2019-09-16 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA                                           16 SEPTEMBER 2019


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: - 41.1% YTD
                                                           Comment: Council has low debt
                                                             levels and strong cash holdings. The
                                                             cash received from July rates issue
                                                             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 (August = 1.0%)
                                                           Result: 1.6%
                                                           Comment: Regardless of the steady
                                                             decline in long term bond rates (due to
                                                             international market factors), 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: 10.1%
                                                           Comment: At the first high point in the
                                                             cycle following issue of the July rates,
                                                             and will stabilise from September to
                                                             December as arrears are collected.




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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