03 Financial Performance Report - Sep 2021

GENERAL COMMITTEE MEETING AGENDA                                                                                                                               18 OCTOBER 2021


 Category                                                                                                                                     Comments
 Net Financial Liabilities Ratio                                                                                                              •   Intent: Outlines the level that net
                                                                                                                                                  Council debt can be serviced by
                                     80%
                                                              60%                                                                                 operating revenues. A ratio below
                                     60%
                                                                                                                                                  zero implies that liabilities are less
                                     40%                                                                                                          than cash (and other current
                                     20%                                                                                                          assets) and there is adequate
                                           0%
                                                                                                                                                  borrowing capacity available if
                                                             Target                        Budget                       YTD Actual                needed.
                        -20%
                                                                                            -8%                                               •   Target: less than 60%
                        -40%
                                                                                                                                              •   Result: -102%
                        -60%
                                                                                                                                              •   Comment: Council has low debt
                        -80%
                                                                                                                                                  levels and strong cash holdings.
   -100%                                                                                                                                          Cash received from the July rates
                                                                                                                          -102%                   revenue also inflates the YTD
   -120%
                                                                                                                                                  actual position
 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 (0.01%)
                                                                                                                                              •   Result: 0.74%
                                                                                                                                              •   Comment: Regardless of the
                                                                                                                                                  current levels of low long term
                                                                                                                                                  bond and interest 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
                                            12.0%
   Percentage of Annual Rates in Arrears




                                                                                                                                      10.2%       sustainable    and    does     not
                                            10.0%                                          9.5%                                                   negatively impact cash flows
                                                                                                  7.4%                                        •   Target: 5% industry benchmark
                                                8.0%   7.1%
                                                              6.0% 5.8% 5.7%                              6.2%                                •   Result: 10.2%
                                                                                                                 5.7%
                                                6.0%                              5.0%                                  5.2%
                                                                                                                               4.6%           •   Comment: Rates arrears are at
                                                4.0%
                                                                                                                                                  the high point in the cycle with
                                                                                                                                                  payments due in September.
                                                2.0%                                                                                              Reminder notices will be issued in
                                                                                                                                                  October, and will stablise through
                                                0.0%
                                                                                                                                                  to January as arrears are
                                                       Oct     Nov    Dec   Jan    Feb     Mar      Apr   May    Jun     Jul   Aug    Sep
                                                                                                                                                  collected      and        payment
                                                                                  Actual             Target                                       arrangements implemented.


Previous Council Consideration
Nil.

Finance
As above.

Risks & Opportunities
Council’s risk register includes a number of risks that could impact on ongoing financial sustainability.
Effective budget management and reporting is an important risk mitigation tool.