Finance Committee

Agenda

 

 

 

19 January 2022

 

 

 

 

 


ALL INFORMATION AVAILABLE IN VARIOUS FORMATS ON REQUEST

city@busselton.wa.gov.au

 

 


CITY OF BUSSELTON

MEETING NOTICE AND AGENDA – 19 January 2022

 

 

 

TO:                  THE MAYOR AND COUNCILLORS

 

 

NOTICE is given that a meeting of the Finance Committee will be held in the Committee Room, Administration Building, Southern Drive, Busselton on Wednesday, 19 January 2022, commencing at 10.00am.

 

The attendance of Committee Members is respectfully requested.

 

 

DISCLAIMER

Statements or decisions made at Council meetings or briefings should not be relied on (or acted upon) by an applicant or any other person or entity until subsequent written notification has been given by or received from the City of Busselton. Without derogating from the generality of the above, approval of planning applications and building permits and acceptance of tenders and quotations will only become effective once written notice to that effect has been given to relevant parties. The City of Busselton expressly disclaims any liability for any loss arising from any person or body relying on any statement or decision made during a Council meeting or briefing.

 

 

 

Mike Archer

 

CHIEF EXECUTIVE OFFICER

 

13 January 2022


CITY OF BUSSELTON

Agenda FOR THE Finance Committee MEETING TO BE HELD ON 19 January 2022

TABLE OF CONTENTS

 

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Declaration of Opening, ACKNOWLEDGEMENT OF COUNTRY and Announcement of Visitors. 4

2....... Attendance. 4

3....... Public Question Time. 4

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

5....... Confirmation Of Minutes. 4

5.1          Minutes of the Finance Committee Meeting held 24 November 2021. 4

6....... Reports. 5

6.1          LIST OF PAYMENTS MADE - NOVEMBER 2021. 5

6.2          FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 NOVEMBER 2021. 21

6.3          RATING DEBT COLLECTION.. 56

7....... General Discussion Items. 61

8....... Next Meeting Date. 61

9....... Closure. 61

 


Finance Committee                                                             4                                                                  19 January 2022

 

1.               Declaration of Opening, ACKNOWLEDGEMENT OF COUNTRY and Announcement of Visitors

 

2.               Attendance 

Apologies

 

3.               Public Question Time

 

4.               Disclosure Of Interests

 

5.               Confirmation Of Minutes

5.1             Minutes of the Finance Committee Meeting held 24 November 2021

Recommendation

That the Minutes of the Finance Committee Meeting held 24 November 2021 be confirmed as a true and correct record.

 


Finance Committee                                                             6                                                                  19 January 2022

6.               Reports

6.1             LIST OF PAYMENTS MADE - NOVEMBER 2021

STRATEGIC THEME

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

STRATEGIC PRIORITY

4.2 Deliver governance systems that facilitate open, ethical and transparent decision making.

SUBJECT INDEX

Financial Operations

BUSINESS UNIT

Financial Services

REPORTING OFFICER

Manager Financial Services - Paul Sheridan

AUTHORISING OFFICER

Acting Director, Finance and Corporate Services – Sarah Pierson

NATURE OF DECISION

Noting: The item is simply for information purposes and noting

VOTING REQUIREMENT

Simple Majority

ATTACHMENTS

Attachment a   List of Payments - November 2021  

 

OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers M119008 – M119050, EF083070 – EF083912, T7578 – T7580, DD004658 – DD004693, as well as payroll payments, together totalling $8,492,817.32

 

EXECUTIVE SUMMARY

This report provides details of payments made from the City’s bank accounts for the month of November 2021, for noting by the Council and recording in the Council Minutes.

 

BACKGROUND

The Local Government (Financial Management) Regulations 1996 (the Regulations) requires that, when the Council has delegated authority to the Chief Executive Officer to make payments from the City’s bank accounts, a list of payments made is prepared each month for presentation to, and noting by, the Council.

OFFICER COMMENT

In accordance with regular custom, the list of payments made for the month of November 2021 is presented for information. 

Statutory Environment

Section 6.10 of the Local Government Act 1995 and more specifically Regulation 13 of the Regulations refer to the requirement for a listing of payments made each month to be presented to the Council.

Relevant Plans and Policies

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

Financial Implications

There are no financial implications associated with the officer recommendation.

Stakeholder Consultation

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

Risk Assessment

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

Options

Not applicable.

CONCLUSION

The list of payments made for the month of November 2021 is presented for information.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.


Finance Committee

8

19 January 2022

6.1

Attachment a

List of Payments - November 2021

 















Finance Committee                                                             41                                                                19 January 2022

6.2             FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 NOVEMBER 2021

STRATEGIC THEME

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

STRATEGIC PRIORITY

4.2 Deliver governance systems that facilitate open, ethical and transparent decision making.

SUBJECT INDEX

Financial Services

BUSINESS UNIT

Financial Services

REPORTING OFFICER

Manager Financial Services - Paul Sheridan

AUTHORISING OFFICER

Acting Director, Finance and Corporate Services – Sarah Pierson

NATURE OF DECISION

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

VOTING REQUIREMENT

Simple Majority

ATTACHMENTS

Attachment a   Loan Schedule - November 2021

Attachment b    Investment Report - November 2021

Attachment c    Financial Activity Statement - November 2021  

 

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 30 November 2021, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations 1996.

 

EXECUTIVE SUMMARY

Pursuant to Section 6.4 of the Local Government Act 1995 (the Act) and Regulation 34(4) of the Local Government (Financial Management) Regulations 1996 (the Regulations), a local government is to prepare, on a monthly basis, a statement of financial activity that reports on the City’s financial performance in relation to its adopted / amended budget.

 

This report has been compiled to fulfil the statutory reporting requirements of the Act and associated Regulations, whilst also providing the Council with an overview of the City’s financial performance on a year to date basis, for the period ending 30 November 2021.

 

BACKGROUND

The Regulations detail the form and manner in which financial activity statements are to be presented to the Council on a monthly basis, and are to include the following:

·        Annual budget estimates

·        Budget estimates to the end of the month in which the statement relates

·        Actual amounts of revenue and expenditure to the end of the month in which the statement relates

·        Material variances between budget estimates and actual revenue/expenditure (including an explanation of any material variances)

·        The net current assets at the end of the month to which the statement relates (including an explanation of the composition of the net current position)

 


 

Additionally, and pursuant to Regulation 34(5) of the Regulations, a local government is required to adopt a material variance reporting threshold in each financial year. At its meeting on 26 July 2021, the Council adopted (C2107/140) the following material variance reporting threshold for the 2021/22 financial year:

That pursuant to Regulation 34(5) of the Local Government (Financial Management) Regulations, the Council adopts a material variance reporting threshold with respect to financial activity statement reporting for the 2020/21 financial year as follows:

·        Variances equal to or greater than 10% of the year to date budget amount as detailed in the Income Statement by Nature and Type/Statement of Financial Activity report, however variances due to timing differences and/or seasonal adjustments are to be reported only if not to do so would present an incomplete picture of the financial performance for a particular period; and

·        Reporting of variances only applies for amounts greater than $25,000.

OFFICER COMMENT

In order to fulfil statutory reporting requirements and to provide the Council with a synopsis of the City’s overall financial performance on a year to date basis, the following financial reports are attached hereto:

Statement of Financial Activity

This report provides details of the City’s operating revenues and expenditures on a year to date basis, by nature and type (i.e. description). The report has been further extrapolated to include details of non-cash adjustments and capital revenues and expenditures, to identify the City’s net current position; which reconciles with that reflected in the associated Net Current Position report.

Net Current Position

This report provides details of the composition of the net current asset position on a full year basis, and reconciles with the net current position as per the Statement of Financial Activity.

Capital Acquisition Report

This report provides full year budget performance (by line item) in respect of the following capital expenditure activities: 

·        Land and Buildings

·        Plant and Equipment

·        Furniture and Equipment

·        Infrastructure

Reserve Movements Report

This report provides summary details of transfers to and from reserve funds, and associated interest earnings on reserve funds, on a full year basis.

 

Additional reports and/or charts can be provided as required to further supplement the information comprised within the statutory financial reports.

Comments on Financial Activity to 30 November 2021

The Statement of Financial Activity (FAS) for the year to date (YTD) shows an overall Net Current Position of $34.1 as opposed to the budget of $18.8M. This represents a positive variance of $15.3M 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

 

1.20%

818,453

111,994

1.    Other Revenue

310,949

78,116

414,950

298.06%

232,833

(1,953)

Expenses from Ordinary Activities

 

9.42%

3,436,226

630,438

2.    Materials & Contracts

(5,854,162)

(7,170,299)

(20,245,296)

18.36%

1,316,137

106,693

3.    Utilities

(934,154)

(1,043,849)

(2,774,773)

10.51%

109,695

72,282

4.    Other Expenditure

(1,278,083)

(2,680,614)

(9,685,100)

52.32%

1,402,531

387,990

5.    Non-Operating Grants, Subsidies and Contributions

822,048

6,145,480

34,850,687

(86.62%)

(5,323,432)

88,818

Capital Revenue & (Expenditure)

 

45.27%

14,402,505

3,275,066

6.    Land & Buildings

(412,514)

(8,742,442)

(22,802,632)

95.28%

8,329,928

1,411,584

Plant & Equipment

(574,245)

(408,000)

(2,890,000)

(40.75%)

(166,245)

(11,967)

Furniture & Equipment

(132,389)

(295,950)

(828,800)

55.27%

163,561

(48,217)

Infrastructure

(4,503,477)

(14,114,138)

(38,537,750)

68.09%

9,610,661

2,508,835

7.    Proceeds from Sale of Assets

0

195,095

776,071

(100.00%)

(195,095)

(48,645)

8.    Total Loan Repayments – Principal

(1,018,178)

(1,159,501)

(3,839,418)

12.19%

141,323

35,420

9.    Transfer to Restricted Assets

(5,394,231)

0

(21,740)

(100.00%)

(5,394,231)

(702,220)

10.  Transfer from Restricted Assets

2,020,043

0

1,735,682

100.00%

2,020,043

346,582


Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is very close to budget at only 1.20% ahead YTD.  There is however two material variance items requiring comment.

                                   

1.      Other Revenue

Ahead of YTD budget by $233K, or 298.1%, 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

43,847

14,392

29,455

204.66%

3,438

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.

Engineering and Works Services

219,940

4,679

215,261

4600.58%

893

G0030 & G0031

Busselton & Dunsborough  Transfer Station – Sale of Scrap Materials

217,138

4,251

212,887

5007.94%

893

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).

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $3.8M, or 10.4%, less than expected when compared to the budget YTD as at November. 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 $1.3M.  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

524,536

953,477

428,941

45.0%

73,259

10000

Members of Council

12,942

64,035

51,093

79.8%

(36)

Timing variance with payment of WALGA subscriptions delayed.  These variances will persist even when this is paid, as the actual cost will spread and be allocated evenly over the term of the subscription, whereas the budget was set on a historical cash-outlay basis.


 

10105

Business Systems Improvement Team

 -

13,230

13,230

100.0%

2,646

It is expected that the budget allocation of $31,750 will remain unused until the end of December when there will be expenditure of about $18K on consultants to support the change of the chart of accounts. The remaining $13,750 budget allocation will not expected to be used until March 2022.

10151

Rates Administration

103,650

127,121

23,471

18.5%

9,012

Variation between YTD actual and budget is mainly due to:

·        Postage $12.1K under budget due to 2nd instalment notice postage invoice having not been processed plus cost savings by using a new printing service for final and reminder notices

·        Bank charges $20.5K under budget as the charges have come a lot less than expected.

·        Legal expenses $19.2K over budget due to a substantial increase in debt recovery proceedings. This expenditure is fully recovered from the property owner/s.

·        Consultancy $6.7K 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

15,856

42,788

26,932

62.9%

3,042

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 cashflows, rather than accrual accounting).

10250

Information & Communication Technology Services

265,968

428,878

162,910

38.0%

55,999

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.

10500

Legal and Compliance Services

11,061

51,310

40,249

78.4%

(288)

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

11,626

46,589

34,963

75.0%

3,934

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

25,725

69,825

44,100

63.2%

936

We can never say with certainty when this budget will be drawn on, even in comparison to prior year trends, as works are carried out throughout the year and generally need to coincide with vacancies.  It is likely refurbishment works will be carried out on at least one unit in the next 4-6 weeks.


 

Community and Commercial Services

546,944

1,014,827

467,883

46.1%

20,291

10380 & 10381

Busselton & Dunsborough Libraries

43,022

91,446

48,424

53.0%

(401)

The variances YTD mainly arise in relation to the cost of Computer Software Licences used at the libraries being spread over the period they relate to, rather than when the cash is outlaid, which is how the budget was allocated.

10540

Recreation Administration

(2,742)

25,695

28,437

110.7%

27

The credit relates to year end accrual reversals for which invoices are still yet to be received.

10543

Community Development

787

60,075

59,288

98.7%

(676)

This relates to the Strengthening Communities program funded by Lotterywest. The program is still in development and procurement has not yet taken place. It is anticipated that this program will be launched during November/December with bulk of expenditure now expected from Jan 2022.

10591

Geographe Leisure Centre

142,156

129,636

(12,520)

(9.7%)

(179)

The overspend YTD is due to increased expenditure in cleaning consumables/maintenance, earlier than forecast procurement of non-capital furniture and office equipment, and increased expenses for café consumables, which is offset by additional income.

10600

Busselton Jetty Tourist Park

174,878

234,070

59,192

25.3%

746

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

31,263

41,406

10,143

24.5%

(2,380)

The underspend at ArtGeo is offset in wages i.e. where staff have the skills to deliver the service we use them and not contractors as it achieves better outcomes.

10630

Economic and Business Development Administration

16,044

29,033

12,989

44.7%

53

The majority of this spend is allocated in Consultancy and with ED team not resourced at this time, consultancy tasks have been deferred to 2022.

10900

Cultural Planning

8,217

22,070

13,853

62.8%

4,414

Awaiting confirmation of further grant monies before engagement of consultants.

11151

Airport Operations

81,877

292,549

210,672

72.0%

16,796

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.


 

B1361

YCAB (Youth Precinct Foreshore)

15,299

39,785

24,486

61.5%

125

Variance YTD is due to:

·        $9k allocated for future commitments;

·        $10k of allocated budget for consultants to be used for wages to fund Dunsborough youth Saturday night program;

·        Planned crime prevention grant funding spending has been deferred to January 2022;

·        Planned expenditure for mental health week was cancelled, with the budgeted funds to be  allocated to a future event;

·        No expenditure on furniture as to date - this will be allocate to The Break Dunsborough youth space.

Planning and Development Services

378,873

272,510

(106,363)

(39.0%)

(27,774)

10805

Planning Administration

3,828

17,390

13,562

78.0%

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

30,259

65,460

35,201

53.8%

(1,284)

The variance YTD is essentially due to holistic Consultancy budget being allocated across the 12-month period. Strategic Planning is subject to competing demands and project prioritisation (also timing delays etc. due to consultancy periods, peak authority feedback or processes and lack of availability on occasion of specialised consultant assistance). Appointment of consultants or other anticipated strategic expenditures are always difficult to predict on that basis.    

10922

Preventative Services – Mosquitoes

29,863

19,405

(10,458)

(53.9%)

10,886

The City’s contribution to the CLAG chemical and communications budget has been transferred after receiving the Department of Health grant for mosquito control.

10925

Preventative Services - CLAG

73,260

59,450

(13,810)

(23.2%)

30,227

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

155,870

11,713

(144,157)

(1230.7%)

(63,601)

The YTD variance is as a result of an invoice for works completed late in the 20/21 financial year that was not accrued.  Funding from DFES was received in last financial year for these works, so this contributed to part of the end of year budget surplus, but will therefore effectively reduce any 21/22 financial year surplus.

Various

Bushfire Brigades

27,747

12,542

(15,205)

(121.2%)

(5,581)

Bush Fire Brigades are currently preparing for the upcoming fire season. A large amount of PPE has been purchased in readiness for dispersal to BFB as required.


 

Engineering and Works Services

4,403,571

4,926,670

523,099

10.6%

(75,017)

10830

Environmental Management Administration

137,825

121,335

(16,490)

(13.6%)

(41,184)

The YTD overspend is due to miscoding of Sustainability Services consulting invoices related to Vasse river capital projects.  This will be rectified in the January accounts.

11170

Meelup Regional Park

15,667

98,550

82,883

84.1%

8,189

The recreation reserve maintenance budget was spread evenly across the year and thus does not reflect seasonally impacted expenditure patterns. To this end, planning is underway for the noxious weed control program and works associated with the Healthy Countries Plan. $95K in works have been committed representing works that are now underway or will commence shortly.   

12600

Street & Drain Cleaning

139,233

168,520

29,287

17.4%

(19,948)

The budget was entered based on historical expenditure patterns averaged over the previous three financial years. All of $465K annual budget has already been committed based on a scheduled maintenance plan, so the YTD variance is timing only.

12620 & 12621

Rural & Urban Tree Pruning

148,436

426,192

277,756

65.2%

53,013

This year’s rural tree pruning budget of $352K included $153K carried over from the prior year. Works are ordinarily planned to be done by the end of November 2021 however priority has been given to storm damage clean-up activities meaning some of these works will now occur later the financial year. The rural road verges to be pruned are prioritised based on the time since last pruned, inspections, volume and types of traffic and numerous other considerations. This is a timing variance only.

Various

Bridge Maintenance

37,551

124,623

87,072

69.9%

(10,862)

Bridge Maintenance works are largely scheduled to occur post-Christmas and in the later part of the financial year when water levels are at their lowest. Planning for these works is well underway and the downward trend YTD variance ($10K reduction since October) is expected to continue in the coming months.

Various

Waste Services

826,032

1,027,635

201,603

19.6%

(21,075)

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

Various

Roads Maintenance

546,037

353,520

(192,517)

(54.5%)

(32,442)

Road Maintenance activities are generally greater in the first five months of the year as the City’s maintenance and construction crews focus on maintenance grading, road shoulders maintenance, road surface repair, drainage maintenance, fixing pot holes etc. There has been an overspend to budget mostly attributable to greater than anticipated works in relation to storm damage clean-up activities contributing to the year to date variance.     

Various

Reserves, Parks & POS Maintenance

622,197

722,158

99,961

13.8%

79,293

Underspend in reserves is linked to a number of cost codes including R0310 Eastern Link Landscape areas (project recently completed and maintenance just underway), R0315 Vasse Village Centre (which has only just been handed over to the city from the developer and contractor engaged), Dunsborough Lakes Sporting Precinct (project not yet completed by Major Projects) and a number of new Dunsborough Lakes cost codes (some not yet been handed over to the City).

 


3.      Utilities

         Underspent compared to YTD November budget by $110K, or 10.5%, due to:

Natural Account

YTD Budget

YTD Actual

Variance 

Comments

3500 - Electricity

673,106

658,159

14,947

November’s Synergy invoice worth $20K did not arrive in time to be processed into November. 

3505 - Gas - Reticulated

2,432

864

1,568

 Immaterial

3506 - Gas - LPG Bottled

6,135

10,529

(4,394)

Main cause is the GLC – There has been an increased LPG demand due to geothermal heating issues.  This variance has since corrected itself and as of January we are back on track, and unlikely to exceed budget by year end.

3507 - Gas - Alinta Boiler Gas (BJTP)

1,786

1,367

419

Immaterial

3510 - Water Consumption

80,634

49,331

31,303

High use of Water usually happens over the summer months.  Plus billing is not every month.   Water Corp bill’s every 60 days and Bsn Water bill 3 times a year.

3511 - Water Meter Rental & Supply Charge

27,487

32,502

(5,015)

Charge for Airport accounts for $3200 of the $5000 variance – generally there are variances across the board. Question if budget set on last years or on averages?

3512 - Water Rates

0

0

0

NA

3513 - Sewerage Volume Charges

30,674

24,591

6,083

Budget included $5900 for the Goose – no charge recorded, presumably as it has burnt down and is not operating

3514 - Sewerage Charge (Rates)

88,499

55,621

32,878

Annual charges are now spread over the period they relate to, rather than hitting the budget all in one go.

3520 - Office Telephones, Faxes & Internet

40,025

32,697

7,328

Recently the City has been migrating to better and cheaper fixed line services.  This is starting to show cost savings.

3521 - Public WIFI

16,540

16,892

(352)

Immaterial

3522 - Mobile Devices Costs

41,711

21,743

19,968

The City moved to cheaper mobile phone and mobile data plans with Telstra in 2021.  This has led to significant cost savings in this area.

3524 - Other Telecommunication & Network Costs

34,820

29,857

4,963

 Similar reason to the above commentary in fixed line and mobiles.

1,043,849

934,154

109,695

 


4.      Other Expenditure  

$1.4M, or 52.3%, 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

$

Finance and Corporate Services

375,540

470,679

95,139

20.2%

98,062

10000

Members of Council

171,827

357,905

186,078

52.0%

135,240

Timing related variances with underspends in member allowances and sitting fees, plus some more minor underspends in reimbursements and training expenses due to change of council members.  The cost of Council elections was budgeted for November, however the bill was not received until December.

10151

Rates Administration

14,990

25,455

10,465

41.1%

2,297

It is not possible to predict when building completions or new developments and business will be completed or finalised, so that they can be sent to LVS for valuations.  The budget is spread evenly, however actual valuations for interim rating purposes has not eventuated in that timeframe.

10200

Financial Services

33,420

 -

(33,420)

(100.0%)

(25,700)

The original budget for the valuation of the City’s Land & Buildings was removed, as it was thought that a qualified in-house valuer would be able to perform this task.  This did not eventuate, so a third party valuer needed to be engaged in order to complete the statutory valuations in the required timeframe.

10221/27/

28/29/30

Finance & Borrowing Program 04/11/12/13/14

100,095

 -

(100,095)

(100.0%)

 -

Notification of the second bi-annual payment of the indicative guarantee for the City’s borrowings through the WA Treasury Corporation, for the 20/21 financial year, was not received by the end of June, so ended up being processed in July. Depending on whether the final payment is made or accrued in June 2022, this may end up being an overspend variance at the end of the year.

10511

Community Assistance Program (Governance)

 -

16,666

16,666

100.0%

 -

Timing variances associated with how this line item has been spread.  It has been spread monthly however spend will not occur until the end of the financial year.  Remaining budget from September to June has been re-allocated to June.

10700

Public Relations

29,561

50,870

21,309

41.9%

(2,117)

Timing variances, up and down, associated with underspend against sister city allocations, community consultations and surveys and catering, and an overspend in council advertising.

Community and Commercial Services

675,013

1,994,066

1,319,053

66.1%

285,760

10532

BPACC Operations

(350)

12,500

12,850

102.8%

 -

BPACC operational activity will not commence until such time as the Tender for construction has been awarded and timeframes for delivery of the project are known.

10533

Welfare / Senior Citizens

45,041

21,699

(23,342)

(107.6%)

(22,520)

Budgeted for Quarterly invoices/payments to Busselton Senior Citizens centre as per grant agreement (months 3,6,9,12), planned December payment was made in November as City was invoiced and KPIs were met.

10543

Community Development

9,145

111,925

102,780

91.8%

39,558

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. Timing is largely dependent on CAP Applications received from community groups.


 

10558

Events

431,339

627,734

196,395

31.3%

74,109

There have been 3 funded events (Pedal Prix WA, SW Mudfest, Cape Naturaliste Pro) cancel for a total of $38k. We are also waiting on a number of events to invoice us for event sponsorships. 

Also, as the timing of Events budget expenditure is estimated prior to the actual allocation of sponsorship, it is impossible to know exactly when the expenditure will occur. With the allocation of the remaining events sponsorship budget due to go to Council in December, we will have a clearer picture of how the budget will be expended.

10634

Business Support Program

 -

23,850

23,850

100.0%

 -

Final acquittals of the support program yet to be received.  This budget was carried over from the 20/21 financial year, funded from the MERG Reserve, however it has now been ascertained that only approximately $10,000 will be required.  This will more than likely be the positive variance by the end of the year, offset by a lower transfer from the reserve.

11151

Airport Operations

 -

958,880

958,880

100.0%

191,676

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

11156

Airport Development Operations

115,139

148,550

33,411

22.5%

 -

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.

 

5.      Non-Operating Grants, Subsidies & Contributions  

The negative variance of $5.3M 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

$

Finance and Corporate Services

57,000

5,000

52,000

1040.0%

52,000

R0288

Locke Estate – Contributions

57,000

5,000

52,000

1040.0%

52,000

Community and Commercial Services

 -

66,401

(66,401)

(100.0%)

 -

10540

Recreation Administration

 -

25,625

(25,625)

(100.0%)

 -

10590

Naturaliste Community Centre

 -

23,350

(23,350)

(100.0%)

 -

C6010

Airport Fencing Works

 -

17,426

(17,426)

(100.0%)

 -


 

Engineering and Works Services

765,048

6,074,079

(5,309,031)

(87.4%)

36,818

A0014

Bussell Highway Bridge – 0241 – Federal Capital Grant

 -

744,000

(744,000)

(100.0%)

 -

A0022

Yallingup Beach Road Bridge - 3347 – Federal Capital Grant

 -

700,000

(700,000)

(100.0%)

 -

A0200

Donated Bridges

698,230

 -

698,230

100.0%

 -

B9407

Busselton Senior Citizens – Developer Cont. Utilised

 -

111,750

(111,750)

(100.0%)

 -

B9591

Performing Arts Convention Centre – Federal Capital Grant

 -

2,277,000

(2,277,000)

(100.0%)

 -

B9999

Donated Buildings

30,000

 -

30,000

100.0%

 -

F0084

Thompson Way - New Path - Contributions

36,818

 -

36,818

100.0%

36,818

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

 -

374,000

(374,000)

(100.0%)

 -

S0335

Kaloorup Road – MR Capital Grant

 -

120,475

(120,475)

(100.0%)

 -

S0336

Wildwood Road – MR Capital Grant

 -

468,875

(468,875)

(100.0%)

 -

 


6.      Capital Expenditure  

As at 30th November 2021, there is an underspend variance of 76.1%, or $17.9M, in total capital expenditure, with YTD actual at $5.6M against the YTD budget of $23.6M. 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

3,671

20,835

17,164

82.4%

3,095

10610

Property Services Administration

3,671

20,835

17,164

82.4%

3,095

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

408,843

8,721,607

8,312,764

95.3%

1,408,489

B9614

Dunsborough Lakes Sporting Precinct-Pavilion /Changeroom Facilities

 -

75,000

75,000

100.0%

 -

There has been nil expenditure to date as the works have not yet commenced. The contract for Pavilion / Changeroom design was to be awarded in September 2021, with construction estimated to commence in April 2022.

B9012

Civic and Administration Building Replacement of Cladding

466

20,000

19,534

97.7%

20,013

Cladding replacement commencing in January 2022.

B9300/1/2

Aged Housing

Capital Improvements

29,689

105,150

75,461

71.8%

(19,969)

Budgeted works were proposed to separate the power and drainage that service Winderlup Court and Winderlup Villas.  Whilst the power requirements are not triggered until the new conditional land title lots are created, the intention was to progress with this anyway. A purchase order has been raised for the preparation of an application to Western Power for an alternative power separation proposal and the contractor will report back once Western Power have responded.  The decision on which option to pursue cannot be made until this is received.

B9407

Busselton Senior Citizens

40,815

111,750

70,935

63.5%

 -

Works have been completed, however supplier invoicing has not yet been fully received and processed.

B9591

Performing Arts Convention Centre

16,946

7,675,743

7,658,797

99.8%

1,530,148

The contract has been awarded to Broad Constructions with works commencing in early January.

B9596

GLC Building Improvements

53,519

71,284

17,765

24.9%

(17,550)

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


 

B9605

Energy Efficiency Initiatives (Various Buildings)

86,013

111,580

25,567

22.9%

 -

Works planned for commencement have encountered delays pending Western Power applications and approvals.

B9611

Smiths Beach

New Public Toilet

 -

250,000

250,000

100.0%

 -

Project commencement was delayed due to changes to the project scope as a result of potential changes to size of the toilet facilities and investigations into the capacity of the existing septic system/upgrade to an ATU system to accommodate these changes. Project planning is now underway, with preliminary design work completed.  Septic system design work is also underway.

Notification has been received by the entity that currently supplies the water that they are no longer able to supply water for City toilets. 

As such an MOU is being reviewed by the property team to establish viability of infrastructure works and costs for water supply. A clearing permit application is also underway, however all other activity on the project has been put on hold until these issues are resolved.

B9612

Churchill Park

Renew Sports Lights

73,562

212,850

139,288

65.4%

(66,402)

Works were planned to take place in July 2021, however due to a budget increase of $73K from CSRFF grant funding, the project was re-scoped. RFQ’s have gone out, with design works expected to commence in November.  Actual works will not commence until after trotting season, sometime in February or March 2022.

B9615

Naturaliste Community Centre AMP

 -

14,400

14,400

100.0%

14,400

Works are delayed due to market pressures – demand for trades and materials is outstripping supply.

B9616

Buildings Asset Management Plan High Use Allocation

36,907

 -

(36,907)

(100.0%)

(2,985)

21/22 expenditure budgeted to occur December – April, however urgent unplanned works have incurred expenditure earlier in the Financial Year. Majority of the cost is attributed to the replacement of the Old Fire Station doors, which were planned to commence January 2022 but brought forward to a change in contractor availability. Variance due to timing of works.

B9622

Dunsborough Youth Centre Building Construction

43,274

 -

(43,274)

(100.0%)

(42,670)

This variance is mainly due to the recognition of a donated mobile building worth $30K.

B9711

Busselton Airport – Building

 -

12,200

12,200

100.0%

 -

Small capital works projects that were planned to be completed prior to Jetstar flights commencing. These have been delayed due to the continuing deferment of the commencement of RPT flights.

B9717

Airport Construction - Existing Terminal Upgrade

 -

39,650

39,650

100.0%

 -

Invoicing in relation to the retention monies owing to Pindan for works completed has not yet been received.


 

Plant & Equipment

574,245

408,000

(166,245)

(40.7%)

(11,967)

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.

10380

Busselton Library

31,805

 -

(31,805)

(100.0%)

(31,805)

The library vehicle was acquired a month earlier than budgeted.

10540

Recreation Administration

 -

40,000

40,000

100.0%

 -

The budget relates to a vehicle for the recently created Manager position. Vehicle has been ordered, delivery due in February.

10610

Property Services Administration

 -

35,000

35,000

100.0%

 -

Vehicle has been ordered, delivery due in February.

10630

Economic and Business Development Administration

 -

75,000

75,000

100.0%

35,000

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 February.

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.

11000

Engineering & Works Services Support

50,332

 -

(50,332)

(100.0%)

(50,332)

The director’s replacement vehicle was acquired a month earlier than budgeted.

11107

Engineering Services Design

 -

70,000

70,000

100.0%

 -

Limited informal quotations were received for new survey equipment, which has delayed commencement of the procurement process.  Formal RFQ documentation has been issued, and submissions have been assessed, with procurement planned for Late December.

11401

Transport – 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

8,000

(412,639)

(5158.0%)

 -

The actual spend relates to a carryover from 2020/21 FY of the second generator for the DWF and a new rubbish truck.  The budget timing for this was later in the year. The $8K budget item relates to a trailer, specification has been developed, to be ordered in December and delivery expected in March.


 

Furniture & Office Equipment

132,389

295,950

163,561

55.3%

(48,217)

10250

Information & Communication Technology Services

87,576

 -

(87,576)

(100.0%)

(29,391)

Due to uncertainty around timing at the time of setting the budget, the fully year budget of $441K was split evenly between the December and June months.  YTD however, the following items have been acquired which make up the actual variance to budget:

·        Attain software (for Governance), and the Council Chambers A/V upgrade, which were not budgeted for;

·        Promapp software (for business process mapping for the whole organisation);

·        CCTV installations at various foreshore locations;

·        A4 and A3 scanners in Records.

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, all of which have come in over the forecast budget. The tender was not awarded and options on how to proceed were discussed with MERG at the November meeting. The tender is to be restructured with options and will be reissued in the new year.

10590

Naturaliste Community Centre

8,826

34,950

26,124

74.7%

(8,826)

The budget represents a carry-over from 20/21 for the purchase of replacement fitness equipment.  Procurement of this equipment is now planned for December to February.

10625

Art Geo Administration

10,000

 -

(10,000)

(100.0%)

(10,000)

First prize and acquisition of the winner’s piece in the City of Busselton Art Awards was paid a month earlier than budgeted.

10900

Cultural Planning

 -

13,400

13,400

100.0%

 -

The virtual reality component of the Ballaarat Engine 150th display has been delayed waiting for an expected grant opportunity to help subsidise the project.

B1350

Churchill Park-

Other Buildings

 -

26,450

26,450

100.0%

 -

The budget relates to the storage facility project. Discussions are still progressing with the Stakeholders, delaying construction until a later date.

Infrastructure

4,503,477

14,114,138

9,610,661

68.1%

2,508,835

Various

Roads

1,386,170

3,607,166

2,220,996

61.6%

154,803

The majority of road construction happens during the months October to April, however in discussions with Council in September/October 2021, it was decided that the current capital works program would be spread over 18 months into the 2022/23 financial year.  The purpose being to take pressure off the City’s works staff and their contractors, to enable a catch up on the backlog of projects.

43% of the YTD variance valued at $953k is associated with the Regional Road Safety Program which is providing sealed road shoulders on Wildwood Road (largely complete), Kaloorup Road and Chapman Hill Road.

25% of the YTD variance valued at $563k is associated with the Peel Terrace/ Queen street roundabout renewal works which are scheduled to commence in February.

21% of the YTD variance valued at $461k is associated with;

·        Sugarloaf Road upgrade – rescheduled to 2022/23 financial year

·        Bussell Highway


 

Various

Bridges

 -

1,444,000

1,444,000

100.0%

698,230

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 is anticipated to continue to increase until invoices for works are provided by Main Roads.

Various

Car Parks

313,847

1,232,175

918,328

74.5%

143,011

73% of the YTD variance valued at $666k is associated with the Dunsborough Lakes Sporting Precinct (Stage 1) – Car parking project.  This project is not scheduled to commence until the new calendar year.

24% of the YTD variance valued at $218k is associated with;

·        Barnard Park East Foreshore Car Parking – in progress

·        Dunsborough Chieftain Crescent Carpark Extension - placed on hold

·        Forth Street Groyne Carpark – placed on hold

Various

Footpaths & Cycleways

442,256

798,044

355,788

44.6%

98,566

41% of the YTD variance valued at $146K is associated with the Buayanup Drain Shared path project that has now been completed. Not all the budget will be expended as the value of the project was reduced towards the end of last financial year, however the amount carried over was not adjusted based on the reduced estimate. This variance will remain unless the budget is reduced formally via a budget amendment.

39% of the YTD variance valued at $138K is associated with;

·        Barnard East Development and Busselton Foreshore Improvements – in progress

·        Carey Street footpath - scheduled for construction during February and March

Parks, Gardens & Reserves

2,281,983

6,867,502

4,585,519

66.8%

1,509,994

Various

Busselton Jetty - Capital Expenditure

31,072

272,524

241,452

88.6%

(10,946)

Major Maintenance works are scheduled to take place on the Jetty between late October and March, when sea conditions are most conducive. The timing of major works on the Jetty can be quite variable based on the nature of tasks planned to be undertaken, the weather and working around the peak tourist seasons.

Various

Coastal & Boating

77,516

1,075,900

998,384

92.8%

586,941

Planning and procurement for Coastal related works continue to progress. The majority of works will commence in the new calendar year.

Various

Waste Services

107,678

602,500

494,822

82.1%

7,544

The majority of this variance is associated with budgets that were carried over from the previous year. 51% of the variance representing $250K is associated with Stage 1 Busselton Landfill Post-closure Capping, Rehab & Remediation works that are not as yet planned to go ahead this financial year. $82K of the YTD variance is with respect to works on a Depot Washdown Facility Upgrade that remains in the planning phase.

Various

Townscape & Vasse River

8,871

169,782

160,911

94.8%

133,378

No works of any significance associated with projects within this category have yet to commence. The YTD variance is considered minor in comparison to the $1.779M on works that are on budget.


 

Various

Other P&G Infrastructure

2,056,845

4,746,796

2,689,951

56.7%

793,077

90% of the YTD variance to budget is associated with the follow projects, all of which are in progress;

·        Barnard Park East Foreshore Development

·        Dunsborough Lakes Sporting Precinct

·        Dunsborough Non-Potable Water Network

·        WAPC POS Upgrades

·        Eagle Bay Viewing Platform

Various

Drainage

12,849

35,200

22,351

63.5%

23,571

The YTD variance to budget is largely associated with the Carey Street drainage upgrade project which is scheduled for construction during February and March.

Various

Regional Airport & Industrial Park Infrastructure

66,372

130,051

63,679

49.0%

(119,339)

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.

 

7.      Proceeds From Sale of Assets  

YTD there have been no proceeds from sale of assets recorded against the YTD budget of $195K. 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. 

 

8.     Total Loan Repayments - Principal

         Repayments of the principal on loans is $141K under budget YTD, due to the loan for the BPACC not proceeding in timeframe as budgeted.

 

9.      Transfer to Restricted Assets  

There is a YTD variance in transfers to Restricted Assets of $5.4M as there is no budget for this item.

 

At the time of budgeting it is not possible to predict what grants will be received in what timeframe, nor when they will be spent and hence potentially transferred to Restricted Assets (or unspent portions thereof). The following grants, totaling $4M, 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;

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

·        $80K for the Dunsborough youth space project from the Department of Primary Industries and Regional Development;

·        $54K from Lotterywest for the Strengthening & Adapting Organisations program;

·        $526K from DFES for the Mitigation Activity Fund and shared costs of the Emergency Services Manager;

·        $30K from the Federal Government Community Grants Hub for Community Child Care Sustainability programs;

·        $11K from the South West Catchment Council - National Landcare Program for the planting of 4,000 seedlings;

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

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

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

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

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

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

·        $130K 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; and

·        $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.

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 $1.4M has been received YTD, with $329K for road works bonds and $508K for caravan park deposits.

 

10.   Transfer from Restricted Assets

YTD there has been $2M transferred from Restricted Assets into the Municipal Account. This was mainly attributable to $605K of Bushfire Mitigation Activity funds that did not need to be restricted, $200K from Department of Primary Industries & Regional Development used for CCTV expansion and training of hospitality workers, and $579K 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 30th November 2021 the value of the City’s invested funds remained at $94.4M, unchanged from $94.4M as at 31st October 2021

 

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

 

During the month of November three term deposits totalling the amount of $9M matured. These were renewed for a further 167 days at 0.33% on average.

 

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

 


Borrowings Update

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

 

Chief Executive Officer – Corporate Credit Card

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

 

Date

Payee

Description

$ Amount

28/10/21

GANNAWAYS

BUS TICKET FOR BCCI GALA NIGHT - MAYOR G.HENLEY

$25.00

29/10/21

THE GOOD EGG

CEO/MAYOR CATCH UP WITH CITY OF BUNBURY

$76.50

02/11/21

CROWN PERTH

LG PRO CONFERENCE – REFRESHMENTS*

$38.00

02/11/21

CROWN METROPOL

LG PRO CONFERENCE ACCOMODATION  –CEO M. ARCHER*

$495.88

4/11/21

CROWN METROPOL

LG PRO CONFERENCE INCIDENTALS & MEALS – CEO M.ARCHER*

$193.29

11/11/21

TUDOR HOUSE

AUSTRALIAN FLAGS FOR COUNCIL CHAMBERS

$385.00

12/11/21

ADINA HOTEL

NEW COUNCILLORS SEMINAR ACCOMMODATION – CR M. LOVE

$191.47

12/11/21

ADINA HOTEL

NEW COUNCILLORS SEMINAR ACCOMMODATION – CR J. RICHARDS

$191.47

 

 

TOTAL

$1,211.61

* Funding from CEO’s professional development allowance under contract.

 

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 30 November 2021, the City’s net current position stands at $34.1M. The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.  


Finance Committee

42

19 January 2022

6.2

Attachment a

Loan Schedule - November 2021

 


Finance Committee

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19 January 2022

6.2

Attachment b

Investment Report - November 2021

 


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19 January 2022

6.2

Attachment c

Financial Activity Statement - November 2021

 













Finance Committee                                                             60                                                                19 January 2022

6.3             RATING DEBT COLLECTION

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

Rating Debt Collection

BUSINESS UNIT

Finance and Corporate Services

REPORTING OFFICER

Rates Coordinator - David Nicholson

AUTHORISING OFFICER

Acting Director, Finance and Corporate Services - Sarah Pierson

NATURE OF DECISION

Noting: The item is simply for information purposes and noting

VOTING REQUIREMENT

Simple Majority

ATTACHMENTS

Nil

 

OFFICER RECOMMENDATION

That the Council notes the information contained in this report.

 

EXECUTIVE SUMMARY

This report is to provide Council with information on the total rating debts currently owed and the existing and proposed procedures so as to recover these debts.

 

BACKGROUND

In the past debt collection, in particular collection via the Court or under provisions of the Local Government Act 1995 (the Act), has been sparingly undertaken, and particularly in recent times given the City’s Covid Financial Hardship position. This has resulted in a number of rateable properties now having rating debts of three or more financial years. As at the 9th December 2021 there were 1,541 properties that owed $3,768,978 in rating arrears and/or overdue 2021/22 rating balances (NOTE: This excludes properties that have elected to pay via an allowed payment option).

The City has commenced a rating review program the primary of which is in relation to fairness and equity of our rating processes throughout the District.  As a part of this review officers have identified the need to more proactively utilise available recovery means to recover outstanding debts.  It is therefore intended in this financial year to recover these rating debts through Court proceedings and / or provisions of the Act.

 

OFFICER COMMENT

Under section 6.56 of the Act, unpaid rates and service charges may be recovered, as well as costs, in a court of competent jurisdiction. Additional unpaid charges may be recovered by garnisheeing a property’s rental under section 6.60 of the Act. If neither of these recovery proceedings are possible due to there being a reasonable belief that recovery costs will equal or exceed the value of the land or, after making reasonable efforts, the owner cannot be located, then recovery can be under section 6.64 of the LGA where there is 3 full years of unpaid rates.

 


 

The following are the steps that can be taken under each of these recovery procedures.

 

 


Details of procedures that have or will be undertaken to recover the existing $3,768,978 of rating debts are depicted in the following notes and flow diagrams.  Diagram 1 details the properties currently subject to recovery proceedings either through the Court or under Section 6.64 of the Act.  The amounts represent the value of debts outstanding.

 

Diagram 1.

 

Properties with 3+ full years of unpaid rates and which are currently subject to legal debt recovery proceedings. 
Number: 25
Amount: $237,368


,Recovery proceedings that has reached the stage of property seizure and sale.
Number: 4
Amount: $62,009

,Intended to be sold by the Bailiff due to there being sufficient equity in the property.
Number: 3
Amount: $50,418
(Note: One of these properties sale has occurred without success. However rating debts were paid after the sale.) 



,To be sold under section 6.64 of the LGA due to there being insufficient equity in the property and as there is 3 full years of unpaid rates.
Number: 1
Amount: $11,591
(NOTE: Owners will have 90 days in which to FULLY pay the rating debts to cease proceedings)

,Recovery proceedings that has NOT reached the stage of property seizure and sale.
Number: 21
Amount: $175,359
(Note: Other action is currently being undertaken.)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


In addition there are a further 4 properties with a total debt values of $41,590, unable to be recovered via court recovery proceedings due to the costs equaling or exceeding the property value or the owners being unable to be located.  Additional processes are required in relation to these 4 properties.     

 

 

 

 

 


Diagram 2 details properties that are currently not but may be subject to recovery proceedings via the court or under the LGA.

 

Diagram 2

Properties that are currently not but may be subject to recovery proceedings.
Number: 1,512
Amount: $3,490,020



,Properties that may be subject to court proceedings.
Number: 1,096
Amount: $2,682,842


,Properties with 3+ full years of unpaid rates that potential may need to be seized and sold.
Number: 31
Amount: $261,748
(May move into court proceedings as per diagram 1 if final demand not actioned)

,Properties that will NOT be subject to any recovery proceedings due to balances being $1,000 or less or subject to a special payment arrangement. 
Number: 385
Amount: $545,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


Statutory Environment

As outlined in the officer comment section of this report recovery can be undertaken through the Magistrates Court (Civil Proceedings) Act 2004 and / or under the Act.  Council has delegated its powers to the CEO under the LGA on sections 6.56, 6.60, and 6.64.

 

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 for Council as all costs associated with debt recovery is recoverable under section 6.56 of the LGA.

 

Stakeholder Consultation

Prior to any recovery action being taken the City issues multiple notices to the property owners in regards to their outstanding debts.  The City also works with property owners to negotiate acceptable payment plans, in order to avoid legal recovery action.  Once legal recovery action is commenced there are multiple opportunities for the property owner to make good on their debt.

 


Risk Assessment

While there is a level of reputational risk associated with legal recovery proceedings, and in particular seizure and sale of property, this risk is considered low.  It is also considered against the reputational and financial risk of not taking any action against those people who consistently fail to pay their rates.

 

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 to the exercise of his delegation in relation to recovery proceedings under the Act.

CONCLUSION

Recovery proceedings as set out in this report are intended to reduce the amount of rating debts owed to the City and to further the City’s aims of a fair and equitable approach to rating across the District.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

It is expected that debt recovery procedures will commence in January and February 2022.


Finance Committee                                                             61                                                                19 January 2022

7.               General Discussion Items

 

8.               Next Meeting Date

 

9.               Closure