Minutes of Finance Committee - Wednesday, 10 November 2021

Finance Committee 3 10 November 2021

MINUTES

MINUTES OF THE Finance Committee HELD IN THE Committee Room,

Administration Building, Southern Drive, Busselton, ON 10 November 2021 AT 10.30am.

1. Declaration of Opening, acknowledgement of country and Announcement of Visitors

Ms Sarah Pierson, Acting Director Finance and Corporate Services, opened the meeting at 10.30am.

Ms Pierson noted the meeting is held on the lands of the Wadandi people and acknowledged them as Traditional Owners, paying respect to their Elders, past and present, and Aboriginal Elders of other communities who may be present.

2. Attendance

Presiding Member:

Members:

Cr Anne Ryan (from 10.35am)

Cr Paul Carter

Cr Grant Henley

Cr Sue Riccelli

Cr Mikayla Love

Officers:

Mr Mike Archer, Chief Executive Officer

Ms Sarah Pierson, Acting Director, Finance and Corporate Services

Mr Paul Sheridan, Manager, Financial Services

Mrs Emma Heys, Governance Coordinator

Public:

Cr Jodie Richards (observer)

Apologies:

Nil

3. ELECTION OF PRESIDING MEMBER AND DEPUTY PRESIDING MEMBER

In accordance with Delegation S1 – 26 ‘Committee Elections’, Ms Pierson called for nominations for the position of the Presiding Member of the Finance Committee.

Cr Anne Ryan nominated herself for the position of Presiding Member.

With no other nominations received, Cr Ryan was elected as Presiding Member of the Finance Committee.

10.35 am: At this time, Cr Ryan assumed the Chair.

The Presiding Member called for nominations for the position of Deputy Presiding Member of the Finance Committee.

Cr Carter nominated himself for the position of Deputy Presiding Member of the Finance Committee.

With no other nominations received, Cr Carter was elected as Deputy Presiding Member of the Finance Committee.

4. Public Question Time

Nil

5. Disclosure Of Interests

Cr Love disclosed an impartiality interest in relation to the term deposits the City holds with Bendigo Bank.

6. Confirmation Of Minutes

6.1 Minutes of the Finance Committee Meeting held 13 October 2021

Committee Decision

F2111/053 Moved Councillor S Riccelli, seconded Councillor P Carter

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

CARRIED 4/1

For the motion: Cr Riccelli, Cr Carter, Cr Love, Cr Henley

Against the motion: Cr Ryan

Finance Committee 5 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 ⇩

The officer recommendation was moved and carried.

Committee RECOMMENDATION

F2111/054 Moved Councillor P Carter, seconded Councillor S Riccelli

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

CARRIED 5/0

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 21 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 ⇩

The officer recommendation was moved and carried.

Committee Recommendation

F2111/055 Moved Councillor S Riccelli, seconded Councillor P Carter

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.

CARRIED 5/0

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 3/12^th 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. 3/12^th 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 150^th 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 28 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 31August 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 (Attachment 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

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		8		10 November 2021
7.1	Attachment a		List of Payments - September 2021

Finance Committee		32		10 November 2021
7.2	Attachment b		Loan Schedule - September 2021

Finance Committee		36		10 November 2021
7.2	Attachment c		Financial Activity Statement - September 2021