Council Minutes - Town of Cambridge

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COUNCIL MINUTES TUESDAY 28 AUGUST 2012 CR12.134 YEAR END REVIEW FOR FINANCIAL YEAR 2011/2012 PURPOSE: To report on the year end actual results as against revised budget for the 2011/2012 financial year consistent with good governance principles and the requirements of the Local Government Act. BACKGROUND: The pre-audit financial statements for the year ending 30 June 2012 have been produced and a report centred around the rate setting statement produced, highlighting the major variations. Whilst the financial statements are nearing finalisation, depreciation adjustments for infrastructure assets are yet to be booked, some expenditures are to be reclassified from operating to capital and a small number of infrastructure assets need to be written off. However, these adjustments will not affect the surplus position which is currently $180K. DETAILS: The following commentary should be read in conjunction with the comparative Rate Setting Statement and End of Financial Year Report contained in attachment one. Operations The result from operations is $2 million compared to a revised budget of $2.8 million, giving a variance of $728k. The variance is a culmination of a mixture of favourable and unfavourable operational area results. A brief overview is a follows and more detail can be found in the attached schedule to this agenda: • The unfavourable variance of $425k in fees and charges is mainly attributable to a decline in fee revenue from the Wembley Golf Course; • The favourable variance of $637k for operating grants, subsidies and contributions is a result of having received $481k of the general purpose grant in advance. • The favourable variance of $102k from interest earnings is due to a combination of accessing higher interest rates and an increase in funds available for investment. • The unfavourable variance of $1.6 million on gains on disposal of assets is due to less than anticipated gains on disposal of residential land. • The favourable variance of $706k for materials and contracts is due to a number of programmes, non capital and capital projects having been carried forward to the 2012/2013 financial year. It is also partially due to a number of services at the Wembley Golf Course and Quarry Amphitheatre having been brought in house as opposed to being contracted out. H:\CEO\GOV\COUNCIL MINUTES\12 MINUTES\AUGUST 2012\C CR.DOCX 189
COUNCIL MINUTES TUESDAY 28 AUGUST 2012 • The unfavourable variance of $515k for employee costs is mainly offset by the favourable variance in materials and contracts expenditure, resulting from a shift in the delivery of services from contracted services to in-house at the Wembley Golf Course and Quarry Amphitheatre. • The favourable variance of $63k for interest expense is due to lower variable interest rates on the $11 million commercial loan for the Wembley Golf Course. • The favourable variance of $309k on loss of disposal of assets is due to infrastructure assets replaced during the year not as yet having been written off or disposed of. Capital Revenue Capital revenue from non operating grants and contributions is $773k more than budget, predominantly due to a capital grant of $1 million received from State Government towards Wembley Sports Park (Stage1) not budgeted for. Capital Expenditure Capital expenditure as at 30 June 2012, excluding land purchases, is $9 million against revised budget of $13.5 million giving a variance of $4.5 million. The majority of this variance relates to capital projects not commenced or which are in progress, such as the City Beach Pavilion renewal. These projects have been re-budgeted in FYE 2013. Reserve and Endowment Lands Account Transfers The net draw down on reserves and Endowment Lands Account is $194k. The transfer to reserves is $522k less than budget due to proceeds from Harding Lane subdivision delayed to 2012/2013. Transfer to Endowment Lands Account is below budget by $941k due to one Ocean Mia lot remaining unsold at year end. Draw downs on the Endowment Lands Account are below budget by $1.2 million due to a number of major ELA funded projects in progress and being carried forward into 2012/2013 such as the City Beach Pavilion upgrade ($450k unspent) and Quarry Amphitheatre Upgrade ($384k unspent). Closing (Municipal) Funds Carried Forward Municipal-funded carried forward projects of $2.95 million have been identified for the 2012/2013 financial year. The notes to and forming part of the 2011/2012 summarised statement of financial activity detail the main programs, non capital and capital projects being carried forward. Add to this the unspent grants received in advance of $1.42 million and the total carried forward municipal funds become $4.37 million. Surplus/(Deficit) The final surplus for the 2011/2012 year is $180k, which is transferred to the Plant Reserve. H:\CEO\GOV\COUNCIL MINUTES\12 MINUTES\AUGUST 2012\C CR.DOCX 190
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Council Minutes - Town of Cambridge

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