Agenda of Finance Advisory Committee Meeting

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 March 2018 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 March 2018 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 March 2018 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 March 2018 The 2017/18 FSP was adopted by Council at its Ordinary Meeting held on 14 December 2017 (Res 17-647). This is the second 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 March 2018 Any identified expenditure savings will be included in the 31 March 2018 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 March 2018 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 March 2018 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 March 2018 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 March 2018 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 March 2018 Reported as required.
5. Prepare submissions and lobby for grant funding for significant infrastructure projects.	DC&CS	June 2018	Progress Update 31 March 2018 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 March 2018 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 March 2018 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 March 2018 Subdivision being processed by LAC. Council resolved to proceed with sale. Expected sale to be completed prior to 30 June 2018.
3. Yaran Road, Tyagarah Airfield – Planning continuing.	DIS	June 2018	Progress Update 31 March 2018 Planning proposal being progressed in accordance with resolution. A further Council resolution has occurred seeking a EOI process for a food hub.
4. Lot 22 Mullumbimby – Progress rezoning and implement EoI in accordance with Res 17-260.	DIS	June 2018	Progress Update 31 March 2018 Planning proposal lodged and responses to DoP continuing. Options regarding an EOI process are been considered. Responses to DoP are continuing.
5. Bayshore Drive Works Depot, Byron Bay (Lot 102, DP1087996, 1.79ha) – Progress relocation project.	DIS	June 2018	Progress Update 31 March 2018 Consultants Complete Urban are working on additional assessments before completing their options report. This work is continuing.
6. Various small surplus land parcels – Continue program.	DIS	June 2018	Progress Update 31 March 2018 The program diversified to assist with the land acquisitions for the five bridge replacement program.
Water Fund
7. Fletcher Street –Development approval and construction procurement.	DIS	June 2018	Progress Update 31 March 2018 Architects on hold pending DCP project outcomes.
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 March 2018 EOI progressed, closing in April. To be reported in June. Remediation plan being finalised.
9. Brunswick Heads STP – Complete remediation and evaluate future use options including possible depot relocation.	DIS	June 2018	Progress Update 31 March 2018 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. Site works are nearing completion.
10. Mullumbimby STP – Complete remediation.	DIS	June 2018	Progress Update 31 December 2018 A project management agreement has been prepared with DPWS to progress the remediation based on the GHD contamination report. No further progress due to resource constraints.
11. Brunswick Valley STP, Vallances Road – Implement Res 17-054 PoM outcomes.	DIS	June 2018	Progress Update 31 March 2018 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 March 2018 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. Five bridge project commencing in April.
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 March 2018 John Holland Rail have advised that sale will be possible late 2018 early 2019.
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 March 2018 Solar farm project continuing to be progressed.
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 March 2018 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 March 2018 Procurement audit included in current internal audit plan. Audit recommendations incorporated into each year’s Annual Procurement Plan and Key Performance Indicators.
2. Review and further develop contracts management processes and system.	DC&CS	June 2018	Progress Update 31 March 2018 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 March 2018 The next NOROC Procurement Group meeting will be discussing the possibility of running a forum for local suppliers to learn more about doing business with NOROC Councils including responding to tenders and quotes.
4. Review Stores procurement.	DC&CS	June 2018	Progress Update 31 March 2018 Scope of review to be undertaken.
5. Implement Stores review recommendations.	DC&CS	June 2018	Progress Update 31 March 2018 Not started. To be undertaken following review.
6. Introduce negotiation processes and training.	DC&CS	June 2018	Progress Update 31 March 2018 Not started.

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 March 2018 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 March 2018 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 March 2018 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 March 2018 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 March 2018 The first quarterly update to the Finance Advisory Committee occurred on 16November 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 updates provided to the 15 February 2018 and 17 May 2018 Finance Advisory Committee Meetings.

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 March 2018 Report to ET 16 May 2018 to establish internal working group to investigate and develop comprehensive volunteering framework that will enable where possible a range of volunteering options including structured and ad hoc or spontaneous volunteering opportunities.
2. Undertake an organisation wide audit of current volunteer activities.	ET	June 2018	Progress Update 31 March 2018 As part of the proposed internal working group, an audit of current volunteering opportunities will be undertaken
3. Recognition of current volunteers.	ET	June 2018	Progress Update 31 March 2018 Given limited take up of volunteer recognition event in 2017, and limited staff resources, it is proposed to not undertake a recognition event in 2018, rather to work towards a volunteer engagement event later in the calendar year, which seeks to both recognise the work of volunteers, and understand how Council can better support current volunteers.
4. Undertake a capacity building project with Council S355 Committees.	Manager Community Development	June 2018	Progress Update 31 March 2018 Love Byron Halls capacity building workshop undertaken. One additional workshop to be provided June 2018 with a specific focus on marketing and promotion.

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 March 2018 Briefings and reports continuing.
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 March 2018 South Byron EOI progressed. Closing April and to be reported in June.
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 March 2018 In progress – a) partnership policy available online (https://www.byron.nsw.gov.au/Business/Doing-business-with-us/Council-procurement-policies) with commitment to look at innovative ways to fund projects. b/c) Communications delivered in line with each project and draft d) guidelines being finalised
4. Provide reports to ET on potential collaboration, partnership and commercial opportunities when they are identified.	ET/Managers	June 2018	Progress Update 31 March 2018 Reported as required. To highlight just a couple of examples, Council: · successfully partnered with NewDemocracy Research Foundation and collaborated with the Community Solutions Panel members to deliver Council’s first deliberative democracy process. · reconfirmed its commitment to partner with LG Professionals in developing the Local Government Performance Excellence Program.

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 March 2018 Council resolved to put the TAMP on exhibition. The Community Solutions Briefing Book was prepared.
2. Improve the integrity of the Asset Management system by implementing actions detailed in key audit reports.	DIS	June 2018	Progress Update 31 March 2018 Actions being addressed and tracked.
3. Implement asset modelling in accordance with Special Rate Variation requirements.	DIS	June 2018	Progress Update 31 March 2018 Modelling used in support of the Community Solutions Panel process.
4. Review annually integration of asset management plans, capital works program, S94 Plan, S64 Plan and LTFP.	DIS	June 2018	Progress Update 31 March 2018 This has occurred in the development of the 2018/19 budget. Draft budget and programs presented to Council.
5. Engage with the community to determine the customer LOS for accessible transport.	DIS	June 2018	Progress Update 31 May 2018 This is occurring as part of the TAMP and also as part of the proposed work by New Democracy. Outcomes from CSP due in April.
6. Complete the annual infrastructure report (SS7).	DIS	June 2018	Progress Update 31 March 2018 Completed.
7. Complete condition and access audit inspections of community buildings.	DIS	June 2018	Progress Update 31 March 2018 Quotes for work have been obtained. Budget included for consideration in 2018/19.
8. Implement replacement of high priority road bridges across the Shire	DIS	June 2018	Progress Update 31 March 2018 Tenders have closed for the five bridge replacement program. The recommendations report will go to Council in March. Tender awarded late 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 March 2018 The next version of the Long Term Financial Plan is yet to be commenced and is behind schedule. It is anticipated this was to be completed and be reported to the 17 May 2018 Finance Advisory Committee Meeting. This has not been able to be achieved an it is now expected to be reported to the 28 June 2018 Extraordinary Council Meeting for adoption.
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 March 2018 To be undertaken following the adoption of the 2018/2019 Budget Estimates.

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 March 2018

The next version of the Long Term Financial Plan is yet to be commenced and is behind schedule. It is anticipated this was to be completed and be reported to the 17 May 2018 Finance Advisory Committee Meeting. This has not been able to be achieved an it is now expected to be reported to the 28 June 2018 Extraordinary Council Meeting for adoption.

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 March 2018

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 Brunswick 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. Progress Update 31 March 2018 No further update provided.
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. Progress Update 31 March 2018 No further update provided.

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 Brunswick 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.

Progress Update 31 March 2018

No further update provided.

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.

Progress Update 31 March 2018

No further update provided.

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 March 2018 As at March 2018, 63% of leave applications lodged across Council were online. On-line leave functionality implemented across work teams remains at 75% due to IT issues which are almost resolved. It is expected that on-line will be accessible by all staff by September 2018.
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 March 2018 In early March 2017, all Managers were provided with names of staff who had taken 10.5 days or more sick leave during 2017. There were 66 staff in total in this category. In early July 2018, Manager P&C will provide Managers with information on staff who have accessed more than 6 days sick leave in the first 6 months of 2018.
3. Ongoing monitoring of overtime costs as a percentage of total employee costs.	Manager Organisation Development	June 2018	Progress Update 31 March 2018 Overtime costs are reported to the Executive Team, with the information available to Managers, monthly.
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 March 2018 Preparations will be made June 2018 for the FY2018 reporting process.
Finance
5. Continue to invest in Finance Team members gaining qualifications and building capacity.	Manager Finance	June 2018	Progress Update 31 March 2018 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 team’s 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 March 2018 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 March 2018 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 March 2018 Finance continue to make progress with mapping of Special Schedule 1 in conjunction with each directorat
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 March 2018 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 March 2018 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 March 2018 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 March 2018 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 March 2018 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 March 2018 Can be included. Survey format is being reviewed to support Wellbeing Framework as well. Survey development will conclude last quarter this financial year, with Survey to be conducted later in year 2018.
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 March 2018 Revised Code of Meeting Practice adopted at March 2018 meeting (18-163) to reduce public access allocated time. New model code being developed by Office of Local Government Revised agenda templates to be implemented.

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 May 2018 Reporting for the quarter ended 30 Sept 2017 reported to the FAC 16 November 2017. The December 2017 quarter reported at meeting on 15 February 2018 and 31 March 2018 quarter reported at meeting on 17 May 2018.
2. Recognition through the QBR process of financial outcomes delivered by the FSP.	Manager Finance	Quarterly	Progress Update 31 March 2018 30 September 2017 QBR reported to FAC on 16 November 2017 and 31 December 2017 QBR reported to the 15 February 2018 FAC. 31 March 2018 QBR will be reported to the 17 May 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 March 2018 2018/2019 Budget Estimates currently completed in draft. To be reported to Council Strategic Planning Workshops in April and May and to Extraordinary Meeting on 17 May 2018 to adopt for public exhibition.
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 March 2018 To be included in the next version of the Long Term Financial Plan to be reported to the Council on 28 June 2018.
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 March 2018 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 March 2018 Not yet commenced but to be included in the development of the next version of the Long Term Financial Plan to be reported to Council on 28 June 2018.

BYRON SHIRE COUNCIL

Staff Reports - Corporate and Community Services 4.2

Report No. 4.2 Budget Review - 1 January 2018 to 31 March 2018

Directorate: Corporate and Community Services

Report Author: James Brickley, Manager Finance

File No: I2018/868

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 March 2018.

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 (#E2018/39650) which includes the following results in the 31 March 2018 Quarterly Review of the 2017/2018 Budget:

a) General Fund – $256,900 increase to the Estimated Unrestricted Cash Result

b) General Fund - $1,734,800 increase in reserves

c) Water Fund - $1,195,100 increase in reserves

d) Sewerage Fund - $2,930,600 increase in reserves

2. That Council adopt the revised General Fund Estimated Unrestricted Cash Result of $1,145,200 for the 2017/2018 financial year as at 31 March 2018.

Attachments:

1 Budget Variations for General, Water and Sewerage Funds, E2018/39647 , page 38 ⇩

2 Itemised Listing of Budget Variations for General, Water and Sewerage Funds, E2018/39650 , page 115⇩

3 Integrated Planning and Reporting Framewrok (IP&R) required Quarterly Review Statement, E2018/39648 , page 131⇩

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 three quarters of the 2017/2018 financial year. This report considers the March 2018 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, 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 2018 as at 31 March 2018.

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 Council’s 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 19 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 March 2018 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 2017/2018 financial year projected to 30 June 2018 but revised as at 31 March 2018.

2017/2018 Budget Review Statement as at 31 December 2017		Original Estimate (Including Carryovers) 1/7/2017	Adjustments to 31 March 2018 including Resolutions*	Proposed 31 March 2018 Review Revotes	Revised Estimate 30/6/2018 at 31/03/2018
	Operating Revenue	76,828,000	2,721,500	2,825,400	82,374,900
	Operating Expenditure	79,542,600	3,544,300	2,911,200	85,998,100
	Operating Result – Surplus/Deficit	(2,714,600)	(822,800)	(85,800)	(3,623,200)
	Add: Capital Revenue	27,790,000	(18,400,400)	(548,900)	8,840,700
	Change in Net Assets	25,075,400	(19,223,200)	(634,700)	5,217,500
	Add: Non Cash Expenses	12,939,400	0	0	12,939,400
	Add: Non-Operating Funds Employed	2,160,000	1,239,000	0	3,399,000
	Subtract: Funds Deployed for Non-Operating Purposes	(64,587,000)	19,940,100	6,752,100	(37,894,800)
	Cash Surplus/(Deficit)	(24,412,200)	1,955,900	6,117,400	(16,338,900)
	Restricted Funds – Increase / (Decrease)	(24,419,500)	2,220,100	5,860,500	16,338,900
	Forecast Result for the Year – Surplus/(Deficit) – Unrestricted Cash Result	7,300	(264,200)	256,900	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 2018:

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)
December Review – increase/(decrease)	($42,300)
Council Resolutions January – March Quarter	0
Recommendations within this Review – increase/(decrease)	$256,900
Forecast Unrestricted Cash Result – Surplus/(Deficit) – 30 June 2018	$0
Estimated Unrestricted Cash Result Closing Balance – 30 June 2018	$1,145,200

The General Fund financial position overall has increased by $256,900 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

There were no resolutions of Council during the January to March quarter that affected the 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	0	(11,300)	11,300
Corporate & Community Services	364,800	310,700	54,100
Infrastructure Services	1,561,400	1,324,800	236,600
Sustainable Environment & Economy	781,300	826,400	(45,100)
Total Budget Movements	2,707,500	2,450,600	256,900

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 General Managers program, it is proposed to remove the $30,000 allocated for the Community Satisfaction survey. This will be completed in the 2018/19 year and is included in the 2018/19 draft budget. This has no effect on the program as the support service costs reallocated will reduce.

· In the People and Culture program it is proposed to decrease the budget for the General Managers performance Review ($9,800) and the Staff recognition scheme ($1,500). These savings can be used for the Administration Office refurbishment works in the Facilities Management capital works program.

Corporate and Community Services

· In the General Purpose Revenues Program an additional $47,600 in revenue has been recognised from interest on investments. This increase adjusts the budget to reflect the estimated actual investment revenue that Council will receive before the end of the financial year.

· In the Corporate Services Program it is proposed to increase expenditure by an additional $40,000 for the Excess on insurance claims. There has been a significant increase in the number of claims that Council is paying. This can be funded from the Risk Management reserve.

Infrastructure Services

· In the Emergency Service Program it is proposed to increase operating income and expenditure by $62,000 to reflect Rural Fire Service (RFS) income from Donations ($25,000 - redistributed to brigades), Ballina RFS and Tweed RFS ($25,000 and $12,000 respectively - reimbursement of expenses incurred by Byron Shire Council).

· In the Depot Services and Fleet Management program, it is proposed to create a budget for the Gate Upgrade ($131,700) and the upgrade of the depot administration building ($35,000). These can be funded through the plant reserve.

· 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 on pages 6, 7 and 8 of Attachment 2 under the budget program heading Local Roads and Drainage.

· In the Roads and Maritime Services (RMS) program it is proposed to increase income by $835,000 and expenditure by $873,500 to account for the March 2017 Natural Disaster ($700,000) and an increase in the budget for Tinderbox Road Causeway as the existing budget did not cover all costs of the project ($173,500). This was Council resolution 18-021 to increase the budget, but this budget review addresses the revenue funding portion.

· In the Open Space & Recreation program, there are a number of adjustments outlined under Note 19 in the Budget Variations explanations section of Attachment 1. Further disclosure is included on pages 8 and 9 of Attachment 2 under the budget program heading Open Space & Recreation.

· In the Waste & Recycling program it is proposed to increase capital expenditure by $166,400 for the Customer Service Foyer renovation contribution ($33,400) and Public Place Bin Network Infrastructure - Projects ($130,000). This budget increase will allow for Council to expand recycling infrastructure networks in Mullumbimby and Bangalow. Asset upgrade/enclosure refurbishment will be conducted at the same time as network expansion. Other adjustments are proposed to bring the income and expenditure budgets into line with actual income and expenditure. All these movements have no impact on the budget result as they are covered through the Domestic Waste Management Reserve and the Other Waste Management Reserve.

· In the Cavanbah Centre program it is proposed to decrease operating income due to no further income expected for food and beverage sales ($34,200) as the canteen/kitchen has taken on all food and beverage sales and a reduction in expected fees received from sporting clubs for the hire of the sportsfields ($22,000). This is offset by various other adjustments outlined under Note 21 in the Budget Variations explanations section of Attachment 1 to bring the budgets into line with the actuals. Further disclosure is included on page 11 of Attachment 2 under the budget program heading Cavanbah Centre.

· In the Holiday Park programs, there are decreases in the capital budgets of $475;000 ($190,000 First Sun and $285,000 Suffolk Park). These budgets have been adjusted as it was identified that these works would not be completed this financial year. A breakdown of these works can be seen on pages 11 and 12 of attachment 2. These are all funded through the Holiday Park reserve.

· In the Facilities Management program it is proposed to decrease operating income by $10,500 due to the Clarkes Beach Café rent being reduced ($38,600 - Funded through the Crown reserve), an increase in the payment received from the insurer relating to the March 2017 flood event ($16,100) and an increase in fees received on Crown reserves ($12,000). It is proposed to decrease operating expenditure due to a decrease in electricity costs at Mullumbimby pool ($20,000) and reductions against various community building costs ($13,800)

Sustainable Environment and Economy

· In the Development and Certification program, it is proposed to increase income by $20,000 and expenditure by $20,000 to budget for the Information and Technology Service fee. It is also proposed to transfer the total Income budget less the total expenditure budget to a newly created Information & Technology Service Fee reserve. It is proposed to increase operating expenditure due to Temporary Resourcing ($50,000) to cover the costs of processing additional DA’s that Council has received and reduce the EHC Exempt and Complying Development ($30,000) as this will not be expended in 2017/18. This can be moved to the 2018/19 draft budget. It is proposed to increase Developer Contribution income by $400,000 to reflect the actual income received from developers. This will be transferred to the respective Section 94 reserves.

· In the Planning Policy and Natural Environment Program, there are a number of adjustments outlined under Note 25 in the Budget Variations explanations section of Attachment 1. Further disclosure is included on page 13 of Attachment 2 under the budget program heading Planning Policy and Natural Environment.

· In the Environment & Compliance program it is proposed to increase operating income due to income being received for the Environment Enforcement Levy ($114,700 – transferred to a new Environment Enforcement Levy reserve), Caravan park inspection fees ($71,400) and various other fees where the actual income is higher than the budget. These adjustments are outlined under note 26 in the Budget Variations explanations section of attachment 1. It is proposed to increase operating expenditure by $43,500 to cover costs associated with the Environment Enforcement Levy ($25,500), an increase against licence plate recognition ($14,200) due to the allocated budget not covering the actual cost and an $8,500 increase for investigation consultants.

· In the Economic Development program there are a number of adjustments outlined under Note 27 in the Budget Variations explanations section of Attachment 1. Further disclosure is included on page 15 of Attachment 2 under the budget program heading Economic Development.

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)
Resolutions January - March Quarter – increase / (decrease)	0
March Quarterly Review Adjustments – increase / (decrease)	11,000
Forecast Reserve Movement for 2017/2018 – Increase / (Decrease)	1,328,700
Estimated Reserve Balance at 30 June 2018	$6,282,500

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)
Resolutions January - March Quarter – increase / (decrease)	0
March Quarterly Review Adjustments – increase / (decrease)	1,184,100
Forecast Reserve Movement for 2017/2018 – Increase / (Decrease)	(3,455,200)
Estimated Reserve Balance at 30 June 2018	$3,236,900

Movements for Water Fund can be seen in Attachment 1 with a proposed estimated increase to reserves (including S64 Contributions) overall of $1,195,100 from the 31 March 2018 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)	(251,000)
December Quarterly Review Adjustments – increase / (decrease)	(524,300)
Resolutions January - March Quarter – increase / (decrease)	0
March Quarterly Review Adjustments – increase / (decrease)	2,647,100
Forecast Reserve Movement for 2017/2018 – Increase / (Decrease)	785,500
Estimated Reserve Balance at 30 June 2018	$8,158,300

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
Resolutions January - March Quarter – increase / (decrease)	0
March 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)
Resolutions January - March Quarter – increase / (decrease)	0
March Quarterly Review Adjustments – increase / (decrease)	283,500
Forecast Reserve Movement for 2017/2018 – Increase / (Decrease)	(2,156,600)
Estimated Reserve Balance at 30 June 2018	$7,427,000

Movements for the Sewerage Fund can be seen in Attachment 1 with a proposed estimated overall increase to reserves (including S64 Contributions) of $2,930,600 from the 31 March 2018 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 March 2018.

Total Legal Income & Expenditure as at 31 March 2018

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	301,000	178,325	59.24%
Total Expenditure General Fund	301,000	178,325	59.24%

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 an additional $100,000 was allocated at the December 2017 budget review 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

For information, the adopted 2017/2018 Budget Estimates currently provides an allocation of $1,457,500 funded from the Infrastructure Renewal Reserve, TDDI Grant, Visitor Centre contribution and other sources 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 with budgets presented prior to any adjustment that may be proposed in this Quarterly Budget Review:

Job No	Project No	Project	Current Budget 2017/2018 $
4835.187	0	Byron Bay Town Centre Masterplan	239,300
44283.013	1	Byron Street	200,000
44265.001	1	Byron Street	311,400
4835.188	2	Byron St Connection Upgrade	139,000
4835.189	3	Railway Park Upgrade	237,500
4835.190	4	Visitor Centre Refurbishment	130,000
2306.028	5	Countrylink Building Project Plan	35,000
4835.191	0	Visitor Centre Technology Project	45,000
4835.219	18	Byron Rail Corridor Park	57,000
4835.222	9	Conservation Mgmt Strategy	8,800
4835.223	11	Market/Comm Relocation/DAs	500
4835.224	12	Rail Corridor Contamination Assessment	32,100
4835.225	13	Farmers Market Relocation	21,900
		Total	1,457,500

Financial Implications

The 31 March 2018 Quarter Budget Review of the 2017/2018 Budget has improved the overall budget result by an estimated $256,900. As a result there is an increase of $256,900 to the estimated unrestricted cash balance attributable to the General Fund, with this becoming an estimated $1,145,200 at 30 June 2018. This is above the adopted target of Council of $1,000,000. Council has recovered the 2017/2018 budget result back to a balanced outcome after the March 2018 Quarter Budget Review.

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 March 2018 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 remains the same during the remainder of the 2017/2018 financial year.

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.

The short term financial position of Council may become unsatisfactory if work is not undertaken to maintain the current budget position. It is pleasing that Council has passed resolution 18-111 part 5 at the 22 February 2018 Ordinary Meeting that Council reaffirm that no expenditure is to occur without an approved budget backed by resolution of Council.

BYRON SHIRE COUNCIL

Staff Reports - Infrastructure Services 4.4

Staff Reports - Infrastructure Services

Report No. 4.4 Funding Options for Railway Square Stage 2

Directorate: Infrastructure Services

Report Author: Nikki Bourke, Project Officer

Christopher Soulsby, Development Planning Officer S94 & S64

File No: I2018/277

Theme: Community Infrastructure

Projects and Commercial Opportunities

Summary:

The purpose of this report is to present the funding options for Stage 2 of Railway Square, Byron Bay and how these funding options interrelate with other town centre master plan projects such as the skate park and to recommend a funding strategy to the Finance Advisory Committee.

RECOMMENDATION:

The funding model and budget estimate for the delivery of Railway Square, Stage 2 as set out in Option 3 of this report is adopted by the Finance Advisory Committee for recommendation to Council.

Report

Background

A full concept design for revitalising the whole of Railway Square, Byron Bay was prepared by Plummer & Smith Landscape Architects following:

· Completion of the Byron Bay Town Centre Master Plan (BBTCMP); and

· Receipt of a NSW Department of Industry Tourism Demand-Driver Infrastructure (TDDI) grant.

The TDDI grant and in kind Council funding is currently delivering Stage 1 of the Railway Square Concept Design.

Status

The Railway Square Concept Design was endorsed by the Byron Bay Town Centre Master Plan Governance Group (BBTCMP GG) and endorsed by Council at its 14 December 2017 meeting (Resolution 17-690).

Stage 1 of the concept design with associated TDDI grant and in-kind Council funding is now complete. Stage 1 works improved the north-eastern entry to the park by providing a plaza area and improved pedestrian safety along the eastern edge of the park including the entry to the Jonson St pedestrian crossing.

At its meeting of 22 February 2018, Council resolved (Resolution 18-111):

4. That the next meeting of the Finance Advisory Committee identify funding to complete the

Railway park renewal project as part of the Byron Bay Town Centre Masterplan (BBTCMP)

as part of the budget estimate process for 2018/19 and that funding options be identified from existing BBTCMP budgets and other budgets relevant to open space and facilities projects within Byron Bay.

The identification of funding is provided in the “Financial Implications” section further below. As such, it is understood that completion of the Railway Square Upgrade – Stage 2 is the priority for Byron Bay town centre improvements and consultants Plummer & Smith have been engaged to complete the Detailed Design phase.

Financial Implications

Council has included the Stage 2 of Railway Square Upgrade in the application for the Building Better Regions fund (Round 2) Infrastructure. The results of this grant application are expected in May 2018.

Council is also in the process of applying for a grant under the NSW Regional Growth – Environment and Tourism Fund for the Stage 2 project. Award advice is expected in September 2018.

Should Council not receive one of the above (or other) grants, Council’s Developer Contributions Officer has identified two options for Council funding the Stage 2 project outright. These options are presented in the tables below. The first option involves using only developer contributions and the second option is a mix of developer contributions and pay parking.

Railway Square Option 1 Funded by Developer Contributions
Funding Source		Expenditure	Predicted Income	Reserve Balance for Masterplan
Developer contributions / pay parking	Component from (Quantity Surveyors Report)	2018/19	2018/19	2019/20
Byron Bay Open Space	Landscaping / Softworks / Play Equipment / Water feature	519,000	242,608	326,525
Byron Bay Civic and Urban Improvements	Furniture / Hardworks / Lighting / Timber Boardwalk / Other	934,000	0	0
Shire Wide Footpaths & Cycleways	Footpath	35,000	5,733	0
Section 94A Levy	Plaza creative feature & interpretive design	170,000	193,210	545,295
Shire Wide Community Facilities	Amenities / Demolition / Preliminaries / Project Management	442,000	120,912	321,275
Pay Parking Revenue for Masterplan			460,000	920,000
Total		2,100,000	1,022,463	2,113,095

Railway Square Option 2 Pay Parking and Developer Contributions
Funding Source		Expenditure	Predicted Income	Reserve Balance for Masterplan
Developer contributions / pay parking	Component from (Quantity Surveyors Report)	2018/19	2018/19	2019/20
Byron Bay Open Space	Landscaping / Softworks / Play Equipment / Water feature	269,000	242,608	576,525
Byron Bay Civic and Urban Improvements	Furniture / Hardworks / Lighting / Timber Boardwalk / Other	934,000	0	0
Shire Wide Footpaths & Cycleways	Footpath	35,000	5,733	0
Section 94A Levy	Plaza creative feature & interpretive design	170,000	193,210	545,295
Shire Wide Community Facilities	Amenities / Demolition / Preliminaries	232,000	120,912	531,275
Pay Parking Revenue for Masterplan	Project Management / Soft Works / Part of water Feature	460,000	460,000	460,000
Total		2,100,000	1,022,463	2,113,095

In both options the relevant contributions reserve account has been matched to the cost from the quantity surveyors report. The above tables also include an estimated cash flow into each of these reserves and a column that shows the probable reserve balance that would be available for the next masterplan project.

Since the preparation of these options two additional issues have arisen. These are the desire to fund the proposed skate park and the need to address stormwater drainage issues associated with the railway carpark.

At the meeting of 19 April 2018 when Council resolved:

18-272 Resolved that Council:

1. Identify the Sandhills area as its preferred location for a Byron Bay Skate park.

2. Seek public and user group feedback and ascertain support for this location.

3. Seek support from the Department of Industry-Crown Land for use of this site for a youth focused activity.

4. Provide a report on the feedback provided by stakeholders, the wider community and the Department of Industry-Crown Land. (Richardson/Ndiaye)

The Byron Contributions Plan 2012 (Amendment 3) has identified funding for the masterplan in different funding streams such as open space and community facilities. When the plan was drafted the description of these works was deliberately broad as the masterplan had not yet been developed and the purpose was to preserve funds to ensure the masterplan could be implemented. The contributions plan also identified specific works separate to the masterplan. One such work was a skate park and it was a lower priority for expenditure than the masterplan. For the purposes of allocating developer contributions Council should allocate the developer contributions to the masterplan first and then to the skate park.

If Council funded the skate park as a masterplan work from developer contributions, which it is able to do as the masterplan works were drafted broadly, then the skate park line item should be deleted from the plan and no further collection made for that work.

If Council proceeds with option 1 as set out in the tables above then this would leave up to $460,000 available for additional masterplan projects. Council may forward fund the skate park via pay parking revenue and keep the skate park in the contributions plan and place this item into the recoupment phase as per section 7.11 (3) of the Environmental Planning and Assessment Act 1979 (c.f. section 94 (3) of the old Act). This mechanism allows Council to fund the skate park from pay parking revenue and legitimately continue to levy a contribution on the future population that will utilise the facility.

Transport for NSW has identified significant drainage works that are required for the upgrade of the car park to the south of Railway Square. These works include running a 375mm stormwater pipe from the car park through Railway Square into the Byron Street drain. Staff have identified that this pipe must be in place prior to the construction of Railway Square upgrade. A preliminary estimate for the stormwater pipe is $160,000. If Council installs the pipe utilising our funds then we would enter into a funding agreement with Transport for NSW for the cost to be reimbursed. Subject to a formal agreement with Transport for NSW, Council may utilise their part 5 approval and undertake these works in advance of the assessment and approval of the substantive works in Railway square.

When the skate park and stormwater works are included then the funding table is set out in Option 3 below.

Option 3 Funding of Railway Square, Preliminary stormwater works and Skate Park

Funding Source	Railway Square Skate Park & Stormwater Works	Expenditure	Predicted Income	Reserve Balance for Masterplan
Developer contributions / pay parking	Component from (Quantity Surveyors Report)	2018/19	2018/19	2019/20
Byron Bay Open Space	Landscaping / Softworks / Play Equipment / Water feature	519,000	242,608	326,525
Byron Bay Civic and Urban Improvements	Furniture / Hardworks / Lighting / Timber Boardwalk / Other	934,000	0	0
Shire Wide Footpaths & Cycleways	Footpath	35,000	5,733	0
Section 94A Levy	Plaza creative feature & interpretive design	170,000	193,210	545,295
Shire Wide Community Facilities	Amenities / Demolition / Preliminaries / Project Management	442,000	120,912	321,275


Pay Parking Revenue for Masterplan	Skate Park	300,000	460,000	460,000
Pay Parking Revenue for Masterplan	Stormwater works (to be reimbursed by Transport for NSW)	160,000	160,000	160,000
Total		2,560,000	1,182,463	1,813,095

Option 3 above is to utilise developer contributions for Railway Square and pay parking funds for the skate park have been incorporated into the draft 2018/2019 budget for Council’s consideration at the 17 May 2018 Extraordinary Council Meeting.

It is suggested the draft budget should be amended to include an additional capital line item to expend $160,000 of pay parking revenue to undertake the required stormwater works. This will utilise virtually all the pay parking revenue estimated to be set aside for masterplan projects for the 2018/2019 financial year.

Statutory and Policy Compliance Implications

Council will be considering the Draft 2018/2019 Budget Estimates at an Extraordinary Meeting to be held on 17 May 2018. At that meeting Council will be adopting Draft 2018/2019 Budget Estimates for the purposes of public exhibition in accordance with Section 405(3) of the Local Government Act 1993. The inclusion of the Railway Park project will be part of those Draft Budget Estimates for Council’s consideration.

Venue	Conference Room, Station Street, Mullumbimby
Date	Thursday, 17 May 2018
Time	2.00pm