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07 Financial Performance Report - Jan 2025
GENERAL COMMITTEE MEETING 17 FEBRUARY 2025
8.2 FINANCIAL PERFORMANCE REPORT – JANUARY 2025
Author Financial Services Manager, Pauline Coles
Financial Services | Corporate Services Department
Index ECM/ Subject / 22.09 – Monthly Financial Performance Report
Attachments 1. Attachment 1 Statement of Income and Expenditure - Jan 2025
2. Attachment 2 Statement of Financial Position - Jan 2025
3. Attachment 3 Statement of Cashflows - Jan 2025
4. Attachment 4 Key Materials & Services Expenditure - Jan 2025
EXECUTIVE SUMMARY
Year-to-date (YTD) performance against current budget as at 31 January 2025 is positive with
operating revenues outperforming forecast and operating expenditure under forecast YTD.
Capital revenues are above forecast with capital expenditure behind of forecast due to delays
and rescheduled timing of project delivery.
The budget position presented in this report and attachments reflects Budget Review 2 (BR2),
which was adopted by Council in January 2025 Council meeting.
YTD Financial Performance Summary
Budget Actual Variance Variance
Status
$m $m $m %
Operating Revenue $123.9 $125.5 $1.6 1.3% On Track
Operating Expense $78.4 $77.6 $0.8 1.0% On Track
Operating Position $45.5 $47.9 $2.4
Capital Revenue $36.1 $45.1 $9.0 14.7% On Track
Capital Expenditure* $78.6 $50.2 $28.4 36.2% Behind Budget
* Reflects constructed assets and intangibles only (excludes contributed assets).
The $2.4 million full year positive interim operating variance comprises $1.6 million general
operating surplus from activities that are funded through Council’s general rate, regulatory fees
and sales of goods and services; as well an additional $0.7 million from waste operations and
$0.1 million from holiday park operations. Any unspent levy and separate charge funds are
constrained in reserve for future use where they are not fully utilised in a given year.
Budget Actual Variance
Item YTD YTD YTD
$m $m $m
General business operating position (unconstrained funds) $32.6 $34.2 $1.6
Commercial operations (constrained funds) * $9.7 $10.5 $0.8
Unspent levies (constrained funds) $3.2 $3.2 $0.0
Total Council Operating Position $45.5 $47.9 $2.4
* Includes Waste and Holiday Park operations as shown in the table below
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025
Council elects to apply National Competition Policy (NCP) reforms to its Waste Management and
Holiday Parks which provides greater transparency and assists with removing anti-competitive
conduct and ensures the best allocation of Councils limited resources. A summary of the YTD
operational performance of these business activities are outlined below.
Waste Operations Holiday Parks
Budget Actual Variance Budget Actual Variance
YTD YTD YTD YTD YTD YTD
$m $m $m $m $m $m
Revenue 22.3 22.5 0.2 2.7 2.9 0.2
Expenditure 13.1 12.6 0.5 2.2 2.3 (0.1)
Net Operating Position 9.2 9.9 0.7 0.5 0.6 0.1
Financial statements including Statement of Income & Expenditure, Statement of Financial Position
(balance sheet), and Statement of Cash Flows are included as attachments for information for
Council.
Figure 1: Actual Performance Compared to Budget
Council’s performance against key measures of financial sustainability has been calculated as at
January 2025. These statutory indicators enable the reader to assess Council’s success in managing
its budget, cash and debt as well as undertaking sustainable asset management. The table below
contains a snapshot of a number of key measures, with full detail included in the report.
YTD Measures of Financial Sustainability
Current
Target Actual YTD Status
Budget
Operating Surplus Ratio 0-10% -0.1% 38.2% On Track
Net Financial Liabilities Ratio <60% -7.0% -58.2% On Track
Cash Cover Ratio 3 months 9.5 months 11.5 months On Track
Asset Sustainability Ratio > 90% 116.6% 42.8% Behind Budget
RECOMMENDATION
That Council note the report by the Financial Services Manager to the General Committee
Meeting dated 17 February 2025 outlining the January 2025 year to date financial performance
against budget, including changes to the financial performance report with the inclusion of key
financial sustainability indicators.
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025
REPORT
Operating Revenue (YTD Benchmark 58.3%)
Council has received 88.9% ($125.5 million) of its operating revenue budget ($141.3 million).
Commentary on each revenue category is provided below.
Category Summary Comments
Rates and $95.5 million (101.3%) • Waste utility charges $212.9k above YTD budget
Levies of the annual budget of (101.52% or $17.3 million of $17.0 million annual
$94.3 million has been budget earned)
earned • General rate (net of discounts) $236.1k below
YTD budget (101.3% or $72.1 million of $71.2
million annual budget earned)
Fees and $6.6 million (60.1%) of • Building & Plumbing Compliance $127.2k above
Charges the annual budget of budget (62.3% or $1.6 million of $2.6 million
$10.9 million has been annual budget earned)
earned • Waste $58.6k above budget (152.1% or $86.6k
of $56.9k annual budget earned)
• Development Assessment $348.9k below
budget (55.9% or $2.0 million of $3.6 million
annual budget earned)
Sale of Goods $9.8 million (61.7%) of • Sports facility revenue $206.7k above budget
and Services the annual budget of (66.3% or $1.9 million of $2.9 million annual
$15.9 million has been budget earned)
earned • Holiday Park revenue $65.2k above budget
(66.9% or $2.9 million of $4.3 million annual
budget earned). Any revenue upside will be
generally offset by a corresponding increase in
associated operating costs.
Interest $3.7 million (105.4%) • Interest revenues have continued to track above
Received of the $3.6 million budget with investment in higher yielding term
annual budget has deposits maximising the return on surplus cash
been earned holdings. Cash holdings remain high due to the
advanced payment of grants & subsidies,
restricted levy balances, future provision
balances and delays in the delivery of the capital
works program.
Other Revenue $2.3 million (70.7%) of • Plant recharge revenue is $84.7k above budget
the $3.2 million due to internal plant being utilised for the delivery
annual budget has of disaster funded capital projects.
been earned • Royalty income from landfill gas $22.4k above
budget (88.5% or $51.5k of $58.1k annual
budget earned)
• Recoupment of Waste Bin (SULO) purchases
$35.6k above budget (63.9% or $66.0k of
$103.3k annual budget earned.
Operating $4.2 million (59.3%) of • Operating Grants and subsidies are in line with
Grants, the $7.1 million budget expectations at this stage of the year.
Subsidies annual budget has • $1.4 million of the FY 2025 financial assistance
been received grant allocation was received in July 2024. This
is a change from the previous approach of
prepaying part or all of the grant in the preceding
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025
Category Summary Comments
year. This prepayment approach had been
consistent over the past 7 years.
• Council has received notification of the approved
FY 2024/25 financial assistance grant allocation
which is less than budgeted. As such there is
potential for this to impact the FY 24/25 operating
position if payment of future years allocations are
not paid in the preceding year.
Unitywater On track • Unitywater distributions are fixed each year so
Distributions there is limited budget variance risk
Figure 2: Operating Revenue Position by Type (Excluding Rates)
Operating Expenditure (YTD Benchmark 58.3%)
Actual operating expenditure is currently 55.0% ($77.6 million) of the full year budget ($141.1
million). Detailed commentary for each expenditure category is provided below.
Category Summary Comments
Employee Costs $28.9 million (54.4%) of the • Expenditure for permanent staff salaries
annual budget of $53.1 and wages underspent ($1.3m) due to
million has been expended position vacancies and recoupment of YTD
vacancy dividend. This underspend is also
partially offset by additional spend on casual
staff and external labour hire ($946.6k).
• Training costs are on target (63.9% or
$246.6k of $386.1k annual budget spent)
Materials and $34.6 million (55.0%) of the • Civil Operations $341.8k above budget
Services $62.8 million annual budget (59.5% or $5.7 million of $9.5 million annual
has been expended. budget spent)
• Holiday Parks $104.0k above budget
(64.3% or $1.6 million of $2.6 million annual
budget spent)
• Disaster Management $60.5k above budget
(103.3% or $107.5k of $104.0k annual
budget spent)
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025
Category Summary Comments
• Waste Management $428.1 below budget
(51.7% or $7.7 million of $14.8 million
annual budget spent)
• Arts & Culture $131.1k below budget
(46.9% or $1.2 million of $2.6 million annual
budget spent)
• Property and facilities $94.4k below budget
(55.4% or $1.6 million of a $2.8 million
annual budget spent)
• Development Assessment $73.5k below
budget (65.7% or $862.6k of a $1.3 million
annual budget spent)
• Buildings and Facilities $56.8k below
budget (47.6% or $588.5k of a $1.2 million
annual budget spent)
Finance Costs Currently on track • Whilst existing loan borrowings are set with
fixed interest rates, any further RBA rate
rises will impact finance costs on new loan
borrowings. YTD underspend also relates
to the timing of drawdown of forecast
borrowings for FY 2025.
Depreciation Currently on track Nil
Other Expenses Currently on track Nil
Figure 3: Operating Expenditure Position by Type
Tourism and Economic Development Investment Summary
Council resolved to report on a monthly basis, investment details for tourism and economic
development. Tourism and economic development activity is funded through the general rates
revenue. Expenditure at 31 January 2025 is outlined below:
Expenditure YTD Budget YTD Actual Variance
$’000 $’000 $’000
Tourism Noosa Funding Agreement $2,520.0 $2,520.0 -
Economic Development $601.2 $571.1 $30.1
Total $1,918.8 $1,948.9 $30.1
All instalments payable under the Tourism Noosa agreement for the 2024-25 financial year have
been made. The Tourism Noosa agreement is due for renewal in June 2025.
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025 • Employee Costs are $32.0k below budget (50.3% or $329.3k of $654.6k annual budget spent) • Materials & Services are in line with budget at this stage of the year. Capital Revenue Year to date Capital revenue of $45.1 million received comprises cash contributions from developers ($0.7m) and capital grants ($44.5 million). Note that the timing of capital grant receipts are generally dependent on the timing of grant conditions and also capital delivery performance, and that the timing of the receipt of developer contributions (both cash and contributed) is unpredictable. Grants and subsidies are higher than prior years due to the receipt of funding from the Queensland Reconstruction Authority for reconstruction works relating to the Black Mountain landslip and several other flood impacted sites, which are currently under construction. Figure 6: Capital Revenue by Type Capital Program Actual capital expenditure (excluding commitments and disaster projects) is $14.8 million (YTD budget $24.9 million). Expenditure on disaster projects (excluding commitments) is $35.4 million (YTD budget $53.7 million). Detailed discussion of progress in the delivery of the capital works program is provided through a separate quarterly report by the infrastructure team. Figure 7: Capital Program Delivery Performance
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025 Cash Management and Investment Performance Total cash on hand at the end of January was $110.9 million. Included in this balance are funds held in trust and for restricted purposes (e.g. unexpended levy and grant funds), prepaid grants including the financial assistance grant, QRA disaster funding and other capital works grants, prepayment of Waste Levy subsidy (3 years), and unspent monies committed for funding capital projects which are underway and will continue during the financial year. The following pie charts present the mix of cash held at January 2025 by agency (graph on the left) and by credit risk rating (graph on the right). All funds have been invested in accordance with the Investment Policy and in consideration of the principles of ethical investment, preservation of capital, return on investment and counterparty thresholds. Figure 8: Closing Cash Held by Agency and Credit Rating The following chart monitors the 12 month trend on total cash and the agencies invested. To maximise the return on in its cash holdings Council has invested $30.5 million in higher yielding term deposits. These investments were made in line with Council’s Investment of Surplus Funds policy. Figure 9: 12 Month Trend of Cash Invested by Agency Measures of Financial Sustainability The following table incorporates a set of financial sustainability indicators to further assist in managing Council financial performance. There are no significant emerging risks regarding
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025
performance identified at this stage, however the delay in the delivery of the capital program
may impact Council’s asset sustainability and renewal targets.
Category Comments
Operating Surplus Ratio • Intent: Identifies the extent to
which revenues cover
operational expenses, to ensure
community equity is not
degraded
• Target: Greater than 0%
• Result: 38.2%
• Comment: The ratio is at the
second peak for the year
following the issue of rates in
January. This ratio will slowly
decline as expenditure on
operations occurs through to the
end of the financial year at 30
June 2025.
Cash Expense Cover • Intent: Indicates how long
council can continue paying its
day-to-day expenses from cash
at bank without needing
additional cash flows
• Target: > 3 months
• Result: 11.5 months
• Comment: Council is forecast to
remain above target for the
financial year. Business as usual
expenditure through to 30 June
2023 will continue to diminish
Council’s cash holdings, albeit
not below the target range of 3 –
6 months.
Cash balances include working
capital requirements and funding for
capital programs, unspent grant
monies paid in advance, Waste Levy
subsidy prepayments and QRA
advance payments for disaster
projects which are restricted for
specific purposes and inflate the
ratio.
Asset Sustainability Ratio • Intent: Measures the extent to
which assets are being replaced
as their condition degrades to
ensure service potential is
maintained
• Target: 80% of depreciation
budget spent on renewals
annually
• Result: 42.8% achieved,
however below forecast result
due to project delays and
scheduling.
• Comment: The ratio will
progressively increases each
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025
Category Comments
month as expenditure on
renewals occurs as part of the
capital works program. For
transparency QRA disaster
projects have been excluded
from the ratio
calculations. Should capital
works continue to fall forecast for
the remainder of the year this
may impact the achievement of
Council’s asset sustainability and
renewal targets
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%
• Result: -58.2%
• Comment: Council has low debt
levels and strong cash holdings.
The advance payment of rates,
grants and subsidies also inflates
the YTD actual outcome.
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 (4.47%)
• Result: 4.85%
• Comment: With higher-than-
normal cash balances due to
the advance payment of
grants and subsidies and a
delayed capital program,
combined with bond rates
remaining steady, Council has
invested surplus cash in
higher yielding term deposits
to maximise
returns. Council’s investment
returns remain above target.
Rates in Arrears • Intent: Ensuring that the amount
of unpaid rates remains
sustainable and does not
negatively impact cash flows
• Target: 5% industry benchmark
• Result: 5.1%
• Comment: Rates arrears are in
line with performance for the
previous 6 and 12 months cycles.
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025
Category Comments
Link to Corporate Plan
Theme No. 5. - Excellence
This theme focuses on customer experience, financial sustainability, innovation and technology,
levels of service, governance, our employees and volunteers, funding streams and asset
management practices.
Objective 5.2 - Continue to deliver a financially sustainable Council that has the resources now and
into the future to achieve its strategic objectives. This will be supported through the introduction of
enhanced sustainability reporting and performance indicators, as well as ESG (environment social
and governance) accounting practices as guided by statutory requirements.
Previous Council Consideration
Nil
Finance
As above
Risk & Opportunities
Council’s risk register identifies a number of risks that could impact on its ongoing financial
sustainability.
In order to manage and mitigate these risks Council uses various tools which include monthly
ongoing financial reporting to identify and address emerging issues, conservative budgeting,
compliance with the Financial Sustainability Policy, regular budget reviews, effective liquidity
management to ensure sufficient fiscal flexibility, as well as adhering to the Reserves and Restricted
Cash policy which requires that Council maintains both a disaster management reserve and a
minimum 3 months cash cover to fund emergent matters.
Some examples of potential risks that may impact on Council’s operational performance, capital
program delivery, cashflow and cash reserves include:
• Substantial damage to or failure of Council infrastructure due to natural disaster or other
emergent issue that may require significant unplanned investment;
• An extended closure of Council facilities impacting operational revenues;
• A prolonged IT system failure affecting Council’s ability to deliver services or issue rates notices;
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GENERAL COMMITTEE MEETING 17 FEBRUARY 2025
• Economic conditions affecting ratepayers’ ability to pay rates;
• Market driven increases in construction and operational costs significantly above estimates;
• Labour and material shortages and delays.
• Strategies, plans and projects deliverables that have not been accurately costed
• Fraud attempts may result in financial impacts to Council if funds cannot be recovered
• Reliance on non-recurrent revenue streams (ie interest revenue on grants and short term cash
holdings) to fund business as usual operations may result in higher rate increases in future years
or service level cuts to fund potential shortfalls.
Human Rights
Human Rights Compatibility Statement
In developing this Report, the subject matter has been considered in accordance with the
requirements of the Queensland Human Rights Act 2019. It is considered that the subject matter
does not conflict with any human rights and supports a human rights approach to decision making
by Council. Council representatives will endeavour to act and make decisions under this report in a
manner that is compatible with human rights. This report should be read in conjunction with Council’s
Human Rights Policy.
Consultation
External Consultation - Community & Stakeholder
Nil
Internal Consultation
All areas of Council are consulted as part of the regular monitoring of budget performance.
Departments consulted:
Office of the CEO, Mayor & Community Services Corporate Services
Councillors
Mayor & Councillors X Director X Director
X Chief Executive Officer Community Development X Financial Services
Executive Officers Sport & Active Lifestyles Fleet
Community Engagement Arts & Culture Revenue Services
People & Culture Community Connection ICT
Governance Customer Experience Procurement
Commercial Property
Strategy & Environment Development & Regulation Infrastructure Services
X Director X Director X Director
Strategic Land Use Planning Development Assessment Infrastructure Planning, Design
and Delivery
Economic Development & Local Laws Civil and Asset operations
Destination Management
Environmental Services Environmental Health Waste
Innovation & Digital Hub Building & Plumbing Building & Facilities
Property / Permits Disaster Management