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BUDGET REVIEW 1 (BR1) FOR THE 2024/25 FINANCIAL YEAR · Report
GENERAL COMMITTEE MEETING 12 AUGUST 2024
6.5 BUDGET REVIEW 1 (BR1) FOR THE 2024/25 FINANCIAL YEAR
Author Financial Services Manager , Pauline Coles
Financial Services | Corporate Services Department
Index ECM/ Subject/ 7.40 – 2024-2025 Budget
Attachments 1. Attachment 1 - BR1 Operating Submissions 2024-25
2. Attachment 2 - BR1 Capital Submissions 2024-25
3. Attachment 3 - BR1 Statement of Income and Expenditure 2024-25
4. Attachment 4 - Budget Financial Statements 2024-25
5. Attachment 5 - BR1 Fees and Charges Amendments 2024-25
EXECUTIVE SUMMARY
The Local Government Act 2009 and Local Government Regulation 2012 require Council to
undertake regular reviews of the adopted budget to ensure it remains reflective of planned activities
to be funded through the financial year. This first budget review for the 2024/25 financial year (BR1)
incorporates:
• Any committed or underway capital or operating projects that were incomplete with unspent
budgets at the close of the 2023/24 last financial year and are eligible for carryover into the
current budget year.
• Any new or emergent actions arising from Council resolution, Executive Team or Capital
Works Executive action since the adoption of the original budget in June 2024.
In summary the budget review is proposing to decrease Council’s operating position by $258k,
reducing from a $118k surplus to a $140k deficit. This is consistent with prior years Budget Review
1 operating positions and is largely due to the carryover of grant funded programs, where revenue
is received in one financial year and program delivery occurs through into the following financial
year.
The revised base capital program (excluding the QRA disaster program) will increase by $8.6 million
to $53.8 million, with the carryover of capital projects that span multiple years. A further $78.7 million
will be carried over relating to the disaster program, bring the total capital works program to $132.6
million.
Item Original Proposed
Budget Adjustments Budget
($’000) ($’000) (BR1)
($’000)
Operating Revenue $138,804 $1,190 $139,994
Operating Expenditure $138,686 $1,448 $140,134
Operating Result $118 ($258) ($140)
Capital Grants and Contributions Revenue $17,225 $78,458 $95,683
Capital Works Expenditure $45,246 $87,348 $132,594
A number of minor amendments to fees and charges are also proposed.
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GENERAL COMMITTEE MEETING 12 AUGUST 2024
RECOMMENDATION
That Council note the report by the Financial Services Manager to the General Committee Meeting
dated 12 August 2024 and approve the proposed changes to the Budget and Schedule of Fees and
Charges for the 2024/25 financial year as outlined in the Revised Budget Financial Statements
provided in Attachments 1 - 5 to the report.
REPORT
Section 170(3) of the Local Government Regulation 2012 allows Council, by resolution, to amend
the budget at any time before the end of the financial year.
The key criteria for budget reviews include:
1. Council must aim for compliance with its Financial Sustainability Policy.
2. Any eligible capital or operating project must be underway with a commitment to deliver and
complete the project.
3. Capital submissions will be reviewed and authorised by the Executive Team before inclusion
as a budget review submission, where the group will consider justification for the request,
deliverability as well as organisational and community priorities before endorsing any capital
works.
4. All operating and capital submissions for additional spend, reallocation of savings or
additional revenue will be confirmed by the Executive Team based on business risk
assessment.
The revised statement of comprehensive income, included as Attachment 4, identifies the financial
statement line items that have been affected by the proposed budget adjustments. The budget
financial statements, included in Attachment 4, also identify the impact of the proposed budget
adjustments to Council’s financial sustainability indicators.
1. Operating Budget Adjustments and Carryovers
Funding Capacity for Operational Carryovers – Prior Year Position
To inform the determination of maximum threshold for operational carryovers, the following table
summarises the 2023/24 draft full year operating financial result. It identifies a $7.8 million surplus
in 2023/24. This surplus provides additional funding for emergent (general rate funded) budget
adjustments and is set as the target ceiling of funding available for carryover. This ensures that cash
reserves are not unnecessarily eroded in accordance with the Financial Sustainability Policy.
Actual
Item $m
General business operating position (unconstrained funds) $1.20
Commercial operations (constrained funds) $5.50
Unspent levies (constrained funds) $1.10
Total Council Operating Position $7.80
It should be noted that the Australian Accounting Standards provide guidance on a case-by-case
basis on the accrual accounting recognition of grant revenue to determine whether grant monies are
recognised upon receipt or upon utilisation.
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GENERAL COMMITTEE MEETING 12 AUGUST 2024
Proposed Budget Adjustment for Operational Carryovers
The proposed operational carryover budget adjustments will result in a $258k decrease to Council’s
operating position. The following table summarises the operational carryovers by type of funding,
with a detailed list contained in Attachment 1. It is noted that the majority of budget submissions are
grant or levy related programs and projects, where as noted in the previous table funds had already
been received last year. There is no long-term cash flow implication for Council as it is reflective of
timing of spend revenue and expenditure between financial years.
The financial statements in Attachments 3 and 4 also outline the revised budget position.
Type Submissions Expense Revenue Net Movement
($’000) ($’000) ($’000)
Grant Funded 20 1,315 1,190 (125)
Levy Funded 1 4 - (4)
General Revenue Funded 4 129 - (129)
Total 25 1,448 1,190 (258)
The $258k in net carryovers will reduce Council’s operating surplus to a $140k deficit. This outcome
is consistent with the outcomes in prior financial years; in comparison for the 2023/24 budget Council
went from a $121k to a $761k deficit in BR1. Future budget reviews during the year (BR2 and BR3),
will capture emergent YTD savings or additional revenue to facilitate mitigation of the budget deficit
with the intent of still achieving a surplus by end of financial year in line with the Financial
Sustainability Policy.
2. Capital Budget Adjustments and Carryovers
Funding Capacity for Capital Carryovers – Prior Year Position
To inform the determination of maximum threshold for capital carryovers, the following table
summarises the 2023/24 full year financial result for the capital works program. It identifies a total
unspent 2023/24 base capital program budget of $13.0 million, which is set as the target ceiling of
funding available for carryover. This ensures that cash reserves are not eroded in accordance with
the Financial Sustainability Policy.
Item Base Disaster
Program Program Total
($’000) ($’000) ($’000)
Current Budget 2023/24 (BR2) $45,908 $127,350 $173,258
Total Expenditure 2023/24 $32,893 $ 48,663 $81,516
Total Unspent $13,015 $ 78,727 $91,742
Proposed Budget Adjustments for Capital Carryovers and Emergent Works
A total of 80 existing projects have been proposed for carryover from the 2023/24 year with a total
value of $13.8 million which is slightly above target ceiling. In addition, a total of 3 variations and
emergent works submissions with a project budget of $0.1 million and 2 multi-year projects
rescheduled to FY 2025/26 with a combined budget of $5.3 million are proposed for inclusion in the
revised budget.
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GENERAL COMMITTEE MEETING 12 AUGUST 2024
The total proposed base capital works adjustment is $8.6 million, with an additional $78.7 million
carried over in respect to the QRA funded disaster program relating to the February 2022 rain event.
A summary of these adjustments are outlined in the table below.
Item Amount
($’000)
Original Budget $45,246
Carryovers $13,775
Multi-year rescheduling ($5,300)
Emergent Works and Variations $145
Revised Base Capital Expenditure Budget $53,866
$78,727
Revised Total Capital Expenditure Budget $132,593
The table below summarises the proposed revised 2024/25 capital budget by program, with the full
list contained in Attachment 2.
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GENERAL COMMITTEE MEETING 12 AUGUST 2024
3. Fees and Charges Amendments
A number of minor amendments are proposed to the 2024-25 Schedule of Fees and Charges as
outlined in the table below.
Treatment Number of Business Area
Fees
New 2 Waterways, Building & Plumbing
Amended 5 Governance, Property, Noosa Seniors
TOTAL 7
An overview of the proposed changes by business area is provided below:
Canals & Waterways
• The recent upgrade of the Noosa Lock and Weir allows for a remote access fob option
to access the facility. This new fee covers the cost of the fob and the cost of
administering the allocation of the fobs to eligible Lock and Weir users.
Building & Plumbing
• New fee for Council Officers to undertake private certification of building works where
appropriate.
Governance
• Amend Right to Information (ROI) fees charged by Council in line with the legislated fee
by the Office of the Information Commissioner, Queensland.
Property
• Council recently took over the operation of tennis court hire at Quamby Place, this
amendment sets the hourly court hire fee at $20.00 per hour.
Noosa Seniors
• Amendment of 2 fees (Allied Health - Podiatry and In-home care) to align with the
Domestic Assistance fee, resulting in an increase from $11.00 to $15.00.
A full listing of the proposed changes and movement against the current fee amounts are provided
in Attachment 5.
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 indicator, as well as ESG (environment social and governance)
accounting practices as guided by statutory requirements.
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GENERAL COMMITTEE MEETING 12 AUGUST 2024
Previous Council Consideration
The 2024/25 original budget was adopted by Council resolution on 28 June 2024 (Ref. Special
Meeting Minutes, 28 June 2024, Item 2.4, Page 3).
The original 2024/25 fees and charges were adopted by Council resolution on 17 June 2024 (Ref:
Ordinary Meeting Minutes, 20 June 2024, Item 8.4, Page 14)
Finance
The financial sustainability ratios for are forecast to meet the benchmark targets under the
revised BR1 budget for 2024/25, with the exception of the Operating Surplus Ratio. This is due
to the small deficit position forecast at this point in the year, which is expected to return to surplus
as the financial year progresses.
A detailed summary of the forecast financial sustainability ratios is provided in Attachment
4. The table below shows the target and forecast for each of these financial sustainability ratios:
Ratio Target Original BR1
Budget
Council Controlled Revenue Ratio No Target Set 75.9% 75.2%
Operating Surplus Ratio Greater than 0% 0.1% (0.1%)
Operating Cash Ratio Greater than 0% 18.1% 17.7%
Unrestricted Cash Expense Cover Ratio (months) Greater than 3 months 7.7 7.3
Total Cash Expense Cover Ratio (months) Greater than 3 months 8.9 9.4
Asset Sustainability Greater than 80% 102.7% 136.7%
Leverage Ratio 0 - 3 times 1.19 1.20
Net Financial Liabilities Less than 60% 0.7% (3.2%)
Risk & 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.
Consultation
External Consultation - Community & Stakeholder
Nil
Internal Consultation
Financial Services have been in contact with all Council branches.
Directors of each department have reviewed endorsed all submissions received. The Executive
Team has also reviewed and endorsed all submissions received.
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GENERAL COMMITTEE MEETING 12 AUGUST 2024
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