2019-05-13 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA                                                      13 MAY 2019


The QTC review segregated Council’s cash balance into four categories:

1. Short Term Surplus (Cash Cycle): Working capital from rates and other operating revenue
   used to fund operations, capital expenditure and servicing debt.
2. Cash Cover: Additional cash set aside to ensure financial sustainability of Council and the
   ability to pay outgoings in the event of unexpected circumstances. Regulatory benchmarks
   set a minimum of 3 months, with a conservative maximum of 6 months.
3. Externally Restricted: Unexpended levies, grants, developer contributions or loans.
4. Long Term Surplus: Additional cash held (in addition to the above) that is not forecast to
   fund operating or capital requirements over the next decade.

The graph below summarises Council’s forecast cash balance over the next decade separated
by the above categories.

Figure 1: Forecast Cash Balances – by Liquidity Category




The above analysis reveals that, even after allowing for cash cycles from capital and operating
programs, setting aside restricted cash and a 3 month cash cover buffer, Council currently has
surplus cash of approximately $20 million. Over the next decade, this surplus will reduce to
approximately $10 million.

Council is currently investing all cash held in accordance with the Investment Policy and in
consideration of the principles of ethical investment, preservation of capital, return on investment
and counterparty thresholds. For the 2019 year to date, Council has been achieving a return of
2.6% on average for cash invested.

Assessment of Debt

The book value of Council’s existing loan borrowings is approximately $35 million (market value
$38 million). All loans are raised through QTC at a fixed interest rate for a 20 year term. As
shown in the figure below, the majority of Council’s debt relates to borrowings transferred as part
of de-amalgamation at a fixed interest rate of 6.29%.

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