2017-07-17 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA                                                  17 JULY 2017


RECOMMENDATION
That Council note the report by the Director Corporate Services to the General Committee
Meeting dated 17 July 2017 providing results of interim 2016/17 financial performance against
budget.


REPORT
Operating Position

Council’s Financial Sustainability Policy requires that an operating surplus be maintained each
year over the life of Council’s ten-year financial plan. An operating surplus is achieved when
operating revenues are greater than operating expenses (including depreciation and interest on
debt). An operating surplus means that the community’s financial capital (with Council as
steward) does not degrade and that sufficient funds are being collected to fund both business as
usual operations and existing asset maintenance and replacement.

Council adopts a conservative approach to forecasting its budget to ensure that any unexpected
financial expenditure shocks during the year can be absorbed. This approach also ensures that
annual rate increases can be effectively managed taking into account community affordability.

This approach is evident with the interim operating surplus position of $7.9 million against the
forecast budget of $594k. This surplus will however reduce once year-end expenditure accruals
are recognised. Operating revenue and expenditure variances against budget are highlighted
below.

Operating Revenue

Council has received 104% ($94 million) of its operating revenue budget ($90 million).
Commentary on each revenue category is provided below:
  Rates and Levies – $62.4m (100%) of the annual budget of $62.3m has been earned, with
    general rates received for the year above budget by $59k.
  Fees and Charges – Fees and charges earned ($5.6m) has exceeded the full year budget
    ($4.9m). Development related fees ($408k), local law infringements ($137k), property
    change of ownership and search fees ($106k), and land use permit fees ($71k) all
    exceeded budget. Cemetery fees ($72k) and plumbing fees ($36k) have failed to meet full
    year budget targets. It is expected that year-end adjustments for unearned revenue will
    reduce the actual fees and charges revenue (not expected to be materially significant).
   Interest Received – Revenue received of $4.8m exceeded the full year budget ($4.4
     million).
   Dividend and Tax – Payments received from Unitywater are in line with budget.
   Other Revenue – Other revenue received (sales, services, rental, other) of $11.4m totals
     114% of the $10m annual budget. Ringtail Creek product sales ($350k), waste landfill fees
     and recyclable sales ($248k), holiday park fees ($237k), Civil Operations recovery from
     capital works ($222k), lease revenue ($171k), Noosa Aquatic Centre ($154k), The J ($59k),
     local laws SPER fees ($49k), and Noosa Leisure Centre activities ($35k) all outperformed
     budget.
   Operating Grants, Subsidies and Contributions – Revenues received of $6.3m totals 112%
     of the $5.6m full year budget. The additional $700k received relates primarily to 50% of the
     2017/18 financial assistance grant paid in June by the Australian government ($1.1 million),
     offset by the $480k Translink operating contribution for the electric bus trial no longer
     available.



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