2023-01-16 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA                                                  16 JANUARY 2023


Restricted Cash - In accordance with Council’s Management of Restricted Cash Policy, funds are
set aside and restricted for a specific purpose. This can be either to meet regulatory requirements,
allocate against specific future projects and activities, and to ensure sufficient working capital to
meet current and long term financial obligations.
Committed Cash - A portion of cash reserves are committed to undertake current year capital
works. At the start of the financial year, this commitment will be increased for any unfinished capital
works from previous year which are carried over as part of the budget review process (BR1) to
ensure the projects can be completed.
Sustainability Requirement – Cash expense cover is a key statutory indicator to measure
liquidity, ensure going concern and is a key measure considered in Council achieving its current
credit rating (Sound with a Neutral Outlook) to ensure borrowing capacity. Cash expense cover
calculates how long Council can continue to pay its day-to-day expenses without needing to seek
borrowings or other external funding. A target minimum of three month’s cash cover is to be held
in any given financial year to minimise financial risk.
Unrestricted Cash – These are funds where there is no regulatory, policy or budgetary
commitment to retain funds for specific purposes. These funds can be separated into the following:
   Working Capital – The cycle of revenue received twice yearly through rates that is held in the
    bank and spent over the following six months on operations and capital.
   Long Term Surplus – Uncommitted cash set aside to fund the 10-year capital works program.
Overall, Council’s $95.4 million total cash balance compromises:
       $39 million (41%) in restricted cash. This has increased during the year with $11 million
        received in advance for Black Mountain disaster recovery works.
       $22 million (23%) committed for capital works, comprising $12 million current year projects,
        $6 million future year projects and $4 million project variations this.
       Remaining $5 million in working capital to pay for operations until next rates and levies
        issue in January.
       $5 million (6%) in unrestricted free cash, which has depleted from $12 million at the start of
        the year due to the significant capital works program and number of project variations
        approved during the year requiring additional funds. There is no funding to replenish this.
Figure 7: 12 Allocation of Cash Balances




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