2020-05-18 General Committee Agenda

GENERAL COMMITTEE MEETING AGENDA                           18 MAY 2020


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%
                                      Target Date: Ongoing
                                      Result: (33.5%)
                                      Comment: Council has low
                                        debt levels and strong cash
                                        holdings reflected in the YTD
                                        result. COVID-19 pandemic
                                        financial impacts through to 30
                                        June 2020 will reduce the ratio
                                        performance as current assets
                                        reduce however the target
                                        range will not be exceeded
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 (April =
                                        0.57%)
                                      Target Date: Ongoing
                                      Result: 1.38%
                                      Comment: Regardless of the
                                        steady decline in long term
                                        bond 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
                                        sustainable and does not
                                        negatively impact cash flows
                                        and ability to provide services
                                      Target: 5% industry benchmark
                                      Target Date: Ongoing
                                      Result: 7.51%
                                      Comment: Ratepayer payment
                                        plans     and     external    debt
                                        recovery measures for rate
                                        arrears have been put on hold
                                        due to the COVID-19 pandemic.
                                        The rate arrears ratio will likely
                                        increase as the economic
                                        impacts of the pandemic are
                                        realised over the next 12-24
                                        months. Cash flow analysis is
                                        currently        occurring       to
                                        understand                financial
                                        sustainability implications

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