2016-07-18 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA                                                     18 JULY 2016


RECOMMENDATION
That Council note the report by the Manager Financial Services to the General Committee
Meeting dated 18 July 2016 providing the interim 2015/16 financial performance report.


REPORT
Operating Position

Council’s financial sustainability policy requires that an operating surplus be maintained each
year over the life of Council’s ten-year financial plan. An operating surplus is achieved when
operating revenues are greater than operating expenses (including depreciation and interest on
debt). An operating surplus means that Council’s financial capital does not degrade and that
sufficient funds are being collected to fund both business as usual operations and existing asset
replacement.

Council adopts a conservative approach to forecasting its budget to ensure that any unexpected
financial expenditure shocks during the year can be absorbed by additional revenues received.
This approach also ensures that annual rate increases can be effectively managed taking into
account community affordability.

This approach is evident with the interim operating surplus position of $8.56 million against the
forecast budget of $961k. Significant recurrent revenue and expenditure variances against
budget are highlighted below.

Recurrent Revenue (YTD Benchmark 100%)

Council has received 102% ($90.2m) of its 2015/16 recurrent revenue budget of $88.2m.
Commentary on each recurrent revenue type is provided below:

 Rates and Levies – $60.6m (100%) of the annual budget of $60.5m has been received.
   General rates are marginally below budget with waste collection charges exceeding budget.
 Fees and Charges – Fees and charges received of $5.8m totals 115% of the $5.1m annual
   budget. Planning and development fees, parking fees, land use permits, change of ownership
   and property searches fees have all exceeded full year budget estimates.
 Interest Received – Interest revenue received of $4.9m is 7.4% or $339k above budget, with
   interest on cash $286k and interest on rate arrears $53k above budget.
 Dividend and Tax – Dividends and the payment of tax equivalents from Unitywater are in line
   with budget forecasts.
 Other Revenue – Other revenue received (sales, services, rental, other) of $10.7m totals
   113% of the $9.4m annual budget. Holiday parks, rental income, and waste tip fees have
   outperformed budget, with sale of waste recyclable materials (concrete and scrap metal)
   below budget. The sale of Ringtail Creek gravel material used in the construction of Dr Pages
   Road has contributed to the overall variance ($325k), although this is offset by an increase in
   cost of sales in materials and services.
 Operating Grants, Subsidies and Contributions – Revenues received of $5.2m totals 92% of
   the $5.7m full year budget. The $480k Translink operating contribution for the electric bus trial
   was not received during 2015/16 given the delay in commencing the project.




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