09 Financial Performance Report - Mar 2025

GENERAL COMMITTEE MEETING                                                         14 APRIL 2025




Quarterly Supplementary Information - Cash Components
An update detailing the composition of Council’s cash reserves is provided quarterly. Council’s
cash balance comprises a number of components – restricted cash (reserves), committed cash,
financial sustainability requirements and unrestricted cash. These are outlined below.

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 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 $12.09 million total cash balance compromises:
   • $46.4 million (38.4%) in restricted cash. This has increased due to the receipt of levy
       funds from the second rates issue in January with funds to be utilised for levy programs
       through to 30 June 2025. Grant funds have also increased but will be utilised as programs
       are delivered.
   • $15.3 million (12.7%) committed for the delivery of capital works projects.
   • $29.0 million (24.0%) to meet sustainability requirements, equivalent to 3 months cash cover.
   • $23.3 million (19.2%) in working capital to pay for operations through to the end of the
       financial year.
   • $6.9 million (5.7%) in unrestricted free cash, which is the cash available to fund emergent
       or new capital works projects. There is no funding to replenish this unless Council
       generates a surplus operating position.