Council Minutes - Section B: Reports - 28 November 2017

Contents | Previous Page: Section A - Procedural Matters | Next Page: Section C - Assembly of Councillors

Reports tabled at the Ordinary Meeting of Council on Tuesday date held at the Council Conference and Reception Centre in City Hall, 57 Little Malop Street, Geelong.


  1. Financial Management Report – October 2017

  2. Draft Breamlea Holiday Park Masterplan

    Notice of Motion – Chief Executive Officer Recruitment

  3. Chief Executive Officer Recruitment

  4. Audit and Risk Committee – Charter Amendment

  5. Tender T1770859 – Construction of Highton Enhanced Children’s Centre (Confidential)

  6. Tender T1770869 – Armstrong Creek East Integrated Children’s and Community Centre (AICCC) (Confidential)


Peter Dorling (Administrator) declared an Indirect Interest in Agenda Item 1, Financial Management Report – October 2017, in that he had a past interest in previous Structure Plan for Barwon Heads and left the meeting room at 6:58pm prior to discussion of the item.


1. Financial Management Report – October 2017

Source:

Strategy & Performance – Financial Services

Acting Director:

Peter Anderson

Index Reference:

SUB-16-2053


Purpose

The purpose of this report is to present financial performance information to 31 October 2017.


Background

This is a financial statement for the period July–October 2017, which compares the budget projection with the actual revenue and expense for both the financial year to date and full year.


Key Issues

Budget 2017-18

The 2017-18 Draft Budget was adopted by Council on 26 April 2017 with a Recurrent surplus of $0.9 million and opening cash balance (1 July 2017) of $67.9 million.

On 27 June 2017 the Final Budget was adopted with a Recurrent deficit of ($8.7 million) and higher opening cash balance of $77.9 million. This change recognised the early receipt of expected 2017-18 Commonwealth Government Grants Commission funding (50% of allocation).


2017-18 Projection

On 5 September 2017 Council approved the carryover of Capital and Non Capital project funding into 2017-18 along with other funding priorities. This change known as 2017-18 Projection was in response to funding allocated in 2016-17 for projects not completed, resulting in higher than expected opening cash balance of $103 million.

The 2017-18 Recurrent Projection of ($19.8 million) includes Recurrent Expenditure for carryover of Non Capital projects funded in 2016-17 ($9.9 million) and additional priority expenditure items ($1.2 million).

The 2017-18 Full Year Projected Net Result is a surplus of $47.3 million.


October Year to Date results


Full Year Forecast 2017-18

Councillor Kontelj moved, Councillor Murnane seconded -

That Council endorse the Financial Report to 31 October 2017 (Refer Attachments 1 and 2).

Carried.


Attachment 1

Discussion

The Financial Management report includes analysis of the Recurrent income & expenditure, Non Recurrent income and expenditure and Capital expenditure, for the Year to Date and Full year Forecast position.

Recurrent or operating items includes income and expenditure for 126 services and is the major focus of variance analysis. Non Recurrent items are one off transactions including recognition of gifted assets, Capital income, gain or loss on Sale of Property and other accounting adjustments.

The Income Statement records Recurrent and Non Recurrent income and expenditure with the combined result known as the Underlying or Net Result – Surplus / (Deficit).

The 2017-18 Draft Budget was adopted by Council on 26 April 2017 with a Recurrent surplus of $0.9 million and opening cash balance (1 July 2017) of $67.9 million.

On 27 June 2017 the Final Budget was adopted with a Recurrent deficit of ($8.7 million) and higher opening cash balance of $77.9 million. This change recognised the early receipt of expected 2017-18 Commonwealth Government Grants Commission funding (50% of allocation).

On 5 September 2017 Council approved the carryover of Capital and Non Capital project funding into 2017-18 along with other funding priorities. This change known as 2017-18 Projection was in response to funding allocated in 2016-17 for projects not completed, resulting in higher than expected opening cash balance of $103 million.

The 2017-18 Projection includes Recurrent Expenditure for carryover of Non Capital projects funded in 2016-17 ($9.9 million) and additional priority expenditure items ($1.2 million).

The 2017-18 Full Year projected Net Result is a surplus of $47.3 million. Refer following Table.

 

Expenditure
$’000

Income
$’000

Surplus/(Deficit)
$’000

Opening Cash Balance

Council Draft 2017-18 Budget - Recurrent Surplus/(Deficit)

333,039

333,940

901

$67.9m

Grants Commission 2017-18 - 50% received in 2016-17

 

(9,588)

(9,588)

 

Council adopted 2017-18 Budget - Recurrent Surplus/(Deficit)

333,039

324,352

(8,687)

$77.9m

2016-17 Non Capital Carryover Requests

9,998

106

(9,892)

 

Other Projection changes

 

 

 

 

Library Contribution increase

215

0

(215)

 

Osborne House

1,000

0

(1,000)

 

2017-18 Recurrent Projection

344,252

324,458

(19,794)

$103m

Non Recurrent Surplus/(Deficit)

6,190

73,309

67,119

 

Net Result Surplus/(Deficit)

350,442

397,767

47,325

 



Full Year Forecast

After 4 months of operating activity the 2017-18 Full Year Recurrent deficit is forecast to increase by $(0.9 million) with changes as follows:

 

Annual Projection
$’000

Annual Forecast
$’000

Movement
$’000

Recurrent Income

324,458

325,398

940

Recurrent Expenses

344,252

346,086

(1,834)

Recurrent Surplus/(Deficit)

(19,794)

(20,688)

(894)

Non Recurrent Surplus/(Deficit)

67,119

69,288

2,169

Net Surplus/(Deficit)

47,325

48,600

1,275



Capital Program

YTD spend on Capital projects as at 31 October is $31.3 million against a YTD projection of $36.2 million, or an underspend of $4.9 million.

The Full Year Forecast for Capital expenditure is $142.2 million or a reduction of $0.4 million.

 

Annual Projection
$’000

Annual Forecast
$’000

Movement
$’000

Expenditure

142,688

142,265

423



Carryover to 2018-19

During August, expenditure plans for Capital Projects were reviewed by project managers which indicated that the carryover expenditure for 2018-19 would be $29M, the same as the 2017-18 Adopted Budget. A further review was held on 12 October and although several risks of further carryover were raised the projected carryover would remain at $29 million until the Mid Year Review.

The graph below summarises total capital gross expenditure to date compared to projection and forecast actual.

Summary of gross expenditure to date compared to projection and forecast actual.

Non Capital Expenditure

Non Capital expenditure is the term used to describe that part of the annual budget program that relates to projects that are one off and not meant to impact on the annual service program or capital works. Examples include studies and investigations, activities that are supporting a one off Government program and/or plans such as for site remediation, etc. The total forecast Non Capital project expenditure is $24.4 million with income of $3.7 million. The figure represents approved budget levels, carryover projects from previous years together with additional forecast changes.

Non Capital Projects

Total Expenditure
$’000

Income
$’000

Net Expenditure
$’000

Adopted Budget 2017-18

12,073

3,330

8,743

Carryover from 2016-17

9,998

106

9,892

Osborne House Works

1,000

0

1,000

Projection 2017-18

23,071

3,436

19,635

Forecast Changes

1,303

310

1,003

TOTAL FORECAST

24,374

3,746

20,628


A review of Non Capital projects was held on 12 October and although several risks of carryover were raised, any estimate of carryover to 2018-19 would be held over until the Mid Year Review. Executive Management is also examining the list of projects with a view of determining what may no longer be required.


Environmental Upgrade Agreements

An environmental upgrade agreement was entered into for Lot 2 on Plan Subdivision 041455, Volume 08704 Folio 526.

Council only has one environmental upgrade agreement in place.

The total charge for this agreement is $0.115 million and all payments that have fallen due have been remitted.

The total value of payments that are yet to fall due is $0.112 million.


Attachment 2

EXECUTIVE OVERVIEW

Report as at 31 October 2017

The YTD underlying surplus of $22.1 million is $10.2 million favourable to the projection mainly due to Recurrent surplus of $11.3 million.

The YTD underlying surplus of $22.1 million is $10.2 million favourable to the projection mainly due to Recurrent surplus of $11.3 million.


Recurrent Variances to Projection

Recurrent Variances to Projection


Favourable Recurrent Variances

Unfavourable Recurrent Variances


Financial Statements

Detailed Operating Statement
Report as at 31 October 2017

Detailed Operating Statement - Report as at 31 October 2017

Statement of Financial Position
Report as at 31 october 2017

Statement of Financial Position - Report as at 31 october 2017

The YTD reporting of net assets shows a favourable position of $92 million from FY17 to FY18 due to growth in non-current assets.

Statement of Cash Flows
Report as at 31 October 2017

Statement of Cash Flows - Report as at 31 October 2017

The net cash position of $69.4 million is ($32.4 million) unfavourable to budget with deferring of budgeted loans of $39.3 million for 3 months, partly offset by favourable operating surplus.

Cash flow trend graph

Operating Results Analysis

Revenue Summary
As at 31 October 2017

Revenue sources

Recurrent income

Revenue source variance analysis

Expenditure Summary
As at 31 October 2017

Expenditure categories

Recurrent expenditure

Expenditure variance analysis

Capital Projects Analysis
As at 31 October 2017

The table below summarises the YTD variance between actual and projected gross expenditure, income and net expenditure for capital projects.

Income and expenditure


Actual expenditure to 31 October was $31.3 million compared to a projected YTD expenditure of $36.2 million. The $4.9 million underspend is inclusive of:

Year to date capital expenditure by program category

YTD income is $0.2 million favourable against the projection of $2.2 million. The favourable variance is mainly due to receipt of unbudgeted lease income of $0.5 million for Northern Arc project.

Main expenditure to date variances versus projection include:

•  

Street Construction SRC Program

$1.6 million

•  

Central Geelong Advancement Fund

$1.0 million

•  

Federal Roads Program

$0.9 million

•  

Leopold Community Hub Stage 2

$0.9 million

•  

Portarlington North East SRC Road Construction

$1.3 million

•  

Building Renewal Works

$0.5 million

•  

Corio Landfill Rehabilitation

($1.2 million)

•  

Drysdale Clifton Springs Sports precinct

($0.8 million)



Full Year Forecast

The full year forecast for capital expenditure is $142.3 million with income of $27.5 million.

The projected full year carryover to 2018-19 for incomplete capital projects is $29 million.

Department with projects expected to carryover are detailed below.

Projected carryover as at 31 October 2017 by Division

Non Capital Project Analysis
As at 31 October 2017

The table below summarises the YTD variance between actual and projected gross expenditure, income and net expenditure for Non Capital projects.

 

Total Expenditure
$

Income
$

Net Expenditure
$

Year to Date Projection

7,646,875

2,085,552

5,561,323

Year to Date Actual

5,194,970

2,476,045

2,718,925

Variation Fav/(Unfav)

2,451,905

390,493

2,842,398


YTD income is $390,000 positive against the projection of $2,086,000 driven by additional grants being received.

Actual expenditure to 31 October is $5.2 million compared to a projected YTD expenditure of $7.6 million. The $2.4 million underspend by division is summarised below.

Division

Actual YTD
$’000

Projection YTD
$’000

Variance YTD
$’000

Chief Executive

964

822

(142)

Finance & Strategy

284

274

(10)

City Services

1,202

1,814

611

Planning & Development

387

1,236

849

Community Life

712

1,594

882

Investment & Attraction

1,646

1,907

261

TOTAL

5,195

7,647

2,452



Full Year Forecast

The full year forecast for Non Capital expenditure is $24.4 million with income of $3.7 million.

A review of Non Capital projects was held on 12 October and although several risks of carryover were raised, any estimate of carryover to 2018-19 would be held over until the Mid Year Review.


Investment Performance

As at 31 October 2017

Council seeks to invest public funds in a manner that will provide the highest investment return with maximum security whilst meeting daily cash flow demands of the City of Greater Geelong.

A cash balance of $69.4m with interest income of $0.69m was achieved as at 31 October 2017. This is a positive variance of $35,000 against the interest income budget of $0.65m.

A YTD actual interest rate of return of 2.48% has been achieved. This is a strong return, the benchmark being the annualised USB Australian Index rate of 1.72%.

Actual Investment Return v Budgeted Return

 

Investment returns are trending as per 2016-17 actuals and are favourable to budget.


Financial Performance Indicators

As at 31 October 2017

4 graphs showing 1. accumulated recurrent surplus; 2. accumlated net surplus; 3. rates and charges collection; 4. working capital.




[Back to List]

2. Development of the Domestic Animal Management Plan 2018-2021

Source:

Planning & Development

Acting Director:

Geoff Lawler

Index Reference:

Domestic Animal Management Plan 2018-2021


Purpose

To seek authorisation from Council to release the draft Domestic Animal Management Plan for further community consultation.


Background

Councils are required to develop and review a Domestic Animal Management Plan (Plan) every four years pursuant to the Domestic Animals Act 1994 (DA Act). The Plan is required to be submitted to the Department of Economic Development, Jobs, Transport and Resources (DEDJTR) by 31 January 2018. To allow for further consultation, an extension will be sought. The scope of the Plan is limited to domestic dogs and cats.

The Plan sets out to promote responsible pet ownership and protect the community and the environment from nuisance dogs and cats. A community consultation process was undertaken over 5 weeks during May/June 2017 to receive feedback on key aspects of animal management to inform the Plan. The consultation was promoted with extensive advertising, and included a comprehensive discussion paper (attached), online survey and an invitation for direct written submissions.

The consultation webpage received over 2,000 views. 197 surveys were submitted, in addition to 14 written submissions.


Key Issues

The Plan is expected to outline how Council intends to promote the following standards of animal management:

Councillor Mason moved, Councillor Mansfield seconded -

That Council authorises the release of the draft Domestic Animal Management Plan 2018-2021, for further community consultation for 28 days and report back on a final draft.

Carried.


Attachment 1

Discussion

Compliance Visibility

Many respondents noted that they rarely saw evidence of Council undertaking animal management compliance activities, despite undertaking almost 5,000 community transactions per annum. This lack of community awareness may affect public confidence in Council’s activities in this area, and encourage some pet owners to disregard the laws and requirements as they relate to responsible pet ownership.

Animal Management Staff currently use white, unmarked Council vehicles to undertake their duties. It is proposed that the next iteration of the Plan includes a provision to identify Council animal management vehicles to increase the visibility and understanding of Council’s animal management activities.

Additional efforts can be undertaken by promoting responsible pet ownership through social media, and the participation/sponsoring of relevant community events and initiatives.


Increased Education

Many respondents also reported a need for Council to increase community education in regards to responsible pet ownership and the related laws and expectations, in particular around the responsible pet ownership of school students.

Council has appointed a Community Engagement Officer in the Animal Management Unit. It is anticipated that this officer will promote responsible pet ownership in the community through a variety of programs, including delivering programs to secondary school students.


Enclosed Dog Parks

Council has many reserves which are available for use by dogs off-leash. Many owners, however, are unable to meet the requirements of these off-leash areas, due to the inability to verbally recall the dog and keep it under effective control. Enclosed dog parks are becoming increasingly common throughout Australia, and are recognised as valuable assets for the socialisation of dogs and building stronger community ties amongst users. Council currently has one enclosed dog park at Stead Park in Corio and a comprehensive strategy for the provision of further facilities throughout the municipality is currently being developed by the Social Planning and Investment Unit.

The concept of having a network of enclosed dog parks was well supported by respondents. Several written submissions were received which identified particular areas of need for such facilities.

It is proposed to hold a public forum on fenced dog parks in collaboration with the Social Planning and Investment Unit to inform the development of a fenced dog park strategy; resulting in the development of new fenced dog parks within the 4-year period of this Plan.

The responses received in the consultation for the Plan will be incorporated into the development of this strategy.


Dog on Beaches

Dogs on beaches has remained an important issue, with most respondents reporting a perception that these zones are minimally regulated.

Such issues are managed not by Council, but by the Bellarine Bayside Coastal Committee of Management and the Barwon Coast Committee for Management. Council are currently working closely with these Committees, in order to introduce/harmonise their dog control orders to ensure a greater degree of understanding of the requirements, and develop compliance regimes to balance the needs of all beach users. This will feed into the development of the Dogs in Public Places Policy 2018-21, which is scheduled to be submitted by mid 2018.


Financial Implications

Implementation of the Plan, once approved, will be subject to Council’s annual budget process.


Stakeholder Consultation and Communication

A comprehensive discussion paper was developed (attached) as the primary basis for the community consultation using the ENGAGE community consultation process (an online survey accessed via Council’s website). The discussion questions were available under “Have your Say.” Hard copy discussion papers were also provided at Customer Service Centres. In addition to the key community issues raised above, other issues included the following:

Whilst there has not been a public forum held during this consultation, public meetings are proposed to enable community feedback into the Dogs in Public Places Policy 2018-21 and the Fenced Dog Park strategy, as these are the key issues upon which community members are anticipated to wish to raise their views in person.


Policy/Legal/Statutory Implications

The Plan is a legislative requirement pursuant to the DA Act. Whilst the revised Plan for 2018-2021 is to be provided to the DEDJTR by 31 January 2018, extensions of time may be sought should the process not be completed by this time.

A draft Plan will be put to community consultation between 28 November and 25 December 2017, with the final Plan submitted to Council by mid 2018.


Alignment to City Plan

The Plan aligns to the Clever and Creative 30-year plan, most closely to infrastructure, natural assets, community safety, inclusive, diverse, healthy and social connected communities and sustainable development.


Conflict of Interest

The community consultation and subsequent Council report does not feature any conflicts of interest.


Notice of Motion – Councillor Peter Murrihy

Chief Executive Officer Recruitment

Background

At the Ordinary Meeting of Council of 20 September 2017, Council resolved to establish a Special Committee consisting of the Mayor, Deputy Mayor, up to 3 other Councillors and an Independent Chairperson pursuant to the provisions of Section 86 & 87 of the Local Government Act 1989. The powers and functions of the Committee were those set out in the Council Policy at Appendix 1.

Council proposes to amend the Policy by providing the Mayor with the overall responsibility of position of Chairperson in accordance with Special Functions of Mayor 11E (1) (b) of the City of Greater Geelong Act 1993 and also by removing clause (5.5) which is identified as an administrative function of the Committee during the course of their work.

The Committee having determined their preferred applicant will convene a meeting of all Councillors for formal interview with shortlist applicants.

A formal appointment will then be ratified by Council as part of its Ordinary Meeting.

Councillor Murrihy moved, Councillor Kontelj seconded -

That Council endorse the following amendments to the Chief Executive Officer Employment Matters Policy (CPL5.2):

  1. that the Mayor assume responsibility as Chair of the CEO Employment Matters Committee;

  2. that the Policy includes the option to appoint an independent person to the CEO Employment Matters Committee.

Carried.


[Back to List]

3. Chief Executive Officer Recruitment

Source:

People and Organisational Development

Executive Manager:

Andrew Keen

Index Reference:

Chief Executive Officer Recruitment


Purpose

To establish a CEO Employment Matters Committee to assist with the recruitment of a new Chief Executive Officer.


Background

The Council is responsible for the appointment of the CEO, determining the CEO’s Performance Plan, assessing the CEO’s performance against that plan and determining the remuneration of the CEO as set out in the Local Government Act 1989.

The CEO Employment Matters Policy was adopted by Council on 20 September 2017 to establish the conditions that assist Council in delivering its legislative responsibilities.

The Chief Executive Officer, Mr Kelvin Spiller tendered his resignation to take effect at the end of March 2018.


Key Issues

Councillor Murrihy moved, Councillor Kontelj seconded -

In exercise of the powers conferred by sections 86 & 87 of the Local Government Act 1989 ("the Act"), Council resolves:

  1. to establish a Chief Executive Officer Employment Matters committee in accordance with the policy attached.

  2. to nominate up to three Councillors in addition to the Mayor and Deputy Mayor to participate on the Committee.

Carried.


Councillor E Kontelj moved, Councillor Asher seconded –

That Councillor Mason be nominated to participate on the Committee.

Carried.


Councillor Asher moved, Councillor Mansfield seconded –

That Councillor Grzybek be nominated to participate on the Committee.

Carried.


Councillor Murrihy moved, Councillor Mason seconded –

That Councillor Aitken be nominated to participate on the Committee.

Carried.


Councillors Mason, Grzybek and Aitken were duly appointed to participate on the Chief Executive Officer Employment Matters Committee.


[Back to List]

4. Audit and Risk Committee – Charter Amendment

Source:

Governance and Legal Services

Executive Manager:

Rebecca Leonard

Index Reference:

Audit and Risk Committee


Purpose

To approve amendments to the Audit and Risk Committee (ARC) Charter; and appoint the Mayor and one other Councillor as members of the ARC.


Background

The ARC is an Advisory Committee of Council established in accordance with section 139 of the Local Government Act 1989.

The ARC provides oversight of the Council’s responsibilities for financial reporting, management of risk, maintaining a reliable system of internal controls and facilitating the organisation’s ethical development.

The ARC Charter was last endorsed by Council at its meeting on 13 December 2016.


Key Issues

Councillor Aitken moved, Councillor Murnane seconded -

That Council:

  1. approves the amended Audit and Risk Committee Charter; and

  2. appoints the Mayor and one other Councillor as members of the Audit and Risk Committee;

  3. appoints the Mayor and one other Councillor and two Councillors as substitutes as members of the Audit and Risk Committee;

  4. amend the Charter to enable Councillors to attend as observers.

Carried.


Councillor Kontelj moved, Councillor Mansfield seconded –

That Councillor Grzybek be nominated as a member on the Audit and Risk Committee.

Carried.


Councillor Grzybek moved, Councillor Asher seconded –

That Councillor Aitken be nominated as a substitute on the Audit and Risk Committee.

Carried.

Councillor Mason moved, Councillor Aitken seconded –

That Councillor Asher be nominated as a substitute on the Audit and Risk Committee.

Carried.


Councillor Grzybek was duly appointed as a member of the Audit and Risk Committee and Councillors Aitken and Asher were appointed as substitutes of the Audit and Risk Committee.


Attachment 1

Financial Implications

Fees payable to the independent members of the Audit and Risk Committee are calculated on a per meeting basis and are set by the Chief Executive Officer.


Community Engagement

The community will be informed of the changes to the Audit and Risk Committee Charter once approved, in accordance with the Council’s Community Engagement Policy 2017.


Social Equity Considerations

There are no significant social equity impacts arising from the amendment to the Audit and Risk Committee Charter.


Policy/Legal/Statutory Implications

The Council is obliged to establish an Audit Committee in accordance with section 139 of the Local Government Act (Vic) 1989.


Alignment to City Plan

The Audit and Risk Committee oversee key operational activities of the Council, including risks associated with the delivery of City Plan and audit of compliance obligations.


Conflict of Interest

The officer preparing this report has no conflict of interest arising from the subject matter or recommendations in the report.


Risk Assessment

There are no significant risks associated with the amendment of the Audit and Risk Committee Charter.


Environmental Implications

There are no environmental implications arising from the amendment of the Audit and Risk Committee Charter.


[Back to List]

5. Tender T1770859 – Construction of Highton Enhanced Children’s Centre

Source:

City Services - Capital Projects

Director:

Guy Wilson-Browne

Index Reference:

Tender T1770859


Councillor Kontelj moved, Councillor Murnane seconded -

That in accordance with Section 89 (2) (d) of the Local Government Act 1989, this contractual matter be considered at the conclusion of all other business at which time the meeting be closed to members of the public.

Carried.


[Back to List]

6. Tender T1770869 – Armstrong Creek East Integrated Children’s and Community Centre (AICCC)

Source:

City Services - Capital Projects

Director:

Guy Wilson-Browne

Index Reference:

Tender T1770869


Councillor Mason moved, Councillor Nelson seconded -

That in accordance with Section 89 (2) (d) of the Local Government Act 1989, this contractual matter be considered at the conclusion of all other business at which time the meeting be closed to members of the public.

Carried.


[Back to List]

Contents | Previous Page: Section A - Procedural Matters | Next Page: Section C - Assembly of Councillors