Water, Waste and Energy Committee - City of Gold …...789 Adopted Report of the Water, Waste and Energy Committee Meeting held on Wednesday 20 May 2020 at 10 am City of Gold Coast

789 Adopted Report

of the

Water, Waste and Energy Committee Meeting

held on

Wednesday 20 May 2020 at

10 am

City of Gold Coast Council Chambers 135 Bundall Road Surfers Paradise

789th Council Meeting 27 May 2020 2 Water, Waste and Energy Meeting 20 May 2020 Adopted Report

Index 789 Adopted Report

Water, Waste and Energy Committee Meeting Wednesday 20 May 2020

Item Direct. File Page Subject

1 WW CM787/790/06/01(P1) 4 Water, Waste and Energy Committee Forward Planning Schedule

2 WW WSS1125/1227/02(P1) 7 Water and Waste Annual Register of Council

3 WW FN334/252/20(P60) 9 Water and Sewerage Services Financial Performance as at 30 April 2020

4 WW FN334/252/20(P60) 36 Waste Services Financial Performance as at 30 April 2020

General Business

5 WW LG115/1377/01/2020(P1) 52 Water, Waste and Energy Committee Meetings Start Time

KEY: OCEO - Office of the Chief Executive Officer OCOO Office of the Chief Operating Officer EPE - Economy, Planning and Environment OS - Organisational Services LC - Lifestyle and Community TI - Transport and Infrastructure WW - Water and Waste

789th Council Meeting 27 May 2020 3 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ADOPTION BY COUNCIL 27 MAY 2020 RESOLUTION G20.0527.016 moved Cr O’Neill seconded Cr Tozer That the Report of the Water, Waste and Energy Committee Meeting of Wednesday 20 May 2020, covered by Recommendations numbered WWE20.0520.001 to WWE20.0520.005, be adopted with the exception of Recommendation Number WWE20.0520.003 which was specifically resolved.

CARRIED

ATTENDANCE Cr G O’Neill (Chairperson) Cr M Hammel Cr P J Young Cr R Bayldon-Lumsden Cr R La Castra Cr G Tozer Cr D McDonald Cr D Gates (Visitor) Cr W Owen-Jones (Visitor) Cr D Taylor (Visitor) Mr P Heaton Director Water and Waste Mr D Dickson Chief Executive Officer Ms K O’Brien Manager Business Performance Mr C Owen Manager Customer Engagement Mr R Packer Manager Strategy and Innovation APOLOGY / LEAVE OF ABSENCE Nil PRESENTATIONS Nil

789th Council Meeting 27 May 2020 4 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 1 WATER AND WASTE WATER, WASTE AND ENERGY COMMITTEE ACTION LIST AND FORWARD PLANNING SCHEDULE CM787/788/06/01(P1)

Proposed Date Subject Action Officers Action

June 2020

LG314/411/19/032 Resource Recovery Services – contract extension

Jodie Maloney/ Rod Packer

June 2020

LG314/690/18/025 Asset Lifecycle Delivery Services – contract extension

Jodie Maloney/ Rod Packer

June 2020

Review of Kerbside Bin Service Area Sam Atkinson/ Rod Packer

That a review of the kerbside bin service area particularly focusing on unserviced rural residential lots outside of the declared waste collection area be completed and brought back to a future committee meeting.

June 2020

Waste and Recycling Centres Operational Improvements (operations and access) Council Resolution: G19.0730.023

Mairead Lenihan / Rod Packer

4 A comprehensive communication plan will be developed and brought back to Committee for endorsement outlining the impact of the State Government Waste Levy on the costs and operations of WRCs, and the potential benefits to the City from improved recycling, environmental and operational outcomes.

5 That a further non-confidential report regarding the capital and regulatory options for the Helensvale, Currumbin and Jacobs Well WRCs be brought directly to Council.

June 2020 Utility Service Provision Transformation Program – Local Government Platform Stage Three

Karen O’Brien 5 That Council note that a further report will be presented to Council once the Statement of Work, Price and Program costs have been finalised.

789th Council Meeting 27 May 2020 5 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 1 (Continued) WATER AND WASTE COMMITTEE ACTION LIST AND FORWARD PLANNING SCHEDULE CM787/790/06/01(P1)

Proposed Date Subject Action Officers Action

June 2020 Customer Hardship and Assistance Programs Recommendation: WW18.0823.005

Chris Owen That the Director Water and Waste investigate, along with the rest of Council, the potential framework for improving Customer Hardship and Assistance Programs.

June 2020

Water and Sewerage Leakage Remission Policy and Smart Metering Recommendation: WW19.0429.006

Chris Owen/ Craig Wainwright

That Council notes a revised Water and Sewerage Leakage Remission Policy will be brought to Council for consideration prior to the end of the 2019 calendar year.

July 2020 Revisit option of Suntown Green Waste pad

Mairead Lenihan / Kathy Baker Rod Packer

July 2020

Implementing a city wide organics service

Mairead Lenihan/Toni Lee/ Rod Packer

August 2020 Commercial Food Waste Service Mairead Lenihan Rod Packer

789th Council Meeting 27 May 2020 6 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 1 (Continued) WATER AND WASTE COMMITTEE ACTION LIST AND FORWARD PLANNING SCHEDULE CM787/790/06/01(P1) RECOMMENDATION It is recommended that Council resolve as follows: That the Action List and Forward Planning Schedule for Water, Waste and Energy Committee be noted. Authorised by: Paul Heaton iSPOT#75297798 Director Water and Waste COMMITTEE RECOMMENDATION WWE20.0520.001 moved Cr Tozer seconded Cr La Castra That the Action List and Forward Planning Schedule for Water, Waste and Energy Committee be noted.

CARRIED

789th Council Meeting 27 May 2020 7 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 2 WATER AND WASTE WATER AND WASTE ANNUAL REGISTER OF COUNCIL DIRECTIONS WSS1125/1227/02(P1)

STANDING AGENDA ITEM: Committee Recommendation: WS14.0430.007 / Council Resolution: G14.0506.025 “That Gold Coast Water establish a standing item on the Water Services Committee Agenda which is a register (and thus an agreed record) of any “directions” that Council gives Gold Coast Water for reporting in the annual operations report.” That is: - a resolution that goes against or substantially modifies the recommendations of the Officers and;

- has a (or potential to have a) material/commercial impact on the business unit. Council Meeting

Council Resolution

Description 2018-19 final

2019-20

That the adopted infrastructure charges are adjusted so that there is a 100% discount for family accommodation dwellings of 100m2 GFA or less for any approvals issued on or after 1 July 2014 through the remainder of this Council’s term. Permanent changes to Adopted Infrastructure Charges Resolution (AICR):

1. Existing building: no infrastructure charges levied for any change in non-residential land use (ongoing).

2. Expansion: for non-residential land uses, up to an additional 50 per cent of GFA or a maximum of 500m², whichever is the lower, will be exempt from infrastructure charges (ongoing).

3. Family accommodation: no charge for family accommodation dwellings of 100m² GFA or less. Family accommodation dwellings greater than 100m² GFA will be charged at 40 per cent of the relevant AICR charge (ongoing).

771 G19.0326.022 4. Not-for-profit community groups: rebates for the water and wastewater networks will be restored, following the return of responsibility to the City (ongoing). Recommendation: WW19.0321.002

$76,473.78

789th Council Meeting 27 May 2020 8 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 2 (Continued) WATER AND WASTE ANNUAL REGISTER OF COUNCIL DIRECTIONS WSS1125/1227/02(P1) RECOMMENDATION It is recommended that Council resolve as follows: That the Water and Waste Annual Register of Council Directions be noted. Authorised by: Paul Heaton iSPOT#43956542 Director Water and Waste COMMITTEE RECOMMENDATION WWE20.0520.002 moved Cr Tozer seconded Cr La Castra That the Water and Waste Annual Register of Council Directions be noted.

CARRIED

789th Council Meeting 27 May 2020 9 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Attachment 1: Detailed Income Statement Attachment 2: Concealed Leakage >$10,000 CONFIDENTIAL 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT This report presents the Water, Waste and Energy Committee with the Water and Sewerage Services 2019-20 financial performance as at 30 April 2020. As the March 2020 budget review was not considered by Special Budget Committee until 11 May, comparisons are against Council’s December 2019 budget review. 4 PREVIOUS RESOLUTIONS Not Applicable. 5 DISCUSSION 5.1 High Level Financial Summary

Table 1 – Water and Sewerage Services - Year to Date Financial Summary

Table 1 presents the financial position for Water and Sewerage Services as at 30 April as 1.4% or $3.24 million below forecast. This is predominantly the result of flow-dependent expenditure being $5.16 million (2.9%) above forecast.

Actual Revised Budget Var Var

Initial Budget

Revised Budget

30 April 2020 ($M) ($M) ($M) % ($M) ($M)Operating Revenue 449.33 448.70 0.63 0.1% 539.29 536.06Flow -Dependent Expenditure 181.79 176.63 (5.16) (2.9%) 210.00 210.10Operating Revenue net of Flow Dependent Expenditure 267.54 272.07 (4.53) (1.7%) 329.29 325.96Gross Margin 0.63 0.64 0.65 0.65

Total Controllable Operating Expenditure 96.80 97.89 1.09 1.1% 116.94 118.69

Loss on Sale of Assets 1.98 3.33 1.35 40.6% 5.00 5.00

Net Profit before Capital Revenu 168.76 170.85 (2.09) (1.2%) 207.35 202.27

Total Capital Revenue 57.18 58.33 (1.15) (2.0%) 70.00 70.00

EBITDA 225.94 229.18 (3.24) (1.4%) 277.35 272.27

Year to Date Full YearWater & Sewerage Services Financial Summary

789th Council Meeting 27 May 2020 10 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) This is partially offset by: § Loss on sale of assets being $1.35 million (40.6%) below forecast, and § Controllable operating expenditure being $1.09 million (1.1%) below forecast. Major variances will be discussed in the following paragraphs with a detailed Income Statement contained in Attachment 3.1 to the report. 5.2 Operating Revenue ($0.63 million Favourable) 5.2.1 Rates Revenue Financial Summary ($0.28 million Favourable)

Table 2 – Water and Sewer Rates Revenue Forecast

Utility Rates revenue is $0.28 million (0.1%) above forecast, with access charges being $2.13 million (1.0%) below forecast and usage charges revenue being $2.41 million (1.1%) above forecast. Access Charges § Year-to-date water access charges revenue recorded is $0.12 million (0.2%) below

forecast. Total water service connections at 30 April 2020 are 268,620, an increase 0.8% in connections since 30 June 2019.

Year-to-date sewerage access charges revenue recorded is $2.01 million (1.3%) below forecast. Total sewerage service connections at 30 April 2020 are 252,790 representing an increase of 0.9% in connections since 30 June 2019 compared to a forecast increase in connections of 1.7%.

Water & Sewerage Rates Revenue

Actual Revised Budget Var Var

Initial Budget

Revised Budget

30 April 2020 ($M) ($M) ($M) % ($M) ($M)Access Charges

Water 57.63 57.75 (0.12) (0.2%) 69.39 69.39Sew age 150.94 152.95 (2.01) (1.3%) 183.84 183.84

Total Access Charges 208.57 210.70 (2.13) (1.0%) 253.23 253.23

Usage Charges RevenueWater - gross 196.47 194.19 2.28 1.2% 230.14 230.64Sew age - gross 33.40 33.69 (0.29) (0.8%) 40.01 40.01Non Drinking Water 1.04 0.98 0.06 6.2% 1.17 1.17Less: Concealed Leakage (1.74) (2.10) 0.36 17.3% (2.50) (2.50)

Total Usage Charges Revenue 229.17 226.76 2.41 1.1% 268.82 269.32

Total Rates Revenue 437.74 437.46 0.28 0.1% 522.05 522.55

Full YearYear to Date

789th Council Meeting 27 May 2020 11 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Usage Charges Revenue Total Usage Charges revenue is recorded at $2.41 million (1.1%) above forecast as at 30 April 2020. § Year-to-date water usage revenue is above forecast by $2.28 million or 1.2%. The

increased usage revenue is due to a 3.0% increase in demand for the year, as outlined in Section 5.3 below. However, this is offset by $2.25 million recognised in the 30 June 2019 accounts in error. The overstatement impacts on both water and sewage usage revenue and is the result of: o Doubling up of revenue recognised for meters read on 29 March 2019 due to

meter readers accelerating the reading cycle ($1.22 million impact). o Recognition of revenue from meters that were replaced during the 2018-19

financial year ($1.03 million impact). Controls have been put in place to ensure that reports used in the end of year accrual process are accurate and are a true reflection of consumption not yet billed to customers. The introduction of rolling billing will also assist in this process as more bills will be issued prior to the end of the financial year, reducing the accrual amount.

§ Year-to-date sewage usage revenue is below forecast by $0.29 million or 0.8%. This decrease is due to the $0.28 million overstatement recognised in the 30 June accounts as outlined above.

An increase in revenue to account for increased demand is proposed as part of the March budget review. This increase was based on events occurring pre COVID-19 and may potentially be overstated. 5.2.2 Other Operating Revenue ($0.35 million Favourable) Other operating revenue is $0.35 million (3.2%) above forecast. This is due to $0.19 million contribution towards prior year expenditure on the Southport-Burleigh Road water main conflict which was not included in the forecast. As a result of economic impacts on customers as a result of COVID-19, it is anticipated that the level of overdue rates will increase as will the number of customers entering into payment arrangements. The City has investigated a number of options to assist customers during this crisis, which will be addressed in the March budget review and 2020-21 budget process.

789th Council Meeting 27 May 2020 12 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.3 Flow Dependent Expenditure ($5.16 million Unfavourable) Bulk Water Purchases ($4.93 million Unfavourable) Bulk water purchases for the month of April 2020 were below forecast by 156 ML (3.1%), however they are 1,591 ML (3.0%) above forecast on a year to date basis. The decrease in April is due to the impact of COVID-19. With the Government enforced shut downs, there was: § Decreased consumption from the tourism sector, with the additional impact of the

April school holidays. § Decreased consumption from the non-residential sectors with business closures. § Increased consumption from the residential sectors as more people working from

home and increased hand washing. Water and Waste are continually monitoring the impact of COVID-19 on demand and the flow on impact to revenue and will provide updates in future financial reports. Rainfall for April was 23% of the long term average, with 27.0 mm recorded at the Gold Coast Seaway. Year to date rainfall is 131% of the long term average with 1,338 mm recorded at the Gold Coast Seaway, predominantly over the December to March period. Graph 1 compares water supplied versus the demand forecast adopted for revised budget. Rainfall recorded for the month is also incorporated.

Graph 1 - Analysis of Water Supplied versus Demand Forecast

789th Council Meeting 27 May 2020 13 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Electricity ($0.10 million Unfavourable) Electricity expenses are $0.10 million or 1.0% higher than forecast. Wet weather conditions over summer have resulted in higher electricity usage at the sewage treatment plants and sewer pump stations. Biosolids Disposal ($0.24 million Unfavourable) Biosolids Disposal costs are $0.24 million or 6.2% lower than forecast. Wet weather conditions over summer resulted in higher tonnages of biosolids being removed from the sewage treatment plants. With the wet weather conditions sludge drying beds at the Coombabah treatment plant have not been fully utilised, resulting in increased moisture content and a higher mass of biosolids requiring removal from site. Chemicals ($0.12 million Favourable) Chemical costs are $0.12 million or 3.8% lower than forecast. Main driver for this favourable variance is the cost of magnesium hydroxide within the sewer network with a new contract being entered into with a lower price. 5.4 Controllable Expenditure ($1.09 million Favourable) At a whole of business unit level, Controllable Expenses are $1.09 million (1.1%) below forecast. Major contributing factors to this variance are discussed below. Employee Expenses ($0.62 million Favourable) Employee expenses are $0.62 million or 1.4% below forecast due to higher than expected vacancies. Appropriate adjustments to budget have been proposed as part of the March 2020 budget review. Materials and Services ($0.32 million Favourable) Material and services are $0.32 million or 1.3% below forecast due to: § Utility network tools project delays due to contractor resourcing issues. § Condition assessment water main expenditure has been costed against consultants. § Environmental water testing and monitoring program activity reduced following the

outcome of review and lower requirements for reactive testing. § Lower training costs, with the ability to hold contact courses impacted by COVID19. This is partially offset by above forecast sewage treatment plant maintenance expenditure and higher maintenance costs within the water and sewer reticulation systems due to significant weather events in February.

Appropriate adjustments to budgets have been proposed as part of the March 2020 budget review.

789th Council Meeting 27 May 2020 14 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Fleet and Plant ($0.72 million Unfavourable) Fleet and plant is $0.72 million or 10.1% unfavourable. Expenditure is above forecast due to the significant weather event which impacted on operations, which required hiring of additional equipment through the City’s Fleet and Plant branch. The main areas impacted were water and sewer reticulation maintenance, Coombabah sewage treatment plant (STP) and the sewer pump station maintenance. Sewage Treatment Charge ($0.79 million Favourable) Sewage treatment charge is $0.79 million or 20.9% favourable. An allowance of $1.0 million was provided for exceeding effluent quality and volume limits for treatment of sewage at the Beenleigh STP as part of the Service Level Agreement with Logan City Council. To date over limit charges incurred have been very minimal. A reduction of $0.75 million is proposed as part of the March 2020 budget review. Consultants ($0.18 million Favourable) Consultants are $0.18 million or 6.7% below forecast mainly due to the timing of expenditure within operational projects including: § Detailed Planning from Water and Sewerage Services Infrastructure Plan 2019-20 § Sewage Treatment Plant Planning Program § Environmental Data Management System. Appropriate adjustments have been proposed as part of the March budget review to adjust project budgets. 5.5 Loss on Asset Disposal ($1.35 million Favourable) Processing of assets for 2019-20 financial year commenced in October 2019. Forecast has been phased evenly over the second half of the financial year, as it was not anticipated disposals would occur until then. Historically there is a significant increase in asset processing and recognition of asset disposals in the last quarter of the financial year for inclusion in statutory accounts. It is anticipated that this will occur again this financial year. 5.6 Capital Revenue ($0.04 million Favourable) Developer (cash) contributions are $3.09 million or 9.3% above forecast. Developer contributions are dependent on the level of development activity across the City which fluctuates both across financial years and during the year. Contributed assets are $4.24 million or 17.0% below forecast. Processing of assets commenced in October following completion of the 2018-19 financial year and processing will increase over the second half of the financial year. Similar to developer contributions, contributed assets are dependent on the level of development activity across the City which fluctuates over the year. As part of the March budget review, it is proposed to increase developer (cash) contributions by $5 million and reduce contributed assets by $5 million.

789th Council Meeting 27 May 2020 15 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.7 Community Returns Income Tax ($4.24 million Unfavourable) Water and Sewerage Services is a commercialised business unit subject to the Local Government Taxation Equivalents Regime (LGTER). As part of this regime, a Pay As You Go (PAYG) Instalment Activity Statement must be prepared and submitted on a monthly basis, with payment of a PAYG instalment to Council. The current instalment rate as issued by our tax assessors is 6.86%. The instalment rate is applied to total revenue generated to derive the amount of PAYG tax payable each month. At year end, a final taxation return will be prepared, based upon taxable income and utilising the company taxation rate of 30% to calculate total taxation payable for the year. Relevant adjustments will be made to record this annual tax liability to Council. As part of the March budget review, it is proposed to increase the Income tax payable to the City by $2.75 million. 5.8 Capital Program 5.8.1 Capital Expenditure

The initial and September revised Water and Sewerage Services capital program consisted of 80 projects totalling $147.91 million. The revised budget following the December budget review is $129.21 million comprising of 84 projects.

Table 3 – Capital Expenditure ($‘000’s)

Year to date capital expenditure of $84.55 million represents a variance of 15% below the year to date forecast of $99.36 million. Product Variances Sewerage The sewerage program is $11.27 million (14%) below forecast. The following projects are the main contributors to the variance: § Long Term Recycled Water Release Stage 1: $3.92 million below forecast. This

project is below forecast as a result of slower than expected progress on the Broadwater crossing. A budget adjustment is proposed as part of the March 2020 budget review.

Product

Actual Expenditure

($M)

RevisedForecast

($M)

Variance($M)

Variance%

Revised Budget Q2

($M)

Revised Budget Q1

($M)

InitialBudget

($M)

Sewerage 67.68 78.95 11.27 14% 103.99 125.36 130.30

Water 16.85 20.39 3.55 17% 25.13 22.47 17.53

Corporate 0.03 0.02 (0.00) (15%) 0.08 0.08 0.08

Total Capital 84.55 99.36 14.81 15% 129.21 147.91 147.91

Water and Sewerage Services Capital Expenditureas at 30 April 2020

Year to Date Full Year

789th Council Meeting 27 May 2020 16 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6)

§ SPS Wet Well Relining 2019-20: $0.92 million below forecast. This project is below

forecast due to delays in design for SPS B49 and condition assessment inspections on four pump stations. A budget adjustment is proposed as part of the March 2020 budget review.

§ STP Process Tank Renewals 2018-2022: $0.81 million below forecast. This project is below forecast due to delays in procuring materials for the clarifiers. Construction works are expected to commence in May 2020 and it is anticipated budget will be fully expended this financial year.

§ SPS CO13 Vacuum Upgrade: $0.75 million below forecast. This project is below forecast due to wet weather delays impacting the completion of the 3D survey. This delay is not expected to significantly impact the completion of the project as scheduled in 2020-21. A budget adjustment is proposed as part of the March 2020 budget review.

§ Long Term Recycled Water Release Elanora: $0.74 million below forecast. This project is below forecast due to an extension of the tender closing date following requests from tenderers experiencing difficulties during the COVID-19 crisis. The project schedule has been revised as a result of this delay. A budget reduction is proposed as part of the March 2020 budget review.

§ Sewer Pressure Main Renewals 2020-2021: $0.62 million below forecast. This project is below forecast due to a conflict with construction works and approvals related to the Recycled Water Network Expansion project. Works on a sewer main at Santa Barbara Road have been deferred to 2020-21 to be constructed concurrently with the recycled water main in the same corridor. A budget reduction is proposed as part of the March 2020 budget review.

§ Coombabah STP Cogeneration Unit - $0.55 million below forecast. This project is below forecast due to a revised construction program from the contractor related to delayed delivery times for equipment from overseas. Some construction works have been deferred to 2020-21. A budget reduction is proposed as part of the March 2020 budget review.

Water The water program is $3.55 million (17%) below forecast. The following projects are the main contributors to the variance. § Reservoir Valve Renewals 2018-19: $0.74 million below forecast. This project is

below forecast as a result of the rescheduling of works due to latent conditions, additional scope, change in design requirements, complications with failed shutdowns and longer than expected lead time of fabricated fittings. Construction works will carry over to 2020-21 and a budget adjustment is proposed as part of the March 2020 budget review.

§ Smart Metering Solution: $0.59 million below forecast. This project is below forecast due to supply chain issues with respect to materials from overseas. Some construction works have been deferred to 2020-21. A budget reduction is proposed as part of the March 2020 budget review.

789th Council Meeting 27 May 2020 17 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) § Water main Stapylton Jacobs Well Road: $0.50 million below forecast. This project

is below forecast due to pending environmental approvals. Some construction works have been deferred to 2020-21. A budget reduction is proposed as part of the March 2020 budget review.

§ Water Analyser System Improvements 2019-20: $0.47 million below forecast. This project is below forecast due to delays in finalisation of the contract for the purchase and maintenance of the new analysers. This is not anticipated to impact the completion of this project by 30 June 2020.

5.8.2 Status Update – Major Investments Long Term Recycled Water Release Stage 1 Project scope and budget The City’s existing excess recycled water release system at the Seaway is nearing capacity. The Long Term Recycled Water Release Plan aims to provide a city wide solution to cater for excess recycled water to support continued growth and economic development of the City. Stage 1 consists of infrastructure upgrades that increase capacity and allow incremental staging of the ultimate solution to cater for both average and peak recycled water release for the whole of the City. The December revised budget for 2019-20 is $40.4 million, however a budget reduction of $3.5 million is proposed as part of the March budget review. Achievements for April § Tunnelling from Quota Park towards South Stradbroke Island 80% complete. § Continued preparations for the Nerang River crossing pipe pull. § Completed commissioning of new pumps and motors at Coombabah and Benowa. § Completed exit shaft on South Stradbroke Island. Major issues § The Broadwater tunnel has encountered further issues with cracked pipes, resulting in

stalling in the tunnel whilst remedial measures are being implemented (propping, internal banding, reconfiguration of jacks etc).

Financial Performance

Forecast ($) 33,588,309 Budget ($) 96,637,386

Expenditure ($) 29,665,445 ITD Expenditure ($) 73,902,831

Variance ($) 3,922,864 Remaining ($) 22,734,555

Variance (%) 12% Remaining (%) 24%

Year to Date Whole Project

789th Council Meeting 27 May 2020 18 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Pimpama to Coombabah Sewage Treatment Plant Release Main Project scope and budget This project includes the design and construction of the first stage of pipeline augmentation works required to transfer excess recycled water from Pimpama Sewage Treatment Plant to Coombabah Sewage Treatment Plant. The proposed infrastructure includes a new pipeline from Coombabah Creek to the storage lagoons at the Coombabah Sewage Treatment Plant. The December revised budget for 2019-20 is $3.22 million. Achievements for April § Trunk main constructed and pressure test successful. Major issues § Connection works have been postponed until early May due to capacity issues with the

Pimpama Sewage Treatment Plant storage lagoon following adverse weather events in March. In order to facilitate the shutdown of the existing trunk main, the lagoon needs to be pumped down from full capacity. Connection works should recommence in May 2020.


Forecast ($) 3,162,535 Budget ($) 27,855,510


Variance ($) 338,764 Remaining ($) 23,396,229


Whole ProjectYear to Date

789th Council Meeting 27 May 2020 19 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Sandy Creek Industrial Precinct Sewer Project scope and budget This project consists of the construction of approximately 4km of new gravity mains, two new Sewerage Pump Stations at Greyhound Road and Burnside Road, and approximately 1km of new rising mains located in the Stapylton Catchment Area as identified through the Local Government Infrastructure Planning (LGIP) process. The December revised budget for 2019-20 is $5.3 million. Achievements for April § Works continue on pipeline construction, with completion anticipated by the end of the

financial year. § Drill designs have been approved in principle, and are expected to commence in the

coming weeks. § Switchboard factory acceptance testing has been scheduled. § First pour of the sewerage pump station walls at DA11 and DA12 has been completed.

Major issues § Contractor management has been challenging, particularly around contractor requested

variations. Financial Performance

Forecast ($) 3,769,959 Budget ($) 8,721,120


Variance ($) (66,857) Remaining ($) 3,563,184

Variance (%) (2%) Remaining (%) 41%


789th Council Meeting 27 May 2020 20 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Coombabah Sewage Treatment Plant Stage 6 Upgrade Project scope and budget This project involves the upgrade of Coombabah Sewage Treatment Plant to provide additional treatment capacity to cater for growth and to meet licence requirements. The preferred Stage 6 option involves approximately 120,000 Equivalent Person (EP) augmentation utilising existing biological nutrient removal technology. This includes a new Preliminary Treatment Facility (PTF), new bioreactor and associated clarifiers, disinfection system, waste sludge thickening and dewatering and associated ancillary and support facilities. The December revised budget for 2019-20 is $4.88 million. Achievements for April § Technical and commercial evaluation of short listed tenderers is 60% complete. § Construction contract award is anticipated to occur in June 2020.

Major issues No major issues. Financial Performance

Forecast ($) 3,168,501 Budget ($) 144,964,997


Variance ($) (149,345) Remaining ($) 140,315,404

Variance (%) (5%) Remaining (%) 97%


789th Council Meeting 27 May 2020 21 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6)

Pimpama STP Stage 2 Works Project scope and budget This project involves the construction of the Pimpama Sewage Treatment Plant Stage 2 works to accommodate for an additional 71,300 EP growth in the Pimpama Catchment and diverted Stapylton Catchment area as identified through the LGIP process. The major elements of the recommended Stage 2 upgrade includes; inlet works expansion, full phosphorus and nitrogen removal (BNR) activated sludge process, sludge handling upgrade, tertiary treatment to maintain existing water quality and recycled water pump station upgrade. The December revised budget for 2019-20 is $2.32 million. Achievements for April § Preliminary design and technical specifications 95% complete. § Noise and odour investigations are 95% complete. Major issues No major issues. Financial Performance

Forecast ($) 1,963,027 Budget ($) 91,043,767




Whole ProjectYear to Date

789th Council Meeting 27 May 2020 22 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Elanora STP Digester A and Sludge Heater Refurbishment Project scope and budget This project includes the refurbishment of digester A and replacement of gas pipework, railings, roof seal and digester heaters at Elanora Sewage Treatment Plant (STP) including cleaning and opportunistic replacement of internal mechanical, electrical and civil components. The December revised budget for 2019-20 is $3.63 million. Achievements for April § Commenced preparation for application of epoxy coating. § Commenced electrical works including installation of cabling for pumps and fabrication

and installation of new switchboard. § Replacement FRP digester roof has been fabricated and delivered to site for assembly

and installation in early May. Major issues No major issues. Financial Performance

Forecast ($) 2,851,321 Budget ($) 5,734,915





789th Council Meeting 27 May 2020 23 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Long Term Recycled Water Release Elanora Project scope and budget The City’s existing excess recycled water release system at the Seaway is nearing capacity. The Long Term Recycled Water Release Plan aims to provide a city wide solution to cater for excess recycled water to support continued growth and economic development of the City. The Elanora component consists of pump station and pipeline upgrades from the Elanora Sewage Treatment Plant. The December revised budget for 2019-20 is $3.0 million, however a budget reduction of $1.95 million is proposed as part of the March budget review. Achievements for April § Tender period closed and tender evaluation commenced.

Major issues § An extension of the tender period has affected the project schedule, resulting in an eight

week delay. Contract award is now anticipated by the end of May 2020. Financial Performance

Forecast ($) 1,458,393 Budget ($) 11,360,599

Expenditure ($) 713,528 ITD Expenditure ($) 974,127




789th Council Meeting 27 May 2020 24 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.9 Other Financial Activities 5.9.1 Community Service Obligations

In accordance with Sections 23 and 24 of the Local Government Regulation 2012:

…The cost of carrying out community service obligations, less any revenue received from performing the obligations must be treated as revenue for the significant business activity. {Section 23} (and) …A community service obligation is an obligation the local government imposes on a business entity to do something that is not in the commercial interests of the business entity to do.

5.9.1.1 Community Service Obligations – Catchment Management Unit Catchment Management Unit protects human health in recreational waters by monitoring the state of the City’s water environments and providing rapid reporting of the health status of primary contact recreation areas. It supports the maintenance of legislated environmental values in the City’s water environments through catchment planning and the implementation of appropriate environmental restoration actions. From 2019-20 financial year, these activities are funded by a combination of a Community Service Obligation (CSO) and the Water and Sewerage Services’ general operating budget. At adoption of Council’s initial budget, the total value of the CSO is $2,116,993, comprising “Catchment Activities” and “SLA for Corporate Services”, as shown in Table 4. No change to this value is currently anticipated. The remaining activities outlined in Table 4 are those funded from the Water and Sewerage Services’ general operating budget. CSO Catchment Management activities are progressing in line with expectations. Water and waste funded activities are below forecast with a reduction of $0.27 million proposed in the March budget review.

Table 4 – Catchment Management Unit ($‘000’s)

Catchment Management Unit - Operational

Initial Budget ($)

Revised Budget ($)

YTD Actuals ($)

Spent (%)

Catchment Activities 1,581 1,581 1,313 83.1%SLA for Corporate Services 536 536 447 83.3%Subtotal CSO Funded 2,117 2,117 1,760 83.1%CMU Operations 1,366 1,523 1,033 67.8%Healthy Waterways Contribution 321 321 289 90.2%WaterSafe Monitoring & Investigations 150 130 14 10.4%Laboratory Testing Services 588 588 203 34.6%Community Action Support 193 193 172 89.0%Water Cycle Implementation 107 22 19 87.9%Subtotal Water and Sewerage Funded 2,725 2,777 1,731 62.3%Total 4,842 4,894 3,491 71.3%

789th Council Meeting 27 May 2020 25 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.9.1.2 Community Service Obligations – Energy Management Unit On 1 February 2020, the Energy Management Unit was transferred to the Water and Waste Directorate to combine all of the City’s Essential Services in the one Directorate. The Unit is responsible for the management of electricity across Council, which includes connections, billing and delivery of renewable energy capital works at City facilities.

The following table is a high level overview of the Energy Management Unit budget and performance to date.

Table 5 – Energy Management Unit ($‘000’s)

Energy management operating expenditure and revenue are continuing in line with year to date budget. A review of electricity charges and recoupment is being performed as a result of reduced demand across the City from actions taken due to the COVID-19 initiatives. Adjustment to forecasts is proposed as part of the March budget review. Funding for the Capital Program is sourced from the City’s Investment Vehicle and the increase in the revised budget is due to carry over funding drawn down and unspent from prior years. A major review of the capital program is being undertaken, taking into account progress to date and the impact of COVID-19 on the ability to progress the capital program. Due to challenges in the funding model, no changes to the capital program were proposed as part of the March 2020 budget review. A review of the Unit’s deliverables and cost recovery framework methodology is current underway. Any changes to the methodology will be implemented in the 2020-21 financial year.

Energy Management Unit - Operational Initial Budget ($) Revised Budget ($)

YTD Budget ($)

YTD Actuals ($)

Spent (%)

Electricity Charges 0 15,613 13,011 12,961 83.0%Electricity Recoupment 0 (18,753) (15,627) (15,439) 82.3%Labour 678 678 573 573 84.6%Administration 177 399 332 297 74.5%Total 854 (2,063) (1,711) (1,608) 77.9%

Energy Management Unit - Capital Initial Budget ($) Revised Budget ($)

YTD Budget ($)

YTD Actuals ($)

Spent (%)

60024 - Street Lighting Pilot Project, Surfers P 0 476 396 102 21.5%60025 - Solar Gener Project, GC Aquatic Centre 0 0 0 0 0.0%60026 - Energy Gen Infrast Comm Venues 258 640 533 154 24.1%60027 - Energy Gen Infrast Sport Clubs 0 160 133 5 3.1%60028 - Energy Gen Infrast GC Aquatic Centre 0 349 291 0 0.0%60029 - Energy Gen Infrast Aquatic Centres 657 1,083 902 9 0.8%60030 - Energy Gen Infrast Libraries 948 1,345 1,121 15 1.1%60031 - Energy Gen Infrast Amenities 400 910 758 3 0.3%60032 - Energy Gen Infrast OS Admin Sites 285 1,268 1,057 193 15.2%60033 - Energy Gen Infrast Depots 285 891 743 4 0.4%60086 - Energy Gen GC Sports & Leisure Carrara 0 700 583 1 0.1%60000 - Robina Library 0 0 0 7 0.0%60034 - Energy Gen Infrast LED 110 319 265 42 13.2%60035 - Energy Gen Infrast GC Aquatic Heat Pump 0 104 86 173 166.8%60082 - Lighting Replacement - Miami Pool 0 0 0 0 0.0%60085 - Energy Mitigation - Batteries 400 400 333 123 30.6%60089 - GC Sports & Leisure Ctr - AC EMU 0 40 33 49 122.0%60090 - Nerang Aquatic Ctr Renew pool heat pumps 0 180 150 6 3.1%60091 - Miami AC Renew pool heat pumps 0 320 267 0 0.0%60092 - Palm Beach AC Renew pool heat pumps 0 210 175 0 0.2%Total Expenditure 3,344 9,393 7,827 886 9.4%Capital Funding (1,081) (5,945) (5,945) 0 0.0%Net Capital Expenditure 2,263 3,447 1,882 886 25.7%

Total Energy Management Unit 3,117 1,385 171 (721) (52.1%)

789th Council Meeting 27 May 2020 26 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Commencing in 2020-21 financial year, a separate financial report will be tabled outlining the operations and performance of the Unit. 5.9.1.3 Community Service Obligations – Infrastructure Charges Waivers Detailed information is not currently available with regard to the permanent discounting of infrastructure charges for “existing buildings”, “expansion” and “family accommodation” development applications. For the 2019-20 year to date, no foregone revenue in the form of waived infrastructure charges under the City’s Non-Profit Community Group Rebate system has been identified. 5.9.2 Water and Sewage Leakage Relief The objective of this policy is to ensure uniform and transparent application of relief from water consumption charges and sewage volumetric charges in cases of proven concealed leakage. Revenue Services administers the Policy on behalf of the City. Table 5 provides summary level detail of the leakage remissions approved to 30 April 2020. A total of 316 approvals were processed during the month of April, with remissions totalling $0.26 million paid. For the year to date, there are twenty remissions greater than $10,000 which total $0.33 million or 19.1% of total remissions. Details of those remissions are contained within [Confidential] Attachment 3.2. The annual budget for concealed leakage remissions is $2.50 million. Remissions paid to April 2020 are 17.3% below forecast, and is mainly attributable to the introduction of rolling billing which commenced on 1 July 2019. With the change in billing approach, customers are receiving their bill shortly after their meter is read which is prompting the early identification and rectification of leaks on their property. While the number of approvals is consistent with prior years, the value of the remission is significantly reduced. A reduction of $0.50 million has been proposed in the March budget review.

Table 5 – Summary of Concealed Leakage Remissions

MonthNumber

of Approvals

Total Leak Volume (kl)

Average Loss per

Account (kl)

Water Remission

Value ($'000)

Sewer Remission

Value ($'000)

Total Remission

Value ($'000)

Jul-19 210 71,965 343 119 29 149 Aug-19 345 136,128 395 245 61 306 Sep-19 273 109,869 402 176 47 223 Oct-19 184 69,380 377 121 30 152 Nov-19 148 49,094 332 88 25 114 Dec-19 111 34,961 315 59 40 99 Jan-20 159 50,759 319 88 52 140 Feb-20 178 39,104 220 73 25 99 Mar-20 223 83,705 375 134 64 198 Apr-20 316 121,536 385 249 15 264 Total 2,147 766,501 357 1,353 389 1,742 Budget provided for year 1,875 625 2,500 Proportion of budget approved to date 72.2% 62.2% 69.7%

789th Council Meeting 27 May 2020 27 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Table 6 illustrates that 87.3% of applications approved to date relate to residential customers, representing 54.7% of the value of remissions provided.

Table 6 – Summary of Concealed Leakage Remissions by Customer Type and Product

Graph 2, depicts the value of remissions provided over the past six years, compared to the value provided to date for 2019-20. Resourcing issues significantly impacted the processing of remission applications in 2015-16, which is the main driver for the very low value paid in that year. The 2019-20 year represents the first year of rolling billing. The policy is due for renewal and will be presented to Council this year.

Graph 2 – Concealed Leakage Remissions Paid

Customer Type Total Leak

# % Volume (kl)

Water ($'000)

Sewer ($'000)

Total ($'000) %

Residential Customers Owner Occupied premises 1,383 64.4% 341,006 767 767 44.0% Rental/Tourist Rental premises 491 22.9% 135,736 186 186 10.7%Total Residential Customers 1,874 87.3% 476,742 952 - 952 54.7%Non-Residential Customers 273 12.7% 289,739 401 389 789 45.3%

2,147 100.0% 766,481 1,353 389 1,742 100.0%Proportion of Total Remissions 77.7% 22.3%

Approvals Value of Remissions Provided

789th Council Meeting 27 May 2020 28 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.10 Future Budgetary Trends Water and Waste recently completed its March Quarterly Business Performance review, which incorporates a full review of revenue and expenditure for the business. The following material movements are proposed as part of the March budget review: § Increase of $9.4 million in usage charge revenue as a result of higher water usage

across the City. § Increase of $7.8 million in bulk water purchases as a result of higher forecast demand

across the City and deferral of water restrictions until the 2020-21 financial year. § Decrease in controllable expenses of $2.56 million following review of operations and

the impact of COVID19. § Increase of $5.0 million in developer contributions revenue as a result of increased

revenue received from Developers. § Decrease of $5.0 million in contributed assets revenue as a result of reduced assets

being contributed to the City. § Increase of $4.5 million in depreciation expense to align to increased asset base. § Decrease in Contribution to Whole of City Projects of $8.0 million due to funding of

LGP Stage 3 being managed within the Water and Sewerage Services budget. § Increase of $2.8 million in income tax equivalents paid to the City as a result of

changes to expenditure and revenue processed through the year. A Budget Review report was tabled at the Special Budget Committee providing detailed explanation of movements. The impact of COVID-19 on Water and Sewerage Service financial position is continually being monitored. Any significant impacts have been highlighted within the report and will continue to be reported each month as part of the monthly financial report. 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN Not Applicable. 7 FUNDING AND RESOURCING REQUIREMENTS Not Applicable. 8 RISK MANAGEMENT The following risk assessment applies to this report: Risk Number Description

Risk No. CO000435

Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS Not Applicable.

789th Council Meeting 27 May 2020 29 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 10 COUNCIL POLICIES The following policies have been taken into account when preparing this report: § Gold Coast Water Capital Structure and Community Returns Policy. § Revenue Policy. § City of Gold Coast Budget Review Policy. § Water and Sewage Leakage Relief Policy. 11 DELEGATIONS Not Applicable. 12 COORDINATION AND CONSULTATION

Name and/or Title of the Stakeholder Consulted

Directorate or Organisation

Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Stephen Mollard Coordinator Financial Management

Office of the OCOO Yes

13 STAKEHOLDER IMPACTS Not Applicable. 14 TIMING Not Applicable. 15 CONCLUSION Water and Sewerage Services Earnings before Interest and Tax (EBIT) for the period to 30 April 2020 is 4.0% or $5.94 million below forecast. This is predominantly the result of: § Flow-dependent expenditure being $5.16 million (2.9%) above forecast, and § Depreciation expense being $2.71 million (3.4%) above forecast. This is partially offset by: § Loss on sale of assets being $1.35 million (40.6%) below forecast, and § Controllable operating expenditure being $1.09 million (1.1%) below forecast.

789th Council Meeting 27 May 2020 30 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Water and sewerage services have continued to operate as normal through the COVID-19 crisis. To date there have been only minor impacts on operations. Key items include: § Decrease in customer water demand. Reduced demand impacts on both bulk water

purchases and usage revenue. Further there has been an adjustment in the residential v non-residential consumption split (increase in residential and decrease non- residential).

§ Increase in customer payment arrangement being entered into (hardship). § Delays in capital expenditure due to resource (people and equipment) constraints Performance will continue to be monitored to ensure that controllable expenditure is minimised. This is achieved through rigorous internal processes which include the detailed review of all projects to ensure that only prudent and efficient expenditure is incurred. 16 RECOMMENDATION It is recommended that Council resolves as follows: 1 That Attachment 2 be deemed non-confidential except for those parts deemed by the

Chief Executive Officer to remain confidential in accordance with sections 171(3) and 200 (5) of the Local Government Act 2009.

2 That Council notes the Water and Sewerage Services Monthly Financial Report for the period ended 30 April 2020.

Author: Authorised by: Karen O’Brien Paul Heaton Manager Business Performance Director Water and Waste 13 May 2020 iSPOT: #76400604

Conflict of Interest – Cr Gates Pursuant to section 175E(2) of the Local Government Act 2009, I would like to inform the meeting that I have a personal interest in this matter, which I recognise may be a real or perceived conflict of interest the particulars of which are as follows: The nature of the interest is: Receipt of Donation The name of the person or entity is: Rayjon Properties The nature of the relationship is: Donor The value and date of the donations are: $2500 18 September 2015

$2500 4 October 2016 The nature of the other person’s interest in the matter is: The donor is mentioned on Page 32 of the confidential attachment. I will now leave and stay away from the meeting so that the matter may be discussed and voted on in my absence. Cr Gates left the meeting.

789th Council Meeting 27 May 2020 31 Water, Waste and Energy Meeting 20 May 2020 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Conflict of Interest – Cr Owen-Jones Pursuant to section 175E(2) of the Local Government Act 2009, I would like to inform the meeting that I have a personal interest in this matter, which I recognise may be a real or perceived conflict of interest the particulars of which are as follows: The nature of the interest is: Receipt of Donation The name of the person or entity is: Rayjon Properties The nature of the relationship is: Donor The value and date of the donations are: $10,000 October 2011 The nature of the other person’s interest in the matter is: The donor is mentioned on Page 32 of the confidential attachment. I will now leave and stay away from the meeting so that the matter may be discussed and voted on in my absence. Cr Owen-Jones left the meeting.

Committee Recommendation Adopted at Council 27 May 2020 COMMITTEE RECOMMENDATION WWE20.0520.003 moved Cr Tozer seconded Cr PJ Young 1 That Attachment 2 be deemed non-confidential except for those parts deemed

by the Chief Executive Officer to remain confidential in accordance with sections 171(3) and 200 (5) of the Local Government Act 2009.


CARRIED

Cr Gates and Cr Owen-Jones were absent for the vote. Cr Gates and Cr Owen-Jones returned to the meeting.

Council Meeting 27 May 2020

RESOLUTION G20.0527.015 moved Cr Tozer seconded Cr PJ Young That Committee Recommendation WWE20.0520.003 be adopted as printed which reads as follows:- 1 That Attachment 2 be deemed non-confidential except for those parts deemed

by the Chief Executive Officer to remain confidential in accordance with sections 171(3) and 200 (5) of the Local Government Act 2009.


CARRIED Cr Gates and Cr Owen-Jones were not present for discussion and voting on this matter. Cr Gates and Cr Owen-Jones returned to the meeting


Attachment 3.1 Financial Management Report – 30 April 2020

Full YearAct Revised

BudgetVar Var Initial

BudgetRevised Budget

30 April 2020 $000's $000's $000's % $000's $000'sRevenueAccess Charges 208,569 210,708 (2,139) (1.0%) 253,231 253,231Usage Charges Revenue 230,911 228,857 2,054 0.9% 271,313 271,813Less: Concealed Leakage (1,742) (2,105) 363 17.3% (2,500) (2,500)Interest on Outstanding Rates 1,671 1,548 123 7.9% 1,858 1,858Interest on Investments 5,725 5,725 - 0.0% 11,177 6,870Fees and Charges 4,195 3,963 233 5.9% 4,214 4,786Total Operating Revenue 449,330 448,696 634 0.1% 539,293 536,058Operating ExpenditureFLOW-DEPENDENT EXPENDITUREBulk Water Purchases 164,773 159,841 (4,933) (3.1%) 189,846 189,846Electricity 9,802 9,700 (101) (1.0%) 11,643 11,643Biosolids Disposal 4,122 3,882 (241) (6.2%) 4,657 4,757Chemicals 3,090 3,211 120 3.8% 3,853 3,853Total Flow-Dependent Expenditure

181,787 176,634 (5,154) (2.9%) 209,999 210,099

Operating Revenue net of Flow-dependent Expenditure

267,542 272,062 (4,520) (1.7%) 329,293 325,959

Gross Margin 0.6 0.6 0.6 0.6

CONTROLLABLE EXPENDITUREEmployee Expenses 43,074 43,695 621 1.4% 51,946 51,881Materials and Services 23,413 23,733 320 1.3% 29,686 29,273Council Corporate SLAs 17,034 17,034 (0) (0.0%) 20,441 20,441Internal Directorate SLA (3,836) (3,836) - 0.0% (4,603) (4,603)Fleet and Plant 7,821 7,104 (717) (10.1%) 8,523 8,548Sew age Treatment Charge 2,998 3,792 794 20.9% 4,550 4,550Insurance Premiums 1,548 1,548 (0) (0.0%) 1,858 1,858Other Expenditure 2,151 2,083 (68) (3.3%) 1,800 2,500Consultants 2,555 2,737 183 6.7% 2,598 4,105Regulatory Expenses 41 0 (41) 0.0% 143 143Total Controllable Expenditure 96,798 97,889 1,091 1.1% 116,940 118,694Total Operating Expenditure 278,586 274,523 (4,063) (1.5%) 326,939 328,793

Loss on Sale of Assets 1,981 3,333 1,353 40.6% 5,000 5,000

Net Profit before Capital Revenue 168,763 170,839 (2,076) (1.2%) 207,353 202,265

Capital RevenueDevelopers Contributions 36,418 33,333 3,085 9.3% 40,000 40,000Contributions and Donations Received 1 0 1 0.0% 0 0Contributed Assets 20,760 25,000 (4,240) (17.0%) 30,000 30,000Total Capital Revenue 57,179 58,333 (1,154) (2.0%) 70,000 70,000

EBITDA 225,943 229,173 (3,230) (1.4%) 277,353 272,265

Depreciation 82,293 79,583 (2,709) (3.4%) 95,500 95,500

EBIT 143,650 149,589 (5,940) (4.0%) 181,853 176,765Interest Expense (QTC Loan) 1,837 1,837 (0) (0.0%) 2,204 2,204Interest Margin Expense 734 734 0 0.0% 881 881Shareholder Interest Expense 74,020 74,020 - 0.0% 88,824 88,824Income Tax Equivalents 33,114 28,869 (4,244) (14.7%) 35,793 34,501NPAT 33,945 44,129 (10,184) (23.1%) 54,151 50,355

Contribution - Whole of City projects

18,333 18,333 (0) (0.0%) 22,000 22,000

Retained earnings impact after participation return

15,612 25,796 (10,184) (39.5%) 32,151 28,355

Year to DateWater & Sewerage Services Income Statement

789th Council Meeting 27 May 2020 33 Water, Waste and Energy Meeting 20 May 2020 Adopted Report Attachment 3.2 (pages 33 - 35) has been redacted due to confidential content.


ITEM 4 WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Attachment 1: Detailed Income Statement 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT This report presents the Water, Waste and Energy Committee with Waste Services 2019-20 financial performance as at 30 April 2020. As the March 2020 budget review was not considered by Special Budget Committee until 11 May, comparisons are against Council’s December 2019 budget review. 4 PREVIOUS RESOLUTIONS Not Applicable. 5 DISCUSSION 5.1 High Level Financial Summary

Table 1 - Waste Services - Year to Date Financial Summary

Table 1 presents the financial position for Waste Services as at 30 April 2020 as $3.31 million (12.4%) above forecast. This is predominantly the result of: § Operating revenue being $1.74 million (1.9%) ahead of forecast. § Operating expenditure being $1.89 million (2.9%) below forecast. The loss on sale of assets not included in original budget of $0.32 million, relating to:

§ A pump on the Stapylton landfill, which has been disposed of. § A parcel of land resumed by the Department of Transport and Main Roads for road

widening. § Disposal of pavement, kerb and channel at the closed Pimpama Transfer Station. Major variances will be discussed in the following paragraphs with a detailed Income Statement contained in Attachment 4.1 to the report.

ActualRevised Budget Var Var

Initial Budget

Revised Budget

30 April 2020 $M $M $M % $M $MOperating Revenue 93.60 91.86 1.74 1.9% 116.36 110.81

Operating Expenses 63.14 65.03 1.89 2.9% 88.06 82.45

Total Operating Profit 30.46 26.83 3.63 13.6% 28.30 28.36

Loss on Sale of Assets 0.32 0.00 (0.32) 0.0% 0.00 0.00

EBITDA 30.14 26.83 3.31 12.4% 28.30 28.36

Year to Date Full YearWaste Services Financial Summary


ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.2 Operating Revenue ($1.74 million favourable) Operating revenue is $1.74 million ahead of forecast and is influenced by the following: § Gate Fees ($1.41 million favourable): The increased revenue is primarily as a result

of revenue received from the City’s Transport and Infrastructure (T&I) Directorate. The initial budget was substantially reduced due to T&I putting in place alternate arrangements for the management of their Construction and Demolition waste. The arrangement has been in place since April 2019, however the revenue received from T&I to date is $1.7 million higher than forecast. The increase has been partially offset with lower than expected volumes from external customers, primarily as a result of the introduction of the State Government Waste Levy. Appropriate adjustments have been proposed as part of the March budget review.

§ Waste Levy Receipts ($0.11 million favourable): Revenue received from Council customers external to the Water and Waste Directorate are tracking ahead of forecast. This is primarily in relation to higher volumes received from T&I, as outlined above.

§ Fees and Charges ($0.18 million favourable): This variance relates to revenue received for the Right for Service payments from JJ Richards to provide services for new kerbside bins. This budget is difficult to estimate and was impacted by the ability to reuse bins obtained following promotions, influencing the revenue stream.

5.2.1 Number of Waste Collection Bins in Service Table 2 presents the number of waste collection bins in service as at 30 April 2020. A customer may have multiple services of a bin on a weekly basis. Currently the Waste Management Utility charge is billed to customers on Council’s rates notice six months in advance. During the previous two months, a number of commercial customers requested changes to bin services as a result of COVID-19 events. Adjustments to customer accounts will flow through to a reduction in Waste Management Utility revenue, which will occur following the completion of the supplementary rates runs scheduled in April and May.


ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) Year to Date

Waste collection bins Bins in service as at 30/04/2020

Bins in service as at

30/06/19 Bin increase\

(decrease) % General waste (weekly) Domestic wheelie bins 194,698 193,369 1,329 0.7% Commercial wheelie bins 7,080 7,192 (112) -1.6% Bulk bins (domestic and commercial) 3,083 3,012 71 2.4% Total weekly general waste services 204,861 203,573 1,288 0.6% Recyclable waste (weekly) Commercial wheelie bins 409 423 (14) -3.3% Bulk bins (domestic and commercial) 1,678 1,608 70 4.4% Total weekly recyclable waste services 2,087 2,031 56 2.8% Recyclable waste (fortnightly) Domestic wheelie bins 186,991 185,271 1,720 0.9% Commercial wheelie bins 2,572 2,589 (17) -0.7% Total fortnightly recyclable waste services 189,563 187,860 1,703 0.9% Other (fortnightly) Green waste 39,017 30,841 8,176 26.5% Total fortnightly other services 39,017 30,841 8,176 26.5% Food waste (weekly) Bulk bins (domestic and commercial) 40 45 (5) -11.1%

Table 2 - Waste Collection Bins in Services 5.3 Operating Expenditure ($1.89 million favourable) At a whole business unit level, operating expenses are $1.89 million (2.9%) below forecast. Major contributors to this variance are discussed below. § Materials and Services ($1.66 million favourable): This variance predominantly

relates to the following: o Concrete Crushing – The previous contract expired in December 2019. A new

tender is due to be released shortly and work is set to resume in the final months of the financial year. A budget reduction is proposed as part of the March budget review.

o Materials Recycling Facility – Recycling volumes from yellow top bins have

decreased by 6% over the same period last year. The introduction of the Container Refund Scheme is likely the reason for the volume reduction. A budget reduction is proposed as part of the March budget review.

o Greenwaste – The City has entered into a new contract for mulching and

disposing of Greenwaste which is a set price per tonne for all sites. This rate is approximately 25% less than the average tonnage rate of the previous contract. A budget reduction is proposed as part of the March budget review.

o Bulk Kerbside Collection – A new ‘on-demand’ service has been implemented

to pick up residential bulk waste. Waste Collections will no longer incur Tipping or Waste Levy fees in relation to this waste, as these costs will be borne by the new contractor for this service.


ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) § Waste Collection Payments ($1.03 million favourable): This variance relates to the

annual Bulk Kerbside Collection. The new ‘on-demand’ service commenced in January 2020. Initial uptake has been slow, however demand has been increasing in the previous two months with costs to be recognised next month.

§ Consultants ($0.43 million favourable): Consultants are below forecast mainly due

to timing of expenditure within operational projects. The largest variance relates to the Waste and Recycling Centre (WRC) upgrades and Master Planning project. Appropriate adjustments to projects have been proposed as part of the March budget review.

§ Waste Levy Payments ($0.63 million unfavourable): Waste Levy payments are a

net balance of the monthly Waste Levy Payment to the State Government offset by the Waste Levy Up Front Payment (Rebate) received from the State Government for Municipal Solid Waste (MSW). Due to reduced MSW volumes being received compared to the volumes used to calculate the MSW Rebate, the Rebate is greater than what has been paid resulting in a ‘negative expense’. The variance, in part, is a timing difference which will dissipate in coming months.

§ Fleet and Plant ($0.35 million unfavourable): This variance is driven by pricing

changes applied by the City’s Fleet and Plant business. The City’s Fleet and Plant truck hook-lifter hourly rates have increased by more than 60% resulting in a significant cost increase for the four trucks used to transfer Waste and Recycling bulk bins to Landfill. There has also been an increase in trailer costs on four of the nine trailers used in the business. Water and Waste continues to work with the City’s Fleet and Plant branch to realise efficiencies through truck movements and plant operations to ensure that costs are minimised by operational areas.


ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.4 Capital Program The initial, and September revised Waste Services capital program consisted of 15 projects totalling $13.48 million. The revised budget following the December budget review is $11.97m comprising of 14 projects.

Table 3 – Capital Expenditure ($ Million)

Year to date capital expenditure of $3.65 million represents a variance of 58% below the year to date forecast of $8.73 million. The following projects are the main contributors to the variance: § Reedy Creek Landfill Cell 3 and 4: $1.97 million below forecast. This project is

behind forecast due the re-establishment of the contractor to site following the finalisation of the revised scope of works. Whilst the project has been significantly delayed, construction works recommenced on site in April 2020, and it is anticipated that the allocated budget will be fully expended this financial year. Completion of the project is scheduled for August 2020.

§ Stapylton Landfill Main Access Upgrade : $0.80 million below forecast. This

project is behind forecast as a result of delays in the finalisation of the concept design for the wheel wash facility. Installation of the wheel wash facility is now expected to commence in June. A budget adjustment to reflect the delay was proposed at the March 2020 budget review.

Product

Actual Expenditure

($M)

RevisedForecast

($M)

Variance($M)

Variance%

Revised Budget Q2

($M)

Revised Budget Q1

($M)

InitialBudget ($M)

Landfills 2.67 6.12 3.45 56% 7.68 8.93 9.47

Waste and Recycling Centres 0.98 2.62 1.63 62% 4.29 4.55 4.01

Total Capital 3.65 8.73 5.08 58% 11.97 13.48 13.48

Waste Services Capital Expenditureas at 30 April 2020

Year to Date Full Year


ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.5 Status Updates - Major Investments The following major investments have been identified for delivery in 2019-20. 5.5.1 Reedy Creek Landfill Cells 3 and 4 Program scope and budget The Environmental Authority for the Reedy Creek Landfill requires that all landfill cells have an appropriately designed and constructed landfill liner system to provide adequate protection against possible environmental impacts such as contamination of local ground water by landfill leachate. This project involves staged construction of cells 3 and 4 at Reedy Creek landfill including bulk earthworks, liner system and associated leachate drainage system. The revised budget for 2019-20 is $3.74 million. Achievements for April § Contractor recommenced works in accordance with the revised scope of the project. § Earthworks on the floor of cells 3 and 4, batter slopes and access road is underway. § Dewatering and desilting of the sediment pond is nearing completion.

Major Issues No major issues.


Forecast ($) 3,090,172 Budget ($) 5,668,393


Variance ($) 1,972,444 Remaining ($) 3,822,272




ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.5.2 Stapylton Landfill Main Access Upgrade Program scope and budget A Master Plan for Stapylton Landfill was developed in 2017-18 which included recommendations to reconfigure the access road network and to replace the existing wheel wash system. This project involves upgrading the site entry road infrastructure at Stapylton Landfill, including the installation of a new wheel wash to enable improved traffic management and compliance with environmental regulations. The revised budget for 2019-20 is $1.62 million, however a budget reduction of $0.85m has been sought at the March budget review to reflect delays to the schedule. Achievements for April § Detailed design commenced. § Installation of the wheel wash facility is scheduled to commence in June 2020.



Forecast ($) 1,492,870 Budget ($) 3,374,215

Expenditure ($) 689,451 ITD Expenditure ($) 2,440,666

Variance ($) 803,419 Remaining ($) 933,549




ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.5.3 Waste and Recycling Centre Bin Bay Upgrades Program scope and budget This project involves the upgrade of bin bays at Reedy Creek, Helensvale, Merrimac, Jacobs Well and Springbrook Waste and Recycling Centres to address operational and safety concerns. The program of works aims to eliminate manual handling issues associated with the current configuration of bin flaps, minimise the risk of damage to bin bay infrastructure and streamline the delivery and removal of bulk bins within the facilities. The December revised budget for 2019-20 is $0.85m with only Helensvale being delivered this financial year. Achievements for April § Site establishment and mobilisation of plant and amenities commenced. § Detailed designs of soundproofing panels and wall cladding extension works have

been finalised. § Councillors and nearby residents have been notified of the scheduled construction

works. § Green waste customers impacted by the construction works have been notified and

diverted to other facilities. A Briefing Note has been circulated to Councillors on this matter.

Major Issues No major issues. Financial Performance

Forecast ($) 494,476 Budget ($) 3,405,082






ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.5.4 Waste and Recycling Centres and Landfills CCTV Renewal Program scope and budget This project proposes to renew and upgrade the CCTV, bodycams and communications network at all Waste and Recycling Centres (WRCs) and landfill weighbridges to improve safety, security, and operational outcomes. The revised budget for 2019-20 is $0.80 million. Achievements for April § Site visits to collect CCTV asset details and site requirements have recommenced

and are approximately 50% complete.

Major Issues § COVID-19 and its restrictions on non-essential travel and social distancing impacted

ability to progress with site visits and requirements gathering. The schedule has been modified to reflect these delays.


Forecast ($) 403,502 Budget ($) 1,811,321






ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.5.5 Reedy Creek Landfill Sewer Connection Program scope and budget This project proposes to provide a permanent solution to managing the leachate from the Reedy Creek Landfill as a prudent alternative to the current costs of leachate transport by tanker trucks and off-site treatment. The design and construction of the sewerage infrastructure will transfer the leachate from the Reedy Creek Landfill to the sewerage network. The revised budget for 2019-20 is $1.30 million. Achievements for April § Construction works progressing to schedule.

Major Issues No major issues. Financial Performance

Forecast ($) 882,959 Budget ($) 1,408,695


Variance ($) 262,507 Remaining ($) 679,548




ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.5.6 Stapylton Landfill Sediment Basin Program scope and budget This project involves the construction of a stormwater sedimentation basin to ensure the existing stormwater infrastructure at Stapylton landfill is capable of managing stormwater runoff from disturbed areas of the landfill so as to comply with the facility's Environmental Authority. The revised budget for 2019-20 is $0.11 million. Achievements for April § Detailed design works are 90% complete, with final completion expected

in May 2020.



Forecast ($) 114,500 Budget ($) 4,049,595






ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 5.6 Community Returns 5.6.1 Income Tax ($2.78 million Unfavourable) Waste Services is a commercialised business unit subject to the Local Government Taxation Equivalents Regime (LGTER). As part of this regime, a PAYG Instalment Activity Statement must be prepared and submitted on a monthly basis, with payment of a PAYG instalment to Council. The current instalment rate as issued by our tax assessors is 7.32%.The instalment rate is applied to total revenue generated to derive the amount of PAYG tax payable each month. At year end, a final taxation return will be prepared, based upon taxable income and utilising the company taxation rate of 30% to calculate total taxation payable for the year. Relevant adjustments will be made to record this annual tax liability to Council. 5.7 Community Service Obligations In accordance with Sections 23 and 24 of the Local Government Regulation 2012:

…The cost of carrying out community service obligations, less any revenue received from performing the obligations must be treated as revenue for the significant business activity. {Section 23} (and)

…A community service obligation is an obligation the local government imposes on a business entity to do something that is not in the commercial interests of the business entity to do.

Table 4 provides a summary of the Community Service Obligations (CSO) currently provided within Waste Services, together with the annual expenditure budget and actual year-to-date expenses incurred for delivery of those CSOs. Revenue for these CSOs is recognised on a monthly basis throughout the year, with revenue recognised to April of $2.54 million.


ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6)

Table 4 – Community Service Obligations - 2019-20 financial year

5.8 Future Budgetary Trends Water and Waste completed the March budget review on 13 March 2020. The Federal Government announced strict shutdown measures as a result of the global COVID-19 Pandemic on 22 March 2020. Water and Waste subsequently completed a further review of the March budget on 31 March 2020 in light of these health and economic challenges. The final March budget review covers the final position from the two reviews. The following are the main movements are proposed as part of the March budget review: § Decrease of $0.5 million in recycling revenue as a result of COVID-19 impacting on

markets. § Decrease of $1.3 million in materials and services due to changes in contracting

arrangements and reduce volumes. § Decrease of $2.8 million in capital program due to review of delivery schedules. § Increase of $0.2 million in income tax equivalents paid to the City as a result of

changes to expenditure and revenue processed through the year. A Budget Review report has been tabled at the Special Budget Committee providing detailed explanation of movements. The impact of COVID-19 on Waste Services financial position is continually being monitored. Any significant impacts have been highlighted within the report and will continue to be reported as part of the monthly financial report.

Community Service Obligation

2019-20 Initial Budget

($M)

2019-20 Revised

Budget ($M)

2019-20 YTD Expenditure

($M)% of Budget Comment

Collection Charge Donations 0.66 - - 0%

Free Tipping Donations 0.58 0.58 0.40 70%

Kerbside Collection 1.19 1.19 (0.12) -10%

Stradbroke Island Waste Disposal - Expenditure 0.60 0.60 0.49 83%

Stradbroke Island Waste Disposal - Revenue (0.11) (0.11) (0.08) 74%

Clean-Up Australia Day 0.02 0.02 0.01 68%

Carcass Collection 0.06 0.06 0.05 82%

Street and Park Bin Services

0.40 0.40 0.34 87%

WoC Waste Minimisation 0.20 0.20 - 0%

E-Waste 0.11 0.11 - 0%

3.71 3.05 1.11 30%

A project plan is currently under development aimed at minimising waste across the City's administration buildings, with potential to expand to Depots. In addition, this allocation will be utilised to fund the customer charge associated with the implementation of the Commercial Food waste Service for the administration buildings in the Waterside precinct.

This CSO component relates to foregone revenue associated with Contract LG314/411/17/023 - Collection, Transportation and Recycling / Disposal of Electronic Waste - refer Council Resolution GA17.0803.004

Provision of waste disposal services to residents and businesses on Sth Stradbroke Island tracking to forecast. Invoicing for South Stradbroke Island businesses for commercial waste and recycling service has been recognised up until March 2020. This Revenue is likely to reduce in light of current events with COVID19

Carcass collection services are tracking to forecast

A rise & fall adjustment was made in April to the JJ's payment for Street and Park Bin Services dating back to March 2019. This has pushed expenditure slightly over YTD budget.

Clean Up Australia Day occurred in March 2020 and came in under budget.

This item has now been transferred to the Organisational Services directorate and no longer forms part of the Waste CSO. This item relates to subsidised disposal at landfills for Charitable Organisations and is tracking below forecast. This is line with the trend we're seeing on reduced landfill volumes.

The rebate received from the State Government of $0.23 million for the Waste Disposal Levy has been allocated to Kerbside Collection resulting in the negative expenditure. The Kerbside activity has been restructured to an on-demand service and uptake has been slow until recently


ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN Not Applicable. 7 FUNDING AND RESOURCING REQUIREMENTS Not Applicable. 8 RISK MANAGEMENT The following risk assessment applies to this report: Risk Number Description

Risk No. CO000435

Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS Not Applicable. 10 COUNCIL POLICIES § Debt Policy. § Revenue Policy. § City of Gold Coast Budget Review Policy.

11 DELEGATIONS Not Applicable. 12 COORDINATION AND CONSULTATION

Name and/or Title of the Stakeholder Consulted

Directorate or Organisation

Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Victoria Clancy – Senior Management Accountant Office of the COO Yes

13 STAKEHOLDER IMPACTS Not Applicable. 14 TIMING Not Applicable.


ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 APRIL 2020 FN334/252/20(P6) 15 CONCLUSION Water and Waste actively monitors performance to ensure its operations are undertaken in the most effective and efficient manner possible to provide value for money to the customers of the City. This is achieved through rigorous internal processes which include detailed review of all projects to ensure only prudent and efficient expenditure is incurred. Waste Services’ Earnings before Interest and Tax (EBIT) for the period to 30 April 2020 is $24.3 million and $2.56 million (11.7%) ahead of forecast, due to operating revenue being slightly ahead of forecast and operating expenditure being below forecast. Waste services have continued to operate through the COVID-19 crisis, with only moderate changes to Waste and Recycling Centres’ operations. Impacts to the financial performance to date include: § Reduced Waste Collections Services. This is primarily due to reduced Commercial

Waste as a result of Government required business closures. Overall waste volumes have not changed significantly as the reduced commercial volumes are offset by increase in MSW volumes due to work and schooling from home.

§ Increased Waste Recycling Centre volumes. There has been in increase in the number of residential customer visits and volumes being disposed at WRCs. Anecdotally, with the direction of Government to stay at home, this has resulted in clean outs of homes and gardens with waste being disposed at WRCs.

§ Increase expenditure relating to security costs at WRCs. There has been a requirement to increase security at WRCs to manage customers during changed operating conditions.

§ Delays in capital expenditure due to resource (people and equipment) constraints. 16 RECOMMENDATION It is recommended that Council resolves as follows: That Council notes the Waste Services Monthly Financial Report for the period ended 30 April 2020. Author: Authorised by: Karen O’Brien Paul Heaton Manager Business Performance Director Water and Waste 13 May 2020 TRACKS REF: #76400781 COMMITTEE RECOMMENDATION WWE20.0520.004 moved Cr PJ Young seconded Cr Tozer That Council notes the Waste Services Monthly Financial Report for the period ended 30 April 2020.

CARRIED


Attachment 4.1 Detailed Financial Management Report – 30 April 2020

Full Year

Actual Revised Budget

Var Var Initial Budget

Revised Budget

30 April 2020 $'000 $'000 $'000 % $'000 $'000RevenueWaste Utility Rate Revenue 72,755 72,795 (41) (0.1%) 87,433 87,377Waste Levy Receipts 4,774 4,663 111 2.4% 10,196 5,767Gate Fees 7,960 6,547 1,413 21.6% 9,248 8,248Recycling Revenue 2,820 2,770 51 1.8% 3,094 3,494Fees and Charges 1,036 858 178 20.7% 1,096 1,030Community Service Obligations 2,540 2,540 - 0.0% 3,706 3,048Interest on Outstanding Rates 261 208 53 25.3% 250 250Interest on Investments 605 605 - 0.0% 932 726Contributions & Donations Revenue 394 410 (16) (3.8%) 410 410Other Operating Income 460 460 0 0.0% 0 460Total Operating Revenue 93,604 91,856 1,748 1.9% 116,364 110,809

Operating ExpensesEmployee Expenses 7,439 7,251 (188) (2.6%) 7,765 8,569Materials and Services 11,093 12,752 1,659 13.0% 15,010 15,480Waste Levy Payments (1,254) (1,879) (625) 33.2% 9,211 1,896Council Corporate SLAs 2,726 2,726 (0) (0.0%) 3,271 3,271Protective Services SLA 655 662 6 1.0% 756 794Internal Directorate SLA 3,836 3,836 0 0.0% 4,603 4,603Waste Collection Payments 24,302 25,327 1,025 4.0% 30,539 30,579Fleet and Plant 10,949 10,595 (354) (3.3%) 13,422 12,722Consultants 644 1,076 432 40.1% 763 1,313Electricity 167 124 (42) (34.2%) 149 149Insurance Premiums 62 62 (0) (0.0%) 74 74Other Expenditure 2,523 2,500 (23) (0.9%) 2,500 3,000Total Operating Expenses 63,143 65,032 1,890 2.9% 88,063 82,452

Total Operating Profit 30,462 26,824 3,638 13.6% 28,302 28,358

Loss on Sale of Assets 317 0 (317) 0.0% 0 0

EBITDA 30,145 26,824 3,321 12.4% 28,302 28,358

Depreciation 5,857 5,083 (773) (15.2%) 8,600 6,100

EBIT 24,289 21,741 2,548 11.7% 19,702 22,258Interest Expense (QTC Loan) 2,918 2,918 (0) (0.0%) 3,660 3,502Interest Margin Expense 107 107 (0) (0.0%) 128 128Income Tax Equivalents 7,818 5,043 (2,776) (55.0%) 5,977 5,915NPAT 13,446 13,673 (228) (1.7%) 9,937 12,713

Participation Return 6,409 6,409 0 0.0% 7,691 7,691

Retained Earnings 7,036 7,264 (228) (3.1%) 2,245 5,022

Waste ServicesFinancial Management Report

Year to Date


ITEM 5 GENERAL BUSINESS WATER, WASTE AND ENERGY COMMITTEE MEETINGS START TIME LG115/1377/01/2020(P1) COMMITTEE RECOMMENDATION WWE20.0520.005 moved Cr O’Neill seconded Cr Hammel That the Water, Waste and Energy Committee meetings commence at 9am.

CARRIED

There being no further business the meeting closed at 10.33am.


These Pages

Numbered 1 to 53

Constitute The Adopted Report Of The Meeting

Of The Water, Waste and Energy Committee

Held Wednesday 20 May 2020

Documents

Water, Waste and Energy Committee - City of Gold …...789 Adopted Report of the Water, Waste and Energy Committee Meeting held on Wednesday 20 May 2020 at 10 am City of Gold Coast