2020-06-15 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA                       15 JUNE 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%
                                      Target Date: Ongoing
                                      Result: (33.5%)
                                      Comment: Council has low
                                       debt levels and strong cash
                                       holdings reflected in the YTD
                                       result. COVID-19 pandemic
                                       financial impacts through to 30
                                       June 2020 will reduce the ratio
                                       performance as current assets
                                       reduce however the target
                                       range will not be exceeded
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 (May =
                                       0.1%)
                                      Target Date: Ongoing
                                      Result: 0.8%
                                      Comment: Regardless of the
                                       steady decline in long term
                                       bond 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
                                       and ability to provide services
                                      Target: 5% industry benchmark
                                      Target Date: Ongoing
                                      Result: 6.91%
                                      Comment: Ratepayer payment
                                       plans and external debt
                                       recovery measures for rate
                                       arrears have been put on hold
                                       due to the COVID-19 pandemic.
                                       The rate arrears ratio will likely
                                       increase as the economic
                                       impacts of the pandemic are
                                       realised over the next 12-24
                                       months (with measures in place
                                       to manage cash flow risk).




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