Financial Performance Report August 2026

Frank Wilkie62:53

Thank you put the motion to the vote those in favour? Councillor Wegener, Councillor Lorentson, Councillor Stockwell-Wayne, yes. Councillor Wilson, Councillor Finzel, against. Councillor Phillips, the motion's carried. Now thank you Rachel, thank you. Now coming to the next report, call point two, Financial Performance Report from August. And we have the acting management accounting coordinator, Wayne Deane, here for this report. Thank you welcome, Wayne, and also direct corporate services Director, Margaret Gatt. Welcome, thank you.

Thank you. And through the Chair, good morning, Mayor and Councillors. I'll take you to the report as read. The August report presents Council's financial performance to 31 August 2026 against the revised budget for the 26-27 financial year that was adopted on August 20, 2026. As this report represents only the first two months of the financial year, caution should be exercised when interpreting variances and emerging trends. Variances continue to be affected by timing, expenditure profiling and carry forward works as well as grant receipts. 31 August 2026 Council reported a favourable net operating result of approximately one favourable net variance to budget of approximately 1.6 million. This comprises a favourable operating result of 1.3 million and a favourable capital revenue variance of approximately 0.2 million. The favourable position is primarily attributable to higher than anticipated rates and utility charge revenue and investment earnings together with lower than anticipated operating expenditure. There are no significant financial risks currently identified that are expected to materially impact Council's 26/27 financial result. Ongoing monitoring will continue through monthly reporting and future budget review processes. I'd like to draw your attention to the following matters detailed in the report. Firstly, operating revenue. At 31 August 2026, Council had received $66.7 million or 40.6% of its full year operating revenue budget of $164.2 million, resulting in a $1 million favourable variance to budget year to date. The main contributors were higher general rates of $169,000, higher waste utility charges of $100,000, lower than anticipated discounts of $91,000 and pension rebates of $71,000, as well as investment earnings, which were higher by $182,000 compared to budget due to higher average cash holdings. Moving to operating expenditure at 31 August 2026, actual operating expenditure was $27.1 million or 16.5% of the full-year operating expenditure budget of. $164.2 million. Operating expenditure was approximately $0.3 million favourable to the year-to-date budget. This was mainly due to employee benefits being $84,000 lower than budget. Materials and services. $103,000 below budget. At this stage of the year, expenditure variances are largely influenced by timing and profiling. Further commentary will be provided as expenditure patterns mature and longer-term trends can be assessed with greater confidence. Looking at business activities the overall operating variance comprises approximately 0.9 million of from Council's core operating activities and 0.4 million from Council's business activities waste management continues to report a favourable operating position while holiday parks remain broadly consistent in line with budget expectations business activity results include competitive neutrality adjustments and are reported to support transparency under the national competition policy requirements with regards to tourism and economic development investment Council continues to report investment in tourism and economic development activities. At 31 August 2026 year-to-date expenditure totalled $775,000 against a year-to-date budget of $775 $802,000 representing a minor variance of $28,000 below budget. Moving to capital revenue and expenditure. So capital revenue received to 31 August totalled $6.2 million. This mainly comprised $6.1 million in capital grants and subsidies and $101,000 in cash contributions from developers. The timing of capital grants, subsidies and developer contributions remains dependent on grant conditions, external factors and capital works delivery. Actual capital works excluding contributed assets, loan redemption payments and commitments was $8.4 million or 6.8% of Council's $99.7 million full-year capital works program. The broader capital expenditure attachment reports $7.7 million when loan redemption is included. This explains the difference between the capital works figure discussed in the report and the total capital expenditure figure in the financial attachments. Future monthly reports will provide further project level variance commentary as budgets and delivery profiles are refined. Capital reporting will also incorporate the graphs presented to the Capital Works Executive committee, complementing the separate quarterly capital works reporting by the infrastructure team. Looking at cash management and investment performance. So Council's total cash on hand at 31 August 2026 was $175.8 million, including $6.7 million held in trust. Council's investments continue to perform above agreed benchmarks. On a rolling 12 month basis, total cash holdings increased by $34.1 million or 24.1% since September 2025. The cash position will continue to be monitored in the context of carry forward expenditure, capital delivery and future budget reviews. Rates and arrears. Outstanding rates and utility charges increased from 7.7 million or 6% of rates levied in July 2026 to 15.7 million or 13.2% in August 2026. The increase reflects the July 2026 levy rates, which were due on the 14th of August 2026. The August 2025 comparative was 12.8% of rates levied. So the month-on movement is consistent with Council's established six-month arrears cycle, with arrears increasing after the July and January levy periods and reducing in the following months after that. Financial sustainability, as previously agreed with Council, the relevant measures of financial sustainability will be reported for the September, December, March and June quarterly financial results. Accordingly, these measures are not included in the August result. Another item is the removal of credit card surcharge service fees. So this report also seeks Council's approval to amend the 20, 26, 27 Fees and Charges schedule by removing the 0.55% credit card surcharge service fee from 1st of October 2026. The amendment is required because changes to national payment regulations mean card surcharges will no longer be permitted from that date. Removing the fee will ensure Council's adopted Fees and Charges schedule remains current and compliant. The surcharge currently operates as a cost recovery mechanism by offsetting merchant transaction fees incurred by Council. Removal is not expected to have impact on Council's operating position or overall revenue base. Operationally, the change requires the surcharge to be removed from the Fees and Charges schedule and from relevant payment channels and systems from the 1st of October 2026. The recommendation provides the formal Council approval required to amend the adopted schedule. In closing, Council remains in a strong and stable financial position as of 31 August 2020.2026. However, as mentioned, the report reflects only two months of financial activity and remains influenced by timing, carry forwards, grant receipts and expenditure profiling. Future monthly reports and budget reviews processes will provide greater clarity on underlying operating trends, capital delivery and the full year forecast end position. Thank you and happy to take any questions.