adopted report gold coast water and waste committee meeting · 2019-06-23 · 743rd council meeting...

743

Adopted Report for the

Gold Coast Water and Waste Committee Meeting

to be held

Wednesday 13 September 2017

at

2pm

City of Gold Coast Council Chambers 135 Bundall Road Surfers Paradise

743rd Council Meeting 15 September 2017 2 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report

Index 743

Adopted Report

Gold Coast Water and Waste Committee Meeting


Item Direct. File Page Subject

1 GCWW CM787/788/06/01(P1) 4 Gold Coast Water And Waste

Committee Action List And Forward Planning Schedule

2 GCWW WSS1125/1227/02(P1) 8 Gold Coast Water And Waste Annual Register Of Council Directions

3 GCWW FN334/252/17(P2) 10 Water And Sewerage Services Performance As At 30 June 2017

4 GCWW FN334/252/17(P2) 40 Waste Services Financial Performance As At 30 June 2017

General Business

5 GCWW HL323/455/02 60 Waste and Kerb Side Clean Up – Value For Money

KEY: OCEO - Office of the Chief Executive Officer GCWW - Gold Coast Water & Waste CI - City Infrastructure OCOO - Office of the Chief Operating Officer CS - Community Services OS - Organisational Services EDMP - Economic Development & Major Projects PE - Planning & Environment

743rd Council Meeting 15 September 2017 3 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ADOPTED AT COUNCIL 15 SEPTEMBER 2017 RESOLUTION G17.0915.030 moved Cr Boulton seconded Cr PJ Young That the Report of the Gold Coast Water & Waste Committee’s Recommendations of Wednesday, 13 September 2017, numbered WW17.0913.001 to WW17.0913.005, be adopted.

CARRIED UNANIMOUSLY ATTENDANCE Cr P Taylor (Chairperson) Cr K Boulton Cr R La Castra Cr PJ Young Cr G Tozer Cr PC Young Mr P Heaton Director Gold Coast Water and Waste APOLOGY / LEAVE OF ABSENCE PROCEDURAL MOTION moved Cr Boulton seconded Cr La Castra That the apology of Cr O’Neill be noted.

CARRIED PRESENTATIONS Nil

743rd Council Meeting 15 September 2017 4 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 1 GOLD COAST WATER AND WASTE GOLD COAST WATER AND WASTE COMMITTEE ACTION LIST AND FORWARD PLANNING SCHEDULE CM787/788/06/01(P1)

Proposed Date Subject Action Officers Action

25 October 2017

Community Partnerships (includes Water Watch Program)

Joshua Evans/ Kathy Baker

27 October 2017

Site Tour of Gold Coast Water and Waste facilities

Wendy Nelson Confirmed 27 October 2017.

November 2017 Recycled Water Master Plan and Pricing Principles Recommendation: WW17.0315.006

Kevin Page / Anthony Ottaway

Council notes that a detailed master plan and program for the potential recycled water system upgrades will be brought back to Council in late 2017.

December 2017 Improved Control and Access to Waste and Recycling Facilities Resolution: G17.0621.014

Matt Fraser 6 That Council endorses assessment of potential electronic access control at Council’s waste and recycling facilities, with a report to be presented by the end of 2017 on a proposed approach.

7 That Council endorses assessment for potential improved control of inappropriate behaviours and issue of infringement notices at waste and recycling centres, with a report to be presented by the end of 2017 on a proposed approach.

May 2018 Commercial Food Waste Agenda Item Mairead Lenihan/ Matt Fraser

743rd Council Meeting 15 September 2017 5 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 1 (CONTINUED) GOLD COAST WATER AND WASTE COMMITTEE ACTION LIST AND FORWARD PLANNING SCHEDULE CM787/788/06/01(P1)


June 2018 Improved Control and Access to Waste and Recycling Facilities Resolution: G17.0621.014

Matt Fraser That Council endorses assessment of the potential for designation of waste and recycling centres into domestic waste only, and full waste facilities, with a report to be presented on the proposal by the end of 2017-18 financial year.

July 2018 Scientific Services Delivery Model – Implementation Plan

Tim Beales/ Chris Owen

That the Director Gold Coast Water and Waste report back to Council in July 2018 on progress associated with the Scientific Services Implementation Plan.

Early 2018 Gold Coast Water and Waste Customer Satisfaction Survey 2017

Carley Freeman/ Chris Owen

To be confirmed

Metering and Leakage Recommendation: WW16.0720.004

Scott Emmonds/ Chris Owen

Council notes that further consideration is being given to residential meter location and other issues to support ongoing development of Council’s Concealed Leakage Remission Policy, which will be brought to Council at a later date.



To be confirmed

Overview of Measures to Mitigate the Impact of Plastic Waste on the Marine Environment Recommendation: WW16.1109.005

Joshua Evans/ Kathy Baker

1. That Council undertake a marine debris data analysis of the materials collected through the City’s canal cleaning program. The results of this analysis will determine the following:

a) Whether a targeted public awareness through education is likely to be effective;

b) Identification of the number of additional Stormwater Quality Improvement Devices required to be retrofitted into the existing stormwater network.

c) Improve the collaboration of volunteer groups to ensure their efforts are effective in reducing marine debris.

3. That consideration at a more appropriate time is given to the provision of a green waste collection service to all residents to reduce the impact of illegal dumping of green waste (which comprises of over 70% of collected materials) into the City’s Canals. 4. That a Litter and Illegal Dumping Management Plan is developed by Environmental Health, Compliance and Lifeguard Services (in accordance with the Solid Waste Strategy 2024). 5. That Council investigate feasibility of a further roll-out of drinking water refill stations to reduce the need for residents and visitors to purchase bottled water and the resulting litter.



To be confirmed

Smart Metering of Community Title Scheme (units and complexes).

Chris Owen / Scott Emmonds

December 2018

Alternate Billing Options for Water and Sewerage Utility Charges

Recommendation: WW17.0426.006

Anthony Ottaway/ Karen O’Brien

2 That in view of the benefits to customers, Council endorses a future transition to rolling billing for water and sewerage utility charges with both fixed and variable charges billed in arrears.

3 The proposed future transition to rolling billing to be scheduled to align with the establishment of a new utility billing system.

4 That a report to be provided back to Council by December 2018 providing details of on the proposed transition plan.

RECOMMENDATION

It is recommended that Council resolve as follows:

That the Action List and Forward Planning Schedule for Gold Coast Water and Waste Committee be noted.

Authorised by:

Paul Heaton iSPOT#37409759 Director Gold Coast Water and Waste COMMITTEE RECOMMENDATION WW17.0913.001 moved Cr Tozer seconded Cr Boulton

That the Action List and Forward Planning Schedule for Gold Coast Water and Waste Committee be noted.

CARRIED

743rd Council Meeting 15 September 2017 8 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 2 GOLD COAST WATER AND WASTE GOLD COAST WATER AND WASTE ANNUAL REGISTER OF COUNCIL DIRECTIONS WSS1125/1227/02(P1)

STANDING AGENDA ITEM: Committee Recommendation: WS14.0430.007 / Council Resolution: G14.0506.025 “That Gold Coast Water establish a standing item on the Water Services Committee Agenda which is a register (and thus an agreed record) of any “directions” that Council gives Gold Coast Water for reporting in the annual operations report.” That is: - a resolution that goes against or substantially modifies the recommendations of the Officers and;

- has a (or potential to have a) material/commercial impact on the business unit. Council Meeting

Council Resolution

Description 2016-17 Progressive

686 G14.0916.004 That the adopted infrastructure charges are adjusted so that there is a 100% discount for family accommodation dwellings of 100m2 GFA or less for any approvals issued on or after 1 July 2014 through the remainder of this Council’s term. Permanent changes to Adopted Infrastructure Charges Resolution (AICR):

1. Existing building: no infrastructure charges levied for any change in non-residential land use (ongoing).

2. Expansion: for non-residential land uses, up to an additional 50 per cent of GFA or a maximum of 500m², whichever is the lower, will be exempt from infrastructure charges (ongoing).

3. Family accommodation: no charge for family accommodation dwellings of 100m² GFA or less. Family accommodation dwellings greater than 100m² GFA will be charged at 40 per cent of the relevant AICR charge (ongoing).

4. Not-for-profit community groups: rebates for the water and wastewater networks will be restored, following the return of responsibility to the City (ongoing). Recommendation: WW16.12.05.003 Resolution: G16.1207.018

$181,612

743rd Council Meeting 15 September 2017 9 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 2 (Continued) GOLD COAST WATER AND WASTE ANNUAL REGISTER OF COUNCIL DIRECTIONS WSS1125/1227/02(P1) RECOMMENDATION It is recommended that Council resolve as follows: That the Gold Coast Water and Waste Annual Register of Council Directions be noted. Authorised by: Paul Heaton iSPOT#43956542 Director Gold Coast Water and Waste

COMMITTEE RECOMMENDATION WW17.0913.002 moved Cr Tozer seconded Cr Boulton That the Gold Coast Water and Waste Annual Register of Council Directions be noted.

CARRIED

743rd Council Meeting 15 September 2017 10 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 GOLD COAST WATER AND WASTE WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) Attachment 1: Income Statement and Notes Attachment 2: Detailed Income Statement - Cash Attachment 3: Status Update – Major Capital Projects Attachment 4: Concealed Leakage Remission Payments 2015-16, by Suburb (Top 20) Attachment 5: Concealed Leakage Remissions > $10,000 - CONFIDENTIAL 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT The purpose of this report is to provide the Gold Coast Water and Waste Committee with results of Water and Sewerage Services financial performance for the 2016-17 financial year. Within the report, the “revised budget” refers to the March 2017 Budget Review. 4 PREVIOUS RESOLUTIONS 2016-17 Budget Adoption: The City’s 2016-17 Budget was adopted by Council at the Budget Meeting held on 24 June 2016. Resolution Number: G16.0624.002 September Budget Review: Resolution Number: B16.1024.004

1. That Council approve the decrease of $9.0 million to be transferred from the Water and Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $30.8 million for the 2016-17 financial year.

2. That Council note budget variations per Attachments 2 and 3 will be included in the September 2016 Budget Review.

CARRIED UNANIMOUSLY December Budget Review: COMMITTEE RECOMMENDATION B17.0130.004 moved Cr Tozer seconded Cr Taylor 1. That Council approve the decrease of $4.2 million to be transferred from the Water

and Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $26.5 million for the 2016-17 financial year.

2. That Council note budget variations per Attachments 2 and 3 will be included in the December 2016 Budget Review.

CARRIED UNANIMOUSLY

743rd Council Meeting 15 September 2017 11 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) March 2017 Budget Review: COMMITTEE RECOMMENDATION B17.0502.001 moved Cr Owen-Jones seconded Cr Vorster 1 That Council approve the decrease of $2.7 million to be transferred to the Water and

Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $23.8 million for the 2016-17 financial year.

2 That Council note budget variations per Attachments 2 and 3 will be included in the March 2017 Budget Review.

CARRIED UNANIMOUSLY

5 DISCUSSION The Gold Coast Water and Waste (GCWW) Directorate is responsible for two of the City’s commercial business units as defined in the Local Government Regulation 2012, Gold Coast Water (GCW) and Gold Coast Waste Management (GCWM). GCW is responsible for water, sewerage and recycled water services across the City. While GCW is a commercial business unit within Council, it is required to maintain the requirements of economic regulatory environment applicable to Distributor-Retail water businesses under the South East Queensland Water (Distribution and Retail Restructuring) Act 2009 and the Local Government Act. This report outlines the performance for the GCW commercial business unit and for the purposes of this this report, is known as Water and Sewerage Services. 5.1 Water and Sewerage Services High Level Financial Summary The table below provides a summary of Water and Sewerage Services financial performance for 2016-17.

Table 1: Gold Coast Water – Summary Financial Management Statement – For year ended 30 June 2017

Summary Financial Management Statement

2016-17Actuals

Revised Budget

2015-16 Actuals

For the year ended 30 June 2017 $M $M $M % $M

Operating Revenue 497.60 491.75 5.85 1.2% 483.42

Flow -Dependant Expenditure 188.22 182.69 (5.53) (3.0%) 174.34

Controllable Expenses 105.21 105.55 0.35 0.3% 102.71

Operating Result 204.17 203.51 0.66 0.3% 206.37

Loss on Sale of Assets 4.98 5.00 0.02 0.5% 9.66

Net Profit before Capital Revenue 199.19 198.51 0.68 0.3% 196.71

Capital Revenue 113.85 95.29 18.56 19.5% 124.87

Depreciation / Amortisation 93.31 92.00 (1.31) (1.4%) 93.18

Earnings Before Interest and Taxation 219.73 201.80 17.93 8.9% 228.40

Interest Expense (QTC loan) 3.07 3.07 0.00 0.0% 3.32

Interest Margin Expense 0.88 0.88 (0.00) (0.0%) 0.88

Shareholder Interest Expense 80.37 80.37 0.00 0.0% 80.37

Income Tax Equivalents 42.07 41.68 (0.40) (1.0%) 47.23

Net Profit After Taxation 93.34 75.80 17.53 23.1% 96.60

Contribution to Whole of City projects 2.11 0.00 (2.11) 0.0% 0.00

Retained Earnings 91.23 75.80 15.43 20.3% 96.60

Variance

743rd Council Meeting 15 September 2017 12 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) Net Profit before Capital Revenue is less than 1.0% ($0.68 million) higher than revised projections, with Earnings before Interest and Taxation (EBIT) 8.9% ($17.93 million) higher than revised projections.

This significant variance in EBIT is due to Contributed Assets being almost $16.7 million higher than revised projections.

Income Tax Equivalents paid to the City is within 1% of projections. 5.2 Distribution of Earnings Water and Sewerage Services Earnings before Interest and Taxation (EBIT) for the period ended 30 June 2017, on a cash basis, is $268.3 million (operating revenue of $497.6 million, cash capital revenues of $57.2 million and Commonwealth Games funding of $6.2 million less operating expenditure of $292.7 million). This result exceeds the target set at the March 2017 Budget Review by 1.2% ($3.3 million) and is 4.5% ($12.5 million) lower than the 2015-16 result. The result in 2015-16 was driven by Developer (Cash) Contributions being extraordinarily high, in excess of $71 million. For further detail on Capital Revenues refer to Section 5.9. Table 2 below outlines the distribution of 2016-17 earnings. The final position results in Total Transfers to Reserves of $69.6 million. These funds are being accumulated for future years’ water and sewerage capital investment program.

Table 2: Water and Sewerage Services – Distribution of Earnings –Year Ended 30 June 2017

Distribution of Earnings2016-17Actuals

Revised Budget

2015-16 Actuals


Interest Expense (External) 3.07 3.07 (0.00) (0.0%) 3.32

Principal Repayment (External) 4.13 4.13 0.00 0.0% 3.88

Debt Service Payment 7.20 7.20 (0.00) (0.0%) 7.20

Capital Expenditure 66.07 72.15 6.08 8.4% 52.11


Interest Returned - Community Investment in GCW 80.37 80.37 (0.00) (0.0%) 80.37

Tax Equivalents (30% taxable earnings) 42.07 41.68 (0.40) (1.0%) 47.23

Contribution to Whole of City projects 2.11 0.00 (2.11) 0.0% 0.00

Participation Return 0.00 0.00 0.00 0.0% 0.00

Interest Expense Margin 0.88 0.88 (0.00) (0.0%) 0.88

Payment to Council(Excluding SLA, Fleet & Plant and Land Tax)

125.44 122.93 (2.51) (2.0%) 128.49

Procurement Savings (operational costs only) 2.21 1.85 (0.37) (19.9%) 0.91

Investment 25.36 21.97 (3.39) (15.4%) 38.15

Developer Contributions received, but not utilised 42.02 38.93 (3.09) (7.9%) 53.98

Total Transfers to Reserve 69.59 62.75 (6.84) (10.9%) 93.04

Total Distribution 268.29 265.02 (3.27) (1.2%) 280.84

Variance

743rd Council Meeting 15 September 2017 13 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.3 Economic Regulation The price monitoring framework that was undertaken by the Queensland Competition Authority (QCA) ended on 30 June 2015. A draft framework was proposed by the QCA however was not adopted by Government. Gold Coast Water and Waste officers continue to engage with the other South East Queensland Distributor Retailers and the State Government on development of an effective long-term regulatory framework. While a framework is currently not in place, Water and Sewerage Services apply principles of economic regulation by ensuring only prudent and efficient expenditure is incurred. 5.4 Returns to Community In accordance with the City’s GCW Capital Structure and Community Returns Policy, Water and Sewerage Services operates as a commercial business unit and provides an appropriate return to the community, based on its investment in the business. Returns paid to the City for 2016-17 exceeded the target set at the March 2017 Budget Review by $2.3 million and are outlined in the table below:

Table 3: Gold Coast Water – Returns to Community –Year Ended 30 June 2017

The increase in returns was primarily the result of a $2.1 million additional contributions being provided to the City. Total community returns for 2016-17 are marginally lower ($3.1 million or 2.3%) than returns provided in 2015-16. This reflects the lower level of Developer (Cash) Contributions received in the 2016-17 year.

Community Returns2016-17Actuals

Revised Budget

2015-16 Actuals


Interest Margin Expense 0.88 0.88 0.00 0.0% 0.88

Shareholder Interest 80.37 80.37 0.00 0.0% 80.37

Income Tax Equivalents 42.07 41.68 0.40 1.0% 47.23

Land Tax Equivalent 1.32 1.50 (0.18) (12.0%) 1.33


Contribution to Whole of City projects 2.11 0.00 2.11 0.0% 0.00

Return to Community 126.76 124.43 2.33 1.9% 129.81

SLA Costs 18.97 18.97 0.00 0.0% 19.27

Health Monitoring Costs 0.00 0.00 0.00 0.0% 0.11

Insurance Premiums 1.85 1.85 0.00 0.0% 2.42

Fleet & Plant Charges 4.49 4.24 0.25 5.8% 4.50

Total Payments to Council 152.06 149.49 2.57 1.7% 156.12

Variance

743rd Council Meeting 15 September 2017 14 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.5 Water and Sewerage Rates Revenue

Table 4: Rates & Charges Revenue –Year Ended 30 June 2017

The overall rates revenue result for 2016-17 was an increase against revised budget of $5.6 million (1.2%) comprising of:

$3.1 million in service charges, comprising of an additional $1.9 million in water services charges and $1.2 million in sewerage service charges. This variance was due to higher than forecast growth projections.

$2.5 million in volumetric charges due primarily to higher than forecast sewage charges of $3.7 million being offset against lower water charges of $1.1 million.

There was a negative variance of $7.7 million recorded in June primarily due to a downward adjustment in volumetric water charges for the financial year. This adjustment was required to ensure that the financial results reflected actual and pending billings for the year ended 30 June 2017, which is something that can only be verified as part of the year end reconciliation process. The adjustment resulted in a larger than forecast Non-Revenue Water (NRW) value than previously allowed for in the monthly accounts. In comparing the actual results against 2015-16:

service charges received of $238.2 million was 2.4% higher than those received in 2015-16 of $232.7 million.

volumetric charges received of $247.3 million for 2016-17 were 4.5% higher than those received in 2015-16 of $236.5 million.

For the second consecutive year, the City’s has maintained all Council water and sewerage charges. As a result the increase in revenue is solely due to growth in connections. Section 5.6.1 provides further information on bulk water demand.

Gold Coast Water Rates Revenue

2016-17Actuals

Revised Budget

2015-16 Actuals


Service Charges

Water 65.79 63.88 1.91 3.0% 64.16

Sew erage 172.36 171.15 1.21 0.7% 168.49

Total Service Charges 238.15 235.03 3.13 1.3% 232.65

Volumetric Charges

Water 207.58 208.69 (1.11) (0.5%) 196.78

Sew erage 38.68 34.99 3.69 10.6% 39.09

Recycled Class A 0.98 0.74 0.24 32.5% 0.67

Less: Concealed Leakage (2.35) (2.00) 0.35 (17.3%) (1.58)

Total Volumetric Charges 244.89 242.41 2.48 1.0% 234.96

Total Rates Revenue 483.04 477.44 5.60 1.2% 467.61

Variance

743rd Council Meeting 15 September 2017 15 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.5.1 Non-Revenue Water Reducing the City’s non-revenue water (NRW) is a key focus for the business. GCWW’s Network Monitoring Team has now been in place since 2016. The team assess both the water and sewerage networks and work closely with field based crews to identify, investigate and rectify potential leaks within the network. Since its inception, the following initiatives have been implemented:

OSiPi Historian ClearSCADA TaKaDu

Configured to analyse all 63 DMA night flows

DMAs now monitored 24 hours per day by the Operations Centre

Predictive software to facilitate identification of leaks

Identifies DMA trends in nights flows - upward trends potentially indicate leaks

High Flow alarms investigated and actioned

Currently operational, but not yet automated

Twenty (20) potential leaks identified for early investigation

Automation to occur following lift of

LGP freeze

Other key initiatives scheduled for implementation over the coming year include:

Enhancement of leak detection resourcing within the business;

Increase of Demand Management Area (DMA) coverage from 35% to 70%

Enhancement of bulk metering of reservoir supply zones

Acceleration of the meter replacement program to reduce meter error

Future billing system upgrades will also assist in reducing NRW through providing better information as to the conversion of meter reading data into bills for individual billing accounts. 5.5.2 Concealed Leakage Remissions

A total of $2.3 million was paid in concealed leakage remissions for the year, an increase of 49% compared to the $1.6 million paid during 2015-16. While there was an increase in remissions paid in 2016-17, there has been a downward trend from 2013-14 where remissions were in excess of $4 million. Consistent with this trend, the average cost per remission approved with the 2016-17 average being approximately $810, a 38% reduction from the average $1,310 recorded in 2013-14. Table 5 below shows that, by number of applications approved, only 13.5% (394 applications) relate to non-residential customers however this equates to 48% of the value of remissions paid.

Table 5: Concealed Leakage Remissions –Year Ended 30 June 2017

NumberApprovals

Total LeakVolume

WaterRemissions

Value ($)

SewerRemissions

Value ($)

TotalRemissions

Value ($)

% of Total Average valueof remissions

Residential 2,517 693,698 1,220,697 1,220,697 52% 485

Non Residential 394 453,489 580,439 545,765 1,126,204 48% 2,858

2016-17 2,911 1,147,187 1,801,136 545,765 2,346,901 100% 806

743rd Council Meeting 15 September 2017 16 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) Further analysis indicates that in 2016-17:

total applications processed increased by 16% (690 applications) to a total of 4,309; of those, 2,911 or 67.5% received a remission

total applications declined was 1,398 (32.5%) compared to 1,208 (33.4%) in 2015-16. The most prevalent reason for applications being declined is repairs not being undertaken within the one-month required timeframe.

the highest single remission paid to a:

o residential customer was $11,451 (2016: $5,328; 2015: $6,605),

o non-residential customer was $28,847 (entirely Water) (2016: $62,349 – nil for

Water and $62,349 for Sewer; 2015: $77,217 - $18,028 for Water and $59,189 for Sewer).

the average value of remissions paid to:

o residential customers was $501 (2016: $384; 2015: $500)

o non-residential customers was $2,799 (2016: $2,233; 2015: $3,533)

The following table provides summary information of high-value remissions paid during 2016-17. Attachment 4 provides a listing of 2016-17’s “Top 20 Suburbs” by value of concealed leakage remissions payments. A listing of all remissions over $10,000 is provided at Confidential Attachment 5.

Table 6: High Value Concealed Leakage Remissions – Year Ended 30 June 2017

5.6 Flow-Dependant Expenditure Water and Sewerage Services flow dependent expenditure exceeded revised budget by a total of $5.5 million or 3.0%.

Table 7: Flow dependent expenditure

NumberApprovals

Total LeakVolume

WaterRemissions

Value ($)

SewerRemissions

Value ($)

TotalRemissions

Value ($)

Average valueof remissions

Remissions greater than $10,000

Residential 1 5,978 11,451 - 11,451 11,451

Non Residential 17 89,097 94,146 157,778 251,924 14,819

Remissions greater than $20,000

Non Residential 9 79,201 79,612 130,139 209,751 23,306

Flow-Dependant Expenditure2016-17Actuals

Revised Budget

2015-16 Actuals


Bulk Water Purchase 171.35 165.84 (5.50) (3.3%) 158.19

Electricity 10.07 9.82 (0.25) (2.5%) 9.70

Biosolids Disposal 3.56 3.87 0.31 7.9% 3.36

Chemicals 3.25 3.16 (0.09) (2.8%) 3.09

Total Flow-Dependant Expenditure 188.22 182.69 (5.53) (3.0%) 174.34

Variance

743rd Council Meeting 15 September 2017 17 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.6.1 Bulk Water Purchases

Total bulk water purchases for 2016-17 was higher than the revised budget by $5.5 million as a result of an additional 1,990ML in demand. In total, 62,340ML of bulk water was purchased in 2016-17 an increase of 3,342ML (5.7%) from 2015-16. As shown in Graph 3 below, the additional demand occurred in February and March as a result of increased temperatures and drier weather conditions than forecast.

Graph 1: Analysis of Water Supplied versus Demand Forecast * ML supplied as invoiced by the SEQ Water Grid Manager.

5.7 Controllable Expenses Controllable Expenses were within 1% of revised forecast. This is consistent with trends since 2013-14 where controllable expenses have been within 4% of revised budget. A detailed Income Statement is appended to this report (Attachment 1).

743rd Council Meeting 15 September 2017 18 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.8 Capital Revenues and Non-Cash Expenses 5.8.1 Capital Revenues Contributed assets are 41.7% ($16.7 million) over revised projections, with almost $57 million in contributed assets being recognised during the year. This exceeds the almost $53 million in recognised 2015-16 by 7.5%. The graph below illustrates the exceptionally high level of capital revenues, both Contributed Assets and Developer (Cash) Contributions that have been received in the past two years and is consistent with the high level of development activity occurring across the City.

Graph 2: Capital Revenues Received

5.8.2 Asset Values and Non-Cash Expenses A total of $3.77 billion (written down replacement cost) of water and sewerage infrastructure assets is managed within the Water and Sewerage Services business unit. A complete revaluation of these assets was undertaken, as at 31 March 2017. Whilst the revaluation resulted in minimal change to gross asset values, there was a 3.92% ($142.6 million) increase in the written down value of the assets. A review of asset useful lives was also undertaken during the year, with the most significant changes being an extension to the design lives for UPVC pipe material and sewer maintenance holes, and a reduction to the design life for sewer structural relines. The above movements resulted in depreciation expense for 2016-17 remaining fairly static at $93.3 million, compared to $93.2 million in 2015-16. Loss on Disposal of assets was $4.98 million for 2016-17, which compares with $9.7 million in 2015-16. Last year’s value was considerably higher than normally expected, due to the large number of assets that were replaced as part of Gold Coast Light Rail Stage 1. The level of disposal costs incurred in the current year is expected to be indicative of expected levels in future years.

743rd Council Meeting 15 September 2017 19 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.9 Capital Program 5.9.1 Capital Expenditure The initial 2016-17 Water and Sewer Services capital program consisted of 56 projects totalling $72.0 million. The revised budget following the budget review processes undertaken during the year was $72.2 million spanning 102 projects.

Table 8: Capital Expenditure

The final capital expenditure for 2016-17 was $66.7 million which represents a variance of 8% against the revised budget of $72.2 million and 7% against initial budget of $72.0. Refer to Attachment 3 for a status update of major capital investment projects. 5.9.2 Capital Program Achievements Thirty-seven capital works projects were completed in the 2016-17 financial year. Some of the significant projects completed are listed in the table below.

Table 9: Significant Capital Projects Completed

Sewerage 51.93 55.61 3.68 7% 40.09

Water 11.63 13.16 1.54 12% 8.76

Noncore Water 2.67 2.93 0.26 9% 2.65

Recycled Water 0.00 0.00 0.00 0% 0.57

Corporate 0.42 0.45 0.03 6% 0.25

Total Capital Expenses 66.65 72.15 5.50 8% 52.32

2015-16 Actuals ($M)

Water and Sewerage Services Capital Programas at 30 June 2017

Product2016-17 Actuals

($M)Revised Budget

($M)Variance ($M) Variance (%)

Water Meter Replacements 2016-17 2,429,037 2,407,589

Water Main Replacements 2016-17 1,905,671 1,713,578

Tallebudgera Connection Road Water Main 1,016,547 1,256,422

Sewerage Pumping Station Civil Renewals Project 2016-17 835,758 835,674

Stapylton Gravity Sewer Diversion SPS DA03 and DA05 597,292 652,745

Sewer Main Renewals Program 2015-16 539,874 4,329,302

Binstead Way Water Main (GW080) 478,077 478,077

CWG Pump Station Rising Main Augmentation Carrara Precinct 351,153 1,279,749

Emergent Works Coomera River Sewer Main (severe weather event) 263,656 264,391

Water Pump Station Civil Renewals 2016-17 260,491 260,491

Sub Total (Significant Projects) 8,677,557 13,478,018

Other Completed Projects 2,464,270 13,672,766

Total 11,141,827 27,150,784

TOTAL PROJECT

EXPENDITUREPROJECT

2016-17 FY EXPENDITURE

743rd Council Meeting 15 September 2017 20 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.9.3 Assets under Construction (AuC) At 30 June 2017, total Assets under Construction (AuC) balance is $80.4 million. The table below shows the movement of AuC balances since the return to Council, in comparison to the capital spend each year.

Table 10: Closing Balances – Assets under Construction (AuC)

The construction of infrastructure assets can extend over multiple financial years and GCWW strives for timely processing of all funds expended, once assets are “in service” and able to recognised within the City’s financial asset register. This is not only to ensure that assets are recorded in the system for customer and maintenance purposes but also for compliance with the Australian Accounting Standards and to ensure the Regulatory Asset Base (RAB) is appropriately maintained for regulatory and pricing purposes. 5.10 Other Financial Activities

5.10.1 Procurement Savings Total procurement savings identified by the Chief Procurement Office for the financial year are highlighted in the table below.

Table 11: Procurement Savings

Identified procurement savings are retained within GCWW and are recognised through the transfer to the Water and Sewerage Infrastructure Reserve, as highlighted in Table 2: Water and Sewerage Services– Distribution of Earnings.

Assets Under Construction

Capital Spend ($M)

AuC Balance ($M)

1 July 2012 - 125.86

30 June 2013 59.28 69.70

30 June 2014 46.96 70.20

30 June 2015 34.17 53.15

30 June 2016 51.81 75.45

30 June 2017 66.65 80.42

Procurement Savings ($'m)

July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Total

Operational 0.32 0.19 0.56 0.31 0.12 0.17 0.05 0.14 0.05 0.11 0.06 0.14 2.21 Capital 2.52 0.26 1.58 0.55 0.59 1.18 0.02 0.29 0.05 0.09 0.10 1.05 8.27

2.84 0.45 2.13 0.86 0.71 1.35 0.06 0.42 0.11 0.20 0.16 1.19 10.49

Recoverable 0.00 0.01 0.00 0.00 0.00 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.07

Where operational procurement savings relate to Private Recoverable Works , these savings are not reflected in budgetary movements.

743rd Council Meeting 15 September 2017 21 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.10.2 Community Service Obligations In accordance with Sections 23 and 24 of the Local Government Regulation 2012:

…The cost of carrying out community service obligations, less any revenue received from performing the obligations, must be treated as revenue for the significant business activity. {Section 23} (and) …A community service obligation is an obligation the local government imposes on a business entity to do something that is not in the commercial interests of the business entity to do. Example of a community service obligation – giving a price concession to a particular group of customers, including pensioners, seniors and students {Section 24}

For the 2016-17 year, a total of $0.18 million in infrastructure charges have been foregone under the City’s rebates provided for Non-Profit Community Groups, as shown in Table 12 (below).

Table 12: Infrastructure Credits Foregone

A further $2.2 million in potential credits available has been identified in Table 13 (below) for Development Applications that have been approved during 2016-17. The realisation of these potential credits will only occur once the development actually proceeds on the basis approved.

Table 13: Potential Infrastructure Credits for Development Applications approved during 2016-17

To date, no Community Service Obligations have been formally recognised for these Rebates and Credits.

ACTUAL CREDITS FOREGONE($'000)

Water Sewer Total

Non-Profit Community Group Rebate 75.9 105.7 181.6

TOTAL CREDITS FORGONE 75.9 105.7 181.6

POTENTIAL CREDITS AVAILABLE($'000)

Water Sewer Total

5.1 Exemption Credit 205.3 623.3 828.6

5.2 Exemption Credit 56.1 168.1 224.1

5.4 Exemption (Secondary dwelling) 92.6 251.7 344.3

Family Accommodation <100m2 41.9 129.1 171.0

Parking Station Exemption Credit 134.6 414.8 549.3

TOTAL POTENTIAL CREDITS 530.4 1,587.0 2,117.4

743rd Council Meeting 15 September 2017 22 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.10.3 Community Service Obligations – Catchment Management Unit The Catchment Management Unit transferred to Gold Coast Water and Waste, effective 1 July 2016. This activity protects human health in recreational waters by monitoring the state of the City’s water environments and providing rapid reporting of the health status of primary contact recreation areas. It supports the maintenance of legislated environmental values in the City’s water environments through catchment and stormwater planning and implementation of appropriate environmental restoration actions. These activities are funded by way of a Community Service Obligation (CSO). At adoption of Council’s initial budget, the total value of this CSO was $4,143,655. The total value of the CSO including funding re-provided from 2015-16 was increased to $4,616,942 in the September budget review. As shown in Table 14 (below), operational business as usual activities for the Catchment Management Unit are ongoing, with expenditure for those activities for the year being 8.6% ($0.28 million) over budget. The main reason for exceeding budget was due to the ‘non capping’ of capital expenditure incurred in previous financial years that do not meet Accounting Standards asset recognition criteria, and therefore are to be expensed. Following adjusting for this expenditure, Catchment Management was in line with revised budget.

Table 14: Summary of Catchment Management Unit – Operational Expenses

Projects that were identified within the Capital Budget Centre for Catchment Management are detailed in Table 15 (below). The main focus of these projects is to mitigate water quality, environmental and ecological impacts on waterways throughout the City. The major project being undertaken is to provide foreshore stabilisation around the lake within Damian Leeding Memorial Park. This project will continue into the 2017-18 financial year and budget of $850,000 was re-provided at the March 2017 budget review for this purpose

Table 15: Summary of Catchment Management Unit – Capital Expenditure

Catchment Management Unit - Operational

2016-17Actuals

Revised Budget

$M $M $M %

CMU Operations 1.56 1.36 (0.20) (14.5%)

Catchment Activities 0.05 0.12 0.07 61.5%

Healthy Waterw ays Contribution 0.29 0.33 0.04 12.6%

WaterSafe Monitoring & Investigations 0.39 0.57 0.18 31.8%

Laboratory Testing Services 0.52 0.48 (0.04) (8.6%)

Non-Capped Capital 0.29 0.00 (0.29) 0.0%

Water Cycle Implementation 0.14 0.11 (0.04) (34.9%)

SLA for Corporate Services 0.26 0.26 0.00 0.0%

3.49 3.22 (0.28) (8.6%)

Variance

Catchment Management Unit - Capital

2016-17Actuals

Revised Budget

$M $M $M %

Lakes and Wetlands. 0.04 0.14 0.11 74.0%

Nerang River 0.01 0.05 0.04 72.7%

Channel Stability 0.24 0.16 (0.08) (50.3%)

Scientif ic Equipment 0.01 0.02 0.01 38.1%

Damian Leeding Foreshore Stabilisation 0.17 0.17 (0.00) (1.8%)

Total CMU - Capital 0.48 0.55 0.07 1.33

Variance

743rd Council Meeting 15 September 2017 23 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.11 Reserve Balances 5.11.1 Water and Sewerage Infrastructure Reserve Cash surpluses from operations are transferred to the Water and Sewerage Infrastructure Reserve. These cash reserves are set aside for future investment in water and sewerage infrastructure. A capital program totalling in excess of $1.5 billion is projected over the next ten years. With the movements processed as part of the 2016-17 year-end review, the reserve balance, as at 30 June 2017 will be $176.9 million. 5.11.2 Infrastructure Charges Reserve Infrastructure Charges may only be utilised to fund growth-related infrastructure assets. As noted previously in this report, receipts of Infrastructure Charges have significantly exceeded expectations over the past two years. As at 30 June 2017, the balance of funds held in the Water and Sewerage Infrastructure Charges Reserves is $154.7 million. Infrastructure Charges that cannot be utilised in the current year are retained within the City’s Infrastructure Charges Reserves to be utilised for funding of growth-related assets in future years. Based on current projections, infrastructure charges reserves are expected to be exhausted within the next ten years to assist with funding of growth-related projects scheduled over that timeframe. 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN Not Applicable. 7 COMMONWEALTH GAMES IMPACT Not Applicable. 8 FUNDING AND RESOURCING REQUIREMENTS Not Applicable. 9 RISK MANAGEMENT The following risk assessment applies to this report:

Risk Number Description

Risk No. CO000435 Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

743rd Council Meeting 15 September 2017 24 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 10 STATUTORY MATTERS Not Applicable. 11 COUNCIL POLICIES

Gold Coast Water Capital Structure and Community Returns Policy

Revenue Policy

Gold Coast City Council Budget Review Policy

Water and Sewage Leakage Relief Policy 12 DELEGATIONS Not Applicable. 13 COORDINATION AND CONSULTATION Name and/or Title of the Stakeholder Consulted

Directorate or Organisation

Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Marilyn Hildebrandt Executive Coordinator – Directorate Finances

Office of the CEO Yes

Chris Owen Manager Customer Engagement

GCWW Yes

14 STAKEHOLDER IMPACTS Not Applicable. 15 TIMING Not Applicable.

743rd Council Meeting 15 September 2017 25 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 16 CONCLUSION Gold Coast Water and Waste comprises of two commercial business units within the City of Gold Coast. Water and Sewerage Services operates in accordance with the requirements of the Local Government Act 2009 and the South East Queensland Water (Distribution and Retail Restructuring) Act 2009 and provide an appropriate return to the community on its investment in the business. As a monopoly service provider, Water and Sewerage Services operates within a regulatory framework that comprises an economic regulator and a number of technical regulators. For 2016-17, total returns to the community of $126.8 million were achieved. This result is 1.9% ($2.3 million) greater than March 2017 budget review projections. This increase in returns is primarily the result of a $2.1 million additional contribution towards whole of City projects. The final result of the year’s operations has provided returns to the community as set out in Table 16 (below):

Table 16: GCW Returns to Community – For the year ended 30 June 2017

17 RECOMMENDATION It is recommended that Council resolves as follows: 1 That Attachment 5 be deemed a confidential document in accordance with

sections 171 (3) and 200 (5) of the Local Government Act 2009 and that the document remain confidential unless Council decides otherwise by resolution.

2 That Council note the Water and Sewerage Services Financial Performance Report for the 2016-17 financial year.

Author: Authorised by: Karen O’Brien Paul Heaton Manager Business Performance Director Gold Coast Water 4 September 2017

TRACKS REF: 64075140

Community Returns2016-17Actuals

Revised Budget

2015-16 Actuals



Shareholder Interest 80.37 80.37 0.00 0.0% 80.37






SLA Costs 18.97 18.97 0.00 0.0% 19.27

Health Monitoring Costs 0.00 0.00 0.00 0.0% 0.11

Insurance Premiums 1.85 1.85 0.00 0.0% 2.42



Variance

743rd Council Meeting 15 September 2017 26 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) COMMITTEE RECOMMENDATION WW17.0913.003 moved Cr Tozer seconded Cr Boulton

1 That Attachment 5 be deemed a confidential document in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009 and that the document remain confidential unless Council decides otherwise by resolution.

2 That Council note the Water and Sewerage Services Financial Performance Report for the 2016-17 financial year.

CARRIED

743rd Council Meeting 15 September 2017 27 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2)

ATTACHMENT 3.1

Attachment 1: Detailed Income Statement - Accrual

Water and Sewerage Services Financial Management Statement

2016-17Actuals

Revised Budget

For the year ended 30 June 2017 $M $M $M %

Revenue

Service Charges 238.15 235.03 3.13 1.3%

Volumetric Charges 247.24 244.41 2.82 1.2%

Less: Concealed Leakage (2.35) (2.00) 0.35 (17.3%)

Interest on Outstanding Rates 1.51 1.75 (0.24) (13.5%)

Interest on Investments 7.63 7.63 0.00 0.0%

Fees and Charges 5.42 4.94 0.48 9.7%

Total Operating Revenue 497.60 491.75 5.85 1.2%

Operating Expenditure

FLOW-DEPENDANT EXPENDITURE

Bulk Water Purchases 171.35 165.84 (5.50) (3.3%)

Electricity 10.07 9.82 (0.25) (2.5%)

Biosolids Disposal 3.56 3.87 0.31 7.9%

Chemicals 3.25 3.16 (0.09) (2.8%)

Total Flow-Dependant Expenditure188.22 182.69 (5.53) (3.0%)

Operating Revenue net of Flow-Dependant Expenditure 309.38 309.06 (0.31) (0.1%)Gross Margin

CONTROLLABLE EXPENDITURE

Employee Expenses 46.40 47.54 1.14 2.4%

Services 20.99 20.35 (0.65) (3.2%)

Council Corporate SLAs 18.97 18.97 - 0.0%

Materials 6.05 6.36 0.30 4.8%

Council Fleet and Plant 4.49 4.24 (0.25) (5.8%)

Sew age Treatment Charge 3.32 3.35 0.03 0.9%

Insurance Premiums 1.85 1.85 (0.00) (0.0%)

Other Expenditure 2.06 1.50 (0.56) (37.7%)

Consultants 1.04 1.31 0.28 21.1%

Regulatory Expenses 0.04 0.09 0.06 59.5%

Total Controllable Expenditure105.21 105.55 0.35 0.3%

Total Operating Expenditure 293.43 288.24 (5.19) (1.8%)

Loss on Sale of Assets 4.98 5.00 0.02 0.5%

Net Profit before Capital Revenue 199.19 198.51 (0.68) (0.3%)

Capital Revenue

Developers Contributions 56.69 55.00 1.69 3.1%Contributions and Donations Received

0.47 0.29 0.18 63.8%Contributed Assets 56.69 40.00 16.69 41.7%Total Capital Revenue 113.85 95.29 18.56 19.5%

EBITDA 313.04 293.80 19.25 6.6%

Depreciation 93.31 92.00 1.31 1.4%

EBIT 219.73 201.80 17.93 8.9%

Interest Expense (QTC Loan) 3.07 3.07 (0.00) (0.0%)Interest Margin Expense 0.88 0.88 0.00 0.0%Shareholder Interest Expense 80.37 80.37 - 0.0%Income Tax Equivalents 42.07 41.68 0.40 1.0%NPAT 93.34 75.80 17.53 23.1%

Contribution - Whole of City projects 2.11 0.00 2.11 0.0%

Participation Return 0.00 0.00 - 0.0%

Retained earnings impact after participation return 91.23 75.80 15.43 20.3%

Variance


ATTACHMENT 3.2

Attachment 2: Detailed Income Statement - Cash

Water and Sewerage Services Financial Management Statement {Cash}

2016-17Actuals

Revised Budget


Operating Revenue

Service Charges 238.15 235.03 3.13 1.3%

Volumetric Charges 247.24 244.41 2.82 1.2%

Less: Concealed Leakage (2.35) (2.00) 0.35 (17.3%)

Interest on Outstanding Rates 1.51 1.75 (0.24) (13.5%)

Interest on Investments 7.63 7.63 0.00 0.0%

Other Operating Income 5.42 4.94 0.48 9.7%


Flow-Dependant Expenditure

Bulk Water Purchase 171.35 165.84 (5.50) (3.3%)

Bulk Water Purchases - billed (86%) 147.36 142.62 (4.73) (3.3%)

Bulk Water - unmetered (10.35%) 17.73 17.16 (0.57) (3.3%)

Bulk Water - metered, unbilled (3.65%) 6.25 6.05 (0.20) (3.3%)

Electricity 10.07 9.82 (0.25) (2.5%)

Biosolids Disposal 3.56 3.87 0.31 7.9%

Chemicals 3.25 3.16 (0.09) (2.8%)

Total Flow-Dependant Expenditure 188.22 182.69 (5.53) (3.0%)

Operating Revenue net of Flow-Dependant Expenditure 309.38 309.06 0.31 0.1%

Controllable Expenses

Employee Expenses 46.40 47.54 1.14 2.4%

Services 20.99 20.35 (0.65) (3.2%)

Council Corporate SLA 18.97 18.97 0.00 0.0%

Materials 6.05 6.36 0.30 4.8%

Council Fleet & Plant 4.49 4.24 (0.25) (5.8%)

Sew age Treatment Charge 3.32 3.35 0.03 0.9%

Insurance Premiums 1.85 1.85 (0.00) (0.0%)

Other Expenditure 1.33 1.50 0.17 11.2%

Consultants 1.04 1.31 0.28 21.1%

Regulatory Expenses 0.04 0.09 0.06 59.5%

Total Controllable Expenses 104.47 105.55 1.08 1.0%Total Operating Expenses 292.70 288.24 (4.45) (1.5%)

Loss on Sale of Assets 0.00 0.00 - 0.0%

Net Profit before Capital Revenue 204.90 203.51 1.39 0.7%

Capital Revenue

Developer Contributions Funding 56.69 55.00 1.69 3.1%

Contribution / Donations Received (Capital) 0.47 0.29 0.18 63.8%

Reserve Funding 6.23 6.23 - 0.0%

Total Capital Revenue 63.39 61.51 1.87 3.0%

Depreciation / Amortisation 0.00 0.00 - 0.0%

EBIT 268.29 265.02 (3.27) (1.2%)Interest Expense (QTC loan) 3.07 3.07 (0.00) (0.0%)

Interest Margin Expense 0.88 0.88 (0.00) (0.0%)

Shareholder Interest Expense 80.37 80.37 (0.00) (0.0%)

Income Tax Equivalents 42.07 41.68 (0.40) (1.0%)

NPAT 141.90 139.03 2.87 2.1%

Contribution - Whole of City projects 2.11 0.00 (2.11) 0.0%

Participation Return 0.00 0.00 - 0.0%

Less Developer Conts Revenue 56.69 55.00 (1.69) (3.1%)

Plus Developers Conts Funding (14.67) (16.07) (1.40) 8.7%

Debt Redemption 4.13 4.13 0.00 0.0%

Capital Expenditure 66.07 72.15 6.08 8.4%

Transfer to Reserves 27.57 23.81 3.76 15.8%

Variance


ATTACHMENT 3.3

Attachment 3: Status Update – Major Capital Projects Merrimac West Wastewater Augmentation Stage 2 Project scope and budget By adopting a traditional approach of upgrading assets on a “just in time” basis, this project aims to upgrade the sewerage collection network in the Merrimac West catchment to cater for both growth and replacement of ageing infrastructure. The detailed scoping study completed by consultants included catchment master planning and concept designs for the required infrastructure upgrades with a forecast project value of $34.8 million over four years (finishing in 2016-17). Due to contract prices being lower than estimates, the forecast project value has reduced to $24.2 million. Initial budget approved for the 2016-17 financial year was $13.9 million. Budget reductions totalling $2.3 million for the 2016-17 financial year were approved resulting from more than anticipated works being completed in 2015-16 which reduced the program of works for 2016-17. Final commissioning checks will be completed by the end of July 2017.

September Budget Review $2.4 million decrease

December Budget Review No change

March Budget Review $0.10 million increase Achievements for 2016-17 All pump station works completed and commissioned:

- Upgrade of existing SPS W35

- Construction of new SPS W58

- Upgrade of existing SPS W13

All pipeline construction works completed and commissioned:

- Construction of 1.1km of sewer rising main at SPS W13

- Construction of 4.8km of sewer rising main at SPS W35

- Construction of 1.8km of sewer gravity main and 1.7km sewer rising main at SPS W58

Decommissioning of redundant SPS W11, mains and structures across the entire sub-catchment completed.

Decommissioning of redundant mains at SPS W13 completed.

Major issues

Issues associated with overseas supply of ductile iron pipes delayed the commissioning of the upgraded network by 10 weeks. As the project was progressing well ahead of schedule, this delay only slightly impacted the completion date of 30 June 2017. Completion is expected by the end of July 2017.


Financial Performance:

Commonwealth Games Western Force Main Duplication to Coombabah Sewage Treatment Plant Project scope and budget This project involves upgrade of the last section of the Western Force Main from sewerage pumping station D57 to Coombabah Sewage Treatment Plant and is designed to cater for projected growth within the Coombabah sewerage catchment. The detailed design work was completed in 2014-15 however ongoing issues with environmental studies and approvals delayed the overall project schedule. The construction contract was awarded in April 2016 with construction anticipated to reach completion in early 2017. Initial budget approval for 2016-17 was $7.52 million. Budget reductions totalling $1.11 million for the 2016-17 financial year were approved resulting from lower than expected tender prices. The project is now expected to carry over into the first quarter of 2017-18, with connection scheduled for late September 2017.

September Budget Review $1.98 million decrease December Budget Review No change March Budget Review $0.87 million increase

Achievements for 2016-17 Majority of pipeline works completed, with final connection expected by the end of

September 2017.

Major issues The construction site is very sensitive to wet weather, resulting in flooding which has

caused substantial delays to the work schedule. Tree logs were discovered along the trench alignment during excavation works, resulting

in delays and contract variations. Heavily contaminated acid sulphate soil was discovered in the excavation which

presented a significant potential environmental hazard and required extensive management activities to be implemented.

Forecast ($) 11,600,000 Budget ($) 24,200,852

Expenditure ($) 11,578,355 ITD Expenditure ($) 24,179,207

Variance ($) 21,645 Remaining ($) 21,645

Variance (%) 0% Remaining (%) 0%

Whole ProjectYear to Date


Financial Performance

Sewerage Pumping Station Emergency Storage Augmentations Project scope and budget The Sewerage Pumping Station (SPS) Emergency Storage Augmentation project entails the detailed design and construction to upgrade 22 SPSs in the Stapylton, Helensvale, Pimpama, Coombabah and Merrimac East catchments and the Carrara Sports Precinct. These works are required to mitigate deficiencies of emergency storage to deal with emergent situations such as power and pump failure and to provide adequate storage capacities to cater for projected growth over the next 50 years. The initial budget for 2016-17 was $4.36 million. Budget reductions totalling $2.49 million for the 2016-17 financial year were approved resulting from lower than expected tender prices and deferral of works into 2017-18. The project is now scheduled for completion in February 2018.

September Budget Review $0.86 million decrease


March Budget Review $1.63 million decrease Achievements for 2016-17 Award of construction contract in December 2016.

Completion of works at SPS A45 in April 2017.

Completion of works at SPS W52 in June 2017. Major issues Delays experienced at various sites due to:

o Site flooding following the wet weather events experienced in 2016-17.

o Relocation of sewer rising main at SPS C4.

o Late delivery of materials to site for SPS A4.

o Gas pipe relocation at SPS DA01.

o Adjustment of storage position to avoid a sewer house connection at SPS B37.

Forecast ($) 6,420,000 Budget ($) 7,065,409




Year to Date Whole Project

743rd Council Meeting 15 September 2017 32 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) Financial Performance

Long Term Recycled Water Release – Stage 1

Project scope and budget Gold Coast Water’s existing excess recycled water release system at the Seaway is nearing capacity. The aim of this project is to plan and deliver a long term recycled water release solution. This is the largest project within Gold Coast Water. A Long Term Recycled Water Release Staging Plan was adopted by Council in July 2015 which is based on options to stage construction and minimise capital expenditure in the immediate future by optimising existing infrastructure and deferring implementation of the ultimate recycled water release solution. Initial budget approval for 2016-17 was $4.0 million. A budget decrease of $1.5 million was actioned at the March 2017 budget review due to the postponement of marine works until after the Commonwealth Games.

September Budget Review No change


March Budget Review $1.5m decrease Achievements for 2016-17

Stage 1 works are progressing and included:

Construction approvals received from regulatory authorities:

o Department of Environment and Heritage Protection for dredging

o Department of Agriculture and Fisheries for seagrass removal

o CoGC for tidal works

o GoldlinQ for works beneath the light rail bridge

Engaged consultant BMT WBM to assist with ongoing environmental support during the construction period.

Marine Parks Permit received for pipe laying in Moreton Bay Marine Park.

Final geotechnical report received.

SMEC engaged as Principal’s Engineer.

Design and Construct contract Expression of Interest developed and advertised. A short list of three proponents was selected and detailed tenders received. An Early Works Agreement (EWA) was reached with a preferred tenderer in advance of the full contract award. The EWA tenderer has pursued a methodology for dredging in the Broadwater and undertaken hydraulic design modelling to verify pipe and pump sizing.

Forecast ($) 1,875,000 Budget ($) 5,409,046


Variance ($) 502,775 Remaining ($) 3,675,775




Involvement in stakeholder meetings regarding Oceanside Cruise Ship Terminal impacts and synergies.

Received hydrodynamic modelling reports for baseline water quality monitoring activities and outlining the impact of future stages.

Major issues The revised delivery programme will reduce project risks associated with a compressed construction schedule for the marine works before the Commonwealth Games blackout period, with only a minor delay to the overall project timing. Financial Performance

Coombabah Sewage Treatment Plant Screening Grit Removal Upgrade 2014-16 Project scope and budget This project replaces and upgrades the existing grit and screening conveyor system incorporating enclosed automatic bins and grit classifiers in the Preliminary Treatment Facility building at the Coombabah Sewage Treatment Plant and addresses regulatory, safety and asset renewal requirements. Construction commenced in August 2016 and was scheduled for completion in 2016-17. Initial budget for 2016-17 was $3.15 million. Budget increases totalling $0.28 million were approved throughout the year.

September Budget Review $0.20 million increase


March Budget Review $0.08 million increase Achievements for 2016-17 Construction contract awarded in August 2016.

Construction works substantially completed with commissioning scheduled for September 2017.

Forecast ($) 2,500,000 Budget ($) 74,000,000





743rd Council Meeting 15 September 2017 34 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) Major issues Delays relating to the design, manufacture and delivery of the switchboard have affected the project schedule, deferring final completion of the project to 2017-18. Financial Performance

Refurbishment of Process Tanks at Elanora and Coombabah Sewage Treatment Plants Project scope and budget This project involves the refurbishment of six process tanks and three pumping facilities at Elanora and Coombabah Sewage Treatment Plants (STP) including process tank structures and mechanical and electrical components. The assets will be replaced or renewed to “as new” condition in order to comply with operational safety standards and Department of Environment and Heritage Protection (DEHP) licence requirements. This is a three year program totalling $7.4 million. The construction contract was awarded to Aquatec Maxcon Pty Ltd on 30 June 2015. The need to ensure the treatment plants continue to operate effectively throughout construction adds significant complexity to this project. Initial budget for 2016-17 was $2.9 million. A budget increase of $0.55 million at the March budget review due to the inclusion of additional scope resulted in a revised budget of $3.45 million. Completion of works is scheduled for the 2017-18 financial year.

September Budget Review No change


March Budget Review $0.55 million increase Achievements for 2016-17 The following facilities have been fully refurbished, recommissioned and are back in service: Coombabah STP Bioreactors E and F.

Coombabah STP Clarifiers F1 and F2.

Elanora STP Secondary Clarifiers A, B and F.

Elanora STP RAS2 pump station and scum pump station.

Forecast ($) 3,425,000 Budget ($) 3,673,342





743rd Council Meeting 15 September 2017 35 Gold Coast Water And Waste Committee Meeting 13 September 2017 Adopted Report ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) Major issues No major issues to report. Financial Performance

Forecast ($) 3,450,000 Budget ($) 7,354,175


Variance ($) (93,705) Remaining ($) 6,295

Variance (%) (3%) Remaining (%) 0%



Attachment 3.4

Attachment 4: Concealed Leakage Remission by Suburb 2016-17

Water Sewer TotalSOUTHPORT 87,107 99,381 186,488 8%

MERMAID WATERS 103,963 - 103,963 4%

ROBINA 72,206 28,542 100,749 4%

PALM BEACH 84,847 15,547 100,393 4%

BUNDALL 54,717 39,556 94,273 4%

SURFERS PARADISE 86,410 7,676 94,086 4%

ASHMORE 64,726 22,931 87,657 4%

BURLEIGH HEADS 42,805 42,876 85,680 4%

MIAMI 59,427 25,623 85,050 4%

NERANG 74,695 552 75,247 3%

HELENSVALE 54,144 12,887 67,031 3%

MERMAID BEACH 34,488 30,016 64,504 3%

BURLEIGH WATERS 61,036 494 61,530 3%

YATALA 14,350 43,464 57,814 2%

ELANORA 57,456 347 57,803 2%

COOMBABAH 44,970 12,300 57,270 2%

MAIN BEACH 37,030 16,180 53,211 2%

PARADISE POINT 49,219 2,106 51,325 2%

HOPE ISLAND 11,645 35,137 46,782 2%

VARSITY LAKES 36,490 9,950 46,440 2%

REMAINDER 669,407 100,199 769,606 33%TOTAL REMISSIONS PAID 1,801,137 545,765 2,346,901 100%

% of Total

TOTAL REMISSIONSSuburb

743rd Council Meeting 15 September 2017 37

Gold Coast Water And Waste Committee Meeting 13 September 2017 CONFIDENTIAL Adopted Report

UNAUTHORISED RELEASE OF CONFIDENTIAL REPORTS OR INFORMATION may be an offence under the Local Government Act 2009 and other legislation and could result in disqualification from office and a penalty of up to 100 units. CONFIDENTIAL

ITEM 3 (Continued) WATER AND SEWERAGE SERVICES PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2)

PAGES 37-39 ARE CONFIDENTIAL


ITEM 4 GOLD COAST WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) Attachment 1: Income Statement Attachment 2: Detailed Income Statement - Cash Attachment 3: Status Update – Major Investments 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT The purpose of this report is to provide the Gold Coast Water and Waste Committee with the results of Waste Services financial performance for the 2016-17 financial year. Within the report, the “revised budget” refers to the March 2017 Budget Review. 4 PREVIOUS RESOLUTIONS 2016-17 Budget Adoption: The City’s 2016-17 Budget was adopted by Council at the Budget Meeting held on 24 June 2016. Resolution Number: G16.0624.002 July Budget Review: Resolution Number: B16.0912.003 in part

6 It is proposed that the uncommitted surplus of $20,405,184 be allocated as follows:

d. $500,000 – transfer to GCWM reserve for landfill rehabilitation September Budget Review:

Resolution Number: B16.1024.003

1. That Council approve the net decrease of $1.5 million to be transferred from the Waste Management Reserve.

2. That Council note budget variations per Attachments 2 and 3 are included in the September 2016 Budget Review.

CARRIED UNANIMOUSLY December Budget Review: COMMITTEE RECOMMENDATION B17.0130.003 moved Cr Crichlow seconded Cr Boulton 1. That Council approve the net increase of $4.2 million to be transferred to the Waste

Management Reserve. 2. That Council note budget variations per Attachments 2 and 3 are included in the

December 2016 Budget Review.

CARRIED


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) March 2017 Budget Review: COMMITTEE RECOMMENDATION B17.0502.002 moved Cr Owen-Jones seconded Cr Gates 1 That Council approve the net increase of $0.9 million to be transferred to the Waste

Management Reserve.

2 That Council note budget variations per Attachments 2 and 3 are included in the March 2017 Budget Review.

3 That Council note the removal of $5.8 million funding for potential works required at the closed Suntown Landfill, on the basis that, should works be required, funding will be made available from the Waste Management Reserve.

CARRIED UNANIMOUSLY 5 DISCUSSION The Gold Coast Water and Waste (GCWW) Directorate is responsible for two of the City’s commercial business units as defined in the Local Government Regulation 2012, Gold Coast Water (GCW) and Gold Coast Waste Management (GCWM). GCWM is responsible for solid waste collection and disposal services across the City. Gold Coast Water and Waste (GCWW) was formed on 1 July 2017, combining Gold Coast Water, Gold Coast Waste Management and Catchment Management. Management’s focus for the first 12 months has been on:

reviewing waste management strategic planning and update to reflect long term vision for the City

full review and alignment of financial structures, including systems and processes aligning management systems and governance processes organisational restructures to combine ‘like’ functions

This report outlines the performance for GCWM and for the purposes of this this report, is known as Waste Services.


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.2 Waste Services High Level Financial Summary Table 1 below provides a summary of Waste Services financial outcomes for 2016-17:

Table 1: Waste Services – Summary Financial Management Statement

Net Profit is 9.1% ($2.8 million) higher than revised projections, with Earnings before Interest and Taxation (EBIT) 13.1% ($2.9 million) higher than revised projections. Income Tax Equivalents paid to the City was $0.8 million higher than projections in line with better than projected operating results. 5.12 Distribution of Earnings Earnings before Interest and Taxation (EBIT) for the period ended 30 June 2017, on a cash basis, is $35.0 million (operating revenue of $103.6 million less operating expenditure of $68.6 million). This result exceeds the target set at the March 2017 Budget Review by 11.9% ($3.7 million) and is 8.6% ($2.8 million) higher than the 2015-16 result. The table below sets out the distribution of these earnings. The final position results in Total Transfers to Reserves of $4.0 million. These funds are being accumulated for future years’ capital and landfill remediation requirements.

Table 2: Waste Services – Distribution of Earnings

Summary Financial Management Statement

Actual Revised Budget

2015-16 Actuals


Operating Revenue 103.57 100.19 3.38 3.4% 97.73

Operating Expenses 69.43 68.89 (0.53) (0.8%) 65.48

Operating Result 34.14 31.30 2.84 9.1% 32.25

Loss on Sale of Assets 0.00 0.00 0.00 0.0% 1.34

Net Profit 34.14 31.30 2.84 9.1% 30.91

Capital Revenue 0.00 0.00 0.00 0.0% 0.00

Depreciation / Amortisation 8.83 8.91 0.08 0.9% 7.91

Earnings Before Interest and Taxation 25.31 22.39 2.92 13.1% 23.00

Interest Expense (QTC loan) 4.59 4.59 0.00 0.0% 4.91

Interest Margin Expense 0.21 0.21 (0.00) (0.0%) 0.22

Income Tax Equivalents 7.45 6.67 (0.78) (11.8%) 7.02

Net Profit After Taxation 13.06 10.93 2.14 19.6% 10.85



Retained Earnings 5.37 3.23 2.14 66.1% 4.84

Variance

Distribution of EarningsActual Revised

Budget2015-16 Actuals


Interest Expense (External) 4.59 4.59 0.00 0.0% 4.91

Principal Repayment (External) 8.69 8.69 0.00 0.0% 8.76

Loan Funding 0.00 0.00 0.00 0.0% (6.27)

Debt Service Movement 13.27 13.27 0.00 0.0% 7.40



Tax Equivalents (30% taxable earnings) 7.45 6.67 (0.78) (11.8%) 7.02



Interest Expense Margin 0.21 0.21 (0.00) (0.0%) 0.22

Payment to Council(Excluding SLA, Fleet & Plant and Land Tax)

15.35 14.57 (0.78) (5.4%) 13.26

Procurement Savings (operational costs only) 0.34 0.28 (0.05) (19.0%) 0.00Retained Earnings for future Capital Works Investment

3.67 0.08 (3.59) (4688.9%) 3.98

Total Transfers to Reserve 4.00 0.36 (3.65) (1016.5%) 3.98

Total Distribution 35.01 31.30 (3.71) (11.9%) 32.23

Variance


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.13 Returns to Community Waste Services operates as a commercial business unit and provides an appropriate return to the community, based on the City’s investment in the business. Returns paid to the City for 2016-17 exceeded the target set at the March 2017 Budget Review by $1.0 million as outlined in the table below:

Table 3: Waste Services – Returns to Community

The increase in returns is due to the higher than projected operating profit. 5.14 Operating Revenue

Table 4: Waste Services Operating Revenue

The overall operating revenue result for 2016-17 was positive variance against the revised budget of $3.4 million (3.4%) comprising of an additional:

$1.4 million in rating revenue due to higher than forecast growth in services

$1.2 million in refuse tipping fees due to higher than forecast waste disposed at landfills

$0.4 million in internal tipping charges due to higher levels of construction activity occurring across the City

Community ReturnsActual Revised









SLA Costs 2.53 2.53 (0.00) (0.0%) 2.45



Variance

Waste Services Operating Revenue


2015-16 Actuals


Waste Utility Rate Revenue 78.04 76.60 1.44 1.9% 73.73Refuse Tipping Fees 8.68 7.46 1.23 16.5% 8.93Recycling Revenue 1.05 1.01 0.04 4.4% 0.00Fees and Charges 1.69 1.52 0.16 10.7% 0.85Internal Tipping Charges 9.50 9.07 0.43 4.8% 10.45Community Service Obligations 3.01 2.90 0.11 3.7% 3.18Interest on Outstanding Rates 0.19 0.14 0.05 37.9% 0.22Interest on Investments 0.52 0.52 (0.00) (0.0%) 0.00Grants & Subsidies Revenue 0.03 0.10 (0.07) (68.9%) 0.03Contributions & Donations Revenue 0.86 0.84 0.02 2.1% 0.35Other Operating Income 0.00 0.04 (0.04) (94.1%) 0.01

Total Operating Revenue 103.57 100.19 3.38 3.4% 97.73

Variance


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) Table 5 shows the total number of bins in service as at 30 June 2017 and the growth this financial year.

Table 5 - Waste Collection Services

5.15 Operating Expenses Table 6 below shows operating expenditure was below revised budget by $0.5 million (0.8%).

Table 6: Waste Services Operating Expenses

The main movements in expenditure are due to

Other Expenditure The variance of $0.7 million within Other Expenditure relates to prior year costs for landfill capping and remediation that were expensed during 2016-17. As part of the review of Waste Services financial structure, it was confirmed that costs associated with the capping and remediation of landfills, both during and post utilisation as an active landfill site, do not meet the asset recognition criteria set out in the Australian Accounting Standards.

5.15.1 Consultants

The variance of $0.2 million within Consultants relates to the delays experienced with completion of the Waste and Recycling Centre Review. Some works associated with this review have been deferred for delivery during 2017-18.

Waste collection binsBins in

service as at 30 June2017

Bins in service as at

30 June16

Bin increase\

(decrease) %

General waste (weekly)

Domestic w heelie bins 186,206 181,956 4,250 2.3%

Commercial w heelie bins 7,003 6,937 66 1.0%

Bulk bins (dommestic and commercial) 2,860 2,783 77 2.8%

Total weekly general waste services 196,069 191,676 4,393 2.3%

Recyclable waste (weekly)

Commercial w heelie bins 349 329 20 6.1%

Bulk bins (dommestic and commercial) 1,475 1,367 108 7.9%

Total weekly recyclable waste services 1,824 1,696 128 7.5%

Recyclable waste (fortnightly)

Domestic w heelie bins 177,869 173,436 4,433 2.6%

Commercial w heelie bins 2,401 2,320 81 3.5%

Total forntightly recyclable waste services 180,270 175,756 4,514 2.6%

Other (fortnightly)

Green w aste 23,533 19,655 3,878 19.7%

Total forntightly other services 23,533 19,655 3,878 19.7%

Waste Services Operating ExpensesActual Revised



Employee Expenses 9.45 9.13 (0.32) (3.5%) 8.46Materials & Services 18.77 19.58 0.81 4.1% 20.36Council Corporate SLA 2.53 2.53 0.00 0.0% 2.45Waste Collection Payments 26.79 26.71 (0.07) (0.3%) 25.25Council Fleet & Plant 8.75 8.32 (0.43) (5.2%) 7.76Other Expenditure 2.09 1.38 (0.71) (51.5%) 1.20Consultants 0.88 1.09 0.20 18.8% 0.00Electricity 0.17 0.16 (0.01) (9.5%) 0.00

Total Operating Expenses 69.43 68.89 0.53 0.8% 83.30

Variance


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2)

5.16 Non-Cash Expenses Depreciation Expense for the year totalled $8.8 million which was within 1% of the projected $8.9 million. 5.17 Capital Program

5.7.1 Capital Expenditure The initial 2016-17 Waste Services capital program consisted of 25 projects totalling $18.4 million. This was reduced to $3.1 million throughout various budget reviews during the year, resulting in 14 projects.

2016-17 actuals include an amount of $0.08 million which was non capitalised

Table 7: Capital Expenditure

The final capital expenditure for 2016-17 was $2.5 million which represents a variance of 19.6% against the revised budget of $3.1 million.

5.7.2 Capital Program Achievements Six capital works projects were completed in the 2016-17 financial year. Significant projects completed are listed in the table below.

Table 8: Significant Capital Projects Completed

Product

2016-17 Actuals Revised Budget Variance Variance

($M) ($M) ($M) %

Landfills 1.69 2.02 0.33 16.3%

Waste and Recycling Centres 0.79 1.07 0.28 25.8%

Total Capital 2.49 3.10 0.61 19.6%

PROGRAM

Gold Coast Waste Services Capital Expenditureas at 30 June 2017

Full Year

Project2016-17

ExpenditureTotal Project Expenditure

Reedy Creek Landfill (Cell 2) 555,178 7,443,487

Stapylton Landfill Line (Cell 6) 404,133 3,088,607

Transfer Station Plant and Equip 393,895 393,895

Refuse Disposal Minor Civil Works 2016-17 262,494 262,494

Purchase of New RORO Bins 223,170 223,170

Total 1,838,869 11,411,652


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 5.18 Other Financial Activities

5.8.1 Procurement Savings

Total procurement savings identified by the Chief Procurement Office for the financial year are highlighted in the table below.

Table 9: Procurement Savings

Identified procurement savings are retained within the business unit and recognised through the transfer to the Waste Management Reserve, as highlighted in Table 2: Waste – Distribution of Earnings.

5.8.2 Community Service Obligations In accordance with Sections 23 and 24 of the Local Government Regulation 2012:

…The cost of carrying out community service obligations, less any revenue received from performing the obligations, must be treated as revenue for the significant business activity. {Section 23} (and) …A community service obligation is an obligation the local government imposes on a business entity to do something that is not in the commercial interests of the business entity to do. Example of a community service obligation – giving a price concession to a particular group of customers, including pensioners, seniors and students {Section 24}

Table 10 (below) provides a summary of Community Service Obligations (CSO) provided to Waste Services for the 2016-17 year.

Table 10 – Community Service Obligations

Procurement Savings ($'m)

July Aug Sept Oct Nov Dec Jan Feb Mar Apr May Jun Total

Operational 0.03 0.02 0.01 0.01 0.01 0.01 0.01 0.17 0.01 0.01 0.02 0.02 0.34 Recoverable - - - - - - - - - - - - - Capital 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.01

0.03 0.02 0.01 0.01 0.01 0.02 0.01 0.17 0.01 0.01 0.02 0.02 0.35

Community Service Obligation

2016-17 Actual

Revised Budget

Variance2015-16 Actual

$ Million $ Million $ Million % $ Million

Refuse Charge Donations 0.52 0.53 (0.01) (2.3%) 0.51

Free Tipping Donations 0.38 0.46 (0.08) (17.4%) 0.38

Kerbside Collection 1.18 1.10 0.08 7.7% 2.21

Disaster Management 0.05 - 0.05 -

Stradbroke Island Waste Disposal

0.45 0.38 0.07 18.6% 0.45

Clean-Up Australia Day 0.02 0.02 (0.00) (19.8%) 0.01

Carcass Collection 0.06 0.06 0.00 3.4% 0.05

Street and Park Bin Services 0.34 0.34 (0.00) (1.4%) 0.33

3.01$ 2.90$ 0.11$ (11.2%) 3.94$


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) At Initial Budget, the total CSO revenue allocation was $3.01 million. This was decreased to $2.90 million with the transfer of responsibility for public place recycling collection services to City Infrastructure at the March 2017 budget review. As shown in Table 10, actual expenditure related to CSO provided in 2016-17 exceeded the budget by $0.11 million. The main drivers for this increase were higher than projected costs for Kerbside Collection program, combined with free tipping provided for clean-up activities following the severe weather event in March 2017. Kerbside Collection costs were higher than projected as a result of higher volumes of waste being collected. This resulted in increased disposal costs. The total CSO costs of $3.01 million were reimbursed by the City, as shown in the Waste Services Financial Management Statement (Attachment 1). 5.19 Waste Management Reserve Cash surpluses from waste management operations are transferred to the Waste Management Reserve. These cash reserves are being accumulated to provide for:

(1) Future funding requirements for the replacement, renewal and expansion of assets required to deliver waste management services; and

(2) Landfill remediation and post-closure environmental monitoring requirements – considerable post closure and remediation costs will be incurred on landfill sites once they are exhausted.

With the movements processed as part of the 2016-17 year-end review, the reserve balance, as at 30 June 2017 will be $23.2 million. 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN Not Applicable. 7 COMMONWEALTH GAMES IMPACT Not Applicable. 8 FUNDING AND RESOURCING REQUIREMENTS Not Applicable. 9 RISK MANAGEMENT The following risk assessment applies to this report:

Risk Number Description

Risk No. CO000435 Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 10 STATUTORY MATTERS Not Applicable. 11 COUNCIL POLICIES

Revenue Policy

Gold Coast City Council Budget Review Policy 12 DELEGATIONS Not Applicable. 13 COORDINATION AND CONSULTATION Name and/or Title of the Stakeholder Consulted

Directorate or Organisation

Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Marilyn Hildebrandt Executive Coordinator – Directorate Finances

Office of the COO Yes

Peter Morichovitis – Chief Procurement Officer

Organisational Services Yes

14 STAKEHOLDER IMPACTS Not Applicable. 15 TIMING Not Applicable.


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) 16 CONCLUSION As a commercial business unit within the City of Gold Coast, Waste Services operates in accordance with the requirements of the Local Government Act 2009 and is required to provide an appropriate return to the community on its investment in the business. For the 2016-17 financial year, total returns to the community of $16.54 million have been achieved. This result is 3.7% ($0.59m) greater than March 2017 budget review projections and $2.09 million (14.5%) higher than last financial year. The final result of the year’s operations has provided returns to the community as set out in the table below, with Income Tax Equivalents paid to the City being $0.78 million higher than anticipated, in line with the better than projected operating profit.

Table 12: Waste Services Community Returns

17 RECOMMENDATION It is recommended that Council resolves as follows: 1 That Council note the Waste Services Financial Performance Report for the

2016-17 financial year.

Author: Authorised by:Karen O’Brien Paul Heaton Manager Business Performance Director Gold Coast Water 4 September 2016

TRACKS REF: 64076386

Community ReturnsActual Revised









SLA Costs 2.53 2.53 (0.00) (0.0%) 2.45



Variance


ITEM 4 (Continued) WASTE SERVICES FINANCIAL PERFORMANCE AS AT 30 JUNE 2017 FN334/252/17(P2) COMMITTEE RECOMMENDATION WW17.0913.004 moved Cr Tozer seconded Cr Boulton

That Council note the Waste Services Financial Performance Report for the 2016-17 financial year.

CARRIED



Attachment 4.1

Attachment 1: Detailed Income Statement - Accrual

Waste Services Financial Management Statement



Revenue

Waste Utility Rate Revenue 78.04 76.60 1.44 1.9%

Refuse Tipping Fees 8.68 7.46 1.23 16.5%

Recycling Revenue 1.05 1.01 0.04 4.4%

Fees and Charges 1.69 1.52 0.16 10.7%

Internal Tipping Charges 9.50 9.07 0.43 4.8%

Community Service Obligations 3.01 2.90 0.11 3.7%

Interest on Outstanding Rates 0.19 0.14 0.05 37.9%

Interest on Investments 0.52 0.52 (0.00) (0.0%)

Grants & Subsidies Revenue 0.03 0.10 (0.07) (68.9%)

Contributions & Donations Revenue 0.86 0.84 0.02 2.1%

Other Operating Income 0.00 0.04 (0.04) (94.1%)


Operating Expenses

Employee Expenses 9.45 9.13 (0.32) (3.5%)

Materials & Services 18.77 19.58 0.81 4.1%


Waste Collection Payments 26.79 26.71 (0.07) (0.3%)


Other Expenditure 2.09 1.38 (0.71) (51.5%)

Consultants 0.88 1.09 0.20 18.8%

Electricity 0.17 0.16 (0.01) (9.5%)

Total Operating Expenses 69.43 68.89 (0.53) (0.8%)

Total Operating Profit 34.14 31.30 2.84 9.1%

Loss on Sale of Assets 0.00 0.00 - 0.0%

EBITDA 34.14 31.30 2.84 9.1%

Depreciation 8.83 8.91 0.08 0.9%

EBIT 25.31 22.39 2.92 13.1%

Interest Expense (QTC Loan) 4.59 4.59 0.00 0.0%



NPAT 13.06 10.93 2.14 19.6%

Dividend 7.69 7.69 - 0.0%

Retained Earnings 5.37 3.23 2.14 66.1%

Variance



Attachment 4.2

Attachment 2: Detailed Income Statement - Cash

Waste Services Financial Management Statement {Cash}



Operating Revenue

Waste Utility Rate Revenue 78.04 76.60 1.44 1.9%

Refuse Tipping Fees 8.68 7.46 1.23 16.5%

Recycling Revenue 1.05 1.01 0.04 4.4%

Fees & Charges 1.69 1.52 0.16 10.7%

Internal Tipping Charges 9.50 9.07 0.43 4.8%

Community Service Obligations 3.01 2.90 0.11 3.7%

Interest on Outstanding Rates 0.19 0.14 0.05 37.9%

Interest on Investments 0.52 0.52 (0.00) (0.0%)

Grants & Subsidies Revenue 0.03 0.10 (0.07) (68.9%)

Contributions & Donations Revenue 0.86 0.84 0.02 2.1%Other Operating Income 0.00 0.04 (0.04) (94.1%)


Operating Expenses

Employee Expenses 9.45 9.13 (0.32) (3.5%)

Materials & Services 18.77 19.58 0.81 4.1%


Waste Collection Payments 26.79 26.71 (0.07) (0.3%)


Other Expenditure 1.22 1.38 0.16 11.5%

Consultants 0.88 1.09 0.20 18.8%

Electricity 0.17 0.16 (0.01) (9.5%)

Total Operating Expenses 68.56 68.89 0.34 0.5%

Total Operating Profit 35.01 31.30 3.71 11.9%

Gain/Loss on Sale of Assets 0.00 0.00 - 0.0%

Depreciation / Amortisation 0.00 0.00 (0.00) 0.0%

EBIT 35.01 31.30 3.71 11.9%

Interest Expense (QTC loan) 4.59 4.59 0.00 0.0%



NPAT 22.76 19.83 2.93 14.8%

Dividend 7.69 7.69 - 0.0%

Debt Redemption 8.69 8.69 0.00 0.0%

Capital Expenditure 2.38 3.10 0.72 23.1%

Transfer from Capital Reserve (1.22) (1.22) - 0.0%

CWG Reserve Funding (0.58) (0.08) 0.50 (664.4%)

Transfer to Reserves Landfill Remediation 4.30 4.30 - 0.0%

Prior year Surplus adjustments (2.25) (2.25) - 0.0%

Transfer to Reserves 3.75 (0.40) 4.15 1,038.7%

Variance



Attachment 4.3

Attachment 3: Status Update – Major Investments Capping and Remediation works at Landfills Project scope and budget The City is responsible for utilising, managing and monitoring a total of seven landfill sites with two active sites at Stapylton and Reedy Creek. In relation to landfill operations, the City: segregates its landfill sites into engineered cells ensures additional cells are created ready for use once the existing operational cell is

filled to capacity progressively caps and remediates filled cells to meet both regulatory environmental

conditions and reduce water infiltration and leachate generation. Initial budget approval for the 2016-17 financial year was $2.13 million. Budget reductions totalling $1.55 million were approved resulting primarily from the deferral of works at Tugun to 2017-18.

September Budget Review $0.93m increase December Budget Review $0.59 decrease March Budget Review $1.89m decrease

Achievements for 2016-17 Stapylton Landfill: Delays were experienced following the severe wet weather even in

March. Clay capping works have deferred to 2017-18.

Reedy Creek Landfill: Minimal works that were required on this site for this financial year were completed.

Tugun Landfill: Project deferred until 2017-18 pending negotiated assessment of the

best ultimate use of the site. Major issues

Severe weather event in March created delays with program of works for the Stapylton

Landfill.

Financial Performance:

Forecast ($) 580,280 Budget ($) 580,280

Expenditure ($) 537,928 ITD Expenditure ($) 537,928


Variance (%) 7.3% Remaining (%) 7.3%

2016-17 Budget Whole Project



Attachment 4.3 Resource Recovery (Waste Reduction Program)

Project scope and budget City of Gold Coast supports a waste management system that operates on the principles of waste hierarchy. Recycling and recovery are two of the easiest alternatives to landfill disposal and they represent the majority of actions in the City’s Solid Waste Strategy 2024. This includes recycling of clean, separated, high-value materials (such as metals, plastics and concrete), recovering nutrients from organic wastes (to create composts and fertilisers) and potential energy production from waste materials. The aim of this program is to promote reuse and recycling of these products thereby reducing waste to landfill. The major waste streams targeted in this program are concrete and greenwaste however other construction and demolition wastes are also reprocessed. Greenwaste is reused through two main programs; mulching and re-use on-site and transported off-site for composting. The amount of green waste presented at the Waste and Recycling Centre (WRC) varies with the prevailing weather conditions. Concrete is stockpiled and crushed on site at the City’s landfills. Currently the majority of this material is re-used on-site, however opportunities for sale of this product are under investigation. As per Solid Waste Strategy 2024, the total waste resource recovery (recovered or recycled) target for 2016-17 is 42.5%, with a domestic waste recovery target of 32%. Initial budget approval for the 2016-17 financial year was $2.77 million.

September Budget Review $0.02m decrease December Budget Review $0.33m increase March Budget Review No change

Achievements for 2016-17 Total waste resource recovery achieved for the year was 40%, 2.5% lower than the

projected target of 42.5%.

Domestic waste resource recovery for the year was 29%, 3% lower than the projected target of 32%

Major issues Council’s Greenwaste recycling contractor failed to achieve its specified service levels

resulting in a significant volume of greenwaste remaining on site. Several discussions took place with the contractor which resulted in the majority of the greenwaste being removed.

Council’s concrete crushing contractor went into voluntary liquidation preventing further works being undertaken from May. This attributed to the $0.12 million under-spend and subsequently, stockpiled concrete product now requires processing in 2017-18.



Attachment 4.3 Financial Performance

Purchase of Waste and Recycling Bins Project scope and budget As part of Waste Services’ business as usual operation of the City’s domestic and residential waste collection services, a substantial cost is incurred each year for the acquisition and repair of refuse and recycled (wheelie) bins. Initial budget approval for the 2016-17 financial year was $1.12 million. A budget increase of $0.5 million was approved at the March budget review due to an increase in the number of replacement bins required due to damage by the contractor.

September Budget Review No change December Budget Review No change March Budget Review $0.5m increase

Achievements for 2016-17 As outlined in Table 5 in Section 5.4, there were a total of 12,913 new wheelie bin

services provided during 2016-17. In addition, there were a total of 15,476 bins replaced during the year:

- Damaged 13,582 bins - Stolen 1,894 bins

Major issues No major issues identified. Financial Performance

Forecast ($) 3,081,559 Budget ($) 3,081,559


Variance ($) 127,046 Remaining ($) -

Variance (%) 4.1% Remaining (%) -

2016-17 Budget Annual Project

Forecast ($) 1,620,000 Budget ($) 1,620,000


Variance ($) 43,062 Remaining ($) -

Variance (%) 2.7% Remaining (%) -

2016-17 Budget Annual Project



Attachment 4.3

Kerbside Clean-up Project scope and budget During Council’s 2016-17 budget deliberations it was determined that a kerbside clean up service would be provided for the entire City over a two year period. This service was provided to Divisions 1 to 7 in the 2016-17 financial year. Divisions 8 to 14 will receive service in the 2017-18 financial year. This program provides residents the opportunity to have unwanted items removed (free of charge) that may be difficult to dispose of via other mechanisms. Initial budget approval for the 2016-17 financial year was $1.1 million. There were no budget movements for the year. Achievements for 2016-17 Collections for Divisions 1 to 7 were completed in 2016-17 within the scheduled

timeframe Average participation rate of 30.96 per cent. No complaints received through City’s email address throughout the collection period. Introduction of “Non Collection Notices” issued for residences placing non-compliant

items on the kerb. Partnership with City Laws and Cleaning to create a procedure for managing reports of

illegal dumping and broken glass. Development of Kerbside Clean-up content produced and published on the City’s

website. Development of information and education sessions provided to participating Councillors

and staff.

Major issues Illegal dumping of items:

o in areas not eligible, including road reserves, parks and vacant land o on the kerb outside the notified collection period.

Unacceptable items presented, including:

o fridges o freezers o household waste and recycling (including food scraps), o commercial builders and business waste o bricks , concrete, dirt and stones o gas bottles o car parts, tyres, batteries o glass and mirrors o lino and fibro sheeting o liquids and hazardous waste (e.g. asbestos, paint, chemicals and oil).

Size and weight restrictions not adhered to, including:

o loads larger than 2 cubic metres and items longer than 1.5 metres and o heavy items (not possible to be lifted by two people).



Attachment 4.3 Green waste not bundled

o bagged green waste and clippings (e.g. palm fronds and clippings not tied in bundles).

The current contract as it stands allows for the contractor to leave items that do not

comply. The contractor has been collecting non-compliant piles for several years creating an expectation amongst the community that these will be collected.

A targeted education program and partnership with City Laws and Cleaning will be

required into the future to manage non-compliance. Alternative models used by other Councils throughout Australia should be investigated to determine alternative delivery options and pricing models. Should this occur it would be recommended this take place prior to 30 June 2018.


Solid Waste Strategy Implementation Project scope and budget The Solid Waste Strategy 2024 was endorsed by Council in September 2015. The Strategy provides a framework for the City to develop a more sustainable and integrated approach to solid waste management. The Strategy is for nine years and is a legislative requirement under the Waste Reduction and Recycling Act 2011 (s 121). The annual program of work contributes to achieving the four important Strategy outcomes:

The City and community actively practise waste avoidance and other positive waste behaviours.

Waste re-use, recycling and resource recovery opportunities are maximised prior to landfill disposal.

Our capacity to manage future waste is secured. Solid waste management has minimal negative impact on our environment and public

health.

Initial budget approval for the 2016-17 financial year was $1.08 million. Budget decreases totalling $0.46 million have been approved during the year.

September Budget Review $0.12m increase December Budget Review $0.01m decrease March Budget Review $0.57m decrease

Forecast ($) 1,100,000 Budget ($) 2,166,000


Variance ($) (84,611) Remaining ($) 981,389

Variance (%) (7.7%) Remaining (%) 45.3%




Attachment 4.3 Achievements for 2016-17 Waste and Recycling Centre (WRC) Review: Network Efficiency review in progress with review to be completed in 2017-18. Concept design for Helensvale WRC Recycled Street and development of signage suite

in progress. Wayfinding and signage audit tendered for remaining larger centres.

Commercial Food Waste Service: Developed of marketing and communications collateral. Assessment of Organic Waste Programs: Specification for the Advanced Waste Treatment Technology report in progress.

Waste and Recycling Centre programs: Developed of WRC behaviour change strategy. Developed of larger recycling bin promotion. Developed of green waste promotion. Design and print of green waste flyers, recycling calendar, waste and recycling pocket

book. Marketing and education plan developed and awaiting approval. Waste Strategy Implementation: Bioresources Market Analysis Report completed. Solid Waste Stream Assessment: Review completed and audit reports currently being finalised.

Major issues No major issues Financial Performance

Forecast ($) 622,919 Budget ($) 1,923,715

Expenditure ($) 588,620 ITD Expenditure ($) 588,620


Variance (%) 5.5% Remaining (%) 69.4%




Attachment 4.3

Coomera Transfer Station Design Project scope and budget Waste Services has been implementing a facility rationalisation program over the past few years resulting in the closure of six facilities, the upgrade of one facility and the establishment of one new facility. A potential need for a new facility at Coomera has been identified, based upon analysis of:

current visitations throughout the transfer station network population projections throughout the City, and available capacity at existing facilities.

Funding was provided in the 2016-17 financial year budget to further investigate and design this facility. The budget was reduced to nil at the March 2017 budget review to facilitate the finalisation of the Business Case.

September Budget Review No change December Budget Review $0.77m decrease March Budget Review $0.23m decrease


Forecast ($) - Budget ($) 16,000,000

Expenditure ($) - ITD Expenditure ($) -

Variance ($) - Remaining ($) 16,000,000

Variance (%) - Remaining (%) 100.0%



ITEM 5 GENERAL BUSINESS WASTE AND KERB SIDE CLEAN UP - VALUE FOR MONEY HL323/455/02

COMMITTEE RECOMMENDATION WW17.0913.005 moved Cr Boulton seconded Cr PJ Young

That a review of kerb side clean-up be conducted with regard to most efficient services and value for money in conjunction with other waste collections.

CARRIED

There being no further business the meeting closed at 2.19pm.


These Pages

Numbered 1 to 61

Constitute The Adopted Report Of The Meeting

Of The Gold Coast Water and Waste Committee

Held


adopted report gold coast water and waste committee meeting · 2019-06-23 · 743rd council meeting...

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