attachments for reports ordinary …...weed biosecurity - risk management system table 1: property...
TRANSCRIPT
137 Oberon Street PO Box 84 Oberon NSW 2787 Telephone: (02) 6329 8100 Fax: (02) 6329 8142 Email: [email protected] Email: [email protected]
ATTACHMENTS FOR REPORTS
ORDINARY COUNCIL MEETING
Tuesday 20 November 2018
commencing at 5.30pm
in the Oberon Council Chambers
Page 1
Page 2
ATTACHMENTS FOR REPORT
Report Item
11.02 UPPER MACQUARIE COUNTY
COUNCIL MEETING
ATTACHMENTS
Copy of the presentation to combined Mayor, General Manager and
Delegates Meeting held on 26 October 2018
Page 3
Page 4
UpperMacquarieCountyCouncilJointMeetingwithConstituentCouncils.!26thOctober2018
Upp
erM
acqu
arieCou
ntyCo
uncil–
Gettin
gtheJobdo
ne!
1
Page 5
1.35Mhectares
4,200kmsroadsides
41,000properties
$918,000certainincome
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
2
Page 6
THEREISANEWAPPROACHTOWEEDBIOSECURITY
Propertyinspectionandadviceonweedcontrolrequirementsisstillakeyaspect.
Cooperationandacoordinatedresponseisemphasised.
ALLLANDHOLDERSNOWHAVETHESAMEDUTYANDLIABILITY.
Thefocusisnowonmanagingrisknoteradication.
ProsecutionisthelastresortBUTtherearemoreotherenforcementtoolsavailable.
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
3
Page 7
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
4
Page 8
PropertyWeedRiskRating–CountyAverageYTD
66%
15%
10% 9%
UpperMacquarie
WeedRisk1
WeedRisk2
WeedRisk3
WeedRisk4
2018/2019YTD:OnsiteInspection&UMCCRiskRatingTool
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
5
Page 9
PropertyWeedRiskRating–TargetResults
81%
19%
UMCC
LowerRisk
HigherRisk
2018/2019YTD:TargetandNon-TargetProperties!
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
6
Page 10
PERFORMANCE
IMPROVEMENT VIABILITY
FUTURE
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
7
Page 11
IMPROVEMENT:
StaffingpositionswereallfilledwithcompetentpeoplebyMay2018.
ApermanentGeneralManagerhasbeeninplacesinceMay2018.
Acomprehensivebiosecurityimplementationsystemwasputinplacefrom1stJuly2018.
Aviable10yearBusinessActivityStrategicPlanwasadoptedbefore1stJuly2018.
A‘ManagementInformationSystem’andbetterReportingCapabilitybegandevelopinginAugust2018.
RebuildingrelationshipswithkeyStateGovernmentlandholdersstartedinJuly2018.
Upp
erM
acqu
arieCou
ntyCo
uncil–
Gettin
gtheJobdo
ne!
THEFOUNDATIONISSUESAREBEINGADDRESSED:
8
Page 12
TheBiosecurityAct(2015)isnowbeingproperlyimplemented-throughacomprehensiveBIOSECURITYCOMPLIANCE&ENFORCEMENTPolicyandassociatedriskmanagementsystem.ThegoaloftheCountyCouncilunderthenewlegislativeframeworkisto:“makesureprivateandpubliclandholdersmanagetheirpropertiestoreachandmaintainasustainablylowlevelofweedbiosecurityrisk!”
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
9
Page 13
WEEDBIOSECURITY-RiskManagementSystem
TABLE1:PropertyInspectionProcess
Inspection(1).
(A)AssessWEEDBIOSECURITYRISKforProperty
[REFERtoTABLE2-WeedRiskScoring]
BiosecurityRisk=0_NONE
UMCCWeedBiosecurityOfficergivesnoticeofintentiontoinspectproperty
ScheduledInspectionofWEEDS
ReportorComplaintabout
BiosecurityRisk=2_MEDIUM
BiosecurityRiskHIGHEST
BiosecurityRiskHIGH
BiosecurityRiskMEDIUM
BiosecurityRiskHIGHEST
BiosecurityRiskHIGH
BiosecurityRiskMEDIUM
BiosecurityRiskHIGHEST
BiosecurityRiskHIGH
BiosecurityRiskMEDIUM
ENDofWEED BiosecurityRiskProcessPHASE
STARTWEEDBiosecurityRiskProcessPHASE
STARTWEEDBiosecurityRisk ProcessPHASE
ENDofWEED BiosecurityRiskProcessPHASE
ENDofWEED BiosecurityRiskProcessPHASE
BiosecurityRisk=3_HIGH
BiosecurityRisk=4_HIGHEST
OO
BiosecurityRisk=1_LOW
BiosecurityRiskLOW
BiosecurityRiskLOW
BiosecurityRiskLOW
(B)AssignaWeedComplianceRatingtotheProperty.
[RefertoTable3forComplianceRatings]
Inspection(2).
(A)AssessWEEDBIOSECURITYRISKforProperty
[REFERtoTABLE2-WeedRiskScoring]
Inspection(3).
(A)AssessWEEDBIOSECURITYRISKforProperty
[REFERtoTABLE2-WeedRiskScoring]
Inspection(4).
(A)AssessWEEDBIOSECURITYRISKforProperty
[REFERtoTABLE2-WeedRiskScoring]
(C)IdentifyEnforcementOptionsforProperty.
[RefertoTable4WeedActionGuide]
BiosecurityRisk=0_NONE
BiosecurityRisk=0_NONE
BiosecurityRisk=0_NONE
(B)AssignaWeedComplianceRatingtotheProperty.
[RefertoTable3forComplianceRatings]
(C)IdentifyEnforcementOptionsforProperty.
[RefertoTable4WeedActionGuide]
(B)AssignaWeedComplianceRatingtotheProperty.
[RefertoTable3forComplianceRatings]
(C)IdentifyEnforcementOptionsforProperty.
[RefertoTable4WeedActionGuide]
(B)AssignaWeedComplianceRatingtotheProperty.
[RefertoTable3forComplianceRatings]
(C)IdentifyEnforcementOptionsforProperty.
[RefertoTable4WeedActionGuide]
ENDofWEED BiosecurityRiskProcessPHASE
ENDofWEEDBiosecurityRiskProcessPHASE
OO
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
10
Page 14
WEEDBIOSECURITY-RiskManagementSystemTABLE4:EnforcementActionGuide
LandholderWeedBiosecurityComplianceRating
MakeAwareofBiosecurityDuty
MakeEducationMaterialAvailable
ProvideBasicTechnicalAdvice
ProvideSpecialistTechnicalAdvice
AgreetoassistwithPhysicalControl
Agreetoincludeincontrolprograms
Agreetovoluntaryundertaking
IssueDirectionNotice
IssuePenaltyNotice
Demandenforceableundertaking
Forciblyundertakecontrolworks
TakeCourtproceedingtoenforceanUndertaking
TakeCourtproceedingtoenforceDirection
TakeCourtproceedingtoauthorisemandatoryworks
TakeCourtproceedingtoimposecriminalpenalty
0-FULL_COMPLIANCE N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A
1_HIGH_COMPLIANCE N/A N/A N/A N/A N/A N/A
2_MEDIUMCOMPLIANCE N/A N/A
3_LOW_COMPLIANCE N/A
4_LOWEST_COMPLIANCE
ONLYUNDEREXCEPTIONAL
CIRCUMSTANCES
LevelsofDecisionMaking
CooperativeComplianceTools EnforcedComplianceTools
GeneralManagerwithCouncilconcurrenceIndividualauthorisedofficerusesdescretion ChiefBiosecurityWeedsOfficerdescretion ChiefWeedsOfficerwithGeneralManagerconcurrence
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
11
Page 15
WEEDBIOSECURITY-RiskManagementSystemTABLE5:EnforcementPriorityTable
EnforcementWorkPriority
Risk_Score1 Risk_Score2 Risk_Score3 Risk_Score4
1stInspection LOWPRIORITY LOWPRIORITY MEDIUMPRIORITY HIGHPRIORITY
2ndInspection LOWPRIORITY MEDIUMPRIORITY HIGHPRIORITY HIGHESTPRIORITY
3rdInspection LOWPRIORITY MEDIUMPRIORITY HIGHPRIORITY HIGHESTPRIORITY
4thInspection LOWPRIORITY HIGHPRIORITY HIGHESTPRIORITY HIGHESTPRIORITY
PropertyWeedRiskRating(FromInspection)
Prop
ertyInspectio
nNu
mbe
r(AsperInspectio
nProcess)
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
12
Page 16
HIGHERRISKWEEDBIOSECURITYREGISTER (ForPropertyWeedRiskRating3&4ONLY)Inspection1 Inspection2 Inspection3 Inspection4
PropertyIDInspectionDate
PropertyRiskRating
InspectionReportIssuedBy.
ReinspectionPeriod(From)
InspectionDate
PropertyRiskRating
EvidenceCheck1
Direction,Undertaking,orLetter
ReinspectionPeriod(From)
InspectionDate
PropertyRiskRating
EvidenceCheck2
PIN,Direction,orUndertaking
ReinspectionPeriod(From)
InspectionDate
PropertyRiskRating
EvidenceCheck3
PINorSummons
ReinspectionPeriod(From)
LT65030 3/7/18 3 17-Jul-1830/11/201
8LT80820 4/7/18 3 18-Jul-18 1/12/2018BX271063 5/7/18 3 19-Jul-18 2/12/2018BX295237 5/7/18 3 19-Jul-18 2/12/2018BX274547 6/7/18 3 20-Jul-18 3/12/2018LT81300 6/7/18 3 20-Jul-18 3/12/2018BLA347135 10/7/18 3 24-Jul-18 7/12/2018LT81270 11/7/18 3 25-Jul-18 8/12/2018104222356RW 12/7/18 3 26-Jul-18 9/12/2018
104278593RW 13/7/18 3 27-Jul-1810/12/201
8
LT589978 13/7/18 3 27-Jul-1810/12/201
8
103689792RW 16/7/18 3 30-Jul-1813/12/201
8
LT104245 16/7/18 4 30-Jul-1813/12/201
8
BLA329234 17/7/18 4 31-Jul-1814/12/201
8
BLA329242 17/7/18 3 31-Jul-1814/12/201
8
LT103040 17/7/18 3 31-Jul-1814/12/201
8
LT107300 17/7/18 3 31-Jul-1814/12/201
8
LT114002 17/7/18 3 31-Jul-1814/12/201
8
104206283RW 20/7/18 303-
Aug-1817/12/201
8
BX117977 20/7/18 303-
Aug-1817/12/201
8
BX295492 6/8/18 420-
Aug-18 3/01/2019
101530620RW 8/8/18 322-
Aug-18 5/01/2019104533117RW 8/8/18 3
22-Aug-18 5/01/2019
LT104713 8/8/18 422-
Aug-18 5/01/2019
31233769RW 9/8/18 423-
Aug-18 6/01/2019
DataEnteredfrom1stPropertyInspection
DataEnteredherefrom2ndPropertyInspectionIncludesReviewofRiskRating&CurrentEnforcementApproach
DataEnteredherefrom3rdPropertyInspectionIncludesReviewofRiskRating&CurrentEnforcementApproach
DataEnteredherefrom4thPropertyInspectionIncludesReviewofRiskRating&CurrentEnforcementApproach
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
13
Page 17
546Sites/2,086ha
UMCCAREADATA=492Sitescovering6,911haofSerratedTussockinfestation.
UpperMacquarieCountyCouncil‘areaofoperations’
SerratedTussockInvasionAreas2016:2018
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
14
Page 18
PERFORMANCE:
Candemonstrateimprovementsalreadyin2018/2019.
Nowrecognisingtherealcostofbusiness–payingandchargingfullcostrecovery*.
Orientatingthewholebiosecurityoperationstorisk-basedsystem.
Abiosecuritymappingsolutionisbeingdeveloped– [toCountyCouncilbyFeb2019.]
EnhancingKPI’sandreportsonperformancetoStakeholders.
Afocusonprovidingvalueformoney.[IncOperatingpolicytomatch.]
Upp
erM
acqu
arieCou
ntyCo
uncil–
Gettin
gtheJobdo
ne!
THEENHANCEMENTSAREUNDERWAY:
15
Page 19
ShareofInspectionWorkforInvestment.
39%
12%
32%
18%
39%
14%
31%
15%
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
Bathurst Blayney Lithgow Oberon
FundingShare
InspectionIndex
FundingSharevs.InspectionShare-2017.2018FullYR:
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
16
Page 20
ShareofInspectionWorkforInvestment.
39%
12%
32%
18%
51%
12%
22%
15%
0%
10%
20%
30%
40%
50%
60%
Bathurst Blayney Lithgow Oberon
FundingShare
InspectionIndex
FundingSharevs.InspectionShare-2018.2019YTD:
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
17
Page 21
PropertyInspectionRates–YearonYear
100% 100% 100% 100%
51%
36%30%
41%
Bathurst Blayney Lithgow Oberon
2017/2018ACT 2018/2019ACT
InspectionProgress:1st¼2018.2019vs.ALLLASTYear2017.2018
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
18
Page 22
VIABILITY:
Auditorconfirmsexpectedfinancialviability-undernew10YearBusinessActivityStrategicPlan.
AnnualOperatingBudgetRestructuredtoachieve100%
fixedcostcoverratio.
UMCCmustsecure$150,000untiedreliablefundingtoremainviableunder10yearplan.
UMCConlyhastwoareasofdiscretionaryspending–
roadsidespraying(entirely)and(limited)inspectionstaff.
CountyCouncilresolution–findrequiredcashelsewhereorcutroadsidesprayingaccordingly.
Noadditionalrecurrentfundingrequiredfordurationofcurrent
10yearplan.
Upp
erM
acqu
arieCou
ntyCo
uncil–
Gettin
gtheJobdo
ne!
THEBUSINESSCANBEVIABLELONG-TERM:
19
Page 23
UMCCASAGOINGCONCERN
Upp
erM
acqu
arieCou
ntyCo
uncil–
Gettin
gtheJobdo
ne!
“TheBusinessStrategicPlanprepared,adoptedbyCouncilfor2018-2019,reportedanoperatingsurplus,operatingcashsurplusandcomfortable
cashpositionforthenext10years.ThisprovidessufficientevidencethatCouncilwillcontinueasagoingconcernfortheforeseeableperiod.”ExtractfromAuditOffice‘KeyIssues’Findings(LettertoUMCCGM5thOctober2018)
20
Page 24
CHANGESTO10YEARPLAN-INSUMMARY
2017.201810YearPLAN
BASP 2018 2027AnnualOperatingResult
(85,000) (108,000)
NETASSETS $753,000 ($52,000)
AnnualInvestment NIL NIL
Cash&EquivalentsPosition
$670,000 ($143,000)
PlantReplacement 45Kp.a.ave 45Kp.a.ave
2018.201910YearPLAN
BASP 2018 2027AnnualOperatingResult
Balanced $14,000
NETASSETS $922,000 $997,000
AnnualInvestment 40Kp.a.ave 40Kp.a.ave
Cash&EquivalentsPosition
800,000 800,000
PlantReplacement 61Kp.a.ave 61Kp.a.ave
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
21
Page 25
THECOUNCILHASCOMMITTEDTOENSURINGAVIABLEBUSINESS
THESPENDINGTHERECURRENTBUDGETNEEDSTOBEPROPERLYFUNDEDTOCOVERCOREBUSINESS–DISCRETIONARYSERVICESARENOTCOREBUSINESS
ESTABLISHEDRECURRENTBUDGETSLEAVENOTHINGFORCAPITALFUNDING–ASSETSAREBEINGCONSUMEDBUTNOTREPLACEDORUPDATED
THEEARNING
COUNCILHASNOREALABILITYTORAISEANYRATESORCHARGESONTHECOMMUNITYITSERVESANDIS
EXCLUDEDFROMGRANTSCOMMISSIONFUNDING
THEREAREFEWOPTIONSTOEARNALTERNATIVEDISCRETIONARY
INCOME–THEYAREALLSUBSTANTIALLYUNRELIABLE
ANYWAY
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
22
Page 26
ITISALLABOUTHOWFUTUREDISCRETIONARYWORKISFUNDED
IFTHEEXTRARECURRENTFUNDINGISPROVIDED.TheRoadsideWeed-sprayingprogramwillcontinuebutinaffectwouldbeincreasinglyfundeddirectlybyConstituentCouncils.
IFTHEEXTRARECURRENTFUNDINGISNOTPROVIDED.TheRoadsideWeed-sprayingprogramwouldreduceforeachofthenexttwoyearsthenceasefrom2021/2022.
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
23
Page 27
THEFINANCIALIMPACTFORCONSTITUENTCOUNCILS.
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
24
PROPOSEDFUNDINGCHANGE
County Council Budget Restructure - Constituent Councils Funding Transition Table WITHEXTRAINCREASE
ConstituentCouncilConstituentCouncilContributionAmount
P.A.
ConstituentCouncilContributionProportion
ProposedNEWConstituentCouncilContributionAmount
P.A.
ProposedNEWConstituentCouncilContributionAmount
P.A.
ProposedNEWConstituentCouncilContributionAmount
P.A.
ProposedNEWConstituentCouncilContributionAmount
P.A.
[AsperestablishedFundingFormula]
[AsperestablishedFundingFormula]
[AsperestablishedFundingFormula](IncRatePeg%Est2.5%)
[AsperestablishedFundingFormula](IncRatePeg%Est2.5%)
[AsperestablishedFundingFormula](IncRatePeg%Est2.5%)
[AsperestablishedFundingFormula](IncRatePeg%Est2.5%)
2018.2019 FY 2018.2019 2019.2020 FY 2020.2021 FY 2021.2022 FY 2022.2023 FY
Bathurst Regional Council $223,333 38.5% $248,147 $273,580 $299,650 $307,141Lithgow City Council $182,918 31.5% $203,240 $224,072 $245,423 $251,559Oberon Council $102,898 17.7% $114,331 $126,049 $138,060 $141,512Blayney Shire Council $71,540 12.3% $79,489 $87,636 $95,987 $98,387 Additonal Funding Contributions (ongoing) sought from Councils NIL $50,000 $50,000 $50,000 NIL TOTALFUNDINGPROGRAM $580,690 100% $695,207 $761,337 $829,120 $798,598
Page 28
THEFINANCIALIMPACTFORCONSTITUENTCOUNCILS.
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
25
DIFFERENCEBETWEENNORMAL&EXTRA 2018.2019 FY 2018.2019 2019.2020 FY 2020.2021 FY 2021.2022 FY 2022.2023 FY Bathurst Regional Council $0 0.0% $19,230 $38,941 $59,144 $60,623
Lithgow City Council $0 0.0% $15,750 $31,894 $48,441 $49,652
Oberon Council $0 0.0% $8,860 $17,942 $27,250 $27,931
Blayney Shire Council $0 0.0% $6,160 $12,474 $18,946 $19,419
RatePeg%TOTALEXTRAFUNDINGPROGRAM $0 0.0% $50,000 $101,250 $153,781 $157,626
Page 29
Arobustoperationalmonitoringandreportingregimewillbeembedded.
SoundworkingrelationshipswithForests,CRNandRMS
willbeestablished.
Essentialbusinesssystems&technologywillbefixedwithin6to12months.
Fundcontributorswillgetafairreturnontheir
investment.
Opportunitiesforuseofremotesensingtechnologieswillbeassessedonmerit.
The‘conceptofoperations’and‘compliance&
enforcementsystem’willproveeffective.
Upp
erM
acqu
arieCou
ntyCo
uncil–
Gettin
gtheJobdo
ne!THEFUTURETARGETS:
26
Page 30
THREEPOSSIBLEFUTURES:
ONE(1):BUSINESSASUSUAL/DONOTHING(PRE-2018)ANDRISKBECOMINGINSOLVENTWITHINAFEWYEARS.
THREE (3) REDESIGN THE WHOLE CONCEPT OF OPERATIONSANDINVESTINLEADINGTECHNOLOGIESANDBECOMEEXEMPLARYINTIME.
TWO (2): REFORMBUDGET,GOVERNANCEANDBIOSECURITYACTIVITY–UPGRADETOCONTEMPORARYTECHNOLOGYANDREMAINAMODESTBUTCAPABLEANDVIABLEGOINGCONCERN.
Upp
erM
acqu
arieCou
ntyCo
uncil–
Gettin
gtheJobdo
ne!WHATWILLTHECOUNTY
COUNCILBE:
27
Page 31
END
ANYQUESTIONS?
Upp
erM
acqu
arieCou
ntyCo
uncil–
GettingtheJobdo
ne!
28
Page 32
ATTACHMENTS FOR REPORT
Report Item
13.01 2017-18 AUDITED FINANCIAL
STATEMENTS
ATTACHMENTS
Audit Office Report
Audited Financial Statements
Page 33
Page 34
Engagement Closing Report
for the year ended 30 June 2018
Oberon Council
Page 35
contents
1 INTRODUCTION 1
2 AUDIT OVERVIEW 1
3 AUDIT OUTCOME AND REPORTS 1
3.1 Audit outcome 1
3.2 Report on the Conduct of the Audit 2
3.3 Auditor-General’s Report to Parliament 2
3.4 Management Letter 2
4 AUDIT FINDINGS 2
4.1 Response to key issues and audit risks 2
4.2 Misstatements 3
4.3 Compliance with legislative requirements 3
5 THE AUDIT PROCESS 4
5.1 Management co-operation 4
5.2 Next year’s audit 4
APPENDIX ONE – GENERAL PURPOSE FINANCIAL STATEMENTS 5
Corrected disclosure deficiencies 5
APPENDIX TWO – SPECIAL PURPOSE FINANCIAL STATEMENTS FOR
DECLARED BUSINESS ACTIVITIES 6
Corrected disclosure deficiency 6
Page 36
Our insights inform and challenge government to improve outcomes for citizens
1
1 INTRODUCTION
We have audited the Oberon Council (the Council’s):
• general purpose financial statements (GPFS)
• special purpose financial statements (SPFS) for the Council’s:
- Declared Business Activities
- Special Schedule 2 ‘Permissible income for general rates’ (the Schedule).
This report informs the General Manager and the Mayor of audit findings relevant to their
responsibilities and oversight of the Council’s financial statements. We will inform you if significant
new matters are found while finalising the audit.
An audit is designed to obtain reasonable assurance the financial statements are free from material
misstatement. It is not designed to identify all matters of governance interest, nor is it conducted to
express an opinion on the effectiveness of internal control. Matters of governance interest identified
during the audit are included in this report.
2 AUDIT OVERVIEW
The table below provides an overview of findings identified during the audit of the Council.
Impact Assessment
High Matters identified which had a high impact on the financial statements and/or audit.
Moderate Matters identified which had a moderate impact on the financial statements and/or
audit.
Low No matters or matters identified which had a low impact on the financial statements
and/or audit.
Section Outcome Reference
Audit outcome:
GPFS Unqualified opinion 3.1
SPFS for Council’s Declared Business
Activities Unqualified opinion 3.1
Special Schedule 2 ‘Permissible income for
general rates’ Unqualified opinion 3.1
Response to key issues and audit risks Matters addressed 4.1
Misstatements No misstatements noted 4.2
Compliance with legislative requirements No matters noted 4.3
3 AUDIT OUTCOME AND REPORTS
3.1 Audit outcome
We are likely to express an unmodified opinion on the GPFS and the SPFS for Declared Business
Activities and the Schedule. The Independent Auditor’s Reports will be signed on 22 October 2018
after the signed financial statements and management representation letters are received.
Page 37
Our insights inform and challenge government to improve outcomes for citizens
2
3.2 Report on the Conduct of the Audit
We will issue the Report on the Conduct of the Audit required by section 417(3) of the Local
Government Act 1993 at the same time as the Independent Auditor’s Reports. The Report on the
Conduct of the Audit will incorporate comments we consider appropriate, based on the audit of the
Council’s financial statement.
3.3 Auditor-General’s Report to Parliament
The 2019 Auditor-General’s Report to Parliament will incorporate the results of the audit.
3.4 Management Letter
We issued an Interim Management Letter in July 2018 which included observations from the interim
phase of the audit. A Final Management Letter will be sent shortly which expands on matters
summarised in this report.
4 AUDIT FINDINGS
4.1 Response to key issues and audit risks
The Client Service Plan, sent on 19 March 2018 identified key issues affecting the Council and how
the audit team planned to respond to them. The results of the audit work are detailed below.
Issue or risk Audit outcome
Revaluation of infrastructure property, plant and equipment
The following infrastructure property, plant and
equipment classes were subjected to a
comprehensive revaluation by an external valuer this
year:
• Operational Land
• Community Land
• Buildings- specialized
• Buildings- non-specialized
• Other structures.
We reviewed the management’s procedures for
assessing fair value at reporting date. We considered
externally available information to be satisfied the
carrying amount materially reflects fair value. This
included reviewing the external valuers methodology
to comply with AASB 13 ‘Fair Value Measurement’,
reasonableness of useful lives and depreciation,
qualifications and experience of experts,
completeness and accuracy of data used in the
valuation and their mathematical accuracy, accuracy
of adjustments to the general ledger and adequacy of
disclosure in the financial statements.
We did not identify any significant control deficiencies
or material misstatements.
Assessing the fair value of Council’s infrastructure, property, plant and equipment
For those asset classes not subject to a
comprehensive revaluation this year, the Council
satisfied itself their carrying value materially reflects
fair value at reporting date.
We reviewed management’s procedures for
assessing fair value at reporting date. We considered
internally available information to satisfy the carrying
amount materially reflects fair value.
Early Close reporting
While not a mandatory requirement, the Council
should consider completing early close procedures to
facilitate:
• a smoother year-end audit process
• the effective resolution of issues; and
• earlier completeion and improvement in the
quality of year-end financial statements.
The following infrastructure property, plant and
equipment classes were revalued prior to
31 May 2018:
• Operational Land
• Community Land
• Buildings- specialized
• Buildings- non-specialized
• Other structures.
Page 38
Our insights inform and challenge government to improve outcomes for citizens
3
Issue or risk Audit outcome
We reviewed the management’s procedures for
assessing fair value. We did not identify any
significant control deficiencies or material
misstatements. We will continue to work with
management to identify procedures that would help
ensure earlier completion and improve the quality of
year-end financial statements.
Procurement and contract management risk
The Council spends a substantial amount each year
to procure goods and services and enters into
numerous contracts which vary in nature, size and
complexity.
We performed the following:
• gained an understanding of Council’s procedures
around procurements and contract management
• reviewed tendering procedures to identify any
probity and related party issues.
Our testing did not identify any exceptions.
Rehabilitation provisions
The Council continues to be responsible for the
rehabilitation of closed and operating landfill sites.
The rehabilitation obligations over the next 50 years
were estimated at $280,000 at 30 June 2018.
We gained an understanding of Council’s procedures
around rehabilitation provisions and reviewed the
assumptions, judgements and estimates used in the
provision. Our testing did not identify any non-
compliance with AASB 137.
4.2 Misstatements
Misstatements are differences between what has been reported in the financial statements and what
is required in accordance with the Council’s financial reporting framework. Misstatements can arise
from error or fraud.
Auditing Standards require matters of governance interest and significant misstatements identified
during the audit to be communicated to those charged with governance.
General Purpose Financial Statements (GPFS)
Appendix One lists and explains the nature and impact of the misstatements contained in the GPFS.
Based on my evaluation, none of the misstatements reported are due to fraud.
Special Purpose Financial Statements (SPFS)
Declared Business Activities
The SPFS for Declared Business Activities contained misstatement. Appendix Two lists and explains
the nature and impact of this misstatement on the SPFS for Declared Business Activities.
Based on my evaluation, the misstatement reported is not due to fraud
Special Schedule 2 ‘Permissible income for general rates’ (the Schedule)
The Schedule did not contain misstatements.
4.3 Compliance with legislative requirements
The Client Service Plan and Terms of Engagement explain that audit procedures are targeted
specifically towards forming an opinion on the Council’s financial statements. This includes testing
whether the Council has complied with legislative requirements that may materially impact the
financial statements.
Page 39
Our insights inform and challenge government to improve outcomes for citizens
4
Our audit procedures did not identify reportable findings on compliance with legislative requirements.
5 THE AUDIT PROCESS
5.1 Management co-operation
The audit team appreciated the co-operation and help received from the Council’s staff, in particular
the finance team.
5.2 Next year’s audit
An efficient audit relies on:
• regular and open communications between the audit team and management
• management responding promptly to the audit team’s questions and documentation requests
• timely preparation of the financial statements and resolution of financial reporting issues
• management implementing appropriate quality controls over financial statement preparation
• performing early close procedures, where appropriate, such as revaluations of property, plant
and equipment before year-end in order to identify and resolve potential issues in a timely
manner.
Your comments about the audit process are welcomed.
Page 40
Our insights inform and challenge government to improve outcomes for citizens
5
APPENDIX ONE – GENERAL PURPOSE FINANCIAL STATEMENTS
Corrected disclosure deficiencies
Management corrected the following disclosure deficiencies in the current year’s GPFS. The audit
team agrees with management’s determination and confirms this treatment complies with Australian
Accounting Standards.
AASB reference Disclosure title Description of disclosure deficiency
AASB 119 Provisions The balance for the current provisions not anticipated to be
settled within the next twelve months was incorrect.
AASB 13 Fair Value Measurement The table (4) Fair value measurements using significant
unobservable inputs (level 3) showed 2017 balances instead
of the 2018 balances.
Page 41
Our insights inform and challenge government to improve outcomes for citizens
6
APPENDIX TWO – SPECIAL PURPOSE FINANCIAL STATEMENTS FOR DECLARED BUSINESS ACTIVITIES
Corrected disclosure deficiency
Management corrected the following disclosure deficiency in the current year’s SPFS for Declared
Business Activities. The audit team agrees with management’s determination and confirms this
treatment complies with the financial reporting framework.
AASB reference Disclosure title Description of disclosure deficiency
Local Government
Code of Accounting
Practice and
Financial Reporting
(the Code)
Calculation of
dividend payable –
water supply
In this disclosure the capital grant was not deducted thus the
potential dividend was overstated.
Page 42
Our insights inform and challenge government to improve outcomes for citizens
7
Page 43
Page 44
Oberon Council GENERAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2018
Page 45
Financial Statements 2018
Oberon Council
General Purpose Financial Statements for the year ended 30 June 2018
Contents
1. Understanding Council’s Financial Statements
2. Statement by Councillors and Management
3. Primary Financial Statements:
– Income Statement– Statement of Comprehensive Income– Statement of Financial Position– Statement of Changes in Equity– Statement of Cash Flows
4. Notes to the Financial Statements
5. Independent Auditor’s Reports:
– On the Financial Statements (Sect 417 [2]) – On the Conduct of the Audit (Sect 417 [3])
Overview
137-139 Oberon StreetOBERON NSW 2787
Council’s guiding principles are detailed in Chapter 3 of the LGA and includes:
principles applying to the exercise of functions generally by council,principles to be applied when making decisions,principles of community participation,principles of sound financial management, andprinciples for strategic planning relating to the development of an integrated planning and reporting framework.
A description of the nature of Council’s operations and its principal activities are provided in Note 2(b).
Through the use of the internet, we have ensured that our reporting is timely, complete and available at minimumcost. All press releases, financial statements and other information are publicly available on our website:www.oberon.nsw.gov.au.
Page
4
67
5
2
3
Oberon Council is constituted under the Local Government Act 1993 (NSW) and has its principal place of businessat:
8
9
i
iiii
page 1Page 46
Financial Statements 2018_
Oberon Council
General Purpose Financial Statementsfor the year ended 30 June 2018
Understanding Council’s financial statements
page 2
Introduction
Each year, individual local governments across NewSouth Wales are required to present a set of auditedfinancial statements to their council and community.
What you will find in the statements
The financial statements set out the financialperformance, financial position and cash flows ofCouncil for the financial year ended 30 June 2018.
The format of the financial statements is standardacross all NSW Councils and complies with both theaccounting and reporting requirements of AustralianAccounting Standards and requirements as setdown by the Office of Local Government.
About the Councillor/Management Statement
The financial statements must be certified by seniorstaff as ‘presenting fairly’ the Council’s financialresults for the year and are required to be adoptedby Council – ensuring both responsibility for andownership of the financial statements.
About the primary financial statements
The financial statements incorporate five ‘primary’financial statements:
1. The Income StatementSummarises Council's financial performance for theyear, listing all income and expenses.
This statement also displays Council's originaladopted budget to provide a comparison betweenwhat was projected and what actually occurred.
2. The Statement of Comprehensive IncomePrimarily records changes in the fair value ofCouncil's Infrastructure, Property, Plant andEquipment.
3. The Statement of Financial PositionA 30 June snapshot of Council's financial positionindicating its assets, liabilities and “net wealth”.
4. The Statement of Changes in EquityThe overall change for the year (in dollars) ofCouncil’s “net wealth”.
5. The Statement of Cash FlowsIndicates where Council's cash came from andwhere it was spent. This statement also displaysCouncil's original adopted budget to provide acomparison between what was projected and whatactually occurred.
About the Notes to the Financial Statements
The Notes to the Financial Statements providegreater detail and additional information on the fiveprimary financial statements.
About the Auditor’s Reports
Council’s annual financial statements are required tobe audited by the NSW Audit Office. In NSW theauditor provides 2 audit reports:
1. an opinion on whether the financial statementspresent fairly the Council’s financial performanceand position, and
2. their observations on the conduct of the audit,including commentary on the Council’s financialperformance and financial position.
Who uses the financial statements?
The financial statements are publicly availabledocuments and must be presented at a Councilmeeting between seven days and five weeks afterthe date of the Audit Report.
The public can make submissions to Council up toseven days subsequent to the public presentation ofthe financial statements.
Council is required to forward an audited set offinancial statements to the Office of LocalGovernment.
.
Page 47
Page 48
Financial Statements 2018
Oberon Council
Income Statement for the year ended 30 June 2018
$ ’000
Income from continuing operationsRevenue:Rates and annual chargesUser charges and feesInterest and investment revenueOther revenuesGrants and contributions provided for operating purposesGrants and contributions provided for capital purposesOther income:Net gains from the disposal of assets
Total income from continuing operations
Expenses from continuing operationsEmployee benefits and on-costsBorrowing costsMaterials and contractsDepreciation and amortisationOther expensesNet losses from the disposal of assets
Total expenses from continuing operations
Operating result from continuing operations
Net operating result for the year
Net operating result attributable to Council
Net operating result for the year before grants andcontributions provided for capital purposes
4,088
18,766
3,931
19,454
4,435
unaudited
3,6003,147
3,021
Original
3e,f
4d
5
4b4c
4,734
505
3b
4a
3e,f
350
2005,393
3,2222,337
– 54e
121
14,678
2,474
5,304
Notes
3a
3d3c
2018
371
5,220165
16,648
2018
5,812330468
6,594
5,591188
5,173
2,449
–
4,088
–
1913,5073,3332,396
4,002
4,4354,088
2017
5,090
416863
4,435
15,018
6,014
157 434
43
6,588
5,411
3,021
Actual Actualbudget
3,021
2,857
13,626
This statement should be read in conjunction with the accompanying notes. page 4Page 49
Financial Statements 2018
Oberon Council
Statement of Comprehensive Income for the year ended 30 June 2018
$ ’000
Net operating result for the year (as per Income Statement)
Other comprehensive income:
Amounts that will not be reclassified subsequently to the operating result
Gain (loss) on revaluation of IPP&ETotal items which will not be reclassified subsequentlyto the operating result
Total other comprehensive income for the year
Total comprehensive income for the year
Total comprehensive income attributable to Council
2017
2,925
(1,510)
2018
4,088
Notes
4,435
(828) (1,510)9a
(1,510)(828)
3,260
(828)
2,9253,260
This statement should be read in conjunction with the accompanying notes. page 5Page 50
Financial Statements 2018
Oberon Council
Statement of Financial Positionas at 30 June 2018
$ ’000
ASSETSCurrent assetsCash and cash equivalentsInvestmentsReceivablesInventoriesOtherTotal current assets
Non-current assetsInventoriesInfrastructure, property, plant and equipmentTotal non-current assets
TOTAL ASSETS
LIABILITIESCurrent liabilitiesPayablesIncome received in advanceBorrowingsProvisionsTotal current liabilities
Non-current liabilitiesPayablesBorrowingsProvisionsTotal non-current liabilities
TOTAL LIABILITIES
Net assets
EQUITYAccumulated surplusRevaluation reserves
Total equity
6,336
291,041
7
976
2017
1,407
–
11,800
1
76784
465
279,414
3,291
155,416
6,789
4,086
Notes
6a6b7
279,180
8
154,588
279,349
2,729
169
1110
1212
89
294,570
2,703
287,781
781
1,657
1,557
1,032
98786
17,962
14,300
15,220
1
2018
287,781
136,453
3,607
3,756
132,365
291,041
329315
109
1,423445
8
1010
10
10
279,414
732
297,376
11
This statement should be read in conjunction with the accompanying notes. page 6Page 51
Financial Statements 2018
Oberon Council
Statement of Changes in Equity for the year ended 30 June 20182018
$ ’000
Opening balance
Net operating result for the year
Other comprehensive income – Gain (loss) on revaluation of IPP&EOther comprehensive income
Total comprehensive income (c&d)
Equity – balance at end of the reporting period
Net operating result for the year prior to correction of errors andchanges in accounting policies
Accumulated Accumulated
(828)
4,088
(828)
3,260
287,781155,416132,365
(1,510)
4,435 (1,510)
– (1,510)
2,925
– (1,510)
4,435
(1,510)
4,435 –– 4,435
equity
284,856
surplus
127,930 156,926
reserverevaluation Total
IPP&E2017
136,453 154,588 291,041
– (828)
4,088 (828)
9a – (828)
2018
132,365 155,416 287,781
revaluation TotalNotes surplus reserve
IPP&E
equity
4,088 –4,088 – 4,088 4,435
This statement should be read in conjunction with the accompanying notes. page 7Page 52
Financial Statements 2018
Oberon Council
Statement of Cash Flows for the year ended 30 June 2018
$ ’000
Cash flows from operating activitiesReceipts:Rates and annual chargesUser charges and feesInvestment and interest revenue receivedGrants and contributionsBonds, deposits and retention amounts receivedOtherPayments:Employee benefits and on-costsMaterials and contractsBorrowing costsOther
Net cash provided (or used in) operating activities
Cash flows from investing activitiesReceipts:Sale of investment securitiesSale of real estate assetsSale of infrastructure, property, plant and equipmentPayments:Purchase of investment securitiesPurchase of infrastructure, property, plant and equipmentPurchase of real estate assets
Net cash provided (or used in) investing activities
Cash flows from financing activitiesReceipts:NilPayments:Repayment of borrowings and advances
Net cash flow provided (used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Plus: cash and cash equivalents – beginning of year
Cash and cash equivalents – end of the year
Additional Information:
plus: Investments on hand – end of year
Total cash, cash equivalents and investments
340
5,0785,3336,263
935
2018 2017Actual
87
978
2018
4,554
–6,362
383
(2,003)
(5,341)
–(6,000)
(14,300)
(6,000)
(446)
407
407
(460)
–
(460)
13a
Notes
5,228
(176)
Original
budgetunaudited
––
(3,118)
14,300
6,867
(5,531)
407
(184)
7,028
(6,012)
(168)
(4,187)
81,761
6,919
Actual
5,592
(4,214)(5,185)
(6,058)
(165)(2,661)
(12,600)
(427)
12,800
(427)
(6,328)
15,332
(16,800)
1,657
11,800
114
1,543
1,657
(625)
(446)
(7,168)
13,457
1,03213a
14,300
13b 6,989
140 160124
14,300
7,982
(2,683)
1,164
116
6b
This statement should be read in conjunction with the accompanying notes. page 8Page 53
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Contents of the notes accompanying the financial statements
Details
Basis of preparationCouncil functions/activities – financial informationCouncil functions/activities – component descriptionsIncome from continuing operationsExpenses from continuing operationsGains or losses from the disposal of assetsCash and cash equivalent assetsInvestmentsRestricted cash, cash equivalents and investments – detailsReceivablesInventories and other assetsInfrastructure, property, plant and equipmentExternally restricted infrastructure, property, plant and equipmentPayables and borrowingsProvisions
Statement of cash flows – additional informationInterests in other entitiesCommitments for expenditureContingencies and other liabilities/assets not recognisedFinancial risk managementMaterial budget variationsFair value measurementRelated party transactionsStatement of developer contributionsFinancial result and financial position by fundStatement of performance measures – consolidated resultsStatement of performance measures – by fund
Additional council disclosures (unaudited)
Statement of performance measures – consolidated results (graphs)
n/a – not applicable
7423(a)
21
73
23(c) 77
6(a)
4
6(c)
23(b)
13
22
20
35
1615
Note
10
Page
12(a)
32(b)
6(b)
5
31
39
Accumulated surplus, revaluation reserves, changes in accountingpolicies, changes in accounting estimates and errors
19
11
5418
4714
17
12
45
4851
27
2829
33
1013141521
27
78
9(a)9(b)
56
6871
44
41
46
66
38
page 9Page 54
Financial Statements 2018_
Oberon Council
Notes to the Financial Statementsfor the year ended 30 June 2018
Note 1. Basis of preparation
page 10
These financial statements were authorised for issue by Council on 18/09/2018.
Council has the power to amend and reissue these financial statements.
The principal accounting policies adopted in the preparation of these financial statements are set out below.These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian AccountingStandards and Australian Accounting Interpretations, the Local Government Act 1993 (NSW) and Regulations,and the Local Government Code of Accounting Practice and Financial Reporting. Council is a not-for-profitentity for the purpose of preparing these financial statements.
The financial statements are presented in Australian dollars and are rounded to the nearest thousand dollars.
Full dollars have been used in Note 20 Related party disclosures in relation to the disclosure of specific relatedparty transactions.
Unless otherwise indicated, all amounts disclosed in the financial statements are actual amounts.
Specific budgetary amounts have been included for comparative analysis (to actuals) in the following reportsand notes:
§ Income statement§ Statement of cash flows§ Note 18 – Material budget variations
and are clearly marked.
(a) New and amended standards adopted by Council
There have been no new (or amended) accounting standards adopted by Council in this year’s financialstatements which have had any material impact on reported financial position, performance or cash flows.
(b) Historical cost convention
These financial statements have been prepared under the historical cost convention, as modified by therevaluation of certain financial assets and liabilities and certain classes of infrastructure, property, plant andequipment and investment property.
(c) Significant accounting estimates and judgements
The preparation of financial statements requires the use of certain critical accounting estimates. It alsorequires management to exercise its judgement in the process of applying the Council's accounting policies.
Estimates and judgements are continually evaluated and are based on historical experience and other factors,including expectations of future events that may have a financial impact on the Council and that are believedto be reasonable under the circumstances.
Critical accounting estimates and assumptions
Council makes estimates and assumptions concerning the future. The resulting accounting estimates will, bydefinition, seldom equal the related actual results. The estimates and assumptions that have a significant risk
Page 55
Financial Statements 2018_
Oberon Council
Notes to the Financial Statementsfor the year ended 30 June 2018
Note 1. Basis of preparation (continued)
page 11
of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial yearinclude:
(i) estimated fair values of infrastructure, property, plant and equipment – refer Note 9,
(ii) estimated tip remediation provisions – refer Note 11,
(iii) employee benefit provisions – refer Note 11.
Significant judgements in applying the Council's accounting policies
(iv) Impairment of receivables
Council has made a significant judgement about the impairment of a number of its receivables in Note 7.
Monies and other assets received by Council
(a) The Consolidated Fund
In accordance with the provisions of Section 409(1) of the Local Government Act 1993 (NSW), all money andother assets received by Council is held in the Council’s Consolidated Fund unless it is required to be held inthe Council’s Trust Fund.
Cash and other assets of the following entities have been included as part of the Consolidated Fund:
§ General purpose operations§ Water service§ Sewerage service
(b) The Trust Fund
In accordance with the provisions of Section 411 of the Local Government Act 1993 (NSW) (as amended), aseparate and distinct Trust Fund is maintained to account for all money and other assets received by theCouncil in trust which must be applied only for the purposes of, or in accordance with the trusts relating tothose monies. Trust monies and other assets subject to Council’s control have been included in these reports.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GSTincurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost ofacquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount ofGST recoverable from, or payable to the taxation authority is included with other receivables or payables in theStatement of Financial Position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing orfinancing activities which that are recoverable from, or payable to the taxation authority are presented asoperating cash flows.
New accounting standards and interpretations issued not yet effective
Certain new accounting standards and interpretations have been published that are not mandatory for thecurrent reporting period and which have not been applied.
Page 56
Financial Statements 2018_
Oberon Council
Notes to the Financial Statementsfor the year ended 30 June 2018
Note 1. Basis of preparation (continued)
page 12
As at the date of authorisation of these financial statements, Council considers that the standards andinterpretations listed below will have an impact upon future published financial statements ranging fromadditional and / or revised disclosures to actual changes as to how certain transactions and balances areaccounted for.
Effective for annual reporting periods beginning on or after 1 July 2018
· AASB 9 Financial Instruments
This replaces AASB 139 Financial Instruments: Recognition and Measurement, and addresses theclassification, measurement and disclosure of financial assets and liabilities.
The standard introduces a new impairment model that requires impairment provisions to be based onexpected credit losses, rather than incurred credit losses.
Based on assessments to date, Council expects a small increase to impairment losses however the standardis not expected to have a material impact overall.
Effective for annual reporting periods beginning on or after 1 July 2019
· AASB 15 Revenue from Contracts with Customers, AASB 1058 Income of Not-for-Profit Entities andAASB 2016-8 Amendments to Australian Accounting Standards - Australian Implementation Guidance forNot-for-Profit Entities
AASB 15 will replace AASB 118 Revenue, AASB 111 Construction Contracts and a number of Interpretations.AASB 2016-8 provides Australian requirements and guidance for not-for-profit entities in applying AASB 9 andAASB 15, and AASB 1058 will replace AASB 1004 Contributions.
Together they contain a comprehensive and robust framework for the recognition, measurement anddisclosure of income including revenue from contracts with customers.
While Council is still reviewing the way that income is measured and recognised to identify whether there willbe any material impact arising from these standards, these standards may affect the timing of the recognitionof some grants and donations.
· AASB 16 Leases
Council is not currently a party to leases that are not recognised in the Statement of Financial Position.
Council has not elected to apply any pronouncements before their operative date in these financialstatements.
Page 57
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 2(a). Council functions/activities – financial information
Total functions and activities 19,453 14,67818,766 294,570
(139)
297,376
4,3830
4,088
7,3566,448
15,018
124130
4,9384,435
310––
5,447
(40) (7)
3,347 3,347
–4,240
12,4735,902– –
–25,717
1,6265,902
12,9471,6268,71111
–(72)
(1,004)
(0)3,547 3,711
9,62711–
11–
20,22722,805
–180,318
–198,071
4,272
585
(115)
–4,240
–
1722,805
435(972)
561
5851,081
11 (3)
(564)(93)
11–
577
(609)
(632)
646 6(450)
2018 2017
–– 12,473
25,7175 51,234(556) 1,585
17 (305)
(1,352)(605) –
–
Economic affairs
Mining, manufacturing and construction 8Transport and communication 5,579
962(276)596
Environment
1,2981,0081,493
366
167
6,625
153
24
7721,5651,465
6,935489
1,063127
Public order and safetyHealth
1,677151
652Adminstration
Other
Governance
6,448
7731 –
340 760
93760 52
11
Recreation and culture
Community services and educationHousing and community amenities
Sewerage servicesWater supplies
444
– 450
7,356
–
294
449
954
6281,099
5,85548
350–
556
–
325
1,0784
945
2,0421,333
Income fromcontinuing operations
Income, expenses and assets have been directly attributed to the following functions/activities.Details of these functions/activities are provided in Note 2(b).
Expenses fromcontinuing operations
Operating result fromcontinuing operations
$ ’000
Total assets held(current and non-
current) Functions/activities
2017
Grants included inincome from continuing
operations
201720182018 2017 2018 2018 2017
page 13Page 58
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 2(b). Council functions/activities – component descriptions
Details relating to the Council’s functions/activities as reported in Note 2(a) are as follows:
Governance
Adminstration
Public order and safety
Health
Environment
Community services and education
Housing and community amenities
Water supplies
Sewerage services
Recreation and culture
Mining, manufacturing and construction
Transport and communication
Economic affairs
Includes noxious plants and insect/vermin control; other environmental protection; solid waste management,including domestic waste; other waste management; other sanitation; and garbage, street cleaning, drainageand stormwater management.
Includes costs relating to Council’s role as a component of democratic government, including elections,members’ fees and expenses, subscriptions to local authority associations, meetings of Council and policy-making committees, public disclosure (e.g. GIPA), and legislative compliance.
Includes corporate support and other support services, engineering works, and any Council policy compliance.
Includes Council’s fire and emergency services levy, fire protection, emergency services, beach control,enforcement of regulations and animal control.
Includes immunisation, food control, health centres etc.
Includes administration and education; social protection (welfare); migrant, Aboriginal and other communityservices and administration (excluding accommodation – as it is covered under ‘housing and community
Includes public cemeteries; public conveniences; street lighting; town planning; other community amenities,including housing development and accommodation for families and children, aged persons, disabled persons,migrants and Indigenous persons.
Includes public libraries; museums; art galleries; community centres and halls, including public halls andperforming arts venues; sporting grounds and venues; swimming pools; parks; gardens; lakes; and othersporting, recreational and cultural services.
Includes camping areas and caravan parks; tourism and area promotion; industrial development promotion;sale yards and markets; real estate development; commercial nurseries; and other business undertakings.
Urban local, urban regional, includes sealed and unsealed roads, bridges, footpaths, parking areas, andaerodromes.
Includes building control, quarries and pits, mineral resources, and abattoirs.
page 14Page 59
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 3. Income from continuing operations
$ ’000
(a) Rates and annual charges
Ordinary ratesResidentialFarmlandBusinessTotal ordinary rates
Special ratesTown improvementTotal special rates
Annual charges (pursuant to s.496, s.496A, s.496B, s.501 & s.611)Domestic waste management servicesWater supply servicesSewerage servicesWaste management services (non-domestic)Total annual charges
TOTAL RATES AND ANNUAL CHARGES
Council has used 2016 year valuations provided by the NSW Valuer General in calculating its rates.
Accounting policy for rates and annual chargesRates, annual charges, grants and contributions (including developer contributions) are recognised as revenuewhen the Council obtains control over the assets comprising these receipts. Developer contributions may onlybe expended for the purposes for which the contributions were required, but the Council may apply contributionsaccording to the priorities established in work schedules.
Control over assets acquired from rates and annual charges is obtained at the commencement of the ratingyear as it is an enforceable debt linked to the rateable property or, where earlier, upon receipt of the rates.
3,233
222
1,441 1,410
1,436
2011,870
3,508
463
20172018
463 447
1,267
1911,776
447
55
226438445
71553
695
5,411 5,090
page 15Page 60
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 3. Income from continuing operations (continued)
$ ’000
(b) User charges and fees
Specific user charges (per s.502 – specific ‘actual use’ charges)Water supply servicesSewerage servicesWaste management services (non-domestic)Industrial waste managementTotal specific user charges
Other user charges and fees(i) Fees and charges – statutory and regulatory functions (per s.608)Inspection servicesPlanning and building regulationPrivate works – section 67Regulatory feesSection 149 certificates (EPA Act)Section 603 certificatesTown planningTotal fees and charges – statutory/regulatory
(ii) Fees and charges – other (incl. general user charges (per s.608))CemeteriesGravel pitsLeaseback fees – Council vehiclesLibraryRMS (formerly RTA) charges (state roads not controlled by Council)Swimming poolTourismWater connection feesVisitor Information CentreTotal fees and charges – other
TOTAL USER CHARGES AND FEES
Accounting policy for user charges and feesUser charges and fees are recognised as revenue when the service has been provided.
–
58
20
321114
75
1,008
39439
2863
31
48
1,551
2018
461
4922,549
2017
2,922
6,014
–
341
3,902
15
17
3,742
–10
7
4913
83
2,730
1,791
30444
10
–
168
67
40
1223
31
–
6
5,812
225
page 16Page 61
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 3. Income from continuing operations (continued)
$ ’000
(c) Interest and investment revenue (including losses)
Interest – Overdue rates and annual charges (incl. special purpose rates) – Cash and investmentsTOTAL INTEREST AND INVESTMENT REVENUE
Interest revenue is attributable to:Unrestricted investments/financial assets:Overdue rates and annual charges (general fund)General Council cash and investmentsRestricted investments/funds – external:Development contributions – Section 7.11Water fund operationsSewerage fund operationsTotal interest and investment revenue recognised
Accounting policy for interest and investment revenueInterest income is recognised using the effective interest rate at the date that interest is earned.
2018
383
2017
33
–
380
330
–
25–
272
3
416
11
40290
3322
330 416
page 17Page 62
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 3. Income from continuing operations (continued)
$ ’000
(d) Other revenues
Rental income – other council propertiesAccident ResponseFines – animals controlFines – otherLegal fees recovery – rates and charges (extra charges)Legal fees recovery – otherCommunity transportDistribution of Natural GasDiesel rebateDiscounts and rebatesFESLHeritageInsurance claim recoveriesInvestment recoveryMisc revenueRental income – aged units rentsSales – generalYouth councilWorkers compServices NSWCTCTOTAL OTHER REVENUE
Accounting policy for other revenueCouncil recognises revenue when the amount of revenue can be reliably measured, it is probable that futureeconomic benefits will flow to the Council and specific criteria have been met for each of the Council’s activitiesas described below. Council bases its estimates on historical results, taking into consideration the type ofcustomer, the type of transaction and the specifics of each arrangement.
Parking fees and fines are recognised as revenue when the service has been provided, or when the penalty hasbeen applied, whichever occurs first.
Rental income is accounted for on a straight-line basis over the lease term.
Miscellaneous sales are recognised when physical possession has transferred to the customer which isdeemed to be the point of transfer of risks and rewards.
Other income is recorded when the payment is due, the value of the payment is notified, or the payment isreceived, whichever occurs first.
863
19
18
265
2
52
74
64–
8
3
16
38
42
74
– 121
2017
3
60
10
7
–
–
–
2
1
1
468
64
64
4
43
71
–
273
1
–
Notes 2018
75
3
– 4
–47
page 18Page 63
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 3. Income from continuing operations (continued)
$ ’000
(e) Grants
General purpose (untied)Current year allocationFinancial assistance – general componentFinancial assistance – local roads componentOtherPensioners’ rates subsidies – general componentTotal general purpose
Specific purposePensioners’ rates subsidies: – Water – Sewerage – Domestic waste managementSewerage servicesBushfire and emergency servicesOLG Innovation Fund - Finance Control Centre ProjectsStronger Country Communities - Stage 1Community infrastructureEmployment and training programsHeritage and culturalLibraryLIRS subsidyNoxious weedsRestart NSW – fixing country roadsTransport – Roads to RecoveryTransport – Flood DamageYouth weekTotal specific purposeTotal grants
Grant revenue is attributable to:– Commonwealth funding– State funding– Other funding
929–
–
–
–
–
–
–
–
–
––
–
–
–
–
77
–
–
–
–
––
–
––
–
2,299
–3,413
4–
––
–
2018
28
–
405
–
37
27
–
6
944
–325
744
–
2,639
Operating
–
4,938
––
–54
CapitalOperating
–
––
–
–
83 –
11
1,655
11
14
5,447
5,447
4,609
38
11
1,487
11
–
761
4,938
1,736
38
–51
–
2
121
–
46
8
1,4662,199
2017
–
–
– –
Capital2017 2018
3,711
–
3
134
––
69 – –
119 – –
1 – –
828
page 19Page 64
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 3. Income from continuing operations (continued)
$ ’000
(f) Contributions
Developer contributions:(s7.4 & s7.11 – EP&A Act, s64 of the LGA):
Cash contributionsS 7.11 – contributions towards amenities/servicesS 64 – water supply contributionsS 64 – sewerage service contributionsTotal developer contributions – cashTotal developer contributions
Other contributions:Cash contributionsBushfire servicesRMS contributions (regional roads, block grant)RMS contributions – traffic facilitiesTotal other contributions – cashTotal other contributionsTotal contributions
TOTAL GRANTS AND CONTRIBUTIONS
Accounting policy for contributionsControl over grants and contributions is normally obtained upon their receipt (or acquittal) and is valued at thefair value of the granted or contributed asset at the date of transfer.
Where grants or contributions recognised as revenues during the financial year were obtained on condition thatthey be expended in a particular manner or used over a particular period and those conditions wereun-discharged at reporting date, the unused grant or contribution is disclosed above.
A liability is recognised in respect of revenue that is reciprocal in nature to the extent that the requisite servicehas not been provided at reporting date.
(g) Unspent grants and contributions
Certain grants and contributions are obtained by Council on conditionthat they be spent in a specified manner:
Operating grantsUnexpended at the close of the previous reporting period
Add: operating grants recognised in the current period but not yet spent
Less: operating grants recognised in a previous reporting period now spent
Unexpended and held as restricted assets (operating grants)
273
1807701,183
134
1,377 1,010 – 134
273 137
1,650
477
300
–
137
1,802
6,594
434
(157)
157134
Capital Capital
1,482
–
434
37
1,377
20172018
17
–
Operating
–157
–
2017 2018Operating
21
6,588
23
Notes
213
300
261137
1,147
2,177
–
–
1,010
–
157
134
1,802
157
60 61 – –
22
(420)
795
157
page 20Page 65
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 4. Expenses from continuing operations
$ ’000
(a) Employee benefits and on-costs
Salaries and wagesEmployee termination costsTravel expensesEmployee leave entitlements (ELE)SuperannuationWorkers’ compensation insuranceFringe benefit tax (FBT)Training costs (other than salaries and wages)Protective clothingMedicalsRecruitment CostsTotal employee costsLess: capitalised costsTOTAL EMPLOYEE COSTS EXPENSED
Accounting policy for employee benefits and on-costsEmployee benefit expenses are recorded when the service has been provided by the employee.
Retirement benefit obligationsAll employees of the Council are entitled to benefits on retirement, disability or death. Council contributes tovarious defined benefit plans and defined contribution plans on behalf of its employees.
Superannuation plansContributions to defined contribution plans are recognised as an expense as they become payable. Prepaidcontributions are recognised as an asset to the extent that a cash refund or a reduction in the future paymentsis available.
Council participates in a Defined Benefit Plan under the Local Government Superannuation Scheme, however,when sufficient information to account for the plan as a defined benefit is not available and therefore Councilaccounts for its obligations to defined benefit plans on the same basis as its obligations to defined contributionplans, i.e. as an expense when it becomes payable – refer to Note 16 for more information.
145
–
6240
30
151538
62
(1,021)
2017
6,194(957)
5,609
–
1661
127
5,591
2
6,548
23
5,173
7
5,286
523(40)
10
37
2018
54
page 21Page 66
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 4. Expenses from continuing operations (continued)
$ ’000
(b) Borrowing costs
(i) Interest bearing liability costsInterest on loansTotal interest bearing liability costs expensed
(ii) Other borrowing costsDiscount adjustments relating to movements in provisions (other than ELE) – Remediation liabilitiesTotal other borrowing costsTOTAL BORROWING COSTS EXPENSED
Accounting policy for borrowing costsBorrowing costs incurred for the construction of any qualifying asset are capitalised during the period of time thatis required to complete and prepare the asset for its intended use or sale. Other borrowing costs are expensed.
–
165
2018 2017
11
Notes
7
–723
184
191
184
23
165
188
page 22Page 67
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 4. Expenses from continuing operations (continued)
$ ’000
(c) Materials and contracts
Raw materials and consumablesContractor and consultancy costs – Animal control – Asset mgt – Building contractors – Cleaning – Development control – Garbage contract – Ground maintenance – Other contractors – Plant – RFS – Road maintenance contractors – Sewer infrastructure – Water infrastructure – Revaluation Expenses – Waste – Noxious WeedsAuditors remuneration (2)
Legal expenses: – Legal expenses: planning and development – Legal expenses: debt recovery – Legal expenses: otherOperating leases: – Operating lease rentals: minimum lease payments (1)
Internal auditingTotal materials and contractsLess: capitalised costsTOTAL MATERIALS AND CONTRACTS
Operating leasesLeases in which a significant portion of the risks and rewards of ownership arenot transferred to Council as lessee are classified as operating leases. Paymentsmade under operating leases (net of any incentives received from the lessor) arecharged to the income statement on a straight-line basis over the period of the lease.
1. Operating lease payments are attributable to:Other
2. Auditor remunerationDuring the year the following fees were paid or payable for services provided by theauditor of Council, related practices and non-related audit firms
Auditors of the Council – NSW Auditor-General:
(i) Audit and other assurance servicesAudit and review of financial statementsRemuneration for audit and other assurance servicesTotal Auditor-General remunerationTotal Auditor remuneration
2017
29
416
86
51 262
33
3,147
29
3,507
68
31
43
8,203
87
–
3535
43
2
35
66
17
45
454343
4345
(5,056) (5,051)
5,744
45
13
9
16
–
6 10
15 21
–
23
8,558
29
45
50 5348 56
–
– 283
5,920
– 144
11
1,566
131
–
2018
13
–
201 –
1,539
17
page 23Page 68
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 4. Expenses from continuing operations (continued)
$ ’000
(d) Depreciation, amortisation and impairment
Depreciation and amortisationPlant and equipmentOffice equipmentFurniture and fittingsLand improvements (depreciable)Infrastructure: – Buildings – non-specialised – Buildings – specialised – Other structures – Roads – Bridges – Footpaths – Stormwater drainage – Water supply network – Sewerage network – Swimming pools – Other open space/recreational assetsOther assets: – Library books – OtherReinstatement, rehabilitation and restoration assets: – Tip assets – Quarry assetsTotal gross depreciation and amortisation costsTOTAL DEPRECIATION, AMORTISATION AND IMPAIRMENT /REVALUATION DECREMENT COSTS EXPENSED
Accounting policy for depreciation, amortisation and impairment expensesDepreciation and amortisationDepreciation and amortisation are calculated using the straight line method to allocate their cost, net of theirresidual values, over their estimated useful lives. Useful lives are included in Note 9 for IPPE assets.
173
292
682
107
6
258 177
211,722
1
5
22
39121
5
6
1,764
117
29
720
2
2
59
3,333
1
3,600
2
56
22
30
10
3,333
59
50
107
Notes
3,600
9 & 119 & 11 2
145
20172018
118
41
5
page 24Page 69
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 4. Expenses from continuing operations (continued)
(d) Depreciation, amortisation and impairment (continued)
Accounting policy for depreciation, amortisation and impairment expenses (continued)Impairment of non-financial assetsIntangible assets that have an indefinite useful life or are not yet available for use are not subject to amortisationand are tested annually for impairment, or more frequently if events or changes in circumstances indicate thatthey might be impaired. Other assets are tested for impairment whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount bywhich the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of anasset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest levels for which there areseparately identifiable cash inflows that are largely independent of the cash inflows from other assets or groupsof assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possiblereversal of the impairment at each reporting date.
Impairment losses for revalued assets are firstly offset against the amount in the revaluation surplus for theclass of asset, with only the excess to be recognised in the Income Statement.
Impairment of financial assetsCouncil assesses at the end of each reporting period whether there is objective evidence that a financial asset orgroup of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairmentlosses are incurred only if there is objective evidence of impairment as a result of one or more events thatoccurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact onthe estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.
page 25Page 70
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 4. Expenses from continuing operations (continued)
$ ’000
(e) Other expenses
AdvertisingBank chargesComputer software chargesContributions/levies to other levels of government – Emergency services levy (includes FRNSW, SES, and RFS levies) – NSW fire brigade levy – NSW rural fire service levy – Upper Macquarie County CouncilCouncillor expenses – mayoral feeCouncillor expenses – councillors’ feesCouncillors’ expenses (incl. mayor) – other (excluding fees above)Donations, contributions and assistance to other organisations (Section 356)Election expensesElectricity and heatingEngineering/Finance/Development ConsultantsFESLHardware expensedHeritageInsuranceOffice expenses (including computer expenses)PostagePrinting and stationeryRates and chargesStreet lightingSubscriptions and publicationsTelephone and communicationsVehicle registrationOtherTotal other expensesTOTAL OTHER EXPENSES
Accounting policy for other expensesOther expenses are recorded on an accruals basis as the Council receives the goods or services.
2018
5123
16
8
23
8
23
–
9161
12
92
25
88
44
9
128
15
–
25
251
274
17
425
391
74
742
369
103
8928
15
2,449
70
410
2,396
–
–
77
14
9
37
31
95
24
79
446
69
2,449 2,396
2017
244
74
47
26
95
Notes
331
101 109
page 26Page 71
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 5. Gains or losses from the disposal of assets
$ ’000
Property (excl. investment property)Proceeds from disposal – propertyLess: carrying amount of property assets sold/written offNet gain/(loss) on disposal
Plant and equipmentProceeds from disposal – plant and equipmentLess: carrying amount of plant and equipment assets sold/written offNet gain/(loss) on disposal
Real estate assets held for saleProceeds from disposal – real estate assetsLess: carrying amount of real estate assets sold/written offNet gain/(loss) on disposal
Financial assets (1)
Proceeds from disposal/redemptions/maturities – financial assetsLess: carrying amount of financial assets sold/redeemed/maturedNet gain/(loss) on disposal
NET GAIN/(LOSS) ON DISPOSAL OF ASSETS
Accounting policy for disposal of assetsThe gain or loss on sale of an asset is determined when control of the asset has irrevocably passed to thebuyer and the asset is derecognised.
Note 6(a). Cash and cash equivalent assets
Cash and cash equivalentsCash on hand and at bankCash-equivalent assets – Deposits at callTotal cash and cash equivalents
Accounting policy for cash and cash equivalentsFor Statement of Cash Flow presentation purposes, cash and cash equivalents includes cash on hand; depositsheld at call with financial institutions; other short-term, highly liquid investments with original maturities of threemonths or less that are readily convertible to known amounts of cash and which are subject to an insignificantrisk of changes in value; and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilitieson the Statement of Financial Position.
140
383(156)124
2018
(552)
Notes
9
2017
–
319
–
(1,332)780 –
(86)160
–
12,800
9
(12,800)
(32)(64)
112(28)
(14,300)
500
532
1,032
(121) 43
14,300
954
7031,657
–
8
6
75
page 27Page 72
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 6(b). Investments
$ ’000
Investmentsa. ‘Held to maturity’Total investments
TOTAL CASH ASSETS, CASHEQUIVALENTS AND INVESTMENTS
Held to maturity investmentsLong term depositsOther long term financial assetsTotal
Accounting policy for investments
ClassificationCouncil classifies its financial assets in the following categories: financial assets at fair value through profit orloss; loans and receivables; held-to-maturity investments; and available-for-sale financial assets. Theclassification depends on the purpose for which the investments were acquired. Management determines theclassification of its investments at initial recognition and, in the case of assets classified as held-to-maturity,re-evaluates this designation at each reporting date.
(a) Held to maturity investmentsHeld-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixedmaturities that Council’s management has the positive intention and ability to hold to maturity. Assets in thiscategory are measured at amortised cost.
Recognition and de-recognitionRegular purchases and sales of financial assets are recognised on trade-date: the date on which Councilcommits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costsfor all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value throughprofit or loss are initially recognised at fair value and transaction costs are expensed in the income statement.Investments are derecognised when the rights to receive cash flows from the financial assets have expired orhave been transferred and Council has transferred substantially all the risks and rewards of ownership.
When securities classified as available-for-sale are sold, the accumulated fair value adjustments recognised inequity are included in the income statement as gains and losses from investment securities.
Impairment of available for sale investmentsIn the case of equity investments classified as available-for-sale, a significant or prolonged decline in the fairvalue of the security below its cost is considered an indicator that the assets are impaired.
11,800
Non-current
15,332
Current
–14,30014,300
2018
11,800
Non-current
–
20172018
14,300
––
14,300700
–
2017
–
–13,457–
–
11,100–
11,800–
–
Current
–
page 28Page 73
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 6(c). Restricted cash, cash equivalents and investments – details
$ ’000
Total cash, cash equivalentsand investments
attributable to:External restrictions (refer below)Internal restrictions (refer below)Unrestricted
$ ’000
Details of restrictions
External restrictions – otherDeveloper contributionsSpecific purpose unexpended grantsWater suppliesSewerage servicesDomestic waste managementTown improvementsOther LIRS loanExternal restrictions – otherTotal external restrictions
–1,092
6,6997,981
15,332
7,002
Non-currentCurrent2018
13,457
7,981
–
–
692
3,282
349
7,981
559
6,699
871
Non-current
2,650
–
13,457
2018
–
Notes 2018
–
Current
15,332
370
2017
717
2017
2017
–
–
6,0416,699
99
259
1,749 1,700
–
–
428
–
929
page 29Page 74
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 6(c). Restricted cash, cash equivalents and investments – details (continued)
$ ’000
Internal restrictionsPlant and vehicle replacementEmployees leave entitlementCemetery plaquesCommunity grantsCommunity centreCommunity technology centreElectionEngineering instrumentsFAG – 50% 2017-18FinanceGarbage depotGravel pitsLand developmentLibraryOffice equipmentRail crossings updateResidential dwellingsRoad constructionSelf care unitsSwimming poolTourismTotal internal restrictions
TOTAL RESTRICTIONS
2017Notes
38 3829 37
11
6,0417,002
12,740
11
15 15
58 40
1,041 902
278 255
1,309 1,247
57 57
411
850
1,047
829 109
1,047411
2018
745 745
150 150850
14,983
56 49
27 27
8 810 10
7 7
26 26
page 30Page 75
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 7. Receivables
$ ’000
PurposeRates and annual chargesInterest and extra chargesUser charges and feesPrivate worksAccrued revenues – Interest on investmentsNet GST receivableTotal
Less: provision for impairmentUser charges and feesTotal provision for impairment – receivables
TOTAL NET RECEIVABLES
Externally restricted receivablesWater supply – Rates and availability charges – OtherSewerage services – Rates and availability charges – OtherTotal external restrictionsUnrestricted receivablesTOTAL NET RECEIVABLES
Movement in provision for impairment of receivablesBalance at the beginning of the yearBalance at the end of the year
Accounting policy for receivablesRecognition and measurementLoans and receivables are non-derivative financial assets with fixed or determinable payments that are not quotedin an active market. They are included in current assets, except for those with maturities greater than 12 monthsafter the reporting date which are classified as non-current assets. Loans and receivables are included inother receivables (Note 8) and receivables (Note 7) in the Statement of Financial Position. Receivables arerecognised initially at fair value and subsequently measured at amortised cost using the effective interestmethod, less provision for impairment. Receivables are generally due for settlement within 30 days.
Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.
–
Current2017
Non-current
50
37805
443
Notes
– 65252
146 –
–
–
1,559
(2)
976
67–
–45
–
–41
2
1,130
2018
–
2
141 –109 –978
Current
–
87
–
–
(2)––(2)
–
–80
–
47
–
–
– ––
1,557 –
–
–
Non-current
364
2
427763
976
37
–
67
228
(2)
––213
–
–
2017
2
–
2018
68
1,557
page 31Page 76
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 7. Receivables (continued)
Accounting policy for receivables (continued)ImpairmentFor loans and receivables the amount of the loss is measured as the difference between the asset’s carryingamount and the present value of estimated future cash flows (excluding future credit losses that have not beenincurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset isreduced and the amount of the loss is recognised in profit or loss.
Collectability of receivables is reviewed on an on-going basis. Debts that are known to be uncollectible are writtenoff by reducing the carrying amount directly. An allowance account (provision for impairment of receivables) isused when there is objective evidence that Council will not be able to collect all amounts due according to theoriginal terms of the receivables.
Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financialreorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicatorsthat the receivable is impaired. When a receivable for which an impairment allowance had been recognisedbecomes uncollectable in a subsequent period it is written off against the allowance account. Subsequentrecoveries of amounts previously written off are credited against other expenses in the Income statement.
2018 2017
page 32Page 77
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 8. Inventories and other assets
$ ’000
(a) Inventories
Inventories at costReal estate for resale(refer below)Stores and materialsTrading stockTotal inventories at cost
TOTAL INVENTORIES
(b) Other assets
PrepaymentsTOTAL OTHER ASSETS
Externally restricted assets
WaterStores and materialsTotal water
SewerageStores and materialsTotal sewerage
Total externally restricted assetsTotal unrestricted assetsTOTAL INVENTORIES AND OTHER ASSETS
Notes
12
Current
781
––
–
––
2017
–
–
–
7
987
8686
–
– –
(320)–
–1,073
169788
1,073 788169
–
–
–
–
7
–
279
––
115
169
205
781
–
205
–
Non-current
169
10
Non-current
115
–
–
Current2018
–
987
320
428
–
169
546 492
–
page 33Page 78
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 8. Inventories and other assets (continued)
$ ’000
(i) Other disclosures
(a) Details for real estate developmentResidentialTotal real estate for resale(Valued at the lower of cost and net realisable value)
Represented by:Acquisition costsTotal costsTotal real estate for resale
Movements:Real estate assets at beginning of the year – Purchases and other costs – WDV of sales (expense)Total real estate for resale
(b) Current assets not anticipated to be settled within the next 12 monthsThe following inventories and other assets, even though classifiedas current are not expected to be recovered in the next 12 months;
Real estate for resale
Accounting policyRaw materials and stores, work in progress and finished goodsRaw materials and stores, work in progress and finished goods are stated at the lower of cost and netrealisable value. Costs are assigned to individual items of inventory on basis of weighted average costs. Costsof purchased inventory are determined after deducting rebates and discounts. Net realisable value is theestimated selling price in the ordinary course of business less the estimated costs of completion and theestimated costs necessary to make the sale.
Inventory held for distributionInventory held for distribution is held at cost, adjusted where applicable for any loss of service potential.
Land held for resale/capitalisation of borrowing costsLand held for resale is stated at the lower of cost and net realisable value. Cost is assigned by specificidentification and includes the cost of acquisition, and development and borrowing costs during development.When development is completed borrowing costs and other holding charges are expensed as incurred.
Borrowing costs included in the cost of land held for resale are those costs that would have been avoided if theexpenditure on the acquisition and development of the land had not been made. Borrowing costs incurred whileactive development is interrupted for extended periods are recognised as expenses.
CurrentNon-currentCurrent
– 492
492
546
–
169
–
(31)(492)–
–
––
199
492
2017
492
492
492
Non-current
286
2018
492–
293
–
546
(86)(28)5
–
169
492
405
169
20172018
546
546
Notes
546546
492
169
169169
169
page 34Page 79
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 9(a). Infrastructure, property, plant and equipment
Asset class
$ ’000
Capital work in progress 240 – 240 – – – – 647 – – – 887 – 887 Plant and equipment 11,275 5,537 5,738 – 1,330 (64) (682) – – – – 12,540 6,218 6,322 Office equipment 312 264 48 – – – (6) – – – – 312 270 42 Furniture and fittings 248 228 20 – – – (6) – – – – 248 234 14 Land: – Operational land 5,274 – 5,274 – – – – – – – – 5,274 – 5,274 – Community land 8,476 – 8,476 – – – – – – – – 8,476 – 8,476 – Land under roads (post 30/6/08) 8,363 – 8,363 – – – – – – (355) – 8,008 – 8,008 Land improvements – non-depreciable 80 – 80 – – – – – – – – 80 – 80 Land improvements – depreciable 1,019 760 259 – – – (59) – – – – 1,019 819 200 Infrastructure: – Buildings – non-specialised 243 75 168 – – – (2) – – (12) 153 – 153 – Buildings – specialised 18,411 2,574 15,837 843 – (1,332) (145) – – (2,048) 22,081 8,925 13,156 – Other structures 920 236 684 106 – – (50) – – – 1,191 2,649 717 1,932 – Roads 194,791 31,955 162,836 3,064 – – (1,764) – (7) – – 197,847 33,718 164,129 – Bridges 10,747 674 10,073 – – – (107) – – – – 10,747 782 9,965 – Footpaths 3,415 489 2,926 – – – (22) – – – – 3,460 554 2,906 – Bulk earthworks (non-depreciable) 31,627 – 31,627 – – – – – – – – 31,627 – 31,627 – Stormwater drainage 10,619 3,282 7,337 – – – (118) – – – – 10,855 3,636 7,219 – Water supply network 12,916 4,576 8,340 60 – – (258) – – – 118 13,160 4,901 8,259 – Sewerage network 20,232 11,072 9,160 – – – (292) – – – 123 20,513 11,523 8,990 – Swimming pools 1,568 687 881 – – – (30) – – (13) 1,049 210 839 – Other open space/recreational assets 968 254 714 – – – (41) – – – 168 1,136 296 840 Other assets: – Library books 338 309 29 15 – – (10) – – – – 352 319 33 – Other 66 57 9 – – – (5) – – – – 66 61 5Reinstatement, rehabilitation and restorationassets (refer Note 11): – Tip assets 28 10 18 – – – (1) – – – – 28 10 18 – Quarry assets 57 14 43 – – – (2) – – – – 57 17 40TOTAL INFRASTRUCTURE,PROPERTY, PLANT AND EQUIP.
Renewals are defined as the replacement of existing assets (as opposed to the acquisition of new assets).
Accumulateddepreciation
andimpairment
Grosscarryingamount
Grosscarryingamount
Depreciationexpense
as at 30/6/2017
WIPtransfers
Adjustmentsand transfers
Additionsnew assets
Additionsrenewals
Carryingvalue
of disposals
Revaluationdecrements
to equity (ARR)
Revaluationincrements
to equity (ARR)Net
carryingamount
as at 30/6/2018
Netcarryingamount
Asset movements during the reporting period
Accumulateddepreciation
andimpairment
279,414(2,428) 1,600 352,624 73,210342,233 63,053 279,180 4,088 (1,396)1,330 (3,600) (7)647
page 35
Page 80
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 9(a). Infrastructure, property, plant and equipment (continued)
Accounting policy for infrastructure, property, plant and equipmentInfrastructure, property, plant and equipment are held at fair value. Independent valuations are performed atleast every five years, however the carrying amount of assets is assessed at each reporting date to confirm that it isnot materially different from current fair value.
Water and sewerage network assets are indexed at each reporting period in accordance with the RatesReference Manual issued by Crown Lands and Water (CLAW).
Increases in the carrying amounts arising on revaluation are credited to the asset revaluation reserve. To theextent that the increase reverses a decrease previously recognising profit or loss relating to that asset class, theincrease is first recognised as profit or loss. Decreases that reverse previous increases of assets in the sameclass are first charged against revaluation reserves directly in equity to the extent of the remaining reserveattributable to the class; all other decreases are charged to the Income Statement.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,only when it is probable that future economic benefits associated with the item will flow to Council and the costof the item can be measured reliably. All other repairs and maintenance are charged to the income statementduring the financial period in which they are incurred.
Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocatetheir cost, net of their residual values, over their estimated useful lives as follows:
Plant and equipment Years Other equipment YearsOffice equipment 5 to 10 Playground equipment 5 to 15Office furniture 10 to 20 Benches, seats etc. 10 to 20Computer equipment 4Vehicles 5 to 8 BuildingsHeavy plant/road making equipment 5 to 8 Buildings: masonry 50 to 100Other plant and equipment 5 to 15 Buildings: other 20 to 40
Water and sewer assets Stormwater assetsDams and reservoirs 80 to 100 Drains 80 to 100Bores 20 to 40 Culverts 50 to 80Reticulation pipes: PVC 70 to 80 Flood control structures 80 to 100Reticulation pipes: other 25 to 75Pumps and telemetry 15 to 20
Transportation assets Other infrastructure assetsSealed roads: surface 20 Bulk earthworks 20Sealed roads: structure 50 Swimming pools 50Unsealed roads 20 Unsealed roads 20Bridge: concrete 100 Other open space/recreational assets 20Bridge: other 50 Other infrastructure 20Road pavements 60Kerb, gutter and footpaths 40
page 36Page 81
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 9(a). Infrastructure, property, plant and equipment (continued)
Accounting policy for infrastructure, property, plant and equipment (continued)The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date.Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are includedin the Income statement.
Land under roadsLand under roads is land under roadways and road reserves including land under footpaths, nature strips andmedian strips.
Council has elected to recognise land under roads acquired before 1 July 2008 in accordance with AASB 1051.
Land under roads acquired after 1 July 2008 is recognised in accordance with AASB 116 Property, Plantand Equipment.
Crown reservesCrown Reserves under Council’s care and control are recognised as assets of the Council. While ownership ofthe reserves remains with the Crown, Council retains operational control of the reserves and is responsible fortheir maintenance and use in accordance with the specific purposes to which the reserves are dedicated.Improvements on Crown Reserves are also recorded as assets, while maintenance costs incurred by Counciland revenues relating to the reserves are recognised within Council’s Income Statement.
Rural Fire Service assetsUnder section 119 of the Rural Fire Services Act 1997 (NSW) , “all fire fighting equipment purchased orconstructed wholly or from money to the credit of the Fund is to be vested in the council of the area for or onbehalf of which the fire fighting equipment has been purchased or constructed”.
Until such time as discussions on this matter have concluded and the legislation changed, Council willrecognise rural fire service assets including land, buildings, plant and vehicles.
page 37Page 82
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 9(b). Externally restricted infrastructure, property, plant and equipment
36,227 16,852 19,375 35,416
2017Gross
carryingamount
Accumulateddepn. and
impairment
Net carryingamount
– – –
–75 41
428
4,649
4
8,68412,916 4,576
1,116
339
9,627
969
311
–
8,340
52
262–
502
13,334
$ ’000
Total sewerage services
Class of asset
Infrastructure
Plant and equipment
Total water supply
Buildings
2018
57
4,901
–27
44
Water supply
Furniture and fittings
8,711
205
WIP
502 258 Plant and equipment
11,52921,440 11,812
Infrastructure26
8,25513,671 4,960
20,514
339
34
240219 26 193
311
– Improvements – depreciable 529
Mobile garbage bins 65 60
31115
244
28
Domestic waste management
115
1
8,985
Other structures6
21
Sewerage services
13,156
Buildings
WIP 205 –
219
Total DWM 1,116
11
Land – Operational land
30
969 –
Grosscarryingamount
Accumulateddepn. and
impairment
Net carryingamount
79 1,037
41
193
16,062 19,354TOTAL RESTRICTED IPP&E
42
11,338
21
20,245 11,07220,966
30
9,173
96910
9,628
969
65 56 975 1,041
–
9
–
page 38Page 83
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 10. Payables and borrowings
$ ’000
PayablesGoods and services – operating expenditureAccrued expenses: – Interest – Salaries and wages – Salary RDO accruals – Workers Compensation on ELE's – Other expenditure accrualsSecurity bonds, deposits and retentionsSuperannuationRFSTotal payables
Income received in advancePayments received in advanceTotal income received in advance
BorrowingsLoans – secured 1
Total borrowings
TOTAL PAYABLES AND BORROWINGS
(a) Payables and borrowings relating to restricted assets
Externally restricted assetsWaterSewer
TOTAL PAYABLES AND BORROWINGS
1. Loans are secured over the general rating income of Council Disclosures on liability interest rate risk exposures, fair value disclosures and security can be found in Note 17.
–
171
249
–
–
8
–
–
–732
35
64
84
31
109
–
344
73 –
–
52
3,291
––
64
33
1,241
–
69
67
44
84–
Non-current
3,292
1,305
Current
–
445
3,757
– –
767
–
3,291
–
2018
–
113
9
465
–
Current
445 3,756
1
–
3,756
145
Current
465
–
2017
––
55–
–
–
–
2017
109
–35 1
–
3,757
1,296
2018
–
–
3,292
1
Non-current Current Non-current
1,296
1,296 3,757
Total payables and borrowings relatingto unrestricted assets
Payables and borrowings relating toexternally restricted assets
Total payables and borrowings relatingto restricted assets
311
– –
Non-current
1,305 3,292
page 39Page 84
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 10. Payables and borrowings (continued)
$ ’000
(b) Current payables and borrowings not anticipated to be settled within the next twelve months
The following payables and borrowings, even though classified as current, are notexpected to be settled in the next 12 months.
Payables – security bonds, deposits and retentions
(c) Changes in liabilities arising from financing activities
Accounting policy for payables and borrowingsPayablesThese amounts represent liabilities for goods and services provided to the Council prior to the end of financialyear that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
BorrowingsBorrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequentlymeasured at amortised cost. Any difference between the proceeds (net of transaction costs) and theredemption amount is recognised in the income statement over the period of the borrowings using the effectiveinterest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of theloan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee isdeferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of thefacility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over theperiod of the facility to which it relates.
Borrowings are removed from the Statement of Financial Position when the obligation specified in the contractis discharged, cancelled or expired. The difference between the carrying amount of a financial liability that hasbeen extinguished or transferred to another party and the consideration paid, including any non-cash assetstransferred or liabilities assumed, is recognised in other income or finance cost.
Borrowings are classified as current liabilities unless Council has an unconditional right to defer settlement ofthe liability for at least 12 months after the reporting date.
TOTAL 4,201 (446)
Class ofborrowings
Openingbalance
as at 1/7/17Cash flows Acquisition Fair value
changes
Othernon-cash
movements
Closingbalance
as at 30/6/18
Loans – secured 4,201 –
2018
(446)–
–
2017
3,755
2017
158
3,755
–158
2018
–– ––
Non-cash changes
page 40Page 85
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 11. Provisions
$ ’000
ProvisionsEmployee benefits:Annual leaveLong service leaveSuperannuation
Asset remediation/restoration:Asset remediation/restoration (future works)
Sub-total – asset remediation/restoration
TOTAL PROVISIONS
(a) Provisions relating to restricted assets
Externally restricted assetsWaterSewer
TOTAL PROVISIONS
$ ’000
(b) Current provisions not anticipated to be settled within the next twelve months
The following provisions, even though classified as current, are notexpected to be settled in the next 12 months.
Provisions – employees benefits
–Provisions relating to externally restrictedassets
Total provisions relating to restrictedassets
329
2017
31– 32
280
946
1,423
63
315
Non-current
1,423
1,407
Current
64 1 62 4
–
–
824–
–
Non-current
–
Non-current
54653667
2017Current
2018Current
–
33
258280 –
–
–
Non-current2018 2017
––
1,007
329
329
31
315 1,4071,360 315
63
2018
Total provisions relating to unrestrictedassets
1,007
799
Current
946
64
34
–
1,344
64
258
page 41Page 86
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 11. Provisions (continued)
$ ’000
(c) Description of and movements in provisions
At beginning of yearELE Movement
ELE Balance C/Fwd
Other provisions
At beginning of yearChanges to provision:Unwinding of discountOther
Other provisions
At beginning of yearChanges to provision:Unwinding of discount
Assetremediation
–
Total ELE provisions atend of year
536
Annual leave TotalSick leave
–1,478
(8)
858
ELE provisions
1,458–
–
Annual leave Sick leave Long serviceleave
ELE on-costs
280
– 66 1,478
7 7
866–
2017
546
Other (enterdetailshere...)
Other (enterdetailshere...)
(10)
Otheremployee
benefits
ELE provisions
ELE on-costs
Total other provisions atend of year
– 1,478
(1)
Other (enterdetails here...)
– – –
546
(20)
866
65
546
66
–
–
66
280
Self-insurance
23(1) (1)
Otheremployee
benefits Total
251
866 –
–
Other (enterdetailshere...)
Assetremediation
251
Self-insurance Total
Total ELE provisions atend of year
2017
Long serviceleave
23
2018 Other (enterdetails here...)
Other (enterdetails here...)
– – – – 258 258
2018
–
Total
Total other provisions atend of year – – – – 258 258
page 42Page 87
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 11. Provisions (continued)
Nature and purpose of non-employee benefit provisionsAsset remediationCouncil has a legal/public obligation to make, restore, rehabilitate and reinstate the council tip and quarry.
Accounting policy for provisionsProvisions are recognised when Council has a present legal or constructive obligation as a result of past events,it is probable that an outflow of resources will be required to settle the obligation, and the amount has beenreliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement isdetermined by considering the class of obligations as a whole. A provision is recognised even if the likelihoodof an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required tosettle the present obligation at the reporting date. The discount rate used to determine the present valuereflects current market assessments of the time value of money and the risks specific to the liability. Theincrease in the provision due to the passage of time is recognised as interest expense.
Employee benefitsShort-term obligationsLiabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leaveexpected to be wholly settled within 12 months after the end of the period in which the employees render therelated service are recognised in respect of employees' services up to the end of the reporting period and aremeasured at the amounts expected to be paid when the liabilities are settled. The liability for annual leaveand accumulating sick leave is recognised in the provision for employee benefits. All other short-termemployee benefit obligations are presented as payables.
Other long-term employee benefit obligationsThe liability for long service leave and annual leave that is not expected to be wholly settled within 12 monthsafter the end of the period in which the employees render the related service is recognised in the provision foremployee benefits and measured as the present value of expected future payments to be made in respect ofservices provided by employees up to the end of the reporting period using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures, andperiods of service. Expected future payments are discounted using market yields at the end of the reportingperiod on national government bonds with terms to maturity and currency that match, as closely as possible,the estimated future cash outflows.
The obligations are presented as current liabilities in the Statement of Financial Position if the Council doesnot have an unconditional right to defer settlement for at least 12 months after the reporting date, regardless ofwhen the actual settlement is expected to occur.
page 43Page 88
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 11. Provisions (continued)
Provisions for close-down and restoration, and environmental clean-up costs – tips and quarriesRestorationClose down and restoration costs include the dismantling and demolition of infrastructure and the removal ofresidual materials and remediation of disturbed areas. Estimated close down and restoration costs are providedfor in the accounting period when the obligation arising from the related disturbance occurs, whether this occursduring the development or during the operation phase, based on the net present value of estimated future costs.
Provisions for close down and restoration costs do not include any additional obligations which are expected toarise from future disturbance. The costs are estimated on the basis of a closure plan. The cost estimates arecalculated annually during the life of the operation to reflect known developments, eg updated cost estimatesand revisions to the estimated lives of operations, and are subject to formal review at regular intervals
RehabilitationWhere rehabilitation is conducted systematically over the life of the operation, rather than at the time of closure,provision is made for the estimated outstanding continuous rehabilitation work at each reporting date and thecost is charged to the Income Statement.
Provision is made for the estimated present value of the costs of environmental clean up obligations outstandingat the reporting date. These costs are charged to the Income Statement. Movements in the environmental cleanup provisions are presented as an operating cost, except for the unwinding of the discount which is shown as aborrowing cost.
Remediation procedures generally commence soon after the time the damage, remediation processand estimated remediation costs become known, but may continue for many years depending on the nature ofthe disturbance and the remediation techniques.
As noted above, the ultimate cost of environmental remediation is uncertain and cost estimates can vary inresponse to many factors including changes to the relevant legal requirements, the emergence of newrestoration techniques or experience at other locations. The expected timing of expenditure can also change, forexample in response to changes in quarry reserves or production rates. As a result there could be significantadjustments to the provision for close down and restoration and environmental clean up, which would affectfuture financial results.
Other movements in the provisions for close down and restoration costs, including those resulting from newdisturbance, updated cost estimates, changes to the estimated lives of operations and revisions to discountrates are capitalised within property, plant and equipment. These costs are then depreciated over the lives of theassets to which they relate.
Close down and restoration costs are a normal consequence of tip and quarry operations, and the majority ofclose down and restoration expenditure is incurred at the end of the life of the operations. Although the ultimatecost to be incurred is uncertain, Council estimates the respective costs based on feasibility and engineeringstudies using current restoration standards and techniques.
Note 12. Accumulated surplus, revaluation reserves, changes in accounting policies, changes in accounting estimates and errors
Nature and purpose of reserves
Infrastructure, property, plant and equipment revaluation reserveThe infrastructure, property, plant and equipment revaluation reserve is used to record increments /decrements of non-current asset values due to their revaluation.
Changes in accounting policies, changes in accounting estimates and errorsThere has been no changes in accounting policies, or changes in accounting estimates and errors.
page 44Page 89
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 13. Statement of cash flows – additional information
$ ’000
(a) Reconciliation of cash assets
Total cash and cash equivalent assetsBalance as per the Statement of Cash Flows
(b) Reconciliation of net operating result to cash provided from operating activities
Net operating result from Income StatementAdjust for non-cash items:Depreciation and amortisationNet losses/(gains) on disposal of assetsUnwinding of discount rates on reinstatement provisions
+/- Movement in operating assets and liabilities and other cash items:Decrease/(increase) in receivablesIncrease/(decrease) in provision for doubtful debtsDecrease/(increase) in inventoriesDecrease/(increase) in other assetsIncrease/(decrease) in payablesIncrease/(decrease) in other accrued expenses payableIncrease/(decrease) in other liabilitiesIncrease/(decrease) in employee leave entitlementsIncrease/(decrease) in other provisionsNet cash provided from/(used in)operating activities from the Statement of Cash Flows
6a
91
Notes
1,032
(2)
23
111112
7,982
(1)
(28)
2017
1,032
(43)1213,600
2018
1,657
4,088
1,657
(9)6
0
(95)(79)
(0)
113
6,989
(580)
(20) 53
(112)
(151)
7
4,435
3,333
page 45Page 90
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 14. Interests in other entities
$ ’000
Associates
Aggregate carrying amount of individually immaterial Associate
Aggregate amounts of Council’s share of individually immaterial:Profit/(loss) from continuing operationsTotal comprehensive income – individually immaterial Associate
The nature and extent of significant restrictions relating to AssociatesCouncil is a member of the Upper Macquarie County Council (which is a body incorporated under the LocalGovernment Act):
The County Council is a noxious weeds control authority...
Council is of the opinion that at 25% it has influence over the County Council and has deemed it as an Associate.The Council's share of the operations of the Country Council were not completed prior to the audit of thesefinancial statements. Council therefore has not accounted for this associate within these financial statements.This disclosure note is based on the "Draft" 2018 Statements of the Associate only.The necessary adjustments to incorporate this Associate will be taken in the 2019 Statements.
14
2017
148
231 223
8
2018
page 46Page 91
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 15. Commitments for expenditure
$ ’000
(a) Capital commitments (exclusive of GST)
Capital expenditure committed for at the reporting date but notrecognised in the financial statements as liabilities:
Property, plant and equipmentOther – Replacement RollersTotal commitments
These expenditures are payable as follows:Within the next yearTotal payable
Sources for funding of capital commitments:Unrestricted general fundsTotal sources of funding
(b) Finance lease commitments
(i) Commitments under finance leases at the reporting date are payable as follows:
Within the next yearTotal minimum lease paymentsAmount recognised as a liabilityWithin the next yearTotal non-cancellable operating lease commitments
245
245
245
–
2018
4–
4
––
2017
–
245–
245
–4
––
–
4
245
4
page 47Page 92
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 16. Contingencies and other liabilities/assets not recognised
The following assets and liabilities do not qualify for recognition in the Statement of Financial Position, but theirknowledge and disclosure is considered relevant to the users of Council’s financial report.
LIABILITIES NOT RECOGNISED:
1. Guarantees
(i) Defined benefit superannuation contribution plans
Council participates in an employer-sponsored defined benefit superannuation scheme, and makes contributionsas determined by the superannuation scheme’s trustees.
Member councils bear responsibility of ensuring there are sufficient funds available to pay out the required benefitsas they fall due.
The schemes most recent full actuarial review indicated that the net assets of the scheme were not sufficient tomeet the accrued benefits of the schemes defined benefit member category with member councils required to makesignificantly higher contributions in future years.
The Local Government Superannuation Scheme however is unable to provide Council with an accurate estimate ofits share of the net deficit and accordingly Council has not recorded any net liability from its defined benefit schemeobligations in accordance with AASB 119.
Future contributions made to the defined benefit scheme to rectify the net deficit position will be recognised as anexpense when they become payable – similar to the accounting for defined contributions plans.
(ii) Statewide Limited
Council is a member of Statewide Mutual, a mutual pool scheme providing liability insurance to local government.
Membership includes the potential to share in either the net assets or liabilities of the fund depending on its pastperformance. Council’s share of the net assets or liabilities reflects Council’s contributions to the pool and the resultof insurance claims within each of the fund years.
The future realisation and finalisation of claims incurred but not reported to 30/6 this year may result in futureliabilities or benefits as a result of past events that Council will be required to fund or share in respectively.
(iii) StateCover Limited
Council is a member of StateCover Mutual Limited and holds a partly paid share in the entity.
StateCover is a company providing workers compensation insurance cover to the NSW local government industryand specifically Council.
page 48Page 93
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 16. Contingencies and other liabilities/assets not recognised (continued)
LIABILITIES NOT RECOGNISED (continued):
1. Guarantees (continued)
(iii) StateCover Limited (continued)
Council has a contingent liability to contribute further equity in the event of the erosion of the company’s capitalbase as a result of the company’s past performance and/or claims experience or as a result of any increasedprudential requirements from APRA.
These future equity contributions would be required to maintain the company’s minimum level of net assets inaccordance with its licence requirements.
(iv) Other guarantees
Council has provided no other guarantees other than those listed above.
2. Other liabilities
(i) Third party claims
The Council is involved from time to time in various claims incidental to the ordinary course of business includingclaims for damages relating to its services.
Council believes that it is appropriately covered for all claims through its insurance coverage and does not expectany material liabilities to eventuate.
page 49Page 94
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 17. Financial risk management
$ ’000
Risk management
Council’s activities expose it to a variety of financial risks including (1) price risk, (2) credit risk, (3) liquidity riskand (4) interest rate risk.
The Council’s overall risk management program focuses on the unpredictability of financial markets and seeksto minimise potential adverse effects on the financial performance of the Council.
Council does not engage in transactions expressed in foreign currencies and is therefore not subject to foreigncurrency risk.
Financial risk management is carried out by Council’s finance section under policies approved by the Council.
A comparison by category of the carrying amounts and fair values of Council’s financial assets and financialliabilities recognised in the financial statements is presented below.
Financial assetsCash and cash equivalentsInvestments – ‘Held to maturity’ReceivablesTotal financial assets
Financial liabilitiesPayablesLoans/advancesTotal financial liabilities
Fair value is determined as follows:
– Cash and cash equivalents, receivables, payables – are estimated to be the carrying value that approximatesmarket value.
– Borrowings and held-to-maturity investments – are based upon estimated future cash flows discounted by the current mkt interest rates applicable to assets and liabilities with similar risk profiles, unless quoted market prices are available.
– Financial assets classified (i) ‘at fair value through profit and loss’ or (ii) ‘available-for-sale’ – are based upon quoted market prices (in active markets for identical investments) at the reporting date or independent valuation.
4,2014,969
733
16,889
4,488
1,032
2018
1,55811,800
2017Fair value
9761,55714,432
4,488 4,843
1,657 1,657
4,201733
3,755642
14,300
3,755
14,433
768
16,890
14,300
2018
975
1,032
11,800
2017Carrying value
page 50Page 95
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 17. Financial risk management (continued)
$ ’000
Council’s objective is to maximise its return on cash and investments whilst maintaining an adequate level ofliquidity and preserving capital.
Council’s finance area manages the cash and Investments portfolio with the assistance of independentadvisors.
Council has an investment policy which complies with the Local Government Act 1993 and MinisterialInvestment Order 625. This policy is regularly reviewed by Council and its staff and a monthly Investment reportis provided to Council setting out the make-up and performance of the portfolio as required by LocalGovernment regulations.
The risks associated with the investments held are:
– Price risk – the risk that the capital value of Investments may fluctuate due to changes in market prices, whether there changes are caused by factors specific to individual financial instruments or their issuers or are caused by factors affecting similar instruments traded in a market.
– Interest rate risk – the risk that movements in interest rates could affect returns and income.
– Credit risk – the risk that the investment counterparty will not complete their obligations particular to a financial instrument, resulting in a financial loss to Council – be it of a capital or income nature.
Council manages these risks (amongst other measures) by diversifying its portfolio and only purchasinginvestments with high credit ratings or capital guarantees.
Council also seeks advice from independent advisers before placing any funds in cash equivalents andinvestments.
(a) Market risk – price risk and interest rate risk
The following represents a summary of the sensitivity of Council’s Income Statement and accumulated surplus(for the reporting period) due to a change in either the price of a financial asset or the interest rates applicable.
It is assumed that the change in interest rates would have been constant throughout the reporting period.
2018Possible impact of a 10% movement in market valuesPossible impact of a 1% movement in interest rates
2017Possible impact of a 10% movement in market valuesPossible impact of a 1% movement in interest rates (90)91
(90)
(75)75
75 (75)
(90)
75
Increase of values/rates
9175
Profit(75)(90)90
EquityDecrease of values/rates
(75)
Profit
90
Equity
page 51Page 96
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 17. Financial risk management (continued)
$ ’000
(b) Credit risk
Council’s major receivables comprise (i) rates and annual charges and (ii) user charges and fees.
The major risk associated with these receivables is credit risk – the risk that debts due and payable to Councilmay not be repaid in full.
Council manages this risk by monitoring outstanding debt and employing stringent debt recovery procedures.It also encourages ratepayers to pay their rates by the due date through incentives.
Credit risk on rates and annual charges is minimised by the ability of Council to secure a charge over the landrelating to the debts – that is, the land can be sold to recover the debt. Council is also able to charge intereston overdue rates and annual charges at higher than market rates which further encourages the payment of debt.There are no significant concentrations of credit risk, whether through exposure to individual customers,specific industry sectors and/or regions.
The level of outstanding receivables is reported to Council monthly and benchmarks are set and monitored foracceptable collection performance.
Council makes suitable provision for doubtful receivables as required and carries out credit checks on mostnon-rate debtors.
There are no material receivables that have been subjected to a re-negotiation of repayment terms.
A profile of Council’s receivables credit risk at balance date follows:
(i) Ageing of receivables – %Current (not yet overdue)Overdue
(ii) Ageing of receivables – valueRates and annual chargesCurrent< 1 year overdue1 – 2 years overdue2 – 5 years overdue> 5 years overdue
Other receivablesCurrent0 – 30 days overdue31 – 60 days overdue61 – 90 days overdue> 91 days overdue
614
100%9%
268
76%
annualRates and
343
23%
2018
26%
receivableschargesannual
Rates and2017
charges
9
31
848
18
Other
2018
2018
1,116
204
74%
5
100%
receivables
523
34
20
77%
2017
100%
7
364
80
413
–
55
Other
11
55443
9
100%24%
2017
91%
page 52Page 97
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 17. Financial risk management (continued)
$ ’000
(c) Liquidity risk
Payables and borrowings are both subject to liquidity risk – the risk that insufficient funds may be on handto meet payment obligations as and when they fall due.
Council manages this risk by monitoring its cash flow requirements and liquidity levels and maintaining anadequate cash buffer.
Payment terms can (in extenuating circumstances) also be extended and overdraft facilities utilised as required.
Borrowings are also subject to interest rate risk – the risk that movements in interest rates could adverselyaffect funding costs and debt servicing requirements. Council manages this risk by borrowing long term andfixing the interest rate on a 4-year renewal basis. The Finance Section regularly reviews interest ratemovements to determine if it would be advantageous to refinance or renegotiate part or all of the loan portfolio.
The contractual undiscounted cash outflows (ie. principal and interest) of Council’s payables and borrowingsare set out in the maturity table below:
$ ’000
Trade/other payablesLoans and advancesTotal financial liabilities
Trade/other payablesLoans and advancesTotal financial liabilities 55
3.60%
interest rateaverage
3,755
2018
4,969
Weighted
7684,201
2017
4,488
1,760
361,992 4,2014.28%
-1,760
171
cashTotal
2,6492,691 4,444660
outflows
768
660 3,755
-
42
55
≤ 1 Yearmaturity
-
payable in:1 – 5 Years > 5 Years
to no
689 733
values
Subject
2,028
carryingActual
677
1,126449
4,969
476446922
171-
page 53Page 98
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 18. Material budget variations
$ ’000
While the Income Statement included in this General Purpose Financial Report must disclose the originalbudget adopted by Council, the Local Government Act 1993 requires Council to review its financial budgeton a quarterly basis, so that it is able to manage the various variations between actuals versus budget thatinvariably occur throughout the year.
This note sets out the details of material variations between Council’s original budget and its actualresults for the year as per the Income Statement – even though such variations may have been adjusted forduring each quarterly budget review.
Note that for variations* of budget to actual :Material variations represent those variances that amount to 10% or more of the original budgeted figure.F = Favourable budget variation, U = Unfavourable budget variation
$ ’000
REVENUESRates and annual charges
User charges and feesDrought conditions has resulted in increased water usage
Interest and investment revenueA result of a change in the in the S&P credit ratings as well as a slight decrease in BBSW points and a reduction ininterest yeilds available has see a decrease in interest revenue
Other revenuesOriginal budget included provision for FESL reimbursment which was subsequently removed by the NSW StateGovernment
Operating grants and contributionsRound 1 of Stronger Country Communities Fund not budgeted plus the movement in 2017-18 and 2018-19 FAGadvanced payment
Capital grants and contributions
Net gains from disposal of assetsThe write off of the residual value from the sale of a council building exceeded the sale price which resulted in aloss from disposal of assets.
F
26%
165
330 (11%)
6,588
(7%)
U
(36)468 U
5,304
U
1,368
5,411
5,220
Budget ---------- Variance* ----------
4,734
107
Council’s original financial budget for 17/18 was adopted by the Council on dd/mm/yy and is not required to beaudited.
F
(350) (100%)
5,812
350
23%
–
(4%)
505
1,078
157
371 (41)
(7)
U
2018 20182018
2% F
Actual
page 54Page 99
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 18. Material budget variations (continued)
$ ’000
EXPENSESEmployee benefits and on-costs
Borrowing costs
Materials and contractsIncrease in water purchases due to drought, increased costs in purchase of chemicals for sewer plant as wellas costs relating to the Round 1 of Stronger Country Communities Fund
Depreciation and amortisationRevaluation of Buildings plus water and sewer incrementation increase has seen an increase in depreciation overthe live of the assets
Other expenses
Net losses from disposal of assetsThe write off of the residual value from the sale of a council building exceeded the sale price which resulted in aloss from disposal of assets.
Budget variations relating to Council’s Cash Flow Statement include:
Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities
U
F
(810)
200
2,337
(7,168) U
14
1%
6%
3,147
F
121
3,222
–
121
2,449
0%
12
(12%)
(35%)
2195,1735,393
(3.1%)
19.5%
(446)
(6,000) (1,168)
25
6,867 6,989 F1.8%
2,474
F(460)
(121)
(377) U3,600
F188
2018
U
---------- Variance* ----------
4%
Budget Actual2018 2018
page 55Page 100
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement
$ ’000
The Council measures the following asset and liability classes at fair value on a recurring basis:
– Infrastructure, property, plant and equipment– Financial assets and liabilities
(1) The following table presents all assets and liabilities that have been measured and recognised at fair values:
2018
Recurring fair value measurements
Financial assetsInvestments– ‘Held for trading’ReceivablesTotal financial assets
Infrastructure, property, plant and equipmentPlant and equipmentOffice equipmentFurniture and fittingsOperational landCommunity landLand improvementsBuildingsOther structuresLand under roadsBulk earth worksRoadsBridgesFootpathsStormwater drainageWater supply networkSewerage networkSwimming poolsOpen space/recreation assetsLibrary books and otherGravel pitsGarbage tipsOtherTotal infrastructure, property, plant and equipment
30/06/18 – –30/06/18 – – 164,128 164,128
839 83930/06/18 – – 8,990 8,99030/06/1830/06/18 –30/06/18 –
– –
– – 18 18– – 57
– 7,219
30/06/18
8,259 8,259
57– – 19
7,219
9,965 9,965
30/06/18
30/06/18
30/06/18 –
– – 8,476
– 5 530/06/1830/06/1830/06/18 19
– 2,905 2,905
30/06/18 – – 840 84030/06/18 – –
6,322–
8,008
– 4214 14
– 42
– – 5,274 5,274
31,627
8,476
–
–
––
278 278
– – 31,627
278,525
prices in observableDate
– 15,858 – 15,8581,558
30/06/18 – 14,300
inputsactive mkts
14,3001,558 –
30/06/18
Quoted Significant
Fair value measurement hierarchyLevel 1 Level 2
Significant
–
Level 3 Total
valuation inputs
30/06/18 –
8,008
– – 13,309 13,3091,9311,931– –
–
–
6,322
30/06/18 –
–
30/06/1830/06/18
30/06/18
30/06/1830/06/18
unobservable
278,525
of latest
–
page 56Page 101
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement (continued)
$ ’000
(1) The following table presents all assets and liabilities that have been measured and recognised at fair values:
2017
Recurring fair value measurements
Financial assetsInvestments– ‘Held for trading’– ‘Held for maturity’ReceivablesTotal financial assets
Infrastructure, property, plant and equipmentPlant and equipmentOffice equipmentFurniture and fittingsOperational landCommunity landLand improvementsBuildingsOther structuresLand under roadsBulk earth worksRoadsBridgesFootpathsStormwater drainageWater supply networkSewerage networkSwimming poolsOpen space/recreation assetsLibrary books and otherGravel pitsGarbage tipsOtherTotal infrastructure, property, plant and equipment
(2) Transfers between level 1 and level 2 fair value hierarchies
During the year, there were no transfers between level 1 and level 2 fair value hierarchies for recurring fairvalue measurements.
30/06/17 – 700
8,36330/06/16 –
– – 2,927 2,92730/06/15 –
–
30/06/1630/06/16 – –
–30/06/15 –
12,775 –
inputs
30/06/15
– – 20
88130/06/17
30/06/15 – –
30/06/15 – – 31,627 31,62730/06/16 – – 8,363
975
8,33730/06/15 – – 7,337 7,337
– 881
– 8,337
29 2930/06/16 – –
162,837 162,837
– 684 684
30/06/16
278,938
714 714
– 18 18
– – 278,938
– – 5,274 5,274
–– 9,160 9,160
––
8,476 8,476
–
Quotedunobservable
339
– 9
30/06/15 – –
Date
30/06/15
active mkts
48
inputsprices in observable
30/06/17
30/06/17– 700
–
42 4230/06/15 –
30/06/17
20
12,775–
48
–
30/06/15
10,072 10,072
9
30/06/16 – –– – 16,005 16,00530/06/16
–
valuation
– 11,100
30/06/15 – – 5,739 5,739
Total
11,100
975
Level 1 Level 2Significant
30/06/15 –
–
SignificantLevel 3
Fair value measurement hierarchy
339
of latest
page 57Page 102
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement (continued)
(3) Valuation techniques used to derive level 2 and level 3 fair values
Where Council is unable to derive fair valuations using quoted market prices of identical assets (ie. level 1 inputs), Council instead utilises a spread of both observableinputs (level 2 inputs) and unobservable inputs (level 3 inputs).
The fair valuation techniques Council has employed while utilising level 2 and level 3 inputs are as follows:
Financial assets
Held to Maturity – Long term asset valued at fair valueValuation Technique: ‘Cost approach’Inputs Used (Level 2): Original investment value
Loans & Receivables - Term deposits valued at fair valueValuation Technique: ‘Cost approach’Inputs Used (Level 2): Original investment value
Receivables - Valued using the cost approachValuation Technique: ‘Cost approach’Inputs Used (Level 2): Cost of product or service
Financial liabilities
Payables - Outstanding creditor payments, security bonds & depositsValuation Technique: ‘Cost approach’Inputs Used (Level 2): Cost of product or service
Loans / Advances - Valued using the cost approachValuation Technique: ‘Cost approach’Inputs Used (Level 2): Loan borrowing amount
page 58Page 103
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement (continued)
(3) Valuation techniques used to derive level 2 and level 3 fair values (continued)
Infrastructure, property, plant and equipment
Plant and Equipment – Major plant (graders, loaders trucks etc.), fleet vehicles (cars, utes etc.) and minor plant (chainsaws, mowers etc.)Valuation Techniques: ‘Cost approach’Inputs Used (Level 3): Purchase price, useful lives (current replacement cost)
Office Equipment – Computers, printers etcValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Purchase price, useful lives (current replacement cost)
Furniture and Fittings – Desks, chairs, air conditioners, etcValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Purchase price, useful lives (current replacement cost)
Operational Land – Industrial land, quarries, residential aged care unitsValuation Techniques: ‘Market approach’Inputs Used (Level 3): Land area, rate per square metre, zoning restrictions, geographical location, sales of comparable landThe valuation of the freehold land has been carried out on a Market Value basis and they have been assessed on the basis of the estimated amount which the interestin each property being valued might reasonably be expected to realise on the date of valuation in an exchange between a willing vendor and a willing purchaser inan arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
With regard to the above, Council's Valuer APV Valuers & Asset Management analysed sales of land throughout Oberon and surrounding Council areas and adopteda rate per square metre, after taking into consideration zoning, location, area and configuration.
page 59Page 104
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement (continued)
(3) Valuation techniques used to derive level 2 and level 3 fair values (continued)
Infrastructure, property, plant and equipment (continued)
Community Land – Parkland, sporting grounds, reserves, land under public buildings (halls & community centres)Valuation Techniques: ‘Cost approach’Inputs Used (Level 3): The NSW Valuer General’s valuations
Council's community land is land intended for public access and use, or where other restrictions applying to the land create some obligation to maintain public access(such as a trust deed, or dedication under section 94 of the Environmental Planning and Assessment Act 1979). This gives rise to the restrictions in the Act, intended topreserve the qualities of the land.Community Land:· Cannot be sold· Cannot be leased, licensed, or any other estate granted over the land for more than 21 years and· Must have a plan of management for it.
In relation to the valuing of Community Land the Office of Local Government has authorised the use of the NSW Valuer General’s valuations as a sufficient basis torepresent fair value for the revaluation of community land under clause 31 of AASB 116.
Depreciable Land ImprovementsValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Unit rates, purchase price, useful lives
Buildings (Specialised/Non Specialised) – Community halls, toilet blocks, council offices, library, works depotValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Unit rates, useful life, asset condition
Council’s buildings were valued at fair value on 30th June 2013 in accordance with Compiled Accounting Standard AASB116 Property, Plant and Equipment.Councils buildings were valued by APV Valuers & Asset Management (APV). APV valuations were calculated by determining the Gross Current Replacement Cost anddetermining the amount of accumulated depreciation to reflect the level of service potential remaining in the asset. Assessed on the basis of replacement with a newasset having similar service potential and includes allowances for preliminaries and professional fees.
page 60Page 105
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement (continued)
(3) Valuation techniques used to derive level 2 and level 3 fair values (continued)
Infrastructure, property, plant and equipment (continued)
Roads – Road surface, pavement, formation, major earthworksValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Unit rates, useful life/remaining life, asset condition, length
Councils roads infrastructure assets were segmented and componentised into the following categories (each representing a significant part of the overall asset):· Road Surface· Pavement· Formation & Major Earthworks· Kerb and Gutter
GPS logged to establish the length and extent of the network. Road terminuses (extent of Council maintenance activities) were taken as the measure of OC asset length.Seal widths (sealed roads) were taken from full condition assessment (undertaken by IMG Data and OC staff).
The pavement width of each segment was an additional 1m on each side of the Seal (e.g. Seal of 6 m was measured to have an 8m wide pavement).
Unit rates for formation, pavement and sealing were based on the Rawlinson’s; Construction Cost Guide 2015, Edition 18. These rates were verified against recent actualrates from OC road works. Unit rates are assumed to be for an undulating topography, as this represents the majority of road corridors in the Shire. The slightly steepergrades are assumed to be countered by the substantially longer corridors of flat to slightly undulating topography.
Formation widths for sealed roads was assumed to be an additional 1m on each side of pavement width.
Kerb and GutterUnit rates for Kerb and Gutter are all based on average cost of previous works.
page 61Page 106
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement (continued)
(3) Valuation techniques used to derive level 2 and level 3 fair values (continued)
Infrastructure, property, plant and equipment (continued)
BridgesValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Unit rates, useful life, asset condition, dimension and specifications (concrete/timber), bridge traffic
Councils bridge infrastructure assets were last valued on 30 June 2015.
Condition assessment for bridges was provided by Bridge Check Australia Pty Ltd, valuation was based on observed defects, but does not include core sampling or tensiletesting of any components.Bridge values were determined on the basis of a square metre (of deck) rate. This was in part because council does not possess sufficient detail on the individualcomponents of individual bridges, or their respective conditions.
Footpaths – Footways including cyclewaysValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Unit rates, useful life, asset condition, dimensions and specifications (concrete/bitumen)
Footpaths assets were valued in-house as at 30 June 2015. Aerial imagery was used to calculate the length of Councils footpath/cycleway network combined with anextensive inspection program. In-house unit rates were developed using recent construction data providing a square metre rate which was then applied across the network.Condition data (captured through the inspection program) was then applied to each individual asset segment to provide a written down value.
Stormwater Drainage – includes pits, pipesValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Unit rates, useful life, asset condition, dimensions and specifications
A register of stormwater drainage was developed using in-house field observations and a valuation was carried out as of 30 June 2015. The level of capture is estimated tobe around 85% to 95%, as by its nature Urban Stormwater drainage is difficult to locate and Oberon Council does not have complete records of drainage installed.
Unit Rates for stormwater pits, pipes etc. were determined by estimates of previous work.
page 62Page 107
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement (continued)
(3) Valuation techniques used to derive level 2 and level 3 fair values (continued)
Infrastructure, property, plant and equipment (continued)
Sewerage Network – Sewer pipes, pump stations, treatment plant, telemetry system, manholesValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Unit rates, useful life, asset condition, dimensions and specifications
Councils Sewer Network was valued by CPE Associates as at 30 June 2012. The valuation was based on the NSW Office of Water’s NSW Reference Rates Tablesissued in July 2012, a supplement to the former Ministry of Energy and Utilities’ 2003 document NSW Reference Rates Manual: Valuation of Water Supply, Sewerageand Stormwater Assets. Valuations in the updated tables are for June 2012.
CPEa conducted a field survey, involving a physical inspection of the ground-level facility assets in the system such as treatment plants, pumping stations and effluentreuse reservoir.
The object of the survey was to uncover any evidence that will challenge the default useful life for that asset class such as corrosion (or lack of), obviousmechanical/electrical defects or structural damage. Field survey sheets were completed and a photographic record also was made.
Tip and Quarry Assets – Reinstatement, rehabilitation and restorationValuation Techniques: ‘Cost approach’Inputs Used (Level 3): Unit rates, useful life, asset condition, dimensions and specifications
page 63Page 108
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement (continued)
$ ’000
(4). Fair value measurements using significant unobservable inputs (level 3)
a. The following tables present the changes in level 3 fair value asset classes.
Opening balance – 30/6/17
Transfers from/(to) another asset classPurchases (GBV)Disposals (WDV)Depreciation and impairmentFV Adjustments to Equity
Closing balance – 30/6/18
Closing balance – 30/6/17
Transfers from/(to) another asset classPurchases (GBV)Disposals (WDV)Depreciation and impairmentFV Adjustments to Equity
Closing balance – 30/6/18
Plant andequipment
Officeequipment
Furnitureand fittings
Operationalland
Communityland
Landimproveme
nts BuildingsOther
structures
Land underroads
Bulkearthworks Roads Bridges Footpaths
Streetfurniture
Kerb andgutter
Stormwaterdrainage
– –
–
(21) (155) (21)– – (7) – – –
(118)
158,883
– – – – – – – – –– – 3,064 – – – – 3,064
– – (7)– – (1,588) (108)
–
146,322
– – – –1,330 –
31,627
16,005
42
5,738 20 5,274 36,5838,47647
Total
2,280(64) – –
–
684339
(1,396)–––
– ––
843(1,332)
(682) (6) (6) – (950)
–
Total
8,363 157,414 10,073 2,927 3,692 1,730
–
1,932
–107
–(50)– (59) (147)
– – (869)
280 35,6488,4765,274 13,309
– 1,191– (2,060)–
8,008
7,337 223,162
(2,011)(355) – – – – – – (355)–
9,965 2,906 3,537 1,709 7,219 223,85431,627page 64Page 109
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 19. Fair value measurement (continued)
$ ’000
(4). Fair value measurements using significant unobservable inputs (level 3) continued
a. The following tables present the changes in level 3 fair value asset classes. (continued)
Closing balance – 30/6/17
Transfers from/(to) another asset classPurchases (GBV)Disposals (WDV)Depreciation and impairmentFV Adjustments to Equity
Closing balance – 30/6/18
(5). Highest and best use
All of Council’s non-financial assets are considered to being utilised for their highest and best use.
Watersupply
Seweragenetwork
Swimmingpool
Open space/ recreation
assetsOther
assets Tip Quarry
881 714 38 18 43 19,192
–
– 8,339 9,159
TotalhereclassAsset
(639)– – – – – –
(258)– –
–– – – – 15 – – 75– – – – – –
60– –
– (292) (30) (41) (15) (1) (3)
– 8,259 841 38 188,990 838 41
396118– 123 (13) 168 – – –
19,024
page 65Page 110
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 20. Related party transactions
$ ’000
a. Key management personnel
Key management personnel (KMP) of the Council are those persons having the authority and responsibility for planning, directing and controlling the activities of thecouncil, directly or indirectly.
The aggregate amount of KMP compensation included in the Income Statement is:
Compensation:Short-term benefitsOther long-term benefitsTermination benefitsTotal
–1,108,744
2018854,510254,234
20171,034,390
299,03340,627
1,374,050
page 66Page 111
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 20. Related party transactions (continued)
b. Other transactions with KMP and their related parties
Council has determined that transactions at arm’s length between KMP and Council as part of Council delivering a public service objective (e.g. access to libraryor Council swimming pool by KMP) will not be disclosed.
Nature of the transaction
2018Oberon ConcreteOberon Earthmoving
2017Oberon ConcreteOberon Earthmoving
At arms length market value - -# 511,000 - At arms length market value - -
Ref Actual $ Actual $ Actual $ Actual $# 50,000 -
# 134,477 - At arms length market value - -# 15,360 - At arms length market value - -
Ref Actual $ Actual $ Actual $ Actual $
during year (incl. loans and debts expensecommitments) outstanding recognised
Terms and conditions Provisions Doubtfultransactions balance for doubtful debts
Value of Outstanding
page 67Page 112
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 21. Statement of developer contributions
$ ’000
Under the Environmental Planning and Assessment Act 1979 , Council has significant obligations to provide Section 7.11 (contributions towards provision orimprovement of amenities or services) infrastructure in new release areas.
It is possible that the funds contributed may be less than the cost of this infrastructure, requiring Council to borrow or use general revenue to fund the difference.
SUMMARY OF CONTRIBUTIONS AND LEVIES
DrainageRoadsOpen spaceCommunity facilitiesEmergency services
Cumulativeinternal
borrowingsdue/(payable)
––––––
–
–
–
–
191
1
9
––
149
–
–
PURPOSE Openingbalance
–26 9
earnedContributions
received during the yearInterest
–
28
Cash
1389in yearNon-cash
– ––
–assetyear
35
–
257
(40)
432
–
–
–
799
1,700
704
196
11
(40)
191
(345)
224(40)
1
(385)
– –
–
–
2
950
950
541
1,749
–
–
–
541
Held as
–
–
37
Internal
–
Expenditureborrowing
–
restricted(to)/from
235
–
during
102–
–
–
––
60
799
Total contributions
S7.11 contributions – under a plan
181S7.11 not under plans
–432
S64 contributions
Total S7.11 and S7.12 revenue under plans
page 68Page 113
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 21. Statement of developer contributions (continued)
$ ’000
S7.11 CONTRIBUTIONS – UNDER A PLAN
CONTRIBUTION PLAN NUMBER 1 – URBAN DEVELOPMENT
DrainageRoadsOpen spaceCommunity facilitiesEmergency services
CONTRIBUTION PLAN NUMBER 2 – RURAL DEVELOPMENT
RoadsOpen spaceCommunity facilitiesEmergency services
Cumulativeinternal
borrowingsdue/(payable)
Cumulativeinternal
borrowingsdue/(payable)
–
–––––
–––––
13
Contributions
balance
Non-cash
–
Expenditure
(40)
–
Internal
received during the year
–
duringearned
–11
Interest
in year
–
300
assetrestricted
–
Internal
yearborrowing(to)/from
restricted
24224
––
–
–
Expenditure
116
4
Total
PURPOSE
5
4
Opening
49–
459
Opening
–
Total
–
Cash
Contributionsreceived during the year
75105
–
341
21–6
PURPOSE
89–
–
–
Interest
7
182
–
––
Non-cash
2517
Cash
5 –
(to)/from
–
–
–
––
balance
5119
26
in year
–
earned
–417–
–
–19
100
Held as
–
–
–
–
–(40)
during
–
Held as
125
assetyear
–
11110
–
102
–
borrowing
534
–
page 69Page 114
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 21. Statement of developer contributions (continued)
$ ’000
S7.11 CONTRIBUTIONS – NOT UNDER A PLAN
Roads
–
–
Cumulativeinternal
borrowingsdue/(payable)in year
(345)704 –Cash Non-cash
received during the yearbalance
181
Contributions Held asrestricted
Internalborrowingduring
yearOpening earned
541
–asset(to)/from
541
1
1
–
Interest Expenditure
(345)
PURPOSE
Total 704 –181
page 70Page 115
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 22. Financial result and financial position by fund
Income Statement by fund$ ’000
Continuing operationsIncome from continuing operationsRates and annual chargesUser charges and feesInterest and investment revenueOther revenuesGrants and contributions provided for operating purposesGrants and contributions provided for capital purposesTotal income from continuing operations
Expenses from continuing operationsEmployee benefits and on-costsBorrowing costsMaterials and contractsDepreciation and amortisationOther expensesNet losses from the disposal of assetsTotal expenses from continuing operationsOperating result from continuing operations
Net operating result attributable to each council fund
Net operating result for the year before grants and contributions provided for capital purposesand contributions provided for capital purposes
1 General fund refers to all Council’s activities other than Water, Sewer and Other NB. All amounts disclosed above are gross – that is, they include internal charges and recoveries made between the funds.
15,391
1,465
561
561
554–
772–
121
577
–
2,042–
–
127
23
524
– 577
2,950
2,853
9311
296188
12,441
37 97
1,549
2,950
468––
153
312
1,333
3,024184
6,483
2632,835
4,724–
721 179– –
11
4,251462
2931,551 3,800
2018
715
2018
25
General1SewerOther Water
2018 2018
445
page 71Page 116
Financial Statements 2018
Oberon Council
Notes to the Financial Statements as at 30 June 2018
Note 22. Financial result and financial position by fund (continued)
Statement of Financial Position by fund$ ’000
ASSETSCurrent assetsCash and cash equivalentsInvestmentsReceivablesInventoriesOtherTotal current assets
Non-current assetsInfrastructure, property, plant and equipmentTotal non-current assetsTOTAL ASSETS
LIABILITIESCurrent liabilitiesPayablesIncome received in advanceBorrowingsProvisionsTotal current liabilities
Non-current liabilitiesBorrowingsProvisionsTotal non-current liabilitiesTOTAL LIABILITIESNet assetsEQUITYAccumulated surplusRevaluation reservesTotal equity1 General Fund refers to all Council’s activities other than Water, Sewer and Other NB. All amounts disclosed above are gross – that is, they include internal receivables and payables between the funds.
315
124,0716,837
2018
–
Other
144,117
2,665
5,546
268,187
–
31
–
1,782871
Sewer
–
2018
1,500273
12,8001,130
General1
(1,621)
2018
Water
154
2018
8613,382
8,711 9,627
3,436
––
261,076
987
–3,291
31
261,076
33– 465
109
1,36033 31
1,144–
–
732
9,6278,711
–
–
13,063
–
333,606–6,271
9,822
13,032 268,188
9,855
–
13,032
274,458
9,822
––
–
6,195
–
–
–
–
4,276
–
– –
page 72Page 117
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 23(a). Statement of performance measures – consolidated results
$ ’000
Local government industry indicators – consolidated
1. Operating performance ratioTotal continuing operating revenue (1) excluding capitalgrants and contributions less operating expensesTotal continuing operating revenue (1) excluding capitalgrants and contributions
2. Own source operating revenue ratioTotal continuing operating revenue (1)
excluding all grants and contributionsTotal continuing operating revenue (1)
3. Unrestricted current ratioCurrent assets less all external restrictions (2)
Current liabilities less specific purpose liabilities (3, 4)
4. Debt service cover ratioOperating result (1) before capital excluding interestand depreciation/impairment/amortisationPrincipal repayments (Statement of Cash Flows)plus borrowing costs (Income Statement)
5. Rates, annual charges, interest and extra charges outstanding percentageRates, annual and extra charges outstandingRates, annual and extra charges collectible
6. Cash expense cover ratioCurrent year’s cash and cash equivalentsplus all term depositsPayments from cash flow of operating andfinancing activities
Notes
(1) Excludes fair value adjustments and reversal of revaluation decrements, net gain/(loss) on sale of assets and the net share of interests in joint ventures and associates.
(2) Refer Notes 6-8 inclusive.Also excludes any real estate and land for resale not expected to be sold in the next 12 months.
(3) Refer to Notes 10 and 11.(4) Refer to Note 10(b) and 11(b) – excludes all payables and provisions not expected to be paid in the next 12 months (incl. ELE).
7.67%
x12
12.38x
1,05815,332
5,926
14.50mths
493
633
11.8 mths > 3 mths
63.79%
3.43x > 1.5x
12.11x > 2x
10%
12.48x
11.0 mths
7.88%
18,766
Indicator
4,051
12,021
Amounts
18,609
2018 20162018Benchmark
> 0.00%
8.31%
64.06%
Prior periods
1,4289,555
7,839
2017
4.78x
61.99%
6.69x
20.55%20.86%21.77%
> 60.00%
page 73Page 118
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 23(b). Statement of performance measures – by fund
$ ’000
Local government industry indicators – by fund
1. Operating performance ratioTotal continuing operating revenue (1) excluding capital grants and contributionsless operating expensesTotal continuing operating revenue (1) excluding capital grants and contributions
2. Own source operating revenue ratioTotal continuing operating revenue (1) excluding capital grants and contributionsTotal continuing operating revenue (1)
3. Unrestricted current ratioCurrent assets less all external restrictions (2)
Current liabilities less specific purpose liabilities (3, 4)
Notes
(1) - (4) Refer to Notes at Note 23a above.(5) General fund refers to all of Council’s activities except for its water and sewer activities which are listed separately.
Benchmark
> 60.00%
> 0.00%
57.25%
6.69x
19.88% 22.13% 27.45% -5.91% 36.37% 38.94%
2018 2018 20182017 2017
98.34% 98.12% 90.20% 96.99%
4.79x 89.20x111.26x34.99x
2017Water indicators Sewer indicatorsGeneral indicators 5
15.20x > 1.5x
58.57%
page 74Page 119
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 23(b). Statement of performance measures – by fund (continued)
$ ’000
Local government industry indicators – by fund (continued)
4. Debt service cover ratioOperating result (1) before capital excluding interest anddepreciation/impairment/amortisationPrincipal repayments (Statement of Cash Flows) plus borrowing costs (IncomeStatement)
5. Rates, annual charges, interest and extra charges outstanding percentageRates, annual and extra charges outstandingRates, annual and extra charges collectible
6. Cash expense cover ratioCurrent year’s cash and cash equivalents plus all term depositsPayments from cash flow of operating and financing activities
Notes
(1) Refer to Notes at Note 23a above.(5) General fund refers to all of Council’s activities except for its water and sewer activities which are listed separately.
9.90x
7.99%
11.05x 0.00x 0.00x 0.00x
0.00months
2017
9.30% 9.36%10.18% 9.00%7.26%
General indicators 5 Water indicators Sewer indicators
0.00x
x12
Benchmark2018 2017 2018 2017
months months monthsmonths11.99 0.00 0.009.43 0.00
months
> 2x
> 3 months
2018
< 10%regional &
rural
page 75Page 120
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 23(c). Statement of performance measures – consolidated results (graphs)
Benchmark: ――― Minimum >=0.00% Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark
Benchmark: ――― Minimum >=60.00% Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark
Benchmark: ――― Minimum >=1.50 Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark
To assess theadequacy of workingcapital and its abilityto satisfy obligationsin the short term for
the unrestrictedactivities of Council.
Council's unrestricted ratio remains abovethe benchmark, indicating it has sufficientliquidity to cover short term obligations.
Purpose of ownsource operating
revenue ratio
Commentary on 2017/18 result
2017/18 ratio 64.06%
This ratio measuresfiscal flexibility. It is
the degree of relianceon external funding
sources such asoperating grants and
contributions.
Again a result of continuing RMS PrivateWorks and the Special Rates Variation
which continues to see Council achive therequired benchmark of 60% and above
Purpose ofunrestricted current
ratio
Commentary on 2017/18 result
2017/18 ratio 6.69x
Purpose ofoperating
performance ratio
Commentary on 2017/18 result
2017/18 ratio 21.77%
This ratio measuresCouncil’s
achievement ofcontaining operatingexpenditure withinoperating revenue.
Council has been consistant over the last 3years in achieving a positive operational
performance ratio due to the Special RatesVariation and continued RMS Private
Works
21% 21% 22%
0%
-5%
0%
5%
10%
15%
20%
25%
2015 2016 2017 2018
Rat
io%
1. Operating performance ratio
64% 62% 64% 64%
0%
10%
20%
30%
40%
50%
60%
70%
2015 2016 2017 2018
Rat
io%
2. Own source operating revenue ratio
3.9 3.44.8
6.7
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
2015 2016 2017 2018
Rat
io(x
)
3. Unrestricted current ratio
page 76Page 121
Financial Statements 2018
Oberon Council
Notes to the Financial Statements for the year ended 30 June 2018
Note 23(c). Statement of performance measures – consolidated results (graphs)
Benchmark: ――― Minimum >=2.00 Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark
Benchmark: ――― Maximum <10.00% Ratio is within BenchmarkSource for Benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside Benchmark
Benchmark: ――― Minimum >=3.00 Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark
Purpose of cashexpense cover ratio
Commentary on 2017/18 result
2017/18 ratio 14.50 mths
This liquidity ratioindicates the numberof months a Councilcan continue paying
for its immediateexpenses withoutadditional cash
inflow.
Due to diligent investment processescouncil continues to ensure sufficient cash
for immediate expenses
To assess the impactof uncollected ratesand annual chargeson Council’s liquidityand the adequacy of
recovery efforts.
Council continues to remain with therequired benchmark.
Purpose of debtservice cover ratio
Commentary on 2017/18 result
2017/18 ratio 12.38x
This ratio measuresthe availability ofoperating cash to
service debt includinginterest, principal and
lease payments
Councils debt service cover ratio remainsconsistant and above the benchmark
Purpose of ratesand annual charges
outstanding ratio
Commentary on 2017/18 result
2017/18 ratio 8.31%
24.1
12.5 12.1 12.4
0.0
5.0
10.0
15.0
20.0
25.0
30.0
2015 2016 2017 2018
Rat
io(x
)
4. Debt service cover ratio
7% 8% 8% 8%
0%
2%
4%
6%
8%
10%
12%
2015 2016 2017 2018
Rat
io%
5. Rates, annual charges, interest andextra charges outstanding percentage
9.211.0 11.8
14.5
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
2015 2016 2017 2018
Rat
io(m
ths)
6. Cash expense cover ratio
page 77Page 122
Financial Statements 2018
END OF AUDITED FINANCIAL STATEMENTS
page 78Page 123
INDEPENDENT AUDITOR’S REPORT
Report on the general purpose financial report
Oberon Council
To the Councillors of the Oberon Council
Opinion
I have audited the accompanying financial report of Oberon Council (the Council), which comprise the
Income Statement and Statement of Comprehensive Income for the year ended 30 June 2018, the
Statement of Financial Position as at 30 June 2018, the Statement of Changes in Equity and
Statement of Cash Flows for the year then ended, notes comprising significant accounting policies and
other explanatory information, and the Statement by Councillors and Management.
In my opinion,
• the Council’s accounting records have been kept in accordance with the requirements of the
Local Government Act 1993, Chapter 13, Part 3, Division 2 (the Division)
• the financial report:
- has been presented, in all material respects, in accordance with the requirements of this
Division
- is consistent with the Council’s accounting records
- presents fairly, in all material respects, the financial position of the Council as at
30 June 2018, and of its financial performance and its cash flows for the year then ended
in accordance with Australian Accounting Standards
• all information relevant to the conduct of the audit has been obtained
• no material deficiencies in the accounting records or financial report have come to light during
the audit.
My opinion should be read in conjunction with the rest of this report.
Basis for Opinion
I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the
standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Report’ section
of my report.
I am independent of the Council in accordance with the requirements of the:
• Australian Auditing Standards
• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for
Professional Accountants’ (APES 110).
I have fulfilled my other ethical responsibilities in accordance with APES 110.
Page 124
Parliament promotes independence by ensuring the Auditor-General and the Audit Office of
New South Wales are not compromised in their roles by:
• providing that only Parliament, and not the executive government, can remove an
Auditor-General
• mandating the Auditor-General as auditor of councils
• precluding the Auditor-General from providing non-audit services.
I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my
audit opinion.
Other Information
Other information comprises the information included in the Council’s annual report for the year ended
30 June 2018, other than the financial report and my Independent Auditor’s Report thereon. The
Councillors are responsible for the other information. At the date of this Independent Auditor’s Report,
the other information I have received comprise the special purpose financial statements and Special
Schedules (the Schedules).
My opinion on the financial report does not cover the other information. Accordingly, I do not express
any form of assurance conclusion on the other information. However, as required by the Local
Government Act 1993, I have separately expressed an opinion on the special purpose financial
statements and Special Schedule 2 - Permissible income for general rates.
In connection with my audit of the financial report, my responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or my knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work I have performed, I conclude there is a material misstatement of the other
information, I must report that fact.
I have nothing to report in this regard.
The Councillors’ Responsibilities for the Financial Report
The Councillors are responsible for the preparation and fair presentation of the financial report in
accordance with Australian Accounting Standards and the Local Government Act 1993, and for such
internal control as the Councillors determine is necessary to enable the preparation and fair
presentation of the financial report that is free from material misstatement, whether due to fraud or
error.
In preparing the financial report, the Councillors are responsible for assessing the Council’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting except where the Council will be dissolved or amalgamated by an
Act of Parliament, or otherwise cease operations.
Auditor’s Responsibilities for the Audit of the Financial Report
My objectives are to:
• obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error
• issue an Independent Auditor’s Report including my opinion.
Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in
accordance with Australian Auditing Standards will always detect material misstatements.
Misstatements can arise from fraud or error. Misstatements are considered material if, individually or
in aggregate, they could reasonably be expected to influence the economic decisions users take
based on the financial report.
A description of my responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar4.pdf. The
description forms part of my auditor’s report.
Page 125
My opinion does not provide assurance:
• that the Council carried out its activities effectively, efficiently and economically
• on the Original Budget information included in the Income Statement, Statement of Cash Flows,
and Note 18 Material budget variations
• on the Special Schedules. A separate opinion has been provided on Special Schedule 2 -
Permissible income for general rates
• about the security and controls over the electronic publication of the audited financial report on
any website where it may be presented
• about any other information which may have been hyperlinked to/from the financial report.
Dominika Ryan
Director
23 October 2018
SYDNEY
Page 126
Oberon Council SPECIAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2018
0
Page 127
SPFS 2018
Oberon Council
Special Purpose Financial Statements for the year ended 30 June 2018
Contents
1. Statement by Councillors and Management
2. Special Purpose Financial Statements:
Income Statement – Water Supply Business ActivityIncome Statement – Sewerage Business Activity
Statement of Financial Position – Water Supply Business ActivityStatement of Financial Position – Sewerage Business Activity
3. Notes to the Special Purpose Financial Statements
4. Auditor’s Report
Background
These Special Purpose Financial Statements have been prepared for the use by both Council and the Office ofLocal Government in fulfilling their requirements under National Competition Policy.
The principle of competitive neutrality is based on the concept of a ‘level playing field’ between persons/entitiescompeting in a market place, particularly between private and public sector competitors.
Essentially, the principle is that government businesses, whether Commonwealth, state or local, should operatewithout net competitive advantages over other businesses as a result of their public ownership.
For Council, the principle of competitive neutrality and public reporting applies only to declared business activities.
These include (a) those activities classified by the Australian Bureau of Statistics as business activities beingwater supply, sewerage services, abattoirs, gas production and reticulation, and (b) those activities with a turnoverof more than $2 million that Council has formally declared as a business activity (defined as Category 1 activities).
In preparing these financial statements for Council’s self-classified Category 1 businesses and ABS-definedactivities, councils must (a) adopt a corporatisation model and (b) apply full cost attribution including tax-equivalentregime payments and debt guarantee fees (where the business benefits from Council's borrowing position bycomparison with commercial rates).
(iv)
7
6
(i)
(ii)
(iii)
5
Page
34
2
page 1Page 128
Page 129
SPFS 2018
Oberon Council
Income Statement of Council's Water Supply Business Activity for the year ended 30 June 2018
$ ’000
Income from continuing operationsAccess chargesUser chargesInterestGrants and contributions provided for non-capital purposesTotal income from continuing operations
Expenses from continuing operationsEmployee benefits and on-costsMaterials and contractsDepreciation, amortisation and impairmentWater purchase chargesOther expensesTotal expenses from continuing operationsSurplus (deficit) from continuing operations before capital amounts
Grants and contributions provided for capital purposesSurplus (deficit) from continuing operations after capital amounts
Surplus (deficit) from all operations before taxLess: corporate taxation equivalent (30%) [based on result before capital]
SURPLUS (DEFICIT) AFTER TAX
Plus opening retained profitsPlus adjustments for amounts unpaid:– Corporate taxation equivalentClosing retained profits
Return on capital %Subsidy from Council
Calculation of dividend payable:Surplus (deficit) after taxLess: capital grants and contributions (excluding developer contributions)Surplus for dividend calculation purposesPotential dividend calculated from surplus
4561,021
811
1,497
296310182641156
1,585(88)
17(71)
(71)–
(71)
5,040
–4,969
-1.0%295
(71)–––
2017
4451,551
1111
2,019
296184263587134
1,465554
23577
577(166)
411205
2018
1665,546
6.4%–
411
4,969
411-
page 3Page 130
SPFS 2018
Oberon Council
Income Statement of Council's Sewerage Business Activity for the year ended 30 June 2018
$ ’000
Income from continuing operationsAccess chargesUser chargesInterestGrants and contributions provided for non-capital purposesTotal income from continuing operations
Expenses from continuing operationsEmployee benefits and on-costsMaterials and contractsDepreciation, amortisation and impairmentOther expensesTotal expenses from continuing operationsSurplus (deficit) from continuing operations before capital amounts
Grants and contributions provided for capital purposesSurplus (deficit) from continuing operations after capital amounts
Surplus (deficit) from all operations before taxLess: corporate taxation equivalent (30%) [based on result before capital]
SURPLUS (DEFICIT) AFTER TAX
Plus opening retained profitsPlus adjustments for amounts unpaid:– Corporate taxation equivalentClosing retained profits
Return on capital %
Calculation of dividend payable:Surplus (deficit) after taxSurplus for dividend calculation purposesPotential dividend calculated from surplus
404
179 772 524
1,061
6,837
5.4%
404
157
202
561 (157)
1,295
145 152 139
311 311 156
404
6,276
2018
32 11
715 462 25
211 648
37 561
93
714 304
2017
413
22 435
4.3%
435 (124)
311
5,842
6,276
153 127 312
124
X3A1T
page 4Page 131
SPFS 2018
Oberon Council
Statement of Financial Position – Council's Water Supply Business Activity as at 30 June 2018
$ ’000
ASSETSCurrent assetsCash and cash equivalentsReceivablesTotal current assets
Non-current assetsInfrastructure, property, plant and equipmentTotal non-current assetsTOTAL ASSETS
LIABILITIESCurrent liabilitiesProvisionsTotal current liabilities
Non-current liabilitiesTotal non-current liabilitiesTOTAL LIABILITIESNET ASSETS
EQUITYAccumulated surplusRevaluation reservesTOTAL EQUITY 9,822
4,163 4,969
–
5,546
–
871 370
8,711 8,685 8,711
273 109 1,144 478
20172018
9,855
8,685
9,163
33 31 31 33
33 9,132
31
9,132 4,276
9,822
X4A0T
page 5Page 132
SPFS 2018
Oberon Council
Statement of Financial Position – Council's Sewerage Business Activity as at 30 June 2018
$ ’000
ASSETSCurrent assetsCash and cash equivalentsInvestmentsReceivablesTotal current Assets
Non-current assetsInfrastructure, property, plant and equipmentTotal non-current assetsTOTAL ASSETS
LIABILITIESCurrent liabilitiesProvisionsTotal current liabilities
Non-current liabilitiesTotal non-current liabilitiesTOTAL LIABILITIESNET ASSETS
EQUITYAccumulated surplusRevaluation reservesTOTAL EQUITY
9,627 9,629
6,837 6,195 6,077
12,353
31 – –
6,276
13,032
13,032
1,782
2018
2,151
31
31 31 31
500
3,436 2,755
13,063
154 104 1,500
2017
9,627 9,629
12,353
12,384
31
X4A1T
page 6Page 133
SPFS 2018
Oberon Council
Special Purpose Financial Statements for the year ended 30 June 2018
Contents of the notes accompanying the financial statements
Details
Summary of significant accounting policies
Water Supply Business Best-Practice Management disclosure requirements
Sewerage Business Best-Practice Management disclosure requirements 143
Note Page
1
2
8
12
X5A0T
page 7Page 134
SPFS 2018
Oberon Council Notes to the Special Purpose Financial Statements for the year ended 30 June 2018 Note 1. Significant accounting policies
page 8
A statement summarising the supplemental accounting policies adopted in the preparation of the Special Purpose Financial Statements (SPFS) for National Competition Policy (NCP) reporting purposes follows. These financial statements are SPFS prepared for use by Council and the Office of Local Government. For the purposes of these statements, the Council is a non-reporting not-for-profit entity. The figures presented in these Special Purpose Financial Statements have been prepared in accordance with the recognition and measurement criteria of relevant Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and Australian Accounting Interpretations. The disclosures in these Special Purpose Financial Statements have been prepared in accordance with the Local Government Act 1993 (NSW), the Local Government (General) Regulation, and the Local Government Code of Accounting Practice and Financial Reporting. The statements are prepared on an accruals basis. They are based on historic costs and do not take into account changing money values or, except where specifically stated, current values of non-current assets. Certain taxes and other costs, appropriately described, have been imputed for the purposes of the National Competition Policy. The Statement of Financial Position includes notional assets/liabilities receivable from/payable to Council's general fund. These balances reflect a notional intra-entity funding arrangement with the declared business activities. National Competition Policy Council has adopted the principle of ‘competitive neutrality’ in its business activities as part of the National Competition Policy which is being applied throughout Australia at all levels of government. The framework for its application is set out in the June 1996 NSW government policy statement titled 'Application of National Competition Policy to Local Government'. The Pricing and Costing for Council Businesses, A Guide to Competitive Neutrality issued by the Office of Local Government in July 1997 has also been adopted. The pricing and costing guidelines outline the process for identifying and allocating costs to activities and provide a standard for disclosure requirements. These disclosures are reflected in Council’s pricing and/or financial reporting systems and include taxation equivalents, Council subsidies, return on investments (rate of return), and dividends paid. Declared business activities In accordance with Pricing and Costing for Council Businesses – A Guide to Competitive Neutrality, Council has declared that the following are to be considered as business activities: Category 1 (where gross operating turnover is over $2 million) None
Page 135
SPFS 20187
Oberon Council Notes to the Special Purpose Financial Statements for the year ended 30 June 2018 Note 1. Significant accounting policies (continued)
page 9
Category 2 (where gross operating turnover is less than $2 million) a. Oberon Council Water Supply Comprising the whole of the water supply activities and net assets therein servicing the town of Oberon, which is established as a separate Special Rate Fund. b. Oberon Council Sewerage Service Comprising the whole of the sewerage reticulation & treatment activities and the net assets therein servicing the town of Oberon, which is established as a separate Special Rate Fund. Monetary amounts Amounts shown in the financial statements are in Australian currency and rounded to the nearest thousand dollars, except for Note 2 (Water Supply Best-Practice Management Disclosures) and Note 3 (Sewerage Best-Practice Management Disclosures). As required by Crown Lands and Water (CLAW), the amounts shown in Note 2 and Note 3 are disclosed in whole dollars. (i) Taxation-equivalent charges Council is liable to pay various taxes and financial duties. Where this is the case, they are disclosed as a cost of operations just like all other costs. However, where Council does not pay some taxes which are generally paid by private sector businesses, such as income tax, these equivalent tax payments have been applied to all Council-nominated business activities and are reflected in Special Purpose Financial Statements. For the purposes of disclosing comparative information relevant to the private sector equivalent, the following taxation equivalents have been applied to all Council-nominated business activities (this does not include Council’s non-business activities): Notional rate applied (%) Corporate income tax rate – 30% Land tax – the first $629,000 of combined land values attracts 0%. For the combined land values in excess of $629,001 up to $3,846,000 the rate is 1.6% + $100. For the remaining combined land value that exceeds $3,846,000 a premium marginal rate of 2.0% applies. Payroll tax – 5.45% on the value of taxable salaries and wages in excess of $750,000. In accordance with Crown Lands and Water (CLAW), a payment for the amount calculated as the annual tax equivalent charges (excluding income tax) must be paid from water supply and sewerage business activities. The payment of taxation equivalent charges, referred to in the NSW Office of Water Guidelines to as a ‘dividend for taxation equivalent’, may be applied for any purpose allowed under the Local Government Act, 1993.
Page 136
SPFS 20187
Oberon Council Notes to the Special Purpose Financial Statements for the year ended 30 June 2018 Note 1. Significant accounting policies (continued)
page 10
Achievement of substantial compliance to the NSW Office of Water Guidelines is not a prerequisite for the payment of the tax equivalent charges, however the payment must not exceed $3 per assessment. Income tax An income tax equivalent has been applied on the profits of the business activities. Whilst income tax is not a specific cost for the purpose of pricing a good or service, it needs to be taken into account in terms of assessing the rate of return required on capital invested. Accordingly, the return on capital invested is set at a pre-tax level - gain/(loss) from ordinary activities before capital amounts, as would be applied by a private sector competitor. That is, it should include a provision equivalent to the corporate income tax rate, currently 30%. Income tax is only applied where a gain/ (loss) from ordinary activities before capital amounts has been achieved. Since the taxation equivalent is notional – that is, it is payable to Council as the ‘owner’ of business operations - it represents an internal payment and has no effect on the operations of the Council. Accordingly, there is no need for disclosure of internal charges in the SPFS. The rate applied of 30% is the equivalent company tax rate prevalent at reporting date. Local government rates and charges A calculation of the equivalent rates and charges payable on all category 1 businesses has been applied to all land assets owned or exclusively used by the business activity. Loan and debt guarantee fees The debt guarantee fee is designed to ensure that council business activities face ‘true’ commercial borrowing costs in line with private sector competitors. In order to calculate a debt guarantee fee, Council has determined what the differential borrowing rate would have been between the commercial rate and Council’s borrowing rate for its business activities. (ii) Subsidies Government policy requires that subsidies provided to customers, and the funding of those subsidies, must be explicitly disclosed. Subsidies occur when Council provides services on a less-than-cost-recovery basis. This option is exercised on a range of services in order for Council to meet its community service obligations. Accordingly, ‘subsidies disclosed’ (in relation to National Competition Policy) represents the difference between revenue generated from ‘rate of return’ pricing and revenue generated from prices set by Council in any given financial year. The overall effect of subsidies is contained within the Income Statement of each reported business activity.
Page 137
SPFS 20187
Oberon Council Notes to the Special Purpose Financial Statements for the year ended 30 June 2018 Note 1. Significant accounting policies (continued)
page 11
(iii) Return on investments (rate of return) The NCP policy statement requires that councils with Category 1 businesses ‘would be expected to generate a return on capital funds employed that is comparable to rates of return for private businesses operating in a similar field’. Such funds are subsequently available for meeting commitments or financing future investment strategies. The actual rate of return achieved by each business activity is disclosed at the foot of each respective Income Statement. The rate of return is calculated as follows:
Operating result before capital income + interest expense
Written down value of I,PP&E as at 30 June As a minimum, business activities should generate a return equal to the Commonwealth 10 year bond rate which is 2.63% at 30/6/18. (iv) Dividends Council is not required to pay dividends to either itself (as owner of a range of businesses) or to any external entities. Local government water supply and sewerage businesses are permitted to pay an annual dividend from its water supply or sewerage business surplus. Each dividend must be calculated and approved in accordance with the DPIW guidelines and must not exceed: (i) 50% of this surplus in any one year, or
(ii) the number of water supply or sewerage assessments at 30 June 2018 multiplied by $30 (less the payment for tax equivalent charges, not exceeding $3 per assessment).
In accordance with the DPIW guidelines a Dividend Payment form, Statement of Compliance, Unqualified Independent Financial Audit Report and Compliance Audit Report are required to be submitted to the DPIW.
END OF AUDITED SPECIAL PURPOSE FINANCIAL STATEMENTS
Page 138
SPFS 2018
Oberon Council
Notes to the Special Purpose Financial Statements for the year ended 30 June 2018
Note 2. Water supply business best-practice management disclosure requirements
Dollars amounts shown below are in whole dollars (unless otherwise indicated)
1. Calculation and payment of tax-equivalents[all local government local water utilities must pay this dividend for tax equivalents]
Calculated tax equivalents
Number of assessments multiplied by $3/assessment
Amounts payable for tax equivalents [lesser of (i) and (ii)]
Amounts actually paid for tax equivalents
2. Dividend from surplus50% of surplus before dividends[calculated in accordance with Best-Practice Management for Water Supply and Sewerage Guidelines]
Number of assessments multiplied by $30/assessment, less tax equivalentcharges/assessment
Cumulative surplus before dividends for the 3 years to 30 June 2018, less thecumulative dividends paid for the 2 years to 30 June 2017 and 30 June 2016
2018 Surplus 2017 Surplus 2016 Surplus2017 Dividend 2016 Dividend
Maximum dividend from surplus [least of (i), (ii) and (iii) above]
Dividend actually paid from surplus [refer below for required pre-dividend payment criteria]
Are the overhead reallocation charges to the water business fair and reasonable? a
3. Required outcomes for 6 criteria[to be eligible for the payment of a ‘dividend from surplus’, all the criteria below need a ‘YES’]
Completion of strategic business plan (including financial plan)
Full cost recovery, without significant cross subsidies[refer item 2 (a) in table 1 on page 22 of the Best-Practice Guidelines]
– Complying charges [item 2 (b) in table 1]
– DSP with commercial developer charges [item 2 (e) in table 1]
– If dual water supplies, complying charges [item 2 (g) in table 1]
Sound water conservation and demand management implemented
Sound drought management implemented
Complete performance reporting form (by 15 September each year)
a. Integrated water cycle management evaluation
b. Complete and implement integrated water cycle management strategy
YES
YES(v)
(vi)
YES
–
–
40,470
2018
–
213,367
40,470
589,820
4,047
–
(iv) NO
NO
YES
(ii)
YES
YES
– 426,735 (71,281)
YES
YES
– 234,366
YES
(iv)
(iii)
(i)
(iv)
(iii)
(iii)
(i)
(ii)
(ii)
(v)
(i)
(vi)
X7A0T
page 12Page 139
SPFS 2018
Oberon Council
Notes to the Special Purpose Financial Statements for the year ended 30 June 2018
Note 2. Water supply business best-practice management disclosure requirements (continued)
Dollars amounts shown below are in whole dollars (unless otherwise indicated)
National Water Initiative (NWI) financial performance indicators
Total revenue (water)Total income (w13) – grants for the acquisition of assets (w11a) – interest income (w9)– Aboriginal Communities W&S Program income (w10a)
Revenue from residential usage charges (water)Income from residential usage charges (w6b) x 100 divided by the sum of[income from residential usage charges (w6a) + income from residentialaccess charges (w6b)]
Written down replacement cost of fixed assets (water)Written down current cost of system assets (w47)
Operating cost (OMA) (water)Management expenses (w1) + operational and maintenance expenses (w2)
Capital expenditure (water)Acquisition of fixed assets (w16)
Economic real rate of return (water)[total income (w13) – interest income (w9) – grants for acquisition of assets (w11a) –operating costs (NWI F11) – current cost depreciation (w3)] x 100 divided by[written down current cost of system assets (w47) + plant and equipment (w33b)]
Capital works grants (water)Grants for the acquisition of assets (w11a)
Notes: 1. References to w (e.g. w12) refer to item numbers within Special Schedules 3 and 4 of Council’s Annual FinancialStatements.
2. The NWI performance indicators are based upon the National Performance Framework Handbook for Urban PerformanceReporting Indicators and Definitions.
a refer to 3.2 (2) on page 15 of the Best-Practice Management of Water Supply and Sewerage Guidelines, 2007
NWI F26 – $’000
NWI F11
NWI F17 %
NWI F14 $’000
6.58%
151
1,202 $’000
$’000NWI F9
2018
2,031
NWI F4 %
8,566
$’000
76.58%
NWI F1
page 13Page 140
SPFS 2018
Oberon Council
Notes to the Special Purpose Financial Statements for the year ended 30 June 2018
Note 3. Sewerage business best-practice management disclosure requirements
Dollars amounts shown below are in whole dollars (unless otherwise indicated)
1. Calculation and payment of tax-equivalents[all local government local water utilities must pay this dividend for tax equivalents]
Calculated tax equivalents
Number of assessments multiplied by $3/assessment
Amounts payable for tax equivalents [lesser of (i) and (ii)]
Amounts actually paid for tax equivalents
2. Dividend from surplus
50% of surplus before dividends[calculated in accordance with Best-Practice Management for Water Supply and Sewerage Guidelines]
Number of assessments x ($30 less tax equivalent charges per assessment)
Cumulative surplus before dividends for the 3 years to 30 June 2018, less thecumulative dividends paid for the 2 years to 30 June 2017 and 30 June 2016
2018 Surplus 2017 Surplus 2016 Surplus2017 Dividend 2016 Dividend
Maximum dividend from surplus [least of (i), (ii) and (iii) above]
Dividend actually paid from surplus [refer below for required pre-dividend payment criteria]
Are the overhead reallocation charges to the sewer business fair and reasonable? a
3. Required outcomes for 4 criteria [to be eligible for the payment of a ‘dividend from surplus’, all the criteria below need a ‘YES’]
Completion of strategic business plan (including financial plan)
Pricing with full cost-recovery, without significant cross subsidies [refer item 2 (a) in table 1 on page 22 of the Best-Practice Guidelines]
Complying charges Residential [item 2 (c) in table 1] Non-residential [item 2 (c) in table 1] Trade waste [item 2 (d) in table 1]
DSP with commercial developer charges [item 2 (e) in table 1] Liquid trade waste approvals and policy [item 2 (f) in table 1]
Complete performance reporting form (by 15 September each year)
a. Integrated water cycle management evaluation
b. Complete and implement integrated water cycle management strategy
–
3,711
YES
NO
YES
201,785
NO
YES
2018
YES
37,110
–
NO
–
–
YES
YES
990,221
YES
YES
(i)
(iv)
(iii)
(ii)
(iii)
403,570
(i)
(ii) 37,110
275,554
(iv)
(c)
(iv)
– 311,097
–
(v)
(iii)
(i)
(ii)
(a)(b)
(vi)
X8A0T
page 14Page 141
SPFS 2018
Oberon Council
Notes to the Special Purpose Financial Statements for the year ended 30 June 2018
Note 3. Sewerage business best-practice management disclosure requirements (continued)
Dollars amounts shown below are in whole dollars (unless otherwise indicated)
National Water Initiative (NWI) financial performance indicators
Total revenue (sewerage)Total income (s14) – grants for acquisition of assets (s12a) – interest income (s10)– Aboriginal Communities W&S Program income (w10a)
Written down replacement cost of fixed assets (sewerage)Written down current cost of system assets (s48)
Operating cost (sewerage)Management expenses (s1) + operational and maintenance expenses (s2)
Capital expenditure (sewerage)Acquisition of fixed assets (s17)
Economic real rate of return (sewerage)[total income (s14) – interest income (s10) – grants for acquisition of assets (s12a)– operating cost (NWI F12) – current cost depreciation (s3)] x 100 divided by[written down current cost (i.e. WDCC) of system assets (s48) + plant and equipment (s34b)]
Capital works grants (sewerage)Grants for the acquisition of assets (12a)
National Water Initiative (NWI) financial performance indicatorsWater and sewer (combined)
Total income (water and sewerage)Total income (w13 + s14) + gain/loss on disposal of assets (w14 + s15)minus grants for acquisition of assets (w11a + s12a) – interest income (w9 + s10)
Revenue from community service obligations (water and sewerage)Community service obligations (NWI F25) x 100 divided by total income (NWI F3)
Capital expenditure (water and sewerage)Acquisition of fixed assets (w16 + s17)
Economic real rate of return (water and sewerage)[total income (w13 + s14) – interest income (w9 + s10) – grants for acquisition of assets(w11a + s12a) – operating cost (NWI F11 + NWI F12) – current cost depreciation (w3 + s3)] x 100divided by [written down replacement cost of fixed assets (NWI F9 + NWI F10)+ plant and equipment (w33b + s34b)]
Dividend (water and sewerage)Dividend paid from surplus (2 (v) of Note 2 + 2 (v) of Note 3)
Dividend payout ratio (water and sewerage)Dividend (NWI F20) x 100 divided by net profit after tax (NWI F24)
$’000
83
9,178
1,225
4.83%
458
191
2018
NWI F3 $’000 3,256
NWI F8 % 0.68%
NWI F19
NWI F21
NWI F20
%
%
– $’000
0.00%
5.67%
341 NWI F16 $’000
NWI F27
NWI F18
NWI F15 $’000
%
$’000
NWI F2
NWI F10
NWI F12
$’000
$’000
page 15Page 142
SPFS 2018
Oberon Council
Notes to the Special Purpose Financial Statements for the year ended 30 June 2018
Note 3. Sewerage business best-practice management disclosure requirements (continued)
Dollars amounts shown below are in whole dollars (unless otherwise indicated)
National Water Initiative (NWI) financial performance indicatorsWater and sewer (combined)
Net debt to equity (water and sewerage)Overdraft (w36 + s37) + borrowings (w38 + s39) – cash and investments (w30 + s31)x 100 divided by [total assets (w35 + s36) – total liabilities (w40 + s41)]
Interest cover (water and sewerage)Earnings before interest and tax (EBIT) divided by net interest
Earnings before interest and tax (EBIT):Operating result (w15a + s16a) + interest expense (w4a + s4a) – interest income (w9 + s10)– gain/loss on disposal of assets (w14 + s15) + miscellaneous expenses (w4b + w4c + s4b + s4c)
Net interest:Interest expense (w4a + s4a) – interest income (w9 + s10)
Net profit after tax (water and sewerage)Surplus before dividends (w15a + s16a) – tax equivalents paid (Note 2-1 (iv) + Note 3-1 (iv))
Community service obligations (water and sewerage)Grants for pensioner rebates (w11b + s12b)
Notes: 1. References to w (eg. s12) refer to item numbers within Special Schedules 5 and 6 of Council’s Annual FinancialStatements.
2. The NWI performance indicators are based upon the National Performance Framework Handbook for Urban PerformanceReporting Indicators and Definitions.
a refer to 3.2 (2) on page 15 of the Best-Practice Management of Water Supply and Sewerage Guidelines, 2007
NWI F25 $’000
NWI F24
NWI F23
NWI F22 %
1,021
22
> 100
1,056
(37)
$’000
-18.17%
2018
page 16Page 143
INDEPENDENT AUDITOR’S REPORT
Report on the special purpose financial report
Oberon Council
To the Councillors of the Oberon Council
Opinion
I have audited the accompanying special purpose financial report (the financial report) of Oberon
Council’s (the Council) Declared Business Activities, which comprise the Income Statement of each
Declared Business Activity for the year ended 30 June 2018, the Statement of Financial Position of
each Declared Business Activity as at 30 June 2018, notes comprising a Summary of significant
accounting policies and other explanatory information for the Business Activities declared by Council,
and the Statement by Councillors and Management.
The Declared Business Activities of the Council are:
• Water Supply
• Sewerage.
In my opinion, the financial report presents fairly, in all material respects, the financial position of the
Council’s declared Business Activities as at 30 June 2018, and its financial performance for the year
then ended, in accordance with the Australian Accounting Standards described in Note 1 and the
Local Government Code of Accounting Practice and Financial Reporting (LG Code).
My opinion should be read in conjunction with the rest of this report.
Basis for Opinion
I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the
standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Report’ section
of my report.
I am independent of the Council in accordance with the requirements of the:
• Australian Auditing Standards
• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for
Professional Accountants’ (APES 110).
I have fulfilled my other ethical responsibilities in accordance with APES 110.
Parliament promotes independence by ensuring the Auditor-General and the Audit Office of New
South Wales are not compromised in their roles by:
• providing that only Parliament, and not the executive government, can remove an
Auditor-General
• mandating the Auditor-General as the auditor of councils
• precluding the Auditor-General from providing non-audit services.
I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my
audit opinion.
Page 144
Emphasis of Matter - Basis of Accounting
Without modifying my opinion, I draw attention to Note 1 to the financial report which describes the
basis of accounting. The financial report has been prepared for the purpose of fulfilling the Council’s
financial reporting responsibilities under the LG Code. As a result, the financial report may not be
suitable for another purpose.
Other Information
Other information comprises the information included in the Council’s annual report for the year ended
30 June 2018, other than the financial report and my Independent Auditor’s Report thereon. The
Councillors are responsible for the other information. At the date of this Independent Auditor’s Report,
the other information I have received comprise the general purpose financial statements and Special
Schedules (the Schedules).
My opinion on the financial report does not cover the other information. Accordingly, I do not express
any form of assurance conclusion on the other information. However, as required by the Local
Government Act 1993, I have separately expressed an opinion on the general purpose financial
statements and Special Schedule 2 - Permissible income for general rates.
In connection with my audit of the financial report, my responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or my knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work I have performed, I conclude there is a material misstatement of the other
information, I must report that fact.
I have nothing to report in this regard.
The Councillors’ Responsibilities for the Financial Report
The Councillors are responsible for the preparation and fair presentation of the financial report and for
determining that the accounting policies, described in Note 1 to the financial report, are appropriate to
meet the requirements in the LG Code. The Councillors’ responsibility also includes such internal
control as the Councillors determine is necessary to enable the preparation and fair presentation of
the financial report that is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the Councillors are responsible for assessing the Council’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting, unless it is not appropriate to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
My objectives are to:
• obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error
• issue an Independent Auditor’s Report including my opinion.
Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in
accordance with Australian Auditing Standards will always detect material misstatements.
Misstatements can arise from fraud or error. Misstatements are considered material if, individually or
in aggregate, they could reasonably be expected to influence the economic decisions users take
based on the financial report.
A description of my responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar4.pdf. The
description forms part of my auditor’s report.
Page 145
My opinion does not provide assurance:
• that the Council carried out its activities effectively, efficiently and economically
• about the security and controls over the electronic publication of the audited financial report on
any website where it may be presented
• about any other information which may have been hyperlinked to/from the financial report.
Dominika Ryan
Director, Financial Services
23 October 2018
SYDNEY
Page 146
Oberon Council SPECIAL SCHEDULES for the year ended 30 June 2018
0
Page 147
Special Schedules 2018
Oberon Council
Special Schedules for the year ended 30 June 2018
Contents
Special Schedules 1
Net Cost of Services
Permissible income for general ratesIndependent Auditors Report
Water Supply Operations – incl. Income StatementWater Supply – Statement of Financial Position
Sewerage Service Operations – incl. Income StatementSewerage Service – Statement of Financial Position
Notes to Special Schedules 3 and 5
Report on Infrastructure Assets
1 Special Schedules are not audited (with the exception of Special Schedule 2).
Background
These Special Schedules have been designed to meet the requirements of special purpose users such as;
the NSW Grants Commissionthe Australian Bureau of Statistics (ABS),the NSW Office of Water (NOW), andthe Office of Local Government (OLG).
The financial data is collected for various uses including;
the allocation of Financial Assistance Grants,the incorporation of Local Government financial figures in national statistics,the monitoring of loan approvals,the allocation of borrowing rights, andthe monitoring of the financial activities of specific services.
Special Schedule 6Special Schedule 5 10
Special Schedule 1
Special Schedule 3
Special Schedule 2 4Special Schedule 2 5
Special Schedule 4
14
13
Page
2
69
21Special Schedule 7
(ii)
(i)
page 1Page 148
Special Schedules 2018
Oberon Council
Special Schedule 1 – Net Cost of Services for the year ended 30 June 2018
$’000
Governance
Administration
Public order and safety
Beach controlEnforcement of local government regulationsAnimal controlOtherTotal public order and safety
Health
EnvironmentNoxious plants and insect/vermin controlOther environmental protectionSolid waste managementStreet cleaningDrainageStormwater managementTotal environment
Community services and educationAdministration and educationSocial protection (welfare)Aged persons and disabledChildren’s servicesTotal community services and education
Housing and community amenitiesPublic cemeteriesPublic conveniencesStreet lightingTown planningOther community amenitiesTotal housing and community amenities
Water supplies
Sewerage services
(93)
313 –
–
– (5)
(51)
–
561
(41) –
–
(52)
58
577
(563)
(93)
– 99
–
51 159
590
937 –
–
52
153
161
– –
–
– –
1,007
113
Net cost.of services.
– –
(523)
(147)
17 –
556 – – (556)
(81) – –
(1,351)
–
16
131
Function or activity
–
Fire service levy, fire protection, emergency services
–
2
95 594
1,677
656
327
– (6) (610)
– 11
–
–
97 6
760 –
–
134
–
83
444
2,042
–
–
47
(30) (161)
(324) (95)
1 –
–
–
–
–
91 44
–
270
60 2
1,465
–
1,333 772
–
– –
Expenses from. continuing. operations. Non-capital.
–
–
– 13
Capital.
Income fromcontinuing operations
–
11
– 38
903
150
954
5
X2A0T
page 2Page 149
Special Schedules 2018
Oberon Council
Special Schedule 1 – Net Cost of Services (continued) for the year ended 30 June 2018
$’000
Recreation and culturePublic librariesMuseumsArt galleriesCommunity centres and hallsPerforming arts venuesOther performing artsOther cultural servicesSporting grounds and venuesSwimming poolsParks and gardens (lakes)Other sport and recreationTotal recreation and culture
Fuel and energy
Agriculture
Mining, manufacturing and constructionBuilding controlOther mining, manufacturing and constructionTotal mining, manufacturing and const.
Transport and communicationUrban roads (UR) – localUrban roads – regionalSealed rural roads (SRR) – localSealed rural roads (SRR) – regionalUnsealed rural roads (URR) – localUnsealed rural roads (URR) – regionalBridges on UR – localBridges on SRR – localBridges on URR – localBridges on regional roadsParking areasFootpathsAerodromesRMS - State Roads not controlled by CouncilOther transport and communicationTotal transport and communication
Economic affairsCamping areas and caravan parksVisitor Information CentreOther economic affairsTotal economic affairs
Totals – functionsGeneral purpose revenues (1)
NET OPERATING RESULT (2)
(1) Includes: rates and annual charges (including ex gratia, excluding water and sewer), non-capital general purpose (2) As reported in the Income Statement
grants, interest on investments (excluding externally restricted assets) and interest on overdue rates and annual charges
Share of interests – joint ventures and associates using the equity method
87
–
–
(40)
(2)
(64)
–
Net cost.of services.
–
–
–
(40)
(214)
(450)
–
– (141)
6,448 –
178 –
–
(146) –
157
–
400 828
(566) –
4,088
–
(2,361) 595
3
(275) (832)
781
–
–
–
–
– (18)
(288)
– 10
–
(632)
– 325
–
Capital.
–
–
–
626
– – 828
1,107 –
– –
214 –
707
–
–
–
60
48
–
– – 620 170
–
–
Non-capital.
–
Expenses from. continuing. operations.
466
2 346
–
23
10 –
–
–
–
–
–
–
–
48
– –
– – 1,081
– – 449
– –
Function or activity
8
–
–
–
–
8 –
–
–
–
–
–
157
–
–
157
– –
–
–
460
–
1,448
– 18 –
–
–
– –
157
14,678
–
5,855 5,423
367 142
18,609
962
20 16
6,448 14,678
923
–
12,161 –
209 19
58
33
–
Income fromcontinuing operations
– – –
– (190)
2,220 2,798 – 577
page 3Page 150
Special Schedules 2018
Oberon Council
Special Schedule 2 – Permissible income for general rates for the year ended 30 June 2019
$’000
Notional general income calculation (1)
Last year notional general income yieldPlus or minus adjustments (2)
Notional general income
Permissible income calculation
Special variation percentage (3)
Or rate peg percentageOr crown land adjustment (incl. rate peg percentage)
Less expiring special variation amountPlus special variation amount
Or plus rate peg amountOr plus Crown land adjustment and rate peg amount
Sub-total
Plus (or minus) last year’s carry forward totalLess valuation objections claimed in the previous yearSub-total
Total permissible income
Less notional general income yieldCatch-up or (excess) result
Plus income lost due to valuation objections claimed (4)
Less unused catch-up (5)
Carry forward to next year
Notes
(1) The notional general income will not reconcile with rate income in the financial statements in the correspondingyear. The statements are reported on an accrual accounting basis which include amounts that relate to prior years’rates income.
(2) Adjustments account for changes in the number of assessments and any increase or decrease in land value occurringduring the year. The adjustments are called ‘supplementary valuations’ as defined in the Valuation of Land Act 1916 .
(3) The ‘special variation percentage’ is inclusive of the rate peg percentage and where applicable Crown land adjustment.
(4) Valuation objections are unexpected changes in land values as a result of land owners successfully objecting to theland value issued by the Valuer-General. Councils can claim the value of the income lost due to valuation objections inany single year.
(5) Unused catch-up amounts will be deducted if they are not caught up within 2 years. Usually councils will have anominal carry forward figure. These amounts can be adjusted for in setting the rates in a future year.
(6) Carry forward amounts which are in excess (an amount that exceeds the permissible income) require ministerial approval by order published in the NSW Government Gazette in accordance with section 512 of the Local Government Act 1993 . The OLG will extract these amounts from Council’s Special Schedule 2 in the financial data return (FDR) to administer this process.
(2) 25 3,790 4,074
3,792 4,049
6.95%7.00%0.00%0.00%0.00%0.00%
– (43) 263 282
(0) 4
– – – –
4,053 4,313
– – (0) 4
4,317
4,049 4,312
a
4 5
Calculation Calculation2017/182018/19
– –
4 5
– –
4,053
lm
n = (l + m)
o = k + n
g
k = (c + g + h + i + j)
b
def
j = c x fi = c x e
h = d x (c – g)
c = (a + b)
pq = o – p
rs
t = q + r – s
X3A0T
page 4Page 151
Special Schedules 2018
Oberon Council
Special Schedule 2 – Independent Auditors Report for the year ended 30 June 2019
Report on Special Schedule 2
Insert here signed Independent Auditors Report
X4A0T
page 5Page 152
Special Schedules 2018
Oberon Council
Special Schedule 3 – Water Supply Income Statement Includes all internal transactions, i.e. prepared on a gross basis for the year ended 30 June 2018
$’000
A Expenses and incomeExpenses
1. Management expensesa. Administrationb. Engineering and supervision
2. Operation and maintenance expenses– dams and weirsa. Operation expensesb. Maintenance expenses
– Mainsc. Operation expensesd. Maintenance expenses
– Reservoirse. Operation expensesf. Maintenance expenses
– Pumping stationsg. Operation expenses (excluding energy costs)h. Energy costsi. Maintenance expenses
– Treatmentj. Operation expenses (excluding chemical costs)k. Chemical costsl. Maintenance expenses
– Otherm. Operation expensesn. Maintenance expenseso. Purchase of water
3. Depreciation expensesa. System assetsb. Plant and equipment
4. Miscellaneous expensesa. Interest expensesb. Revaluation decrementsc. Other expensesd. Impairment – system assetse. Impairment – plant and equipmentf. Aboriginal Communities Water and Sewerage Programg. Tax equivalents dividends (actually paid)
5. Total expenses
–
– – –
– –
–
182
20 –
– –
–
–
–
71 50
646
– –
587 120 43
273
–
– – –
–
–
–
1
364
–
– –
– 89
– –
–
–
– –
2018
–
113
–
263
150 23 55
2017
–
1,465 1,585
X5A0T
page 6Page 153
Special Schedules 2018
Oberon Council
Special Schedule 3 – Water Supply Income Statement (continued) Includes all internal transactions, i.e. prepared on a gross basis for the year ended 30 June 2018
$’000
Income
6. Residential chargesa. Access (including rates)b. Usage charges
7. Non-residential chargesa. Access (including rates)b. Usage charges
8. Extra charges
9. Interest income
10. Other income10a. Aboriginal Communities Water and Sewerage Program
11. Grantsa. Grants for acquisition of assetsb. Grants for pensioner rebatesc. Other grants
12. Contributionsa. Developer chargesb. Developer provided assetsc. Other contributions
13. Total income
14. Gain (or loss) on disposal of assets
15. Operating result
15a. Operating result (less grants for acquisition of assets)
(71)
17 –
–
– 11 11
–
–
– –
– –
11 8
456
–
1,021
2018
577
–
–
577
–
23
2,043
12
–
(71)
–
1,520 465
–
–
2017
1,514
–
–
page 7Page 154
Special Schedules 2018
Oberon Council
Special Schedule 3 – Water Supply Income Statement (continued) Includes all internal transactions, i.e. prepared on a gross basis for the year ended 30 June 2018
$’000
B Capital transactionsNon-operating expenditures
16. Acquisition of fixed assetsa. New assets for improved standardsb. New assets for growthc. Renewalsd. Plant and equipment
17. Repayment of debt
18. Totals
Non-operating funds employed
19. Proceeds from disposal of assets
20. Borrowing utilised
21. Totals
C Rates and charges
22. Number of assessmentsa. Residential (occupied)b. Residential (unoccupied, ie. vacant lot)c. Non-residential (occupied)d. Non-residential (unoccupied, ie. vacant lot)
23. Number of ETs for which developer charges were received
24. Total amount of pensioner rebates (actual dollars)
2018
–
– –
12 12 1,097
54
1,097
–
–
–
128
–
151
–
2017
53
– –
–
–
75 97
240 –
240 –
4 ET2 ET
20,497$ 19,687$
page 8Page 155
Special Schedules 2018
Oberon Council
Special Schedule 4 – Water Supply Statement of Financial Position Includes internal transactions, i.e. prepared on a gross basis as at 30 June 2018
$’000
ASSETS25. Cash and investments
a. Developer chargesb. Special purpose grantsc. Accrued leaved. Unexpended loanse. Sinking fundf. Other
26. Receivablesa. Specific purpose grantsb. Rates and availability chargesc. User chargesd. Other
27. Inventories
28. Property, plant and equipmenta. System assetsb. Plant and equipment
29. Other assets
30. Total assets
LIABILITIES31. Bank overdraft32. Creditors
33. Borrowings
34. Provisionsa. Tax equivalentsb. Dividendc. Other
35. Total liabilities
36. NET ASSETS COMMITTED
EQUITY37. Accumulated surplus38. Asset revaluation reserve39. Other reserves
40. TOTAL EQUITY
Note to system assets:41. Current replacement cost of system assets42. Accumulated current cost depreciation of system assets43. Written down current cost of system assets
– –
–
31
– –
31
–
– –
33
–
– – –
–
33
– –
– –
–
– –
5,546
8,566
13,499 (4,933)
4,276
9,822
9,822
33
33
–
45
–
–
9,855
115
8,711 1,111
– –
–
–
115
45
–
–
871 –
228
8,711
–
– –
–
1,144
8,565
Current
– –
– –
–
– –
–
Total
–
– –
8,565
871
228 –
Non-current
–
–
X6A0T
page 9Page 156
Special Schedules 2018
Oberon Council
Special Schedule 5 – Sewerage Service Income Statement Includes all internal transactions, i.e. prepared on a gross basis for the year ended 30 June 2018
$’000
A Expenses and incomeExpenses
1. Management expensesa. Administrationb. Engineering and supervision
2. Operation and maintenance expenses– mainsa. Operation expensesb. Maintenance expenses
– Pumping stationsc. Operation expenses (excluding energy costs)
d. Energy costse. Maintenance expenses
– Treatmentf. Operation expenses (excl. chemical, energy, effluent and biosolids management costs)
g. Chemical costsh. Energy costsi. Effluent managementj. Biosolids managementk. Maintenance expenses
– Otherl. Operation expensesm. Maintenance expenses
3. Depreciation expensesa. System assetsb. Plant and equipment
4. Miscellaneous expensesa. Interest expensesb. Revaluation decrementsc. Other expensesd. Impairment – system assetse. Impairment – plant and equipmentf. Aboriginal Communities Water and Sewerage Programg. Tax equivalents dividends (actually paid)
5. Total expenses
2018 2017
–
292
111 110 99 32
103
50 – –
–
31
772 648
20 – –
– –
25
2
– –
– –
–
–
– – –
– –
– – –
–
5
72 –
–
139 20
–
– –
126
–
–
183
–
X7A0T
page 10Page 157
Special Schedules 2018
Oberon Council
Special Schedule 5 – Sewerage Service Income Statement (continued) Includes all internal transactions, i.e. prepared on a gross basis for the year ended 30 June 2018
$’000
Income
6. Residential charges (including rates)
7. Non-residential chargesa. Access (including rates)b. Usage charges
8. Trade waste chargesa. Annual feesb. Usage chargesc. Excess mass chargesd. Re-inspection fees
9. Extra charges
10. Interest income
11. Other income11a. Aboriginal Communities Water and Sewerage Program
12. Grantsa. Grants for acquisition of assetsb. Grants for pensioner rebatesc. Other grants
13. Contributionsa. Developer chargesb. Developer provided assetsc. Other contributions
14. Total income
15. Gain (or loss) on disposal of assets
16. Operating result
16a. Operating result (less grants for acquisition of assets)
25 32
5 10
– –
– – – –
–
–
–
561 435
479
– –
11 11 83 –
1,333 1,083
–
435
37 22
– – – –
– –
–
457 100 98
–
293
616 615
20172018
page 11Page 158
Special Schedules 2018
Oberon Council
Special Schedule 5 – Sewerage Service Income Statement (continued) Includes all internal transactions, i.e. prepared on a gross basis for the year ended 30 June 2018
$’000
B Capital transactionsNon-operating expenditures
17. Acquisition of fixed assetsa. New assets for improved standardsb. New assets for growthc. Renewalsd. Plant and equipment
18. Repayment of debt
19. Totals
Non-operating funds employed
20. Proceeds from disposal of assets
21. Borrowing utilised
22. Totals
C Rates and charges
23. Number of assessmentsa. Residential (occupied)b. Residential (unoccupied, ie. vacant lot)c. Non-residential (occupied)d. Non-residential (unoccupied, ie. vacant lot)
24. Number of ETs for which developer charges were received
25. Total amount of pensioner rebates (actual dollars)
43 191
9 – 34 –
–
–
–
–
4 ET
19,503$
–
191 –
2018 2017
–
–
53 189
995
–
–
–
18,498$
–
189 53
–
2 ET
995
page 12Page 159
Special Schedules 2018
Oberon Council
Special Schedule 6 – Sewerage Service Statement of Financial Position Includes internal transactions, i.e. prepared on a gross basis as at 30 June 2018
$’000
ASSETS26. Cash and investments
a. Developer chargesb. Special purpose grantsc. Accrued leaved. Unexpended loanse. Sinking fundf. Other
27. Receivablesa. Specific purpose grantsb. Rates and availability chargesc. User chargesd. Other
28. Inventories
29. Property, plant and equipmenta. System assetsb. Plant and equipment
30. Other assets
31. Total assets
LIABILITIES32. Bank overdraft33. Creditors
34. Borrowings
35. Provisionsa. Tax equivalentsb. Dividendc. Other
36. Total liabilities
37. NET ASSETS COMMITTED
EQUITY38. Accumulated surplus39. Asset revaluation reserve40. Other reserves
41. TOTAL EQUITY
Note to system assets:42. Current replacement cost of system assets43. Accumulated current cost depreciation of system assets44. Written down current cost of system assets
3,282
67
– – –
– –
Non-current Current
3,282 – –
–
–
Total
– –
– –
244
81 6 –
–
–
–
–
67
–
– –
205
–
81 –
– – 244
9,178
3,436
–
–
13,063
9,178
9,627
6
–
–
205
– –
–
6,837
9,178
20,733 (11,554)
6,195
13,032
9,627
–
–
3,405
–
–
– –
– –
–
31 –
31
– –
13,032
31
31 – –
X8A0T
page 13Page 160
Special Schedules 2018
Oberon Council
Notes to Special Schedules 3 and 5 for the year ended 30 June 2018
Administration (1) Engineering and supervision (1)
(item 1a of Special Schedules 3 and 5) comprises the following: (item 1b of Special Schedules 3 and 5) comprises the following:
• Administration staff: • Engineering staff:− Salaries and allowance − Salaries and allowance− Travelling expenses − Travelling expenses− Accrual of leave entitlements − Accrual of leave entitlements− Employment overheads. − Employment overheads.
• Meter reading • Other technical and supervision staff:− Salaries and allowance
• Bad and doubtful debts − Travelling expenses− Accrual of leave entitlements
• Other administrative/corporate support services − Employment overheads.
Operational expenses (item 2 of Special Schedules 3 and 5) comprise the day to day operational expensesexcluding maintenance expenses.
Maintenance expenses (item 2 of Special Schedules 3 and 5) comprise the day to day repair and maintenanceexpenses. (Refer to Section 5 of the Local Government Asset Accounting Manual regarding capitalisationprinciples and the distinction between capital and maintenance expenditure).
Other expenses (item 4c of Special Schedules 3 and 5) includes all expenses not recorded elsewhere.
Revaluation decrements (item 4b of Special Schedules 3 and 5) is to be used when I,PP&E decreases in FV.
Impairment losses (item 4d and 4e of Special Schedules 3 and 5) are to be used when the carrying amount ofan asset exceeds its recoverable amount (refer to page D-31).
Aboriginal Communities Water and Sewerage Program (item 4f of Special Schedules 3 and 5) is to beused when operation and maintenance work has been undertaken on behalf of the Aboriginal CommunitiesWater and Sewerage Program. Similarly, income for item 11a of Special Schedule 3 and item 12a of SpecialSchedule 5 are for services provided to the Aboriginal Communities Water and Sewerage Program and is notpart of Council’s water supply and sewerage revenue.
Residential charges
(2) (items 6a, 6b and item 6 of Special Schedules 3 and 5 respectively) include all incomefrom residential charges. Item 6 of Schedule 3 should be separated into 6a access charges (including rates ifapplicable) and 6b usage charges.
Non-residential charges
(2) (items 7a, 7b of Special Schedules 3 and 5) include all income from non-residentialcharges separated into 7a access charges (including rates if applicable) and 7b usage charges.
Trade waste charges (item 8 of Special Schedule 5) include all income from trade waste charges separatedinto 8a annual fees, 8b usage charges and 8c excess mass charges and 8d re-inspection fees.
Other income (items 10 and 11 of Special Schedules 3 and 5 respectively) include all income not recordedelsewhere.
Other contributions (items 12c and 13c of Special Schedules 3 and 5 respectively) including capital contributionsfor water supply or sewerage services received by Council under Section 565 of the Local Government Act .
Notes:(1) Administration and engineering costs for the development of capital works projects should be reported as part of the capital cost of the project and not as part of the recurrent expenditure (ie. in item 16 for water supply and item 17 for sewerage, and not in items 1a and 1b).
(2) To enable accurate reporting of residential revenue from usage charges, it is essential for councils to accurately separate their residential (item 6) charges and non-residential (item 7) charges.
X9A0T
page 14Page 161
Special Schedules 2018
Oberon Council
Special Schedule 7 – Report on Infrastructure Assets as at 30 June 2018
$’000
Bulk earthworks
Sealed Roads Pavement
Kerb & Gutter 774 774 124 – 1,706 3,814 4% 22% 0% 74% 0%
2,906 31,627
0%3,416 0% 0%
8
20% 14%
4.0%
127 13 47.7% 2.2%
11% 0%
26,992 33,891 86% 2% 10% 2% 0%
0%
10,747
31,627
Buildings Council Offices/Admin – – 28 5 1,969 3,700 28% 70% 2% 0%
Council Works Depot 32 32 34 – 1,254 2,416 36% 29% 30% 5%0%
Assets in condition as a percentage of gross replacement cost
Net carryingamount
153
505
0%
0%
0%
83,282 3,543 0%
92%
56%14% 18%0%
– 40%60%
20.9% 4.2%452
Sub-total 8.0%208,627 5%
5,271
–
0%0%
0%Footpaths
Street Furniture–
–
14.4%
0%4%
100%
100%
2,257 883
4,822 13,309
1,932 0%
3%
Libraries
Emergency Services
2 –
21%1
13
65%
13
Roads Sealed Roads Surface 196 196 138 622
structures
Amenities/Toilets 37 1,369 55%
5
1,796 7,518
9
– –
27 18
Unsealed roads
73%23.0%2
1,754
–
1,426
2 1,932
48,606
2
196
9
21
–
0%
0.0%
1%
Other structuresSub-total
Asset class
to bring assetsEstimated cost
2017/18to bring to the 2017/18 Gross
standard maintenanceAsset categoryRequired Actual replacement
cost (GRC)maintenanceato satisfactory
Estimated cost
agreed level ofservice set by
Council
–
– 3 7 37 14 – 795
Other
Sub-totalRecreational Facilities
27 18
17%
3,331 45%
127
23%
20 65
22,234
4
– 0%
0%
48%
874 5%
0%–
4%9%
18%
0%
4 4%
0%153
4%
5
Aged Care Facilities
Other Buildings
3
Buildings – non-specialised
0%0%
35.6%
66%10%
– – 0%
83%
100%
0%1,077 73%
8 –
1,754 61,246 11%
25%
3%
1%
0.0%
4%2,649
671
2 –
– –
– 2 Bridges 9,965 –
93,624 81% 14% 0%243,636 0.3%2,732
450 –
2,166
0%
2,732
21
0%23
1,642
0%73.0%
– 5 –
566 0%
66.7%
2,649 0.0%
X10A0T
page 15Page 162
Special Schedules 2018
Oberon Council
Special Schedule 7 – Report on Infrastructure Assets as at 30 June 2018 (continued)
$’000
Asset class
2017/18
Water supply Mains 55 55 62 43 3,807 6,265 65% 4% 27% 4% 0%
Sewerage Equipment 1,503 1,503 283
– 0%111
– 15
0.0%
748 3,614
Assets in condition as a percentage of gross replacement cost
–
91
Net carryingamount
29.3%38.1%1,503 0%0%
21
0%
Sub-totalPipes
8,990 20,513 – 96
897
6%– 975
6,409
81% 0%
98
0%0%
0%0%
1,503
7,418 0% 0% 19%–
50
21.5%395
1,334 28%
3
66%0%–
– 10,718
8,259 0%
5
3%
Pumping Stations –
Sub-total
72% 28%1,043
28%19%
Asset category
72%
90 –
–
4
–
1,394
Gross
100%
2
5,410 0%0%
78%
3
Treatment–
43 166 –
to satisfactorystandard
to bring assets
maintenancea
Estimated cost
ActualRequired2017/18
agreed level of
Estimated cost
1.9%12.7% 0.0%14.1%71.3%13,160
1
0%
cost (GRC)
0%
maintenance
–
0% 0%
0%
replacementto bring to the
service set byCouncil
166
709 0%
50
Other Meters
111
network
Reservoirsnetwork
Manholes
11.1%
13 – –
100%
page 16Page 163
Special Schedules 2018
Oberon Council
Special Schedule 7 – Report on Infrastructure Assets as at 30 June 2018 (continued)
$’000
Notes:a Required maintenance is the amount identified in Council’s asset management plans.
Infrastructure asset condition assessment ‘key’
Excellent/very good No work required (normal maintenance) Condition Description here…Good Only minor maintenance work required Condition Description here…Satisfactory Maintenance work required Condition Description here…Poor Renewal required Condition Description here…Very poor Urgent renewal/upgrading required Condition Description here…
0% 0%
4321 6
10987
250,015 TOTAL – ALL ASSETS 4,534 2,908 1,763
Inlet and Junction Pits – – 1
Assets in condition as a percentage of gross replacement cost
314,997 63.9% 11.3% 19.3% 5.4% 0.2%4,534
4 15 15 2,186 41.1%
– 1,457
4
8,683 – 1,936 95% 5%Stormwater
Swimming pools –
4 – 1,136 79% 17%
Sub-total
1,050 0% 100%
to bring assets
Asset class
26%
2017/18
21Asset category
–
22.2% 0.0%1.6%
0%
– 0.0%29
0%
0% 0%
56.9% 2.1% 0.0% 0.0%1,679
15
4% 0%
11
3cost (GRC)
28
to bring to the
Council
0%
2017/18
0%72% 2%5,762 0%
maintenanceActual
– Stormwater Pipes
Estimated cost
–
Requiredto satisfactorystandard
Estimated cost
agreed level ofservice set by
Net carryingamountmaintenancea
10,619 Sub-total 76.2%
Open space/
7,219
839
840
–
Other Open Spaces/ Recreational 4
Gross
5
–
recreational4 4
drainage
5replacement
page 17Page 164
Special Schedules 2018
Oberon Council
Special Schedule 7 – Report on Infrastructure Assets (continued) for the year ended 30 June 2018
$ ’000
Infrastructure asset performance indicators * consolidated
1. Buildings and infrastructure renewals ratio (1)
Asset renewals (2)
Depreciation, amortisation and impairment
2. Infrastructure backlog ratio (1)
Estimated cost to bring assets to a satisfactory standardNet carrying amount of infrastructure assets
3. Asset maintenance ratioActual asset maintenanceRequired asset maintenance
4. Cost to bring assets to agreed service level
Gross replacement cost
Notes
* All asset performance indicators are calculated using the asset classes identified in the previous table.
(1) Excludes Work In Progress (WIP)
(2) Asset renewals represent the replacement and/or refurbishment of existing assets to an equivalent capacity/performance as opposed to the acquisition of new assets (or the refurbishment of old assets) that increases capacity/performance.
1.44% 0.61% 0.00%4,534
1,763
314,997
Estimated cost to bring assets toan agreed service level set by Council
2,908
Amounts Prior periods
60.63% 93.78% 89.51%
2018
>= 100%
< 2.00%
> 100%
BenchmarkIndicator
143.94% 224.78% 214.45%
2018 2017 2016
4,072
4,534 1.81% 4.22% 3.45%250,215
2,829
page 18Page 165
Special Schedules 2018
Oberon Council
Special Schedule 7 – Report on Infrastructure Assets (continued) for the year ended 30 June 2018
Benchmark: ――― Minimum >=100.00% Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark
Benchmark: ――― Maximum <2.00% Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark
Benchmark: ――― Minimum >100.00% Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark
This ratio provides a snapshot of the
proportion of outstanding renewal works compared to the total value of
assets under Council's care and
stewardship.
With the introduction of the Special Rates Variation and LIRS in the last few years Council has worked hard to reduce this
ratio.
Commentary on 2017/18 result
Purpose of asset maintenance ratio
This ratio showswhat proportion the backlog is against
the total valueof a Council’s infrastructure.
2017/18 Ratio 143.94%
To assess the rate at which these assets are being renewed
relative to the rate at which they are depreciating.
Purpose of infrastructure backlog ratio
Purpose of asset renewals ratio
Compares actual vs. required annual asset maintenance. A ratio
above 100% indicates Council is investing
enough funds to stop the infrastructure backlog growing.
Council has fallen behind a result of decreased funding during the 2017-18 period being the first year without LIRS
funding.
Council continues to maintain the benchmark requirement for this ratio.
Commentary on 2017/18 result
2017/18 Ratio 1.81%
2017/18 Ratio 60.63%
Council has made headways into reducing the infrastructure backlog with the
introduction of the Special Rates Variation.
Commentary on 2017/18 result
Purpose of agreed service level ratio
Commentary on 2017/18 result
2017/18 Ratio 1.44%
166%214% 225%
144%
0%
50%
100%
150%
200%
250%
300%
2015 2016 2017 2018
Rat
io %
1. Buildings and infrastructure renewals ratio
1.8%
3.6% 3.5%4.2%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
2015 2016 2017 2018
Rat
io %
2. Infrastructure backlog ratio
85% 90% 94%61%
0%20%40%60%80%
100%120%140%
2015 2016 2017 2018
Rat
io %
3. Asset maintenance ratio
0.00%
0.61%
1.44%
-0.02%0.19%0.41%0.62%0.84%1.05%1.26%1.48%1.69%1.90%
2016 2017 2018
Rat
io %
4. Cost to bring assets to agreed service level
page 19Page 166
Special Schedules 2018
Oberon Council
Special Schedule 7 – Report on Infrastructure Assets (continued) for the year ended 30 June 2018
$ ’000
Infrastructure asset performance indicators by fund
1. Buildings and infrastructure renewals ratio (2)
Asset renewals (3)
Depreciation, amortisation and impairment
2. Infrastructure backlog ratio (2)
Estimated cost to bring assets to a satisfactory standardNet carrying amount of infrastructure assets
3. Asset maintenance ratioActual asset maintenanceRequired asset maintenance
4. Cost to bring assets to agreed service levelEstimated cost to bring assets to an agreed service level set by CouncilGross replacement cost
Notes
(1) General fund refers to all of Council’s activities except for its water and sewer activities which are listed separately.
(2) Excludes Work In Progress (WIP)(3) Asset renewals represent the replacement and/or refurbishment of existing assets to an equivalent capacity/performance as opposed to the acquisition of new assets
(or the refurbishment of old assets) that increases capacity/performance.
2018
0.00%254.79% 0.00%
2018
178.67%
87.92%
50.00%
7.55%
1.23%
1.26% 7.33%1.02%
3.60%0.45%
12.66%91.88%
2.05%0.07%
95.78%
2.01%
69.15%
General indicators (1)
2017
>= 100%
< 2.00%
> 100%
Benchmark2017
Sewer indicatorsWater indicators20172018
0.00% 0.00%
16.72%
43.88%
page 20Page 167
INDEPENDENT AUDITOR’S REPORT
Special Schedule 2 - Permissible Income for general rates
Oberon Council
To the Councillors of the Oberon Council
Opinion
I have audited the accompanying Special Schedule 2 – Permissible income for general rates (the
Schedule) of the Oberon Council (the Council) for the year ending 30 June 2019.
In my opinion, the Schedule of the Council for the year ending 30 June 2019 is prepared, in all
material respects in accordance with the requirements of the Local Government Code of Accounting
Practice and Financial Reporting (LG Code) issued by the Office of Local Government (OLG), and is in
accordance with the books and records of the Council.
My opinion should be read in conjunction with the rest of this report.
Basis for Opinion
I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the
standards are described in the ‘Auditor’s Responsibilities for the Audit of the Schedule’ section of my
report.
I am independent of the Council in accordance with the requirements of the:
• Australian Auditing Standards
• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for
Professional Accountants’ (APES 110).
I have fulfilled my other ethical responsibilities in accordance with APES 110.
Parliament promotes independence by ensuring the Auditor-General and the Audit Office of
New South Wales are not compromised in their roles by:
• providing that only Parliament, and not the executive government, can remove an
Auditor-General
• mandating the Auditor-General as auditor of councils
• precluding the Auditor-General from providing non-audit services.
I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my
audit opinion.
Emphasis of Matter – Basis of Accounting
Without modifying my opinion, I draw attention to the special purpose framework used to prepare the
Schedule. The Schedule had been prepared for the purpose of fulfilling the Council’s reporting
obligations under the LG Code. As a result, the Schedule may not be suitable for another purpose.
Page 168
Other Information
Other information comprises the information included in the Council’s annual report for the year ended
30 June 2019, other than the Schedule and my Independent Auditor’s Report thereon. The Councillors
are responsible for the other information. At the date of this Independent Auditor’s Report, the other
information I have received comprise the general purpose financial statements, special purpose
financial statements and the Special Schedules excluding Special Schedule 2 (the other Schedules).
My opinion on the Schedule does not cover the other information. Accordingly, I do not express any
form of assurance conclusion on the other information. However, as required by the Local
Government Act 1993, I have separately expressed an opinion on the general purpose financial
statements and the special purpose financial statements.
In connection with my audit of the Schedule, my responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the Schedule or my
knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work I have performed, I conclude there is a material misstatement of the other
information, I must report that fact.
I have nothing to report in this regard.
The Councillors’ Responsibilities for the Schedule
The Councillors are responsible for the preparation of the Schedule in accordance with the LG Code.
The Councillors’ responsibility also includes such internal control as the Councillors determine is
necessary to enable the preparation of the Schedule that is free from material misstatement, whether
due to fraud or error.
In preparing the Schedule, the Councillors are responsible for assessing the Council’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting, unless it is not appropriate to do so.
Auditor’s Responsibilities for the Audit of the Schedule
My objectives are to:
• obtain reasonable assurance whether the Schedule as a whole is free from material
misstatement, whether due to fraud or error
• issue an Independent Auditor’s Report including my opinion.
Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in
accordance with Australian Auditing Standards will always detect material misstatements.
Misstatements can arise from fraud or error. Misstatements are considered material if, individually or
in aggregate, they could reasonably be expected to influence the economic decisions users take
based on the Schedule.
A description of my responsibilities for the audit of the Schedule is located at the Auditing and
Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar8.pdf. The
description forms part of my auditor’s report.
Page 169
My opinion does not provide assurance:
• that the Council carried out its activities effectively, efficiently and economically
• about the security and controls over the electronic publication of the audited Schedule on any
website where it may be presented
• about any other information which may have been hyperlinked to/from the Schedule.
Dominika Ryan
Director, Financial Audit
23 October 2018
SYDNEY
Page 170
ATTACHMENTS FOR REPORT
Report Item
13.02 2017-18 ANNUAL REPORT
ATTACHMENTS
Annual Report 2017-18
Page 171
Page 172
Page 1 of 19
2017/18
ANNUAL REPORT
Page 173
Page 2 of 19
INDEX / CONTENTS
Contents PAGE
Contact Details 3
Councillor Contact Details 4
Message from the Mayor 5
General Manager’s Report 6
Workforce / Organisational Structure 7
Planning and Development 8
Finance and Community Services 9
Technical Services 14
Statutory Information 16
Attachments
Oberon End of Term Report 2018
2017/18 State of the Environment Snapshot
2017/18 Audited Financial Statements
Page 174
Page 3 of 19
CONTACT DETAILS Oberon Council Administration Centre & Council Chambers
137 Oberon Street (PO Box 84) Oberon NSW 2787 Ph: 02 6329 8100 Email: [email protected] Website: www.oberon.nsw.gov.au
Council Works Depot 21 Albion Street Oberon NSW 2787 Ph: 02 6329 8200 (Store) Fax: 02 6329 8201 (Workshop)
Oberon Library 74 Dart and Fleming Street Oberon NSW 2787 Ph: 02 6329 8220
Oberon Visitor Information Centre Cnr Ross & Edith Streets Oberon NSW 2787 Ph: 02 6329 8210 or 8212
Robert (Bob) Hooper Community Centre 9 Fleming Street Oberon NSW 2787 Ph: 02 6329 8100
Oberon Swimming Pool 15 Cunynghame Street Oberon NSW 2787 Ph: 02 6329 8251
Oberon Fire Control Centre 12 North Street Oberon NSW 2787 Ph: 02 6329 0493
Page 175
Page 4 of 19
OUR COUNCIL COUNCILLORS: Elected September 2017
Councillor Phone Email
Don Capel 6335 8226 [email protected]
Ian Doney 6337 5793 [email protected]
Kerry Gibbons 6336 0830 [email protected]
Mark Kellam 0438 215 482 [email protected]
Brenda Lyon 0418 629 073 [email protected]
Clive McCarthy 6336 1019 [email protected]
Michael McKechnie 0408 542 711 [email protected]
Andrew McKibbin 6337 9624 [email protected]
Kathy Sajowitz 6336 0742 [email protected]
MAYOR Kathy Sajowitz was elected Mayor in July 2015, and September 2015, 2016, 2017 and 2018. DEPUTY MAYOR Kerry Gibbons was elected Deputy Mayor in September 2012, 2013, 2014, 2015, 2016, 2017 and 2018.
From left to right: Clr Mick McKechnie, Clr Don Capel, Clr Andrew McKibbon,
Deputy Mayor Kerry Gibbons, Mayor Kathy Sajowitz, Clr Ian Doney, Clr Brenda Lyon,
Clr Mark Kellam, Clr Clive McCarthy
Page 176
Page 5 of 19
ORGANISATIONAL STRUCTURE The Organisation Structure was reviewed by Council and represents the current structure.
GENERAL MANAGER
DIRECTOR PLANNING AND DEVELOPMENT
Shane Wilson
Health & Building Manager Senior Development Control Officer
DIRECTOR FINANCE AND COMMUNITY SERVICES
Lynette Safranek
Finance Coordinator Community Services Coordinator
IT/GIS Coordinator
DIRECTOR TECHNICAL SERVICES
Chris Schumacher
Works Manager Project Engineer
EXECUTIVE AND CUSTOMER SERVICES
Executive Coordinator Human Resources Coordinator
Work Health & Safety/Risk Coordinator
Page 177
Page 6 of 19
A MESSAGE FROM THE MAYOR It is my great pleasure to introduce the 2017/18 Oberon Council Annual Report which provides an overview of the Council’s activities over the past Financial Year. The 2017/18 has been a year of rejuvenation after the reversal of the forced amalgamation proposal.
A new council was elected to office in September 2017 for a period of three years. This deviation from the normal four year cycle will enable councils who were under merger proposals to come back in line with the majority of NSW Local Government Elections. Oberon was fortunate to receive substantial funding from the NSW Government through the Stronger Country Communities Fund which has enabled us to progress projects important to the community including new playground equipment for the villages, upgrades to the Oberon Pool, the Oberon Recreation Ground, new BBQ’s on the Fish River and the commencement of a Skateboard Precinct at the Oberon Common. Council has worked in collaboration with many community groups over the past twelve months to achieve some good outcomes examples being the Wellness Festival Event and the Oberon Show. Our current focus is to promote economic development by not only encouraging our existing small businesses but actively pursuing new business initiatives. We have facilitated this by collaborating with OBTA on the delivery of relevant workshops for small business owners, assisting to forge connections and importantly the employment of an Economic Development and Tourism Manager. This has proved to be a great success; tourism is the single most beneficial driver of economic development in the region and a rapidly growing benefit to Oberon. Wedding venues, gardens, caves, adventure tourism and history are just a few of the attractions we boast and promote. On Australia Day 2018 we welcomed Sam Cawthorn as our Ambassador into our community. We congratulated Neil Francis from Burraga as Citizen of the Year and Hannah Dusselaar and Victoria Webb as joint Young Citizens of the Year. I would like to pass on my congratulations to all of the award category winners. As a community we celebrated Youth Week, Seniors Week and I hosted a Mayoral Lunch to celebrate International Women’s Day. Indigenous artist Nyree Reynolds was the keynote speaker. We commemorated Anzac Day and council through the 356 Community Donation Program was happy to support our local schools, sporting groups and community organisations with projects and activities too numerous to mention here to the value of over $90000, a great investment into the social fabric of the town. The Oberon Youth Council has been very active, assisting at community events and fundraising for various projects. Our youth are valued members of the community and we need to continually invest in and encourage their participation. I would like to acknowledge the many volunteers that work in our community, without you we would be much the poorer, please be assured you are all greatly valued and appreciated. Council continues to deliver on the Special Rate Variation agreed to by the community in 2015/16 to improve road infrastructure. After two years of implementation, targets are being met on the upgrade of priority roads agreed upon by the community during the consultation process. The Borg Manufacturing expansion program is almost complete and subdivision development continues to grow which augers well for our future, our population is growing and I am pleased to say we have a strong well connected community culture. Council continues its efforts to secure a more equitable solution to the issue of unrateable land and progress is being made. My thanks go to the community, Oberon Council staff and elected representatives for their amazing effort on behalf of the community during 2017/18. Our financial position is sound, we are vibrant and inclusive – our future is bright indeed. Clr Kathy Sajowitz Mayor
Page 178
Page 7 of 19
GENERAL MANAGER’S REPORT
I take this opportunity to thank the Oberon community for their ongoing support during what has been a very quick 2018. The year has sped along and with it a very steep learning curve in my tenure as Oberon Councils General Manager. On the back of the scrapping of the forced mergers proposals by the NSW State Government Oberon Council continues to punch well above its weight in terms of outcomes achieved.
Some of the significant outcomes include a new Community Engagement Strategy that sees Council engaging with the community in a more hands on approach. The community continues to be our best source of information and this new approach puts that engagement front of mind. 2018 has also seen significant investment in the Local Government Area by way of the Stronger Country Communities fund. This injection of over $2,000,000 from the State Government has produced foot path extensions in Oberon, Black Springs and Burraga, playground upgrades to Oberon, Black Springs and Burraga, Village improvement in Black Springs and Burraga together with our BBQ’s on the Fish application that sees new BBQ Shelter, BBQ and information boards placed at the Reef Reserve, Flat Rock and Hassall Park. Additionally, new grandstands will be commissioned in the recreation ground and a signage strategy prepared and implemented across the local government area. Another huge accomplishment was the contribution towards a funding application for a Community Fitness Centre. This was helped by the overwhelming support from the community. A new and exciting strategic initiative is the development of a new Community Strategic Plan that will guide Oberon towards 2040. I am confident that the long term prospects for Oberon are positive. Significant development in industry, together with thriving residential and business sectors are all good triggers for long term prosperity. Another significant change in 2018 was the introduction of a Tourism and Economic Development Manager into the Council fold. In a very short time this investment has produced significant opportunities and in the coming year it will be very exciting to see how these initiatives flourish. Council has also welcomed a new Library Manager who has made a significant contribution to the Library operation since commencing. The positive comments received in this area are always encouraging. One of the most pleasing things I have received this year was a ‘clean’ audit result from the NSW Audit Office in relation to our 2017/18 financial statements. It is a credit to our finance staff (and Council as a whole) to provide these statements in a clear and transparent way and get that acknowledged by the independent auditing authority. In order to continue to provide a robust and transparent process Council has also implemented an Independent Internal Audit Committee that will continue to monitor risk to Council and its operations. Advocating for unrateable lands to become rateable is something that Council continues to push with the State Government. Over $700,000 is unable to be collected by Council from approximately 47% of the Local Government Area being unrateable. This is significant and Council continues to lobby for this to be rectified. We continue to be mindful of the significant achievements for the Oberon Community with the development of new infrastructure whilst being mindful of reducing our infrastructure backlog within our Area. We continue to undertake projects on the State road network outside the Local Government Area which is a credit to our Works Staff and acknowledgement for their professionalism in undertaking these projects on behalf of the RMS.
Page 179
Page 8 of 19
Our commitments statement in accordance with the current Community Strategic Plan is simple: We respect the past, the future and position of others. We take pride in community achievement, and we work together in an open and co-operative manner. I believe in this mantra and continue to reinforce this within the organisation. However, we do not want to lose the relaxed rural environment and pace of living we now enjoy. Our identity is key to underpinning the intonation of life as it should be! I would like to thank all the Staff of Oberon Council for their ongoing support and I congratulate them on the achievements during the last year. I look forward to working with them, Council and our Community to achieve priorities identified in the Oberon Local Government Area during 2018/19. Gary Wallace General Manager
Page 180
Page 9 of 19
PLANNING & DEVELOPMENT Council's Planning and Development Department helps to conserve, protect and enhance the natural and built environment of the Oberon Local Government Area. Council has a primary responsibility of ensuring our sensitive environment is retained and where possible, enhanced through the application of appropriate building and development controls.
The 2017/18 year resulted in the stabilisation of the department with new staff coming on board, thus ensuring that a complement and seamless delivery of all planning and building services are available to the community. The year also resulted in a number of unauthorised developments having action taken upon them, of which some have escalated into the Land & Environment court for further enforcement. A number of applications for subdivision of residential and large lot residential land continues and is a sign of the continued expansion of the Oberon Council area, some of these application have also attracted a great deal of public interest. A number of major projects have been undertaken during this time with a substantial development continuing at the major industrial hub of Borg. The $120 Million project which was approved by the NSW State Government increases the ability of the manufacturer to utilise its Particleboard operations whilst also consolidating its approvals which were many and varied over the lifetime of the facility. The interest in the Oberon Industrial Estate continues with several lots being sold throughout the year and ever increasing interest showing a positive sign for the area. Amendments to the Environmental Planning & Assessment Act and the commencement of the Crown Land Management Act resulted in several processes having to be reviewed and staff training to now have a Native Title Manager on staff and understanding of the new requirements for crown land management. Gateway Planning Proposals for the creation of recreations zones were granted during the year and once completed will allow for more flexible use of some of the community recreation areas around Oberon. A Planning Proposal for rezoning of land within O’Connell has seen substantial interest and continues to be reviewed by the Independent Planning Commission prior to progressing to the next stages. The Oberon Waste Facility improvements continued with the construction and official opening of the Community Recycling Centre in February. This facility allows residential properties to disposal of Household problem waste, such as paints, oils, gas bottles and an assortment of other items.
Heritage During the year there were a number of locally listed heritage item nominated for State Heritage listings. Council along with the Friends of Lindlegreen at O’Connell were successful in obtaining a $100,000 Heritage Local Strategic Project grant through NSW Government - Heritage Near Me program for a “Conserving O’Connell’s Earth Building Heritage”. The first part of this program has already been undertaken with the University of Sydney having spent a weekend to undertake heritage assessments of several sites in the O’Connell area. This will see a number of activities being undertaken in the upcoming year. Shane Wilson Planning & Development Director
Page 181
Page 10 of 19
FINANCE & COMMUNITY SERVICES The 2017/18 Financial Statements show a net surplus of $3.9 million, before grants and contributions for capital purposes. The Statement of Cash Flows shows the total cash, cash equivalents and investments at $15.3 million, which is made up of $1 million in cash and $14.3 million in investments. Council is pleased to have received a ‘clean’ external audit with no reportable issues.
Community Services Oberon and Surrounding Villages Community Newsletter The Community Newsletter continues to be distributed to all Oberon residents, as well as motels, caravan parks, and small businesses within Oberon. The promotion of advertising space has proven so successful we have extended the pages within the Newsletter to cope with the demand. The Community Newsletter is key tool, together with Council’s Facebook and Website, to spread the word regarding local news and events. All of Oberon’s community groups use the Newsletter to promote upcoming events, as well as provide updates on what is or has happened in and around local communities. Oberon Youth Council
2017/18 has seen the Oberon Youth Councillors secure funding for a new Skate Park for the Oberon Youth. Construction is due to commence on the new park at The Common in late 2018. The Youth Councillors have been busy holding multiple raffles and sausage
sizzles in an effort to raise funds for youth activities in and around Oberon. They held a successful Youth Week event at the Oberon Recreation ground. Community Services The Community Services Department of Oberon Council is small, just five staff members including two Library Staff. Over the past 12 months this small group of people supported by the organisation have produced some amazing outcomes. The team often give up valuable family time to run weekend projects. They go above and beyond to ensure our community are engaged and active. This attitude and commitment needs to be encouraged and acknowledged.
Page 182
Page 11 of 19
Some of the successful projects and events CS have facilitated or assisted this year include:
Australia Day Celebrations engaging with over two hundred community members
Youth Week, a highly successful activity Day held at Oberon Rec Ground involving Youth Council and Community Volunteers
Wellness Festival incorporating Seniors Week held in collaboration with local schools and Aged Care facility
National Simultaneous Storytime involving local preschool and kindy students held at the library. Every library in Australia read the same book on the same day at the same time, thirty children participated
Oberon Biggest Morning Tea raising funds for cancer held at Library
International Women’s Day Mayoral Lunch held at the Community Centre and booked out with 60 community members attending
Dragonskin Event – Scouts weekend held at Black Springs involving approx. 2000 scouts and their support grew, as a result of this event the organisers have expressed a wish to bring the event to Oberon bi-annually. A huge economic boost to Oberon. CSS worked closely with the organisers of this event and participated in part of the weekend.
Support for W2A Competition – collaborating with Friends of the Oberon Library
Noel Braun Author talk at the library
Council School Holiday Activities including activities such as Pink Mad Hatters Tea Party; Lego workshops; Wombats are Wonderful talk; Ice Skating in Bathurst as part of the Winter Festival; seasonal craft activities; and Programming the Future Activity Van visit, wonderful concept for our young people, something they may not normally be exposed to. The participants built robots and worked on digital projects, with plans for further visits. Our young people are once again engaging at the Library. A brilliant outcome!
Welcome to Oberon afternoon tea, a meet and greet for new residents held each December. The Community Services Staff at Oberon Council actively engage and support the Oberon Youth Council assisting both physically and organisationally to ensure our young people are
valued in our community. The soon to be commenced Oberon Skateboard Precinct is an example of the success of this collaboration. Events such as Youth Week Celebration, Fright Night Movies (Halloween), Dive in Movies at the Oberon Pool, and Youth Life Skills Workshop are coordinated and encouraged by the CSS.
The success of this small group of staff members is easily measured by the increased level of community participation in events, projects and promotions, other organisations both internal and external are seeking to engage with CSS to collaborate and deliver beneficial outcomes for Oberon and the wider community. The CSS work well together and are well supported by council; they are engaged with the community. Lynette Safranek Finance & Community Services Director
Page 183
Page 12 of 19
TECHNICAL SERVICES Oberon Council Technical Services area has delivered on another big budget during the 2017/2018 financial year including several road projects across the combined network of Local, Regional and State Roads. Following is an outline of road works listed with the respective funding sources which have permitted Council to deliver improvements to the Local Government Ratepayers of the Oberon Local Government Area.
During the 2017/2018 ‘Community Strategic Plan’ consultation meetings held across the LGA, the general consensus by community echoed an ongoing need for continued road improvements. Council agreed, allocating more funding to make more improvements to the public road assets, building wider roads, stronger pavements and vast improvements to safety for all users of our road LGA network. Council will continue to advocate for improvements to the road network seeking additional funding opportunities to upgrade the structural integrity of main trunk roads that provide economic prosperity and tourism to the Oberon LGA Below is a summary of the completed capital road upgrades, routine maintenance, and gravel re-sheeting of rural roads within the Oberon Council area for 2017/2018. Regional Roads During 2017/2018 2km section of road rehabilitation work was carried out on the Edith Road. The work was part of the 2017/2018 RMS Regional Roads ‘Repair’ Program. The work was completed on the from the intersection Old Shooters Hill Road running south east for 2km to the intersection of Titania Road. The work was supported through an additional 50% funding of $400,000 from the Roads & Maritime Service, with a total amount of project expenditure being $800,000. A further $400,000 of sectional road reconstruction work was completed on various sections of Titania Road between Edit Road and Duckmaloi Road. Through the Annual Block Grant of $823,000, further maintenance work was undertaken on heavy patch pavement repairs on the Abercrombie Road between Oberon and Black Springs, and three heavy patch repairs undertaken on the Albion Street heavy vehicle bypass. Further road safety improvement works included new guardrail work on Abercrombie Road at Porters Retreat. This work involved removal of old chain wire mesh fence and old rotted timber posts, replaced with new safety barrier. Refresher line marking also carried out along various sections of Abercrombie Road. Roads to Recovery (R2R) During 2017/2018 Oberon Council received an allocated funding amount of $840,833 from the Federal Government to upgrade selected road pavement sections on the following roads:
1) Arkstone Road - 1.2 km road rehabilitation work costing $400,000
2) Campbell’s River Road - 1.0k m road realignment work costing $116,833 (Partially subsidised by R2R).
3) Edith Road- 2.0 km road rehabilitation work costing $324,000 (Partially subsidised by R2R). Special Rate Variation (SRV) Part of the Oberon Councils Special Rate Variation (SRV) was spent on the continuation to upgrade the Campbell’s River Road on the western side of the Black Springs Village. An SRV amount of $154,000 was allocated along with $116,833 of R2R funding (combined total $270,833) utilised to acquire land and realign a 1km section of the Campbell’s River Road, adjacent to Swatchfield Road. The primary objective to remove the existing ninety degree bend and improve road user safety for motorists and heavy vehicles which frequent Campbell’s’ River Road daily.
Page 184
Page 13 of 19
Further (SRV) funding was distributed to assist with the ongoing grading maintenance of Councils unsealed road network, an allocation of over $25,000 contributing to the upkeep of these roads. RMCC - Roads Maintenance Council Contracts As part of Oberon Council continued commitment with Roads & Maritime Services the following projects were completed as part of Oberon Council ongoing contract commitment to both capital improvements and maintenance work on Roads & Maritime Services ‘State Roads’ network O’Connell Road (MR 253) and Duckmaloi Road (MR 358):
Trunkey Road (MR 54) 1km of road rehabilitation Trunkey Village, additional drainage construction, widening, new bitumen seal and installation of new guardrail for the Roads & Maritime Services, total cost of project work $425,756.75
O’Connell Road -Bitumen resealing various section of road pavement between Albion Street and the Bathurst Regional Council boundary, total project cost $370,146.83
Perthville Road – Road rehabilitation, kerb and gutter construction of 1.8km of road pavement for Bathurst Regional Council and Roads & Maritime Services, total cost of project work $544,536
O’Connell Road – Heavy Patching rectification works to road pavement various sections, total cost of project works $302,550
Duckmaloi Road – Heavy Patching rectification works to road pavement various sections, total cost of project works $67,425
Duckmaloi Road – Bitumen resealing various section, total cost of project works $136,835
Duckmaloi & O’Connell Roads – Road shoulder maintenance, vegetation/tree trimming and removal works, total project cost $124,300
Hartley & Forty Bends – Work on the Great Western Highway to assist Roads & Maritime Services on the Lithgow to Mt Victoria upgrade. Work including road shoulder widening, drainage construction, bitumen sealing, signage and guard rail installation works, total cost of project works $282,671
A very proud achievement for our Work staff is continued work on RMS State Roads outside of the Oberon Local Government Area. This continues to be a proud achievement for our staff. Routine Maintenance budget spent on maintaining the daily operations of the combined state road network $170,000. Chris Schumacher Technical Services Director
Page 185
Page 14 of 19
STATUTORY INFORMATION
Councillor Expenses Local Government (General) Regulations Clause 217(1) (a1)
Council reimburses the following costs incurred while on Council business:
Travelling expenses for private vehicle use
Accommodation, travelling and sustenance whilst attending conferences and seminars
Provision of a mobile phone for the Mayor
Provision of an IPad for the Mayor and all Councillors.
The total costs associated with Mayor and Councillor Expenses for 2017/18 were $139,245 made up as follows:
Mayor Fee (excluding Councillor fee) $34,540
Councillor’s Fees $77,070
Councillor Expenses (other excluding fees above) $27,635
TOTAL $139,245
Councillor Overseas Visits – Nil during 2017/18
Councillor Interstate Visits – Nil during 2017/18
Councillor Training and Skill Development Councillor Professional Development
19 September 2017: Councillor Induction Workshop 19 October 2017: LG NSW Capable Councillor Workshop Orange 2 November 2017: Clr Workshop - Hit the ground Running 22 November 2017: Councillor Roads Inspections 14 February 2018: Councillor General Manager Performance Review
Training
Councillor Informal Briefing Sessions - 11 July 2017 - 8 August 2017 - 10 October 2017 - 14 November 2017 - 12 December 2017 - 13 February 2018 - 13 March 2018 - 10 April 2018 - 8 May 2018 - 12 June 2018
Rates and Charges Written Off Local Government (General) Regulations Clause 132
The amount of rates written off in the period under review related to the following:
Total Pensioner concession 2017/18 $132,873
LESS: Subsidy reimbursement ($73,080)
Rates and Water written off by Council $6,162
Rates debts abandoned 0
Concessions 0
$65,955
Work carried out on Private Land Local Government (General) Regulation Clause 217 (1)(a4)
During the year ending 30 June 2018 Council made no resolutions under Section 67 of the Local Government Act to subsidise work carried out on private land.
Page 186
Page 15 of 19
Joint Ventures/Partnerships Local Government (General) Regulation Clause 217 (1)(a8)
Oberon Council is a member of the Upper Macquarie County Council (which is a body incorporated under the Local Government Act). Council is of the opinion that at 25% share it has influence of the Country Council and has deemed it as an Associate.
Legal Proceedings Local Government (General) Regulation Clause 217 1(a4) For the year ended 30 June 2018, Council had incurred $204,000 in legal fees for proceedings taken by or against Council. By comparison, Council had expended $416,000 in 2016/17.
Planning Matters $87,000
Debt Recovery $66,000
Other Matters $51,000
Total $204,000
External Bodies Local Government (General) Regulation Clause 217 (1)(a6)
Council delegated debt recovery functions to SR Law during 2017/18.
Companies Controlled by Council Local Government (General) Regulation Clause 217 (1)(a7)
Oberon Council is a member of the Statewide Mutual Liability, Workers Compensation and Property Schemes.
Remuneration Packages – Senior Staff Local Government (General) Regulation Clause 217(1)(b) and Clause 217(1)(c)
Council’s organisation structure provides for the employment of the General Manager as the only Senior Staff position. The General Manager is engaged under the Office of Local Government Standard Contract of Employment. The senior staff contract is performance based for a period of five (5) years. The all-inclusive remuneration package of senior staff incorporating salary, employer superannuation, non-cash benefits, and amounts payable for fringe benefits tax, in the 2017/18 financial year totalled $218,387.
State of the Environment Local Government Act 1993 S428(1)
Information on the environment can be found in the 2017/18 State of the Environment Snapshot included as an Appendix.
Companion Animals Act and Regulations Local Government (General) Regulation Clause 217 (1)(f)
The Oberon Council undertakes companion animal management functions and activities in accordance with the Companion Animals Act 1998 and the associated Regulations.
Further information can be found in the Planning and Development section of this Annual Report.
Public Interest Disclosures (PID) Act 1994 PID Act 1994 Council is committed to the objectives of the Public Interest Disclosure Act 1994 and encourages the disclosure of any instances of corrupt conduct, maladministration, serious and substantial waste and government information contravention.
Page 187
Page 16 of 19
In accordance with the Act, Council’s Internal Reporting Policy (as required by PID Act 1994) establishes guidelines for the reporting and management of Protected Disclosures. For the reporting period ending 30 June 2018, Oberon Council received no protected disclosures.
Contributions and Donations – (Section 356 of LG Act 1993) Local Government (General) Regulation Clause 217 (1)(a5)
Under Council’s Community Grants Program, Council allocates funding to various organisations and community groups that make annual requests.
Community recipients of Section 356 Financial Assistance
In 2017/18 a total of $90,891 was made available and provided as follows:
Details $
Local Schools $1,250
Bathurst Harness Racing $500
Black Springs Public School P&C $500
Country Women’s Association NSW – Central Western Group $100
Burraga Community $5,000
Black Springs Community $5,000
O'Connell Community $5,000
Can Assist, Oberon Branch $2,000
LiveBetter – Oberon Community Transport $26,000
CHOICE (Churches of Oberon Implementing Christian Educ.) $500
Daffodil Fairies $1,000
Friends of Oberon Library Inc. $500
Neighbourhood Centre Oberon $500
Oberon Community & Farmers Markets $500
Oberon District Little Athletics Centre Inc. $500
Oberon & District Museum $500
Oberon Golf Club $20,000
Oberon High School - Performing Arts Department $500
Oberon Junior Hockey Club $500
Oberon Junior Rugby League $500
Oberon Masonic Centre $544
Oberon Men's Shed $500
Oberon Netball Club $500
Oberon Pony Club $500
Oberon Public School P&C Association $500
Oberon Rotary Club $500
Oberon Senior Hockey Club $500
Oberon Senior Rugby League $500
Oberon Show Society $5,000
Oberon Showground Trust $1,115
Oberon Tarana Heritage Railway $5,000
Page 188
Page 17 of 19
Oberon United Football Club $500
Oberon United Junior Football Club $500
Oberon Wrap with Love Knitters Group $150
RSL Sub Branch Memorial $374
RSL Sub Branch Memorial/Museum $570
St Vincent De Paul $500
University of Sydney $2,000
Western Region Academy of Sports $288
Total Grants $90,891
Page 189
ATTACHMENT 1
2017/18 STATE OF THE ENVIRONMENT SNAPSHOT
Page 190
ATTACHMENT 2
2017/18 AUDITED FINANCIAL STATEMENTS
Page 191
Page 192