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Annual Financial Report and Performance Statement

For the year ended 30 June 2016

Maroondah City Council Annual Report 2015/16 | 157

Understanding the Financial Report Introduction The Financial Report shows how Council performed financially during the 2015/16 financial year and the overall position at the end (30 June 2016) of the financial year.

Council presents its financial report in accordance with the Australian Accounting Standards.

Particular terms required by the Standards may not be familiar to some readers. Further, Council is a ‘not for profit’ organisation and some of the generally recognised terms used in private sector company reports are not appropriate for Council’s reports.

Council is committed to accountability and transparency. It is in this context that the plain English guide has been developed to assist readers to understand and analyse the financial report.

What is contained in the Annual Financial Report? Council’s financial report has two sets of Statements:

1. Financial Statements 2. Performance Statement

Each of these statements is prepared by Council’s employees, examined by the Council Audit and Risk Advisory Committee and by Council, and then are audited by the Victorian Auditor-General.

Financial Statements The Financial Statements report on how the Council performed financially during the year and the overall financial position at the end of the year.

The Financial Statements include a Comprehensive Income Statement, Balance Sheet, Statement of Changes in Equity, Statement of Cash Flows and Statement of Capital Works. The Financial Statements also contain 39 Notes, which set out Council’s accounting policies and details of the line item amounts contained in each of the first four main statements.

158 | Maroondah City Council Annual Report 2015/16

Comprehensive Income Statement The Comprehensive Income Statement is sometimes referred to as a ‘Profit and Loss Statement’ in the private sector and shows the: Sources of Council’s revenue under various income headings Expenses incurred in running the Council during the year. These expenses relate only to the

‘Operations’ and do not include the cost associated with the purchase or the building of assets. While asset purchase costs are not included in the Expenses there is an item for ‘Depreciation’.

The surplus or deficit for the year is the key figure to look at on the Comprehensive Income Statement to assess Council’s financial performance. It is calculated by deducting the total expenses for the year from total revenues.

The comprehensive result on the Comprehensive Income Statement includes items that will not be reclassified to surplus or deficit in future periods,

Balance Sheet The Balance Sheet is a one page summary which is a snapshot of the financial situation as at 30 June. It shows what Council owns as assets and what it owes as liabilities. The bottom line of this Statement is Net Assets. This is the equity or net worth of Council which has been built up over many years.

The assets and liabilities are separated into Current and Non-Current. Current generally means those assets which will be received or liabilities which will be paid, within the next 12 months. Non-current are all those assets and liabilities which are held for a longer term.

The net current assets or working capital as it is sometimes called is an important measure of Council’s ability to meet its debts as and when they fall due.

The components of the Balance Sheet are:

Current and Non-Current Assets

Cash and cash equivalent assets include cash and investments, i.e. cash held in the bank and in petty cash and the market value of Council’s investments maturing within 90 days.

Trade and other receivables are monies owed to Council by ratepayers and others. Financial assets are the market value of investments held with a maturity date greater than 90 days. Inventories – consumables are stocks held for sale or consumption in Council’s services. Other assets include prepayments of expenses that Council has paid in advance of the service

delivery and assets held for resale which are in a position of being marketed and sold. Investments in associates represent Council’s investment in Eastern Regional Libraries Corporation

and Narre Warren User Group. Intangibles represent non-current assets held by Council that are not tangible. Property, infrastructure, plant and equipment is the largest component of Council’s worth and

represents the value of all the land, buildings, roads, drains, vehicles, equipment etc., which has been built up by Council over many years

Current and Non-Current Liabilities

Trade and other payables are those to whom Council owes money as at 30 June. Trust fund and deposits represent monies held in trust by Council e.g. Security Deposits. Provisions represent estimates of future obligations and include accrued Long Service and Annual

Leave owed to employees. Interest-bearing liabilities are borrowings of Council.


Net Assets

This term is used to describe the difference between the value of Total Assets and the value of Total Liabilities. It represents the net worth of Council as at 30 June.

Total Equity

This always equals Net Assets. It is made up of the following components: assets revaluation reserve is the difference between the previously recorded value of assets and their

current valuations accumulated surplus is the value of all net assets accumulated over time.

Statement of Changes in Equity During the course of the year the value of Total Equity as set out in the Balance Sheet changes. This Statement shows the values of such changes and how these changes arose.

The main reasons for a change in equity stem from: the ‘surplus or deficit’ from operations, described in the Comprehensive Income Statement as

Comprehensive Result for the year the use of monies from Council’s reserves a revaluation of the assets which takes place on a regular basis to ensure the most up-to-date value is

included in Council’s books. It also occurs when existing assets are taken up in the books for the first time.

Statement of Cash Flows The Statement of Cash Flows summarises Council’s cash payments and cash receipts for the year. This Statement is presented according to a very specific Accounting Standard and needs some care in analysis. The values may differ from those shown in the Comprehensive Income Statement because the Comprehensive Income Statement is prepared on an accrual accounting basis.

Cash in this Statement refers to bank deposits and other forms of highly liquid investments that can be readily converted to cash.

Council’s cash arises from, and is used in, three main areas. 1. Cash flows from operating activities: Receipts – all cash received into Council’s bank account from ratepayers and others who owe

money to Council. Receipts also include the interest earnings from Council’s cash investments. It does not include the costs associated with the sale of assets.

Payments – all cash paid by Council from its bank account to employees, creditors and other persons. It does not include the costs associated with the creation of assets.

2. Cash flows from investing activities: This section shows the cash invested in the creation or purchase of property, infrastructure, plant

and equipment assets and the cash received from the sale of these assets. 3. Cash flows from financing activities: This is where the receipt and repayment of borrowed funds are recorded.

The bottom line of the Cash Flows Statement is the cash and cash equivalents at end of financial year. This shows the capacity of Council to meet its cash debts and other liabilities.


Notes to the Financial Statements The Notes are a very important and informative section of the report. The Australian Accounting Standards are not prescriptive regarding a lot of issues. Therefore, to enable the reader to understand the basis on which the values shown in the Statements are established, it is necessary to provide details of Council’s significant accounting policies. These are described in Note 1.

Apart from the accounting policies, the Notes also give details behind many of the summary figures contained in the Statements. The Note numbers are shown beside the relevant items in the Comprehensive Income Statement, Balance Sheet, Statement of Changes in Equity and the Statement of Cash Flows.

The Notes also include information that Council wishes to disclose but which cannot be incorporated into the Statements.

Other notes include: The breakdown of expenses, revenues, reserves and other assets Contingent liabilities Transactions with persons related to Council.

The Notes should be read at the same time as, and together with, the other parts of the Financial Statements to get a clear picture of the accounts.

Certification by the Principal Accounting Officer, Chief Executive Officer (CEO) and Councillors The Certification of the Principal Accounting Officer is made by the person responsible for the financial management of Council that, in her/his opinion, the Financial Statements have met all the statutory and professional reporting requirements.

The Certification of the CEO and Councillors is made by two Councillors and the CEO on behalf of Council that, in their opinion, the Financial Statements are fair and not misleading or inaccurate.

Performance Statement The Performance Statement reflects the Council performance on indicators included in the Local Government Performance Reporting Framework. As this framework came into effect on 1 July 2014, the 2015/16 financial year is the first reporting period for these indicators that comparative data for past years is available. Please note that the source for some of the data included in this framework is derived from external sources such as the Local Government Satisfaction Survey, the Australian Bureau of Statistics and the Department of Health and Human Services.

Auditor General’s Report The Independent Audit Report provides the reader with an external and independent opinion on the Financial Statements. It confirms that the Financial Report has been prepared in accordance with relevant legislation and professional standards and that it represents a fair picture of the financial affairs of the Council.


Table of Contents – Annual Financial Report Page

Financial Statements Comprehensive Income Statement 164 Balance Sheet 165 Statement of Changes in Equity 166 Statement of Cash Flows 167 Statement of Capital Works 168

Notes to Financial Statements. Introduction 169 Note 1 Significant accounting policies 169 Note 2 Budget comparison 176 Note 3 Rates and charges 179 Note 4 Statutory fees and fines 179 Note 5 User fees 179 Note 6 Grants 180 Note 7 Contributions 181 Note 8 Net gain/(loss) on disposal of property, infrastructure, plant and equipment 181 Note 9 Other income 181 Note 10 Employee costs 181 Note 11 Materials and services 182 Note 12 Bad and doubtful debts 182 Note 13 Depreciation and amortisation 182 Note 14 Borrowing costs 182 Note 15 Other items of expense 183 Note 16 Investment in associates, joint ventures and subsidaries 183 Note 17 Cash and cash equivalents 184 Note 18 Trade and other receivables 184 Note 19 Other financial assets 185 Note 20 Inventories 185 Note 21 Other assets 185 Note 22 Property, infrastructure, plant and equipment 186 Note 23 Intangible assets 192 Note 24 Trade and other payables 192 Note 25 Trust funds and deposits 193 Note 26 Provisions 193 Note 27 Interest bearing loans and borrowings 194 Note 28 Reserves 195 Note 29 Adjustments for prior periods 196 Note 30 Reconciliation of cash flows from operating activities to surplus (deficit) 196 Note 31 Reconciliation of cash and cash equivalents 196 Note 32 Financing arrangements 196 Note 33 Commitments 197 Note 34 Operating leases 198 Note 35 Superannuation 198 Note 36 Contingent liabilities and contingent assets 199 Note 37 Financial instruments 201 Note 38 Related party transactions 203 Note 39 Events occurring after balance date 204

Certification of the Financial Report 205 Victorian Auditor-General’s Report on the Financial Report 206


Table of Contents – Annual Financial Report (continued...)

Page Performance Statement

Performance Statement for the Year Ended 30 June 2016 207 Certification of the Performance Statement 219 Victorian Auditor-General’s Report on the Financial Report 206


Comprehensive Income Statement For the year ended 30 June 2016

The above statement should be read in conjunction with accompanying notes.


Balance Sheet As at 30 June 2016

The above balance sheet should be read in conjunction with accompanying notes.


Statement of Changes in Equity For the year ended 30 June 2016



Statement of Cash Flows For the year ended 30 June 2016



Statement of Capital Works For the year ended 30 June 2016



Notes to the Financial Statements For the year ended 30 June 2016


Note 2 Budget comparison (cont)

(b) Capital Works Budget Actual Variance

2016 2016 2016 $'000 $'000 $'000 Ref

Property Land

Total Land Buildings 20,183 18,493 (1,690)

Total Buildings 20,183 18,493 (1,690)

Total Property 20,183 18,493 (1,690)

Plant and Equipment Plant, machinery and equipment 3,332 2,692 (640) 2

Fixtures, fittings and furniture 60 89 29

Computers and telecommunications 890 633 (257) 3

Total Plant and Equipment 4,282 3,414 (868)

Infrastructure Roads 4,299 5,101 802 4

Footpaths and cycleways 1,840 1,948 108

Drainage 2,180 1,859 (321) 5

Waste management 90 117 27

Recreational, leisure and community facilities 2,941 2,191 (750) 6

Parks, open space and streetscapes 932 969 37

Off street car parks 330 400 70 7

Total Infrastructure 12,612 12,585 (27)

Total Capital Works Expenditure 37,077 34,492 (2,585)

Represented by: New asset expenditure 14,875 12,030 (2,845)

Asset renewal expenditure 18,799 16,759 (2,040)

Asset expansion expenditure Asset upgrade expenditure 3,403 5,703 2,300

Total Capital Works Expenditure 37,077 34,492 (2,585)

(i) Explanation of material variations

Variance Item Explanation Ref

1 Buildings Delays in the East Ringwood Pavilion $2,000k and the Building Renewal program $77 4k offset by increase spending on Mullum Pavilion $1200k and Yarra Valley Bridge $428k.

2 Plant, machinery and equipment

Delays in the plant and equipment expenditure $600k and leisure equipment at Aquahub $124k

3 Computers and The transfer of software expenditure to the Intangible Asset $152k and also Computer Equipment below the threshhold telecommunications written back to operating expenditure $1 OOk.

4 5 6

Roads Drainage Recreational, leisure and community facilities

The variance relates to expenditure due to increased funding for Oban Road $780k and Great Ryrie Street $296k. Expenditure on North West Drainage $100k and Ringwood Metropolitan Activity Centre $328 delay to 2016/17 Variance due to Sports Field Renovation carried forward to 2016/17 $767k.

7 Off street car parks Extra expenditure for car park at Wyreena Reserve.


190 Maroondah City Council Annual Report 2015/16

Note 25

Note 26

Trust funds and deposits

Current

Refundable deposits Retention amounts

Other deposits Total current trust funds and deposits

Non-Current

Other deposits Total non-currenttrustfunds and deposits Total trust funds and deposits

Purpose and nature of items

Refundable deposits- Deposits are taken by council as a form of surety in a number of circumstances, including in relation to building works, tender deposits, contract deposits and the use of civic facilities.

Retention Amounts- Council has a contractual right to retain certain amounts until a contractor has met certain requirements or a related warrant or defect period has elapsed. Subject to the satisfactory completion of the contractual obligations, or the elapsing of time, these amounts will be paid to the relevant contractor in line with Council's contractual obligations.

Provisions 2016

Balance at beginning of the financial year Additional provisions Amounts used Increase in the discounted amount arising because of time and the effect of any change in the discount rate Balance at the end of the financial year

(a) Employee provisions

Current provisions expected to be wholly settled within 12 months

Annual leave Long service leave Service Gratuties Other

Current provisions expected to be wholly settled after 12 months

Annual leave Long service leave Service Gratuties

Total current provisions

Non-current

Long service leave Annual leave Total non-current provisions

Aggregate carrying amount of employee provisions: Current Non-current Total aggregate carrying amount of employee

The following assumptions were adopted in measuring the present value of employee benefits: Weighted average increase in employee costs Weighted average discount rates Weighted average settlement period

2016 2015 $'000 $'000

2,199 2,172 427 583 710 653

3,336 3,408

208 343

208 343 3,544 3,751

11,123 10,526 4,262 4,257 (3,437) (3,723)

81 63 12,029 11,123

2,277 2,062 800 800

51 38 9 13

3,137 2,913

1,203 1,073 6,546 6,116

98 110 7,847 7,299

10,984 10,212

1,045 911

1,045 911

10,984 10,212 1,045 911

12,029 11,123

4.13% 4.44%

2.02% 2.85% 7.36 years 6.85 years


Note 28 Reserves

(a) Asset revaluation reserves

2016

Property

Land

Buildings

Infrastructure

Roads

Footpaths and cycleways

Drainage

Total asset revaluation reserves

2015

Property

Land

Buildings

Infrastructure

Roads

Footpaths and cycleways

Drainage

Total asset revaluation reserves

Balance at beginning of

reporting period

$'000

506,342 83,188

589,530

196,623 22,657

144,229 363,509 953,039

506,342 83,188

589,530

157,279 5,230

144,229 306,738 896,268

Increment (decrement)

$'000

35,398 (17,426) 17,972

8,873 1,230

(7,818) 2,285

20,257

39,344 17,427

56,771 56,771

The asset revaluation reserve is used to record the increased (net) value of Council's assets over time.

(b) Other reserves

2016

General

Total other reserves

2015

General

Total other reserves

Balance at beginning of

reporting period

$'000

1,000 1,000

Transfer from accumulated

surplus

$'000

4,000 4,000

1,000 1,000

Transfer to accumulated

surplus

$'000

The general reserve is used to record funds set aside for future possible contingencies e.g. unfunded superannuation call, unplanned capital expenditure

Balance at end of reporting period

$'000

541,740 65,762

607,502

205,496 23,887

136,411 365,794 973,296

506,342 83,188

589,530

196,623 22,657

144,229 363,509 953,039

Balance at end of reporting period

$'000

5,000 5,000

1,000 1,000


Certification of the Financial Statements


Victorian Auditor General’s Report - Financial Statements


Performance Report


Performance Statement


Description of municipality

The City of Maroondah covers a land area of 61.4 square kilometres in Melbourne's outer east, 22 kilometres f rom the Central Business District (CBD). The area is a substantially developed periurban residential municipality, with an estimated population of 112,310 residents1 and 43,663 households with an average of 2.55 people per household?

The City of Maroondah includes the suburbs of Bayswater North, Croydon, Croydon Hills, Croydon North, Croydon South, Heathmont, Kilsyth South, Ringwood, Ringwood East, Ringwood North and Warranwood. The City also includes small sections of Kilsyth, Park Orchards, Vermont and Wonga Park. With little rema ining land available for greenfield residential development, future population growth will be mainly stimulated by housing consolidation and medium density development.

Maroondah has the strategic advantage of being located at the north-eastern junction of the Eastern Freeway - Eastlink corridor. There are two train lines and a large number of bus routes linking the City with other regions. Some areas have limited access to public transport and many residents are reliant on private vehicles. Our sustainable transport links continue to expand, with on-road cycling paths and shared paths on major t rails, including the Mullum Mullum Creek Trail, the Eastlink Trail, Taralla Creek Trail and the Dandenong Creek Trail.

This Performance Statement reflects Council performance on indicators included in the Local Government Performance Reporting Framework. Please note that the source for some of the data included in this framework is derived from external sources such as the Local Government Community Satisfaction Survey, the Australian Bureau of Statistics and the Department of Health and Human Services.

1 Estimated Residential Population, Australian Bureau of Statistics, 2016. 2 Maroondah Population Forecasts, ld Consulting, 2016.


Sustainable Capacity Indicators


R15(3) Sch3 R16(1) R17(2)

Results Indicator/ measure 2015 2016 Population Expenses per head of municipal

population [Total expenses I Municipal population]

$958.27 $1,066.04

Infrastructure per head of municipal $6,904.17 $6,954.91 population [Value of infrastructure I Municipal population]

Population density per length of 234.65 236.44 road Own-source revenue Own-source revenue per head of $847 municipal population [Own-source revenue I Municipal population]

Recurrent grants Recurrent grants per head of population [Recurrent grants I population]

Disadvantage Relative socio-economic disadvantage (Index of Relalive Socio-economic Disadvantage by decile]

$131

9

$927.29

$82.01

9

Material Variat ions

The increase is due Lo non cash wrile off of property, plant and equipment at year end.

No malerial varialions

No material variations

No malerial varialions

Due Lo Lhe early paymenl of Lhe half o f t he 2015116 Financial Assistance Grant Municipal in t he 2014115 Financial Year



BP Definitions "adjusted underlying revenue" means total income other t han: (a) non-recurrent grants used to fund capital expenditu re; and (b) non-monetary asset contributions; and (c) contributions to fund capit al expenditure from sources other than those referred to above " infrastructure" means non-current property, plant and equ ipment excluding land " local road" means a sealed or unsealed road for w hich t he council is the responsible road authority under t he Road Management Act 2004 " populalion" means Lhe residenl populal ion esLimaLed by council "own-source revenue" means adjusted underlying revenue other t han revenue that is not under the control or council (includ ing governmenL gran ls) " relative socio-economic disadvantage", in relat ion to a municipality, means the relative socio-economic disadvantage, expressed as a decile for the relevant financial year, of the area in which the municipality is located according t o the Index of Relative Socio-Economic Disadvantage (catalogue Number 2033.0.55.001) of SElF A "SEIFA" means Lhe Socio-Economic Indexes for Areas published from Lime Lo lime by Lhe Auslralian Bureau of Statistics on its Internet website " unresLricLed cash" means all cash and cash equivalenls oLher Lhan resLricLed cash.


Service Performance Indicators


R15(1) Sch3 R16(1) tR17(2)

Service/Indicator/measure Aquatic facilities Utilisation Utilisation of aquatic facilities

[Number of visits to aquatic facilities I Municipal population) Animal management Health and safety Animal management prosecutions [Number of successful animal management prosecutions]

I Food safety Heath and safety Critical and major non-compliance noli fica lions [Number of critical non-compliance notifications and major noncompliance noti fications about a food premises followed up I Number of crilical non-compliance notifications and major noncompliance noli fications about food premises] x100

Governance Satisfaction Satisfaction with council decisions [Community satisfaction rating out of 100 with how council has performed in making decisions in I the lote"" of the oomm"""YI

Home and community care Participation Participation in HACC service [Number of people that received a HACC service I Municipal target populalion for HACC services] xlOO

Participation

Participation in HACC service by CALDpeople [Number of CALD people who receive a HACC service I Municipal target population in relation to CALD people for HACC services]xlOO

Results 2015 2016 Material Variations

5.75

6

97.92%

61.00

23.35%

24.02%

7.23 Increase in ut ilisation can be attr ibuted

to the opening of Aqua nat ion in August

2015

1 This number fluctuates based on the nature of incidents reported each year

92.31% Variance resulting from phasing assessment and follow ups across the end of financial year. Some notifications are to be followed up in July 2016.

61.00 No material variations

25.63% No material variations

23.21% No material variations


Results

Service/Indicator/measure 2015 2016 Material Variations

Libraries Participation Active library members [Number of active library members I Municipal population] x100

Maternal and child health Participation

17.08%

Participation in the MCH service 83.51% [Number of children who attend the MCH service alleasl once (in lhe year) I Number of children enrolled in the MCH service] x100

Participation Participation in the MCH service by 73.24% Aboriginal children [Number of Aboriginal children who attend the MCH service at least once (in the year) I Number of Aboriginal children enrolled in the MCH service] x100

Roads Satisfaction Satisfaction with sealed local roads [Community satisfaction rating out of 100 with how council has performed on the condition of sealed local roads)

Statutory Planning Decision making Council planning decisions upheld al VCAT [Number of VCAT decisions that did not set aside council's decision in relation to a planning application I Number of VCAT decisions in relation to planning applications] x100

Waste Collection Waste diversion

69

76.47%

Kerbside collection waste diverted 55.28% from landfill [Weight of recyclables and green organics collected from kerbside bins I Weight of garbage, recyclables and green organics collected from kerbside bins] x100

24.17% The increase in active members can be attributed to the opening of the REALM library in October 2015.

90.62% Data taken from children up to the age of 18 months as indicative of number number of children who allended lhe service "at least" once in the year. Over the age of 18 months, visits are scheduled at less than one per year.

118.31% Data for th is indicator varies widely from year to year given the low numbers of indigenous families using the service in Maroondah . This

68

42.86%

53.96%

indicator reflects actual visits throughout the year and the enrolments as of 30 June. ll is possible that attendees during the year may not be enrolled at the end of the year.


This indicator measures the percentage of planning application decisions made by Council, appealed by an applicant and subject to review by VCAT that were not set aside (i.e. VCAT agreed with Council's decision.) It should be noted lhis does nol capture results where Council negoliales a successful outcome with the applicant during the appeal process.



Definitions "Aboriginal child" means a child who is an Aboriginal person "Aboriginal person" has the same meaning as in the Aboriginal Heritage Act 2006 "active library member" means a member of a library who has borrowed a book from the library "annual report" means an annual report prepared by a council under sections 131, 132 and 133 of the

Act "CALD" means culturally and linguistically diverse and refers to persons born outside Australia in a country whose national language is not English "class 1 food premises" means food premises, within the meaning of the Food Acl1984, that have been declared as class 1 food premises under section 19C of that Act "class 2 food premises" means food premises, within the meaning of the Food Acl1984, that have been declared as class 2 food premises under section 19C of tha t Act "Community Care Common Standards "means the Community Care Common Standards for the delivery of HACC services, published from time to time by the Commonwealth "critical non-compliance outcome notification" me·ans a notification received by council under section 19N(3) or (4) of the Food Act 1984, or advice given to council by an authorized officer under that Act, of a deficiency that poses an immediate serious threat to public health " food premises" has the same meaning as in the Food Act 1984 "HACC program" means the Home and Community Care program established under the Agreement entered into for the purpose of the Home and Community Care Act 1985 of the Commonwealth "HACC service" means home help, personal care or community respite provided under the HACC program "local road" means a sealed or unsealed road for which the council is the responsible road authority under the Road Management Act 2004

"major non-compliance outcome notification" means a notification received by a council under section 19N(3) or (4) of the Food Act 1984, or advice given to council by an authorized officer under that Act, of a deficiency that does not pose an immediate serious threat to public health but may do so if no remedial action i.s taken "MCH" means the Maternal and Child Health Service provided by a council to support the health and development of children within the municipality from birth until school age "population" means the resident population estimated by council " target population" has the same meaning as in the Agreement entered into for the purposes of the Home and Community Care Act 1985 of the Commonwealth "WorkSafe reportable aquatic facility safety incident" means an incident relating to a council aquatic facility that is required to be notified to the Victorian WorkCover Authority under Part 5 of the Occupational Health and Safety Act 2004.


Financial Performance Indicators


Results Forecasts Dimension/indicator/measure 2015 2016 2017 2018 2019 2020 Material Variations

Rl5(2) Efficiency

Sch3 Revenue level R16(1) Average residenlial rale per $1,451 $1,506 $1,542 $1,605 $1,633 $1,694 No material variation R16(2) residenlial properly assessment R17(2) [Residential rale revenue I Rl7(3) Number of residential property

assessments]

Expenditure level Expenses per properly assessment $2,220 $2,443 $2,441 $2,437 $2,472 $2,550 The slowing upward trend reflects cost [Tolal expenses I Number of conlainmenl measures Laken by council property assessmenls] since 2014 resulting in forecasl increases in

expenses below CPI

Workforce turnover Resignations and terminations 4.21% 7.53% 6.59% 6.59% 6.59% 6.59% No malerial varia lion compared to average staff [Number of permanent staff r esignations and terminations I Average number of permanent staff for the financial year] x100

Liquidity Working capital

Current assets compared to 195.74% 171.89% 167.61% 174.07% 174.41% 176.36% No material variance currenlliabililies (Currenl assets I Current liabilities] x100


Results Forecasts Dimension/ indicator/ measure .2015 2016 2017 2018 2019 2020 Material Variations

Unrestricted cash Unrestricted cash compared to 84.21% 94.41% 59.89% 68.70"/o 71.18% 75.99% No material variations current liabilities [Unrestricted cash I Current liabilities] x100

Obligations Asset renewal Asset renewal compared to 125.58% 87.18% 94.68% 93.08% 98.13% 99.00% The resul t ror this measure is expected to depreciation increase by 2020 to almost 100%. The [Asset renewal expenses I Asset increasing trend reflects measures taken depreciation] x100 since 2015 to address the asset renewal gap

through rate increases above CPI Loans and borrowings Loans and borrowings compared 31.99% 28.75% 25.94% 23.44% 21.04% 11.8.76% The decreasing forecast trend reflects the to rates scheduled repayment of debt over the four (Interest bearing loans and year period borrowings I Rate revenue] x100

Loans and borrowings Loans and borrowings repayments 1.55% 2.94% 2.81% 2.70% 2.59% 2.50% The decreasing forecast trend reflects the compared to rates scheduled repayment of debt over the four [In terest and principal period. repayments on interest bearing loans and borrowings I Rate revenue] x100

Indebtedness Non-current liabilities compared 25.19% 21.64% 19.33% 17.50% 15.72% 14.03% The decreasing forecast trend reflects t he to own source revenue scheduled repayment of debt over the four [Non-current liabilities I Own period source revenue] x100

8


Results Forecasts Dimension/indicator/measure 2015 2016 2017 2018 2019 2020 Material Variations

Operating position Adjusted underlying result Adjusted underlying surplus (or 3.65% -0.77% 4.19% 4.34% 4.72% 4.97% The improving trend over the 4 year forecast deficit) period is due to the introduction of cost [Adjusted underlying surplus containment measures in 2016 and the increase (deficit)/ Adjusted underl ying in income base. revenue] xlOO

Stability Rates concentration Rates compared lo adjusted 66.81% 65.84% 64.40% 65.71% 65.80% 66.01% No material variations underlying revenue [Rate revenue/ Adjusted underlying revenue] x100

Rates effort Rates compared lo properly 0.31% 0.32% 0.33% 0.32% 0.34% 0.34% No material variations values [Rate revenue I Capital improved

I value of rateable proper lies in the municipality] x100


BP Definitions "adjusted underlying revenue" means total income other than: (a) non-recurrent grants used to fund capital expenditure; and (b) non-monetary asset contribulions; and (c) contributions to fund capital expenditure from sources other than those referred to above "adjusted underlying surplus (or deficit)" means adjusted underlying revenue less total expenditure "asset renewal expendiLUre" means expenditure on an exisling asset or on replacing an exisling asset that returns the service capability of the asset toils original capability "current assets" has the same meaning as in t he AAS "current liabililies" has the same meaning as in the AAS "non-current assets" means all assets other t han current assets

"non-current liabilit ies" means ali liabilities other t han current liabilities "non-recurrent grant" means a grant obtained on t he condition that it be expended in a specified manner and is not expected to be received again during the period covered by a council's Strategic Resource Pian "own-source revenue" means adjusted underlying revenue other than revenue that is not under the control of council (including government grants "population "means the resident population estimated by council " ra te revenue" means revenue from general rates, municipal charges, service rates and service charges "recurrent grant "means a grant other t han a non-recurrent grant "residenlial rates" means revenue from general rates, municipal charges, service rates and service charges levied on residenlial properlies "restricted cash" means cash and cash equivalents, within the meaning of t he AAS, t hat are not available for use other t han for a purpose for which it is restricted, and includes cash to be used to fund capital works expenditure from the previous financial year "unrestricted cash" means all cash and cash equivalents other t han restricted cash.


Rl8(1) R18(2)

In my opinion, the accompanying performance statement has been prepared in accordance with the Local Government Act 1989 and the Local Government (Planning and Reporting) Regulations 2014.

Alan Ellis CPA Principal Accounting Officer Dated: 31 August 2016

In our opinion, the accompanying performance statement of the (council nome) for the year ended 30 June 2016 presents fairly the results of council's performance in accordance with the Loco/ Government Act 1989 and the Local Government (Planning and Reporting) Regulations 2014.

The performance statement contains the relevant performance indicators, measures and results in relation to service performance, f inancial performance and sustainable capacity.

At the date of signing, we are not aware of any circumstances that would render any particulars in the performance statement to be misleading or inaccurate.

We have been authorised by the council and by the Local Government (Planning and Reporting) Regulat ions 2014 to certify this performance statement in its final form.

T. Dib Councillor Dated: 31 August 2016

~-s. Kozlowski Chief Executive Officer Dated: 31 August 2016

Certification of the Performance Statement


Victorian Auditor General’s Report - Performance Report


Independent Auditor's Report (continued)

Independence

The Auditor-General's independence is established by the Constitution Act 1975. The Auditor-General is

not subject to direction by any person about the way in which his powers and responsibilities are to be

exercised. In conducting the audit, I and my staff and delegates complied with all applicable independence requirements of the Australian accounting profession.

Auditor's Opinion

In my opinion, the performance statement of the Maroondah City Council in respect of the 30 June 2016

financial year presents fairly, in all material respects, in accordance with the Local Government Act 1989.

MELBOURNE 6 September 2016

~.j Dr Peter Frost Acting Auditor-Genera/

2

Auditing in the Public Interest


annual financial report and ... - maroondah.vic.gov.au · current and non-current assets cash and...

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