Cassowary Coast Regional Council Financial Plan 2010/2020 · Relief payments and commitments for the Tully Multi Purpose Centre amounting to $3,979,163 were received in previous years

Cassowary Coast Regional Council

Financial Plan 2010/2020

1. Statutory Requirements Section 131 of the Local Government (Finance, Plans and Reporting)

Regulations 2010 provides that:

(1) A local government must prepare and adopt a financial plan. (2) The financial plan must be consistent with the following –

(a) the long-term financial forecast (b) the long-term community plan (c) the long term asset management plan

(3) For applying the financial plan to a decision about an investment, the local government must consider the whole-of-life costing for the investment.

Section 104 (5) of the Local Government Act 2009 provides that a financial plan is a document that:

(a) outlines the local governments goals, strategies and policies for

managing the local government's finances, during the period covered by the plan, including the following policies :

an investment policy a debt policy a revenue policy; and

(b) covers a period of at least 10 years after the commencement of the plan

2. Current position

The Cassowary Coast Regional Council was formed on 15 March 2008 through the amalgamation of the former Cardwell Shire Council and Johnstone Shire Council. The new Council faces a number of financial challenges including: Ageing infrastructure High levels rates and charges Amalgamation costs Poor assessment of its long-term financial sustainability without significant

financial support for infrastructure replacement renewal.

3. OBJECTIVES

3.1 Implement a responsible capital works program that addresses ageing infrastructure

Current Status Council has adopted in the 2010/2011 budget a record capital works program totalling $85.7 million which addresses key infrastructure concerns including:

o Jubilee Bridge o Innisfail water Treatment Plant o Innisfail Sewerage Treatment plant o Tully Sewerage System Upgrade

The budget also looks forward with a 10 year capital works program outlining a range of community infrastructure totalling $375.4 million.

3.2 Achieve operating surpluses in Council's annual budget

Current Status The Budget projects an operating deficit of $5,854,723. A substantial portion of this amount reflects a timing adjustment. Natural Disaster Relief payments and commitments for the Tully Multi Purpose Centre amounting to $3,979,163 were received in previous years and will be transferred out of Reserve for use this year. With these adjustments made the more accurate financial position is a projected deficit of $1,875,561. This non-cash deficit has resulted largely from a 31% increase in depreciation costs and Council's financial model forecasts that a relatively small (non-cash) deficit is also expected in the following year. A return to surplus will then be achieved and maintained into the future. Council has also taken a number of additional initiatives seeking to increase revenue and reduce expenditure. A review of water and sewerage charges has been undertaken and strategies implemented that seek to implement full cost recovery. In addition, Council strategy of reviewing service delivery is continuing with new initiatives aimed at achieving a reduction in costs which would flow directly to meeting the challenge of maintaining a balanced budget.

3.3 Achieve and maintain a “moderate” financial rating from the

Queensland Treasury Corporation

Current Status The financial rating provided by the Queensland Treasury Corporation for the former Johnstone Shire Council was (distressed) and for the Cardwell Shire Council was the (moderate). A substantial amount of

work has been undertaken seeking to ensure that the new Cassowary Coast Regional Council is able to maintain a “moderate” financial rating. To date an assessment of the Cassowary Coast Regional Council has not been undertaken by the Queensland Treasury Corporation. However, the combined efforts in addressing financial management issues is directed at ensuring a positive rating can be achieved and maintained into the future. The Council will consider requesting the Queensland Treasury Corporation to undertake a financial sustainability review during the 2010/11 financial year.

3.4 Manage the debt within financially sustainable levels

Current Status Whilst the 2010/11 budget will see a substantial increase in borrowings of $17.96 million, the overall level projected going into the future is within Council's capacity to manage. The purpose of the borrowings for the 2010/11 financial year is outlined below:

Cardwell Sewerage $4,599,000 Jubilee Bridge $5,800,000 Innisfail STP $4,193,000 Tully Sewerage $1,509,000 Innisfail WTP $1,859,000

Total $17,960,000

3.5 Achieve unqualified audits

Current Status In 2009/10 Council achieved an unqualified audit through addressing issues particularly relating to asset valuations and systems. New systems in asset management and new resources in asset accounting are being applied to ensure that Council continues to achieve an unqualified audit.

3.6 Maximise funding from external sources and commercial revenue

streams to reduce dependence on rate income

Current Status During 2009/10 Council was successful in obtaining substantial grant financial commitments totalling $49.92 million primarily for addressing ageing infrastructure. This was achieved during a time when the Queensland Government reduced its funding support for local government capital works. The results have substantially improved the capacity of Council to undertake a record capital works program. In addition, Council is continuing to review commercial revenue streams in key business areas through a review of leasing arrangements.

3.7 Achieve equitable rating policies across the region

Current Status Council has reviewed rating structures and sought to develop an equitable general rating system based upon recommendations from a ratepayer’s reference group that was established. A full cost pricing model for water and sewerage is being developed to form the basis for reviewing utility charges.

4. KEY STRATEGIES 4.1 Debt Policy (Appendix A)

To adopt and implement a Debt Policy that ensures effective management of Council debt within financial sustainable levels. Current status As at 30 June 2010 Council debt was $20.1 million and this is expected to increase by $17.96 million during 2010/2011. This increase in loan borrowings is considered necessary to assist in funding the record capital works program of $88.3 million. Future direction The projections over the next 10 years will see Council debt increased to $33.5 million in 2011/2012 with progressive repayments resulting in outstanding borrowings of $17.1 million as at 30 June 2020. It is Council’s plan to maintain its debt servicing costs within the 0% to 10% range in terms of the interest coverage ratio. Council's capital works program over the next 10 years forecasts that total expenditure of $375.4 million and this is considered necessary to maintain infrastructure and provide community facilities.

4.2 Review of Council services

To complete a systematic review of Council services ensuring that the right services are being provided as efficiently as possible and identify potential savings. Current status Over the past 12 months Council has reviewed areas including: Plant and machinery operations Public Liability and Workers Compensation Insurance Library services Information Technology Development Approval Unsealed Roads Management Pool Complexes Corporate Overheads Housing Public conveniences Sale of Council land Waste Management Some savings have been identified, however it is evident that further work is required to realize some of the opportunities. Officer workloads and project timelines are also making progress slower then anticipated.

Future direction In order to progress the service review, a number of additional initiatives are planned for the current financial year, these include:

(a) A review of staffing requirements will be undertaken to identify

opportunities for work practice re-design and/or duplication. After two years operation it is necessary to review staffing needs and identify an optimal staffing compliment to match long term service delivery based on a sustainable financial model.

(b) An initial review of Council corporate overheads has been undertaken. It

is planned that a fully developed corporate overhead model will be developed and apply to Council operations as a means of identifying full cost at an activity level. This can assist when making management decisions and also when determining pricing methodology.

4.3 Investment policy (Appendix B)

To adopt and implement an Investment Policy that strengthens Council’s financial position.

4.4 Revenue policy (Appendix C)

To adopt and implement a Revenue Policy that outlines the principles and processes employed when considering revenue raising issues.

4.5 Asset Management Plan

To develop and adopt an Asset Management Plan in order to ensure the appropriate management of Council infrastructure. Current status Council has engaged an Asset Manager as part of a concerted effort to develop its Asset Management Plan by December 2010. The aim is to better understand the nature and performance of Council non current assets which amount to $813.9 million (written down value) as that 30th of June 2011. Future direction Documenting the condition of the particular assets over time is important in determining the estimated life and calculating depreciation. The Asset Management Plan will be managed within a dedicated asset register designed as an integrated part of the financial accounting system. Performance forecast and asset replacement will be achieved as the data is gathered and processed. In addition, important accounting information will be generated and form the basis for audited valuations.

4.6 Strategic Financial Action Plan

To continue the implementation of the Strategic Financial Action Plan. Current status Council adopted a Strategic Financial Action Plan aimed at addressing many of the core strategic issues around amalgamation and the challenges of a new Local Government. Good progress has been made in implementing the Action Plan with quarterly updates provided to Council. Future direction The Strategic Financial Action Plan shall be updated to more clearly reflect on the next stage of Council development.

4.7 Long-term Financial Forecast (Appendix D)

To adopt and implement the Long-term Financial Forecast as developed within the QTC model. Current status Council utilises the QTC model as the tool to undertake its long term financial forecast. As a financial tool and a management concept, the model has gained acceptance and the challenge is to maintain accurate information. Future direction The Long-term Financial Forecast through the QTC model will become part of the assessment process as Council considers making decisions regarding investment and infrastructure projects.

Appendix A Debt Policy

CASSOWARY COAST REGIONAL COUNCIL

POLICY

Debt

Policy Number: ____ 1. Authority Local Government (Finance, Plans and Reporting) Regulation 2010 S133. 2. Objective To establish the Policy framework for Council to borrow money to fund budgeted capital expenditure and will state:

(a) the new borrowings planned for the current financial year and the next nine (9) financial years; and

(b) the time over which the local government plans to repay existing and new borrowings.

3. Scope This policy applies to all forms of borrowing undertaken by Council. 4. Policy statement

a. Council will only borrow in circumstances where there are insufficient funds from revenue, grants, subsidies or specific reserves primarily established to fund capital works;

b. Borrowing will be undertaken in accordance with Queensland Treasury Corporation guidelines and the Statutory Bodies Financial Arrangements Act 1982;

c. Borrowing will be for a period which is less than or equal to the estimated useful life of the related asset(s) however in the case of road, water and sewerage infrastructure with useful lives ranging from 20 to 60 years the term will be limited to between 10 and 20 years unless longer terms are recommended by the Queensland Treasury Corporation;

d. Detailed capital works and assets acquisition programs for the next 5 years together with the 10 year financial forecast will provide the basis for determination of funding options;

e. Council will use the Queensland Treasury Corporation for the management of its long term debt facilities;

f. Borrowing planned for the next 10 financial years based on estimated new capital expenditure provided to Queensland Treasury Corporation:

Current debt $20.1M to be repaid over various periods. Proposed new debt

Year and purpose Amount Term Year ended 30 June 2011 17,960,000 20 years Year ended 30 June 2012 4,408,000 20 years Year ended 30 June 2013 Nil Year ended 30 June 2014 Nil Year ended 30 June 2015 Nil Year ended 30 June 2016 Nil Year ended 30 June 2017 Nil Year ended 30 June 2018 Nil Year ended 30 June 2019 Nil Year ended 30 June 2020 Nil Year ended 30 June 2021 Nil

Date of adoption: 27 July 2010 Resolution number: B0069 Policy review: 1 year or as determined by Council

Appendix B Investment Policy


POLICY

Investment Policy Policy Number 1. Authority for Investment Statutory Bodies Financial Arrangements (SBFA) Act 1982 Statutory Bodies Financial Arrangements (SBFA) Regulation 2007 Local Government (Finance, Plans and Reporting) Regulation 2010 Responsible Officer: Chief Executive Officer Related delegations: Manager of Finance 2. Policy Objective To set guidelines and boundaries for the investment of Cassowary Coast Regional Council surplus cash balances which meet the requirements of the Statutory Bodies Financial Arrangements (SBFA) Act 1982 and its regulation, support Council’s investment and risk philosophy and provide a sequential process to be followed in undertaking investment activities. 3. Investment Risk Philosophy Council maintains a conservative and risk averse investment philosophy for its surplus cash investments. 4. Investment Philosophy, Objective and Strategy As the custodian of public monies Council chooses to secure it’s capital base but take the opportunity to produce revenue from the asset as far as possible within established risk averse constraints. At a minimum the investment should offset the devaluing effects of inflation. This policy outlines the strategy to achieve that intent.

5. Scope This policy applies to the investment of all cash holdings of the Cassowary Coast Regional Council. 6. Definitions Surplus Cash Balances For the purposes of this policy, surplus cash balances are Council’s cash holdings available for investment at any one time after consideration of the amount and timing of Council’s cash flow needs. Surplus cash balances do not include Council’s trust account balances which are to be invested with QTC Capital Guaranteed Cash Fund. Authorised Investments Authorised investments are as permitted under the SBFA Act 1982, and in accordance with the Category 1 Investment Powers applicable to Cassowary Coast Regional Council under the SBFA Regulation 2007. Prescribed Investment Arrangements Investments listed at Schedule 6 of the SBFA regulation 2007. 7. Policy Statement In investing Council’s surplus cash balances regard must be had to the following points. 7.1 Prudent person standard Officers responsible for investing local government funds must act with a duty of care, skill, prudence and diligence that a prudent person would exercise when investing and managing their own funds. Conflicts of interest must be recorded and disclosed to the Chief Executive Officer.

7.2 Range of investments Cassowary Coast Regional Council has Category 1 investment power under the SBFA Act 1982. A category 1 investor is permitted to invest at call or for a fixed period of no more than one year in the following ways:

Deposits with a financial institution; Investment arrangements accepted, guaranteed or issued by or for the

Commonwealth or a State or a financial institution; Other investment arrangements secured by investment arrangements

accepted, guaranteed or issued by or for the Commonwealth or a State or a financial institution;

Investment arrangements, managed or offered by QIC or QTC, prescribed under a regulation of the SBFA Act 1982;

An investment arrangement with a rating prescribed under a regulation of the SBFA Act 1982;

Other investment arrangements prescribed under a regulation of the SBFA Act 1982.

All investments must be denominated in Australian Dollars and undertaken in Australia. The QIC cash fund, QTC Capital Guaranteed Cash Fund, QTC Debt Offset Facility, QTC Fixed Rate Deposit (up to 12 months) and the QTC Working Capital Facility are prescribed investment arrangements. Standard and Poor’s (Australia) Pty Ltd ratings of A-1+, A-1, AAm or AAAm are prescribed ratings. 7.3 Assessment of surplus cash balance

Surplus cash balances must be determined in accordance with Council’s finance procedure.

7.4 Credit risk guidelines

The minimum and maximum invested surplus cash within any line of credit risk must conform with the following Table A..

Long-term

credit rating# Short-term

credit rating# Minimum %

of total investments

Maximum % of total

investments

Maximum Term for Fixed Term Investments

Only QTC Capital Guaranteed Cash Fund 30 100 1yr

AAA A-1+ 0 50 1yr AA A-1+ 0 40 1yr

A+ to A A-1 0 30 6 months BBB+ to BBB A-2 0 20 6 months

BBB- A-3 0 5 6 months Unrated ** Unrated ** 0 $500,000 30 days

# Most recently available credit ratings from Standard & Poor's. ** Most building societies and credit unions are unrated financial institutions.

Table A: Credit Risk Guidelines In addition: QTC recommends that caution should be exercised with respect to investing

funds with unrated institutions. Cassowary Coast Regional Council may choose to invest with an unrated facility to encourage that facility to remain in the Cassowary Coast region. The decision to invest in an unrated facility must be balanced off against the credit worthiness of the institution;

the credit worthiness of an unrated financial institution should be assessed with regard to the most recent audited financial statements and Capital Adequacy Disclosure of that institution;

before rollover of existing investments or undertaking new investments the credit rating of the investment institutions used or intended to be used by Council should be assessed;

in the event of published economic downturn or instability the credit rating of the investment institutions used by Council should be reassessed and remedial action taken if necessary;

the website of the Queensland Treasury Corporation may be used to assist with financial institution credit ratings.

7.5 Quotations and fair value

At least 3 verbal quotations must be obtained and noted from authorised institutions when investing surplus cash however this requirement does not apply to investing within the prescribed investment arrangements.

In general, financial institutions with lower credit ratings have a higher credit risk and therefore, the interest rate received on the investment should be higher reflecting the higher level of risk.

The quotes received should be considered relative to the assessed risk of the financial institution. The fair value calculator provided by QTC may be used to assist with this evaluation.

7.6 Term to maturity The term to maturity of the surplus cash investment must be determined taking into consideration Councils future cash flow needs, credit risk guidelines and the prevailing outlook regarding interest rates. The term cannot exceed 1 year for any investment. 7.7 Reporting requirements Reporting procedures must be established to ensure the investments are being reviewed and overseen regularly.

Date of adoption: 27 July 2010 Minute Number: B0069 Policy Review: 2 years or as determined by Council

Appendix C Revenue Policy


Revenue Policy 2010/2011 Policy Number: 2.3.4 1. Authority Local Government Act S518 2. Objective The purpose of this policy is to set out the principles used by Council in 2010/2011. The making and levying of rates and charges Exercising its powers to grant rebates and concessions Recovery of unpaid amounts of rates and charges 3. Scope This policy applies to the Cassowary Coast Regional Council. 4. Policy statement 4.1 The Making and Levying of Rates and Charges In general Council will be guided by the principle of user pays in the making of rates and charges, particularly in water, sewerage and cleansing, so as to minimise the impact of rating on the efficiency of the local economy. Council will be guided by the following principles in making rates and charges: transparency in the making of rates and charges; having in place a rating regime that is simple and inexpensive to administer; flexibility to take account of changes in the local economy. equitable distribution of the cost of its operations between different groups of

ratepayers; application of user pays such that where applicable. In levying rates Council will apply the principles of: making clear what is the Council’s and each ratepayers’ responsibility to the

rating system;

making the levying system simple and inexpensive to administer; timing the levy of rates to ensure a sustainable cash flow for operations of the

Council and to spread the burden to ratepayers over the financial year; equity through flexible payment arrangements for ratepayers with a lower

capacity to pay. General rate revenue provides whole of community services not funded through subsidies, grants, contributions or donations received from other entities or not provided by other levies or charges. Council will distribute the rates burden by the use of differential rating categories with banding applied where it considers relevant. Council will consider levying special and separate rates and charges when appropriate, to recover the costs associated with a particular service, project or facility that provides direct or additional benefit to the ratepayer or class of ratepayer.

4.2 Concessions for rates and charges In considering the application of concessions, Council will be guided by the principles of: equity by having regard to the different levels of capacity to pay within the local

community, the same treatment for ratepayers with similar circumstances; transparency by making clear the requirements necessary to receive

concessions, and flexibility to allow Council to respond to local economic issues. consideration may be given by Council to granting a class concession in the

event all or part of the local government area is declared a natural disaster area by the State Government.

4.3 Principles used for the recovery of rates and charges Council will exercise its rate recovery powers in order to reduce the overall rate burden on ratepayers. It will be guided by the principles of: transparency by making clear the obligations of ratepayers and the processes

used by Council in assisting them meet their financial obligations; making the processes used to recover outstanding rates and charges clear,

simple to administer and cost effective; capacity to pay in determining appropriate arrangements for different sectors of

the community; equity by having regard to providing the same treatment for ratepayers with

similar circumstances; and flexibility by responding where necessary to changes in the local economy.

Date of adoption: 27 July 2010 Resolution Number: B0069 Policy Review: this policy will remain in force until 30 June 2011 or as otherwise determined by Council.

4.7 Long-term Financial Forecast (Appendix D) Estimated Actual Budget Budget Budget Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Year ended 30-Jun-10 30-Jun-11 30-Jun-12 30-Jun-13 30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20$ $ $ $ $ $ $ $ $ $ $

Current assets

Cash assets and cash equivalents 39,807,463 31,091,891 30,902,186 32,856,738 39,884,714 38,274,027 39,794,160 39,002,751 46,325,999 47,371,127 45,037,011

Inventories 1,010,401 1,010,401 1,010,401 1,010,401 1,010,401 1,010,401 1,010,401 1,010,401 1,010,401 1,010,401 1,010,401Receivables 7,379,380 7,297,136 7,248,787 7,735,748 8,220,374 8,700,797 9,188,694 9,728,325 10,252,371 10,805,122 10,805,122Tax assets 519,821 504,821 509,821 499,821 519,821 534,821 514,821 504,821 499,821 504,821 504,821Prepayments 418,655 413,655 418,655 413,655 418,655 413,655 418,655 413,655 418,655 413,655 413,655

Total current assets 49,135,720 40,317,904 40,089,850 42,516,363 50,053,965 48,933,701 50,926,731 50,659,953 58,507,247 60,105,126 57,771,010

Non-current assetsProperty, plant and equipment 740,376,788 810,781,812 851,500,053 885,813,168 914,722,280 954,762,551 992,039,073 1,032,407,367 1,066,413,459 1,106,886,933 1,116,824,286Intangible assets 57,848 53,848 49,848 45,848 41,848 37,848 33,848 30,384 30,384 30,384 30,384Capital works in progress 2,823,493 2,823,493 2,823,493 2,823,493 2,823,493 2,823,493 2,823,493 2,823,493 2,823,493 2,823,493 2,823,493

Total non-current assets 743,258,129 813,659,153 854,373,394 888,682,509 917,587,621 957,623,892 994,896,414 1,035,261,244 1,069,267,336 1,109,740,810 1,119,678,163

Total assets 792,393,849 853,977,057 894,463,244 931,198,872 967,641,586 1,006,557,593 1,045,823,145 1,085,921,197 1,127,774,583 1,169,845,936 1,177,449,173

Current liabilitiesTrade and other payables 3,199,173 4,225,075 3,038,268 3,151,356 3,271,631 3,374,746 3,514,241 3,679,679 3,863,736 4,056,999 4,056,999Borrowings 2,774,730 2,902,357 3,218,989 3,317,231 2,437,098 1,618,349 1,653,933 1,608,616 1,632,524 1,516,349 1,500,000Employee payables/provisions 3,791,055 3,791,055 3,828,967 3,867,257 3,907,537 3,949,915 3,994,493 4,041,380 4,090,735 4,142,681 4,142,681

Total current liabilities 9,764,958 10,918,487 10,086,224 10,335,844 9,616,266 8,943,010 9,162,667 9,329,675 9,586,995 9,716,029 9,699,680

Non-current liabilities

Borrowings 17,329,313 32,386,956 33,575,967 30,258,736 27,821,638 26,203,289 24,549,356 22,940,740 21,308,216 19,791,867 17,106,739

Employee payables/provisions 1,955,175 1,955,175 1,955,175 1,955,175 1,955,175 1,955,175 1,955,175 1,955,175 1,955,175 1,955,175 1,955,175Other provisions 728,811 728,811 728,811 728,811 728,811 728,811 728,811 728,811 728,811 728,811 728,811

Total non-current liabilities 20,013,299 35,070,942 36,259,953 32,942,722 30,505,624 28,887,275 27,233,342 25,624,726 23,992,202 22,475,853 19,790,725

Total liabilities 29,778,257 45,989,429 46,346,177 43,278,566 40,121,890 37,830,285 36,396,009 34,954,401 33,579,197 32,191,882 29,490,405

Net community assets 762,615,592 807,987,628 848,117,067 887,920,306 927,519,696 968,727,308 1,009,427,136 1,050,966,796 1,094,195,386 1,137,654,054 1,147,958,768

Community equityAsset revaluation reserve 242,096,666 244,846,666 260,346,666 291,336,666 322,326,666 354,316,666 387,306,666 420,296,666 453,286,666 487,276,666 487,276,666Other reserves 26,943,262 17,823,899 17,081,899 17,204,899 17,400,899 17,677,899 18,043,899 18,509,899 19,084,899 19,780,899 19,780,899Retained surplus (deficiency) 493,575,664 545,317,063 570,688,502 579,378,741 587,792,131 596,732,743 604,076,571 612,160,231 621,823,821 630,596,489 640,901,203

Total community equity 762,615,592 807,987,628 848,117,067 887,920,306 927,519,696 968,727,308 1,009,427,136 1,050,966,796 1,094,195,386 1,137,654,054 1,147,958,768

Estimated Actual Budget Budget Budget Forecast Forecast Forecast Forecast Forecast Forecast ForecastYear ended 30-Jun-10 30-Jun-11 30-Jun-12 30-Jun-13 30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20

$ $ $ $ $ $ $ $ $ $ $

Cash flows from operating activities:Receipts from customers 64,474,827 63,497,830 63,043,756 66,740,370 70,954,338 75,133,642 79,366,226 84,004,148 88,573,943 93,348,908 98,795,705Payment to suppliers and employees (45,633,636) (50,817,149) (45,273,250) (45,786,047) (47,686,838) (49,533,042) (51,639,705) (54,146,793) (56,844,317) (59,687,088) (63,021,588)Payments for land held as inventory - (546,000) - - - - - - - -Proceeds from sale of land held as inventory - 546,000 - - - - - - - -Interest received 1,865,086 1,860,001 1,913,633 2,102,677 2,368,445 2,540,414 2,566,699 2,616,749 2,824,068 3,082,621 3,267,578

Interest on loans (1,379,901) (1,275,836) (2,229,981) (2,307,071) (2,089,323) (1,897,342) (1,763,483) (1,657,519) (1,552,127) (1,447,891) (1,731,222)

Finance costs (1,379,901) (1,275,836) (2,229,981) (2,307,071) (2,089,323) (1,897,342) (1,763,483) (1,657,519) (1,552,127) (1,447,891) (1,731,222)

Other - 15,000 (5,000) 10,000 (20,000) (15,000) 20,000 10,000 5,000 (5,000) -

Net cash inflow (outflow) from operating activities 19,326,376 13,279,846 17,449,158 20,759,929 23,526,622 26,228,672 28,549,737 30,826,585 33,006,567 35,291,550 37,310,473

Cash flows from investing activities:Payments for property, plant and equipment (13,787,167) (85,662,447) (44,090,240) (23,954,591) (20,414,912) (32,329,537) (29,660,991) (34,004,219) (29,071,325) (36,221,429) (40,000,000)Subsidies, donations and contributions for new capital expenditur 2,943,849 47,568,009 23,676,494 6,878,876 5,446,198 5,038,273 2,629,974 1,793,312 2,986,800 1,544,000 1,544,000Proceeds from sale of property, plant and equipment - - 354,240 564,327 826,299 869,703 559,747 1,123,580 840,643 825,643 140,000Other 1,810,684 913,750 915,000 925,000 961,000 1,019,300 1,060,015 1,123,266 1,169,179 1,237,888 1,232,888

Net cash inflow (outflow) from investing activities (9,032,634) (37,180,688) (19,144,506) (15,586,388) (13,181,415) (25,402,261) (25,411,255) (29,964,061) (24,074,703) (32,613,898) (37,083,112)

Cash flows from financing activitiesProceeds from borrowings - 17,960,000 4,408,000 - - - - - - -Repayment of borrowings (365,221) (2,774,730) (2,902,357) (3,218,989) (3,317,231) (2,437,098) (1,618,349) (1,653,933) (1,608,616) (1,632,524) (1,516,349)

Net cash inflow (outflow) from financing activities (365,221) 15,185,270 1,505,643 (3,218,989) (3,317,231) (2,437,098) (1,618,349) (1,653,933) (1,608,616) (1,632,524) (1,516,349)

Net increase (decrease) in cash held 9,928,521 (8,715,572) (189,705) 1,954,552 7,027,976 (1,610,687) 1,520,133 (791,409) 7,323,248 1,045,128 (1,288,988)

Cash at beginning of reporting period 29,878,942 39,807,463 31,091,891 30,902,186 32,856,738 39,884,714 38,274,027 39,794,160 39,002,751 46,325,999 46,325,999

Cash at end of reporting period 39,807,463 31,091,891 30,902,186 32,856,738 39,884,714 38,274,027 39,794,160 39,002,751 46,325,999 47,371,127 45,037,011

Estimated Actual Budget Budget Budget Forecast Forecast Forecast Forecast Forecast Forecast ForecastYear ended 30-Jun-10 30-Jun-11 30-Jun-12 30-Jun-13 30-Jun-14 30-Jun-15 30-Jun-16 30-Jun-17 30-Jun-18 30-Jun-19 30-Jun-20

$ $ $ $ $ $ $ $ $ $ $

Revenue

Recurrent revenue:General rates 30,203,583 31,976,842 34,023,360 36,200,855 38,517,710 40,597,666 42,789,940 45,100,597 47,536,029 50,102,974 52,808,535Separate rates 1,318,913 1,416,600 2,465,418 2,623,797 2,792,350 2,971,730 3,162,634 3,365,802 3,582,021 3,812,130 4,017,985Levies 651,969 699,604 734,584 771,313 809,879 850,373 892,892 937,536 984,413 1,033,634 1,085,316Water 7,744,657 8,310,928 8,842,827 9,408,768 10,010,930 10,651,629 11,333,333 12,058,667 12,709,835 13,396,166 14,119,559Sewerage 5,343,747 5,948,462 6,448,133 7,289,776 7,902,117 8,565,895 9,285,430 10,065,406 10,608,938 11,181,821 11,785,639Waste management 5,530,297 5,831,120 6,204,312 6,601,388 7,023,876 7,473,405 7,951,702 8,460,611 9,002,090 9,578,224 10,095,448

Total rates and utility charge revenue 50,793,166 54,183,556 58,718,634 62,895,897 67,056,862 71,110,698 75,415,931 79,988,619 84,423,326 89,104,949 93,912,482

less: Discounts (3,801,989) (4,107,479) (4,353,532) (4,636,830) (4,938,305) (5,208,857) (5,683,508) (5,994,515) (6,322,358) (6,667,945) (7,032,682)less: Pensioner remissions (623,582) (656,400) (662,964) (669,594) (676,290) (683,052) (689,883) (696,782) (703,750) (710,787) (717,895)

Net rates and utility charges 46,367,595 49,419,677 53,702,138 57,589,473 61,442,267 65,218,789 69,042,540 73,297,322 77,397,218 81,726,217 (7,750,576)

Fees and charges 3,927,957 2,857,500 2,991,803 3,132,417 3,279,641 3,443,623 3,615,804 3,796,594 3,986,424 4,185,745 4,395,032Sales - contract and recoverable works 818,411 928,500 968,147 1,009,487 1,052,592 1,097,538 1,144,402 1,193,268 1,244,221 1,297,349 1,358,324

Grants, subsidies, contributions and donations 12,526,741 8,848,665 3,917,658 4,023,603 4,133,047 4,246,128 4,362,991 4,483,789 4,608,680 4,737,830 4,870,489

Interest received 1,865,086 1,860,001 1,913,633 2,102,677 2,368,445 2,540,414 2,566,699 2,616,749 2,824,068 3,082,621 3,267,578Rental income 489,623 788,774 814,567 841,203 868,711 912,146 957,753 1,005,641 1,055,923 1,108,719 1,164,155

Other recurrent income - 572,470 601,094 631,148 662,706 695,841 730,633 767,165 805,523 845,799 845,799

Total recurrent revenue 65,995,413 65,275,587 64,909,040 69,330,008 73,807,409 78,154,479 82,420,822 87,160,528 91,922,057 96,984,280 102,063,283

Capital revenue:Grants, subsidies, contributions and donations 2,943,849 47,568,009 23,676,494 6,878,876 5,446,198 5,038,273 2,629,974 1,793,312 2,986,800 1,544,000 1,544,000Developer contributions 1,810,684 908,750 920,000 920,000 966,000 1,014,300 1,065,015 1,118,266 1,174,179 1,232,888 1,232,888

Total capital revenue 4,754,533 48,476,759 24,596,494 7,798,876 6,412,198 6,052,573 3,694,989 2,911,578 4,160,979 2,776,888 2,776,888

Capital income:Gain on sale of property, plant and equipment - - 95,175 117,616 177,949 164,779 141,745 163,916 153,802 138,802 140,000

Total capital income - - 95,175 117,616 177,949 164,779 141,745 163,916 153,802 138,802 140,000

Total capital revenue and capital income 4,754,533 48,476,759 24,691,669 7,916,492 6,590,147 6,217,352 3,836,734 3,075,494 4,314,781 2,915,690 2,916,888

Total income 70,749,946 113,752,346 89,600,709 77,246,500 80,397,556 84,371,831 86,257,556 90,236,022 96,236,838 99,899,970 104,980,171

Expenses

Recurrent expenses:

Employee benefits 20,000,000 21,000,000 21,945,000 22,932,525 23,964,489 25,042,890 26,169,821 27,497,462 28,872,459 30,316,205 31,983,596

Materials and services 23,187,883 30,486,593 22,038,590 22,858,125 23,729,862 24,476,068 25,485,922 26,684,715 28,018,951 29,419,898 31,037,992

Depreciation and amortisation 18,361,434 18,011,423 18,616,934 20,188,765 21,851,450 23,578,342 24,960,467 25,669,725 27,368,392 29,051,114 29,922,647

Finance costs 1,545,982 1,632,294 2,370,746 2,453,846 2,242,365 2,056,919 1,931,518 1,834,460 1,738,446 1,644,085 1,731,222

Total recurrent expenses 63,095,299 71,130,310 64,971,270 68,433,261 71,788,166 75,154,219 78,547,728 81,686,362 85,998,248 90,431,302 94,675,458

Total expenses 63,095,299 71,130,310 64,971,270 68,433,261 71,788,166 75,154,219 78,547,728 81,686,362 85,998,248 90,431,302 94,675,458

Result from ordinary activities 7,654,647 42,622,036 24,629,439 8,813,239 8,609,390 9,217,612 7,709,828 8,549,660 10,238,590 9,468,668 10,304,714

Other non-recurrent items - - - - - - - - - -

Net result attributable to Council 7,654,647 42,622,036 24,629,439 8,813,239 8,609,390 9,217,612 7,709,828 8,549,660 10,238,590 9,468,668 10,304,714

OPERATING RESULT

Operating revenue 65,995,413 65,275,587 64,909,040 69,330,008 73,807,409 78,154,479 82,420,822 87,160,528 91,922,057 96,984,280 102,063,283

Operating expense 63,095,299 71,130,310 64,971,270 68,433,261 71,788,166 75,154,219 78,547,728 81,686,362 85,998,248 90,431,302 94,675,458

Operating result 2,900,114 (5,854,723) (62,230) 896,747 2,019,243 3,000,260 3,873,094 5,474,166 5,923,809 6,552,978 7,387,826

Total Retained surplusAsset revaluation

reserve Other reserves$ $ $

Opening Balance 01.07.09 754,960,945 487,778,384 242,096,666 25,085,895

Net result for the period to 30.06.10 Estimated 7,654,647 7,654,647Transfers to reserves - (5,720,187) 5,720,187Transfers from reserves - 3,862,820 (3,862,820)Asset revaluation adjustment - -

Estimated Actual Balance at 30 Jun 2010 762,615,592 493,575,664 242,096,666 26,943,262

Net result for the period 42,622,036 42,622,036Transfers to reserves - 695,413 (695,413)Transfers from reserves - 8,423,950 (8,423,950)Asset revaluation adjustment 2,750,000 2,750,000

Budgeted Balance at 30 Jun 2011 807,987,628 545,317,063 244,846,666 17,823,899

Net result for the period 24,629,439 24,629,439Transfers to reserves - (4,304,638) 4,304,638Transfers from reserves - 5,046,638 (5,046,638)Asset revaluation adjustment 15,500,000 15,500,000





Forecast Balance at 30 Jun 2014 927,519,696 587,792,131 322,326,666 17,400,899


Forecast Balance at 30 Jun 2015 968,727,308 596,732,743 354,316,666 17,677,899


Forecast Balance at 30 Jun 2016 1,009,427,136 604,076,571 387,306,666 18,043,899







Net result for the period 10,304,714 10,304,714Transfers to reserves - -Transfers from reserves - -Asset revaluation adjustment - -


$

Estimated Actual Budget Budget Budget Forecast Forecast Forecast Forecast Forecast Forecast Forecast

Year ended 30/06/2010 30/06/2011 30/06/2012 30/06/2013 30/06/2014 30/06/2015 30/06/2016 30/06/2017 30/06/2018 30/06/2019 30/06/2020

1 Working Capital Ratio

(Current Assets / Current Liabilities) 1:5.0318 1:3.6926 1:3.9747 1:4.1135 1:5.2051 1:5.4717 1:5.5581 1:5.43 1:6.1028 1:6.1862 1:5.956

Target Ratio 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00

Does Working Capital Ratio meet or exceed Target Ratio?

Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes

2 Operating Surplus Ratio

(Net Operating Surplus / Total Operating Revenue) (%)

4.4% (9.0)% (0.1)% 1.3% 2.7% 3.8% 4.7% 6.3% 6.4% 6.8% 7.2%

Target Ratio Lower Limit (%) 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%Target Ratio Upper Limit (%) 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0% 15.0%

Does Operating Surplus Ratio fall between the target band?

Yes No No Yes Yes Yes Yes Yes Yes Yes Yes

3 Net Financial Asset / Liability Ratio

((Total Liabilities - Current Assets) / Total Operating Revenue)

(29.3)% 8.7% 9.6% 1.1% (13.5)% (14.2)% (17.6)% (18.0)% (27.1)% (28.8)% (27.7)%

Target Ratio Upper Limit (%) 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0% 60.0%

Does Net Financial Asset / Liability Ratio fall below the upper limit?


4 Interest Coverage Ratio

(Net Interest Expense / Total Operating Revenue) (%)

(0.5)% (0.3)% 0.7% 0.5% (0.2)% (0.6)% (0.8)% (0.9)% (1.2)% (1.5)% (1.5)%


Does Interest Coverage Ratio fall between the target band?

Yes Yes Yes Yes Yes Yes Yes Yes No No No

5 Asset Sustainability Ratio

(Capital Expenditure on the Replacement of Assets (renewals) / Depreciation Expense)

64.4% 431.3% 92.2% 67.4% 59.6% 67.4% 67.8% 90.2% 41.0% 110.0% 134.0%

Target Ratio Lower Limit (%) 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0% 90.0%

Does Asset Sustainability Ratio fall above the lower limit?

No Yes Yes No No No No Yes No Yes Yes

6 Asset Consumption Ratio

(Written Down Value of Infrastructure Assets / Gross Current Replacement Cost of Infrastructure Assets) (%)

70.0% 69.6% 65.6% 65.4% 62.7% 60.5% 58.4% 56.5% 54.6% 53.0% 52.3%

Written Down Value of Infrastructure Assets 716,171,223 783,871,051 809,453,897 813,830,288 813,524,491 824,120,536 831,762,447 843,291,379 849,279,647 861,600,408 871,537,761

Gross Current Replacement Cost of Infrastructure Assets

1,041,248,261 1,129,660,708 1,189,510,013 1,244,901,315 1,296,954,577 1,361,979,038 1,425,048,031 1,493,001,914 1,555,750,080 1,626,648,350 1,666,508,350


Does Asset Consumption Ratio fall above the lower limit?


Documents

Cassowary Coast Regional Council Financial Plan 2010/2020 · Relief payments and commitments for the Tully Multi Purpose Centre amounting to $3,979,163 were received in previous years