05 Financial Performance Report - Nov 2021

GENERAL COMMITTEE MEETING AGENDA                                                                                                                        13 DECEMBER 2021


 Category                                                                                                                                  Comments
 Net Financial Liabilities Ratio                                                                                                           •   Intent: Outlines the level that
                                                                                                                                               net Council debt can be
               80%
                                                         60%
                                                                                                                                               serviced by operating revenues.
               60%                                                                                                                             A ratio below zero implies that
                                                                                                                                               liabilities are less than cash (and
               40%
                                                                                                                                               other current assets) and there
               20%                                                                                                                             is adequate borrowing capacity
                                                                                                                                               available if needed.
                                    0%
                                                      Target                           Budget                        YTD Actual
                                                                                                                                           •   Target: less than 60%
   -20%                                                                                 -5%                                                •   Result: -70%
   -40%
                                                                                                                                           •   Comment: Council has low debt
                                                                                                                                               levels and strong cash holdings.
   -60%                                                                                                                                        Cash received from the July
                                                                                                                                               rates revenue also inflates the
   -80%                                                                                                                -70%
                                                                                                                                               YTD actual position
 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 (0.06%)
                                                                                                                                           •   Result: 0.46%
                                                                                                                                           •   Comment: Regardless of the
                                                                                                                                               current levels of low long term
                                                                                                                                               bond and interest 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
                                           12.0%
   Percentage of Annual Rates in Arrears




                                                                                                                     10.2%                     sustainable and does not
                                           10.0%                       9.5%                                                                    negatively impact cash flows
                                                                                                                                           •   Target: 5% industry benchmark
                                            8.0%                              7.4%                                           7.3%
                                                                                       6.2%                                         6.5%   •   Result: 6.5%
                                                   5.8% 5.7%                                    5.7%
                                            6.0%                5.0%                                   5.2%
                                                                                                              4.6%
                                                                                                                                           •   Comment:        Rates     arrears
                                                                                                                                               continue to decline from the
                                            4.0%
                                                                                                                                               high point in the cycle with
                                            2.0%
                                                                                                                                               payments coming due in
                                                                                                                                               September. Reminder notices
                                            0.0%                                                                                               were issued in October, and
                                                   Dec    Jan   Feb    Mar     Apr      May     Jun    Jul    Aug     Sep     Oct   Nov        arrears will continue to stabilise
                                                                              Actual             Target
                                                                                                                                               through to January as they are
                                                                                                                                               collected      and      payment
                                                                                                                                               arrangements implemented.


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.