Minutes of Finance Committee - Wednesday, 9 March 2022

Finance Committee 4 9 March 2022

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 30April 2022.

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

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 31^st 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 31^st 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 31^st January 2022 the 11AM account balance is $14.0M, up from $4M as at 31^st 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

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

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		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