Capital Program 2025-2026 Delivery Status Report

Brian Stockwell83:05

Okay anyone else I'll therefore put the procedural motion that the matter lay on the table all those in favour I'm happy yes okay that's unanimous okay we then move on to the next agenda item and that is a consideration of recommendations from the General Committee on the 11th of August you very much.1.1 is the capital program 2025-26 delivery status report. 11.1.2 is the housing monitoring report. 11.1.3 is Noosa Heads alliance park. Yes, Mr Chair. Yes, Councillor Wilkie.

Good afternoon Councillors apologies for my voice and if I cough I'm just a bit husky just getting my coughing when we get into it. So thank you and through Chair I'll take the report as read. The July report presents Council's financial performance to the 31st of June 2026 against Council's original budget for the corresponding year. As this report represents our represents only one of the first month of the financial year, cautions should be exercised in interpreting and variances and emerging trends. Many revenue and expenditure categories are influenced by time and profiling and carry forward from the previous financial year and a single month does not provide sufficient basis to identify meaningful trends. As at the 31st of July 2026 Council reported a favourable net variance to budget of 1.4 million. It's it is important to note that the July results remain preliminary as we complete the 25-26 financial statements and external audit process. A number of year-end accounting adjustments may be required which could result in some movements to the current reported position. The favourable position is primarily attributed to higher than anticipated rates and utility charges from revenue. Stronger investment earnings and lower than anticipated operating and capital expenditure. It is important to note that many of the variances reported at this stage reflect carry forward balances from the 25-26 program. Grant timing and expenditure profiling rather than underlying changes to Council's financial performance. The next item on today's agenda is budget review 1 which will provide greater detail on these movements. I would like to take the opportunity to draw attention to a number of the matters detailed in the report. As at the 31st of July 2026, Council had received 64.1 million or 39% of its operating revenue of 163 or 164 million. The favourable operating revenue variance of 0.9 million is mainly attributed to rates and charges and higher than anticipated investment earnings. Our operating expenditure for the same period was 11.4 million or 7% of Council's underlying budget. The favourable variance of approximately 0.6 million was mainly attributed to lower than anticipated employee benefits and lower than anticipated materials and services for the period. At this stage of the financial year expenditure variances are largely driven by timing and profiling factors. Further detailed commentary and analysis will be provided in subsequent for monthly finance reports. In regards to Council's business activities, the overall operating variance comprises of $1.1 million from Council's core operating activities and 0.3 from its business activities. Waste management continues to report favourably. Against its operating position, with holiday parks remaining the channelling consistent with the underlying budget. Council's capital, revenue and expenditure for the 31st of July 2026. Its capital revenue is $5.4 million, comprised primarily of capital grants, subsidies, together with development contributions, as consistent with previous comments made in monthly finance reports. Grants, receipts and development contributions remain dependent on external factors and project delivery timelines. Capital expenditure to the 31st of July 2026 was $1.8 million or 2.1% of Council's $84 works program. It is important to know that July is typically not representative of the annual capital program of delivery due to the commencement of procurement lead times, carry forward balances and mobilisation activities. Additional detail regarding the capital works for forward program, project profile and budget adjustments is included within the budget review one report following the monthly finance report. Council's total cash on hand is at the 31st of July was 153 million including 67 million held in trust. Six points 6.7 sorry, my correction, 6.7 million held in trust Councillors, investments continue to perform well against agreed benchmarks. On a 12-month basis total cash holdings have increased.4 million or 6.5% to this time last year. The stronger cash position will fix the combined impact of carry forward expenditure, timing of capital delivery and investment performance. Writer rate arrears as at the 31st of July totalled 7.7 million or 6% of Council's rate and utility charge base. This was a reduction of 354 million from June 2026 it is worth noting that the basis for the calculation of rate arrears changed and changes in July each year as the calculation is reset to use the adopted annual rates in the underlying budget just and I just think.

Thank you, if I could assist, um, I just want to note working through, uh, the people and culture area, we're actually working on a dedicated piece, uh, early ahead of the workplace capability plan with a specific focus on infrastructure services and the need for, uh, management resources, uh, against the competition that we're facing across the region. So, and I just thank the Director and manager of people and culture for pulling that out, uh, because the forces we're faced against across the region are significant. They are. And if we need to have confidence in the delivery of our capital rewards program, uh, we need to, um, can could significantly improve our health. Thrust. Now we, whilst we have had some resources challenges, we have had an increasing delivery of the program in recent years, evidenced by the increase in commitments. Um, and we also note that some of the models that we're using, such as use of external consultants for the disaster reconstruction program, have proven to be incredibly successful. There's some good models that we can follow on to actually increase our capacity, and this process is set up by people and culture, and I'll have to straw that out. Thank you.

Thank you and through the Chair I will take the report as read. This report presents budget review 1 for the 2026/27 review has been prepared in accordance with the underlying legislative requirements which requires Council to undertake regular reviews of its adopted budget to ensure it remains reflective of Council's projected financial position as at the 30th June of each year. The first budget review of financial each one year is a routine budget management process. BR1 primarily reflects updated delivery schedules, grant timing, and carry forward adjustments identified after the adoption of the 2026-27 budget on 23rd of June. Importantly, this review should not be interpreted as an indication that the original budget was inaccurate or unrealistic, rather that it reflects the normal progression of operating and capital projects and programs across financial years. The proposed BR1 position does not represent a material change to Council's adopted financial settings, strategic priorities, service levels, or long-term financial direction. I would like to draw your attention to a number of matters detailed in the report. In regards to operating budget adjustments budget review 1 proposes no change to Council's operating result. This report identifies proposed increases to employee benefits of $81,000 and materials and services of $583,000, mainly associated with previously recognised grants. These increases are offset by additional interest revenue of $300,000, waste collection charges of $250,000 and a housing support program grant of $113,000. The key point is that these movements are offsetting in nature and do not change Council's overall operating position. Full details of these operating adjustments are provided as attachment 1 and schedule 6. Capital budget adjustments and carryovers. The revised capital works program increases from $84.3 million to $99.7 million. This includes an increase of $11.9 million in other capital works and $3.4 million in waste management, while recovery works remain unchanged to $29.2 million. The increase on the revised capital budget largely reflects projects that were approved in the previous budget but remained underway as at the 30th of June. As such, the movement primarily relayed to the timing of expenditure rather than new expenditure commitments. This is an important distinction. BR1 is not introducing a significant new capital program. It is largely aligning with approved budgets with revised delivery timelines so that projects already underway can continue to their completions. The majority of capital adjustments relate to previously adopted projects carried forward from the 25-26 financial year with only limited emergent items proposed through BR1. Funding for the revised capital program comprises of grant funding of $47.8 million, loans of $13.2 million, and internal reserves of $9.9 million, with the balance coming from cash reserves. Full details of the capital works program are provided as schedule 7 and 8 of attachment 1. Consequently, as part of BR1, BL1, our forecasted loan funds increased from $10.8 million to $13.2 million. This relates to waste management loans of $11.2 million and Lake Macdonald residential subdivision of as a result of this, Council is required to adopt a revised debt policy which reflects the revised loan totals and the forecast across the 10-year forecast period. The revised debt policies is included as attachment to the report. In regards to Council's financial sustainability, the proposed BI1 position does not indicate any significant financial concerns arising from either the operating or capital budget adjustments. The operating amendments are offsetting and maintain Council's operating position. Similarly, the increased capital program primarily relates to the carry forward of approved projects. Because the majority of amendments relate to the timing adjustments rather than new commitments, the proposed amendments present limited additional financial risk to Council. Key financial sustainability indicators remain within their adopted benchmark ranges, with no main changes to Council's long-term the financial position. Report the notes the assets sustainability ratio falls below the target level in some forecasted years due to the current composition of the capital works program. However, it should be noted across the 10-year forecast period, the average ratio is 10.6, which is in excess of the targeted benchmark when viewed in that regard. Council's however, operating cash balance has also been revised to $132.6 million following the close of the 25-26 financial year. This has improved Council's liquidity ratios and net liability ratios. Council's leverage ratio has also improved in BR1 following the decision to not draw down $3.1 million as at the 30th of June related to capital projects in the previous financial year. Lastly, in regards to Fees and Charges, BR1 includes a small number of amendments to Council's adopted 26/27 fee schedule. These amendments are predominantly administrative in nature and intended to ensure the schedule remains accurate, reflects operational requirements, and addresses matters identified following the adoption of the budget. The report identifies key changes including temporary revision to selected digital hub management fees pending a broader review of charges, a revised per kilometre charge for Noosa Seniors, an introduction a waste, the introduction of a waste solar panel disposal fee, corrections to impound animal release fees and noting the GST treatment related to certain cemetery related fees. These amendments have no impact Council's overall operating position or revenue base. In closing, BR1 represents a routine and prudent budget management process. There are no significant adjustments as a result of the amendments proposed today. The majority of the adjustments reflect timing, carry forward and re-profiling of Council's current service delivery and capital works program. Effective budget monitoring and periodic reviews remains an important part of Council's financial governance framework and supports continued alignment between the adopted budget, current project delivery schedules, funding availability and approved operational commitments. Thank you and we'll be happy to take questions.

Thank you, Councillor Finzel, through the Chair. There are a number of ways that we monitor that sustainability ratio. It's through the monthly excuse me monthly finance report. It's also through our asset management steering committee and through our capital works program where the financial delivery of the capital works program gets presented to that executive group. In terms of then often you can have sustainability ratios that are lumpy or up and down over a 10-year period, and that is largely driven by the creation of new assets, the associated depreciation, and also the delivery of the capital works program, timing of that. Um so affects that sustainability ratio as well, so it is just something, there's quite a few indicators that feed into that ratio.

Amelia Lorentson241:52

I have a question. Probably to the CEO. Do we have the workforce capacity to deliver the capital program this year? And what does staff turnover and vacancy data look like right now? And particularly responsible for delivering the capital works, infrastructure, planning, design, delivery.