Notice of Meeting

 

 

 

 

 

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Finance Advisory Committee Meeting

 

 

A Finance Advisory Committee Meeting of Byron Shire Council will be held as follows:

 

Venue

Council Chamber, Station Street, Mullumbimby

Date

Thursday, 15 February 2018

Time

2.00pm

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Anna Vinfield

Acting Director Corporate and Community Services                                                       I2018/211

                                                                                                                                    Distributed 09/02/18

 

 


CONFLICT OF INTERESTS

What is a “Conflict of Interests” - A conflict of interests can be of two types:

Pecuniary - an interest that a person has in a matter because of a reasonable likelihood or expectation of appreciable financial gain or loss to the person or another person with whom the person is associated.

Non-pecuniary – a private or personal interest that a Council official has that does not amount to a pecuniary interest as defined in the Local Government Act (eg. A friendship, membership of an association, society or trade union or involvement or interest in an activity and may include an interest of a financial nature).

Remoteness – a person does not have a pecuniary interest in a matter if the interest is so remote or insignificant that it could not reasonably be regarded as likely to influence any decision the person might make in relation to a matter or if the interest is of a kind specified in Section 448 of the Local Government Act.

Who has a Pecuniary Interest? - a person has a pecuniary interest in a matter if the pecuniary interest is the interest of the person, or another person with whom the person is associated (see below).

Relatives, Partners - a person is taken to have a pecuniary interest in a matter if:

§  The person’s spouse or de facto partner or a relative of the person has a pecuniary interest in the matter, or

§  The person, or a nominee, partners or employer of the person, is a member of a company or other body that has a pecuniary interest in the matter.

N.B. “Relative”, in relation to a person means any of the following:

(a)   the parent, grandparent, brother, sister, uncle, aunt, nephew, niece, lineal descends or adopted child of the person or of the person’s spouse;

(b)   the spouse or de facto partners of the person or of a person referred to in paragraph (a)

No Interest in the Matter - however, a person is not taken to have a pecuniary interest in a matter:

§  If the person is unaware of the relevant pecuniary interest of the spouse, de facto partner, relative or company or other body, or

§  Just because the person is a member of, or is employed by, the Council.

§  Just because the person is a member of, or a delegate of the Council to, a company or other body that has a pecuniary interest in the matter provided that the person has no beneficial interest in any shares of the company or body.

Disclosure and participation in meetings

§  A Councillor or a member of a Council Committee who has a pecuniary interest in any matter with which the Council is concerned and who is present at a meeting of the Council or Committee at which the matter is being considered must disclose the nature of the interest to the meeting as soon as practicable.

§  The Councillor or member must not be present at, or in sight of, the meeting of the Council or Committee:

(a)   at any time during which the matter is being considered or discussed by the Council or Committee, or

(b)   at any time during which the Council or Committee is voting on any question in relation to  the matter.

No Knowledge - a person does not breach this Clause if the person did not know and could not reasonably be expected to have known that the matter under consideration at the meeting was a matter in which he or she had a pecuniary interest.

Participation in Meetings Despite Pecuniary Interest (S 452 Act)

A Councillor is not prevented from taking part in the consideration or discussion of, or from voting on, any of the matters/questions detailed in Section 452 of the Local Government Act.

Non-pecuniary Interests - Must be disclosed in meetings.

There are a broad range of options available for managing conflicts & the option chosen will depend on an assessment of the circumstances of the matter, the nature of the interest and the significance of the issue being dealt with.  Non-pecuniary conflicts of interests must be dealt with in at least one of the following ways:

§  It may be appropriate that no action be taken where the potential for conflict is minimal.  However, Councillors should consider providing an explanation of why they consider a conflict does not exist.

§  Limit involvement if practical (eg. Participate in discussion but not in decision making or vice-versa).  Care needs to be taken when exercising this option.

§  Remove the source of the conflict (eg. Relinquishing or divesting the personal interest that creates the conflict)

§  Have no involvement by absenting yourself from and not taking part in any debate or voting on the issue as if the provisions in S451 of the Local Government Act apply (particularly if you have a significant non-pecuniary interest)

RECORDING OF VOTING ON PLANNING MATTERS

Clause 375A of the Local Government Act 1993 – Recording of voting on planning matters

(1)   In this section, planning decision means a decision made in the exercise of a function of a council under the Environmental Planning and Assessment Act 1979:

(a)   including a decision relating to a development application, an environmental planning instrument, a development control plan or a development contribution plan under that Act, but

(b)   not including the making of an order under Division 2A of Part 6 of that Act.

(2)   The general manager is required to keep a register containing, for each planning decision made at a meeting of the council or a council committee, the names of the councillors who supported the decision and the names of any councillors who opposed (or are taken to have opposed) the decision.

(3)   For the purpose of maintaining the register, a division is required to be called whenever a motion for a planning decision is put at a meeting of the council or a council committee.

(4)   Each decision recorded in the register is to be described in the register or identified in a manner that enables the description to be obtained from another publicly available document, and is to include the information required by the regulations.

(5)   This section extends to a meeting that is closed to the public.

 


BYRON SHIRE COUNCIL

Finance Advisory Committee Meeting

 

 

BUSINESS OF MEETING

 

1.    Apologies

2.    Declarations of Interest – Pecuniary and Non-Pecuniary

3.    Adoption of Minutes from Previous Meetings

3.1       Finance Advisory Committee Meeting held on 16 November 2017

4.    Staff Reports

Corporate and Community Services

4.1       2017/18 Financial Sustainability Plan - Update on the Action Implementation Plan as at 31 December 2017................................................................................................................................... 4

4.2       Quarterly Update - Implementation of Special Rate Variation....................................... 25

4.3       Rural Roads Expenditure................................................................................................ 29

4.4       Council Budget Review - 1 October 2017 to 31 December 2017.................................. 32   

 

 


BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services                                            4.1

 

 

Staff Reports - Corporate and Community Services

 

Report No. 4.1             2017/18 Financial Sustainability Plan - Update on the Action Implementation Plan as at 31 December 2017

Directorate:                 Corporate and Community Services

Report Author:           James Brickley, Manager Finance

File No:                        I2018/20

Theme:                         Corporate Management

                                      Financial Services

 

 

Summary:

 

Council at its Ordinary meeting held on 14 December 2017 adopted the 2017/18 Financial Sustainability Plan (FSP) via Resolution 17-647 without change, following endorsement of the Draft 2017/18 FSP by the Finance Advisory Committee at its Meeting held on 16 November 2017.

 

The FSP adopted by Council is for the 2017/18 Financial Year and details the strategic approach adopted by Council for managing the Financial Sustainability of the Council as an organisation.

 

The Council via Resolution 13-148 resolved to develop the FSP as a means of communicating with the community on proposed reforms.

 

Council in Resolution 13-148 also determined that progress reports on the implementation of the actions within the FSP be submitted to the Council's Finance Advisory Committee.

 

This report has been prepared to provide the Finance Advisory Committee with an update report on the implementation of the actions in the 2017/18 FSP, for the period to 31 December 2017.

 

  

 

RECOMMENDATION:

That the update report to 31 December 2017 on the 2017/2018 Financial Sustainability Plan Action Implementation Plan (E2018/1508) be received and noted.

 

Attachments:

 

1        FSP Action Implementation Plan as at 31 December 2017, E2018/1508 , page 7  

 

 

Sustainable icon TICK

 


Report

 

Council at its Ordinary meeting held on 14 December 2017 adopted the 2017/18 Financial Sustainability Plan (FSP) via Resolution 17-647 without change, following endorsement of the Draft 2017/18 FSP by the Finance Advisory Committee at its Meeting held on 16 November 2017.

 

The FSP adopted by Council is for the 2017/18 Financial Year and details the strategic approach adopted by Council for managing the Financial Sustainability of the Council as an organisation.

 

The Council via Resolution 13-148 resolved to develop the FSP as a means of communicating with the community on proposed reforms.

 

Council in Resolution 13-148 also determined that progress reports on the implementation of the actions within the FSP be submitted to the Council's Finance Advisory Committee.

 

This report has been prepared to provide the Finance Advisory Committee with an update report on the implementation of the actions in the 2017/18 FSP, for the period to 31 December 2017.

 

A summary of the actions detailed in the FSP has been prepared and attached to this Report at Attachment 1.  A comment has been included in the summary against each of the identified actions for the main areas or elements being:

 

·     Expenditure Review

·     Revenue Review

·     Land Review and Property Development

·     Strategic Procurement

·     Policy and Decision Making

·     Volunteerism

·     Collaborations and Partnerships

·     Asset Management

·     Long Term Financial Planning

·     Environmental Projects

·     Continuous Improvement

·     Finance Performance Indicators

 

Financial Implications

 

The Finance Advisory Committee by referencing Attachment 1 will see progress against various action items associated with the FSP.  At this stage up to 31 December 2017, there have not been any positive financial outcomes derived from the 2017/18 FSP at this point.

 

As a general comment, Council may recall at the 2 February 2017 Ordinary Council Meeting, Council resolved to increase effective from 1 July 2017 pay parking hour charges by $1 and the capped fee for four hours by $2.  This fee increase has been applicable since 1 July 2017 and as a result pay parking meter revenue at 31 December 2017 is $1,622,348 whereas at 31 December 2016 it was $1,361,879.  This represents an increase of $260,469 and excludes meter revenue from Wategoes that commenced in December 2016 for complete comparison.  Whether the revenue increase is due simply to the fee increase, greater use of the pay parking scheme or a combination of both, there is additional revenue for Council to utilise.

 

It is also prudent that any positive financial outcomes derived from actions of the FSP be based on actual outcomes and not estimated outcomes.  In that regard, the financial reporting of outcomes of the FSP will be in arrears, once the outcomes are known and actions in the FSP are completed.

 

Further reporting will be provided to the Finance Advisory Committee at future meetings on financial outcomes.  This will be done in conjunction with the Quarterly Budget Review (QBR) reporting process over the 2017/2018 financial year according to Resolution 14-326.  A register has been developed to track the financial outcomes of the FSP actions that is envisaged will derive an improved quantifiable financial sustainability outcome overall to Council.

 

Statutory and Policy Compliance Implications

 

Council Resolutions 13-148, 13-238, 14-326, 15-606 and 17-011.

 

The development of the FSP can also be considered as a tool to assist Council in its ongoing obligations as defined in Section 9 (The Council’s charter), Section 8 of the Local Government Act 1993.

 


BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services                                                           4.1 - 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.

DC&CS

June 2018

Progress Update 31 December 2017

Reports are prepared following the quarterly Strategic Procurement Steering Committee meetings to the Executive Team 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.

DC&CS

Monthly

Progress Update 31 December 2017

Monthly Management Finance Reports are prepared by the Manager Finance 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.

DC&CS

Monthly

Progress Update 31 December 2017

A copy of the Monthly Management Finance Report is distributed by the Director of 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 to 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.

DC&CS

Quarterly

Progress Update 31 December 2017

The 2017/18 FSP was adopted by Council at its Ordinary Meeting held on 14 December 2017 (Res 17-647).  This is the first progress report prepared for the Finance Advisory 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.

DC&CS

Quarterly

Progress Update 31 December 2017

There were no identified expenditure savings in the 30 September 2017 Quarter Budget Review presented to Council in November 2017.

 

Any identified expenditure savings will be included in the 31 December 2017 Quarter Budget Review report to this meeting of the Finance Advisory Committee Meeting.

6.   Report to Council any recommendations regards policy changes.

DC&CS

As required

Progress Update 31 December 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.

DC&CS

June 2018

Progress Update 31 December 2017

The Internal Working Group has 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 the Executive Team.

 

2.   Internal Staff Working Group/staff to report to the Executive Team any proposed opportunities for deriving new/additional revenue.

DC&CS

June 2018

Progress Update 31 December 2017

Reported as required.

 

3.   Report to the Finance Committee and/or the Council any proposed opportunities for deriving new/additional revenue.

DC&CS

Quarterly

Progress Update 31 December 2017

Reported as required.

 

4.   Report to Council any recommendations regarding policy change and/or increases to existing or new revenue sources.

DC&CS

June 2018

Progress Update 31 December 2017

Reported as required.

 

5.   Prepare submissions and lobby for grant funding for significant infrastructure projects.

DC&CS

June 2018

Progress Update 31 December 2017

The Grant applications submitted by Council have been supported, where appropriate, with submissions to Local Members and the responsible State or Federal Minister.  The Grant applications submitted are detailed in the monthly Grants Report to Council.

 

6.   Research non-residential revenue sources (if any) and report to the Finance Advisory Committee quarterly.

DC&CS

June 2018

Progress Update 31 December 2017

Reported as required.

 


 

Strategy Element:       Land Review and Property Development

 

Actions

Action Owner

Action Due Date

Management Comments

General Fund

1.   Lot 12 Bayshore Drive – Future use assessment through EoI and possible PPP.

DIS

June 2018

Progress Update 31 December 2017

Council has placed the proposed EOI on a temporary hold while potential sources of government funding are being explored.

 

2.   Station Street – Complete sale to North Coast Community Housing.

DIS

June 2018

Progress Update 31 December 2017

DA assessment and subdivision registration are nearing completion.

 

3.   Yaran Road, Tyagarah Airfield – Planning continuing.

DIS

June 2018

Progress Update 31 December 2017

Planning proposal being progressed in accordance with resolution.

 

4.   Lot 22 Mullumbimby – Progress rezoning and implement EoI in accordance with Res 17-260.

DIS

June 2018

Progress Update 31 December 2017

Planning proposal lodged and responses to DoP continuing. Options regarding an EOI process are been considered.

 

5.   Bayshore Drive Works Depot,
Byron Bay (Lot 102, DP1087996, 1.79ha) – Progress relocation project.

DIS

June 2018

Progress Update 31 December 2017

Consultants Complete Urban are working on additional assessments before completing their options report.

 

6.   Various small surplus land parcels – Continue program.

DIS

June 2018

Progress Update 31 December 2017

Ongoing assessment and sales

 

Water Fund

7.   Fletcher Street –Development approval and construction procurement.

DIS

June 2018

Progress Update 31 December 2017

Architects progressing the detail and the preparation of a DA.

 

Sewer Fund

8.   South Byron STP – Implement Res 17-225 by finalising remediation and Future Use assessment through EoI and possible PPP.

DIS

June 2018

Progress Update 31 December 2017

Council has resolved to complete the remediation in 2018 and jointly go out to future use EOI in February.

 

9.   Brunswick Heads STP – Complete remediation and evaluate future use options including possible depot relocation.

DIS

June 2018

Progress Update 31 December 2017

A further stage of remediation is required as recovered fill volumes were insufficient to complete the works. The site is being assessed for a potential depot relocation.

 

10.  Mullumbimby STP – Complete remediation.

DIS

June 2018

Progress Update 31 December 2017

A project management agreement has been prepared with DPWS to progress the remediation based on the GHD contamination report.

 

11.  Brunswick Valley STP, Vallances Road – Implement Res 17-054 PoM outcomes.

DIS

June 2018

Progress Update 31 December 2017

The POM and associated actions are being progressed.

 

12.  Bangalow STP – Site could be considered for solar farm options.

DIS

June 2018

Progress Update 31 December 2017

The focus of solar options has been Lot 15 Dingo Lane. The site will also be used for the storage of recovered timbers from the five bridge replacement project.

 

13.  Lot 4 Mill Street – Complete site access acquisition process and implement EoI in accordance with Res 17-260.

DIS

June 2018

Progress Update 31 December 2017

Land acquisition progressing.

 

Waste Fund

14.  Lot 15 Dingo Lane, Myocum – Site to be retained in accordance with the Resource Recovery Master Plan.

DIS

June 2018

Progress Update 31 December 2017

Site being assessed for a potential solar farm.

 

15.  Lot 16 Dingo Lane, Myocum – Implement Res 17-228 and sell to use funds to pay down loans to reduce debt servicing costs.

DIS

June 2018

Progress Update 31 December 2017

Sold

 

 


Strategy Element:       Strategic Procurement

 

Actions

Action Owner

Action Due Date

Management Comments

1.   Develop a compliance and audit plan.

DC&CS

June 2018

Progress Update 31 December 2017

Procurement audit included in current internal audit plan.

 

2.   Review and further develop contracts management processes and system.

DC&CS

June 2018

Progress Update 31 December 2017

Contract management system has been implemented. This action is now complete.

 

3.   Develop ongoing supplier education program to assist local business.

DC&CS

June 2018

Progress Update 31 December 2017

Not started.

 

4.   Review Stores procurement.

DC&CS

June 2018

Progress Update 31 December 2017

Permanent Stores Officer recruited. Scope of review to be defined by Strategic Procurement Committee first quarter of 2018.

 

5.   Implement Stores review recommendations.

DC&CS

June 2018

Progress Update 31 December 2017

Not started.

 

6.   Introduce negotiation processes and training.

DC&CS

June 2018

Progress Update 31 December 2017

Training course and relevant staff members to be identified.

 


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.

Manager

Finance

June 2018

Progress Update 31 December 2017

The Manager Finance 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 2016/17 budget recommended to be carried over to the 2017/18 Budget be reported to Council following the end of the 2016/17 Financial Year.

Council

June 2018

Progress Update 31 December 2017

This item is complete.  Carryovers from the 2016/2017 to be added to the 2017/2018 budget were considered by the Finance Advisory Committee at its Meeting held on 17 August 2017. These were later adopted by Council at its Ordinary Meeting held on 24 August 2017 (Res 17-322).

 

 

3.   That the monthly Finance Report be distributed to Councillors on a monthly basis.

Manager Finance

June 2018

Progress Update 31 December 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.

DC&CS

June 2018

Progress Update 31 December 2017

This project is ongoing and if applicable, policies once reviewed will be submitted to Council for consideration.

 

5.   That the Special Rate Variation (SRV) and policy frameworks established through Res 17-222 be implemented and reported quarterly to the Finance Advisory Committee.

Manager Finance

June 2018

Progress Update 31 December 2017

The first quarterly update to the Finance Advisory Committee occurred on 16 November 2017 and included an expenditure table detailing how SRV funds have been expended for the first quarter of the 2017/2018 financial year.  There is a subsequent provided to the 15 February 2018 Finance Advisory Committee Meeting.


 

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 2018

Progress Update 31 December 2017

Draft Volunteer Policy and Guidelines completed und expected to report to ET in February 2018.

 

2.   Undertake an organisation wide audit of current volunteer activities.

ET

June 2018

Progress Update 31 December 2017

Not commenced.

 

3.   Recognition of current volunteers.

ET

June 2018

Progress Update 31 December 2017

Volunteer recognition event scheduled in National Volunteer Week May 2018

 

4.   Undertake a capacity building project with Council S355 Committees.

Manager Community Development

June 2018

Progress Update 31 December 2017

Grant funded project “Love Byron Halls” has been awarded. Grant funds allow for capacity building workshops in relation to marketing and promotion. Contractor for project has been engaged. Delivery of full project by June 31 2018

 

 

 


 

 

Strategy Element:       Collaborations and Partnerships

 

Actions

Action Owner

Action Due Date

Management Comments

1.    Progress investigation of potential commercial opportunity projects currently underway such as:

 

a)     Redevelopment of the Fletcher Street (former Library Building) site;

b)    Management and development of the Tyagarah Aerodrome;

c)     Redevelopment of Byron Bay Swimming Pool/Café.

DIS

June 2018

Progress Update 31 December 2017

 

Briefings and reports provided to Council as required.

2.    Progress with calling Expressions of Interest (or another type of competitive processes) currently underway, to investigate potential partnership opportunity on the following valuable community land sites:

 

a)     Lot 12 Bayshore Drive, Byron Bay.

b)    156 (Lot 22) Stuart Street, Mullumbimby.

c)     3 Broken Head Road, Suffolk Park (former South Byron Sewerage Treatment Plant site).

d)    Lot 4 Mill Street, Mullumbimby.

 

DIS

June 2018

Progress Update 31 December 2017

 

In progress.

3.   For the Supporting Partnerships Policy, develop:

 

a)     tools, guides and information for community and future partners on Council’s Partnership Policy;

b)    a public web-based register to provide community with information on upcoming or potential partnerships and  partnership projects;

c)     a Communications Strategy to support the community becoming and remaining informed about all things ‘Partnership’;

d)    internal procedures and processes for management of potential collaboration and partnership opportunities.

Manager Corporate Services

June 2018

Progress Update 31 December 2017

 

In progress.

4.   Provide reports to ET on potential collaboration, partnership and commercial opportunities when they are identified. 

ET/Managers

June 2018

Progress Update 31 December 2017

 

Reported as required.

 


 

Strategy Element:       Asset Management

 

Actions

Action Owner

Action Due Date

Management Comments

1.   Update the Strategic Asset Management Plan including access considerations and other emerging issues.

DIS

June 2018

Progress Update 31 December 2017

The TAMP has been completed to draft stage and will be reported to the 13 Feb TIAC meeting.

 

2.   Improve the integrity of the Asset Management system by implementing actions detailed in key audit reports.

DIS

June 2018

Progress Update 31 December 2017

Actions being addressed and tracked.

 

3.   Implement asset modelling in accordance with Special Rate Variation requirements.

DIS

June 2018

Progress Update 31 December 2017

MyPredictor software has bee used in the preparation of the TAMP.

 

4.   Review annually integration of asset management plans, capital works program, S94 Plan, S64 Plan and LTFP.

DIS

June 2018

Progress Update 31 December 2017

This has occurred in the development of the 2018/19 budget.

 

5.   Engage with the community to determine the customer LOS for accessible transport.

DIS

June 2018

Progress Update 31 December 2017

This is occurring as part of the TAMP and also as part of the proposed work by New Democracy.

 

6.   Complete the annual infrastructure report (SS7).

DIS

June 2018

Progress Update 31 December 2017

Completed

 

7.   Complete condition and access audit inspections of community buildings.

DIS

June 2018

Progress Update 31 December 2017

Quotes for the work have been obtained.

 

8.   Implement replacement of high priority road bridges across the Shire

DIS

June 2018

Progress Update 31 December 2017

Tenders have closed for the five bridge replacement program. The recommendations report will go to Council in March.

 

 


Strategy Element:       Long Term Financial Planning

 

Actions

Action Owner

Action Due Date

Management Comments

1.   Develop the 2017-2028 Long Term Financial Plan following adoption of the 2017/18 Operational Plan and report to the Finance Advisory Committee/Council prior to 16 November 2017.

Manager Finance

June 2018

Progress Update 31 December 2017

The next version of the Long Term Financial Plan is yet to be commenced and is behind schedule.  It is anticipated this will be completed to be reported to the 17 May 2018 Finance Advisory Committee Meeting.

 

2.   Further update the 2017-2028 Long Term Financial Plan to incorporate outcomes from the development of the new Community Strategic Plan in conjunction with the adoption of the 2018/19 Operational Plan and Budget Estimates to be reported to Council in June 2018.

Manager Finance

June 2018

Progress Update 31 December 2017

To be undertaken following the adoption of the 2018/2019 Budget Estimates.

 

 


 

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 2018

Progress Update 31 December 2017

Council endorsed 3 reports 14 Dec meeting:

·      Council Emissions Reduction Strategy

·      GHG annual report / baseline emissions of Council operations

·      BE19 and council project update

 

The Emissions Reduction Strategy will transition from the existing Low Carbon Strategy to a net zero target by 2025, with the recently established 2015/16 baseline of Council operations, and identify measures required to move council towards this goal. Any ongoing actions from the Low Carbon Strategy will be reviewed and carried forward into the new Emissions Reduction Strategy if applicable.

 

Actions progressed between 1/7/17 & 31/12/17  include: progression of cumulative ~99kW solar installs on the Byron Library, Sandhills Childcare Centre and Byron Resource and Recovery Centre; launch of Electric Vehicle Strategy; ongoing feasibility of Bio-Energy facilities; preparation of Bruswick Valley Sustainability Centre Management Plan; ongoing feasibility of ground mounted solar farm at Dingo Lane; ongoing analysis of EV charge station and solar covered car park at Mullumbimby administration building; partnering with ongoing procurement process of new electricity contracts (with intention of including green power and local electricity trading as a requirement); ongoing fit-out of Solar Analytics technology to provide real-time monitoring of solar systems on Council assets; Council collaborating with ISF:UTS (Solar Gardens Project) in application for ARENA grant; and the employment of the Sustainability and Emissions Reduction Officer.

 

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

DSEE

June 2018

Progress Update 31 December 2017

Zero Emissions Byron (ZEB) have produced the Baseline Emissions Report, which details the current emissions and emission reduction strategies, for the Byron community. ZEB have also developed a draft strategic plan and have produced their Energy Emissions Reduction Plan.

 

Council’s Emissions Reduction strategy will be developed in consultation with Zero Emissions Byron and the community. Council staff have initiated monthly meetings with ZEB, with the first meeting held 11/12/17, to collaboratively share information on a regular basis

 

Strategy Element:       Continuous Improvement

 

Actions

Action Owner

Action Due Date

Management Comments

Workforce

1.   Management of excessive annual and long service leave, supported by introduction of online leave processes.

Managers & Manager P&C

June 2018

Progress Update 31 December 2017

 

On-line leave functionality implemented across 75% of work teams. Approximately 50% of leave applications now being lodged online.  

 

Management of excessive leave by Managers is ongoing and performance continues to improve and exceed benchmarks.

 

FY17 Performance Excellence Program results show at 30/6/17:

 

-     18% has excessive long service leave. This is favourable compared to a NSW average of 28% and is an improvement on FY16 results of 22%.

 

 

-     10% of workforce has excessive annual leave. This is favourable, compared to a NSW average of 12% and was the same as FY16 result (which is good bearing in mind the significant improvement in excessive long service leave has been achieved without a corresponding negative impact on annual leave results).

 

2.   Management of sick leave – improvement effort to be focused on staff taking 10.5 days or more p/a.

Managers

June 2018

Progress Update 31 December 2017

 

Manager P&C to provide report to all Managers by end January 2018 on staff who have taken 10.5 days or more sick leave during 2017.

 

3.   Ongoing monitoring of overtime costs as a percentage of total employee costs.

Manager Organisation Development

June 2018

Progress Update 31 December 2017

 

Overtime costs are reported to the Executive Team, with the information available to Managers, monthly.

 

Total overtime cost of itself is not an indicator of performance, as some overtime arises because of the nature of services (24/7 for some), to meet community needs (for example adjusting starting or finishing times for works to reduce impact on businesses) or as an efficiency measure in itself (eg managing spans of work to reduce site establishment/management costs). Purpose of monitoring and reporting is to give Managers business insights for management of their operations and resources.

 

 

4.   Review and improve mapping of workforce to services (consistent with a review of Special Schedule 1).

Manager Organisation Development &

Manager Finance

June 2018

Progress Update 31 December 2017 - Complete

 

A complete review of workforce mapping was conducted in July/Aug 2017 resulting in much improved data.

 

In addition, a regional practitioners group has been established which will give Byron an opportunity to compare the business rules we have used to establish mapping to those of adjoining councils.

Finance

5.   Continue to invest in Finance Team members gaining qualifications and building capacity.

Manager Finance

June 2018

Progress Update 31 December 2017

There are currently two members undertaking long term study to gain qualifications of a tertiary nature, enabling capacity for current staff to broaden their knowledge and assist in strengthening the Finance teams ability to step into various roles.

6.   Review Manager Finance Position Description to confirm focus on strategic transformation and increased focus on business insight activities.

DC&CS and Manager Finance

June 2018

Progress Update 31 December 2017

Position description not yet reviewed, however the expectation of providing a greater emphasis on business insight is understood.

7.   Finance Team to review operations and act on improvement opportunities with a focus on increasing business insight activity.

Manager Finance

June 2018

Progress Update 31 December 2017

Not commenced but proposed to review BIS Management Reporting system available through Council’s Authority software.

 

8.   Directorate nominees with Finance Team to review Cost Centres and Allocation under Special Schedule 1 categories.

Manager Finance

June 2018

Progress Update 31 December 2017

Finance continue to make progress with mapping of Special Schedule 1 in conjunction with each directorate.

 

Operations

9.   Review IT spend to identify total IT spend and map capital and recurrent costs drivers to increase business understanding and assist with future budgeting

Manager Business Systems and Technology

June 2018

Progress Update 31 December 2017

Undertaken in setting annual budget and quarterly budget reviews.

 

Service Delivery

10.  IS Managers, working with People and Culture Team, will develop actions focused on succession planning and increasing workforce diversity.

IS Managers

June 2018

Progress Update 31 December 2017

 

In progress.

11.  SEE Managers, working with People and Culture Team, will develop actions focused on succession planning

SEE Managers

June 2018

Progress Update 31 December 2017

 

In progress.

12.  Roads Services (Operating) – Working with Finance Team and benchmarking with comparable councils, Manager to critically review data, ascertain key drivers and develop an action plan to:

 

1.  fully articulate and explain results;

2.  develop a methodology to consistently measure genuine operating (non capital) expenditure. 

 

Including a focus on:

 

a.  Cost coding and accuracy of expense allocation;

b.  Depreciation expenses;

c.  Internal charging (including on-cost calculations and fleet charges);

d.  Capital expenditure required to be accounted for as operating expenditure (as per the Code of Accounting Practice).

Manager Works & Manager Finance

June 2018

Progress Update 31 December 2017

 

In progress.

13.  Sewerage Services (Operating) – Working with Finance Team and benchmarking with comparable councils, Manager to critically review data, ascertain key drivers and develop an action plan to:

 

1.  fully articulate and explain results;

2.  develop a methodology to consistently measure genuine operating (non capital) expenditure. 

 

Including a focus on:

 

a)  Debt servicing impact on expenses;

b)  Position in lifecycle of plants;

c)  Impacts from environmental initiatives;

d)  Internal charging (on-cost calculations).

 

 

 

Manager Utilities

 

June 2018

Progress Update 31 December 2017

 

In progress.

Corporate Leadership

14.  Include measurement of Customer Satisfaction in the biennial CATI Community Satisfaction Survey going forward.

Manager Organisation Development

June 2018

Progress Update 31 December 2017

 

Noted. Can be included but development of the survey is not due to start yet.

15.  Council meetings – Council continues to have some of the longest meetings and one of the top half a dozen councils with the highest number of resolutions.

 

Councillors can review information provided and meeting procedures. Some considerations suggested in the Performance Excellence Report to help review meeting practices include:

•    Are our Council meetings passing resolutions in an efficient manner?

•    Are our meeting papers clear and concise?

•    Are agendas provided to Councillors well in advance to allow a timely review prior to the meeting?

•    Does Council conduct meeting performance reviews at the end of the year or end of the term?

•    Is Council up to date with best practice when it comes to council meetings?

•    Did the complexity of issues match the time taken to resolve them?

Manager Corporate Services

June 2018

Progress Update 31 December 2017

 

Council will be receiving a workshop in February 2018 regarding a review of the Code of Meeting Practice.  This is also linked to a new Model Code of Meeting Practice being developed by the Office of Local Government.


Strategy Element:       Finance 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.

Manager Finance

Quarterly

Progress Update 31 December 2017

Reporting for the quarter ended 30 Sept 2017 reported to the FAC 16 November 2017.  The December 2017 update will be reported at meeting on 15 February 2018.

2.   Recognition through the QBR process of financial outcomes delivered by the FSP.

Manager Finance

Quarterly

Progress Update 31 December 2017

30 September 2017 QBR reported to FAC on 16 November 2017 and 31 December 2017 QBR will be reported to the 15 February 2018 FAC.

 

3.   Structural changes to both revenue sources and expenditure will be updated in the base budget during the preparation of the 2018/19 Budget.

Manager Finance

June 2018

Progress Update 31 December 2017

2018/2019 Budget Estimates currently under development.  Will be reported to Finance Advisory Committee and Council in May and June 2018.

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.

Manager Finance

June 2018

Progress Update 31 December 2017

To be included in the next version of the Long Term Financial Plan to be reported to the Finance Advisory Committee in May 0218.

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.

Manager Finance

June 2018

Progress Update 31 December 2017

Assessment was completed as part of finalisation of 2016/2017 Financial Statements reported to Council in October 2017.

 

6.   Assessment of the seven ‘Fit for Future’ benchmarks on an ongoing basis to ensure Council maintains the ‘Fit’ outcome.

Manager Financer

June 2018

Progress Update 31 December 2017

Not yet commenced but to be included in the development of the next version of the Long Term Financial Plan to be reported to the Finance Advisory Committee in May 2018.

 

 

 


BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services                                            4.2

 

 

Report No. 4.2             Quarterly Update - Implementation of Special Rate Variation

Directorate:                 Corporate and Community Services

Report Author:           James Brickley, Manager Finance

File No:                        I2018/105

Theme:                         Corporate Management

                                      Financial Services

 

 

Summary:

 

Council at its Ordinary Meeting held on 2 February 2017 resolved to apply for a Special Rate Variation (SRV) of 7.50% per annum for four years commencing from the 2017/2018 financial year (Resolution 17-020 part 5).

 

Following approval of Council’s SRV by the Independent Pricing and Regulatory Tribunal (IPART) received on 9 May 2017, Council resolved to implement the SRV at its Ordinary Meeting held 22 June 2017 (Resolution 17-268 part 1).

 

Council at the same Ordinary Meeting held on 22 June 2017 resolved (Resolution 17-222 part 2) to incorporate reporting on the Special Rate Variation into the development of the 2017/2018 Financial Sustainability Plan and quarterly updates to Council through the Finance Advisory Committee on the implementation of the adopted Financial Sustainability Plan.

 

The purpose of this report is to provide the Finance Advisory Committee with a quarterly update on implementation of the SRV and expenditure up to 31 December 2017.

 

 

  

 

RECOMMENDATION:

That the Finance Advisory Committee note the quarterly update on the Special Rate Variation Implementation as at 31 December 2017

 

 

Attachments:

 

1        2017-2018 Special Rate Variation Expenditure at 31 January 2018, E2018/8204 , page 30  

 

 


 

Report

 

Council at its Ordinary Meeting held 2 February 2017 resolved to apply for a Special Rate Variation (SRV) as follows:

 

Resolution 17-020 part 5

 

Lodge a Section 508A permanent Special Rate Variation application to the Independent Pricing and Regulatory Tribunal, for increases to the ordinary rate income (general revenue) of 7.5% (including rate peg) in 2017/18, 7.5% (including rate peg) in 2018/19, 7.5% (including rate peg) in 2019/20 and 7.5% (including rate peg) in 2020/21.

 

After lodging the Special Rate Variation application with the Independent Pricing and Regulatory Tribunal (IPART), Council received approval to increase its ordinary rate income as per resolution 17-020. This approval was granted on 9 May 2017.  Council resolved to implement the SRV through adoption of the 2017/2018 Operational Plan and Revenue Policy at its Ordinary Meeting held on 22 June 2017 (Resolution 17-268 part 1).

 

Council at its Ordinary Meeting held 22 June 2017 received Report 13.13 confirming the outcome of the SRV application and its subsequent approval.  Council resolved resolution 17-222 as follows:

 

1.   That Council note the determination from IPART in relation to its 2017/2018 Special Rate Application including the following conditions imposed by IPART on Council for the:-

a)   use of the additional income derived from the special variation for the purposes of reducing its infrastructure backlog and improving financial sustainability; and

b)   reporting on this use against the forecasts included in the Council’s application as part the Council’s annual report for each year from 2017-18 to 2026-27.

 

2.  That Council adopt as a Policy Framework the use and reporting conditions imposed by IPART in the SRV determination and further incorporate reporting on the Special Rate Variation into the development of the 2017/2018 Financial Sustainability Plan and the quarterly updates to Council through the Finance Advisory Committee on the implementation of the adopted Financial Sustainability Plan.

 

3.  That Council establish as a policy framework that funding for infrastructure renewal and maintenance from general revenue sources is not ever lower then the general revenue baseline indicator established in the 2016/2017 Budget.

        

4.That Council establish as a policy framework that any funds generated by the SRV that remain unexpended at the end of each financial year are to be restricted and held in a internal reserve, to be carried forward to subsequent financial year, for expenditure in accordance with the uses imposed in the SRV approval.

 

5.  That Council incorporate the research of potential non resident revenue sources (if any) as part of the Revenue Review chapter in the development of the 2017/2018 Financial Sustainability Plan, and provide quarterly updates to Council through the Finance Advisory Committee.

 

         6. That Council not proceed with the implementation of part 9 and part 11 of resolution 17-020.

 

The 2017/2018 Financial Sustainability Plan has been developed to incorporate future quarterly reporting on the SRV as outlined in Chapter 7 ‘Policy and Decision Making’.

 

This report is provided to the Finance Advisory Committee to advise on the implementation of the SRV and the current status of expenditure from 1 July 2017 to 31 December 2017 which is

detailed in Attachment 1 (E2018/8204).

 

The levy of Council’s annual rates and charges was completed in accordance with Resolution 17-268 prior to 31 July 2017 and this included applying the first tranche of the 7.5% ordinary rate increase for 2017/2018 and revised ordinary rating structure adopted by Council.  The estimated yield from the SRV for 2017/2018 being the first year of the increase is $1,185,000.

 

Upon adoption of the 2017/2018 Budget Estimates, Council resolved to undertake the following program of capital and maintenance works including the additional SRV revenue and other funding as outlined in Attachment 1.  During the course of the 2017/2018 financial year, there may be adjustments required to the expenditure budgets identified in the schedule of capital and maintenance works currently funded by the SRV revenue which will be presented to Council for approval via the Quarterly Budget Review process.

 

The expenditure program adopted for 2017/2018 financial year is consistent with Council’s SRV application and approval from IPART to use the funding to improve financial sustainability and reduce infrastructure backlog.

 

Financial Implications

 

There are no direct financial implications associated with this report. The table included at Attachment 1 (E2018/8204) provides information to the Finance Advisory Committee as to the expenditure of the Special Rate Variation Funds up to the second quarter of the 2017/2018 financial year.

 

Statutory and Policy Compliance Implications

 

Approval and conditions received from the Independent Pricing and Regulatory Tribunal (IPART) regarding the Byron Shire Council Special Rate Application 2017-2018 received 9 May 2017.

 

Council Resolution 17-268 and 17-222.

 


BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services                                                           4.2 - Attachment 1

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BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services                                            4.3

 

 

Report No. 4.3             Rural Roads Expenditure

Directorate:                 Corporate and Community Services

Report Author:           James Brickley, Manager Finance

File No:                        I2018/170

Theme:                         Corporate Management

                                      Financial Services

 

 

Summary:

 

At the 16 November 2017 Finance Advisory Committee Meeting, the following recommendation was adopted by the Committee:

 

“That the Finance Advisory Committee receive a report detailing expenditure on rural roads (maintenance and capital) over the last three to five years identifying funding sources to inform the 2018/2019 Budget Estimates’

 

Council subsequently adopted the Committee recommendation at the 14 December 2017 Ordinary Meeting via resolution 17-646. The purpose of this report is to provide information as per the adopted Committee recommendation and Council resolution.

 

 

  

 

RECOMMENDATION:

That Council note the information on rural roads expenditure (both maintenance and capital) over the last five full financial years 2012/2013 to 2016/2017.

 

 

 

 

 


 

Report

 

At the 16 November 2017 Finance Advisory Committee Meeting, the following recommendation was adopted by the Committee:

 

“That the Finance Advisory Committee receive a report detailing expenditure on rural roads (maintenance and capital) over the last three to five years identifying funding sources to inform the 2018/2019 Budget Estimates’

 

Council subsequently adopted the Committee recommendation at the 14 December 2017 Ordinary Meeting via resolution 17-646. The purpose of this report is to provide information as per the adopted Committee recommendation and Council resolution.

 

Provided below in summary is a table outlining the expenditure or spend of both a maintenance and capital nature on rural roads over the last five financial years from 2012/2013 to 2016/2017 along with the identification of funding sources: 

 

 

Item

2012/2013

$

2013/2014

$

2014/2015

$

2015/2016

$

2016/2017

$

Maintenance Spend

 

 

 

 

 

Sealed Rural Roads

888,008

1,231,206

1,187,878

1,182,000

1,109,475

Unsealed Rural Roads

232,124

205,225

289,173

547,055

375,034

Total Maintenance Spend

1,120,132

1,436,430

1,477,051

1,729,055

1,484,509

 

 

 

 

 

 

Maintenance Funding

 

 

 

 

 

Revenue

888,008

1,209,430

1,250,051

1,472,055

1,257,509

Special Rate Variations

227,000

227,000

227,000

227,000

227,000

Total Maintenance Funding

1,120,132

1,436,430

1,477,051

1,729,055

1,484,509

 

 

 

 

 

 

Capital Spend

 

 

 

 

 

Rural Roads and Bridges

1,304,648

1,095,480

2,036,309

4,311,458

3,168,760

Total Capital Spend

1,304,648

1,095,480

2,036,309

4,311,458

3,168,760

 

 

 

 

 

 

Capital Funding

 

 

 

 

 

Capital Grants & Contributions

330,888

246,785

1,037,403

1,216,920

1,743,275

Holiday Park Reserve

0

0

0

0

205,110

IS Carryover Reserve

6,393

77,126

62,010

7,783

51,200

Council Pay Parking Reserve

0

119,180

0

0

0

Developer Contributions

335,577

289,896

695,306

423,129

121,798

ELE Reserve

0

0

0

99,970

100,000

Footpath Dining Reserve

0

0

0

102,843

100,000

Infrastructure Renewal Reserve

0

0

0

796,851

279,107

Legal Services Reserve

0

0

0

1,803

175,000

Revenue Funding

378,412

257,690

236,656

939,496

241,412

Special Rate Variations

97,797

84,848

4,935

258,765

123,166

Unexpended Grants

81,516

0

0

218,815

12,500

Unexpended Loans

0

13,100

0

0

0

Other Waste Reserve

74,067

6,855

0

0

0

Bridge Replacement Reserve

0

0

0

245,085

16,193

Total Capital Funding

1,304,648

1,095,480

2,036,309

4,311,458

3,168,760


 

 

Item

2012/2013

$

2013/2014

$

2014/2015

$

2015/2016

$

2016/2017

$

Total Rural Roads Spend

2,424,780

2,531,911

3,513,360

6,040,513

4,653,269

Total Roads Spend

3,461,634

3,454,149

5,469,264

10,270,134

13,619,466

% Allocated to Rural Roads

70.05%

73.30%

64.24%

58.82%

34.17%

 

In the above table a comparison is also provided for each year of how much of the overall roads budget Council is allocating to the rural area. It has also been assumed that the expenditure disclosed constitutes expenditure for roads (maintenance and capital) and bridges (capital).  It does not include footpaths, cycleways, drainage maintenance, natural disaster restoration and bridge maintenance (bridge maintenance is not separated into urban and rural expenditure).

 

Whilst the data above is summarised, a spread sheet has been developed that has captured the information in detail, that detail can be provided to Committee Members should it be required.  The detailed spread sheet identifies the funding source of the expenditure and details the specific capital expenditure projects and costs undertaken each financial year.

 

As indicated in the table above, over the last five full financial years, the following summary information is realised:

 

Item

Amount $/Value

Total Rural Roads Expenditure

19,163,883

Total Roads Expenditure

36,274,648

% Allocated to Rural Roads

52.83%

Average Annual Rural Roads Total Spend

3,832,767

 

Financial Implications

 

There are no financial implications associated with this report as the report identifies past expenditures incurred by Council for rural roads and bridges in terms of maintenance and capital expenditure.

 

Statutory and Policy Compliance Implications

 

Each financial year, Council adopts an Operational Plan (Section 405 of the Local Government Act 1993) including a Revenue Policy containing Budget Estimates to fund the activities outlined in the Operational Plan.  The expenditure contained in this report are the results achieved by Council as per the adopted Budget Estimates and subsequent Quarterly Budget Reviews for the last five full financial years.

 


BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services                                            4.4

 

 

Report No. 4.4             Council Budget Review - 1 October 2017 to 31 December 2017

Directorate:                 Corporate and Community Services

Report Author:           James Brickley, Manager Finance

File No:                        I2018/195

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 2017/2018 financial year, reviewed as at 31 December 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 (#E2018/9537) which includes the following results in the 31 December 2017 Quarterly Review of the 2017/2018 Budget:

 

a)      General Fund – $42,300 decrease to the Estimated Unrestricted Cash Result

b)      General Fund - $14,700 increase in reserves

c)      Water Fund - $106,500 decrease in reserves

d)      Sewerage Fund - $799,300 decrease in reserves

 

2.       That Council adopt the revised General Fund Estimated Unrestricted Cash Result of $888,300 for the 2017/2018 financial year as at 31 December 2017

 

 

Attachments:

 

1        Budget Variations for General, Water and Sewerage Funds, E2018/9612 , page 44  

2        Itemised Listing of Budget Variations for General, Water and Sewerage Funds, E2018/9537 , page 108  

3        Integrated Planning and Reporting Framework (IP&R) required Quarterly Review Statement, E2018/9550 , page 114  

 

 


 

Report

 

Council adopted the 2017/2018 budget on 22 June 2017 via Resolution 17-268.  It also considered and adopted the budget carryovers from the 2016/2017 financial year, to be incorporated into the 2017/2018 budget at its Ordinary Meeting held on 24 August 2017 via Resolution 17-322.  Since that date, Council has reviewed the budget taking into consideration the 2016/2017 Financial Statement results and progress through the first half of the 2017/2018 financial year.  This report considers the December 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 22 June 2017 plus the adopted carryover budgets from 2016/2017 followed by the resolutions between July and September, the September Review, resolutions between October and December and the revote (or adjustment for this review) and then the revised position projected for 30 June 2018 as at 31 December 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 2018 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 the last 16 pages 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 December 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 October to December 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 2017/2018 financial year projected to 30 June 2018 but revised as at 31 December 2017.

 

 

2017/2018 Budget Review Statement as at 31 December 2017

Original Estimate (Including Carryovers)

1/7/2017

 

Adjustments to 31 Dec 2017 including Resolutions*

Proposed 31 Dec 2017 Review Revotes

 

Revised Estimate 30/6/2018 at 31/12/2017

 

Operating Revenue

76,828,000

2,530,900

190,600

79,549,500

 

Operating Expenditure

79,542,600

3,252,800

324,500

83,119,900

 

Operating Result – Surplus/Deficit

(2,714,600)

(721,900)

(133,900)

(3,570,400)

 

Add: Capital Revenue

27,790,000

(18,543,700)

143,300

9,389,600

 

Change in Net Assets

25,075,400

(19,265,600)

9,400

5,819,200

 

Add: Non Cash Expenses

12,939,400

0

0

12,939,400

 

Add: Non-Operating Funds Employed

2,160,000

2,516,000

(1,277,000)

3,399,000

 

Subtract: Funds Deployed for Non-Operating Purposes

(64,587,000)

20,099,900

334,200

44,152,900

 

Cash Surplus/(Deficit)

(24,412,200)

3,350,300

(933,400)

(21,995,300)

 

Restricted Funds – Increase / (Decrease)

(24,419,500)

3,572,200

(891,100)

(21,738,400)

 

Forecast Result for the Year – Surplus/(Deficit) – Unrestricted Cash Result

7,300

(221,900)

(42,300)

(256,900)

 

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 December 2017:

 

Opening Balance – 1 July 2017

$1,145,200

Plus original budget movement and carryovers

$7,300

Council Resolutions July – September Quarter

($50,000)

September Review – increase/(decrease)

($161,900)

Council Resolutions October – December Quarter

($10.000)

Recommendations within this Review – increase/(decrease)

($42,300)

Forecast Unrestricted Cash Result – Surplus/(Deficit) – 30 June 2018

($256,900)

Estimated Unrestricted Cash Result Closing Balance – 30 June 2018

$888,300

 

The General Fund financial position overall has decreased by $42,300 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 impacting the Budget Result

 

Resolution 17-500 resolved that Council reinstates the Feral Animal Management Program by allocating $10,000 to assist meeting the costs of a trapper from January to June 2018.  There was no suggested funding source for this resolution and at this point no funding source has been identified.

 

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

0

0

0

Corporate & Community Services

182,400

110,000

72,400

Infrastructure Services

(898,000)

(739,900)

(158,100)

Sustainable Environment & Economy

176,300

132,900

43,400

Total Budget Movements

(539,300)

(497,000)

(42,300)

 

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:

 

Corporate and Community Services

 

·   In the General Purpose Revenues Program an additional $73,300 in revenue has been recognised from general rates through the amount of supplementary valuations and levies year to date greater then the budget estimate.

 

·   In the Corporate Services Program it is proposed to increase expenditure by an estimated $100,000 for legal expenses.  This can be funded through the Legal Services reserve.  There is also an additional $60,000 required to cover costs of the consultancies associated in the development of the Council’s new Community Strategic Plan funded from savings in the Strategic Procurement Roadmap budget.

 

Infrastructure Services

 

·   In the Supervision & Administration program, it is proposed to increase expenditure by $40,000 for uniform issues to account for new boots, uniforms and hi-vis work wear for staff that is now required at the Depot for Work Health and Safety reasons.  This is offset by a support services cost adjustment to other budget programs.

 

·   In the Local Roads and Drainage 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 and fourths page of Attachment 2 under the budget program heading Local Roads and Drainage. 

 

·   In the Open Space and Recreation program, operating income and expenditure increased by $52,000 due to a grant received for a Shark Management Strategy.

 

·   In the Waste & Recycling program it is proposed to increase capital expenditure by $88,000 for Organics Processing Infrastructure – The budget forecasts for this project were approximately $88,000 under actual costs due to unforeseen EPA restrictions on the use of fill for engineering preparation works.  Council had planned to use excavated public road material from infrastructure works projects as general fill, however the EPA did not provide approval and as such Council had to purchase quarry products at a higher cost.

 

·   In the Facilities Management program It is proposed to decrease operating expenditure by $22,100 due to the budget for the contract of Mullumbimby swimming pool being more than the contract.

 

Sustainable Environment and Economy

 

·   In the Development and Certification program, it is proposed to increase income by $80,000 and expenditure by $17,000 to budget for the Information and Technology Service fee.  The expenditure will part fund the Process Improvement Officer position

 

·   In the Planning Policy and Natural Environment Program, It is proposed to increase income and expenditure to accommodate the OEH New Brighton Beach Scraping grant ($56,300), and an increase to the OEH Saving our Species Iconic Koala grant ($40,000).  It is also proposed to allocate $10,000 to the Bangalow village plan and Mullumbimby masterplan to engage a graphic designer for document design and desktop publication for both of these projects.

 

WATER FUND

 

After completion of the 2016/2017 Financial Statements the Water Fund as at 30 June 2017 has a capital works reserve of $4,953,000 and held $6,692,100 in section 64 developer contributions.

 

The estimated Water Fund reserve balances as at 30 June 2018, and forecast in this Quarter Budget Review, are derived as follows:

 

Capital Works Reserve

 

Opening Reserve Balance at 1 July 2017

$4,953,800

Plus original budget reserve movement

1,539,000

Less reserve funded carryovers from 2016/2017

(124,800)

Resolutions July -  September Quarter – increase / (decrease)

0

September Quarterly Review Adjustments – increase / (decrease)

(40,000)

Resolutions October - December Quarter – increase / (decrease)

0

December Quarterly Review Adjustments – increase / (decrease)

(56,500)

Forecast Reserve Movement for 2017/2018 – Increase / (Decrease)

1,317,700

Estimated Reserve Balance at 30 June 2018

$6,271,500

 

Section 64 Developer Contributions

 

Opening Reserve Balance at 1 July 2017

$6,692,100

Plus original budget reserve movement

(1,874,000)

Less reserve funded carryovers from 2016/2017

(2,645,300)

Resolutions July -  September Quarter – increase / (decrease)

0

September Quarterly Review Adjustments – increase / (decrease)

(70,000)

Resolutions October - December Quarter – increase / (decrease)

0

December Quarterly Review Adjustments – increase / (decrease)

(50,000)

Forecast Reserve Movement for 2017/2018 – Increase / (Decrease)

(4,639,300)

Estimated Reserve Balance at 30 June 2018

$2,052,800

 

Movements for Water Fund can be seen in Attachment 1 with a proposed estimated decrease to reserves (including S64 Contributions) overall of $106,500 from the 31 December 2017 Quarter Budget Review.

 

SEWERAGE FUND

 

After completion of the 2016/2017 Financial Statements the Sewer Fund as at 30 June 2017 has a capital works reserve of $7,372,800 and plant reserve of $827,800. It also held $9,583,600 in section 64 developer contributions.

 

Capital Works Reserve

 

Opening Reserve Balance at 1 July 2017

$7,372,800

Plus original budget reserve movement

(1,008,100)

Less reserve funded carryovers from 2016/2017

(102,200)

Resolutions July -  September Quarter – increase / (decrease)

0

September Quarterly Review Adjustments – increase / (decrease)

24,000

Resolutions October - December Quarter – increase / (decrease)

0

December Quarterly Review Adjustments – increase / (decrease)

(524,300)

Forecast Reserve Movement for 2017/2018 – Increase / (Decrease)

(1,610,600)

Estimated Reserve Balance at 30 June 2018

$5,762,200

 

Plant Reserve

 

Opening Reserve Balance at 1 July 2017

$827,800

Plus original budget reserve movement

0

Less reserve funded carryovers from 2016/2017

0

Resolutions July -  September Quarter – increase / (decrease)

0

September Quarterly Review Adjustments – increase / (decrease)

(12,300)

Resolutions October - December Quarter – increase / (decrease)

0

December Quarterly Review Adjustments – increase / (decrease)

0

Forecast Reserve Movement for 2017/2018 – Increase / (Decrease)

(12,300)

Estimated Reserve Balance at 30 June 2018

$815,500

 

Section 64 Developer Contributions

 

Opening Reserve Balance at 1 July 2017

$9,583,600

Plus original budget reserve movement

(188,800)

Less reserve funded carryovers from 2016/2017

(1,949,600)

Resolutions July -  September Quarter – increase / (decrease)

0

September Quarterly Review Adjustments – increase / (decrease)

(26,700)

Resolutions October - December Quarter – increase / (decrease)

0

December Quarterly Review Adjustments – increase / (decrease)

(275,000)

Forecast Reserve Movement for 2017/2018 – Increase / (Decrease)

(2,440,100)

Estimated Reserve Balance at 30 June 2018

$7,143,500

 

Movements for the Sewerage Fund can be seen in Attachment 1 with a proposed estimated overall decrease to reserves (including S64 Contributions) of $799,300 from the 31 December 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 potentially 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 December 2017.

 

Total Legal Income & Expenditure as at 31 December 2017

 

 

Program

2017/2018

Budget ($)

 

Actual ($)

Percentage To Revised Budget

Income

 

 

 

Legal Expenses Recovered

0

0

0%

Total Income

0

0

0%

 

 

 

 

Expenditure

 

 

 

General Legal Expenses

201,000

170,320

84.7%

Total Expenditure General Fund

201,000

170,320

84.7%

 

Note: Due to current legal matters, it is estimated that Council may incur costs for legal expenses of approximately $100,000 in addition to the original budget.  In view of this, there is a recommendation in this report to allocate an additional $100,000 to the General Legal Expenses budget, funded from the Legal Services Reserve.  This will leave an estimated Legal Services Reserve balance at 30 June 2018 of $324,500.

 

Byron Railway Precinct Projects

 

The adopted 2017/2018 Budget Estimates currently provides an allocation of $790,800 funded from the Infrastructure Renewal Reserve, TDDI Grant and a Visitor Centre contribution for projects related to the Byron Bay Master Plan – Railway Precinct.

 

A summary of the current projects with funded budgets associated with the Byron Railway Precinct are outlined in the table below:

 

Job No

Project

Proposed Budget 2017/2018 $

Funding from TDDI Grant $

Funding from Infrastructure Renewal Reserve $

Funding from Section 94

$

Funding from Visitor Centre Contribution $ (1)

4835.187

Byron Bay Town Centre Masterplan

239,300

0

239,300

0

0

4835.188

Byron St Connection Upgrade

139,000

69,500

69,500

0

0

4835.189

Railway Park Upgrade

237,500

118,800

118,700

0

0

4835.190

Visitor Centre Refurbishment

130,000

50,000

0

30,000

50,000

4835.191

Visitor Centre Technology Project

45,000

22,500

22,500

0

0

 

Total

790,800

260,800

450,000

30,000

50,000

(1)  This contribution whilst budgeted and invoiced is yet to be paid to Council.

 

With the addition of the TDDI grant revenue to Council’s existing budget allocation of $500,000, there is now $790,800 available towards projects in the Byron Railway Precinct.

 

There are a number of Railway Precinct projects that have been identified and have current expenditure allocated against them but do not have a budget:-

 

Job No

Project

Actual Expenditure to 31 December 2017 (Inc Commitments)

4835.219

Byron Rail Corridor Park (RPP18)

$57,043

4835.222

Conservation Management Strategy (RPP9)

$8,824

4835.223

Market/Comm Relocation/Use DAs (RPP11)

$480

4835.224

Rail Corridor Contam'tion Ass (RPP12)

$32,096

4835.225

Farmers Market Relocation (RPP13)

$21,890

 

Total

$120,334

 

Allocating budgets for these projects will be required by Council at a future point before the end of the 2017/2018 financial year.  These need to be addressed no later than the 31 March 2017 Quarter Budget Review.

 

Financial Implications

 

The 31 December 2017 Quarter Budget Review of the 2017/2018 Budget has decreased the overall budget result by $42,300.  As a result there is a decrease of $42,300 to the estimated unrestricted cash balance attributable to the General Fund, with this becoming an estimated $888,300 at 30 June 2018.  This is below the adopted target of Council of $1,000,000.  It is recommended that Council will need to recover the 2017/2018 budget result to at least a balanced outcome over the remainder of the 2017/2018 financial year and be conscious of this when considering matters with financial implications.

 

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 the Council is still satisfactory for the 2017/2018 financial year, having consideration of the original estimate of income and expenditure at the 31 December 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 2017/2018 outlined in this Budget Review is recovered during the remainder of the 2017/2018 financial year.  It is most important this occurs and the current projected budget deficit of $256,900 does not deteriorate further.

 

There needs to be an awareness that any modifications proposed for Council’s budget are not approved without consideration of funding if additional expenditure is proposed through either reallocation of existing budgets, additional revenue or available reserves.

 

Whilst not covered in this budget review, Council needs to recognise that the maintenance expenditure budgets in the Local Roads and Drainage Program are under pressure.  Current expenditure trends suggest there is not sufficient funding to support maintenance expenditure up to the end of the financial year.  Urban Road Maintenance and Bridge Maintenance budgets are examples. Any additional expenditure over and above the current budget estimates will of course increase the budget deficit in future quarterly budget reviews if not addressed.

 

The short term financial position of Council may become unsatisfactory if work is not undertaken to address the current budget position and any unfunded expenditure in the remaining two quarterly budget reviews or by separate report to Council.

 

 


BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services                                 4.4 - Attachment 1

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BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services                                                           4.4 - Attachment 2

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Staff Reports - Corporate and Community Services                                 4.4 - Attachment 3

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