Please note:  These minutes are yet to be confirmed as a true record of proceedings

CITY OF BUSSELTON

MINUTES OF THE Finance Committee MEETING HELD ON 9 March 2022

TABLE OF CONTENTS

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Declaration of Opening, acknowledgement of country and Announcement of Visitors. 2

2....... Attendance. 2

3....... Public Question Time. 2

4....... Disclosure Of Interests. 2

5....... Confirmation Of Minutes. 2

5.1          Minutes of the Finance Committee Meeting held 9 February 2022. 2

6....... Reports. 4

6.1          2021/22 MID-YEAR BUDGET REVIEW... 4

6.2          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 JANUARY 2022. 20

6.3          LIST OF PAYMENTS MADE - JANUARY 2022. 55

6.4          BUDGET AMENDMENT PERCENT FOR ART. 66

7....... General Discussion Items. 75

7.1          INSTALMENT FEES & INTEREST & SPECIAL ARRANGEMENT FEES & DISCOUNTS & PRIZES FOR FULL PAYMENT BY ANNUAL DUE DATE. 75

8....... Next Meeting Date. 79

9....... Closure. 79

 


Finance Committee                                                             2                                                                       9 March 2022

MINUTES

 

MINUTES OF The Finance Committee HELD IN The Committee Room, Administration Building, Southern Drive, Busselton, ON 9 March 2022 AT 10.00am.

 

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

The Presiding Member opened the meeting at 10:04am.

 

The Presiding Member noted this 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 Paul Carter

 

 

Cr Grant Henley    

Cr Sue Riccelli

Cr Mikayla Love

Cr Anne Ryan

 

Officers:

 

Mr Tony Nottle, Director, Finance and Corporate Services

Mr Paul Sheridan, Manager, Financial Services
Mrs Jacquie Happ, Cultural Development Officer

Ms Jo Barrett-Lennard, Governance Officer

 

 

Apologies:

 

Nil

 

3.               Public Question Time

 

Nil

 

4.               Disclosure Of Interests

Nil


 

5.               Confirmation Of Minutes

5.1             Minutes of the Finance Committee Meeting held 9 February 2022

Committee Decision

F2203/008               Moved Councillor P Carter, seconded Councillor M Love

That the Minutes of the Finance Committee Meeting held 9 February 2022 be confirmed as a true and correct record.

CARRIED 5/0

 


Finance Committee                                                             4                                                                       9 March 2022

6.               Reports

6.1             2021/22 MID-YEAR BUDGET REVIEW

STRATEGIC GOAL

6. LEADERSHIP Visionary, collaborative, accountable

STRATEGIC OBJECTIVE

6.1 Governance systems, process and practices are responsible, ethical and transparent.

SUBJECT INDEX

Budget Planning and Reporting

BUSINESS UNIT

 Financial Services

REPORTING OFFICER

Manager Financial Services - Paul Sheridan

AUTHORISING OFFICER

Director Finance and Corporate Services - Tony Nottle

NATURE OF DECISION

Executive: substantial direction setting, including adopting strategies, plans and policies (excluding local planning policies), tenders, setting and amending budgets, funding, donations and sponsorships, reviewing committee recommendations

VOTING REQUIREMENT

Absolute Majority

ATTACHMENTS

Attachment a   Detailed Budget Review Schedule

Attachment b    Financial Activity Statement YTD December 2021

Attachment c    Capital Construction & Acquisition Report YTD December 2021  

 

 The officer recommendation was moved and carried.

 

Committee Recommendation

F2203/009               Moved Councillor P Carter, seconded Councillor M Love

That the Council, pursuant to Regulation 33A of the Local Government (Financial Management) Regulations, adopts the 2021/22 Annual Mid-Year Budget Review as presented within this report.

CARRIED 5/0

By absolute majority

officer Recommendation

That the Council, pursuant to Regulation 33A of the Local Government (Financial Management) Regulations, adopts the 2021/22 Annual Mid-Year Budget Review as presented within this report.

 

EXECUTIVE SUMMARY

Between January and March in each financial year, a local government is to carry out a review of its annual budget for that year. The Council is required to consider the review submitted to it after consideration by the Finance Committee, and determine (by absolute majority) whether or not to adopt the review, any parts of the review or any recommendations made in the review within 30 days of the review being undertaken.

BACKGROUND

Local governments are required to carry out an annual budget review and in accordance with Regulation 33A of the Local Government (Financial Management) Regulations.

 

The purpose of an annual budget review is to ensure that a local government conducts a review of its financial performance at an appropriate time in the financial year. This is to identify significant budget variances and recommend remedial action as necessary, prior to the end of the financial year.

This report, based on the City’s financial performance for the financial year to date as at 31 December 2021, has been compiled to fulfil the statutory reporting requirements of the Local Government Act 1995 and associated Regulations in respect of the annual budget review process.

OFFICER COMMENT

The budget review process was conducted throughout January and February 2022, via a series of workshop meetings with each of the manager/coordinator groups across the entire organisation (14 in total).

 

This review takes into account a number of factors including what has occurred during the first six months of the fiscal year, the likely operating environment over the remaining six months under the current economic climate, and the most likely impact on the City’s net current position. 

 

The attached Detailed Budget Review Schedule (Attachment A), outlines the estimated variations from the existing amended budget position on a line by line basis, showing an estimated total positive net variance to the budgeted net current position of approximately $1.16M.

 

A copy of the Financial Activity Statement YTD December 2021 (“FAS”) has also been attached (Attachment B), including columns that show the net surplus / (deficit) variance totals for each Nature & Type category.

 

For ease of reference, the net surplus / (deficit) variance totals for each of the affected Nature & Type categories from the FAS are summarised in the table below.

 

Affected FAS Categories by Nature &Type

Nature & Type Code

Forecast Surplus / (Deficit) Variance to Amended Budget at Year End

 

 

$

Revenue from Ordinary Activities

 

 

Rates

10

100,000

Operating Grants, Subsidies and Contributions

21

(52,070)

Fees & Charges

35

900,390

Other Revenue

40

166,857

Interest Earnings

45

26,544

 

 

1,141,721

Expenses from Ordinary Activities

 

 

Employee Costs

55

516,978

Materials & Contracts

60

882,884

Utilities (Gas, Electricity, Water etc.)

65

75,200

Insurance Expenses

85

5,700

Other Expenditure

90

5,557,209

 

 

7,037,971

 

 

 

Operating Surplus / (Loss)

 

8,179,692

 

 

 

Capital Revenue & Expenditure

 

 

Non-Operating Grants, Subsidies and Contributions

26

(5,186,385)

Capital Expenditure

99

5,567,787

Proceeds from Sale of Assets

50

(3,690)

Proceeds from New Loans

N/A

(4,000,000)

Advances to Community Groups

N/A

4,000,000

Combined net Impact from reserves & restricted

N/A

(7,401,598)

Net Current Position - Surplus / (Deficit)

 

1,155,806

Attachment A lists the details that make up each of the lines in the table above, however some high level commentary around the most significant factors contributing to the more material variances in the table above is provided below.

 

Rates

Management forecasts an increase of rates revenue in excess of budget by $100K, largely due to a surge in interim rating due to development activity.

 

Operating Grants, Subsidies and Contributions

The negative variance of $52K within this category mainly relates to;

·        Reimbursement - legal fees $45K;

·        Grants commission - general purpose grant ($13)K;

·        Grants commission - local roads grant $66K;

·        Reimbursement - insurance recovered ($50)K;

·        Community development grant ($66)K;

·        Hospitality worker training and marketing grant ($100)K (see Materials and contracts for offset);

·        Reimbursement – insurance recovered $20K.

 

Fees & Charges

Of the $900K forecast increase in fees and charges, $773K will remain in reserves; resulting in only a $127K impact on the net current position which is not material. Identified major variances in this category relate to the following;

·        Cemetery fees $134K;

·        Swimming lessons, Program cancellations due to staff shortages ($80)K;

·        GLC Membership fees ($80)K;

·        Busselton jetty tourist park fees $330K, (will form part of end of year reserve reconciliation);

·        Airport landing and take-off fees $260K, (will form part of end of year reserve reconciliation);

·        Airport car parking income $208K, (will form part of end of year reserve reconciliation);

·        Airport screening fees ($227)K, (will form part of end of year reserve reconciliation);

·        Statutory planning development application fees $100k;

·        Waste tipping fees $80K, (will form part of end of year reserve reconciliation);

·        Unbudgeted recovery of various utilities charges from tenants/lessees of certain City facilities due to new contractual arrangements.

 

Other Revenue

The projected positive variance of $167K is mainly due to much higher sales of scrap materials from the waste facilities.  Almost all of this value (i.e. $150K) is offset against the transfers to the waste reserve, so the impact on the Municipal net current position is negligible (i.e. $17k).

 

Interest Earnings

The marginal increase in return on City deposits has an effect on this year’s financial position in that interest earnings will achieve budget levels. Current projections are as follows:


 

 

Budgeted

Projected

Surplus /

 

June '22

June '22

(Deficit)

Overdue Payment Interest

150,000

160,000

10,000

Municipal Funds

75,000

51,648

(23,352)

Reserve Funds

125,000

164,896

39,896

Total

350,000

376,544

26,544

 

Original 2021/22 budget projections were conservative, hence it is anticipated that the end of year results will be achieved.

 

Employee Costs

There is an estimated net savings against budget to 30 June of approximately $517K, with $179K of that funded from reserves, therefore estimated net muni savings of $338K is predicted.

 

Materials & Contracts

This category indicates a potential savings to budget of $883K.  This is reduced by the fact that a net amount of $394K of these savings would have been funded from reserves, therefore the transfer from reserves back into muni is also reduced by this amount.  This leaves a forecast net savings of $430K.

 

Utilities

Savings of approximately $75K are forecast due to savings on the landline charges in the main administration building, mobiles and internet, as well as forecast savings on the electricity accounts across some of the City facilities and buildings.

 

Insurance Expenses

Minor saving of $6K is anticipated at years end for machinery break down insurance. All other insurance categories are in line with budget estimates.

 

Other Expenses

Of the $5.557M forecast savings, $5.492M will remain in reserves, resulting in a $65K in variance to Net current position.  Of this, $3M relates to Busselton Jetty AUDC Contribution and $2.3M relates to the BMRRA.


Non-Operating Grants, Subsidies and Contributions

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.  Also, the non-recognition of funds already physically received means that they will remain in either a reserve or restricted asset account.

 

Capital Expenditure

The schedule of Capital Projects & Acquisitions YTD as at December 2021 (Attachment C) has been reviewed in conjunction with officers. 

 

Of the total annual amended budget of $65M, it is estimated that approximately $5.6M will still be in progress come 30 June 2022, and will need to be carried forward to be re-listed (and/or re-scoped), in the 2022/23 budget.

 

A summary of the detailed listing in Attachment C is shown below:


 

Description

2021/22 Actual Spend to 30/12/21      (B)

2021/22
Amended Budget      (A)

Remaining Budget        (A - B)

Forecast Under / (overspend) to 30/6/22

Land

2,599

50,000

47,401

25,000

Buildings

556,330

22,752,632

22,196,302

61,485

Plant & Equipment

577,445

2,890,000

2,312,555

0

Furniture & Office Equipment

147,665

828,800

681,135

624

Roads*

2,763,348

12,523,430

9,760,082

1,337,909

Bridges**

698,230

6,849,989

6,151,759

2,218,000

Car Parks

448,262

1,960,600

1,512,338

424,280

Footpath and Cycleway

506,348

1,944,200

1,437,852

414,129

Parks, Gardens & Reserves:

0

0

0

0

-      Busselton Jetty

114,465

817,550

703,085

0

-      Coastal and Boating

80,016

1,216,800

1,136,784

423,239

-      Waste Services

264,329

2,292,500

2,028,171

0

-      Townscapes & Vasse River

35,748

1,779,067

1,743,319

525,000

-      Other P&G Infrastructure

3,442,858

8,476,925

5,034,067

110,000

Drainage

13,090

311,605

298,515

0

Airport Industrial Parks

81,197

365,084

283,887

28,120

 

9,731,930

65,059,182

55,327,252

5,567,786

 

* Sugarloaf Road $1M, and Boallia Road $400K are the two materially significant projects in this class that have been identified as being carried forward.

** Timing is heavily influenced by MRWA. Bridgeworks not expected to be completed by end of year are Layman Road Bridge 3438 $234K, Kaloorup Road Bridge $975K, and Boallia Road Bridge $1.009M.

 

These carry-forwards (as identified in the table above) are entirely funded from reserves, restricted funds, grants, and where approved loan drawdowns.  As such, there will be a nil impact on the net muni position at year end.

 

General Commentary

The ongoing effects of the COVID pandemic continue to impact the City’s operations. For example, the tightening of the employment market has resulted in difficulties in recruiting staff to fill vacancies, resulting in savings on salaries and wages. Conversely, rising fuel and supply prices are increasing costs.

 

Components of the unspent capital and operating expenditure budgets are currently being assessed for re-listing in the Council’s 2021/22 draft budget, if required.


Statutory Environment

Regulation 33A of the Local Government (Financial Management) Regulations is set out below:

 

Regulation 33A.                Review of budget

(1)         Between 1 January and 31 March in each financial year a local government is to carry out a review of its annual budget for that year.

             (2A)     the review of an annual budget for a financial year must —

(a)      Consider the local government’s financial performance in the period beginning on 1 July and ending no earlier than 31 December in that financial year; and

(b)      Consider the local government’s financial position as at the date of the review; and

(c)       Review the outcomes for the end of that financial year that are forecast in the budget.

(2)       Within 30 days after a review of the annual budget of a local government is carried out it is to be submitted to the council

(3)       A council is to consider a review submitted to it and is to determine* whether or not to adopt the review, any parts of the review or any recommendations made in the review.

(4)       Within 30 days after a council has made a determination, a copy of the review and determination is to be provided to the Department.

             *Absolute majority required.

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

Risk assessments have been previously completed in relation to a number of ‘higher level’ financial matters, including timely and accurate financial reporting to enable the Council to make fully informed financial decisions. The completion of the monthly Financial Activity Statement report is a control that assists in addressing this risk.


Options

As an alternative to the proposed recommendation, the Council could not adopt the budget review report. If Council is intends to consider this option, officers can assist on the drafting of a suitable alternative motion for adoption before the statutory due date of 30 April 2022.

CONCLUSION

Despite uncertainty in the current economic climate, planned and budgeted works activities, as at December 2021 for the City’s overall financial performance is considered satisfactory.  Projections resulting from the budget review process during January and February in consultation with all manager/co-ordinator groups across all parts of the City, indicated a potential positive impact on closing net current position as at 30 June 2022, in the order of approximately $1.16M.   

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Officers will inform the Department of the Council’s consideration by 30 April 2022.

 

 


Finance Committee

14

9 March 2022

6.1

Attachment a

Detailed Budget Review Schedule

 






Finance Committee

15

9 March 2022

6.1

Attachment b

Financial Activity Statement YTD December 2021

 


Finance Committee

19

9 March 2022

6.1

Attachment c

Capital Construction & Aquisition Report YTD December 2021

 





Finance Committee                                                             39                                                                     9 March 2022

6.2             FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 JANUARY 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

Financial Services

BUSINESS UNIT

Financial Services

REPORTING OFFICER

Manager Financial Services - Paul Sheridan

AUTHORISING OFFICER

Director Finance and Corporate Services – Tony Nottle

NATURE OF DECISION

Executive: Substantial direction setting, including adopting budgets, strategies, plans and policies (excluding local planning policies); funding, donations and sponsorships; reviewing committee recommendations

VOTING REQUIREMENT

Simple Majority

ATTACHMENTS

Attachment a   Statement of Financial Position - Period Ended 31 January 2022

Attachment b    Loan Schedule - January 2022

Attachment c    Investment Report - January 2022  

 

The officer recommendation was moved and carried.

 

Committee Recommendation

F2203/010               Moved Councillor G Henley, seconded Councillor S Riccelli

That the Council receives the statutory financial activity statement reports for the period ending 31 January 2022, 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 31 January 2022, 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 January 2022.


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 January 2022

The Statement of Financial Activity (FAS) for the year to date (YTD) shows an overall Net Current Position of $19.8M as opposed to the budget of $189K. This represents a positive variance of $19.6M 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

 

1.14%

814,489

(127,524)

1.    Other Revenue

359,024

193,212

414,950

85.82%

165,812

(16,173)

Expenses from Ordinary Activities

 

7.63%

3,842,105

(414,285)

2.    Materials & Contracts

(9,399,204)

(10,636,502)

(20,245,296)

11.63%

1,237,298

(521,002)

3.    Other Expenditure

(1,918,522)

(3,715,045)

(9,685,100)

48.36%

1,796,523

141,306

4.    Non-Operating Grants, Subsidies and Contributions

1,425,277

8,519,155

34,850,687

(83.27%)

(7,093,878)

509,229

Capital Revenue & (Expenditure)

 

42.49%

19,625,360

3,102,719

5.    Land & Buildings

(609,306)

(12,650,332)

(22,802,632)

95.18%

12,041,026

1,838,070

Plant & Equipment

(752,922)

(1,771,000)

(2,890,000)

57.49%

1,018,078

304,523

Furniture & Equipment

(175,090)

(549,191)

(828,800)

68.12%

374,101

(27,426)

Infrastructure

(9,613,831)

(20,058,246)

(38,537,750)

52.07%

10,444,414

285,203

6.    Proceeds from Sale of Assets

0

547,561

776,071

(100.00%)

(547,561)

(139,934)

7.    Proceeds from New Loans

10,025,000

5,450,000

15,450,000

83.94%

4,575,000

4,550,000

8.   Total Loan Repayments – Principal

(1,615,120)

(1,848,193)

(3,839,418)

12.61%

233,073

(25,000)

9.  Advances to Community Groups

(25,000)

(5,450,000)

(5,450,000)

99.54%

5,425,000

5,450,000

10.  Transfer to Restricted Assets

(17,110,256)

0

0

(100.00%)

(17,110,256)

(10,135,762)

12.  Transfer from Restricted Assets

3,054,422

0

0

100.00%

3,054,422

397,189


Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is very close to budget at only 1.14% ahead YTD.  There is however two material variance items requiring comment.

                                   

1.      Other Revenue

Ahead of YTD budget by $166K, or 85.8%, 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

49,890

18,420

31,470

170.85%

(780)

10100

Long Service Leave Re-imbursements from other LG’s

25,999

 -

25,999

(100.00%)

 -

The reimbursement came in a lot earlier than was originally predicted in the budget.  This will rectify by year end.

Community and Commercial Services

17,967

2,887

15,080

522.33%

(6,940)

10625

Art Geo – Sale of Artworks

8,893

 -

8,893

(100.00%)

(8,833)

This line is cleared out by year end i.e. sales proceeds are on-paid to the artists.  There was a delay in on-paying December and January’s sales due to Art Geo Administration moving premises, plus staff being on leave.

Engineering and Works Services

224,961

96,291

128,670

133.63%

(4,916)

G0030 & G0031

Busselton & Dunsborough  Transfer Station – Sale of Scrap Materials

221,026

87,218

133,808

153.42%

1,421

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 November 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 differences).

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $3.8M, or 7.6%, less than expected when compared to the budget YTD as at January. 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.

 

2.     Materials & Contracts

Less than YTD budget by $1.24M.  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

983,078

1,329,084

346,006

26.0%

12,451

10105

Business Systems Improvement Team

 -

18,522

18,522

100.0%

2,646

Consultants to support the change of the chart of accounts have now been engaged and expenditure now incurred. The budget will be utilised over coming months.

10151

Rates Administration

134,313

165,515

31,202

18.9%

1,312

Variation between YTD actual and budget is mainly due to:

·        Postage $15.8K under budget due to instalment notice postage invoice having not been processed plus cost savings by using a new printing service for final and reminder notices

·        Bank charges $26.2K under budget as the charges have come a lot less than expected.

·        Legal expenses $22.1K over budget due to a substantial increase in debt recovery proceedings. This expenditure is fully recovered from the property owner/s.

·        Consultancy $8.4K under budget due to the rating review project that this budget is for only just now commencing.  There will be under underspend in this area offset by a possible overspend in wages, as an internal resource has been seconded to the project to help defray external consulting costs.

10200

Financial Services

20,364

54,107

33,743

62.4%

1,200

Savings to budget are as a result of bank charges not coming in at the level expected, and some budgeted subscriptions either being cancelled, allocated to more appropriate areas, or spread over the year rather than hitting one month per the way the budget was set (based on historical cash flows, rather than accrual accounting).

10250

Information & Communication Technology Services

509,863

586,750

76,887

13.1%

(13,055)

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 on a monthly basis with the new prepaid expenses allocation process that has been adopted to more accurately reflect proper accrual accounting practices, however it should resolve by year end.

10360

Customer Service

8,834

19,662

10,828

55.1%

1,502

Most of the variance is due to a lower spend on stationery. Difficult to predict monthly spend due to orders being made on an ‘as required’ basis.

10500

Legal and Compliance Services

53,006

71,834

18,828

26.2%

(25,843)

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

17,375

65,627

48,252

73.5%

6,564

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

37,830

98,467

60,637

61.6%

6,750

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.  Property inspections are to be undertaken at which time items requiring maintenance will be identified.

R0288

Locke Estate

4,281

15,169

10,888

71.8%

1,317

Likely spend from remaining budget will be between $4-8k depending on whether and when sites are leased.

R0305

Creekview Road Reserve 12492 (Lot 501)

 -

14,572

14,572

100.0%

296

Due to a controlled burn, certain activities such as targeted flora and fauna surveys have not been able to be conducted.  Alternative animal monitoring and habitat surveys are now planned to be undertaken by the end of the financial year, however there still should be an overall underspend of approximately $7K.

Community and Commercial Services

975,291

1,564,853

589,562

37.7%

(108,958)

10380 & 10381

Busselton & Dunsborough Libraries

56,331

119,072

62,741

52.7%

6,020

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

(155)

51,673

51,828

100.3%

14

YTD expenses are well below Budget figures as the Consultancy works for the Bovell Ovals Masterplan and Dunsborough Country Club Masterplan are only in the early stages. It is expected that the work should be completed by years end.

10543

Community Development

926

100,075

99,149

99.1%

39,861

This relates to the Strengthening Communities program funded by Lotterywest. There were delays in the program development, and procurement has not yet taken place. It is anticipated that this program will be now be launched during February with bulk of expenditure to occur through February and March.

10590

Naturaliste Community Centre

28,676

52,432

23,756

45.3%

7,054

The under spend here is as a result of Non-Capital Furniture & Office Equipment, Contractors and Licence Fees – this has been due to controlled spending and invoice timing.  There was also an increased budget in F&OE this year is as result of grant monies received, which are planned to be expended by the end of the financial year.

10600

Busselton Jetty Tourist Park

271,461

344,663

73,202

21.2%

(5,371)

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

41,012

60,552

19,540

32.3%

4,814

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.  Also, some activities were postponed or deferred due to the relocation.

10630

Economic and Business Development Administration

20,985

93,353

72,368

77.5%

(1,637)

The majority of this spend is allocated in Consultancy and with ED team not resourced at this time, tasks involving the engagement of consultants have been deferred to later in the financial year.


 

10900

Cultural Planning

3,495

22,098

18,603

84.2%

4,736

Awaiting confirmation of further grant monies before engagement of consultants.

10980

Other Law, Order & Public Safety

165,562

 -

(165,562)

(100.0%)

(165,562)

The variance to budget represents the payment of the annual contribution to the Surf Life Saving Service a month earlier than originally forecast.

11151

Airport Operations

121,245

432,040

310,795

71.9%

12,901

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 (due to delay in commencement of RPT services).

B1361

YCAB (Youth Precinct Foreshore)

30,995

49,967

18,972

38.0%

(5,204)

Past expenses had been allocated to the old Section of 330 and not 332. A correcting journal has been organised in February.

Planning and Development Services

452,964

474,487

21,523

4.5%

79,205

10801

Sustainability

109,421

79,793

(29,628)

(37.10%)

0

The Environmental Management Business Unit has been restructured mid-way through the financial year. A number of budget realignment journals are required, but have not yet been fully processed. This is causing reporting misbalances between various accounts and will be resolved in the coming months. The variance of $29.6k is also partly attributable to a timing difference within the consultancy natural account relating to the river sediment project.

10805

Planning Administration

5,707

24,448

18,741

76.7%

3,478

Computer software license renewals have either not as yet been received, so no allocations for these costs have occurred, or those that have, have been spread over the term of the licence rather than all in one hit at time of payment.

10820

Strategic Planning

39,719

91,898

52,179

56.8%

10,092

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

79,200

60,100

(19,100)

(31.8%)

200

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

178,575

35,905

(142,670)

(397.4%)

(11,929)

The YTD variance is in line with DFES Mitigation Activity Grant Funding of $500,000 being received and spent over the 2021/22 FY. YTD Budget does not reflect the grant funding received.

10950

Animal Control

16,983

31,234

14,251

45.6%

5,792

The variance YTD relates to the delivery of a pallet of dog bags ($6k) late January, not processed and paid until February.  There are also savings due to no Fines Enforcement Referrals YTD.


 

Various

Bushfire Brigades

49,000

23,276

(25,724)

(110.5%)

(9,849)

Funding is from DFES ESL Local Government Grant Scheme funding and is spent according to operational needs of the City’s Bushfire Brigades and SES. Spending will be above historical levels due to a busier than average 2021/22 fire season.

Engineering and Works Services

6,987,550

7,264,583

277,033

3.8%

(504,036)

10830

Environmental Management Administration

62,572

140,475

77,903

55.5%

(5,894)

The Environmental Management Business Unit has been restructured mid-way through the financial year. A number of budget realignment journals are required, but have not yet been fully processed. This is causing reporting misbalances between various accounts and will be resolved in the coming months.

11170

Meelup Regional Park

71,455

153,638

82,183

53.5%

(18,099)

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. $55K in works have been committed representing works that are now underway or will commence shortly.  

11160, 11161 & 11162

Busselton Jetty

21,450

10,935

(10,515)

(96.2%)

(5,826)

In October a compressor and ducted heater was replaced in the UWO. $21k of the annual budget totalling $54k has now been outlaid. This variance is due to timing only. Hoping to claim some of these cost through and insurance claim.

12600

Street & Drain Cleaning

189,517

224,615

35,098

15.6%

(4,883)

The budget was entered based on historical expenditure and service levels determined by that figure, patterns averaged over the previous three financial years. All of $465k annual budget has been committed based on scheduled maintenance plans, thus the YTD variance is attributable to timing only.

12620 & 12621

Rural & Urban Tree Pruning

231,763

464,301

232,538

50.1%

(43,420)

This year’s rural tree pruning budget of $352K includes $153K carried over from the previous year. Rural tree pruning works are ordinarily completed in the first half of the year however storm damage clean-up took priority this year. Rural road verges to be pruned are prioritised based on factors including the period of time since last pruned, inspections, volume and types of traffic and many other considerations. Works will now be scheduled outside the fire season.

Various

Building Maintenance

882,793

787,432

(95,361)

(12.1%)

(48,222)

The YTD building maintenance budget variance is attributable primarily to timing only. Costs associated with the Busselton Depot Building totalling $47k YTD are $15k over the YTD but remain $11k under the annual budget. Costs associated with the Micro-Brewery - Public Ablution totalling $24.5k YTD are over the zero YTD budget but also remain under the $43k annual budget. These two variances along account for 40% of $95k variance.   

Various

Waste Services

1,290,526

1,526,306

235,780

15.4%

(42,274)

$135K of the variance is associated with concrete crushing and a further $73K is associated with green waste processing, both planned for later in the financial year. $87K of the underspend to budget is attributable to External Restoration Works associated with the Rendezvous Road contaminated sites matter while another $38K of the variance is associated with postponement of the FOGO trial; where no costs have being incurred.


 

Various

Roads Maintenance

730,720

498,619

(232,101)

(46.5%)

(79,251)

This budget was entered monthly based on historical expenditure patterns averaged out over the previous three financial years. To this end some of this variance is due to timing. As a comparison, total costs to the end of Jan 22 are only $20k more than at the same time last year. $75k of the variance is attributable to unbudgeted storm damage contractor clean-up costs associated with the City’s road network.  These costs are anticipated to moderate somewhat as a large majority of the City’ s Construction and Maintenance crews have switched primarily onto Capital works.

Various

Reserves, Parks & POS Maintenance

1,099,363

1,227,509

128,146

10.4%

(36,848)

The underspend to budget YTD on City Parks and Reserves is linked to numerous Cost Codes including;

•           Dunsborough Lakes Sporting Precinct Ovals / Turf as project not yet handed over by Major Projects. -$58k under budget YTD.

•           Busselton Foreshore Skate Park. -$32k under due to scheduled non-recurrent concrete maintenance repair not yet undertaken.

•           Busselton Foreshore Area -$17k under expended as scheduled works to increase after Easter and Events.

 

3.      Other Expenditure  

$1.8M, or 48.3%, under the budget YTD. The main contributing items are listed below:

Cost Code

Cost Code Description

Actual YTD

$

Amended Budget YTD

$

Variance
YTD
$

Variance
YTD
%

Change in Variance Current Month

$

Executive Services

59,247

48,419

(10,828)

(22.4%)

(3,854)

10001

Office of the CEO

31,393

48,419

17,026

35.2%

(3,885)

The underspend relates to the inter-council initiatives budget line item, which has not been spent to date. 

10011

Emergency Contingency Costs (Other)

27,855

 -

(27,855)

(100.0%)

(5,527)

There is no budget for this particular area, as it is used purely to capture specific unforeseen emergency related costs.  YTD actuals represent the costs associated with the forgone rental opportunities at the YCAB, whilst it is being used as a COVID vaccination clinic i.e. effectively tracking this part of the City’s contribution to the vaccination effort.  As this a non-cash “book entry”, there is an offsetting revenue amount shown in Venue Hire income for the YCAB facility.

Finance and Corporate Services

762,818

715,639

(47,179)

(6.6%)

(142,318)

10000

Members of Council

393,158

451,658

58,500

13.0%

(127,578)

Timing related variances with underspends in primarily member allowances and sitting fees ($35k), plus underspends in reimbursements and training expenses due to change of council members.

10151

Rates Administration

17,650

35,637

17,987

50.5%

7,522

The budget is for rating valuations in relation to the interim rating of new properties.  It was set as an even monthly spread, as historically these activities are random (e.g. dependant on building completions), and can’t be predicted.  As such, there will always be timing variances.

10200

Financial Services

45,029

 -

(45,029)

(100.0%)

(11,609)

The budget for the 5 yearly valuation of the City’s Land & Buildings was removed, as at the time of developing the budget it was believed that a qualified in-house valuer would be able to conduct this service. 

10221, 10227, 10228, 10229 & 10230

Finance & Borrowing Programs 4, 11, 12, 13 & 14

197,054

103,082

(93,972)

(91.2%)

6,123

The Government Guarantee levy on the City’s loans as collected by the WA Treasury Corp payable for the period 1 January to 30 June 2021 was levied in July 2021. This invoice should have been posted to June via an accrual, however it was not completed and instead included in July’s expenses. Accordingly there will be three payments included in 2021/2022’s reports.

10511

Community Assistance Program (Governance)

 -

16,666

16,666

100.0%

 -

Funds for the You Choose Program yet to be allocated.  Will be allocated in May / June.

Community and Commercial Services

888,566

2,738,908

1,850,342

67.6%

531,289

10532

BPACC Operations

432

25,000

24,568

98.3%

11,718

BPACC operational activity will not commence until 2023.

10533

Welfare / Senior Citizens

67,561

43,398

(24,163)

(55.7%)

(821)

This is the annual agreed grant paid to the Busselton Senior Citizens centre which is paid quarterly on invoice from the centre.  A further invoice (quarterly payment) has recently been approved.

10536

School Chaplaincy

 -

41,400

41,400

100.0%

41,400

This is the annual grant to Youthcare which is paid on invoice. An Invoice for the full amount was approved in December.

10543

Community Development

80,539

126,735

46,196

36.5%

(56,584)

This relates to the first three rounds of Community Assistance Program. Round 1 and 2 approvals were combined due to Council elections and round 3 closed on 30 November.

From the first 3 rounds $133,873 is committed with actual expenditure to be seen in first quarter of 2022.  Round 4 has now closed and applications are being assessed.  Timing is largely dependent on CAP Applications received from community groups.

10558

Events

477,403

829,091

351,688

42.4%

155,292

We are waiting on a number of events to invoice us for event sponsorships or services provided totalling over $175K, including for events such as Ironman, Jetty Swim and many others.  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.

10630

Economic and Business Development Administration

84,545

95,179

10,634

11.2%

8,208

YTD actual is below target with due to expenditure for advertising, valuations and cruise ship visitor servicing activities not being completed.

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

1,681

1,342,232

1,340,551

99.9%

381,671

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

11156

Airport Development Operations

115,139

148,550

33,411

22.5%

 -

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, however we have not received practical completion on the works, and there are still some outstanding works in progress.

Planning and Development Services

60,526

83,943

23,417

27.9%

27,059

10805

Planning Administration

 -

15,000

15,000

100.0%

15,000

The Planning item relates to the Façade Refurbishment Program which the City normally runs on an annual basis.  Due to staff shortages and other priorities this year, it’s not likely that the $30K budgeted will get spent at all.


 

Engineering and Works Services

147,365

128,136

(19,229)

(15.0%)

(18,184)

B1223

Micro Brewery - Public Ablution

 -

60,000

60,000

100.0%

 -

The full contribution of $120K to the ablutions, in two instalments, was made in the 20/21 financial year, however due to the lateness of the second $60K instalment, it was inadvertently included again in the 21/22 year budget unnecessarily.

G0042

BTS External Restoration Works

96,812

25,000

(71,812)

(287.2%)

(616)

Rendezvous Road Refuse site remedial works.

 

4.     Non-Operating Grants, Subsidies & Contributions  

The negative variance of $7.1M 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 completed 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

 -

115,376

(115,376)

(100.0%)

(48,975)

10540

Recreation Administration

 -

51,250

(51,250)

(100.0%)

(25,625)

10590

Naturaliste Community Centre

 -

46,700

(46,700)

(100.0%)

(23,350)

C6010

Airport Fencing Works

 -

17,426

(17,426)

(100.0%)

 -

Engineering and Works Services

1,364,277

8,338,779

(6,974,502)

(83.6%)

(1,665,471)

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

 -

3,415,500

(3,415,500)

(100.0%)

(1,138,500)

B9612

Churchill Park Renew Sports Lights –

State Capital Grant

 -

72,850

(72,850)

(100.0%)

(72,850)

B9999

Donated Buildings

30,000

 -

30,000

100.0%

 -

C3116

Dawson Park (Mcintyre St Pos) – Developer Cont. Utilised

71,116

 -

71,116

100.0%

71,116

C3211

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

25,043

 -

25,043

100.0%

25,043


 

C3214

Kingsford Road - POS Upgrade – Developer Cont. Utilised

71,437

 -

71,437

100.0%

71,437

C3215

Monash Way - POS Upgrade – Developer Cont. Utilised

71,939

 -

71,939

100.0%

71,939

C3216

Wagon Road - POS Upgrade – Developer Cont. Utilised

81,341

 -

81,341

100.0%

81,341

C3217

Limestone Quarry - POS Upgrade – Developer Cont. Utilised

119,687

 -

119,687

100.0%

119,687

C3218

Dolphin Road - POS Upgrade – Developer Cont. Utilised

90,634

 -

90,634

100.0%

90,634

C3219

Kingfish/ Costello - POS Upgrade – Developer Cont. Utilised

33,551

 -

33,551

100.0%

33,551

C3220

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

34,480

 -

34,480

100.0%

34,480

C3241

Vasse River - Ongoing Restoration of River Habitat – State Capital Grant

 -

90,000

(90,000)

(100.0%)

(90,000)

F0084

Thompson Way - New Path - Contributions

36,818

 -

36,818

100.0%

 -

F0112

Causeway Road Shared Path – State Capital Grant

 -

80,000

(80,000)

(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

 -

748,000

(748,000)

(100.0%)

(374,000)

S0335

Kaloorup Road – MR Capital Grant

 -

240,950

(240,950)

(100.0%)

(120,475)

S0336

Wildwood Road – MR Capital Grant

 -

937,750

(937,750)

(100.0%)

(468,875)

5.      Capital Expenditure  

As at 31st January 2022, there is an underspend variance of 68.2%, or $23.9M, in total capital expenditure, with YTD actual at $11.2M against the YTD budget of $35M. 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

29,169

26,570

91.1%

4,167

10610

Property Services Administration

2,599

29,169

26,570

91.1%

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

606,707

12,621,163

12,014,456

95.2%

1,833,903

B9614

Dunsborough Lakes Sporting Precinct-Pavilion /Changeroom Facilities

10,425

279,167

268,742

96.3%

204,167

There has been minimal expenditure to date as works have not yet commenced. The design is currently under review to achieve budget alignment.  A Council briefing is scheduled in February to review and discuss.

B9012

Civic and Administration Building Replacement of Cladding

1,004

60,000

58,996

98.3%

20,000

Cladding replacement only commenced in January, with planned completion toward the end of February and associated billing from the supplier to follow after that.

B9300/1/2

Aged Housing

Capital Improvements

35,250

143,700

108,450

75.5%

 -

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.

B9538

Weld Theatre

 -

26,000

26,000

100.0%

26,000

The Weld Theatre upgrade works will be undertaken as part of the Performing Arts Centre construction. 

B9591

Performing Arts Convention Centre

40,054

10,745,168

10,705,114

99.6%

1,516,603

The contract for construction was awarded to Broad Constructions in late January. Broad took full site possession at the end of January and have commenced investigative works. Unspent budget at June 30 will be carried over into the following financial year.

B9596

GLC Building Improvements

75,167

142,568

67,401

47.3%

(7,168)

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


 

B9605

Energy Efficiency Initiatives (Various Buildings)

90,791

137,910

47,119

34.2%

 -

Works planned for commencement have encountered delays pending Western Power applications and approvals. Works programmed to be completed by the end of the financial year.

B9610

Old Butter Factory

17,991

6,000

(11,991)

(199.8%)

2,000

The YTD overspend is due the retention monies owing to the contractor on final completion of project.

B9611

Smiths Beach

New Public Toilet

 -

250,000

250,000

100.0%

 -

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

73,562

212,850

139,288

65.4%

 -

RFQ for installation of lights awarded with works to commence in March 2022.

B9613

GLC CCTV Installation

29,921

10,000

(19,921)

(199.2%)

10,000

The budgeted works were completed much earlier than originally anticipated.  There will also be a considerable saving against the overall $50K budget.

B9615

Naturaliste Community Centre AMP

(495)

43,200

43,695

101.1%

14,400

Delays due to contractor availability, these works will be re listed into next financial year.

B9616

Buildings Asset Management Plan High Use Allocation

73,133

60,000

(13,133)

(21.9%)

9,203

Variance due to timing of works.

B9617

Buildings AMP Renewal Allocation - Meelup Ablution

7,389

80,000

72,611

90.8%

39,997

The Meelup project is being recommended for deferral due to a mix of unforeseen design complexities, and to allow time to assess the impact of other water saving initiatives at Meelup.  Once analysed, a direction on the final scope of the project can be made.

B9622

Dunsborough Youth Centre Building Construction

15,740

 -

(15,740)

(100.0%)

(136)

Works to commence 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 (in receivership), for works completed has not yet been received.

B9720

BMRA Hangars

 -

210,000

210,000

100.0%

 -

This is a timing issue - the RFT has just closed and will be evaluated and (if) awarded, works should commence by mid-February.


 

B9808

Busselton Jetty Tourist Park Upgrade

4,314

25,000

20,686

82.7%

 -

Timing Issue - capital works upgrades that cannot be done until after Easter (the tourist season).

Plant & Equipment

752,922

1,771,000

1,018,078

57.5%

304,523

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 April.

10610

Property Services Administration

 -

35,000

35,000

100.0%

 -

Vehicle has been ordered, delivery due in February.

10630

Economic and Business Development Administration

 -

75,000

75,000

100.0%

 -

The budget relates to the replacement vehicle for the Manager Economic and Business Development, and the Events Co-Ordinator.  Not yet ordered.

10810

Statutory Planning

 -

35,000

35,000

100.0%

 -

Vehicle has been ordered, delivery due in April.

10920

Environmental Health Services Administration

 -

40,000

40,000

100.0%

 -

The budget relates to the replacement vehicle for the Manager Regulatory Services.  Not yet ordered.

11001

Engineering Services Administration

 -

35,000

35,000

100.0%

 -

Vehicle not yet ordered.

11107

Engineering Services Design

 -

140,000

140,000

100.0%

 -

Survey equipment and 2 x vehicles ordered, 1 x vehicle delivered in January but not paid for until February, survey equipment and 1 x vehicle expected to be delivered and paid for in February.

11151

Airport Operations

 -

15,000

15,000

100.0%

 -

Slasher (tractor mounted) not yet ordered.

11401

Depot Workshop

 -

10,000

10,000

100.0%

 -

The budget is for a replacement hydraulic press.  Specification requirements are being reviewed in light of supply chain issues.

11403

Plant Purchases (P11)

127,186

200,000

72,814

36.4%

62,976

An RFQ for a light truck is in progress.

11404

Plant Purchases (P12)

88,453

515,000

426,547

82.8%

241,547

2 x light trucks not yet ordered, and an RFQ is progress for a new grader.

11500

Operations Services Administration

 -

40,000

40,000

100.0%

 -

Vehicle ordered, not yet delivered.


 

Furniture & Office Equipment

175,090

549,191

374,101

68.1%

(27,426)

10250

Information & Communication Technology Services

100,279

220,891

120,612

54.6%

(12,704)

Underspend is due to not yet ordering ICT asset replacement items. This is due to be ordered in the coming months though actual delivery may not occur for some time due to global supply chain issues.

10558

Events

 -

200,000

200,000

100.0%

 -

The budget YTD represents the carry-over from the 20/21 year for the electronic billboard. The tender closed with three responses over the forecast budget. The tender was not awarded and it was agreed at the November MERG meeting to restructure the tender with options. The tender is with Legal Services to assist to finalise and will be reissued in February.

10590

Naturaliste Community Centre

16,326

43,300

26,974

62.3%

 -

The budget represents a carry-over from 20/21 for the purchase of replacement fitness equipment.  Order for fitness equipment will be placed in February.  Fencing purchase of $8k was moved out to infrastructure, increasing the variance further.

B1000

Administration Building- 2-16 Southern Drive

 -

14,000

14,000

100.0%

 -

This is a budget timing issue.  Orders have been placed totalling approximately $10.5K, with the remaining $3.5K expected to be spent by EOFY.

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.

B1450

Depot Building-Busselton

17,776

 -

(17,776)

(100.0%)

 -

Expenditure was for 8 sit-to-stand workstations at the depot administration building.  There is no budget in this particular line, however it is offset by considerable savings in other areas, and is funded from the Furniture & Office Equipment Reserve.

Infrastructure

9,613,831

20,058,246

10,444,414

52.1%

285,203

Various

Roads

3,708,071

6,039,930

2,331,859

38.6%

(193,099)

Many road construction projects are now underway.  Impacting this increasing variance through to June will be the outcome from discussions with Council in September/October 2021 where it was decided that the current capital works program would be spread over 18 months extending into the 2022/23 financial year.  To this end, some projects that were to be contracted this financial year have been put on hold given the state of the economy, availability of contractors and increased costs.

•         32% of the YTD variance valued at $746k is associated with the Regional Road Safety Program Chapman Hill Road project that has an approved Tender and is planned to commence mid to late March after Kaloorup works have been completed.

•         24% of the YTD variance valued at $562k is associated with the Peel Terrace/ Queen street roundabout renewal works which have now commenced.

•         25% of the YTD variance valued at $575k is associated with both the Sugarloaf Road upgrade that has been rescheduled to the 2022/23 financial year and major works on the Bussell Highway that are currently in progress.

•         9% of the YTD variance valued at $215k being a 1000m section of Boalia Road reconstruction has also been rescheduled to the 2022/23 financial year due to environmental approval requirements that have yet to be resolved.


 

Various

Bridges

 -

1,444,000

1,444,000

100.0%

 -

Major bridge works are completed by Main Roads, with financial recognition of works often not occurring until late in the financial year.

To date works have been completed on the Bussell Highway bridge #241 and the Yallingup Beach Road bridge #3347.

Tuart Drive bridge #0238 is in progress and is scheduled for completion in March 2022.

Other major bridge works are currently out for tender by Main Roads with works possibly to be undertaken towards the end of summer 2022, subject to contractor and material availability. 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 will continue to increase until invoices for works are provided by Main Roads, which is typically at the end of the financial year.

Various

Car Parks

542,098

1,549,157

1,007,059

65.0%

34,461

79% of the YTD variance valued at $800k is associated with the Dunsborough Lakes Sporting Precinct (Stage 1) – Car parking project. The tender for these works has now been awarded and site works have now commenced and are on schedule.

The following two projects have been put on hold adding to the YTD variance by the amount provided:

•         Dunsborough Chieftain Crescent Carpark Extension $69.8k annual budget $240k.

•         Forth Street Groyne Carpark $46k annual budget $53k.

Various

Footpaths & Cycleways

538,797

1,108,632

569,835

51.4%

142,544

23% of the YTD variance valued at $123K is associated with the Buayanup Drain Shared path project that is complete. 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 totalling $122k come June 30 will remain unless the budget is reduced formally via a budget amendment.

54% of the YTD variance valued at $292k is associated with;

•         $89k being the Barnard East Development which is in progress.

•         $121k being continuation of the Busselton CBD Footpath Renewal program, which involves landscaping and street furniture within areas paved last financial year - in progress.

•         $82k Carey Street footpath scheduled for construction in March.

Parks, Gardens & Reserves

4,730,467

9,602,531

4,872,064

50.7%

266,208

Various

Busselton Jetty - Capital Expenditure

151,431

408,786

257,355

63.0%

(36,966)

Major Maintenance works 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 the tasks planned year to year, the weather and working around the peak tourist seasons. There is $202k in committed works currently under way that accounts for the YTD variance.  

Various

Coastal & Boating

93,808

1,136,800

1,042,992

91.7%

(13,792)

74% of the variance valued at $776k is attributable to both the stage 2 West Busselton & Forth Street seawall works. A report to Council in late January resulted in a decision to only proceed with the West Busselton works at this time with some of these costs offset by the Forth Street Seawall project that cost more than anticipated.  

19% of the variance values at $200k is associated with a Coastal Adaptation project re the Mitigation of Coastal Flooding that is still in the planning phase.

Various

Waste Services

380,812

952,500

571,688

60.0%

(116,483)

The majority of this variance is associated with budgets that were carried over from the previous year. $93k of the YTD variance is associated with the Liquid Waste Pond Renewal works that are proceeding as planned, Works associated with the Busselton Landfill Post-Closure Capping, Rehab & Remediation are well under budget YTD with the focus on development of the phase two landfill now taking priority.


 

Various

Townscape & Vasse River

43,548

539,023

495,475

91.9%

215,759

No works of any significance associated with projects within this category have yet to commence. Townscape Works in Dunsborough valued at $1.057m and Vasse River works valued at $640,000 are contributing to the YTD variance.   

The Dunsborough Townscape project is being staged, with this financial year’s scope comprising of service relocation and roundabout/ carpark construction in quarter 4.

Various

Other P&G Infrastructure

4,060,868

6,565,422

2,504,554

38.1%

217,689

There are 45 individual Parks & Gardens capital projects budgeted this financial year ranging in value from between a mere $1.8k to $2.118m.

•         62% of the YTD variance valued at $ 1.566m is associated with the Dunsborough Lakes Sporting Precinct project and the new Non-Potable Water Network both under construction.

•         38% of the YTD variance totalling $952k is comprised of a further 14 projects that have an YTD variance in excess of $40k under expended to budget. Most of these projects are underway, have committed costs or are due to commence in the coming months.

•         The Barnard Park East Foreshore Landscaping project is reported at $195k over expended to the annual budget. With commitments included this variance increased to $597k over budget, this over expenditure has been highlighted in Councillor briefings. 

Various

Drainage

13,200

105,600

92,400

87.5%

35,089

The YTD variance to budget is largely associated with the Carey Street drainage upgrade project which has now commenced.

Various

Regional Airport & Industrial Park Infrastructure

81,197

208,396

127,198

61.0%

 -

YTD actual 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.

 

6.      Proceeds From Sale of Assets  

YTD there have been no proceeds from sale of assets recorded against the YTD budget of $548K. This is due to the continuing delays in delivery of acquisitions, and the associated transfer to auction of the vehicles being replaced.  Some vehicles that were planned to be traded/auctioned have also been retained and redeployed instead. 

 

7.     Proceeds from New Loans

         During the month two $5M loans for the BPACC project were drawn from the WATC.  At the time of setting the budget, the timing of these two drawdowns was spread apart, however to take advantage of lower interest rates before they were predicted to rise, Council decided to draw both $5M tranches at the same time.  This has caused a $5M positive timing variance to budget in this area.

        This is offset by a negative timing variance of $425K that relates to draw downs for the provision of self-supporting loans, including $200K for Community Groups.  It is impossible to predict when and to what extent applications will be submitted to the City.  This is 100% offset by the actual outgoing advance of the funds to the applicants.

 

8.     Total Loan Repayments - Principal

         Repayments of the principal on loans is $233K under budget YTD, due to the loan for the BPACC not proceeding in timeframe as budgeted.




9.   Advances to Community Groups

         During the month a Community Group loan was drawn for the Dunsborough Bay Yacht Club for $25K.  Per above, although not possible to predict when these loans will be applied for, the negative variance is 100% offset by the positive variance in proceeds from New Loans.  YTD the variance is $5.4M mainly due to the AUDC being put on hold.

 

10.   Transfer to Restricted Assets  

There is an YTD variance in transfers to Restricted Assets of $17M 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). Loans ($10M) received for BPACC was transferred to restricted assets until utilized.  Also, the following grants, totaling $5M, have been received and transferred to Restricted Assets for which there was no budgeted transfer:

·        $50K for the Causeway Road Shared Path Project from the Department of Transport;

·        $3M 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;

·        $60K 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;

·        $25K 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;

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

·        $330K from the Department of Primary Industries & Regional Development’s Community Stewardship Program, for the removal of sediment in the lower Vasse river;

·        $250K from Rio Tinto for the BPACC project;

·        $30K from the Department of Primary Industries & Regional Development’s Small Grants Program 2021 for the upgrade of the women’s change rooms at Bovell Sports Park;

·        $150K from the WA Waste Authority for the “Tip Shop” development;

·        $30.8K from the Department of Local Government, Sport and Cultural Industries for the “Creative Art for Heart” initiative; and

·        $17.4K from the Department of Transport, from the RADS program, for the perimeter fencing at the airport.

 

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 $1.5M has been received YTD, including $459K for road works bonds and $530K for caravan park deposits.

 

11.   Transfer from Restricted Assets

YTD there has been $3.05M 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, $280k attributable to cash in lieu of public open space to recoup Muni for expenditure incurred to reporting date, and $2.2M 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 31st January 2022 the value of the City’s invested funds are $100M, up from $91.9.M as at 31st December 2021.

 

The increase of $8M in the investment pool is due in two parts to:

·                Addition of $10M loan received for the BPACC project initially deposited into 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).

·                Reduction due to the closure of $2M term deposit (transferred to the municipal fund).

 

As at 31st January 2022 the 11AM account balance is $14.0M, up from $4M as at 31st December due to the above deposit.

 

During the month of January two term deposits totalling the amount of $8M matured. These were renewed for a further 132 days at 0.36% on average and one term deposit was closed with an amount of $2M.

 

The official cash rate remains steady for the month of January 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 a $10M was drawn from the WATC for the BPACC project.  The funds have been restricted for use solely on the project.  The attached Loan Schedule outlines the status of all existing loans as at January YTD.

 

Chief Executive Officer – Corporate Credit Card

Details of transactions made on the Chief Executive Officer’s corporate credit card during January 2022 are provided below to ensure there is appropriate oversight and awareness.

 

Date

Payee

Description

$ Amount

13/01/22

Regional Development Australia South West Inc.

2 x tickets to SW Regional Futures-Busselton Launch Sundowner

CEO M. Archer & Mayor G. Henley

44.00

 

 

TOTAL

$44.00

 


Donations & Contributions Received

During the month no donations or contributions were received.

 

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 January 2022, the City’s net current position stands at $19.8M. The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.  


Finance Committee

51

9 March 2022

6.2

Attachment a

Statement of Financial Position - Period Ended 31 January 2022

 













Finance Committee

53

9 March 2022

6.2

Attachment b

Loan Schedule - January 2022

 


Finance Committee

54

9 March 2022

6.2

Attachment c

Investment Report - January 2022

 


Finance Committee                                                             56                                                                     9 March 2022

6.3             LIST OF PAYMENTS MADE - JANUARY 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

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 - January 2022  

 

The officer recommendation was moved and carried.

 

Committee Recommendation

F2203/011               Moved Councillor P Carter, seconded Councillor G Henley

That the Council notes payment of voucher numbers as follows:

CHEQUE PAYMENTS

119121 - 119145

79,634.00

ELECTRONIC TRANSFER PAYMENTS

EFT84496 - EFT85167

5,813,050.95

TRUST ACCOUNT

CHQ # 7584, EFT84535 - EFT84536

48,321.89

PAYROLL PAYMENTS

01.01.22 - 31.01.22

1,692,998.11

INTERNAL PAYMENT VOUCHERS

DD004727 - DD004756

148,125.83

TOTAL PAYMENTS

7,782,130.78

 

CARRIED 5/0

Officer Recommendation

That the Council notes payment of voucher numbers as follows:

CHEQUE PAYMENTS

119121 - 119145

79,634.00

ELECTRONIC TRANSFER PAYMENTS

EFT84496 - EFT85167

5,813,050.95

TRUST ACCOUNT

CHQ # 7584, EFT84535 - EFT84536

48,321.89

PAYROLL PAYMENTS

01.01.22 - 31.01.22

1,692,998.11

INTERNAL PAYMENT VOUCHERS

DD004727 - DD004756

148,125.83

TOTAL PAYMENTS

7,782,130.78

EXECUTIVE SUMMARY

This report provides details of payments made from the City’s bank accounts for the month of January 2022, 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 January 2022 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 January 2022 is presented for information.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee                                                             67                                                                     9 March 2022









 

 

 

 

 

 

 

10:42am              At this time, Mrs Happ joined the meeting.


6.4          BUDGET AMENDMENT PERCENT FOR ART

 

STRATEGIC THEME

LIFESTYLE - A place that is relaxed, safe and friendly with services and facilities that support healthy lifestyles and wellbeing

STRATEGIC PRIORITY

2.5 Facilitate events and cultural experiences that provide social connection.

SUBJECT INDEX

Budget Amendment

BUSINESS UNIT

Community Services

REPORTING OFFICER

Cultural Development Officer – Jacquie Happ

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   Artist Brief  

 

DISCLOSURE OF INTEREST

Date

9 March 2022

Meeting

Finance Committee

Name/Position

Cr Anne Ryan, Councillor

Item No./Subject

Item 6.4, ‘Budget Amendment Percent for Art’

Type of Interest

Impartiality Interest

Nature of Interest

My residential property is in Vasse.

 

A motion to defer the consideration of this item was moved and carried.

 

Committee Decision

F2203/012               Moved Councillor G Henley, seconded Councillor P Carter

That the Committee defer this item until the Finance Committee Meeting to be held on 13 April 2022.

CARRIED 5/0

Reasons:    The Committee requests the CEO provide further information regarding the installation of artwork in the Vasse Precinct.  

OFFICER RECOMMENDATION

That the Council endorses a budget amendment to transfer $13,750 of developer contributions from the Cash in Lieu Public Art Reserve and accepts $11,818 in contributions for the design and installation of artwork in the Vasse Precinct.

EXECUTIVE SUMMARY

The City’s Cash in Lieu - Public Art Reserve - 341 is an account that collects cash in lieu funds resulting from developer contributions through the Local Planning Policy No. 4.4 Percent for Art. Funds received are allocated to the precincts that they originate from. The funds are put towards artworks that will create vibrancy and interest in the area of their locality.

 

Funds are requested to be transferred from the City’s Public Art Reserve to the Cultural Planning budget. The funds will be used to pay for a public art consultant to commission and install an artwork in the Vasse Precinct.

BACKGROUND

The Vasse Precinct Developer commissioned a Public Art Strategy that is a guide to creating a vibrant and engaging town centre. The City has been working with the Developer to commission artworks that are appropriate to the town centre, have a local and social theme, and are diverse in art form. The artworks are commissioned through the engagement of a public art consultant who coordinates an expression of interest process.

 

To date, three artworks have been commissioned and installed through expenditure from the Public Art Reserve. City Officers work with the Developer, property owner and the public art consultant to procure public artworks within the identified Precinct.

 

The artwork that is the subject of this report is located at Lot 114, 4 Warrior Court, Vasse. Officers  commenced working with the Developer and public art consultant on an artist brief in June 2021, through which appropriate themes were identified, as outlined in Attachment A - Artist Brief.

 

The Developer and property owners have signed an Agreement for a Licence to allow the City to install and maintain artwork on the Lot.

 

The next stage requires the artwork to be commissioned by the engaged public art consultant. The consultant will issue an Expression of Interest (EOI) using the Artist Brief and select an artist.

OFFICER COMMENT

Vasse Precinct has $32,296 of Percent for Art funds available in 341 Public Art Reserve (this Reserve has a current balance of $87,051).  An artwork will be commissioned using funds from the Reserve and funds from the owner of the building and developer. The funds are to be transferred to the Cultural Planning capital budget for expenditure on the artwork.

 

Expenses are for a public art consultant and the services of the artist to design, produce and install the artwork. A Licence has been signed by the three parties to provide permission from the Owner to the City to install the artwork and maintain it. The artwork will be commissioned through an EOI undertaken by the art consultant.

 

The project financials are shown in the table below.

 

ITEM #

ACCOUNT CODE STRING

DESCRIPTION

AMOUNT DR / (CR)

CURRENT BUDGET

AMENDED BUDGET

1

341 Public Art Reserve

Cash in Lieu contribution from Public Art Reserve (Vasse Precinct)

($13,750)

$0

($13,750)

2

330-10900-1300-0000

Contributions - Operating Activities

($11,818)

$0

($11,818)

3

330-10900-7743-0000

Exp Offset Acc-Furn & Equip

$25,568

$25,400

$50,968

 

 

Net total

$0

$25,400

$25,400

 


Statutory Environment

Section 6.8 of the Local Government Act 1995 refers to expenditure from the Municipal fund that is not included in the annual budget. Any adjustments to a budget allocation must be made by an absolute majority decision of the Council. Additionally, where no budget allocation exists, expenditure is not to be incurred until such time as it is authorised in advance, by an absolute majority decision of the Council.


Relevant Plans and Policies

The officer recommendation aligns to the following adopted plan or policy:

·        Local Planning Policy 4.4 Percent for Art

·        Purchasing Policy

 

The Local Planning Policy 4.4 Percent for Art allows the City to commission artworks in precincts where cash in lieu contributions have been made by developers.

 

The Purchasing Policy outlines the conditions under which purchases at various levels are made.

 

Financial Implications

The City’s net municipal cash budget position remains unchanged as a result of this budget amendment. 

 

Stakeholder Consultation

City Officers have worked with the Developer, property owner and the public art consultant on this project. External stakeholder consultation has been conducted by the Developer.

 

Risk Assessment

No risks of a medium or greater level have been identified.

 

Options

As an alternative to the proposed recommendation the Council could:

1.         Refuse the recommendation to transfer funds. If the funds are refused, the Developer and property owner will be unable to proceed with the artwork. Both parties are likely to dispute the City’s Local Planning Policy 4.4 for Percent for Art given the request complies with the policy.

CONCLUSION

Funds from the Local Planning Policy 4.4 Percent for Art allow for the commissioning of artwork in the precinct that the funds are received from. The funds will be used to pay for a public art consultant to commission and install an artwork in the Vasse Precinct, under agreements executed between the City, the Developer and Public Art Consultant. The artwork will contribute to the aesthetic and vibrancy of the Vasse precinct.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

The artwork EOI will commence immediately


Finance Committee

74

9 March 2022

6.4

Attachment a

Artist Brief

 






 


Finance Committee                                                             75                                                                     9 March 2022

11:00am        At this time, Mrs Happ left the meeting.

7.               General Discussion Items

7.1             INSTALMENT FEES & INTEREST & SPECIAL ARRANGEMENT FEES & DISCOUNTS & PRIZES FOR FULL PAYMENT BY ANNUAL DUE DATE

STRATEGIC THEME

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

STRATEGIC PRIORITY

4.5 Responsibly manage ratepayer funds to provide for community needs now and in the future.

SUBJECT INDEX

Fees & Interest & Discounts & Prizes

BUSINESS UNIT

Finance and Corporate Services

REPORTING OFFICER

Rates Coordinator - David Nicholson

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

Nil

 

The officer recommendation was moved and carried.

 

Committee Recommendation

F2203/013               Moved Councillor M Love, seconded Councillor G Henley

That the Committee notes the information contained in this report.

CARRIED 5/0

Officer Recommendation

That the Committee notes the information contained in this report.

 

EXECUTIVE SUMMARY

This report is to provide the Finance Committee with the results of surveys conducted on other Councils regarding their instalment option and special payment arrangement fees and interest. Additionally this report provides the results of surveys conducted on other Councils regarding any discounts and/or prizes that they may offer for full payment of annual rates by the due date.

BACKGROUND

A query was raised by Councillor’s on what the City of Busselton (COB) charged in fees and interest for instalment option and special payment arrangements. 

 

As part of responding to this query, surveys were conducted with other Councils on what their instalment option and special arrangement fees and interest were.

 

Additionally these other Councils were surveyed on what discounts and/or prizes they offered for full payment of annual rates by the due date.


OFFICER COMMENT

For this financial year, the City of Busselton charged $6.10 per instalment, 5.50% instalment interest and a $30.50 special payment arrangement fee. 

 

The questions asked with other Councils were:

1.    Do you waive the instalment fee and interest?

a.    If not then what is your fee and interest rate?

2.    Do you charge a special rate payment arrangement fee?

a.    If not then what is your fee?

3.    Do you provide a discount for early payment?

a.    If so then what was/is the discount?

4.    Do you run a competition or provide prizes for rates paid on or before the due date?

a.    If so then what type of competition or prizes were provided?

5.    Did any provision of a discount, competition or prizes improve the amount of rates paid by the due date and/or overall cash flow?

 

The following are the results of the instalment fee, interest and payment arrangement fees queries for the COB and other Councils:

 

 

Instalment Option

Payment Arrangement

Council

Fee Per Instalment

Interest Rate

Direct Debit

Other Method

City of Busselton

$6.10

5.50%

$30.50

City of Joondalup

$12.00

0.00% (20/21 & 21/22)

$34.00

$52.00

City of Fremantle

$13.40

5.5%

$33.00

City of Karratha

$10.00

4.00%

$25.00

$50.00

Shire of Coolgardie

$10.00

3.00%

$80.00

City of Mandurah

$3.00

5.50%

$20.00 (Waived if paid by direct debit.)

City of Rockingham

$3.50

5.50%

Don’t allow payment arrangements.

City of Subiaco

$52.20 (One of Fee. No Interest)

$52.20

City of Gosnells

$5.00

3.00%

$15.00 (Direct Debit Fee. No arrangement fee.)

City of Kalgoorlie /Boulder

$8.00

5.00%

$37.50

$37.50

City of Melville

$0.00 (20/21 & 21/22)

2.00%

No Fee

City of Kwinana

$10.50

3.00%

$55.00

City of Albany

$6.50

5.5%

$20.00

$30.00

City of Canning

$1.65(Inc GST)

2.50%

No Fee

 

FOOTNOTE: Maximum instalment interest rate that can be charged under the Local Government (Financial Management) Regulations 1996 is 5.50%

 


The following are the survey results on other Councils on discounts and/or prizes offered for full payment of annual rates by the due date:

 

Council

Discount

Prizes

Improved Payments/Cash Flow

Sponsors

City of Armadale

No

No

N/A

N/A

Shire of Dardanup

No

$1,500

Not Answered

 

City of Geraldton

5.00% (2020/21 Only)

No

Approximate 5.00% improvement.

 

City of Gosnells

No

*1 x $2,000 & *1 x $1,500 & **5 x $1,000

General feedback from ratepayers is that they pay in full to be eligible.

*Westpac & **City of Gosnells

City of Kwinana

No

Did previously offer 5 x $1,000 & WASO tickets & 3 gold Recquatic memberships

No noticeable improvement.

 

 

City of Karratha

No

*1 x $2,000 & **1 x $1,000 & **1 x $500

Not Answered

*Westpac & ** City of Karratha

City of Canning

No

Free Rates or *5 x $500 or **1 x $1,000 or I Year Hoyts tickets Or 2 WA Symphony Orchestra Tickets or 10 x Leisureplex Memberships plus 18 Holes of Golf

Not Answered

*Commonwealth Bank & ** EASI Group

City of Rockingham

No

10 x $500

Around a 4.00% improvement.

NAB

Shire of Denmark

No

1 x $1,000 & 2 x $500 & 4 x $250

Not Answered

Chamber of Commerce with prizes required to be spent in any local business.

City of Bunbury

No

Did previously offer 1 x $2,000

No noticeable improvement.

Commonwealth Bank

City of Swan

No

No

N/A

N/A

City of Perth

No

No

N/A

N/A

City of South Perth

No

No

N/A

N/A

City of Fremantle

No

No

N/A

N/A

City of Albany

No

No

N/A

N/A

City of Kalamunda

No

No

N/A

N/A

 

 

 

 

 

 


Statutory Environment

The Local Government (Financial Management) Regulations 1996 sets the maximum instalment interest that can be charged at 5.50%.

 

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter.

 

Financial Implications

Current and past income derived by the City of Busselton from instalment option fees and interest and special payment arrangement fees were:

 

Financial Year

Instalment Fee

Instalment Interest

EasyRates Fees

Arrangement Fees

2021/22

$108,987

$263,223

$59,868

$3,259

2020/21

$115,928

$253,537

$37,414

$9,330

2019/20

$144,742

$298,645

Nil (Started 2020/21)

$7,740

2018/19

$108,357

$249,172

Nil (Started 2020/21)

$9,772

If Council was to waive any instalment option fees and interest and/or special payment arrangement fees then this would reduce the City’s annual income unless compensated by increasing the rating revenue.

 

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

 

Risk Assessment

No risks of a medium or greater level have been identified.

Options

While the intent of this report is to provide information only for Council, the Council could choose to provide additional direction to the CEO in relation not charging instalment fees or interest or special arrangement fees and/or providing discounts and/or prizes for full payment of annual rates by the due date.

CONCLUSION

That Council notes the information contained in this report and provides direction on how to proceed with instalment fees and interest, special arrangement fees and discounts and/or prizes.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Any changes to fees, interest, discounts and/or prizes should be implemented for the 2022/23 financial year.


Finance Committee                                                             79                                                                     9 March 2022

8.               Next Meeting Date

The next meeting will be held on 13 April 2022.

 

 

9.               Closure

The meeting closed at 11:42am.

 

THESE MINUTES CONSISTING OF PAGES 1 TO 79 WERE CONFIRMED AS A TRUE AND CORRECT RECORD ON Wednesday, 13 April 2022.

 

DATE:_________________    PRESIDING MEMBER:        _________________________