Agenda of Finance Committee - Wednesday, 24 November 2021

Finance Committee 21 24 November 2021

6.2 FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 OCTOBER 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	Acting Director, Finance 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 Loan Schedule - October 2021 ⇩ Attachment b Financial Activity Statement - October 2021 ⇩ Attachment c Investment Report - October 2021 ⇩

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 31 October 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 31 October 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 31 October 2021

The Statement of Financial Activity (FAS) for the year to date (YTD) shows an overall Net Current Position of $41.2M as opposed to the budget of $29.4M. This represents a positive variance of $11.7M 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				*1.06%*	*706,459*	*178,339*
1. Other Revenue	295,153	60,366	414,950	388.94%	234,787	112,547
2. Interest Earnings	368,214	293,317	609,250	25.53%	74,897	(88,651)
Expenses from Ordinary Activities				*10.09%*	*2,873,121*	*210,300*
3. Materials & Contracts	(4,521,911)	(5,731,355)	(20,245,296)	21.10%	1,209,444	(34,673)
4. Other Expenditure	(917,720)	(1,932,260)	(9,685,100)	52.51%	1,014,540	99,384
5. Non-Operating Grants, Subsidies and Contributions	733,230	6,145,480	34,850,687	(88.07%)	(5,412,250)	(10,000)
Capital Revenue & (Expenditure)				*43.57%*	*11,127,439*	*1,339,261*
6. Land & Buildings	(239,630)	(7,157,974)	(22,802,632)	96.65%	6,918,344	1,467,984
Plant & Equipment	(452,278)	(298,000)	(2,890,000)	(51.77%)	(154,278)	160,000
Furniture & Equipment	(84,172)	(295,950)	(828,800)	71.56%	211,778	(1,395)
Infrastructure	(4,059,704)	(11,161,530)	(38,537,750)	63.63%	7,101,826	991,282
7. Proceeds from Sale of Assets	0	146,450	776,071	(100.00%)	(146,450)	(74,950)
8. Transfer to Restricted Assets	(4,692,012)	0	(21,740)	(100.00%)	(4,692,012)	(2,022,226)
9. Transfer from Restricted Assets	1,673,460	0	1,735,682	100.00%	1,673,460	778,988

Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is very close to budget at only 1.06% ahead YTD. There are however some material variance items, that contribute to this.

1. Other Revenue

Ahead of YTD budget by $235K, or 388.9%, mainly due to the items listed in the table below:

Revenue Code	Revenue Code Description	Actual YTD $	Amended Budget YTD $	Variance YTD $	Variance YTD %	Change in Variance Current Month $
*Finance & Corporate Services*		*36,787*	*10,770*	*26,017*	*241.57%*	*21,173*
10100	Long Service Leave Re-imbursements from other LG’s	25,999	-	25,999	(100.00%)	25,999
The reimbursement came in a lot earlier than was originally predicted in the budget. This will rectify by year end.
*Planning & Development Services*		*30,263*	*44,064*	*(13,801)*	*(31.32%)*	*(11,875)*
10940	ESL Commission	-	11,825	(11,825)	(100.00%)	(11,825)
The commissions from DFES for the administration of the Emergency Services Levy have not yet been received.
*Engineering and Works Services*		*218,530*	*4,162*	*214,368*	*5150.60%*	*105,402*
G0030 & G0031	Busselton & Dunsborough Transfer Station – Sale of Scrap Materials	215,728	3,734	211,994	5677.41%	105,868
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 received in July and $255/tonne received in October for major collections in both months, compared to $110-$140/tonne during 2020. When prices are this good, a lot more material is moved to take advantage (causing budget timing variances). When they are lower, materials are stockpiled and only moved when space is required (which gives rise to the historic trend of the budget timing).

2. Interest Earnings

Interest earnings are $75K 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 $2.9M, or 10.1%, less than expected when compared to the budget YTD as at October. The expense line items on the face of the financial statement 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*		*451,477*	*807,158*	*355,681*	*44.1%*	*75,512*
10000	Members of Council	12,899	64,028	51,129	79.9%	13,473
Timing variance with payment of WALGA subscriptions delayed. These variances will persist even when this is paid, as the actual cost will spread and be allocated evenly over the term of the subscription, whereas the budget was set on a historical cash-outlay basis.
10105	Business Systems Improvement Team	-	10,584	10,584	100.0%	2,646
It is expected that the budget allocation of $31,750 will remain unused until the end of December when there will be expenditure of about $18K on consultants to support the change of the chart of accounts. The remaining $13,750 budget allocation will not expected to be used until March 2022.
10151	Rates Administration	93,861	108,321	14,460	13.3%	15,480
Variation between YTD actual and budget is mainly because of the following reasons: · Postage $10.8K under budget due to 2^nd instalment notice postage invoice having not been processed plus cost savings by using a new printing service for final and reminder notices · Printing $4.4K over budget due to bushfire flyer printing costs incorrectly charged to rates and a redesign of the 2021/22 annual rate notice layout was necessary to improve EasyRates information and apply a QR code. · Bank charges $18.4K under budget as the charges have come a lot less than expected. · Legal expenses $16.4K over budget due to a substantial increase in debt recovery proceedings. This expenditure is fully recovered from the property owner/s. · Consultancy $5K under budget due to the rating review project that this budget is for only just now commencing.
10200	Financial Services	14,304	38,194	23,891	62.6%	13,438
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	246,122	353,033	106,911	30.3%	7,193
Most of this budget relates to software licence renewals and subscriptions paid in advance. The monthly allocation of the annual budget was set based on an 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	511	41,048	40,537	98.8%	9,110
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.

10510	Governance Support Services	7,989	39,019	31,030	79.5%	6,290
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.
10616, 10617, & 10618	Aged Housing	12,790	55,954	43,164	77.1%	12,152
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*		*424,047*	*871,639*	*447,592*	*51.4%*	*40,236*
10380 & 10381	Busselton & Dunsborough Libraries	32,212	81,037	48,825	60.2%	28,434
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	(2,729)	25,681	28,410	110.6%	(5,993)
The credit relates to year end accrual reversals for which invoices are still yet to be received.
10543	Community Development	36	60,000	59,964	99.9%	5,000
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 now expected from Jan 2022. Timing of disbursement may need to be amended a mid-year budget review.
10591	Geographe Leisure Centre	112,859	100,518	(12,341)	(12.3%)	342
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	130,466	188,912	58,446	30.9%	2,497
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.
10625	Art Geo Administration	25,004	37,527	12,523	33.4%	2,921
The underspend at ArtGeo is offset in wages i.e. where staff have the skills to deliver the service we use them and not contractors as it achieves better outcomes.
10630	Economic and Business Development Administration	16,044	28,980	12,936	44.6%	3,450
The majority of this spend is allocated in Consultancy and with ED team not resourced at this time, consultancy tasks have been deferred to 2022.
11151	Airport Operations	60,404	254,280	193,876	76.2%	18,364
YTD variances are mainly due to: · Airport screening services – allocated monthly amounts have been delayed until flights start. · Planned consultancy tasks not started. · A number of contractor invoices having not been received. · Underspends in Contract building cleaning costs & fire safety materials.

10950	Animal Control	9,842	22,517	12,675	56.3%	1,670
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 Licenses & 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	21,030	11,406	(9,624)	(84.4%)	615
Bush Fire Brigades are currently preparing for the upcoming fire season. A large amount of PPE has been purchased in readiness for dispersal to BFB as required.
*Engineering and Works Services*		*3,258,839*	*3,856,955*	*598,116*	*15.5%*	*12,853*
10830	Environmental Management Administration	95,917	120,611	24,694	20.5%	(21,144)
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 $30K of invoices for street tree planting, revegetation and weed control were approved in October. Spring weed control is currently underway.
11170	Meelup Regional Park	10,636	85,330	74,694	87.5%	22,306
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 underway 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	87,823	137,057	49,234	35.9%	26,180
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	144,238	368,981	224,743	60.9%	50,602
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	26,689	124,623	97,934	78.6%	7,782
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	435,085	372,442	(62,643)	(16.8%)	(4,815)
The budget was entered based on historical expenditure patterns averaged over the previous three financial years. Traditionally the region is impacted by seasonality, but this year has seen unprecedented volumes of tourists through all months of the year, leading to higher usage levels and maintenance at this point in the year when compared to historical financial data. This variance is considered a timing variance only at this point, and adjustments to budgets in accordance with building maintenance timing will be made should the trend for higher usage through off-peak times continue.
Various	Waste Services	581,420	804,098	222,678	27.7%	(43,596)
$135K of the variance is associated with concrete crushing and a further $73K is associated with green waste processing, both that are planned for later in the financial year. $87K is attributable to External Restoration Works associated with the Rendezvous contaminated sites matter while another $38K of the variance is associated with postponement of the FOGO trial, where no costs are being incurred.
Various	Roads Maintenance	427,971	267,896	(160,075)	(59.8%)	(78,549)
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.

4. Other Expenditure

$1M, or 52.5%, 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 $
*Community and Commercial Services*		*442,970*	*1,476,263*	*1,033,293*	*70.0%*	*69,046*
10532	BPACC Operations	(350)	12,500	12,850	102.8%	-
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%	-
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 approx. $50,853 by end of November. Timing is largely dependent on CAP Applications received from community groups.
10558	Events	233,322	355,608	122,286	34.4%	314
There have been 3 funded events (Pedal Prix WA, SW Mudfest, Cape Naturaliste Pro) cancel for a total of $38k. We are also waiting on a number of events to invoice us for event sponsorships. Also, as the timing of Events budget expenditure is estimated prior to the actual allocation of sponsorship, it is impossible to know exactly when the expenditure will occur. With the allocation of the remaining events sponsorship budget due to go to Council in December, we will have a clearer picture of how the budget will be expended.
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	-	767,204	767,204	100.0%	191,676
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	115,139	148,550	33,411	22.5%	(115,139)
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*		*60,535*	*45,786*	*(14,749)*	*(32.2%)*	*10,874*
10925	Preventative Services – CLAG	24,930	9,980	(14,950)	(149.8%)	(18,317)
The CLAG budget is reconciled with the Shire of Capel on an annual basis, approximately in April, meaning there will always be an overspend shown until this time.

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%)*	-
10540	Recreation Administration	-	25,625	(25,625)	(100.0%)	-
10590	Naturaliste Community Centre	-	23,350	(23,350)	(100.0%)	-
C6010	Airport Fencing Works	-	17,426	(17,426)	(100.0%)	-
*Engineering and Works Services*		*728,230*	*6,074,079*	*(5,345,849)*	*(88.0%)*	*(10,000)*
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%	-
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%)	-
B9999	Donated Buildings	30,000	-	30,000	100.0%	30,000
F0112	Causeway Road Shared Path – State Capital Grant	-	80,000	(80,000)	(100.0%)	(40,000)
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%)	-
S0335	Kaloorup Road – MR Capital Grant	-	120,475	(120,475)	(100.0%)	-
S0336	Wildwood Road – MR Capital Grant	-	468,875	(468,875)	(100.0%)	-

6. Capital Expenditure

As at 31 October 2021, there is an underspend variance of 74.43%, or $14M, in total capital expenditure, with YTD actual at $4.8M against the YTD budget of $18.9M. A large portion of this positive underspend variance is offset by the negative variance in Non-Operating Grants, Contributions & Subsidies discussed above, with the remainder offset by the negative variances in Transfers From Reserves and Restricted Assets related to funds held aside for these projects. The attachments to this report include detailed listings of all capital expenditure (project) items, however the main areas of YTD variance are summarised as follows:

Cost Code	Cost Code Description	Actual YTD $	Amended Budget YTD $	Variance YTD $	Variance YTD %	Change in Variance Current Month $
*Land*		*2,599*	*16,668*	*14,069*	*84.4%*	*4,167*
10610	Property Services Administration	2,599	16,668	14,069	84.4%	4,167
This is a contingency fund for costs associated with land acquisition or disposal under the LTFP, such as advertising costs in relation to the proposed disposition of freehold land holdings at Ambergate.
*Buildings*		*237,031*	*7,141,306*	*6,904,275*	*96.7%*	*1,463,817*
B9614	Dunsborough Lakes Sporting Precinct-Pavilion /Changeroom Facilities	-	75,000	75,000	100.0%	-
There has been nil expenditure to date as the works have not yet commenced. The contract for Pavilion / Changeroom design was to be awarded in September 2021, with construction estimated to commence in April 2022.

B9300/1/2	Aged Housing Capital Improvements	9,721	105,150	95,430		90.8%	5,150
Budgeted works were proposed to separate the power and drainage that service 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	40,815	111,750	70,935		63.5%	(40,815)
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 programme. Completion date estimated November 2021.
B9591	Performing Arts Convention Centre	10,861	6,139,510	6,128,649		99.8%	1,534,712
The project has been re-tendered with tenders closing 6 October 2021.
B9596	GLC Building Improvements	35,969	71,284		35,315	49.5%	(3,756)
Proposed project for stadium ventilation has been put on hold, pending a review of capital projects.
B9605	Energy Efficiency Initiatives (Various Buildings)	86,013	111,580		25,567	22.9%	(7,851)
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%	-
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.
B9615	Buildings Asset Management Plan High Use Allocation	33,922	-		(33,922)	(100.0%)	(26,947)
21/22 expenditure budgeted to occur December – April, however urgent unplanned works have incurred expenditure earlier in the Financial Year. Majority of the cost is attributed to the replacement of the Old Fire Station doors, which were planned to commence January 2022 but brought forward to a change in contractor availability. Variance due to timing of works.
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*	*298,000*		*(154,278)*	*(51.8%)*	*160,000*
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 the recently created Manager position. Vehicle has been ordered, delivery due in February.
10610	Property Services Administration	-	35,000		35,000	100.0%	35,000
Vehicle has been ordered, delivery due in February.
10630	Property and Business Development	-	40,000		40,000	100.0%	40,000
The budget relates to the replacement vehicle for the Manager Economic and Business Development. Not yet ordered.
10810	Statutory Planning	-	35,000		35,000	100.0%	35,000
Vehicle has been ordered, delivery due in February.
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.
11401	Transport – Workshop	-	10,000		10,000	100.0%	10,000
The budget is for a replacement hydraulic press. Specification requirements are being reviewed in light of supply chain issues.
11402	Plant Purchases (P10)	420,639	8,000		(412,639)	(5158.0%)	-
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. The $8K budget item relates to a trailer, specification has been developed, to be ordered in December and delivery expected in March.
11403	Plant Purchases (P11)	31,639	-		(31,639)	(100.0%)	-
This is a carryover from 2020/21 FY – the Turf Maintenance rough cut ute. The budget for this was included with the current year purchases, timed for later in the financial year.
*Furniture & Office Equipment*		*84,172*	*295,950*		*211,778*	*71.6%*	*(1,395)*
10250	Information & Communication Technology Services	58,185	-		(58,185)	(100.0%)	(1,395)
Costs were incurred for new Attain software (for Governance), and the Council Chambers A/V upgrade, which were not budgeted for. The new Promapp software (for business process mapping for the whole organisation) was also purchased earlier than expected.

10558	Events	-	200,000	200,000	100.0%	-
The budget October 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%	-
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*		*4,059,704*	*11,161,530*	*7,101,826*	*63.6%*	*991,282*
Various	Roads	823,181	2,889,375	2,066,194	71.5%	(194,808)
The majority of road construction happens during the months October to April. 84% of the YTD variance representing $1.733M is associated with the four projects being Wildwood Road (now underway) and Chapman Hill Road safety shoulder widening projects, the State blackspot project for the Sugarloaf Road upgrade and renewal that is unlikely to be completed this financial year and $599K variance associated with the major Peel / Queen street roundabout renewal works that were carried over from last financial year scheduled now to commence after Christmas. All these project had their budget spread evenly across the year as works had not yet been scheduled. These projects are valued at $5.188M collectively and represent 41% of Road capital works for the year. Budgeted cash flows are not reflective of scheduled works which is resulting in this significant YTD variances.
Various	Bridges	698,230	1,444,000	745,770	51.6%	-
Major bridge works are completed by Main Roads 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 often does not occur until late in the financial year. To date, Main Roads has completed works on the Bussell Highway bridge with works currently underway on the 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 Main Roads with works anticipated to take place between 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 based on capacity. This variance is anticipated to continue to increase until invoices for works are provided by Main Roads.
Various	Car Parks	208,168	983,486	775,318	78.8%	84,331
86% of the YTD variance is attributable to the following projects: · Dunsborough Lakes Sporting Precinct (Stage 1) – Car parking under spent to YTD budget by $533K; 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 $134K; Tender has been awarded with works now underway. · Dunsborough Chieftain Crescent Carpark Extension $240K budget - contract awarded with anticipated expenditure of approx. $120K - placed on hold due to ongoing consultation.

Various	Footpaths & Cycleways	405,229	662,450	257,221	38.8%	13,718
57% of the YTD variance valued at $146K is associated with the Buayanup Drain Shared path project that has now been completed. 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 estimate. This variance will remain unless the budget is reduced formally via a budget amendment. 46% of the YTD variance valued at $118K is associated with path works at the Barnard East Development that is now underway and works at the Busselton Foreshore. This variance decreased from the prior period. The majority of other footpath and cycleway projects are scheduled for construction between the months of November to March.
Parks, Gardens & Reserves		1,976,642	5,052,168	3,075,526	60.9%	928,817
Various	Busselton Jetty - Capital Expenditure	20,126	272,524	252,398	92.6%	130,106
Major Maintenance works are scheduled to take place on the Jetty between late October through to 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 to be undertaken, the weather and working around the peak tourist seasons.
Various	Coastal & Boating	43,557	455,000	411,443	90.4%	415,000
Planning and procurement for Coastal related works continue to progress. The majority of works will commence in the new calendar year.
Various	Waste Services	52,722	540,000	487,278	90.2%	45,481
The majority of this variance is associated with budgets that were carried over from the previous year. 51% of the variance representing $250K is associated with 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 with respect to works on a Depot Washdown Facility Upgrade that remains in the planning phase.
Various	Townscape & Vasse River	8,690	36,223	27,533	76.0%	(2,605)
No works of any significance associated with projects within this category have yet to commence. The YTD variance is considered minor in comparison to the $1.779M on works that are on budget.
Various	Other P&G Infrastructure	1,851,546	3,748,421	1,896,874	50.6%	340,836
68% of this significant YTD variance to budget valued at a combined $1.288M is associated with the carried over Barnard Park East Foreshore Development and the Dunsborough Lakes Sporting Precinct project including the Non-Potable Water Network.
Various	Regional Airport & Industrial Park Infrastructure	(52,967)	130,051	183,018	140.7%	159,844
This line is in credit doe to an incorrect cost re-allocation amendment that was processed twice in the amount of $115K (will be corrected in November) – YTD actual should in fact be $63K, which 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 $146K. This is due to the continuing delays in delivery of acquisitions, and the associated transfer to auction of the vehicles being replaced.

8. Transfer to Restricted Assets

There is a YTD variance in transfers to Restricted Assets of $4.7M 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, totaling $3.6M, 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;

· $2.25M for various roads projects from Main Roads, State Blackspot Fund, the Regional Roads Program and the Road Safety Innovation Fund;

· $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;

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

· $100K from the Department of Primary Industries & Regional Development for the expansion of the CCTV network;

· $20K from Rio Tinto for Youth Development Services;

· $4.9K from the Busselton Senior Citizens to go towards the expansion project;

· $137K from the Department of Industry, Science, Energy and Resources for improvements to safety and accessibility at the airport; and

· $100K from the Southwest Development Corporation do develop a training and marketing campaign to build a pool of skilled hospitality workers in the region.

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 $1.1M has been received YTD, with $260K for road works bonds and $409K for caravan park deposits.

9. Transfer from Restricted Assets

YTD there has been $1.7M 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 $565K 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 31October 2021, the value of the City’s invested funds remained at $94.4M, unchanged from $94.4M as at 30 September 2021

The balance of the 11am account (an intermediary account which offers immediate access to the funds compared to the term deposits and a higher rate of return compared to the cheque account) remains at $6.5M.

During the month of October two term deposits totalling the amount of $4.5M matured. These were renewed for a further 197 days at 0.23% on average.

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

Borrowings Update

During the month there were no new loans entered into or drawn down. The attached Loan Schedule outlines the status of all existing loans as at October YTD.

Chief Executive Officer – Corporate Credit Card

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

Date		Payee	Description	$ Amount
29/10/21	BUSINESS EXCELLENCE AWARDS 2021		1 TICKET – G. HENLEY		$187.00
			TOTAL		$187.00

Donations & Contributions Received

During October, a mobile site office valued at $30K was donated to the City from the developers of the new Origin Markets, upon completion of said development. This is to be used as part of the construction of the upgraded Dunsborough Youth Services space next to the Naturaliste Community Centre in Dunsborough.

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 31 October 2021, the City’s net current position stands at $41.2M. The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.

Finance Committee 49 24 November 2021

6.3 PROPOSED FINANCE COMMITTEE DATES 2022

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	Committee Meetings
BUSINESS UNIT	Governance Services
REPORTING OFFICER	Governance Officer - Melissa Egan
AUTHORISING OFFICER	Acting Director, Finance 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	Nil

OFFICER RECOMMENDATION

That the Finance Committee endorse the following Finance Committee meeting dates for 2022:

· 19 January 2022

· 9 February 2022

· 9 March 2022

· 13 April 2022

· 11 May 2022

· 8 June 2022

· 20 July 2022

· 10 August 2022

· 14 September 2022

· 12 October 2022

· 9 November 2022

· 23 November 2022

EXECUTIVE SUMMARY

This report is presented to the Finance Committee to enable the Committee to schedule and advertise its meeting dates for the 2022 calendar year.

BACKGROUND

The Council of the City of Busselton has established a standing a committee known as the Finance Committee (the Committee), pursuant to section 5.8 of the Local Government Act 1995 (the Act). The Committee is established for the purpose of assisting Council to fulfil its role under section 2.27(2)(a) of the Act, namely to oversee the allocation of the local government’s finances and resources.

Under its terms of reference, the Committee must meet at least six times per year and report to Council once every two months as a minimum. Following a Committee resolution made in October 2015 (F1510/057), the Committee has been meeting on a monthly basis and the meeting schedule has been prepared accordingly.

In October 2019, Council indicated a preference that the meetings of its Committees are held on the same day as Ordinary Council Meetings and/or Council briefings, being a Wednesday. This arrangement was reviewed midway through 2020 and it was agreed to continue with this arrangement, as it has done throughout 2021.

In September 2021, the terms of reference for the Committee were reviewed and revised by Council (C2109/201), including the provision of a delegated power to schedule and endorse the dates, times and locations of the meetings held by the Committee.

OFFICER COMMENT

Pursuant to regulation 34(4)(a) of the Local Government (Financial Management) Regulations 1996, a local government is statutorily obliged to present a monthly statement of financial activity to Council “within two months after the end of the month it relates to”. To facilitate this obligation, it is proposed that the Committee meets on the second Wednesday of each month.

To ensure the statement of financial activity for November 2021 is presented to Council within the statutory deadline, it is proposed that a Committee meeting be held on Wednesday 19 January 2022, to then be presented at the Council meeting on Tuesday 25 January 2021 (noting that Wednesday 26 January 2022 is a public holiday).

To accommodate Council’s mid-year recess, it will be necessary to hold a Committee meeting on 20 July 2022 to enable the statement of financial activity for May 2022 to be presented at the Council meeting on 27 July 2022.

To ensure the statement of financial of activity for October 2022 can be presented to Council within the statutory deadline, and as Council’s last meeting of 2022 is scheduled to be held on 14 December 2022, it is proposed to schedule a second Committee meeting in the last week of November 2022. To avoid two committee meetings being scheduled for this day, it will be proposed that there is no Policy and Legislation Committee meeting scheduled for November and it is instead scheduled for 14 December 2022.

Under regulation 12 of the Local Government (Administration) Regulations 1996, if a committee meeting is open to the public or proposed to be open to the public, the local government must give public notice of the dates, times and place at which the committee meetings are to be held in the next 12 months. Once endorsed by the Committee, the 2022 meeting dates will be publicly advertised.

Statutory Environment

The legislation relevant to this report is:

· Local Government Act 1995

· Local Government (Administration) Regulations 1996

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

Options

As an alternative to the proposed recommendation, the Committee could propose different dates for its meetings to be held.

CONCLUSION

Regulation 12 of the Local Government (Administration) Regulations 1996 requires the local government to give notice of the dates of its Committee meetings that are open, or proposed to be open, to the public. The proposed Committee meeting dates for 2022 are presented to the Committee for endorsement.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

The schedule of the Committee meetings for 2022 will be advertised prior to the end of 2021.

Finance Committee 53 24 November 2021

6.4 SELF SUPPORTING LOAN APPLICATION - GEOGRAPHE BAY YACHT CLUB INC.

STRATEGIC THEME	LIFESTYLE - A place that is relaxed, safe and friendly with services and facilities that support healthy lifestyles and wellbeing.
STRATEGIC PRIORITY	2.3 Provide well planned sport and recreation facilities to support healthy and active lifestyles.
SUBJECT INDEX	Self Supporting Loans
BUSINESS UNIT	Recreation and Community Development
REPORTING OFFICER	Senior Sport and Recreation Project Officer - Brendan McNally
AUTHORISING OFFICER	Director, Community and Commercial Services - Naomi Searle
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 Geographe Bay Yacht Club Strategic Plan 2022-26 ⇩

OFFICER RECOMMENDATION

That the Council:

1. Approve a self-supporting loan to the Geographe Bay Yacht Club Inc., for the purposes of purchasing a new fleet of Pacer sail training dinghies to complement the Discover Sailing program, through the Western Australian Treasury Corporation for the amount of $50,000 for a term of up to ten (10) years; and

2. Authorises the CEO to enter into a loan repayment agreement with the Geographe Bay Yacht Club Inc. where:

(a) The Geographe Bay Yacht Club Inc. acknowledges it is responsible for reimbursement to the City of Busselton of full costs associated with the loan; and

(b) The loan repayment calculations are on the basis of the prevailing Western Australian Treasury Corporation lending rate including Government Guarantee Fee at the time of actual funding of the loan.

EXECUTIVE SUMMARY

The Geographe Bay Yacht Club Inc. (the Club) has applied to the City of Busselton for a self-supporting loan of $50,000 for a term of 10 years, to purchase a fleet of Pacer sail training dinghies to add to the Club’s Discover Sailing program. The Discover Sailing program is the core national participation program that provides opportunities for people of all backgrounds, ages and abilities to start and continue sailing by developing skills, experience and confidence. Officers have been working closely with the Club, including through the development of a Strategic Plan, and can confirm that this is one of the Club’s key actions under the ‘Our Club Facilities’ key priority area.

BACKGROUND

In 2021, through the City’s club development program, the Club was engaged to work with the City to undertake a comprehensive strategic planning process. This was funded through a grant from the Department of Local Government, Sport and Cultural Industries’ Every Club Funding program.

As an outcome, the Geographe Bay Yacht Club Inc. Strategic Plan was developed (Attachment A) which identified five (5) key priority areas. In the priority area of ‘Our Club Facilities’ and ‘Support Sailing Pathways’, an action was to upgrade the existing facilities:

Outcome: Maximise the use of the boating and recreation facilities; and

Maintain a suite of sailing training programs

Strategy: Purchase new training boats to ensure ongoing quality training is provided to the community

Who: GBYC Committee

When: 2021

Priority: Very High

The Club has been using a fleet of six (6) 420 class dinghies, which are all over 30 years old and are too heavy and technical for participants who are learning to sail. These dinghies now require significant time and finances to keep them maintained, safe and sailable. This is severely limiting the sailing participation pathway once sailors graduate from the entry level “tackers” sailing yachts.

The Club’s preferred replacement is the Pacer training dinghy. The Pacer is a sturdy, low maintenance dinghy that is light enough for two people to lift, they are ideal for beginners and are suitable for all ages. Many clubs and sailing schools throughout Australia use Pacers as their training yachts. The addition of this fleet assists the Club in achieving one of its Strategic Plan outcomes of establishing a South West Sailing Centre of Excellence at the Club by 2025/26.

The Club currently has an active membership of 400 including 90 junior members and plays host to regattas and State level competitions throughout the sailing season.

OFFICER COMMENT

The City has assisted the Club in developing a Strategic Plan which attempts to clearly articulate strategies to grow the sport and forms part of the Club’s regular management committee meetings.

The Club has advised officers that its Strategic Plan has been endorsed by the committee and will soon be advertised to members. This is an important piece of the strategic planning cycle so members can understand the direction and key focus areas of the club.

The purchase of this fleet is considered to be of a high priority given it aligns with Sailing Australia’s participation pathway and ensuring there are less barriers to participate in sailing.

The project cost breakdown is:

Self-Supporting Loan: $50,000 (over 10 years)

Applicant cash: $20,000

Total project: $70,000

As part of the self-supporting loan application, the Club has provided a range of supporting documentation including:

· Audited financial statements for the financial years ended 30 April 2020 and 30 April 2019.

· Profit and Loss Report for the financial year ended 30 April 2021.

· Cash Flow Forecast for 1 May 2021 to 30 April 2022.

· Sail Training ‘Discover Sailing’ Business Case.

· Geographe Bay Yacht Club Strategic Plan 2022-26.

City officers are also working with the club in current remediation works to the boat ramp and to establish a future annual fund contribution from the club for ongoing maintenance.

Statutory Environment

The City’s adopted 2020/21 budget has been compiled in accordance with section 6.2 of the Local Government Act 1995 and Part 3 of the Local Government (Financial Management) Regulations 1996.

Relevant Plans and Policies

The officer recommendation aligns to Council Policy ‘Loan Facilities’. This Policy is applicable in offering the Club a self-supporting loan.

Financial Implications

The City's 2021/2022 adopted budget includes a provision of $200,000 for the funding of self supporting loans to the community.

The loan would be granted on the basis of the prevailing Western Australian Treasury Corporation (WATC) lending rate including Government Guarantee Fee at the time of actual funding of the loan and subject to WATC approval. The WATC have advised that as at 2 November 2021 the current borrowing rate for 10 years is 2.1274%. The Government Guarantee Fee is 0.7%.

All interest and principal repayments would be formally agreed to prior to release of any funding. The repayments of a $50,000 loan over 10 years would be approximately $5563 per annum plus the Government Guarantee fee of 0.7% on outstanding principal each year.

The Club has another self-supporting loan with the City, with a balance of $63,578 owing at 30/6/21, which is currently budgeted to have P&I repayments of $11,672 made in 21/22. Review of the financial information provided by the club identifies some recent decline in finances. The financial documentation supplied did not contain any future budget or cashflow forecast outlining how this would be addressed, noting however that the Club has recently developed its strategic plan and priorities. When balanced against the non-financial benefits to the community of the proposal, and its capacity to grow the membership base (as proposed in the Club’s strategic plan), the club is deemed to pose a low risk of not be capable of meeting the additional repayment amount of $5,563 per annum ($463 per month).

Stakeholder Consultation

City officers have been consulting with the Club and the WATC throughout this process.

Risk Assessment

The supporting documents have been reviewed by Community and Recreation and Services Officers and in accordance with the City’s Risk Management Framework the proposal by the Club is considered to be low risk. Based on the information provided the Club should be able to meet the repayment obligations provided the Club maintains its current financial position.

Options

As an alternative to the proposed recommendation, the Council could chose to not approve the request from the Club or consider the following options:

1. Agree to a different loan amount.

2. Set different terms of the loan.

CONCLUSION

It is recommended that Council support the Club’s request for a self-supporting loan in order to further its strategic priorities as identified in its Strategic Plan.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Action will be taken immediately to implement the recommendations of the Council.

Finance Committee 58 24 November 2021

6.5 SELF SUPPORTING LOAN APPLICATION - MARGARET RIVER BUSSELTON TOURISM ASSOCIATION

STRATEGIC THEME	OPPORTUNITY - A vibrant City with diverse opportunities and a prosperous economy.
STRATEGIC PRIORITY	3.1 Work with key partners to facilitate the activation of our town centres, creating vibrant destinations and consumer choice.
SUBJECT INDEX	Margaret River Busselton Tourism Association
BUSINESS UNIT	Community and Commercial Services
REPORTING OFFICER	Director, Community and Commercial Services - Naomi Searle
AUTHORISING OFFICER	Director, Community and Commercial Services - Naomi Searle
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 Ancient Lands - site plan ⇩ Attachment b Ancient Lands - Journey and Lookout ⇩ Attachment c Ancient Lands - Pre Cave Experiences ⇩ Attachment d Ancient Lands - Post Cave Experiences ⇩

OFFICER RECOMMENDATION

That the Council:

1. Approve a self-supporting loan to the Margaret River Busselton Tourism Association (MRBTA) for the Ancient Lands Discovery Park project at Ngilgi Cave, through the Western Australian Treasury Corporation for the amount of $1,250,000 for a term of up to ten years; and

2. Authorises the CEO to enter into a Loan Repayment Agreement with MRBTA where:

(a) MRBTA acknowledges it is responsible for reimbursement to the City of Busselton of full costs associated with the loan; and

EXECUTIVE SUMMARY

Margaret River Busselton Tourism Association (MRBTA) has applied to the City of Busselton for a self-supporting loan of $1,250,000, for a term of ten years, for the Ancient Lands Discovery Park project at Ngilgi Cave (the Project). Officers have been working with the Association, through the provision of support letters to seek external funding, and recommend that Council approve the provision a self-supporting loan to MRBTA.

BACKGROUND

In late 2020, MRBTA approached the Council with a proposal to develop the facilities at Ngilgi Cave, to create a more authentic and modern cultural tourism experience (see attached concept plans). MRBTA advised that both Commonwealth and State Government funds would be sought for the Project, however they would need to fund the balance of the budget. At the time, Councillors, through a briefing session informally indicated its in-principle support for the Project.

The overarching purpose of the Project is to provide a unique natural and cultural experience through the development of above ground visitor facilities, interpretive signage and pathways to mirror and complement the below ground experience at Ngilgi Cave. The Project will provide an authentic and expanded visitor experience, increase site and regional viability through increased marketing opportunities, visitor and community satisfaction, and result in increased visitation, spend, length of stay and employment in the region. The Project also aims to value-add to the cultural experiences offered in the region through the creation of a unique Aboriginal tourism experience through a new meeting area for Aboriginal tours and products.

The primary capital works associated with the Project include:

· Renovation and extension of existing visitor centre facility.

· Removal of ageing and/or hazardous out-buildings.

· Development of large roofed cultural meeting space.

· Development of well-defined pathways between the visitor centre, carpark, above ground experiences and cave entrance.

· Installation of interpretive signage and experiences within the facility and along pathways.

· Development of ancillary infrastructure including seating, carparks, playground and fencing.

The Project is being developed in partnership with Koomal Dreaming (local Aboriginal tour operator) and the Undalup Association (Traditional Owners), as well as various other government and community stakeholders.

OFFICER COMMENT

This Project is considered strategic in nature as it builds on the more limited cultural tourism experiences the region has to offer. Located at the top end of the Busselton Margaret River region, Ngilgi Cave is a very popular tourist destination. The above ground infrastructure at Ngilgi Cave has been built in an ad-hoc fashion, with buildings constructed, added to, and usage changing as demand and visitation grew from the 1970s to the 1990s.

The current infrastructure is now inadequate to service consumer demand or meet modern visitor expectations. This is evidenced by the current trend of a 7.3% average annual decline in visitation between 2018 and 2021 and consistent poor online reviews for the above ground experience.

MRBTA operates a number of tourist attractions and understand the importance of offering quality tourism products. The key drivers for this Project are broadly summarised as the following:

· Declining visitor numbers based on degraded visitor experience.

· Limited capacity for peak periods and special interest groups.

· A disconnect between the above ground and below ground visitor experience.

· No or very limited above ground interpretation.

· No universal access at the site.

· Limited activity of tourists that do not wish to engage with a below ground experience.

· Existing pathways are difficult to navigate, lacking interest and not well defined.

· Underdeveloped carpark and pathways, presenting tripping and slipping hazards.

· Ageing and unattractive visitor interface facility and infrastructure.

· Ablutions and other buildings are located directly above the cave and are ageing and present serious hazards.

· Gap in quality cultural tourism experience offerings.

The project cost breakdown is proposed as:

Self-Supporting Loan: $1,250,000 (over 10 years)

Commonwealth Government funding: $1,350,000

State Government funding: $ 70,000

Applicant cash: $ 80,000

Applicant In-kind: $ 90,000

Total project: $2,840,000

As part of the self-supporting loan application, MRBTA has provided a range of supporting documentation including:

· Audited financial statements for the financial years ended 30 June 2020 and 2021.

· Ancient Lands Discovery Park at Ngilgi Business Case dated February 2021.

· Letters of support.

These supporting documents have been reviewed by City Officers and the proposal is overall considered to be sound.

Statutory Environment

The City’s 2020/21 adopted budget has been compiled in accordance with section 6.2 of the Local Government Act 1995 and Part 3 of the Local Government (Financial Management) Regulations 1996.

Relevant Plans and Policies

The officer recommendation aligns to Council Policy ‘Loan Facilities’. This Policy is applicable in offering the MRBTA a self-supporting loan.

Financial Implications

MRBTA has been successful in securing $1,420,000 towards the Project; $1,350,000 through the Commonwealth Government’s Building Better Regions Fund (round 5), and $70,000 through the State Government’s Regional Economic Development Grant. MRBTA is contributing $80,000 in cash and $90,000 in in-kind support towards the Project, and are seeking a self-supporting loan of $1,250,000 through the City to enable the project to proceed.

The City’s 2021/2022 adopted budget includes provision for this self-supporting loan of $1,250,000, to be expended subject to Council’s consideration and approval of this application.

The loan would be granted on the basis of the prevailing Western Australian Treasury Corporation (WATC) lending rate (including Government Guarantee Fee) at the time of actual funding of the loan and subject to WATC approval. The WATC have advised that as at 10 November 2021 the current borrowing rate for 10 years is 1.9872% plus an annual Government Guarantee Fee of 0.7%.

All interest and principal repayments would be formally agreed to prior to release of any funding. The repayments of a $1,250,000 loan over 10 years would be approximately $139,065 per annum plus the Government Guarantee fee of 0.7% on outstanding principal each year. Based on the information provided MRBTA should be able to meet the repayment obligations.

Stakeholder Consultation

City officers have been consulting with the MRBTA and the WATC throughout this process.

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. There are no risks identified of a medium or greater level.

Options

As an alternative to the proposed recommendation, the Council could:

1. Choose to not approve the request from MRBTA.

2. Agree to a different loan amount.

3. Set different terms of the loan.

CONCLUSION

Through the assessment of documents provided during the application process, officers are of the opinion that MRBTA is financially sound, has limited debt levels and sufficient income streams to ensure the repayment schedule is met. Further, the business case projects additional revenue as a result of this Project, further adding to the Association’s net positive financial position.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Action will be taken immediately to implement the recommendations of the Council.

B1361	YCAB (Youth Precinct Foreshore)	11,542	35,903	24,362	67.9%	968
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 and 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*		*272,218*	*193,628*	*(78,590)*	*(40.6%)*	*(48,470)*
10805	Planning Administration	3,828	13,912	10,084	72.5%	2,538
Computer software license renewals have not as yet been received so not allocations for these costs have occurred yet.
10820	Strategic Planning	15,883	52,368	36,485	69.7%	2,226
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.
10922	Preventative Services – Mosquitoes	29,131	7,787	(21,344)	(274.1%)	(23,443)
The City’s contribution to the CLAG chemical and communications budget has been transferred after receiving the Department of Health grant for mosquito control.
10925	Preventative Services - CLAG	73,038	29,000	(44,038)	(151.9%)	(18,046)
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	87,738	7,182	(80,556)	(1121.6%)	(10,110)
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.

Finance Committee		14		24 November 2021
6.1	Attachment a		List of Payments - October 2021

Finance Committee		44		24 November 2021
6.2	Attachment b		Financial Activity Statement - October 2021

Finance Committee		46		24 November 2021
6.2	Attachment c		Investment Report - October 2021

Finance Committee		94		24 November 2021
6.5	Attachment d		Ancient Lands - Post Cave Experiences