2020-04-30 Ordinary Meeting Agenda

ORDINARY MEETING AGENDA                                30 APRIL 2020


Category                          Comments
Net Financial Liabilities Ratio      Intent: Outlines the level that net
                                      Council debt can be serviced by
                                      operating revenues. A ratio
                                      below zero implies that liabilities
                                      are less than cash (and other
                                      current assets) and there is
                                      adequate borrowing capacity
                                      available if needed.
                                     Target: less than 60%
                                     Target Date: Ongoing
                                     Result: (40.1%)
                                     Comment: Council has low debt
                                      levels and strong cash holdings
                                      reflected in the YTD result.
                                      COVID-19 pandemic financial
                                      impacts through to 30 June 2020
                                      will reduce the ratio performance
                                      as current assets reduce
Investment Return                    Intent:   Ensure     appropriate
                                      return on investment yield for
                                      cash at bank.
                                     Target: 0.25% above current
                                      Bloomberg commonwealth 10
                                      year bond rate yield (March =
                                      1.18%)
                                     Target Date: Ongoing
                                     Result: 1.83%
                                     Comment: Regardless of the
                                      steady decline in long term bond
                                      rates (due to current economic
                                      conditions),            Council’s
                                      investment return still remains
                                      above target
Rates in Arrears                     Intent: Ensuring that the amount
                                      of     unpaid     rates    remains
                                      sustainable and does not
                                      negatively impact cash flows and
                                      ability to provide services
                                     Target: 5% industry benchmark
                                     Target Date: Ongoing
                                     Result: 8.3%
                                     Comment: Ratepayer payment
                                      plans and external debt recovery
                                      measures for rate arrears have
                                      been put on hold due to the
                                      COVID-19 pandemic. The rate
                                      arrears ratio will likely increase
                                      as the economic impacts of the
                                      pandemic are realised over the
                                      next 12-24 months. Analysis is
                                      currently        occurring       to
                                      understand                financial
                                      sustainability implications




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