2020-09-14 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA                                          14 SEPTEMBER 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%
                                                               Result: -48.7%
                                                               Comment: Council has low debt
                                                                levels and strong cash holdings. The
                                                                July rates revenue and prepayment
                                                                of the financial assistance grant 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 (0.11%)
                                                               Result: 0.53%
                                                               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 sustainable
                                                                and does not negatively impact cash
                                                                flows
                                                               Target: 5% industry benchmark
                                                               Result: 4.5%
                                                               Comment: Regardless of being at
                                                                the low point in the cycle (with July
                                                                rates becoming due in September
                                                                with the extended 60-day payment
                                                                terms), the rate arrears ratio may
                                                                increase as the economic impacts of
                                                                the pandemic are realised over the
                                                                next 12-24 months.

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.


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