Reports tabled at the Ordinary Meeting of Council on Tuesday date Livestreamed on our website,.
Source: |
Customer & Corporate Services |
Director: |
Michael Dugina |
To approve ‘in-principle’ the Audited Financial Statements and the Annual Performance Statement which are contained within the Annual Financial Report and authorise the Deputy Mayor and another Councillor to certify the statements.
Under section 98 of the Local Government Act 2020 (the Act), in each financial year Council must prepare an annual report that includes audited financial statements and a performance statement for the financial year. These statements must be prepared in the prescribed manner and form and be certified by the City’s external auditor. The City’s current external auditor is the Victorian Auditor-General’s Office (VAGO).
The City’s Audit and Risk Committee have the responsibility according to its Charter in section 4.i – Financial Reporting to:
Review the annual financial report and performance statement and consider whether they are complete, consistent with information known to committee members and reflects appropriate accounting treatments; and
Recommend the adoption of the annual financial report and performance statement to Council.
Under section 99 of the Act, Council is required to approve ‘in-principle’ the statements prior to receiving final certification from the Auditor-General. Council’s approval requires nominating two Councillors to certify those statements, together with Chief Executive Officer and Principal Accounting Officer, and to lodge these statements with the Auditor-General.
The 2020-21 audited financial statements and performance statement have been prepared by the City and reviewed by VAGO. These statements have been prepared in accordance with the Australian equivalents to International Financial Reporting Standards.
A draft closing audit report and draft final management letter has been received from VAGO. VAGO has concluded that the statements are presented fairly and has, ‘in-principle’ given its clearance of the statements.
The 2020-21 financial statement of accounts highlight:
A satisfactory period of operation with a $141.6 million surplus, high closing cash balances of $144 million and significant asset growth to $3.2 billion;
An overall spend of $540 million, including operating expenditure $418.2 million and capital expenditure $121.8 million. The comprehensive income statement highlights a surplus for the year of $141.6 million plus $208.7 million asset revaluation increment for a total comprehensive result of $350.3 million;
Early receipt of $11.8 million being 50% of the Victorian Financial Assistance Grants funding for 2021-22 and $7.8 million of Working for Victoria Funding; and
The balance sheet shows that Council has a very strong asset position with over $3.1 billion worth of assets that are used to provide services to the community.
The completion of the 2020-21 audited financial statements has indicated that the Council is in a sound financial position to meeting its obligations going forward.
Councillor Aitken moved, Councillor Grzybek seconded -
That Council:
|
Carried.
As detailed within the attached 2020-21 audited financial statements.
The 2020-21 audited financial statements and the performance statement will be available to the public as part of the published Annual Report, available on the Geelong Australia website.
The prescribed indicators and measures of service performance outcome, financial performance and sustainable capacity will be available on the State Government ‘Know Your Council’ website.
Incomes and expenditures on the City’s social equity programs are included in the attached 2020-21 audited financial statements.
Under section 98 of the Act a Council must in respect of each year prepare an Annual Report, which includes audited financial statements for the financial year.
Under section 99 of the Act a Council must not submit the financial statements to its auditors of the Minister unless it has passed a resolution giving approval ‘in-principle’ to the statements.
Under section 99 of the Act a Council must authorise two Councillors to certify the statements in their final form after any changes recommended or agreed to with the auditor.
The actions outlined in this report are aimed at complying with the requirements of the Act.
This report aligns with Our Community Plan 2021-2025 strategic priority:
High-performing council and organisation.
This report aligns with the Community led 30-year Vision, “Greater Geelong: A Clever and Creative Future” community aspiration:
A prosperous economy that supports jobs and education opportunities.
No officer involved in the preparation of this report declared a general or material conflict of interest.
The 2020-21 audited financial statements are released as a draft and are still subject to being signed off by the Auditor-General.
Incomes, expenditure and investments focus on the preservation and enhancement of Council’s commitment to environmental strategies and targets.
The $141.6 million surplus result was ($56.8 million) favourable to adopted budget and included the following favourable and unfavourable income and expenditure items.
Main variances are as follows:
|
Budget 2021 |
Actual 2021 |
Variance |
|---|---|---|---|
INCOME |
|
|
|
Rates and charges |
260,311 |
257,691 |
(2,620) |
Statutory fees and fines |
15,877 |
12,504 |
(3,373) |
User fees |
50,943 |
45,697 |
(5,246) |
Grants - operating |
45,907 |
68,867 |
22,960 |
Grants - capital |
11,573 |
21,485 |
9,913 |
Contributions - monetary |
14,608 |
33,761 |
19,153 |
Contributions - nonmonetary |
75,000 |
98,699 |
23,699 |
Other income |
4,496 |
1,341 |
(3,155) |
Net gain/(loss) on disposal of property, infrastructure, plant and equipment |
3,866 |
(995) |
(4,861) |
Share of net profits (losses) of associates |
0 |
(74) |
(74) |
Total Income |
482,850 |
538,975 |
56,395 |
EXPENSES |
|
|
|
Employee costs |
173,190 |
171,830 |
1,361 |
Materials & services |
116,821 |
118,038 |
(1,217) |
Bad & doubtful debts |
1,060 |
1,741 |
(681) |
Depreciation & amortisation |
69,063 |
68,281 |
782 |
Amortisation – intangible assets |
387 |
387 |
0 |
Amortisation – right of use assets |
2,813 |
3,201 |
(388) |
Borrowing costs |
3,336 |
2,993 |
1343 |
Finance costs - leases |
134 |
147 |
(13) |
Other expenses |
30,170 |
30,802 |
(632) |
Total expenses |
396,974 |
397,419 |
(445) |
Surplus/(Deficit) for the year |
85,606 |
141,556 |
56,840 |
Grants Commission 2021-22, 50% received in June 2021 totalling $11.8 million and Working for Victoria funding received totalling $7.8 million.
Parking infringement income reduced by $1.9 million due to the introduction of free parking and refunds of $1.5 million for health/food permits due to COVID-19 stimulus package.
Levies from developers were received early due to growth being greater than budget.
Increased subdivision assets of $5.5 million and recognition of open space $18.2 million.
User fees reduced due to closure of leisure centres and outdoor pools $4.4 million and waiving of on-street and off-street parking fees and reduced utilisation $3.4 million.
Grants were received for a number of capital projects earlier than anticipated or as unbudgeted projects of $9.9 million.
The balance sheet shows that Council has a very strong asset position with over $3.1 billion worth of assets that are used to provide services to the community.
Current liabilities are $118.0 million which is predominately, leave provisions, trade payables, trust funds and deposits and non-current liabilities are $125.2 million which has increased due to the drawing down of a loan in 2020-21.
Debt levels increased during the year from $82.6 million to $117.1 million with $45 million of new loans and $10.5 million repayment of borrowings.
Council’s cash position at the end of the year is $144.0 million, which is an increase from the opening balance.
The cash balance will provide funds to complete capital and non-capital projects carried over from 2020-21 and working capital to ensure service provision continues at the same levels in 2021-22.
Council has an extensive capital works program to renew, upgrade and provide new assets to ensure the continuation and improvement of services provided to the community. Council spent $121.2 million on capital works in 2020-21 and included the following highlights.
|
Actual $ million |
|---|---|
Civic accommodation |
32.5 |
Road replacement and construction |
29.6 |
West Oval redevelopment |
9.1 |
Computers and telecommunications |
5.9 |
Drainage replacement and construction |
5.5 |
LED Lighting and smart control delivery |
4.5 |
Footpaths and bike paths |
4.3 |
Herne Hill Reserve |
3.5 |
Fleet |
3.1 |
Kerb and channel replacement |
2.1 |
Building renewal works |
1.9 |
Northern Aquatic Community Hub (NACH) detailed design |
0.8 |
New bin supply |
0.8 |
Gym equipment |
0.7 |
Playground development |
0.5 |
Queens Park Golf Club water irrigation |
0.5 |
Council is required to prepare and include a performance statement within its Annual Report. The performance statement includes the results of the prescribed sustainable capacity, service performance, financial performance indicators and measures, together with a description of the municipal district and an explanation of material variations in the results. This statement has been prepared to meet the requirements of the Act and Local Government (Planning and Reporting) Regulations 2014.
The governance and management checklist has been completed for 2020-21. The results in the prescribed form represent Councils assessment against the prescribed governance and management checklist as at 30 June 2021.
Where applicable the results in the performance statement have been prepared on accounting bases consistent with those reported in the 2020-21 audited financial statements. The other results are based on information drawn from the City’s information systems or from third parties (e.g. Australian Bureau of Statistics).
The performance statement presents the actual results for the current year and for the prescribed financial performance indicators and measures and the results forecast by the Council’s Strategic Resource Plan. The forecast figures included in the performance statement are those adopted by Council in its four year budget on 22 June 2021 and which forms part of Our Community Plan. The results for 2020-21 are consistent with the results from the previous year.
The performance statement and performance indicators prescribed under the Local Government Performance Reporting Framework will be reported on the ‘Know Your Council’ website.
In accordance with the requirements of section 99 of the Act the nominated Principal Accounting Officer of Council, two Councillors and the Chief Executive Officer are required to sign the performance statement. The Governance and Management checklist is required to be signed by Chief Executive Officer and the Mayor to represent the status of Council’s Governance and Management arrangements.
The external audit, conducted by the Victorian Auditor General’s Office (VAGO), was completed on Friday, 20 August 2021 as per the audit plan. A closing report summarising the audit findings and a Final Management Letter has been reviewed by the Audit and Risk Committee.
City of Greater Geelong Annual Financial Report 2020-21 - Post ARC 8 September 2021 [2.1.1 - 45 pages]
Performance Statement 2020 21 Post ARC Review [2.1.2 - 13 pages]
Councillor - Management Representation Letter - For the Year Ended 30 June 2021 [2.1.3 - 8 pages]
VAGO - Management Representation Letter - For the Year Ended 30 June 2021 [2.1.4 - 8 pages]
Source: |
Customer & Corporate Services |
Director: |
Michael Dugina |
To seek Council approval to undertake community engagement in accordance with section 91(4) of the Local Government Act 2020 (the Act) and Council’s Community Engagement Policy for the Long-term Financial Plan.
Under section 91 of the Local Government Act 2020 Council must develop and keep in force a Financial Plan covering at least the next 10 financial years. The financial plan must be in place by 31 October the year following a general election and be developed in accordance with its deliberative engagement practices.
A Financial Plan must contain all required statements, reports and data as prescribed by the Act.
The Long-term Financial Plan (the plan) is an integral part of Council’s suite of strategic management plans that links Council’s business plans and asset management plans and translates the outcomes and strategies of these plans into financial terms.
Generation 1 of the plan covers period a 10-year period 2021-2031, the first four years being underpinned by the 2021-22 to 2024-25 Budget with the remaining years based on key assumptions. Subsequent generations will be enhanced as our approach to long term planning matures as well as data and information are improved and made available.
The plan is an integral part of Council’s planning process and is aligned to other core planning documents, including the 30 Year Community Vision, the Council’s Our Community Plan (2021-2025), the Social Infrastructure Plan and Sustainability Framework. Further updates will be made to the plan to integrate information from Asset Management Plans and Workforce Plans when they are completed and adopted by Council.
The plan will be exhibited for 14 days on the City’s Have Your Say Engagement page on the Geelong Australia website.
Feedback received from the engagement will be considered in development of the Final plan.
The Long-term Financial Plan will be presented to Council for adoption at a meeting on 26 October 2021.
Councillor Aitken moved, Councillor Mason seconded -
That Council:
|
Carried.
Key financial sustainability principles are used to provide Council with a sound framework and guidance for decision making in which sound and sustainable financial decisions are made.
Key financial indicators used to assess Council’s long-term financial sustainability include the operating surplus/(deficit) ratio, asset renewal funding ratio, liquidity and indebtedness ratio. These ratios are in line with Council’s established benchmarks and risk appetite to ensure the financial sustainability of Council’s long-term financial performance and position.
The Local Government Act 2020 requires a financial plan be developed in accordance with its deliberative engagement practices.
In the development of Long-term Financial Plan, a process of community engagement has been undertaken. Further engagement will be undertaken for a two week period for additional community comment.
The City’s Social Equity Principles have influenced the development of the Long-term Financial Plan.
The Long-term Financial Plan is prepared to comply with the requirements of the Local Government Act 2020 and Council’s Borrowing Policy.
This report aligns with Our Community Plan 2021-2025 strategic priority:
High-performing council and organisation.
Strong local economy.
This report aligns with the Community led 30-year Vision, “Greater Geelong: A Clever and Creative Future” community aspiration:
A prosperous economy that supports jobs and education opportunities.
No officer involved in the preparation of this report declared a general or material conflict of interest.
Under section 91 of the Local Government Act 2020 Council must develop and adopt a Financial Plan by 31 October in the year following a general election.
The proposed plan identified the sources and allocation of resources to assist in the implementation of a number of initiatives to support environmental sustainability as identified in Our Community Plan 2021-2025.
DRAFT Long Term Financial Plan [2.2.1 - 38 pages]
As there was no further business the meeting closed at 6:36pm Tuesday, 14 September 2021.
Signed: _________________________________________
Councillor Trent Sullivan (Deputy Mayor)
Date of Confirmation: _____________________________
Contents | Previous Page: Section 1 - Procedural Matters
