Agenda of Finance Committee - Wednesday, 11 May 2022

Finance Committee 22 11 May 2022

6.3 FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 31 MARCH 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 Loan Schedule - March 2022 ⇩ Attachment b Investment Report - March 2022 ⇩ Attachment c Financial Activity Statement - March 2022 ⇩

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 31 March 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 March 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 March 2022

The Statement of Financial Activity (FAS) for the year to date (YTD) shows an overall Net Current Position of $10.5M as opposed to the budget of ($6M). This represents a positive variance of $16.5M 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				*1.56%*	*1,157,703*	*225,812*
1. Other Revenue	573,789	244,465	414,950	134.71%	329,324	49,926
2. Interest Earnings	588,789	533,897	609,250	10.28%	54,892	17,997
Expenses from Ordinary Activities				*10.98%*	*7,306,488*	*3,211,218*
3. Other Expenditure	(2,283,600)	(7,561,269)	(9,685,100)	69.80%	5,277,669	3,323,969
4. Non-Operating Grants, Subsidies and Contributions	3,545,044	12,036,912	34,850,687	(70.55%)	(8,491,868)	(684,823)
Capital Revenue & (Expenditure)				*28.08%*	*12,952,884*	*1,921,070*
5. Land & Buildings	(2,527,103)	(16,577,224)	(22,802,632)	84.76%	14,050,121	1,360,178
Plant & Equipment	(848,413)	(2,230,000)	(2,890,000)	61.95%	1,381,587	192,103
Furniture & Equipment	(327,684)	(562,541)	(828,800)	41.75%	234,857	(133,567)
Infrastructure	(14,106,305)	(26,585,758)	(38,537,750)	46.94%	12,479,453	2,370,410
6. Proceeds from Sale of Assets	28,839	674,078	776,071	(95.72%)	(645,239)	(39,800)
7. Proceeds from New Loans	11,325,000	15,450,000	25,450,000	(26.70%)	(4,125,000)	1,250,000
8. Self Supporting Loans - Repayment of Principal	44,938	146,069	267,033	(69.24%)	(101,131)	(101,132)
9. Total Loan Repayments – Principal	(2,285,208)	(2,625,919)	(3,839,418)	12.97%	340,711	107,638
10. Advances to Community Groups	(1,325,000)	(5,450,000)	(5,450,000)	75.69%	4,125,000	(1,250,000)
11. Transfer to Restricted Assets	(21,580,611)	(11,600)	(10,021,740)	(185939.75%)	(21,569,011)	(1,896,506)
12. Transfer from Restricted Assets	6,856,622	0	1,735,682	100.00%	6,856,622	1,658,942

Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is very close to budget at only 1.56% ahead YTD. There are however material variance items contained within this category, on the face of the Financial Activity Statement, that require comment.

1. Other Revenue

Ahead of YTD budget by $329K, or 134.7%, 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*		*53,945*	*47,927*	*6,018*	*12.56%*	*(109)*
10360	Customer Services – Sale of Number Plates	9,818	3,150	6,668	211.69%	(630)
This financial year there has been a spike in people wishing to acquire personalised plates.
*Planning and Development Services*		*121,100*	*94,478*	*26,622*	*28.18%*	*38,710*
10942	Bushfire Risk Management Planning – DFES – Sundry Income	37,861	-	37,861	(100.00%)	37,861
This is the DFES contribution to the shared bushfire risk mitigation coordinator position - as per bushfire risk management planning program grant agreement May 2021.
10950, 10960, 10970	Animal, Litter & Parking Control – Fines & Prosecutions	40,774	58,530	(17,756)	(30.34%)	(5,076)
Result impacted by improved public compliance coupled with a shift in focus away from prosecution toward education.
*Engineering and Works Services*		*396,866*	*98,158*	*298,708*	*304.31%*	*12,252*
11107	Engineering Services Design – LSL Contribution from Other LGA	10,897	-	10,897	(100.00%)	10,897
At the time of Budget development a staff member had not planned to take LSL, which has since changed. We have now received the contribution of the previous employer.
12642	NCC Standpipe – Sale of Water	25,396	9,073	16,323	179.90%	-
Sales are based on meter readings for water taken from the standpipe. Over summer there was considerably more volume taken than was originally budgeted.
G0030 & G0031	Busselton & Dunsborough Transfer Station – Sale of Scrap Materials	358,942	89,085	269,857	302.92%	1,355
Prices received for scrap metal have been favourable affecting the positive result. Due to the more favourable prices, a higher volume of scrap metal was sold from stockpiles.

2. Interest Earnings

Ahead of YTD budget by $54.9K, or 10.28%, due to a slight increase in interest rates being offered on investments over the last few months.

Expenses from Ordinary Activities

Expenditure from ordinary activities is $7.3M, or 10.98%, less than expected when compared to the budget YTD as at March. The expense line items on the face of the financial statement that have a YTD variance that meet the material reporting threshold are outlined below.

3. Other Expenditure

$5.3M, or 69.8%, 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*		*89,813*	*62,253*	*(27,560)*	*(44.3%)*	*(7,904)*
10001	Office of the CEO	41,995	62,253	20,258	32.5%	(1,395)
The underspend relates to the inter-council initiatives budget line item, which has not been spent to date.
10011	Emergency Contingency Costs (Other)	47,818	-	(47,818)	(100.0%)	(6,509)
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. This a non-cash “book entry”, with an offsetting revenue amount shown in Venue Hire income for the YCAB facility.
*Finance and Corporate Services*		*874,464*	*839,127*	*(35,337)*	*(4.2%)*	*8,758*
10000	Members of Council	479,495	544,310	64,815	11.9%	3,411
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	31,296	45,819	14,523	31.7%	2,465
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 cannot be predicted. As such, there will always be timing variances.
10200	Financial Services	45,029	-	(45,029)	(100.0%)	-
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%)	-
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. The full year budget of $100K will be allocated in May / June.
*Community and Commercial Services*		*1,042,318*	*6,419,239*	*5,376,921*	*83.8%*	*3,344,968*
10532	BPACC Operations	2,860	37,500	34,640	92.4%	12,500
BPACC operational activity will not commence until 2023.
10536	School Chaplaincy	-	41,400	41,400	100.0%	-
This is the annual grant to Youthcare which is paid on invoice. An invoice for the full amount is expected before the end of financial year.
10543	Community Development	97,634	176,318	78,684	44.6%	34,435
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	557,155	969,448	412,293	42.5%	25,729
The YTD underspend to budget can be explained as follows: · To date there have been 8 budgeted events cancelled due to COVID, totaling approximately $71K; · There have been 5 events that have occurred for which the City has yet to be invoiced for their contribution, totaling $57.5K; · 6 events have had partial payments, however a total of $91.5K remains due to milestones not yet met; · A further $192K was forecast to have been incurred by YTD March ($110K for Winter Wonderland, and approximately $72K in general unallocated funds).
10630	Economic and Business Development Administration	126,600	140,637	14,037	10.0%	44,917
This is due to a number of underspends including allocations towards cruise ship visitor servicing, advertising and valuation expenses.
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	1,978	1,729,584	1,727,606	99.9%	195,690
Marketing activities continue to be delayed due to the postponement of Jetstar RPT services as a result of COVID restrictions etc.
11160	Busselton Jetty	-	3,000,000	3,000,000	100.0%	3,000,000
The budget YTD represents the City’s contribution to the AUDC project, which has been deferred. This was to funded from the Jetty Reserve, so it will remain in the reserve at year end.
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 was 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*		*100,371*	*85,463*	*(14,908)*	*(17.4%)*	*(29,473)*
10805	Planning Administration	-	15,000	15,000	100.0%	-
This budget 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 full year budget of $30K will get spent at all.
10942	Bushfire Risk Management Planning – DFES	27,145	-	(27,145)	(100.0%)	(27,145)
This unbudgeted spend represents the return of unspent grant funds to DFES for the 20/21 BRP program.
*Engineering and Works Services*		*176,634*	*155,187*	*(21,447)*	*(13.8%)*	*7,620*
10830	Environmental Management Administration	16,037	937	(15,100)	(1611.5%)	143
Biodiversity Incentive Rate Rebate costs per allocated and paid in January, however the budget of $17,650 is allocated to June. Variance will rectify at year end.

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	118,176	50,000	(68,176)	(136.4%)	8,636
Rendezvous Road Refuse site remedial works.

4. Non-Operating Grants, Subsidies & Contributions

The negative variance of $8.5M 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*		-	*164,351*	*(164,351)*	*(100.0%)*	*(48,975)*
10540	Recreation Administration	-	76,875	(76,875)	(100.0%)	(25,625)
10590	Naturaliste Community Centre	-	70,050	(70,050)	(100.0%)	(23,350)
C6010	Airport Fencing Works	-	17,426	(17,426)	(100.0%)	-
*Engineering and Works Services*		*3,066,082*	*11,807,561*	*(8,741,479)*	*(74.0%)*	*(635,848)*
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%)	-
A0023	Kaloorup Road Bridge – 3381 – Federal Capital Grant	-	234,000	(234,000)	(100.0%)	(234,000)
A0024	Boallia Road Bridge – 4854 – Federal Capital Grant	-	143,750	(143,750)	(100.0%)	(143,750)
A0025	Tuart Drive Bridge 0238 – Developer Cont. Utilised	-	667,583	(667,583)	(100.0%)	(667,583)
B9407	Busselton Senior Citizens – Developer Cont. Utilised	-	111,750	(111,750)	(100.0%)	-
B9591	Performing Arts Convention Centre – Federal Capital Grant	-	4,554,000	(4,554,000)	(100.0%)	-
B9612	Churchill Park Renew Sports Lights – State Capital Grant	-	72,850	(72,850)	(100.0%)	-
C3116	Dawson Park (Mcintyre St Pos) – Developer Cont. Utilised	71,116	-	71,116	100.0%	-
C3211	Tulloh St (Geographe Bay Road) - POS Upgrade – Developer Cont. Utilised	25,043	-	25,043	100.0%	-
C3214	Kingsford Road - POS Upgrade – Developer Cont. Utilised	71,437	-	71,437	100.0%	-
C3215	Monash Way - POS Upgrade – Developer Cont. Utilised	71,939	-	71,939	100.0%	-
C3216	Wagon Road - POS Upgrade – Developer Cont. Utilised	81,341	-	81,341	100.0%	-
C3217	Limestone Quarry - POS Upgrade – Developer Cont. Utilised	119,687	-	119,687	100.0%	-
C3218	Dolphin Road - POS Upgrade – Developer Cont. Utilised	90,634	-	90,634	100.0%	-
C3219	Kingfish/ Costello - POS Upgrade – Developer Cont. Utilised	33,551	-	33,551	100.0%	-
C3220	Quindalup Old Tennis Courts Site - POS Upgrade – Developer Cont. Utilised	34,480	-	34,480	100.0%	-
C3225	Dunsborough Lakes Sporting Precinct (Stage 1) – Developer Cont. Utilised	944,234	-	944,234	100.0%	944,234
C3243	Vasse River - Ongoing Restoration of River Habitat – State Capital Grant	-	90,000	(90,000)	(100.0%)	-
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	-	643,198	(643,198)	(100.0%)	(321,599)
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	-	1,122,000	(1,122,000)	(100.0%)	(374,000)
S0335	Kaloorup Road – MR Capital Grant	-	361,425	(361,425)	(100.0%)	(120,475)
S0336	Wildwood Road – MR Capital Grant	750,200	1,406,625	(656,425)	(46.7%)	281,325

5. Capital Expenditure

As at YTD March, there is an underspend variance of 61.2%, or $28.1M, in total capital expenditure, with YTD actual at $17.8M against the YTD budget of $46M. 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*	*37,503*	*34,904*	*93.1%*	*4,167*
10610	Property Services Administration	2,599	37,503	34,904	93.1%	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*		*2,524,505*	*16,539,721*	*14,015,216*	*84.7%*	*1,356,011*
B9614	Dunsborough Lakes Sporting Precinct-Pavilion /Changeroom Facilities	12,272	687,501	675,229	98.2%	203,267
There has been minimal expenditure to date as works have not yet commenced. The design is currently under review to achieve budget alignment in consultation with user groups.
B9012	Civic and Administration Building Replacement of Cladding	121,889	100,000	(21,889)	(21.9%)	7,482
Cladding replacement commenced in January and was completed toward the end of February. Associated billing from the supplier is expected to be completed by the end of April, totalling approximately $430K, which will be less than the forecast of $500K.
Various	Busselton Performing Arts Convention Centre	1,747,955	13,892,593	12,144,638	87.4%	978,599
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.
B9300/1/2	Aged Housing Capital Improvements	38,148	182,250	144,102	79.1%	35,652
Budgeted works were proposed to separate the power and drainage that service Winderlup Court and Winderlup Villas. Western Power have now confirmed that separation of power is not required. As there are other works required to these units the proposal is a capex spend of circa $28,000 for bathroom upgrades and reflux valves and a possible further $70,000 for replacement carports.

B9596	GLC Building Improvements	87,464	213,852	126,388	59.1%	61,936
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)	116,897	164,240	47,343	28.8%	225
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%)	-
The YTD overspend is due the retention monies owing to the contractor on final completion of project. These were not factored in at the time of developing the budget.
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	75,617	212,850	137,233	64.5%	(2,056)
RFQ for installation of lights was awarded with works commenced in March 2022. Supplier billing will follow completion of the works.
B9615	Naturaliste Community Centre AMP	641	72,000	71,359	99.1%	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	92,319	120,000	27,681	23.1%	18,094
This budget will be fully expended come June 30. The budget is used for various maintenance activities on numerous buildings across the City.
B9617	Buildings AMP Renewal Allocation - Meelup Ablution	7,389	160,000	152,611	95.4%	40,000
During Budget planning these works were anticipated to be spread evenly over 5 months. Due to unforeseen design complexities the works were not able to start on time. These issues have been resolved and this project will be delivered in this financial year.
B9622	Dunsborough Youth Centre Building Construction	15,740	-	(15,740)	(100.0%)	-
The timing for works and initial procurement of a transportable building was not accurately known at the time of setting the original total budget of $80K.
B9717	Airport Construction - Existing Terminal Upgrade	-	46,485	46,485	100.0%	-
Invoicing in relation to the retention monies owing to Pindan (in receivership), for works completed has not yet been received. There is also a budget amount for unforeseen works required to enable RPT services, however this has not as yet been utilised.
B9720	BMRA Hangars	-	210,000	210,000	100.0%	-
This is a timing issue - the RFT process closed in January, however negotiations with tenderers are still ongoing. It is hoped that the tender will be awarded in April.

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*		*848,413*	*2,230,000*	*1,381,587*	*62.0%*	*192,103*
10250	Information & Communication Technology Services	-	40,000	40,000	100.0%	-
Vehicle due to be delivered April.
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. The delay in procurement of these items is due to current material and supply related issues.
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 April.
10630	Economic and Business Development Administration	-	75,000	75,000	100.0%	-
The budget relates to the replacement of two vehicles. One vehicle due to be delivered in June. Second vehicle yet to be 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%	-
Vehicle will be ordered when new officer appointed.
10950	Animal Control	-	50,000	50,000	100.0%	-
Ute for rangers to be ordered in April.
11001	Engineering Services Administration	-	35,000	35,000	100.0%	-
Vehicle due in November.
11107	Engineering Services Design	69,015	140,000	70,986	50.7%	-
Survey equipment incorrectly budgeted here, but actual cost has been allocated under Furniture & Office Equipment. 2 x cars delivered. Survey ute to be ordered in April.
11151	Airport Operations	-	15,000	15,000	100.0%	-
Slasher (tractor mounted) not yet ordered.
11202	Building Facilities - Weather Station Installations	10,280	-	(10,280)	(100.0%)	-
The actual weather stations were procured earlier than expected, and will be installed in April.
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.
11402	Plant Purchases (P10)	420,639	446,000	25,361	5.7%	-
Waste truck P166019 to be sent to auction end of April. Bin cleaning trailer expected to be built November. DWF site ute to be held and not replaced at this time.
11403	Plant Purchases (P11)	130,486	544,000	413,514	76.0%	180,000
An RFQ for 3 x light trucks is in progress. Irrigation ute and Parks maintenance ute not yet ordered, waiting feedback on requirements from P&Gs team.
11404	Plant Purchases (P12)	88,453	515,000	426,547	82.8%	-
Specification development is in progress for 2 x light trucks and RFQ is in progress for a new grader.
11407	P&E - P&G Smart Technologies	-	25,000	25,000	100.0%	25,000
This budget was to be used for investment in smart technologies to manage / address drying climate, however plans have not yet been developed for its use. Funds will remain in reserve if not spent for this purpose by year end.
11500	Operations Services Administration	-	40,000	40,000	100.0%	-
Vehicle ordered, delivery expected in April.
G0013	Domestic Organics Collections (FOGO)	12,897	-	(12,897)	(100.0%)	-
At the time of setting the budget of $75K for investigative works and FOGO trials, it was unknown what sort of activities would be undertaken. As such, the full year budget of $75K has been allocated to an operational contractors line, where in fact we needed to purchase some monitoring equipment to affix to the trucks. There should be an underspend against budget in the contractor line that will offset this spend against a nil budget.
*Furniture & Office Equipment*		*327,684*	*562,541*	*234,857*	*41.7%*	*(133,567)*
10250	Information & Communication Technology Services	163,250	220,891	57,641	26.1%	(65,467)
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. A new tender has been issued which closes on 14 April 2022.
10590	Naturaliste Community Centre	16,326	51,650	35,324	68.4%	8,350
The budget represents a carry-over from 20/21 for the purchase of replacement fitness equipment. Order for fitness equipment was placed in February, however delivery is not expected until April/May due to supply issues. Fencing purchase of $8k was moved out to infrastructure, increasing the variance further.
11107	Engineering Services Design	73,211	-	(73,211)	(100.0%)	(73,211)
Survey equipment that was incorrectly budgeted for under Plant & Equipment.
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.

Parks, Gardens & Reserves		6,784,883	11,669,123	4,884,240	41.9%	501,173
Various	Busselton Jetty - Capital Expenditure	236,223	545,048	308,825	56.7%	(33,317)
At the time this budget was being prepared the 50 year Jetty plan was being revised and structural assessments were being carried out. To this end, some of the scheduled works were able to be moved forward and as such were not required to be completed this financial year. There will be a variance to budget in the order of $200k come June 30; where these monies will remain in the Jetty Reserve to fund the rescheduled works going forward.
Various	Coastal & Boating	60,148	1,136,800	1,076,652	94.7%	127,522
72% of the variance valued at $775k 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 to be offset by the Forth Street Seawall project that has been put on hold. This project has now commenced with committed costs totalling $691k. The expectation is that it will be completed prior by June 30 weather permitting. 18% of the variance values at $200k is associated with a Coastal Adaptation project re the Mitigation of Coastal Flooding. This project is in the design phase with a major portion of the funding anticipated to be outlaid before the end of the FY; subject to the availability of resources and material.
Various	Waste Services	912,321	1,512,500	600,179	39.7%	207,349
Works associated with the Busselton Landfill Post-Closure Capping, Rehab & Remediation budget set at $1m are $657k under budget YTD with the focus this year having shifted to the development of stage two phase 1 of the Dunsborough landfill budgeted at $500k taking priority. There will be a significant under expended variance to budget associated with Waste Services projects come June 30.
Various	Townscape & Vasse River	53,576	1,023,264	969,688	94.8%	243,569
No townscape works of any significance associated with projects in this category have yet to commence, however planning is well advanced. Some of the townscape works in Dunsborough valued at $1.057m will be staged, between the 21/22 and 22/23 financial years. Major Vasse River works valued at $640,000 will commence in April.
Various	Other P&G Infrastructure	5,522,615	7,451,511	1,928,896	25.9%	(43,950)
There are 45 individual Parks & Gardens capital projects budgeted this financial year ranging in value from between a mere $1.8k to $2.118m. • 74% of the YTD variance valued at $ 1.468m is associated with the Dunsborough Lakes Sporting Precinct project and the new Non-Potable Water Network both under construction. • The Barnard Park East Foreshore Landscaping project is reported at $237k over expended to the annual budget. This variance is anticipated to increase to an est. $550k over expenditure to budget, this has been highlighted in Councillor briefings.
Various	Regional Airport & Industrial Park Infrastructure	93,288	286,740	193,452	67.5%	66,254
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. A nominal amount was budgeted for unforeseen noise mitigation requirements, resulting from the commencement of RPT services. Some of these works have only just commenced.

6. Proceeds From Sale of Assets

YTD there have been minimal proceeds from sale of assets recorded against the YTD budget of $674K. 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

By YTD March it was forecast that a self-supporting loan of $4M would have been drawn, which has not happened at this time. A further $125K of self-supporting loans to community groups was also forecasted to have been drawn and on-lent by this stage of the financial year. The combination of these things accounts for the $4.125M negative variance YTD.

This is offset by a corresponding positive timing variance of $4.125M in Advances to Community Groups.

8. Self Supporting Loans – Repayments of Principal

This line is $101K under budget due to the AUDC loan not proceeding.

9. Total Loan Repayments - Principal

Repayments of the principal on loans is $340K under budget YTD, due to the loan for the BPACC not proceeding in the timeframe as budgeted, as well as the deferment of the AUDC and hence the non-draw down of the associated loan (offset per #8 above).

10. Advances to Community Groups

Although it is 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 outlined above. YTD the variance is $4.125M mainly due to the AUDC being put on hold.

11. Transfer to Restricted Assets

There is a YTD variance in transfers to Restricted Assets of $21.6M because there is no budget for this item during the year. The transfers are usually not possible to predict, and are fully reconciled only at year end.

At the time of budgeting it is not possible to predict what grants will be received, and in what timeframe, nor when they will be spent and hence potentially transferred to Restricted Assets (or unspent portions thereof).

YTD, loans of $10M were received for BPACC that were transferred to restricted assets until utilized, as well as $7.9M in various government grants, plus $1.6M in Roadwork Bonds, and $3.7M in developer contributions, deposits and bonds.

12. Transfer from Restricted Assets

YTD, there has been $6.9M transferred from Restricted Assets into the Municipal Account. This was attributable to $2.19M of grant money for works completed and reconciled, $687K of Roadwork Bonds, $462K of caravan park deposit refunds, utilization of $1.7M of restricted loan money (BPACC), and $1.9M of various other bonds and deposits.

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 March 2022 the value of the City’s invested funds remained at $97M from 28^th February 2022.

As at 31^st March 2022 the 11AM account balance is $13.0M, up from $11M as at 28^th February 2022 due to the closure of MEBank Term Deposit of $2M.

During the month of March seven term deposits totalling the amount of $20M matured, including the closure of the MEBank Term Deposit as transferred to 11am account above. These were renewed for a further 93 days at 0.54% on average.

The official cash rate remains steady for the month of March 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 self-supporting loan of $1.25M was drawn down and on-lent to the MRBTA for their Ancient Lands Discovery Park. Also, $670K of principal and $250K of interest was repaid on existing loans. The attached Loan Schedule outlines the status of all existing loans as at March YTD.

Chief Executive Officer – Corporate Credit Card

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

Date		Payee	Description	$ Amount
10/03/22	City of Busselton		Geographe Leisure Centre Café – CEO Morning tea with GLC Team		$73.20
29/03/22	Event Brite Ticket - Tonic By The Bay		Budget Breakfast 2022 - 1 April 2022 M. Archer		$32.74
			TOTAL		$105.94

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^st March 2022, the City’s net current position stands at $10.5M. The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.

*Infrastructure*		*14,106,305*	*26,585,758*	*12,479,453*	*46.9%*	*2,370,410*
Various	Roads	5,592,539	8,506,528	2,913,989	34.3%	711,200
Many road construction projects are now well 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 budgeted this financial year have been put on hold given the state of the economy, availability of contractors and increased costs. • 46% of the YTD variance valued at $1.351m is associated with the two remaining Regional Road Safety Program projects that are both currently in progress. The $1.465m in committed works will be receipted against invoices prior to June 30. • 15% of the YTD variance valued at $442k is associated with the Peel Terrace/ Queen street roundabout renewal works recently completed in April. This variance will swing into a deficit positon upon receipt of all invoices associated with the project. The project will exceed the budget due to increases in the work scope and unforeseen unfavourable ground conditions identified. City officers have secured a transfer of unspent Regional Road Group grant monies that will be applied against this project together with an additional draw down of funds from the City’s Major traffic Improvement Reserve. A report will go to Council on this matter. There will be a significant under expended variance to budget associated with road projects come June 30.
Various	Bridges	630	2,682,997	2,682,367	100.0%	1,238,367
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, Yallingup Beach Road bridge #3347 and the Tuart Drive bridge #0238 that should be open to the public soon. The City has limited control over Main Roads scheduling and it is often the case that some Bridge projects are carried over into the following year. The City was recently been notified that bridge works on Layman Road, Kaloorup Road, Boallia Road & Gale Road values at $2.308m will now not commence until the 2022/23 financial year. 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	828,088	1,805,750	977,662	54.1%	(153,887)
52% of the YTD variance valued at $511k is associated with the new car parking for the Dunsborough Lakes Sporting Precinct. Works are well under way with the first progress payment of $281k made in March. The following two projects will not be completed this year and thus will represent under expenditures come June 30: • Dunsborough Chieftain Crescent Carpark Extension $129k YTD, annual budget $240k. • Hotel Site 2 Carpark $230k YTD. There will be a significant under expended variance to budget associated with Car Parks projects come June 30.
Various	Footpaths & Cycleways	625,185	1,458,620	833,435	57.1%	137,180
29% of the year to date variance totalling $241k is associated with the $500k Busselton CBD Footpath Renewal project where the majority of this project has temporarily been put on-hold pending further review and potential re list. 12% of the YTD variance valued at $105K is associated with the Buayanup Drain Shared path project. Not all of this 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. 14% of the YTD variance valued at $116K is associated with the Causeway Road Shared Path project. Tender prices for these works have come in higher than anticipated and it is thus unclear if this project will proceed this financial year. There will be a significant under expended variance to budget associated with Footpaths & Cycleway projects come June 30.

Finance Committee		10		11 May 2022
6.2	Attachment a		List of Payments - March 2022

Finance Committee		36		11 May 2022
6.3	Attachment b		Investment Report - March 2022

Finance Committee		47		11 May 2022
6.3	Attachment c		Financial Activity Statement - March 2022