wa local government accounting manual chapter … · web viewformation not depreciated pavement 50...

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Notes to the Budget Statements

Town of Eagle Bay

NOTES TO AND FORMING PART OF THE BUDGETFOR THE YEAR ENDING 30 JUNE 201Z

Note Page

1 Significant Accounting Policies 502 Revenues and Expenses 663 Acquisition of Assets 744 Disposal of Assets 765 Information on Borrowings 786 Reserves 827 Net Current Assets 868 Rating Information 889 Specified Area Rate 9010 Service Charges 9011 Rate Payment Discounts, Waivers and Concessions 9212 Interest Charges and Instalments 9213 Fees and Charges 9414 Elected Members’ Remuneration 9415 Notes to the Statement of Cash Flows 9616 Major Land Transactions 9817 Trading Undertakings and Major Trading Undertakings 100

Section 4 - Budget Process – Page 45

Note 1 Commentary – Summary of Significant Accounting Policies

DLGC Australian Accounting Standards do not require specific disclosures in the Budget. However, it is recommended to disclose council policy for consistency with the annual financial report. Some classifications are referred to in the budget document and inclusion in the Significant Accounting Policy provides information with respect to their composition.

Refer to Accounting Manual Section 6.4 for commentary on Significant Accounting Policies.


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AASB 101.10(e) TOWN OF EAGLE BAYAASB 101.51 NOTES TO AND FORMING PART OF THE BUDGETAASB 101.112 FOR THE YEAR ENDING 30 JUNE 201Z

AASB 101.117 1. SIGNIFICANT ACCOUNTING POLICIESThe significant accounting policies which have been adopted in the preparation of this budget are:

AASB 101.117 (a) Basis of Accounting

AASB 1054.7The budget has been prepared in accordance with applicable Australian Accounting Standards (as they apply to local governments and no-for-profit entities), Australian Accounting

AASB 108.13Interpretations, other authoritative pronouncements of the Australian Standards Board, the Local Government Act 1995 and accompany regulations.

FMR r. 22(2)Except for cash flow, the budget has also been prepared on the accrual basis under the convention of historical cost accounting, modified where applicable, by the measurementat fair value of selected non-current assets, financial assets and liabilities.

(b) The Local Government Reporting Entity

All Funds through which the council controls resources to carry on its functions havebeen included in the financial statements forming part of this budget. In the process of reportingon the local government as a single unit, all transactions and balances between those funds (for example, loans and transfers between Funds) have been eliminated.

FMR r. 30(2) (c) Previous Actual BalancesBalances shown in this budget as Previous Actual are as forecast at the time of budgetpreparation and are subject to final adjustments.

FMR r. 15(3)(d) Rounding Off Figures

AASB 101.51(e)All figures shown in this budget, other than a rate in the dollar, are rounded to the nearest dollar.

AASB 1004.27 (e) Rates, Grants, Donations and Other ContributionsRates, grants, donations and other contributions are recognised as revenues when thelocal government obtains control over the assets comprising the contributions. Control over assets acquired from rates is obtained at the commencement of the rating period or,

AASB 1004.30 where earlier, upon receipt of rates.

Interpretation1031 (f) Goods and Services TaxIn accordance with recommended practice, revenues, expenses and assets capitalisedare stated net of any GST recoverable. Receivables and payables in the statement offinancial position are stated inclusive of applicable GST, cash flows are presented on a gross basis.

(g) Superannuation

The council contributes to a number of Superannuation Funds on behalf of their employees.


Note 1 Commentary – Summary of significant accounting policies (Continued)


Section 4 - Budget Process – 8

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AASB 101.117 1. SIGNIFICANT ACCOUNTING POLICIES (continued)

AASB 107.6 (h) Cash and Cash EquivalentsAASB 107.45,46 Cash and cash equivalents in the statement of financial position comprise cash at bank and

in hand and short-term deposits with an original maturity of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. For the purposes of the Cash Flow Statement, Bank overdrafts are included as short-term borrowings in current liabilities.

AASB 101.78(b) (i) Trade and Other ReceivablesTrade and other receivables include amounts due from ratepayers for unpaid rates and service charges and other amounts due from third parties for goods sold and services performed in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets. Collectability of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is raised when there is objective evidence that they will not be collectible

AASB 102 (j) InventoriesGeneral

AASB 102.9 Inventories are valued at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.

AASB 102.36(a)

Land Held for ResaleAASB 102.9 Land purchased for development and/or resale is valued at the lower of cost and netAASB 102.10 realisable value. Cost includes the cost of acquisition, development, borrowing costs andAASB 102.36(a) holding costs until completion of development. Finance costs and holding charges incurred

after development is complete are recognised as expenses. Revenue arising from the sale of property is recognised in the statement of comprehensive income as at the time of signing binding contract of sale. Land held for resale is classified as current except where it is held as non-current based on council's intention to release for sale.

AASB 116 (k) Fixed AssetsEach class of fixed assets is carried at cost or fair value as indicated less, where applicable, anyaccumulated depreciation and impairment losses.

FMR r. 17A Mandatory Requirement to Revalue Non-Current AssetsFMR r. 17A(4) Following the phasing in of fair value in relation to fixed assets by 30 June 2015, thereafter

each asset class must be revalued at least every 3 years in accordance with the date set down in the FMR. Relevant disclosures, in accordance with requirements of Australian Accounting Standards, have been made in the financial report as necessary.

FMR r. 16(b)(i) Land Under ControlIn accordance with the FMR, the council is required to include as an asset, land which is not owned but under the control or management of council and which is used as a golf course, showground, race course or any other sporting or recreational facility of state or regional significance. Upon initial recognition of assets, these assets were recorded at cost in accordance with AASB 116, classified as land and revalued with other land in accordance with other policies at detailed in this note. After being initially recorded at cost, they were revaluated with other Land and Building at 30 June 201X.


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AASB 116 (k) Fixed Assets (continued)AASB 116.15 Initial Recognition and Measurement between Mandatory Revaluation Dates

AASB 116.73(a)

All assets are initially recognised at cost. Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition. For assets acquired at no cost or for nominal consideration, cost is determined as fair value at the date of acquisition. The cost of non-current assets constructed by the council includes the cost of all materials used in construction, direct labour on the project and an appropriate proportion of variable and fixed overheads.

Individual assets acquired between initial recognition and the next revaluation of the asset class, are carried at cost less accumulated depreciation which it is believed approximates fair value. They will be subject to subsequent revaluation at the next anniversary date in accordance with the mandatory measurement framework.

RevaluationAASB 116.Aus39.1, AASB 116 Aus40.1AASB 116.Aus40.2

Where the carrying amount of a class of assets is increased as a result of revaluation. The net revaluation increase is recognised in other comprehensive income and accumulated in equity under revaluation surplus, except to the extent that it reverse a net revaluation decrease of the same asset class previously recognised as an expense, in which case the increase is recognised as income.

Revaluation decrease is recognised as an expense, except to the extent that it offsets a previous revaluation increase for the same asset class, in which case the decrease is debited directly to the asset revaluation surplus to the extent of the credit balance existing in revaluations reserve for that asset class.

Revaluation increases and decreases relating to individual assets within the same class of assets are offset against one another within that class but are not offset in respect of assets in different classes.

Land under RoadsIn Western Australia, all land under roads is Crown land, where the responsibility formanaging is vested in the local government.

Effective as at 1 July 2008, council elected not to recognise any value for land under roadsAASB 1051.8 acquired on or before 30 June 2008. This accords with the treatment available in

Australian Accounting Standard AASB 1051 Land Under Roads and the fact thatGovernment (Financial Management) Regulation 16 (a) (i) prohibits local governments from recognising such land as an asset.FMR r. 16(a)(i)

In respect of land under roads acquired on or after 1 July 2008, as detailed above,Local Government (Financial Management) Regulation 16(a)(i) prohibits localgovernments from recognising such land as an asset.

Whilst such treatment is inconsistent with the requirements of AASB 1051, LocalGovernment (Financial Management) Regulation 4(2) provides, in the event of such aninconsistency, the Local Government (Financial Management) Regulations prevail.

FMR r. 4(2) Consequently, any land under roads acquired on or after 1 July 2008 is not included as anasset of the council.




NoteThe Depreciation of Non-Current Assets Schedule is a guide only and each local government should adjust this schedule to their own circumstances.


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AASB 101.117 1. SIGNIFICANT ACCOUNTING POLICIES (continued)AASB 116.73(b,(c) (l) Depreciation of Non-Current Assets

All non-current assets having a limited useful life are separately and systematicallydepreciated over their useful lives in a manner which reflects the consumption of thefuture economic benefits embodies in economic benefits embodied in those assets.Assets are depreciated from the date of acquisition or, in respect of internally constructedassets, from the time the asset is completed and held ready for use.

Expenditure on items of equipment under $2,000 are not capitalised but are placed on anAsset Inventory listing.

Buildings 50-80 yearsFurniture and Equipment 4-10 yearsPlant and Equipment 5-15 years

Sealed roads and streets formation not depreciated pavement 50 years seal - bituminous seals 20 years - asphalt surfaces 25 years

Gravel roads formation not depreciated pavement 50 years

Formed roads (unsealed) formation not depreciated pavement 50 yearsFootpaths - slab 20 yearsSewerage piping 100 yearsWater supply piping & drainage systems 75 years

The assets residual values and useful lives are reviewed and adjusted if appropriate,AASB 136.59 at the end of each reporting period. An asset's carrying amount is written down

immediately to its recoverable amount if the asset's carrying amount is greater thanits estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carryingamount. These gains and losses are included in the statement of comprehensive income.

When revalued assets are sold, amounts included in the revaluation surplus relating to thatasset are transferred to retained earnings.


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AASB 101.10(e) TOWN OF EAGLE BAYAASB 101.51 NOTES TO AND FORMING PART OF THE FINANCIAL REPORTAASB 101.112 FOR THE PERIOD ENDED 30 JUNE 201Z


AASB 116.73(a) (m) Fair Value of Assets and LiabilitiesAASB 13.91 When performing a revaluation, the council uses a mix of both independent and

management valuations using the following as a guide:

AASB 13.2,11,

Fair Value is the price that Council would receive to sell the asset or would have to pay to transfer a liability, in an orderly (i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement date.

61,67As fair value is a market-based measure, the closest equivalent observable market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the specific asset. The fair values of assets that are not traded in an active market are determined using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market data.

AASB 13.16-21To the extent possible, market information is extracted from either the principal market for the asset (i.e. the market with the greatest volume and level of activity for the asset) or, in the absence of such a market, the most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts from the sale of the asset after taking into account transaction costs and transport costs).

AASB 13.27-33For non-financial assets, the fair value measurement also takes into account a market participant’s ability to use the asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and best use.

AASB 13.91 Fair Value HierarchyAASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair value measurement into one of three possible levels based on the lowest level that an input that is significant to the measurement can be categorised into as follows:

Level 1Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.Level 2Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.Level 3Measurements based on unobservable inputs for the asset or liability.

AASB 13.93(d)The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation technique. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant inputs are not based on observable market data, the asset or liability is included in Level 3.


Note 1 Commentary – Summary of significant accounting policies(Continued)



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AASB 101.10(e) TOWN OF EAGLE BAYAASB 101.51 NOTES TO AND FORMING PART OF THE FINANCIAL REPORTAASB 101.112 FOR THE PERIOD ENDED 30 JUNE 201Z


AASB 116.73(a) (m) Fair Value of Assets and Liabilities (continued)

Valuation TechniquesThe Council selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or liability being measured. The valuation techniques selected by the Council are consistent with one or more of the following valuation approaches:Market Approach: Valuation techniques that use prices and other relevant information generated by market transactions for identical or similar assets or liabilities.Income Approach: Valuation techniques that convert estimated future cash flows or income and expenses into a single discounted present value.Cost Approach: Valuation techniques that reflect the current replacement cost of an asset at its current service capacity.

Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the asset or liability, including assumptions about risks. When selecting a valuation technique, the Council gives priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that buyers and sellers would generally use when pricing the asset or liability and considered observable, whereas inputs for which market data is not available and therefore are developed using the best information available about such assumptions are considered unobservable.

FMR r. 17A(4)(b)As detailed above, the mandatory measurement framework imposed by the Local Government (Financial Management) Regulations requires, as a minimum, all assets carried at a valued amount to be re valued at least every 3 years by dates prescribed in the FMR

AASB 7.21 (n) Financial Instruments

Initial Recognition and MeasurementAASB 139.14 Financial assets and financial liabilities are recognised when the council becomes a partAASB 139.38 to the contractual provisions to the instrument. For financial assets, this is equivalent toAASB 7.B5 (c) the date that the council commits itself to either the purchase or sale of the asset (i.e. trade date

accounting is adopted). Financial instruments are initially measured at fair value plus transactionAASB 139.43 costs, except where the instrument is classified 'at fair value through profit or loss', in which case

transaction costs are expensed to profit or loss immediately.

AASB 139.46 Classification and Subsequent MeasurementFinancial instruments are subsequently measured at fair value, amortised cost using the

AASB 139.9

effective interest rate method or cost. Amortised cost is calculated as:(a) the amount in which the financial asset or financial liability is measured at initial recognition;(b) less principal repayments;(c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest rate method; and(d) less any reduction for impairment

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(n) Financial Instruments (continued)

AASB 139.AG8 The effective interest method used is to allocate interest income or interest expenseover the relevant period and is equivalent to the rate that exactly discounts estimatedfuture cash payments or receipts (including fees, transaction costs and other premiumsor discounts) through the expected life (or when this cannot be reliably predicted, thecontractual term) of the financial instrument to the net carrying amount of the financialasset or financial liability. Revisions to expected future cash flows will necessitate anadjustment to the carrying value with a consequential recognition of an income orexpense in profit or loss.

(i) Financial assets at fair value through profit and lossAASB 139.9 Financial assets at fair value through profit or loss are financial assets held for trading.AASB 7.B5(a) A financial asset is classified in this category if acquired principally for the purpose of

selling in the short term. Derivatives are classified as held for trading unless they aredesignated as hedges. Assets in this category are classified as current assets.

AASB 139.9 (ii) Loans and receivablesLoans and receivables are non-derivative financial assets with fixed or determinable

AASB 101.66, 69 payments that are not quoted in an active market. They are included in current assets,except for those with maturities greater than 12 months after the balance sheet datewhich are classified as non-current assets. Loans and receivables are included in trade and other receivables in the Statement of Financial Position.

AASB 139.9 (iii) Held-to-maturity investmentsAASB 101.66 Held-to-maturity investments are non-derivative financial assets with fixed or

determinable payments and fixed maturities that the council’s management has thepositive intention and ability to hold to maturity. If council were to sell other than aninsignificant amount of held-to-maturity financial assets, the whole category would betainted and reclassified as financial available-for-sale. Held-to-maturity assets areincluded in non-current assets, except for those maturities less than 12 monthsfrom the balance date, which are classified as current assets.

AASB 139.9 AASB 7B5(b) (iv) Available-for-sale financial assets

AASB 139.46,55

Available-for-sale financial assets, comprising principally marketable equity securities, are non-derivatives that are either designated in this category or not classified in any of the other categories. They are included in non-current assets unless management intends to dispose of the investment within 12 months of the Statement of Financial Position date. Investments are designated as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term.

They are subsequently measured at fair value with changes in such fair value (i.e. gainsAASB 7B5(e) or losses) recognised in other comprehensive income (except for impairment losses).

When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.

AASB 101.66

Available-for-salefinancial assets are included in current assets where they are expected to be sold within 12 months after the end of the reporting period. All other available-for-sale financial assets are classified as non-current.


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(n) Financial Instruments (continued)

AASB 139.46,47,56 (v) Financial LiabilitiesNon-derivative financial liabilities (excluding financial guarantees) are subsequentlymeasured at amortised cost.

AASB 139.58 ImpairmentAASB 139.55(b),67AASB 7.B5(f)

At the end of each reporting period, the council assesses whether there is objectiveevidence that a financial instrument has been impaired. In the case of available-for-salefinancial instruments, a prolonged decline in the value of the instrument is considered todetermine whether impairment has arisen. Impairment losses are recognised in profit or loss in the statement of comprehensive income.

In the case of financial assets carried at amortised cost, loss events may include: indications that the debtors or a group of debtors are experiencing significant financial difficulty, default or delinquency in interest or principal payments; indications that they will enter bankruptcy or other financial reorganisation; and changes in arrears or economic conditions that correlate with defaults.

For financial assets carried at amortised cost (including loans and receivables), a separate allowance account is used to reduce the carrying amount of financial assets impaired by credit losses. After having taken all possible measures of recovery, if management establishes that the carrying amount cannot be recovered by any means, at that point the written-off amounts are charged to the allowance account or the carrying amount of impaired financial assets is reduced directly if no impairment amount was previously recognised in the allowance account.

AASB 139.17-20 DerecognitionAASB 139.39,41,42 Financial assets are derecognised where the contractual rights to receipt of cash flows expire

or the asset is transferred to another party whereby the Council no longer has any significant continual involvement in the risks and benefits associated with the asset.

Financial liabilities are derecognised where the related obligations are discharged, cancelled or expired. The difference between the carrying amount of the financial liability extinguished or transferred to another party and the fair value of the consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

AASB 136.9 &12 (o) Impairment of AssetsIn accordance with Australian Accounting Standards the Council's assets, other than inventories, are tested annually for impairment. Where such an indication exists, an estimate of the recoverable amount of the asset is made in accordance with AASB 136 Impairment of Assets and appropriate adjustments made. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell and value in use. Impairment losses are recognised in the Statement of Comprehensive Income. For non-cash generating assets of the Council such as roads, drains, public buildings and the like, value in use is represented by the asset's written down replacement cost of the asset.



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AASB 101.17(c) (p) Trade and Other PayablesTrade and other payables are carried at amortised cost. They represent liabilities forgoods and services provided to the Municipality prior to the end of the financial yearthat are unpaid and arise when the Municipality becomes obliged to make futurepayments in respect of the purchase of these goods and services. The amounts areunsecured and are usually paid within 30 days of recognition.

AASB 119 (q) Employee BenefitsThe provisions for employee benefits relates to amounts expected to be paid for longservice leave, annual leave, wages and salaries and are calculated as follows:

AASB 119.9 (i) Wages, Salaries, Annual Leave and Long Service Leave (Short-term Benefits)AASB 119.11 The provision for employees’ benefits to wages, salaries, annual leave and long serviceAASB 101.70 leave expected to be settled within 12 months represents the amount the municipality

has a present obligation to pay resulting from employees services provided to balancedate. The provision has been calculated at nominal amounts based on remunerationrates the council expects to pay and includes related on-costs.

AASB 119.8 (ii) Long Service Leave (Long-term Benefits)AASB 119.155 The liability for long service leave is recognised in the provision for employee benefitsAASB 119.156 and measured as the present value of expected future payments to be made in respect

of services provided by employees up to the reporting date using the projected unitcredit method. Consideration is given to expected future wage and salary levels,experience of employee departures and periods of service. Expected future paymentsare discounted using market yields at the reporting date on national government bondswith terms to maturity and currency that match as closely as possible, the estimatedfuture cash outflows. Where council does not have the unconditional right to defersettlement beyond 12 months, the liability is recognised as a current liability.

AASB 123 (r) Borrowing CostsAASB 123.8 Borrowing costs are recognised as an expense when incurred except where they areAASB 123.Aus8.1 directly attributable to the acquisition, construction or production of a qualifying asset.

Where this is the case, they are capitalised as part of the cost of the particular asset.

AASB 137.14 (s) ProvisionsProvisions are recognised when: The council has a present legal or constructiveobligation as a result of past events; it is more likely than not that an outflow ofresources will be required to settle the obligation; and the amount has been reliablyestimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will berequired in settlement is determined by considering the class of obligations as a whole.A provision is recognised even if the likelihood of an outflow with respect to any oneitem included in the same class of obligations may be small.


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AASB 101.66 (t) Current and Non-Current ClassificationAASB 101.69 In the determination of whether an asset or liability is current or non-current, consideration is

given to the time when each asset or liability is expected to be settled. The asset or liability is classified as current if it is expected to be settled within the next 12 months, being the Council’s operation cycle.

In the case of liabilities where the Council does not have the unconditional right to defer settlement beyond 12 months, such as vested long service leave, the liability is classified as current even if not expected to be settled within the next 12 months. Inventories held for trading are classified as current even if not expected to be realised in the next 12 months except for land held for resale where it is held as non-current based on the Council’s intentions to release for sale.

AASB 101.38 (u) Comparative FiguresWhere required, comparative figures have been adjusted to conform with changes inpresentation for the current financial year.

FMR r. 36(2) (v) Budget Comparative FiguresAASB 101.17(b) Unless otherwise stated, the budget comparative figures shown in this budget document

relate to the original budget estimate for the relevant item of disclosure.


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Note 2 Commentary – Revenue and Expenses

Investment informationFMR r. 28 The notes to the annual budget are to include, in relation to money invested by

the local government, an estimate of —(a) the amount to be earned from the investment of money held in reserve;(b) the amount to be earned from the investment of other money; and(c) the total earnings from investments.

Disclosure of Specific Revenues and ExpensesAASB 101(86) When a revenue or an expense from ordinary activities is of such size, nature

or incidence that its disclosure is relevant in explaining the financial performance of the local government, its nature and amount may be disclosed separately.

Extraordinary ItemsAASB 101(87) Disclosures of income or expense as extraordinary items are not allowed in the

Statement of Comprehensive Income or in the notes.

Depreciation and AmortisationAASB 116(73)(e)FMR r. 27(n)

The financial report shall disclose, for each class of property, plant andEquipment a reconciliation of the carrying amount at the beginning andend of the period showing depreciation and amortisation.

Auditors RemunerationAASB 101Aus 138(1)

Disclose the amount payable to auditor for an audit or a review of the financial statements.

Finance LeaseAASB 117.31(c) For financial leases, the amount of contingent rents recognised as an expense

in the period need to be disclosed.

Operating LeaseAASB 117.35(c) Operating leases are to disclose the amount of lease and sublease payments

recognised as an expense in the period, with separate amounts for minimum lease payments, contingent rents, and sublease payments

Investment informationFMR r. 49 The annual financial report is to include, in relation to money invested, details

of:(a) the amount earned from the investment of money held in reserve;(b) the amount earned from the investment of other money; and(c) the total earnings from investments.


TOWN OF EAGLE BAY

AASB 101.10(e)AASB 101.51 NOTES TO AND FORMING PART OF THE BUDGETAASB 101.112 FOR THE YEAR ENDING 30 JUNE 201Z

NOTE 201Z 201Y 201YFMR r.15(3) Budget Actual Budget

2. REVENUES AND EXPENSES $ $ $(a) Result from Ordinary Activities

(i) Charging as Expenses:AASB 101.97 Significant Expense

The significant expense relates to the 0 (60,000) 0reduction in the fair value of investmentsAuditor's RemunerationAudit 15,000 14,800 15,000Interest on Overdraft 0 0 0Other Services 5,000 4,830 5,000Bad and Doubtful DebtsRates 3,542 6,432 0General Debtors 0 391 0

FMR r.27(n) DepreciationBy ProgramGovernance 217,000 216,547 215,000Law, Order, Public Safety 2,500 2,541 2,500Health 550 550 550Community Amenities 2,800 2,781 2,700Recreation and Culture 8,500 8,486 8,000Transport 6,170,200 5,878,904 6,072,850Economic Services 3,450 3,427 3,400Other Property and Services 795,000 794,171 795,000

15(b) 7,200,000 6,907,407 7,100,000

By ClassLand and Buildings 577,998 366,771 433,860Furniture and Equipment 130,343 77,146 109,951Plant and Equipment 1,338,126 1,348,558 1,540,000Roads 4,751,175 4,730,174 4,696,189Footpaths 98,684 94,480 91,240Drainage 70,130 68,033 28,760Other 233,544 222,245 200,000

7,200,000 6,907,407 7,100,000

Interest Expenses (Finance Costs)- Finance Lease Charges 0 0 0- Debentures 5(a) 92,149 96,257 399,441

92,149 96,257 399,441

Rental Charges- Operating Leases 143,423 139,246 139,250

(ii) Crediting as Revenue:FMR r.28 Interest Earnings

Investments - Reserve Funds 225,000 247,379 200,000 - Other Funds 225,000 199,330 139,100 Other Interest Revenue 12 50,000 52,255 46,000

500,000 498,964 385,100


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2. REVENUES AND EXPENSES (Continued)FMR r.27(m) (b) Statement of ObjectiveFMR Schedule 1Part 1 The Town of Eagle Bay is dedicated to providing high quality services to the community

through the various service orientated programs which it has established.

REPORTING PROGRAM DESCRIPTIONSCouncil operations that are disclosed encompass the following service orientated activities/programs:

GOVERNANCEObjective: To provide a decision making process for the efficient allocation of resources.Activities: Includes the activities of members of Council and the administrative supportavailable to the council for the provision of governance of the district. Other costs relate tothe task of assisting elected members and ratepayers on matters which do not concernspecific council services.

GENERAL PURPOSE FUNDINGObjective: To collect revenue to allow for the provision of services.Activities: Rates, general purpose government grants and interest revenue.

LAW, ORDER, PUBLIC SAFETYObjective: To provide services to help ensure a safer and environmentally consciouscommunity.Activities: Supervision and enforcement of various local laws relating to fire prevention,animal control and other aspects of public safety including emergency services.

HEALTHObjective: To provide an operational framework for environmental and community health.Activities: Inspection of food outlets and their control, provision of meat inspection services,noise control and waste disposal compliance.

EDUCATION AND WELFAREObjective: To provide services to disadvantaged persons, the elderly, children and youth.Activities: Maintenance of child minding centre, playgroup centre, senior citizens centreand aged care centre. Provision and maintenance of home & community care programsand youth support services.

HOUSINGObjectives: To provide and maintain elderly residents housing.Activities: Provision and maintenance of elderly residents housing.

COMMUNITY AMENITIESObjective: To provide services required by the community.Activities: Rubbish collection services, operation of rubbish disposal sites, litter control,construction and maintenance of urban storm water drains, protection of theenvironment and administration of town planning schemes, cemetery and publicconveniences.


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2. REVENUES AND EXPENSES (Continued)

FMR r.27(m) (b) Statement of Objective (continued)FMR Schedule 1Part 1 RECREATION AND CULTURE

Objective: To establish and effectively manage infrastructure and resource which will helpthe social well-being of the community.Activities: Maintenance of public halls, civic centres, aquatic centre, beaches, recreationcentres and various sporting facilities. Provision and maintenance of parks, gardens andplaygrounds. Operation of library, museum and other cultural facilities.

TRANSPORTObjective: To provide safe, effective and efficient transport services to the community.Activities: Construction and maintenance of roads, streets, footpaths, depots, cycleway,parking facilities and traffic control. Cleaning of streets and maintenance of street trees,street lighting etc.

ECONOMIC SERVICESObjective: To help promote the shire and its economic wellbeing.Activities: Tourism and area promotion including the maintenance and operation of acaravan park. Provision of rural services including weed control, vermin control andstandpipes. Building Control.

OTHER PROPERTY & SERVICESObjective: To monitor and control Council's overheads operating accounts.Activities: Private works operation, plant repair and operation costs and engineering operation costs.

(c) Nature or Type Classifications

The Town of Eagle Bay is required by the Australian Accounting Standards to disclose revenueand expenditure according to it's nature or type classification. The following nature or functiondescriptions are also required by State Government regulations.

REVENUE

RatesAll rates levied under the Local Government Act 1995. Includes general, differential, specificarea rates, minimum rates, interim rates, back rates, ex-gratia rates, less discounts offered.Excludes administration fees, interest on instalments, interest on arrears, service chargesand sewerage rates.

Operating Grants, Subsidies and Contributions

Refer to all amounts received as grants, subsidies and contributions that are not non-operating grants.

Non-Operating Grants, Subsidies and ContributionsAmounts received specifically for the acquisition, construction of new or the upgrading ofnon-current assets paid to a local government, irrespective of whether these amounts arereceived as capital grants, subsidies, contributions or donations.


Profit on Asset Disposal Profit on the disposal of assets including gains on the disposal of long term investments. Losses are disclosed under the expenditure classifications.

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TOWN OF EAGLE BAYNOTES TO AND FORMING PART OF THE FINANCIAL REPORT

FOR THE YEAR ENDING 30 JUNE 201Z

2. REVENUES AND EXPENSES (Continued)

(c) Nature or Type Classifications (continued)Fees and ChargesRevenue (other than service charges) from the use of facilities and charges made for local government services, sewerage rates, rentals, hire charges, fee for service, photocopying charges, licences, sale of goods or information, fines, penalties and administration fees.

Service ChargesService charges imposed under Division 6 of Part 6 of the Local Government Act 1995. Regulation 54 of the Local Government (Financial Management) Regulations identifies the charges which can be raised. These are television and radio broadcasting, underground electricity and neighbourhood surveillance services. Excludes rubbish removal charges.

Interest EarningsInterest and other items of a similar nature received from bank and investment accounts, interest on rate instalments, interest on rate arrears and interest on debtors.

Other RevenueOther revenue, which cannot be classified under the above headings, includes dividends, discounts and rebates. Reimbursements and recoveries should be separated by note to ensure the correct calculation of ratios.

EXPENDITURE

Employee CostsAll costs associated with the employment of persons such as salaries, wages, allowances, benefits such as vehicle and housing, superannuation, employment expenses, removal expenses, relocation expenses, worker's compensation insurance, training costs, conferences safety expenses, medical examinations, fringe benefits tax etc.

Material and ContractsAll expenditure on materials, supplies and contracts not classified under other headings. These include supply of goods and materials, legal expenses, consultancy, maintenance agreements communication expenses, advertising expenses, membership, periodicals, publications, hire expenses, rental, leases, postage and freight etc.

Utilities (Gas, Electricity, Water, etc)Expenditures made to respective agencies for the provision of power, gas or water.Excludes expenditure for the re-instatement of road works on behalf of these agencies.

Depreciation on Non-Current AssetsDepreciation and amortisation expense raised on all classes of assets.

Loss on Asset DisposalLoss on the disposal of fixed assets.

Interest ExpensesInterest and other costs of finance paid, including costs of finance for loan debentures,overdraft accommodation and re-financing expenses.

InsuranceAll insurance other than worker's compensation and health benefit insurance included as a cost of employment.

Other ExpenditureStatutory fees, taxes, provision of bad debts. Donations and subsidies made to community groups.

Note 3 Commentary – Acquisition of Assets


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Recognition

Initial recognition - disclosure in accordance with AASB 116.73(a)AASB 116 PPE should be recognised when it meets the recognition criteria of an asset.

PPE is measured initially at cost. Cost includes the fair value of the consideration given to acquire the asset (net of discounts and rebates) and any directly attributable cost of bringing the asset to working condition for its intended use (inclusive of import duties and taxes).Directly attributable costs are the cost of site preparation, delivery, installation costs and relevant professional fees

Subsequent recognition - disclosure in accordance with AASB 116.73(a).Classes of PPE should be carried at historical cost less accumulated depreciation and any accumulated impairment losses, or at a revalued amount less any accumulated depreciation and subsequent accumulated impairment losses.

The depreciable amount of PPE (being the gross carrying value less the estimated residual value) should be depreciated on a systematic basis over its useful life.

The cost of a major inspection or overhaul of an item occurring at regular intervals over the useful life of the item is capitalised only where the entity has clearly identified as a separate component of the asset an amount representing major inspection or overhaul and has already depreciated that component to reflect the consumption of benefits that are to be subsequently replaced. The carrying amount of the parts replaced should be appropriately derecognised. In all other circumstances such costs are expensed as incurred.

Impairment - this policy refers only to non-current assets – see Commentary Impairment of Assets

Determining “Classes” of AssetsAASB 116.37 A class of property, plant and equipment is a grouping of assets of a similar

nature and use in an entity’s operations. Subject to materiality, classes of assets should be determined according to their nature. Where an asset is comprised of a number of different components of rather different natures, the grouping is still made on the basis of the nature of the asset as used by the council.

LGA s. 6.2(4)(a) The Acquisition of Assets Note dissects infrastructure assets into respective classifications. However, it is recommended that all capital works and purchases are disclosed in this note. It is also recommended that supplementary information is included in the budget document giving details of the plant replacement program, road replacement program and other infrastructure.



201Z

LGA s. 6.2(4)(a)3. ACQUISITION OF ASSETS Budget

$By ProgramGovernanceBuildings 60,000Furniture & Equipment 20,000Plant & Equipment 55,000

Law, Order, Public SafetyBuildings 55,000FESA Replacement Tender 103,000

Education and WelfareBuildings 22,000

Community AmenitiesBuildings 181,500Loader for Landfill Site (second hand) 140,000

Recreation and CulturePlant & Equipment 123,000Infrastructure Assets - Parks, Ovals & Other 122,000

TransportLand 500,000Buildings 10,000Plant & Equipment 926,000Infrastructure Assets - Parks, Ovals & Other 1,235,000Infrastructure Assets - Roads 6,865,895

Economic ServicesPlant & Equipment 72,000

Other Property and ServicesLand Held for Resale 3,851,373Plant & Equipment 80,000

14,421,768By ClassLand Held for Resale 3,851,373Land 500,000Buildings 328,500Infrastructure Assets - Roads 6,865,895Infrastructure Assets - Parks, Ovals & Other 1,357,000Plant and Equipment 1,499,000Furniture and Equipment 20,000As per Rate Setting Statement 14,421,768As per Cash Flow Statement (14,421,768)As per Rate Setting Statement (14,421,768)


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Note 4 Commentary – Disposal of Assets

FMR r. 27(d) The Disposal of Assets Note should include the net book value of that class of assets, an estimate of the sale price of the class of assets and an estimate of the profit or loss on the sale of that class of assets.



FM Reg 27(d)4. DISPOSALS OF ASSETS

The following assets are budgeted to be disposed of during the year.

Net Book Sale Profit(Loss)Value Proceeds

By Program 201Z 201Z 201ZBUDGET BUDGET BUDGET

$ $ $GovernanceCEO Vehicle 48,500 50,000 1,500Recreation & CultureGardener Truck 25,000 20,000 (5,000)Gardener Vehicle 21,000 19,000 (2,000)TransportAerodrome Hanger 252,705 360,000 107,295Loader 50,000 50,000 0Grader 44,000 40,000 (4,000)BuildingBuilding Officer Vehicle 23,000 22,000 (1,000)Other Property & ServicesWorks Supervisor Vehicle 16,000 17,000 1,000Engineering Vehicle 30,000 24,000 (6,000)

510,205 602,000 91,795

Net Book Value Sale Proceeds Profit(Loss)

By Class 201Z 201Z 201ZBUDGET BUDGET BUDGET

$ $ $

Land & Buildings 252,705 360,000 107,295Furniture & Equipment 0 0 0Motor Vehicles 138,500 132,000 (6,500)Plant & Machinery 119,000 110,000 (9,000)

510,205 602,000 91,795

201ZSummary BUDGET

$

Profit on Asset Disposals 109,795Loss on Asset Disposals (18,000)

91,795


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Note 5 Commentary – Information on Borrowings

DLGC Long term borrowings are split into current and non-current portion.

If a council expects to refinance or roll over a loan for at least 12 months it classifies the loan as non-current. When refinancing or rolling over the loan is not at the discretion of the council and the potential to refinance is not considered then loan is classified as current.

This disclosure has more detail that is required but it provides useful information which is consistent with Annual Financial Report.

Self-Supporting Loans should be stated giving details of how the loan is funded.

FMR r. 29(f) The Regulation requires detail on how the repayments are to be financed. In this example this detail is shown in the report but it could be show by way of a note.

FMR r. 30(1)(d) Previous year budget and annual details are required to be shown.



5. INFORMATION ON BORROWINGS(a) Debenture Repayments

Interest Maturity Principal New Principal Principal InterestFM Reg 29(f) Rate Date 1 Jul 201Y Loans Repayments Outstanding RepaymentsFM Reg 30(1)(d) % 201Z 201Y 201Z 201Y 201Z 201Y

Particulars Budget Actual Budget Actual Budget Actual$ $ $ $ $ $

Self-Supporting LoansLoan 112 - Surf Club 7.52 09/18 239,771 9,125 8,825 230,646 239,771 15,887 16,187Loan 113 - Speed Way 6.65 07/22 110,321 8,126 7,926 102,195 110,321 4,704 4,904Loan 114 - Yacht Club 8.95 10/09 29,462 8,148 7,642 21,314 29,462 2,025 2,531Loan 229 - Soccer Club 5.45 05/24 500,000 25,000 0 475,000 500,000 27,000 0

Total SS Loans 879,554 0 50,399 24,393 829,155 879,554 49,616 23,622

Education & WelfareAge Care Facility 6.51 02/17 386,377 30,100 22,100 356,277 386,377 35,280 37,282

TransportLoan 120 - Loader 6.5 09/15 0 320,000 0 0 320,000 0 0 0

Other Property & ServicesLoan 228 - Lester 6.45 04/17 375,896 28,113 24,104 347,783 375,896 22,300 35,353 Sub-Division

Total Council Loans 762,273 320,000 58,213 46,204 1,024,060 762,273 57,580 72,635

TOTAL ALL LOANS 1,641,827 320,000 108,612 70,597 1,853,215 1,641,827 107,196 96,257

All debenture repayments are to be financed by general purpose revenue.


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Note 5 Commentary – Information on Borrowings (continued)

FMR r. 29LGA s. 6.2(4)(d) & (g)

The following are the various details requiring disclosure where certain conditions exist.

Unspent LoansWhen an unspent loan balance is carried forward the following requirements are to be included as per FMR r. 29(a):(a) an estimate of the amount brought forward on 1 July;(b) the purpose for which the money was borrowed;(c) an estimate of the amount to be used during the financial year;(d) an estimate of the amount which will remain unused at 30 June.

OverdraftWhere an overdraft exists, details required as per FMR r.29(b) are as follows:(a) an estimate of the amount brought forward on 1 July;(b) the purpose for which the overdraft was established;(c) the year in which the overdraft was first established;(d) an estimate of the amount by which the overdraft will be increased or

decreased during the financial year;(e) an estimate of the balance at 30 June.

Change of PurposeWhere it is proposed to change the purpose of existing borrowings the requirements of FMR r. 29(c) are as follows:(a) the purpose for which the money was borrowed;(b) the purpose for which the money is to be applied;(c) the reasons for the application of the money to that purpose;(d) an estimate of the amount to be applied.

Re-financing of Existing BorrowingsWhere it is proposed to re-finance existing borrowings the requirements of FMR r. 29(e) are as follows:(a) an estimate of the amount to be re-financed;(b) where the principal sum under the new loan will be different from the

principal sum under the existing loan, detail of the amount of the difference and the reasons for the re-financing are to be given;

(c) a brief summary of the changes to the original terms of the borrowing it is expected will result from the re-financing.



5. INFORMATION ON BORROWINGS (Continued)

LGA S 6.2(4)(d)FM Reg 29(d) (b) New Debentures

Estimated Institution Loan Term Total Interest Amount BalanceParticulars/Purpose Amount Type (Years) Interest & Rate Used Unspent

To Be Charges % Budget $Borrowed

TransportLoan 120 - Loader 320,000 WATC Debenture 5 104,000 6.5 320,000 0

FM Reg 29(a) (c) Unspent DebenturesCouncil had $30,000 in unspent debenture funds as at 30 June 201Y but it is not expected to have unspent debenture funds as at 30 June 201Z

FM Reg 29(b) (d) OverdraftCouncil has not utilised an overdraft facility during the financial year although an overdraft facility of $400,000 with the Bank of Western Australiadoes exist. It is not anticipated that this facility will be required to be utilised during 201Z.


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Note 6 Commentary – Reserves

DLGC Not all the detail in this disclosure is required but is suggested to enhance the Rate Setting Statement and to be consistent with the Annual Financial Report.

FMR r. 27(g) In relation to each reserve account the report must include the following:(i) the opening balance brought forward on 1 July;(ii) the amount to be set aside during the financial year;(iii) the amount to be used during the financial year;(iv) the closing balance at 30 June.

If all or part of a reserve account is to be used or set aside for a purpose other than for which it was establish then FMR r.27(h) requires the following disclosure:(i) the proposed purpose;(ii) an estimate of the amount to be used or set aside;(iii) the reasons for the change of use or purpose.

The note regarding reserve accounts needs to be tailored to the local government circumstances. However, additional information regarding the exact purpose of each transfer provides an easy access throughout the financial year of what the intent was at the budget adoption. This is particularly useful when there is a change in staff.

The note regarding asset revaluation should be worded to suit the policy of the local government.



201Z 201Y 201YBudget Actual Budget

FMR r. 15(3) $ $ $LGA s. 6(4)(e) 6. RESERVES

FMR r. 27(g)(a) Land Purchase & Development Reserve

FMR r. 30(1)(d) Opening Balance 1,163,026 584,375 584,375Amount Set Aside / Transfer to Reserve 1,764,199 781,352 209,110Amount Used / Transfer from Reserve (1,066,000) (202,701) (299,490)

1,861,225 1,163,026 493,995(b

) Plant ReserveOpening Balance 775,544 806,956 806,956Amount Set Aside / Transfer to Reserve 550,000 632,244 318,012Amount Used / Transfer from Reserve (422,000) (663,656) (285,545)

903,544 775,544 839,423(c) Building Reserve

Opening Balance 977,669 824,785 824,785Amount Set Aside / Transfer to Reserve 500,000 948,367 477,019Amount Used / Transfer from Reserve (121,653) (795,483) (1,178,616)

1,356,016 977,669 123,188(d

) Sanitation (Rubbish Removal) ReserveOpening Balance 623,039 406,750 406,750Amount Set Aside / Transfer to Reserve 600,000 218,906 91,318Amount Used / Transfer from Reserve (221,500) (2,617) (42,000)

1,001,539 623,039 456,068(e) Aerodrome Reserve

Opening Balance 178,880 250,000 250,000Amount Set Aside / Transfer to Reserve 372,821 624,110 215,000Amount Used / Transfer from Reserve (422,000) (695,230) (405,210)

129,701 178,880 59,790(f) Employee Entitlements Reserve

Opening Balance 644,160 657,330 657,330Amount Set Aside / Transfer to Reserve 79,200 171,082 168,125Amount Used / Transfer from Reserve (486,692) (184,252) (236,993)

236,668 644,160 588,462(g

) Workers Compensation Premium ReserveOpening Balance 0 0 0Amount Set Aside / Transfer to Reserve 1,000 0 0Amount Used / Transfer from Reserve 0 0 0

1,000 0 0

Total Reserves 5,489,693 4,362,318 2,560,926

All of the above reserve accounts are to be supported by money held in financial institutions

Council have a policy of annual revaluation of road infrastructure. The amount of any revaluationadjustment at 30 June 201Z is not known. Any transfer to or from an asset revaluation reservebe a non-cash transaction and as such has no impact on this budget document.


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FMR r. 15(3) $ $ $

LGA s. 6(4)(e)6. RESERVES (Continued)

FMR r. 27(g) Summary of Reserve Transfers

Transfers to ReservesLand Purchase & Development Reserve 1,764,199 781,352 209,110Plant Reserve 550,000 632,244 318,012Building Reserve 500,000 948,367 477,019Sanitation (Rubbish Removal) Reserve 600,000 218,906 91,318Aerodrome Reserve 372,821 624,110 215,000Employee Entitlements Reserve 79,200 171,082 168,125Workers Compensation Premium Reserve 1,000 0 0

3,867,220 3,376,061 1,478,584

Transfers from ReservesLand Purchase & Development Reserve (1,066,000) (202,701) (299,490)Plant Reserve (422,000) (663,656) (285,545)Building Reserve (121,653) (795,483) (1,178,616)Sanitation (Rubbish Removal) Reserve (221,500) (2,617) (42,000)Aerodrome Reserve (422,000) (695,230) (405,210)Employee Entitlements Reserve (486,692) (184,252) (236,993)Workers Compensation Premium Reserve 0 0 0

(2,739,845) (2,543,939) (2,447,854)

Total Transfer to/(from) Reserves 1,127,375 832,122 (969,270)

In accordance with council resolutions in relation to each reserve account, the purpose for whichthe reserves are set aside are as follows:

Land Purchased & Development Reserve - established to fund land improvements and sub-division development.Plant Reserve - to be used for the purchase of major plant.Building Reserve - to be used for the construction of a new administration centre.Sanitation (Rubbish Removal) Services Reserve - established to fund the purchase of major sanitation equipment and for the future development of waste disposal facilities. Funded from the annual surplus derived from property rubbish disposal/collection fees after expenses.Aerodrome Reserve - to maintain a safe landing airstrip and functional airport amenities.Employee Entitlement Reserve - to be used to fund annual and long service leave requirements.Workers Compensation Premium Reserve - established to hold any workers' compensation insurance premium savings that may be made each year and to fund any additional premium demand made by council's insurers from time to time.


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Note 7 Commentary – Net Current Assets

FMR r. 31 Net current assets to be shown at the start of the financial year are as follows:(1) The annual budget is to include the net current assets carried forward from

the previous financial year.(2) If at the time of preparation of the annual budget the net current assets is

not known, an estimate of that figure may, if it is disclosed as an estimate, be included in the annual budget.

(3) The annual budget is to include or be accompanied by notes containing –

(a) a summary explaining the composition of the net current assets;(b) if the net current assets differs from the figure used in the rate setting

statement, a disclosure of the difference and a brief explanation of the reason for the difference.

FMR r. 32 Amounts which may be excluded in calculation of budget deficiency are as follows:(a) money borrowed or to be borrowed, to the extent that it is proposed in the

annual budget to remain unspent at the end of the financial year;(b) reserves, to the extent that they are proposed in the annual budget to

remain unspent at the end of the financial year;(c) in relation to a land transaction or trading undertaking, assets and liabilities,

to the extent to which they are proposed in the annual budget to remain restricted to the purposes of the land transaction or trading undertaking at the end of the financial year;

(d) any proposed amounts of depreciation of non-current assets;(e) assets from grants or gifts or non-cash revenue or expenditure;(f) current liabilities which, by their nature, are restricted, to the extent that

they are proposed in the annual budget to remain uncleared at the end of the financial year;

(g) any other current assets which, by their nature, are restricted, to the extent that they are proposed in the annual budget to remain unused at the end of the financial year.

Local Government Operational GuidelinesDLGC Guideline Number 08 sets out the procedure for determining the opening funds

for the annual budget. This is a useful tool to be used in the preparation of the annual budget.

It is also suggested that a Budget Statement of Financial Position is prepared although this is not required by regulation.

In this model, loan repayments are added back as they represent a current liability to be paid over the next 12 months, already reflected as expenditure in the budget.

Leave reserve is also added back to the extent of the amount cash backed as this is deducted as a liability and also as restricted cash.

Note – only deduct the lesser amount. If the provision amount is more than the cash backed amount then only the cash backed amount can be deducted. If the cash backed amount is more than the provision amount then only the provision amount can be deducted.



NOTE 201Z 201YBudget Est. Actual

FMR r. 15(3) $ $

FMR r. 317. NET CURRENT ASSETS

Composition of Estimated Net Current Asset Position

CURRENT ASSETS

Cash - Unrestricted 15(a) 450,639 422,895Cash - Restricted Reserves 15(a) 5,489,693 4,362,318Cash - Restricted Unspent Grants 0 1,496,637Cash - Restricted Unspent Grants to future year 70,000Cash - Restricted Unspent Loans 0 30,000Investments 0 190,000Trade and Other Receivables 917,492 503,587Inventories - Fuel and Materials 256,313Inventories - Land Held for Resale 487,621 424,393

7,345,445 7,756,143

LESS: CURRENT LIABILITIESPayables and Provisions (2,201,032) (2,033,690)

NET CURRENT ASSET POSITION 5,144,413 5,722,453

FMR r. 32(b) Less: Cash - Restricted Reserves6,15(a

) (5,489,693) (4,362,318)FMR r. 32(g) Less: Cash - Restricted future year Grants 0 (70,000)

Less: Land Held for Resale 5 0 (424,393)Add Back: Current Loan Liability 5 108,612 83,612Add Back: Cash Backed Employee Provision 6 236,668 644,160

ESTIMATED SURPLUS/(DEFICIENCY) C/FWD 0 1,593,514

The estimated surplus/(deficiency) c/fwd in the 201Y actual column representsthe surplus/(deficit) brought forward as at 1 July 201Y.

The estimated surplus/(deficiency) c/fwd in the 201Z budget column representsthe surplus/(deficit) carried forward as at 30 June 201Z.

It is recommended that only the cash backed reserve amount of employeeprovisions be added back in this calculation. However, if the annual leave is fullybudgeted for under salaries and wages then it is appropriate to add back theannual leave provision amount.


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Note 8 Commentary – Rating Information

LGA s. 6.2(4)(b) & (g)FMR r. 23

Disclosure in regard to rating information is specified under FMR r.23 of the Financial Management Regulations.

The annual budget is to include:(a) in relation to general rates –

(i) the reasons for any differential rates imposed under section 6.33 and any differential minimum payments imposed under section 6.35(6)(c);

(iii) for each general rate —

(I) the rate in the dollar;(II) whether the basis for the rate was the gross rental value or the

unimproved value of land;(III) an estimate of the number of properties to which the rate will

apply;(IV) an estimate of the total rateable values of the properties referred

to in Item (III);(V) the amount it is estimated will be imposed by way of —

(A) the rate;(B) interim rates; and(c) back rates;

(b) if a differential general rate or minimum payment differs from the proposed rate or payment set forth in the local public notice given under section 6.36 –(i) details of the rate or payment set forth in the public notice; and(ii) reasons for the difference;

(c) in relation to each minimum payment —(ii) the amount of the minimum payment;(v) an estimate of the total rateable values of the properties to which the

minimum payment is to apply;(vi) an estimate of the total number of properties to which the minimum

payment is to apply; and(vii) the amount it is estimated will be imposed by way of each

(I) minimum payment;(II) interim minimum payment; and(III) back minimum payment.

Attention:Do you have differential general rates?If yes, and the differential general rates or minimum payments differ from those advertised in the local public notice, then you need to make disclosures in accordance with FMR r.23(b) which set out:(a) Details of the rate or payment set forth in the public notice;(b) Reasons for the difference.



8. RATING INFORMATION - 201Z FINANCIAL YEARLGA s. 6.2(4)(b) Rate in Number Rateable Rate Interim Back Total 201YFMR r.23 (a)-(c) (a) RATE TYPE $ of Value Revenue Rates Rates Revenue Actual

Properties $ $ $ $ $ $

Differential General Rate GRV - Residential 8.3900 3207 27,943,588 2,344,467 2,344,467 2,512,438 GRV - Comm/Industrial 8.3900 390 14,003,417 1,174,887 1,174,887 1,234,027 GRV - Truck/Bus Depot 9.0450 140 850,492 76,927 76,927 76,251 UV - Rural 1.2403 1231 351,422,400 4,358,692 8,636 4,367,328 4,115,380 UV - Mining 1.2403 50 1,496,250 18,557 18,557 6,470 UV - Commercial Industrial 1.2403 5 486,160 6,030 6,030 6,138 Sub-Totals 5023 396,202,307 7,979,560 8,636 0 7,988,196 7,950,704Minimum Rates Minimum GRV - Residential 521 1570 7,894,525 817,970 817,970 928,760 GRV - Comm/Industrial 521 91 420,977 47,411 47,411 44,128 GRV - Truck/Bus Depot 521 60 603,132 31,260 31,260 31,066 UV - Rural 260 15 37,821 3,900 3,900 6,835 UV - Mining 260 12 95,099 3,120 3,120 23,506 UV - Commercial/Industrial 260 2 8,755 520 520 530 Sub-Totals 1750 9,060,309 904,181 0 0 904,181 1,034,825

6773 8,883,741 8,636 8,892,377 8,985,529Ex Gratia Rates 7,010 6,950Discounts (Note 12) 0 (289,330)

Total Amount Required to be Raised from Rates 8,899,387 8,703,149Specified Area Rates (Note 9) 15,230 49,261Excess Rates or Rates in Advance 0 595

TotalsTotal Rates by Nature or Type 8,914,617 8,753,005

All land except exempt land in the Town of Eagle Bay is rated according to its Gross Rental Value (GRV) in town sites or Unimproved Value (UV) in the remainder of the Shire.The general rates detailed above for the 201Z financial year have been determined by Council on the basis of raising the revenue required to meet the


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deficiency between the total estimated expenditure proposed in the budget and the estimated revenue to be received from all sources other than rates.


Note 9 Commentary – Specified Area RateFMR r. 23 (d) FMR r. 23(d) requires local governments to show how the proceeds of the rate

are to be applied. The model example shows a specified area rate for a Sewerage Scheme.

(d) for each specified area rate —(i) the purpose of the rate;(ii) the rate in the dollar;(iii) a brief description identifying the area within which the rate is to be

imposed;(iv) whether the basis for the rate is the gross rental value or the

unimproved value of land;(v) an estimate of the total rateable values of the properties rated on

gross rental value or rated on unimproved value, as the case requires;

(vi) the amount it is estimated will be imposed by way of —(I) the rate;(II) interim rates; and(III) back rates;

(vii) how the proceeds of the rate are to be applied including an estimate of —(I) the amount applied;(II) the amount to be set aside in a reserve account;(III) the amount to be applied from the reserve account.

Note 10 Commentary – Service ChargesFMR r. 24 FMR r. 24 requires local governments to show details of each service charge

and must include the following. The model example shows a service charge for property surveillance and security.

(a) details of the nature of the service for which the service charge is imposed;(b) the reasons for the service charge;(c) the amount of the service charge;(d) an estimate of the total amount to be imposed by way of the service

charge;(e) if the service charge is to be imposed on land in a defined part of the

district, a brief description identifying the area within which the service charge is to be imposed;

(f) details of how the proceeds of the service charge are to be applied, including an estimate of —(i) amount to be applied;(ii) the amount to be set aside in a reserve account; and(iii) the amount to be applied from the reserve account.

FMR r. 54 Defined service charges are:(i) television and radio re-broadcasting;(ii) underground power;(iii) property surveillance and security; and(iv) water.

FMR r. 27(a) Refer to FMR r. 27(a) if interest is to be charged.


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8. RATING INFORMATION - Current FINANCIAL YEAR (continued)(b) Differential Rates

The Town of Eagle Bay has applied a uniform general rate to land rated on the basis ofUnimproved Values (UV).

Differential general rates have been imposed on Gross Rental Value (GRV) rated land wherea higher rate of Industrial land has been imposed on 133 properties to reflect theimpact that larger vehicles using these sites have on the road infrastructure in the Town's industrial park.The differential general rate is approximately 8% higher than the rate thatapplies to all other GRV rated land. The object of the rate is to raise additional revenue tomeet the higher costs of road maintenance works required.

(c) Minimum PaymentsA minimum payment of $260 is applied uniformly to all UV land and a minimum payment of$521 is applied to all other GRV rated land. This is in recognition that every property receivessome minimum level of benefit from services and needs to make a reasonable contribution tothose services.

FMR r. 23(d) 9. SPECIFIED AREA RATE - 201Y/201Z FINANCIAL YEAR

Rate in Basis 201Z Budget 201Y$ of Budgeted Applied Actual

Rate Revenue to Costs $$ $

Eagle Bay Water SchemeUV Rural 0.0050 3,579,000 15,230 15,230 49,261

15,230 15,230 49,261

The specified are rate for the Eagle Bay Water Scheme is for those properties in the Eagle baylocality which are connected to the scheme and is levied on the gross rental value ofaffected properties.

The proceeds of the rate are applied in full to the maintenance of the scheme which includesloan repayments.

As such, no transfer to or from reserve accounts will occur.

FMR r. 2410

. SERVICE CHARGES - 201Y/201Z FINANCIAL YEAR

Amount 201Z Budget 201Yof Budgeted Applied Actual

Charge Revenue to Costs $$ $ $

0 0 0FMR r. 27(a) No interest will be charged on overdue service charges.


Note 11 Commentary – Discount, Incentive, Concession, Waiver and Write-off Information

FMR r. 26 (1) The annual budget is to include for each discount or other incentive or waiver or concession for early payment of any money proposed in relation to any money —(a) in respect of a discount —

(i) the amount or the percentage of the discount to be allowed;(ii) the circumstances in which the discount will be granted.

(c) in relation to a waiver or concession —

(i) a brief description of the waiver or concession;(ii) a statement of the circumstances in which it will be granted;(iii) details of the persons or class of persons to whom it is

available;(iv) the objects of and reasons for the waiver or concession.

(2) The annual budget is to separately include an estimate of the following to all general rates, specified area rates, service charges and fees and charges imposed under the Act or any other written law —(a) the total amount of the discounts which may be granted;(b) the total cost of each incentive scheme;(c) the total cost or reduction of revenue of a waiver or concession;(d) the total amount of money to be written off.

This disclosure could be presented by way of a table or by way of explanation.

Note 12 Commentary – Interest Charges & Instalments

FMR r. 27 (a),

(b), & (c)

LGA s. 6.13

Under ‘Budget notes’, FMR r.27 requires the annual budget to include notes detailing –

(a) & (b) for the late payment of a rate or service charge:(i) the rate of interest;(ii) an estimate of the total amount of revenue from the imposition of the

interest.LGA s. 6.45 (c) for the instalment options of the Local Government Act s6.45:

(i) due dates for each instalment under each option;(ii) rate of interest;(iii) the additional charge;(iv) an estimate of the total amount of revenue from the imposition of the

interest and additional charge.

Note that the amounts shown in the Model are for guidance only.


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FMR r. 2611

. RATE PAYMENT DISCOUNTS, WAIVERS & CONCESSIONS- 201Y/201Z FINANCIAL YEARNo discount is being offered to ratepayers for early payment of rates. However, a holidaypackage donated by the Eagle Bay Motel will be drawn from those ratepayers who havepaid their rates in full by the due date.

A waiver of rates in relation to commercial leases entered into with tenants of the Museum

The Council offers those resident who hold a current valid seniors concession card, aconcession in respect of the following services:(I) Rubbish Collection Services, 50% of the normal fee applicable(II) Dog registration fees, 50% of the normal fee applicable(III) User charges at the Bay of Eagle Leisure Centre, 30% of admission fees.

FMR r. 27 (a)(b)(c)

12. INTEREST CHARGES AND INSTALMENTS

- 201Y/201Z FINANCIAL YEARAn interest rate of 11% will be charged on all rate payments which are late. It isestimated this will generate income of $25,000. Three separate option plans will beavailable to ratepayers for payment of their rates.

Option 1 (Full Payment)Full amount of rates and charges including arrears, to be paid on or before 24 September201Y or 35 days after the date of service appearing on the rate notice whichever is thelater. See Note 12 for discount provisions under this option. Option 2 (Two Instalments)First instalment to be received on or before 24 September 201Y or 35 days after the dateof service appearing on the rate notice whichever is later and including all arrears andhalf the current rates and service charges. Second instalment to be made on or before28 January 201Z. Option 3 (Four Instalments)First instalment to be received on or before 24 September 201Y or 35 days after the date ofservice appearing on the rate notice whichever is later and including all arrears and onequarter of the current rates and service charges. Second instalment to be made on orbefore 26 November 201Y, third instalment to be made on or before 28 January 201Zand the fourth instalment to be made on or before 28 March 201Z.

The cost of the instalment plans will comprise of simple interest of 5.5% p.a. calculatedfrom the date the first instalment is due, together with an administration fee of $10 foreach instalment notice (ie $10 for Option 2 and $30 for Option 3)

The total revenue from the interest and administration charge is estimated as follows:

Interest Admin. Budgeted ActualRate Charge Revenue Revenue

FMR r. 15(3) % $ $ $Interest on Unpaid Rates 11.00 0 25,000 25,683Interest on Instalments Plan 5.50 0 25,000 26,572Charges on Instalment Plan 0 10 25,000 9,800

75,000 62,055


Note 13 Commentary – Fees and Charges

FMR r. 25 Local Governments are to disclose information of fees and charges imposed in relation to each program. The total fees and charges should agree back to the total fees and charges disclosed in the Statement of Comprehensive Income by Nature or Type.

FMR Schedule 1Part 1

Note that Sewerage, Waste Service (as defined in the Waste Avoidance and Resource Recovery Act 2007) and Rubbish Collection Charges are part of this disclosure and are also included under the Community Amenities program.

Note 14 Commentary – Elected Members’ Remuneration

FMR r. 27 (l) The provisions regarding disclosure of fees paid to elected members contained in FMR r.27 are:

(i) the nature of the fee, expense or allowance; and(ii) an estimate of the total amount or value of each class of fee, expense

or allowance.

Admin Regs 30-34 Prescribed amounts are contained in the Local Government (Administration) Regulations 30 to 34.

DLGC General guidance regarding meeting fees, allowances and expenses are provided in Local Government Operational Guideline Number 15.

Note that the amounts shown in the Model are for guidance only.


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FMR r. 2513

. FEES & CHARGES REVENUE201Z 201Y

Budget ActualFMR r. 15(3) $ $

FMR Schedule 1 Governance 14,900 14,115Part 1 General Purpose Funding 800 784

Law, Order, Public Safety 230,500 229,958Health 150,000 98,247Education and Welfare 382,000 278,472Housing 600 520Community Amenities 1,586,150 1,424,141Recreation & Culture 1,190,000 921,370Transport 750,000 811,692Economic Services 494,300 445,437Other Property & Services 300,500 774,981

5,099,750 4,999,717

FMR r. 27 (l)14

. ELECTED MEMBERS REMUNERATION

The following fees, expenses and allowances were paid to council members and/or themayor:

201Z 201YBudget Actual

FMR r. 15(3) $ $

Admin Reg 30-34 Meeting Fees 49,000 49,000

Mayor's Allowance 14,000 14,000Deputy Mayor's Allowance 3,500 3,500Travelling Expenses 10,500 9,450Telecommunications & IT Allowance 21,000 18,575

98,000 94,525


Note 15 Commentary – Notes to Statement of Cash Flows

AASB 107 The cash flow statement presents the generation and use of cash by category (operating, investing and finance) over a specific period of time. It provides the users with a basis to assess the entity’s ability to generate and utilise its cash.Investing activities are the acquisition and disposal of non-current assets and investments that are not cash equivalents. Financing activities are changes in the equity and borrowings. Operating activities are the entity’s revenue-producing activities.Entities may present their operating cash flows by using either the direct (gross cash receipts/payments by function) or the indirect method (adjusting net profit or loss for non-operating and non-cash transactions; and for changes in working capital).

Non Cash TransactionsAASB 107.43 Information about transactions and other events which do not result in cash

flow during the reporting period but affect assets and liabilities that have been recognised are required to be disclosed where the transaction involved external parties and relate to the financing, investing and other non-operating activities of an entity.Examples of non-cash financing and investing activities include: Assets acquired but not paid for at year-end; An exchange of non-cash assets or liabilities; Assets acquired for debt, obtaining an asset by finance lease.These non-cash activities would usually be disclosed as an additional note to the Notes to the Cash Flow Statement.

Reconciliation of CashAASB 107.45 AASB 107 requires disclosure of the components of cash and cash equivalents

and presents a reconciliation of the amounts in its cash flow statement with the equivalent items reported in the balance sheet.

Reconciliation of Net Cash by Operating ActivitiesAASB 107 Aus.20(1) When an entity uses the direct method, a reconciliation of cash flows arising

from operating activities to profit or loss needs to be disclosed in the financial report.There are a number of different formats that may be used for the reconciliation according to professional preference. Some formats are illustrated in AASB 107 Appendix A5.

Additional DisclosureAASB 107.50 Additional information may be relevant to users in understanding the financial

position and liquidity of an entity. Disclosure of this information, together with a commentary by management, is encouraged and may include the amount of undrawn borrowing facilities that may be available for future operating activities and to settle capital commitments, indicating any restrictions on the use of these facilities.


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15. NOTES TO THE STATEMENT OF CASH FLOWS

AASB 107.45 (a) Reconciliation of CashFor the purposes of the cash flow statement, cash includes cash and cashequivalents net of outstanding bank overdrafts.Estimated cash at the end of the reporting period is as follows:

201Z 201Y 201Y

BudgetEst.

Actual BudgetFMR r. 15(3) $ $ $

Cash - Unrestricted Muni 450,639 422,895 1,444,000Cash - Restricted Unspent Grants 0 1,566,637 2,000,779Cash - Restricted Reserves 5,489,693 4,362,318 2,560,925Cash - Restricted Unspent Loans 0 30,000 0

5,940,332 6,381,850 6,005,704The following restrictions have been imposed by regulation or other externally imposed requirements

Land Purchase & Development Reserve 1,861,225 1,163,026 493,995Plant Reserve 903,544 775,544 839,423Building Reserve 1,356,016 977,669 123,188Sanitation (Rubbish Removal) Reserve 1,001,539 623,039 456,068Aerodrome Reserve 129,701 178,880 59,790Employee Entitlements - Annual Reserve 236,668 644,160 588,462Workers Compensation Premium Reserve 1,000 0 0Unspent Loans 0 30,000 0Unspent Grants 0 1,566,637 2,000,779

5,489,693 5,958,955 4,561,705

AASB 107.(b

) Reconciliation of Net Cash Provided By Operating Activities to Net Result Aus20.2 Net Result 5,983,637 3,521,496 5,197,532

Depreciation 7,200,000 6,907,407 7,100,000Write-down of Fair Value of Investments 0 60,000 0

(Profit)/Loss on Sale of Asset (91,795) 54,277(2,284,58

1)(Increase)/Decrease in Receivables (320,085) (106,454) (90,278)(Increase)/Decrease in Inventories 193,085 (89,854) (1,749)Increase/(Decrease) in Payables 563,972 259,498 702,643Increase/(Decrease) in Employee Provisions (412,351) (289,554) (701,905)Grants/Contributions for the Development

of Assets(5,658,33

4)(2,994,03

7)(5,856,32

8)Net Cash from Operating Activities 7,458,129 7,322,779 4,065,334

AASB 107.50 (c) Undrawn Borrowing FacilitiesCredit Standby ArrangementsBank Overdraft limit 400,000 400,000 400,000Bank Overdraft at Balance Date 0 0 0Credit Card limit 24,000 31,000 24,000Credit Card Balance at Balance Date 0 (8,212) 0Total Amount of Credit Unused 424,000 422,788 424,000Loan FacilitiesLoan Facilities - Current 108,612 83,612 70,597Loan Facilities - Non-Current 1,744,603 1,558,215 2,699,145


Loan Facilities in use at Balance Date 1,853,215 1,641,827 2,769,742Unused Loan Facilities at Balance Date 0 30,000 0


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Note 16 Commentary – Major Land Transactions

LGA s. 3.59

F&G r. 7

The Local Government Act 1995 s.3.59 Commercial enterprises by local governments defines a land transaction as an agreement, or several agreements for a common purpose, under which a local government is to – Acquire or dispose of an interest in land, or Develop land.

Before the local government enters into a land transaction that is preparatory to entry into a major land transaction, a local government is to prepare a business plan.

Under Regulation 8A of the Function and General Regulations, for a land transaction to be a major land transaction, the total value has to be the lesser of: $10 million or 10% of the operating expenditure of a local government

in the metropolitan area or a major regional centre; or $2 million or 10% of the operating expenditure of other local

governments.FMR r. 27(k) If the transaction was entered into during a prior year the local government is

required to disclose an estimate of opening assets and liabilities.In relation to each major land transaction according to nature or type –(i) an estimate of revenue and expenditure;(ii) estimated assets and liabilities at 1 July;(iii) such other information as is necessary to provide full and complete

information on the transaction; andFMR r. 30(1)(d)

LGA s. 3.58

Comparative figures are also required for each transaction.

Disposing of Property

(2) Except as stated in this section, a local government can only dispose of property to —

(a) the highest bidder at public auction; or(b) the person who at public tender called by the local government

makes what is, in the opinion of the local government, the most acceptable tender, whether or not it is the highest tender.

(3) A local government can dispose of property other than under subsection (2) if, before agreeing to dispose of the property —

(a) it gives local public notice of the proposed disposition —and

(b) it considers any submissions made to it before the date specified in the notice and, if its decision is made by the council or a committee, the decision and the reasons for it are recorded in the minutes of the meeting at which the decision was made.

(4) The details of a proposed disposition that are required by subsection (3)(a)(ii) include —

(a) the names of all other parties concerned; and(b) the consideration to be received by the local government for the

disposition; and(c) the market value of the disposition —

(i) as ascertained by a valuation carried out not more than 6 months before the proposed disposition; or

(ii) as declared by a resolution of the local government on the basis of a valuation carried out more than 6 months before the proposed disposition that the local government believes to be a true indication of the value


at the time of the proposed disposition.


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Note 17 Commentary – Trading Undertakings and Major Trading Undertakings

FMR r. 27(i) & (j) If the local government has a major trading undertaking the disclosure requirements for each undertaking are –

(i) separately, in relation to each trading undertaking —(i) an income statement;(ii) such other information as is necessary to provide full and complete

information on the undertaking;

(j) in relation to each major trading undertaking, in addition to the information required by paragraph (i), a statement setting out all other revenue and expenditure which is not included in the income statement referred to in paragraph (i)(i) but which has been used in the pricing structure for goods or services to be provided by the undertaking.

FMR r. 30(1)(d)

LGA s. 3.59

F&G r. 8A

Comparative figures are also required for each undertaking.

The Local Government Act 1995 s.3.59 (2) requires that before entering into a major trading or land transaction OR entering into a land transaction that is preparatory to entering into a major land transaction, a local government is to prepare a business plan. S.3.59 (3) requires the Business Plan it to include the following: an overall assessment of the undertaking its expected effect on the provision of facilities and services its expected effect on other persons providing facilities and services its expected financial effect its expected effect on the Plan for the Future the ability of the local government to manage the undertaking any other matters

s.3.59 (4) (i) (ii) requires that the local government is to give Statewide public notice of its proposal to commence the major undertaking and to provide a copy of the business plan in a place specified in that notice.

Minimum value of major land transaction

For a land transaction to be a major land transaction the total value of —

(a) the consideration under the transaction; and

(b) anything done by the local government for achieving the purpose of the transaction,

Is the lesser of: $10 million or 10% of the operating expenditure of a local government

in the metropolitan area or a major regional centre; or $2 million or 10% of the operating expenditure of other local

governmentsincurred by the local government from its municipal fund in the last completed financial year.

Note: (b) expenditure should include such items as printing and stationery, selling costs, development costs, consultant engineer, legal fees, administration allocation costs (e.g. CEO, planner, building surveyor etc. time allocated to project) and all expenses relating to the undertaking.


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FMR r. 27(i)17

.TRADING UNDERTAKINGS AND MAJOR TRADING UNDERTAKINGS

FMR r. 27(j)ABC Aerodrome

Council's objective is to maintain a safe landing airstrip and functional airport amenitiesconducive to the promotion of the district as a tourist and business destination. OperatingCosts are met by landing fees charged. Annual surpluses are transferred to reserve fundsin the next financial year to finance future improvements to the facility.

201Z 201Y 201Y(a) Operating Statement Budget Actual Budget

$ $ $Operating Revenues Passenger Landing Fees 565,000 569,423 500,000 Commissions Fuel Agency 15,000 15,277 14,800 Rental 13,000 12,542 13,000 Identification Charges 200 182 - Other Sundry Income 500 420 2,040 Subsidies 340,000 319,164 339,367 Gain on Disposal of Asset 107,295 3,545 - Reimbursement Expenses 3,000 8,042 3,100

1,043,995 928,595 872,307Less Operating Expenses

Employee Expenses (112,000) (171,650) (169,138)

Insurance (18,000) (17,776) (16,130)

Building Expenses (17,000) (16,827) (10,584)

Grounds & Strip Maintenance (44,000) (64,130) (51,742)

Fuel Agency Expense (4,500) (4,216) (5,500)

Marketing (7,000) (7,393) (5,000)

Identification Expenses (500) (271) (1,500)

Administration Overheads (27,000) (29,618) (27,458)

Depreciation (96,500) (96,793) (85,051)

Other (33,500) (41,043) (33,450)

(360,000) (449,717) (405,553)

Operating Result 683,995 478,878 466,754

(b) Non-Operating Income & ExpenditureCapital Revenue Proceeds on Disposal 360,000 24,545 24,546 Transfer From Reserve Fund 422,000 695,230 405,210

782,000 719,775 429,756


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FMR r. 27(i)17

.TRADING UNDERTAKINGS AND MAJOR TRADING UNDERTAKINGS (continued)

FMR r. 27(j)(b) Non-Operating Income & Expenditure (continued)


$ $ $Less Capital Expenditure

Land & Buildings (30,000)

(25,560)

(28,956)

Infrastructure (340,000)

(43,836)

(46,575)

Runway Extension - (175,874)

(229,644)

Plant & Equipment (160,000)

(36,472)

(45,354)

Transfers to Cash Reserves (385,801)

(624,110)

(215,000)

(915,801)

(905,852)

(565,529)

Non-Operating Result (133,801)

(186,077)

(135,773)

TOTAL NET TRADING UNDERTAKING 550,194 292,801 330,981

(c) Financial PositionCURRENT ASSETSCash Assets 550,156 212,605Receivables 426,766 150,869TOTAL CURRENT ASSETS 976,922 363,474

NON-CURRENT ASSETSProperty Plant & Equipment 1,211,560 1,111,548Infrastructure 1,970,545 1,934,045TOTAL NON-CURRENT ASSETS 3,182,105 3,045,593

TOTAL ASSETS 4,159,027 3,409,067

CURRENT LIABILITIESPayables (Creditors & Wages Payable) 88,910 68,910Provisions (Employee Entitlements) 53,001 9,036TOTAL CURRENT LIABILITIES 141,911 77,946

NON-CURRENT LIABILITIESProvisions (Employee Entitlements) 18,810 16,810TOTAL NON-CURRENT LIABILITIES 18,810 16,810

TOTAL LIABILITIES 160,721 94,756

NET ASSETS 3,998,306 3,314,311

EQUITYAccumulated Surplus 3,855,625 3,254,521Reserves - Cash Backed 142,681 59,790TOTAL EQUITY 3,998,306 3,314,311


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4.11.1 Cross Reference Guide

This guide is a useful tool to ensure that the notes to the statements agree with the figures used in the statutory statements.

REFERENCE BALANCE WITH DESCRIPTIONStatement of Comprehensive Income by Nature or Type (SCI - N or T)Rates Note 8 Total Rates including Specified Area RatesFees and Charges Note 13 Total Fees & ChargesService Charges Note 10 Revenue RaisedInterest Earnings Note 2(a)(ii) Interest Earnings

Note 12 Interest on Unpaid Rates and InstalmentsInterest Expenses Note 2(a)(i) Interest Expenses (Finance Costs)

Note 5(a) Interest Repayments on BorrowingsDepreciation Note 2(a)(i) Depreciation

Note 15(b) Depreciation

Non-Operating Grants, Subsidies SCI - ProgramNon-Operating Grants, Subs and Contributions

and Contributions SCFNon-Operating Grants, Subs and Contributions

Note 15(b)Non-Operating Grants, Subs and Contributions

Fair Value Adjustments to Note 2(a)(i) Significant Expense

financial assets at fair valueProfit on Asset Disposals Note 4 Summary – Profit on Asset DisposalLoss on Asset Disposals Note 4 Summary – Loss on Asset DisposalNet Result Note 15(b) Net ResultOther Comprehensive Income SCI - Program Change on revaluation of non-current assets

or other changeTotal Comprehensive Income SCI - Program Total Comprehensive IncomeStatement of Comprehensive Income by Program (SCI - Program)

Non-Operating Grants, Subsidies SCI - N or TNon-Operating Grants, Subs and Contributions

and Contributions SCFNon-Operating Grants, Subs and Contributions

Note 15(b)Non-Operating Grants, Subs and Contributions

Profit/(Loss) on Asset Disposals SCI - N or T Profit and Loss Totals

Note 4 Summary - Profit/(Loss) on Asset DisposalNet Result SCI - N or T Net Result

Note 15(b) Net ResultOther Comprehensive Income SCI – N or T Change in revaluation of non-current assetsTotal Comprehensive Income SCI – N or T Total Comprehensive IncomeStatement of Cash Flows (SCF)Net Cash provided by Operating Note 15(b) Net Cash From Operating Activities

ActivitiesPayments for Development of Note 3 Acquisition of Assets by Class

Land Held for ResalePayments for Purchase of Property, Note 3 Acquisition of Assets by Class

Plant and EquipmentPayments for Construction Note 3 Acquisition of Assets by Class

Infrastructure


CROSS REFERENCE GUIDE (continued)REFERENCE BALANCE WITH DESCRIPTION

Non-Operating Grants, Subsidies SCI – N or T Non-Operating Grants, Subsidies and Contributions

and Contributions SCI - Program Non-Operating Grants, Subsidies and Contributions

Note 15(b) Non-Operating Grants, Subs and Contributions

Proceeds from Disposal of Assets RSS Proceeds from Disposal of Assets

Note 4 Actual Sale PriceRepayment of Debentures RSS Repayment of Debentures

Note 5(a) Actual Principal RepaymentsProceeds from SS Loans RSS SS Loans Principal Income

Note 5(a) Principal Repayments (*)Proceeds from New Loans RSS Proceeds from New Debentures

Note 5(b) Actual Amount BorrowedCash at Beginning of Year Prior Year Total Prior Annual Statements Total Cash

Note 15(a) Prior Year Cash and Cash EquivalentsCash and Cash Equivalents Note 15(a) Cash and Cash Equivalents

at End of the YearRate Setting Statement (RSS)(Profit)/Loss on Asset Disposals Note 15(b) Reconciliation of Net Cash

Note 4 Summary Total on Asset DisposalsDepreciation on Assets SCI – N or T Depreciation

Note 2(a)(i) Total Depreciation

Note 15(b) Reconciliation of Net Cash

Purchase of Land Held for Resale SCFPayments for Development of Land Held for Resale

Note 3 Acquisition of Assets by ClassPurchase of Land and Buildings SCF Payments for Property, Plant and Equipment

Note 3 Acquisition of Assets by ClassPurchase Plant and Equipment SCF Payments for Property, Plant and Equipment

Note 3 Acquisition of Assets by ClassPurchase of Furniture and SCF Payments for Property, Plant and Equipment Equipment Note 3 Acquisition of Assets by ClassInfrastructure Assets SCF Payments for Construction of Infrastructure

Note 3 Acquisition of Assets by ClassRepayment of Debentures SCF Repayment of Debentures

Note 5(a) Actual Principal RepaymentsProceeds from Disposal of Assets SCF Proceeds from Disposal of Assets

Note 4 Actual Sale PriceProceeds from New Debentures SCF Proceeds from New Debentures

Note 5(b) Actual Amount BorrowedSS Loan Principal Income SCF Proceeds from SS Loans

Note 5(a) Principal Repayments (*)Transfer to Reserves Note 6 Summary of Transfer Reserves - TOTransfer from Reserves Note 6 Summary of Transfer Reserves - FROMEst. Surplus/(Deficit) 1 July B/F Annual Statements 30 June Carried Forward Figure

Note 7 Net Current Assets Prior Year CalculationsEst. Surplus/(Deficit) 30 June C/F Note 7 Estimate for the BudgetAmount Required to be Note 8 Total Revenue – Sub Total to Rate

Raised from Rates Setting Statement


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Note 2 (a)Operating Revenues and SCI – N or T Fair Value Adjustments to Financial Assets Expenses - Net Result SCI – N or T Depreciation

RSS Depreciation Written Back

Note 15(b) Reconciliation of Net Cash

SCI – N or T Interest Expenses

Note 5(a) Interest Repayments on Borrowings

SCI – N or T Interest Earnings

Note 12 Rate Interest Charges and InstalmentsNote 3Acquisition of Assets SCF Payments for Capital

RSS Purchase of Capital

Appendix II Capital TemplatesNote 4Disposal of Assets SCI – N or T Profit and Loss on Asset Disposals

SCI – Program Profit and Loss on Asset Disposals

SCF Proceeds from Disposal of Assets

RSS (Profit)/Loss on Asset Disposal written back

RSS Proceeds from Disposal of Assets

Appendix II Capital TemplatesNote 5Information on Borrowings SCI - N or T Interest Expenses Debenture Repayments SCF Repayment of Debentures

SCF Proceeds from New Debentures

RSS Repayment of Debentures

RSS Proceeds from SS Loans

RSS Proceeds from New Debentures

Note 2(a)(i) Interest Expenses

Appendix II Capital TemplatesNote 6Reserves - Cash/Investment SFP (Appendix I) Equity Summary Backed SCE (Appendix I) Reserve Transfers

RSS Transfer to Reserves

RSS Transfer from Reserves

Appendix II Capital TemplatesNote 7 - Net Current AssetsRate Setting Statement RSS Estimated B/F to Budget from prior annuals

RSS Estimated C/F for BudgetInformation on Borrowings Note 5 SSL Principal RepaymentsReserves Note 6 Cash Backed Leave ReserveReconciliation of Cash Note 15(a) Cash Restricted and UnrestrictedNote 8 - Rating InformationRates SCI – N or T Rates including Specified Area Rates

RSS Amount Required to be Raised from General Rates

Note 9 Specified Area Rates

Note 11 Discounts



Note 9 - Specified Area RateRating Information Note 8 Specified Area RatesNote 10 - Service ChargesService Charges SCI – N or T Service ChargesNote 11 - Rate Payment discounts, Waivers and ConcessionsRating Information Note 8 Discounts, Incentives, Concessions

Write-offsNote 12Interest Charges and Instalments Note 2(a)(ii) Other Interest RevenueNote 13 - Fees and ChargesFees and Charges SCI – N or T Fees and ChargesNote 15 - Notes to the Statement of Cash Flows

(a) Reconciliation of Cash SCFCash and Cash Equivalents and the End of the Year

Note 7 Total Unrestricted and Restricted Cash(b) Reconciliation of Net Cash SCI – N or T Net Result

Provided by Operating SCI – N or TFair Value Adjustments to financial assets at fair value

Activities to Net Result SCI – N or T Depreciation

SCI – N or T Profit/(Loss) on Asset Disposals

SCI – N or TNon-Operating Grants, Subsidies and Contributions

SCI - Program Net Result

SCI - Program Profit/(Loss) on Asset Disposals

SCI - ProgramNon-Operating Grants, Subsidies and Contributions

SCFNon-Operating Grants, Subsidies and Contributions

SCF Net Cash provided by Operating activities

RSS Depreciation

RSS (Profit)/Loss on Asset Disposals written back

Note 2(a)(i) Depreciation

Note 4 Summary Profit/(Loss) on Asset Disposals(c) Undrawn Borrowing Facilities Note 5(c) Unspent DebenturesStatement on Financial Position (SFP) - Appendix I

Cash and Cash Equivalents SCFCash and Cash Equivalents and the End of the Year

Note 7 Total Unrestricted & Restricted Cash

Note 15(a) Cash and Cash EquivalentsInvestments Note 7 InvestmentsTrade and Other Receivables Note 7 Total Current Trade and Other ReceivablesInventories Note 7 Total Current InventoriesTotal Current Liabilities Note 7 Total Current Payables and ProvisionsLong Term Borrowings Note 5(a) Total Current Long Term Borrowings

Note 15(c) Loan Facilities - Current and Non-CurrentReserves – Cash/Investment SCE (Appendix I) Transfer to/from Reserves Backed Note 6 Total Reserves

Note 7 Restricted ReservesReserves – Asset Revaluation SCE (Appendix I) Total Other Comprehensive IncomeNet Assets SCE (Appendix I) Total EquityStatement of Changes in Equity (SCE)Reserve Transfers Note 6 Total Net Transfers To/(From) ReservesTotal Equity SFP (Appendix I) Net Assets


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4.12 Annual Budget Review

Local governments are required to conduct a budget review between 1 January and 31 March each financial year. This is a requirement of Regulation 33A of the Local Government (Financial Management) Regulations 1996 (FMR). The intention of the legislation is to ensure local governments conduct at least one budget review between six and eight months into a financial year.

A budget review is a detailed comparison of the year to date actual results with the adopted or amended budget. It establishes whether a local government continues meeting its budget commitments, is in receipt of income and incurs expenditure in accordance with the adopted budget. The results of the review and accompanying report from senior staff should be presented to the audit committee for consideration and advice to council.

FMR r. 33A(1) requires that between 1 January and 31 March in each financial year a local government is to carry out a review of its annual budget for that year.

FMR r. 33A(2A) requires the review of an annual budget for a financial year must –

(a) consider the local government’s financial performance in the period beginning on 1 July and ending no earlier than 31 December in that financial year; and

(b) consider the local government’s financial position as at the date of the review; and

(c) review the outcomes for the end of that financial year that are forecast in the budget.

FMR r. 33A(2) and (3) require the results of the budget review to be submitted to council within 30 days of the review. Council is then to consider a review submitted to it and determine whether or not to adopt the review, any part of the review or any recommendations made in the review.

FMR r. 33A(4) requires that within 30 days after council has made a determination a copy of the review and determination is to be provided to the Department.

Local governments should consider reviewing their budget on a regular basis as well as the statutory requirement between the above dates. Best practice would indicate that the budget should be reviewed on a three monthly cycle and be undertaken on a line by line basis.

It is extremely important for a local government to review the budget immediately following the annual financial statements being completed and audited. Very often the actual carried forward figure in the budget will differ from the audited actual carried forward figure and this should be adjusted by a budget variation adopted by council.

Note: If prior budget reviews have been undertaken, the r 33A review must still cover the period from 1 July and also cover any adjustments made as a result of prior reviews. This can usually be addressed by including an additional column in the statutory review headed ‘Previous Budget Review” or similar.


TOWN OF EAGLE BAYBUDGET REVIEW

FOR THE PERIOD ENDED 28 FEBRUARY 201Z

TABLE OF CONTENTS

Statement of Budget Review – By Program 110

Statement of Budget Review – By Nature or Type 112

Statement of Budget Review – By Business Unit 114

Notes to the Budget Review Report Closing Funds and Budget Amendments 116

Budget Review Agenda Item 118


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Note:When forwarding the budget review documents, the Department of Local Government only requires the following information (refer to following pages for suggested formats):

1. Minutes that show the report and resolution

2. Statement of Budget Review by program, nature or type or business unit showing the new opening (after audit of prior year financial statements) and closing funds

3. Note on how closing funds are derived

4. Line item description of variations

SURPLUS/(DEFICIT)BY PROGRAM

Note Action ResultAdopted Budget

ResultRevised Budget

ResultYTD

Actual

(a)

This total is the sum of operating revenue, operating expenditure, capital income and capital expenditure, excluding rates.

($17,171,106) ($17,177,713) ($13,639,848)

(b) Add back all non-cash items $7,108,205 $7,081,534 $4,712,297

(c) Add surplus/(deficit) July 1 brought forward $1,163,514 $1,163,514 $1,163,514

(d) Deduct surplus/(deficit) June 30 carried forward 0 $6,722 $1,103,367

(e)

Sum (a), (b) and (c), deduct amount at (d). Total is amount of rates to be levied.

($8,899,387) ($8,939,387) ($8,867,404)


TOWN OF EAGLE BAYSTATEMENT OF BUDGET REVIEW

BY PROGRAMFOR THE PERIOD ENDING 28 FEBRUARY 201Z

Adopted Revised YTDBudget Budget Actual Variance Variance

Revenue (a) $ (b) $ $ (b) - (a) %General Purpose Funding 220,617 220,617 147,078 0 0.00Governance 3,688,491 3,688,491 3,458,994 0 0.00Law, Order and Public Safety 707,433 677,479 451,653 (29,954) -4.23Health 270,249 270,249 180,166 0 0.00Education and Welfare 1,710,763 1,710,763 1,140,509 0 0.00Housing 600 600 400 0 0.00Community Amenities 1,738,813 1,732,678 1,155,119 (6,135) -0.35Recreation and Culture 1,368,770 1,368,770 912,513 0 0.00Transport 6,367,662 6,367,662 4,245,108 0 0.00Economic Services 518,813 418,304 278,869 (100,509) -19.37Other Property and Services 1,030,584 1,030,584 687,056 0 0.00

17,622,795 17,486,187 12,657,465 (136,598)ExpensesGeneral Purpose Funding (826,134) (826,134) (550,756) 0 0.00Governance (176,970) (191,665) (127,777) (14,695)Law, Order and Public Safety (1,371,758) (1,398,315) (932,210) (26,557) 1.94Health (369,302) (369,302) (246,201) 0 0.00Education and Welfare (1,792,712) (1,792,712) (1,195,141) 0 0.00Housing (1,500) (1,500) (1,000) 0Community Amenities (3,295,015) (3,295,015) (2,196,677) 0 0.00Recreation and Culture (4,391,021) (4,348,770) (2,899,180) 42,251 -0.96Transport (6,940,311) (6,940,311) (4,626,874) 0 0.00Economic Services (675,667) (567,602) (378,401) 108,065 -15.99Other Property and Services (698,155) (579,205) (386,137) 118,950 -17.04

(20,538,545) (20,310,531) (13,540,354) 228,014Capital IncomeProceeds from Disposal of Assets 602,000 583,250 388,833 (18,750) -3.11New Borrowings 320,000 320,000 320,000 0 0.00Self Supporting Loan Principal 25,399 25,399 12,700 0 0.00Transfer from Reserve 2,739,845 2,749,622 0 9,777 0.36

3,687,244 3,678,271 721,533 (8,973)Capital ExpenditureLand Held for Resale (3,421,373) (3,421,373) (3,045,189) 0 0.00Land & Buildings (828,500) (883,990) (883,990) (55,490) 6.70Infrastructure - Roads (6,865,895) (6,830,505) (6,984,459) 35,390 -0.52Infrastructure - Other (1,357,000) (1,357,000) (1,129,643)Plant and Equipment (1,499,000) (1,449,000) (1,320,005) 50,000 -3.34Furniture and Equipment (20,000) (20,000) (19,000)Repayment of Debentures (83,612) (83,612) (41,806) 0 0.00Transfer to Reserves (3,867,220) (3,986,170) (54,400) (118,950) 3.08

(17,942,600) (18,031,650) (13,478,492) (89,050)

Total Operating + Non-Operating(a) (17,171,106) (17,177,713) (13,639,848) (6,607)

ADJUST- NON CASH ITEMS(b)

Depreciation 7,200,000 7,181,020 4,787,347 (18,980) -0.26Movements 0 0 0 0(Profit)/Loss on Sale of Assets (91,795) (99,486) (75,050) (7,691) 8.38

ADD Surplus/(Deficit) July 1 B/F Opening (c) 1,163,514 1,163,514 1,163,514 0LESS Surplus/(Deficit) June 30 C/F Closing

(d) 0 6,722 1,103,367 6,722


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Amount Required from Rates(e) (8,899,387) (8,939,387) (8,867,404) (40,000)


SURPLUS/(DEFICIT)BY NATURE OR TYPE

Note ActionResultAdoptedBudget

ResultRevisedBudget

ResultYTDActual

(a)

This total is the sum of operating revenue, operating expenditure, capital income and capital expenditure, including rates.

($8,271,719) ($8,238,326) ($4,772,444)




(e)

Sum (a), (b) and (c), deduct amount at (d). Total is a control amount which must equal zero (0)

0 0 0


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TOWN OF EAGLE BAYSTATEMENT OF BUDGET REVIEW

BY NATURE OR TYPEFOR THE PERIOD ENDING 28 FEBRUARY 201Z

Adopted Revised YTD

Operating Income Budget Budget Actual VarianceVarianc

e(a) $ (b) $ $ (b) - (a) %

Rates 8,914,617 8,954,617 8,882,634 40,000 0.46Operating Grants, Subsidies & Contributions 5,424,320 5,424,320 3,950,891 0 0.00

Grants for the Development of Assets 5,658,334 5,557,825 4,399,077(100,509

) -1.78Fees and Charges 5,099,750 5,063,661 3,342,166 (36,089) -0.71Service Charges 0 0 0 0Interest Earnings 500,000 500,000 333,333 0 0.00Profit on Disposal of Assets 109,795 109,795 73,197 0 0.00Other Revenue 815,366 815,366 543,577 0 0.00

26,522,182 26,425,584 21,524,876 (96,598)

Operating ExpenditureEmployee Costs (7,821,052) (7,670,736) (5,113,824) 150,316 -1.92Materials and Contracts (3,995,534) (3,917,836) (2,611,891) 77,698 -1.94Utility Charges (457,291) (457,291) (304,861) 0 0.00Depreciation (7,200,000) (7,200,000) (4,800,000) 0 0.00Interest Expenses (92,149) (92,149) (61,433) 0 0.00Insurance Expenses (346,481) (346,481) (230,987) 0 0.00Loss on Disposal of Assets (18,000) (18,000) (12,000) 0 0.00Other Expenditure (608,038) (608,038) (405,359) 0 0.00

(20,538,545) (20,310,531) (13,540,354) 228,014Capital IncomeProceeds from Disposal of Assets 602,000 583,250 388,833 (18,750) -3.11New Borrowings 320,000 320,000 320,000 0 0.00Self-Supporting Loan Principal 25,399 25,399 12,700 0 0.00Transfer from Reserve 2,739,845 2,749,622 0 9,777 0.36

3,687,244 3,678,271 721,533 (8,973)Capital ExpenditureLand Held for Resale (3,421,373) (3,421,373) (3,045,189) 0 0.00Land & Buildings (828,500) (883,990) (883,990) (55,490) 6.70Infrastructure - Roads (6,865,895) (6,830,505) (6,984,459) 35,390 -0.52Infrastructure - Other (1,357,000) (1,357,000) (1,129,650)Plant and Equipment (1,499,000) (1,449,000) (1,320,005) 50,000 -3.34Furniture and Equipment (20,000) (20,000) (19,000)Repayment of Debentures (83,612) (83,612) (41,806) 0 0.00

Transfer to Reserves (3,867,220) (3,986,170) (54,400)(118,950

) 3.08(17,942,600) (18,031,650) (13,478,499) (89,050)

Total Operating + Non-Operating (a) (8,271,719) (8,238,326) (4,772,444) 33,393

ADJUST- NON CASH ITEMS(b)

Depreciation 7,200,000 7,181,020 4,787,347 (18,980) -0.26Movements 0 0 0(Profit)/Loss on Sale of Assets (91,795) (99,486) (75,050) (7,691) 8.38

ADD Surplus/(Deficit) July 1 B/F Opening (c) 1,163,514 1,163,514 1,163,514 0

LESS Surplus/(Deficit) June 30 C/F Closing(d) 0 6,722 1,103,367 6,722

Control = 0 (e) 0 0 0 0


SURPLUS/(DEFICIT)BY BUSINESS UNIT

Note ActionResultAdoptedBudget

ResultRevisedBudget

ResultYTDActual

(a)

This total is the sum of operating revenue, operating expenditure, capital income and capital expenditure, including rates.

($8,271,719) ($8,238,326) ($4,772,444)




(e)

Sum (a), (b) and (c), deduct amount at (d). Total is a control amount which must equal zero (0)

0 0 0


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CLOSING FUNDS AND BUDGET AMENDMENTS

Note Action ResultAdoptedBudget

ResultRevisedBudget

ResultYTD

Actual

(a)

This net current assets total should agree with the statement of financial position in the annual statements or with the budgeted net current assets note.

$5,974,413 $6,109,862 $7,243,594

(b) Deduct restricted reserve ($6,289,693) ($6,418,420) ($6,418,420)

(c)Deduct restricted unspent grants only if not being used in a future budget year

($0) ($0) ($0)

(d) Deduct SSL Principal Repayments ($25,399) ($25,399) ($12,700)

(e)

Add back current loan liability as they represent a current liability for payments to be made over the next 12 months already reflected as expenditure.

$91,592 $91,592 $41,806

(f)

Add back cash backed leave reserve. This figure must only be the cash backed amount and not the provision amount if that amount is greater. If the provision amount is less than the cash backed amount then only use the provision amount.

$249,087 $249,087 $249,087

(g) Closing Funds 0 6,722 1,103,367

(h)The budget amendments table should open with the adopted closing fund amount.

0

(i)

The amended closing fund amount should be the closing figure in the amended budget column.

$6,722

DLGC

When undertaking a budget review it is extremely important to ensure that the closing funds remain within the adopted material variation percentage and dollar amount. In some cases the opening funds can vary significantly after the annual financial statements have been audited. In this case it is imperative that this variation is addressed as soon as possible by taking a variation item to council prior to the statutory budget review period.

When a local government forwards the statutory budget review to the department any change in opening and closing funds will be closely monitored.


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TOWN OF EAGLE BAYNOTES TO THE BUDGET REVIEW REPORT

FOR THE PERIOD ENDING 28 FEBRUARY 201ZAdopted Revised YTDBudget Budget Actual

Note 1: CLOSING FUNDS $ $ $Closing Funds represented by:Current AssetsCash & Cash Equivalents 6,715,332 6,850,781 7,393,157Receivables 917,093 917,093 685,780GST Receivable 0 0 98,970Inventories 526,000 526,000 586,000TOTAL CURRENT ASSETS 8,158,425 8,293,874 8,763,907

Current LiabilitiesCreditors and Accounts Payables 1,569,087 1,569,087 905,388Provisions 523,333 523,333 523,333Current Loan Liability 91,592 91,592 91,592Total Current Liabilities 2,184,012 2,184,012 1,520,313

Net Current Assets(a) 5,974,413 6,109,862 7,243,594

Less Restricted Reserves(b) (6,289,693) (6,418,420) (6,418,420)

Less Restricted Muni (c) 0 0 0

Less SSL Principal Repayments(d) (25,399) (25,399) (12,700)

Add Back Current Loan Liability(e) 91,592 91,592 41,806

Add Back Cash Backed Leave Reserve (f) 249,087 249,087 249,087

Closing Funds(g) 0 6,722 1,103,367

Note 2: BUDGET AMENDMENTSAmendments to original budget since budget adoption. Surplus/(Deficit)

Description

Increase Decrease Amended Budget

Running Balance

$ $ $

Budget Adoption - Closing Funds(h) 0

Increase in Interim Rates due to subdivision 40,000 40,000Decrease in fees from burn permits (29,954) 10,046Decrease in septic tank inspection fees (6,135) 3,911Tourism Grant not achieved (100,509) (96,598)Contra to grant savings on maintenance to Tourist Bureau 108,065 11,467Increase in stationery expenses (14,695) (3,228)Increase in hazard burn expenses (26,557) (29,785)Savings on hall maintenance 42,251 12,466Savings on land development costs 118,950 131,416Transfer to reserve savings on land development costs (118,950) 12,466Decrease in proceeds on disposal of loader and grader (18,750) (6,284)Transfer from reserve interest adjustment 9,777 3,493Purchase of Land over budget estimate (55,490) (51,997)Road construction under budget estimate 35,390 (16,607)Purchase of major plant under budget estimate 50,000 33,393Loss on disposal of plant assets under budget estimate (7,691) 25,702Depreciation of assets under budget estimate (18,980) 6,722Amended Closing Funds as per Council Resolution (i) 404,433 (397,711) 6,722


10.1 Budget Review

The following is an example of a Budget Review agenda Item

10.1.1 Adoption of the 201Y/201Z Budget Review

REPORT DATE: 23 March 201Z

LOCATION ADDRESS: Town of Eagle Bay

APPLICANT N/A

FILE REFERENCE: 4.20.3

AUTHOR Tim Jones - Executive Manager Corporate Services

SENIOR OFFICER James Farnham – Chief Executive Officer

DISCLOSURE OF INTEREST Nil

APPENDICES Nil

DOCUMENTS TABLEDAttachment 10.1.1 – 201Y/201Z Budget Review Statement of Financial Activity and notes on Closing Funds and Budget Amendments.

PURPOSE To consider and adopt the Budget Review as presented in the Statement of Financial Activity for the period 1 July 201Y to 31 December 201Y.

BACKGROUND A Statement of Financial Activity incorporating year to date budget variations and forecasts to 30 June 201Y for the period ending 31 December 201Y is presented for council to consider. The Local Government (Financial Management) Regulations 1996, regulation 33A, requires that local governments conduct a budget review between 1 January and 31 March in each financial year. A copy of the review and determination is to be provided to the Department of Local Government within 30 days of the adoption of the review.

DETAILSThe budget review has been prepared to include information required by the Local Government Act 1995, Local Government (Financial Management) Regulations 1996 and Australian Accounting Standards. Council adopted a 5% and a $5,000 minimum for the reporting of material variances to be used in the statements of financial activity and the annual budget review. Features of the budget review include:


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Increase in interim rates due to subdivision – interim rates raised on the new subdivision were not accounted for in the adopted budget.

$40,000

Savings on hall maintenance – agreements have been finalised for community groups to take over some maintenance of council’s halls.

$42,251

Savings on maintenance to Tourist Bureau due to funding not received for the project.

$108,065

Application for a grant from Tourism Australia to upgrade the Tourist Bureau was not successful.

($100,509)

Decrease in fees from burn permits. The budget was overestimated due to high demand in the previous financial year.

($29,954

Decrease in septic tank inspection fees due to downturn in building not anticipated.

($6,135)

Increase in stationery expenses due to 2 council surveys being instigated and not allowed for in original budget.

($14,695)

Increase in hazard burn expenses due to exceptional winter rains that increased the dry vegetation needing to be dealt with.

($26,557)

Savings on land development costs due to part of the Eagle Bay subdivision not able to be completed in this financial year.

$118,950

Savings on land development costs to be transferred to reserve for use in future budgeting for the completion of the Eagle Bay subdivision.

($118,950)

Purchase of land for the Eagle Bay subdivision was over the budget estimate and is a contributory factor in deferring some development into the next financial year.

($55,490)

Decrease in proceeds on disposal of loader and grader ($18,750)Interest on the reserve funds has shown a steady increase to the budget forecast.

$9,777

Road construction is under budget estimate due to Notary Lane reseal being deferred until next financial year

$35,390

Purchase of the new tractor has been deferred until the next financial year as the trade value was very low on the old tractor and it was decided to utilise for another 12 months.

$50,000

Loss on disposal of the grader was under the budget estimate ($7,691)Depreciation of assets is adjusted due to the earlier than anticipated purchase of major plant.

($18,980)

Overall Change (surplus) $6,722

Due to the above adjustments the closing funds have increased from $0 to $6,722 and remains within the percentage and dollar material variance set by council in the 201Y/201Z Adopted Budget.


CONSULTATION James Farnham - Chief Executive Officer, Tim Jones - Executive Manager Corporate Services, Tanya Turner – Executive Manager Development Services, Murray Doulton – Executive Manager Engineering Services, Amy Woodhouse – Manager Administration and Community Services.

STATUTORY ENVIRONMENT Regulation 33A of the Local Government (Financial Management) Regulations 1996 requires:

(1) Between 1 January and 31 March in each year a local government is to carry out a review of its annual budget for that year.

(2) Consideration and review is to be given to a local government’s financial performance in the period beginning on 1 July and ending no earlier than 31 December in that financial year.

(3) Within 30 days after a review of the annual budget of a local government is carried out it is to be submitted to the council.

(4) A council is to consider a review submitted to it and is to determine* whether or not to adopt the review, any parts of the review or any recommendations made in the review.

*Absolute majority required.

(5) Within 30 days after a council has made a determination, a copy of the review and determination is to be provided to the Department.

POLICY IMPLICATIONS The budget is based on the principles contained in the Strategic Plan and Plan for the Future.

FINANCIAL IMPLICATIONS Specific financial implications are as outlined in the Detail section of this report.

STRATEGIC IMPLICATIONS The Budget Review has been developed based on existing strategic planning documents adopted by council.

VOTING REQUIREMENT Absolute Majority required: Yes.

TRIPLE BOTTOM LINE ASSESSMENT


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Economic ImplicationsThe budget has been reviewed based on sound financial management and accountability principles and is considered to deliver a sustainable economic outcome for council and the community.

Social ImplicationsThe budget has been reviewed to deliver social outcomes identified in various planning and community supporting strategies that have previously been adopted by the council.

Environmental ImplicationsThe budget has been reviewed to support key environmental strategies and initiatives adopted by the council.

COMMENTThe budget has been reviewed to continue to deliver on other strategies adopted by the council and maintains a high level of service across all programs. The closing funds remain in surplus as a result of this budget review with a slight increase of $6,722. Savings in land development costs have been transferred to reserve for future development projects.


OFFICER RECOMMENDATION TO BE DEBATED AND RESOLVED BY COUNCIL

That:

Council adopt the budget review with the following variations for the period 1 July 201Y to 31 December 201Y and amend the budget accordingly:

Increase in interim rates due to subdivision $40,000

Savings on hall maintenance $42,251

Savings on building maintenance $108,065

Savings on land development costs $118,950

Reserve interest adjustment $9,777

Savings on road construction $35,390

Savings on major plant purchases $50,000

Decrease in burn permit fees ($29,954)

Decrease in septic tank inspection fees ($6,135)

Tourism grant not achieved ($100,509)

Increase in stationery expenses ($14,695)

Increase in hazard burn expenses ($26,557)

Decrease in proceeds on disposal of loader and grader ($18,750)

Purchase of land over budget estimate ($55,490)

Loss on disposal of plant assets over budget estimate ($7,691)

Depreciation of assets over budget estimate ($18,980)

Transfer savings on land development costs to reserve ($108,065)

Increase in closing funds $6,722

Moved: Seconded:

ABSOLUTE MAJORITY REQUIRED


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