2020-07-10 Special Meeting Agenda

SPECIAL MEETING AGENDA                                                                 10 JULY 2020


Whilst the 2020/21 budget will be the first budget since de-amalgamation to forecast an operating
deficit, rigorous financial analysis has taken place to provide a financial recovery roadmap for how
Council will navigate through the COVID-19 impacts, to ensure that financial sustainability is
maintained for the benefit of the community, ratepayers and the shire, and key financial
sustainability ratio targets can again be met in the short term. This approach also ensures that key
levels of service to the community will not be compromised, and the benefits of the investment of
Council funds via local business procurement can continue to ensure the local economy is
supported to assist with its recovery.

Whilst it is appropriate for a local government to adopt a conservative financial management and
budgeting approach to protect community equity and minimise financial impacts on ratepayers,
any actual upside resulting from the bounce back of Council revenues more quickly than forecast
will return Council to an operating surplus position consistent with previous years and Council’s
financial sustainability policy requirements.

3     Total Council Expenditure Budget

Council’s total 2020/21 expenditure budget of $125 million incorporates an operating expenditure
budget of $98 million, capital expenditure budget of $24.6 million and loan repayments of $2.4
million.

4     Financial Sustainability

The key measurement criteria for whether Council is achieving its financial sustainability objectives
over the short and medium term are three financial sustainability ratios required to be published
under legislation. These ratios allow the community to determine if Council is:
1.    Appropriately funding its day to day operations and asset consumption costs (i.e. the
      operating surplus ratio);
2.    Ensuring its debt is at a level that can be repaid from current operating revenues (i.e. the net
      financial liabilities ratio); and
3.    Replacing community infrastructure when required and ensuring asset service levels can be
      maintained (i.e. the asset sustainability ratio).

The 2020/21 budget has been prepared with the knowledge that two of the three financial
sustainability ratio targets set by the Queensland Government will not be met, however Council’s
financial sustainability policy requirement to meet all three targets will be achieved by 2022/23 and
thereafter for the term of the 10 year financial plan in accordance with the financial recovery plan
(without compromising current levels of service).

 Indicator                         Target                 Budget
 Operating Surplus Ratio           0-10%                   (1.9%)
 Net Financial Liabilities Ratio   Less than 60%           -11.1%
 Asset Sustainability Ratio        Greater than 90%        87.5%




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