Financial Performance Report February 2026

Brian Stockwell174:13

For this and I think it's going to work out well. I'll put the motion. Those in favour? That's unanimous. We then move on to the next item of business, which is. Thank you, yontji. Is the Financial Performance Report for February 2026 and we welcome Acting Director. Margaret Gatt and Acting Manager of Finance, Zach. And you're going to give us a brief overview. Good afternoon, Councillors. Good afternoon.

Thank you, and Through the Chair. So we'll take the report as read and I'll provide some just additional commentary and an overview of the report itself. The February report provides us eight months of the current financial year or roughly 67% of the financial year started. As at the 28th of February 2026 and noting the impacts of higher than anticipated operational revenue and the timing of delivery of the capital works program, there are no identified. Financial risks that will impact council's forecasted financial position at 30th of June 2026. Please note that the February 2026 report reflects our Budget Review 2 position for the. 25-26 financial year which was adopted at Council on the 19th of February 2026. Further to this and following adoption of BR2 at council's ordinary meeting, Council is required to update its amended. Update an amended debt policy. This is included as attachment six to the report today and reflects total borrowings of 3.1 million for the financial year. The balance of the policy itself remains unchanged. It's simply just the Appendix A and the amount that's referred to as loan borrowings that has been updated, which simply reflects our BR2 position. There are no other substantial changes to the policy. The need to update the policy came from our submission to QTC for our potential loan borrowings to the end of the year, and a debt policy being required as part of the submission process. As noted in the report, Council has recorded a favourable operating $2.9 million, and a net result variance of $4.8 million when you take into account. $1.9 million for funding from capital sources. I would like to draw some. Expressed attention to elements of the report. So on the bottom of page two, there is a table that refers to waste management in holiday parks. In regards to some of. The variances noted in that table, the revenue line item of a negative $111,000 variance is. Driven by materials and services related to general waste and sales of recyclables. Being slightly lower than budget had anticipated, and it is partially offset. By additional rates and annual charges. We are currently doing an exercise. Behind the scenes to bring back a more detailed analysis of that in the next finance report. So I'm just earmarking that as the case and we will expect a table more detailed results to explain those variances in a subsequent report. Expect This is also paired with the expenditure line items. Which are currently showing as a $920,000 overspend. We are again currently undertaking an effort. With both the financial business partner and the waste team just to provide further clarification and details on those amounts and intend to provide them in the next subsequent financial report. Regards to the holiday parks, revenue performance is higher than budget. This is primarily. By the Noosa River Holiday Park of $210,000 and the Boreen Point Holiday Park of $82,000. It does also exhibit a $269,000 overspend to budget of the expenses. Again, we will bring in more detailed summary of this back to Council in the next finance report. There's been. Considerable work undertaken behind the scenes to look at. Credits and unearned revenue, so I hope to consolidate this in a simple. Manner in the next finance report. The operating revenue and operating expenditure variance tables have been modified to assist the community understanding the report. There is some complexity of reporting debits as and credits as in terms of the underlying accounting ledger, but to ensure we can actually illustrate whether is it a positive or a negative variance, there's been green shading or colouring added to those tables, so where a revenue item is higher than budget or expenditure line item is lower than budget, it is demonstrated by effectively a green colour to exhibit that. It's probably an over. Probably an oversimplified way of conveying that because there are explanations possibly if the expenditure is under, but it's true in the simplest way kind of conveyed to the public where we're tracking. To use a specific example to that, there's two I would like to discuss. The rates, levies and charges currently are showing as is a four hundred $14 and,000 dollar collection over budget. When you look at that against the overall budget, it's actually a 0.4% variance, so well below a benchmark or threshold that you would typically discuss. This leads to the existing questions around whether we are over collecting rates, and that's a primary driver of our operating surplus. So of the $400,000 revenue to date over budget, most of that is actually driven by waste utility charges. Only 0.1 of a million dollars or $100,000 are actually attributed to rates across our $106 million budget. Employee benefits is another one that regularly comes up in the finance report, which is currently exhibiting a $905,000 underspend today, which in dollar terms is material, but actually represents less than 3% of the overall budget to date of employee benefits. Just like to convey that this is a continual rolling program of improvements that we're trying to do. We take feedback on board from Councillors. The community also just alignment with best practice and we should hopefully see minor updates as we move ahead. With the capital revenue and expenditure, these have been updated to obviously reflect our BR2 position. The table on page five an overview of our major capital and grant subsidies. In regards to capital expenditure, when adjusted for asset write-offs, loan redemption payments and contributed assets, $19.6 million has been million has been spent on 25% of the overall capital works budget today. Noting there is the ongoing work program with the infrastructure team is a much more detailed analysis of capital works program is provided to the Capital Works Executive group and we are again working on that behind the scenes. We will have to hope to have an update in due course as we work through that. From cash management and an investment performance position so total cash on hand at February 2026 was 159 million of which 6.7 million dollars is in trust. These are higher than anticipated through a standard budget which is primarily driven by the reprofiling of our capital works program through budget review too. As noted in the report our investments can continue to perform well against benchmarks with a summary of our investment performance provided on the table on page six. I just want to draw attention please not to one topographical area the wording that table refers to January 2026 and it is a February 2026 report so my apologies for the typo. In regards to rate arrears, page seven of the report provides additional detail on our rates arrears to February 2026. Our rate have gone up to 12.8%.% from 5.8% in January. This is primarily driven by the fact that January, the 2026 rates period has now, payment has now lapsed if you haven't paid your rates today and so that is now showing up as part of the arrears balances. And it's worth noting that it gets raised that a March 2026 report, or next month's report, we will provide a more detailed analysis of rate arrears, which is a regular question, which is part of our quarterly rolling program that will actually look at the ageing and categorisation of those arrears including the January rates levy. The February results are consistent as my normal dialogue in these meetings talk about the semi-annual pattern or six-monthly pattern with rates which fall in the July and January levy we find the arrears balances increase. Is worth noting that rates issuances or reminder notices will be sent in the mail later this week to ratepayers who are currently in arrears and following the reminder notices going out we actually will begin to operationalize our rates and charges debt management and recovery policy. It is worth noting this question has come up a few times just to provide commentary that while rates arrears are secured over the land and present limited risk of non-collection to Council there's a pragmatic step for Council actually to move through the arrears process and we're actually pragmatically looking to see how we can encourage to engage with the revenue ratepayers services team to actually look at what payment methods or payment profiles might be available to actually start to begin some of those rate balances it may be seen as negative or hard to deal with but we would prefer in the first instance to actually work with ratepayers before we have to go through more the policy itself will escalate through the policy in regards to the measures of financial sustainability there are no significant emerging risks to council's performance metrics it is worth noting in the report that the asset sustainability ratio is currently below the 80% target this is just as a result of the re-profiling through BR2 we expect by the end of the year and the adoption of the new budget for next year as we re-profile the capital works into the future year this will Resolve itself and we will become come in over the 80% threshold. As part of a continuing process of improvement we will look in the future to provide a recommendation to Council of actually providing the financial sustainability on a quarterly basis. There's some volatility to the ratios being provided in a monthly basis and they can actually provide noise that's actually unhelpful in terms of conveying our financial information. In previous months reports we have included a section on questions taken on notice. There were some taken questions on notice in the previous finance report. I will provide verbal updates to them today. My apologies not standard practice. We were actually just an undertaking further investigation at the time of writing the report. So we'll provide verbal updates to those today. Although I was briefly the previous financial report, a question from Councillor Wilson was raised around the balance sheet as an attachment to a statement of financial position and just clarifying why some of the line balances have updated while others have remained the same. Again, some of these questions may not verbatim, but hopefully they capture the intent of the question. So to provide some further commentary, the 2025-26 budget was prepared in June using the balance sheets available at that time. Throughout the year, as you understand, we do a reconciliation terms of our financial statements. We subsequently have BR1 and BR2 movements which capture updated positions and at the end of the year we actually go through a full reconciliation and ensure our balance sheet is ready for audit and our financial statement preparation. So that's some of the aspects why are periodic, I.e. cash updates every month because we take or receive cash, where other aspects are done on a monthly, quarterly or yearly basis in terms of reconciliation. So that's why some of them will exhibit movements while some won't. A question was taken from Mayor Wilkie as to the variance of property, plant and equipment in the statement of financial position. So to provide some context, there was a $3.3 million variance to property, plant and equipment from the 2024-25 financial statements and actuals to January 2026. And I can provide this in writing if that's helpful afterwards as well. The primary driver behind that is our accumulated depreciation, our work in progress movements and asset disposals during the year, as well as commission assets. Effectively, the property plan equipment is kind of a work in progress as we move throughout the year and assets are commissioned. So the biggest driver in that is 11 million dollars of accumulated depreciation or for the current year and that's why the balance today is actually showing 3.3 million dollar variance. As we move closer to the end of the financial year we will expect to bring more assets online as commissioned. Commissioning an off offset by disposal. It's effectively a net account so you've got the accumulated depreciation disposals which are tracked and as you can see from our capital project list there's an intention of capital projects to be delivered by the end of the year and they will be then effectively added to that balance. And just one last question which was Councillor Phillips's question around can you provide the three most significant strategic or financial risk to the community just in response to that question we have noted that and put that on our strategic as sorry our action register is the word I'm looking for sorry um and we will look to improve and incorporate their future reports the reason we haven't today is there's some broader dependencies with the ongoing work with our budget audit and risk and it's a complex matter to work through so we are hoping to have that as soon as possible in future reports it has been noted in summary Council remains in a strong financial position with variances largely driven by timing differences or approved budget adjustments through budget reviews but performance will continue to be monitored through our established reporting and detailed reviews in the background thank you happy to take questions