Late Items Agenda of Finance Advisory Committee Meeting

BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services 4.1

Staff Reports - Corporate and Community Services

Report No. 4.1 Review of Council Investment Policy

Directorate: Corporate and Community Services

Report Author: James Brickley, Manager Finance

File No: I2017/593

Theme: Corporate Management

Financial Services

Summary:

Council at its Ordinary Meeting held on 23 February 2017, considered Report 13.4 regarding Council Investments January 2017. Council resolved 17-043 part 2:

‘That a workshop on the financial investment strategy occurs at the next SPW on 9 March 2017’

A presentation was provided to the Strategic Planning Workshop (SPW) on 9 March 2017. Following from that presentation, a report was provided to the Finance Advisory Committee to consider an updated Draft Policy - Council Investments 2017 on 13 April 2017. Following feedback from that Meeting of the Finance Advisory Committee, this further report is provided subject to any consideration or amendment, to recommend to Council adoption of a revised Draft Policy - Council Investments 2017 for the purposes of public exhibition.

RECOMMENDATION:

That the Finance Advisory Committee recommend to Council:

1. That the Draft Policy - Council Investments 2017 be placed on public exhibition for a period of 28 days.

2. That in the event:

a) that any submissions are received on the Draft Policy - Council Investments 2017, that those submissions be reported back to Council prior to adoption of the policy; or

b) that no submissions are received on the Draft Policy - Council Investments 2017, that the policy be adopted and incorporated into Council’s Policy Register.

Attachments:

1 Draft Council Investment Policy submitted to Finance Advisory Committee 18 May 2017, E2017/30990 , page 8⇩

Report

Council at its Ordinary Meeting held on 23 February 2017, following consideration of Report 13.4 regarding Council Investments January 2017, resolved (in part) as follows:-

17-043 part 2:

‘That a workshop on the financial investment strategy occurs at the next SPW on 9 March 2017’

After consideration of the Report, the Finance Advisory Committee recommended to Council at its Ordinary Meeting to be held on 25 May 2017:-

“Committee Recommendation 4.1.1

That the Finance Advisory Committee receive a further report on the review of the Council’s Investment Policy at its next meeting scheduled for 18 May 2017, with the following amendments to the Draft Policy - Council Investments 2017 to be included:

a) Definition for Social and Environmentally Responsible Investments

b) Decision making process for the investment of funds with an authorised deposit-taking institution.”

Following the Finance Advisory Committee Recommendation 4.1.1 above, this further report is provided subject to any further consideration or amendment, to recommend to Council adoption of a revised Draft Policy - Council Investments 2017 for the purposes of public exhibition.

The revised Draft Policy - Council Investments 2017 is included at Attachment 1. The document has been updated to comply with the new template for Council policies and sets out the following guidance in relation to Council’s investments:

· Set the objectives of investing.

· Outline the legislative requirements.

· Ascertain authority for implementation and management of the Policy.

· Establish the capital, liquidity and return expectations.

· Determine the diversity of the investment portfolio.

· Environmentally and Socially Responsible Investing.

· Define the risk profile.

· Establish legal title.

· Set benchmarks.

· Establish monitoring and reporting requirements.

· Define duties and obligations of Delegated Officers.

The new Draft Policy - Council Investments 2017 incorporating the above is provided for the Finance Advisory Committee’s further consideration, amendment and recommendation to Council, for public exhibition.

Financial Implications

There are no financial implications directly associated with this report. However, the management of Council’s investments is a significant responsibility. Poor investment decisions have the potential to negatively impact upon the financial position of Council through either revenue from investment interest or possible capital loss of principal invested.

Statutory and Policy Compliance Implications

Section 625 of the Local Government Act 1993 governs how Councils can invest. Specifically Section 625 states:

(1) A council may invest money that is not, for the time being, required by the council for any other purpose.

(2) Money may be invested only in a form of investment notified by order of the Minister published in the Gazette.

(3) An order of the Minister notifying a form of investment for the purposes of this section must not be made without the approval of the Treasurer.

(4) The acquisition, in accordance with section 358, of a controlling interest in a corporation or an entity within the meaning of that section is not an investment for the purposes of this section.

The forms of investment approved by the Minister for Local Government as identified in Section 625(2) of the Local Government Act 1993 refer to the Ministerial Investment Order. The most recent Investment Order was issued on 12 January 2011 and the contents of this Order are provided in Attachment 1 as part of the Draft Council Investments Policy 2017.

Clause 212 of the Local Government (General) Regulation 2005 also outlines requirements regarding Council’s investments as follows:

(1) The responsible accounting officer of a council:

(a) must provide the council with a written report (setting out details of all money that the council has invested under section 625 of the Act) to be presented:

(i) if only one ordinary meeting of the council is held in a month, at that meeting, or

(ii) if more than one such meeting is held in a month, at whichever of those meetings the council by resolution determines, and

(b) must include in the report a certificate as to whether or not the investment has been made in accordance with the Act, the regulations and the council’s investment policies.

(2) The report must be made up to the last day of the month immediately preceding the meeting.

In regard to Council investments, attention also needs to be directed towards Section 14 of the Trustees Amendment (Discretionary Investments) Act 1997 where a trustee must exercise the care, diligence, and skill that a prudent person would exercise in managing the affairs of another person. As Councils are acting as custodians when investing public assets, account of the requirements of Section 14 should also be considered. Specifically contained in Section 14(C)(1) are the following matters which should be considered:

(a) the purposes of the trust and the needs and circumstances of the beneficiaries,

(b) the desirability of diversifying trust investments,

(c) the nature of, and the risk associated with, existing trust investments and other trust property,

(d) the need to maintain the real value of the capital or income of the trust,

(e) the risk of capital or income loss or depreciation,

(f) the potential for capital appreciation,

(g) the likely income return and the timing of income return,

(h) the length of the term of the proposed investment,

(i) the probable duration of the trust,

(j) the liquidity and marketability of the proposed investment during, and on the determination of, the term of the proposed investment,

(k) the aggregate value of the trust estate,

(l) the effect of the proposed investment in relation to the tax liability of the trust,

(m) the likelihood of inflation affecting the value of the proposed investment or other trust property,

(n) the costs (including commissions, fees, charges and duties payable) of making the proposed investment,

(o) the results of a review of existing trust investments in accordance with section 14A (4).

BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services 4.1 - Attachment 1

bsc_logo_150dpi_rgb

Draft Policy:

Council Investments

2017

INFORMATION ABOUT THIS DOCUMENT

Date Adopted by Council	??-??-2017	Resolution No.	17-???
Document Owner	Corporate and Community Services
Document Development Officer	Manager Finance
Review Timeframe	Annually if required
Last Review Date:	June 2012	Next Scheduled Review Date	May 2018

Document History

Doc No.	Date Amended	Details/Comments eg Resolution No.
#574352	7/3/06	Res 06-86
#711341	27/9/07	Res 07-533
#838120	9/4/09	Draft amendments reported to Council – further amendments see Res 09-181
#847260	21/4/09	Incorporating amendments 09-181 – On Public Exhibition
#906111	8/10/09	Res 09-805
#1241222	28/6/12	Draft amendments policy reported to Council 28/6/12 Res 12-470 placed on public exhibition (Previous Policy No 2.5)
#E2012/1401	15/8/12	Adopted after close of Public Exhibition – no submissions received
#E2017/18817	13/4/17	Draft updated policy reported to Finance Advisory Committee
#E2017/30990	18/5/17	Revised draft updated policy reported to Finance Advisory Committee

Further Document Information and Relationships

List here the related strategies, procedures, references, policy or other documents that have a bearing on this Policy and that may be useful reference material for users of this Policy.

Related Legislation*

Local Government Act 1993 – Section 625.

Local Government Act 1993 – Investment Order (of the Minister) dated 12 January 2011 (attached to policy).

Local Government (General) Regulation 2005 – Regulation 212

The Trustee Amendment (Discretionary Investments) Act 1997 – Sections 14A(2), 14(C)(1) & (2)

Related Policies

Related Procedures/ Protocols, Statements, documents

Note: Any reference to Legislation will be updated in the Policy as required. See website http://www.legislation.nsw.gov.au/ for current Acts, Regulations and Environmental Planning Instruments.

TABLE OF CONTENTS

1. OBJECTIVES.. 2

2. SCOPE.. 2

3. DEFINITIONS.. 2

4. STATEMENT.. 2

4.1. Environmental and Socially Responsible Investments. 3

4.2. Delegation of Authority. 4

4.3 Prudent Person Standard/Ethics and Conflict of Interest 4

4.4 Authorised Investments. 4

4.5 Risk Management 5

4.6 Credit Quality and Limits. 5

4.7 Safe Custody Arrangements – Security of Title. 6

4.8 Accounting and Reporting. 6

4.9 Performance Benchmarks. 7

5. LEGISLATIVE AND STRATEGIC CONTEXT.. 7

5.1. Community Strategic Plan. 7

5.2. Legislative Requirements. 7

6. SUSTAINABILITY.. 8

6.1. Social 8

6.2. Environmental 8

6.3. Economic. 8

6.4. Governance. 8

1. OBJECTIVES

The purpose of this Policy is to provide a framework for the investment of Council’s funds at the most favourable rate of interest available to it at the time of investment and maximising return whilst having due consideration of risk, liquidity, and security for its investments. Council must consider the purpose of an investment opportunity in terms of environmental and social outcomes when investing funds where the investment return is favourable relative to alternate investment opportunities.

2. SCOPE

This Policy is to cover:

· Council’s objectives for its investment portfolio;

· Applicable Risks to be managed;

· Detail any constraints or other prudential requirements to apply to the investment of Funds;

· The applicable legislation and regulation governing Council investments;

· The reporting of investments;

· Appropriate performance benchmark(s)

The Investment Policy is a policy produced by the Corporate and Community Services Directorate. The Finance Branch is responsible for the operation and updating of this Policy.

This Policy document replaces any previous Investment Policy document approved by Council.

3. DEFINITIONS

ADI	Authorised Deposit Taking Institution as defined in the Banking Act 1959 (Cwth).
Environmentally and Socially Responsible Investments	Defined by Council in accordance with resolution 15-515 as disclosed at section 4.1 to this Policy.
Delegated Officers	Director of Corporate and Community Services Manager Finance Management/Assets Accountant Financial Operations Accountant
RAO	Responsible Accounting Officer as prescribed by Regulation 196 of the Local Government (General) Regulation 2005.The Responsible Accounting Officer of Byron Shire Council is the Manager Finance.

4. STATEMENT

While exercising the power to invest, consideration is to be given to the preservation of investment principal, liquidity, and the return of investment. Council therefore has several primary objectives for its investment portfolio:

a) Compliance with legislation, regulations, the prudent person tests of the Trustee Act and guidelines issued by the Office of Local Government.

b) Preservation of the investment principal amount invested.

c) To ensure there is sufficient liquid funds to meet all reasonably anticipated cash flow requirements of Council.

d) To generate income from the investment portfolio that exceeds the performance benchmark(s) established in this Policy.

e) Facilitate the enhancement of environmental and social outcomes through investment of Council funds as outlined in section 4.1 (part (i) and (ii)) of this Policy as the decision making process at each investment opportunity available to Council.

4.1. Environmental and Socially Responsible Investments

Council gives preference to finance institutions that invest in or finance Environmentally and Socially Responsible Investments (SRI) where:

i) The investment is compliant with legislation and investment policy objectives and

parameters; and

ii) The rate of return is favourable relative to comparable investments on offer to Council at the time of investment

SRI status may be in respect of the individual investment, the issuer of the investment, or both and should be endorsed by an accredited environmentally and socially responsible industry body or institution.

Environmentally and Socially Responsible Investments will be assessed on the same basis as other investment opportunities and the Council will select the investment that best meets its overall investment selection criteria.

The Council’s criteria relating to an SRI are those which:

• direct investment towards the socially and environmentally productive activities listed below

• avoid investment in the socially and environmentally harmful activities listed below.

The criteria for SRI are all desirable and not mandatory requirements.

Environmentally productive activities are considered to be:

• resource efficiency-especially water and energy

• renewable energy

• production of environmentally friendly products

• recycling, and waste and emissions reduction

Socially productive activities are considered to be:

• fair trade and provision of a living wage

• human health and aged care

• equal opportunity employers, and those that support the values of communities,

indigenous peoples and minorities

• provision of housing, especially affordable housing

Environmentally harmful activities are considered to be:

• production of pollutants, toxins and greenhouse gases

• habitat destruction, especially destruction of forests and marine eco-systems.

• nuclear power

• uranium mining

• coal seam gas mining

• production or supply of armaments

Socially harmful activities are considered to be:

• abuse of Human Rights and Labour Rights

• involvement in bribery/corruption

• production or supply of armaments

• manufacture of alcohol, tobacco or gambling products”

4.2. Delegation of Authority

Authority for the implementation of the Investment Policy is delegated by Council to the General Manager in accordance with Section 377 of the Local Government Act 1993. The General Manager has in turn delegated the management of the Investment Policy to the Delegated Officers as defined in this Policy. Specifically, day-to-day management of Council’s investments rests with the Manager Finance as Council’s RAO.

Any investment undertaken under this Policy requires two Delegated Officers to approve the investment on the following basis:

i) Investments up to $1,000,000 in accordance with this Policy can be authorised by the RAO and one of the Delegated Officers.

ii) Investments greater then $1,000,000 in accordance with this Policy can be authorised by the RAO and Director Corporate and Community Services.

Such authorisations extents to Council Officers that may fill these positions from time to time when the position incumbent is on approved leave.

4.3 Prudent Person Standard/Ethics and Conflict of Interest

The investment portfolio of Council will be managed with the care, diligence and skill that a prudent person would exercise. As Trustees of public money, Delegated Officers are to manage the Council Investment Portfolio to safeguard the portfolio in accordance with the requirements of this Investment Policy and not for speculative purposes.

Delegated Officers shall refrain from personal activities that would conflict with the proper execution and management of Council’s Investment Portfolio. This Policy requires Delegated Officers to disclose any conflict of interest to the General Manager.

4.4 Authorised Investments

All investments must be denominated in Australian Dollars and be only those investments prescribed by the Investment Order (of the Minister) issued from time to time. The current Investment Order (of the Minister) is attached to this Policy. Individual investments will generally be in at least $1,000,000 parcels wherever possible.

4.5 Risk Management

In regard to performing investment management on Council’s behalf, due consideration must also be given to the following:

a) Preservation of Capital – The requirement for preventing losses in an investment portfolio’s total value.

b) Credit Risk – The risk that a party or guarantor to a transaction will fail to fulfil its obligations. In the context of this document it relates to the risk of loss due to the failure of an institution/entity with which an investment is held to pay the interest and/or repay the principal of an investment.

c) Diversification – the requirement to place investments in a broad range of products so as not to be over exposed to a particular sector of the investment market.

d) Liquidity Risk – the risk an investor runs out of cash, is unable to redeem investments at a fair price within a timely period, and thereby incurs additional costs (or in the worst case is unable to execute its spending plans).

e) Market Risk – the risk that fair value or future cash flows will fluctuate due to changes in market prices, or benchmark returns will unexpectedly overtake the investment’s return.

f) Maturity Risk – the risk relating to the length of term to maturity of the investment. The longer the term, the greater the length of exposure and risk to market volatilities.

g) Rollover Risk – the risk that income will not meet expectations or budgeted requirement because interest rates are lower than expected in future.

4.6 Credit Quality and Limits

a) Direct Investments

The amount invested with any one financial institution should not exceed the following percentages of average annual funds invested.

Long Term Rating (Standard & Poors)	Short Term Rating (Standard & Poors)	Maximum Percentage of Total Investments
AAA to AA	A1+	100%
A+ to A-	A1	60%
BBB+ to NR	A2, NR	40%

As an alternate to credit ratings issued by Standard and Poor’s, Council can also utilise credit ratings published by Moody’s and Fitch rating agencies However, it needs to be recognised that the primary control of credit quality is the prudential supervision of the Authorised Deposit-Taking Institutions (ADI) sector.

Council should also consider counterparty limits in terms of the amounts of investments held with any single ADI. This should especially be the case for longer term investments.

Term to maturity limits should be structured around the time horizon of investment to ensure that liquidity and income requirements are met. Council always retains the flexibility to invest as short as required by internal requirements or the economic outlook.

b) Credit Ratings

If any of Council’s investments are downgraded such that they no longer fall within these investment policy guidelines, they will be divested as soon as is practicable whilst preserving invested capital.

4.7 Safe Custody Arrangements – Security of Title

a) Where necessary, investments may be held in safe custody on Council’s behalf as long as the following criteria are met:

i) Council must retain beneficial ownership of all investments.

ii) Adequate documentation is provided, verifying the existence of the investments.

iii) The custodian conducts regular reconciliation of records with relevant registries and/or clearing systems

iv) The Institution or Custodian recording and holding the investment on Council’s behalf will be:

o The Custodian nominated by New South Treasury Corporation for Hour Glass Facilities (if used).

o Austraclear

o An institution with an investment grade Standard and Poor’s, Moody’s or Fitch rating.

o An institution with adequate insurance, including professional indemnity insurance and other insurances considered prudent and appropriate to cover its liabilities under any agreement.

b) Prior to undertaking any investment it is imperative that the security of title of the investment proposed must be in the name and ownership of Byron Shire Council.

4.8 Accounting and Reporting

Council will comply with appropriate Accounting Standards in valuing its investments and quantifying its investment returns including interest and fair value gains/losses. Council will provide disclosure relating to its investment portfolio at the conclusion of each financial year as prescribed by Accounting Standards and the Local Government Code of Accounting Practice and Financial Reporting.

Council is to maintain a register of its investments including documentary evidence to Council’s legal title to the investments held. The register of investments is to be reconciled monthly to the general ledger which forms the basis of monthly reporting to Council in accordance with Regulation 212 of the Local Government (General) Regulation 2005 and the monthly financial report to the Executive Team.

Reporting on Environmentally and Socially Responsible Investment opportunities and outcomes are to be included in the Investment Report provided to Council each month.

4.9 Performance Benchmarks

The performance expectation of all Council’s individual investments within the overall Council investment portfolio will meet the performance benchmark in the table below:

Investment	Performance Benchmark
Cash / Direct Investments	Exceed average 90 day Bank Bill Swap Index

5. LEGISLATIVE AND STRATEGIC CONTEXT

5.1. Community Strategic Plan

Council’s Investment Policy supports the effective governance, business, project and financial management of Council. Specifically strategy CM1.1 Improve the transparency, effectiveness and accountability of Council and CM1.3 Improve organisational sustainability (economic, social, environmental and governance).

5.2. Legislative Requirements

a) Local Government Act 1993 – Section 625(2).

b) Local Government Act 1993 – Investment Order (of the Minister) dated 12 January 2011.

c) Trustee Amendment (Discretionary Investments) Act 1997 – Section 14A(2), 14C(1) 7 (2).

d) Local Government (General) Regulation – Regulation 212.

e) Local Government Code of Accounting Practice and Financial Reporting as amended from time to time.

f) Australian Accounting Standards

g) Office of Local Government Investment Policy Guidelines and Circulars.

h) Council resolution 15-515 – Environmentally and Socially Responsible Investments.

6. SUSTAINABILITY

6.1. Social

The investment of Council’s funds may provide the Council to seek investment opportunities that assist in the improvement of society or the community through the investment into projects where allowable that have positive social outcomes.

6.2. Environmental

The investment of Council’s funds may provide the Council to seek investment opportunities that assist in the improvement of the Environment through the investment into projects where allowable that have positive environmental outcomes.

6.3. Economic

The investment of Council’s funds provides the opportunity to generate revenue to assist in the financial sustainability of the Council and to carry out its functions.

6.4. Governance

This Policy establishes the framework for the management of Council’s invested funds and to ensure due diligence and care is exercised by those charged with the investment of Council’s funds.

ATTACHMENT

11-01 Investment Order

BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services 4.2

Report No. 4.2 Budget Review 1 January - 31 March 2017

Directorate: Corporate and Community Services

Report Author: James Brickley, Manager Finance

File No: I2017/598

Theme: Corporate Management

Financial Services

Summary:

This report is prepared to comply with Regulation 203 of the Local Government (General) Regulation 2005 and to inform Council and the Community of Council’s estimated financial position for the 2016/2017 financial year, reviewed as at 31 March 2017.

This report contains an overview of the proposed budget variations for the General Fund, Water Fund and Sewerage Fund. The specific details of these proposed variations are included in Attachment 1 and 2 for Council’s consideration and authorisation.

Attachment 3 contains the Integrated Planning and Reporting Framework (IP&R) Quarterly Budget Review Statement (QBRS) as outlined by the Division of Local Government in circular 10-32.

RECOMMENDATION:

That the Finance Advisory Committee recommend to Council:

1. That Council authorise the itemised budget variations as shown in Attachment 2 (#E2017/31291) which includes the following results in the 31 March 2017 Quarterly Review of the 2016/2017 Budget:

a) General Fund – $3,300 increase in the Estimated Unrestricted Cash Result

b) General Fund - $1,628,300 increase in reserves

c) Water Fund - $870,600 increase in reserves

d) Sewerage Fund - $2,810,300 increase in reserves

2. That Council adopt the revised General Fund Estimated Unrestricted Cash Result of $1,145,200 for the 2016/2017 financial year as at 31 March 2017.

Attachments:

1 Budget Variations fro General, Water and Sewerage Funds, E2017/31290 , page 28 ⇩

2 March 2017 Quarterly Budget Review, E2017/31291 , page 104⇩

3 Integrated Planning and Reporting Framework (IP&R) Quarterly Review Statement, E2017/31292 , page 110⇩

Report

Council adopted the 2016/2017 budget on 29 June 2016 via Resolution 16-348. It also considered and adopted the budget carryovers from the 2015/2016 financial year, to be incorporated into the 2016/2017 budget at its Ordinary Meeting held on 25 August 2016 via Resolution 16-446. Since that date, Council has reviewed the budget taking into consideration the 2015/2016 Financial Statement results and progress through the first three quarters of the 2016/2017 financial year. This report considers the March 2017 Quarter Budget Review.

The details of the budget review for the Consolidated, General, Water and Sewer Funds are included in Attachment 1, with an itemised listing in Attachment 2. This aims to show the consolidated budget position of Council, as well as a breakdown by Fund and Principal Activity. The document in Attachment 1 is also effectively a publication outlining a review of the budget and is intended to provide Councillors with more detailed information to assist with decision making regarding Council’s finances.

Contained in the document at Attachment 1 is the following reporting hierarchy:

Consolidated Budget Cash Result

General Fund Cash Result Water Fund Cash Result Sewer Cash Result

Principal Activity Principal Activity Principal Activity

Operating Income Operating Expenditure Capital income Capital Expenditure

The pages within Attachment 1 are presented (from left to right) by showing the original budget as adopted by Council on 29 June 2016 plus the adopted carryover budgets from 2015/2016 followed by the resolutions between July and September, the September review, resolutions between October and December, the December review, resolutions between January and March and the revote (or adjustment for this review) and then the revised position projected for 30 June 2017 as at 31 March 2017.

On the far right of the Principal Activity, there is a column titled “Note”. If this is populated by a number, it means that there has been an adjustment in the quarterly review. This number then corresponds to the notes at the end of the Attachment 1 which provides an explanation of the variation.

There is also information detailing restricted assets (reserves) to show Council estimated balances as at 30 June 2017 for all Council’s reserves.

A summary of Capital Works is also included by Fund and Principal Activity.

Office of Local Government Budget Review Guidelines:-

The Office of Local Government on 10 December 2010 issued the new Quarterly Budget Review Guidelines via Circular 10-32, with the reporting requirements to apply from 1 July 2011. This report includes a Quarterly Budget Review Statement (refer Attachment 3) prepared by Council in accordance with the guidelines.

The Quarterly Budget Review Guidelines set a minimum standard of disclosure, with these standards being included in the Local Government Code of Accounting Practice and Financial Reporting as mandatory requirements for Council’s to address.

Since the introduction of the new planning and reporting framework for NSW Local Government, it is now a requirement for Councils to provide the following components when submitting a Quarterly Budget Review Statement (QBRS):-

· A signed statement by the Responsible Accounting Officer on Councils financial position at the end of the year based on the information in the QBRS

· Budget review income and expenses statement in one of the following formats:

o Consolidated

o By fund (e.g General, Water, Sewer)

o By function, activity, program etc to align with the management plan/operational plan

· Budget Review Capital Budget

· Budget Review Cash and Investments Position

· Budget Review Key performance indicators

· Budget Review Contracts and Other Expenses

The above components are included in Attachment 3:-

Income and Expenditure Budget Review Statement by Type – This shows Councils income and Expenditure by type. This has been split by Fund. Adjustments are shown, looking from left to right. These adjustments are commented on through pages 59 to 74 of Attachment 1.

Capital Budget Review Statement – This statement identifies in summary Council’s capital works program on a consolidated basis and then split by Fund. It also identifies how the capital works program is funded.

Cash and Investments Budget Review Statement – This statement reconciles Council’s restricted funds (reserves) against available cash and investments. Council has attempted to indicate an actual position as at 31 March 2017 of each reserve to show a total cash position of reserves with any difference between that position and total cash and investments held as available cash and investments. It should be recognised that the figure is at a point in time and may vary greatly in future quarterly reviews pending on cash flow movements.

Key Performance Indicators (KPI’s) – At this stage, the KPI’s within this report are:-

o Debt Service Ratio - This assesses the impact of loan principal and interest repayments on the discretionary revenue of Council.

o Rates and Annual Charges Outstanding Ratio – This assesses the impact of uncollected rates and annual charges on Councils liquidity and the adequacy of recovery efforts

o Asset Renewals Ratio – This assesses the rate at which assets are being renewed relative to the rate at which they are depreciating.

These may be expanded in future to accommodate any additional KPIs that Council may adopt to use in the Long Term Financial Plan (LTFP.)

Contracts and Other Expenses - This report highlights any contracts Council entered into during the January to March quarter that are greater then $50,000.

CONSOLIDATED RESULT

The following table provides a summary of the overall Council budget on a consolidated basis inclusive of all Funds budget movements for the 2016/2017 financial year projected to 30 June 2017 but revised as at 31 March 2017.

2016/2017 Budget Review Statement as at 31 March 2017	Original Estimate (Including Carryovers) 1/7/2016	Adjustments to March 2017 including Resolutions*	Proposed March 2017 Review Revotes	Revised Estimate 30/6/2017 at 31/03/2017
Operating Revenue	75,503,200	1,461,600	910,200	77,875,000
Operating Expenditure	76,715,900	2,157,600	179,700	79,053,200
Operating Result – Surplus/Deficit	(1,212,700)	(696,000)	730,500	(1,178,200)
Add: Capital Revenue	19,784,900	(7,259,700)	(2,050,000)	10,475,200
Change in Net Assets	18,572,200	(7,955,700)	(1,319,500)	9,297,000
Add: Non Cash Expenses	12,515,100	0	0	12,515,100
Add: Non-Operating Funds Employed	1,673,000	0	0	1,673,000
Subtract: Funds Deployed for Non-Operating Purposes	(60,072,800)	5,787,600	6,632,000	(47,653,200)
Cash Surplus/(Deficit)	(27,312,500)	(2,168,100)	5,312,500	(24,168,000)
Restricted Funds – Increase / (Decrease)	(27,350,100)	(2,127,200)	5,309,200	(24,168,000)
Forecast Result for the Year – Surplus/(Deficit) – Unrestricted Cash Result	37,600	(40,900)	3,300	0

GENERAL FUND

In terms of the General Fund projected Unrestricted Cash Result the following table provides a reconciliation of the estimated position as at 31 March 2017:

Opening Balance – 1 July 2016	$1,145,200
Plus original budget movement and carryovers	$37,600
Council Resolutions July – September Quarter	0
September Review – increase/(decrease)	0
Council Resolutions October – December Quarter	0
December Review – increase/(decrease)	(40,900)
Council Resolutions January – March Quarter	0
March Review – increase/(decrease)	3,300
Forecast Unrestricted Cash Result – Surplus/(Deficit) – 30 June 2017	$0
Estimated Unrestricted Cash Result Closing Balance – 30 June 2017	$1,145,200

The General Fund financial position overall has increased by $3,300 as a result of this budget review. The proposed budget changes are detailed in Attachment 1 and summarised further in this report below.

Council Resolutions

There were no Council resolutions during the January to March 2017 quarter that impacted the overall 2016/2017 budget result.

Budget Adjustments

The budget adjustments identified in Attachments 1 and 2 for the General Fund have been summarised by Budget Directorate in the following table:

Budget Directorate	Revenue Increase/ (Decrease) $	Expenditure Increase/ (Decrease) $	Accumulated Surplus (Working Funds) Increase/ (Decrease) $
General Manager	1,500	1,500	0
Corporate & Community Services	57,700	22,300	35,400
Infrastructure Services	(2,194,100)	(2,166,800)	(27,300)
Sustainable Environment & Economy	252,700	257,500	(4,800)
Total Budget Movements	(1,882,200)	(1,885,500)	3,300

Budget Adjustment Comments

Within each of the Budget Directorates of the General Fund, are a series of budget adjustments identified in detail at Attachment 1 and 2. More detailed notes on these are provided in Attachment 1 but in summary the major additional items included are summarised below by Directorate and are included in the overall budget adjustments table above:

General Manager

· In the People & Culture Budget Program various changes to budget items are required to reflect revised actual/projected expenditure. These movements have no overall impact on the budget result.

Corporate and Community Services

· In the Councillor Services Budget Program a decrease in expenditure of $22,800 is attributable to the final election expenses being under budget.

· In the Information Services Budget Program it is proposed to increase operating expenditure by $45,000 to cover the costs of the implementation of online purchase requisitions. This cost is distributed across other programs through support service costs.

· In the Governance Services Budget Program it is proposed to decrease the Strategic Procurement Roadmap budget by $45,000 to assist with the funding of the online purchase requisitions (in Information Services Budget Program above), and an increase in the Internal Audit budget to reflect the actual cost of the additional internal audits conducted. These costs are distributed across other programs through support service costs.

· In the Community Development Budget Program, It is proposed to increase operating expenditure due to additional costs for the Disability Inclusion Planning ($14,000) offset by savings recognised against the positive ageing Strategy ($5,000), International Day for People with a Disability ($1,000), Disability and Access Project ($3,000) and mobility Maps ($1,000). It is proposed to increase income and expenditure at the Ocean Shores Community Centre to reflect actuals ($40,000) and decrease expenditure for the Periwinkle Pre-school lease ($17,000). This building was sold and Council no longer receives rent for this building.

· In the Library Services Budget Program, it is proposed to increase operating expenditure by $10,000 to fund the Richmond Tweed Regional Library (RTRL) Governance Model Development.

Infrastructure Services

· In the Asset Management Planning Budget Program it is proposed to increase capital expenditure by $35,000 due to an additional $100,000 required for Lot 12 Bayshore Drive Byron Bay Remediation and a reduction in Lot 22 Mullumbimby South ($10,000), the Depot Relocation ($5,000) and Surplus Property Sales ($50,000). These adjustments are funded through the Property Development Reserve.

· In the Depot Services and Fleet Management Budget Program it is proposed to increase operating income by $25,000 to reflect actual income received from internal plant hire and increase expenditure by $20,000 for additional Depot training room costs and $27,000 for additional fleet management costs for the installation of GPS tracking. The movements in this Budget Program have no impact on the Budget result as funding is provided by the Plant Reserve.

· In the Local Roads and Drainage Budget Program, there are a number of adjustments outlined under Note 15 in the Budget Variations explanations section of Attachment 1. Further disclosure is included in the second page of Attachment 2 under the budget program heading Local Roads and Drainage.

· In the Roads and Maritime Services Budget Program (RMS) it is proposed to decrease capital expenditure by $21,000 as the scale of works for Ewingsdale Road have been reduced to provide RMS funding for the actual costs of reseal works at Tweed Valley Way (In the Local Roads & Drainage program).

· In the Open Space and Recreation Budget Program, there are a number of adjustments outlined under Note 17 in the Budget Variations explanations section of Attachment 1. Further disclosure is included in the third page of Attachment 2 under the budget program heading Open Space and Recreation.

· In the Quarry Budget Program it is proposed to decrease income by $33,700 and increase expenditure by $14,200 to reflect the actuals. This is funded through the Quarry reserve.

· In the Waste & Recycling Budget Program it is proposed to increase the operating income budget due to an increase in income for Domestic Waste Management Charges ($115,000), Commercial - Annual Charges ($22,000) and Sale of Scrap Metal Income ($60,000 ) as the actual income received has exceeded the original budget. It is proposed to reduce capital expenditure for the Development of New Landfill Capacity ($13,400) and New Landfill ($10,000) as the strategic direction for Council's waste disposal no longer involves progression of the Myocum Quarry Landfill project as well as the Resource Recovery Centre Upgrade ($150,000) as Council have submitted a grant application to enhance the delivery of this project. The decision of the grant funding won’t be announced until May or June 2017. Scope and delivery of the project is dependent on the result of the grant application.

· In the Cavanbah Centre Budget Program, there are a number of adjustments outlined under Note 20 in the Budget Variations explanations section of Attachment 1. Further disclosure is included in the third page of Attachment 2 under the budget program heading Cavanbah Centre.

· In the Holiday Park Budget Programs it is proposed to reduce capital expenditure at First Sun by $260,000 as the current capital program is behind schedule due to unforeseen delays with the Safari Tents and $540,000 at Suffolk Beachfront as the Cabins budget is subject to land reclassification finalisation and also requires a business case review.

· In the Facilities Management Budget Program it is proposed to decrease the Special rate funded community building maintenance budget by $557,200 and move to 2017/18 as they will not be expended this financial year. It is proposed to decrease capital expenditure by $267,400 due to the Byron Bay Library project being complete ($35,400) with the Suffolk Park Community hall upgrade ($100,000) and the Public Toilet Maintenance ($132,000) being moved to the 2017/18 budget.

Sustainable Environment and Economy

· In the Development & Certification Budget Program it is proposed to increase operating income by $30,000 as there has been a steady and significant increase in compliance certificate inspections.

· In the Planning Policy and Natural Environment Budget Program, it is proposed to increase income by $20,000 due to a $15,000 grant received from the Office of Environment and Heritage for the Shire Wide Flying Fox Management Plan and $5,000 received from the National Climate Change Adaptation Research Facility (NCCARF). It is proposed to decrease operating expenditure due to a reduction against planning studies ($7,500), an increase for the Shirewide Flying Fox Management Plan ($22,500), an increase for the revolving energy fund that relates to the supply and installation of a lighting upgrade to the Depot ($27,900 funded from the Revolving Energy reserve) and decreases against Community Infrastructure Maintenance Program ($13,300), CZMP for Byron Bay Embayment ($16,900) and the Review of the Biodiversity Conservation Strategy ($20,000) that will remain unexpended this financial year and are all funded through the Environmental Levy.

· In the Economic Development Budget Program, it is proposed to increase operating income by $215,000 due to the Conferencing Byron project ($210,000) and the Back to Business project ($5,000). Operating expenditure increased due to Conferencing Byron ($240,000), Back to business ($5,000) and the Byron Placemaking Seed Fund ($10,000).

WATER FUND

After completion of the 2015/2016 Financial Statements the Water Fund as at 30 June 2016 has a capital works reserve of $2,723,000 and held $10,549,100 in section 64 developer contributions.

The estimated Water Fund reserve balances as at 30 June 2017, and forecast in this Quarter Budget Review, are derived as follows:

Capital Works Reserve

Opening Reserve Balance at 1 July 2016	$2,723,000
Plus original budget reserve movement	1,553,000
Less reserve funded carryovers from 2015/2016	(346,800)
Resolutions July - September Quarter – increase / (decrease)	0
September Quarterly Review Adjustments – increase / (decrease)	(53,700)
Resolutions October - December Quarter – increase / (decrease)	0
December Quarterly Review Adjustments – increase / (decrease)	(289,700)
Resolutions January - March Quarter – increase / (decrease)	(250,000)
March Quarterly Review Adjustments – increase / (decrease)	356,600
Forecast Reserve Movement for 2016/2017 – Increase / (Decrease)	969,400
Estimated Reserve Balance at 30 June 2017	$3,692,400

Section 64 Developer Contributions

Opening Reserve Balance at 1 July 2016	$10,549,100
Plus original budget reserve movement	(7,794,000)
Less reserve funded carryovers from 2015/2016	(383,100)
Resolutions July - September Quarter – increase / (decrease)	0
September Quarterly Review Adjustments – increase / (decrease)	1,270,000
Resolutions October - December Quarter – increase / (decrease)	0
December Quarterly Review Adjustments – increase / (decrease)	(1,740,900)
Resolutions January - March Quarter – increase / (decrease)	0
March Quarterly Review Adjustments – increase / (decrease)	514,000
Forecast Reserve Movement for 2016/2017 – Increase / (Decrease)	(8,134,000)
Estimated Reserve Balance at 30 June 2017	$2,415,100

Movements for Water Fund can be seen in Attachment 1 with a proposed estimated increase to reserves (including S64 Contributions) overall of $870,600 from the 31 March 2017 Quarter Budget Review.

SEWERAGE FUND

After completion of the 2015/2016 Financial Statements the Sewer Fund has a capital works reserves of $5,153,600 and plant reserve of $827,800. It also held $8,760,300 in section 64 developer contributions.

Capital Works Reserve

Opening Reserve Balance at 1 July 2017	$5,153,600
Plus original budget reserve movement	814,200
Less reserve funded carryovers from 2015/2016	(96,900)
Resolutions July - September Quarter – increase / (decrease)	0
September Quarterly Review Adjustments – increase / (decrease)	1,071,600
Resolutions October - December Quarter – increase / (decrease)	0
December Quarterly Review Adjustments – increase / (decrease)	(427,100)
Resolutions January - March Quarter – increase / (decrease)	0
March Quarterly Review Adjustments – increase / (decrease)	1,678,500
Forecast Reserve Movement for 2016/2017 – Increase / (Decrease)	3,040,300
Estimated Reserve Balance at 30 June 2017	$8,193,900

Plant Reserve

Opening Reserve Balance at 1 July 2016	$827,800
Plus original budget reserve movement	0
Less reserve funded carryovers from 2015/2016	0
Resolutions July - September Quarter – increase / (decrease)	0
September Quarterly Review Adjustments – increase / (decrease)	0
Resolutions October - December Quarter – increase / (decrease)	0
December Quarterly Review Adjustments – increase / (decrease)	0
Resolutions January - March Quarter – increase / (decrease)	0
March Quarterly Review Adjustments – increase / (decrease)	0
Forecast Reserve Movement for 2016/2017 – Increase / (Decrease)	0
Estimated Reserve Balance at 30 June 2017	$827,800

Section 64 Developer Contributions

Opening Reserve Balance at 1 July 2016	$8,760,300
Plus original budget reserve movement	(2,785,400)
Less reserve funded carryovers from 2015/2016	(503,200)
Resolutions July - September Quarter – increase / (decrease)	0
September Quarterly Review Adjustments – increase / (decrease)	1,074,700
Resolutions October - December Quarter – increase / (decrease)	0
December Quarterly Review Adjustments – increase / (decrease)	(2,449,800)
Resolutions January - March Quarter – increase / (decrease)	0
March Quarterly Review Adjustments – increase / (decrease)	1,131,800
Forecast Reserve Movement for 2016/2017 – Increase / (Decrease)	(3,531,900)
Estimated Reserve Balance at 30 June 2017	$5,228,400

Movements for the Sewerage Fund can be seen in Attachment 1 with a proposed estimated overall increase to reserves (including S64 Contributions) of $2,810,300 from the 31 March 2017 Quarter Budget Review.

Legal Expenses

One of the major financial concerns for Council over previous years has been legal expenses. Not only does this item represent a large expenditure item funded by general revenue, but can also be susceptible to large fluctuations.

The table that follows indicates the allocated budget and actual legal expenditure within Council on

a fund basis as at 31 March 2017.

Total Legal Income & Expenditure as at 31 March 2017

Program	2016/2017 Budget ($)	Actual ($)	Percentage To Revised Budget
Income
Legal Expenses Recovered	0	0	0%
Total Income	0	0	0%

Expenditure
General Legal Expenses	200,000	60,314	30.1%
Total Expenditure General Fund	200,000	60,314	30.1%

Note: The above table does not include costs incurred by Council in proceedings after 31 March 2017 or billed after this date along with legal costs incurred with the Byron Bay Bypass project that have currently been charged to the project.

Financial Implications

The 31 March 2017 Quarter Budget Review of the 2016/2017 Budget has increased the overall budget result by $3,300. As a result the estimated unrestricted cash balance attributable to the General Fund decreased to an estimated $1,145,200 at 30 June 2017.

Statutory and Policy Compliance Implications

In accordance with Regulation 203 of the Local Government (General) Regulation 2005 the Responsible Accounting Officer of a Council must:-

(1) Not later than 2 months after the end of each quarter (except the June quarter), the responsible accounting officer of a council must prepare and submit to the council a budget review statement that shows, by reference to the estimate of income and expenditure set out in the statement of the council’s revenue policy included in the operational plan for the relevant year, a revised estimate of the income and expenditure for that year.

(2) A budget review statement must include or be accompanied by:

(a) a report as to whether or not the responsible accounting officer believes that the statement indicates that the financial position of the council is satisfactory, having regard to the original estimate of income and expenditure, and

(b) if that position is unsatisfactory, recommendations for remedial action.

(3) A budget review statement must also include any information required by the Code to be included in such a statement.

Statement by Responsible Accounting Officer

This report indicates that the short term financial position of Council is satisfactory for the 2016/2017 financial year, having consideration of the original estimate of income and expenditure at the 31 March 2017 Quarter Budget Review.

This opinion is based on the estimated General Fund Unrestricted Cash Result position and that the current indicative budget position for 2016/2017, whilst now a projected balanced result still provides that the General Fund Unrestricted Cash Balance will remain above Council’s adopted benchmark of $1,000,000. Not withstanding this, Council will need to continue to carefully monitor the 2016/2017 budget over the remainder of the financial year especially in the Local Roads & Drainage Budget Programs and Open Space and Recreation Budget Programs that are under pressure given recent weather events and expenditure to date.

BYRON SHIRE COUNCIL

Late Reports 5.1 - Attachment 1

Strategy Element: Expenditure Review

Actions	Action Owner	Action Due Date	Management Comments
1. Recommendations on expenditure savings or efficiency gains identified by responsible staff reported to the Executive Team.	DCCS	June 2017	Progress Update (31 March 2017) Reports are prepared following the quarterly Strategic Procurement Steering Committee meetings to the ET and responsible Managers. The reports include recommendations for potential savings or efficiency gains from Contracts tendered by Council or the NOROC Procurement Group, and recommendations on Contracts that should be developed and Tendered by Council.
2. Monthly Management Finance Reports provided to the Executive Team.	DCCS	Monthly	Progress Update (31 March 2017) Monthly Management Finance Reports are prepared by the Finance Manager and considered by the Executive Team at the monthly Performance Management meeting held on the second Wednesday of each month.
3. Monthly Management Finance Reports provided to Councillors.	DCCS	Monthly	Progress Update (31 March 2017) A copy of the Monthly Management Finance Report is distributed by the Director Corporate and Community Services to Councillors on the Friday following the Executive Team Performance Management meeting. The version of the Monthly Management Finance Report distributed Councillors is in accordance with the template adopted by Council for the monthly report.
4. Progress reports to the Finance Committee on the implementation of the adopted FSP actions.	DCCS	Quarterly	Progress Update (31 March 2017) The 2016/17 FSP was adopted by Council at its ordinary meeting held on 2 February. This is the second progress report prepared for the Finance Committee updating the Committee on the progress of implementing the adopted actions.
5. Report to Council through the Quarterly Budget Review any identified expenditure savings.	DCCS	Quarterly	Progress Update (31 March 2017) Expenditure savings will be included in the March 2017 Quarterly Budget Review Report to this meeting of the Finance Committee.
6. Report to Council any recommendations regards policy changes.	DCCS	As required	Progress Update (31 March 2017) Reported to Council as required.

Strategy Element: Revenue Review

Actions	Action Owner	Action Due Date	Management Comments
1. Internal Staff Working Groups to report to the Executive Team on the progress achieved on the implementation of their specific initiative/s.	DCCS	June 2017	Progress Update (31 March 2017) The Internal Working Groups have continued to operate and report to the Executive Team as required. A weekly status update for identified critical projects is provided in the internal weekly Critical Project Status Update Report to ET.
2. Internal Staff Working Group/staff to report to the Executive Team any proposed opportunities for deriving new/additional revenue.	DCCS	June 2017	Progress Update (31 March 2017) The focus during the reporting period has been on the finalisation and lodgement of Council’s Special Rate Variation (SRV) application to the Independent Pricing and Regulatory Tribunal (IPART) following Council’s resolution to proceed with an application.
3. Report to the Finance Committee and/or the Council any proposed opportunities for deriving new/additional revenue.	DCCS	Quarterly	Progress Update (31 March 2017) Reported as required.
4. Report to Council any recommendations regarding policy change and/or increases to existing or new revenue sources.	DCCS	June 2017	Progress Update (31 March 2017) Presentations and Workshop sessions were held with the Finance Advisory Committee and Council Strategic Planning Workshops on proposals regarding the redistribution of the rating structure fro the 2017-2018 financial year. This enable the consideration of options and a report to Council to consider a proposal for the purposes of public exhibition at its April 2017 Ordinary Meeting.
5. Prepare submissions and lobby for grant funding for major capital works projects.	DCCS	June 2017	Progress Update (31 March 2017) The Grant application submitted by Council have been supported, where appropriate, with submissions to the Local Members and the responsible State or Federal Minister. The Grant Applications submitted are detailed in the Monthly Grants Report to Council.
6. Community Consultation and Submission of the Special Rate Variation Application to IPART to apply from 2017/2018 financial year and three following financial years.	DCCS	June 2017	Progress Update (31 March 2017) Following Council’s resolution to proceed to lodge an application for a Special Rate Variation (SRV) to IPART after consideration of the community consultation outcome, a comprehensive application was lodged addressing the IPART criteria for consideration by the lodgement date of 13 February 2017. Council has also been providing additional information as requested by IPART during the assessment process of Council’s application that was not requested as part of the original application.

Strategy Element: Land Review and Property Development

Actions	Action Owner	Action Due Date	Management Comments
General Fund
2. Lot 12 Bayshore Drive – Evaluation and possible sale.	DIS	June 2017	Progress Update (31 March 2017) The waste processing licence has been surrendered to the EPA with finalization pending. The site is fenced and stable. A report to Council on future use is pending.
3. Manfred Street – Complete and lodge planning proposal for the reclassification in accordance with Res 13-698.	DCCS	June 2017	Progress Update (31 March 2017) Currently awaiting Department of Planning determination of the Planning Proposal.
4. Station Street – Complete sale.	DIS	June 2017	Progress Update (31 March 2017) Contract for sale finalised with NCCH contingent upon DA approval and registered subdivision. Subdivision works commenced. A S96 will be required to align the NCCH outcomes with the existing consent.
5. Yaran Road, Tyagarah Airfield – Rezoning, DA works.	DIS	June 2017	Progress Update (31 March 2017) The matter was reported to Council and deferred subject to a range of matters articulated in Res 17-121, including Social Impact Assessment, Noise Impact Assessment, Strategic Floodplain Management Plan, Councillor Workshop, community consultation and accumulative ecological impact assessment.
6. Lot 22 Mullumbimby – Planning proposal and rezoning.	DIS	June 2017	Progress Update (31 March 2017) A planning consultant has been engaged to facilitate the rezoning/ reclassification process. Key supporting studies such as the Flood study and Recreational Land Use study are progressing. A planning proposal will be developed.
7. Bayshore Drive Works Depot, Byron Bay (Lot 102, DP1087996, 1.79 hectares) – Reassess the feasibility and options for a potential relocation.	DIS	June 2017	Progress Update (31 March 2017) The report from consultants, Complete Urban, is expected in April.

Water Fund
8. Fletcher Street –Finalise architectural concept and business case.	DIS	June 2017	Progress Update (31 March 2017) The tender was issued and closed. A recommendation will be reported to Council. The project remains on track.
Sewer Fund
9. South Byron STP – Future option determination. Continue site remediation. Start rezoning.	DIS	June 2017	Progress Update (31 March 2017) A draft report was prepared for Council and this will be used to inform a presentation to a SPW in May.
10. Brunswick Heads STP – Complete remediation.	DIS	June 2017	Progress Update (31 March 2017) Work has progressed in finalizing the necessary pre construction supporting documentation and work for the site contamination auditor.
11. Mullumbimby STP – Detailed site contamination and remediation assessments.	DIS	June 2017	Progress Update (31 March 2017) Work with GHD is progressing in accordance with the project plan.
12. Brunswick Valley STP, Vallances Road – Assess development options.	DIS	June 2017	Progress Update (31 March 2017) Council has resolved to prepare a site POM and this will be progressed with a consultant.
13. Bangalow STP – The RLUS has determined that rural residential is not viable in this location due to the proximity of both the STP and surrounding agricultural activity.	DIS	June 2017	Progress Update (31 March 2017) No further work required.
14. Lot 4 Mill Street – Assess development options.	DIS	June 2017	Progress Update (31 March 2017) Waiting for a response from JHR. The March flood reached a height of 4.2m. Based on this flood level it will not be possible to achieve a flood free access.
15. Various small surplus land parcels – Continue program.	DIS	June 2017	Progress Update (31 March 2017) This matter is ongoing and work has progressed on the options for sale of surplus road reserves and other minor land areas and been reported to Council.
Waste Fund
16. Lots 3 and 29 Manse Road – Progress options for resource recovery in the quarry	DIS	June 2017	Progress Update (31 March 2017) A Resource recovery Master Plan has been developed. This will be an important step in establishing options for the future use of the adjoining quarry.
17. Lot 15 Dingo Lane, Myocum – Progress options for resource recovery in the quarry.	DIS	June 2017	Progress Update (31 March 2017) Consultants Complete Urban have considered this site in their depot relocation assessment.
18. Lot 16 Dingo Lane, Myocum – Assess retention and sale options.	DIS	June 2017	Progress Update (31 March 2017) A report will be prepared for Council regarding options.

Strategy Element: Strategic Procurement

Actions	Action Owner	Action Due Date	Management Comments
1. Develop contracts management guidelines and processes.	DCCS	June 2017	Progress Update (31 March 2017) Contract Management Guidelines endorsed and provided to staff with a toolkit. Staff training sessions booked for April and May. Complete.
2. Develop annual procurement plan.	DCCS	June 2017	Progress Update (31 March 2017) Annual Procurement Plan developed and endorsed by the Executive Team. Complete.
3. Develop and implement priority contracts program.	DCCS	June 2017	Progress Update (31 March 2017) Priority contracts program developed with Annual Procurement Plan, based on spend analysis data. Complete.
4. Detailed spend analysis and reporting.	DCCS	June 2017	Progress Update (31 March 2017) Spend analysis is completed at the end of each financial year to track performance and identify opportunities for improvement. Complete.
5. Implement ongoing procurement and contract management training program.	DCCS	June 2017	Progress Update (31 March 2017) Identified staff are undertaking online training through local government procurement. Training courses being undertaken include: Probity in Procurement, Procurement Essentials, Contract Management, and Specification Writing. Online training will continue to be offered to relevant staff. Complete.
6. Implement targeted program to reduce invoice numbers and transaction costs.	DCCS	June 2017	Progress Update (31 March 2017) The new purchase to pay process (see item 8 below) will result in a significant reduction in transaction costs. Work to reduce invoice numbers is ongoing. For example, where appropriate, new contracts require suppliers to provide a consolidated monthly invoice. In progress.
7. Develop social and sustainable procurement and economic development plan.	DCCS	June 2017	Progress Update (31 March 2017) The Sustainable Procurement Plan which addresses the four elements of sustainable procurement (social, environmental, economic, governance) has been completed. Complete.
8. Review purchase to pay process.	DCCS	June 2017	Progress Update (31 March 2017) On-line purchase requisitions (OLR) has now been implemented and went live during April 2017. Efforts are continuing to resolve issues as they arise in conjunction with software supplier and to assist staff with the transition to the new processes. In progress.
9. Implement purchasing cards for low value high volumed transactions.	DCCS	June 2017	Progress Update (31 March 2017) Project is progressing. Application has been made to Council’s bank for the provision of the purchase card credit facility. Draft Policy has been endorsed by Executive Team. Staff identified to participate in trial of purchaser cards completed

Strategy Element: Policy and Decision Making

Actions	Action Owner	Action Due Date	Management Comments
1. Council continue to consider the short, medium and long term financial impacts and the context of Council’s long term financial sustainability in its ongoing policy and decision making processes.	Finance Manager	June 2017	Progress Update (31 March 2017) The Finance Manager undertakes a review of the reports to Council on a monthly basis and provides comments to Report Writers and the Executive Team on the financial implications. Comments are included in the reports for consideration of Council in the decision making process. Resolutions impacting on budgets are considered in the QBR process and then included in the financial modelling used for the preparation of the LTFP
2. That any unspent budget votes from the 2015/16 budget recommended to be carried over to the 2016/17 Budget be reported to Council following the end of the 2015/16 Financial Year.	Council	June 2017	Progress Update (31 March 2017) This item is complete. Carryovers from 2015/2016 to be added to the 2016/2017 budget were considered by the Finance Advisory Committee at its Meeting held on 18 August 2016. These were later adopted by Council at its Ordinary Meeting held on 25 August 2016 (Resolution 16-446).
3. That the monthly Finance Report be distributed to Councillors on a monthly basis.	Finance Manager	June 2017	Progress Update (31 March 2017) Monthly finance reports are being circulated to Councillors.
4. That policies that contain wording or provisions that are considered to be restrictive be reviewed to incorporate enabling wording and guidelines for Council’s consideration and approval.	DCCS	June 2017	Progress Update (31 March 2017) This project is ongoing.

Strategy Element: Potential Commercial Opportunities

Actions	Action Owner	Action Due Date	Management Comments
1. Management will progressively prepare and submit to Council reports on any potential commercial opportunities and ventures identified in the adopted Byron Bay Town Centre Masterplan.	ET	June 2017	Progress Update (31 March 2017) Leadership Group has been established. Other Projects identified by staff will be reported to Council as developed.
2. Management to prepare and submit to Council reports on any potential commercial opportunities and ventures when identified for any other specific projects such as: a) Future management and development of the Tyagarah Aerodrome b) Development of Byron Bay Swimming Pool/Café c) Redevelopment of the old Fletcher Street Library building.	DIS	June 2017	Progress Update (31 March 2017) a) The matter was reported to Council and deferred subject to a range of matters articulated in Res17-121 including Social Impact Assessment, Noise Impact Assessment, Strategic Floodplain Management Plan, Councillor Workshop, community consultation and accumulative ecological impact assessment. b) This matter is currently pending the resolution of the land tenure issues at this site. Council has resolved to close the section of road reserve and Crown lands has agreed that upon closure that this land will vest to Council. c) The tender was issued and closed. A recommendation will be reported to Council. The project remains on track. · information for their consideration. · Expected that a report on the final Planning Proposal will be presented to Council at the 25 August 2016 meeting, pending OEH’s further advice. · The Agreement to Lease and lease documents for the Tyagarah Hall have been signed by the successful applicant · DA for associated activities has been lodged with Council.

Actions

Action Owner

Action Due Date

Management Comments

1. Management will progressively prepare and submit to Council reports on any potential commercial opportunities and ventures identified in the adopted Byron Bay Town Centre Masterplan.

June 2017

Progress Update (31 March 2017)

Leadership Group has been established.

Other Projects identified by staff will be reported to Council as developed.

2. Management to prepare and submit to Council reports on any potential commercial opportunities and ventures when identified for any other specific projects such as:

a) Future management and development of the Tyagarah Aerodrome

b) Development of Byron Bay Swimming Pool/Café

c) Redevelopment of the old Fletcher Street Library building.

DIS

June 2017

Progress Update (31 March 2017)

a) The matter was reported to Council and deferred subject to a range of matters articulated in Res17-121 including Social Impact Assessment, Noise Impact Assessment, Strategic Floodplain Management Plan, Councillor Workshop, community consultation and accumulative ecological impact assessment.

b) This matter is currently pending the resolution of the land tenure issues at this site. Council has resolved to close the section of road reserve and Crown lands has agreed that upon closure that this land will vest to Council.

c) The tender was issued and closed. A recommendation will be reported to Council. The project remains on track.

· information for their consideration.

· Expected that a report on the final Planning Proposal will be presented to Council at the 25 August 2016 meeting, pending OEH’s further advice.

· The Agreement to Lease and lease documents for the Tyagarah Hall have been signed by the successful applicant

· DA for associated activities has been lodged with Council.

Strategy Element: Volunteerism

Actions	Action Owner	Action Due Date	Management Comments
1. Review the Volunteer Policy and framework to ensure that it meets the National Standards for volunteer involvement, and supports the organisation in delivering volunteer activities.	Manager Community Development	June 2017	Progress Update (31 March 2017) Preparation underway, however delayed due to full S355 guideline and induction rewrite based on feedback from committees. Expected to be delivered first quarter 17/18 financial year.
2. Undertake an organisation wide audit of current volunteer activities.	ET	June 2017	Progress Update (31 March 2017) Internal Audit yet to be progressed.
3. Recognition of current volunteers.	ET	June 2017	Progress Update (31 March 2017) Volunteer recognition event scheduled for 12 May. Additional volunteer event to be undertaken to thank volunteers and community sector for assistance in the wake of ex-tropical cyclone Debbie.
4. Identify and deliver a social innovation pilot project.	Manager Community Development	June 2017	Progress Update (31 March 2017) Proceed to scope social enterprise project pipeline through the Social Enterprise Action Plan to establish feasibility and buy-in. · CountryLink social enterprise project underway. Currently working on heritage components. Delay in heritage assessment process due to severe weather event preventing meeting with Heritage Office in Sydney. Meeting date rescheduled to 15^th May 2017 · Resource Recovery Study tour completed April 2017 to Great Lakes and Kimbriki (Sydney). Workshop with Resource Recovery team May 2017 · Byron Young Innovators pilot project endorsed by Council March. Implementation plan under development. Pilot a social procurement project in 2017 (Asset Management Program, Water and Sewer) · Specification for Myocum Tip electrical sorting being developed · Specifications toilet cleaning being developed Develop a Council supported funding strategy for a long-term social enterprise incubator program and facility · In development · MOU with STEAM consortium · Potential pilot project Southern Cross University/SAE · Government and philanthropic funding outside of funding cycles being scoped and explored Convene staff and external educational workshops in social procurement and social impact measurement · Social Traders introduction to social enterprise workshops delivered Byron Bay · Community capacity building, knowledge sharing and networking underway · Social enterprise mapping underway Develop a communications strategy to demonstrate Council’s commitment to social impact · Concept plan endorsed by ET as first step · All staff forum information session on benefits social procurement · Processes and programs to be fully developed prior to communication strategies

Strategy Element: Collaborations and Partnerships

Actions	Action Owner	Action Due Date	Management Comments
1. Embed collaboration/partnerships into the IP&R framework through the four year preparation of IP&R documents.	DCCS	June 2017	Progress Update (31 March 2017) Collaboration/partnership strategy to be developed and implemented in Years 1-2 of Delivery Program 2017-2021 which is currently on public exhibition.
2. Identify key potential organisational strategic partnerships/collaborations.	DCCS	June 2017	Progress Update (31 March 2017) · As above · Opportunities for collaboration/partnership to be identified across Council during development of strategies and actions
3. Review the format of Council reports as part of the internal audit recommendations to align Council reporting with strategic objectives.	DCCS	June 2017	Progress Update (31 March 2017) Progressing.
4. Provide a report to ET quarterly that identifies strategic partnerships/collaboration projects.	DSEE	June 2017	Progress Update (31 March 2017) Research Paper currently being prepared for presentation to the Executive Team and Council on potential frameworks for strategic partnerships/collaboration projects.

Strategy Element: Asset Management

Actions	Action Owner	Action Due Date	Management Comments
1. Prepare infrastructure reports for the Financial Statements and NSW Fit for Future program.	DIS	June 2017	Progress Update (31 March 2017) This was completed and submitted as part of the submission to the State Government.
2. Develop levels of service for infrastructure to support investment.	DIS	June 2017	Progress Update (31 March 2017) Work is progressing on the Transport AMP and will be further advanced following the outcome of the Special Rate Variation Application (SRVA).
3. Progress the outcomes of Asset Management Audits to improve performance.	DIS	June 2017	Progress Update (31 March 2017) Work is continuing and in February an audit was completed by Grant Thornton. The findings will be reported to the IAC.
4. Improve the level and integration of asset information to better assist decision making and focus infrastructure investment.	DIS	June 2017	Progress Update (31 March 2017) A new Customer Relationship Management (CRM) project is progressing. The level of integration with the assets system is yet to be finalised.
5. Revalue water and sewer assets in accordance with the Local Government Accounting Code.	DIS	June 2017	Progress Update (31 March 2017) The revaluation is progressing.
6. Creatively develop new and revised funding strategies for better community outcomes.	DIS	June 2017	Progress Update (31 March 2017) The SRVA was developed and submitted following extensive community consultation.
7. Actively work with government and industry leaders to improve asset management performance.	DIS	June 2017	Progress Update (31 March 2017) Staff have arranged for a industry leading workshop on Special Schedule 7 Infrastructure Reporting. Staff have been asked to speak regarding our advanced approach to bridge risk analysis using the software Reflect.
8. Engage with the community on the challenges of asset management.	DIS	June 2017	Progress Update (31 March 2017) The SRVA was developed and submitted following extensive community consultation. The IPART decision is expected in May. The Transport & Infrastructure Advisory Committee continues to be engaged with detailed presentations made at 16 February meeting.

Strategy Element: Long Term Financial Planning

Actions	Action Owner	Action Due Date	Management Comments
1. Develop the 2016-2026 Long Term Financial Plan following adoption of the 2016/17 Operational Plan and report to the Finance Advisory Committee/Council prior to 18 August 2016.	Finance Manager	June 2017	Progress Update (31 March 2017) 2016-2026 Long Term Financial Plan adopted by Council on 15 December 2017. Completed but not by the Action due date.
2. Further update the 2016-2026 Long Term Financial Plan to address the requirements of Council’s proposed Special Rate Variation (SRV) application prior to lodgement with IPART in February 2017.	Finance Manager	June 2017	Progress Update (31 March 2017) Additional versions of LTFP also created to support Special Rate Variation (SRV) to IPART to match actual application and a further scenario to analyse impacts of proposed SRV expenditure without the proposed SRV revenue as requested by IPART during assessment of Council’s application. Completed.

Actions

Action Owner

Action Due Date

Management Comments

1. Develop the 2016-2026 Long Term Financial Plan following adoption of the 2016/17 Operational Plan and report to the Finance Advisory Committee/Council prior to 18 August 2016.

Finance Manager

June 2017

Progress Update (31 March 2017)

2016-2026 Long Term Financial Plan adopted by Council on 15 December 2017.

Completed but not by the Action due date.

2. Further update the 2016-2026 Long Term Financial Plan to address the requirements of Council’s proposed Special Rate Variation (SRV) application prior to lodgement with IPART in February 2017.

Finance Manager

June 2017

Progress Update (31 March 2017)

Additional versions of LTFP also created to support Special Rate Variation (SRV) to IPART to match actual application and a further scenario to analyse impacts of proposed SRV expenditure without the proposed SRV revenue as requested by IPART during assessment of Council’s application.

Completed.

Strategy Element: Performance Indicators

Actions	Action Owner	Action Due Date	Management Comments
1. Ongoing quarterly reporting to the Finance Advisory Committee and Council on Financial Sustainability Plan (FSP) outcomes.	Finance Manager	Quarterly	Progress Update (31 March 2017) Reporting for the quarter ended 31 March 2017 reported to the FAC 18 May 2017.
2. Recognition through the QBR process of financial outcomes delivered by the FSP.	Finance Manager	Quarterly	Progress Update (31 March 2017) March 2017 QBR reported to FAC on 18 May 2017.
3. Structural changes to both revenue sources and expenditure will be updated in the base budget during the preparation of the 2017/18 Budget.	Finance Manager	June 2017	Progress Update (31 March 2017) 2017/2018 budget currently on public exhibition at time of preparing this comment. To be adopted by Council on 22 June 2017 to include additional revenue from Special Rate Variation now approved and projects funded from the first year increase. Also includes additional asset maintenance funding.
4. The financial outcomes delivered by the FSP updated into the Council’s Long Term Financial Plan and modelled in the Long Term Financial Plan Scenarios.	Finance Manager	June 2017	Progress Update (31 March 2017) Changes are being identified by the Finance Manager through the QBR and financial modelling processes.
5 Assessment of the Note 13 and Special Schedule 7 performance ratios disclosed annually in Council’s audited financial statements which should indicate a trend improvement from FSP outcomes.	Finance Manager	June 2017	Progress Update (31 March 2017) No update for this reporting period.
6. Assessment of the seven ‘Fit for Future’ benchmarks on an ongoing basis to ensure Council maintains the ‘Fit’ outcome.	Finance Manager	June 2017	Progress Update (31 March 2017) No update for this reporting period.

Strategy Element: Environmental Projects

Actions	Action Owner	Action Due Date	Management Comments
1. Implement actions from the Low Carbon Strategy as per scheduled timeframes. Example of actions that meet the FSP include energy efficiency measures, installation of solar power and solar hot water, energy data optimisation, electric fleet vehicles and installation of smart meters.	DSEE	June 2017	Progress Update (31 March 2017) 100% of the Low Carbon Strategy actions to date have been completed or are in progress. The strategy sets a target to reduce greenhouse gas emissions by a minimum of 30% from 2003-2004 levels by 2020. Achievements to date: The Myocum Landfill Gas collection network and flare was upgraded and a 10 year contract procured for the system operation and flare hire. A 103kW solar system installed on council assets. 5 solar hot water systems at Community Centres and the Depot. Energy audits of the Sandhills Child Care and The Cavanbah Centre. Lighting efficiency retrofits on council assets.
2. Work collaboratively with the Zero Emissions Byron project to identify actions that go beyond the Byron Shire Low Carbon Strategy.	DSEE	June 2017	Progress Update (31 March 2017) The Zero Emissions Byron project is overseen by a steering committee comprising the Mayor, Council staff, local community groups, BZE and the Centre for Social Change. The project is organised according to five sectors that contribute to emissions in the Shire: energy, transport, buildings, land use and waste. In each sector a team of local volunteers and experts has been established and has now calculated the baseline emissions. The Baseline Emissions Report is the current emissions and emission reduction strategies for the Byron community. Moving forward post baseline report, the creation a 10 Year Strategic Action Plan, identifying clear projects/strategies to help reduce emissions is now under development.

Actions

Action Owner

Action Due Date

Management Comments

1. Implement actions from the Low Carbon Strategy as per scheduled timeframes. Example of actions that meet the FSP include energy efficiency measures, installation of solar power and solar hot water, energy data optimisation, electric fleet vehicles and installation of smart meters.

DSEE

June 2017

Progress Update (31 March 2017)

100% of the Low Carbon Strategy actions to date have been completed or are in progress. The strategy sets a target to reduce greenhouse gas emissions by a minimum of 30% from 2003-2004 levels by 2020.

Achievements to date: The Myocum Landfill Gas collection network and flare was upgraded and a 10 year contract procured for the system operation and flare hire. A 103kW solar system installed on council assets. 5 solar hot water systems at Community Centres and the Depot. Energy audits of the Sandhills Child Care and The Cavanbah Centre. Lighting efficiency retrofits on council assets.

2. Work collaboratively with the Zero Emissions Byron project to identify actions that go beyond the Byron Shire Low Carbon Strategy.

DSEE

June 2017

Progress Update (31 March 2017)

The Zero Emissions Byron project is overseen by a steering committee comprising the Mayor, Council staff, local community groups, BZE and the Centre for Social Change. The project is organised according to five sectors that contribute to emissions in the Shire: energy, transport, buildings, land use and waste. In each sector a team of local volunteers and experts has been established and has now calculated the baseline emissions. The Baseline Emissions Report is the current emissions and emission reduction strategies for the Byron community. Moving forward post baseline report, the creation a 10 Year Strategic Action Plan, identifying clear projects/strategies to help reduce emissions is now under development.

Venue	Conference Room, Station Street, Mullumbimby
Date	Thursday, 18 May 2017
Time	2.00pm