2018/19 Annual Report

KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council Annual Report 2018-19

I KANGAROO ISLAND COUNCIL annual report 2018-2019

ISSN: 1835-484X (Print) ISSN: 1835-4858 (Online)

II KANGAROO ISLAND COUNCIL annual report 2018-2019

Table of Contents

Welcome 1

Island Profile and Fast Facts 2

Message from the Mayor 3

Your Elected Members 5

Message from the CEO 6

Infrastructure 7

Community and Island Culture 11

Collaboration 14

Our Island 16

Supporting our Economy 19

Our Organisation 21

Governance 25

Finance Report 35

General Purpose Financial Statement 43

Appendices

FRWA Annual Report

Southern and Hills LGA Annual Report

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Welcome Kangaroo Island Council presents the 2018-19 Annual Report and Audited Financial Statements. The first section of this Report reflects Council’s performance as set by its Strategic Management Plan 2014-2018, and as directed by its Annual Business Plan 2018-19. We view the highlights of key work undertaken in our priority areas of Infrastructure, Community and Island Culture, Collaboration, Supporting Our Economy, Our Island, and Our Organisation. In section two we report Governance matters and in Section 3 Finance. Council measures its cumulative performance against the three Strategic Imperatives which underpin our 2014-2018 Strategic Plan, those being Cost Reduction, Revenue and Stimulus/Service. This is the final year of the current Strategic Plan. The 2019-2023 Strategic Plan is being developed following input from the residents and ratepayers, Elected Members and our staff. Over the life of the 2014-18 Strategic Plan, we are pleased to report that we have completed almost all of our planned actions. As we move forward with our new Strategic Plan, we will continue to be guided by our Vision of achieving a confident, growing and cohesive community, benefitting from a thriving economy based on strong tourism and primary production, preserving our unique heritage, and sustainably managing our environment. We also remain steadfast in our Mission to provide leadership, direction and responsible stewardship of resources, and delivery of efficient, cost effective key services to our community. We would like to thank the community, our Elected Members and key Island stakeholders for their commitment and energy in helping to make Kangaroo Island a great place to live and do business.

Michael Pengilly Greg Georgopoulos Mayor Chief Executive Officer

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Island Profile 81% unsealed roads

4,702 4,405km2 1,362 third largest island population km of roads in Australia

8% 4th residential, most recoginised 65% 27% businesses tourism destination primary production parks/rural land and Council in Australia

Fast Facts

30,902 1,424/242 255 dogs/cats 2009 library books annual boat customer borrowed ramp permits registered requests

$1,245 9,157 29 average residential 939 received cruise ships rates levied after-hour calls KANGAROO ISLAND COUNCIL annual report 2018-2019

Message from the Mayor

Kangaroo Island Council has in large part been a tale of Reflecting on matters of budget, Council has had an two councils over the past financial year. expenditure problem more than a revenue problem. That said, there is never enough money to do everything, Local Government elections in November 2018 brought but Council is spending public monies, and is extremely in a new direction and a focus on returning to the basic cognisant of those providing the money, i.e. the role of local government. ratepayers! Therefore, in its budget deliberations Whilst many projects remained at the fore through for 2019-20, Council reduced expenditure by $1.5M, our Strategic Plan and works programs – and were working as a team with Council staff. undertaken and will continue to be undertaken – a During the reporting period, Council worked hard to get return to engaging with the community was seen as back to basics to focus on delivering quality, core Council paramount. The newly elected Council firmly wanted to services. Council administration is effectively dealing be in control of its destiny and expenditure of the district with the risks to the organisation around procurement as the “board of directors”. and some changes and risks are discussed in this report. Early after the elections, Council had three resignations During the financial year Council was successful in but now has in place only one vacancy which under the winning many project grants and increased investment Local Government Act 1999, it is not required to fill. from the State and Federal Governments, including During the early part of 2019 a number of serious a most welcomed additional $2M from the South governance and staff matters became a concern and Australian Government for the upgrade of our local distraction for the Council and community following roads. This money ensured Council was able to meet all a report sent to Council by the Office of Public its planned upgrades to unsealed roads in 2018-19. Integrity (OPI) which required Council to give serious The completion of the Kangaroo Island Airport project consideration to a number of directives contained in the has left Council with an unfunded debt of over $600K, report. Council is doing this. even after State and Federal Governments bailed out From a financial perspective Council’s independent the overruns to the tune of $2.75M. Council must make auditors assessed Council’s financial records to be in the airport and surrounding land work, and lift revenue accordance with accepted accounting standards and significantly. It is a great facility but will be difficult to legislative requirements. However, Council intends to fund in its entirety. ask serious questions of its auditors after all reports arising out of the OPI investigation are received.

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There have been some notable outcomes during the We allocated just over $111K through our Community reporting period. Council’s work in diverting waste Grants Programs and it has been wonderful to see so from landfill, to improve the sustainability and reduce many projects come to fruition with the assistance of the cost of our waste collection has been important. Council funding and support. The increased collection of foodstuffs for conversion We were honoured to present at this year’s Australia to fertilizer has also proved to be rewarding. Day ceremony, the Citizen of the Year Award Work on the pilot Coastal Hazard Mapping Project (posthumously) to Elizabeth (Beth) Mae Bald. was completed this financial year and has highlighted Our Council/Progress Association Working Bee to Council serious risks the Island faces from coastal Program with volunteers continues, with towns, parks erosion and potential flooding, caused by sea level rise. and gardens benefitting from the improved tidiness Council introduced a regulatory framework to provide a of our townships. high level of accessibility to 13 beaches and at the same And in the world of arts and culture, Council worked time maintain a level of protection for coastal features closely with the Adelaide Festival Centre to secure and habitat. This proved to be a contentious issue at the Guitar Festival performances and guitar workshops time and has resulted in ongoing community consultation by Slava Grygorian and Dave Finnen, attracting to get the balance right. appreciative audiences and calls for more of the same The Community Wastewater Management on Island. We also continued to support and encourage Scheme roll out continued throughout 2018-2019 our talented Island artists by hosting three exhibitions at with Council achieving 95% completion for the the Kangaroo Island Airport. Penneshaw Community. I thank the diligence of Elected Members and the entire We continued to provide a supportive environment staff from the Acting CEO down, for knuckling down and for business and economic development. Council’s delivering in the best interests of Kangaroo Island. Development and Environmental Services staff continue I encourage you to read our reflection on 2018-2019. We to meet with the community and prospective developers, welcome your feedback and comments, as we build on to streamline the Development Applications (DA) the year that was. process, reducing the cost and time of processing DA’s to the community. Michael Pengilly Mayor

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Your Elected Members

Cr Bob Teasdale, Deputy Mayor Cr Peter Denholm E: [email protected] E: [email protected] M: 0448 635 009 P: 08 8553 1343

Committee Representative Committee Representative

• Audit Committee • Finance Committee • Finance Committee • Awards and Grants Assessment Panel • Penneshaw Community • Fleurieu Regional Waste Authority Business Centre Council Assessment Panel

Cr Sam Mumford Cr Ken Liu E: [email protected] E: [email protected] M: 0427 595 156 M: 0428 322 005

Committee Representative Committee Representative

• Audit Committee • Finance Committee • Finance Committee • Boating Facilities Committee

Cr Rosalie Chirgwin Cr Graham Walkom E: Rosalie.Chirgwin E: [email protected] @kicouncil.sa.gov.au M: 0452 286 238 M: 0409 485 123 Committee Representative Committee Representative • Finance Committee • Finance Committee • Audit Committee

• Boating Facilities Committee

Cr Shirley Pledge Cr Peter Tiggemann E: [email protected] [email protected] M: 0427 041 787 M: 0400 588 659

Committee Representative Committee Representative

• Finance Committee • Finance Committee • Awards and Grants • Boating Facilities Committee Assessment Panel

Cr Leeza Irwin (resigned 9 July 2019) 5 KANGAROO ISLAND COUNCIL annual report 2018-2019

Message from the CEO

Since taking on the role of Acting CEO in January 2019, and then CEO in August 2019, I have worked closely with the newly Elected Member body to help them achieve their objective of getting back to basics in this transition year, and to build a sound foundation going forward. The months which followed the elections presented many changes and challenges for the organisation but staff have worked closely with the Elected Member body to achieve harmonisation and common goals. One of the first key tasks of the incoming Council was the 2019-20 Annual Budget and it was one that responded to the community’s desire to see Council focus on key service infrastructure. It involved a decision to reduce overall expenditure by $1.5M from the 2019-20 budget, and focus on consolidating services and concentrating on day to day core business. There has also been a strong focus on improving governance across the organisation. This reporting period has been the final year of the 2014-18 Strategic Plan and the Elected Members and our staff, with input from the community, have begun developing the 2019-23 Strategic Plan which aims to encapsulate the Vision of the Elected Members and set the foundation for the Council for the next decade. I am looking forward to working with our community, key stakeholders, the Mayor, Elected Members and the dedicated staff of Council to deliver on this Council’s goals. Greg Georgopoulos Chief Executive Officer

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SECTION 1

Infrastructure The responsible management and provision of essential Council assets. Prospect Hill Staircase Construction Senator the Honourable Anne Ruston, Minister All planned works on unsealed roads were completed for Families and Social Services, opened the new this year, improving safety, durability and amenity. The Prospect Hill Staircase in September 2019. Rebuilding following roads were all resheeted. the Staircase was made possible through a Federal Government Building Better Regions Fund 2 Grant Unsealed Roads Upgrade Program for $750,000, a $125,000 State Government Open AREA ROAD Spaces 2018 Grant (Department of Planning, Transport Stokes Bay Pratts Road and Infrastructure), and a Kangaroo Island Council Wisanger Dover Farm Road commitment of $125,000. Wisanger Wallaby Run A somewhat complex project, the new structure had to MacGillivray Halls Road be installed in a way that limited issues associated with Island Beach Du Couedic Drive building on a moving sand dune, classed as a “sensitive environment”. The project included flying in the building The State Government’s (DPTI) $2M Unsealed Road materials by helicopter. Upgrade Program Stage 8 enabled works to be completed on Three Chain Road. These works were The stairs are constructed from Composite Fibre project managed by Council and completed by an external Technologies and stainless steel, providing a significantly contractor. Works also included the resheeting of the longer life and requiring less maintenance in a coastal Prospect Hill Access Road and partial resheets of Old environment. Unlike the old staircase, this new build Salt Lake Road and Moores Road. Receiving this money conforms to the Building Code of Australia and meets the annually has been confirmed for the next four (4) years in new design standards which have more safety features the State Budget, which goes a long way to sustaining our such as hand rails and balustrading. The approach to road network. This is a key deliverable for our Strategic the build has helped ensure the preservation of this Plan and without this funding, managing and maintaining local heritage site. our unsealed roads to an acceptable level is challenging. It was planned to explore different funding and ownership models to achieve longer term sustainability of our road network, however Council was not able to achieve this in the 2014-2018 Strategic Planning period, but has included this in the 2019-23 Strategic Plan.

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Sealed Roads Upgrade Program Street to kerbed and sealed status. For many years this steep section of unsealed urban street was the victim AREA ROAD of washout during high rainfall events. The upgrade to Kingscote Kingscote Street reseals for kerbed and sealed status has improved amenity, road Ayliffe Street, Giles Street longevity and road safety. The work consisted of design, Wisanger Emu Bay Road reseal tender and on ground works in a progressive manner. American Redbanks Road reseal River New kerb installations were also project managed by Council in Investigator Avenue, Kingscote. The street Vivonne Bay Knofel Drive was upgraded to was subsequently sealed by Council staff to complete the Bitumen Seal from the South Coast projects and improve the overall amenity. Road to the township, receiving strong support from the community. Stormwater works included extending stormwater Vivonne Bay South Coast Road received a four (4) pipes on Millers Road and American River streets km section of reseal (Moreanda and Bimberta) including engineering design Penneshaw Work on Trethewey Terrace was and initial construction. The Lane in Penneshaw also had completed with new kerbing stormwater pipes installed in preparation for the kerbing and sealed surface and sealing of the road. Penneshaw Christmas and Clark Street were Council completed many upgrades to bitumen road upgraded to bitumen sealed intersections adjoining a sealed road. These included Kingscote Kingscote Street reseals for South Coast Road and Elsegood Road, Lovers Lane Ayliffe Street and Giles Street and Playford Highway, Hillview and Playford Highway, Turkey Lane and Playford Highway, McHughes Road and Playford Highway, Harriet Road and Playford Highway, Special Local Roads Program (SLRP) The Local Pennington Bay Rd and Hog Bay Road, and Angle Pole Government Transport Advisory Panel (LGTAP) Road and Hog Bay Road. issue funding from the Federal Government, We also received Federal Government Blackspot for roads of regional significance in the three Funding for two intersections at $145,000 per primary priority categories of Freight, Tourism and intersection for the North Coast Road Emu Bay Road Community/Social need. intersection, and the junction of Playford Highway, Wedgewood /Hickmans Road a major transport route Tinsmith Road and North Coast Road. Council managed between Parndana and South Coast Road was nominated both projects on behalf of DPTI and both have been by Council and was successful on assessment by the completed to specifications. It is anticipated these LGTAP for funding over four (4) years to upgrade upgrades will lead to improved safety outcomes. this route to sealed bitumen status. In Stage One this year there have been upgrades to stormwater assets, the Eleanor Bridge was widened by 2.5 metres, and vegetation clearance undertaken. Stage Two will include raising and installing pavement materials and sealing of the first sector to East West Highway One junction. The intersection will also be treated with a staggered alignment - a road safety upgrade that Council is adopting at many rural road intersections across the network. Stage One cost $300K with $200K contributed by SLRP and the remainder by Council. Stage Two will see bitumen sealing from Airport Road to East West Highway One. This section of the project will cost $840K with SLRP providing $500K funding. Council allocated funds to upgrade Trethewey Terrace, Penneshaw between South Terrace and Mansell

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Penneshaw Cemetery received 70 new burial sites this Stage One of the Emu Bay Boat Ramp project year which involved Council defining and constructing commenced with a commitment of 50% of eligible project the new burial sites and spreading clean quarry material costs, to a maximum of $1.9M grant funding from the SA over the existing site to tidy up the area. The team also Boating Facilities Advisory Committee. The works cleaned-up the non-Heritage section. This cemetery is have involved the development of new launching lanes, receiving increased visitation by interested Cruise Ship new rock revetment and fixed landing structures with visitors, looking for an insight into the local history of wave attenuation boards. Kangaroo Island. Rising Main C The upgrade of Rising Main C as part of the Kingscote Community Wastewater Management Scheme (CWMS) was essential given the old system was approaching the end of its operational life (this is the Pressure Sewer Main that transports waste water from Kingscote to the Waste Water Treatment Plant). Identified in Council’s Long Term Financial Plan and Asset Management Plan it helped Council win a $320,000 State Local Government Infrastructure Partnership (SGLIP) Grant in FY2016-17. The project was valued at $1.6M. The SLGIP partnership enabled Council to enter into a specially discounted loan agreement over ten (10) years through the Local Government Finance Authority for the remaining $1,280,000. Work commenced on the project in However, being a fair weather marine facility without FY 2017-18 and the pipe work was completed FY 2018- a breakwater structure, a number of complaints 19. This grant allowed Council to bring forward planned were received about its functionality. In August 2019 works to complete the upgrade project in 2019-20. Council engaged a qualified marine engineer to make an assessment of the structure in order to determine Council Projects whether the boat ramp could be left operating, while Council completed Stage Five of the Kingscote Walking under construction, or have restricted access until the Trail which was 50% co-funded through a 2017-18 issues are addressed. The builders, Civil Tech, decided Open Spaces Grant. The Department of Planning to close the launch facility while still under their care Transport and Infrastructure provided $110,000 and control, due to the level of unease expressed by towards the $220,000 project. This section picks up boat users. Completion of the boat ramp and car park the Trail from the end of Stage Four and runs from the is scheduled for November 2019 to allow for bitumen entrance to historic Reeves Point, following the old track sealing in warmer weather. to the top of Flagstaff Hill. Community Capital Infrastructure Grants Program (CCIGP) Four applications were initially granted Council CCIGP funding with a total of $70,846 being awarded to Community projects in Kingscote, Parndana, and American River (with one tied to achieving other funding). A further $20,000 was contributed to the Penneshaw Sculpture Trail Swing Bridge, a project which successfully gained State and Federal Government Funding of $168,400 – with a further $10,500 cash contributed by the Community, bringing the total value of this project to $247,136.

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The 2018-19 capital infrastructure projects, including the Sculpture Trail, have a combined value of $715,621 with CCIGP grant contributions totalling $90,846 or 13% of the combined project value. Every dollar Council has contributed has been matched by $6.88 from the Community by way of grant co-funding, cash or in-kind support.

PROJECT ORGANISATION GRANT American River Progress Association American River Hall Indoor Toilets $ 26,846 Advance Kingscote Progress Association Igniting Kingscote $ 2,500 Penneshaw Progress Association Kangaroo Island Sculpture Trail Swing Bridge $ 20,000 Parndana Sports Club Oval lights Upgrade $ 21,500 Parndana Bowling Club Synthetic Green $ 20,000 GRANT TOTAL $ 90,846 During the past seven years, Council’s Community Capital Infrastructure Grant Program (CCIGP) has contributed $1,014,632 towards 52 Community projects with a combined project value of $3,371,845. Thirteen projects were valued above $100,000, 17 have leveraged funding through grant co-contribution, and one achieved funding through a Community Loan at a reduced interest rate through Council. In all, Council has contributed 30% in funding towards the value of these projects with every $1 funded by Council matched by $2.32 from the Community in cash, grant funding or in-kind support. Equipment Upgrades Council invested in an excavator and vegetation groomer to manage vegetation and also purchased a new small truck for the Garden and Construction Teams. Buildings Council constructed a new Penneshaw toilet block to expand the facility at the back of the Penneshaw Hall to cater for Cruise Ship days, Market Day and football and netball weekends. The Gallery on Murray Street in Kingscote had its walls repaired, the cladding to the Kingscote Pavilion was upgraded and the toilet block at the Kingscote Swimming Pool re-roofed. This year also saw the hall floors polished in Kingscote, Penneshaw and Parndana.

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Community and Island Culture Supporting our diverse Community and Culture Grants and Sponsorship This year $20,000 was allocated for the Community Partnership Grant Program. A total of $18,833 was awarded to eight (8) Community projects.

ORGANISATION PROJECT GRANT EX GST Kangaroo Island Road Safety $2,475 Road Safety Messages via Committee Food and Wine (KIRSC) app Kangaroo Island New Mats for $2,000 Gymnastics Gymnastics National Trust SA Purchase of $ 988 Kangaroo Island Computer Branch Equipment Parndana Sports Court Safety $ 455 Club Inc Project (court sweeper) Parndana Construct two $4,000 Progress (2) Garden Beds Association in Town Hall and Museum Precinct Penneshaw Flagpole for $1,818 Progress inclusion of New Association Zealand flag for ANZAC services Stokes Bay Double Glass $6,218 Community Hall Doors - (part of Inc final stage of Stage Three renovation) Art Museum of Purchase of laptop $ 879 Kangaroo Island and software Establishment Association TOTAL $18,833

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Commemorative Services Council worked with the Returned and Services League (RSL-Kangaroo Island Sub Branch) and Legacy to once again facilitate ANZAC Day and Remembrance Day commemorative services and assisted with the Vietnam Veterans Day service.

Through Council’s Sponsorship Program and the Youth Services budget it was a pleasure to support a number of concerts and film events this year. Among them were Kaput a children’s show staged in Parndana, the 60 40s – a band which filled the Kingscote Town Hall to capacity, and a Documentary Film Festival at the Parndana Town Hall featuring films by local film makers and the award winning film Sixteen Legs. Working closely with the Adelaide Festival Centre, Council secured for two days on the Island the wonderful Adelaide Guitar Festival’s Resonance Program, the event including Guitar Festival Director Slava Grygorian, blues artist Dave Finnen and singer songwriter Katie Pomery. Their first performance was a free Guitars in Bars concert played to a packed American River Hall. The next day they performed privately for the residents of Carnarvon and Anchusa and later at KICE followed by a guitar workshop for the students. This visit was a collaboration between Council, Adelaide Festival Centre, the American River Community and Sports Association, the American River Progress Association, and transport by Sealink.

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This year’s Young Achiever Awards were presented on 27 July by Mayor Michael Pengilly at Council’s Settlement Day ceremony at Reeves Point. At age 14 the inspiring Ryan Turner was the youngest ever Young Achiever of the Year recipient, partly due to his entrepreneurial environmental project Tangle Bins - waste bins he developed to hang on Kangaroo Island’s jetties. Joshua Keenan won an award for Outstanding Commitment to Leadership and Community Service and Tarryn Putland won an Award for Outstanding Achievement – Academic, Sporting and Community Service. Civic Youth Programs and Youth Sponsorship RSL launched its Commemorative Signs project on ANZAC Day. The project has resulted in 24 This year Council again worked with Kangaroo Island interchangeable signs commemorating various battles Community Education (KICE) in assisting students to and remembrance days which hang in Memorial Park, take part in the KICE to Canberra study trip. Council Kingscote. Council worked closely with RSL to produce also assisted 21 students to attend the South Australian the signs. Funding was provided by a Veterans SA Science Teachers Association (SASTA) Oliphant Science grant of $2,000. Awards, enabled a further three students to attend the YMCA Youth Parliament in Adelaide, and helped one student to attend the Youth Environmental Council. There were also successful applications from a number of aspiring young people seeking assistance for a variety of pursuits, from judging at a surf carnival to an apprenticeship in Adelaide. Community Working Bees The Council/Community Working Bee Program continues to be a success having improved the tidiness of townships and lifted civic pride. Our Parks and Gardens team works with each volunteer progress association to determine staff, plant and equipment requirements for the next working bee, and a date that suits the Council and the volunteers. Any township can have up to a half day of Council assistance each month, provided they initiate a schedule of works in advance to allow for planning. Next On Patrol 1 by Neil Sheppard year this initiative will be converted into a Town Blitz Also on ANZAC Day, a special exhibition of Neil program involving a bigger team over two days. Sheppard’s Images of War collection was mounted in Kingscote Town Hall courtesy of Liz Sheppard and RSL. Celebrations and Awards Council’s Australia Day ceremony at Hope Cottage included the traditional presentation of Council’s Citizen of the Year Awards. Elizabeth (Beth) Mae Bald was awarded 2019 Citizen of the Year posthumously. The Event of the Year Award went to Parndana Museum Soldier Settlement Reunion and Concert with an Event of the Year Special Commendation going to the Variety Bash. Project of the Year winner was Heartsafe KI. 13 KANGAROO ISLAND COUNCIL annual report 2018-2019

Collaboration Inter-governmental relations Working with the KI Commissioner Southern and Hills Local Government This year the Federal Government’s Building Association (S&HLGA) Grant of $155,000 for Stage Better Regions Fund As a member of the S&HLGA we participate in the 1 of the KI Growth Project was acquitted. Granted in S&HLGA Regional Public Health Committee meetings. September 2017 this project, was run by the Office Council is committed to the Kangaroo Island aspects of the Commissioner for Kangaroo Island (OCKI), and of the Regional Public Health Plan. This includes a was supported with a $40,000 cash contribution from number of regional and local health initiatives to promote Council and $103,975 from OCKI. In all, 269 businesses the greater health and wellbeing of our community. This participated in the training and development program and year Council also joined the newly formed Southern and 585 individual participants were involved. The program Hills Community Wellbeing Alliance. included upskilling, marketing, mentoring, business workshops, events and expos, industry collaboration, We also sit on the S&HLGA Road Working Party to peak body amalgamations, a leadership series and a prioritise external funding for regional road projects. regional skills audit. Other Group and Committee involvement Council’s Development team participated in OCKI’s Development & Housing EXPO with stakeholders We are actively engaged with the Department of including home builders, designers, real estate agents, Environment and Water (DEW) on road vegetation the Kangaroo Island lending institutions, SA Water, SA management, submitting an annual program to DEW Power Networks & Department for Planning, Transport & prior to commencing works for threatened species Infrastructure. identification. We meet monthly and have on site meetings to discuss local issues. Resilient Hills and Coasts Resilient Hills and Coasts is a collaborative initiative formed by Fleurieu Peninsula and Kangaroo Island Councils, the Adelaide and Mount Lofty Ranges Natural Resource Management and Kangaroo Island Natural Resource Management Boards to develop a Regional Climate Change Adaptation Plan. Following the Regional Plan sign off in FY2017, Kangaroo Island Council subsequently developed and began implementing a Local Action Plan to guide and support Council decision making in order to build resilience and capacity across the community, economy and natural and built environs. Council attended a Climate Risk Governance workshop and in 2019-20 and will also be involved with these assessments.

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A Council representative sits on the The Kangaroo DACO Island Bushfire Management Committee with the Department of Environment and Water, NRM Board, SA The new registration of Dogs & Cats Online (DACO) Water, KI Agriculture, CFS, CFS Volunteer Association, database is managed by the Dog and Cat Management SAPOL, DPTI and Tourism KI. The Committee oversee Board of South Australia and will be the new central the Kangaroo Island Bushfire Management Area Plan database for microchipped and registered dogs and (BMAP) which identifies assets at risk from bushfire and cats, as well as for registration payments. DACO the prevention and preparedness strategies to reduce the will also be the Register of Breeders central database. risk to those assets. South Australian Councils using the new central database currently number 68. Council is also represented on the Kangaroo Island Visit: www.dogsandcatsonline.com.au Emergency Services Operational Group along with SES, Ambulance, CFS, Red Cross, SA Health, SA Airport Art and Cafe Ambulance , Sealink, DCSI, PIRSA, KI Veterinary Clinic, KI Wildlife Network and SAVEM. Kangaroo Island Airport continued to support our talented local artists throughout the year with the Natural Resources Kangaroo island staging of three back to back exhibitions - KI Through the Lens, Coastal Magic and Kangaroo Island Art Society 30 (NRKI) Year Retrospective. The Airport Art program is curated Council and NRKI were successful in a joint application to by Fleur Peters working with Council. Council staff the Department of Agriculture and Water Resources for a prepare the website exhibition pages. Communities Combatting Pests and Weed Impacts During Drought grant program, receiving $55,000 for the removal of boxthorn in the Dudley Peninsula. This work will be completed in 2019-20. Visitor Information Centre Closes (VIC) The Kangaroo Island Visitor Information Centre closed in March 2019 as Tourism Kangaroo Island (TKI) were no longer able to support the $150,000 annual operational costs of running a “Yellow i” category information centre. Council was not prepared to fund this Siren by Deb Sleeman cost. While TKI organised for VIC calls to be diverted through to the Victor Harbor Visitor Centre until June 2019, the Penneshaw Community Business Centre offered to provide basic visitor information services, to cover the busy Easter period. Meanwhile the Office for the Commissioner for Kangaroo Island funded a Visitor Information Services Options Paper and this was presented to Council. Council has yet to decide what level of support it will give to visitor information services. Plumbing Roadshow Council again hosted its successful trade and compliance orientated Plumbing Roadshow for the third year. It Cape Coots with Flowers by Mishka Amman was convened by our Development Team with substantial participation from local tradespersons and stakeholders, Council signed an Agreement with MOBO to run the builders and allied businesses. Airport KI Café as a social enterprise. KI Café is Kangaroo Island’s first social enterprise operation which enables people living with a disability to be the best they can be, by providing them the opportunity for sustained employment within the local community.

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Our Island Healthy, natural and cultural environment Waste Management It is positive to note that all of Kangaroo Island’s waste collection and diversion trend lines are heading in the right direction, with a decrease in the overall amount of waste collected, a decrease in waste to landfill, and an increase in diversion to green and recycled waste. To assist, Fleurieu Regional Waste Authority (FRWA) introduced an education program (running 21 on Island presentations including five at KICE, and one pilot project) to help increase diversion of FOGO (Food Organics/Green Organics) from the landfill bin, into the green organics waste stream for retention and processing on the Island. What we still need to see in the future, in order to mitigate the negative impacts of the spiralling costs of waste to landfill, and waste transport off Island costs, is full participation by our communities in diversion practices, resulting in decreased total waste and importantly, decreased tonnage of waste to landfill.

Kangaroo Island Council – Total Waste – 4 years Kangaroo Island Trend – Total Waste – 4 years

3500 3500

3000 3000

2500 2500

2000 2000

1500 1500

1000 1000

500 500

0 0

2015/16 2016/17 2017/18 2018/19 3,355 3,411 3,478 3,427 1,933 2,071 1,871 1,783 1,423 1,340 1,607 1,644

Total Waste Landfill Diverted

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FOGO Pilot Project Community Wastewater Management The first stage of the pilot project called ‘Increase Scheme Participation in Food Organics/Green Organics Council reached 95% completion and commissioning of ’ commenced (FOGO) Diversion on Kangaroo Island Penneshaw Community Wastewater Management in April 2019. Assisted by KESAB Environmental Solutions System (CWMS) Stages One and Two during 2018- (KESAB), Greening SA and Council, Fleurieu Regional 19. Negotiations continue with landowners to achieve Waste Authority (FRWA) worked with four Kingscote 100% connection to the scheme. based food processing businesses, providing them with education, waste separation resources and green The first section of Penneshaw CWMS (West) organics bins to divert food waste away from landfill. The was completed and landowners advised that property initial trial ran for six weeks, following a bin audit that connections to the scheme could commence. found almost 70% of the participating businesses’ waste Approximately 25% of these properties have could be diverted to a green bin for composting. Early been connected. The second stage is planned for findings showed a gradual increase in amounts of food construction in 2019-20 incorporating Bates Way and waste collected over the trial period, an improvement of William Walkers Way. 183%, with 109kg collected in the first week compared Septic tank pump out of the Kingscote CWMS to 308kg in the final week. The four businesses have continued during 2018-19 and on completion, will move successfully kept 1.4 tonne of food waste on Kangaroo to the Parndana CWMS and after that a portion of the Island for processing in the new composting system. The American River CWMS. The Council undertakes the value added work in this area continues. pumping out of septic tanks connected to CWMS schemes on an on-going four year cycle to maintain the health and In Vessel Composting System operation of each system. This year FRWA purchased an In Vessel Composting System, or Hot Rot system, for Kangaroo Island. The in-vessel composting process ensures that processing temperatures are high enough to compost green waste and food material and deal with harmful microorganisms that may be present. FRWA and Council based their business case for the in-vessel composting system on provision of up to 900 tonne of “feedstock” per annum. It accepts any compostable material, converting it into good quality compost within 12-14 days, including bio solids / animal manure. Diversion of FOGO into the green waste stream not only reduces off-Island transport costs but supplies good quality compost material for local purchase and use. Early anecdotal reports suggest a high level of community demand for the product. This particular compost unit is a first for South Australia and allows Kangaroo Island residents the opportunity to see a circular economy in action, reducing the financial and environmental cost of waste transport to the mainland.

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Green Initiatives By-laws

Climate change and sea level rise are a significant risk Beach Access facing all levels of Government in Australia and Kangaroo The defined areas for beach access for vehicles and Island Council has acknowledged this challenge. boat launching were refined following community Work on the pilot Coastal Hazard Mapping Project comment, after signs were erected at various sites. The was completed this year with a final report presented to defined areas apply to 13 locations around Kangaroo Council. This work was made possible through a grant Island, complementing available boat launching options at obtained under the Natural Disaster Resilience Kangaroo Island Council’s established boat ramp facilities. Program ($70,000) and Southern Hills Local Government Refinements will continue in 2019-20 to ensure that the Association (S&HLGA) ($30,000). The project provided areas identified are fit for purpose, safe and accessible, LiDAR (laser light survey tool) imaging and hazard impact whilst being environmentally sensitive, particularly to analysis for a substantial portion of Eastern Kangaroo shorebird species which nest near coastal fore-dunes. Island and delivered modelling data which was used to The regulatory framework seeks to promote a high level develop future erosion and flood scenarios, which will of accessibility and to maintain a level of protection for inform future policy and decision making. The data was coastal features and habitat, including the now well-known presented in a series of community presentations at each endangered plover species, which inhabit the Kangaroo of the four main townships. Island shoreline.

The focus on coastal hazards associated with current and Animal Management projected sea level rise aligns with the outcomes of the As part of its continued involvement in the Feral Cat Resilient Hills and Coasts (RH&C) Regional Climate Eradication project, Council makes cat traps available to Change Adaptation Plan, which identified built coastal the public. It also provides a humane euthanizing service assets as one of four priority areas of adaptation on for trapped feral cats. Council supports Natural Resources Kangaroo Island. Findings of the Pilot Project remain Kangaroo Island (NRKI) in targeting high risk ecological publicly available as an interactive portal on Council’s areas such as the Little Penguin habitat at Penneshaw and website, to ensure ease of access and to encourage public shares all feral cat data with NRKI. Council also assists consideration of the potential impacts of climate change with the NRKI project for training feral cat detection on Kangaroo Island. dogs. As part of NRKI’s Feral Cat Eradication Project Works continued on the Flagstaff Hill Development Plan Council will run community consultation in 2019-20, for the which provided a Significant Environmental Benefit erection of a Cat Fence on the eastern end of the Island, to offset vegetation removal in the establishment of as the proposed alignment is across Crown Land and the Brownlow to Kingscote Walking Trail. A further road reserves. 2,500 trees were planted with 4,500 more trees to be planted in 2019-20. Advocacy Discussions continued with our Federal Member for Mayo Rebekah Sharkie MP regarding options for Remote Area Concessions. Ms Sharkie has been lobbying the Government to deliver direct tax offsets for Kangaroo Island residents, emphasising the water gap classifies the Island as a remote area. This would bring it into line with tax breaks offered to other Island residents such as Tasmania and northern Australia. Her efforts include lobbying to return the 50% Outer Area Concession on vehicle registration which is planned to be completely phased out by 1 July 2020.

Parking In order to allow greater flexibility for residents to go off Island for a day, Council extended timed parking in Penneshaw at the North Terrace and Bay Terrace car park.

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Supporting our Economy Working to facilitate and develop an attractive environment in which to conduct business Strategic Plan 2019-23 New Section 41 Committees planned Council is developing the Kangaroo Island Council Council agreed to set up a two new section 41 2019-23 Strategic Plan (the Plan). Built around five Committees. One is a Strategic and Economic overarching goals, the goals qualify what we want to Development Committee to provide advice and achieve for our community in five key focus areas: direction to Council on strategic plans, strategies, policies Infrastructure, Community, Economy, Environment, and and initiatives as it relates to fostering good economic our Organisation. development outcomes for Kangaroo Island. The second is an Airport Management Committee to attract new In the new Plan, to support a strong and diverse private investment and diversify the economic output and economy Council is looking to achieve three key strategic activity of the Airport for the Island. This will require a outcomes: to facilitate appropriate economic development Master Plan for the Airport. The Terms of Reference for by providing a supportive environment for local business; both are expected to be endorsed later in the first half of to optimise land use to grow the Island economy; and to the next financial year. foster innovation. The Plan is expected to be adopted in the first half of the next financial year.

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Kangaroo Island Prospectus Significant changes to the Planning environment will be in place following the implementation of the new Planning, This year Council developed a which Prospectus Development & Infrastructure Act. The Development provides an overview of the priority development needs Team has been in consultation with DPTI to provide for Kangaroo Island that will assist with sustainable feedback on the proposed new Act, Regulations and growth, as well as increased revenue through tourism. incoming Planning & Design Codes. Liaison with DPTI This advocacy document has been handed out to with respect to the incoming changes will continue to be politicians and funding bodies to encourage investment in reported to Council and the local community. the Island’s resources, infrastructure and amenity. Council has been trialling improvements and Planning troubleshooting telecommunications challenges at Pay Stations at Council campgrounds, boat ramps and Council, in conjunction with DPTI, developed a parking locations to ensure a more reliable system to Penneshaw Structure Plan. Council and DPTI planning capture revenue, is in place at these facilities. staff consulted with ratepayers, residents and businesses, across two well-attended Community drop-in sessions in Water Infrastructure May 2018 to collect thoughts and ideas on the medium to long term vision for Penneshaw. Key themes arising This year Council was part of the SA Water stakeholder from the sessions were incorporated into the Plan. The engagement process to consider the long term plans Plan was adopted by Council in September 2018 and will for water on the Island. Council subsequently approved be used to assist Council and the community with longer a permit to allow a public infrastructure pipeline to be term community planning, such as infrastructure and installed between Arranmore Road and Pelican Lagoon community services planning, grant attraction for special with potential extension to other areas. This work is projects, and future zoning and town planning. yet to commence. Structure plans for Kingscote, Parndana and American River are still to be developed and are to be actioned through the 2019-23 Strategic Plan. As part of our aim to ensure a supportive environment exists for business and economic development, Council’s Development and Environmental Services Staff continue to meet with community members and prospective developers, to improve initial proposals and proof check Development Applications (DAs) prior to DAs being lodged. DA processing reports during 2018-2019 consistently reflected that compliance times for statutory processing of applications were not only met, but generally took only half the maximum timeframe allowed, even with a small but noteworthy rise in applications. The quick turnaround of DAs equates to considerable time and cost savings for Council and Developers.

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Our Organisation as at 30 June 2019 Internal management and organisational effectiveness

CEO

Deputy CEO

Director Council Services

Manager Asset Technical Development Accountant Customer Community Program Program and Finance Engagement Affairs Manager Manager Environmental Professional Manager Manager Services

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Leadership Training and Development Council has seen a number of leadership changes during Providing our staff with the skills and knowledge to this reporting period. A new Council was elected in ensure they can fulfil the requirements of their roles November 2018 (including a new Mayor) and an Acting and meet legislative compliance, is an essential Council CEO was appointed in January 2019. Together with investment. Training is identified through the Performance the 2019-2023 Strategic Plan, which will be introduced Development Plan (PDP) process, the needs of the in the first half of 2019-20, Council has a refreshed Council, and annual budget allocations. leadership team with the skills and knowledge to deliver Employee training during the reporting period included: the objectives and reach the targets outlined in the Strategic Plan. • Work Zone Traffic Management • Environmental Awareness for Civil Construction Project Executive Leadership team • Health and Safety Representative training • Chief Executive Officer, Andrew Boardman (July 2018 • Bullying and Harassment in the workplace – January 2019) • Conflict Management • Deputy Chief Executive Officer, Greg Georgopoulos • Collect specimens for drugs of abuse testing (August 2018 – January 2019) • Drug & Alcohol Reasonable Suspicion Training • Acting Chief Executive Officer, Greg Georgopoulos • First Aid training (January 2019 – June 2019) • Fire Warden Training (Depot Lunch room) + • Director Council Services, Nicki Putland Emergency Evacuation Exercises Council Leadership Team • i-Responda Bushfire Training • John Howe, Accountant • Local Government Risk Services – Return To Work/ Internal Return to Work Co-ordinator Supervisors and • John Fernandez, Technical Programs Manager Managers training • Yarran Iversen, Asset Services Technical Officer • Confined Spaces training • Aaron Wilksch, Development and Environmental • Hoarders, Junkyards, Unsightly and Derelict Properties Services Manager • Planning Reform • Danielle Fleet, Customer Engagement Manager • Basic Levelling • Pat Austin, Community Affairs Manager • People Management essentials Our People • Leadership Success training Recognition of Service Awards 2019 went to: • Social Media – Keeping updated in a rapidly changing world • Wayne Buick – 35yrs • Healthy Wastewater Management Schemes • Aaron Wilksch – 15yrs • Fire Prevention Officer Training • Ashley Richardson – 10yrs • Council Elections Liaison Officer Training • Sam Henderson – 10yrs • Chain of Responsibility and Load Restraint • Danielle Fleet – 10yrs

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Our Workplace Council maintains its commitment to Equal Employment Opportunities, guided by its Equal Opportunity Policy. We also maintain a relatively balanced gender representation. Council is committed to providing a work environment free from discrimination, harassment and bullying. Council’s Employee Code of Conduct defines the principles of probity and ethical behaviour that is expected of all staff, contractors and volunteers. Governance Council has continued to implement and refine our internal control reporting system -ControlTrack. A self-assessment tool, it enables us to facilitate an integrated risk and control assessment process focusing on finance and governance. We provide a standard report to the Audit Committee each meeting to track how we are performing from one period to the next. Council has also introduced a Risk Management Policy and Framework to the organisation which will be revisited Apprentice Dylan Lockett in 2019-20 by the new Elected Body.

Trainees / Apprentices Council has one Heavy Vehicle Apprentice mechanic. This position comes under the Motor Trading Authority and we have had numerous apprentices under this program who have gone on to successful jobs, both locally and off Island. Our two trainees from the previous reporting period have each moved into short term contracts with Council. Health and Wellbeing The health and well-being of our employees is important to Council and we offer a number of opportunities that may help people to make informed life and wellbeing choices. These included:

• Healthy Lifestyle Program - through the LGA Workers Compensation Scheme (LGAWCS) and Corporate Health Group • Annual flu vaccination • Skin cancer screenings through LGAWCS • Mind Your Wellbeing Program Confidential access to Council’s Employee Assistance Program is provided to all Staff members needing assistance with difficulties in the workplace or other personal concerns.

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Section 2: Governance Council and Council meetings Monthly Ordinary Meetings of Council are held on the second Tuesday of each month. All meeting times and locations are advertised in The Islander newspaper, in the front window of Council’s Dauncey Street office, at the Penneshaw Community Business Centre, on Council’s website and through social media. During the reporting period, 12 Ordinary Meetings of Council were held and 12 Special Council Meetings. Each month the Council agenda and minutes are posted on the Council website and made available to the public at the main Council office at 43 Dauncey Street Kingscote and the Penneshaw Community Business Centre, between 9:00am and 5:00pm. Meetings are generally held in the Council Chambers at 43 Dauncey Street, Kingscote. During the period one Ordinary Meeting of Council was held at Parndana.

Public forum Section 41 Committees The public is welcome to attend all Ordinary Meetings During 2018-19 Council convened the following Section 41 of Council where formal provision is made for Petitions, committee meetings: Deputations and Questions from the Gallery. The public is COMMITTEE MEETINGS also welcome to attend Informal Gatherings. HELD Members of the public may seek a time to present a Audit Committee 4 Petition or Deputation to a Council meeting by making Finance Committee 3 an application in writing to the Chief Executive Officer. Awards and Grants Assessment Panel 2 Approval for Petitions and Deputations to be heard, rests with the Mayor. Boating Facilities 6 Committees Council Representation on Various Committees Section 41 Committees Council is also represented on other committees including Pursuant to Section 41 of the Local Government Act 1999, Regional Subsidiaries, Council Assessment Panel and Council may establish committees to: Bushfire Safety Committee. These committees, along with • assist it in the performance of its functions internal operational committees, contribute to Council’s • inquire into, and report on, matters within the ambit of decision making. For a full list of committees, refer to its responsibilities the tables below. provide advice, and/or • Regional Subsidiaries (Section 43) • exercise, perform or discharge delegated powers, COMMITTEE functions or duties. Southern & Hills LGA (Executive & General meetings) Documentation for each Committee meeting Fleurieu Regional Waste Authority (meeting times, agenda with reports, attachments and minutes) can be accessed on Council’s website Development Act www.kicouncil.sa.gov.au and can be viewed in hard COMMITTEE copy at Council Customer Service in Kingscote. Council Assessment Panel Section 41 meetings are open to the public. Building Fire Safety Committee Strategic Planning & Development Policy Committee (Section 101A)

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Internal Operational Committees Council Allowances COMMITTEE Elected Members Airport Safety Elected Members’ allowances are determined by the Airport Security Remuneration Tribunal of South Australia. CEO Performance Management Panel Kangaroo Island Airport Emergency Committee The annual allowances as of 7 November 2018 for Workplace Consultative Committee 12 months were: Workplace Health and Safety Committee • Councillor $9,900 • Deputy Mayor $12,375 External Committees / Boards • Mayor $39 ,600 (Mayor Pengilly has chosen to COMMITTEE take only 90% of this allowance) Community Centres Working Group In addition to their Elected Member allowance, the Mayor KI Bushfire Management Committee and Councillors were due the following from Council for KI Community Housing performing and discharging official functions and duties. KI Emergency Services Operational Advisory Group KI Health Advisory Council 7 November 2018 – 30 June 2019 KI Natural Resources Management Board ELECTED MEMBER REIMBURSEMENT LGA SA ALLOWANCE Penneshaw Community Business Centre Mayor Pengilly $2,699.60 Regional Development Australia Cr Mumford $254.99 Southern & Hills LGA Roads Working Party Cr Walkom $254.99 STARCLUB Cr Pledge $0.00 Tourism Optimisation Management Model Cr Teasdale $2,934.87 ZEMC Cr Denholm $4,044.10 Resilient Hills & Coasts Cr Liu $0.00 Cr Tiggemann $0.00 Scheme of Delegation Cr Chirgwin $0.00 By the direction of the Local Government Act (1999) Cr Irwin (resigned) $1,022.34 S44; “A Council may delegate a power or function vested Cr Turner (resigned) $0.00 or confirmed under this or another Act”. By Motion of Cr Kauppila (resigned) $0.00 Council [C307:2017], the Chief Executive Officer has GRAND TOTAL $11,210.89 been provided with the decision making powers in terms of prescribed actions in order for Council to manage its 1 July 2018 – 7 November 2018 operations. By the direction of the Local Government ELECTED MEMBER REIMBURSEMENT Act (1999) S101(1) and through a Motion of Council ALLOWANCE [C307:2017], “the Chief Executive Officer may delegate Mayor Clements $5,274.91 (or sub-delegate) a power or function vested or confirmed in or on the Chief Executive Officer under this Act”. These Cr Turner $0.00 delegations have been granted to specific staff positions Cr Ricketts $2,073.32 in order that those staff can carry out their roles and Cr Kauppila $0.00 responsibilities. The delegation of powers occurs on and Cr Denholm $1,583.72 is reviewed on an annual basis. Cr Liu $0.00 Cr Masters $0.00 Cr Willson $1,167.56 Grand Total $10,099.51 In addition, the Section 41 Audit Committee Chair, Mr Greg Connor received $4,616.36 in allowances from Council, including sitting fees and disbursements.

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Executive Management Salary packages for members of the Executive Leadership Team include the provision of a motor vehicle, superannuation and income protection. Training and Development for Elected Members The following training and development sessions were attended by Elected Members during the 2018-19 financial year.

COUNCILLOR TRAINING Mayor Michael Pengilly Norman Waterhouse - Introduction to Local Government Mandatory Training Audit, Strategic Planning, ABP and Long-term Financial Plan Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Peter Denholm Norman Waterhouse - Introduction to Local Government Mandatory Training Audit, Strategic Planning, ABP and Long-term Financial Plan Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Ken Liu Norman Waterhouse - Introduction to Local Government Mandatory Training Audit, Strategic Planning, ABP and Long-term Financial Plan Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Sharon Kauppila Norman Waterhouse - Introduction to Local Government Mandatory Training Audit, Strategic Planning, ABP and Long-term Financial Plan Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Shirley Pledge Norman Waterhouse - Introduction to Local Government Mandatory Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Sam Mumford Norman Waterhouse - Introduction to Local Government Mandatory Training Audit, Strategic Planning, ABP and Long-term Financial Plan Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Larry Turner Norman Waterhouse - Introduction to Local Government Mandatory Training Audit, Strategic Planning, ABP and Long-term Financial Plan Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Bob Teasdale Norman Waterhouse - Introduction to Local Government Mandatory Training Audit, Strategic Planning, ABP and Long-term Financial Plan Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Leeza Irwin Norman Waterhouse - Introduction to Local Government Mandatory Training Audit, Strategic Planning, ABP and Long-term Financial Plan Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Graham Walkom Norman Waterhouse - Introduction to Local Government Mandatory Training Audit, Strategic Planning, ABP and Long-term Financial Plan Training LGA - Intro to the Local Government, Council Behaviours, Council Leadership Rosalie Chirgwin Kelledyjones - Elected Member Mandatory Training Peter Tiggemann Kelledyjones - Elected Member Mandatory Training

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Confidential Items – Pursuant to Section 90 and 91 of the Act Section 90(1) of the Local Government Act 1999 determines that Council meetings, and meetings of Committees of Council, are to be held in a place that ensures public access. On occasions this principle is outweighed by considerations for the need to keep information or discussions confidential. Section 90(2) of the Local Government Act 1999 allows that the public may be excluded from attendance for certain matters listed in Section 90(3). Section 91(7) then allows for matters deemed confidential under Section 90(2) to be excluded from the requirement for minutes to be placed on public display and available for inspection. During 2018-19, provisions of the Local Government Act 1999 Section 90(2) were utilised 23 times. The date, subject of item and grounds upon which Council determined to exclude the public from the meeting are outlined in the following table. Grounds on which the public can be excluded from the meeting include: a Personal affairs b Commercial advantage c Trade secret d Commercial information (not a trade secret) e Security / safety f Maintenance of law g Breach of law h Legal advice i Litigation j Minister of the Crown k Tenders for supply of goods or services l Amendment to Development Plan m Freedom of Information Act 1991.

MEETING DATE LG ACT SECTION ITEM DETAILS 14-Aug-18 90(3)(d) Strategic Plan Consultant Appointment (excluding Council decision) 11-Sep-18 90(3)(h) Development / Change of Land Use Issue 11-Sep-18 90(3)(a) CEO Performance Review (report and attachments only) 9-Oct-18 90(3)(a) Elections for the positions of representative members of the Board of Trustees - LGFA 9-Oct-18 90(3)(d) Airline Servicing 22-Nov-18 90(3)(d) Business Arising from In-confidence Minutes - Discussion only - no report or minutes provided 12-Dec-18 90(3)(a) WHS and Duty of Care to the CEO 12-Dec-18 90(3)(a) Staff Matters 12-Dec-18 90(3)(a) Airport Report - request for information 12-Dec-18 90(3)(a) CEO Contract & Performance Reviews 22-Jan-19 90(3)(a) Business Arising from In-confidence Minutes 17/01/19 17-Jan-19 90(3)(a) (h) Legal Advice 12-Feb-19 90(3)(a) Legal Advice 19-Feb-19 90(3)(a) Legal Advice 9-Apr-19 90(3)(d) KI Energy Biomass Project 9-Apr-19 90(3)(a) Sale of land for non-payment of rates

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MEETING DATE LG ACT SECTION ITEM DETAILS 9-Apr-19 90(3)(d) Request to purchase Council land - Lot 4 Baudin Beach 20-Mar-19 90(3)(d) Strategic Development Opportunity 17-Apr-19 90(3)(a) Confidential Report to Council 17-Apr-19 90(3)(d) KI Energy Biomass Project 14-May-19 90(3)(d) Sale of land for non-payment of rates 11-Jun-19 90(3)(j) Confidential report to the Mayor 18-Jun-19 90(3)(a) CEO Selection Panel

125 confidential items were revoked, none expired and none ceased to apply during the financial year with 76 items still remaining in confidence, detailed in the table below.

MEETING DATE LG ACT SECTION ITEM DETAILS 10-Oct-08 90(3)(a) Rates Remission Application 9-Apr-09 90(3)(d) Leases and Licences 10-Dec-10 90(3)(b) Lot 4 Hd Dudley 13-Apr-11 90(3)(b) Sale of Lot 4 Hog Bay Road, Hd Dudley 30-Jun-11 90(3)(b) Lot 4 Hog Bay Road, Baudin Beach, Hd Dudley 17-Aug-11 90(3)(b) Potential for Land Exchange 21-Sep-11 90(3)(b) Lot 4 Baudin Beach 8-Feb-12 90(3)(a) Lot 4 Baudin Beach 11-Jul-12 90(3)(d)(i&ii) Commercial Correspondence 31-Aug-12 90(3)(a) Ombudsman’s Draft Report 12-Dec-12 90(3)(a) CEO Review Report (sealed) 12-Jun-13 90(3)(a) CEO Review Panel Report (sealed) 11-Sep-13 90(3)(a) Request for Rate Assistance 30-Oct-13 90(3)(a) CEO Performance Review 30-Oct-13 90(3)(a) Organisation Performance Review 13-Nov-13 90(3)(a) Community Service Award 13-Nov-13 90(3)(a) Request from a Ratepayer 12-Feb-14 90(3)(a) Rating Matter 12-Mar-14 90(3)(a) Rates Outstanding 3+ Years (excluding Council decision) 14-Mar-14 90(3)(a) Employee Update 9-Apr-14 90(3)(e) 5 March 2014 Workshop Notes (report sealed) 10-Jul-14 90(3)(a) Code of Conduct 07/2014 - Final Report 10-Jul-14 90(3)(a) Code of Conduct 08/2014 - Final Report 23-Jul-14 90(3)(a) Code of Conduct final report 09/2014 13-Aug-14 90(3)(a) COC 10/2014 Final Report 13-Aug-14 90(3)(a) Staff Exit Interview Report 20-Aug-14 90(3)(a) CEO Performance Review 20-Nov-14 90(3)(a) Appointment of Independent DAP Members - Attachments Only

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MEETING DATE LG ACT SECTION ITEM DETAILS 20-Jan-15 90(3)(a) Nominations for DAC 14-Apr-15 90(3)(a) Soldier Memorial Gates 12-May-15 90(3)(a) Request for rates refund / waiver 9-Jun-15 90(3)(g) 2015-01- 2015-03 Code of Conducts verbal update - COC’s finalised 18-Aug-15 90(3)(a) Code of Conduct 2015/04 13-Oct-15 90(3)(a) Confidential Report to Mayor 13-Oct-15 90(3)(d)(i&ii) Island Development #1 10-Nov-15 90(3)(a) CEO Review 8-Dec-15 90(3)(g) Legal Advice #2 8-Mar-16 90(3)(g) Audit Committee Minutes 27-Oct-16 90(3)(a) CEO Annual Review Process 8-Nov-16 90(3)(g) Legal Matter 8-Nov-16 90(3)(g) Organisational Chart 13-Dec-16 90(3)(g) Legal Matter - Business Arising from In confidence Minutes 18.2 - 8/11/16 9-May-17 90(3)(a) Code of Conduct 2017/01 29-Jun-17 90(3)(a) Code of Conduct 2017/02 30-Oct-17 90(3)(a) CEO Performance Review 30-Oct-17 90(3)(d) Forestry Road Use Assessment 14-Nov-17 90(3)(a) Recruitment of the Independent Chairperson for the FRWA Board 13-Feb-18 90(3)(a) Report for Information - CEO Contract 12-Jun-18 90(3)(a) Final report on Code of Conduct complaint against CEO 12-Jun-18 90(3)(a) Debt Management - Section 181-184 of LGA 12-Jun-18 90(3)(a) Insurance Claim against Council 12-Jun-18 90(3)(a) Outstanding Rates 12-Jun-18 90(3)(d) Forestry Update 14-Aug-18 90(3)(d) Strategic Plan Consultant Appointment (excluding Council decision) 11-Sep-18 90(3)(h) Development / Change of Land Use Issue 11-Sep-18 90(3)(a) CEO Performance Review (report & attachments only) 9-Oct-18 90(3)(a) Elections for the positions of representative members of the Board of Trustees - LGFA 12-Dec-18 90(3)(a) WHS and Duty of Care to the CEO 12-Dec-18 90(3)(a) CEO Contract & Performance Reviews 22-Jan-19 90(3)(a) Business Arising from In-confidence Minutes 17/01/19 17-Jan-19 90(3)(a) (h) Legal Advice 12-Feb-19 90(3)(a) Legal Advice 19-Feb-19 90(3)(a) Legal Advice 9-Apr-19 90(3)(d) KI Energy Biomass Project 9-Apr-19 90(3)(a) Sale of land for non-payment of rates

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Procurement and Competitive Tender The Council has a Procurement Policy (incorporating Contracts and Tenders) which commits to delivering cost-effective services to our Community while supporting local businesses where possible. Tenders are assessed across a range of criteria appropriate to the works / services being tendered for and to ensure a “fair go” for local businesses. One of the criteria assessed is Local Content with a weighting of up to 20%. The Procurement Policy is also mindful of the Government Business Enterprises (Competition) Act 1996. The contracting of significant works or services is released to open competitive tender unless there are mitigating reasons, for example, specialist expertise is required, and then a limited select tender process is carried out. While the policy has a focus on buying locally, there remains a commitment to ensuring the best value for money is received. Council has a complaints mechanism in place and in 2018-19 no complaints were received with regard to Competitive Neutrality.

List of Registers and Codes required to be kept By-Laws S68 Register of Elected Members’ Interests By-Law 1 Permits and Penalties S79 Register of Elected Members’ Allowances and By-Law 2 Moveable Signs Benefits By-Law 3 Local Government Land S105 Register of Salaries and Allowances (Officers) By-Law 4 Roads S116 Register of Departmental Heads and Interests By-Law 5 Dogs S188 Schedule of Fees and Charges By-Law 6 Cats S207 Register of Community Land By-Law 7 Keeping of Livestock, Fowl and Bees S231 Register of Public Roads By-Law 8 Foreshores and Boat Facilities S252 Register of By-Laws As required by Legislation, Council By-Laws were Other Council Registers reviewed during 2016-17, inclusive of a full public consultation process. The revised Council By-Laws came Register of Registered Cats into effect in November 2017. Register of Registered Dogs Register of Campaign Donation Returns Register of Confidential Items Development Register Register of Council Delegations

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Code of Conduct Documents On 29 August 2013, a new Code of Conduct for Elected Many of the documents listed below are available for Members was made by Legislation. The Code of public inspection free of charge at the Kingscote Office, Conduct applies to all Elected Members across the 43 Dauncey Street, Kingscote, between 9.00am and Local Government sector and may be the subject of an 5.00pm weekdays. Most documents can also be found investigation by an Independent Investigator, Council, on the Council’s website www.kangarooisland.sa.gov.au. Local Government Governance Panel, Ombudsman, ICAC Copies may be purchased at a cost of $0.40 per single A4 and/or SAPOL, depending on the nature of the issue. page or $0.80 per doubled sided A4 page. The Code of Conduct also contains sanctions which may Documents include but are not limited to: be imposed by Council on an Elected Member where a Annual Report breach of the Code is found to be sustained. The Code of Annual Business Plan Conduct for Elected Members underwent Periodic Review Annual Financial Statements in August 2018. Infrastructure and Asset Management Plans A similar Code of Conduct, applicable to Council Environmental Management Plans Employees, was revoked by Legislation and replaced Business Continuity Plan by the Local Government (General) (Employee Code of Council and Committee Agendas and Minutes Conduct) Variation Regulations 2018 - Code of Conduct Council Budget for Council Employees (Gifts & Benefits) and Complaints Against Council Employees Policy, endorsed by Council Council Assessment Panel Agendas and Minutes on 10 April 2018. The full Codes of Conduct and other Development Plan policies pertaining to the behaviour of Elected Members Kangaroo Island Plan and Council Employees may be found at the Council’s Kangaroo Island Study website www.kangarooisland.sa.gov.au or at Lands Management Plan 43 Dauncey St, Kingscote. Long Term Financial Plan Code of Conduct for Council Employees (Gifts and Paradise Girt By Sea Benefits) Policy Policies and Procedures Complaints Against Council Employees Policy Schedule of Fees and Charges Code of Conduct for Elected Members Policy Strategic Plan Code of Conduct for Elected Members (Gifts and Town Centres Plan Benefits) Southern & Hills LGA 2020 Transport Management Plan Code of Conduct for Elected Members Procedure Council Assessment Panel Code of Conduct Freedom of Information

Codes of Practice and Guidelines Where possible Council provides information to residents and/or ratepayers without referral to the provisions of the Access to Council and Committee Meetings and Freedom of Information Act 1991. Where information is Documents requested under the Freedom of Information Act 1991 a Code of Practice for Meeting Procedures request form (provided for in the Act) must be completed Code of Practice for Access to Meetings and Documents and forwarded with the required application fee (unless Caretaker Guidelines (2018) an exemption is granted). Caretaker Policy (Election) Requests for other information not publicly available Election Signage Guidelines (2018) will be considered in accordance with the Freedom of Information Act 1991 (SA) which gives individuals the right to access documents (subject to certain restrictions) that are within the Council’s possession. It also allows for the amendment of documents which contain personal information that is incomplete, incorrect, out of date or misleading.

32 KANGAROO ISLAND COUNCIL annual report 2018-2019

There were seven (7) requests for information from A Review was completed and endorsed by the Electoral 1 July 2018 to 30 June 2019. Commissioner of South Australia [ECSA] on 14 February 2017. The Representation Quota remains unchanged NEW APPLICATIONS 7 and the new Quota period came into effect at the first Applications brought forward from previous year 0 sitting of the new Council in November 2018. It was Access granted in full 1 determined that: Access granted in part or the majority 6 • The Council area will not be divided into wards. Access refused 0 • The Elected Council will comprise the Mayor and Transferred 0 nine (9) Area Councillors who represent the Council Closed/withdrawn 0 area as a whole. Undetermined at 30 June 2019 0 Internal review – decision confirmed 0 Community Land Internal review – decision varied 0 During this financial year the Council continued to Time Limits progress proposals to revoke the Community Land status of 16 properties owned by the Council on the Island, An application will be dealt with by an accredited FOI and received Ministerial approval for such revocations officer as soon as practicable and within 30 days after its in March 2019. The land revocation matter and any final receipt, unless an extension of time is required to process decision will be revisited in the 2019-20 financial year. the application. Council’s Community Land Register is updated on an Exemptions as-required basis and is available on Council’s website Access to documents under the Freedom of Information www.kangarooisland.sa.gov.au or at 43 Dauncey St, Act 1991 may be refused subject to prescribed Kingscote. Council maintains leases and permits for exemptions. These are to ensure that other people’s the use of Community Land. This process is regularly privacy is not breached or that the proper administration reviewed and improved upon, with consideration to the of the Council is not adversely affected. impact of Climate Change on Community Lands and the Island as a whole. Internal Review of Council Decisions There were no requests for Internal Review of Council Local Nuisance and Litter Control Act and Decisions for the period governed by this Annual Report. Regulations There were 14 complaints of local nuisance or littering Council Representation Quota Review received by Council. The Local Government Act 1999 requires a Council to FUNCTIONS NUMBER NATURE undertake a ‘Representation review’ at regular intervals determined by the Minister for Local Government. Offenses under the Act that Nil n/a were expiated An elector representation review gives councils and Offenses under the Act that Nil n/a their community the opportunity to examine the options were prosecuted available for the composition of Council and consider Nuisance abatement notices or Nil n/a whether the current composition is adequate, or litter abatement notices issued whether a change will provide ratepayers with increased Civil penalties negotiated Nil n/a representation and input into Council decision making. under section 34 of the Act Applications by the Council to Nil n/a the Court for orders made by the Court on those applications Any other functions performed Nil n/a by Council under the Act

33 KANGAROO ISLAND COUNCIL annual report 2018-2019

COMMONLY USED ACRONYMS Legend – Council Personnel CAM Community Affairs Manager KIIBA Kangaroo Island Industry Brand Alliance CEO Chief Executive Officer KIFA Kangaroo Island Futures Authority CLG Council Leadership Group KIHS KI Health Service DCS Director Council Services KINRM Kangaroo Island Natural Resource Management DCEO Deputy Chief Executive Officer KIPMG KI Ports Management Group DSA Developmental Services Advisor KPIs Key Performance Indicators ELT Executive Leadership Team KIRRC KI Resource Recovery Centre EM Elected Members KIRSC KI Road Safety Committee EHO Environmental Health Officer LG Local Government FM Finance Manager LGA Local Government Association FPO Fire Prevention Officer LGS Local Government Services GI General Inspector MOU Memorandum of Understanding GO Governance Officer MOA Memorandum of Agreement HR Human Resources NVC Native Vegetation Council MDES Mgr Development & Environmental Services PAR Plan Amendment Review TPM Technical Programs Manager PDs Position Description WHS Workplace Health & Safety PDI Act Planning, Development & Infrastructure Act 2016 BCP Business Continuity Plan PDP Personal Development Plan CDAP Council Development Assessment Panel RDA Regional Development Australia CFS Country Fire Service RDIF Regional Development Infrastructure Fund CKI Commissioner for Kangaroo Island RH&C Resilient Hills & Coats CPN Community Passenger Network RPT Regular Passenger Transport CWMS Community Wastewater Management Scheme SA Govt South Australian Government DAC Development Assessment Commission SATC South Australian Tourism Commission DEW Dept for Environment & Water SCAP State Commission Assessment Panel DPA Development Plan Amendment SEB Significant Environmental Benefit DPTI Dept of Planning, Transport & Infrastructure SHLGA Southern & Hills Local Government Association EPA Environment Protection Authority SIRPA Sapphiretown, Island Beach Residents Association ERD Environment, Resources & Development SOP Safe Operating Procedure FRWA Fleurieu Regional Waste Authority SPC State Planning Commission FWS Finding Workable Solutions TKI Tourism Kangaroo Island FY Financial Year TOMM Tourism Optimisation Management Model HAC Health Advisory Committee URPS Urban & Regional Planning Solutions KIC Kangaroo Island Council YAC Youth Advisory Committee KICHA KI Community Housing Association ZEMC Zone Emergency Management Committee KIBMC Kangaroo Island Bushfire Management Committee

34 KANGAROO ISLAND COUNCIL annual report 2018-2019

SECTION 3 Finance Report 2018-19 year

35 KANGAROO ISLAND COUNCIL annual report 2018-2019

Council’s 2018-19 Annual Financial Statements were formally adopted by Elected Members on 12 November 2019. Council’s financial accounts for the 2018-19 financial For FY 2019 Council recognised $2.612M of the airport year are represented fairly, in all material respects, and funding as Amounts Received Specifically for New Council’s financial performance for the year ended in or Upgraded Assets. Council also received $875K accordance with accepted accounting standards and towards the Prospect Hill Stairs, $438K towards the legislative requirements. Emu Bay Boat Ramp and $145K from DPTI towards the North Coast Road junctions. The total of Amounts This reporting period reflects a net surplus of Received Specifically for New or Upgraded Assets is $4.26M. This result is a positive return for Council, shown as $4.071M. being an increase of $2.527M on last year’s result. For the first time since 2015 Council has returned an Total expenses increased by $1.252M compared operating surplus. with the previous year. The largest increase in costs is attributable to materials, contracts and other There are a number of influences in the Statement expenses where costs were up by $766K in FY2019. of Comprehensive Income which have brought Employee costs increased by $93K when compared with about this result. FY 2018. This was due largely to a greater expenditure Operating Grants increased by $2.129M (up from on operating activities rather than on improvements $3.18M in 2018 to $5.309M in 2019). to, or upgrading of, our assets. Finance costs also One reason for this is that Council received an advance increased by $100K in FY 2019, attributable to the payment in June, of the Financial Assistance Grant overdraft for the airport being carried for much longer (FAGS) . In FY 2019 this payment was $1.076M than expected, the last grant payment for the airport compared to $1.061M in FY 2018. ($1.5M) was not received until 4 June 2019. In addition, the DPTI Special Road Program funding was FY2019 shows an increase in depreciation of $289K this year provided as a grant (1.783M) and reported as from FY2018, which is largely attributable to the a grant. In previous years these funds were received upgrade of the airport. In FY 2019 the new airport as Physical Resources Received Free of Charge was depreciated for the full financial year, whereas and were reported as such. In FY 2018, these funds in FY 2018 half of the airport upgrade (Airside) was amounted to $1.56M. depreciated for half of the year. Council saw an increase in private works undertaken Although Council achieved only a small operating during the financial year. These are reported as surplus in this reporting period it nevertheless achieved Reimbursements and they increased from $503K in FY a significant improvement on the previous year’s result. 2018 to $680K in FY 2019. Council moved from a deficit position of $1.346M in FY 2018 to a surplus position of $185K in FY 2019. This is User Charges increased by $72K, up from $1.169M a positive change of $1.531M and underpins Council’s in FY 2018 to $1.241M in FY 2019. This includes among excellent net surplus position of $4.26M. other items an increase in: aerodrome fees by $24K; camp ground fees by $4K; Lot 89 landing fees by $2K; The FY 2019 audit fees were $58,452. This represented Property Rental and Hall and Equipment hire by $15K; Deloitte’s final year of their four year independent audit and Marina Launch Fees and Marina Berth Fees by engagement and the services of BRM Holdich who $1.5K and $6.5K respectively. conducted internal audits of Council’s Procurement Policy and compliance with that policy. The $20.75M Council received over financial years 2017, 2018 and 2019 for the Kangaroo Island Deloitte are responsible for the audit of Council’s Airport redevelopment was recorded as Income financial statements and internal controls. Received in Advance. This was in line with Council’s BRM Holdich were engaged after Council passed a Accounting Policy and the three funding agreements resolution in December 2018 requesting an undertaking - South Australian State Government ($10.25M), of an independent audit into Council’s procurement Commonwealth’s National Stronger Regions Fund policy so that Council may make an informed decision ($9.0M) and Commonwealth Development Grants as to whether this restricted level of delegation is Program ($1.5M), where receipt of the funding is to be appropriate and to ascertain if any changes are required recognised over the next 20 years. or needed to the policy.

36 KANGAROO ISLAND COUNCIL annual report 2018-2019

Two audits to consider these matters were undertaken. The first of these was completed in March 2019 and the results presented to the Audit Committee in April 2019. The second report was presented was tabled at the October 2019 Ordinary Meeting of Council. As a result of these audits, continuous improvement methodologies have been incorporated into the governance of our finance policies and procedures, and in particular, Council’s Procurement Policy. The recommended changes align with 5.1 of our Strategic Management Plan, namely to remove inefficiencies in core business processes and de-risk the business. The Deloitte contract of service concludes at the completion of the 2019 FY audit. Consequently Council be tendering for audit services next financial year. Revenue Sources During 2018-19, Council continued to rely heavily on rates (57% of revenue, compared to 65% last year) and total grants (30%, compared to 21% last year) as its prime revenue sources. The comparative proportion of funding sources can be seen in Graph 1: Graph 1: Revenue Sources

Rates Revenue

Statutory Charges

User Charges

Grants, Subsidies & Contributions

Investment Income

Reimbursements

Other Income

Net Gain - Equity Accounted Council Businesses 0 2000 4000 6000 8000 10000 12000

2019 2018

Expenditure Further challenges to Council’s long term financial planning are the year to year variations in operational expenditure as reflected in Graph 2. Graph 2: Expenditure Areas

Employee Costs

Materials, Contracts & Other Expenses

Depreciation, Amortisation & Impairment

Finance Costs

Net Loss - Equity Accounted Council Businesses

0 1000 2000 3000 4000 5000 6000 7000 8000

2019 2018

37 KANGAROO ISLAND COUNCIL annual report 2018-2019

Borrowings / Debt Management Council continued to borrow funds for the development of key infrastructure assets for the Community, including road upgrades and Community Waste Water Management System (CWMS) assets. Council used the borrowings as a means of allocating costs to ratepayers and consumers over the useful life of the assets. From time to time Council also uses borrowings to cover insufficient immediate cash management needs. Outstanding borrowings as at 30 June 2019 are $14.668M, a decrease in borrowings from $17.13M the previous year. At 30 June 2019 Council was carrying $610K of debt for the airport, a decrease of $3.745M on the previous year. It is expected that this loan will be fully repaid in FY 2021. Council’s long-term financial plan provides for borrowings of $1.5M each year to fund capital expenditure (new, renewal, and upgrade). Financial Indicators Council continues to monitor and report performance against the three key financial indicators that have been generally adopted by Councils across South Australia as a guide to their financial performance. (See note 15 in the Financial Statements). Operating Surplus Ratio The operating surplus expressed as a percentage of general and other rates, net of rate rebates and NRM Levy. Net Financial Liabilities Ratio Net financial liabilities at the end of Year as a percentage of operating revenue for the year. Asset Sustainability Ratio Measuring capital expenditure on renewal or replacement of assets relative to the optimal level proposed in Council’s Infrastructure and Asset Management Plans.

Table 1: Financial Indicators

2015/16 2016/17 2017/18 2018/19 Operating Surplus / (Deficit) ($'000) -2,951 -1,143 -1,346 $185 Operating Surplus Ratio -23% -7% -9% 1% Adjusted Operating Surplus Ratio -16% -13% -10% 1% Net Financial Liabilities ($'000) 10,857 17,953 14,880 13,295 Net Financial Liabilities Ratio 84% 113% 99% 74% Asset Sustainability Ratio 33% 47% 155% 136% The Financial indicators table has been updated in line with Note 15 of the Financial Statements for each of the financial years reported. The Financial Statements for each financial year are available on Council’s website. Council continues to face significant challenges in relation to delivering an operating surplus and the management of its asset-driven indicators. Both the Asset Sustainability Ratio and the Operating Surplus Ratio for 2018-19 have improved. The Asset Sustainability Ratio calculation and comparison across financial years reflects a change in the management and funding of local unsealed roads. The road assets that were previously managed by DPTI are now, in this period, being managed and funded by Council. The $2M DPTI funding for these upgrades was received as a grant this financial year, and works were accounted for by Council. Previously, these road upgrades were managed by DPTI and reported in in our accounts as Assets Received Free of Charge. The change in the way DPTI provided the funding this financial year (as a grant) has also reflected positively on our Operating Surplus Ratio because we are now recognising an additional $2M as income, which previously was not recorded as income. Council’s Net Financial Liabilities Ratio is within the target range (0-100%) and as expected, is showing an improvement on last year. The Net Financial Liabilities Ratio excludes the liability “Income Received in Advance”. This income includes the airport grant funds which, as discussed earlier, will be recognised as income over a twenty year (20) period, in line with the funding agreements. This trend meets with Council’s 2017-27 Long-term Financial Plan projections.

38 KANGAROO ISLAND COUNCIL annual report 2018-2019

Graph 3 below illustrates this trend where Council’s level of net financial liability is no greater than its annual operating revenue and not less than zero. Graph 3 – Net Financial Liabilities Net Financial Liabilities

20000 18000 16000 14000 12000 10000 8000 6000 4000 2000 0 Year 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 Net Operating Income Net Financial Liabilities Rates All land within the Council area, except for land specifically exempt is rateable. The Local Government Act, 1999 provides for Council to raise revenue for the broad purposes of the Council through a general rate which applies to all rateable properties, or through differential general rates which apply to classes of properties. In addition, Council can raise separate rates for specific areas of the Council, or service rates or charges for specific services. The number of rateable properties has remained relatively constant at 5,604 properties (in FY 2018, the number was 5,549). The capital value of properties on Kangaroo Island increased by approximately 1% during FY 2019 year to a total of $1.678BN (up from $1.666BN in FY 2018). These changes are depicted in Table 2 and Graph 4 below. Table 2: Capital valuations by rating category

DESCRIPTION 2018-19 2017-18 Non-Rateable $96,949,390.00 $96,254,432.00 Residential $711,161,114.00 $702,893,114.00 Commercial $86,415,509.00 $84,442,621.00 Industrial $10,520,250.00 $10,497,487.00 Primary Production $627,865,491.00 $623,304,500.00 Vacant Land $119,884,500.00 $120,255,000.00 Other $25,588,246.00 $26,922,746.00 $1,678,384,500.00 $1,664,569,900.00

39 KANGAROO ISLAND COUNCIL annual report 2018-2019

Property Valuations by Rating Category

2% 7% 6%

Non-Rateable

Residential

Commercial

37% Industrial

42% Primary Production

Vacant Land

Other

1% 5%

Average general rates for a residential property on Kangaroo Island were $1,245 (compared with $1,227 in FY 2018), being an overall increase of 1.47%. Average rates for primary production properties were $1,740 up from $1,682, being an increase of 3.45% from FY 2018. Table 3: Average Rates Levied

DESCRIPTION 2018-19 2017-18 Residential $1,245.00 $1,227.00 Commercial $1,524.00 $1,540.00 Industrial $1,224.00 $1,188.00 Primary Production $1,740.00 $1,682.00 Vacant Land $738.00 $733.00 Other $677.00 $709.00

40 KANGAROO ISLAND COUNCIL annual report 2018-2019

Average General Rates Levied

10% Residential 18% 10% Commercial

Industrial 21% Primary Production 24% Vacant Land 17% Other

Council offered both Mandatory and Discretionary Rebates during FY 2019. The payment of these rebates were made in accordance with the provisions stipulated in Chapter 10, Division 5 of the Local Government Act, 1999. The value of rebates and other concessions provided to ratepayers in FY 2019 totalled $97K and can be seen in Note 2 of the financial statements. In FY 2018 it was $94K. Full details of rebates and rate capping provisions can be found in Council’s Rating and Rebate Policy available on Council’s website. Looking Ahead to 2019-20 (From 2019-20 Annual Business Plan)

Significant Influences and Priorities CPI – set at Dec 2018 quarter: CPI rate (1.6%) To meet the needs of the Capital Works Program, the Long Term Financial Plan demonstrates that a sustainable level of borrowing for the Council in future years is $1.5M annually. When coupled with the $2M that the State provides through the Unsealed Roads Upgrade Program and $560K provided by other funding sources, we expect to deliver over $4.5M of infrastructure and asset upgrades in FY 2020. To meet Council funded capital works and plant/equipment purchase requirements, it is intended that we establish variable cash advance debenture facilities (CAD) to the level required (with plant/equipment generally being funded on a fixed rate loan). The Federal Government’s Financial Assistance Grants (FAGs) are distributed to the States who in turn distribute the grants to Local Government via the State Grants Commission funding formula. For budgeting purposes, it was included at FY 2019 rates plus CPI, with the expectation that an advance payment will be received as has been the practice for the past three years. The Federal Government Roads to Recovery funding allocation for Kangaroo Island Council in FY 2020 is at $345K, the same as the amount received in FY 2019. This will be allocated to the Capital Works Program. A current Enterprise Bargaining Agreement (EBA) between Council and its staff sets out the employment conditions, which are then taken into account as part of the 2019-20 budget considerations. This EBA is due for renegotiation prior to June 2020.

41 KANGAROO ISLAND COUNCIL annual report 2018-2019

The planned increase in Rates Revenue in FY 2020 will comprise CPI at 1.6% together with a 1% allowance for an increase in capital values of properties (noting that this has varied between 0.1 and 0.8% over the past three years). In addition to this, Council has determined that the temporary reduction in differential for Primary Production (land use code), introduced as a response to the drought in the late 2000s, will be phased out at 2.5% per year until parity with the residential differential is reached (100%), so in FY 2020 the differential will move from 92.5% to 95.0%. Continued efficiencies in the management of waste have been offset by an increase in the cost of processing recyclables and consequently the Waste Management Service Charge is increased by CPI in the FY 2020. Community Wastewater Management Schemes (CWMS) service charges were increased by 1.6% in FY 2020 to $642 in line with CPI. This service charge will be allocated to those properties that have the capability to be connected to one of the schemes and does not apply to all ratepayers. Going forward it is expected that these service charges will continue to increase by the CPI each year.

42 KANGAROO ISLAND COUNCIL annual report 2018-2019

General purpose financial statements for the year ended 30 June 2019

A confident, growing and cohesive Community; Benefiting from a thriving economy based on strong tourism and primary production sectors; Preserving our unique heritage; Sustainably managing our natural evironment

Contents 1. Council Certificate 44 2. Primary Financial Statements: - Statement of Comprehensive Income 45 - Statement of Financial Position 46 - Statement of Changes in Equity 47 - Statement of Cash Flows 48 3. Notes to the Financial Statements 49 4. Independent Auditor’s Report - Financial Statements 89 5. Independent Auditor’s Report - Internal Controls 91 6. Certificates of Audit Independence - Council Certificate of Audit Independence 93 - Audit Certificate of Audit Independence 94

43 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

General Purpose Financial Statements for the year ended 30 June 2019

X2A1T Certification of Financial Statements

We have been authorised by the Council to certify the financial statements in their final form.

In our opinion:

 the accompanying financial statements comply with the Local Government Act 1999 , Local Government (Financial Management) Regulations 2011 and Australian Accounting Standards,

 the financial statements present a true and fair view of the Council’s financial position at 30 June 2019 and the results of its operations and cash flows for the financial year,

 internal controls implemented by the Council provide a reasonable assurance that the Council’s financial records are complete, accurate and reliable and were effective throughout the financial year,

 the financial statements accurately reflect the Council’s accounting and other records.

Greg Georgopoulos Michael Pengilly CHIEF EXECUTIVE OFFICER MAYOR

Date: 12 November 2019

44 page 2 KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council

StatementX3A0T of Comprehensive Income forStatement the year ended of 30 ComprehensiveJune 2019 Income for the year ended 30 June 2019

$ '000 Notes 2019 2018

Income Rates Revenues 2a 10,231 9,807 Statutory Charges 2b 297 264 User Charges 2c 1,241 1,169 Grants, Subsidies and Contributions 2g 5,309 3,180 Investment Income 2d 8 7 Reimbursements 2e 680 503 Other Income 2f 98 138 Net Gain - Equity Accounted Council Businesses 19 - 13 Total Income 17,864 15,081

Expenses Employee Costs 3a 4,637 4,544 Materials, Contracts & Other Expenses 3b 7,501 6,735 Depreciation, Amortisation & Impairment 3c 4,925 4,636 Finance Costs 3d 612 512 Net loss - Equity Accounted Council Businesses 19 4 - Total Expenses 17,679 16,427

Operating Surplus / (Deficit) 185 (1,346)

Asset Disposal & Fair Value Adjustments 4 4 19 Amounts Received Specifically for New or Upgraded Assets 2g 4,071 1,496 Physical Resources Received Free of Charge 2i - 1,564 Net Surplus / (Deficit) 1 4,260 1,733

Other Comprehensive Income Amounts which will not be reclassified subsequently to operating result Changes in Revaluation Surplus - I,PP&E 9a (3,113) - Impairment (Expense) / Recoupments Offset to Asset Revaluation Reserve 9a - (13)

Total Other Comprehensive Income (3,113) (13)

Total Comprehensive Income 1,147 1,720

1 Transferred to Statement of Changes in Equity

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies.

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 3 KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council

StatementX3A1T of Financial Position asStatement at 30 June 2019 of Financial Position as at 30 June 2019

$ '000 Notes 2019 2018

ASSETS Current Assets Cash and Cash Equivalents 5a 1,943 4,519 Trade & Other Receivables 5b 2,413 1,068 Inventories 5c 407 366 Total Current Assets 4,763 5,953

Non-Current Assets Equity Accounted Investments in Council Businesses 6a 117 121 Infrastructure, Property, Plant & Equipment 7a 214,454 218,387 Other Non-Current Assets 6b 5,085 965 Total Non-Current Assets 219,656 219,473 TOTAL ASSETS 224,419 225,426

LIABILITIES Current Liabilities Trade & Other Payables 8a 4,296 4,716 Borrowings 8b 1,366 1,189 Provisions 8c 1,142 971 Total Current Liabilities 6,804 6,876

Non-Current Liabilities Trade & Other Payables 8a 14,599 14,013 Borrowings 8b 13,303 15,946 Provisions 8c 275 300 Total Non-Current Liabilities 28,177 30,259 TOTAL LIABILITIES 34,981 37,135 Net Assets 189,438 188,291

EQUITY Accumulated Surplus 19,740 14,240 Asset Revaluation Reserves 9a 168,587 171,700 Other Reserves 9b 1,111 2,351 Total Council Equity 189,438 188,291

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies.

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 4 KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council

StatementX4A0T of Changes in Equity forStatement the year ended of 30 Changes June 2019 in Equity for the year ended 30 June 2019

Asset Accumulated Revaluation Other Total $ '000 Notes Surplus Reserve Reserves Equity

2019 Balance at the end of previous reporting period 14,240 171,700 2,351 188,291 a. Net Surplus / (Deficit) for Year 4,260 - - 4,260 b. Other Comprehensive Income - Gain (Loss) on Revaluation of I,PP&E 7a - (3,113) - (3,113) Other Comprehensive Income - (3,113) - (3,113)

Total Comprehensive Income 4,260 (3,113) - 1,147 c. Transfers between Reserves 1,240 - (1,240) - Balance at the end of period 19,740 168,587 1,111 189,438

2018 Balance at the end of previous reporting period 13,093 171,713 1,765 186,571 a. Net Surplus / (Deficit) for Year 1,733 - - 1,733 b. Other Comprehensive Income - Gain (Loss) on Revaluation of I,PP&E 7a - (13) - (13) Other Comprehensive Income - (13) - (13)

Total Comprehensive Income 1,733 (13) - 1,720 c. Transfers between Reserves (586) - 586 - Balance at the end of period 14,240 171,700 2,351 188,291

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies.

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 5 KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council

StatementX5A0T of Cash Flows forStatement the year ended of 30 CashJune 2019 Flows for the year ended 30 June 2019

$ '000 Notes 2019 2018

Cash Flows from Operating Activities Receipts Rates Receipts 10,225 9,912 Statutory Charges 289 264 User Charges 1,333 1,195 Grants, Subsidies and Contributions (operating purpose) 4,500 3,012 Investment Receipts 11 6 Reimbursements 687 484 Other Receipts 1,507 16,296 Payments Payments to Employees (4,627) (4,455) Payments for Materials, Contracts & Other Expenses (9,299) (9,268) Finance Payments (597) (503)

Net Cash provided by (or used in) Operating Activities 11b 4,029 16,943

Cash Flows from Investing Activities Receipts Amounts Received Specifically for New/Upgraded Assets 4,071 1,496 Sale of Replaced Assets 78 60 Sale of Surplus Assets - 70 Distributions Received from Equity Accounted Council Businesses 4 - Payments Expenditure on Renewal/Replacement of Assets (6,773) (7,066) Expenditure on New/Upgraded Assets (1,526) (12,004) Net Cash provided by (or used in) Investing Activities (4,150) (17,444)

Cash Flows from Financing Activities Receipts Proceeds from Borrowings 2,780 4,569 Proceeds from Bonds & Deposits 20,456 5 Payments Repayments of Borrowings (5,246) (2,466) Repayment of Other Borrowings - (5) Repayment of Bonds & Deposits (20,445) - Net Cash provided by (or used in) Financing Activities (2,455) 2,103

Net Increase (Decrease) in Cash Held (2,576) 1,602

plus: Cash & Cash Equivalents at beginning of period 11 4,519 2,917

Cash & Cash Equivalents at end of period 11 1,943 4,519 The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies.

The above statement should be read in conjunction with the accompanying Notes and Significant Accounting Policies. page 6 KANGAROO ISLAND COUNCIL annual report 2018-2019 Notes to and forming part of the Financial Statements For the year ended 30 June 2019 Contents Note Details Page 1 Significant Accounting Policies 49 2 Income 58 3 Expenses 61 4 Asset Disposal & Fair Value Adjustments 62 Current Assets 5a Cash & Cash Equivalents 63 5b Trade & Other Receivables 63 5c Inventories 63 Non-Current Assets 6a Equity Accounted Investments in Council Businesses 63 6b Other Non-Current Assets 63 Fixed Assets 7a Infrastructure, Property, Plant & Equipment 64 7b Valuation of Infrastructure, Property, Plant & Equipment 65 Liabilities 8a Trade & Other Payables 68 8b Borrowings 68 8c Provisions 68 Reserves 9a Asset Revaluation Reserve 69 9b Other Reserves 70 10 Assets Subject to Restrictions 70 11 Reconciliation to Statement of Cashflows 71 12a Functions 72 12b Components of Functions 73 13 Financial Instruments 74 14 Commitments for Expenditure 78 15 Financial Indicators 79 16 Uniform Presentation of Finances 81 17 Operating Leases 82 18 Superannuation 83 19 Interests in Other Entities 84 20 Non Current Assets Held for Sale & Discontinued Operations 85 n/a 21 Contingencies & Assets/Liabilities Not Recognised in the Balance Sheet 85 22 Events After the Balance Sheet Date 86 23 Related Party Transactions 87 Additional Council Disclosures 24 Council Information & Contact Details 88 n/a – not applicable 49

KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council Notes to and forming part of the Financial Statements

For Notes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies

The principal accounting policies adopted by Council 2 The Local Government Reporting Entity in the preparation of these consolidated financial statements are set out below. Kangaroo Island Council is incorporated under the South Australian Local Government Act 1999 and These policies have been consistently applied to all has its principal place of business at 43 Dauncey St the years presented, unless otherwise stated. Kingscote, SA. These financial statements include the Council’s direct operations and all entities 1 Basis of Preparation through which Council controls resources to carry on its functions. In the process of reporting on the 1.1 Compliance with Australian Accounting Council as a single unit, all transactions and Standards balances between activity areas and controlled entities have been eliminated. This general purpose financial report has been prepared on a going concern basis using the Other entities in which Council has an interest but historical cost convention in accordance with does not control are reported in Note 19. Australian Accounting Standards as they apply to not for profit entities, other authoritative Trust monies and property held by Council but pronouncements of the Australian Accounting subject to the control of other persons have been Standards- - Board, Interpretations and relevant South excluded from these reports. A separate statement Australian legislation. of moneys held in the Trust Fund is available for inspection at the Council Office by any person free of The financial report was authorised for issue by charge. certificate under regulation 14 of the Local Government (Financial Management) Regulations As at 30 June 2019, Kangaroo Island Council has 2011 dated 12 November 2019. net current assets of $189,438,000 (2018 net current assets of $188,291,000). 1.2 Historical Cost Convention Kangaroo Island Council has considered its current Except as stated below, these financial statements financial position along with other information such have been prepared in accordance with the historical as the cash flows for the forthcoming 12 month cost convention. period and the operating budget for the forthcoming 12 months; the ability of the Council to borrow funds 1.3 Critical Accounting Estimates from the LGFA to meet any outflows that may arise and the taxing powers of the Council to recoup, The preparation of financial statements in conformity through rates and levies, expenditure incurred. with Australian Accounting Standards requires the Through the evaluation of these factors, the Council use of certain critical accounting estimates and believes that there is no significant going concern requires management to exercise its judgement in matter and the Council will be able to meet its debts applying Council’s accounting policies. when they fall due.

The areas involving a higher degree of judgement or 3 Income Recognition complexity, or areas where assumptions and estimates are significant to the financial statements Income is measured at the fair value of the are specifically referred to in the relevant sections of consideration received or receivable. Income is these Notes. recognised when the Council obtains control over the assets comprising the income, or when the amount 1.4 Rounding due constitutes an enforceable debt, whichever first occurs. All amounts in the financial statements have been rounded to the nearest thousand dollars ($’000). Where grants, contributions and donations recognised as incomes during the reporting period were obtained on the condition that they be expended in a particular manner or used over a

50 page 8

KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

particular period, and those conditions were All receivables are reviewed as at the reporting date undischarged as at the reporting date, the amounts and adequate allowance made for amounts the subject to those undischarged conditions are receipt of which is considered doubtful. disclosed in these notes. Also disclosed is the amount of grants, contributions and receivables All financial instruments are recognised at fair value recognised as incomes in a previous reporting period at the date of recognition. A detailed statement of the which were obtained in respect of the Council's accounting policies applied to financial instruments operations for the current reporting period. forms part of Note 13.

In recent years the payment of untied financial 5 Inventories assistance grants has varied from the annual allocation as shown in the table below: Inventories held in respect of stores have been valued by using the weighted average cost on a Cash Annual continual basis, after adjustment for loss of service Payment Difference $ ‘000 Allocation potential. Inventories held in respect of business Received undertakings have been valued at the lower of cost 2016/17 $2,778 $1,834 + $944 and net realisable value. 2017/18 $2,114 $1,997 + $117 2018/19 $2,254 $2,239 +$15 5.2 Other Real Estate Held for Resale

In addition to the financial assistance grants Properties not acquired for development, but which payments bought forward, Supplementary Local Council has decided to sell as surplus to Road Funding payments of $400,000 were also requirements, are recognised at the carrying value at received in advance. the time of that decision.

Because these grants are untied, the Australian 6 Infrastructure, Property, Plant & Accounting Standards require that payments be Equipment recognised upon receipt. Accordingly, the operating results of these periods have been distorted 6.1 Initial Recognition compared to those that would have been reported had the grants been paid in the year to which they All assets are initially recognised at cost. For assets were allocated. acquired at no cost or for nominal consideration, cost is determined as fair value at the date of acquisition. The Operating Surplus Ratio disclosed in Note 15 has also been calculated after adjusting for the All non current assets purchased or constructed are distortions resulting from the differences between the capitalised as the expenditure is incurred and actual grants received and the grants entitlements depreciated- as soon as the asset is held “ready for allocated. use”. Cost is determined as the fair value of the assets given as consideration plus costs incidental to 4 Cash, Cash Equivalents and other the acquisition, including architects' fees and Financial Instruments engineering design fees and all other costs incurred. The cost of non current assets constructed by the Cash Assets include all amounts readily convertible Council includes the cost of all materials used in to cash on hand at Council’s option with an construction, direct- labour on the project and an insignificant risk of changes in value with a maturity appropriate proportion of variable and fixed of three months or less from the date of acquisition. overhead.

Receivables for rates and annual charges are 6.2 Materiality secured over the subject land, and bear interest at rates determined in accordance with the Local Assets with an economic life in excess of one year Government Act 1999. Other receivables are are only capitalised where the cost of acquisition generally unsecured and do not bear interest. exceeds materiality thresholds established by Council for each type of asset. In determining (and in

page 9 51

KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council Notes to and forming part of the Financial Statements

For Notes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

annually reviewing) such thresholds, regard is had to Building & Other Structures 7 to 100 years the nature of the asset and its estimated service life. Examples of capitalisation thresholds applied during Infrastructure the year are given below. No capitalisation threshold Roads – pavement for sealed and unsealed is applied to the acquisition of land or interests in built to specification N/A land. Roads – wearing surface for sealed and unsealed 5 to 100 years Land Improvement $10,000 Bridges 5 to 100 years Buildings and Other Structures $10,000 Footpaths, Kerb & Gutter 5 to 100 years Road – pavement for sealed and unsealed Stormwater Drainage 50 to 70 years built to specification $10,000 Community Wastewater Road – wearing surface sealed and unsealed $10,000 Management Schemes 10 to 70 years Bridge $10,000 Footpaths, Kerb & Gutter $10,000 Furniture & Fittings 3 to 100 years Stormwater Drainage $10,000 Community Wastewater Management Systems $5,000 Plant & Equipment 4 to 20 years Furniture & Fittings $5,000 Plant & Equipment $5,000 Library Books 1 to 7 years Library Books N/A 6.5 Impairment 6.3 Subsequent Recognition Assets whose future economic benefits are not All material asset classes are revalued on a regular dependent on the ability to generate cash flows, and basis such that the carrying values are not materially where the future economic benefits would be different from fair value. Significant uncertainties replaced if Council were deprived thereof, are not exist in the estimation of fair value of a number of subject to impairment testing. asset classes including land, buildings and associated structures and infrastructure. Further Other assets that are subject to depreciation are detail of these uncertainties, and of existing reviewed for impairment whenever events or valuations, methods and valuers are provided at changes in circumstances indicate that the carrying Note 7. amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s 6.4 Depreciation of Non-Current Assets carrying amount exceeds its recoverable amount (which is the higher of the present value of future Other than land, all infrastructure, property, plant and cash inflows or value in use). equipment assets recognised are systematically depreciated over their useful lives on a straight line Where an asset that has been revalued is basis which, in the opinion of Council, best reflects subsequently impaired, the impairment is first offset the consumption of the service potential embodied- in against such amount as stands to the credit of that those assets. class of assets in Asset Revaluation Reserve, any excess being recognised as an expense. Depreciation methods, useful lives and residual values of classes of assets are reviewed annually. 6.6 Borrowing Costs

Major depreciation periods for each class of asset Borrowing costs in relation to qualifying assets (net are listed below. Depreciation periods for of offsetting investment revenue) have been infrastructure assets have been estimated based on capitalised in accordance with AASB 123 “Borrowing the best information available to Council, but Costs”. The amounts of borrowing costs recognised appropriate records covering the entire life cycle of as an expense or as part of the carrying amount of these assets are not available, and extreme care qualifying assets are disclosed in Note 3, and the should be used in interpreting financial information amount (if any) of interest revenue offset against based on these estimates. borrowing costs in Note 2.

Land Improvement 7 to 100 years

52 page 10

KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

7 Payables 9.2 Superannuation

7.1 Goods & Services The Council makes employer superannuation contributions in respect of its employees to the Creditors are amounts due to external parties for the Statewide Superannuation Scheme and other supply of goods and services and are recognised as Superannuation Funds where the employee has liabilities when the goods and services are received. exercised a choice. The Statewide Superannuation Creditors are normally paid 30 days after the month Scheme has two types of membership, each of of invoice. No interest is payable on these amounts. which is funded differently. No changes in accounting policy have occurred during either the current or 7.2 Payments Received in Advance & Deposits previous reporting periods. Details of the accounting policies applied and Council’s involvement with the Amounts other than grants received from external schemes are reported in Note 18. parties in advance of service delivery, and security deposits held against possible damage to Council 10 Provisions for Reinstatement, Restoration assets, are recognised as liabilities until the service and Rehabilitation is delivered or damage reinstated, or the amount is refunded as the case may be. Close down and restoration costs include the dismantling and demolition of infrastructure and the 8 Borrowings removal of residual materials and remediation and rehabilitation of disturbed areas. Estimated close Borrowings are initially recognised at fair value, net down and restoration costs are provided for in the of transaction costs incurred and are subsequently accounting period when the obligation arising from measured at amortised cost. Any difference the related disturbance occurs and are carried at the between the proceeds (net of transaction costs) and net present value of estimated future costs. the redemption amount is recognised in the income statement over the period of the borrowings using Although estimated future costs are based on a the effective interest method. closure plan, such plans are based on current environmental requirements which may change. 9 Employee Benefits Council’s policy to maximise recycling is extending the operational life of these facilities, and significant 9.1 Salaries, Wages & Compensated Absences uncertainty exists in the estimation of the future closure date. Liabilities for employees’ entitlements to salaries, wages and compensated absences expected to be 11 Leases paid or settled within 12 months of reporting date are accrued at nominal amounts (including payroll based Lease arrangements have been accounted for in oncosts) measured in accordance with AASB 119. accordance with Australian Accounting Standard AASB 117. Liabilities for employee benefits not expected to be paid or settled within 12 months are measured as the In respect of finance leases, where Council present value of the estimated future cash outflows substantially carries all of the risks incident to (including payroll based oncosts) to be made in ownership, the leased items are initially recognised respect of services provided by employees up to the as assets and liabilities equal in amount to the reporting date. Present values are calculated using present value of the minimum lease payments. The government guaranteed securities rates with similar assets are disclosed within the appropriate asset maturity terms. class and are amortised to expense over the period during which the Council is expected to benefit from Weighted avg. discount rate 1.02% (2018, 1.97%) the use of the leased assets. Lease payments are Weighted avg. settlement period 7 years (2018, 7 years) allocated between interest expense and reduction of the lease liability, according to the interest rate Council had recognised a provision for sick leave implicit in the lease. liabilities for the employees falling under the AWU enterprise bargaining agreement.

page 11 53

KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council Notes to and forming part of the Financial Statements

For Notes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

In respect of operating leases, where the lessor . Amounts included in the Statement of Cash substantially retains all of the risks and benefits Flows are disclosed on a gross basis. incident to ownership of the leased items, lease payments are charged to expense over the lease 15 New accounting standards and UIG term. interpretations

12 Construction Contracts In the current year, Council adopted all of the new and revised Standards and Interpretations issued by Construction works undertaken by Council for third the Australian Accounting Standards Board (AASB) parties are generally on an agency basis where the that are relevant to its operations and effective for third party reimburses Council for actual costs the current reporting period. The adoption of the incurred, and usually do not extend beyond the new and revised Standards and Interpretations has reporting period. As there is no profit component, not resulted in any material changes to Council's such works are treated as 100% completed. accounting policies. Reimbursements not received are recognised as receivables and, reimbursements received in Kangaroo Island Council has not applied any advance are recognised as “payments received in Australian Accounting Standards and Interpretations advance”. that have been issued but are not yet effective.

For works undertaken on a fixed price contract basis, AASB 7 Financial Instruments Disclosures and revenues and expenses are recognised on a AASB 9 Financial Instruments commenced from 1 percentage of completion basis. Costs incurred in July 2018 and have the effect that- non contractual advance of a future claimed entitlement are classified receivables (e.g. rates & charges) are now treated as as work in progress in inventory. When it is probable financial instruments. Although the - disclosures that total contract costs will exceed total contract made in Note 13 Financial Instruments have revenue, the expected loss is recognised as an changed, there are no changes to the amounts expense immediately. disclosed.

13 Equity Accounted Council Businesses AASB 15 Revenue from Contracts with Customers and AASB 1058 Income of Not for Profit Entities, Council participates in cooperative arrangements which will commence from 1 July 2019, affect the with other Councils for the provision of services and timing with which revenues, particularly- - special facilities – specifically the operation of waste purpose grants, are recognised. Amounts received collection and disposal. Council’s interests in in relation to contracts with sufficiently specific cooperative arrangements, which are only performance obligations will in future only be recognised if material, are accounted for in recognised as these obligations are fulfilled. In these accordance with AASB 128 and set out in detail in Statements, the sum of $55,000 has been Note 19. recognised as revenue, in accordance with the current Standards, but would in future be recorded 14 GST Implications as a liability "Amounts in Advance" until the performance obligations have been fulfilled. In accordance with UIG Abstract 1031 “Accounting for the Goods & Services Tax” AASB 16 Leases, which will commence from 1 July 2019, requires that the right of use conveyed by . Receivables and Creditors include GST leasing contracts except leases with a maximum receivable and payable. term of 12 months and leases for non material amounts be recognised- as a form of Infrastructure, . Except in relation to input taxed activities, Property, Plant and Equipment, and that the- lease revenues and operating expenditures exclude liability be- disclosed as a liability. Although the effect GST receivable and payable. on profit and loss will be non material, the value of the Right of use asset, and the lease liability, to be . Non-current assets and capital expenditures disclosed is $126,856 at 30 June- 2019. include GST net of any recoupment.

54 page 12

KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

Some Australian Accounting Standards and extent that the Council has received payment but Interpretations have been issued but are not yet has not met its associated performance effective. Those standards have not been applied in obligations (such amounts would be reported as these financial statements. Council will implement a liability in the meantime). them when they are effective. Prepaid rates will not be recognised as revenue The standards that are expected to have a until the relevant rating period starts. Until that material impact upon Council's future financial time these receipts will be recognised as a statements are: liability (unearned revenue). There will be no impact upon the recognition of other fees and Effective for annual reporting periods beginning charges. on or after 1 July 2019 Based on Councils assessment, if Council had  AASB 15 Revenue from Contracts with adopted the new standards in the current Customers, AASB 1058 Income of Not-for-Profit financial year it would have had the following Entities and AASB 2016-8 Amendments to impacts: Australian Accounting Standards - Australian Implementation Guidance for Not-for-Profit - Revenue decrease of $55,000 due to deferral Entities. of grant funding, pre-paid rates, and other sales related revenue (based on the facts available to AASB 1058 clarifies and simplifies the income Council at the date of assessment). recognition requirements that apply to not-to- profit (NFP) entities, in conjunction with AASB - Net result would be lower on initial application 15, and AASB 2016-8. These Standards as a result of decreased revenue. A range of supersede the majority of income recognition new disclosures will also be required by the new requirements relating to public sector NFP standards in respect of the council's revenue. entities, previously in AASB 1004 Contributions. Transition method Identifiable impacts at the date of this report are: The Council intends to apply AASB 15, AASB Some grants received by the Council will be 1058 and AASB 2016-8 initially on 1 July 2019, recognised as a liability, and subsequently using the modified retrospective approach. The recognised progressively as revenue as the recognition and measurement principles of the Council satisfies its performance obligations standards will be retrospectively applied for the under the grant. At present, such grants are current year and prior year comparatives as recognised as revenue upfront. though the standards had always applied, consistent with AASB 108 Accounting Policies, Grants that are not enforceable and/or not Changes in Accounting Estimates and Errors. sufficiently specific will not qualify for deferral, and continue to be recognised as revenue as The Council intends to apply the practical soon as they are controlled. Council receives expedients available for the full retrospective several grants from the Federal Government and method. Where revenue has been recognised in State Government for which there are no full under AASB 1004, prior to 1 July 2019, but sufficiently specific performance obligations where AASB 1058 would have required income these are expected to continue being recognised to be recognised beyond that date, no as revenue upfront assuming no change to the adjustment is required. Further, Council is not current grant arrangements. required to restate income for completed contracts that start and complete within a Depending on the respective contractual terms, financial year. This means where income under the new requirements of AASB 15 may AASB 1004 was recognised in the comparative potentially result in a change to the timing of financial year (i.e. 2018/19), these also do not revenue from sales of the Council's goods and require restatement. services such that some revenue may need to be deferred to a later reporting period to the

page 13 55

KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council Notes to and forming part of the Financial Statements

For Notes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

 AASB 16 Leases – The Council has assessed the facts available to Council at the date of the impacts of the new standard that initial assessment). application of AASB 16 will have on its consolidated financial statements, however, the - There will be a reduction in the reported equity actual impacts may differ as the new accounting as the carrying amount of lease assets will policies are subject to change until the Council reduce more quickly than the carrying amount of presents its first financial statements that include lease liabilities. the date of initial application. - Net result will be lower on initial application as AASB 16 introduces a single, on-balance sheet depreciation and the lease liability interest will be lease accounting model for lessees. A lessee initially higher than operating lease expenses recognises a right-of-use asset representing its previously recorded. right to use the underlying asset and a lease liability representing its obligation to make lease Leases in which the Group is a lessor payments. There are recognition exemptions for short-term leases and leases of low-value items. No significant impact is expected for other leases Lessor accounting remains similar to the current in which the Council is a lessor (see Note 17). standard – i.e. lessors continue to classify leases as finance or operating leases. Peppercorn Leases

Leases in which the Council is a lessee Council is the leasee of a number of Deed of Grant in Trust leases, for which no or little lease The Council will recognise new assets and payments are made. These have been identified liabilities for its operating leases of motor as peppercorn leases which are currently not vehicles (see Note 17). The nature of expenses recognised in Council's financial statements. related to those leases will now change because Council does not intend to elect to apply the fair the Council will recognise a depreciation charge value measurement requirements to these for right-of-use assets and interest expense on leases until such time as this requirement is lease liabilities. mandated.

Previously, the Council has recognised an Transition method operating lease expense on a straight-line basis over the term of the lease, and recognised The Council intends to apply AASB 16 initially on assets and liabilities only to the extent that there 1 July 2019, using the modified retrospective was a timing difference between actual lease approach. Therefore, the cumulative effect of payments and the expense recognised. adopting AASB 16 will be recognised as an adjustment to the opening balance of retained The Council has elected not to recognise earnings at 1 July 2019, with no restatement of photocopy leases under the AASB 16 as they comparative information. have been assessed as being low-value assets under the standard. The Council intends to apply the practical expedient for the definition of a lease on No significant impact is expected for the transition. This means that it will apply AASB 16 Council’s finance leases. on transition only to contracts that were previously identified as leases applying AASB Based on Councils assessment, it is expected 117 Leases and Interpretation 4 Determining that the first-time adoption of AASB 16 for the whether an Arrangement contains a Lease. year ending 30 June 2020 will have the following impacts: The following list identifies all the new and amended Australian Accounting Standards, and - Lease assets and financial liabilities on the Interpretation, that were issued but not yet balance sheet will increase/decrease by effective at the time of compiling these $120,000 and $140,000 respectively (based on illustrative statements.

56 page 14

KANGAROO ISLAND COUNCIL annual report 2018-2019

Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 1. Summary of Significant Accounting Policies (continued)

The standards are not expected to have a  AASB 2018-2 Amendments to Australian material impact upon Council's future financial Accounting Standards – Plan Amendment, statements are: Curtailment or Settlement

Effective for annual reporting periods beginning  AASB 2018-3 Amendments to Australian on or after 1 January 2019 Accounting Standards – Reduced Disclosure Requirements  AASB 15 Revenue from Contracts with Customers  AASB 2018-4 Amendments to Australian Accounting Standards – Australian  AASB 16 Leases Implementation Guidance for Not-for-Profit Public Sector Licensors  AASB 16 Leases (Appendix D)  AASB 2018-5 Amendments to Australian  AASB 1058 Income of Not-for-Profit Entities Accounting Standards - Deferral of AASB 1059

 AASB 1058 Income of Not-for-Profit Entities Effective for annual reporting periods beginning Appendix D) on or after 1 January 2021

 AASB 1059 Service Concession Arrangements:  AASB 17 Insurance Contracts Grantors  AASB 17 Insurance Contracts (Appendix D)  AASB 1059 Service Concession Arrangements: Grantors (Appendix D) 16 Comparative Figures

 AASB 2016-8 Amendments to Australian To ensure comparability with the current reporting Accounting Standards - Australian period’s figures, some comparative period line items Implementation Guidance for Not-for-Profit and amounts may have been reclassified or Entities individually reported for the first time within these financial statements and/or the notes.  AASB 2017-1 Amendments to Australian Accounting Standards - Transfers of Investment 17 Disclaimer Property, Annual Improvements 2014-2016 Cycle and Other Amendments Nothing contained within these statements may be taken to be an admission of any liability to any  AASB 2017-4 Amendments to Australian person under any circumstance. Accounting Standards – Uncertainty over Income Tax Treatments

 AASB 2017-6 Amendments to Australian Accounting Standards – Prepayment Features with Negative Compensation

 AASB 2017-7 Amendments to Australian Accounting Standards – Long-term Interests in Associates and Joint Ventures

 AASB 2018-1 Amendments to Australian Accounting Standards – Annual Improvements 2015–2017 Cycle

page 15 57

KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

X8A19T Note 2. Income

$ '000 Notes 2019 2018

(a).X8A0T Rates Revenues

General Rates General Rates 6,853 6,522 Less: Discretionary Rebates, Remissions & Write Offs (97) (94) Total General Rates 6,756 6,428

Other Rates (Including Service Charges) Natural Resource Management Levy 407 385 Waste Collection 1,568 1,545 Community Wastewater Management Systems 1,418 1,364 Total Other Rates 3,393 3,294

Other Charges Penalties for Late Payment 67 84 Legal & Other Costs Recovered 15 1 Total Other Charges 82 85

Total Rates Revenues 10,231 9,807

(b).X8A1T Statutory Charges

Development Act Fees 94 93 Town Planning Fees 11 - Health & Septic Tank Inspection Fees 47 52 Animal Registration Fees & Fines 56 54 Parking Fines / Expiation Fees 2 9 Other Licences, Fees & Fines 66 30 Rate Searches 21 26 Total Statutory Charges 297 264

(c).X8A2T User Charges

Cemetery/Crematoria Fees 38 38 Hall & Equipment Hire 160 145 Sundry 43 112 Biosolids Fees 7 7 Aerodrome Fees 465 441 Lease Fees 353 344 Camping Fees 86 82 Standpipe income 89 - Total User Charges 1,241 1,169

page 16 58 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 2. Income (continued)

$ '000 Notes 2019 2018

(d).X8A4T Investment Income

Interest on Investments - - - Local Government Finance Authority 8 7 Total Investment Income 8 7

(e).X8A5T Reimbursements

Private Works 382 334 Asset Management 180 - Solar Contributions - 2 Insurances 50 33 CWMS Connections 4 38 Airport Internal Works - 22 Other 64 74 Total Reimbursements 680 503

(f).X8A6T Other Income

Rebates Received 30 - Sundry 9 52 Insurance Rebates 56 52 Traineeships - 30 Standpipe Fees 1 1 Late Fees/Private Hire 2 3 Total Other Income 98 138

(g).X8A3T Grants, Subsidies, Contributions

Amounts Received Specifically for New or Upgraded Assets 4,071 1,496 Total Amounts Received Specifically for New or Upgraded Assets 4,071 1,496 Other Grants, Subsidies and Contributions 1,633 486 Untied - Financial Assistance Grant 2,254 1,023 Roads to Recovery 346 580 Library and Communications - 30 Individually Significant Item - Additional Grants Commission Payment (refer below) 1,076 1,061 Total Other Grants, Subsidies and Contributions 5,309 3,180 Total Grants, Subsidies, Contributions 9,380 4,676

The functions to which these grants relate are shown in Note 12.

page 17 59 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 2. Income (continued)

$ '000 Notes 2019 2018

(g). Grants, Subsidies, Contributions (continued)

(i) Sources of grants Commonwealth Government 2,850 758 State Government 6,263 3,841 Other 267 77 Total 9,380 4,676

(ii) Individually Significant Items Grant Commission (FAG) Grant Recognised as Income 1,076 1,061

On the 19th June 2019 Council received an advance payment of $1,075,842 being 50% of the estimated FAGS grant income for the 2019/20 financial year. In 2017/18 Council received an advance payment of $1,060,930 being 50% of estimated FAGS grant for the 2018/19 year.

(h). Conditions over Grants & Contributions

Grants and contributions which were obtained on the condition that they be expended for specified purposes or in a future period, but which are not yet expended in accordance with those conditions, are as follows:

Unexpended at the close of the previous reporting period 110 257

Less: Expended during the current period from revenues recognised in previous reporting periods Roads Infrastructure (110) (40) Heritage & Cultural Services - (18) Community Services - (199) Subtotal (110) (257)

Plus: Amounts recognised as revenues in this reporting period but not yet expended in accordance with the conditions Roads Infrastructure - 110 African Boxthorn Grant 55 - Subtotal 55 110

Unexpended at the close of this reporting period 55 110

Net increase (decrease) in assets subject to conditions in the current reporting period (55) (147)

60 page 18 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 2. Income (continued)

$ '000 Notes 2019 2018

(i).X8A12T Physical Resources Received Free of Charge

Roads, Bridges & Footpaths - 1,564 Total Physical Resources Received Free of Charge - 1,564

X8A20T Note 3. Expenses

(a).X8A7T Employee Costs

Salaries and Wages 3,049 2,971 Employee Leave Expense 801 797 Superannuation - Defined Contribution Plan Contributions 18 325 305 Superannuation - Defined Benefit Plan Contributions 18 75 76 Workers' Compensation Insurance 148 166 Other 239 229 Total Operating Employee Costs 4,637 4,544

Total Number of Employees (full time equivalent at end of reporting period) 55 55

(b).X8A8T Materials, Contracts and Other Expenses

(i) Prescribed Expenses Auditor's Remuneration - Auditing the Financial Reports and Grant Acquittals 58 47 Elected Members' Expenses 292 218 Election Expenses 56 3 Subtotal - Prescribed Expenses 406 268 (ii) Other Materials, Contracts and Expenses Contractors 2,242 1,736 Contractors - Fleurieu Regional Waste Authority (FRWA) 1,374 1,418 Community Grants Provided 177 284 Energy 509 409 Insurances 292 251 Legal Expenses 141 47 Levies Paid to Government - NRM levy 395 385 Levies - Other 1 1 Parts, Accessories & Consumables 802 723 Professional Services 247 262 Sundry 612 617 Telecoms & Software 213 232 Lease & Rental 90 102 Subtotal - Other Material, Contracts & Expenses 7,095 6,467 Total Materials, Contracts and Other Expenses 7,501 6,735

page 19 61 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 3. Expenses (continued)

$ '000 Notes 2019 2018

(c).X8A9T Depreciation, Amortisation and Impairment

(i) Depreciation and Amortisation Land Improvements 199 430 Buildings & Other Structures 286 323 Infrastructure - - - Stormwater Drainage 98 96 - CWMS 614 612 - Roads/Bridges/Footpaths 2,522 2,597 - Airport Upgrade 934 265 Library Books 1 1 Plant, Machinery & Equipment 243 279 Office Equipment, Furniture & Fittings 28 33 Subtotal 4,925 4,636

(ii) Impairment Nil

Total Depreciation, Amortisation and Impairment 4,925 4,636

(d).X8A10T Finance Costs

Interest on Loans 612 507 Premiums & Discounts Recognised - 5 Total Finance Costs 612 512

X8A11T Note 4. Asset Disposal & Fair Value Adjustments

Infrastructure, Property, Plant & Equipment

(i) Assets Renewed or Directly Replaced Proceeds from Disposal 78 60 Less: Carrying Amount of Assets Sold (74) (60) Gain (Loss) on Disposal 4 -

(ii) Assets Surplus to Requirements Proceeds from Disposal - 70 Less: Carrying Amount of Assets Sold - (51) Gain (Loss) on Disposal - 19

Net Gain (Loss) on Disposal or Revaluation of Assets 4 19

62 page 20 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

X8A21T Note 5. Current Assets

$ '000 Notes 2019 2018

(a).X8A13T Cash & Cash Equivalents

Cash on Hand at Bank 92 1,652 Deposits at Call 1,851 2,867 Total Cash & Cash Equivalents 1,943 4,519

(b).X8A14T Trade & Other Receivables

Rates - General & Other 673 667 Accrued Revenues 267 12 Debtors - General 1,429 357 GST Recoupment 26 11 Prepayments 18 21 Total Trade & Other Receivables 2,413 1,068

X8A18T (c).X8A15T Inventories

Stores & Materials 407 366 Total Inventories 407 366

X8A22T Note 6. Non-Current Assets

(a).X8A16T Equity Accounted Investments in Council Businesses

Fleurieu Regional Waste Authority 19 117 121 Total Equity Accounted Investments in Council Businesses 117 121

(b).X8A17T Other Non-Current Assets

Capital Works-in-Progress 5,085 965 Total Other Non-Current Assets 5,085 965

page 21 63 - - 91 102 4,515 3,498 6,149 3,481 1,850 26,503 21,787 24,784 218,387 121,694 214,454 Carrying ------page 22 page Impairment Value - - 301 Accumulated 3,105 7,679 Dep'n 105,562 as at 30/6/2019 at as - - - - At 43,732 Cost - 403 600 14 614 531 167 607 7,357 1,422 2,630 At 26,103 400 12,242 142 10,534 11,672 21,685 8,573 274,702 46,126 102,441 166,214 18,742 63,262 276,284 Fair Value ------(79) 7,620 (43) 6,928 958 4,388 (2,863) 29,466 (3,113) (ARR) (ARR) (Note 9) to Equity Revaluation Decrements ------4,298 (1,070) (3,228) (128) 7,148 202 3,869 & Transfers Adjustments ------Loss (Note 9) in Equity) in Equity) Impairment (recognised - - (7) KANGAROO ISLAND COUNCIL annual report 2018-2019 (1) (98) (28) (149) (192) (137) (614) (934) (2,522) (4,925) Expense Notes to and (Note 3c) forming part of the Financial Statements For the year endedDepreciation 30 June 2019 ------(74) - - WDV 91 102 of Asset Asset of 4,515 3,498 6,149 3,481 1,850 Disposals 26,503 21,787 24,784 218,387 121,694 214,454 Carrying ------9 Asset Movements during the Reporting Period 44 page 22 page 1,161 2,652 Impairment Value - - Renewals 301 Accumulated 3,105 7,679 Dep'n 105,562 ------9 as at 30/6/2019 at as - - - - At 43,732 Asset Additions 1,526 Cost 12,004 13,794 (124) (4,636) (13) New / New Upgrade - 403 600 14 614 531 167 607 7,357 1,422 2,630 At 26,103 400 12,242 142 10,534 11,672 21,685 8,573 274,702 46,126 102,441 166,214 18,742 63,262 276,284 - 1 Fair Value ------110 109 (43) 6,928 958 4,388 (79) 7,620 6,206 4,683 3,271 265 321 (74) (243) 6,972 58 1,943 (2,863) 29,466 (3,113) 26,503 24,723 385 157 21,313 21 85 (ARR) (ARR) (Note 9) to Equity 197,346 218,387 122,553 788 875 Revaluation Decrements Carrying ------4,298 (1,070) (3,228) (128) 7,148 202 3,869 ------& Transfers Adjustments ------Loss (Note 9) in Equity) in Equity) Impairment (recognised Impairment Value - - (7) (1) (98) (28) (149) (192) (137) (614) (934) - - (2,522) (4,925) Expense (Note 3c) 294 Depreciation Accumulated ------(74) Dep'n 102,441 WDV of Asset Asset of Disposals as at 30/6/2018 at as ------9 Asset Movements during the Reporting Period - - 44 1,161 2,652 Renewals At 46,126 21,578 265 ------9 Cost Asset Additions 1,526 12,004 13,794 (124) (4,636) (13) New / New Upgrade - - - 1 110 109 403 601532 14 158 614 580 6,206 4,683 3,271 265 321 (74) (243) 6,972 58 1,943 26,503 24,723 385 157 21,313 21 85 197,346 218,387 122,553 788 875 9,4517,412 261 269 3,506 7,379 2,998 459 4,567 Carrying At 26,103 400 16,891 61 9,980 12,242 98 10,397 27,636 5,588 8,501 275,049 20,407 98,110 274,702 166,052 17,240 60,739 ------Fair Value Impairment Value - - 294 Accumulated 2 2 3 2 3 3 3 3 3 3 3 3 Dep'n 102,441 Level as at 30/6/2018 at as Fair Fair Value - - At 46,126 21,578 265 Cost - - 403 601532 14 158 614 580 9,4517,412 261 269 3,506 7,379 2,998 459 4,567 At 26,103 400 16,891 61 9,980 12,242 98 10,397 27,636 5,588 8,501 275,049 20,407 98,110 274,702 166,052 17,240 60,739 Fair Value 2 2 3 2 3 3 3 3 3 3 3 3 Level Fair Fair Value Kangaroo Island Council Island Kangaroo FinancialStatements the of part forming and to Notes Equipment & Plant Property, Infrastructure, 7a. Note X9A0T Plant & Equipment & Plant Total Infrastructure, Property, Infrastructure, Total - Stormwater Drainage - CWMS Office Equipment, Furniture & Fittings & Furniture Equipment, Office Infrastructure Land ImprovementsLand Buildings & Other Structures Land ImprovementsLand Plant, Machinery & Equipment - Roads/Bridges/Footpaths Library Books - Airport Upgrade Buildings & Other Structures for the year 30 ended 2019 June $ '000 Land Comparatives Kangaroo Island Council Island Kangaroo FinancialStatements the of part forming and to Notes Equipment & Plant Property, Infrastructure, 7a. Note X9A0T Plant & Equipment & Plant Total Infrastructure, Property, Infrastructure, Total - Stormwater Drainage - CWMS Office Equipment, Furniture & Fittings & Furniture Equipment, Office Infrastructure Land ImprovementsLand Buildings & Other Structures Land ImprovementsLand Plant, Machinery & Equipment - Roads/Bridges/Footpaths Library Books - Airport Upgrade Buildings & Other Structures for the year 30 ended 2019 June $ '000 Land Comparatives

64 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

X10A8T Note 7b. Valuation of Infrastructure, Property, Plant & Equipment & Investment Property

$ '000

Valuation of Assets

The fair value of assets and liabilities must be estimated in accordance with various Accounting Standards for either recognition and measurement requirements or for disclosure purposes.

AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a "level" in the fair value hierarchy as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

Refer to Note 7a for the disclosure of the Fair Value Levels of Infrastructure, Property, Plant and Equipment Assets.

Information on Valuations Certain land, and the buildings and structures thereon, are shown above as being based on fair value hierarchy level 2 valuation inputs. They are based on prices for similar assets in an active market, with directly or indirectly observable adjustments for specific advantages or disadvantages attaching to the particular asset.

Valuations of Crown land, community land and land subject to other restrictions on use or disposal, shown above as being based on fair value hierarchy level 3 valuation inputs, are based on prices for similar assets in an active market, but include adjustments for specific advantages or disadvantages attaching to the particular asset that are not directly or indirectly observable in that market, or the number and / or amount of observable adjustments of which are so great that the valuation is more fairly described as being based on level 3 valuation inputs.

There is no known market for buildings, infrastructure and other assets. These assets are valued at depreciated current replacement cost. This method involves: - The determination of the cost to construct the asset (or its modern engineering equivalent) using current prices for materials and labour, the quantities of each being estimated based on recent experience of this or similar Councils, or on industry construction guides where these are more appropriate. - The calculation of the depreciation that would have accumulated since original construction using current estimates of residual value and useful life under the prime cost depreciation method adopted by Council.

This method has significant inherent uncertainties, relying on estimates of quantities of materials and labour, residual values and useful lives, and the possibility of changes in prices for materials and labour, and the potential for development of more efficient construction techniques.

page 23 65 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 7b. Valuation of Infrastructure, Property, Plant & Equipment & Investment Property (continued)

$ '000

Valuation of Assets (continued)

Other Information At 1 July 2004 upon the transition to AIFRS, Council elected pursuant to AASB 1.D5 to retain a previously established deemed cost under GAAP as its deemed cost. With subsequent addition at cost, this remains as the basis of recognition of non-material asset classes. ‐ ‐ Upon revaluation, the current new replacement cost and accumulated depreciation are re stated such that the difference represents the fair value of the asset deter mined in accordance with AASB 13 Fair Value Measurement: accumulated depreciation is taken to be the difference between current new replacement cost and fair value. In the case of land, current replacement cost is taken to be the fair value.

Highest and best use All of Council's non financial assets are considered as being utilised for their highest and best use.

Transition to AASB 13 - Fair Value Measurement The requirements of AASB 13 Fair Value Measurement have been applied to all valuations undertaken since 1 July 2013 as shown by the valuation dates by individual asset classes below.

Land & Land Improvements Council being of the opinion that it is not possible to attribute a value sufficiently reliable to qualify for recognition; land under roads has not been recognised in these reports.

Freehold land and land over which Council has control, but does not have title, is recognised on a fair value basis. No capitalisation threshold is applied to the acquisition of land or interests in land.

Land improvements are recognised at fair value, originally deriving from a valuation conducted by Liquid Pacific at 30 June 2016 at current replacement cost. Estimated future costs of reinstatement of land, capitalised in accordance with AASB 116.16(c), are reviewed annually (see Note 1) and depreciated over the estimated remaining life of the relevant asset. The weighted average depreciation period for 2018 is 40 years (2017 – 40 years).

In line with the Asset Accounting Policy adopted in 2011/12 and reviewed annually, Council has decided to apply the capitalisation thresholds for Land Improvement assets, to be consistent with the other major asset classes. Council does not recognise on its balance sheet or provide depreciation for Land Improvements, or Buildings and Structures which Council considers will not rationally be replaced. Where there is no regular cash flow gererated from the asset, the net present value of future cash flows for that asset is the disposal value. Where assets are not rationally replaced, and Council has decided that there is no expected future economic benefit continuing to flow to Council, the disposal value will be reduced to nil.

66 page 24 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 7b. Valuation of Infrastructure, Property, Plant & Equipment & Investment Property (continued)

$ '000

Valuation of Assets (continued)

Buildings & Other Structures Buildings and other structures generally are recognised at fair value, based on current market values and were valued for 30 June 2016 by Liquid Pacific.

For Buildings & Structure assets which Council considers will not rationally be replaced, the same accounting treatment applies as stated in the Land & Land Improvements section above.

Infrastructure Transportation assets were valued by Tonkin’s Engineering at depreciated current replacement cost as at 30 June 2014, GHD reviewed data at 1 July 2014, and an in-house valuation undertaken for 30 June 2015.

Stormwater drainage infrastructure was valued by JLL Public Sector Valuations Pty Ltd as at 30 June 2019 at depreciated current replacement cost, based on actual costs incurred during the reporting period and an assessment of useful life and asset condition data.

Community wastewater management system infrastructure was valued at depreciated current replacement cost during the reporting period ended 30 June 2019 by JLL Public Sector Valuations Pty Ltd on the same basis as that determined for Stormwater assets.

Plant & Equipment Plant & Equipment assets were revalued as at 30 June 2017 by Maloney Field Services, Property Consultant and Valuers. This asset class is not required to be revalued on a regular basis in line with the current Asset Accounting Policy.

Furniture & Fittings Furniture and Fitting assets were revalued as at 30 June 2010 by Maloney Field Services, Property Consultant and Valuers. This asset class is not required to be revalued on a regular basis in line with the current Asset Accounting Policy.

Library Books Library books and other lending materials were revalued as at 30 June 2010 by Maloney Field Services, Property Consultant and Valuers. This asset class is not required to be revalued on a regular basis in line with the current Asset Accounting Policy.

page 25 67 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements NotesFor the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

X10A9T Note 8. Liabilities

2019 2019 2018 2018 $ '000 Notes Current Non Current Current Non Current

(a).X10A1T Trade and Other Payables

Goods & Services 1,170 - 1,306 - Payments Received in Advance 1. 2,731 14,599 2,698 14,013 Accrued Expenses - Employee Entitlements 126 - 119 - Accrued Expenses - Finance Costs 106 - 91 - Accrued Expenses - Other 112 - 461 - Deposits, Retentions & Bonds 50 - 39 - Other 1 - 2 - Total Trade and Other Payables 4,296 14,599 4,716 14,013

1. As per the Funding Agreement with State and Federal Governments, amounts received for the construction of the airport are treated as payments received in advance as Council is required to satisfy certain conditions as per the funding agreements.

(b).X10A3T Borrowings

Loans 1,366 13,303 1,189 15,946 Total Borrowings 1,366 13,303 1,189 15,946

All interest bearing liabilities are secured over the future revenues of the Council

(c).X10A4T Provisions

Employee Entitlements (including oncosts) 1,038 84 960 109 Provision for Legal and Constructive Obligation 97 - - - Future Reinstatement / Restoration, etc 7 191 11 191 Total Provisions 1,142 275 971 300

68 page 26 X10A5T KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

X10A11T Note 9. Reserves

Increments 1/7/2018 Transfers Impairments 30/6/2019 $ '000 Notes (Decrements)

(a).X10A0T Asset Revaluation Reserve

Land 21,244 - - - 21,244 Land Improvements 6,337 (128) - - 6,209 Buildings & Other Structures 771 - - - 771 Infrastructure ------Stormwater Drainage 3,768 (79) - - 3,689 - CWMS 10,141 (2,863) - - 7,278 - Roads/Bridges/Footpaths 126,827 - - - 126,827 Furniture & Fittings 362 - - - 362 Library Books 204 - - - 204 Plant, Machinery & Equipment 2,046 (43) - - 2,003 Total Asset Revaluation Reserve 171,700 (3,113) - - 168,587 Comparatives 171,713 - - (13) 171,700

Tfrs to Tfrs from Other 1/7/2018 30/6/2019 $ '000 Notes Reserve Reserve Movements

(b).X10A2T Other Reserves

Airport Reserve 1,225 - (1,062) - 163 CWMS Reserve 667 - (126) - 541 Asset Reinvestment Reserve 289 - - - 289 Kingscote CBD Car Park Reserve 29 - 1 - 30 Open Space Reserve 81 - (66) - 15 Ronald Maxwell Bell Property Reserve 60 - 1 - 61 Daniel Williams Reserve - - 12 - 12 Total Other Reserves 2,351 - (1,240) - 1,111 Comparatives 1,765 586 - - 2,351

PURPOSES OF RESERVES Asset Revaluation Reserves The asset revaluation reserve is used to record increments and decrements arising from changes in fair value of non current assets (less any subsequent impairment losses, where applicable).

Airport Reserve The Airport is a self servicing entity within the Council and any surplus or deficit for the year is accumulated in this reserve.

CWMS Reserve CWMS is a self servicing entity within the Council and any surplus or deficit for the year is accumulated in this reserve.

page 27 69 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 9. Reserves

Increments 1/7/2018 Transfers Impairments 30/6/2019 $ '000 Notes (Decrements)

(b). Other Reserves (continued)

Asset Reinvestment Reserve The reserve holds contributions from the sale of Council assets for future land purchases.

Kingscote CBD Carpark Reserve Developer Car Park contributions held for future CBD carparking in Kingscote.

Open Space Fund Reserve Contributions from developers for future open space developments and expenditure.

Ronald Maxwell Bell Property Reserve Sale proceeds of ratepayer's property, which are required to be held by Council until owner is located or until processed as per the Unclaimed Moneys Act 1891.

Daniel Williams Reserve Sale proceeds of ratepayer's property, which are required to be held by Council until owner is located or until processed as per the Unclaimed Moneys Act 1891.

X10A10T Note 10. Assets Subject to Restrictions

$ '000 Notes 2019 2018

The uses of the following assets are restricted, wholly or partially, by legislation or other externally imposed requirements. The assets are required to be utilised for the purposes for which control was transferred to Council, or for which the revenues were originally obtained.

Cash & Financial Assets Unexpended amounts received from Federal Government Developer Contributions 31 97 Sale of Ratepayer's Property 74 61 Community Services 55 34 Infrastructure - 110 Total Cash & Financial Assets 160 302

Land Assets 1 26,503 26,503 Total Infrastructure, Property, Plant & Equipment 26,503 26,503

Total Assets Subject to Externally Imposed Restrictions 26,663 26,805

1 - Land assets utilised for recreation or other community purposes are subject to the provisions of Chapter 11, Part 1 of the Local Government Act, 1999 relating to 'Local Government Land'. Such assets are identified on Council's Community Land Register in accordance with the provisions in the Act.

page 28 70 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

X10A7T Note 11. Reconciliation to Statement of Cash Flows

$ '000 Notes 2019 2018

(a). Reconciliation of Cash

Cash Assets comprise highly liquid investments with short periods to maturity subject to insignificant risk of changes of value. Cash at the end of the reporting period as shown in the Statement of Cash Flows is reconciled to the related items in the Balance Sheet as follows: Total Cash & Equivalent Assets 5 1,943 4,519 Balances per Statement of Cash Flows 1,943 4,519

(b).X10A6T Reconciliation of Change in Net Assets to Cash from Operating Activities

Net Surplus/(Deficit) 4,260 1,733 Non-Cash Items in Income Statements Depreciation, Amortisation & Impairment 4,925 4,636 Equity Movements in Equity Accounted Investments (Increase)/Decrease 4 (13) Premiums & Discounts Recognised & Unwound - 5 Non-Cash Asset Acquisitions - (1,564) Grants for Capital Acquisitions (Treated as Investing Activity Receipts) (4,071) (1,496) Net (Gain) Loss on Disposals (4) (19) 5,114 3,282 Add (Less): Changes in Net Current Assets Net (Increase)/Decrease in Receivables (1,345) 1,498 Net (Increase)/Decrease in Inventories (41) (150) Net Increase/(Decrease) in Trade & Other Payables 155 12,209 Net Increase/(Decrease) in Unpaid Employee Benefits 53 119 Net Increase/(Decrease) in Other Provisions 93 (15) Net Cash provided by (or used in) operations 4,029 16,943

(c). Non-Cash Financing and Investing Activities

Acquisition of assets by means of: - Physical Resources Received Free of Charge 2i - 1,564 Amounts recognised in Income Statement - 1,564 Total Non-Cash Financing & Investing Activities - 1,564

(d). Financing Arrangements

Unrestricted access was available at balance date to the following lines of credit: Bank Overdrafts 100 100 Corporate Credit Cards 14 14 LGFA Cash Advance Debenture Facility 8,163 4,059

The bank overdraft facilities may be drawn at any time and may be terminated by the bank without notice.

page 29 71 KANGAROO ISLAND COUNCIL annual report 2018-2019 52 12 283 962 343 2018 3,971 1,141 6,003 Actual 26,002 30,954 29,878 125,825

Notes to and forming part of the Financial Statements page 30 For the year ended 30 June 2019 46 12 261 880 324 2019 4,132 1,141 5,576 (CURRENT & Actual 24,393 29,835 30,595 NON-CURRENT) 52 12 127,224 283 962 343 2018 TOTAL ASSETS HELD ASSETS TOTAL 3,971 1,141 6,003 Actual 26,002 30,954 29,878 125,825 page 30 ------30 580 257 2018 2,313 46 12 Actual 261 880 324 2019 4,132 1,141 5,576 (CURRENT & Actual 24,393 29,835 30,595 NON-CURRENT) 127,224 TOTAL ASSETS HELD ASSETS TOTAL ------31 55 ------346 239 30 IN INCOME 2019 4,638 580 257 2018 Actual 2,313 Actual GRANTS INCLUDEDGRANTS ------31 55 (70) 620 346 239 (354) (204) (788) (195) (288) (531) (491) IN INCOME 2018 2019 6,547 4,638 Actual (1,639) (3,953) Actual GRANTS INCLUDEDGRANTS (70) 620 (354) (204) (788) (195) (288) (531) (491) (64) (88) 2018 6,547 (403) (486) (936) (268) (589) (633) Actual (1,639) (3,953) 2019 OPERATING 2,212 7,114 (1,640) (4,034) Actual SURPLUS (DEFICIT) (64) (88) - (403) (486) (936) (268) (589) (633) 2019 OPERATING 2,212 7,114 70 (1,640) (4,034) Actual 354 253 535 705 2018 1,593 1,822 1,134 1,639 3,723 4,599 SURPLUS (DEFICIT) Actual - 70 354 253 535 705 Details of these Functions/Activities are provided in Note 12(b). 2018 - 1,593 1,822 1,134 1,639 3,723 4,599 Actual 64 403 324 591 880 EXPENSES 2019 2,046 2,339 1,282 1,640 3,652 4,458 Actual Details of these Functions/Activities are provided in Note 12(b). - 64 403 324 591 880 EXPENSES 2019 2,046 2,339 1,282 1,640 3,652 4,458 Actual - - - Income, Expenses have been and attributed directly Assets to the following Functions / Activities. 4 58 346 214 646 2018 1,389 2,442 6,547 3,435 Actual - - - Income, Expenses have been and attributed directly Assets to the following Functions / Activities. 4 58 346 214 646 2018 1,389 2,442 6,547 3,435 Actual - - - 2 56 INCOME 346 247 424 2019 1,560 4,551 7,114 3,564 - - - 2 Actual 17,864 15,081 17,679 16,427 185 (1,346) 5,309 3,180 224,419 225,426 56 INCOME 346 247 424 2019 1,560 4,551 7,114 3,564 Actual 17,864 15,081 17,679 16,427 185 (1,346) 5,309 3,180 224,419 225,426 Functions/Activities Functions/Activities BusinessUndertakings Plant Hire & Depot/Indirect & Hire Plant Governance Community Services Community Culture Support Services Support Other Revenue/Expenses Other EconomicDevelopment Environment Recreation Regulatory Services Regulatory Transport & Communication & Transport BusinessUndertakings Plant Hire & Depot/Indirect & Hire Plant Governance Community Services Community Culture Support Services Support Other Revenue/Expenses Other EconomicDevelopment Environment Recreation Regulatory Services Regulatory Transport & Communication & Transport Kangaroo Island Council Notes to and forming part of the Financial Statements Note 12a. Functions X11A0T Total Functions/Activities Total for ended 30 June 2019 the year $ '000 Revenues and expenses exclude net gain (loss) on disposal or revaluation of assets, amounts received specifically for or new upgraded assets and physical resources received free of charge. Kangaroo Island Council Notes to and forming part of the Financial Statements Note 12a. Functions X11A0T Total Functions/Activities Total for ended 30 June 2019 the year $ '000 Revenues and expenses exclude net gain (loss) on disposal or revaluation of assets, amounts received specifically for or new upgraded assets and physical resources received free of charge.

72 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

X12A3T Note 12b. Components of Functions

$ '000

The activities relating to Council functions are as follows:

BUSINESS UNDERTAKINGS Airport Management, Caravan & Camping Parks, Marinas/Boat Havens, Private Works, Property Portfolio.

COMMUNITY SERVICES Public Order and Safety, Emergency Services, Other Fire Protection, Other Public Order and Safety, Health Services, Pest Control – Health, Children and Youth Services, Community Assistance, Community Transport, Other Community Support, Community Amenities, Bus Shelters, Cemeteries, Public Conveniences, Car Parking – non-fee-paying, Telecommunications Networks, and Other Community Amenities.

CULTURE Library Services, Cultural Services, Cultural Venues, Heritage, Museums and Art Galleries, and Other Cultural Services.

ECONOMIC DEVELOPMENT Employment Creation Programs, Regional Development, Support to Local Businesses, Tourism, and Other Economic Development.

ENVIRONMENT Agricultural Services, Agricultural Water, Other Agricultural Services, Sewerage/CWMS, Waste Management, Domestic Waste, Green Waste, Recycling, Transfer Stations, Waste Disposal Facility, Other Waste Management, Other Environment, Coastal Protection, Stormwater and Drainage, Street Cleaning, Street Lighting, Streetscaping, Natural Resource Management Levy, Water Supply and Other Environment.

RECREATION Jetties, Other Marine Facilities, Parks and Gardens, Sports Facilities – Indoor, Sports Facilities – Outdoor, Swimming Centres – Outdoor, and Other Recreation.

REGULATORY SERVICES Dog and Cat Control, Building Control, Town Planning, Clean Air/Pollution Control, Litter Control, Health Inspection, Parking Control, and Other Regulatory Services.

TRANSPORT Bridges, Footpaths and Kerbing, Roads – sealed, Roads – formed, Roads – natural formed, Roads – unformed, Traffic Management, LGGC – roads (formula funded), and Other Transport, Wharfs & Jetties.

COUNCIL ADMINISTRATION Governance, Administration n.e.c., Elected Members, Organisational, Support Services, Accounting/Finance, Payroll, Housing for Council Employees, Human Resources, Information Technology, Communication, Rates Administration, Records, Occupancy, Contract Management, Customer Service, Other Support Services, Revenues, LGGC – General Purpose, and Separate and Special Rates.

page 31 73 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements NotesFor the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

X12A4T Note 13. Financial Instruments

$ '000

Recognised Financial Instruments

Bank, Deposits at Call, Short Term Deposits Accounting Policy: Carried at lower of cost and net realisable value; Interest is recognised when earned.

Terms & Conditions: Deposits are returning fixed interest rates between 0.1% and 1.25% (2018: 0.1% and 1.5%).

Carrying Amount: Approximates fair value due to the short term to maturity.

Receivables Accounting Policy: Rates & Associated Charges Carried at nominal values less any allowance for doubtful debts. (including legals & penalties for late payment) An allowance for doubtful debts is recognised (and re-assessed annually) when collection in full is no longer probable.

Terms & Conditions: Secured over the subject land, arrears attract fines of 2% and interest of 6% (2018: 2% and 6.6%). Council is not materially exposed to any individual debtor, credit risk exposure is concentrated within the Council's boundaries in the State.

Carrying Amount: Approximates fair value (after deduction of any allowance).

Receivables Accounting Policy: Fees & Other Charges Carried at nominal values less any allowance for doubtful debts. An allowance for doubtful debts is recognised (and re-assessed annually) when collection in full is no longer probable.

Terms & Conditions: Unsecured, and attract interest of 6%% (2018: 10%). Council is not materially exposed to any individual debtor, credit risk concentrated within the Council's boundaries.

Carrying Amount: Approximates fair value (after deduction of any allowance).

74 page 32 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 13. Financial Instruments (continued)

$ '000

Recognised Financial Instruments

Receivables Accounting Policy: Other Levels of Government Carried at nominal value.

Terms & Conditions: Amounts due have been calculated in accordance with the terms and conditions of the respective programs following advice of approvals, and do not bear interest. All amounts are due by Departments and Agencies of State and Federal Governments.

Carrying Amount: Approximates fair value.

Liabilities Accounting Policy: Creditors and Accruals Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not billed to the Council.

Terms & Conditions: Liabilities are normally settled on 30 day terms.

Carrying Amount: Approximates fair value.

Liabilities Accounting Policy: Interest Bearing Borrowings Carried at the principal amounts. Interest is charged as an expense as it accrues.

Terms & Conditions: Secured over future revenues, borrowings are repayable (describe basis); interest is charged at fixed (or variable - describe) rates between 2.95% and 6.8% (2018: 3.6% and 6.8%). Overdraft rate is 9.1% (2018: 9%).

Carrying Amount: Approximates fair value.

Liabilities Accounting Policy: Finance Leases Accounted for in accordance with AASB 117.

page 33 75 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 13. Financial Instruments (continued)

Due Due > 1 year Due Total Contractual Carrying $ '000 < 1 year & ≤ 5 years > 5 years Cash Flows Values

2019 Financial Assets Cash & Equivalents 1,943 - - 1,943 1,943 Receivables 2,413 - - 2,413 2,516 Other Financial Assets - - - - (4) Total Financial Assets 4,356 - - 4,356 4,455

Financial Liabilities Payables 1,565 - - 1,565 18,895 Current Borrowings 1,900 - - 1,900 1,366 Non-Current Borrowings - 5,841 10,814 16,655 13,303 Total Financial Liabilities 3,465 5,841 10,814 20,120 33,564

2018 Financial Assets Cash & Equivalents 4,519 - - 4,519 4,519 Receivables 369 - - 369 1,047 Other Financial Assets - - - - 121 Total Financial Assets 4,888 - - 4,888 5,687

Financial Liabilities Payables 1,634 - - 1,634 18,729 Current Borrowings 1,886 - - 1,886 1,189 Non-Current Borrowings - 10,209 9,154 19,363 15,946 Total Financial Liabilities 3,520 10,209 9,154 22,883 35,864

The following interest rates were applicable 30 June 2019 30 June 2018 to Council's Borrowings at balance date: Weighted Avg Carrying Weighted Avg Carrying Interest Rate Value Interest Rate Value Overdraft 9.11% - 9.00% - Other Variable Rates 2.95% 5,741 3.60% 8,704 Fixed Interest Rates 4.25% 8,928 4.73% 8,431 14,669 17,135

Net Fair Value All carrying values approximate fair value for all recognised financial instruments. There is no recognised market for the financial assets of the Council.

76 page 34 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 13. Financial Instruments (continued)

$ '000

Risk Exposures

Credit Risk represents the loss that would be recognised if counterparties fail to perform as contracted. The maximum credit risk on financial assets of the Council is the carrying amount, net of any allowance for doubtful debts. All Council investments are made with the SA Local Government Finance Authority and are guaranteed by the SA Government. Except as detailed in Notes 5 & 6 in relation to individual classes of receivables, exposure is concentrated within the Council's boundaries, and there is no material exposure to any individual debtor.

Market Risk is the risk that fair values of financial assets will fluctuate as a result of changes in market prices. All of Council's financial assets are denominated in Australian dollars and are not traded on any market, and hence neither market risk nor currency risk apply.

Liquidity Risk is the risk that Council will encounter difficulty in meeting obligations with financial liabilities. In accordance with the model Treasury Mangement Policy (LGA Information Paper 15), liabilities have a range of maturity dates. Council also has available a range of bank overdraft and standby borrowing facilities that it can access.

Interest Rate Risk is the risk that future cash flows will fluctuate because of changes in market interest rates. Council has a balance of both fixed and variable interest rate borrowings and investments. Cash flow fluctuations are managed holistically in seeking to minimise interest costs over the longer term in a risk averse manner.

page 35 77 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

X12A5T Note 14. Commitments for Expenditure

$ '000 Notes 2019 2018

(a). Capital Commitments

Capital expenditure committed for at the reporting date but not recognised in the financial statements as liabilities:

Land Improvements 500 1,238 Infrastructure 478 - Other 55 - 1,033 1,238

These expenditures are payable: Not later than one year 1,033 1,238 Later than one year and not later than 5 years - - Later than 5 years - - 1,033 1,238

(b). Other Expenditure Commitments

Other expenditure committed for (excluding inventories) at the reporting date but not recognised in the financial statements as liabilities:

Audit Services 37 72 IT 72 144 Managed Services - 48 Other 540 345 649 609

These expenditures are payable: Not later than one year 300 494 Later than one year and not later than 5 years 349 115 Later than 5 years - - 649 609

(c).X12A13T Finance Lease Commitments

Council has no Finance Leases.

page 36 78 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

X12A6T Note 15. Financial Indicators

Amounts Indicator Prior Periods $ '000 2019 2019 2018 2017

These Financial Indicators have been calculated in accordance with Information paper 9 - Local Government Financial Indicators prepared as part of the LGA Financial Sustainability Program for the Local Government Association of South Australia.

1. Operating Surplus Ratio Operating Surplus 185 1% (9%) (7%) Total Operating Income 17,864

This ratio expresses the operating surplus as a percentage of total operating revenue.

2. Net Financial Liabilities Ratio Net Financial Liabilities 13,295 74% 99% 85% Total Operating Income 17,864

Net Financial Liabilities are defined as total liabilities less financial assets (excluding equity accounted investments in Council businesses). These are expressed as a percentage of total operating revenue.

Adjustments to Ratios In recent years the Federal Government has made advance payments prior to 30th June from future year allocations of financial assistance grants, as explained in Note 1. These Adjusted Ratios correct for the resulting distortion in key ratios for each year and provide a more accurate basis for comparison.

Adjusted Operating Surplus Ratio 1% (10%) (14%)

Adjusted Net Financial Liabilities Ratio 74% 99% 91%

3. Asset Renewal Funding Ratio Net Asset Renewals 6,695 136% 151% 47% Infrastructure & Asset Management Plan required expenditure 4,925

Net asset renewals expenditure is defined as net capital expenditure on the renewal and replacement of existing assets, and excludes new capital expenditure on the acquisition of additional assets.

page 37 79 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 15. Financial Indicators - Graphs (continued)

Commentary on 2018/19 Result 1. Operating Surplus Ratio Purpose of Operating Surplus Ratio 2018/19 Ratio 1% 3% 1% The change in the receipt of the State -2% 2017 2018 2019 This indicator is to Government Local Road Funding from determine the Assets Free of Charge to Grant income has Ratio % percentage the operating -7% revenue varies from made a significant change to this ratio. -7% operating expenditure The target for this ratio is break even or -9% better. -12%

2. Net Financial Liabilities Ratio Purpose of Net Commentary on 2018/19 Result Financial Liabilites 140% Ratio 2018/19 Ratio 74% 120% 99% 100% 85% 74% 80% This indicator shows The reduction in short term borrowings for the significance of the 60% the Airport redevlopment has seen a positive Ratio % net amount owed to 40% reduction in this ratio. The target for this 20% others, compared to ratio is to be between zero and 100%. 0% operating revenue 2017 2018 2019

Commentary on 2018/19 Result Adjusted Operating Surplus Ratio Purpose of Adjusted 6% Operating Surplus Ratio 2018/19 Ratio 1% 1% 1% This indicator is to 2017 2018 2019 determine the -4% percentage the operating Small change from the actual operating ratio revenue (adjusted for Ratio % -9% as only a $15,000 increase in FAGS grants timing differences in the -10% in advance. -14% Financial Assistance -14% Grant) varies from -19% operating expenditure

Adjusted Net Financial Liabilities Ratio Purpose of Adjusted Commentary on 2018/19 Result Net Financial Liabilities 140% Ratio 2018/19 Ratio 74% 120% 99% 100% 91% This indicator is to 74% determine the 80% percentage the operating The receipt of the FAGS grant in advance 60% revenue (adjusted for translates to a reduction in the net liabilities Ratio % 40% timing differences in the ratio. As the net amount received was small 20% Financial Assistance the corresponding reduction here is minor. 0% Grant) varies from 2017 2018 2019 operating expenditure

Commentary on 2018/19 Result 3. Asset Renewal Funding Ratio Purpose of Asset Renewal Funding Ratio 2018/19 Ratio 136% 151% 150% 136% Major renewals of the Road assets funded by This indicator aims to 100% the DPTI Grant and the renewal of the determine if assets are 47% Prospect Hill Stairs have contributed to the Ratio % 50% being renewed and replaced in an optimal asset renewal being higher than expected. 0% way The target for this ratio is to be between 90% 2017 2018 2019 and 110%.

page 38 80 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

X12A7T Note 16. Uniform Presentation of Finances

$ '000 2019 2018

The following is a high level summary of both operating and capital investment activities of the Council prepared on a simplified Uniform Presentation Framework basis.

All Councils in South Australia have agreed to summarise annual budgets and long-term financial plans on the same basis.

The arrangements ensure that all Councils provide a common 'core' of financial information, which enables meaningful comparisons of each Council's finances.

Income 17,864 15,081 less Expenses (17,679) (16,427) Operating Surplus / (Deficit) 185 (1,346)

Net Outlays on Existing Assets Capital Expenditure on Renewal and Replacement of Existing Assets (6,773) (7,066) add back Depreciation, Amortisation and Impairment 4,925 4,636 add back Proceeds from Sale of Replaced Assets 78 60 Subtotal (1,770) (2,370)

Net Outlays on New and Upgraded Assets Capital Expenditure on New and Upgraded Assets (1,526) (12,004) (including Investment Property & Real Estate Developments) add back Amounts Received Specifically for New and Upgraded Assets 4,071 1,496 add back Proceeds from Sale of Surplus Assets - 70 (including Investment Property, Real Estate Developments and Non-Current Assets Held for Resale) Subtotal 2,545 (10,438)

Net Lending / (Borrowing) for Financial Year 960 (14,154)

page 39 81 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

X12A8T Note 17. Operating Leases

$ '000 2019 2018

Leases commitments under all non-cancellable lease agreements, including those relating to Investment Property, are as follows:

Not later than one year 48 67 Later than one year and not later than 5 years 83 114 Later than 5 years 4 10 135 191

Lease Payment Commitments of Council

Council has entered into non-cancellable operating leases for various items of office equipment and motor vehicles. No contingent rentals were paid during the current or previous reporting periods. No lease imposes any additional restrictions on Council in relation to additional debt or further leasing.

Commitments under non-cancellable operating leases that have not been recognised in the financial statements are as follows:

Not later than one year 124 130 Later than one year and not later than 5 years 284 312 Later than 5 years 33 74 441 516

82 page 40 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

X12A9T Note 18. Superannuation

$ '000

The Council makes employer superannuation contributions in respect of its employees to Statewide Super (formerly Local Government Superannuation Scheme). There are two types of membership, each of which is funded differently. Permanent and contract employees of the South Australian Local Government sector with Salarylink benefits prior to 24 November 2009 have the option to contribute to the Accumulation section and/or Salarylink. All other employees (including casuals) have all contributions allocated to the Accumulation section.

Accumulation only Members Accumulation only members receive both employer and employee contributions on a progressive basis. Employer contributions are based on a fixed percentage of ordinary time earnings in accordance with superannuation guarantee legislation (9.50% in 2018/19; 9.50% in 2017/18). No further liability accrues to the Council as the superannuation benefits accruing to employees are represented by their share of the net assets of the Fund.

Salarylink (Defined Benefit Fund) Members Salarylink is a defined benefit scheme where the benefit payable is based on a formula determined by the member’s contribution rate, number of years and level of contribution and final average salary. Council makes employer contributions to Salarylink as determined by the Fund’s Trustee based on advice from the appointed Actuary. The rate is currently 6.3% (6.3% in 2017/18) of “superannuation” salary.

In addition, Council makes a separate contribution of 3% of ordinary time earnings for Salarylink members to their Accumulation account. Employees also make member contributions to the Salarylink section of the Fund. As such, assets accumulate in the Salarylink section of the Fund to meet the member's benefits, as defined in the Trust Deed, as they accrue.

The Salarylink section is a multi-employer sponsored plan. As the Salarylink section's assets and liabilities are pooled and are not allocated by each employer, and employees may transfer to another employer within the local government sector and retain membership of the Fund, the Actuary is unable to allocate benefit liabilities, assets and costs between employers. As provided by AASB 119.32(b), Council does not use defined benefit accounting for these contributions.

The most recent actuarial investigation was conducted by the Fund's actuary, Louise Campbell, FIAA, of Willie Towers Watson as at 30 June 2017. The Trustee has determined that the current funding arrangements are adequate for the expected Salarylink liabilities. However, future financial and economic circumstances may require changes to Council’s contribution rates at some future time.

Contributions to Other Superannuation Schemes Council also makes contributions to other superannuation schemes selected by employees under the “choice of fund” legislation. All such schemes are of the accumulation type, where the superannuation benefits accruing to the employee are represented by their share of the net assets of the scheme, and no further liability attaches to the Council.

page 41 83 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

X12A0T Note 19. Interests in Other Entities

$ '000

All joint ventures and associates are required to prepare Annual Financial Statements that comply with the SA Local Government Model Financial Statements.

Council's Share of Net Income Council's Share of Net Assets 2019 2018 2019 2018 Joint Ventures (4) 13 117 121 Total (4) 13 117 121

(i) JOINT VENTURES, ASSOCIATES AND JOINT OPERATIONS

(a) Carrying Amounts

Name of Entity Principal Activity 2019 2018 Fleurieu Regional Waste Authority Waste and Recycling Management 117 121 Southern and Hills Local Government Local Government Policies & Association Procedures - - Total Carrying Amounts - Joint Ventures & Associates 117 121

Fleurieu Regional Waste Authority The Fleurieu Regional Waste Authority (FRWA) is an authority under Section 43 of the Local Government Act (1999). FRWA is a regional subsidiary formed by the member councils; Alexandrina Council, City of Victor Harbor, Kangaroo Island Council, and District Council of Yankalilla in South Australia in order to manage the operation of waste and recycling in the combined areas.

Southern and Hills Local Government Association The Southern and Hills Local Government Association is a regional subsidiary to represent the interests of all Councils in the Southern Hills, Fleurieu Peninsula and Kangaroo Island within Local Government in South Australia. The group meets 6 times annually to discuss Local Government policy and procedures and to promote Local Government Iniatives from a regional perspective.

Kangaroo Island Councils interest in the Southern & Hills Local Government Association for 2018-19 is deemed to be immaterial in amount and has not been recognised. This will be reviewed annually.

(b) Relevant Interests Interest in Ownership Operating Share of Proportion of Result Equity Voting Power Name of Entity 2019 2018 2019 2018 2019 2018 Fleurieu Regional Waste Authority 15% 15% 15% 15% 15% 15%

(c) Movement in Investment in Joint Venture or Associate Fleurieu Regional Waste Authority 2019 2018 2019 2018 Opening Balance 121 108 Share in Operating Result - (4) 13 Council's Equity Share in the Joint Venture or Associate 117 121

84 page 42 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

Note 19. Interests in Other Entities (continued)

$ '000

(d). Share of Joint Operations Expenditure Commitments

Expenditure committed for (excluding inventories) at the reporting date but not recognised in the financial statements as liabilities:

(i) Operating Expenditures Payable Not later than one year 281 211 Later that one year and not later than 5 years 31 197 Later than 5 years - - 312 408

(e). Contingent Liabilities of Joint Venture Operations

Each Member is Jointly and Severally Liable for the Debts of the Operation 2019 2018 - arising from Council's Share of Joint Operation 582 272 - arising from Joint and Several Liability of all Members 3,879 1,811

(f). Transactions with Council

Aggregate amount of transactions with Council 2019 2018 - receipts from Council 1,358 1,483

X12A1T Note 20. Non-Current Assets Held for Sale & Discontinued Operations

Council does not have any Non-Current Assets Held for Sale or any Discontinued Operations.

X12A10T Note 21. Contingencies & Assets/Liabilities Not Recognised in the Balance Sheet

The following assets and liabilities do not qualify for recognition in the Balance Sheet, but knowledge is considered relevant to the users of the financial report in making and evaluating decisions about the allocation of scarce resources.

1. LAND UNDER ROADS As reported in the Financial Statements, Council is of the opinion that it is not possible to attribute a value sufficiently reliably for these assets to qualify for recognition, and accordingly land under roads has not been recognised in the reports. Land acquired for road purposes during the year is initially recognised at cost, but transferred to fair value at reporting date, effectively writing off the expenditure.

At reporting date, Council controlled 2,485 km of road reserves of average width 20 metres.

page 43 85 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements NotesFor the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

Note 21. Contingencies & Assets/Liabilities Not Recognised in the Balance Sheet

2. POTENTIAL INSURANCE LOSSES Council is a multi-purpose organisation providing a large range of building, parks infrastructure, playgrounds and other facilities accessible to the public. At any time, it is likely that claims will have been made against Council that remain unsettled.

Council insures against all known insurable risks using a range of insurance policies, each of which is subject to deductable "insurance excesses", the amount of which varies according to the class of insurance.

Council has recognised the potential losses arising from claims known at reporting date based on average historical net cost (including insurance excess) of similar types of claims. Other potential claims not reported to Council may have existed at reporting date.

3. BANK GUARANTEES Council has not guaranteed any loans or other banking facilities to community organisations and sporting bodies.

Council does not expect to incur any loss arising from these guarantees.

4. LEGAL MATTERS Council is the planning consent authority for its area under the Development Act 1993 (as amended). Pursuant to that Act, certain persons aggrieved by a planning decision of the Council may appeal. It is normal practice that parties bear their own legal costs. At the date of these reports, Council had no notice of appeals against planning decisions made prior to reporting date.

X12A11T Note 22. Events after the Balance Sheet Date

Events that occur after the reporting date of 30 June 2019, up to and including the date when the financial statements are "authorised for issue" have been taken into account in preparing these statements.

Council has adopted the date of receipt of the Certification of Financial Statements as the appropriate "authorised for issue" date relating to these General Purpose Financial Statements.

Accordingly, the "authorised for issue" date is 12/11/19.

Council is unaware of any material or significant "non adjusting events" that should be disclosed.

86 page 44 KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council

Notes to and forming part of the Financial Statements for the year ended 30 June 2019

X12A12T Note 23. Related Party Transactions

$ '000 2019 2018

Key Management Personnel

Transactions with Key Management Personel The Key Management Personnel of the Council include the Mayor, Councillors, CEO and certain prescribed officers under section 112 of the Local Government Act 1999 . In all, 22 persons were paid the following total compensation:

The compensation paid to Key Management Personnel comprises: Short-Term Employee Benefits 526 528 Post-Employment Benefits 40 46 Supplies 15 70 Total 581 644

Amounts paid as direct reimbursement of expenses incurred on behalf of Council have not been included above. One Key Management Personnel provided construction/handyman services to Council to the value of $13,360. One Key Management Personnel has interests in a hire business that provided goods to the value of $1,630.

Receipts from Key Management Personnel comprise: Other than amounts paid as ratepayers or residents (e.g. rates, swimming pool entry fees, etc.), Council received the following amounts in total:

Outdoor Permits - 2 Private works - 9 Total - 11

page 45 87 X13A0T KANGAROO ISLAND COUNCIL annual report 2018-2019 Kangaroo Island Council Notes to and forming part of the Financial Statements ForNotes the year to ended and 30 forming June 2019 part of the Financial Statements for the year ended 30 June 2019

X13A1T Note 24. Council Information & Contact Details

Principal Place of Business: 43 Dauncey St KINGSCOTE SA 5223

Contact Details Mailing Address: Opening Hours: PO Box 121 9.00am to 5.00pm KINGSCOTE SA 5223 Monday to Friday

Telephone: 08 8553 4500 Internet: www.kangarooisland.sa.gov.au Facsimile: 08 8553 2885 Email: [email protected]

Officers Elected Members CHIEF EXECUTIVE OFFICER MAYOR Greg Georgopoulos Michael Pengilly

PUBLIC OFFICER COUNCILLORS name here… Bob Teasdale - Deputy Mayor Sam Mumford AUDITORS Shirley Pledge Deloitte Touche Tohmatsu Graham Walkom Level 17, 11 Waymouth St Rosalie Chirgwin Adelaide SA 5000 Peter Tiggerman Peter Denholm Ken Liu

Other Information ABN: 93 741 277 391

88 page 46 KANGAROO ISLAND COUNCIL annual report 2018-2019 Auditor’s Report – Financial Statements

Deloitte Touche Tohmatsu ABN 74 490 121 060 11 Waymouth Street Adelaide, SA, 5000 Australia

Phone: +61 8 8407 7000 www.deloitte.com.au

Independent Auditor’s Report to the Members of the Kangaroo Island Council

Opinion

We have audited the financial report of the Kangaroo Island Council (the “Council”), which comprises the statement of financial position as at 30 June 2019, the statement of comprehensive income, statement of changes in equity and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the declaration of the Chief Executive Officer.

In our opinion the accompanying financial report presents fairly, in all material respects, the Entity’s financial position as at 30 June 2019, and of its financial performance and its cash flows for the year then ended in accordance with Australian Accounting Standards, Local Government Act 1999 and Local Government (Financial Management) Regulations 2011.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Entity in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

The Chief Executive Officer is responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2019, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Chief Executive Officer’s Responsibilities for the Financial Report

The Chief Executive Officer is responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards, Local Government Act 1999 and Local Government (Financial Management) Regulations 2011 and for such internal control as the Chief Executive Officer determines is necessary to enable the preparation and fair presentation of the financial report and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Chief Executive Officer is responsible for assessing the Entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Chief Executive Officer either intends to liquidate the Entity or to cease operations, or have no realistic alternative but to do so.

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte Network.

89 KANGAROO ISLAND COUNCIL annual report 2018-2019 Auditor’s Report – Financial Statements

Auditor’s Responsibilities for the Audit of the Financial Report

Our obectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion easonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists isstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taen on the basis of this financial report

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional udgement and maintain professional scepticism throughout the audit e also

• Identify and assess the riss of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those riss, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion he ris of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Chief Executive Officer

• Conclude on the appropriateness of the Chief Executive Officer’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern If we conclude that a material uncertainty exists, we are reuired to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadeuate, to modify our opinion Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern

• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation

e communicate with the Chief Executive Officer regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit

EOIE OCE OAS

ee irolamo Partner Chartered Accountants Adelaide, 1 ovember 01

KANGAROO ISLAND COUNCIL annual report 2018-2019 Auditor’s Report – Internal Controls

Deloitte Touche Tohmatsu ABN 74 490 121 060 11 Waymouth Street Adelaide, SA, 5000 Australia

Phone: +61 8 8407 7000 www.deloitte.com.au

Independent Assurance Report to the members of the Kangaroo Island Council

Opinion

We have undertaken a reasonable assurance engagement on the Kangaroo Island Council (the “Council”)’s compliance, in all material respects, with the requirement to design and implement internal controls to ensure that the receipt, expenditure and investment of money, acquisition and disposal of property and incurring of liabilities are in accordance with legislative provisions, as evaluated against Section 125 of the Local Government Act 1999, for the period from 1 July 2018 to 30 June 2019.

In our opinion, the Council has complied, in all material respects, with the requirement to design and implement internal controls to ensure that the receipt, expenditure and investment of money, acquisition and disposal of property and incurring of liabilities are in accordance with legislative provisions, as evaluated against Section 125 of the Local Government Act 1999, for the period from 1 July 2018 to 30 June 2019.

Basis for Opinion

We conducted our engagement in accordance with Standard on Assurance Engagements ASAE 3100 Compliance Engagements (“ASAE 3100”) issued by the Auditing and Assurance Standards Board.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

The Council’s Responsibilities

The Council is responsible for:

(a) The compliance activity undertaken to meet Section 125 of the Local Government Act 1999 in relation to the design and implementation of internal controls;

(b) Identifying risks that threaten compliance with Section 125 of the Local Government Act 1999 in relation to the design and implementation of internal controls identified above being met;

(c) Identifying suitable compliance requirements as specified by Section 125 of the Local Government Act 1999 in relation to the design and implementation of internal controls; and

(d) Identifying, designing and implementing controls to enable Section 125 of the Local Government Act 1999 to be met and to monitor ongoing compliance.

Our Independence and Quality Control

We have complied with the independence and other relevant ethical requirements relating to assurance engagements, and apply Auditing Standard ASQC 1 Quality Control for Firms that Perform Audits and Reviews of Financial Reports and Other Financial Information, and Other Assurance Engagements in undertaking this assurance engagement.

Assurance Practitioner’s Responsibilities

Our responsibility is to express an opinion on the Council’s compliance, in all material respects, with the requirement to design and implement internal controls to ensure that the receipt, expenditure and investment of money, acquisition and disposal of property and incurring of liabilities are in accordance with legislative provisions, as evaluated against Section 125 of the Local Government Act 1999, for the period

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte Network. 91

KANGAROO ISLAND COUNCIL annual report 2018-2019 Auditor’s Report – Internal Controls

rom 1 uly 01 to 30 une 01. ASAE 3100 reuires that we plan and perorm our procedures to obtain reasonable assurance about whether the Council has complied, in all material respects, with the reuirement to design and implement internal controls to ensure that the receipt, expenditure and investment o money, acuisition and disposal o property and incurring o liabilities are in accordance with legislative provisions, as evaluated against Section 1 o the ocal overnment Act 1, or the period rom 1 uly 01 to 30 une 01.

An assurance engagement to report on the Council’s compliance with the reuirement to design and implement internal controls to ensure that the receipt, expenditure and investment o money, acuisition and disposal o property and incurring o liabilities are in accordance with legislative provisions involves perorming procedures to obtain evidence about the compliance activity and controls implemented to meet the compliance reuirements. he procedures selected depend on our udgement, including the identiication and assessment o risks o material noncompliance with reuirement to design and implement internal controls to ensure that the receipt, expenditure and investment o money, acuisition and disposal o property and incurring o liabilities are in accordance with legislative provisions, as evaluated against Section 1 o the ocal overnment Act 1.

ur procedures included obtaining an understanding o internal controls in relation to the receipt, expenditure and investment o money, the acuisition and disposal o property and the incurring o liabilities, evaluating managements assessment o these internal controls, assessing the risk that a material weakness exists, and testing the implementation o internal controls on a sample basis based on the assessed risks.

nherent iitations

Because o the inherent limitations o an assurance engagement, together with the internal control structure it is possible that raud, error, or noncompliance with compliance reuirements may occur and not be detected.

A reasonable assurance engagement or the period rom 1 uly 01 to 30 une 01 does not provide assurance on whether compliance with reuirement to design and implement internal controls to ensure that the receipt, expenditure and investment o money, acuisition and disposal o property and incurring o liabilities are in accordance with legislative provisions will continue in the uture.

Restricted Use

his report has been prepared or use by the members o the Council in accordance with Section 129 of the Local Government Act 1999 in relation to the design and implementation o internal controls. We disclaim any assumption o responsibility or any reliance on this report to any person other than the members o the Council, or or any purpose other than that or which it was prepared.

EIE CE AS

ee irolamo artner Chartered Accountants Adelaide, 1 ovember 01

2 KANGAROO ISLAND COUNCIL annual report 2018-2019 Certificate of Auditor Independence

Kangaroo Island Council

General Purpose Financial Statements for the year ended 30 June 2019

X15A0T Certification of Auditor Independence

To the best of our knowledge and belief, we confirm that, for the purpose of the audit of Kangaroo Island Council for the year ended 30 June 2019, the Council’s Auditor, Deloitte Touche Tohmatsu has maintained its independence in accordance with the requirements of the Local Government Act 1999 and the Local Government (Financial Management) Regulations 2011 made under that Act.

This statement is prepared in accordance with the requirements of Regulation 22(3) Local Government (Financial Management) Regulations 2011.

Greg Georgopoulos Greg Connor CHIEF EXECUTIVE OFFICER PRESIDING MEMBER, AUDIT COMMITTEE

Date: 12 November 2019

page 51 KANGAROO ISLAND COUNCIL annual report 2018-2019 Statement by Auditor

Deloitte Touche Tohmatsu ABN 74 490 121 060 11 Waymouth Street Adelaide, SA, 5000 Australia

Phone: +61 8 8407 7000 www.deloitte.com.au

19 November 2019

Kangaroo Island Council 41 Dauncey Street KINGSCOTE SA 5223

Dear Members

Kangaroo Island Council

In accordance with the Local Government (Financial Management) Regulations 2011, I am pleased to provide the following declaration of independence to the councillors of the Kangaroo Island Coucil.

I confirm that, for the audit of the financial statements of the Kangaroo Island Council for the 30 June 2019 financial year, I have maintained my independence in accordance with the requirements of APES 110—Code of Ethics for Professional Accountants, Section 290, published by the Accounting Professional and Ethical Standards Board, and in accordance with the requirements of the Local Government Act 1999 and the Local Government (Financial Management) Regulations 2011 made under that Act.

Yours faithfully

DELOITTE TOUCHE TOHMATSU

Lee Girolamo Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte Network.

Annual Report 2018-2019

FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

Photographs Cover-Clockwise 1. New Waste collection truck outside mechanical workshop – Goolwa Waste and Recycling Depot 2. New Loader – Goolwa Waste and Recycling Depot 3. FRWA Education Officer Jo McPhee and Encounter Lutheran CREST Sustainability Group 4. Recyclable load unloaded in the waste transfer shed – Goolwa Waste and Recycling Depot

CONSTITUENT COUNCILS: Alexandrina Council City of Victor Harbor District Council of Yankalilla Kangaroo Island Council

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

Contents

Page No ABOUT THE AUTHORITY 1 CHAIRPERSON’S MESSAGE 2 THE BOARD 3 THE FRWA YEAR – 2018/19 4 - 7 WASTE STATISTICS 8 - 13 FINANCIAL STATEMENTS 14 - 43

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

OUR HISTORY About The Authority In 2007 the Constituent Councils of the Fleurieu Region unanimously adopted the Fleurieu Peninsula Waste Strategy. A key recommendation of the strategy was that if Councils decided to own and WHO WE REPRESENT operate common assets, then they should establish The Fleurieu Regional Waste Authority (FRWA) was a Regional Subsidiary pursuant to Section 43 of the formed by the member councils of the Fleurieu SA Local Government Act, 1999. Peninsula in South Australia: The Fleurieu Regional Waste Authority (FRWA) was  Alexandrina Council subsequently established as a regional subsidiary.  City of Victor Harbor The FRWA Charter was approved in January 2010  District Council of Yankalilla with the second revision completed and gazetted in  Kangaroo Island Council November 2016.

THE FUTURE WHAT WE DO A key consideration going forward for FRWA, is to FRWA provides waste and recycling services on ensure the region has the necessary strategy, behalf of the four member councils. This includes: infrastructure and planning in place to meet both the region’s population growth and legislative  The operation of four Waste and Recycling requirements under the EPA’s Environment Depots, Protection (Waste to Resources Policy).  The provision of waste, recycling and green waste kerbside collection services, Education and promotional programs within the community will continue to remain a high priority  Public litter bin collections, with community education based around;  Event bin provision and collection, and  Waste avoidance and reduction,  Community information and education.  Reduction of food organics and green waste in the general waste stream, These services are covered by a Service Level  Recycle right, recycle more, and Agreement with each Council setting out the key  Hazardous waste management performance indicators that must be achieved and the agreed budgets to deliver services. The Authority is cooperating with neighbouring councils and other waste authorities in South The services are benchmarked against comparable Australia to develop a best-practice approach to services provided by local government and the sustainable waste and resource management. private sector. The Authority commits to its continued support of local and regional businesses and services as their preferred suppliers wherever possible.

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

This will become a final draft with input from and Chairperson’s under the guidance of the new EO when he/she is appointed before it is presented to the Constituent Message Councils for input.

Relevant to the Strategic Plan are the emerging The 2018/19 Financial opportunities which are being recognised as a Year was both a necessary consequence of the impact of the China challenging and an National Sword policy. South Australia is and has exciting one for the Authority. Indeed, I note that shown itself to be, a leader in recycling. The State this reflection resonates with my comments last Government ban on single use plastics is testimony year about the future of waste. to this State’s environmental leadership. In addition, it is to be noted that the amount of The challenges came in the form of the impact from recovered materials reprocessed locally is the implementation by China of its waste import significant at 87%. policy for recyclables, commonly known, as the ‘China National Sword’ policy. This policy, as The Authority is well placed to participate both mentioned in my first “Chairperson’s Message” directly and indirectly in the exciting initiatives appearing in our last Annual Report, adversely which are now occurring in our economy that seek impacted not only the Authority, but also Australia to positively address the requirements of and for a and the global market for recyclable materials. circular economy. With a particular interest in green waste and an eye on waste to energy and the The position for the Authority was further necessary community education and engagement, compounded by the consequential difficulties that the Authority will continue to pursue its objectives one of our service providers, SKM, found itself in and goals to minimise waste to landfill and the and contributing to its resultant receivership. increased use of resources in a sustainable manner.

In addition, we saw the departure of the Authority’s As we move forward in a new era of sustainability, long-term Executive Officer, Marina Wagner, who the Authority looks forward to a focus that is less on had been fundamental to the establishment and waste but improved use of resources to achieve evolution of the Authority from its inception to its broader environmental, social and economic current position. benefits. In the words of Otto Scharmer “We are truly standing on a precipice, a turning point.” The exciting matters for the Authority saw the (Leading from The Emerging Future) and our November 2018 periodic elections resulting in the commitment to our Constituent Councils and their appointment of three new Board members in respective communities is that the Authority Elizabeth Williams, Michael Scott and Alistair recognises this position and will continue to identify Christie, each of whom have brought new skills and and pursue opportunities in the circular economy, a fresh perspective to Board decision-making and as appropriate. direction. The ‘new’ Board has been working hard over the last half of the financial year in the development of the Authority’s draft 10-year MICHAEL KELLEDY Strategic Plan. CHAIRPERSON, FRWA BOARD OF MANAGEMENT

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

The FRWA Board

FRWA is governed by a nine member Board comprising an Independent Chair to govern and lead the Authority and eight other members, made up of an Elected Member and one Officer from each Constituent Council.

Independent Chairperson Elizabeth Williams Michael Scott Michael Kelledy General Manager Resources Councillor

Alexandrina Council Alexandrina Council

Glenn Sanford Tim Glazbrook Andy Baker Director Environment & Councillor Chief Operating Officer

Infrastructure City of Victor Harbor District Council of Yankalilla

City of Victor Harbor

Greg Georgopoulos Alistair Christie Peter Denholm Councillor Chief Executive Officer Councillor District Council of Yankalilla Kangaroo Island Council Kangaroo Island Council

BOARD MEETINGS

During the 2018/19 financial year the Board met eight times, with each council and FRWA taking turns in hosting the proceedings. All Board members complied with statutory requirements.

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

The FRWA Year - 2018 / 19

KERBSIDE COLLECTIONS

The Authority continued to service all four member The Authority along with KESAB and the Kangaroo councils, with kerbside collection services for over Island Council worked with several food processing 51,000 residential and small business premises businesses in Kingscote, educating staff on diversion across the region. In July 2019 the City of Victor of food waste at the source, with waste separation Harbor moved to a new fortnightly kerbside occurring in the kitchen area before emptying into collection system. All four FRWA member councils the correct bin. Initial audits of the general waste now have a fortnightly system, with current trends bin from four businesses indicated that 70% of the indicating an increase in diversion and reduction in weight was FOGO material that could go into the waste to landfill as a result. green bin for composting.

Over the last 12 months FRWA delivered just over The Authority continues to work with local 1.7 million bin pickups across all four member businesses to increase diversion away from landfill councils and collected; and would like to thank KESAB, Green Industries SA  10,383 tonnes of general waste and Kangaroo Island Council for their support of the (14% decrease from last year) FOGO campaign.  4,848 tonnes of comingled dry recyclables (increase of 4% from last year)  5,644 tonnes of green waste (25% increase from last year)

The introduction of kerbside green waste collection in designated areas in the District Council of Yankalilla in July 2018 was well received, with all four constituent councils now providing this service in nominated areas within each council.

In preparation for the move to fortnightly Compostable food waste placed in the general waste collection, the City of Victor Harbor provided (landfill) bin subsidised bins and compost equipment to residents and introduced Exceptional Circumstances IN-VESSEL COMPOSTING UNIT (EC) bins, providing 140L general waste bins free of charge to eligible residents. The FRWA Education To assist in FOGO diversion and management of Officer and Kerbside Supervisor offered education compostable material on Kangaroo Island, the and advice to residents and small businesses to Authority purchased an in vessel composting assist in the transition to fortnightly collection. system to recycle this material into a product for use on the island, located at the Kangaroo Island FOGO COLLECTION LAUNCHED ON KANGAROO ISLAND Resource Recovery Centre (KIRRC) near Kingscote, production of compost from FOGO material Via an education program, the Authority sought to commenced in July 2019. increase diversion of FOGO (food organics / green organics) out of the landfill bin and into the green Diversion of FOGO material out of the general organics waste stream, for retention and processing waste bin and into the green waste bin to enable on Kangaroo Island via the in vessel composting composting on Kangaroo Island will reduce system. compostable material going to landfill, reduce transport costs and also supply a high quality Businesses and households were encouraged to compost product for purchase by the community place compostable food waste into the green bin, for use in domestic gardens and agricultural diverting it away from landfill. applications.

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

This compost unit was the first of its type installed attendees through advice and education. FRWA will in South Australia and allows Kangaroo Island continue to explore opportunities for ‘Waste Less’ residents the opportunity to see a circular economy events in our member council areas. in action, reducing both the financial and environmental cost of waste transport to the mainland.

Bin station to assist in waste segregation

BIN TAGGING PROGRAM Bin tagging this year was a follow on program from

In vessel composting system at the KIRRC bin tagging carried out last year in Mt Compass and Strathalbyn. This year it was located in selected areas of the City of Victor Harbor and District WOODEN BOAT FESTIVAL – WASTE LESS EVENT Council of Yankalilla.

The Goolwa Wooden Boat Festival took place along Inspectors carried out weekly inspections of the foreshore area of the Goolwa Wharf Precinct in kerbside bins to provide advice to residents in the April 2019, with FRWA and Alexandrina Council correct use of the three bin system. Bins were working together to make this a ‘Waste Less’ event, tagged with either a ‘Thank You’ tag for correct use promoting the use of compostable and recyclable material and minimising event waste going to of the bin, an ‘Alert’ tag to indicate some landfill. contamination and a need for improvement (e.g. food scraps in recycling bin) or an ‘Unacceptable’ In addition, the program provided an opportunity to tag if items placed in the bin were not suitable for undertake education and behaviour change and kerbside collection (e.g. liquid or E waste). encourage correct recycling practices for the yellow and green bins. FRWA assisted in planning for the Data was collected at the beginning and end of the event and provided waste separation posters and program in each area and revealed improvement in bin monitors, to assist attendees at bin stations selected areas with the following results: located throughout the venue with advice on which  11% reduction in general waste bins containing bin to use for their waste. recyclables in Victor Harbor The program was enthusiastically received by the  6% reduction in recycling bins containing non- majority of attendees. Many people chose to recyclables in Victor Harbor engage with the bin monitors and displayed a  2% reduction in green organics bins containing willingness to learn more about waste diversion, non-compostable material in Victor Harbor with many attendees surprised to learn that food  7% reduction in general waste bins containing waste could go into the green bin. recyclables in Yankalilla Only 25% of the event bins provided for the festival  4% reduction in recycling bins containing non- were general waste (landfill) bins, with the majority recyclables in Yankalilla green (food waste and compostable packaging) and  2% reduction in green organics bins containing yellow (recyclable items) bins. Monitored bin non-compostable material in Yankalilla stations were successful in encouraging correct use of the three bin system and engaging with

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

The tagging program was funded via a grant from FRWA also provides a range of mulches, road base Green Industries SA and supported by councils and material, composting equipment, bin parts, advice residents, with many residents engaging with and education via our WRD’s to both residential and tagging staff to find out more about waste diversion commercial customers. and correct use of their kerbside bins. COMMUNITY INFORMATION AND EDUCATION WASTE AND RECYCLING DEPOTS The Authority continued its successful education FRWA operates four waste & recycling depots and information sessions to community groups, (WRD’s) at Goolwa, Strathalbyn, Yankalilla and kindergartens, primary and high schools during Kingscote, the largest at Goolwa where the recently 2018/19. During the year a total of eighteen redeveloped facilities are proving to be an efficient presentations to 599 students were delivered on way of managing the waste and recycling needs of the mainland and five presentations to 100 children our communities. at primary schools on Kangaroo Island.

On the mainland, one show and two local markets were attended and eleven presentations delivered to various local service and community groups directly reaching an audience of almost 300 residents. The focus of the presentations was ‘where our waste goes’, efficient waste separation and the Food Organics / Green Organics (FOGO) initiative to divert food waste away from landfill.

Waste sorting shed at the Goolwa WRD

Through our waste and recycling depots we diverted a wide range of recyclable items in 2018/19 including;

 2,181 mattresses with metal springs recovered for recycling  4,252 tonnes of green waste processed into mulch Jo McPhee Education Officer at Victor Harbor Kindergarten

 7,364 tonnes of rock and inert construction On Kangaroo Island one market and three events waste processed into road base were attended, with nearly 140 residents taking  1,223 tonnes of scrap metal diverted to advantage of the opportunity to learn more about recyclers waste and recycling.  32,500 litres of waste oil collected and diverted to recyclers FRWA’s Education Officer assisted in the implementation of fortnightly collection in the City  690kg of light globes of Victor Harbor through attendance at composting  17 tonnes of batteries workshops presented by the ABC’s Sophie  10,540 Drum Muster containers diverted to Thompson, council foyer displays and community recyclers group presentations.

FRWA came second in the national Agsafe FRWA will continue the focus on community Awards in July, for our contribution to the Drum education in 2019/20 with continued interest from Muster recycling program, with our Strathalbyn schools, businesses and community groups throughout our member council area keen to learn site handling over 7,000 containers in the how to better manage their waste and reduce 2018/19 year. waste to landfill.

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

FRWA’S PEOPLE FRWA employed 34 FTE staff of which  43% work in kerbside collections,  37% in WRD operations, and  20% in community education and corporate services.

FINANCE AND GOVERNANCE The Authority is committed to meeting the highest standards in governance, financial and human resources management.

FRWA CHARTER FRWA’s Charter must be reviewed at least once in every four years and Revision 2 of the Charter was Gazetted on 17 November 2016.

INTERNAL AUDIT COMMITTEE The Committee conducted six meetings during the 2018/19 financial year and provided advice and recommendations to the FRWA Board on the Authority’s financial performance, the review of core financial controls, policies, procedures and asset management matters.

FINANCIAL STATEMENTS Nexia Edward Marshall audited the 2018/19 Financial Statements which were provided to all Constituent Councils. A complete copy of the FRWA Audited Financial Statements 2019 forms part of this report.

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

FRWA Region Waste Statistics 2018/19

FRWA City of Victor Annual Waste (t) Alexandrina DC Yankalilla KI Council Region Harbor

Waste to Landfill 15,195 8,243 3,573 1,596 1,783

Waste Diverted from Landfill 28,548 22,385 2,679 1,840 1,644

Total 2018/19 43,743 30,628 6,252 3,436 3,427

2015/16 to 2018/19 – FRWA Region

FRWA Region - Total Waste - 4 years

50,000 45,000 40,000

35,000 30,000 25,000

Tonnes 20,000 15,000 10,000 5,000 0 2015/16 2016/17 2017/18 2018/19 Total Waste 47,068 49,607 49,323 43,743 Landfill 18,465 17,687 16,891 15,195 Diverted 28,602 31,919 32,431 28,548

FRWA Regional Trend - Total Waste - 4 years 60,000

50,000

40,000

30,000 Tonnes 20,000

10,000

0 2015/16 2016/17 2017/18 2018/19 Total Waste 47,068 49,607 49,323 43,743 Landfill 18,465 17,687 16,891 15,195 Diverted 28,602 31,919 32,431 28,548

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

Waste Statistics 2018/19 by Council Area

District FRWA Alexandrina City of Victor Kangaroo Council of Region Council Harbor Island Council Yankalilla

Kerbside Waste to Landfill 10,383 4,804 3,573 1,134 872

Kerbside Green waste 5,644 3,300 1,492 658 194

Kerbside Recyclables 4,848 2,635 1,1187 551 475

Total Diverted from Landfill 10,492 5,935 2,679 1,209 670

Total Kerbside Collected 20,875 10,739 6,252 2,343 1,542

WRD Waste to landfill 4,812 3,439 461 911

WRD Waste Diverted 18,055 16,450 631 974

Total WRD Waste 22,867 19,889 N/A 1,092 1,885

Total Waste to Landfill 15,195 8,243 3,573 1,596 1,783

Total Waste Diverted 28,548 22,385 2,679 1,840 1,644

Total all Waste Streams 43,743 30,628 6,252 3,436 3,427

*The tables above only include waste streams that are weighed; there are a wide range of waste products diverted from landfill that are managed per item and not included; mattresses, lounges, light globes, batteries, paint, tyres, x-rays, mobile phones and a wide range of salvage items.

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

Trends 2015/16 to 2018/19 – by Council Area

Alexandrina Council - Total Waste - 4 years

40,000 35,000 30,000

25,000 20,000

Tonnes 15,000 10,000 5,000 0 2015/16 2016/17 2017/18 2018/19 Total Waste 34,247 36,713 36,473 30,628 Landfill 10,469 9,781 9,137 8,243 Diverted 23,777 26,932 27,336 22,385

*Introduction fortnightly collection system July 2016

Alexandrina Council Trend - Total Waste - 4 years 40,000 35,000 30,000

25,000 20,000

Tonnes 15,000 10,000 5,000 0 2015/16 2016/17 2017/18 2018/19 Total Waste 34,247 36,713 36,473 30,628 Landfill 10,469 9,781 9,137 8,243 Diverted 23,777 26,932 27,336 22,385

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

City of Victor Harbor - Total Waste - 4 years

7,000 6,000 5,000

4,000 3,000 Tonnes 2,000 1,000 0 2015/16 2016/17 2017/18 2018/19 Total Waste 6,279 6,127 6,088 6,252 Landfill 3,838 3,653 3,679 3,573 Diverted 2,442 2,474 2,409 2,679

City of Victor Harbor Trend - Total Waste - 4 years 7,000 6,000 5,000

4,000 3,000 Tonnes 2,000 1,000 0 2015/16 2016/17 2017/18 2018/19 Total Waste 6,279 6,127 6,088 6,252 Landfill 3,838 3,653 3,679 3,573 Diverted 2,442 2,474 2,409 2,679

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

District Council of Yankalilla - Total Waste - 4 years

3,500 3,000

2,500 2,000 1,500 Tonnes 1,000 500 0 2015/16 2016/17 2017/18 2018/19 Total Waste 3,186 3,355 3,284 3,436 Landfill 2,225 2,184 2,204 1,596 Diverted 961 1,172 1,080 1,840

*Introduction fortnightly collection and kerbside green waste collection July 2018

District Council of Yankalilla Trend - Total Waste - 4 years 4,000 3,500 3,000

2,500 2,000 Title 1,500 1,000 500 0 2015/16 2016/17 2017/18 2018/19 Total Waste 3,186 3,355 3,284 3,436 Landfill 2,225 2,184 2,204 1,596 Diverted 961 1,172 1,080 1,840

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FLEURIEU REGIONAL WASTE AUTHORITY - ANNUAL REPORT 2018-2019

Kangaroo Island Council - Total Waste - 4 years

3,500 3,000

2,500 2,000 1,500 Tonnes 1,000 500 0 2015/16 2016/17 2017/18 2018/19 Total Waste 3,355 3,411 3,478 3,427 Landfill 1,933 2,070 1,871 1,783 Diverted 1,423 1,341 1,607 1,644

*Introduction fortnightly collection and kerbside green waste collection October 2017

Kangaroo Island Trend - Total Waste - 4 years 4,000 3,500 3,000

2,500 2,000

Tonnes 1,500 1,000 500 0 2015/16 2016/17 2017/18 2018/19 Total Waste 3,355 3,411 3,478 3,427 Landfill 1,933 2,070 1,871 1,783 Diverted 1,423 1,341 1,607 1,644

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Lot 1226 Port Elliot Road (PO Box 2375) Goolwa SA 5214 Telephone: (08) 8555 7405 Website: www.frwa.com.au

Fleurieu Regional Waste Authority

Southern & Hills Local Government Association

Adelaide Hills Council │Alexandrina Council │Kangaroo Island Council │ Mount Barker District Council City of Victor Harbor │District Council of Yankalilla│

ANNUAL REPORT

2018-2019

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2 Southern & Hills Local Government Association Annual Report 2018 - 2019

Population

127,975

Area of 8,656 Km2

Coastline 652 Kilometres Prominent retirement

destination

Total Council revenue $182.4 million Adelaide Hills, Fleurieu and Kangaroo Island are major tourism destinations

5,539 kilometres of Local

Roads 25% projected Population increase

by 2026

Southern & Hills Local Government Association Annual Report 2018 - 2019

About the Southern & Hills Local Government Association region

The Southern & Hills Local Government Association was first formed in July 1969 and is now constituted as a Regional Subsidiary under Section 43 and Schedule 2 of the Local Government Act 1999. Consisting of six (6) local government Councils: o Adelaide Hills Council o Alexandrina Council o Kangaroo Island Council o Mt Barker District Council o City of Victor Harbor o District Council of Yankalilla

Collectively these six (6) Councils have:

 More than 127,000 people as at 30th June 2018.  5,539 kilometres of local roads  Area consists of 8,656 square kilometres.  An ocean coastline of 652 Km.  The River Murray and lakes form the southeast boundary of the region.  The region has extreme diversity form the foothill suburbs of Adelaide to the isolation of the inaccessible west coast of Flinders Chase National Park.  Significant areas within the region are under primary production include highly productive farm, horticulture, viticulture, forestry, fishing and intensive animal keeping enterprises and in the more undulating parts sheep farming, cereal growing and dairying.  The region contributed nearly $3 billion in gross value to the State economy in 2006/07 or 4.4% of gross state product.  Much of the area has, (by South Australian standards) a high rainfall.  A large part of the area is within the 30 Year Plan for Greater Adelaide.  Significant growth pockets both in population and development, placing demands on infrastructure and the natural environment.  Projected change in the population to 2026 by approximately 25%.  Within the region, Victor Harbor and Goolwa are key retirement destinations.  Within the region, The Adelaide Hills, The Fleurieu and Kangaroo Island are all major tourism destinations.  Kangaroo Island is a major component of the Australian and SA tourism plan with tourist numbers targeted to double over the next decade.

Southern & Hills Local Government Association Annual Report 2018 - 2019

The Southern and Hills Local Government Association Board

June 2019

Council Elected Member Council Staff Representative Representative

Adelaide Hills Council Deputy Mayor Jan - Claire CEO Andrew Aitken Wisdom Post November 2018 LG Mayor Jan – Claire Wisdom CEO Andrew Aitken election

Alexandrina Council Mayor Keith Parkes CEO Glenn Rappensberg

Kangaroo Island Council Mayor Peter Clements CEO Andrew Boardman Post November 2018 LG Mayor Michael Pengilly CEO Greg Georgopolous election

Mt Barker District Council Mayor Ann Ferguson CEO Andrew Stuart

City of Victor Harbor Mayor Graham Philip CEO Victoria MacKirdy Post November 2018 LG Mayor Moira Jenkins CEO Victoria MacKirdy election

District Council of Mayor Glen Rowlands CEO Nigel Morris Yankalilla

5 Southern & Hills Local Government Association Annual Report 2018 - 2019

Office Bearers 2018 – 2019

President Mayor Keith Parkes, Alexandrina Council

Deputy President Mayor Glen Rowlands, District Council of Yankalilla

Executive Officer Mr Graeme Martin

Auditor Mr Jon Colquhoun, FCA, HLB Mann Judd

Elected under the provisions of the Constitution of the Local Government Association

Delegates to LGA Board Mayor Keith Parkes Mayor Jan – Claire Wisdom (via Metro/GAROC)

Delegates to SAROC Mayor Keith Parkes Alexandrina Council Mayor Glen Rowlands District Council of Yankalilla

6 Southern & Hills Local Government Association Annual Report 2018 - 2019

President’s Forward

The 2018-2019 year yet again has largely seen Southern and Hills Local Government Association consolidate its role and activities.

Core activities remain and have included the continuing work of the existing Roads Working Party and the 2020 Transport Plan review, monitoring the S&HLGA Regional Public Health plan and implementing the region’s Climate Change Adaptation Plan, working very closely with the RDA to further the Regional Infrastructure Plan, as well as maintaining and reviewing key strategy and performance documents such as the Annual Action Items, Annual Budget and adopting a new 4 year Business Plan. These activities are all designed to drive and improve the wellbeing of our communities.

Critically during the year we have developed and presented the S&HLGA Value proposition which demonstrated a hugely significant 3,500% return on member Council subscriptions as well as conduct a future directions and strategy forum for the organisation.

Following on from the Local Government Association of SA governance review and restructure the S&HLGA has been an active player in the further development of its regional SAROC committee.

We acknowledge and continue to work with the Local Government Association of SA and State Government’s Office of Local Government. We have partnered with our regional economic development organisation, Regional Development Australia as well as PIRSA and the Natural Resource Management Boards as we continue to confront the many impacting regional issues.

We were able to welcome new S&HLGA Board members in Mayors Moira Jenkins (Victor Harbor) and Michael Pengilly (KI) and new CEOs Victoria MacKirdy (Victor Harbor) and Greg Georgopolous (KI).

Thank you to our Executive Officer, Graeme Martin for his continued energy and drive in supporting the body.

In closing, I acknowledge and thank all the member councils for their support during the year, and say how much I value ongoing contribution of member Mayors and CEOs.

Mayor Keith Parkes President

7 Southern & Hills Local Government Association Annual Report 2018 - 2019

The Board

The Board held 6 ordinary bi-monthly meetings during the year. Board Members are generally the Mayor and Chief Executive Officer of each Council. To provide the opportunity for Board Members to gain first hand knowledge of regional issues, meetings are hosted by Member Councils on a rotational basis and were held at:

17 August 2018 – City of Victor harbor 19 October 2018 - Yankalilla 14 December 2018 - Mt. Barker 8 February 2019 - Kangaroo Island 26 April 2019 - Yankalilla 28 June 2019 - City of Victor Harbor

Key Issues acted on by the Board included: o Continued to work closely with the Adelaide Hills Fleurieu and Kangaroo Island Regional Development Australia Board and with RDA officers to complete the 2019 Regional Public Transport study, develop the regional Infrastructure Priority Plan, the regional middle - east trade engagement strategy, Board governance and membership and a regional workplan in partnership with PIRSA. o Continued working with the Local Government Association and SAROC on lobbying on the review of the business plans, administrative fee and levy proposals of the Natural Resource Management Boards and conversion to Landscapes Boards, continuing lobbying for a more balanced & nationally consistent approach to planning, regulation for rural and regional road safety & speed limits, equitable road funding for SA, continuing the development of a balanced and consistent policy approach to Council sustainability, finances and rate revenue in the face of the call for a State Rate Capping policy, input into the LGA governance and organisational review and SAROC 2019 -2023 Strategic Plan and 2019-2020 Annual Business Plan, working with the State government on the management and control of abundant pest species particularly Little Corellas, telecommunications Black Spot funding, working on the LG Coastal Alliance project and cost shifting policies such as e-planning portal contributions, hard waste levy and the transfer of rate exempt community housing and developing and promoting the regional decentralisation and population growth strategies. o Monitoring ad implementing the S&HLGA Regional Public Health Plan. o Monitoring ad implementing the S&HLGA Regional Climate Change Adaptation Plan o Input into the SA Visitor strategy o Continued the updating of the Roads Database component of the regional 2020 Transport Plan, special local roads funding applications and continued the comprehensive review of the Regional Transport Plan including the development of the South Coast Freight Corridor marketing material and advocating on Public Transport issues o Working with the State Government and lobbying on Local Government reform around the key elements such as Council member capacity and conduct, representation, benchmarking and simpler regulation o Updating and maintaining of the S&HLGA Website and developing new promotional material.

8 Southern & Hills Local Government Association Annual Report 2018 - 2019

Regional Consultations and briefings were coordinated to occur on the day of Board meetings. 10 various speakers addressed meetings of the Board. In addition the CEO’s group conducted several of their meetings in the morning preceding the Board meeting. The Board reviewed its achievements to date and developed a new Action Plan for 2018-2019 At the commencement of 2018-2019 the Board completed a review of its Annual Key Actions, the EO performance and its Annual Budget performance covering the previous period. The Board also conducted a comprehensive Strategic Futures workshop in May 2019.

S&HLGA Value proposition

The S&HLGA provided a report back to its Council members on the estimated value of their membership. This is based on the same methodology utilised by the LGA in determining its membership value.

The value from membership in a regional organisation can be summarised in the following key categories; advocacy and representing the region, establishing and implementing high level regional partnerships and links, developing and strengthening regional capacity.

The table below summarises the 2018-2019 value per council and for the region as a total.

2019 Summary Value per Council Value for the S&HLGA region

General advocacy $20,000 $120,000 Programs and Projects $375,005 $2,003,500 Capacity building $35,948 $165,692

Total $430,953 $2,289,192

9 Southern & Hills Local Government Association Annual Report 2018 - 2019

Task Force and Working Groups

The S&HLGA EO was a member of the following Task Force and Working Groups during the course of the year:

Committee S&HLGA Executive Meeting Frequency Comment Officer Role Regional Public Secretarial/Administration Every 2 months ongoing Health Resilient Hills & Committee member Every 2 months ongoing Coast - Climate change Adaptation Regional Economic Committee member Every 2 months ongoing Development Officers SA Coastal Alliance Committee member Every 2 months Estimated phase 2 project to be complete by Dec 2020 Regional EO Committee member Every 2 months Precedes SAROC Management Group S&HLGA CEO group Secretarial/Administration Every 3 months Precedes S&HLGA Board S&HLGA Roads Secretarial/Administration Ad hoc but at least 3 ongoing Works Group times per annum S&HLGA CWMS Secretarial/Administration Every 2-3 months ongoing User Group SAROC Advisor/Observer Every 2 months ongoing

S&HLGA Roads Working Party

The Roads Working Party (RWP), with membership drawn from directors /managers of technical services of Councils and regional managers and infrastructure planners of the Department of Planning, Transport and Infrastructure held meetings in November 2018 and March 2019 to review the S&HLGA 2020 Transport Plan (Plan) Roads database priority summary list and to make recommendations on regional priorities for the Special Local Roads Program (SLRP). The work of the committee included:

o Co-ordinate the annual review of HDS Australia Pty Ltd’s summary assessment and update of the 2020 Transport Plan Roads Database. o Co-ordinated and supported the application process of Councils to the SLRP. o Review and plan the update of the S&HLGA Roads Database that comprises the roads nominated by Councils under the policies of the 2020 Transport Plan o Reviewed the next 3 year work plan for the region

10 Southern & Hills Local Government Association Annual Report 2018 - 2019

o The following projects were recommended, based on the methodology of the Plan and proposed funding under the Special Local Roads Program for 2019 – 2020

Project Council Total Project SLRP request Council comment Cost for this contribution stage Waitpinga Rd City of Victor $600,000 $400,000 $200,000 Stage 4 of 4 Harbor Springs Rd Mt Barker $1,160,000 $773,000 $387,000 Stage 3 of 4

Wedgewood/Hickmans Kangaroo $840,649 $560,432 $280,217 Stage 2 of 3 Rd Island Springs Rd Mt Barker $1,146,000 $774,000 $372,000 Stage 4 of 4 Total $3,746,649 $2,507,432 $1,239,217

CWMS Group

The S&HLGA Community Waste Water Management Systems (CWMS) User group has been formally constituted with member establishment levies set comprising a base rate plus a percentage based on the number of connections.

Following on the Essential Services Commission of SA (ESCOSA) to review Water Industry reform and the implications of the Water Industry Act 2012, The S&HLGA Council CEO group has been reviewing options for CWMS assets in light of:

o The risk factors and increasingly time and resource consuming compliance regime associated with this critical asset management. o The opportunity for regional scale o Continued investment interest from the private sector o Adopting best practice and efficient operations

The CWMS User group meeting on 28 May and 20 June 2018 as well as attending the CWMS state conference in the Barossa

S&HLGA Regional Public Health Plan

Role: Secretary and Task group member - Implementation and Monitoring of a Regional Public Health Plan for S&HLGA:

o Working group meetings ( preparation Agendas & Minutes ) 20/07/2018, 29/01/2019, 21/02/2019, 3/07/2019 o Liaise with LGA Public Health Program Manager

11 Southern & Hills Local Government Association Annual Report 2018 - 2019

o Liaise with SA Public Health Office o Represent the region at Forums and workshops o Liaise with Public Health Researchers o Prepare funding submissions for regional Public Health projects

Of significant importance was the successful application to run the Community Wellbeing alliance Pilot study for the S&HLGA region

S&HLGA Regional Climate Change Adaptation Committee

Role: Committee member (Resilient Hills and Coast) - Implementation and Monitoring of the Regional Climate Change Adaptation Plan for S&HLGA:

o Working group meetings 22/08/2018, 19/12/2018, 10/04/2019, 20/06/2019 o S&HLGA presentations o Liaise and co-ordinate with Project Manager o Prepare funding submissions for regional Climate adaptation projects

Of significant importance was the successful application to run the Resilient Regions Central Co- ordinator Pilot study for the S&HLGA region to be rolled out in 2019-2020

Regional Economic Development Officers Committee

The S&HLGA has strongly supported the activities and research of the Adelaide Hills Fleurieu and Kangaroo Island Regional Development Australia Board and worked closely with RDA officers to partner with the organisation in the general Economic Development of the region.

Role: Task Group member - A Working Group has been formed with the Economic Development Officers from the S&HLGA Member Councils. - The principal activity is to share information, achieve procurement and resource sharing efficiencies and develop a regional infrastructure Plan by:

o Identify and collating infrastructure projects from Council plans o Grade them according to Local, District or Regional category, dollar value and impact and probability o The Working group has held meetings 18/09/2018, 12/11/2018, 4/02/2019 and 6/05/2019 o In conjunction with the CEO and Chair of the RDA, the EO S&HLGA met regularly with the regions State government MPs (Finniss, Kavel and Heysen) to discuss key priorities and policy impact for the region. o Liaise and regularly meet with GTA Consultants who were commissioned to review the region’s public transport and provide strategic directions and an action plan.

12 Southern & Hills Local Government Association Annual Report 2018 - 2019

Regional LGA Organisations EO Management Group

Role: Committee member – To provide input into the sector, develop capacity, share knowledge and develop co-operation between the regions:

o Meetings were held 22/08/2018, 4/12/2018, 20/03/2019,15/05/2019 o Have input into SAROC Business Plan and the Agenda o Develop a working relationship with the LGA Management team o Have input into sector issues o Advocate on behalf of the regions o Share information and provide collegiate support o Develop a priority issues and action list

SAROC

The South Australian Regional Organisation of Councils (SAROC) is a Committee of the LGA that focuses on key issues affecting country Councils. The S&HLGA supports the Governance process by contributing to agenda items for SAROC meetings, the distribution of Key Outcomes Statements of meetings to S&HLGA Board meetings and collegiate support to prepare submissions on behalf of country Councils that included:

o Continuing lobbying and input into the ongoing review of the business plans, administrative fee and levy proposals of the Natural Resource Management Boards o Continuing lobbying for a more balanced & nationally consistent approach to planning, regulation for rural and regional road safety & speed limits as well as advocating the return of appropriate Road funding for SA o Lobbying and continuing the development of a balanced and consistent policy approach to Council sustainability, finances and rate revenue in the face of the call for a State Rate Capping policy and cost shifting policies such as e-planning portal contributions, hard waste levy, transfer of rate exempt community housing. o Working with the State Government on the management and control of abundant pest species particularly Little Corellas o Developing and promoting the Regional Decentralisation and population growth strategies o Working on Coastal Council Alliance project and working with State Government on a Jetties and Wharves replacement and maintenance plan o Member of the Regional Task Group to oversee the Ratings Equity Project o Input into LGA Governance review and the SAROC 2019-2023 Strategic Plan and 2019- 2020 Annual Business Plan o Reviewing and having input into the SA Visitor strategy o Taking a leadership position on Climate risk o Developing a measurement project with the RDAs on the socio economic impact on regions of the NDIS delay and rollout

13 Southern & Hills Local Government Association Annual Report 2018 - 2019

o Working with the State Government and lobbying on Local government reform around key elements such as Council member capacity and conduct, representation, benchmarking and simpler regulation.

Regional Research Papers and Submissions

The following Papers and Submissions have been prepared on behalf of Member Councils during the course of the year:

o To the LGA on behalf of the S&HLGA region – Expression of interest for pilot study “Community Well Being Alliance regional trial” o To Minister for the Environment on behalf of the S&HLGA region – Abundant Bird Species Management o To SA Grants Commission on behalf of the S&HLGA region – Review of methodology o To Department of Environment & Water – Funding application for Resilient Regions Central co-ordinator o LGA R&D application for “Peri-Urban” research grant o S&HLGA Value proposition paper o To SA Health on behalf of S&HLGA Regional Public Health progress report for the period 2016 – 2018 o To EO Management Group – project briefs on Peri Urban organisation, overabundant pest species and Financial Assistance Grants reform

Workshops and seminars

The Executive officer represented the member Councils at various workshops and seminars during the course of the year: o LGA Showcase / OGM o LGA Conference / AGM o LGA Smart Cities Forum o CWMS state conference o Yorke & Mid North Bio Energy Forum o Commissioner for Kangaroo Island meeting o Various Council presentations on S&HLGA Key Activities and Projects o Australian Institute of Company Directors Economic Outlook Forum o SA Grants Commission Forum o LGA Rate Capping Forum x 2 o Climate Change and risk officers Forum o Adelaide Hills and Fleurieu Peninsula Public Transport workshop

14 Southern & Hills Local Government Association Annual Report 2018 - 2019

o S&HLGA Regional Community Energy Project Forum o SAROC Planning and Business plan workshop x 2 o Goyder Economic development and resilience roundtable o “Where we build, What we build” stakeholder inception forum o RDA SA state conference

Rubble Royalties

The S&HLGA received top up funds from Rubble Royalties in 2018-2019. The S&HLGA has member Council Kangaroo Island as the sole contributor to this scheme. During the year funds were allocated to: o Contribution to the Resilient Hills & Coast Climate Change Adaptation Project Officers 12 month contract extension o S&HLGA Strategic directions forum 10 May 2019 o Working with the State Government and the Regional EO group to review the impact of Rubble Royalties and seek their removal.

LGA Board

Mayor Jan – Claire Wisdom (Adelaide Hills Council) along with Mayor Keith Parkes (Alexandrina Council) have represented the Southern and Hills Region at the Local Government Association State Board meetings.

Resources

The continuation of the capacity building grant from the Local Government Research and Development Scheme and the final Outreach Grant has improved the capacity of the Executive Officer that has been applied across a range of Association activities during the year. Part of the additional capacity has supported the administrative processes around the S&HLGA Roads Working Party and the applications to the Local Government Transport Advisory Panel, involvement with SAROC, the regional EO group, the regional working groups and various reports, submissions and forums throughout the year. Mr Graeme Martin, Director of Grange Advisors Pty Ltd has provided Executive Officer services to the Association under a contract services agreement for the period July 2018 – February 2019. He has continued in the role as an employee of S&HLGA from February 2019.

15 Southern & Hills Local Government Association Annual Report 2018 - 2019

KEY CATEGORIES & THEMES

THE 2017-2021 S&HLGA BUSINESS PLAN

OBJECTIVE

1. To provide leadership and advocacy for Member Councils on regional issues. 2. To market & promote the Southern & Hills Local Government Association 3. To support sustainable economic, environmental and social development in the region 4. To improve infrastructure to meet the community’s needs. 5. To strengthen the capacity of the Association to meet its service obligations.

THE 2018-2019 S&HLGA ANNUAL KEY ACTION PLAN

Theme Items & Actions General Administration Budget, Charter Review, Board meetings, Subscriptions and Levies, Key (sound financial and Actions, Audit, Annual Report, Grant reporting & acquitals compliance management) Projects and support Regional Public Health Plan, Resilient Hills & Coast Climate adaptation (sustainability and Plan, Northern Freight Bypass Project, Fleurieu Futures Pilot, Regional development) Transport Plan, Grants Commission review. Leadership, advocacy and LGA Governance review, New Government Policies (e.g Rate Capping ), marketing Relationship building with new Government MPs, Website maintenance Opportunities (capacity and CWMS, Waste, Regional Infrastructure Plan, Regional Procurement, infrastructure) External Funding, Regional Development Assessment Panel

Theme Items & Actions Item Status Comment General Budget, Charter Budget Review, Board Administration Charter review (sound financial meetings, and compliance Subscriptions and Subscriptions &

management) Levies, Key levies Actions, Audit, Audit Annual Report, Grant reporting & Annual Report

acquitals LGA Grants Successful LGA R&D $45,000

CEP Projects and Regional Public Regional Public Successful LGA pilot region

support Health Plan, Health Plan submission/2 year report

16 Southern & Hills Local Government Association Annual Report 2018 - 2019

(sustainability and Resilient Hills & submitted/Committee regularly development) Coast Climate meeting adaptation Plan, Resilient Hills & Committee meeting regularly.

Northern Freight Coast Climate $45,000 CEP grant, $95,000 Bypass Project, adaptation Plan What we build where we build Fleurieu Futures grant Pilot, Regional Grants Transport Plan Commission Review Project Fleurieu Futures Councils Seeking funding for

Pilot, next stage investigation Regional Transport Plan Leadership, LGA Governance LGA Governance Peri-urban regional

advocacy and review, New review organisation to be investigated marketing Government Rate Capping Policies (e.g Rate Relationship with Regularly meeting Capping ), Relationship MPs building with new Website Updated after Council elections Government MPs, Website maintenance Opportunities CWMS, Waste, CWMS Committee meeting regularly Regional (capacity and Waste infrastructure) Infrastructure Plan, Regional Infrastructure Plan Recent RDA priority project

Procurement, forum/ Committee meeting External Funding, regularly Regional Procurement Development Assessment Panel External funding Seeking Native Veg Plan contributions DAP

= Not on track / yet to commence = on track = completed / no further action required

Category S&HLGA Role Item Comment/Description Administration Active/Lead Charter Review Original target date Dec 2018, revised August 2019. Active/Lead Draft Budget 2019-2020 Endorsed by Board 26/04/2019 out for individual Council approval. Majority approval received Active/Lead Draft Key Action 2019-2020 Draft June 2019 Active/Lead Regional Capacity grant Due July 2019 acquittal 2018-2019 Active/Lead Audit 2018-2019 Due July-Aug 2019 Active/Lead Annual Report 2018-2019 Due Sept 2019

Projects – Active/Lead Regional Public Health Plan Community Wellbeing Lead/S&HLGA Alliance Pilot funding of Committee $75,000 received. Expect at least 18 month delivery

17 Southern & Hills Local Government Association Annual Report 2018 - 2019

Category S&HLGA Role Item Comment/Description timeframe. Consultant contractor appointed and work plan being developed Active/Lead Resilient Hills & Coast Community Energy Scheme funding $45,000. Working through the second phase of this at present and seeking external funding for phase three (State Bank grant application unsuccessful) Active/Lead Where we build, what we build project has received $95,000 Natural disaster Program grant and $60,000 Insurance Council of Australia grant commitment. Milestones 1&2 completed. Active/Lead Road Works Party Completed HV assessment of South Coast Freight Corridor. Issues with Middleton main street traffic to be resolved. Developing a new Roads database and new 2030 Transport Plan for 2020-2021 Active/Lead CWMS Committee now active with regular meetings scheduled. Just waiting for LGA availability. Key focus is on audit/description of each Council scheme and then seek common ground for efficiencies around operations and procurement. Meeting scheduled 24 June 2019

Projects – Lead Active/Lead Grants Commission March 2019 - Completed methodology review submission to SA Grants Commission Active/Lead Regional Native Vegetation Reviewing cost and Plan opportunity for some external contributory funding Lead/Partner/Influence Regional LGA Management Regular meeting of the LGA Group EOs and development of priority projects in conjunction with SAROC Projects - Partner Partner/Influence Coastal Alliance project We have a significant interest in this but S&HLGA role is largely information provision via steering committee and input into the report. Partner/Advocate Digital Maturity S&HLGA role is largely information provision and input into the report although EO is on monitoring task group

18 Southern & Hills Local Government Association Annual Report 2018 - 2019

Category S&HLGA Role Item Comment/Description Partner/Influence Economic Development RDA lead but focus on Officers Forum Regional Infrastructure plan and Public Transport

Relationships Active/Lead/Influence New Elected members Updated S&HLGA Value Proposition presented to all 6 member Councils 1st May 2019 Active/Lead Peri –Urban Group Advocate and seek input from potential expanded Council members into a larger peri – urban Regional Organisation

19 Southern & Hills Local Government Association Annual Report 2018 - 2019

Acronyms

AICD………………………..Australian Institute of Company Directors

AMLRNRM...... Adelaide and Mt Lofty Ranges Natural Resources Management Board

CEO...... Chief Executive Officer

CWMS...... Community Wastewater Management Systems

DEW…...... Department of Environment and Water

EO…………………………...Executive Officer

ESCOSA...... Essential Services Commission of South Australia

GAROC……………………..Greater Adelaide Region of Councils

LGA...... Local Government Association

MDBA……………………….Murray Darling Basin Authority

MOU...... Memorandum of Understanding

NBN………………………….National Broadband Network

NRM...... Natural Resources Management

OLG…………………………Office of Local Government

PIRSA……………………….Primary Industries & Regions SA

RDA...... Regional Development Australia

SAROC...... South Australian Regional Organisation of Councils

SEB………………………….Significant Environmental Benefits

S&HLGA...... Southern and Hills Local Government Association

SLRP...... Special Local Roads Program

20 Southern & Hills Local Government Association Past Presidents and Secretaries / Executive Officers

Years President Council Secretary / EO

2018 - 2019 Mayor Keith Parkes Alexandrina Council Graeme Martin 2017 – 2018 Mayor Keith Parkes Alexandrina Council Graeme Martin 2016 - 2017 Mayor Bill Spragg Adelaide Hills Council Graeme Martin 2015 - 2016 Mayor Bill Spragg Adelaide Hills Council Graeme Martin f 2014 - 2015 Mayor Bill Spragg Adelaide Hills Council Graeme Martin

Mayor Ann Ferguson DC Mount Barker 2013 - 2014 Mayor Ann Ferguson DC Mount Barker Graeme Martin 2012 - 2013 Mayor Ann Ferguson DC Mount Barker Graeme Martin

d 2011 - 2012 Mayor Ann Ferguson DC Mount Barker Fred Pedler Graeme Martin e

2010 - 2011 Mayor Ann Ferguson c DC Mount Barker Fred Pedler b Mayor Brian Hurn OAM The Barossa Council 2009 - 2010 Mayor Brian Hurn OAM The Barossa Council Fred Pedler b 2008 - 2009 Mayor Brian Hurn OAM The Barossa Council Fred Pedler b 2007 - 2008 Mayor Brian Hurn OAM The Barossa Council Fred Pedler b 2006 - 2007 Mayor Brian Hurn OAM The Barossa Council Fred Pedler b 2005 - 2006 Mayor Brian Hurn OAM The Barossa Council Fred Pedler b 2004 - 2005 Mayor Kym McHugh Alexandrina Council Fred Pedler b 2003 - 2004 Mayor Kym McHugh Alexandrina Council Fred Pedler b 2002 - 2003 Mayor John Crompton a City of Victor Harbor Fred Pedler b 2001 - 2002 Mayor John Crompton City of Victor Harbor Fred Pedler b 1999 - 2000 Mayor Bernie Eglinton APM DC Mt Barker Fred Pedler b 1998 - 1999 Mayor Bernie Eglinton APM DC Mt Barker Dean Gollan 1997 - 1998 Mayor Janice Kelly Kangaroo Island Council Barry Hurst 1996 - 1997 Mayor Janice Kelly Kangaroo Island Council Barry Hurst 1995 - 1996 Mayor Anita Aspinall DC Stirling Peter Vlatko 1993 - 1994 Cr GR Mayfield DC Yankalilla Malcolm Davis 1991 - 1992 Mayor Val Ball DC Strathalbyn John Coombe 1989 - 1990 Cr Val Bonython DC East Torrens Eric March 1987 - 1988 Cr PD Secker DC Mt Barker Dean Gollan 1985 - 1986 Mayor Leon O’Driscoll DC Strathalbyn Vernon Cotton 1984 - 1985 Cr CA Phieffer DC Onkaparinga David Seaman 1982 - 1983 Cr Brian Pym DC Mt Pleasant Adrian Hamiester 1980 - 1981 Cr Roy Galpin DC Port Elliot and Goolwa Ron Wellington 1979 Mayor M Checker DC Gumeracha Malcolm Anderson 1978 Mayor M Checker DC Gumeracha John Grosvenor 1976 - 1977 Mayor A Davidson DC Strathalbyn Vernon Cotton 1975 Cr Ray Orr DC Mt Barker Reginald Walters 1974 Cr L Hughes DC Meadows Wally Richards 1969-1973 No minutes available 30th July 1969 First Constitution for S&HLGA Adopted Attendance register maintained for annual and half yearly conferences from 1968 to 1990 a Until 12th May 2003 b Executive Officer c From February 2011 d To December 2011 e From January 2012 f From February 2015 21 Southern and Hills LGA Membership subscription history

Financial Year ended 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Individual member subs $ 2,275 $ 4,500 $ 4,635 $ 4,867 $ 5,000 $ 5,100 $ 5,200 $ 5,300 $ 5,500 $ 7,500 $ 8,829 $ 9,270 $ 10,000 $ 10,250 $ 10,500 $ 10,685 $ 11,000 $ 11,200 $ 12,000 Total Subscriptions $ 18,200 $ 31,500 $ 37,080 $ 38,936 $ 40,000 $ 40,800 $ 41,600 $ 42,400 $ 44,000 $ 60,000 $ 61,803 $ 64,890 $ 80,443 $ 82,172 $ 84,037 $ 72,995 $ 75,173 $ 76,373 $ 81,214 $ Change from previous year $13,300 $5,580 $1,856 $1,064 $800 $800 $800 $1,600 $16,000 $1,803 $3,087 $15,553 $1,729 $1,865 -$11,042 $2,178 $1,200 $4,841 % Change from previous year 73.1% 17.7% 5.0% 2.7% 2.0% 2.0% 1.9% 3.8% 36.4% 3.0% 5.0% 24.0% 2.1% 2.3% -13.1% 3.0% 1.6% 6.3%

NB 8 members 2001-2010 7 members 2011-2015 6 members 2016

S&HLGA Member Subscriptions

$90,000 $85,000 $80,000 $75,000 $70,000 $65,000 $60,000 $55,000 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $- 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Total Subscriptions Individual member subs

Page 1 D:\OneDrive\Documents\Shlga\Admin\Annual Report\2018-2019\Subscriptions22 History SOUTHERN & HILLS LOCAL GOVERNMENT ASSOCIATION

FINANCIAL STATEMENTS

Statement of Comprehensive Income for the Year Ended 30th June 2019

2019 2018 Notes $ $

Income

Subscriptions 1.8 76,373 75,173 Operating Grants 2.2 261,239 89,777 Investment Income 1.7 4,456 3,164 Other 28,655 90,280

Total Income 1.4 370,723 258,394

Expenditure Contractual Services 3 167,523 163,911 Finance Charges 3,763 3,482 Other 104,707 51,410

Total Expenditure 275,993 218,803

Surplus (Deficit) from Operations 94,731 39,591

The above Income Statement should be read in conjunction with the accompanying notes

23 SOUTHERN & HILLS LOCAL GOVERNMENT ASSOCIATION

Balance Sheet as at 30th June 2019

2019 2018

Notes $ $

Current Assets Investments 181,281 126,959 Debtors 147,675 6,000 Total Current Assets 328,956 132,959

Current Liabilities Accounts Payable 21,326 60 Grants in Advance 80,000 Total Current Liabilities 101,326 60

Net Current Assets 227,630 132,899

Net Assets 227,630 132,899

Equity

Accumulated Surplus 227,630 132,899 Total Equity 227,630 132,899

The above Balance Sheet should be read in conjunction with the accompanying notes

24 SOUTHERN & HILLS LOCAL GOVERNMENT ASSOCIATION

Statement of Changes in Equity for the Year Ended 30th June 2019

2019 2018

Notes $ $

Accumulated Surplus Balance at beginning of period 132,899 93,308 Net Surplus / (Deficit) 94,731 39,591 Balance at end of period 227,630 132,899

Total Equity 227,630 132,899

The above Statement of Change in Equity should be read in conjunction with the accompanying notes

25 SOUTHERN & HILLS LOCAL GOVERNMENT ASSOCIATION

Statement of Cash Flows for the Year Ended 30th June 2019

2019 2018

Notes $ $

Cash Flows from Operating Activities Receipts 328,452 280,753 Payments (273,599) (252,299) GST Paid (received) (4,987) (2,587) Interest Receipts 4,456 3,164 Net Cash Provided by (Used in) 54,322 29,031 Operating Activities

Net increase/(decrease) in Cash 54,322 29,031 Held

Cash at the beginning of the 126,959 97,928 reporting period

Cash at the end of the reporting 181,281 126,959 period

Reconciliation of Change in Net Assets to Cash from operating activities

2019 2018

$ Net Surplus 94,731 39,591

Decrease / (Increase) in Debtors (147,675) 0 (Decrease) / Increase in Accounts Payable 27,266 (10,560) (Decrease) / Increase in Grants in Advance 80,000 0 Net Cash provided by Operating Activities 54,322 29,031

The above Statement of cash Flows should be read in conjunction with the accompanying notes

SOUTHERN & HILLS LOCAL GOVERNMENT ASSOCIATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS For the year ended 30 June 2019 Note 1 - Significant Accounting Policies The principal accounting policies adopted in the preparation of the financial report are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

1 Basis of Preparation 1.1 Compliance with Australian Accounting Standards

This general purpose financial report has been prepared in accordance with Australian Accounting Standards as they apply to not-for-profit entities, other authoritative pronouncements of the Australian Accounting Standards Board, interpretations and relevant South Australian legislation

The Southern & Hills Local Government Association is a Regional Subsidiary under Section 43 and Schedule 2 of the Local Government Act 1999. The Constituent Councils are the Adelaide Hills Council, Alexandrina Council, Kangaroo Island Council, Mt Barker District Council, City of Victor Harbor and District Council of Yankalilla.

All funds received and expended by the Association have been included in the financial statements forming part of this financial report.

1.2 Historical Cost Convention

Except where stated below, these financial statements have been prepared in accordance with the historical cost convention.

1.3 Critical Accounting Estimates

The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain critical accounting estimates, and requires management to exercise its judgement in applying the Authority’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are specifically referred to in the relevant sections of this note.

1.4 Rounding

All amounts in the financial statements have been rounded to the nearest dollar

1.5 Non Current Assets and Non Current Liabilities

The Association has no non current assets or non current liabilities.

1.6 Employees

The Association has one employee having converted the EO from contractor to employee in February 2019.

1.7 Investments

Investments are valued at cost. Interest revenues are recognised as they accrue.

1.8 Subscriptions

Clause 6 of the Charter of the Association prescribes that subscriptions (not levies) by Constituent Councils are equal.

Constituent Council Subscription 2019 $11,200 Constituent Council Subscription 2018 $11,000

SOUTHERN & HILLS LOCAL GOVERNMENT ASSOCIATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

1.9 Income recognition

Income is measured at the fair value of the consideration received or receivable. Income is recognized when the authority obtains control over the assets comprising the income, or when the amount due constitutes an enforceable debt, whichever occurs first.

1.10 Cash

For purposes of the statement of cash flows, cash includes cash deposits which are readily convertible to cash on hand and which are used in the cash management function on a day to day basis.

1.11 New accounting standards for application in future periods

The Australian Accounting Standards Board has issued new and amended Accounting Standards and interpretations that have mandatory application dates for future periods. The organisation has assessed that it is not expected to be materially impacted by those changes.

2 Functions / Activities of the Association

2.1 Revenues and expenses have been attributed to the following functions / activities, descriptions of which are set out in Note 2.2.

2.2 The activities of the Association are categorised into the following broad functions:

Administration: The operation of the Office of the Association and its decision making forums.

Special projects: The research into and implementation of projects prescribed by Acts or regulations or approved by Board decision.

Transport and Communication: The review and implementation of the S&H 2020 Transport Plan.

Note 2.2 Functions / Activities of the Southern & Hills Local Government Association

Administration

Revenue Expenses Year Surplus Grants Other Total % Expenses % (Deficit) Revenue Total 2019 106,989 80,829 187,818 50.7% 184,528 66.9% 3,290 2018 39,777 78,338 118,115 45.7% 160,692 73.4% (42,577)

Projects

2019 154,250 12,255 166,505 44.9% 68,020 24.7% 98,485 2018 50,000 70,789 120,789 46.8% 49,442 22.6% 71,347

Transport and Communication

2019 0 16,400 16,400 4.4% 23,444 8.4% (7,044) 2018 0 19,490 19,490 7.5% 8,669 4.0% 10,821

SOUTHERN & HILLS LOCAL GOVERNMENT ASSOCIATION

NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTS

Revenue Expenses Year Surplus Grants Other Total % Expenses % (Deficit) Revenue Total

Total

2019 261,239 109,484 370,723 100% 275,993 100% 94,731 2018 89,777 168,617 258,394 100.0% 218,803 100.0% 39,591

3. Contractual Services

Contractual Services involve payments or liabilities for the external provision of services and include (net of GST): 2019 2018

Consultants: LKS Quaero $0 $12,682 Grange Advisors Pty Ltd $85,239 $142,560 HDS Australia Pty Ltd $23,444 $8,669 RH&C (CVH) $45,000 $0 Seed Consulting $13,840 $0

Totals $167,523 $163,911

4. Comparison of Budget and Actual Results

2019 2018 Budget Actual Budget Actual $ $ $ $

Revenue

Administration 174,273 187,818 202,369 118,115 Projects (incl Transport Plan ) 20,050 182,905 18,350 140,279

Total Revenue 194,323 370,723 220,719 258,394

Expenditure Administration 170,000 184,529 170,190 160,692 Projects 68,050 91,464 38,250 58,111

Total Expenditure 238,050 275,993 208,440 218,803

Surplus (Deficit) (43,727) 94,731 12,279 39,591

29 Southern & Hills Local Government Association – Financial Statements Year Ended 30th June 2019

CERTIFICATION OF FINANCIAL STATEMENTS

We have been authorised by the Southern & Hills Local Government Association to certify the financial statements in their final form. In our opinion: o the accompanying financial statements comply with the Local Government Act 1999, Local Government (Financial Management) Regulations 2011 and Australian Accounting Standards. o the financial statements present a true and fair view of the Association’s financial position at 30 June 2019 and the results of its operations and cash flows for the financial year. o internal controls implemented by the Authority provide a reasonable assurance that the Association’s financial records are complete, accurate and reliable and were effective throughout the financial year. o the financial statements accurately reflect the Association’s accounting and other records.

Dated 23rd August 2019

Graeme Martin Mayor Keith Parkes EXECUTIVE OFFICER PRESIDENT

CERTIFICATION OF AUDITOR INDEPENDENCE

To the best of our knowledge and belief, we confirm that, for the purpose of the audit of the Southern & Hills Local Government Association for the year ended 30 June 2019, the Association’s Auditor, HLB Mann Judd, 169 Fullarton Rd, Adelaide, has maintained its independence in accordance with the requirements of the Local Government Act 1999 and the Local Government (Financial Management) Regulations 2011 made under that Act.

This statement is prepared in accordance with the requirements of Regulation 22(3) Local Government (Financial Management) Regulations 2011.

Dated 23rd August 2019

Graeme Martin Mayor Keith Parkes EXECUTIVE OFFICER PRESIDENT

The Board C/- Graeme Martin Executive Officer Southern & Hills Local Government Association 13 Ringmer Drive Burnside SA 5066

TO THE BOARD MEMBERS OF SOUTHERN & HILLS LOCAL GOVERNMENT ASSOCIATION

STATEMENT OF AUDITORS INDEPENDENCE ANNUAL FINANCIAL STATEMENT FOR THE YEAR ENDED 30 JUNE 2019

I confirm that, for the audit of the financial statements of Southern & Hills Local Government Association for the year ended 30 June 2019, I have maintained my independence in accordance with the requirements of APES 110 – Code of Ethics for Professional Accountants, Section 290, published by the Accounting Professional and Ethical Standards Board, in accordance with the Local Government Act 1999 and the Local Government (Financial Management) Regulations 2011 made under that Act.

This statement is prepared in accordance with the requirements of Regulation 22(5) Local Government (Financial Management) Regulations 2011.

HLB Mann Judd Audit (SA) Pty Ltd Jon Colquhoun Chartered Accountants Director

Adelaide, South Australia

23 August 2019

Independent Auditor’s Report to the Members of Southern & Hills Local Government Association

Opinion

We have audited the financial report of Southern & Hills Local Government Association (“the Entity”) which comprises the Balance Sheet as at 30 June 2019, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying financial report presents fairly, in all material aspects, the financial position of the Entity as at 30 June 2019, and its financial performance and its cash flow for the year then ended in accordance with Australian Accounting Standards.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Entity in accordance with the auditor independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Responsibilities of Management and Board Members for the Financial Report

Management is responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards and for such internal control as management determines is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error.

In preparing the financial report, management is responsible for assessing the Entity’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intend to liquidate the Entity or to cease operations, or have no realistic alternative but to do so.

Board Members are responsible for overseeing the Entity’s financial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Entity’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management. • Conclude on the appropriateness of the management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Entity to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

We communicate with Board Members regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

HLB Mann Judd Audit (SA) Pty Ltd Jon Colquhoun Chartered Accountants Director

Adelaide, South Australia 23 August 2019