ORDINARY MEETING OF COUNCIL
Tuesday, 27 August 2019 SECTION 1
ITEMS 1 – 11 (PAGES 1 – 359)
T O S T R I V E F O R B E T T E R T H I N G S
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
ITEM SUBJECT PAGE
SECTION 1 – ITEMS 1-11
ITEM-1 CONFIRMATION OF MINUTES
ITEM-2 2018/2019 DRAFT STATUTORY FINANCIAL STATEMENTS & BUDGET RESULT
14
ITEM-3 BUDGET REVIEW AS AT 31 JULY 2019 156
ITEM-4 RESTON GRANGE, BELLA VISTA - PROPOSED PEDESTRIAN REFUGE ISLAND
193
ITEM-5 LTC RECOMMENDATION JULY 2019 - 2019 KENTHURST FAIR AND STREET PARADE
198
ITEM-6 LTC RECOMMENDATION JULY 2019 - 2019 ORANGE BLOSSOM FESTIVAL - CASTLE HILL SHOWGROUND
224
ITEM-7 TRANSFER OF LAND ARISING FROM CLOSURE OF TEMPORARY ROAD - GUNGARTEN CLOSE, KELLYVILLE
258
ITEM-8 TENDER T20/2 WATERMAIN RELOCATION IN SAMANTHA RILEY DRIVE, KELLYVILLE (FROM HEZLETT ROAD TO FOXALL ROAD)
265
ITEM-9 VARIATION TO EASEMENT FOR ELECTRICITY SUPPLY WITHIN ARNOLD AVENUE SPORTS COMPLEX, KELLYVILLE & CRESTWOOD RESERVE, BAULKHAM HILLS
269
ITEM-10 FURTHER REPORT - OPERATION OF LOWER PORTLAND FERRY AND TENDER T19/42 FOR RECONSTRUCTION OF EASTERN RAMP FOR LOWER PORTLAND FERRY
283
ITEM-11 INFORMATION AND STATUS REPORTS 315
SECTION 2 - ITEM 12
ITEM-12 'WAVES' AQUATIC CENTRE REDEVELOPMENT - AH WHALING MEMORIAL RESERVE NO 93, ROXBOROUGH PARK ROAD, BAULKHAM HILLS
3
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
ITEM SUBJECT PAGE
ITEM-1 CONFIRMATION OF MINUTES 3
MAYORAL MINUTE NO. 9/2019 - KELLYVILLE RESIDENT REACHED 107 YEARS
3
MAYORAL MINUTE NO. 10/2019 - VALE RAY WHITEMAN 3
ITEM-2 VOLUNTARY PLANNING AGREEMENTS - MACKILLOP DRIVE, NORWEST AND 34 SALAMANDER GROVE, BAULKHAM HILLS (5/2018/PLP & 6/2012/JP/C)
4
ITEM-3 AMENDMENT TO BOX HILL NORTH VOLUNTARY PLANNING AGREEMENT 4/2018/VPA
6
ITEM-4 POST EXHIBITION - KELLYVILLE PARK - PROPOSED PREMIER RUGBY LEAGUE FACILITY AND CENTRE OF EXCELLENCE FOR PARRAMATTA RUGBY LEAGUE
5
ITEM-5 PROPERTY DEALINGS RELATING TO DEVELOPMENT MATTERS
8
ITEM-6 REVIEW OF ADVERTISING ON COUNCIL OWNED INFRASTRUCTURE (FP255)
6
ITEM-7 STRATEGIC PLANNING PROCESS 8
ITEM-8 EASEMENT FOR ELECTRICITY SUPPLY - PART LOT 21 DP 1092663 CONNAUGHT CIRCUIT RESERVE NO 473 19Z, ROSEBERY ROAD, KELLYVILLE
8
QUESTIONS WITHOUT NOTICE 8
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
387 PRESENT
Mayor Dr M R Byrne (In the Chair) Clr R A Preston
Clr Dr P J Gangemi Clr B L Collins OAM Clr M G Thomas Clr E M Russo Clr F P De Masi Clr A J Hay OAM Clr S P Uno 388 APOLOGIES
Clr A N Haselden (Deputy Mayor) Clr R Jethi
Clr J Jackson Clr R M Tracey
389 TIME OF COMMENCEMENT 7.09pm
390 TIME OF COMPLETION 8.06pm
391 DECLARATIONS OF INTEREST Nil.
392 ARRIVALS AND DEPARTURES Nil.
393 DISSENT FROM COUNCIL'S DECISIONS Nil.
394 ADJOURNMENT & RESUMPTION
Nil.
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
ITEM-1 CONFIRMATION OF MINUTES
A MOTION WAS MOVED BY COUNCILLOR COLLINS OAM AND SECONDED BY COUNCILLOR UNO THAT the Minutes of the Ordinary Meeting of Council held on 23 July 2019 be confirmed.
THE MOTION WAS PUT AND CARRIED.
395 RESOLUTION
The Minutes of the Ordinary Meeting of Council held on 23 July 2019 be confirmed.
APOLOGIES
A MOTION WAS MOVED BY COUNCILLOR HAY OAM AND SECONDED BY COUNCILLOR RUSSO THAT the apologies from Councillors Haselden, Jackson, Jethi and Tracey be accepted and leave of absence granted.
THE MOTION WAS PUT AND CARRIED.
396 RESOLUTION
The apologies from Councillors Haselden, Jackson, Jethi and Tracey be accepted and leave of absence granted.
MAYORAL MINUTE NO. 09/2019 – KELLYVILLE RESIDENT REACHED 107 YEARS A MOTION WAS MOVED BY THE MAYOR AND SECONDED BY COUNCILLOR DE MASI THAT
1. This Mayoral Minute be received;
2. A minute silence be observed to pay tribute to Mr Shri Shankerlal Dalsukhram Trivedi.
THE MOTION WAS PUT AND CARRIED.
397 RESOLUTION
1. This Mayoral Minute be received;
2. A minute silence be observed to pay tribute to Mr Shri Shankerlal Dalsukhram Trivedi.
(A minute’s silence was observed).
MAYORAL MINUTE NO. 10/2019 - VALE RAY WHITEMAN
A MOTION WAS MOVED BY THE MAYOR AND SECONDED BY COUNCILLOR PRESTON THAT
1. This Mayoral Minute be received;
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
2. A minute silence be observed to pay tribute to Ray Whiteman and his life-time dedication to our community;
3. Council write to the Whiteman family to pass on the condolences of the Councillors and the wider Hills community; and
4. Council investigate suitable naming opportunities in the Glenorie region after Ray Whiteman.
THE MOTION WAS PUT AND CARRIED.
398 RESOLUTION
1. This Mayoral Minute be received;
2. A minute silence be observed to pay tribute to Ray Whiteman and his life-time dedication to our community;
3. Council write to the Whiteman family to pass on the condolences of the Councillors and the wider Hills community; and
4. Council investigate suitable naming opportunities in the Glenorie region after Ray Whiteman.
(A minute’s silence was observed).
COMMUNITY FORUM
There were no addresses to Council during Community Forum.
ITEM-2 VOLUNTARY PLANNING AGREEMENTS - MACKILLOP DRIVE, NORWEST AND 34 SALAMANDER GROVE, BAULKHAM HILLS (5/2018/PLP & 6/2012/JP/C)
A MOTION WAS MOVED BY COUNCILLOR THOMAS AND SECONDED BY COUNCILLOR DE MASI THAT the Recommendation contained in the report be adopted.
THE MOTION WAS PUT AND CARRIED.
399 RESOLUTION
1. The draft Voluntary Planning Agreements be subject to legal review at the cost of the Proponent, prior to public exhibition and subject to the following amendments:
a. In association with the removal of the existing requirement for the Developer to
embellish Lot 214 (public reserve) for the purpose of a drainage reserve (including
bioretention basin), proposed embellishment works to Lot 214 (public reserve) for the
purpose of a local park be included as an obligation through amendments to existing
VPA (Attachment 1); and
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
b. The requirement for the Developer to embellish Lot 214 (public reserve) for the purpose of a local park be deleted from the draft VPA submitted in association with the planning proposal (Attachment 2).
2. The draft Voluntary Planning Agreements (Attachments 1 and 2) be updated, as required, prior to public exhibition to incorporate the recommendations of the legal review.
3. The draft Voluntary Planning Agreements (Attachments 1 and 2) be publicly exhibited concurrently with the associated planning proposal (5/2018/PLP) for a period of at least 28 days, in accordance with the Environmental Planning and Assessment Act 1979.
Being a planning matter, the Mayor called for a division to record the votes on this matter VOTING FOR THE MOTION
Clr F P De Masi Clr R A Preston Clr Dr P J Gangemi Clr A J Hay OAM Clr B L Collins OAM Clr M G Thomas Clr E M Russo
VOTING AGAINST THE MOTION Mayor Dr M R Byrne
Clr S P Uno
MEETING ABSENT Clr A N Haselden Clr R Jethi
Clr R M Tracey Clr J Jackson
ITEM-4 POST EXHIBITION - KELLYVILLE PARK - PROPOSED PREMIER RUGBY LEAGUE FACILITY AND CENTRE OF EXCELLENCE FOR PARRAMATTA RUGBY LEAGUE A MOTION WAS MOVED BY COUNCILLOR THOMAS AND SECONDED BY COUNCILLOR HAY OAM THAT the Recommendation contained in the report be adopted.
THE MOTION WAS PUT AND CARRIED.
400 RESOLUTION
1. The Draft Master Plan for Kellyville Park be adopted as exhibited.
2. The Expression of Interest submission by Parramatta National Rugby League be
accepted and a formal licence/ lease agreement be entered into.
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
ITEM-3 AMENDMENT TO BOX HILL NORTH VOLUNTARY PLANNING AGREEMENT 4/2018/VPA
A MOTION WAS MOVED BY COUNCILLOR DR GANGEMI AND SECONDED BY COUNCILLOR COLLINS OAM THAT the Recommendation contained in the report be adopted.
THE MOTION WAS PUT AND CARRIED UNANIMOUSLY.
401 RESOLUTION
Council consent to the written request to vary Schedule 3 of Voluntary Planning Agreement 4/2018/VPA and authorise the issuing of a letter of acceptance in response.
Being a planning matter, the Mayor called for a division to record the votes on this matter VOTING FOR THE MOTION
Mayor Dr M R Byrne Clr F P De Masi Clr R A Preston Clr Dr P J Gangemi Clr A J Hay OAM Clr B L Collins OAM Clr M G Thomas Clr E M Russo Clr S P Uno
VOTING AGAINST THE MOTION None
MEETING ABSENT Clr A N Haselden Clr R Jethi
Clr R M Tracey Clr J Jackson
ITEM-6 REVIEW OF ADVERTISING ON COUNCIL OWNED INFRASTRUCTURE (FP255)
A MOTION WAS MOVED BY COUNCILLOR UNO AND SECONDED BY COUNCILLOR RUSSO THAT the Recommendation contained in the report be adopted.
THE MOTION WAS PUT AND CARRIED UNANIMOUSLY.
402 RESOLUTION
1. Council prepare planning proposals to:
a. Include exempt development criteria for advertising on bus shelters, seats, street
signs and bridges under Local Environmental Plan 2012, as detailed within this
report; and
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
b. Include exempt development criteria for advertising on bus shelters, seats, street signs and bridges under State Environmental Planning Policy (Sydney Region Growth Centres) 2006, as detailed within this report.
2. The planning proposals be reported to the Local Planning Panel for advice, in accordance with Section 2.19 of the Environmental Planning and Assessment Act 1979.
3. Following receipt of the Local Planning Panel’s advice and subject to this advice not requiring any revisions to the planning proposals as detailed within this report, the planning proposals be forwarded to the Department of Planning, Industry and Environment for a Gateway Determination.
Being a planning matter, the Mayor called for a division to record the votes on this matter VOTING FOR THE MOTION
Mayor Dr M R Byrne Clr F P De Masi Clr R A Preston Clr Dr P J Gangemi Clr A J Hay OAM Clr B L Collins OAM Clr M G Thomas Clr E M Russo Clr S P Uno
VOTING AGAINST THE MOTION None
MEETING ABSENT Clr A N Haselden Clr R Jethi
Clr R M Tracey Clr J Jackson
CALL OF THE AGENDA
A MOTION WAS MOVED BY COUNCILLOR HAY OAM AND SECONDED BY COUNCILLOR RUSSO THAT items 5, 7 and 8 be moved by exception and the recommendations contained therein be adopted.
THE MOTION WAS PUT AND CARRIED.
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
403 RESOLUTION
Items 5, 7 and 8 be moved by exception and the recommendations contained therein be adopted.
ITEM-5 PROPERTY DEALINGS RELATING TO DEVELOPMENT MATTERS
404 RESOLUTION
Council consent to the release of a restriction on the use of land from the title of Lot 231 DP 1207855 (4-16 Saltwater Crescent, North Kellyville) and the associated dealing accompanying the final plan of subdivision of Development Consent 1272/2019/ZB be authorised for execution under Council seal.
ITEM-7 STRATEGIC PLANNING PROCESS
405 RESOLUTION
The Strategic Planning Process and timetable outlined in this report be adopted.
ITEM-8 EASEMENT FOR ELECTRICITY SUPPLY - PART LOT 21 DP 1092663 CONNAUGHT CIRCUIT RESERVE NO 473 19Z, ROSEBERY ROAD, KELLYVILLE
406 RESOLUTION
Council agree to the following:
1. Authorise the General Manager to sign all required authority application forms associated with the construction of the padmount substation on Lot 10 DP 1169003 and the creation of the easement and Restriction on Use for Lot 21 DP 1092663.
2. Creation of an easement for underground cables approximately 5.5 metres x 1.09 metres variable width, and associated Restriction on Use within Lot 21 DP 1092663, Connaught Circuit Reserve No 473, 19Z Rosebery Road, Kellyville with Plans, Section 88B instruments, Deeds and Transfers Granting Easements authorised for execution under Seal.
QUESTIONS WITHOUT NOTICE
407 WEST PENNANT HILLS VALLEY PROGRESS ASSOCIATION
Councillor Uno advised that he attended the West Pennant Hills Valley Progress Association meeting and tabled an email from Leonard Shelton who raised some concerns about the West Pennant Hills area.
408 RATES NOTICES
Councillor Uno enquired whether the General Manager would consider taking the
opportunity when Council rates notices are sent out next year to include key information and
upcoming events.
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
The General Manager advised he would take the matter on notice and look at what opportunities are available.
Councillor Preston asked whether Council sends out rates to every single rate payer or only if they nominate to receive the rates by mail.
The General Manager advised that a proportion of rates are paid in full, some are received electronically and some are quarterly letters.
409 ANNANGROVE ROAD, ANNANGROVE
Councillor Dr Gangemi attended the Box Hill Progress Association meeting last night and asked for an update on when the following intersections will be upgraded and what works are proposed?
Annangrove Road/Edwards Road
Annangrove Road/Withers Road and
Annangrove Road/Windsor Road.
The General Manager advised that the intersections nominated are either part or fully funded through the contributions plans (Annangrove Industrial Contributions Plan and Box Hill Contributions Plan). The General Manager is not aware of where the Windsor Road lights are up to, but is aware that Council is looking at a future budget review around the other two to bring the design forward in this financial year for a roundabout at Edwards/Annangrove Road and also the signals at Withers Road/Annangrove Road. Council is also currently doing some work on the Mason/Nelson/Old Pitt Town Road intersection as well.
410 NELSON/MASON ROAD, BOX HILL INTERSECTION
Councillor Dr Gangemi asked for an update on the progress of any short term works proposed for the Nelson/Mason Road intersection, such as removing the Armco on the inside of the intersection, or potential for straightening the Mason/Nelson alignment?
The General Manager advised that he would have to check where Council was up to with this works. Council has looked at what property acquisition might be needed and this work has not been finalised. The General Manager advised he would take the matter on notice and get further details on this project.
411 BOX HILL PARK
Councillor Dr Gangemi asked about the park in Box Hill, bordered by Ceres Way, Centaurus Way, Andromeda Parkway and Dorado Street off George Street and the one the developer has brought forward two years to deliver for the community. It looks close to completion, is there an opening date for this park?
The General Manager confirmed that the park was a Works-in-Kind where the developer
brought forward the construction and delivery of the park ahead of where the contribution
would do. Obviously the developer is marketing houses around the park and hoped it won’t
be long before the park is open.
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
412 POT HOLES - NELSON ROAD, NELSON
Councillor Dr Gangemi asked if the potholes on Nelson Road between Mason Road and Blind Road in Nelson can be fixed.
413 CASTLE HILL CEMETERY
Councillor Russo received an email from someone who attended a funeral at Castle Hill Cemetery with outstanding feedback in relation to the upkeep of the Cemetery. Councillor Russo commended Mark Colburt and his entire team on getting on top of the upkeep of the cemetery.
414 KISS AND DROP ZONE – CASTLE HILL METRO INTERCHANGE
Councillor De Masi asked if there was a dedicated Kiss & Drop zone at Castle Hill Metro as it was getting quite dangerous with passengers being dropped off around the interchange.
The Group Manager Shire Strategy, Transformation & Solutions advised that there is a Kiss
& Drop on the Castle Towers side at the Metro at Castle Hill.
Councillor De Masi asked if Council could let residents know where this is because there is a lot of dangerous activity happening particularly at the Old Castle Hill Road intersection where traffic lights turn green and cars are letting passenger off. There are ‘No Stopping’ zones outside of Castle Towers and there is concern that either an adult or child is going to be injured.
The Group Manager Shire Strategy, Transformation & Solutions advised that Council will investigate and also raise this issue with Metro in terms of the management of the station precincts.
415 JERSEY DAY – 27 AUGUST 2019
Councillor De Masi asked, under the Code of Conduct, is there a requirement for a dress standard to be observed?
The General Manager replied not expressly written but along the words of business attire and appropriate attire.
Councillor De Masi enquired whether the Mayor, Councillors and staff would be happy to wear a Jersey at the next Council Meeting on 27 August in support of “Jersey Day” which raises awareness of Organ Donations.
The General Manager advised that it would be entirely appropriate given that it’s tied into a fairly significant event.
416 THE HILLS SHIRE TIMES ARTICLE - SUBURBAN HOLY WAR
Councillor Thomas was quite appalled to read the headline of an article in the Hills Shire
Times “Suburban Holy War” and above that quotes ”Community remains divided over plan
for Mosque”. Councillor Thomas advised that this is not a “Holy War” but is a “Planning
Matter”. It doesn’t help to have a hysterical, out of control newspaper fanning the flames of
division and hatred! Councillor Thomas requested the matter be put to some Standards
Board or perhaps Council write a letter.
MINUTES of the duly convened Ordinary Meeting of The Hills Shire Council held in the Council Chambers on 13 August 2019
Councillor Hay OAM asked if Council could refer this to the appropriate authority about this headline as it is divisive and would impact on a number of legal levels and its baiting the community to respond to that sort of slur.
Councillor Collins OAM further added if Council could also refer to the headline this time last year after the Planning Proposal was kicked out for review and requested Council to combine the two when referring this matter to the appropriate authority.
The Minutes of the above Meeting were confirmed at the Meeting of the Council held on 27 August 2019.
MAYOR GENERAL MANAGER
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
ITEM-2 2018/2019 DRAFT STATUTORY FINANCIAL STATEMENTS & BUDGET RESULT
THEME: Proactive Leadership
OUTCOME:
4. Prudent management of financial resources, assets and people for long term sustainability.
STRATEGY:
4.2 Maintain a strong financial position that supports the delivery of services and strategies and ensures long term financial sustainability.
MEETING DATE: 27 AUGUST 2019 COUNCIL MEETING
AUTHOR:
MANAGER FINANCE, INTERGRATED PLANNING &
REPORTING ANEESH ZAHRA
RESPONSIBLE OFFICER:
GROUP MANAGER FINANCE & ORGANISATIONAL PERFORMANCE
CHANDI SABA
BACKGROUNDThe Draft Annual Financial Statements for FY18/19 were completed and presented to the Auditors, Nexia Sydney, on 10 July 2019. This is Nexia Sydney’s first audit engagement with Council as appointed by the Audit Office. The audit commenced on 15 July 2019. This has now been completed and the Audit Office presented their findings to the Audit Committee on 20 August 2019.
Audit Committee’s Recommendation is as follows:
RECOMMENDATION
1. The presentation from Council’s External Auditor be received.
2. The Financial Statements (Attachment 1) as required by Section 413 of the Local Government Act 1993 be referred to Council on 27 August 2019 and the external auditor is requested to present his findings at that meeting.
The Audit Office & Nexia Sydney will present the draft financial statements to Council.
REPORT HIGHLIGHTS
In FY 18/19 The Hills Shire Council spent $310.8m to provide recurrent operations and new infrastructure. Council manages infrastructure assets worth $3.5b.
The Hills Shire Council delivers a broad range of services such as civil and parks asset maintenance, community facilities, town planning, regulatory functions, waste and recycling, aged care, child care, community service, libraries, community events and economic development activities. Council also provides new infrastructure to the developing areas such as Balmoral Road, North Kellyville, Box Hill and Station Precincts.
Operating Surplus
Operating Surplus for the FY18/19 totals $146.9m compared to an operating surplus in FY17/18 of
$146.3m.
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
Budget Result
The Actual Budget Result for the FY18/19 totals to a surplus of $4.56m compared to FY 17/18
$3.74m. It is proposed to transfer this surplus to the Capital Works Reserve.
Capital Works
Original adopted budget was based on delivering 192 projects excluding land and project supervision costs totalling $46.0m.
During the year 38 new additions along with the 125 carry over projects from FY17/18 and 40 deferred projects resulted in a Works Program consisting of 315 projects excluding land totalling
$63.4m.
As at 30th June 2019, 290 projects were completed totalling $163.2m which includes property acquisitions totalling $94.8m and supervision costs of $5.0m.
Infrastructure Backlog
Infrastructure backlog continues to remain at zero.
Cash & Investments
Cash and Investments as at 30 June 2019 total $364.1m, compared to $401.6m as at 30 June 2018.This reduction is mainly due to reduction in Section 7.11(Developer Contributions) funds.
However Internally Restricted Assets commonly known as Reserves total $230.3m compared to
$216.0m as at 30 June 2018.
Debt
Council has been debt free for the last 17 years.
Financial Ratios
All the financial ratios (with exception of Own Source Operating Revenue) are above the Industry Benchmarks.
Other Indicators
The Hills Shire Plan details various Key Performance Indicators which measures Council’s service standards.
The successful implementation of this plan can be measured by two indicators, namely the percentage of Delivery Program Actions completed and the percentage of KPI’s achieved.
Delivery Program Actions
There are 15 Delivery Program Actions were expected to be completed over this Council Term. Progress on these actions will be reported to Council within the Annual Report after the completion of the Audit at a later date.
Percentage of KPI’s achieved
97% of Hills Shire Plan standards were achieved in FY18/19.
These have been achieved with a staff establishment of 564.18 FTE’s in FY18/19 compared with 568.15 FTE’s in FY 17/18. Furthermore, Council currently provides services to the local area based on a Staff to Population Ratio of 2.96 FTE, i.e. approximately 2.96 FTE per 1,000 population. This is compared to 4.60 FTE per 1,000 populations as the median for larger councils in NSW (2016 NSW Local Government Benchmarking Report).
Other measures
FY18/19 FY 17/18
Lost Time Injury Frequency Rate 8.53% 7.20%
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
FINANCIAL PERFORMANCE – YEAR IN REVIEW
1.0 OPERATING SURPLUS $146.9m & BUDGET RESULT $4.56m
The Budget Result varies from the Opening Surplus as the Local Government Code of Accounting Practice requiring all income including capital income received as income for the year be brought to account in that year, even though the associated expenditure may be incurred in future periods.
As such, the matching concept is not in place and the Statutory Accounts differ from the Budget Format, which reflects the matching of income to the period that the expenditure is incurred. Table below details the Statutory Operating Result $146.9m along with the Budget Result $4.56m.
Comments on how this surplus has been achieved is referenced to the table below and detailed in notes 1.1 to 1.5.
Statutory Format
Description
Management Reporting Format (Matching Principles) FY1819
Actual Original
Budget Current
Budget FY1819 Actual
Carry
Overs Surplus After Carry Overs
Surplus after CO
vs Current Budget
Ref
$’000 $’000 $’000 $’000 $’000
(100,629) Rates & Annual Charges (99,455) (100,503) (100,629) - (100,629) (126) (20,261) User Charges & Fees (21,603) (21,190) (20,261) - (20,261) 929 (7,548) Interest Revenues – Operational (7,234) (7,251) (7,548) - (7,548) (297)
(3,461) Interest Revenue-
Restricted/Capital - - - -
(8,846) Other Revenues (6,952) (9,124) (9,541) (18) (9,559) (435)
(18,586) Grants & Contributions –
Operating (15,182) (14,203) (13,245) (621) (13,866) 337
(134,550) Grants & Contributions – Capital - - - -
(557) Profit From Disposal of Assets - - - -
- Trf From Internal Restrictions1 - (6,485) (6,485) - (6,485) -
- Trf From External Restrictions2 (50) (9,749) (8,970) (978) (9,948) (199) (2,527) Fair Value Increment on Inv
Property - - - -
(296,965) Total Revenue (150,476
) (168,504) (166,678) (1,617) (168,295) 209 1.1
54,026 Employment Costs 57,076 56,815 54,027 43 54,070 (2,745)
41,346 Materials, Contracts 42,893 45,474 41,346 1,700 43,046 (2,428)
22,480 Depreciation and Amortisation 15,677 22,317 22,481 - 22,481 163
28,336 Other Expenses 21,680 32,173 25,709 4,491 30,200 (1,973)
3,912 Revaluation Decrement IPP&E - - - -
150,100 Total Expenditure 137,325 156,780 143,562 6,234 149,796 (6,983) 1.2
(146,865) Operating Result (Surplus)/Deficit (13,151) (11,725) (23,116) 4,617 (18,499) (6,774)
Add Back
- Depreciation & Amortisation (15,677) (22,317) (22,481) - (22,481) (163) 1.3 (146,865) Funds Available (Cash Surplus) for
Transfer to Reserves (28,827) (34,042) (45,596) 4,617 (40,979) (6,937)
- Transfer to Asset Related
Reserves 28,227 29,538 30,181 - 30,181 643 1.4
- Transfer to Other Reserves 553 4,389 6,243 - 6,243 1,854 1.4
(146,865) Budget Result (Surplus)/Deficit after
Transfers to Reserves (47) (116) (9,172) 4,617 (4,555) (4,440) 1.5
Transfer of Year End Surplus
to Capital Works Reserve 4,555 1.5
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
Budget Result - Surplus $4.56m
As detailed above , Budget Surplus after adjusting for ‘Carry Over ‘ projects of $4.6m totals to a surplus of $4.56m. It is proposed to transfer this surplus to Capital Works Reserve. These funds will be utilised for future Capital Works and reflected in a future Budget Review.
Comments on the $4.4m variations compared to May 2019 Budget Review are detailed below.
1.1 Income – Net decrease $209k as detailed below
$1,032k decrease in Subdivision and Development Assessment income
$166k decrease in Roads and Traffic Block Grant Partly offset by $989k increases in:
$459k Road Restorations Income
$293k Interest on Investment Income
$135k Bus Shelter Income
$102k Waste Levy Income
The decrease of $209k income equates to 0.12% decrease in total revenue on a Current Budget of
$168.5m.
1.2 Expenditure – Net decrease $6,983k as detailed below
Savings of $7,163k relating to below:
$2,691k Employment costs and Superannuation
$1,386k Resource Recovery contract expenditure
$944k Materials and Contracts expenditure, mainly from Buildings
$436k Community & Economic Development project savings
$268k Professional and Consultancy costs, mainly from Development Assessment
$230k Donation and Subsidy payments
$195k Office expenses
$184k Storm Water Project expenditure
$165k Legal expenses
$115k SES & NSW Fire Levy payments
$113k Marketing and Communications projects
$115k Telephones and communication expenses
$105k Asset Management and Infrastructure Planning projects
$93k Seminars and Conference expenses
$62k Hills Community Care expenses
$52k Insurance excess payments
$9k Other expenses
Offset by higher costs below:
$180k increase in Street lighting and Utilities Expenditure
The net savings of $6,983k equates to 4.5% decrease in total expenditure on a Current Budget of
$156.8m.
Both these results are within the Key Performance Indicators set out in the Hills Shire Plan.
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
1.3 Depreciation
Actual depreciation is greater than forecast by $163k due to increased depreciation on Plant and Equipment items. This is an increase of 0.73% on the Budget of $22.3m.
1.4 Transfer to Reserves - Net Increase $2.5m
Some of the savings related to specific programs, and it is proposed to make the following transfers to/from the respective Reserves over and above the current adopted Budget.
a) Transfer to Asset Related Reserves - Increase $643k
$459k Transfer to Restoration Reserve due to greater than anticipated income received from Road Restorations.
$184k Transfer to Stormwater Reserve due to savings in various stormwater projects
b) Transfer to Other Reserves - Net Increase $1.8m
$1,601k Transfer to Waste Reserve due to savings in Resource Recovery activities, mainly due to less than expected expenditure on Contractor’s charges.
$135k Transfer to HCC Project Reserve savings in Hills Community Care activities.
$165 Transfer to Legal Reserve due to savings legal expenditure.
$52k Transfer to Insurance Reserve due to savings in insurance excesses.
$99k Transfer from Child Care Project Reserve to fund the deficit in Children’s Services.
1.5 Budget Surplus & Proposed Transfer to Capital Works Reserves $4.56m
As outlined above this Budget surplus of $4.4m along with the Budget Surplus reported in May 2019 of $116k totalling $4.56m is proposed to transfer to the Capital Works Reserves to fund future major capital works such as the upgrade of the Waves Aquatic Centre.
It is also proposed to transfer the Carry Over projects funding of $7.2m to Carry over Reserves comprising of $4.6m Recurrent Operations, $0.2m Capital Purchases and $2.4m Real Estate Carryovers which will be brought in to the July Budget Review.
A list of these Carry Over funds and transfer to Reserves are detailed in Attachment 4, Pages 11 to 14.
2.0 CAPITAL PURCHASES
Purchase & Sale of Assets Original Budget '$000
Current Budget '$000
FY1819 Actual '$000
Carry Overs '$000
Surplus After Carry Overs
Surplus after CO vs Current
Budget
Ref
Capital Purchases 4,107 4,643 4,033 175 4,208 (435) 2.1
Sale of Assets (1,097) (1,354) (1,663) - (1,663) (309) 2.2
Transfer To /(from) Reserves (3,009) (3,289) (2,545) - (2,545) 744 2.3
Net Purchases / Sales - - (175) 175 - - -
2.1 Capital Purchases – Decrease $435k
Less than anticipated purchases were made due to not replacing certain plant items which were in
better condition than expected, and not requiring a changeover in this year.
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
2.2 Sale of Assets – Increase $ 309k
Greater than anticipated income from sales in disposed plant items of $309k.
2.3 Transfer to Reserves $744k
It is proposed to transfer these savings of $744k to the Plant Reserve, as these funds will be required in the future when some of these items are replaced.
A list of these Carry Over funds and transfer to Reserves are detailed in Attachment 4, Pages 11 to 14.
3.0 CAPITAL WORKS SUMMARY
The table below details summary of proposed Budget Variations net decrease of $5.6m and the proposed carryover Projects totalling $25.8m. A list of all Carry Over funds and transfer to Reserves are detailed in Attachment 4, Pages 11 to 14.
Carryover projects are projects that had started in FY 18/19 and were in progress at 30 June 2019.
Most of these projects are very large projects and require more than one year to complete. Variations on all projects are in Attachment 4 Pages 15 – 25.
Original Budget Actual Carry Revised Variations Ref
Budget May-19 Over Budget Jun-19
$000 $000 $000 $000 $000 $000
Bridges 195 5,397 2,317 3,044 5,360 (36)
Buildings 2,895 7,688 3,829 3,001 6,830 (858)
Parks 13,683 16,439 11,503 5,828 17,331 892
Pathways 3,432 4,313 3,074 1,134 4,207 (106)
Traffic 5,491 14,179 8,483 5,495 13,978 (201)
Roads 16,380 30,209 24,184 5,320 29,504 (705)
Waterways 3,905 9,557 7,147 1,994 9,141 (416)
Sub Total 45,981 87,781 60,537 25,814 86,351 (1,430) 3.1
Land 111,067 101,495 89,054 - 89,054 (12,441) 3.2
Total (Ex Proj Del) 157,048 189,276 149,591 25,814 175,405 (13,871)
Project Delivery 5,318 5,318 4,971 - 4,971 (347) 3.3
Total (In Proj Del) 162,367 194,594 154,562 25,814 180,376 (14,218)
VPA Dedication CP16 - - 8,508 - 8,508 8,508 3.4
VPA Reimb CP15 - - 151 - 151 151 3.5
Total (In VPAs) 162,367 194,594 163,220 25,814 189,034 (5,560)
Source Original Budget Actual Carry Revised Variations
of Budget May-19 Over Budget Jun-19
Funds $000 $000 $000 $000 $000 $000
Reserves 23,650 29,984 19,232 6,236 25,468 (4,516)
Sec 7.11 & Old Grants 136,067 156,833 136,538 18,262 154,800 (2,033)
Grants & Contributions 2,650 7,777 7,450 1,317 8,767 989
Total (In VPAs) 162,367 194,594 163,220 25,814 189,034 (5,560)
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
3.1 Net reduction in Projects completed $1.43m
These variations are due to the following:
$3,035,023 savings in projects completed as listed in Attachment 4 pages 15 to 25. It is proposed to transfer these savings to Reserves ($2,343,962), and the balance to Sec 7.11 and other Externally Restricted reserves.
$1,491,000 additional funds for Arnold Avenue Reserve Sports Complex, Kellyville as approved by T19-37 Council resolution dated on 11 June 2019, funded from Sec 7.11 CP12.
$66,178 additional funds for Glenhaven Road & Old Northern Road traffic signals funded from RMS grants.
$40,885 increase in funds required for Castle Hill cemetery master plan development funded from Cemetery Reserve.
$7,073 additional funds for various projects as listed in Attachment 4 pages 15 to 25, funded mainly from Capital Works Reserve.
3.2 Net Reduction in Land projects $12.4m
$12,452,745 less than anticipated funds required for property acquisition in FY 18/19, now returned to respective Sec 7.11 plans.
$11,555 additional funds required for land purchases that have been classified as non- essential acquisitions by IPART. It is proposed to fund from Capital Works Reserve.
3.3 Savings for project delivery costs $347k
$347,383 savings in project survey, design and supervision costs proposed to transfer to Capital Works Reserves.
3.4 Box Hill North VPA (CP16) $8.5m
$8,508,103 in recognition of Capital Works and land items dedicated by developers, pursuant to the executed Voluntary Planning Agreements for Box Hill North (CP16):
Box Hill North VPA Date of
Dedication
Works & Land Value
$000
Dedications Recognised prior to this Review
$000
Dedications Recognised in this Review
$000
Park 11 (Precinct H) Aug-18 $1,730,074 $1,730,074 -
Park 12 (Precinct A) Aug-18 $577,023 $577,023 -
Park 16 (Precinct A) Aug-18 $1,080,000 $1,080,000 -
Water Mgt Land 32 (Precinct A) Aug-18 $553,226 $553,226 -
Water Mgt Land 33 (Precinct H) Aug-18 $1,571,044 $1,571,044 -
Water Mgt Land 34 (Precinct A) Aug-18 $4,051,044 $4,051,044 -
Part Park 1 (Precinct I Portion) Jun-19 $5,378,017 - $5,378,017
Park 3 (Precinct I) Jun-19 $2,227,679 - $2,227,679
Part Water Mgt Land 25 (Precinct I portion) Jun-19 $640,665 - $640,665
Water Mgt Land 26 (Precinct I) Jun-19 $261,741 - $261,741
Total $18,070,513 $9,562,411 $8,508,103
3.5 Hills of Carmel VPA (CP15) $151k
$150,565 reflecting Council’s reimbursements to the developer, pursuant to the executed
Voluntary Planning Agreements for Hills of Carmel. This reimbursement relates to items 30 & 30L as
per the table below:
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
Hills of Carmel VPA
Date ofCompletion or Dedication
Works &
Land Value
$000
Reimburse- ment made prior to this
Review
$000
Remaining Balance prior to this Review
$000
Reimburse- ment in this
Review
$000
Item 9. Water Detention Basin Jul-18 $5,778 $5,778 - -
Item 73. Mt Carmel Rd/Boundary Rd Link Jul-18 $465 $465 - -
Item 30. Portion of Mt Carmel Rd Mar-19 $5,867 $5,722 $145 $145
Item 72. Mt Carmel Rd/Mason Rd Mar-19 $465 $465 - -
Item 30L. Land associated with completed
portion of Mt Carmel Rd Mar-19 $526 $140 $386 $6
Total $13,101 $12,570 $531 $151
4.0 REAL ESTATE ASSETS
Real Estate Assets
Original Budget '$000
Current Budget '$000
FY1819 Actual '$000
Carry Overs '$000
Surplus After Carry Overs
Surplus after CO
vs Current
Budget
Ref
Development Cost - 2,443 - 2,443 - -
Funded by transfer from Reserves - (2,443) - (2,443) - -
A list of these Carry Over funds and transfer to Reserves are detailed in Attachment 4, Pages 11 to 14.
5.0 FINANCIAL STATEMENTS
5.1 Non GAAP Financial Statements adjustments
A qualified audit opinion was issued in FY16/17 relating to the valuation method applied for Land under Roads (LUR). In addition, concerns were raised in relation to the valuation of Community land after the initial purchase.
Workshops were held with Councillors on 28 June 2018 & 7 August 2018 along with the Auditor General and her staff, to discuss these items in detail. It was concluded that that additional notes will be included to show the Non GAAP Results if these Standards were not applied.
Impact of these Non GAAP Financial Statements, are detailed below.
Community Land
$m Initial Purchase Price
$m
Write Off
$m
Fair Value as at 30 June
$m
FY 17/18 61.6 (49.6) 12.0
FY 18/19 91.5 (55.9) 35.6
Total 153.1 (105.5) 47.6
Land under Roads
During FY 18/19, Council purchased LUR valued at $4.7m and it has now written down by $3.9m
against the Income Statement. This write down was the result of a discount factor being applied to
reflect the restrictions on the use of the land under roads.
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
$m Initial Purchase Price
$m
Write Off
$m
Fair Value as at 30 June
$m
FY 17/18 & prior 2,395.9 (1,466.8) 929.1
FY 18/19 4.7 (3.9) 0.8
Total 2,400.6 (1,470.7) 929.9
The comparison between Non GAAP and Statutory Financial Statements is detailed in tables below:
Income Statement
$’000 NON GAAP
Before Adjustments for Community
Land & LUR
Adjustments STATUTORY After Adjustments For Community
Land & LUR
Total Income from Continuing Operations 296,965 - 296,965
Total Expenses from Continuing Operations 146,188 (3,912) 150,100
Net Operating Result 150,777 (3,912) 146,865
The Non GAAP net operating result for FY 18/19 is $150.8m compared to $146.9m in the statutory financial statements due to write down of Land Under Roads acquisitions this financial year.
Statement of Financial Position
$’000 NON GAAP
Before Adjustments for Community
Land & LUR
Adjustments STATUTORY After Adjustments For Community
Land & LUR
Current Assets 394,220 - 394,220
Non – Current Assets 5,199,057 (1,576,162) 3,622,895
Total Assets 5,593,277 (1,576,162) 4,017,115
Total Liabilities 52,183 - 52,183
Net Assets 5,541,094 (1,576,162) 3,964,932
Equity 5,390,317 (1,572,250) 3,818,067
Plus Net Operating Result 150,777 (3,912) 146,865
Total Equity 5,541,094 (1,576,162) 3,964,932
The Non GAAP equity for FY 18/19 is $5.5bn compared to $3.96bn in the statutory financial statements due to write down of Land Under Roads and Community Land in FY1718 and FY1819.
5.2 Cash & Investment Balances
Total Cash & Investments held as at 30 June 2019 decreased from $401.6m to $364.1m. The table
below details the restrictions that apply to Cash and Investments.
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
Type 2018/19
$ ‘000 2017/18
$ ‘000
Unrestricted Cash 25,919 32,516
Externally Restricted
Developer Contributions 91,601 141,617
Grants/Contributions (Restricted for Specific Purpose ) 8,439 7,141
Waste Management (Restricted for Waste Services) 7,798 4,295
Total externally Restricted 107,838 153,053
Internally Restricted 230,330 216,030
Total Cash & Investments 364,087 401,599
5.3 Debtors & Proposed Write off of Bad Debts
Debtors outstanding as at 30 June 2019 amounts to $28.7m, compared to $23.6m as at 30 June 2018. Included in the $28.7m are Rates and Charges, amounting to $3.6m.
Amount o/s > 90 days represents 50.8% of total Debtors excluding Rates and Charges. Summary of all Debtors are detailed below:
FY 17/18
$’000 Total
FY18/19
$’000
Current 31-60
days 61-90
days >90 days
3,131 Rates & Charges 3,634 2,832 572 188 42
4,600 Government Agencies 6,908 5,844 56 0 1,007
1,768 Sundry Debtors (a) 2,530 2,023 71 73 364
9,499 Sub Total 13,072 10,699 699 261 1,413
6,861 Bio Banking & Bonds 8,564 40 0 0 8,523
44 Netball /Hills District Tennis 35 9 0 0 26
3,198 Hills Basketball Association 3,105 273 0 0 2,832
3,967 Accrued Interest 3,960 3,960 0 0 0
23,569 Total Debtors 28,736 14,981 699 261 12,795
a) Sundry Debtors $ 2.5m
Under Local Government (General) Regulation 2005 Reg 213 (2), a Council must from time to time by resolution fix a threshold amount by which debts owing to the Council may be written off. A Council may under Regulations 2005 Reg 213 (3) give the General Manager delegated authority to write off any debts below that limit.
In the absence of such delegation to the General Manager, it is proposed to write off the following debts totalling $82k as detailed in table below in FY18/19. This write-off has been incorporated in the draft Financial Statements. The write off is against the Bad Debts provision and does not affect the current year’s surplus.
These debts are difficult to recover and commercially no longer viable to pursue as the customers are no longer contactable or businesses have closed down.
The table below details the proposed write off amounts listed under Sundry Debtors and the balances
as at 30 June 2019.
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
$’000 Balance as at
30 June 2019
$000
Proposed Write
Off Balance after W/O as at 30 June 2019
$000
$000
Licences 12 2 10
Application Fees 640 80 560
Hills Community Care 93 0 93
Leases 303 0 303
Sports Fields 38 0 38
Sundry Debtors 1,526 0 1,526
Total 2,612 82 2,530
6.0 FINANCIAL SUSTAINABILITY RATIOS
The Financial Sustainability Assessment can be measured by taking into consideration the following industry ratios as detailed in The Financial Statements.
Ratio 2018/19 2017/18 Bench Mark
Operating Performance 15.46% 11.99% >= 0.0%
It measures a Council’s ability to contain operating expenditure within operating revenue.
Own Source Operating Revenue 47.89% 45.73% >= 60.0%
This ratio measures the reliance on Grants and Contributions and it does not reflect a true picture for a Growth Council such as ours, as the growth is funded from Developer Contributions (Sec 7.11).
If this ratio is adjusted to exclude S7.11, VPA and Subdivider Dedications income, it would be 84.34%, which is well above benchmark.
LIQUIDITY RATIOS
Unrestricted Current Ratio 20.55:1 16.19:1 >= 1.5 times
It measures the adequacy of working capital and the ability to satisfy obligations in the short term, indicating sound liquidity.
Debt Service Cover Ratio 0.0% 0.0% >= 200%
Council remains debt free since 2002.
Rates & Annual Charges Outstanding 3.86% 3.62% < 5%
This ratio measures the impact of uncollected Rates and Charges.
INFRASTRUCTURE RATIOS
Building & Infrastructure Renewal Ratio 102.16% 102.81% >= 100%
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
Ratio 2018/19 2017/18 Bench Mark
This ratio compares the proportion of funds spent on infrastructure asset renewals and the deterioration of assets measured by its accounting depreciation.
Infrastructure Backlog Ratio 0.0% 0.0% < 2%
This ratio measures the proportion of Infrastructure Backlog against the total value of a Council’s infrastructure.
Asset Maintenance Ratio 143.66% 152.43% >=100%
This ratio indicates that we are spending greater than what is required in order to maintain the assets in a satisfactory condition. Maintaining this ratio above the benchmark avoids creating infrastructure backlogs.
CONCLUSION
Council’s Chief Financial Officer, as the responsible accounting officer, advises that the financial position as at 30 June 2019 is strong.
The attached Statutory Financial Statements are required by Section 413 of the Local Government Act, 1993 and the Local Government Code of Accounting Practice to be adopted by Council and signed by the Mayor, Deputy Mayor, General Manager and the Responsible Accounting Officer, for formal reference to the Auditor.
IMPACTS Financial
This report does recommend variations to the adopted budget. Variations are listed in Attachment 4 pages 1-25.
In adopting the proposed movements to the Reserves detailed in this report, total Internal Reserves as at 30 June 2019 will be $230.3m.
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
1. The presentation from Audit Office be received.
2. The Statutory Financial Statements (Attachment 1) as required by Section 413 of the Local Government Act, 1993 and the Local Government Code of Accounting Practice be adopted and signed by the Mayor, Deputy Mayor, General Manager and the Responsible Accounting Officer.
3. Upon Council receiving the Auditor’s written Report:-
(a) The Financial Statements (Attachment 1) be advertised and forwarded to the NSW Office of Local Government;
(b) following advertising, be presented to the next available Meeting of Council.
4. The Capital Improvement Budget Variations, Carryover Funds and Proposed Transfers to
Reserves as detailed in Attachment 4 Pages 1 to 25 be adopted.
ORDINARY MEETING OF COUNCIL 27 AUGUST, 2019
ATTACHMENTS Attachment 1:
Page 1-100
Attachment 2:
Attachment 3:
General Purpose Financial Report for year ended 30 June 2019, Special Purpose Financial Reports for year ended 30 June 2019 and Special Schedules for year ended 30 June 2019 (100 Pages)
Purpo
Statement required by Section 413 of the Local Government Act, 1993 (1 page)
Statement required by the Local Government Code of Accounting Practice (1 page)
Attachment 4:
Page 1-4 Management Reporting Format Page 5-10 Statutory Reporting Format
Page 11-14 Listing of Carry Over and Transfers to Reserves Page 15-25 Capital Works Expenditure and Variations Page 26 Key Performance Indicators
Page 27 Listing of Contracts & Other Expenses
ORDINARY MEETING OF COUNCIL 27 AUGUST 2019
GENERAL PURPOSE FINANCIAL STATEMENTS
for the year ended 30 JUNE 2019
GENER AL PURPOSE FINANCIAL S TA TEMENTS | 30 JUNE 20 19
$77$&+0(17
ORDINARY MEETING OF COUNCIL 27 AUGUST 2019
Financial Statements 2019
The Hills Shire Council
General Purpose Financial Statements
for the year ended 30 June 2019
Contents
Understanding Council’s Financial Statements Statement by Councillors and Management Primary Financial Statements:
– Income Statement
– Statement of Comprehensive Income – Statement of Financial Position – Statement of Changes in Equity – Statement of Cash Flows
Notes to the Financial Statements
Independent Auditor’s Reports:
– On the Financial Statements (Sect 417 [2]) – On the Conduct of the Audit (Sect 417 [3])
Overview
3 Columbia Court Norwest NSW 2153
Council’s guiding principles are detailed in Chapter 3 of the LGA and includes:
principles applying to the exercise of functions generally by council, principles to be applied when making decisions,
principles of community participation,
principles of sound financial management, and
principles for strategic planning relating to the development of an integrated planning and reporting framework.
A description of the nature of Council’s operations and its principal activities are provided in Note 2(b).
Through the use of the internet, we have ensured that our reporting is timely, complete and available at minimum cost. All press releases, financial statements and other information are publicly available on our website:
www.thehills.nsw.gov.au.
Page
4 6 7 5 2 3
The Hills Shire Council is constituted under the Local Government Act 1993 (NSW) and has its principal place of business at:
8 9
ORDINARY MEETING OF COUNCIL 27 AUGUST 2019
Financial Statements 2019
A qualified audit opinion was issued in FY16/17 relating to the valuation method applied for Land under Roads (LUR). In addition, concerns were raised in relation to the valuation of Community land after the initial purchase.
Workshops were held with Councillors on 28 June 2018 & 7 August 2018 along with the Auditor General and her staff, to discuss these items in detail. It was concluded that that additional notes will be included to show the results if these Standards were not applied.
Community Land
As per Australian Accounting Standard AASB 116, all infrastructure assets must be initially recorded at cost, and subsequent measurement must be at revalued amounts.
Australian Accounting Standard AASB 13 (11) states that all assets must be measured at fair value and must take into account restrictions on the sale or use of the asset.
The following table details amounts written off as per accounting standards for the respective years.
$m Initial Purchase
Price Write Off Fair Value as at 30 June
FY 17/18 61.6 (49.6) 12.0
FY 18/19 91.5 (55.9) 35.6
Total 153.1 (105.5) 47.6
Land under Roads
Land under Roads (LUR) was first brought into the Hills Shire Council books in 2009 at a valuation of $1.8 billion. LUR was last revalued in 2014 and as at 30 June 2017 this valuation was $2.4 billion. This was based on an average residential unit value of $107 per sq/metre, and no discount factor was applied. Prior to FY 16/17, this method was specified option under the Office of Local Government Code of Accounting Practice.
For valuation of LUR, one of the methods recommended by Office of Local Government (OLG) is the ‘Englobo’ method which requires applying a discount of 90% on the average value. Application of this “Englobo” methodology resulted in a Write Off of $1.47b. This was reflected in FY 17/18 opening balance.
During FY 18/19, Council purchased LUR valued at $4.7m and it has now written down by
$3.9m against the Income Statement. This write down was the result of a discount factor being applied to reflect the restrictions on the use of the land under roads.
Impact on Statutory Financial Statements
Before Adjustments
for Community Land & LUR
Adjustments
After Adjustments
For Community Land & LUR INCOME STATEMENT
Net Operating Result $150.8m ($3.9)m $146.9m
STATEMENT OF FINANCIAL POSITION
Non-Current Assets $5.20b ($1.58)b $3.62b
Equity $5.53b ($1.57)b $3.96b
ORDINARY MEETING OF COUNCIL 27 AUGUST 2019
Financial Statements 2019_
The Hills Shire Council
General Purpose Financial Statements
for the year ended 30 June 2019
Understanding Council’s financial statements
page 2
Introduction
Each year, individual local governments across New South Wales are required to present a set of audited financial statements to their council and community.
What you will find in the statements
The financial statements set out the financial performance, financial position and cash flows of Council for the financial year ended 30 June 2019.
The format of the financial statements is standard across all NSW Councils and complies with both the accounting and reporting requirements of Australian Accounting Standards and requirements as set down by the Office of Local Government.
About the Councillor/Management Statement The financial statements must be certified by senior staff as ‘presenting fairly’ the Council’s financial results for the year and are required to be adopted by Council – ensuring both responsibility for and ownership of the financial statements.
About the primary financial statements
The financial statements incorporate five ‘primary’
financial statements:
1. The Income Statement
Summarises Council's financial performance for the year, listing all income and expenses.
This statement also displays Council's original adopted budget to provide a comparison between what was projected and what actually occurred.
2. The Statement of Comprehensive Income Primarily records changes in the fair value of Council's Infrastructure, Property, Plant and Equipment.
3. The Statement of Financial Position
A 30 June snapshot of Council's financial position indicating its assets, liabilities and “net wealth”.
4. The Statement of Changes in Equity
The overall change for the year (in dollars) of Council’s “net wealth”.
5. The Statement of Cash Flows
Indicates where Council's cash came from and where it was spent. This statement also displays Council's original adopted budget to provide a comparison between what was projected and what actually occurred.
About the Notes to the Financial Statements The Notes to the Financial Statements provide greater detail and additional information on the five primary financial statements.
About the Auditor’s Reports
Council’s annual financial statements are required to be audited by the NSW Audit Office. In NSW the auditor provides 2 audit reports:
1. an opinion on whether the financial statements present fairly the Council’s financial performance and position, and
2. their observations on the conduct of the audit, including commentary on the Council’s financial performance and financial position.
Who uses the financial statements?
The financial statements are publicly available documents and must be presented at a Council meeting between seven days and five weeks after the date of the Audit Report.
The public can make submissions to Council up to seven days subsequent to the public presentation of the financial statements.
Council is required to forward an audited set of financial statements to the Office of Local Government.
