Financial Performance Report – June 2023 · Financial Performance Report

GENERAL COMMITTEE MEETING                                                               17 JULY 2023


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 $115.4 million total cash balance compromises:
        •   $51 million (44%) in restricted cash. This has increased since the previous quarter by
            $11 million relating to advance payment for QRA Feb 22 flood event disaster works
            (Black Mountain) and a total of $4.0 million expended year to date.
        •   $19 million (17%) committed for capital works, comprising $9 million current year projects
            pushed to FY 2024 and $10 million expected to carryover from projects currently
            underway.
        •   $7 million in working capital to pay for operations until the next rates and levies issue in
            July.
        •   $5 million (4%) 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.
        •   $9 million (8%) in interim operating result, which is higher than forecast, but subject to
            the finalisation of levy and reserve balances and accounting adjustments and allocations
            being finalised.

Figure 7: 12 Allocation of Cash Balances