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06 Financial Performance Report - Dec 2024
GENERAL COMMITTEE MEETING 20 JANUARY 2025
8.5 FINANCIAL PERFORMANCE REPORT – DEC 2024
Author Financial Services Manager, Pauline Coles
Financial Services | Corporate Services Department
Index ECM/ Subject / 22.09 – Monthly Financial Performance Report
Attachments 1. Attachment 1 - Statement of Income and Expenditure - Dec 2024
2. Attachment 2 - Statement of Financial Position - Dec 2024
3. Attachment 3 - Statement of Cashflows - Dec 2024
4. Attachment 4 - Key Materials & Services Expenditure - Dec 2024
EXECUTIVE SUMMARY
Year-to-date (YTD) performance against current budget as at 31 December 2024 is positive with
operating revenues outperforming forecast and operating expenditure under forecast YTD.
Capital revenues are above forecast with capital expenditure behind of forecast due to delays
and rescheduled timing of project delivery.
YTD Financial Performance Summary
Budget Actual Variance Variance
Status
$m $m $m %
Operating Revenue $70.4 $73.4 $3.0 4.3% On Track
Operating Expense $66.6 $67.0 ($0.5) (0.7%) On Track
Operating Position $3.8 $6.4 $2.6
Capital Revenue $30.5 $35.0 $4.5 14.7% On Track
Capital Expenditure* $72.5 $46.7 $25.8 35.6% Behind Budget
* Reflects constructed assets and intangibles only (excludes contributed assets).
The $2.6 million full year positive interim operating variance comprises $1.9 million general
operating surplus from activities that are funded through Council’s general rate, regulatory fees
and sales of goods and services; as well an additional $0.7 million from waste operations and
$0.1 million from holiday park operations. Any unspent levy and separate charge funds are
constrained in reserve for future use where they are not fully utilised in a given year.
Budget Actual Variance
Item YTD YTD YTD
$m $m $m
General business operating position (unconstrained funds) $1.1 $3.0 $1.9
Commercial operations (constrained funds) * $2.0 $2.8 $0.8
Unspent levies (constrained funds) $0.7 $0.6 ($0.1)
Total Council Operating Position $3.8 $6.4 $2.6
* Includes Waste and Holiday Park operations as shown in the table below
Council elects to apply National Competition Policy (NCP) reforms to its Waste Management and
Holiday Parks which provides greater transparency and assists with removing anti-competitive
conduct and ensures the best allocation of Councils limited resources. A summary of the YTD
operational performance of these business activities are outlined below.
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GENERAL COMMITTEE MEETING 20 JANUARY 2025
Waste Operations Holiday Parks
Budget Actual Variance Budget Actual Variance
YTD YTD YTD YTD YTD YTD
$m $m $m $m $m $m
Revenue 12.7 13.1 0.4 2.2 2.5 0.3
Expenditure 11.2 10.9 0.3 1.7 1.9 (0.2)
Net Operating Position 1.5 2.2 0.7 0.4 0.5 0.1
Financial statements including Statement of Income & Expenditure, Statement of Financial Position
(balance sheet), and Statement of Cash Flows are included as attachments for information for
Council.
Figure 1: Actual Performance Compared to Budget
Council’s performance against key measures of financial sustainability has been calculated as at
December 2024. These statutory indicators enable the reader to assess Council’s success in
managing its budget, cash and debt as well as undertaking sustainable asset management. The
table below contains a snapshot of a number of key measures, with full detail included in the report.
YTD Measures of Financial Sustainability
Current
Target Actual YTD Status
Budget
Operating Surplus Ratio 0-10% -0.1% 8.8% On Track
Net Financial Liabilities Ratio <60% -3.2% -31.5% On Track
Cash Cover Ratio 3 months 9.4 months 9.9 months On Track
Asset Sustainability Ratio > 90% 136.7% 38.7% Behind Budget
RECOMMENDATION
That Council note the report by the Financial Services Manager to the General Committee
Meeting dated 20 January 2025 outlining the December 2024 year to date financial performance
against budget, including changes to the financial performance report with the inclusion of key
financial sustainability indicators.
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GENERAL COMMITTEE MEETING 20 JANUARY 2025
REPORT
Operating Revenue (YTD Benchmark 50.0%)
Council has received 52.5% ($73.4 million) of its operating revenue budget ($139.9 million).
Commentary on each revenue category is provided below.
Category Summary Comments
Rates and $47.0 million (49.8%) • Waste utility charges $90.0k above YTD budget
Levies of the annual budget of (50.3% or $8.5 million of $16.9 million annual budget
$94.4 million has been earned)
earned • General rate (net of discounts) $157.9k below YTD
budget (49.7% or $35.5 million of $71.4 million annual
budget earned)
Fees and $5.8 million (52.9%) of • Building & Plumbing Compliance $165.7k above
Charges the annual budget of budget (50.7% or $1.3 million of $2.6 million annual
$10.9 million has been budget earned)
earned • Waste $56.0k above budget (147.4% or $83.9k of
$56.9k annual budget earned)
• Development Assessment $272.9k below budget
(51.1% or $1.8 million of $3.6 million annual budget
earned)
Sale of Goods $7.6 million (55.0%) of • Holiday Park revenue $315.3k above budget (61.3%
and Services the annual budget of or $2.5 million of $4.0 million annual budget earned).
$15.6 million has been Any revenue upside will be generally offset by a
earned corresponding increase in associated operating costs.
• Waste $196.7k above budget (51.8% or $3.9 million of
$7.7 million annual budget earned).
• Sports facility revenue $167.7k above budget (56.1%
or $1.7 million of $2.9 million annual budget earned)
Interest $3.3 million (105.1%) • Interest revenues have continued to track above
Received of the $3.1 million budget with investment in higher yielding term
annual budget has deposits maximising the return on surplus cash
been earned holdings. Cash holdings are higher compared to
previous years due to the advanced payment of QRA
disaster capital works grants and delays in the delivery
of the capital works program.
Other Revenue $1.9 million (59.2%) of • Plant recharge revenue is $76.9k above budget due to
the $3.3 million internal plant being utilised for the delivery of disaster
annual budget has funded capital projects.
been earned • Royalty income from landfill gas $22.4k above budget
(88.5% or $51.5k of $58.1k annual budget earned).
• Recoupment of Waste Bin (SULO) purchases $14.3k
above budget (63.9% or $66.0k of $103.3k annual
budget earned.
Operating $4.2 million (62.9%) of • Operating Grants and subsidies are in line with budget
Grants, the $6.6 million expectations at this stage of the year. YTD variance
Subsidies annual budget has relates to $65k Floating Land grant, $75k for Disaster
been received Recovery & Resilience Officer funding program, $90k
for Regional Enablers program and $98k final
payment relating to Black Summer Bushfire Funding
for the living tech fire lab.
• $1.4 million of the FY 2025 financial assistance grant
allocation was received in July 2024. This is a change
from the previous approach of prepaying part or all of
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GENERAL COMMITTEE MEETING 20 JANUARY 2025
Category Summary Comments
the grant in the preceding year. This prepayment
approach had been consistent over the past 7 years.
• Council has received notification of the approved FY
2024/25 financial assistance grant allocation which is
less than budgeted. As such there is potential for this
to impact the FY 24/25 operating position if payment
of future years allocations are not paid in the
preceding year.
Unitywater On track • Unitywater distributions are fixed each year so there is
Distributions limited budget variance risk
Figure 2: Operating Revenue Position by Type (Excluding Rates)
Operating Expenditure (YTD Benchmark 50.0%)
Actual operating expenditure is currently 47.8% ($67.0 million) of the full year budget ($140.1
million). Detailed commentary for each expenditure category is provided below.
Category Summary Comments
Employee Costs $25.7 million (49.0%) of • Expenditure for permanent staff salaries and wages
the annual budget of underspent ($823.3k) due to position vacancies and
$52.6 million has been recoupment of YTD vacancy dividend. This
expended underspend is also partially offset by additional spend
on casual staff and external labour hire ($823.3k).
• Training costs are on target (58.9% or $227.3k of
$386.1k annual budget spent).
Materials and $29.1 million (46.7%) of • Civil Operations $617.0k above budget (53.9% or
Services the $62.4 million annual $5.1 million of $9.5 million annual budget spent).
budget has been • Holiday Parks $217.0k above budget (58.4% or $1.4
expended. million of $2.4 million annual budget spent).
• Holiday Parks $217.0k above budget (58.4% or $1.4
million of $2.4 million annual budget spent).
• Sustainable Transport above budget (14.8% or
$141.8k of $962k annual budget spent).
• Digital Hub above budget (56.0% or $204.8k of
365.4k annual budget spent.
• Waste Management $313.3 below budget (45.0% or
$6.6 million of $14.7 million annual budget spent).
• Arts & Culture $99.8k below budget (41.3% or $1.1
million of $2.6 million annual budget spent).
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GENERAL COMMITTEE MEETING 20 JANUARY 2025
Category Summary Comments
• Development Assessment below budget (59.4% or
$779.7 of a $1.3 million annual budget spent).
• Transport and Traffic $40.1k below budget (28.1% or
$64.6k of a $229.6k annual budget spent).
• Sports facilities $52.3k below budget (45.8% or
$730.1k of a $1.6 million annual budget spent).
• Canals & Waterways $40.6 below budget (35.0% or
$121.2k of $526.4k annual budget spent.
Finance Costs Currently on track • Whilst existing loan borrowings are set with fixed
interest rates, any further RBA rate rises will impact
finance costs on new loan borrowings. YTD
underspend also relates to the timing of drawdown of
forecast borrowings for FY 2025.
Depreciation Currently on track Nil
Other Expenses Currently on track Nil
Figure 3: Operating Expenditure Position by Type
Tourism and Economic Development Investment Summary
Council resolved to report on a monthly basis, investment details for tourism and economic
development. Tourism and economic development activity is funded through the general rates
revenue. Expenditure at 31 December 2024 is outlined below:
Expenditure YTD Budget YTD Actual Variance
$’000 $’000 $’000
Tourism Noosa Funding Agreement $1,260.0 $1,260.0 -
Economic Development $525.6 $508.7 $16.9
Total $1,785.6 $1,768.7 $16.9
Tourism and economic development activity is funded through the general rates. The first instalment
payable under the Tourism Noosa agreement for the 2024-25 financial year was made in July 2024,
with the second instalment due in January 2025. The Tourism Noosa agreement is due for renewal
in June 2025.
• Employee Costs are $18.0k below budget (46.7% or $301.4k of $644.4k annual budget spent)
• Materials & Services are in line with budget at this stage of the year
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GENERAL COMMITTEE MEETING 20 JANUARY 2025 Capital Revenue Year to date Capital revenue of $35.0 million received comprises cash contributions from developers ($0.6m) and capital grants ($34.4 million). Note that the timing of capital grant receipts are generally dependent on the timing of grant conditions and also capital delivery performance, and that the timing of the receipt of developer contributions (both cash and contributed) is unpredictable. Grants and subsidies are higher than prior years due to the receipt of funding from the Queensland Reconstruction Authority for reconstruction works relating to the Black Mountain landslip and several other flood impacted sites, which are currently under construction. Figure 6: Capital Revenue by Type Capital Program Actual capital expenditure (excluding commitments and disaster projects) is $13.6 million (YTD budget $23.8 million). Expenditure on disaster projects (excluding commitments) is $33.1 million (YTD budget $48.8 million). Detailed discussion of progress in the delivery of the capital works program is provided through a separate quarterly report by the infrastructure team. Figure 7: Capital Program Delivery Performance
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GENERAL COMMITTEE MEETING 20 JANUARY 2025 Cash Management and Investment Performance Total cash on hand at the end of December was $94.5 million. Included in this balance are funds held in trust and for restricted purposes (e.g. unexpended levy and grant funds), prepaid grants including the financial assistance grant, QRA disaster funding and other capital works grants, prepayment of Waste Levy subsidy (3 years), and unspent monies committed for funding capital projects which are underway and will continue during the financial year. The following pie charts present the mix of cash held at December 2024 by agency (graph on the left) and by credit risk rating (graph on the right). All funds have been invested in accordance with the Investment Policy and in consideration of the principles of ethical investment, preservation of capital, return on investment and counterparty thresholds. Figure 8: Closing Cash Held by Agency and Credit Rating The following chart monitors the 12 month trend on total cash and the agencies invested. To maximise the return on in its cash holdings Council has invested $30.5 million in higher yielding term deposits. These investments were made in line with Council’s Investment of Surplus Funds policy. Figure 9: 12 Month Trend of Cash Invested by Agency
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GENERAL COMMITTEE MEETING 20 JANUARY 2025
Measures of Financial Sustainability
The following table incorporates a set of financial sustainability indicators to further assist in
managing Council financial performance. There are no significant emerging risks regarding
performance identified at this stage, however the delay in the delivery of the capital program
may impact Council’s asset sustainability and renewal targets.
Category Comments
Operating Surplus Ratio • Intent: Identifies the extent to which
revenues cover operational expenses,
to ensure community equity is not
degraded
• Target: Greater than 0%
• Result: 8.8%
• Comment: The slowly declining ratio
reflects the levying of 50% of rates in
July and gradual utilisation of these
monies as expenditure occurs on
operations through to the next rating
cycle in January 2025.
Cash Expense Cover • Intent: Indicates how long council can
continue paying its day-to-day
expenses from cash at bank without
needing additional cash flows
• Target: > 3 months
• Result: 9.9 months
• Comment: Cash cover remains
above target, while business as usual
expenditure through to 30 June 2025
will degrade Council’s cash holdings,
albeit not below the target range of 3 –
6 months.
Cash balances include funding for
capital programs, unspent grant
monies paid in advance, Waste Levy
subsidy prepayments and QRA
advance payments for disaster
projects which are restricted for
specific purposes and inflate the ratio.
Asset Sustainability Ratio • Intent: Measures the extent to which
assets are being replaced as their
condition degrades to ensure service
potential is maintained
• Target: 80% of depreciation budget
spent on renewals annually
• Result: 38.7% achieved, however
below forecast result due to project
delays and scheduling.
• Comment: The ratio will
progressively increases each month
as expenditure on renewals occurs as
part of the capital works program. For
transparency QRA disaster projects
have been excluded from the ratio
calculations. Should capital works
continue to fall forecast for the
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GENERAL COMMITTEE MEETING 20 JANUARY 2025
Category Comments
remainder of the year this may impact
the achievement of Council’s asset
sustainability and renewal targets
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: -31.5%
• Comment: Council has low debt
levels and strong cash holdings. The
advance payment of rates, grants and
subsidies 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 (4.45%)
• Result: 5.8%
• Comment: With higher-than-
normal cash balances due to the
advance payment of grants and
subsidies and a delayed capital
program, combined with bond
rates remaining steady, Council
has invested surplus cash in
higher yielding term deposits to
maximise returns. Council’s
investment returns remain 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: 6.3%
• Comment: Rates arrears continue to
decline from the high point in the cycle
with payments coming due in August.
Reminder notices have been issued,
and arrears will continue to stabilise
through to January as they are
collected, and payment arrangements
implemented.
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GENERAL COMMITTEE MEETING 20 JANUARY 2025
Link to Corporate Plan
Theme No. 5. - Excellence
This theme focuses on customer experience, financial sustainability, innovation and technology,
levels of service, governance, our employees and volunteers, funding streams and asset
management practices.
Objective 5.2 - Continue to deliver a financially sustainable Council that has the resources now and
into the future to achieve its strategic objectives. This will be supported through the introduction of
enhanced sustainability reporting and performance indicators, as well as ESG (environment social
and governance) accounting practices as guided by statutory requirements.
Previous Council Consideration
Nil.
Finance
As above.
Risk & Opportunities
Council’s risk register identifies a number of risks that could impact on its ongoing financial
sustainability. In order to manage and mitigate these risks Council uses various tools which include
monthly ongoing financial reporting to identify and address emerging issues, conservative budgeting,
compliance with the Financial Sustainability Policy, regular budget reviews, effective liquidity
management to ensure sufficient fiscal flexibility, as well as adhering to the Reserves and Restricted
Cash policy which requires that Council maintains both a disaster management reserve and a
minimum 3 months cash cover to fund emergent matters.
Some examples of potential risks that may impact on Council’s operational performance, capital
program delivery, cashflow and cash reserves include:
• Substantial damage to or failure of Council infrastructure due to natural disaster or other
emergent issue that may require significant unplanned investment;
• An extended closure of Council facilities impacting operational revenues;
• A prolonged IT system failure affecting Council’s ability to deliver services or issue rates notices;
• Economic conditions affecting ratepayers’ ability to pay rates;
• Market driven increases in construction and operational costs significantly above estimates;
• Labour and material shortages and delays.
• Strategies, plans and projects deliverables that have not been accurately costed
• Fraud attempts may result in financial impacts to Council if funds cannot be recovered
• Reliance on non-recurrent revenue streams (i.e. interest revenue on grants and short term cash
holdings) to fund business as usual operations may result in higher rate increases in future years
or service level cuts to fund potential shortfalls.
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GENERAL COMMITTEE MEETING 20 JANUARY 2025
Human Rights
Human Rights Compatibility Statement
In developing this Report, the subject matter has been considered in accordance with the
requirements of the Queensland Human Rights Act 2019. It is considered that the subject matter
does not conflict with any human rights and supports a human rights approach to decision making
by Council. Council representatives will endeavour to act and make decisions under this report in a
manner that is compatible with human rights. This report should be read in conjunction with Council’s
Human Rights Policy.
Consultation
External Consultation - Community & Stakeholder
Nil.
Internal Consultation
All areas of Council are consulted as part of the regular monitoring of budget performance.
Departments consulted:
Office of the CEO, Mayor & Community Services Corporate Services
Councillors
Mayor & Councillors X Director X Director
X Chief Executive Officer Community Development X Financial Services
Executive Officers Sport & Active Lifestyles Fleet
Community Engagement Arts & Culture Revenue Services
People & Culture Community Connection ICT
Governance Customer Experience Procurement
Commercial Property
Strategy & Environment Development & Regulation Infrastructure Services
X Director X Director X Director
Strategic Land Use Planning Development Assessment Infrastructure Planning, Design
and Delivery
Economic Development & Local Laws Civil and Asset operations
Destination Management
Environmental Services Environmental Health Waste
Innovation & Digital Hub Building & Plumbing Building & Facilities
Property / Permits Disaster Management