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Extraordinary Meeting Notice and Agenda An Ordinary Meeting of the Bega Valley Shire Council will be held at Council Chambers, Bega on Wednesday, 26 November 2014 commencing at 11.00 am to consider and resolve on the matters set out in the attached Agenda. 20 November 2014
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The Agendas for Council Meetings and Council Reports for each meeting are available from 5.00 pm one week prior to each Ordinary Meeting, on Council’s website. A hard copy is also made available to each Library Branch and at the Bega Administration Building reception desk.
The Minutes of Committee and Council Meetings are available from 5.00pm on Council's Web Site on the Friday after the Meeting on Councils website and hard copies distributed with the Agenda for the following meeting.
1. Please be aware that the recommendations in the Council Meeting Agenda are recommendations to the Council for consideration. They are not the resolutions (decisions) of Council.
2. Background for reports is provided by staff to the General Manager for his presentation to Council.
3. The Council may adopt these recommendations, amend the recommendations, determine a completely different course of action, or it may decline to pursue any course of action.
4. The decision of the Council becomes the resolution of the Council, and is recorded in the Minutes of that meeting.
5. The Minutes of each Council meeting are published in draft format, and are confirmed, with amendments by Councillors if necessary, at the next available Council Meeting.
If you require any further information or clarification regarding a report to Counci, please contact Council’s Executive Assistant who can provide you with the appropriate contact details
Phone (6499 2104) or email execassist@begavalley.nsw.gov.au.
· Is the decision or conduct legal?
· Is it consistent with Government policy, Council’s objectives and Code of Conduct?
· What will the outcome be for you, your colleagues, the Council, anyone else?
· Does it raise a conflict of interest?
· Do you stand to gain personally at public expense?
· Can the decision be justified in terms of public interest?
· Would it withstand public scrutiny?
A conflict of interest is a clash between private interest and public duty. There are two types of conflict:
· Pecuniary – regulated by the Local Government Act and Department of Local Government
· Non-pecuniary – regulated by Codes of Conduct and policy. ICAC, Ombudsman, Office of Local Government (advice only). If declaring a Non-Pecuniary Conflict of Interest, Councillors can choose to either disclose and vote, disclose and not vote or leave the Chamber.
· Is it likely I could be influenced by personal interest in carrying out my public duty?
· Would a fair and reasonable person believe I could be so influenced?
· Conflict of interest is closely tied to the layperson’s definition of ‘corruption’ – using public office for private gain.
· Important to consider public perceptions of whether you have a conflict of interest.
1st Do I have private interests affected by a matter I am officially involved in?
2nd Is my official role one of influence or perceived influence over the matter?
3rd Do my private interests conflict with my official role?
Whilst seeking advice is generally useful, the ultimate decision rests with the person concerned.
Officers of the following agencies are available during office hours to discuss the obligations placed on Councillors, officers and community committee members by various pieces of legislation, regulation and codes.
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Contact |
Phone |
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Website |
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Bega Valley Shire Council |
(02) 6499 2222 |
council@begavalley.nsw.gov.au |
www.begavalley.nsw.gov.au |
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ICAC |
8281 5999 Toll Free 1800 463 909 |
icac@icac.nsw.gov.au |
www.icac.nsw.gov.au |
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Office of Local Government |
(02) 4428 4100 |
olg@olg.nsw.gov.au |
http://www.olg.nsw.gov.au/ |
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NSW Ombudsman |
(02) 8286 1000 Toll Free 1800 451 524 |
nswombo@ombo.nsw.gov.au |
TO: The
General Manager
Bega Valley Shire Council
In accordance with the Council’s Code of Meeting Practice and the requirements of the Local Government Act and regulations or dispensation issued by the Office of Local Government I hereby disclose the following pecuniary interests and/or non-pecuniary conflict of interests at the meeting as indicated below:
Ordinary meeting held on _____ / _____ / 20___
dd mm yy
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Item no & subject |
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Interest (tick one) |
Pecuniary interest Non-pecuniary conflict of interest |
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* Nature of interest |
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If Non-pecuniary (tick one) |
Disclose & vote Disclose & not vote Leave chamber |
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Item no & subject |
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Interest (tick one) |
Pecuniary interest Non-pecuniary conflict of interest |
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* Nature of interest |
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If Non-pecuniary (tick one) |
Disclose & vote Disclose & not vote Leave chamber |
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Signed |
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Print Name |
Councillor |
* Note: Under the provisions of Section 451(1) of the Local Government Act 1993 (pecuniary interests) and Part 6.11 of the Model Code of Conduct prescribed by the Local Government (Discipline) Regulation 2004 (conflict of interests) it is necessary for you to disclose the nature of the interest when making a disclosure of a pecuniary interest or a non-pecuniary conflict of interest at a meeting.
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Council |
26 November 2014 |
I would like to commence by acknowledging, on behalf of Bega Valley Shire Council the Traditional Custodians of the lands and waters of the Shire – the people of Yuin nation and show our respect to elders past and present.
Recommendation
That the Minutes of the Ordinary Meeting held on 12 November 2014 as circulated, be taken as read and confirmed.
Pecuniary, Non-Pecuniary and Political Donation Disclosures to be declared and tabled.
That the Ordinary meeting of the Council be adjourned for the purpose of dealing with staff reports to Standing Committees.
In accordance with Council’s Code of Meeting Practice, this section of the agenda will be chaired by Cr Ftizpatrick.
Nil Reports
In accordance with Council’s Code of Meeting Practice , this section of the agenda will be chaired by Cr Tapscott.
Nil Reports
In accordance with Council’s Code of Meeting Practice, this section of the agenda will be chaired by Cr McBain.
Nil Reports
In accordance with Council’s Code of Meeting Practice, this section of the agenda will be chaired by Cr Taylor.
Nil Reports
In accordance with Council’s Code of Meeting Practice, this section of the agenda will be chaired by Cr Mawhinney
12.1 2013 -14 Annual Report for publishing.................................................................................... 10 .
In accordance with Council’s Code of Meeting Practice, this section of the agenda will be chaired by Cr Hughes
13.1 Presentation of Audited Financial Statements for the year ended 30 June 2014.............. 15
13.2 Quarterly Budget Review Statement (QBRS) at 30 June 2014................................................ 23
13.3 Quarterly Review Budget Statement (QBRS) at September 2014........................................ 33.
That all motions recorded in the Standing Committees, including votes for and against, and acknowledging declarations of interest already made, be adopted in by the Ordinary Council meeting.
Council |
26 November 2014 |
In accordance with Council’s Code of Meeting Practice (2011), this section of the agenda will be chaired by Cr Mawhinney.
12.1 2013 -14 Annual Report for publishing............................................................... 10
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Council 26 November 2014 |
Item 12.1 |
Council’s 2013-14 Annual Report is presented for the information of Councillors. The report is required to be lodged with the Office of Local Government by 30 November 2014
General Manager
Each year Council is required to produce a comprehensive annual report that provides details on the organisation’s activities and finances over the period of the previous financial year. The Annual Report is one of the key points of accountability between Council and our community. Under the Integrated Planning and Reporting framework, the Annual Report focuses on Council’s achievements towards the Community Strategic Planning framework, and also includes some information that is prescribed by the Local Government (General) Regulation 2005. Council’s Audited Financial Report and itemised update against the Operational Plan are provided as attachments to the Annual Report. The NSW Office of Local Government provides guidelines for the development of the Annual Report and requires a copy of the report for its records
For the purposes of section 428 (4) (b) of the Act, an annual report of a council is to include the following information:
§ Details (including the purpose) of overseas visits undertaken during the year by councillors, council staff or other persons while representing the council (including visits sponsored by other organisations).
§ Details of the total cost during the year of the payment of the expenses of, and the provision of facilities to, councillors in relation to their civic functions (as paid by the council, reimbursed to the councillor or reconciled with the councillor), including separate details on the total cost of each of the following:
§ the provision during the year of dedicated office equipment allocated to councillors on a personal basis, such as laptop computers, mobile telephones and landline telephones and facsimile machines installed in councillors’ homes (including equipment and line rental costs and internet access costs but not including call costs),
§ telephone calls made by councillors, including calls made from mobile telephones provided by the council and from landline telephones and facsimile services installed in councillors’ homes,
§ the attendance of councillors at conferences and seminars,
§ the training of councillors and the provision of skill development for councillors,
§ interstate visits undertaken during the year by councillors while representing the council, including the cost of transport, the cost of accommodation and other out-of-pocket travelling expenses,
§ overseas visits undertaken during the year by councillors while representing the council, including the cost of transport, the cost of accommodation and other out-of-pocket travelling expenses,
§ the expenses of any spouse, partner (whether of the same or the opposite sex) or other person who accompanied a councillor in the performance of his or her civic functions, being expenses payable in accordance with the Guidelines for the payment of expenses and the provision of facilities for Mayors and Councillors for Local Councils in NSW prepared by the Director-General from time to time,
§ expenses involved in the provision of care for a child of, or an immediate family member of, a councillor, to allow the councillor to undertake his or her civic functions.
§ Details of each contract awarded by the council during that year (whether as a result of tender or otherwise) other than:
§ employment contracts (that is, contracts of service but not contracts for services), and
§ contracts for less than $150,000 or such other amount as may be prescribed by the regulations, including the name of the contractor, the nature of the goods or services supplied by the contractor and the total amount payable to the contractor under the contract.
§ A summary of the amounts incurred by the council during the year in relation to legal proceedings taken by or against the council (including amounts, costs and expenses paid or received by way of out of court settlements, other than those the terms of which are not to be disclosed) and a summary of the state of progress of each legal proceeding and (if it has been finalised) the result.
§ Details or a summary (as required by section 67 (3) of the Act) of resolutions made during that year under section 67 of the Act concerning work carried out on private land and details or a summary of such work if the cost of the work has been fully or partly subsidised by the council, together with a statement of the total amount by which the council has subsidised any such work during that year.
§ The total amount contributed or otherwise granted under section 356 of the Act.
§ A statement of all external bodies that during that year exercised functions delegated by the council,
§ A statement of all corporations, partnerships, trusts, joint ventures, syndicates or other bodies (whether or not incorporated) in which the council (whether alone or in conjunction with other councils) held a controlling interest during that year,
§ A statement of all corporations, partnerships, trusts, joint ventures, syndicates or other bodies (whether or not incorporated) in which the council participated during that year,
§ A statement of the activities undertaken by the council during that year to implement its equal employment opportunity management plan.
§ A statement of the total remuneration comprised in the remuneration package of the general manager during the year that is to include the total of the following:
§ the total value of the salary component of the package,
§ the total amount of any bonus payments, performance payments or other payments made to the general manager that do not form part of the salary component of the general manager,
§ the total amount payable by the council by way of the employer’s contribution or salary sacrifice to any superannuation scheme to which the general manager may be a contributor,
§ the total value of any non-cash benefits for which the general manager may elect under the package,
§ the total amount payable by the council by way of fringe benefits tax for any such non-cash benefits.
§ A statement of the total remuneration comprised in the remuneration packages of all senior staff members (other than the general manager) employed during the year, expressed as the total remuneration of all the senior staff members concerned (not of the individual senior staff members) and including totals of each of the following:
§ the total of the values of the salary components of their packages,
§ the total amount of any bonus payments, performance payments or other payments made to them that do not form part of the salary components of their packages,
§ the total amount payable by the council by way of the employer’s contribution or salary sacrifice to any superannuation scheme to which any of them may be a contributor,
§ the total value of any non-cash benefits for which any of them may elect under the package,
§ the total amount payable by the council by way of fringe benefits tax for any such non-cash benefits.
§ If the council has levied an annual charge for stormwater management services-a statement detailing the stormwater management services provided by the council during that year,
§ If the council has levied an annual charge for coastal protection services-a statement detailing the coastal protection services provided by the council during that year,
§ A detailed statement, prepared in accordance with such guidelines as may be issued by the Director-General from time to time, of the council’s activities during the year in relation to enforcing, and ensuring compliance with, the provisions of the Companion Animals Act 1998 and the regulations under that Act.
Development, design and printing of 2013-14 Annual Report has utilised in house resources only.
2013-14 Annual Report has been prepared to comply with the legislative requirements and to overview the achievements against the 2013-14 operational plan. The annual report is to be provided to the Office of the Local Government by 30 November 2014. It will also be published on the Council’s website.
Nil
RecommendationThat the 2013-14 Annual Report be endorsed for publishing on Council website, provision of hard copies to library branches and lodged with the Office of Local Government. |
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Council |
26 November 2014 |
In accordance with Council’s Code of Meeting Practice (2011), this section of the agenda will be chaired by Cr Hughes.
13.1 Presentation of Audited Financial Statements for the year ended 30 June 2014 15
13.2 Quarterly Budget Review Statement (QBRS) at 30 June 2014........................... 23
13.3 Quarterly Review Budget Statement (QBRS) at September 2014...................... 33
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Council 26 November 2014 |
Item 13.1 |
13.1. Presentation of Audited Financial Statements for the year ended 30 June 2014
This report presents the draft financial statements to Council to be confirmed by the presentation of the audited financial statements to Council on 26th November 2014.
Group Manager Strategy and Business Services
Issues
Financial
Council has achieved an operating result of ($1,951k) across all Funds (General, Water, and Sewer).
|
Fund |
2014 |
2013 |
% |
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General |
-$1,247 |
$3,586 |
-135% |
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Water |
-$590 |
-$1,887 |
-69% |
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Sewer |
-$114 |
-$1,188 |
-90% |
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Total |
-$1,951 |
$511 |
-482% |
This operating deficit is attributable to the return of Financial Assistance Grant (‘FAG’) to annual payment. This reversion consequently decreased the FAG revenue by $3,238k compared to last financial year. To be clear, the result is an operating deficit, not a cash deficit. Cash position of Council is sound as the prior year extra instalments were held in internal restriction and have now decreased to nil.
There was advance payment of FAG for $3.454M that was recognised as revenue in the prior year. Had this amount been recognised as revenue in 2014 FY, the result would have been a surplus of $1.503M.
Operating Revenues:
Council’s operating revenues have decreased by 9% in 2014. Council had forecast a reduction in operating revenues in its budget and this decrease was less than expected. The decrease can be largely attributed to the Operating Grants and Contributions. The main contributors being FAG and other grants associated with flood restoration works. Council is forecasting a general reduction in operating and capital grants over the short to midterm with the change in Government and the longer term effects of the Global Financial Crisis.
Council’s revenues detailed as follows:
|
Item |
2014 |
2013 |
$ Mvmt |
% |
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Rates & Annual Charges |
$43,310 |
$41,281 |
$2,029 |
5% |
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Operating Grants & Contributions |
$11,026 |
$23,289 |
-$12,263 |
-53% |
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User Charges |
$14,213 |
$12,111 |
$2,102 |
17% |
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Investment Returns |
$2,318 |
$2,665 |
-$347 |
-13% |
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Sale of Assets & Other |
$739 |
$644 |
$95 |
15% |
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Capital Grants |
$4,550 |
$3,627 |
$923 |
25% |
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|
$76,156 |
$83,617 |
-$7,461 |
-9% |
Operating Expenditure:
Operating Expenses decreased by 6% in the 2014 financial year.
The major contributor to the decrease is completion of flood restoration works.
Balance Sheet:
Overall Council saw an improvement to its balance sheet of $7.7M. This was mainly attributable to net increase in Infrastructure, Property, Plant and Equipment of $16.3M with a decrease in Cash and Cash Equivalents of $6M
There were no asset revaluations in 2014.
Financial Ratios:
Council is required to report the following ratios to the Office of Local Government:
Operating Performance Ratio | Benchmark > 0%
This ratio measures Council’s achievement of containing operating expenditure within operating revenue.
Councils Operating Performance Ratio has been severely impacted in 2014 due to the Federal Government not advancing the Financial Assistance Grant in 2014. This has reduced councils operating revenue.
Own Source Operating Revenue Ratio | Benchmark > 60%
This ratio measures fiscal flexibility. It is the degree of reliance on external funding sources such as operating grants & contributions.
Council is well above the benchmark for own source revenue. The 2014 result was improved by the lower reported Financial Assistance Grant revenue in 2014. An integral part of Council’s adopted Long Term Financial Plan is to attempt to increase own source revenues. Unfortunately as the State and Federal Government reduce the number and value of grants available to Local Government this ratio starts to show Councils having to rely on own source revenue to fund their works programs.
Unrestricted Current Ratio | Benchmark >1.5X
The ratio measures the adequacy of working capital and its ability to satisfy obligations in the short term for the unrestricted activities of Council.
Council is well above the industry benchmark of 1.5 X. This indicates a strong capacity to pay its debts as and when they fall due. The decline in the ratio is direct result of Councils strategic planning and the work put into the reduction of Councils infrastructure backlog over time. We anticipate this ratio continuing to decline as reserves are drawn down to fund capital works programs.
Debt Service Cover Ratio | Benchmark > 2.0X
The ratio measures the availability of operating cash to service debt including interest, principal and lease payments.
Council's debt service ratio is in strong position. Council has sufficient fund to meet its debt obligation. Council holds approximately $35.7M in debt across all three funds. Councils Long Term Financial Plan outlines that Council will see draw down more debt to enable Council to reduce infrastructure backlog and construct some community priority projects while still remaining below the benchmark.
Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage | Benchmark < 5%
This ratio assesses the impact of uncollected rates and annual charges on Council’s liquidity and the adequacy of recovery efforts.
Outstanding Rates, Charges and fees are 4.14% which is within industry benchmark of 5%. Council has strong debt collection procedures in place to collect its rates and charges.
Council has managed to maintain an outstanding collection percentage close to the Office of Local Government benchmark for a number of years now. It is critical that Council keep this ratio as low as possible to aid with Councils cash flow. For example, allowing this ratio to increase by 1% will result in more than $500,000 that Council will not collect and by extension would not be able to utilise to resource works in the community. This could either lead to the work not being performed or alternate funding arrangement being made, such as borrowings, increased fees, etc. It is worth noting that Council has seen its recovery costs increase from approximately $40,000 in 2009 to approximately $290,000 in 2014. These costs are passed onto the ratepayers that Councils has had to instigate collection on. No costs are passed onto the general rate base.
Cash Expense Cover Ratio
This liquidity ratio indicates the number of months a council can continue paying for its immediate expenses without additional cash inflow.
Council again has a very strong liquidity ratio and is well above the benchmark.
Services:
While the financial statements provide a high level view of Council as an entity, it is worth noting that while a large portion of Councils finances go to maintain the infrastructure that we use on a daily basis, there is a significant portion of Councils revenues that provide many services back to the community such as:
§ $9.6M on Environmental Management projects.
§ $4.9M on Community Support projects.
§ $1.6M on Economic Development projects.
Out of total expense of $100M (including capital), $26M was spent in maintenance and operation of community assets, $31M in capital projects, $5M in repayment of borrowings and $38M in provision of services to community.
The chart below illustrates 2015 operating expenditure
$ per function with comparative.
Council’s financial results for the 2014 financial year are indicative of the approach Council has taken over the past few years. The adoption of the Community Strategic Plan, the Asset Management Plans, and the Long Term Financial Plan has allowed Council to set out a pathway for the short to mid-term horizon. The results as reported for 2014 illustrate that Council is progressing well. All indicators are satisfactory and Councils finances remain in a healthy position.
Council has also undergone several internal and external audits during the 2014 financial year. All of these reviews have indicated Council is in a stable and sound financial position.
Click here to view the Financial Statements for the year ended 30 June 2014
Attachments
Nil
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1. That Council accept the Auditors presentation and report provided to Council on November 26, 2014 relating to the audited Financial Statements of Bega Valley Shire Council for the 2014 financial year. 2. That Council note the contents of the Financial Statements for the 2014 financial year. |
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Council 26 November 2014 |
Item 13.2 |
13.2. Quarterly Budget Review Statement (QBRS) at 30 June 2014
Budget review statements are prepared and presented to Council quarterly in accordance with Section 203 of the Local Government (General) Regulations 2005.
Group Manager Strategy and Business Services
Background
Under the Integrated Planning and Reporting (IPR) guidelines, it is not mandatory to present a Quarterly Budget Review Statement (QBRS) for the June quarter. However, it is considered a QBRS offers more detailed and direct information that can assist the community in understanding Councils financial position. The QBRS will be published on Councils website for the community once adopted:
Click here to access the Quarterly Review Budget Statement
Issues
Strategic
In order to make it clearer for Councillors and the public, the following graphic depicts the flow of financial information in any given financial year and how the various financial documents interact.
This chart illustrates that:
1. The financial statements are true audited records for the financial year. These results are used to “reset” the Long Term Financial plan (LTFP).
2. The “reset” LTFP plan is then remapped with moving works schedules and is confirmed to still be in a sustainable position. The LTFP is presented to Councillors at this time for adoption. At this time Councillors can request changes in direction of staff. The LTFP is adopted in January/February.
3. The adopted LTFP plan then is expanded into the relevant years’ operating budget. It is adopted by Council in March/April.
4. The Quarterly Budget Review Statement process occurs throughout the financial year at the end of each quarter. Variances are noted and adopted by Councils.
5. The cycle then draws to a close as the financial year figures are closed, audited and presented to Council
6. Then cycle starts again…
Each stage feeds information into the next until we have a very tight strategic finance frame work. There are a range of other statutory documents that Council adopts each year, this diagram only reflects the financial documents.
Legal
Clause 203 of the Local Government (General) Regulations 2005 states:
Budget review statements and revision of estimates
1. Not later than 2 months after the end of each quarter (except the June quarter), the responsible accounting officer of a council must prepare and submit to the council a budget review statement that shows, by reference to the estimate of income and expenditure set out in the statement of the council’s revenue policy included in the operational plan for the relevant year, a revised estimate of the income and expenditure for that year.
2. A budget review statement must include or be accompanied by:
a) A report as to whether or not the responsible accounting officer believes that the statement indicates that the financial position of the council is satisfactory, having regard to the original estimate of income and expenditure, and
b) If that position is unsatisfactory, recommendations for remedial action.
c) A budget review statement must also include any information required by the Code to be included in such a statement.
Financial
As noted above, a June QBRS is not mandatory, most of the information is already prepared and presented within Council’s annual financial statements. As such, this report does not contain information that is reported within the financial statements, but instead focuses on the non-operating items that are not covered in the Financial Statement.
Council’s budget result for the 2014 financial year is positive. While there are specific issues that need to be addressed which will be covered in more detail below, the overall picture for Council is positive.
§ Council’s achieved $1.98M less in operating revenue compared to original budget. This is good result considering Financial Assistance Grant (‘FAG’) revenue decreased by $3.24M. If FAG was taken out of the equation, it would mean Council’s operating revenue increased by $1.26M.
§ Council expended $712K more in operating costs than it predicted at the start of the financial year (excluding depreciation and other non-cash expenses). Most of which can be attributable to prior period revotes of $3.3M out of which $2.2M was fully spent.
§ Operating grants compared to original budget was less by $3.19M which is mainly attributable to decrease in FAG revenue, while capital grants received were $435K more than predicted.
§ There was a net reduction of $5.6M in the reserves which compares to $6.1M in the original budget. Major reserve movements were:
§ FAG Advance Payment – $3,454K
§ Waste Management – $1,754K
§ Plant Replacement – $926K
§ Infrastructure Replacement – $905K
§ Property Development (Eden Port & Littleton Gardens) – $903K
§ Airport – $531K
§ There was a 8% ($2.065M) increase in employment cost which can be attributable to
§ Take-up of Sapphire Aquatic Centre with employment cost of around $700K
§ Overtime cost of $865K ($700K in Operating | 165K in Capital) *noting that in cash terms these costs were incorporated into the works budgets for the particular projects affected.
§ Rollout of Cadets and Trainee program of worth around $500K
Council still holds a healthy working capital balance. The table below shows the working capital balances for each of Councils funds at the 30th June 2014.
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General Fund |
$4.13M |
|
Water Fund |
$2.37M |
|
Sewer Fund |
$2.51M |
|
Total |
$9.01M |
Council’s restrictions (reserves) totalled $51.8M at the conclusion of the 2014 financial year. The following chart illustrates the current value of Councils restrictions. Councils LTFP outline how those restrictions will be utilised over time.
Operationally Council performed reasonably well in its individual functions. Council’s operating budget is broken into functions which are managed by Council staff. Council has 23 designated functions across its five community strategic plan themes. Of those 23, 19 were deemed to have performed better than budgeted. The remaining four were deemed to have performed less than expected. Council’s senior management has met on these functions to discuss why the results have occurred and more importantly how to avoid them happening into the future.
The following charts Councils budget performance against actuals over the course of the financial year.
The following charts show the Council functions and their performance. The functions marked red have explanations included in this report for Councils consideration.
Community Relations and Leisure
|
Function outside of budget |
Reason |
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Leisure |
Leisure includes service areas of Swimming Pools, Sportsgrounds, Park and Beaches.
The issue in this function relating to Sportsgrounds were overruns in Maintenance and Operations of $200K as well as non-completion of planned capital projects at the same time take-up of unplanned capital projects.
Issues relating to swimming pools were over-estimation of fees by $300K and unbudgeted operational costs of around $300K in order to have the 6 pools made ready for opening.
There were similar overrun issues in parks with Maintenance and Operations being overestimated budget by $150K.
The reason of these overrun can be attributed to a lack of robust AMP and LTFP funding applied. These issues will be rectified in future years with the revised plans and resourcing strategy. |
Planning and Environment
Strategy and Business Services
|
Function outside of budget |
Reason |
|
Strategy and Business Services
|
Strategy and Business Services includes the General Purpose funding for Council that includes the Rates Revenue and Untied Grants. The budgeted revenue for FAG was not met; this was due to FAG reverting to annual payments in 2014 financial year.
This did not result in a cash deficit. Cash position of Council is sound as the prior year extra instalments were held in internal restriction and have now decreased to nil. |
Transport and Utilities
|
Function outside of budget |
Reason |
|
Transport Services |
Service areas under Transport Services are Roads and Bridges.
There were overruns in capital expenses for Bridges to a value of $170K. This was largely due to the heritage works undertaken on Beauty Point Bridge.
Whereas for Roads, maintenance expenses was $200K over the budgeted value. |
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Emergency Services |
The overrun in Emergency Services is in relation to council related Hazard Reduction works which was unbudgeted by $80K.
In addition, there was also recognition of loss in regards to donated asset to SES of a value of around $65K. |
Organisation Development and Governance
Council has limited revotes for the 2014 financial year. Rather than revoting the works from one year to the next, under the Long Term Financial planning framework Council has begun adopted, we place the funds back into reserve and we reset the AMP and LTFP to account for the unfinished work. This then results in the reserves being called upon to fund that work in the relevant year that the job is scheduled for.
The only amounts revoted relate to Unspent Grants and Council Contribution towards those projects. The total amount
|
Project |
Cost - $ |
|
Bus Shelters |
109K |
|
Community Programs |
193K |
|
Cycleways |
34K |
|
Environmental Management |
416K |
|
Health |
12K |
|
Library |
308K |
|
LPMA Crown Projects |
123K |
|
Planning |
63K |
|
Sports |
50K |
|
Weeds |
29K |
Conclusion
Council’s 2014 end of year position has concluded favourably compared to budget. All surplus funds have been moved to Council’s reserves. All revoted projects have been noted and will be tracked through the 2014 financial year QBRS reports.
In order to maintain a sound financial performance for future years, we need to put processes in place to rectify issues identified in this report. Some of the proposed action items are:
§ Procedures around budgeting and monitoring of employment costs including subsidiary budgeting and tracking against actuals quarterly along with mechanism to report on overtimes.
§ Refining of Asset Management Plans (AMPs) and having processes in place to report on its progress.
Attachments
Nil
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1. That the Quarterly Budget Review Statement (QBRS) for June 2014 be adopted and the votes adjusted by those values as reported in the variance column 2. That Council adopt the Reserve schedule for 2014. Council note that the updated reserve balances will be incorporated into the September QBRS due to Council in November. 3. That Council adopt the Revote schedule for 2014. Council note that the updated revotes will be incorporated into the September QBRS also reported to this meeting. |
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Council 26 November 2014 |
Item 13.3 |
13.3. Quarterly Review Budget Statement (QBRS) at September 2014
Budget review statements are prepared and presented to Council quarterly in
accordance with Section 203 of the Local Government (General) Regulations 2005.
Group Manager Strategy and Business Services
Background
Under the Integrated Planning and Reporting (IPR) guidelines, a quarterly budget review statement (QBRS) must be presented to Council for each financial quarter.
The QBRS, due to its size has been distributed to Councillors electronically and if requested, in hardcopy. The electronic version has been placed on Councils website for public access at:
Click here to view the Quarterly Budget Review Statement for September 2014
The QBRS is presented in a summary format which reflects the Long Term Financial Plan. Each function of Council is presented individually as is a summary page for each theme. The report also shows a range of management information for each Function, such as:
§ Income Progress graphs: These graphs illustrate how each function is progressing with their revenue estimates. The overall graph illustrates the cumulative progress of the function, while the monthly graph shows progress month by month.
§ Reserves table: This table outlines cash reserves that are linked to that particular function and their movements throughout the financial year.
§ Expense Progress Graphs: These graphs illustrate how each function is progressing with their expenditure estimates. The overall graph illustrates the cumulative progress of the function, while the monthly graph shows progress month by month.
§ Revotes Table: This table tracks the progress of the revotes from the 2014 financial year.
It is the intent of this report to provide information to the users of the QBRS report in order to illustrate the financial performance of each particular function of Council.
Council staff retain the ability to enquire, transact, and report on the detailed General Ledger, which includes budgets. If there are specific questions relating to detailed transactional information, staff can provide answers to those questions.
Issues
Legal
Clause 203 of the Local Government (General) Regulations 2005 states:
Budget review statements and revision of estimates
1. Not later than 2 months after the end of each quarter (except the June quarter), the responsible accounting officer of a council must prepare and submit to the council a budget review statement that shows, by reference to the estimate of income and expenditure set out in the statement of the council’s revenue policy included in the operational plan for the relevant year, a revised estimate of the income and expenditure for that year.
2. A budget review statement must include or be accompanied by:
a. A report as to whether or not the responsible accounting officer believes that the statement indicates that the financial position of the council is satisfactory, having regard to the original estimate of income and expenditure, and
b. If that position is unsatisfactory, recommendations for remedial action.
c. A budget review statement must also include any information required by the Code to be included in such a statement.
Financial
The QBRS reports the detailed variances for the September 2014 quarter. The September QBRS generally only includes the revotes from the preceding year as variances. Revotes are those works committed to in the preceding year that were not completed. The works are shifted into the current year with an increase in the relevant expenditure lines and a corresponding increase in funding from the preceding year.
The value of revotes brought forward from the 2014 financial year equal $1.4M. There are a number of other commitments transferred from reserves, but the net impact is nil. These transfers relate to unspent grants and related commitments from 2014 being brought forward into 2015.
There are no major or significant variances to report to Council. A more detailed analysis is located within the QBRS attachment.
A number of variances relate to Council undertaking an organisational restructure which commenced on July 1, 2014. These movements relate to functions moving among groups. Not net impacts have occurred.
As at the end of September 2014, Council held $59M in cash and investments – the bulk of which remain restricted for use with planned infrastructure or projects preconditioned by loans, grants or development contributions.
As per Council’s policy, the QBRS reflects the budget in a balanced position and maintains working capital at adopted levels. All net movements are factored through the movement to and from reserves, including anticipated transfers to asset, ELE and property reserves at year end.
Conclusion
Council’s September 2014 QBRS has been presented to Council. Council financial performance is healthy and within the operating budget set by Council in June 2014.
Attachments
Nil
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1. That Council note and endorse the September 2014 Quarterly Budget Review Statement. 2. That Council adopt the variances, in this instance being revotes from the 2014 financial year, to its operating budget as outlined in the QBRS. 3. That Council place the QBRS for September 2014 on its website for public information. |
