Financial Performance Report - January 2026

You committee so and Through the Chair. Take the report as read in front of you which is the Financial Performance Report for January 2026 the January report provides us with 58% of the financial year's data for context there has been no significant changes to the previous comments provided in the report other some re-profiling of the capital works program just like to note in regards to the report in front of you that it does use budget review one as the underlying budget for comparison noting that the subsequent report in today's General Committee will be around budget review two from an operational point of view for context there isn't a significant change to the underlying operating position or movements so there can still be provided reliance of the data included in the performance report in front of you as noted in the report council's current operating position to the 31st of January shows a 3.2 million dollar variance against its operating surplus budget I just would like to draw attention to this today because of the nature of how we ultimately prepare our underlying budgets and recognise rates so in the January 2026 report we have revenue recognition or recognise the January rates levy and its totality so six months worth of rates revenue which shows up in our operating surplus and what we will look to actually provide over time is that Council receives its rates in January and over the preceding five months expenses will be incurred that's why our operating result shows a slightly different level to what was in the December 2025 report. Provide a simplest simplistic view of how this works and relating it to a household if you happen to be on a wage and you receive your wage for two weeks over the preceding two weeks you then spend your expenses or your household expenses and ideally at the end of that period you either break even or have some savings left. Simplistically that's what our Council does with its rates. We collect in January. It just happens to be over the preceding six months that we actually incur it. So it's a balancing effect of our expenditure. Will look to bring in some graphs and illustrations to outline this because when you look at the finance report it does show quite a significant surplus but it is simply a timing difference to date. I would like to draw your attention to elements of the report. So on the top of page two there is a table that outlines at the highest level both our operating revenue and our operating action expenditure. That reports both aspects actually reporting within two percent of the budgeted level so our budget and our year-to-date expenses and operating revenue are tracking very closely. The table also illustrates the 2.5 million dollar positive variance today in terms of revenue. Now we historically have shadowed questions as to whether the operating surplus is driven primarily by rates. I address that today. So the 2.5 million dollars of additional revenue is primarily actually driven from our interest revenue, which is a result of more cash holdings than we expected at this time of the year, primarily related to a slower-than-anticipated delivery of the capital program, noting that the cash review will be done by QTC, which will inform our budget 26/27 procedures around cash holdings. There is also another $500,000 variance, which relates to rates, levies and charges. Notably, the biggest portion,000 that relates to waste utility charges. Is $400 So as to the question as to whether general rates or are too high and is driving the surplus, across our $106 million budget for rates, we are only tracking about $100,000 over the budget. It is not a material aspect as to the operating surplus today, if that makes sense. In terms of our operating expenditure, we currently have a $800,000 underspend as it relates to the major employees benefits or employee benefits. To provide some context, to how this works, that $800,000 variance can sell material as an outlier when we don't provide the supporting context. So our employee benefits year to date spend is $33.4 million. So we are currently only at an $800,000 underspend or less than 2% of the $33 million budget. So it doesn't help to explain the variance that when you helps look at it at an overall perspective that it is between one and five positions that have possibly been held over the course of the year on a rolling basis. So it doesn't compel a significant material underspend to that expense. One of the questions that previous was monthly finance report was a question as to what made up the other materials and services category. So this ultimately ties to our financial statements and how we draw individual cost categories the together. Other materials and services category is primarily made up of our cost of goods sold, materials which can cover aggregate, landscaping, sand, general, concrete and timber, venue hire, and it also includes our state government waste levy and waste levy subsidy. So it's a bit of a catch-all category in some ways. So that gives you the information for how it's built up. If there is a drive to a further analysis, I understand that we can also provide that. But that was one of the questions we did take on those in the previous monthly finance report. In regards to capital and revenue expenditure, I won't make any significant comments here, noting that the BRT report will follow this report, which has further commentary as to our budget review position, which will probably provide some more salient information to Councillors around that. In regards to our cash management and investment performance section just building just on what I said earlier have slightly higher cash reserves than we intended at this point in the year, about 18.4% higher than we were tracking in January 2025 today, primarily driven by slower-than-expected spend in the capital works program. Council investments is a general comment of performing well against industry benchmarks, but we do anticipate to provide a much more consolidated update to Councillors through budget proceedings around our cash position, investment position, and when we see ourselves going into the future. Regards to the rate raise, I'm on page 7 on the report we provide our summary as at the 31st of January 2026, noting that as of January we are in rate arrears of 5.8% having received around $400,000 in payments in the January month. Noting that you always hear me paragon around the idea of it being cyclical in nature and that in any January and July period we have a rates revenue. So our January rate arrears do not include the January arrears that are outstanding because technically they are not in arrears until February. This is the most valid indication of kind of where our absolute truest form of rate arrears sit. Knowing that Councillors have made common as to trying to get that under the five cent benchmark. So this is our truest form of where we sit with our arrears. Noting that this is why we have our debt and charges policy that we that are we are looking over to time we encourage ratepayers to bring their rates arrears down and actually actively work with my team downstairs to actually look at how we can deal with the rate arrears to bring that down one final comment noting that there's no section in this report as to questions taken on notice which had been in previous reports because the AMOM was covered naturally through the contents of the report. Thank you. A lot of detail. Happy to take any questions.