January 2015
5. Section 7.11 Interest – Increase $1.1m
Greater than anticipated Section 7.11 interest, due a higher cash balance mainly as a result of a reduction in land projects that were unlikely to be settled this financial year.
Section 7.11 funds invested as at 1 July 2019 amounted to $85.7m. If all the budgeted expenditure and income materialises in this financial year, it is anticipated that Section 7.11 funds will reduce to $64.0m as at 30 June 2020.
Gap Funding
Due to the cap placed on developer contributions imposed by the State Government (currently
$45,000 per dwelling) the State Government funds the gap between the capped amount and the full contributions required. Council is invited to apply for this gap funding based on the State Government’s timetable.
Council has been invited to apply for gap funding up to 30 September 2019. To date Council has received gap funding up to 31 December 2017 for CP12 and CP13. CP15 was deemed ‘IPART and Minister endorsed’ in December 2019 (i.e. Amendment A as adopted by Council following endorsement by the Minister for Planning and a review by IPART). Accordingly gap funding up to 31 December 2017 for CP15 was lodged in December 2019.
Council has also lodged applications relating to 1 January 2018 to 20 September 2019 for CP12, CP13 and CP15 in February 2020, as per the State Government’s timetable.
Estimated outstanding Gap funding up to 30 September 2019 calculated on plan versions specified below are as follow:
DA Approval Date CP12 CP13 CP15 Grand Total
Mar 15 to Dec 17 - - 106,942,525 106,942,525
Jan 18 to Sep 19 3,099,572 4,105,527 72,487,605 79,692,704
Gap Funding to 30 Sep 19 3,099,572 4,105,527 179,430,130 186,635,229
The total estimated gap funding receivable of $186.6m has been calculated using the respective IPART endorsed plans for CP12 (Balmoral Road Release Area) and CP13 (North Kellyville release area). These calculations did not take into account of IPART reviews on these plans that are currently underway or recently completed as they are yet to be finalised or endorsed by the Minister. For CP15, the estimated gap funding receivable has been based on the ‘IPART and Minister endorsed’ plan (Amendment A) adopted in December 2019.
ORDINARY MEETING OF COUNCIL 24 MARCH, 2020
In order to levy full contribution rates from 1 July 2020 when this gap funding ceases, Council will need to have adopted the abovementioned IPART and Minister endorsed plans. Council is awaiting the Ministers advice on CP12 and working with IPART on their review of CP13. The Revised CP15 (Amendment B as reported to Council in February 2020) will also need to be reviewed by IPART, endorsed by the Minister and adopted by Council.
It is critical for Council to have in place these IPART and Minister endorsed plans in order to levy full contribution rates above the levy threshold of $30,000 per dwelling from 1 July 2020.
Bio Banking Activities
There are no variations proposed in this Review.
Real Estate Assets
This section relates to a summary of Property Development Activities. Following budget is to develop the Hill Road subdivision.
Real Estate Assets Original
Budget
Current Budget
Proposed Revised Budget
Proposed Contra variations
Proposed Other Variations
Ref
$000 $000 $000 $000 $000
Development Cost - 2,443 2,443 - -
Funded by transfer from Reserves - (2,443) (2,443) - -
There are no variations proposed in this Review.
Conclusion
This Opinion by the Responsible Accounting Officer is required under the Local Government (General) Regulation 2005 – Clause 203(2).
Council’s Group Manager – Finance & Organisational Performance, as the Responsible Accounting Officer, advises that the Council’s projected financial position is satisfactory.
Furthermore the investments shown in Attachment 1 page 10-11 has been made is in accordance with the Act, the Regulations and Council’s actual Investment Policy.
Council’s cash and bank balances are reconciled daily to Council’s bank balances.
IMPACTS Financial
Below is a summary of all proposed variations listed in this report:
ORDINARY MEETING OF COUNCIL 24 MARCH, 2020
Current Budget Proposed
Revised Budget
Proposed Variation
$000 $000 $000
Recurrent Budget Surplus (225) (225) -
Capital Purchases 3,431 3,431 -
Capital Works Expenditure 140,314 141,532 1,218*
Real Estate Assets Expenditure 2,443 2,443 -
* Includes contra variation of $768,126 as mentioned above.
Should the above proposed variations be adopted, internally restricted and externally restricted cash balances as at 30 June 2020 are projected to be $214.3m and $81.0m respectively.
Hills Future
The impact of this budget will ensure that short term actions are aligned with future direction.
It also demonstrates Council's transparency and ability to effectively manage funds.
RECOMMENDATION
The proposed budget variations in Attachment 1, Pages 6 to 11 and the variations detailed in page 12-29 be adopted.
ATTACHMENTS
Page 1-4 Management Reporting Format Page 5–11 Statutory Reporting Format
Page 12-29 Capital Works Expenditure and Comments on Variations Page 30 Key Performance Indicators
Page 31 Listing of Contracts & Other Expenses
ORDINARY MEETING OF COUNCIL 24 MARCH 2020
ATTACHMENT 1
The Hills Shire Council
PAGE 1
FY18/19 FY19/20 FY19/20 Description FY18/19 FY19/20 % Actual/
Actual Current Revised YTD Total Revised
July-June Budget Budget Actual YTD Budget
$'000 $'000 $'000 $'000 $'000
RECURRENT OPERATIONS
(166,421) (171,783) (171,783) Income (149,247) (154,432) 90%
121,082 137,863 137,863 Expenditure 81,111 86,029 62%
22,481 22,575 22,575 Depreciation 14,984 15,218 67%
(22,859) (11,346) (11,346) Budget (Surplus)/Deficit (53,152) (53,185)
Add Back
(22,481) (22,575) (22,575) Depreciation (14,984) (15,218) 67%
29,741 32,186 32,186 Transfer to Asset Related Reserves 28,843 32,186 100%
11,044 1,510 1,510 Transfer to Other Reserves 1,682 1,510 100%
(4,555) (225) (225) Budget Result (Surplus)/Deficit (37,612) (34,706)
CAPITAL PURCHASES
4,033 3,431 3,431 Capital Purchases 2,639 2,604 76%
(2,626) (2,423) (2,423) Transfer to/ (from) Plant Reserve (3,501) (2,423) 100%
(1,406) (1,008) (1,008) Sale of Plant Assets (863) (893) 89%
257 0 0 Transfer to Section 7.11 0 0 0%
0 1,627 1,627 Transfer to Reserves 0 1,627 100%
(257) (1,627) (1,627) Sale of Fixed Assets 0 (1,627) 100%
(0) 0 0 Net Capital Purchases (1,726) (713)
CAPITAL WORKS
63,743 94,499 95,717 New & Renewal 32,894 39,614 41%
94,506 40,310 40,310 Land Acquisition 88,355 10,926 27%
4,971 5,505 5,505 Project Development & Delivery 3,538 3,567 65%
163,220 140,314 141,532 Total Expenditure 124,787 54,107
(7,450) (4,938) (5,125) Grants and Contributions 0 0 0%
(19,232) (39,353) (40,233) Transfer to/(from) Reserves (28,280) (39,353) 98%
(136,161) (95,981) (96,132) Transfer from Prior Years Section 7.11 0 0 0%
(377) (42) (42) Transfer from Prior Years Income 0 0 0%
(163,220) (140,314) (141,532) Total Funding (28,280) (39,353)
0 0 0 Net Capital Expenditure 96,507 14,754
SECTION 7.11
(141,617) (85,715) (85,715) Opening Balance (Surplus)/Deficit (141,617) (85,715)
(82,235) (73,069) (73,069) Income (49,817) (48,432) 66%
(2,859) (783) (1,930) Interest Received/(Paid) (2,149) (1,422) 74%
140,996 96,581 96,732 Expenditure (inc VPA) 97,169 32,120 33%
55,902 22,728 21,732 Movement for the year 45,202 (17,734)
(85,715) (62,987) (63,982) Section 7.11 Balance (Surplus)/Deficit (96,415) (103,449)
REAL ESTATE ASSETS
98,462 98,462 98,462Assets at Book Value 1 July 2019 98,462 98,462
0 2,443 2,443 Development Costs 0 23 1%
0 (2,443) (2,443) Transfer from Reserves (0) (23) 1%
Management Reporting Format (Applying Matching Principles)
ORDINARY MEETING OF COUNCIL 24 MARCH 2020
ATTACHMENT 1
The Hills Shire Council
Statement of Income By Program PAGE 2
FY18/19 FY19/20 FY19/20 Description FY18/19 FY19/20 % Actual/
Actual Current Revised YTD Total Revised
July-June Budget Budget Actual YTD Budget
$'000 $'000 $'000 $'000 $'000
REVENUE - RECURRENT
(71,560) (74,643) (74,643) Corporate Management (71,184) (75,072) >100%
(1,514) (3,047) (3,047) Infrastructure & Transport Planning (1,507) (1,566) 51%
(1,314) (1,573) (1,573) Forward Planning (1,418) (1,417) 90%
(2,038) (1,452) (1,452) Asset Management, Traffic & Parks (773) (670) 46%
(5,900) (4,736) (4,736) Property Dev, Buildings & Special Projects (4,417) (3,580) 76%
(453) (417) (417) Fire Control (429) (683) >100%
(10) 0 0 Buildings Operations (10) (0) 0%
(10) (7) (7) Councillors & Executive Services (7) (7) 97%
(496) (518) (518) Finance, Budgeting, IP & R, Payroll & Rates (288) (425) 82%
0 (130) (130) Human Resources & Wellbeing 0 (130) 100%
(9,856) (10,834) (10,834) Expenditure & Revenue (6,743) (7,073) 65%
(10) 0 0 Project Delivery 0 0 0%
(434) (457) (457) Fleet and Workshop (260) (264) 58%
(2,077) (2,460) (2,460) Civil & Roads Maintenance (1,111) (1,753) 71%
(347) (388) (388) Parks & Bushland Maintenance (116) (276) 71%
(3,116) (3,683) (3,683) Development Assessment (2,289) (2,484) 67%
(5,115) (5,434) (5,434) Subdivision & Development Certification (3,535) (3,070) 57%
(526) (487) (487) Environment & Public Health (510) (398) 82%
(28,451) (28,877) (28,877) Resource Recovery (28,030) (30,111) >100%
(2,048) (4,245) (4,245) Regulatory Services (1,244) (2,041) 48%
(5,316) (5,556) (5,556) Children's Services (3,559) (3,804) 68%
(5,949) (6,398) (6,398) Hills Community Care (4,260) (4,348) 68%
0 (0) (0) Information Technology 0 (0) 100%
(1) (1) (1) Customer Relations (0) (1) 63%
(4,028) (3,854) (3,854) Community Outcome (2,870) (3,307) 86%
(655) (644) (644) Library Services (516) (609) 95%
(151,223) (159,840) (159,840) Total Recurrent Revenue (135,075) (143,089) 90%
(6,485) (6,246) (6,246) Transfer from Reserve - Internal Restrictions (5,607) (6,246) 100%
(8,713) (5,697) (5,697) Transfer from Reserve - External Restrictions (8,565) (5,097) 89%
(166,421) (171,783) (171,783) Revenue as Per Income Statement (149,247) (154,432) 90%
Management Reporting Format (Applying Matching Principles)
ORDINARY MEETING OF COUNCIL 24 MARCH 2020
ATTACHMENT 1
The Hills Shire Council
Management Reporting Format (Applying Matching Principles)
Statement of Expenditure By Program PAGE 3
FY18/19 FY19/20 FY19/20 Description FY18/19 FY19/20 % Actual/
Actual Current Revised YTD Total Revised
July-June Budget Budget Actual YTD Budget
$'000 $'000 $'000 $'000 $'000
EXPENDITURE - RECURRENT
7,360 8,830 8,830 Corporate Management 4,922 5,234 59%
2,247 4,484 4,484 Infrastructure & Transport Planning 1,413 1,918 43%
5,255 6,387 6,387 Forward Planning 3,468 3,700 58%
12,419 9,622 9,622 Asset Management. Traffic & Parks 9,844 4,477 47%
4,467 4,984 4,984 Property Dev, Buildings & Special Projects 2,868 3,045 61%
3,722 4,343 4,343 Fire Control 2,007 2,431 56%
7,232 8,348 8,348 Buildings Operations 4,092 6,200 74%
1,749 1,796 1,796 Councillors & Executive Services 1,273 1,046 58%
5,724 5,661 5,661 Finance, Budgeting, IP & R, Payroll & Rates 4,412 4,063 72%
1,899 2,072 2,072 Human Resources & Wellbeing 1,234 1,345 65%
1,841 1,716 1,716 Expenditure & Revenue 1,225 1,183 69%
1,319 1,249 1,249 Project Delivery 810 821 66%
4,607 4,813 4,813 Fleet Management 2,982 3,204 67%
11,264 15,105 15,105 Civil & Roads Maintenance 7,122 8,974 59%
13,833 13,707 13,707 Parks & Bushland Maintenance 8,657 9,399 69%
5,658 6,229 6,229 Development Assessment 3,832 4,077 65%
3,732 3,760 3,760 Subdivision & Development Certification 2,444 2,386 63%
3,613 3,914 3,914 Environment & Public Health 2,415 2,548 65%
25,062 29,084 29,084 Resource Recovery 17,268 18,059 62%
3,703 4,345 4,345 Regulatory Services 2,482 2,770 64%
1,340 1,414 1,414 Marketing & Communications 873 890 63%
5,521 5,665 5,665 Children's Services 3,654 3,693 65%
7,283 8,805 8,805 Hills Community Care 4,761 6,006 68%
6,167 7,122 7,122 Information Technology 4,145 5,631 79%
3,562 3,635 3,635 Customer Relations 2,413 2,397 66%
10,858 12,643 12,643 Community Outcome 7,329 8,323 66%
6,761 7,409 7,409 Library Services 4,442 4,956 67%
(47,117) (49,281) (49,281) Internal Recoveries (31,275) (32,747) 66%
121,082 137,863 137,863 Total Recurrent Expenditure 81,111 86,029 62%
22,481 22,575 22,575 Depreciation and Amortisation 14,984 15,218 67%
143,562 160,438 160,438 Expenditure as Per Income Statement 96,095 101,247 63%
ORDINARY MEETING OF COUNCIL 24 MARCH 2020
ATTACHMENT 1
The Hills Shire Council
Management Reporting Format (Applying Matching Principles)
Income Statement PAGE 4
FY18/19 FY19/20 FY19/20 Description FY18/19 FY19/20 % Actual/
Actual Current Revised YTD Total Revised
July-June Budget Budget Actual YTD Budget
$'000 $'000 $'000 $'000 $'000
RECURRENT Revenue
(100,629) (104,180) (104,180) Rates & Annual Charges (100,220) (106,192) >100%
(20,261) (23,217) (23,217) User Charges & Fees (13,864) (15,433) 66%
(7,548) (7,521) (7,521) Investment Revenues - Operational (4,954) (4,369) 58%
(9,541) (10,382) (10,382) Other Revenues - Operational (6,235) (6,165) 59%
(13,245) (14,541) (14,541) Grants & Contributions - Operational (9,803) (10,930) 75%
(6,485) (6,246) (6,246) Tranfer From Reserve - Internal Restrictions (5,607) (6,246) 100%
(8,713) (5,697) (5,697) Tranfer From Reserve - External Restrictions (8,565) (5,097) 89%
(166,421) (171,783) (171,783) Total Revenue (149,247) (154,432) 90%
Expenditure
54,027 58,930 58,930 Employment Costs 36,954 37,362 63%
41,346 47,449 47,449 Materials, Contracts & Plant Running Exp 26,065 31,538 66%
22,481 22,575 22,575 Depreciation and Amortisation 14,984 15,218 67%
25,709 31,484 31,484 Other Expenses 18,092 17,129 54%
143,562 160,438 160,438 Total Expenditure 96,095 101,247 63%
(22,859) (11,346) (11,346) Operating Result (Surplus)/Deficit (53,152) (53,185)
Add
(22,481) (22,575) (22,575) Depreciation & Amortisation (14,984) (15,218) 67%
(45,340) (33,921) (33,921) Operating Result (Cash) (68,136) (68,403)
29,741 32,186 32,186 Transfer to Asset Related Reserves 28,843 32,186 >100%
11,044 1,510 1,510 Transfer to Other Reserves 1,682 1,510 100%
(4,555) (225) (225) Net Budget Result (Surplus)/Deficit (37,612) (34,706)
ORDINARY MEETING OF COUNCIL 24 MARCH 2020
ATTACHMENT 1