MEETING OF COUNCIL - Town of Cambridge

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COUNCIL MINUTES TUESDAY 27 NOVEMBER 2012 • Rates income of $342k received in advance for the 2012/2013 financial year; • Better than expected interest earnings with excess funds available for investment as a result of timing expenditure differences and favourable interest rates giving rise to this result; • Decline in fees and charges with the Wembley Golf Course experiencing a reduction in green fee revenue of $468k with the golf industry still impacted by the aftermath of the global financial crisis. • Savings and timing delays in expenditures on materials and contractors of $1.1 million as compared to budget. Statement of Financial Position Current Assets Current assets decreased slightly from $26.4 million to $26.3 million during the year. The two major movements being primarily as a result of the decrease in financial assets of $492k with the redemption of a floating rate maturing which was partially offset by an increase in trade and other receivables of $300k as a result of an increase in waste fees raised during the year. The other point to note is that the inventories of $5.5 million includes Ocean Mia land held for resale of $5.2 million which is reflected in the accounts at the lower of cost or net realisable value. The net market value of this land is estimated between $27 million to $29 million. Non Current Assets Property, Plant and Equipment and Infrastructure has increased during the year by $8 million, reflecting the Town's continued commitment to maintaining and enhancing its infrastructure. The Town expended $10.5 million on assets against depreciation and writeoffs of $7.2 million. In addition, the Town gained $4.8 million of infrastructure assets as a contribution from the Perry Lakes Land Development. Current Liabilities Trade and Other Payables decreased by $1.9 million with the repayment of $945,100 to the Commonwealth for the Perry Lakes Reserve Aquifer Recharge project and the transfer of a $1 million works bonds and deposits liability into trust . Non Current Liabilities The Town’s non current loan liability increased by $0.9 million during the year with the acquisition of 39 Southport Street, West Leederville for $990k financed by a three year fixed interest loan with the WA Treasury Corporation. Equity Accumulated surplus increased by $8.2 million primarily as a result of capital contributions and expenditure on infrastructure assets beyond depreciation. The overall net worth of the Town increased by $8.7 million. Financial Ratios The statutory financial ratios provide an indication of the reliance on rate funding over other sources of funds and to measure the impact of loan borrowing and debt servicing. Whilst there is some movement in the indicators, the ratios reflect a healthy position as shown in the following table: H:\CEO\GOV\COUNCIL MINUTES\12 MINUTES\NOVEMBER 2012\D AU.DOCX 203
COUNCIL MINUTES TUESDAY 27 NOVEMBER 2012 Ratio Actual Target/Benchmark Current Ratio 2.18 Greater than 1 Outstanding Rates Ratio 2.13% Less than 5% Rate Coverage Ratio 42% Greater than 40% Untied Cash to Trade Creditors 2.77 Greater than 1 Ratio Gross Debt to Revenue Ratio 37.27% Less than 60% Gross Debt to Economically 16.38% Less than 30% Realisable Assets Ratio Debt Ratio # 11.32% Less than 10% Debt Service Ratio 1.95% Less than 10% # The debt ratio represents total liabilities as a percentage of total assets. The total assets amount does not include the net realisable value of Ocean Mia land held for resale which would have reduced the ratio value from 11.32% to 10% Statement of Cash Flows The following observations are made with respect to the Statement of Cash Flows. Cash flows from operating activities increased $250k compared to budget for the financial year. Grants and subsidies increased by $800k predominantly due to financial assistance and local roads grants of $482k received in advance. This was partially offset by a net increase in outflows in materials and contracts of $500k with a refund of $945k to the Federal Government in relation to the Perry Lakes Acquifer project. Cash flows outflows from investing activities have decreased compared to both budget and last financial year's result, as timelines for major projects such as the City Beach Surf Club redevelopment with a budget of $9.2 million against actual expenditure of $100k spent are re adjusted and re budgeted for next financial year. Cash flows from financing activities have decreased with $1 million of work bonds and deposits moved out of operations into trust during the financial year. Overall, there has been a increase in cash held by $247k during the year resulting in a modest increase in the amount of cash and cash equivalents at 30 June 2012 from $18.9 million to $19.2 million as per the Statement of Financial Position. Audit Opinion The year end audit has been completed. The scope of the audit included verification of all balance sheet account closing balances at year end, ensuring that Australian Accounting Standards, Local Government Act 1995 and Financial Management Regulations (1996) had been complied with. The Town's auditors advised that no significant issues were identified. The Audit Report will be tabled at the Council meeting on 27 November 2012, subject to any amendments, if any, made at the Audit Committee meeting on 20 November 2012. H:\CEO\GOV\COUNCIL MINUTES\12 MINUTES\NOVEMBER 2012\D AU.DOCX 204
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MEETING OF COUNCIL - Town of Cambridge

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