5.3 FINANCIAL MANAGEMENT REPORT - DECEMBER 2012

Ordinary Meeting of Council 16 January 2013

Page 1

5.3 FINANCIAL MANAGEMENT REPORT - DECEMBER 2012

Ward: (All Wards) (Financial Services)

Disclosure of Interest: Nil

Authorised Officer: (Executive Manager Corporate)

KEY ISSUES

This report provides Council with the suite of financial management reports in

order for Council to monitor the financial performance and position of the City.

A summary page has been developed that includes high level financial

information, commentary and graphical representation from the Statements of

Comprehensive Income, Statement of Financial Position, Capital Payments,

Investments and Debtors.

A Debtors Schedule has been included that lists the top 10 non-rate debtors (in

value). For privacy purposes the names of the debtors are not included,

however the report provides insight into the management of the aged debtors.

It is recommended that Council receive the monthly financial management reports for

the period ended 31 December 2012.

BACKGROUND

Monthly reporting of financial management reports is standard practice for most

organisations. These reports facilitate analysis of the performance of the organisation against the target (budget). Section 6.4 of the Local Government Act 1995 requires an annual financial report to be prepared as well as such other financial reports as prescribed.

Regulation 34 (5) of the Local Government (Financial Management) Regulations 1996 (the Regulations) require a financial activity statement report to be prepared each

month.

The financial management report for December 2012 has been included as attachments.

Under regulation 34(5) of the Regulations each financial year a local government is to adopt a percentage or value, calculated in accordance with AASB 1031 to be used in the statement of financial activity for reporting material variances.

The City of Swan financial management reports use a materiality threshold to measure, monitor and report on financial performance and position of the City. The materiality threshold adopted by Council, together with the annual budget for 2012/13 is variances greater or lower than 10% of the original adopted budget and greater than $10,000 in value.


Page 2

DETAILS

The December 2012 financial management reports provide insight up to the sixth month of the new financial year. As the information contained in the Statement of Financial Activity is repeated in the Statement of Comprehensive Income and Statement of Financial Position, the analysis of the information is included below.

1. Statement of Comprehensive Income

The actual revenue from ordinary activities for the year to date is $111.6 million; this is less than budget by $2.2 million year to date.

Expenditure from ordinary activities for the year to date is $56.8 million: this is less than budget by $3.8 million year to date.

The net result is currently $68.1 million actual profit in comparison to $66.5 million budget.

2. Statement of Financial Position

The current assets of $118.9 million for December 2012 are significantly higher than at

year end 2011/12 which can be attributed to the rates being raised and collected.

Current liabilities are $19.1 million compared to $21.6 million at year end 2011/12 mainly due to the decrease in income in advance by $1.3 million and the decrease in short term borrowings by $1.2 million.

3. Statement of Cash Flows

This report shows cash and cash equivalents at the end of December 2012 with a balance of $86.5 million. Cash and cash equivalents at the end of December 2011 reflected a balance 53.6 million. The main variant is the cash at the beginning of the year.

CONSULTATION

Nil

ATTACHMENTS

Financial Report for the period ending December 2012

STRATEGIC IMPLICATIONS

Monitoring performance by comparison of budget and actual is an essential management tool to ensure financial performance within acceptable pre determined limits.


Page 3

STATUTORY IMPLICATIONS

Action in accordance with section 6.4 of the Local Government Act 1995 and clause 34 of

the Local Government (Financial Management) Regulations 1996.

FINANCIAL IMPLICATIONS

Compares financial activity with budget as detailed in this report.

VOTING REQUIREMENTS

Absolute

RECOMMENDATION

That the Council resolve to:

1) Receive the monthly financial statements and report for the period ended 31 December 2012.

CARRIED

Financial Report

for the Period Ending

31 December 12

Contents

1.0 Financial Summary

2.0 Statements of Comprehensive Income 2.1 - 2.2 (With Variance Analysis Commentary)

By Nature & Type 2.3 By Program 2.4

3.0 Statements of Financial Position & Equity 3.1 Statement of Financial Position 3.2 Statement of Changes in Equity 3.3 4.0 Capital Payment 4.1 Capital Works Schedules 4.2 - 4.6 5.0 Cash and Investments 5.1 Investment Report 5.2 - 5.3 6.0 Debtors Rates Debtors 6.1 Sundry Debtors 6.2 7.0 Statement of Financial Activity 7.1 - 7.2

(With Variance Analysis Commentary) Statement of Financial Activity 7.3 Net Current Funding Position 7.4

Liquidity Over Three Years 7.4

8.0 Other Statutory Reports 8.1 Statement of Cash Flow 8.2

Rate Setting Statement 8.3

1.0

City of Swan - Financial Management SummaryReport for the period ended 31st December 2012

2.0 Statement of Comprehensive Income (Performance)Year to 31st December 2012 Annual Annual

Budget Bgt Var$000's %

Revenue 111,611 113,845 -2% 126,055 89%

Expenses (56,821) (60,616) -7% (120,159) 47%

Profit/Loss 54,790 53,229 3% 5,896 929%

Non-operating 13,334 13,222 1% 39,604 34%

Net Result 68,124 66,451 2% 45,500 150%

3.0 Statement of Financial Position2012 2012 2012June November December$000's $000's $000's

Current

Assets 59,572 132,696 118,965

Liabilities 21,600 23,428 19,108

Non Current

Assets 809,052 817,366 819,979

Liabilities 26,007 30,689 30,695

Net Assets 821,018 895,945 889,141

4.0 Capital PaymentsYear to 31st December 2012 Annual Annual

Act/Com Budget Var Budget Bgt Var$000's $000's % $000's %

Buildings 4,216 8,026 53% 16,051 26%Drainage 929 1,273 73% 2,545 37%

Footpaths 269 383 70% 766 35%Parks 2,845 4,059 70% 8,118 35%

Roads 6,799 9,762 70% 19,523 35%P&E, Other 13,424 6,538 205% 13,075 103%

Total 28,482 30,039 95% 60,078 47%

5.0 Cash and InvestmentsVolume held

November December Ave Interest$000's $000's %

Cash 16,190 17,425 2.7%

24 hr Call 7,781 7,398 3.3%Cash Mgt 264 270 3.6%

Floating Rate 2,490 1,550 2.7%Term Deposits 72,000 61,000 4.5%

Total 98,725 87,643 3.4%

6.0 Debtors November December Change

$000's $000's %Trade Debtors

Current 412 560 36%> 30 Days 59 200 238%> 60 Days 50 42 -16%> 90 Days 594 571 -4%

Total Trade 1,115 1,374 23%Rates Debtors

Rates Debtors 28,141 25,585 -9%Other Debtors 3,485 3,269 -6%Total Debtors 32,741 30,228 -8%

Actual '$000's

Budget '$000's

Var%

In December 2012 the overall performance is 2% above budget.

Revenue is marginally below budget as Rates revenue are $2.5m under ytd budget partly due to Rates in advance being recognised at end of financial year.

Expense continue to show a favourable variance with 93% budget spent. Savings of $2.2m were made in Materials & Contracts and Utility charges contributed $409k to this variance.

Developers Cash Contributions positive variance of $2.1m, a negative variance for In Kind Developers Contributions of $1.3m combined with a lower than budgeted Non-operating Grants, Subsidies and Contributions variance of $0.8m resulted in a slightly better than budgeted position for

The Principal Protected Note Dandelion matured in December reducing the Floating Rate holdings in the City's Investment portfolio.

The Reserve Bank of Australia reduced the official cash rate by 0.25% from 3.25% to 3% at the meeting on 5 December 2012.

Amendments have been made to the Oakvale Report for the Investments to include Cash Account holdings. Cash amounts are now reflected in the adjacent table.

Cash and Cash Equivalents have decreased by $10.1m. This is a result of $4.1m in payments to creditors and the purchase of land for $2m.

The Westpac - Dandelion Principal Protected Note matured on 21 December 2012 decreasing investments by $0.9m.

The quarterly payment of $3.6m for the Emergency Service Levy to FESA contributed to the $4.1m decrease in the Trade and Other Payables.

The Current Ratio has increased in December due to the decrease in Trade and Other Payables.

0.73

3.65 3.75

1.00 1.00 1.00

-

1.00

2.00

3.00

4.00

5.00

6.00

June 12 Nov-12 Dec-12C.Assets C.Liabilities

Within Building Capital Works 26% of annual budget has been spent, with only 1% of grants received to date. Baskerville Hall upgrade has $631k expenditure committed with a budget adjustment of $734k expected in January 2013.

Road works have progressed another $860k in December totalling $6.8m expenditure to date. Gnangara Road (Drumpellier Drive) account for $3.3m of road costs and is currently at 95% complete.

December revenue of $18k was received for Lanius Park capital grant.

The City acquired a new property valued at $2m in December.

0

200

400

600

800

Current > 30 Days

> 60 Days

> 90 Days$0

00's

Trade Debtors

November December

AA+ to AA-76%

A+ to A-

23%

B Range

1%

The total Trade Debtors have increased by 23%. Current debtors has increased significantly during the month as a result of quarterly lease invoices being raised. It is anticipated these large invoices will be paid in January. A large prosecution invoice was also raised in December for $93k along with the Crime Prevention invoice for $88k.

Rates debtors, excluding Emergency Service Levy, decreased a further $2.5m in December, equivalent to a 9% reduction on the prior month's closing balance. As there is no due date for instalments/interims in December the outstanding balance is slightly less than prior month.

2.1

REVENUE FROM ORDINARY ACTIVITIES

Operating Grants, Subsidies and Contributions 20% Favourable Variance of $655,328

Other Revenue 24% Unfavourable Variance of $178,846

AASB 101.8 requires a financial report to include a "Statement of Comprehensive Income". The definition of "IncomeStatement" at Financial Management Regulation 3 is "income statement (or equivalent) that meets therequirements of Australian Accounting Standards for income statements". By virtue of the changes to terminology inAASB101, we now refer to the "income statement" as the "statement of comprehensive income" as that is the"equivalent" in the context of the Australian Accounting Standards.

The Statements of Comprehensive Income summarise the operating revenue and expenditure for a particular periodof a financial year. The principle aim of these financial statements are to report on the performance of the City inmeeting the approved budgets in both revenue and expenditure terms. An important aspect of The Statements ofComprehensive Income is the exclusion of capital and infrastructure project expenditure. There are two versionsthat are prepared with each presenting information in two distinct forms.

The first Statement of Comprehensive Income is by Nature & Type as prescribed by the Financial ManagementRegulations Schedule 1 Part 2 that ensures compliance with statutory requirements. The report categorisesrevenues and expenses into easy to understand types based on the nature of the individual revenue or expense. Forexample employee costs are made up of not only salaries and wages but also casual labour, labour hire, staffrecruitment, staff training etc.

The second Statement of Comprehensive Income is by Program. Since the withdrawal of AAS 27, AASB 1052.11(b)now governs the disclosure requirements relating to income and expenditure by program (function / activity). Thereport aims to give the reader information on what activity within the community revenue is generated from andwhere money is spent. For example the General Purpose Funding program is where most revenue is generated fromrates, the main source of local government funds. In regards to expenditure the program titled Recreation & Cultureoften has the greatest outlay. This program includes costs associated with operating Libraries, Leisure Centres,Street Lighting, maintaining Parks & Reserves and City owned Buildings.

Both reports calculate variances based on the Current Revised Budget. The actual figures for the year to date arecompared to the year to date current revised budget to present a monetary variance as well as a the variance shownas a percentage of the budget.

The following report on significant variances refers to those variances in the Statement of Comprehensive Income byNature and Type.

Report on Significant Variances of 10% of Current Revised Budget and greater than $10,000 in value

In December revenue was received for Aged Care ($92k), GrafFix project ($80k), Avon Descent - Family Event ($24k)and Community Development ($18k). The total of $214k is adding to the favourable variance in Operating Grants,Subsidies and Contributions due to timing of funds received.

Leisure Services advertising revenue anticipated at budget adoption did not come to fruition resulting in a revised forecast of $20k in lieu of $200k, resulting in $100k variance to date. Recycling Collection revenue for September and October totalling $140k was received from the City of Wannaroo, however November and December are still outstanding, thus contributing $50k to this variance. The revenue should come in line with budget over time.

2.0 Statements of Comprehensive Income

2.2

EXPENSES FROM ORDINARY ACTIVITIES

Materials & Contracts 16% Favourable Variance of $2,232,113

Utility Charges 16% Favourable Variance of $408,893

Insurance Expenses 71% Unfavourable Variance of $443,180

Other Expenses 16% Favourable Variance of $75,790

NON-ORDINARY ACTIVITIES

Non-Operating Grants, Subsidies & Contributions10% Unfavourable Variance of $773,495

Developers Contribution: Cash 156% Favourable Variance of $2,072,342

Developers Contribution: In Kind 33% Unfavourable Variance of $1,291,160

Profit / Loss on Disposal of Assets 11% Favourable Variance of $38,305

Profit / Loss on Impairment of Investments 100% Favourable Variance of $65,892

Capital Grant of $18k for Lanius Park drainage was received in this month. Building grants are revised in the forecastto reflect the lower than expected ytd budget caused by project delays.

Westpac's principal-protected note Dandelion was held at a book value of $939,700 and received the full face valueof $1m upon maturity. This resulted in a gain of $60,300 for the period.

The unfavourable variance will be addressed during the Budget review.

Insignificant under spending on several accounts make up this favourable variance. $30k is attributable to Councillors' Conferences / Training. Within Civic Events & Functions, fluctuations of actual expenditure caused a variance of $30k.These accounts should align with budget by year end.

No contribution was received in this period. Due to the complexities in determining the timing of futuredevelopment and the method of contribution (cash or in kind) during budgeting, variances to actual can beexpected.

Roads infrastructure to the value of $584k was recognised for Caversham in this period. Developer Contributions budgeting is subject to a multitude of variables including overall economic activity. This category should be reviewed in conjunction with the Developer Contributions Cash.

Equipment and 3 vehicles were disposed of in December resulting in the favourable variance. It is expected thatrecognised gains on sales will align with budget as the year progresses.

Projects, Studies & Surveys Costs contribute to the variance as only 63% of ytd budget has been spent on the variousprojects across cost centres. Significant variances are noted in Human Resources ($400k), Facilities Management($534k), and Strategic Planning ($641k). Contracts savings are across the City with major variances in BuildingCleaning ($1m) and Park & Reserve Maintenance ($0.7m).

This variance is caused by the timing of billing from utility companies. Electricity is 80% of ytd budget as Novemberand December invoices have not been received in full. Gas and Water & Sewage costs increase ($40k) will bereviewed and budget adjustment will follow if necessary.

2.3

Original Budget 2012/13

Revised Budget 2012/13

YTD CURRENTREVISED BUDGET

@ DECEMBER2012

YTD ACTUAL@ DECEMBER 2012

$ VarianceVAR

NOTE

% VAR / CURRENT BUDGET

Revenue from Ordinary Activities85,856,260 85,856,260 Rates Revenue 85,856,260 83,329,129 2,527,131 - -

942,100 942,100 Service Charges 942,100 965,359 (23,259) - -

26,675,100 26,675,100 Fees & Charges 20,590,498 20,320,673 269,825 - -

7,123,320 7,223,080 Operating Grants, Subsidies & 3,353,520 4,008,848 (655,328) F (20%)

3,856,000 3,856,000 Interest Earnings 2,342,485 2,406,362 (63,878) - -

1,467,610 1,502,070 Other Revenue 759,703 580,857 178,846 U 24%

125,920,390 126,054,610 Sub-Total Ordinary Revenue 113,844,565 111,611,227 (2,233,338)

Expenses from Ordinary Activities(57,623,220) (57,664,030) Employee Costs (28,462,594) (27,353,726) (1,108,869) - -

(27,322,501) (27,341,681) Materials & Contracts (14,091,924) (11,859,810) (2,232,113) F (16%)

(5,105,310) (5,105,310) Utility Charges (2,583,215) (2,174,322) (408,893) F (16%)

(27,278,600) (27,278,600) Depreciation on Non-Current Assets (13,639,300) (13,196,574) (442,726) - -

(1,471,500) (1,471,500) Interest Expenses (749,784) (780,292) 30,508 - -

(360,680) (360,680) Insurance Expenses (620,791) (1,063,971) 443,180 U 71%

(937,250) (937,250) Other Expenses (468,174) (392,384) (75,790) F (16%)

(120,099,061) (120,159,051) Sub-Total Ordinary Expenses (60,615,783) (56,821,079) 3,794,703 - -

5,821,329 5,895,559 Ordinary Activities 53,228,782 54,790,148 1,561,366 - -

Add Non-Ordinary Activities

14,875,450 14,894,550Non-Operating Grants, Subsidies & Contributions 7,567,103 6,793,608 (773,495) U (10%)

10,000,000 10,000,000Non-Operating Gifted Assets from Developers: Other - - - - -

2,662,550 2,662,550 Developer Contribution Plans: Cash 1,331,275 3,403,617 2,072,342 F 156%

7,926,940 7,926,940 Developer Contribution Plans: In Kind 3,963,470 2,672,310 (1,291,160) U (33%)

720,000 720,000 Profit / (Loss) on Disposal of Assets 360,000 398,305 38,305 F 11%

- -

Profit / (Loss) on Impairment of

Investments - 65,892 65,892 F 100%

3,400,000 3,400,000

Unrealised Gain from Other Financial

Assets: EMRC - - - - -

45,406,269 45,499,599 Net Result 66,450,631 68,123,880 1,673,249 - -

CITY OF SWANSTATEMENT OF COMPREHENSIVE INCOME BY NATURE OR TYPE

FOR THE PERIOD 1 JULY 2012 to 31 DECEMBER 2012

2.4

OriginalBudget2012/13

RevisedBudget2012/13

YTD CURRENTREVISED BUDGET

@ DECEMBER2012

YTD ACTUAL@ DECEMBER 2012 $ Variance

VARNOTE

% VAR / CURRENT BUDGET

Revenues from Ordinary Activities95,763,260 95,763,260 General Purpose Funding 89,069,413 87,101,847 (1,967,566) - -

10,702,900 10,717,360 Governance 5,358,920 6,186,232 827,312 F 15%

1,814,120 1,814,120 Law Order & Public Safety 1,446,577 1,446,158 (420) - -

293,500 293,500 Health 146,750 103,420 (43,330) U (30%)

4,347,930 4,437,690 Education & Welfare 2,303,443 2,621,132 317,689 F 14%

50,000 50,000 Housing 25,000 30,851 5,851 - -

16,111,900 16,111,900 Community Amenities 15,115,857 15,219,683 103,826 - -

11,552,030 11,591,130 Recreation & Culture 5,819,531 3,011,452 (2,808,079) U (48%)

21,162,840 21,162,840 Transport 5,917,498 7,140,582 1,223,084 F 21%

2,099,200 2,099,200 Economic Services 1,049,600 741,487 (308,113) U (29%)

1,607,650 1,617,650 Other Property & Services 813,825 877,919 64,094 - -

165,505,330 165,658,650 Sub-Total Revenue 127,066,413 124,480,763 (2,585,651) - -

Expenses from Ordinary Activities Excluding Borrowing Costs

(2,021,719) (2,021,069) General Purpose Funding (1,055,775) (906,447) 149,328 F 14%

(9,065,254) (9,353,174) Governance (4,821,625) (4,006,562) 815,063 F 17%

(4,899,727) (4,938,477) Law Order & Public Safety (2,488,331) (2,306,354) 181,976 - -

(1,495,488) (1,511,678) Health (761,709) (745,557) 16,152 - -

(8,666,804) (8,635,724) Education & Welfare (4,309,153) (4,081,381) 227,771 - -

(132,599) (132,599) Housing (66,318) (69,142) (2,824) - -

(20,215,755) (19,568,005) Community Amenities (9,231,631) (8,650,108) 581,523 - -

(35,634,777) (35,547,377) Recreation & Culture (18,010,654) (16,947,035) 1,063,619 - -

(30,336,536) (30,251,446) Transport (15,467,662) (14,159,319) 1,308,343 - -

(4,969,625) (5,195,485) Economic Services (2,719,636) (1,657,991) 1,061,645 F 39%

(1,189,277) (1,532,517) Other Property & Services (933,505) (2,046,695) (1,113,189) U (119%)

(118,627,561) (118,687,551) Sub-Total Non-Borrowing Expense (59,865,999) (55,576,591) 4,289,408 - -

Borrowing Costs Expense- - General Purpose Funding - - - - -

(205,540) (205,540) Governance (109,847) (109,838) 9 - -

(421,910) (421,910) Recreation & Culture (161,514) (161,695) (181) - -

(419,390) (419,390) Transport (213,380) (213,378) 2 - -

- - Economic Services - - - - -

(424,660) (424,660) Other Property & Services (265,043) (295,381) (30,338) U (11%)

(1,471,500) (1,471,500) Sub-Total Borrowing Costs (749,784) (780,292) (30,508) - -

45,406,269 45,499,599 Net Result 66,450,631 68,123,880 1,673,249 - -

Financial Ratios 2010 2011 2012 Current Month

OPERATING SURPLUS RATIO 8.54% 4.61% 10.34%

DEBT SERVICE COVER RATIO 15.67 17.76 18.49

OWN SOURCE REVENUE COVERAGE RATIO 0.99 0.96 1.01

CITY OF SWANSTATEMENT OF COMPREHENSIVE INCOME BY PROGRAM


The Debt Service Cover Ratio measures the ability to service debt. Also known as 'debt coverage ratio', this is the ratio of cash available for debt servicing to interest, principal and lease payments from the operations of the City. A ratio below 2.00 should be monitored carefully. A ratio above 5.00 is considered low risk. The higher the ratio, the better the City's financial capacity to meet the debt servicing commitments.

The Own Source Revenue Coverage Ratio measures the local government's ability to cover operating expenses from own source revenue. The higher the ratio, the more self reliant the City will be. This allows greater flexibility as less external funds are required for operational purposes. A ratio above 0.90 is considered low risk and less than 0.60 high risk.

51.10%

30.88

1.90

The Operating Surplus Ratio highlights the extent of the operating surplus (deficit) relative to the revenues of the Council. This is an indicator of the extent to which revenue raised cover operational expenses and is available for capital funding purposes. The higher the ratio the more financial capacity to deal with asset renewal before reliance on external sources of revenue. A ratio above 15% is considered low risk - an indication that own source income is available to fund capital expenditure initiatives over and above depreciation. A ratio below 0% is considered high risk. The year to date ratios will vary considerably from year end results.

3.1

Description

2. Statement of Change in Equity

Financial Ratios 2010 2011 2012 Current MonthCURRENT RATIOS 0.39 0.67 0.73 3.75

QUICK RATIO 0.24 0.57 0.72 3.74

UNTIED CASH TO TOTAL CREDITORS 0.00 0.09 2.53 35.60

This ratio assesses the City's ability to meet immediate commitments from readily available cash. Trade creditors include orders for goods and services that have been received but not paid and any amount owing for GST. The higher the ratio the better placed Council is to pay its Creditors. This ratio is always at its lowest point at 30 June due to much of the cash reserves of the City having been expended by this time. This ratio has improved over the last couple of years with an improvement in net funds available at the end of the year.

A Current Ratio shows short - term paying ability with restricted assets removed from the current assets. It relates to the immediate financial sustainability of Council. A ratio greater than 1.00 (100%) indicates Council has more current assets than current liabilities. If less than 1.00 (100%), current liabilities are greater than current assets and there may be a short term funding issue.

1. Statement of Financial Position

AASB 101 requires all Councils to prepare a Statement of Financial Position, which discloses the assets, liabilities and equity ofthe Council as at the reporting date. The ratepayer equity in the Council can be calculated by deducting total liabilities fromtotal assets.

The purpose of the Statement of Financial Position is to provide a "snap - shot" of the overall financial position of the Council asat a particular date. An entity shall present current and non-current assets, and current and non-current liabilities, as separateclassifications on the face of its balance sheet and on the basis of liquidity. Subject to special requirements for revaluation ofvarious classes of assets, accepted accounting practice includes well defined accounting principles. This convention dictates thatan asset represents the value of an investment acquired to provide future economic benefit to an entity. The future economicbenefits may be in the form of cash or cash equivalents or in the case of not-for-profit (including public sector) entities, theeconomic benefits are derived from meeting the entities objectives of providing goods and services.

Councils are required by AASB 101 to prepare a Statement of Changes in Equity and include it in the Financial Statements. TheStatement of Changes in Equity reconciles the opening and closing balances of each class of the local government's equity overthe reporting period. It provides a summary of causes of the changes in equity and identifies specifically the changes incomposition of the local government's equity.

A Quick Ratio measures the short - term debt paying ability and the liquid position of the City of the Swan and the ability to pay its immediate debts with restricted assets and inventories removed from the calculation. The ratio should be greater than 1.00 (100%).

3.0 Statement of Financial Position & Equity

3.2

ACTUAL @31 DECEMBER 2012

ACTUAL @30 JUNE 2012

Current AssetsCash and cash equivalents 86,549,105 50,679,765Investments 1,550,164 2,489,864Trade and other receivables 30,228,028 5,995,776Other Assets 483,907 201,386Inventories 153,987 205,053

Total: Current Assets 118,965,191 59,571,844

Non Current AssetsTrade and other receivables 2,390,117 2,363,412Property, plant and equipment 790,115,268 779,214,684Other Financial Assets 27,473,865 27,473,865

Total: Non Current Assets 819,979,250 809,051,961

Total Assets 938,944,441 868,623,805

Current LiabilitiesShort term borrowings 916,385 2,182,164Trade and other payables 9,087,679 8,857,224Income in advance 837,512 2,148,544Provisions 8,266,076 8,411,654

Total: Current Liabilities 19,107,652 21,599,586

Non Current LiabilitiesLong term borrowings 24,348,925 21,442,394

Trade and other payables 4,461,699 3,213,799

Provisions 1,884,571 1,350,311Total: Non Current Liabilities 30,695,195 26,006,503

Total Liabilities 49,802,847 47,606,089

NET ASSETS 889,141,594 821,017,715

Equity AccountsAccumulated Surplus 643,172,460 579,457,682Asset Revaluation Reserves 200,438,626 200,438,626Cash Backed Reserves 45,530,508 41,121,407

TOTAL EQUITY 889,141,594 821,017,715

CITY OF SWANSTATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2012

3.3

RETAINEDSURPLUS

ASSET REVALUATION

RESERVES

RESERVES CASH / INVESTMENT

BACKED

TOTALEQUITY

Balance as at 1 July 2011 546,436,082 172,985,105 26,232,672 745,653,859

Changes in Accounting Policy - - - -

Correction Of Errors - - - -

Restated Balance 546,436,082 172,985,105 26,232,672 745,653,858

Net Result 47,910,336 - - 47,910,336

Total Other Comprehensive Income - 27,453,521 - 27,453,521

Transfer to Trust Fund from Reserves - - - -

Transfer from/(to) Reserves (14,888,736) - 14,888,736 -

Balance as at 30 June 2012 579,457,682 200,438,626 41,121,408 821,017,715

Net Result 68,123,880 - - 68,123,880

Total Other Comprehensive Income - - - -

Transfer from/(to) Reserves (4,409,101) - 4,409,101 -

Balance as at 31 December 2012 643,172,460 200,438,626 45,530,508 889,141,594

ADDITIONAL DISCLOSURE ON CASH HOLDINGS, INVESTMENTS, RESERVES & MUNICIPAL FUNDS31-Dec-12 30-Jun-12

Cash / Investment Backed ReservesAged Services Asset Replacement 110,557 193,597COS New Asset Replacement 4,158,180 3,100,630Ellenbrook Community Facilities 628,999 1,272,902General Insurance 1,339,989 954,798Gravel Pit Rehabilitation 282,850 277,934Hazelmere/Guildford District Drainage 774,172 511,470Midland District Drainage 6,684,661 5,568,911Plant & Equipment 3,851,659 3,014,985Vale Community Facilities 1,517,100 1,628,047Waste Management 3,612,397 5,966,600Employee Entitlement LSL 718,817 644,351Hazelmere Industrial Reserve 3,749,744 1,689,978Strategic Development 0 810,876Urban Growth Corridor Developer Funds - Brabham (Albion) 3,026,378 2,707,407 - Caversham 4,867,985 4,731,101 - Dayton (West Swan East) 6,655,256 4,560,709Other Restricted Assets - Midland Brick Trust Fund 35,275 35,275 - Drainage contributions 38,158 34,658 - Footpath contributions 155,648 155,648 - Malaga Parking contributions 216,475 221,801 - Roadwork contributions 2,150,097 2,076,750 - Other internal cash backed reserves 956,112 962,980Sub total Cash / Investment Backed Reserves 45,530,509 41,121,408Add: other restricted cash / investment assets (i.e Bonds) 4,461,700 3,213,799Total of restricted cash / investment assets 49,992,209 44,335,207Add: Unrestricted cash / investment assets (i.e. MUNI funds) 38,107,060 8,834,422

TOTAL CASH AND CASH EQUIVALENTS / INVESTMENTS 88,099,269 53,169,629Consisting of: Cash and Cash Equivalents 86,549,105 50,679,765 Investments 1,550,164 2,489,864

88,099,269 53,169,629

CITY OF SWANSTATEMENT OF CHANGES IN EQUITY


4.1

Comments

► Switchboard Renewal program has been rolled out to Ballajura Library & West Bullsbrook Hall at a higher cost than budgeted. A budget adjustment is required.

► Works on Midland Gateway Project, North Street drainage, Lockridge drainage, asphalt overlay on Harold Street and Whittome Street were completed in the period.

► West Swan/Gnangara Road Roundabout has incurred $671k expenditure or 67% annual budget. Western Power works is anticipated to commence next month.

► A property was purchased in December for $2m.

► Gnangara Road (Drumpellier Drive) has expended 95% of the $3.5m annual budget with $2.9m in actual expense and $415k commitments. Construction was completed and the road opened to public in December. Minor works to follow in January include kerbing and linemarking.

Altone Youth Centre - $38k for airconditioner installation Swan View Oval - $354k Benara Road/West Swan Road Roundabout - $65k Ellenbrook Road - $172k Foothpath replacements -$110k Baskerville Hall upgrade - $631k expenditure committed. Pending budget adjustment in January 2013.

► Overall Capital expenditure is 47% of the annual budget. $21.9m expensed at the end of December and $6.6mcommitments raised.

► Lanius Park has received $18k capital grant in December. Ellenbrook DOS North in Parks has a further $148k expended, bringing the total ytd expenditure to $1.4m or 37% of full year budget.

► The projects below commenced in December with following actual and committed costs:

4.0 Capital

05,000

10,00015,00020,00025,00030,00035,00040,00045,00050,00055,00060,00065,000

July Aug Sep Oct Nov Dec Jan Feb March April May June

mill

ions

$

Capital Expenditure - Actual v Budgetwith Prior Year comparison

Actual 12/13 Budget 12/13

Prior Year Actual Prior Year Budget

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

Buildings Drainage Footpaths Parks Roads P&E, Other

mill

ions

$

YTD Capital Works expenditure

Actual & CommittedBudget

Total CommittedActualJob Number and Name

YTD

Revenue

3/01/13

8:49:27AM

% of

Budget

% of

Budget

Current Budget

YTD CAPITAL JOBS SUMMARY REPORTFOR THE PERIOD ENDING 31 DECEMBER 2012

Current Budget

Full Year

Revenue

Full Year

Expense

Y T D E x p e n s e

Administration Building 27,261 2,960 30,221 BCW04134

Community Facilities 138,000 BCW05106

Minor Capital Building Project 180,750 3,268 20,211 23,479 BCW05114 13

Swan Caring Building Upgrade 10,000 3,556 200 3,756 BCW05122 38

Guildford Visitor Centre 98,790 316 7,560 7,876 19,744 BCW05129 8 34 58,700

Altone Leisure Centre 9,520 9,517 9,517 BCW05137 100

New Depot 2,000,000 398,572 81,537 480,109 BCW05139 24

West Swan Home Supp 35,230 29,549 29,549 BCW07103 84

Swan Park Recreation Centre 100,000 10,065 10,065 BCW07108 10

Roof Safety Access Systems 49,250 BCW07115

Airconditioner Renewal Program 162,000 6,938 6,938 BCW07116 4

Lock & Key Replacement Program 50,000 33,968 10,120 44,088 BCW07117 88

Charlottes Vineyard Pavilion 237,500 60,242 66,320 126,562 BCW07119 53 187,500

Percy Cullen Pavilion 3,095,000 1,091,952 2 1,091,954 BCW07121 35 420,000

Depot 100,000 BCW07128

Aveley/Turkich Pde Com Centr 1,897,570 360,161 1 360,162 BCW08103 19 450,000

Ballajura Youth Facility 49,000 19,994 21,154 41,148 BCW08111 84

Midland Junction Arts Centre 750,000 2,447 328,826 331,273 BCW08116 44

Midland Village 20,000 11,588 31,328 42,916 BCW08117 215

Swan City Youth Service 2,055,000 74,921 180,419 255,340 BCW08120 12 1,400,000

Bin Compounds 20,000 16,985 16,985 BCW09104 85

Energy Conservation Measures 124,000 11,273 1,500 12,773 BCW09105 10

Switchboards Renewal 75,000 70,008 7,891 77,899 BCW09106 104

Electrical Plant & Equipment 25,000 2,691 2,691 BCW09107 11

Heritage Precincts 300,000 30,300 16,245 46,544 BCW09108 16

Asbestos Management Program 20,000 BCW10101

Integrated Systems Program 130,000 30,117 64,610 94,727 BCW10102 73

Equipment Fire System Safety 80,400 10,641 6,807 17,448 BCW10106 22

Universal Access - Buildings 30,000 848 848 BCW10109 3

Building Renewal Program 813,000 30,708 3,597 34,304 BCW11102 4

Ellenbrook DOS Nthn 2,035,600 12,967 107,820 120,787 BCW11103 6 1,235,680

Ellenbrook DOS Sthn 95,630 BCW11104

Ellenbrook Recreation Centre 200,000 6,088 6,088 BCW11106 3

Ellenbrook Resource Centre 100,000 BCW11107

Security Systems Renewal Progr 50,000 12,137 5,758 17,895 BCW11108 36

Building Disposal 20,000 19,221 208 19,429 BCW11109 97

Malvern Springs Community Cent 189,500 134,448 134,448 BCW11112 71

CWA Toilet 60,000 42,600 6,114 48,714 BCW12101 81

Pickett Park Community Facilit 300,000 BCW12102

Woodlake Community Centre 15,000 BCW12103

15 Keane Street Upgrade 250,000 BCW12104

Swan Valley Visitors & Noongar 42,000 BCW12105

Altone Youth Centre 37,970 37,968 37,968 BCW12106 100 19,100

Baskerville Hall Upgrade 631,264 631,264 BCW12107

BCW Building Capital Works 3,770,980 16,050,710 2,603,797 1,611,968 4,215,765 19,744 26 1

Midland Drainage 50,000 DRN04213

Weir Road 155,000 124,926 124,926 DRN08201 81

Gidgegannup / Bullsbrook 26,500 26,380 26,380 DRN08204 100

Beechboro Road 50,000 9,220 9,220 DRN09201 18

Kidman Ave Sth Guildford 200,000 1,474 1,474 DRN09202 1

Lockridge Drainage 15,000 557 9,073 9,630 DRN09204 64

Ferguson St Midland 350,000 DRN10202


YTD

Revenue

3/01/13

8:49:27AM

% of

Budget

% of

Budget

Current Budget


Current Budget

Full Year

Revenue

Full Year

Expense

Y T D E x p e n s e

North St Midland 270,000 253,772 28,144 281,916 DRN10203 104

Janet St Hazelmere 200,000 DRN10204

Terrace Road 115,000 16,121 5,859 21,980 DRN11202 19

Charles Street 480,000 5,528 42,531 48,059 DRN11205 10

Wroxton Street 150,000 124,955 31,061 156,016 DRN11206 104

Bond Street 40,000 37,398 1,161 38,558 DRN12201 96

Eric Street 0 DRN12202

Fauntleroy Street 60,000 352 352 DRN12203 1

Greenoaks Gardens 185,000 127,735 127,735 DRN12204 69

Hamersley Street 70,000 DRN12205

Henry Street 90,000 50,479 8,299 58,778 DRN12206 65

Allpike Street 25,000 9,958 9,958 DRN12208 40

Warren Rd, Bullsbrook 13,500 14,414 14,414 DRN12209 107

DRN Drainage 2,545,000 665,576 263,820 929,396 37

Footpath Replacements 416,000 109,763 109,763 FTP06505 26

Swan Cycle Planning Project 200,000 3,421 18,400 21,821 FTP09501 11

Universal Access - Footpath 30,000 27,862 978 28,840 FTP10101 96

Helena River Crossing 20,000 FTP12501

Upper Swan 100,000 107,965 180 108,145 FTP12502 108

FTP Footpaths 766,000 249,011 19,558 268,569 35

Gravel Pit 71,861 30,501 102,362 33,484 GRP04100

GRP Gravel Pit 71,861 30,501 102,362 33,484 0

Internal Build P & E 18,500 22,920 158 23,078 PEQ07100 125

CCTV - Safer Suburbs 170,000 1,065 68,678 69,744 PEQ08104 41

ePlanning 46,540 PEQ09101

Global Positioning System 30,000 26,278 26,278 PEQ10103 88

Website Development - SVC 67,080 (1) 61,071 61,071 PEQ10104 91

Online Learning System 20,000 9,000 9,000 PEQ10105 45

Aurion OHS 18,562 11,838 30,400 PEQ11101

Midland Parking Technology 50,000 PEQ11102

Generator Administration Build 65,700 54,795 2,930 57,725 PEQ11104 88

YSwan - Youth Website Develop 11,814 11,814 PEQ11108

Aurion - Electronic Forms 30,000 PEQ12101

Aurion - Planning Development 40,000 7,425 7,425 PEQ12102 19

Swan Business Website 70,000 PEQ12103

Purchasing of eBooks 40,000 PEQ12104

Unified Communications (PABX) 150,000 PEQ12105

Dial Before You Dig 13,620 20,511 20,511 PEQ12106 151

PEQ Plant & Equipment 811,440 144,131 172,914 317,045 39

Percy Cullen Oval 102,000 18,537 18,537 PRK04313 18

Midland Streets & Entry Lscape 550,000 34,851 26,819 61,670 PRK04322 11

Residential Street Trees 36,000 13,154 13,154 PRK04324 37

Trees to Residents-Rural Areas 20,000 14,582 14,582 PRK04328 73

James St Lscape & Entry 350,000 PRK05303

Parks & Streetscapes Minor 50,000 7,301 6,495 13,796 PRK05304 28

Swan Regional Riverside Park 60,000 35,726 10,184 45,910 PRK05307 77

Tourism Signage 54,000 8,386 19,448 27,834 1,390 PRK05309 52


YTD

Revenue

3/01/13

8:49:27AM

% of

Budget

% of

Budget

Current Budget


Current Budget

Full Year

Revenue

Full Year

Expense

Y T D E x p e n s e

Emu Lake Restoration 98,000 500 500 PRK05311 1

Playgrounds - Ellenbrook 45,200 45,200 45,200 PRK05317 100

Park Lighting 0 PRK05320

Altone Streets & Entry Lscape 200,000 21,965 2,339 24,304 PRK07315 12

Water Play Facility 33,900 33,900 33,900 PRK07340 100

Aveley/Turkich Pde Play Field 3,360 30,206 30,206 PRK08304 899

Irrigation Infra Replacement 52,000 31,709 5,480 37,189 PRK08306 72

Bushland Fencing 50,000 5,550 5,550 PRK08307 11

Gazebo Replacement 77,000 27,858 27,858 PRK08308 36

Ballajura & Malaga POS/PAW Lan 150,000 15,329 57,387 72,716 PRK08311 48

Public Art 146,300 51,458 1,320 52,778 PRK08318 36

Kingfisher Oval 346,600 107,602 144,290 251,892 PRK08324 73

Playspace Replacemet Pgm 320,000 5,232 118,789 124,022 PRK10102 39

Regional Open Space - Whiteman 200,000 PRK11101

Reticulation/Hydrozoning 200,000 99,757 41,585 141,341 PRK11102 71

Upper Swan Skate Park 20,000 21,309 750 22,059 PRK11103 110

Ellenbrook DOS North 3,764,000 1,302,757 74,162 1,376,919 PRK11105 37 1,125,000

Ellenbrook DOS South 4,370 4,366 4,366 PRK11106 100

Swan View Oval 417,480 6,438 347,734 354,172 PRK11108 85 185,400

Anna Plains Park 20,000 9,326 6,947 16,273 PRK12301 81

Fauntleroy Park 250,000 3,548 2,500 6,048 PRK12302 2

Gidgegannup Skate Park 40,000 PRK12303

Maguire Oval 311,100 10,097 10,097 PRK12304 3 89,290

Woburn Park Playgrounds 85,000 PRK12305

City Wide Fencing Water Bodies 50,000 814 814 PRK12306 2

Louisa Grove Security Fence 11,640 11,641 11,641 PRK12307 100

Lanius Park Drain 18,000 PRK12308

PRK Parks 1,399,690 8,117,950 1,964,018 881,310 2,845,328 19,390 35 1

Morley Drive East 215,000 197,628 197,628 185,000 RDN04409 92 100 185,000

Chittering Road 1,715,000 54,793 547,784 602,577 RDN04426 35

Gnangara Road 3,000,000 88,172 34,479 122,650 2,148,544 RDN04468 4 107 2,000,000

Midland Parking 95,000 1,530 1,530 RDN05401 2

Street Lighting Upgrades 156,000 13,146 52,281 65,427 RDN05402 42

Traffic Safety Minor Projects 100,980 95,274 50 95,324 RDN05405 94

Marangaroo Drive 100,000 83,439 83,439 RDN05406 83

Ellenbrook Road 175,000 168,867 3,455 172,322 129,880 RDN05449 98

O'Brien Road 95,000 858 858 70,000 RDN05457 1

Clenton Road 95,000 728 728 70,000 RDN05459 1

Kingsley Drive 75,000 1,108 1,108 RDN05487 1

Cale Street Midland 38,000 RDN05501

Hepburn Avenue 28,490 28,488 28,488 RDN06404 100

Bridge Works 560,000 6,620 6,500 13,120 RDN06420 2

Investigation,Design Projects 139,000 69,064 69,064 RDN06421 50

Lloyd Street 1,000,000 11,533 29,820 41,353 RDN06450 4 1,000,000

Beechboro Road North 219,966 2,998 2,998 RDN06453 1

Local Road Program-Testing 70,000 855 855 RDN07402 1

Smith Road 123,000 6,022 6,022 19,688 RDN07449 5 41 48,600

Warbrook Road 54,294 RDN07451 21,800

Malaga Industrial Carparking 300,000 5,327 5,327 RDN07454 2

Carpark Renewals 104,000 52,076 16,170 68,246 RDN08405 66

Stirling Crescent 165,000 4,142 3,014 7,156 140,000 RDN08406 4

Alexander Drive 290,000 179,421 2,150 181,572 25,444 RDN08408 63 40 63,600


YTD

Revenue

3/01/13

8:49:27AM

% of

Budget

% of

Budget

Current Budget


Current Budget

Full Year

Revenue

Full Year

Expense

Y T D E x p e n s e

Malaga Drive 59,500 3,909 17,877 21,786 RDN08426 37

Pinaster Parade 105,000 60,958 60,958 RDN08427 58

Copley Road 25,000 10,764 10,764 RDN09414 43

Altone Road 70,000 36,381 36,381 RDN09423 52

Oakover Road 45,000 74 74 RDN09431 0

Bishop Road 348,000 RDN09440

Beach Road 219,600 146,984 388 147,372 RDN09441 67

Coolamon/Mornington 43,500 43,502 43,502 RDN10233 100

Dalgety Road 80,000 81,011 81,011 RDN10239 101

James Road/Toodyay Road 1,418 1,418 RDN10240

Henley Street 60,000 45,782 45,782 RDN10253 76

Beach Road/Crocker 55,000 117 117 RDN10266 0

Hazelmere Industrial Area 2,300,000 52,281 9,595 61,877 RDN11201 3

Benara Road 1,050,000 29,628 35,513 65,141 RDN11401 6

Breeze Road 75,000 11,462 350 11,812 RDN11404 16

Marshall Road 1,065 1,065 RDN11409

Military Road 216,210 162,250 300 162,550 RDN11410 75

Summerlakes Parade 131,510 104,027 104,027 95,000 RDN11416 79 100 95,000

Gnangara Road (Drumpellier Dr) 3,500,000 2,896,230 415,225 3,311,454 2,700,000 RDN11424 95 77 3,500,000

Beach Rd / Oxleigh - RAB 60,000 66,582 66,582 RDN12401 111

Harold Road 90,000 43,582 43,582 RDN12402 48

Henley Brook Avenue 75,000 RDN12403

Percy Cullen Parking 120,000 RDN12404

West Swan/Gnangara Rd - RAB 1,000,000 53,799 617,173 670,972 400,000 RDN12405 67 40 1,000,000

Whittome Street 165,000 82,571 82,571 130,000 RDN12406 50

Vines Avenue 30,000 RDN12407

Arbor Drive/Broadway - RAB 136,000 RDN12408

Clayton/Cowie - RAB 550,000 RDN12409

RDN Roads 8,618,880 19,523,050 5,006,468 1,792,124 6,798,592 6,113,556 35 71

13,789,550 C A P I T A L J O B S T O T A L 47,814,150 10,704,862 4,772,195 15,477,057 6,186,173 32 45

FOR THE PERIOD ENDING 31 DECEMBER 2012YTD CAPITAL JOBS SUMMARY REPORT

8:49:27AM

3/01/13

% of

Budget

YTD

Revenue

% of

BudgetTotal CommittedActual

Full Year

Expense

Full Year

Revenue

Y T D E x p e n s e

Current Budget

Current Budget

1603 Purchase of Assets Land

1608 Purchase of Assets Buildings

3,100,000 8,354,585 270 8,354,585 1609 Purchase of Assets Comm Bus Pr

262,070 93,975 36 58,787 35,187 1613 Purchase of Asset Office F & F

6,287,730 3,183,045 51 1,962,938 1,220,108 1618 Purchase of Assets P & E

1,118,170 199,403 18 135,788 63,616 1623 Purchase of Assets Computer

1,496,390 1,158,433 77 684,349 474,085 1628 Purchase of Assets Vehicle

(7,178)(7,178)1634 Purchase of Asset Other Rd Inf

22,291 7,178 15,113 1638 Purchase of Assets Parks & Res

1648 Purchase of Assets Other Infr

1692 Purchase of Other Assets

C A P I T A L A S S E T S T O T A L 12,264,360 13,004,555 106 11,196,447 1,808,108

G R A N D T O T A L 13,789,550 60,078,510 21,901,309 6,580,303 28,481,612 6,186,173 47 45

5.1

4.0 DInvestmentsSummary

Note: The 2012/13 figures include Cash and Investments. Prior years only reflect investments.

The City received $1m for the investment Dandelion in December. Dandelion was invested as a Principal protected note in December 2007 with Westpac Bank. Due to market conditions this investment reached its floor level mark, which triggered the principal protection clause in October 2008. This clause protected the face value from loss and secured the initial investment until maturity. The City received full face value redemption, however, the City did not receive any interest on this investment during its term.

5.0 Cash and Investments

0

10

20

30

40

50

60

1 2 3 4 5 6 7 8 9 10 11 12

Mill

ions

$

Total Investment Position showing Prior Year Comparisons

2009

2010

2011

2012

0

20

40

60

80

100


Mill

ions

$

Total Cash and Investment Position showing Prior Year Comparisons

2009 2010 2011 2012 2013

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000


Cash and Investment Mix (by Type)

24 Hour Call Cash Management Floating Rate Term Deposits Cash

City of Swan Economic and Investment Portfolio Commentary

December 2012

Global issues:

The media-stoked US ‘fiscal cliff’ reached a fever pitch in thinly traded markets leading up to year end. Talk of an impending US recession if no budget compromise was reached put pressure on politicians to negotiate a wide ranging solution or at least agree to minor adjustments and delay bigger/tougher decisions. Predictably, the latter prevailed leaving tough budget choices to be made in the next few months, but gave the markets a positive spin to start the New Year.

The political posturing in the US also gave the markets a reprieve from the usual European-focussed concerns. Although Europe’s fiscal concerns are expected to linger throughout 2013, a more positive outlook is beginning to prevail as incremental progress is being made to address the debt crisis.

Chinese manufacturing data continued to reveal solid growth with December figures reaching 19 month highs. Economists are predicting China’s economy to grow 7-9% in 2013; while slower than previous years it would be a solid result, if accurate, given global conditions.

Domestic issues:

In its most recent Monetary Policy Release statement, the RBA conceded the resources peak is approaching, a point widely proclaimed by economists and miners during the year.

While private spending is expected to increase, the impact of a declining mining sector and still weak manufacturing sector, combined with general global sluggishness, the RBA is cautious regarding growth prospects for 2013.

Interest rates

Over the course of 2012 the RBA cut the official cash rate by 125 basis points from 4.25% to 3.00%. The market is still pricing in a further 50bps to be cut during 2013.

The low interest rate environment will be reflected in declining average interest rate returns in portfolios such as Council’s over the course of 2013.

Investment Portfolio Commentary

Council’s investment portfolio posted a return in December of 5.23%pa versus the bank bill index benchmark return of 3.44%pa. For the financial year to date, Council’s investment portfolio has exceeded the bank bill index benchmark by 2.14%pa (5.65%pa vs 3.51%pa). Without marked-to-market influences, Council’s investment portfolio currently has an overall yield of 3.87%pa. This is based on the actual interest rates being received on existing investments and excludes the underlying changes to the market value of the securities/deposits.

Investments with realised losses:

Investment Purchase Price Realised value Crystallised Loss Kalgoorlie 500,000 430,000 70,000 Bluegum 500,000 0 500,000 Deutsche Yield Curve 1,000,000 960,000 40,000 Scarborough 1,500,000 0 1,500,000 Parkes2A 500,000 0 500,000 Torquay 500,000 0 500,000 Flinders 250,000 215,000 35,000 Totals 4,750,000 1,605,000 3,145,000

Alternative Investment Group 1,734,440

Face Value Last Coupon

Borrower Rating Maturity Purchase Price

Current Value Annualised Monthly Return

Reference

1,000,000 0.0000 ANZ Climate Change Trust AA 20-Jan-14 1,000,000 967,080 0.0000234,440 0.0000 Lehman Bros. Global Property Note D 7-Jul-15 300,000500,000 0.0000 Saphir Finance PLC 2004 - 4 NR 7-Jul-15 500,000 Endeavour

1,734,440 0.0000 1,800,000 967,080Credit Linked Note Investment Group 3,124,033 379,809

Face Value Current Coupon


Current Value Accrued Interest

Reference

348,658 4.8500 Helium Capital 60 D 20-Mar-13 500,000 112,238 556 Esperence500,000 4.2000 Zircon Finance Ltd Series 2007 - 9 Class A NR 20-Jun-13 500,000 549 690 Merimbula502,708 4.5500 Corsair (Cayman Islands) No 4 Ltd Series 6 CCC 20-Mar-14 550,000 326 752 Kakadu22,667 5.0200 Helix Capital - OASIS A CC 4-Sep-14 1,000,000 16 87 Oasis A

500,000 4.4500 Zircon Finance Ltd 2007-1 Class A NR 22-Sep-14 500,000 170 732 Coolangatta1,000,000 4.8400 Aphex Pacific Capital Ltd Series 2006-5 CCC- 22-Dec-14 1,000,000 266,340 1,061 Glenelg

250,000 4.7750 MSM ACES SPC Series 2006 -7 Class 1A D 22-Jun-15 500,000 170 392 Parkes 1A3,124,033 4.6257 4,550,000 379,809 4,270

Current Account Investment Group ##### 24,823,321 24,823,321Face Value Current

YieldBorrower Rating Maturity Current Value Reference

7,398,235 3.2500 Commonwealth Bank of Australia A-1+ 41274 7,398,235 RBA1,959,248 2.0000 Commonwealth Bank of Australia A-1+ 41274 1,959,248 Cash at bank3,033,390 2.0000 Commonwealth Bank of Australia A-1+ 41274 3,033,390 Barbham4,869,174 2.0000 Commonwealth Bank of Australia A-1+ 41274 4,869,174 Caversham7,563,274 2.0000 Commonwealth Bank of Australia A-1+ 41274 7,563,274 Dayton

24,823,321 2.3725 24,823,321Floating Rate Note Investment Group ##### 42,783 500,000 394,003

Face Value Current Coupon


Current Value Accrued Interest

Reference

500,000 4.0100 Royal Bank of Scotland PLC Subordinated Notes BBB- 17-Feb-17 500,000 394,003 2,362500,000 4.0100 500,000 394,003 2,362

Pooled Managed Investment Group 270,238 270,238Face Value Current

YieldBorrower Rating Current Value Reference

270,238 3.6200 UBS Cash Management Trust AAA 41274 270,238270,238 270,238

Term Investment Group ##### 41,423 61,000,000 61,658,156Face Value Purchase

YieldBorrower Rating Maturity Purchase

PriceCurrent Value Accrued

InterestReference

1,000,000 3.9800 Commonwealth Bank of Australia Perth A-1+ 04-Jan-13 1,000,000 1,003,159 3,1622,000,000 4.2500 Bendigo and Adelaide Bank Limited A-2 08-Jan-13 2,000,000 2,013,100 12,8082,000,000 4.9600 National Australia Bank Limited A-1+ 09-Jan-13 2,000,000 2,035,172 34,5162,000,000 4.2500 Bendigo and Adelaide Bank Limited A-2 14-Jan-13 2,000,000 2,012,305 11,6442,000,000 5.2000 Westpac Banking Corporation A-1+ 17-Jan-13 2,000,000 2,039,836 38,1812,000,000 4.9000 St. George Bank Limited A-1+ 21-Jan-13 2,000,000 2,037,746 35,9784,000,000 5.2000 Westpac Banking Corporation A-1+ 24-Jan-13 4,000,000 4,077,213 72,3732,000,000 4.4700 Suncorp Metway A-1 31-Jan-13 2,000,000 2,016,700 14,6964,000,000 3.9800 Commonwealth Bank of Australia Perth A-1+ 01-Feb-13 4,000,000 4,015,225 12,6492,000,000 4.4500 Suncorp Metway A-1 04-Feb-13 2,000,000 2,016,163 13,8992,000,000 4.7500 St George Bank Limited A-1+ 07-Feb-13 2,000,000 2,033,249 30,1922,000,000 4.4700 National Australia Bank Limited A-1+ 08-Feb-13 2,000,000 2,015,603 12,9812,000,000 4.4800 ANZ Banking Group Limited A-1+ 11-Feb-13 2,000,000 2,014,901 12,0281,000,000 4.8000 Bendigo and Adelaide Bank Limited A-2 18-Feb-13 1,000,000 1,015,427 13,4142,000,000 4.6500 St George Bank Limited A-1+ 21-Feb-13 2,000,000 2,030,032 25,9892,000,000 4.6000 Suncorp Metway A-1 25-Feb-13 2,000,000 2,013,355 9,0742,000,000 4.4900 ANZ Banking Group Limited A-1+ 27-Feb-13 2,000,000 2,012,260 8,1192,000,000 4.3200 ANZ Banking Group Limited A-1+ 05-Mar-13 2,000,000 2,010,664 6,6282,000,000 4.5300 National Australia Bank Limited A-1+ 05-Mar-13 2,000,000 2,011,705 6,9502,000,000 4.5000 Bendigo and Adelaide Bank Limited A-2 06-Mar-13 2,000,000 2,011,415 6,9042,000,000 4.7000 Westpac Banking Corporation A-1+ 11-Mar-13 2,000,000 2,027,173 21,3752,000,000 4.2200 Suncorp Metway A-1 11-Mar-13 2,000,000 2,023,145 19,1922,000,000 4.5000 St. George Bank Limited A-1+ 12-Mar-13 2,000,000 2,025,841 20,7122,000,000 4.4300 St. George Bank Limited A-1+ 19-Mar-13 2,000,000 2,023,612 18,2052,000,000 4.5000 ANZ Banking Group Limited A-1+ 26-Mar-13 2,000,000 2,015,204 8,8772,000,000 4.3500 Suncorp Metway A-1 08-Apr-13 2,000,000 2,026,646 20,2601,000,000 4.6000 Bendigo and Adelaide Bank Limited A-2 16-Apr-13 1,000,000 1,013,502 9,4522,000,000 4.5000 Bendigo and Adelaide Bank Limited A-2 01-May-13 2,000,000 2,023,526 14,7952,000,000 4.4300 ANZ Banking Group Limited A-1+ 02-May-13 2,000,000 2,023,385 14,5642,000,000 4.6200 National Australia Bank Limited A-1+ 29-May-13 2,000,000 2,020,896 8,354

61,000,000 4.5433 61,000,000 61,658,156 537,972

Investment Face Value 74,026,946 Investment Current Value 71,067,520Cash Face Value 17,425,086 Cash Current Value 17,425,086Total Face Value 91,452,032 Total Current Value 88,492,606

Disclaimer: The statements and opinions contained in this report are based on currently prevailing conditions in financial markets and are so contained in good faith and in the belief that such statements and opinion are not false or misleading. In preparing this report, Oakvale Capital Limited has relied upon information which it believes to be reliable and accurate. Oakvale Capital Limited believes that this report and the opinions expressed in this report are accurate, but no warranty of accuracy or reliability is given. Oakvale Capital Limited does not warrant that its investigation has revealed all of the matters which a more extensive examination might disclose. This report may not be reproduced, transmitted, or made available either in part or in whole to any third party without the prior written consent of Oakvale Capital Limited. AFS Licence No. 229842.

6.1

5.0 Debtors

i) Rate Debtors ii) Sundry Debtors

i) Rate Debtors

Notes

TABLE 6.1 Rates Debtor Breakdown by Type

Type of DebtorTotal Levied $('000)Current & Arrears

Collected YTD $('000)Outstanding $('000)Current & Arrears

Total Outstanding %

General Rates 84,559 60,078 24,481 29%Sanitation Charges 14,541 13,575 966 7%Drainage Charges 1,731 1,665 66 4%Security Charges 991 921 70 7%Other 6 4 2 33%

101,828$ 76,243$ 25,585$ 25%

GRAPH 6.2 Rates Debtor Position with Prior Year Comparisons

??? Prior year debtors

Each year Rates are levied in July. When this occurs the City recognises the Rates owed as an asset on the balance sheet. Ratenotices are printed and distributed to the public. As these are paid the Rates Debtor position reduces over the course of theyear. Graph 6.2 below shows the progress in collecting these funds over the financial year including a comparison to prior yearcollection.

The City's Debtors can be divided into two types:

As at 31 December 2012

0

10

20

30

40

50

60

70

80

90

100


$ M

illio

ns

2010

2011

2012

2013A high number of residential rates are paid in August as ratepayers take advantage of the early bird payment prize draw.

Current PositionRate Debtors in Arrears

outstanding $1.9m

Current Debtors outstanding$23.7m

Total Debtors $25.6m

6.0 Debtors

The second, third & fourth rate instalments are due in Oct, Jan & Mar respectively.

6.2

ii) Sundry Debtors

Notes

Table 6.3 shows a summary of the City's top 10 debtors 30 Days plus by dollar value divided by periods. Table 6.4 shows debt recovery comments for the top 10 debtors over 30 days.

Graph 6.5 shows sundry debtors outstanding as a percentage based on payment period.

TABLE 6.3 Total Debtors including Top Ten 30 Days plus as at 31 December 2012

Current 30 Days 60 Days 90 Days plus Total

$ $ $ $ $

1 118,000 - - 9,700 127,700 1.70% 9.30%2 - - - 127,188 127,188 22.26% 9.26%3 - 94,548 - - 94,548 6.88%4 - - - 70,000 70,000 12.25% 5.10%5 - 69,795 - - 69,795 5.08%6 - - - 39,955 39,955 6.99% 2.91%7 - - - 39,405 39,405 6.90% 2.87%8 - - - 31,342 31,342 5.49% 2.28%9 - - - 22,985 22,985 4.02% 1.67%

10 - - - 20,878 20,878 3.65% 1.52%Other Debtors 442,087 35,310 42,424 209,910 729,731 36.74% 53.13%

Total 560,087 199,652 42,424 571,362 1,373,525 100.00% 100.00%

TABLE 6.4 Progress on Debt Recovery. Comments for top 10 over 30 days from table above

Top Ten Debtors1

2

3

4

56

7

8

9

10

GRAPH 6.5 Outstanding Debtors as a percentage

Prosecution of debt has commenced.

A reminder letter and statement has been sent. Paying in instalments.

The City has lodged a Caveat on the land title, monies to be recovered upon sale of land or redevelopment of the site.A reminder letter and statement has been sent. Prosecution of debt has commenced.

Memorial registered against land.

A reminder letter and statement has been sent.

Sundry debtors include all monies owed to the City other than those relating to Rates. This includes but is not limited toinvoices raised for grants, leasing of City's premises, and recovery of costs for services provided to developers. The City issuesinvoices with 7 day payment terms.

As % of 90 Days Plus Debtors

As % of Total Debtors

Top Ten Debtors

Memorial registered against land.

Progress for the recovery of Funds Comment

Acquittal recently finalised.

Current41%

30 Days14%

60 Days3%

90 Days plus42%

7.1

Income from Operating Activities

Grants and Other Contributions 17% Favourable Variance of $559,565

Governance 122% Favourable Variance of $60,590

Health 30% Unfavourable Variance of $43,330

Education and Welfare 12% Favourable Variance of $234,142

Economic Services 29% Unfavourable Variance of $309,113

Expenditure from Operating Activities

Governance 11% Favourable Variance of $527,153

Community Amenities 12% Favourable Variance of $1,229,273

The timing of revenue received from the Avon Descent - Family Event project for $24k has contributed to the favourable variance for the year. A positive variance year to date of $35k exists within other revenue a budget adjustment has been processed to account for this increase in revenue.

A Local Government is to prepare each month a statement of financial activity as prescribed by Regulation (34) of the Local Government (Financial Management) Regulations 1996. The statement of financial activity must report on the revenue and expenditure, as set out in the annual budget under FM Regulation 22(1)(d), taking into account any expenditure incurred for an additional purpose under section 6.8(1)(b) or (c). It includes original budget estimates to the end of the month to which the statement relates and actual amounts of expenditure and revenue to the end of the month. The statement must include material variances between the comparable amounts in ytd budget and ytd actual and an explanation of each. The net current assets at the end of each month have to be shown within the statement of financial activity.

The report calculates variances based on the Original Budget. The actual figures for the year to date are compared to the year to date original budget to present a monetary variance as well as the variance shown as a percentage of the budget.

The composition of net current assets is also required to be presented as support to the statement and this is presented showing funds at the end of the current month, those at the previous 30 June and also those at the end of the corresponding month in the previous year. A graph is also included that identifies the monthly movement in funds for the current year and the previous two years.

Report on Significant Variances of 10% of Original Budget and greater than $10,000 in value

The prepayment of the Financial Assistance Grant during the year continues to contribute to the favourable variance of $432k within Operating Grants, Subsidy and Contributions.

Environmental Health Services statutory charges show an unfavourable variance of $36k. It is anticipated actual will fall in line with budget during the course of the year.

The Home and Community Care (HACC) Operating Grant received quarterly in advance continues to create a positive variance within the Swan Community Care and Transport Services cost centre.

Confidence within the economy is still low, this is reflected in the number of building applications received for the period. The budget is expected to be revised in line with this downward trend.

Computing Services Licence Fees is under budget by $239k. Project Studies & Surveys expenditures shows a positive variance of $227k within the Training and Development and General Administration projects. Consultants expenditure shows a positive variance of $223k for the period ended December. This is offset by employee costs being over budget by $163k to the end of December.

Contracts expenditure is below budget by $415k due to the timing of invoices received within the Refuse and Recycling Collection cost centres. Employee costs have a positive variance of $455k for December. A budget adjustment for employee costs has been processed for $525k to take into account the organisational restructure within the City of Swan. This budget is now being reflected within the other programs.

1.0 Income 7.0 Statement of Financial Activity

7.2

Economic Services 34% Favourable Variance of $835,785

Other Property and Services 174% Unfavourable Variance of $1,486,767

Non Cash Items

Provisions and Other Accruals 162% Favourable Variance of $224,077

Capital Income & Expenditure

Capital Grants, Subsidies & Contributions 10% Unfavourable Variance of $754,395

Developer Contributions 156% Favourable Variance of $2,072,342

Purchase or Construction of Infrastructure 49% Favourable Variance of $7,455,130

Other Funding Sources

Profit and Loss on Impairment of Investments 100% Favourable Variance of $65,892

Opening Net Current Assets July 1 B/Fwd 34% Favourable Variance of $1,067,068

The final year end position for 2011/12 has been finalised by the City's external Auditors. The Opening Net Current Position was higher than originally budgeted.

The full capital grant of $2.1m was received as Income In Advance in the last financial year for the Gnangara Road project. 77% of the capital grant for Gnangara Road (Drumpellier Drive) has been received. 40% of the full year budget for the West Swan/Gnangara Road project has been received for December. Capital grants for Building and Parks have yet to be received for the major projects.

The previously impaired Dandelion Note reached maturity in December. The Note was redeemed for its full value creating a gain of $60k.

Employee costs show a positive variance of $102k year to date. Project Studies & Surveys expenditure show a favourable variance of $404k ytd. Strategic Land Use Planning and Economic Development projects are still in the planning phase.

Overhead recovery in the Project and Asset Management cost centres relate directly to capital expenditure. Capital project expenditure is 37% of the full year original budget this has contributed to the unfavourable variance.

Net Long Service leave accrued has increased by $225k for the period ended December. Annual Leave entitlements have increased by $135k for the period. The Material Recovery Facility has decreased by $140k, there has also been an increase of $167k to the deferred pensioner rebates as a result of the yearly rating process.

Developer contributions shows a favourable variance of 156% for the first six months of the year. The full year budget will be reviewed in line with future forecasts.

26% of the drainage budget has been expended year to date. Parks capital projects expenditure is well below budget for the year with only 25% incurred. The Ellenbrook DOS North project has expended $1.3m for the period. The Regional Open Space - Whiteman has yet to receive expenditure. The majority of expenditure on the Hazelmere Industrial Area project is expected in the second half of the financial year. The Gnangara Road and Lloyd Street projects are still in the planning phase with construction not expected to commence this financial year.

7.3

Original Budget

2012/13

Revised Budget

2012/13

YTD ORIGINALBUDGET

@ DECEMBER 2012

YTD ACTUAL@ DECEMBER

2012$

VARIANCEVAR

NOTE

% VAR /ORIGINAL BUDGET

YTDOPERATING ACTIVITIESIncome

85,856,260 85,856,260 Rates 85,856,260 83,329,129 (2,527,131) - -6,507,000 6,507,000 Grants and Other Contributions 3,213,153 3,772,718 559,565 F 17%

92,363,260 92,363,260 Total General Purpose Funding 89,069,413 87,101,847 (1,967,566) - -113,410 127,870 Governance 49,715 110,305 60,590 F 122%

1,814,120 1,814,120 Law, Order and Public Safety 1,446,577 1,446,158 (420) - -293,500 293,500 Health 146,750 103,420 (43,330) U (30%)

4,067,930 4,157,690 Education and Welfare 2,073,683 2,312,825 239,142 F 12%50,000 50,000 Housing 25,000 30,851 5,851 - -

16,111,900 16,111,900 Community Amenities 15,115,857 15,219,683 103,826 - -6,200,460 6,220,460 Recreation and Culture 3,104,645 2,839,708 (264,937) - -1,198,960 1,198,960 Transport 825,280 827,025 1,745 - -2,099,200 2,099,200 Economic Services 1,049,600 741,487 (308,113) U (29%)1,607,650 1,617,650 Other Property and Services 803,825 877,919 74,094 - -

125,920,390 126,054,610 Subtotal Income 113,710,345 111,611,227 (2,099,118)

Expenditure(2,021,719) (2,021,069) General Purpose Funding (1,056,425) (972,339) 84,086 - -(9,270,794) (9,558,714) Governance (4,643,552) (4,116,399) 527,153 F 11%(4,899,727) (4,938,477) Law, Order and Public Safety (2,449,581) (2,306,354) 143,226 - -(1,495,488) (1,511,678) Health (745,519) (745,557) (38) - -(8,666,804) (8,635,724) Education and Welfare (4,340,233) (4,081,381) 258,851 - -

(132,599) (132,599) Housing (66,318) (69,142) (2,824) - -(20,215,755) (19,568,005) Community Amenities (9,879,381) (8,650,108) 1,229,273 F 12%(36,056,687) (35,969,287) Recreation and Culture (18,259,568) (17,105,663) 1,153,905 - -(30,755,926) (30,670,836) Transport (15,766,132) (14,774,069) 992,063 - -

(4,969,625) (5,195,485) Economic Services (2,493,776) (1,657,991) 835,785 F 34%(1,613,937) (1,957,177) Other Property and Services (855,308) (2,342,076) (1,486,767) U (174%)

(120,099,061) (120,159,051) Subtotal Expenditure (60,555,793) (56,821,079) 3,734,713

5,821,329 5,895,559 Net Operating Profit / (Loss) 53,154,552 54,790,148 1,635,596

ADD NON CASH ITEMS27,278,600 27,278,600 Depreciation 13,639,300 13,196,574 (442,726) - -

275,802 275,802 Provisions and Other Accruals 137,901 361,978 224,077 F 162%27,554,402 27,554,402 Subtotal Non Cash Items 13,777,201 13,558,552 (218,649)

33,375,731 33,449,961 Net Operating Surplus / (Deficit) 66,931,753 68,348,700 1,416,946

LESS CAPITAL INCOME & EXPENDITURE14,875,450 14,894,550 Capital Grants, Subsidies & Contributions 7,548,003 6,793,608 (754,395) U (10%)

2,662,550 2,662,550 Developers Contributions 1,331,275 3,403,617 2,072,342 F 156%(28,927,870) (29,178,510) Purchase of Plant and Equipment (14,463,935) (13,996,451) 467,484 - -(30,653,030) (30,900,000) Purchase or Construction of Infrastructure (15,326,515) (7,871,385) 7,455,130 F (49%)(42,042,900) (42,521,410) Subtotal Capital Income and Expenditure (20,911,172) (11,670,611) 9,240,560

LESS OTHER NON OPERATING ITEMS(2,594,095) (2,594,095) Loan Principal Repayments (1,350,000) (1,459,247) (109,247) - -

(20,396,090) (20,396,092) Transfer to Reserves (10,498,371) (10,899,742) (401,372) - -(22,990,185) (22,990,187) Subtotal Other Non Operating Items (11,848,371) (12,358,989) (510,618)

OTHER FUNDING SOURCES16,635,834 17,008,364 Transfer from Reserves 6,931,598 6,490,641 (440,956) - -

Other Loans Repayments - - - - -Profit on Impairment of Investments - 65,892 65,892 F 100%

1,735,600 1,735,600 Proceeds from Sale of Assets 867,800 841,295 (26,505) - -75,430 75,430 Self Supporting Loans Repayments 37,715 41,277 3,562 - -

10,285,000 10,285,000 Proceeds from New Loans 3,100,000 3,100,000 - - -New Self Supporting Loan Advance - - - - -

3,094,550 3,094,550 Opening Net Current Assets July 1 B/Fwd 3,094,550 4,161,618 1,067,068 F 34%31,826,414 32,198,944 Subtotal Other Funding Sources 14,031,663 14,700,723 669,061

169,060 137,308 CLOSING NET CURRENT ASSETS YTD 48,203,873 59,019,827 10,815,949

CITY OF SWANSTATEMENT OF FINANCIAL ACTIVITY


7.4

ACTUAL @DECEMBER

2012

ACTUAL @JUNE 2012

ACTUAL @DECEMBER

2011

Current AssetsUnrestricted Cash, Cash Equivalents & Investments 38,107,060 8,834,422 19,967,254Restricted Cash, Cash Equivalents & Investments 49,992,209 44,335,207 37,378,859Rates Debtors Current 27,879,745 3,982,468 26,257,463Trade and Other Receivables 2,348,283 2,013,308 1,721,258Prepayments 483,913 201,386 446,305Inventory 153,987 205,053 239,337

118,965,197 59,571,844 86,010,476Less Current LiabilitiesIncome in Advance (837,512) (2,148,544) (928,583) Accrued Expenses (269,117) (2,068,919) 29,761 Accounts Payable (8,818,561) (6,788,306) (7,622,344)

109,040,006 48,566,075 77,489,310 Less Restricted Cash, Cash Equivalents & InvestmentsReserves: Cash Backed (45,530,508) (41,121,408) (34,712,866) Monies Held In Trust (4,461,699) (3,213,799) (2,665,993) Self Supporting Loan Contributions (27,972) (69,249) (25,542)

Closing Funds 59,019,827 4,161,618 40,084,909

CITY OF SWANNET CURRENT FUNDING POSITION

AS AT 31 DECEMBER 2012

0

20

40

60

80

100

120

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

Mill

ion

$

Liquidity Over Three Years

2010/11

2011/12

2012/13

8.1

1. STATEMENT OF CASH FLOW

Comments

2. RATE SETTING STATEMENT

Comments

Cash flow information provides users of financial reports with a basis to assess the ability of an entity to generatecash and cash equivalents and the needs of the entity to utilize those cash flows. The cash flow statement shallreport flows during the period classified by operating, investing and financing activities. The key objective of a cashflow forecast is to predict the period in which cash inflows and outflows will occur.

Cash and Cash Equivalents at the end of December 2012 are $86.5m compared to $50.7m as at June 2012. TotalOperating Receipts for the period are $88.6m, with $6.8m being received from Capital Grants, Subsidies &Contributions. Payments for Capital Assets and Infrastructure costs ytd amounted to $21.9m.

It is essential that local governments have meaningful and accurate financial information on which to base decisions.The starting point for sound financial management is the preparation of the Rate Setting Statement. This statementis a crucial component of the budget process and shows how much rates are required to pay for the localgovernment's operations. The Rate Setting Statement is a statutory requirement and is unique to local governmentin that it contains values of opening funds and closing funds. Opening funds refer to 'net current assets lessrestricted funds and committed cash and amounts already reflected in the current year budget'. The opening fundforms part of the calculation of the amount of the deficiency to be raised from rates as referred to in s 6.2(2)(C) ofthe Local Government Act.

The City of Swan has levied all rateable properties as per the 2012/2013 Budget. Instalment interest for the year of$371k has been levied (excluding eligible pensioners and seniors). Penalty interest of $295k has been levied up tothe end of December and this process will continue throughout the year. Ex-Gratia rates of $1.6m was received inthe month of October. Interim rates of approximately $2m will be levied throughout the year.

8.0 Other Statutory Reports

8.2

ORIGINALBUDGET2012/13

REVISEDBUDGET2012/13 CASH FLOWS FROM OPERATING ACTIVITIES

ACTUAL YTD@ DECEMBER 2012

2011/2012ACTUAL

Receipts85,493,151 85,493,151 Rates Revenue 60,028,948 78,537,662

936,674 936,674 Service Charges 965,359 917,48326,662,205 26,662,205 Fees & Charges 20,320,673 23,881,436

3,856,000 3,856,000 Interest Earnings 2,406,362 3,894,2177,111,153 7,111,153 Operating Grants, Subsidies & Contributions 1,860,304 12,501,2661,467,610 1,467,610 All other revenue 1,828,754 3,064,9203,618,400 3,618,400 GST Inflow 1,221,661 2,787,940

129,145,193 129,145,193 Total Receipts 88,632,061 125,584,924Payments

(26,339,499) (26,339,499) Materials & Contracts (11,396,403) (27,439,557)(5,120,360) (5,120,360) Utility Charges (2,174,322) (4,457,614)

(57,321,165) (57,321,165) Employee Costs (27,604,417) (50,926,627)(350,680) (350,680) Insurance Payments (1,063,971) (377,073)

(1,471,500) (1,471,500) Interest Payments (780,292) (904,077)(999,639) (999,639) Other Payments (392,384) (888,710)

(3,716,800) (3,716,800) GST Outflow (1,349,242) (2,716,799)(95,319,643) (95,319,643) Total Payments (44,761,032) (87,710,457)

33,825,549 33,825,549 Net cash provided / (used) by operating activities 43,871,030 37,874,467CASH FLOWS FROM INVESTING ACTIVITIES Payments

(28,927,870) (29,178,510) Purchase / Construction of capital assets (13,996,451) (24,427,012)(30,653,030) (30,900,000) Purchase / Development of infrastructure (7,871,385) (21,988,392)

- - Payments for Purchase of Investments - -- - Proceeds from Disposal of Investments 1,005,592 3,458,467

(59,580,900) (60,078,510) (20,862,244) (42,956,937)Receipts

12,875,450 12,875,450 Capital Grants, Subsidies & Contributions 6,793,608 5,688,3542,662,550 2,662,550 Developers Contributions 3,403,617 8,392,0831,735,600 1,735,600 Proceeds from Sale of Fixed Assets 841,295 1,524,685

17,273,600 17,273,600 11,038,520 15,605,122(42,307,300) (42,804,910) Net cash provided / (used) by investing activities (9,823,724) (27,351,815)

CASH FLOWS FROM FINANCING ACTIVITIES10,285,000 10,285,000 Proceeds from Loan Borrowings 3,100,000 14,070,400(2,594,095) (2,594,095) Repayment of Borrowings (1,459,247) (1,131,305)

75,430 75,430 Contributions to Repayments 41,277 58,100ESL Movements - 238,049

120,000 120,000 Other Loan Repayments Received 140,000 200,0007,886,335 7,886,335 Net cash provided / (used) by financing activities 1,822,030 13,435,244(595,416) (1,093,026) Net increase / (decrease) in cash held 35,869,336 23,957,896

46,589,027 46,589,027 Cash at the beginning of the year 50,679,765 26,721,86945,993,611 45,496,000 CASH & CASH EQUIVALENTS AT THE END OF THE YEAR 86,549,105 50,679,765

CITY OF SWANSTATEMENT OF CASH FLOWS


8.3

ORIGINALBUDGET2012/13

REVISEDBUDGET2012/13 OPERATING REVENUE

CURRENT REVISEDBUDGET YTD

@ December 2012

YTD ACTUAL@ December

2012

942,100 942,100 Service Charges 942,100 965,35926,675,096 26,675,100 Fees & Charges 20,590,498 20,320,673

7,123,320 7,223,080 Operating Grants, Subsidies & Contributions 3,353,520 4,008,8483,856,000 3,856,000 Interest Earnings 2,342,485 2,406,3621,467,610 1,502,070 Other Revenue 759,703 580,857

40,064,126 40,198,350 Subtotal - operating revenue 27,988,305 28,282,098OPERATING EXPENSE

(57,623,220) (57,664,030) Employee Costs (28,462,594) (27,353,726)(27,322,501) (27,341,681) Materials & Contracts (14,091,924) (11,859,810)

(5,105,310) (5,105,310) Utility Charges (2,583,215) (2,174,322)(27,278,600) (27,278,600) Depreciation on Non-Current Assets (13,639,300) (13,196,574)

(1,471,500) (1,471,500) Interest Expenses (749,784) (780,292)(360,680) (360,680) Insurance Expenses (620,791) (1,063,971)(937,250) (937,250) Other Expenses (468,174) (392,384)

(120,099,061) (120,159,051) Subtotal - operating expense (60,615,783) (56,821,079)(80,034,935) (79,960,701) Net cash from / (Non) operating activities (32,627,478) (28,538,981)

Non Cash Items275,802 275,802 Movement in Provisions 137,901 361,978

27,278,600 27,278,600 Write Back Depreciation 13,639,300 13,196,57427,554,402 27,554,402 Total 13,777,201 13,558,552

Capital Works(30,653,030) (30,900,000) Purchase / Construction of infrastructure assets (15,450,000) (7,871,385)(28,927,870) (29,178,510) Purchase / Construction of other capital assets (14,589,255) (13,996,451)(59,580,900) (60,078,510) Total Capital Outlays (30,039,255) (21,867,836)

1,735,600 1,735,600 Proceeds from Sale of Fixed Assets 867,800 841,2952,662,550 2,662,550 Developers contributions 1,331,275 3,403,617

14,875,450 14,894,550 Capital Grants, Subsidies & Contributions 7,567,103 6,793,608(40,307,300) (40,785,810) Net Capital Outlays (20,273,077) (10,829,316)

Debt Management10,285,000 10,285,000 Proceeds from New Loans 3,100,000 3,100,000(2,594,095) (2,594,095) Repayment of Loans (1,350,000) (1,459,247)

75,430 75,430 Contributions to Debt 37,715 41,2777,766,335 7,766,335 Total 1,787,715 1,682,030

Other Funding TransactionsImpairment of Investments 65,892

16,635,834 17,008,364 Transfers from reserves 7,086,818 6,490,641(20,396,090) (20,396,092) Transfers to reserves (10,498,371) (10,899,742)

(3,760,256) (3,387,728) Net Movement in Reserves (3,411,553) (4,343,209)

3,094,550 3,094,550 Opening Funds 1 July - Net Current Assets 3,094,550 4,161,618(169,060) (137,308) Less Closing Funds 30 June - Net Current Assets (48,203,619) (59,019,827)2,925,490 2,957,242 Net Current Assets (Less Restricted) (45,109,069) (54,858,209)

85,856,260 85,856,260 SHORTFALL TO BE MADE UP FROM RATES 85,856,260 83,329,129


CITY OF SWANRATE SETTING STATEMENT

Documents

5.3 FINANCIAL MANAGEMENT REPORT - DECEMBER 2012