnings

Interest earnings are $164K ahead of budget due to the total annual budget being allocated based on the monthly 4-year trend. The actual levying of annual rates, and when all interest is charged in advance for 21/22, does not match this trend, therefore the City will see a timing difference to budget for the first and second quarters of the 21/22 financial year. This will decrease as the year progresses.

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $2.7M, or 12.6%, less than expected when compared to the budget YTD as at September. The expense line items that have a YTD variance that meet the material reporting threshold are outlined below.

 

3.     Materials & Contracts

Less than YTD budget by $1.2M.  The main contributors to this variance are listed in the table below:

Cost Code

Cost Code Description

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Variance
YTD
%

Change in Variance Current Month

$

Finance and Corporate Services

289,410

569,580

280,170

49.2%

7,792

10000

Members of Council

2,365

40,021

37,656

94.1%

(2,312)

Timing variance with payment of WALGA subscriptions delayed. These variances will persist even when this is paid, as the actual cost will be spread and allocated evenly over the term of the subscription, whereas the budget was set on a cash-outlay basis.

10200

Financial Services

5,571

16,024

10,453

65.2%

5,321

Savings to budget are as a result of bank charges not coming in at the level expected, and some budgeted subscriptions either being cancelled or allocated to more appropriate areas.


 

10250

Information & Communication Technology Services

151,328

251,047

99,719

39.7%

(13,186)

The monthly allocation of the annual budget was set based on a historical 4 year monthly cash payment trend. This will not necessarily align with the new prepaid expenses allocation process that has been adopted to more accurately reflect proper accrual accounting practices.

10500

Legal and Compliance Services

(641)

30,786

31,427

102.1%

7,340

The variance YTD relates predominantly to the unspent budgeted amount for external legal services.  It is not possible to predict when or to what extent legal services will be required at the time of setting the budget, therefore the annual allocation is spread evenly over the year.  The credit represents a year end accrual reversal, where the invoices for the services have come in slightly less than expected on the purchase orders.

10510

Governance Support Services

6,711

31,451

24,740

78.7%

8,375

The underspend is due to a number of software licenses for programs used in the Governance area not as yet being renewed. When paid, the cost for these will be spread over the term of the license, so timing differences to the budget (set based on historical cash trend) will persist.

10521

Human Resources & Payroll

17,570

30,537

12,967

42.5%

(6,884)

The WALGA ER Subscription renewal was delayed, and will be spread over the subscription period.  Actual incurrence of other budgeted items YTD, such as TAPS payroll and the WALGA Remuneration Survey are now forecast to occur later in the year.

10616, 10617, & 10618

Aged Housing

10,721

41,733

31,012

74.3%

9,054

We can never say with certainty when this budget will be drawn on, even in comparison to prior year trends, as works are carried out throughout the year and generally need to coincide with vacancies.  It is likely refurbishment works will be carried out on at least one unit in the next 4-6 weeks.

Community and Commercial Services

285,581

692,937

407,356

58.8%

141,067

10380 & 10381

Busselton & Dunsborough Libraries

18,587

38,978

20,391

52.3%

5,983

The variances YTD mainly arise in relation to the cost of Computer Software Licences used at the libraries being spread over the period they relate to, rather than when the cash is outlaid, which is how the budget was allocated.

10540

Recreation Administration

(8,736)

25,667

34,403

134.0%

25,478

The credit relates to year end accrual reversals for which invoices are yet to be received.

10543

Community Development

36

55,000

54,964

99.9%

15,000

This relates to the Strengthening Communities program funded by Lotterywest. The program is still in development and procurement has not yet taken place. It is anticipated that this program will be launched during November/December with bulk of expenditure expected from Jan 2022.  Timing of disbursement may need to be amended at mid-year budget review.

10591

Geographe Leisure Centre

85,137

72,454

(12,683)

(17.5%)

(13,374)

The overspend YTD is due to increased expenditure in cleaning consumables/maintenance, earlier than forecast procurement of non-capital furniture and office equipment, and increased expenses for café consumables, which is offset by additional income.


 

10600

Busselton Jetty Tourist Park

87,805

143,754

55,949

38.9%

8,350

The YTD variance is mainly due to the monthly payment of the Park Management Contract being one month in arrears.  By end of financial year this expenditure catches up, as June will be accrued, however the budget timing does not reflect this.

11151

Airport Operations

38,499

214,011

175,512

82.0%

107,328

YTD variances are mainly due to:

·        Airport screening services – allocated monthly amounts have been delayed until flights start.

·        Inspections – Electrical ATI and generator inspections have been delayed until September to a value of $6,800.

·        Commission charges – due to the timing of the monthly invoices/billing we will always be at least a month behind.

11152

Airport Operations – Buildings

 -

17,034

17,034

100.0%

5,678

The actual maintenance and cleaning costs budgeted here have inadvertently been included amongst the Facilities Maintenance section expenditures. Actual cost or budget allocations will be rectified in subsequent months.

B1361

YCAB (Youth Precinct Foreshore)

6,927

30,321

23,394

77.2%

645

The variance is due to:

·        Crime prevention grant for a series of workshops delivered to schools. Workshops were due to commence in August but the dates were changed to September and have not yet been invoiced.

·        Delay in processing grant tax invoices for COVID-19 Youth recovery grants for the leadership camp. The camp was held over the weekend of 20 August 2021. Accommodation payment on the corporate credit card has not yet been processed as yet.

·        August & September purchases on credit card have not been processed.

·        Mental health week event budget was not utilised as paired with Raising the Vibe concert.

·        Crime prevention grant cost for August/ Sept/ October/ November will now be delivered in Jan 2022.

Planning and Development Services

170,046

139,927

(30,119)

(21.5%)

(35,702)

10820

Strategic Planning

5,017

39,276

34,259

87.2%

8,096

The variance YTD is essentially due to holistic Consultancy budget being allocated across the 12-month period. Strategic Planning is subject to competing demands and project prioritisation (also timing delays etc. due to consultancy periods, peak authority feedback or processes and lack of availability on occasion of specialised consultant assistance). Appointment of consultants or other anticipated strategic expenditures are always difficult to predict on that basis.    

10925

Preventative Services - CLAG

43,242

17,250

(25,992)

(150.7%)

(34,769)

The CLAG budget is fully reconciled with the Shire of Capel after the mosquito season each year.  This will occur circa February and all changes made accordingly by the EOFY each year.

10931

Protective Burning & Firebreaks-Reserves

74,457

4,011

(70,446)

(1756.3%)

1,269

The YTD variance is as a result of an invoice for works completed late in the 20/21 financial year that was not accrued.  Funding from DFES was received in last financial year for these works, so this contributed to part of the end of year budget surplus, but will therefore effectively reduce any 21/22 financial year surplus.


 

10950

Animal Control

6,238

17,243

11,005

63.8%

5,330

The YTD underspend variance relates to the following:

·        Loose Tools Purchase - $1.2K for the Spectur Annual Charges

·        Purchase of Materials:

o   $4.5K due to only 1 pallet of dog bags being purchased as a result of reduced usage over winter period.  Another pallet will be purchased November (forecast 1 pallet per quarter)

o   $1.5K due to purchase of cat cages delayed (ACF modification)

·        Computer Software Licences & Cloud Services - $750 due to timing delay in prepaid cost allocation

·        Fines Enforcement Costs - $1.3K underspend. Fines enforcement referrals are processed on an ad-hoc basis, and dependent on non-payment of fines.

Various

Bushfire Brigades

14,609

4,369

(10,240)

(234.4%)

(4,409)

Bushfire Brigades are currently preparing for the upcoming fire season.  A large amount of PPE has been purchased in readiness for dispersal to Bushfire Brigade as required.

Engineering and Works Services

2,222,499

2,807,761

585,262

20.8%

(9,207)

10830

Environmental Management Administration

53,717

99,555

45,838

46.0%

64,395

Annual budgets for consultancy, contractors and purchase of materials were allocated at the end of each quarter.  Historic expenditure is weighted in a large proportion during the second half of the year and so a review of budget timing will be undertaken.  Approximately $30,000 of invoices for street tree planting, revegetation and weed control were approved in October.  Spring weed control is currently underway.

11170

Meelup Regional Park

7,122

59,510

52,388

88.0%

22,723

The recreation reserve maintenance budget was spread evenly across the year and thus does not reflect seasonally impacted expenditure patterns. To this end, planning is under for the noxious weed control program and works associated with the Healthy Countries Plan. $95K in works have been committed, representing works that are now underway or will commence shortly.   

12600

Street & Drain Cleaning

86,018

109,072

23,054

21.1%

(5,549)

The budget was entered based on historical expenditure patterns averaged over the previous three financial years. All of $465K annual budget has already been committed based on a scheduled maintenance plan, so the YTD variance is timing only.

12620 & 12621

Rural & Urban Tree Pruning

117,360

291,501

174,141

59.7%

63,555

This year’s rural tree pruning budget of $352K included $153K carried over from the prior year. Works are ordinarily planned to be done by the end of November 2021 however priority has been given to storm damage clean-up activities meaning some of these works will now occur later the financial year. The rural road verges to be pruned are prioritised based on the time since last pruned, inspections, volume and types of traffic and numerous other considerations. This is a timing variance only.

Various

Bridge Maintenance

25,457

115,608

90,151

78.0%

(13,547)

Bridge Maintenance works are largely scheduled to occur post-Christmas and in the later part of the financial year when water flows are at their lowest; planning of these works are well underway. Bridge maintenance works scheduled in 2020/21 were postponed due to May 2020 storm costs incurred, with $208,000 of the 2021 budget subsequently carried over into the first quarter of this the new financial year. This variance will moderate as this level with the remaining budget realigned to later in the year commensurate with when works are planned to commence.


 

Various

Building Maintenance

305,478

247,649

(57,829)

(23.4%)

(18,833)

The budget was entered based on historical expenditure patterns averaged over the previous three financial years. This area is impacted by seasonality with costs increasing through the busy summer holiday period and also post Easter where the level of scheduled maintenance has historically been at its highest. To this end 3/12th of the annual Materials & Contractor budget equates to $518K which is favourable to the $305K expended YTD. Thus the $57.8K variance is considered a timing variance only.  

Various

Waste Services

352,520

618,794

266,274

43.0%

(28,520)

$65K and $53K of the variance is associated with a portion of the concrete crushing and green waste processing that is planned for later in the financial year. $52.8K is attributable to External Restoration Works associated with the Rendezvous contaminated sites matter. $38K of the variance is associated with postponement of the FOGO trial where no costs are being incurred.

Various

Roads Maintenance

275,424

193,898

(81,526)

(42.0%)

(60,870)

Road Maintenance activities are generally greater in the first five months of the year as the City’s maintenance and construction crews focus on maintenance grading, road shoulders maintenance, road surface repair, drainage maintenance, fixing pot holes etc. There has been an overspend to budget mostly attributable to greater than anticipated works in relation to storm damage clean-up activities contributing to the year to date variance.     

Various

Parks & Gardens

260,354

299,738

39,384

13.1%

30,267

This variance comprises YTD under and over’s against 188 individual cost codes with an annual budget totalling $2.392M. 3/12th of the annual budget is $598K and thus actual costs at the end of September amounting to $260K are acceptable. The variance is due to timing only.

 

4.      Other Expenditure  

$915K, or 58.5%, 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

14,285

20,751

6,466

31.2%

3,681

10001

Office of the CEO

4,303

20,751

16,448

79.3%

4,503

Timing variances associated with spending against donations, contributions budget, discretionary and inter Council initiatives.

10011

Emergency Contingency Costs (Other)

7,200

 -

(7,200)

(100.0%)

 -

Costs represent the City granting the use of the YCAB building as a COVID vaccination hub. 

Finance and Corporate Services

222,090

210,642

(11,448)

(5.4%)

41,982

10000

Members of Council

84,400

136,503

52,103

38.2%

42,544

Timing related variances with underspends in primarily member allowances and sitting fees, plus some more minor underspends in reimbursements and training expenses due to change of council members.

10221/27/

28/29/30

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

100,095

 -

(100,095)

(100.0%)

 -

Notification of the second bi-annual payment of the indicative guarantee for the City’s borrowings through the WA Treasury Corporation, for the 20/21 financial year, was not received by the end of June, so ended up being processed in July. Depending on whether the final payment is made or accrued in June 2022, this may end up being an overspend variance at the end of the year.


 

10511

Community Assistance Program (Governance)

 -

16,666

16,666

100.0%

 -

Timing variances associated with how this line item has been spread.  It has been spread monthly however spend will not occur until the end of the financial year.  Remaining budget from September to June has been re-allocated to June.

10700

Public Relations

18,460

28,682

10,222

35.6%

(910)

Timing variances, up and down, associated with underspend against sister city allocations, community consultations and surveys and catering, and an overspend in council advertising.

Community and Commercial Services

281,808

1,246,055

964,247

77.4%

313,338

10530

Events & Cultural Services Administration

(10,015)

50

10,065

20130.0%

50

The credit represents the reversal of an accrual of costs related to services received in June from Busselton Horse & Pony Club, for an invoice has not yet been received and processed.

10532

BPACC Operations

(350)

12,500

12,850

102.8%

12,500

BPACC operational activity will not commence until such time as the tender for construction has been awarded and timeframes for delivery of the project are known.

10543

Community Development

145

63,367

63,222

99.8%

880

This relates to the first two rounds of Community Assistance Program. Round 1 and 2 approvals were combined due to Council elections. Expected a similar trend in October, with approximately $50,853 by end of November.  Timing of disbursement may need to be amended a mid-year budget review as timing is largely dependent on CAP Applications received from community groups.

10558

Events

207,510

329,482

121,972

37.0%

38,720

There have been 3 funded events cancel (Pedal Prix WA, SW Mudfest, Cape Naturaliste Pro) for a total of $38K. We are also waiting on a number of events to invoice us for event sponsorships.

10634

Business Support Program

 -

23,850

23,850

100.0%

 -

Final acquittals of the support program yet to be received.  This budget was carried over from the 20/21 financial year, funded from the MERG Reserve, however it has now been ascertained that only approximately $10,000 will be required. This will more than likely be the positive variance by the end of the year, offset by a lower transfer from the reserve.

11151

Airport Operations

 -

575,528

575,528

100.0%

192,176

Marketing activities continue to be delayed due to the postponement of Jetstar RPT services as a result of COVID restrictions/lockdowns etc. in the Eastern States.

11156

Airport Development Operations

 -

148,550

148,550

100.0%

 -

At the time of setting the budget the timing for the final carried over payments related to a noise mitigation project were not known. $148K is estimated to be remaining in total, split over three payments in September, November and January. As such, there will be budget timing variances until these payments are completed. 

Planning and Development Services

33,233

7,610

(25,623)

(336.7%)

(25,075)

10820

Strategic Planning

28,710

215

(28,495)

(13253.6%)

(28,300)

The budgeted contribution to the Peron Naturaliste Partnership occurred one month earlier than planned.


 

Engineering and Works Services

98,688

80,202

(18,486)

(23.0%)

6,381

11000

Engineering & Works Services Support

117

19,083

18,966

99.4%

6,950

The budget YTD represents the planned donations of portions of the pavers removed from the CBD during the footpath upgrade project. The recipients of the donations are yet to contact the City to organise collection, as such the donations have not been processed in the accounts.

B1223

Micro Brewery - Public Ablution

 -

60,000

60,000

100.0%

 -

The full contractual contribution towards the Micro Brewery Public Ablutions was made in the 19/20 and 20/21 financial years. A remaining $60K contribution was incorrectly included again in the 21/22 budget. The budget will be amended in due course to remove this outgoing.

G0042

BTS External Restoration Works

94,497

 -

(94,497)

(100.0%)

 -

Settlement outlays and reimbursements are inherently difficult to predict, both in timing and in quantum. 

 

5.      Non-Operating Grants, Subsidies & Contributions  

The negative variance of $5.4M is mainly due to the items in the table below. It should be noted that 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. Where this is not the case, the reconciliation of the projects and the required funding to be recognised in revenue is not competed until closer to year end.

Revenue Code

Revenue Code Description

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Variance
YTD
%

Change in Variance Current Month

$

Community and Commercial Services

 -

66,401

(66,401)

(100.0%)

(66,401)

10540

Recreation Administration

 -

25,625

(25,625)

(100.0%)

(25,625)

10590

Naturaliste Community Centre

 -

23,350

(23,350)

(100.0%)

(23,350)

C6010

Airport Fencing Works

 -

17,426

(17,426)

(100.0%)

(17,426)

Engineering and Works Services

698,230

6,034,079

(5,335,849)

(88.4%)

(1,403,620)

A0014

Bussell Highway Bridge – 0241 – Federal Capital Grant

 -

744,000

(744,000)

(100.0%)

 -

A0022

Yallingup Beach Road Bridge - 3347 – Federal Capital Grant

 -

700,000

(700,000)

(100.0%)

 -

A0200

Donated Bridges

698,230

 -

698,230

100.0%

698,230

B9407

Busselton Senior Citizens – Developer Cont. Utilised

 -

111,750

(111,750)

(100.0%)

 -

B9591

Performing Arts Convention Centre – Federal Capital Grant

 -

2,277,000

(2,277,000)

(100.0%)

(1,138,500)

F0112

Causeway Road Shared Path – State Capital Grant

 -

40,000

(40,000)

(100.0%)

 -

S0048

Bussell Highway – Developer Cont. Utilised

 -

200,000

(200,000)

(100.0%)

 -

S0076

Kaloorup Road (Stage 1) – Main Roads Direct Grant

 -

224,400

(224,400)

(100.0%)

 -

S0077

Ludlow-Hithergreen Stage 2 Reconstruct & Widen – MR Capital Grant

 -

96,000

(96,000)

(100.0%)

 -

S0078

Sugarloaf Road –

State Capital Grant

 -

321,599

(321,599)

(100.0%)

 -

S0321

Yoongarillup Road - Second Coat Seal –

MR Capital Grant

 -

100,000

(100,000)

(100.0%)

 -

S0331

Barracks Drive Spray Seal – MR Capital Grant

 -

130,980

(130,980)

(100.0%)

 -

S0332

Inlet Drive Spray Seal –

MR Capital Grant

 -

47,000

(47,000)

(100.0%)

 -

S0333

Chapman Crescent Spray Seal – MR Capital Grant

 -

78,000

(78,000)

(100.0%)

 -

S0334

Chapman Hill Road – MR Capital Grant

 -

374,000

(374,000)

(100.0%)

(374,000)

S0335

Kaloorup Road – MR Capital Grant

 -

120,475

(120,475)

(100.0%)

(120,475)

S0336

Wildwood Road – MR Capital Grant

 -

468,875

(468,875)

(100.0%)

(468,875)

 

6.      Capital Expenditure  

As at 30 September 2021, there is an underspend variance of 76.3%, or $11.5M, in total capital expenditure, with YTD actual at $3.5M against the YTD budget of $15M. 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

$

Buildings

145,470

5,585,928

5,440,458

97.4%

1,650,474

B9614

Dunsborough Lakes Sporting Precinct-Pavilion /Changeroom Facilities

 -

75,000

75,000

100.0%

25,000

There has been nil expenditure to date as the works have not yet commenced. The contract for Pavilion / Change room design was to be awarded in September 2021, with construction estimated to commence in April 2022.

B9300/1/2

Aged Housing

Capital Improvements

1,870

92,150

90,280

98.0%

40,280

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. A purchase order has been raised for the preparation of an application to Western Power for an alternative power separation proposal and the contractor will report back once Western Power have responded.  The decision on which option to pursue cannot be made until this is received.  

B9407

Busselton Senior Citizens

 -

111,750

111,750

100.0%

 -

Roofing upgrade works were planned to be completed July 2021, but were postponed due to unsuitable weather. Works have now commenced but the discovery of asbestos material will cause further delays to the works program. Completion date estimated November 2021.

B9591

Performing Arts Convention Centre

10,861

4,604,798

4,593,937

99.8%

1,534,772

The project has been re-tendered. 

B9596

GLC Building Improvements

32,213

71,284

39,071

54.8%

41,612

Proposed project for stadium ventilation has been put on hold, pending a review of capital projects.

B9605

Energy Efficiency Initiatives (Various Buildings)

78,162

111,580

33,418

29.9%

22,568

Works planned for commencement have encountered delays pending Western Power applications and approvals.

B9611

Smiths Beach

New Public Toilet

 -

250,000

250,000

100.0%

 -

Project commencement was delayed due to changes to the project scope as a result of potential changes to size of the toilet facilities and investigations into the capacity of the existing septic system/upgrade to an ATU system to accommodate these changes. Project planning is now underway, with preliminary design work completed.  Septic system design work is also underway.

Notification has been received by the entity that currently supplies the water that they are no longer able to supply water for City toilets. 

As such, an MoU is being reviewed by the property team to establish viability of infrastructure works and costs for water supply. A clearing permit application is also underway, however all other activity on the project has been put on hold until these issues are resolved.

B9612

Churchill Park

Renew Sports Lights

7,160

212,850

205,690

96.6%

(5,160)

Works were planned to take place in July 2021, however due to a budget increase of $73K from CSRFF grant funding, the project was re-scoped. RFQ’s have gone out, with design works expected to commence in November.  Actual works will not commence until after trotting season, sometime in February or March 2022.

B9711

Busselton Airport – Building

 -

12,200

12,200

100.0%

 -

Small capital works projects that were planned to be completed prior to Jetstar flights commencing. These have been delayed due to the continuing deferment of the commencement of RPT flights.

B9717

Airport Construction - Existing Terminal Upgrade

 -

39,650

39,650

100.0%

 -

Invoicing in relation to the retention monies owing to Pindan for works completed has not yet been received.

Plant & Equipment

452,278

138,000

(314,278)

(227.7%)

(391,997)

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.

10540

Recreation Administration

 -

40,000

40,000

100.0%

 -

The budget relates to a vehicle for a Management position. Vehicle has been ordered, delivery due in January.


 

11107

Engineering Services Design

 -

70,000

70,000

100.0%

 -

Limited informal quotations were received for new survey equipment, which has delayed commencement of the procurement process. Formal RFQ documentation will be prepared in October, with procurement planned for November.

11402

Plant Purchases (P10)

420,639

8,000

(412,639)

(5158.0%)

(391,997)

This is a carryover from 2020/21 FY of the second generator for the DWF and a new rubbish truck. The budget timing for this was later in the year.

11403

Plant Purchases (P11)

31,639

 -

(31,639)

(100.0%)

 -

This is a carryover from 2020/21 FY – the Turf Maintenance rough cut ute.

Furniture & Office Equipment

82,777

295,950

213,173

72.0%

(9,420)

10250

Information & Communication Technology Services

56,790

 -

(56,790)

(100.0%)

(14,690)

Costs were incurred for new Attain software (for Governance), and the Council Chambers A/V upgrade.  The new Promapp software (for business process mapping for the whole organisation) was purchased earlier than expected.

10558

Events

 -

200,000

200,000

100.0%

 -

The budget August YTD represents the carry-over from the 20/21 year for the electronic billboard. The tender has closed with three responses, all of which have come in over the forecast budget. Options on how to proceed are currently being investigated and will be discussed with MERG at the November meeting.

10590

Naturaliste Community Centre

 -

34,950

34,950

100.0%

8,350

Budget is for fencing to accommodate vacation care program and purchase of replacement fitness equipment. A purchase order will be raised in October for fencing works and an equipment purchase order will be finalised in November.

10900

Cultural Planning

 -

13,400

13,400

100.0%

 -

The virtual reality component of the Ballaarat Engine 150th display has been delayed waiting for an expected grant opportunity to help subsidise the project.

B1350

Churchill Park-

Other Buildings

 -

26,450

26,450

100.0%

 -

The budget relates to the storage facility project. Discussions are still progressing with the stakeholders, delaying construction until a later date.

Infrastructure By Class

2,877,830

8,988,375

6,110,544

68.0%

1,344,836

Various

Roads

443,548

2,704,550

2,261,002

83.6%

1,381,187

The majority of road construction happens during the months October to April. 56% of the YTD variance representing $1.256M is associated with the four projects being Wildwood Road (now underway), Chapman Hill and Kaloorup Road safety shoulder widening projects and the State blackspot project for the Sugarloaf Road upgrade and renewal. All these projects had their budget spread evenly across the year as works had not yet been scheduled. These projects are valued at $5.059M collectively and represent 40% of Road capital works for the year. 27% representing $615K of the variance is associated with the Peel / Queen Street roundabout renewal works that were carried over from last financial year. These works will now commence after Christmas. It is anticipated that this variance will begin to moderate as major road works projects continue to come on line. Budgeted cash flows are not reflective in all instances of scheduled works which is resulting in the significant YTD variances.


Finance Committee                                                             31                                                          10 November 2021

 

Various

Bridges

698,230

1,444,000

745,770

51.6%

(698,230)

Major bridge works are completed by MRWA and are primarily scheduled to take place between the months of October to May when creek and river flows are at their lowest levels. Financial recognition of works is often not done with MRWA until late in the financial year. MRWA is currently working on the construction of Yallingup Beach Road bridge #3347 and the Tuart Drive Bridge #0238 both of which are scheduled for completion in early 2022. Other major bridge works are currently out for tender by MRWA with works anticipated to take place January to May 2022. The City has limited control over Main Roads scheduling and it is often the case that some Bridge projects are rescheduled into the following year.     

Various

Car Parks

95,440

786,427

690,987

87.9%

176,669

87.5% of the YTD variance is attributable to the following projects:

·        Dunsborough Lakes Sporting Precinct (Stage 1) – Car parking under spent to YTD budget by $400K; stage 2 works are not scheduled to commence until the new calendar year thus the budget timing is not reflective of when works will be undertaken.

·        Barnard Park East Foreshore Car Parking $204K; Tender has been awarded with works now underway.

Various

Footpaths & Cycleways

288,746

532,250

243,504

45.7%

(24,759)

47% of the YTD variance valued at $114K is associated with the Buayanup Drain Shared path project that has now been completed with only minor works remaining. Not all the budget will be expended as the value of the project was reduced towards the end of last financial year, however the amount carried over was not adjusted based on the reduced cost. This variance will remain unless the budget is reduced accordingly.

52% of the YTD variance valued at $102K is associated with path works at the Barnard East Development that is now underway and works at the Busselton Foreshore.       

The majority of other footpath and cycleway projects are scheduled for construction between the months of November to March.

Parks, Gardens & Reserves

1,245,488

3,392,197

2,146,709

63.3%

538,757

Various

Busselton Jetty - Capital Expenditure

13,970

136,262

122,292

89.7%

(5,250)

Major Maintenance works are scheduled to take place on the Jetty between late October and March, when sea conditions are most conducive. The timing of major works on the jetty can be quite variable based on the nature of tasks planned.

Various

Waste Services

10,703

452,500

441,797

97.6%

310,924

The majority of this variance is associated with budgets that were carried over from the previous year. 56% of the variance representing $250K is regarding Stage 1 Busselton Landfill Post-closure Capping, Rehab & Remediation works that are not as yet planned to go ahead this financial year. $82K of the YTD variance is regarding works on a Depot Washdown Facility Upgrade that is still in the planning phase.    

Various

Townscape & Vasse River

6,085

36,223

30,138

83.2%

3,697

No works of any significance associated with projects within this category have yet commenced.

Various

Other P&G Infrastructure

1,171,173

2,727,212

1,556,038

57.1%

231,459

72% of this significant YTD variance to budget valued at a combined $1.125M is associated with the carried over Barnard Park East Foreshore Development and the Dunsborough Lakes Sporting Precinct project including the Non-Potable Water Network. A further $158K of the YTD variance is associated with the Mitchell Park redevelopment with works on this project ongoing.

Various

Regional Airport & Industrial Park Infrastructure

105,778

128,951

23,174

18.0%

(28,189)

This line item is made up of four separate account strings all part of the Airport development project. Some are completed (underspent) and others may not be spent until the end of the FY depending on timing of the works.

 

7.      Proceeds From Sale of Assets  

YTD there have been no proceeds from sale of assets recorded against the YTD budget of $71.5K. This is due to the continuing delays in delivery of acquisitions, and the associated transfer to auction of the vehicles being replaced. 

 

8.      Total Loan Repayments - Principal  

Repayments of the principal on loans is $117K under budget YTD, due to the loan for the BPACC not proceeding as budgeted.

 

9.      Transfer to Restricted Assets  

There is a YTD variance in transfers to Restricted Assets of $2.7M as there is no budget for this item.

 

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 $2.3M, have been received and transferred to Restricted Assets for which there was no budgeted transfer:

·        $44K for the Causeway Road Shared Path Project from the Department of Transport;

·        $1.4M for various roads projects from Main Roads, State Blackspot Fund and the Regional Roads Program;

·        $80K for the Dunsborough youth space project from the Department of Primary Industries and Regional Development;

·        $54K from Lotterywest for the Strengthening & Adapting Organisations program;

·        $526K from DFES for the Mitigation Activity Fund and shared costs of the Emergency Services Manager;

·        $30K from the Federal Government Community Grants Hub for Community Child Care Sustainability programs;

·        $11K from the South West Catchment Council - National Landcare Program for the planting of 4,000 seedlings; and

·        $20K from Australia’s South West to fund an aviation research report for the Recovery for Regional Tourism Project Control Group.

 

Developer contributions, deposits and bonds are inherently hard to predict and budget for. An annual amount of $22K was budgeted for later in the year, however over $393K has been received YTD, with $136K for road works bonds and $166K for caravan park deposits.

 

10.   Transfer from Restricted Assets

YTD there has been $894K transferred from Restricted Assets into the Municipal Account. This was mainly attributable to $500K of Bushfire Mitigation Activity funds that did not need to be restricted, and $287K of various roadworks grant & bond funding that has been utilised.

 

Investment Report

Pursuant to the Council’s Investment Policy, a report is to be provided to the Council on a monthly basis, detailing the investment portfolio in terms of performance and counterparty percentage exposure of total portfolio. The report is also to provide details of investment income earned against budget, whilst confirming compliance of the portfolio with legislative and policy limits.

 

As at 30 September 2021, the value of the City’s invested funds totalled $94.4M up from $78.4M as at 31 August 2021. This is due to the payment of rates becoming due during the month and subsequently invested.

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) decreased from $12.5M to $6.5M as funds were transferred to new term deposit accounts.  

 

During the month of September, four term deposits totalling the amount of $11.0M matured and a further eight term deposits totalling $22.0M were opened. Remaining deposits were renewed for a further 193 days at 0.31% on average.

 

The official cash rate remains steady for the month of September at 0.10%. This will continue to have an impact on the City’s interest earnings for the foreseeable future.

 

Borrowings Update

As at YTD September 2021, there have been no new loans entered into or drawn down. The attached Loan Schedule (Attchment B) outlines the status of all existing loans as at September 2021 YTD.

 

Chief Executive Officer – Corporate Credit Card

Details of transactions made on the Chief Executive Officer’s corporate credit card during September 2021 are provided below to ensure there is appropriate oversight and awareness.

 

Date

Payee

Description

$ Amount

20/09/21

AUSTRALIAN INSTITUTE  OF COMPANY DIRECTORS

SOUTH WEST DIRECTOR’S BRIEFING - THE BOARD’S ROLE IN WORKFORCE CULTURE.  M.ARCHER*

$60.00

22/09/21

MANTRA ON HAY

FOOD & ACCOMMODATION -ATTENDANCE AT 2021 LOCAL GOVT CONVENTION  - Cr R.PAINE

$581.00

30/09/21

LOCAL GOVERNMENT PROFFESIONALS AUST. WA

LOCAL GOVERNMENT PROFFESIONALS ANNUAL STATE CONFERENCE 2021.  M.ARCHER*

$1,200.00

 

 

TOTAL

$1,841.00

* Funding from CEO’s professional development allowance under contract.

 

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 September 2021, the City’s net current position stands at $48M. The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.  


Finance Committee

32

10 November 2021

7.2

Attachment a

Investment Report - September 2021

 


Finance Committee

33

10 November 2021

7.2

Attachment b

Loan Schedule - September 2021

 


Finance Committee

44

10 November 2021

7.2

Attachment c

Financial Activity Statement - September 2021

 













Finance Committee                                                             46                                                          10 November 2021

8.               General Discussion Items

 

9.               Next Meeting Date

 

10.             Closure