Land (Operational, Community and Land Under Roads) Community Land
Council’s Community Land valuations have been performed internally based on Valuer General's valuations for rating purposes where available, or the average total Valuer General rate divided by the total land area to derive a unit rate. For parcels not in the Valuer General report, the value is derived from the average of the community land parcels unit rate rather than the municipal average.
Council’s Community Land has been revalued at 30 June 2021 as a result of new land valuations received from the Valuer General.
Operational Land
Operational land was valued internally based on ABS Price Index for Sydney Established Houses from June 2013 to June 2018. Where this information is not available, current prices in an active market for properties of different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences are considered. Appropriate adjustments are also made for the inherent features of the property such as fire-prone, flood zonings and usability of the land.
Council’s Operational Land was revalued at 30 June 2019 in accordance with the fair valuation policy as mandated by the Office of Local Government and this was undertaken by Preston Rowe Paterson Sydney Pty Ltd.
Land Under Roads
The fair value for Land under Roads has been performed internally using a unit rate per square metre by suburb, derived from the Valuer General’s valuation performed for rating purposes and discounted by 90% based on Englobo method. Given the nature of Land under Roads, comparable sales data is not available. As the Valuer General considers land in all zoning, average unit rates derived from the Valuer General’s valuation is considered the most practicable approach to valuing Land under Roads.Council’s Land under Roads has been revalued as at 30 June 2021 as a result of new land values received from the Valuer General.The key unobservable input to the valuation is the rate per square metre by suburb.
Other Assets (Plant & Equipment, and Office Equipment)
Other assets are not revalued every five years; the depreciated value of the various asset category is considered a close proxy for fair value.
D2 Fair value measurement
(continued)T H E H I L LS S H I R E C O U N C I L | F I N A N C I A L STAT E M E N T S | 2 0 2 0 - 2 0 2 1
6 2
§Note/Subtotal§
Fair value measurements using significant unobservable inputs (level 3)
§Total§
A reconciliation of the movements in recurring fair value measurements allocated to Level 3 of the hierarchy is provided below:
Bulk earthworks Other assets Community land Land under roads
$ '000 2021 2020 2021 2020 2021 2020 2021 2020
108,142 110,440 96,328 80,916 543,626 557,563 1,013,107 929,920
– – – – – – – 62,440
– – 4,549 8,447 – – – –
1,807 2,233 7,291 8,879 34,591 20,186 19,032 16,845
– – – – – (858) (20) (10)
– – (2,097) (1,914) – – – –
– – – – – – – 3,912
– (4,531) – – (7,026) (33,265) (14,267) –
Opening balance Total gains or losses for the period
Recognised in other comprehensive income – revaluation surplus Other movements Transfers from/(to) another asset class
Purchases (GBV) Disposals (WDV)
Depreciation and impairment Reval Decrement - Income Statement
Reval Decrement - Other comprehensive Income
Closing balance 109,949 108,142 106,071 96,328 571,191 543,626 1,017,852 1,013,107
Buildings Civil Stormwater drainage
Plant and office equipment
$ '000 2021 2020 2021 2020 2021 2020 2021 2020
246,451 246,697 1,065,522 1,057,239 310,839 294,730 6,358 7,000
– 56 4,092 12,830 – – – –
3,731 3,608 54,142 54,183 11,774 14,859 1,460 2,753
(4,357) – – (364) – – (110) (426)
(3,927) (3,910) (13,041) (12,679) (1,646) (1,583) (2,836) (2,969)
– – – (45,687) – 2,833 – –
Opening balance Total gains or losses for the period
Other movements Transfers from/(to) another asset class
Purchases (GBV) Disposals (WDV)
Depreciation and impairment Reval Decrement - Other comprehensive Income
Closing balance 241,898 246,451 1,110,715 1,065,522 320,967 310,839 4,872 6,358
§Total§
Total
$ '000 2021 2020
3,390,373 3,284,505
– 62,440
8,641 21,333
133,828 123,546 (4,487) (1,658) (23,547) (23,055)
– 3,912
(21,293) (80,650) 3,483,515 3,390,373
§Total§
Opening balance
Recognised in other comprehensive income – revaluation surplus Transfers from/(to) another asset class
Purchases (GBV) Disposals (WDV)
Depreciation and impairment Reval Decrement - Income Statement
Reval Decrement - Other comprehensive Income Closing balance
§Subnote§
Highest and best use
All of Council’s non-financial assets are considered as being utilised for their highest and best use.
D2 Fair value measurement
(continued)§Note/Subtotal§§TocItem§§Subnote§
The following assets and liabilities do not qualify for recognition in the Statement of Financial Position, but their knowledge and disclosure is considered relevant to the users of Council’s financial report.
LIABILITIES NOT RECOGNISED 1. Guarantees
Council is party to an Industry Defined Benefit Plan under the Local Government Superannuation Scheme, named The Local Government Superannuation Scheme – Pool B (the Scheme) which is a defined benefit plan that has been deemed to be a
‘multi-employer fund’ for purposes of AASB119 Employee Benefits for the following reasons:
(i) Defined benefit superannuation contribution plans
– Assets are not segregated within the sub-group according to the employees of each sponsoring employer.
– The contribution rates have been the same for all sponsoring employers. That is, contribution rates have not varied for each sponsoring employer according to the experience relating to the employees of that sponsoring employer.
– Benefits for employees of all sponsoring employers are determined according to the same formulae and without regard to the sponsoring employer.
– The same actuarial assumptions are currently used in respect of the employees of each sponsoring employer.
Given the factors above, each sponsoring employer is exposed to the actuarial risks associated with current and former employees of other sponsoring employers, and hence shares in the associated gains and losses (to the extent that they are not borne by members).
Description of the funding arrangements.
Pooled employers are required to pay standard employer contributions and additional lump sum contributions to the fund.
The standard employer contributions were determined using the new entrant rate method under which a contribution rate sufficient to fund the total benefits over the working life-time of a typical new entrant is calculated. The current standard employer contribution rates are:
For all Employers, minimum contributions of: Employer Standard Defined Benefit Contributions for Contributors
Division B Division C Division D
1.9 times member contributions for non-180 Point
Members; Nil for 180 Point Members* 2.5% of salary 1.64 times member contributions
* For 180 Point Members, Employers are required to contribute 7% of salaries for the year ending 30 June 2021 (increasing to 7.5% in line with the increase in the Superannuation Guarantee) to these members' accumulation accounts, which are paid in addition to members' defined benefits.
The past service contribution for each Pooled Employer is a share of the total past service contributions of $40 million per annum from 1 July 2019 to 30 June 2021, apportioned according to each employer's share of the accrued liabilities as at 30 June 2019. These past service contributions are used to maintain the adequency of the funding position for the accrued liabilities.
The adequacy of contributions is assessed at each triennial actuarial investigation and monitored annually between triennials.
Description of the extent to which Council can be liable to the plan for other Council’s obligations under the terms and conditions of the multi-employer plan
As stated above, each sponsoring employer (Council) is exposed to the actuarial risks associated with current and former employees of other sponsoring employers and hence shares in the associated gains and losses.
However, there is no relief under the Fund's trust deed for employers to walk away from their defined benefit obligations.
Under limited circumstances, an employer may withdraw from the plan when there are no active members, on full payment of outstanding past service contributions. There is no provision for allocation of any surplus which may be present at the date of withdrawal of the Council.
There are no specific provisions under the Fund's trust deed dealing with deficits or surplus on wind-up.