Shire of Esperance 2011/2012 Annual Report Our Vision
The spirit of Esperance is unique, we take pride in being a creative, caring, and supportive community.
We live in a diverse and dynamic region with outstanding opportunities for all.
As custodians, we are committed to protect our spectacular natural environment.
Esperance has a sense of community ownership with a commitment to determine its own direction.
We make it happen!
Mission
The Shire of Esperance will listen to its people and provide services in a caring, responsive and consultative manner through Councillors and staff that are well equipped to meet community needs, and show leadership in development at regional and higher levels.
2 Shire of Esperance 2011/2012 Annual Report Contents
Shire President’s Report 4
CEO’s Report 6
Your Councillors 8
Executive Team 9
Executive Services 10
Community Services 14
Engineering Services 34
Development Services 36
Corporate Services 40
Annual Financial Report 47
3 Shire Presidents Report
It is with a great deal of pleasure that I present to you the Shire of Esperance Annual Report for 2011/2012. Council elections held in October 2011 installed a new Council which I believe has operated as a strong dynamic team during the year. I wish to sincerely thank my fellow Councillors, the CEO and Council staff for their dedicated contribution to enable Council to achieve what it has over the 2011/2012 year. We are fortunate to have such an enthusiastic and professional team and I thank each and every member of our Council for their contribution. As we reflect on the year I would describe it asa year of steady achievement punctuated with some highs and a few lows. We have had a steady stream of good news stories which is always guaranteed to attract a politician or two. It’s even better if they come bearing a cheque which we have been able, “As we reflect on on each occasion, to put to good use. the year I would The year has been dominated by Esperance being describe it as a year selected as a SuperTown which presented an of steady achievement opportunity to compete for a share of an $85m pool earmarked for the nine SuperTowns. The Council punctuated with some worked frantically to prepare business cases for highs and a few lows.“ our prioritised programs. A collaborative effort and pooling of resources with the Goldfields Esperance Development Commission (GEDC) and Esperance Chamber of Commerce and Industry (ECCI) produced four very professional submissions. These were assessed by the SuperTowns panel and Esperance was very fortunate to receive the requested funding on three of the four projects. The number one community endorsed project which received $12.65m was the Esperance Waterfront Project (formerly called the Esperance Foreshore Protection and Enhancement project).
4 Shire of Esperance 2011/2012 Annual Report I know the community of Esperance will be delighted In addition Council has produced and endorsed, in to see this long awaited project commence and conjunction with the GEDC and ECCI, an interim hopefully resolve the erosion and other issues Growth Plan for the South East Region which will concerning on our foreshore. The Waterfront provide direction and strategic priorities for the region project will extend beyond the seawall and also for the next twenty years. The final Growth Plan will include foreshore landscaped park land and amenity be completed within the next few months. which will link the town centre to our foreshore. Our landscape planners were appointed in June The Shire has continued its good work in the 2012 and we look forward to community input in the asset management arena and now has a number finalisation of these project plans. of maintenance or management plans in place to preserve the value of our community assets Whilst on the subject of infrastructure development and extend their useful life span. Ongoing asset there is a lot either happening or about to happen. management plans will continue into the future until The State and Federal funded Port Access Corridor such time as we have a long term financial plan for project has commenced and on completion will all our community assets. make transport movement, not only to and from the Port, but traversing the railway line much more The Council has a goal to provide quality services user friendly. In addition the High School hostel and to the community at an affordable cost. With new Esperance Primary School developments have increasing utility and other costs, this has not been a commenced. Esperance Hospital upgrades have simple exercise. In accordance with the community’s been announced and we are exhausting all avenues expectations, Council has prioritised where to spend to obtain funding for the Greater Sports Ground its resources to achieve the most cost effective development. outcome and still provide a quality level of service. The Local Government Minister introduced the In closing I wish to acknowledge the input and interest Integrated Planning and Reporting Framework of our local community in all these developments requiring Council to prepare medium and long within our wonderful town. For Esperance to achieve term planning documents for implementation. A and continue to achieve a team effort is required refinement of our Draft Strategic Community Plan involving the community, Industry groups, Shire which summarises our community long term vision, staff, Councillors and our local Politicians. I am very values, priorities and aspirations for the next ten pleased to say, because of all these ingredients years is near completion and will be circulated for Esperance is a SuperTown and will continue to be comment to the community early in the next financial a safe and wonderful environment to visit or more year. We continue working on our Corporate Business importantly, to raise a family in. Plan (four year plan) so that both of these plans will I would like to thank our CEO Mal Osborne for his be ready for implementation by the deadline date of guidance, leadership and dedication during the past June 2013. 12 months. I conclude by saying that 2011/2012 was a watershed year and 2012/2013 will be even better.
Malcolm Heasman Shire President.
5 CEO’s Report
The 2011/2012 financial year The State Government’s Royalties for Regions has been especially rewarding program announced the SuperTowns initiative and for the Shire of Esperance due in early 2012 Esperance was selected as one of to the number of significant nine towns identified as future regional centres. projects and opportunities that The impact of the SuperTowns funding will be felt have become available to the positively throughout the community. We are now Esperance community. This able to begin work on the Esperance Waterfront, was achieved by the hard work and commitment which is a transformational project along the of Council and the staff, by the contributions of foreshore. Funding was also secured for Town our community organisations, by partnerships with Centre Revitalisation and Economic Development government agencies and the active participation of Projects, both of which look at social and economic our community members. drivers that will encourage investment and growth in a sustainable manner. Royalties for Regions has The October 2011 Local Government Elections saw also included funding for Esperance Residential a substantial change to the makeup of the Council. A College, Esperance Primary School and upgrades complete spill of all 11 existing Councillors occurred, to the Esperance Hospital. with 9 positions contested at the election. This was a recommendation by the previous Council to reduce Extensive work has been carried out within the Shire the number of elected representatives as part of the to develop the required plans under the Integrated State Government’s Structural reform process. The Planning and Reporting Framework. These plans are Esperance Community saw this as an opportunity to designed to assist in equipping our organisation to have their input with a record number of nominees respond to short, medium and long term community and voter turnout being recorded. The election requirements. The Strategic Community Plan is in saw 3 returning Councillors (Crs Rodgers, Stewart draft format and will be advertised as an overarching & Walker) and 6 new Councillors (Crs Heasman, plan that guides the future directions of Council’s Brown, Bowman, Griffiths, McIntyre and Mansell) policies, plans, projects and decision making over being elected to represent the Shire of Esperance. the next ten years to 2022. I would like to acknowledge the retiring Councillors, Asset Management Plans (AMP) have been further especially Ian Mickel, who was Shire president advanced this year with the majority of the Shire’s and Councillor for 22 years. 74 years of collective asset classes AMP’s now being completed. These Council experience was contributed by the outgoing AMP’s identify our current assets, current and Councillors. They are to be applauded for ensuring future expenditure requirements and the assets that Esperance continually embraced development condition. This information then feeds into our Long and reacted positively to change for the benefit of Term Financial Plan which will determine priorities the whole Shire. The time and energy committed and identify any funding shortfalls. The Long Term as elected representatives is greatly appreciated by Financial Plan needs to balance the services needed all members of the community. by the community with the resources available. I would like to extend a welcome to Cr Malcolm Drafts have been completed for the Strategic Heasman as our new Shire President and all current Community Plan, the Corporate Business Plan and Councillors, who as a whole, have challenged the the Workforce Plan. These documents are required status quo and encouraged fresh initiatives, whilst by the State Government to be in place by 1 July ensuring strong and visionary leadership within the 2013 under the Integrated Planning and Reporting community. We look forward to continuing to build Framework. The Draft Strategic Community Plan on this relationship to ensure the delivery of the is an overarching plan outlining community visions Community’s aspirations and goals. and aspirations which guide Council actions. It will
6 Shire of Esperance 2011/2012 Annual Report “We are poised to grab hold of the opportunities The Shire was very fortunate to secure the services and address the challenges of Shane Burge as the incoming Director Corporate Services. Shane had previously worked for the Shire that come our way in and came back to Esperance from his role as CEO such a rapidly changing at the Shire of Derby-West Kimberley. landscape.“ Workforce training has been undertaken to ensure all staff have the skills required to perform their duties efficiently and effectively. A need to become more be advertised for public comment in October 2012. proficient in project management throughout the The Corporate Business Plan is the operational plan organisation was identified therefore a Diploma in for Shire Staff to deliver on services and projects Project Management course was conducted locally. identified as important to the community. Staff across all levels of the organisation committed to investing personal time to complete the study Some major challenges faced at the Shire this required. Our commitment to providing skills based financial year include the temporary closure of the training will assist in retaining a stronger more Myrup Truck wash due to environmental constraints. efficient workforce. This site has subsequently been reopened however additional funding is being sought to ensure There are exciting times ahead for the Shire of the facility meets best practice standards in Esperance and the broader community as the environmental management.. The redevelopment of Esperance Waterfront project gets under way. the truck wash facility will include the integration of This will build a better foreshore by protecting a liquid waste facility, therefore ensuring efficiencies existing infrastructure and building environmental and better practice in liquid waste management for and picnic related infrastructure. The Town Centre the Esperance community. Revitalisation project will be working towards the development of a town centre that boosts both Legislative changes regarding baggage and security economic and social investment. As an organisation screening at Airports saw major capital works take we are very excited to be living and working in such place at the Esperance Airport. Security screening, a dynamic environment. I wish to thank all staff for incorporating x-raying of checked in and hand their ongoing commitment and efforts and extend on luggage, explosive trace detection and passenger behalf of the Shire, appreciation to all community screening had to be in place by July 2012. This groups and individuals that have supported and deadline was met through some great organisation assisted Shire staff over these past twelve months. and project management by the Staff involved. Additional upgrades to the terminal include an expansion of the departure lounge that will be completed later in 2012. Executive and Managerial staff have remained relatively consistent over the financial year allowing Mal Osborne for stability and the building of local knowledge. The Chief Executive Officer one significant change was the loss of our Director Corporate Services, Darren Kennedy who took the opportunity to move into a role in the private sector. I would like to thank Darren for his commitment and contribution to the Shire of Esperance.
7 Your Councillors
Cr Malcom Heasman Cr Victoria Brown Cr Nigel Walker Shire President Deputy Shire President Rural Ward Town Ward Rural Ward Term expires 2013 Term expires 2015 Term expires 2015
Cr Lara McIntyre Cr Wayne (Buck) Rodgers Cr Natalie Bowman Town Ward Town Ward Rural Ward Term expires 2015 Term expires 2013 Term expires 2015
Cr Roger Mansell Cr Paul Griffiths Cr Beverley Stewart Town Ward Town Ward Town Ward Term expires 2015 Term expires 2013 Term expires 2013
Contact details Cr M Heasman Cr V Brown Cr N Walker H: 9076 1483 M: 0428 713 444 H: 9076 6088 M: 0418 905 407 H: 9076 5089 M: 0427 081 856 E: [email protected] E: [email protected] E: [email protected] Cr L McIntyre Cr W Rodgers Cr N Bowman H: 9072 0006 M: 0429 301 066 H: 9072 0093 M: 0457 720 093 H: 9075 7034 M: 0427 757 034 E: [email protected] E: [email protected] E: [email protected] Cr R Mansell Cr P Griffiths Cr B Stewart H: 9072 0146 M: 0428 720 146 H: 9071 4106 M: 0458 381 840 H: 9072 0737 M: 0427 720 737 E: [email protected] E: [email protected] E: [email protected]
8 Shire of Esperance 2011/2012 Annual Report Executive Team
Mal Osborne Chief Executive Officer
Shane Burge Rod Hilton Director Corporate Services Director Community Services
Richard Hindley Gavin Harris Director Development Services Director Engineering Services
9 Executive Services
Executive Services is responsible for the coordination of Elected Members of Council; emergency services management; governance; human services; occupational safety and health; media and communications; major projects; strategic planning and economic and business development.
The Executive Services Team has been working Work will continue on the integration of asset towards achieving compliance with the Integrated management, workforce and long term financial Planning and Reporting Framework that was plans ensuring the Shire is in a position to resource introduced late in 2011. Community forums were an appropriate level of service satisfactory to the held in the late stages of 2011 to re-evaluate the community whilst maintaining an acceptable level of community’s visions and aspirations for the future sustainability. growth of our Shire. These views, along with those established from previous community consultation, The promotion of health and well being in the the community perception survey and community workplace has been actively encouraged throughout engagement through the SuperTowns initiative, the organisation this financial year. With new form the foundations of the Esperance Strategic initiatives being introduced around healthy work Community Plan. The community showed great place practices for internal and external staff, enthusiasm and passion to see Esperance grow in improving safety and producing a more positive an economically sustainable manner whilst retaining work environment. our current inclusive community spirit and pristine The Shire of Esperance, via the Emergency environment. Services Levy (ESL) was allocated funding through The Esperance Strategic Community Plan is the 2011/2012 Capital Grant allocation. This meant now in draft format and work has begun on the eight new fire fighting appliances are to be supplied Corporate Business Plan. The Corporate Business to replace aging equipment throughout the Shire Plan coordinates the processes required to and a further six appliances are offered as part of ensure the aspirations and goals identified in the the 2012/2013 allocation. Strategic Community plan are utilised to drive These new trucks will replace existing fleet vehicles Shire operations. The Corporate Business Plan is at a cost of $3.6m. Neridup and Commalbidgup a planning document that outlines priorities and Bush Fire Brigade were the first to receive their major projects being undertaken within the Shire in new appliances, with trucks to arrive for Cascade, addition to outlining business as usual activities. Munglinup, Grass Patch and Beaumont in the near future.
10 Shire of Esperance 2011/2012 Annual Report “The Team has been working towards achieving compliance with the Integrated Planning and Reporting Framework”
SuperTowns We were excited to be announced as one of We have been successful in attracting funding for nine SuperTowns across the Southern part of three projects from the competitive funding round. Western Australia by the State Government. The major funding contribution is $12.65m for the This announcement provided us with significant Waterfront project, which means we now have Royalties for Regions funds to undertake long-term enough funds to commence physical works on the community planning (Esperance SuperTown Growth project. We also received funding for preparing a and Implementation Plan) and access to almost Town Centre Revitalisation program and undertaking $80m of competitive project funding. an Economic Development Program. These three projects will provide Esperance with a strong platform The SuperTowns program has resulted in a fantastic for community driven growth and development into working relationship being developed between the future, with all three projects to commence by the Shire, Goldfields-Esperance Development the end of 2012. Commission and Esperance Chamber of Commerce and Industries, which has huge benefits for the One of the outcomes of the local partnership that we whole of the Esperance community. Development are looking forward to in the near future is the Town of the Growth and Implementation Plan is due to Centre Conference, an opportunity to showcase be finalised by the end of October 2012, with the Esperance as a place and highlight the skills and significant community input received to this point abilities of the people of Esperance to organise and being extremely valuable. deliver an event of significance to the State. Future funding opportunities will continue to be explored to allow the SuperTowns program to continue to be delivered and we look forward to continuing this in a collaborative environment with the Esperance community.
11 Executive Services
Elected Members There was some significant changes in the Council Due to the nature of this election four Councillors for Shire of Esperance during the 2011/2012 financial terms were condensed to a two year period allowing year with Local Government elections being held in for an election in 2013. After this date all terms will October 2011. Prior to this election Council made a be for a four year period with Elections being held decision to reduce the number of Elected Members every two years, this allows for half the council seats from eleven to nine therefore a complete spill of to be contested each time. Council was undertaken. Fourteen nominations The Council meets on the evening of the fourth were received for the six town ward positions and Tuesday of every month as part of a monthly seven for the rural ward. The number of nominations business cycle, with Council meetings being open to received generated significant community interest the general public. Reports to Council are the formal which saw a record turnout in the amount of voters. method by which the administration provides advice The Town Ward representatives are: to the Elected Members. The majority of business is Cr Malcolm Heasman dealt with by the All Purpose Committee of Council, which makes recommendations to the Council. The Cr Lara McIntyre All Purpose Committee comprises all nine Elected Cr Wayne (Buck) Rodgers Members. Cr Roger Mansell Agendas for Council and Committee meetings are Cr Paul Griffiths made available to members of the public on the Cr Beverley Stewart Shire’s website, as well as at the Shire Administration The Rural Ward representatives are: Offices and Library. Minutes of all Council and Committee meetings are also publicly available. Cr Victoria Brown Cr Natalie Bowman Cr Nigel Walker
12 Shire of Esperance 2011/2012 Annual Report 13 Community Services
Community Services covers a range of services within the Shire, including: rangers; Senior Citizens Centre; Home and Community Care centre; Museum; Library; Bay of Isles Leisure Centre; Civic Centre; Volunteer Resource Centre; community development funds; culture; recreation reserves and playgrounds and tourism and events.
14 Shire of Esperance 2011/2012 Annual Report 15 Community Services
Esperance Public Library The Esperance Public Library provides an essential service to the Esperance Community and its visitors. It offers a variety of items available for loan such as books, DVD’s Electronic resources, magazines and jigsaws. The library also provides reliable internet access, photocopying, printing, faxing and scanning services, all of which are utilised regularly.
Key Outcomes The Library loaned 119,426 items from July 2011 to • Regular Children’s programmes are well June 2012 attended with two Toddler Time and Story Time sessions held each week during school term. • Ongoing informal surveying indicates a On average 75 children per week access these continuing high level of community satisfaction programmes which are provided free and are with library services however usage patterns available to both locals and visitors. These are slowly changing with reduced loans of programmes are interactive and provide a print materials beginning to emerge as a trend. learning and social environment in a positive • The Library was visited by 82,962 people during way to encourage children to enjoy their trip to 2011/2012 and 40,867 of these people loaned the Library. In addition the library runs Better items. Other reasons for visiting the library, but Beginnings Early Literacy programmes and not necessarily loaning items, include using School Holiday Activities throughout the year, the Public Access Computers and Internet, both have high attendance rates. attending various library events and activities, • The library held two main Family events which accessing the Tax Help programme, utilising were rewarded by excellent attendances. other services, reading newspapers or seeking They were the 2011 National Science Week information. See Figure 1. Dinosaur Discoveries night and the 2012 Heavens Above: Family Stargazing Night. • The Library has retained a team of experienced Staff and is greatly benefitted by their combined skills and strengths in many different areas of Figure 1 - 2011/2012 Library Statistics library services. Major Achievements • Library staff were excited to be Finalist’s in the Community Services Category of the 2011 Esperance Chamber of Commerce Business Awards. We are also thrilled to be announced as a Finalist in the 2012 Awards and are proud of our Library Trainee Mel Harper who is also a Finalist in the Trainee section of the 2012 Awards.
16 Shire of Esperance 2011/2012 Annual Report “The library has taken another step into the future by introducing E - Services.”
• To celebrate 40 years of library services in the • The eighth State Library Discard Book Sale was existing building a Library Open Week was held over the Easter long weekend and was a held in February 2012 to highlight the diverse great example of teamwork between the State range of services and resources provided Library, Esperance Library staff, Esperance by the library. The priority focus was the Library Friends (ELF) and other volunteers. introduction of more electronic, digital services More than 3000 people attended and it was and resources. fantastic to see how much enthusiasm the community has for reading. The Esperance • Adult events and activities also continue to be Library benefitted from the publicity and the appreciated, for example: donation of over 500 Large Print books left over from the sale. • The 2012 Telstra Connected Seniors Computer Classes have attracted over 70 • The Esperance Library Friends (ELF) group participants had another successful year with sales from the ELF Discard Book Shop supporting Early • Adult Learners’ Week workshops in Literacy programmes and the purchase of 2011 offered Cooking on a Budget, Cake other resources. ELF also assisted staff with Decorating, Laptop Lessons and an Art activities and events such as visiting author Class and were attended by 100 participants sessions, the Library Open Week and the • The 2012 Great Gardens Show featuring State Library Discard Book Sale. They are a John Colwill and The Great Gardens team fantastic volunteer group who work towards from Perth was very popular with over 170 making better resources and services available attendees to all members of our community. • The library has taken another step into the • Local authors Jim Finnerty and Fleur future by introducing, in a staged rollout, a MacDonald featured in lunchtime Meet range of electronic resources, namely Ebooks, the Author sessions and the popularity of Downloadable Audio and Ezines. these sessions encouraged the formation of a Library Book Club, Reading Between the • The Structural Reform of Public Libraries is a Wines. This group has over 30 participants lengthy process and is impacting on activities who meet monthly in various locations to currently being undertaken at the Esperance discuss a range of literary issues and also Library. Staff are monitoring the changes has an online presence through the library’s being implemented and sourcing alternatives Facebook site to continue to provide essential community services.
17 Community Services
Ranger Services Rangers are responsible for dog and cat control, parking control, litter control, coastal reserves patrols and maintenance and block inspections under the Bushfires Act.
Ranger Services has seen significant improvements • Upgrades and self registration for overflow over the last twelve months thanks to the hard camping on the Greater Sports Ground over work and ongoing team commitment of all staff. By Xmas, New Year and Easter 2011 into 2012 working as a team and receiving amazing ongoing support from all Shire staff, various businesses in • Development of ongoing relationships with town and animal support groups such as SAFE a variety of organisations in town inclusive (Save Animals from Euthanasia) and the RSPCA we of Fisheries, Police, Customs, DEC, support have achieved great things. organisations and a multitude of other people and businesses. Outstanding achievements include: • Heightened awareness through out the • The introduction of the “Pound Pooch” community of Ranger Services and what we program involving ongoing advertising of our offer through media support and pro active pound dogs and re homing them into safe and work engaging all staff with the community wonderful homes through out Esperance and beyond – one of our dogs was even returned Ranger Services are extremely proud of these to his original breeder in the Northern Territory. achievements and are all looking forward in This has resulted in an amazing 100 dogs being 2012/2013 to ongoing engagement within the re homed in the financial year 2011/2012. community of Esperance to ensure a safe, happy and well balanced lifestyle in what is a magnificent • Ongoing works on the Coastal Reserves natural environment. targeting Quagi and Alexander Bay including maintenance, upgrades and signage as well as the introduction of the Camp Hosts program.
18 Shire of Esperance 2011/2012 Annual Report Illegal Camping Parking A total of 195 illegal campers were issued with A total of five parking cautions were issued during written cautions and 50 verbal cautions were issued. the year with no specific problem areas in town. The illegal campers were requested to move on to Rangers respond to public complaints regarding authorised camping grounds and the overflow camp parking, we do not actively conduct parking patrols. ground was offered as an alternative when it was available. Fire Control/Unsightly blocks The Greater Sports Ground was utilised for an Rangers inspected a total of 650 vacant blocks overflow camping ground during Christmas, New during the fire season, and subsequently 53 Notice Year and Easter due to the town’s caravan parks and to Comply were sent out to property owners to camping grounds being full. As part of a new initiative ensure that blocks were brought up to the required for the overflow camping ground the introduction of standards. self registration was trialled for Easter 2012. This Local Laws proved extremely successful and in conjunction with signage will be continued into the ensuing years for Quarterly inspections were conducted of all verges the overflow area. and thoroughfares during the year resulting in six cautions and nil infringement notices being issued This resulted in a marked reduction in the number for non compliance. of hours spent by Ranger Services staff conducting fee collection duties resulting in staff being able to attend to other matters over this busy period of the year. Ranger Services staff utilised early starts to catch illegal campers and language translation sheets to convey positive messages as to why illegal camping was not permitted in the Shire of Esperance. “We have a heightened awareness through out the community of Ranger Services.”
19 Community Services
Ranger Services
Litter Control Dog control Rangers received a total of 34 illegal dumping Dog control and education of the public remained reports. One written warning and four infringements the biggest single issue for rangers during the year. were issued for illegal dumping/littering. Rangers continued to conduct random patrols to detect 19 cautions were issued in relation to dog matters offenders in this regard but rely heavily on community with an increased focus on dogs off lead and dogs support to be effective. roaming. 71 infringements were issued in matters ranging from dogs causing nuisance to dogs Coastal Reserve roaming. Figure 3 provides additional information regarding animal control. All coastal reserves continued to be occupied to their maximum capacity during the summer months There appears to have been a marked increase with ongoing maintenance carried out during this in the number of dog attacks over the 2011/2012 period. During the winter months upgrades and financial year however, this could possibly be due maintenance works were carried out by Ranger to increased media releases regarding responsible Services staff as part of the annual works program. dog ownership and encouraging residents to report dog attack incidents. After Hours Due to the strong Pound Pooch re homing program, Rangers Emergency after Hours Service was very ongoing business and local support and continued busy over the year. Rangers received a total of 943 support from dog support agencies SAFE and after hour calls during the year resulting in Rangers RSPCA, the number of dogs successfully re homed attending to 76 call outs after hours. has considerably increased. This financial year Ranger Services reached a milestone re homing Currently rangers respond to out of hours call outs their 100th pound pooch. which are related to, dog attacks, livestock roaming, emergency services requiring assistance and shark sightings. Telephone enquiries Telephone enquiries are one of our largest sources of information with a total of 1932 inquiries received during the 2011/2012 year. This included 943 out of hours calls from Insight (all calls taken after 4:30 pm daily) and a total of 989 jobs on the ranger services job register. Dealing with dog related complaints still constitutes the main percentage of Ranger Services work. The jobs on the job register are calls taken by the on call ranger for that week from Monday to Friday 7:30 am to 4:30 pm daily. See Figure 2.
20 Shire of Esperance 2011/2012 Annual Report Figure 2 - Ranger Services Telephone enquiries 2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 Dogs 2654 2847 2522 939 831 RSPCA 57 56 18 8 13 Livestock 175 154 185 66 56 Litter 29 29 43 34 35 Cats 166 233 219 56 54 Fire 216 364 152 49 54 Parking 104 103 90 21 14 Camping 73 142 117 50 49 General Enquiries 811 934 787 139 149 After Hours Not known Not known Not known 501 943 Total 4285 4862 4133 1863 2198
Figure 3 - Animal Control
2007/2008 2008/2009 2009/2010 2010/2011 2011/2012 Impounded dogs 479 416 390 296 275 Dogs returned to owners 179 149 179 150 149 after impounded Dogs Euthanized 99 106 61 66 30 Rehoused Dogs N/A 49 53 70 88 Feral cats Euthanized 24 41 25 20 15
21 Community Services
Esperance Visitor Centre The Esperance Visitor Centre provides a gateway for tourists to the Esperance Region.
The Esperance Visitor’s Centre has enjoyed another pages per visit and each visitor spent an average of successful year. The 2011/2012 financial year saw 3-4 minutes on our site with 84% of visitors coming a slight decrease in our ‘door count’ numbers from to the site via search engines – this represents no 125,399 in 2010/2011 to 123,600 in 2011/2012 - see real change from the 2010/2011 Financial Year. Figure 4. Other Esperance Visitors Centre highlights from the Despite slightly decreased numbers, the Esperance 2011/2012 Financial Year include: Visitors Centre did achieve an increase in income. Key outcomes include: • In October 2011 The Esperance Visitors Centre was represented at the annual Visitors • Accommodation bookings through the Centre Association of Western Australia Esperance Visitors Centre rose from $539,470 (VACWA) conference, held in Kununurra. The in 2010/2011 to $678,670 in 2011/2012, a rise conference ran for three days and featured a of 25.8%. series of guest speakers on a diverse range • Overall commissions rose from $117,357 of topics including, staff recruitment, staff in 10/11 to $123,734 in 2011/2012, a 5.4% training, using social media as a promotional increase. This figure was severely affected by tool, the impact of natural disasters on tourism commissions earned from tour bookings that and the impact of cane toads on tourism. fell from $10,085 in 2010/2011 to $1,273 in • On the 1st of December 2011 the Esperance 2011/2012 – a direct result of the change in Visitors Centre co-hosted (with Tourism ownership of the Woody Island Cruises with Esperance) the December ‘ECCI Business the new owners not wishing to use the Visitors After Hours’. The function went well with Centre as a booking agent. about 30 guests attending the function held at • Advertising revenue (from building and website the Visitor Centre. advertising) rose from $4,571 in 2010/2011 to $7,920 in 2011/2012, a 73.275 increase. • In April 2012 Ross Beckett attended the Sydney Caravan, Camping and Touring Supershow • Souvenirs and CALM Pass sales rose from and represented Australia’s Golden Outback $109,593 in 2010/2011 to $114,462, a 4.4% (AGO). This involved ‘manning’ the AGO increase. booth on the Tourism WA stand and answering questions from prospective visitors about Our Web site continues to be popular with 187,138 things to see and do around the AGO and the unique visits in 2011/2012, averaging 3,599 visits a Esperance regions. Costs were covered by week. This represents a 23% increase in visitation AGO. to our website. The average web visitor looked at 4
22 Shire of Esperance 2011/2012 Annual Report • In May 2012 Visitor Centre Representatives spent half a day with The Hon. Kim Hames MLA – Minister for Tourism. The Minister was taken on a cruise to Woody Island which was also attended by representatives from Tourism Esperance, ECCI and Cr. Paul Griffiths. • In June 2012 it was announced that Lucky Bay won the ‘Natural Resource Management Award’ at the ‘Keep Australia Beautiful WA Clean Beaches Awards’; the submission was put together by Tahnee Adamson, and Milton Valli represented the Visitor Centre at the Awards Breakfast on Wednesday 13th June. • The Australian Traveller Magazine “100 Best “The Visitor Centre Views in Australia” awared Esperance the 31st spot due to a picture submitted of the Great web site averages Ocean Walk Cycle way. 3,599 visits a week.”
Figure 4 - Visitor Centre Door Count
23 Community Services
Esperance Civic Centre The Esperance Civic Centre provides the focal point of entertainment in the south east of Western Australia.
Entertainment During the 2011/2012 financial year the Esperance The increase in expenditure for the 2011/2012 Civic Centre presented 26 shows (up from 24 in the financial year is matched by an increase in income 2010/2011 financial year). Seven of these shows for the same period. In dollar terms there was an were venue hire’s, which was an increase of six from increase of $50,787 (this is a 7.8% increase) in the previous financial year. This year there were two expenditure and an increase of $57,852 (23.8%) in simulcast shows (both venue hire’s) from the Perth income - detailed in Figure 5. Concert Hall they were the Vienna Philharmonic Orchestra and the Western Australian Symphony Orchestra. The Civic Centre also continued its collaborative relationship with the Bijou Theatre by assisting in the sale of tickets for all their shows. In 2011/2012, 6,743 tickets were sold to all shows at and presented by Esperance Civic Centre and at The Bijou Theatre. Ticket sales included: • 779 Concession Card holders and Seniors Card holders (a 32.4% decrease) Figure 5 -Civic Centre Income and Expenditure • 25 Companion Card holders (up from 21) • 224 Friends of Esperance Civic Centre (up from 175) • 2,082 internet sales (a 10.1% decrease) • 469 from the Library and The Visitors Centre (down from 734) The total figure of 6,743 represents a 14.2% decrease on 2010/2011 ticket sales. However our revenue increased by 10.5% - $191,993.5 in 2011/2012 compared to $173,753 in 2010/2011.
24 Shire of Esperance 2011/2012 Annual Report “The venue is utilised for a wide variety of community events”
Venue Hire / Use The Civic Centre hosted a wide variety of functions • The Yellow Dot Ball across the 2011/2012 financial year, including: • Jehovah’s Witness Convention – a three day • 92 meeting days event • 32 private functions and wedding receptions • Seventh Day Adventist services – seven days over a three week period • 13 funerals The Esperance Civic Centre was also the venue • 4 Blue Light Dance Parties for two significant community celebrations and the Other highlights at the Esperance Civic Centre funeral for a former civic leader. included: • In January 2012 Fred DeGrussa celebrated • Annual Shire Senior Citizens dinner his 100th birthday surrounded by family and friends. • Annual Esperance Senior High School Ball and careers day • In March 2012 former Shire President Ian Mickle was made a ‘Freemen of the Shire’. • Annual Esperance Music Festival over three days • Also in March 2012 former Shire President David Reichstein’s life was celebrated at a • Annual Dance School End of Year Concert(s) funeral in the Auditorium. • Bridge Club Conference over four days In 2011/2012 The Esperance Civic Centre continued its strong association with both CircuitWest and • Apex Teenage Fashion Awards Country Arts WA. Ross Beckett continued as a • Esperance Chamber of Commerce and Management Committee member of CircuitWest Industry awards night and a Board Member (representing Regional Performing Arts Venues) of Country Arts WA. Mr • Esperance District Recreation Association Beckett attended two special CircuitWest meetings, Sports Star of The Year award the Australian Performing Arts Centres Association annual conference and Long Paddock, in Perth and • Six School graduations (plus rehearsals) South both were funded by Country Arts WA. Mr Beckett East Premium Wheat Growers Association also represented Country Arts WA and the Esperance Ladies Day Civic Centre at the “Open Your Eyes” Regional Arts • Woolworths Charity Ball Conference in September of 2011 in Geraldton.
25 Community Services
Bay of Isles Leisure Centre The Bay of Isles Leisure Centre provides access to a number of services for the community. This includes recreational, lap and hydrotherapy pools, gym, fitness classes, venue hire for sporting groups, sauna and spa.
In this financial year attendance through the Bay Improvements made at the BOILC to increase of Isles Leisure Centre (BOILC) has dropped by efficiencies, reduce costs and ensure legislative 30,000 in total - see Figure 6. However, 24,000 of compliance include, but are not limited to, the this decrease is from casual pool visits and matches following: with anecdotal observation that the pools have been • An energy audit of the facility was conducted quieter this year, without any determinable reason. and the recommendations resulted in The other areas suffering decreases in attendance improvements including the reactivation of are explainable. Firstly, group fitness has had the automatic temperature control systems for the effect of ESP Fitness opening in town and offering a four swimming pools and investigation into the larger suite of classes, particularly evening classes air handling unit control systems. Changing which BOILC cannot offer, this inturn impacts crèche from manual to automatic control has shown attendance. There was also a noticeable drop in a trend to fewer spikes in gas use and a more Function and Sports Hall attendance. However, this consistent gas use pattern. figure is already under-reported by possibly 50% since gymnastics and taekwondo user groups do • Backwash waters from the swimming pools is not register their entry into the facility. In 2010/2011 now discharged on site to sewer from a holding payments were made at reception but in 2011/2012 tank at a controlled low flow rate. user groups are invoiced directly and do not at any time need to approach reception. Once Entry Control • The chlorine gas storage area was upgraded systems are operating these attendance statistic will to comply with the Dangerous Goods Storage increase dramatically. Act and simultaneously the on site storage area for chemicals was improved ensuring staff safety. • Sight glasses were installed into the backwash discharge lines enabling water to go to waste for only as long as needed rather than for a set period of time. There will be a reduced duration and frequency of backwash for the coming years with anticipated large water savings and associated reduction in pool chemical use. • An automatic floor cleaning machine for the pool concourse was purchased. This provides a more hygienic and clean surface whilst using less water and man hours.
26 Shire of Esperance 2011/2012 Annual Report “Improvements have been made to increase efficiencies, reduce costs and ensure legislative compliance”
• Permanent pool blanket rollers were installed for the rehabilitation and lagoon pool which now enables a single staff member to complete the job. The 25m pool blanket trolleys are now stored on a newly built paved area immediately outside the deep end of the facility. These will soon be operational now the dive blocks have been removed. • A Preventative Maintenance Schedule has been created and maintained. This was achieved in consultation with all Shire Buildings and it is now possible to refer to a single document to determine when inspections and programmed maintenance is due. This will also lead to savings as potential suppliers can be approached for multi-year contracts. Figure 6 - Attendance Statistics 2009/2010 2010/2011 2011/2012 Memberships sold 1001 979 976 Casual Gym 3887 4557 4474 Casual Class 1997 2741 1831 Member Gym 29484 35873 32068 Member Class 7863 8857 8922 Casual Pool 95129 91390 67772 Member Pool 30158 27674 27126 Staff entry (all) - 2206 2101 Swim School Enrol 2265 1874 1830 Crèche 3748 3540 2884 Function & Sports 4494 3986 2723 Total entries 176,760 180,824 149,901 (Health & Fitness) 47798 52028 47295 (Pools) 125287 119064 94898
27 Community Services
Bay of Isles Leisure Centre
Finances The largest of metropolitan centres achieved 93% cost recovery primarily due to their very large health Operating figures in Figure 7 are taken from the and fitness centre operations generating significant ‘BOILC Business Plan Operating Report’. This does profit to offset the costs of operating swimming pools. not include: The Shire of Esperance needs to determine an i) depreciation of the building ($127k), acceptable cost recovery figure and therefore ii) building expenses ($398k) or estimate the proportion of the expenses of the facility supported by rate payers as a service to the iii) Shire’s administration allocation ($88k). community versus the revenue generated by the facility. In a positive development, both attendance The BOILC does not currently pay for gas use, which and income will be highly likely to increase in is approximately $235,000 per year. Our operational 2012/2013 with the implementation of Entry Control cost recovery has remained at 74% which is a positive systems to the facility for the first time and the statistic given the large decrease in total attendance. employment of a Health and Fitness Supervisor The decrease in total attendance increased the ‘cost to improve membership retention and customer per attendance’ figure for the facility. service. Benchmarking services engaged in 2011/2012 Figure 7 - Annual Figures: Operating consider the total cost, rather than just operating, and BOILC compared similarly to most WA facilities 2009/2010 2010/2011 2011/2012 of similar size. Our cost per visit was $3.09 in comparison to $2.80 for the others. However, once Expenditure $1,021,927 $1,105,950 $1,178,472 a figure for gas consumption is included the cost will Income $762,523 $813,093 $876,469 increase. This is also a result of our low attendance and small catchment population. However, BOILC Deficit $259,404 $292,857 $302,003 was fifth top on the whole list for attendance based Total Attendance 176760 180824 149901 on catchment population indicating our small population use the facility frequently. Cost per visit $1.46 $1.62 $2.01 Figure 8 details are taken from the ‘BOILC Cost Recovery 74% 73% 74% Committee Operating Report’ and include all costs associated with the facility. Rec Centre Building Figure 8 - Annual Figures: All expenses expenses were $400,000 this year, $150,000 over budget – primarily due to urgent repairs required 2009/2010 2010/2011 2011/2012 on the lagoon pool wall and the requirement for the Expenditure $1,446,870 $1,620,999 $1,794,747 chlorine gas storage area to become compliant with the Dangerous Goods Storage Act. Income $762,523 $813,093 $876,469 In 2010/2011 benchmarking, only Swan Park Leisure Deficit $684,347 $807,906 $918,278 Centre in Perth had a worse cost per visit figure Total Attendance 176760 180824 149901 with $6.35. They too had significant capital building expenditure in that year. Augusta-Margaret River Cost per visit $3.87 $4.46 $6.12 had a cost recovery of only 49% and a comparable Cost Recovery 53% 50% 49% metro facility, Leisurepark Balga had 60%.
28 Shire of Esperance 2011/2012 Annual Report Figure 9 - Health and Fitness Attendance
Health and Fitness Attendances Figure 9 indicates the total member and non- member attendance to both the gym and group fitness classes. It is apparent that the general shape Figure 10 - Aquatics Attendance of the graph is the same as the preceding year with troughs in the school holidays, particularly over the summer break and Easter. Attendance in the pre- Christmas period was inflated with the attendance of Horizon Power and John Holland employees who were on short-term corporate memberships with the facility. Post-Christmas many of their individual memberships were not renewed and, combined with the lower Group Fitness attendance left our attendance lower than the corresponding period in the previous year. Membership levels have been higher or equal to the previous year. Aquatics Once again a very different pattern to metropolitan centres is seen with the complete absence of a heat Group Fitness Classes related increase in pool attendance during January to March as shown in Figure 10. There is a similar Esperance appears to have an inverse attendance trend over both years with an Easter trough evident pattern to metropolitan centres with our numbers but with a clear reduction in attendance this year reducing in summer time, seemingly due to people across all the months. We can only speculate as to departing during school holidays. However, unique the reason, it’s not immediately evident. to 2011/12 was the opening of a new Group Fitness facility in Esperance in direct competition Swim School to our programs. This occurred in December and exacerbated the usual drop in attendance at that Swim School continues to struggle to attract and time. The new business offered free three month retain Swim Instructors. However this has stabilised memberships plus regular evening classes which over the latter half of 2011/2012. The young immediately caused some of our members to leave instructors now have a year of teaching experience to obtain better value for money and access to more which helps with the parents’ perception. A dip in classes. Term 4 this year in comparison to last year is due to a greater range of classes offered by VacSwim During autumn our numbers have increased once (Education Department) over summer and parents more and happily are not too much below last year. opting for this. Total numbers for the year were 31 May had a spike in total numbers as it was a five less than the previous year. week month with only four weekends included.
29 Community Services
Bay of Isles Leisure Centre
Greater Sports Ground Re-Development Funding Partnership With Sports Clubs Update Four projects were funded this financial year by the The Football Development Commission released Department for Sport and Recreation through the its report about football in Esperance and the CSRFF, the associated sporting clubs and the Shire. main recommendation was for Ports Football Club • The Esperance Motocross Club received to remain located on the Greater Sports Ground funding to upgrade its ablution block. (GSG). The potential playing field space around Ports is considered more than adequate for a • Grass Patch Tennis club upgraded its tennis significant increase in participant numbers based on court playing surfaces. the highest estimates of likely growth. Consequently the GSG Master Plan was amended to retain Ports • Esperance Cricket Association upgraded its Oval. nets on Esperance Oval and installed new nets on Newtown Oval. Following this decision Indoor Stadium user groups were consulted with at length regarding • Esperance Soccer installed lighting towers on future requirements in the proposed new stadium. Little Lords Oval. Ultimately several alternative options of court and room layouts were considered, all of which fit inside Public Open Space Strategy the proposed building ‘footprint’. This footprint Recently there was an audit of the Shire’s parks and has been approved by Council and along with the reserves completed. This was necessary to gain a southern car park being upgraded to a sealed and complete understanding of the asset management kerbed surface. issues for all reserves without splitting these into separate components such as playground Future GSG direction involves seeking a feasibility equipment, reticulation, mowing. This audit lead to the study to be carried out by an independent consultant, development of a single document addressing public final plans to be sought and most importantly Council open space and may serve to consolidate various to determine when funding will be made available previous stand-alone documents such as the Trails so that Community Sports and Recreation Facilities Master Plan, Playgrounds Strategy and Physical Fund (CSRFF) funds can be applied for. This will Activity Plan all of which had involvement from the require the engagement of the Department of Sports Manager Recreation and Youth. Department of Sport and Recreation as there are other projects likely to and Recreation have expressed a strong interest be asking for over $1 million in the region. in providing input at an early stage, particularly in Once a timeline is found then a number of other relation to Education Department lands and their jobs within the GSG can be scheduled including accessibility or otherwise to the public. demolition of badminton hall and netball hall, potential tennis club courts extension, creation of an ablution block in the north east corner and alterations to the agricultural society buildings. These jobs will cascade once the stadium redevelopment occurs.
30 Shire of Esperance 2011/2012 Annual Report Looking Ahead Entry control systems will be installed in Spring 2012 A significant increase in the number of group as the final phase of an upgrade to the entry and fitness classes offered at BOILC is going to occur foyer area of the leisure centre. It is expected that in September with the implementation of Les MillsTM this will increase recorded participation and revenue pre-choreographed classes. Restricted attendance significantly plus improve the safety of young evening classes will be added to the time table and children around the aquatic area. will be conducted in the current indoor cycling room. This is not an ideal situation but evening classes Recommendations were made in the Energy Audit for are paramount for the success of a group fitness installation of Solar Heating systems to pre-heat the program and it is hoped the redevelopment of the pool water thereby reducing the gas consumption. Health and Fitness area will prioritise the creation Although the regular use of pool blankets is likely of a dedicated Group Fitness Studio and turn the to reduce gas consumption by around 20% the Group Fitness area of the facility into the revenue unit cost of gas is likely to continue to increase. It generating exciting area of the facility it ought to be. is imperative that the Council prepare for the effect of paying full price for gas consumption in 2023 by During the 2012/2013 financial year a new 0.5 FTE allocating money for suitable capital improvements Health and Fitness Supervisor position will be filled to reduce consumption prior to this date. with the primary aim to drive membership retention and customer service of the dry side of the facility A report from an independent consultant into the plus supervision of the group fitness program. potential for redevelopment of the Bay of Isles ‘dry This should have an immediate positive effect on side’ is expected around November. It is expected membership numbers and participation. that this will provide direction for revenue-generating improvements to the facility, positively affecting membership numbers and group fitness class attendance.
31 Community Services
Esperance Volunteer Resource Centre Esperance Volunteer Resource Centre provides information and support to volunteers and agencies working with volunteers.
The Esperance Volunteer Centre was successful with 319 volunteers and volunteer managers in winning the Best Local Community Group award attending topics as diverse as Mental Health First at the 2011 Esperance Chamber of Commerce and Aid and Suicide Prevention through to Governance Industry awards for the second year running. The and Recruiting, Recognising and Retention of centre officially opened its doors on 4 May 1999 Volunteers. Figure 11 provides a comparisson of with the assistance of funding from the Federal individualls and organisations assisted. Department of Health and Aged Care, at the time, through their Volunteer Management Program, The Esperance Volunteer Resource Centre was auspiced by the Shire of Esperance. The funding involved in the 2012 Kids Fun Day, a large and very model of short annual funding has remained fairly successful event held annually in Esperance. The unchanged over the years. However, in late June centre was able to help as part of the management 2012 we finalised negotiations to continue our committee for the event and assisted in the recruiting Federal Funding for a further three years and we and management of the volunteers on the day. were successful in bidding for State Government The Volunteer Resource Centre would like to funding which covers the next five years. The Centre acknowledge all members of the community who has never before had the luxury of knowing funding volunteer, without your commitment to volunteering was guaranteed into the future for this length of time. some community events could not occur or would be In the last year the centre has assisted 299 people to of a smaller scale. volunteer either through individual interview, phone The winning of our second Best Local Community contact or email assistance. We have worked with Group award was fantastic and is something we over 70 agency enquiries from the short query about could not achieve without the assistance of many volunteer insurance to the longer assistance on how wonderful community members who volunteer their to review and change a Constitution. The Centre time. organised and facilitated over 16 training sessions
“we were successful Figure 11 2009/2010 2010/1011 2011/2012 in bidding for State Individuals assisted to volunteer 283 119 299 Government funding which covers the next Community organisations assisted 80 72 71 five years.” Volunteers Trained 188 236 228 Volunteer Managers Trained 88 96 86
32 Shire of Esperance 2011/2012 Annual Report 33 Engineering Services
Engineering Services is responsible for: infrastructure and property services, local roads, bridges, footpaths, drainage; asset management; airport; waste collection and recycling; cemeteries and foreshore erosion management and development.
A significant part of the year has been spent in • Resealed approximately 16.5km of rural developing the Esperance Waterfront Project ready sealed roads for works to commence in the 2012/2013 financial year. Along with this a number of peripheral projects • Construction of approximately 3.2km of new have commenced including a review of the Norfolk rural sealed roads to the value of $ 425,576 Pines throughout the Esperance townsite, review • Asphalt overlays on urban roads to the value of all playground equipment for compliance with of $378,467 Australian Safety standards, a review of the Road Network Hierarchy, commencement of a Public • Footpaths – Replaced 1km of slab footpaths Open Space review and an audit of the Eastern with brickpaved paths, constructed Suburbs Waste Water Reuse Scheme. approximately 1km of new footpaths Also officers have been working to secure funding for • Spent $51,184 on new kerbing in the residential the new Myrup Waste Water Facility which will see and industrial areas in Esperance. the upgrading of the existing truckwash facility and • A number of solar lights were installed in the integration of the waste water facility currently remote location along the Twilight Beach located at the Wylie Bay Waste Facility. footpath Roads Parks and Gardens The Shire of Esperance is responsible for the Works were completed on the new Walker Street management and maintenance of the largest Playground, valued at $180,000, which included road network of any local government in Western playground equipment, landscaping, street furniture, Australia with 819 km of sealed roads and 3,679 km footpaths, nature trail and tree top viewing area. This of unsealed roads project represents the continuation of the Esperance In the 2011/2012 financial year we were able to reserve upgrade strategy, designed to develop more complete the following works – usable recreation space. • Gravel re-sheeting of approximately 113km of This year also saw a review of Parks and Gardens gravel roads including 59km on the Cascade - operations and infrastructure, to develop more Lake King Road. efficient work programs and an increased level of service for our recreation spaces. The review also • Limestone re-sheeted of approximately 55km determined that a significant amount of investment of limestone roads was required to upgrade our existing aging • Reconstructed approximately 10km of rural reticulation network. This program is commencing in sealed roads the 2012/2013 financial year.
34 Shire of Esperance 2011/2012 Annual Report “The Wylie Bay Waste Facility celebrated it’s 10 year anniversary in 2011”
Waste Management Asset Management This year saw the commencement of a review of This year saw the continuation of data collection waste management within the Shire of Esperance and the development of asset management plans and the development of a Waste Disposal Strategy for all shire assets. The asset management plans which looks at the future of the Wylie Bay Waste identify our assets, what they are, where they are, Facility. The review is being developed further in what condition are they in and what needs to be consultation with the Department of Environment spent on them in the future to maintain them. This and Conservation prior to discussion with the information then feeds into the long term financial community. plan to determine what Council needs to be allocating for the maintenance of our existing assets The Wylie Bay recycling centre also celebrated its into the future. Currently our asset base is valued at 10 year anniversary with the Esperance community approximately $651m. having recycled over 10,000 ton of material in that period. The recycling centre has continued to The Shire road asset’s were also reviewed with the operate in an efficient manner and sent 1,300 ton introduction of new asset management software of product to Perth for recycling in 2011/2012. This (ROMAN II). This also involved the collection of year saw the introduction of e-waste and florescent condition data on our entire sealed and unsealed globe recycling. road network. The entire road network was traversed over a five week period with a variety of data Esperance Airport collected for input into the new software system. This year saw the commencement of the Airport This information will be used to develop the Roads redevelopment for the introduction of security Asset Management Plan in 2012/2013. screening on 1 July 2012. The works involved a $2.5 million upgrade of the airport terminal to accommodate the screening equipment and a secure boarding area. The screening equipment was purchased with the assistance of a federal government grant and is valued at $650,000. The cost of the equipment including running and replacement and the engagement of a contractor to undertake the screening also will see an increase in airfare prices between Esperance and Perth of $40 per person on the outbound ticket. This price represents the total cost of screening per passenger per ticket. The 2011/2012 financial year saw approximately 48,000 passengers travel through the airport.
35 Development Services
Development Services is responsible for: health services such as water and food inspection, immunisation services, toilet facilities, noise control and meat inspections and animal control; building services, including inspections, licensing, certification and enforcement; planning and development approval and environmental services.
Town Planning Amendments 6, 8, 9 and 10 to Local Planning Audits were carried out by our Planning staff to Scheme No. 23 were Gazetted in 2011/2012. provide input in developing draft stategies for access A further 5 Scheme Amendments were being and parking, residential and industrial land. These processed throughout the year. strategies are temporarily on hold to allow for the development of the SuperTowns Growth Strategy A significant number of development applications and Town Centre Revitalisation plan. were received and determined, by shire staff as per Figure 12. Local Planning Policies for Holiday Homes and Wind Turbines were adopted in 2012, and a further policy The Commercial Centre Strategy was also adopted for Industrial Precinct Design Guidelines will be by Council. This Strategy aims to guide the provision considered by Council in late 2012. of commercial and associated activities within the region during the next 10 to 15 years. Further development has been made into the implementation of a Geographic Information System A Business Case for the Town Centre Revitalisation (GIS). The improvements, both in the range of data Plan was prepared for the SuperTowns project, that is displayed as well as the quality of the data and was sucessful in receiving $380,000. The available, are enabling officers to more fully and Background Analysis document for the Plan has efficiently assess development applications. been developed, and will continue to develop over the next year.
Figure 12 - 2011/2012 Development Application Approvals Applications Applications Received Determined Development Applications 292 276 Subdivisions 23 23 Home Occupations 5 5 Home Occupation Renewals1 17 13
1Home Occupation Renewals have reduced based on a number becoming exempt under Local Planning Scheme No. 23.
36 Shire of Esperance 2011/2012 Annual Report 37 Development Services
Environmental Health During 2011/2012, Environmental Health and Environment Services continued to undertake inspections and actions to promote community health and well being. This included undertaking a range of activities including inspections, monitoring of Shire activities, audits, provision of educational material, complaint investigation and resolution. The Environmental Health team completed over 1000 assigned tasks associated with actives relating to food premises, caravan parks and camping grounds, environmental protection, public buildings, accommodation and aquatic facilities and a number of other health related premises. Some of this activity is outlined in Figure 13.
Figure 13
Inspections Eastern Suburbs Water supply Scheme Food 333 Chemistry 36 Effluent Disposal Systems 39 Microbiological 240 Caravan Parks & Camping Grounds 9 Myrup Truckwash 6 Hairdressing and Skin Penetration 4 Recreational Water 55 Lodging House 27 Food Safe Workshops provided 7 Offensive Trade 5 Public Buildings 106 Meat Inspection – Animals Inspected Aquatic facilities 10 Bovine 13,551 Ovine 116,821 Sampling Activity
Food: West Australian Department of Health Co-ordinated Food Sampling Programs Participation 14 Samples collected 21 Rainwater Tank Sampling 18 Aquatic Facilities 137 Air Handling Systems 24 Mosquito 21 Potable Water (Microbiological) 102 Landfills 48
38 Shire of Esperance 2011/2012 Annual Report Building Building Legislation Changes During the 2011/2012 financial year, Building In April 2012 sections of the Local Government Services prepared for new building projects such as (Miscellaneous Provisions) Act 1960 were repealed the West Beach toilets (currently at design stage) so that the new Building Act 2011 could take full and overseeing additions to existing buildings, some effect. The changes have resulted in considerable of which were the Home Care Building (kitchen administration and building approval process additions) and Bay of Isles Leisure Centre chemical changes. storage area. Building Approvals The Building Maintenance Program has been split into two areas, planned and reactive maintenance In total, 246 building permits were issued by the Shire so that a measure can be put into place to confirm of Esperance, worth over $34 million dollars. These that planned maintenance of the Shires built comprised of 52 residential dwellings, 14 commercial assets is having the desired effect which is to and industrial buildings, 112 outbuildings and 68 minimise reactive maintenance by implementing additions and alterations made up the remainder of a comprehensive maintenance program. Council the approvals. See Figure 14 for details. allocated funds in the 2011/2012 year for building asset maintenance which is also being used to inspect and rationalise existing buildings, ensuring that they will be brought up to standard, complying with legislative requirements.
Figure 14 - Breakdown of Building Approvals 2010/2011 2011/2012 Description Number Value Number Value New Single Dwellings/Duplexes 72 $22,313,885 52 $14,969,358 Alter to Dwellings 45 $2,905,259 25 $2,432,174 Approval Certificates Dwellings 0 0 0 0 (Retrospective Approval) Industrial, Commercial 16 $11,450,982 14 $5,320,689 Alter to Industrial, Commercial 13 $1,008,414 15 $9,990,503 Approval Certificates Industrial, 0 0 2 $13,000 Commercial (Retrospective Approval) Outbuildings 126 $1,842,915 106 $1,573,716 Alter to Outbuildings 16 $127,737 6 $25,000 Approval Certificates Outbuilding 1 $18,000 0 0 (Retrospective Approval) Sundry Structures (Retaining walls, 19 $198,000 18 $172,998 Fencing, etc) Sundry Structures (Retaining walls, 0 0 0 0 Fencing, etc) (Retrospective Approval) Demolition 5 $78,275 4 $28,355 Pools 2 $59,000 4 $57,500 Total 315 $40,002,467 246 $34,583,293
39 Corporate Services
Corporate Services is responsible for: audit and grant management ; finance management; long term financial planning; information technology; records management; statutory reporting; administration; customer service; licensing and rates.
Corporate Services changed leadership this year As a result of these changes the annual Shire budget with Mr Darren Kennedy leaving the Shire to take commencing 2013/2014 and subsequent annual up other opportunities. Mr Kennedy was an asset budgets will need to be predominately derived from to the Shire implementing many improvements for a Council adopted Corporate Business Plan and the long term benefit of the Shire and its residents. accompanying Long Term Financial Plan. These Mr Shane Burge has taken on the role since May changes are a major deviation from what the Shire and 2012 and is keen to capitalise on the opportunities local government have traditionally done in the past and challenges open to the Shire to ensure ongoing although Council and staff are progressively working sustainability. through the new legislative framework to ensure that compliance is achieved within the stipulated New legislation introduced by the State Government timeframes. The majority of the changes will enable has seen local government make preparations for the local government industry within WA to move the Integrated Planning and Reporting Framework. towards closer uniformity with the rest of Australia. The new framework is designed to improve the overall standard of long term strategic planning and financial management within Western Australian local governments. A particular emphasis has been placed on community engagement with the preparation of the strategic plans and for financial planning to take a longer term view.
“Emphasis has been placed on community engagement with the preparation of Strategic Plans for long term Financial Planning”
40 Shire of Esperance 2011/2012 Annual Report Information Technology In the year leading up to 7 November 2011, IT conducted the “Managed Services Migration” project. This was an extensive project to inform and prepare staff for the transition of most IT systems to a secure data centre in Sydney. The majority of the project focused around analysis of staff interaction with the IT systems, and then defining and mitigating risks with the move. The move was well tested, and successfully completed on the 7 November 2011. The result of the move to a “Managed Services” environment has ensured the Shire has complete business continuity and a disaster recovery system with respect to its IT systems. A new Council Agendas and Minutes system know as InfoCouncil was deployed during the year. This program allows agendas and minutes to be managed through dedicated software and includes processes to upload minutes directly to the Shire’s website. Preparation for telephone services to move to VOIP (TIPT) was performed, which included re-cabling of the Shire’s Admin building’s wired network, and a logical redesign of the whole Shire’s physical network (Administration building and attached out-centres). A new Customer Request Module(CRM) system was configured and is ready for testing. Over the coming year there will be an assessment of the in-house Management Accounting Reporting Software (MARS) that was developed in-house. This software is no longer supported from an IT perspective therefore a sustainable IT solution needs to be implemented to ensure a continuance of management reports can be retained within the Shire.
41 Corporate Services
Statutory Reports is for upper body training only whilst the Multi Plex station provides a full body workout Report under Section 29(2) of the Disability when required, both machines are wheelchair Services Act 1993 friendly. Health and Fitness staff have been The Shire of Esperance has continued its trained to work with people with disabilities to commitment to provided improved access for people assist in providing guidance and safety advice with disabilities. on the use of all equipment. The Disability Access and Inclusion Plan Working • The introduction of the Swim ability squad has Party monitor’s the Disability Access and Inclusion allowed children with disabilities to maintain Plan 2010/2012 (DAIP). Key projects are identified their water fitness and increases the likelihood and an implementation schedule is set out for each of their inclusion into a mainstream swimming financial year. For the 2011/2012 financial year the school program. following projects were undertaken: Compliance with the State Records Act 2000 • Promote and publish details of the DAIP and The Shire submitted an amended Recordkeeping how persons with a disability or their carers Plan to the State Records Office on 26 July 2011. can have input into the plan. This amended plan was approved by the State • Publish and advertise the process for lodging Records Commission on 2 December 2011. complaints or requests for works with the This Plan describes the Shire’s commitment to Shire. good and compliant recordkeeping procedures and • Advertise and promote the options available identifies future projects. for people to receive information in differing The Shire main focus in Records has been improving formats from the Shire. the Electronic Document Management System • Over the last five years the Shire has been (EDMS) TRIM, enhanced with a new business replacing all concrete slab footpaths in the classification system and semi automated retention central business district to ensure smooth and and disposal of folders. easy access for all community members, this The Shire has also been addressing the disposition year saw the annual works program complete backlog of hardcopy files held in storage within this project along The Esplanade. The Shire Records. The Shire has currently sentenced 8,285 also regularly sweeps concrete footpaths folders, of which: of loose stones, installs kerb ramps in new footpaths, and requires provisions for disabled • 575 files identified as permanent archives people in new commercial buildings and where major alterations have been undertaken in • 1,336 files identified as local archives existing buildings. • 3,053 files identified as inactive records, for • The Bay of Isles Leisure Centre installed future disposal, and two new machines in the gymnasium that • 3,321 files identified for destruction, which specifically target strength training and can be have since been destroyed. utilised by able bodied patrons and patrons with a disability. The cardiovascular machine
42 Shire of Esperance 2011/2012 Annual Report National Competition Policy Information Statement The Competition Principles Agreement is an Inter- On 19 April 2012, the Shire updated and approved government Agreement between the Information Statement as required by the Freedom of Information Act 1992. The Information the Commonwealth and State/Territory Governments Statement can be obtained from the Shire’s website, that sets out how government will apply National Administration Office or on request. Competition Policy principles to public sector organisations within their jurisdiction. Records Training The State Government released a Policy Statement The Shire has developed a structured induction effective from July 1996 called the Clause 7 and training program to ensure that employees, Statement, which forms part of the Competition contractors and elected members are aware of their Principles Agreement. The Clause 7 policy document role and responsibilities in regard to compliance with sets out nominated principles from the Agreement the Shire’s Recordkeeping Plan. that now apply to Local Government. The provisions of Clause 7 of the Competition Principles Agreement The Training consists of: require local government to report annually as to • Introduction to Records Management the implementation, application and effects of the Competition Policy. • Records Awareness Training (RAT) The Competition Principles Agreement, under • TRIM (Electronic Document Management Clause 7, specifies three broad areas of reporting. System) Training Manual These are: • Specific TRIM training targeting priority areas. 1. Competitive Neutrality; • Advice to staff regarding recordkeeping or 2. Structural Review of Public Monopolies; and TRIM on an ongoing as needs basis. 3. Legislative Review. This training is provided to all employees who have record keeping duties. Employees are advised In accordance with the requirements of the National of any additional information such as policies and Competition Policy, the Shire of Esperance makes procedures which are published on the Shire’s the following disclosures for 2011/2012. intranet. Performance Indicators The Records Department is currently maintaining statistical information for work processes within the department. In accordance with the State Records Act 2000 the Shire has developed performance indicators based on the statistical information gathered.
43 Corporate Services
Competitive Neutrality Legislative Review The objective of competitive neutrality is the Parties to the National Competition Policy package elimination of resource allocation distortions arising agreed that legislation should not restrict competition out of local government ownership of significant unless: business activities. The benefits of the restriction to the community as a The Shire of Esperance has previously assessed its whole outweigh the costs; and operations and considers that it has one business activity that would be classed as significant under The objectives of the legislation can only be achieved the current guidelines. Also the Shire of Esperance by restricting competition. does not operate a business enterprise that has been Accordingly, the Shire of Esperance is required to classified by the Australian Bureau of Statistics as implement a systematic review of all of its existing either a Public Trading Enterprise or Public Financial legislation to determine whether there are any direct Enterprise. or indirect effects on competition. The number of activities to which competitive The Local Government Act 1995 requires all existing neutrality principles have been applied in the Local Laws to be reviewed every eight years. As part reporting period is Zero (0). of this process the intention to review Local Laws The number of activities to which competitive is advertised in the media giving residents and rate neutrality principles have been considered but not payers the opportunity to comment on any proposed applied in the reporting period is Zero (0). changes, additions or deletions to the Shire’s Local Laws. For the 2011/2012 Financial year there were During the reporting period the Shire of Esperance no changes to the Shire’s Local Laws: did not become aware of any allegations of non- compliance with the competitive neutrality principles • As at the reporting date the number of by-laws made by a private entity against the Shire. and Local Laws which have been reviewed and reformed as a result of any legislative Structural Review of Public Monopolies review is Zero (0); and In relation to Structural review of public monopolies, • As at the reporting date the number of by-laws the Shire of Esperance discloses the following: and Local Laws which the application of any legislative review principles were considered Structural reform principles have been applied to the but not applied is Zero (0). following number of activities in the reporting period: Zero (0); and Structural reform principles have been considered but not applied to the following number of activities in the reporting period: Zero (0). As no structural reform has been applied to any activities, the review requirements of principal SR.3 of Clause 7 of the Competition Policy Statement have not been undertaken.
44 Shire of Esperance 2011/2012 Annual Report Plan for the Future Employee Remuneration Section 5.56 of the Local Government Act 1995 Pursuant to Regulation 19B of the Local Government (the Act) requires a local government to plan for the (Administration) Regulation 1996, the following table future of the district. Furthermore, Section 5.53(e) sets out, in bands of $10,000, the number of Shire of the Act requires local government to provide an employees entitled to an annual salary of $100,000 overview of the Plan for the Future in its Annual or more: Report, including major initiatives that are proposed to commence or continue in the following financial Salary Band (S) 2012 2011 2010 year. $100,000 - $109,999 - 3 2 The Shire’s Plan for the Future was last reviewed $110,000 - $119,999 2 1 - during 2009/2010 and nominates the following $120,000 - $129,999 2 - - initiatives as projects of key strategic importance: $160,000 - $169,000 - - 1 • Esperance Foreshore Protection and $170,000 - $179,999 - 1 - Enhancement Project, now known as the $200,000 – 209,999 1 - - Esperance Waterfront Project Complaints • Greater Sports Ground Redevelopment; Section 5.53(2)(hb) of the Local Government Act • Tanker Jetty Maintenance; 1995 requires the Annual report to contain details of entries made under section 5.121 during the financial The Plan also identifies the imperatives of Asset year in the Register of Complaints. The 2011/2012 Management and Information and Communication year saw zero (0) entries made in this regard. Technologies as key operational objectives for the Shire for the period of the Plan. The Shire has performed significant work in both of these areas to ensure sustainable asset management is planned for now and into the future and that new technologies are embraced when proven efficiencies can be identified. A copy of the Plan is available from the Administration Office or from the Shire website www.esperance.wa.gov.au
45 46 Shire of Esperance 2011/2012 Annual Report 47 Annual Financial Report Table of Contents For the year ended 30th June 2012 2011-12
TABLE OF CONTENTS
Page Statement by Chief Executive Officer (i)
Independent Audit Report (ii) - (iii)
Statement of Comprehensive Income by Nature or Type 1 Statement of Comprehensive Income by Program 2 Statement of Financial Position 3 Statement of Changes in Equity 4 Statement of Cash Flows 5 Rate Setting Statement 6
Notes to and Forming Part of the Financial Report Note Significant Accounting Policies 1 7 Revenues and Expenses 2 21 Cash and Cash Equivalents 3 26 Trade and Other Receivables 4 27 Inventories 5 27 Property, Plant and Equipment 6 28 Infrastructure 7 30 Trade and Other Payables 8 32 Long Term Borrowings 9 32 Provisions 10 32 Reserves - Asset Revaluation 11 32 Reserves - Cash Backed 12 33 Notes to the Cash Flow Statement 13 39 Capital and Leasing Commitments 14 40 Contingent Liabilities 15 40 Joint Venture 16 40 Assets by Function and Activity 17 41 Financial Ratios 18 41 Trust Funds 19 42 Disposal of Assets 20 42 Information on Borrowings 21 43 Rating Information 22 45 Discounts, Incentives, Concessions and Write-offs 23 48 Interest Charges and Instalments 24 48 Fees and Charges 25 49 Grant Revenue 26 49 Employee Numbers 27 49 Councillors' Remuneration 28 49
Major Land Transactions 29 50 Major Trading Undertakings 30 53 Financial Risk Management 31 55
SHIRE OF ESPERANCE Windich Street, Esperance Western Australia, 6450 Tel: (08) 9071 0666, Fax: (08) 9071 0600 Email: shire @esperance.wa.gov.au www.esperance.wa.gov.au Annual Financial Report Audit Report For the year ended 30th June 2012 2011-12
(i) Annual Financial Report Audit Report For the year ended 30th June 2012 2011-12
(ii) Annual Financial Report Audit Report For the year ended 30th June 2012 2011-12
(iii) Annual Financial Report Statement of Comprehensive Income by Nature & Type For the year ended 30th June 2012 2011-12
NOTE 2012 2012 2011 Actual Budget Actual $ $ $ Revenue Rates 22 12,187,696 12,236,861 11,388,430 Operating Grants, Subsidies and Contributions 26 9,230,839 6,115,712 8,032,526 Fees and Charges 25 6,395,373 5,687,890 6,528,332 Interest Earnings 2(a) 1,190,025 772,000 980,277 29,003,933 24,812,463 26,929,565
Expenses Employee Costs (11,757,213) (11,471,982) (10,732,697) Materials and Contracts (6,521,682) (6,024,493) (7,102,086) Utility Charges (936,309) (918,740) (728,678) Depreciation on Non-Current Assets 2(a) (8,588,017) (8,579,880) (8,606,104) Interest Expenses 2(a) (54,999) (57,761) (43,600) Insurance Expenses (excludes W.Comp) (473,578) (462,568) (421,886) Other Expenditure (529,470) (616,220) (570,861) (28,861,268) (28,131,644) (28,205,912)
Sub-total 142,665 (3,319,181) (1,276,347)
Non-Operating Grants, Subsidies and Contributions 26 19,398,853 5,421,445 3,789,965 Profit on Asset Disposals 20 329,180 83,872 442,888 Loss on Asset Disposal 20 (16,187) (83,071) (89,079)
NET RESULT 19,854,511 2,103,065 2,867,427
Other Comprehensive Income - - -
Total Other Comprehensive Income - - -
TOTAL COMPREHENSIVE INCOME 19,854,511 2,103,065 2,867,427
This statement is to be read in conjunction with the accompanying notes.
Page 1 Annual Financial Report Statement of Comprehensive Income by Program For the year ended 30th June 2012 2011-12 NOTE 2012 2012 2011 Actual Budget Actual $ $ $ Revenue Governance 221,647 126,750 216,988 General Purpose Funding 18,643,845 16,019,419 16,369,377 Law, Order, Public Safety 351,855 320,989 758,791 Health 158,405 154,853 161,395 Education and Welfare 2,353,543 2,201,294 2,218,181 Community Amenities 2,659,854 2,299,800 2,569,867 Recreation and Culture 2,005,803 1,575,975 1,592,547 Transport 1,298,901 1,094,950 1,251,687 Economic Services 690,127 407,433 711,155 Other Property and Services 619,953 611,000 1,079,577 2 (a) 29,003,933 24,812,463 26,929,565 Expenses Excluding Finance Costs Governance (1,219,015) (1,095,029) (1,087,820) General Purpose Funding (384,080) (434,355) (341,288) Law, Order, Public Safety (1,154,889) (1,152,935) (1,945,899) Health (412,662) (386,501) (316,940) Education and Welfare (2,542,779) (2,545,960) (2,401,933) Community Amenities (3,783,020) (3,409,747) (3,538,407) Recreation & Culture (5,806,630) (5,442,619) (5,741,809) Transport (10,996,849) (10,848,353) (10,697,382) Economic Services (1,651,299) (1,873,370) (1,010,423) Other Property and Services (855,046) (885,014) (1,080,411) 2 (a) (28,806,269) (28,073,883) (28,162,312) Finance Costs Recreation & Culture (54,491) (57,761) (48,833) Other Property and Services (508) - 5,233 (54,999) (57,761) (43,600) Non-Operating Grants, Subsidies and Contributions Law, Order, Public Safety 26,227 12,713 38,190 Education and Welfare 22,651 20,000 99,213 Recreation & Culture 1,269,175 1,145 399, 944 Transport 4,069,934 5,387,587 3,252,618 Economic Services 13,942,866 - - Other Property and Services 68,000 - - 19,398,853 5,421,445 3,789,965 Profit on Disposal of Assets Law, Order, Public Safety - 234 - Education and Welfare 909 - - Community Amenities - 4,484 - Transport 177,699 79,154 56,608 Other Property and Services 150,572 - 386, 280 329,180 83,872 442,888 Loss on Disposal of Assets Governance - - (6,041) Law, Order, Public Safety (4,924) (2,646) (6,996) Community Amenities (6,691) - (5,002) Transport (4,572) (75,884) (52,432) Economic Services - (3,839) - Other Property and Services - (702) (18,608) (16,187) (83,071) (89,079)
NET RESULT 19,854,511 2,103,065 2,867,427
Other Comprehensive Income - - - Total Other Comprehensive Income - - -
TOTAL COMPREHENSIVE INCOME 19,854,511 2,103,065 2,867,427 This statement is to be read in conjunction with the accompanying notes. Page 2 Annual Financial Report Statement of Financial Position For the year ended 30th June 2012 2011-12
NOTE 2012 2011 Actual Actual $ $ CURRENT ASSETS Cash and Cash Equivalents 3 32,946,714 13,974,222 Trade and Other Receivables 4 2,160,390 2,065,552 Inventories 5 395,813 394,803 TOTAL CURRENT ASSETS 35,502,917 16,434,577
NON-CURRENT ASSETS Other Receivables 4 845,458 925,907 Inventories 5 10,604,952 10,410,993 Property, Plant and Equipment 6 36,214,149 35,167,321 Infrastructure 7 196,268,937 194,629,455 TOTAL NON-CURRENT ASSETS 243,933,496 241,133,676
TOTAL ASSETS 279,436,413 257,568,253
CURRENT LIABILITIES Trade and Other Payables 8 2,638,200 903,627 Current Portion of Long Term Borrowings 9 127,779 76,541 Provisions 10 1,591,472 1,534,149 TOTAL CURRENT LIABILITIES 4,357,451 2,514,317
NON-CURRENT LIABILITIES Long Term Borrowings 9 8,973,938 8,840,972 Provisions 10 219,170 181,621 TOTAL NON-CURRENT LIABILITIES 9,193,108 9,022,593
TOTAL LIABILITIES 13,550,559 11,536,910
NET ASSETS 265,885,854 246,031,343
EQUITY Retained Surplus 236,122,784 232,356,754 Reserves - Cash Backed 12 29,763,070 13,674,589 TOTAL EQUITY 265,885,854 246,031,343
This statement is to be read in conjunction with the accompanying notes.
Page 3 Annual Financial Report Statement of Changes in Equity For the year ended 30th June 2012 2011-12
RESERVES ASSET RETAINED CASH REVALUATION TOTAL NOTE SURPLUS BACKED RESERVE EQUITY $ $ $ $
Balance as at 1 July 2010 127,415,662 11,363,104 104,385,150 243,163,916
Correction of Errors 104,385,150 0 (104,385,150) 0 Restated Balance 11 231,800,812 11,363,104 0 243,163,916
Net Result 2,867,427 - - 2,867,427
Total Other Comprehensive Income - - - -
Transfers from/(to) Reserve (2,311,485) 2,311,485 - -
Balance as at 30 June 2011 232,356,754 13,674,589 0 246,031,343
Net Result 19,854,511 - - 19,854,511
Total Other Comprehensive Income - - - -
Transfers from/(to) Reserve (16,088,481) 16,088,481 - -
Balance as at 30 June 2012 236,122,784 29,763,070 0 265,885,854
This statement is to be read in conjunction with the accompanying notes.
Page 4 Annual Financial Report Statement of Cash Flows For the year ended 30th June 2012 2011-12 NOTE 2012 2012 2011 Actual Budget Actual Cash Flows From Operating Activities $ $ $ Receipts Rates 12,217,845 12,258,861 11,362,217 Operating Grants, Subsidies and Contributions 9,445,780 6,190,712 8,318,079 Fees and Charges 6,219,060 5,833,469 6,552,302 Interest Earnings 1,082,155 772,000 976,483 Goods and Services Tax 3,028,167 2,100,000 1,690,512 31,993,007 27,155,042 28,899,593 Payments Employee Costs (11,580,123) (11,272,427) (10,557,396) Materials and Contracts (6,104,917) (5,093,238) (7,629,535) Utility Charges (895,809) (918,740) (750,985) Insurance Expenses (473,578) (462,568) (421,886) Interest Expenses (49,471) (57,761) (48,882) Goods and Services Tax (1,828,014) (2,100,000) (1,835,141) Other Expenditure (528,220) (616,220) (570,861) (21,460,132) (20,520,954) (21,814,686) Net Cash Provided By Operating Activities 13(b) 10,532,875 6,634,088 7,084,907
Cash Flows from Investing Activities Payments for Development of Land Held for Resale (469,441) (104,262) (1,050,984) Payments for Purchase of Property, Plant & Equipment (3,400,400) (6,299,078) (2,390,192) Payments for Construction of Infrastructure (8,146,229) (9,078,709) (7,103,076) Advances to Community Groups (59,395) - (410,000) Proceeds from Self Supporting Loans 63,659 113,837 Non-Operating Grants, Subsidies and Contributions used for the Development of Assets 19,398,853 5,421,445 3,789,965 Proceeds from Sale of Assets 868,366 662,762 1,268,771 Net Cash Used In Investing Activities 8,255,413 (9,397,842) (5,781,679)
Cash Flows from Financing Activities Repayment of Debentures (263,659) (78,611) (245,543) Proceeds from New Debentures 447,863 64,330 809,877 Net Cash Provided By (Used In) Financing Activities 184,204 (14,281) 564,334
Net Increase (Decrease) in Cash Held 18,972,492 (2,778,035) 1,867,562 Cash at Beginning of Year 13,974,222 13,945,514 12,106,660 Cash and Cash Equivalents at the End of the Year 13(a) 32,946,714 11,167,479 13,974,222
This statement is to be read in conjunction with the accompanying notes.
Page 5 Annual Financial Report Rate Setting Statement For the year ended 30th June 2012 2011-12 2012 2012 2011 NOTE Actual Budget Actual $ $ $ Revenue Governance 221,647 126,750 216,988 General Purpose Funding 6,456,149 3,782,558 4,980,947 Law, Order, Public Safety 378,082 333,936 796,981 Health 158,405 154,853 161,395 Education and Welfare 2,377,103 2,221,294 2,317,394 Community Amenities 2,659,854 2,304,284 2,569,867 Recreation and Culture 3,274,978 1,577,120 1,992,491 Transport 5,546,534 6,561,691 4,560,913 Economic Services 14,632,993 407,433 711,155 Other Property and Services 838,525 611,000 1,465,857 36,544,270 18,080,919 19,773,988 Expenses Governance (1,219,015) (1,095,029) (1,093,861) General Purpose Funding (384,080) (434,355) (341,288) Law, Order, Public Safety (1,159,813) (1,155,581) (1,952,895) Health (412,662) (386,501) (316,940) Education and Welfare (2,542,779) (2,545,960) (2,401,933) Community Amenities (3,789,711) (3,409,747) (3,543,409) Recreation & Culture (5,861,121) (5,500,380) (5,790,642) Transport (11,001,421) (10,924,237) (10,749,814) Economic Services (1,651,299) (1,877,209) (1,010,423) Other Property and Services (855,554) (885,716) (1,093,786) (28,877,455) (28,214,715) (28,294,991)
Net Result Excluding Rates 7,666,815 (10,133,796) (8,521,003) Adjustments for Cash Budget Requirements: Non-Cash Expenditure and Revenue (Profit)/Loss on Asset Disposals 20 (312,993) (801) (353,809) Movement in Provisions and Accruals 47,015 153,639 70,069 Movement in Deferred Pensioner Rates & 24,947 - 27,218 Sundry Debtors (non-current) Depreciation and Amortisation on Assets 2(a) 8,588,017 8,579,880 8,606,104 Capital Expenditure and Revenue Purchase Land Held for Resale (469,441) (104,262) (1,050,984) Purchase Land and Buildings (1,943,386) (3,650,893) (368,738) Purchase Infrastructure Assets - Roads (6,505,702) (7,697,575) (5,963,412) Purchase Infrastructure Assets - Other (1,640,527) (1,381,134) (1,139,664) Purchase Plant and Equipment (1,285,060) (2,599,120) (1,931,018) Purchase Furniture and Equipment (171,954) (49,065) (90,436) Proceeds from Disposal of Assets 20 868,366 662,762 1,268,771 Repayment of Debentures 21(a) (263,659) (78,611) (245,543) Proceeds from New Debentures 21(a) 447,863 64,330 809,877 Advances to Community Groups (59,395) (64,330) (410,000) Self-Supporting Loan Principal Income 63,659 78,611 113,837 Transfers to Reserves (Restricted Assets) 12 (20,120,053) (1,923,175) (5,655,140) Transfers from Reserves (Restricted Assets) 12 4,005,772 4,730,286 3,343,655
Surplus/(Deficit) July 1 B/Fwd 22(b) 939,573 1,196,393 1,041,359 Surplus/(Deficit) June 30 C/Fwd 2,067,553 20,000 939,573 Amount Required to be Raised from Rates 22(a) (12,187,696) (12,236,861) (11,388,430)
This statement is to be read in conjunction with the accompanying notes.
Page 6 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES The significant accounting policies which have been adopted in the preparation of this financial report are:
(a) Basis of Preparation The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (as they apply to local governments and not-for-profit entities), Australian Accounting Interpretations, other authoritative pronouncements of the Australia Accounting Standards Board, the Local Government Act 1995 and accompanying regulations.
Except for cash flow and rate setting information the report has also been prepared on the accrual basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and liabilities.
Critical Accounting Estimates The preparation of a financial report in conformity with Australian Accounting Standards requires management to make judgements, estimates and assumptions that effect the application of policies and reported amounts of assets and liabilities, income and expenses.
The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances; the results of which form the basis of making the judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.
(b) The Local Government Reporting Entity All Funds through which the Council controls resources to carry on its functions have been included in the financial statements forming part of this financial report.
In the process of reporting on the local government as a single unit, all transactions and balances between those funds (for example, loans and transfers between Funds) have been eliminated.
All monies held in the Trust Fund are excluded from the financial statements, but a separate statement of those monies appears at Note 19 to these financial statements.
(c) Goods and Services Tax Revenues, expenses and assets capitalised are stated net of any GST recoverable. Receivables and payables in the statement of financial position are stated inclusive of applicable GST. The net amount of GST recoverable from, or payable to, the ATO is included with receivables or payables in the statement of financial position.
Cash flows are presented on a Gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows.
(d) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, cash at bank, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less that are readily convertible to know amounts of cash which are subject to an insignificant risk of changes in value and bank overdrafts. Bank overdrafts are shown as short term borrowings in current liabilities on the statement of finanical position.
(e) Trade and Other Receivables Collectibility of trade receivables is reviewed on an ongoing basis. Debts that are known to be uncollectible are written off when identified. An allowance for doubtful debts is raised when there is objective evidence that they will not be collectible.
Page 7 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(f) Inventories General Inventories are measured at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.
Land Held for Resale Land purchased for development and/or resale is valued at the lower of cost and net realisable value. Cost includes the cost of acquisition, development, borrowing cost and holding costs until completion of development. Finance costs and holding charges incurred after development is completed are expensed.
Revenue arising from the sale of property is recognised in the statement of comprehensive income as at the time of signing an unconditional contract of sale.
Land held for resale is classified as current except where it is held as non-current based on Council's intention to release for sale.
(g) Fixed Assets Each class of fixed assets is carried at cost or fair value as indicated less, where applicable, any accumulated depreciation and impairment losses.
Initial Recognition All assets are initially recognised at cost. Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition. For assets acquired at no cost or for nominal consideration, cost is determined as fair value at the date of acquisition. The cost of non-current assets constructed by the Council includes the cost of all materials used in construction, direct labour on the project and an appropriate proportion of variable and fixed overheads.
Subsequent costs are included in the assets's carrying amount or recognised as a separate asset, as appropriate, only when it is probably that future economic benefits associated with the item will flow to the Council and the cost of the item can be measured reliably. All other repairs and maintenance are recognised as expenses in the statement of comprehensive income in the period in which they are incurred.
Revaluation Certain asset classes may be revalued on a regular basis such that the carying values are not materially different from fair value. For infrastructure and other asset classes where no active market exists, fair value is determined to be the current replacement cost of an asset less, where applicable, accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset.
Increases in the carrying amount arising on revaluation of assets are credited to a revaluation surplus in equity. Decreases that offset previous increases of the same asset are recognised against revaluation surplus directly in equity; all other decreases are recognised in profit or loss.
Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset and the net amount is restated to the revalued amount of the asset.
Those assets carried at a revalued amount, being their fair value at the date of revaluation less any subsequent accumulated depreciation and accumulated impairment losses, are to be revalued with sufficient regularity to ensure the carrying amount does not differ materially from that determined using fair value at reporting date.
Page 8 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(g) Fixed Assets (Continued)
Land under Roads In Western Australia, all land under roads is Crown Land, the responsibility for managing which, is vested in the local government.
Effective as at 1 July 2008, Council elected not to recognise any value for land under roads acquired on or before 30 June 2008. This accords with the treatment available in Australian Accounting Standard AASB1051 - Land Under Roads and the fact Local Government (Financial Management) Regulation 16(a)(i) prohibits local governments from recognising such land as an asset.
In respect of land under roads acquired on or after 1 July 2008, as detailed above, Local Government (Financial Management) Regulation 16(a)(i) prohibits local governments from recognising such land as an asset.
Whilst such treatment is inconsistent with the requirements of AASB 1051, Local Government (Financial Management) Regulation 4(2) provides, in the event of such an inconsistency, the Local Government (Financial Management) Regulations prevail.
Consequently, any land under roads acquired on or after 1 July 2008 is not included as an asset of the Council.
Depreciation of Non-Current Assets All non-current assets having a limited useful life are separately and systematically depreciated over their useful lives in a manner which reflects the consumption of the future economic benefits embodied in those assets.
Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time the asset is completed and held ready for use.
Depreciation is recognised on a straight-line basis, using rates which are reviewed each reporting period. Major depreciation periods are:
Buildings 20 to 50 years Furniture and Equipment 5 to 20 years Motor Vehicles 3 years Road Making Plant 5 to 10 years Other Plant and Equipment 3 to 15 years Infrastructure Roads and Streets - Construction Road Base 50 years Roads and Streets - Bituminous Seal 25 years Footpaths - slab 10 to 30 years Parking Facilities 15 to 16 years Water Supply Piping and Drainage Systems 40 years Parks and Gardens 20 years Airport 35 to 36 years
The assets residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater than its estimated recoverable amount.
Page 9 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(g) Fixed Assets (Continued) Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. When revalued assets are sold, amounts included in the revaluation surplus relating to that asset are transferred to retained earnings.
Capitalisation Threshold Expenditure on items of equipment under $5,000 is not capitalised. Rather, it is recorded on an asset inventory listing.
(h) Financial Instruments
Initial Recognition and Measurement Financial assets and financial liabilities are recognised when the Council becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Council commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified 'at fair value through profit or loss', in which case transaction costs are expensed to profit or loss immediately.
Classification and Subsequent Measurement Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method or cost.
Fair value represents the amount for which an asset could be exchanged or a liability settled, between knowledgeable, willing parties. Where available, quoted prices in an active market are used to determine fair value. In other circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
(a) the amount in which the financial asset or financial liability is measured at initial recognition;
(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the difference, if any, between the amount initially recognised and the maturity amount calculated using the effective interest rate method; and
(d) less any reduction for impairment.
The effective interest method used is to allocate interest income or interest expense over the relevant period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense in profit or loss.
Page 10 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h) Financial Instruments (Continued) (i) Financial assets at fair value through profit and loss Financial assets at fair value through profit or loss are financial assets held for trading. A financial asset is classified in this category if acquired principally for the purpose of selling in the short term. Derivatives are classified as held for trading unless they are designated as hedges. Assets in this category are classified as current.
(ii) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and subsequently measured at amortised cost.
Loans and receivables are included in current assets where they are expected to mature within 12 months after the end of the reporting period.
(iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed maturities and fixed or determinable payments that the Council’s management has the positive intention and ability to hold to maturity. They are subsequently measured at amortised cost.
Held-to-maturity investments are included in current assets, where they are expected to mature within 12 months after the end of the reporting period. All other investments are classified as non-current.
(iv) Available-for-sale financial assets Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be classified into other categories of financial assets due to their nature, or they are designated as such by management. They comprise of investments in the equity of other entities where there is neither a fixed maturity nor fixed or determinable payments.
They are subsequently measured at fair value with changes in such fair value (ie gains or losses) recognised in other comprehensive income (except for impairment losses). When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are included in current assets, where they are expected to be sold within 12 months after the end of the reporting period. All other financial assets are classified as non- current.
(v) Financial liabilities Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.
Impairment At the end of each reporting period, the Council assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline in the value of the instrument is considered to determine whether impairment has arisen. Impairment losses are recognised in profit or loss. Any cumulative decline in fair value previously recognised in other comprehensive income is reclassified to profit and loss at this point.
Page 11 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h) Financial Instruments (Continued)
Derecognition Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the Council no longer has any significant continual involvement in the risks and benefits associated with the asset.
Financial liabilities are derecognised where the related obligations are discharged, cancelled or expired. The difference between the carrying amount of the financial liability extinguished or transferred to another party and the fair value of the consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.
(i) Impairment In accordance with Australian Accounting Standards the Council's assets, other than inventories, are assessed at each reporting date to determine whether there is any indication they may be impaired.
Where such an indication exists, an impairment test is carried out on the asset by compairing the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, to the asset's carrying amount.
Any excess of the asset's carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another standard (eg AASB 116) whereby any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other standard.
For non-cash generating assets such as roads, drains, public buildings and the like, value in use is represented by the depreciated replacement cost of the asset.
(j) Trade and Other Payables Trade and other payables represent liabilities for goods and services provided to the Council prior to the end of the financial year that are unpaid and arise when the Council becomes obliged to make future payments in respect of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of recognition.
(k) Employee Benefits Provision is made for the Council's liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later that one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows.
Page 12 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(l) Borrowing Costs Borrowing costs are recognised as an expense when incurred except where they are directly attributable to the acquisition, construction or production of a qualifying asset. Where this is the case, they are capitalised as part of the cost of the particular asset.
(m) Provisions Provisions are recognised when:
(a) The Council has a present legal or constructive obligation as a result of past events; (b) for which it is probable that an outflow of economic benefits will result to settle the obligation; and (c) that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at the end of the reporting period.
(n) Leases Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of the asset, but not legal ownership, are transferred to the Council, are classified as finance leases. Finance leases are capitalised recording an asset and a liability at the lower amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.
Leased assets are depreciated on a straight line basis over the shorter of their estimated useful lives or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight line basis over the life of the lease term.
(o) Joint Venture The Council’s interest in a joint venture has been recognised in the financial statements by including its share of any assets, liabilities, revenues and expenses of the joint venture within the appropriate line items of the financial statement. Information about the joint venture is set out in Note 16. The Council's interests in joint venture entities are recorded using the equity method of accounting in the financial report.
Where the Council contributes assets to the joint venture or if the Council purchases assets from the joint venture, only the portion of the gain or loss that is not attributable to the Council's share of the joint venture shall be recognised. The Council recognises the full amount of any loss when the contribution results in a reduction in the net realisable value of current assets or an impairment loss.
Page 13 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(p) Rates, Grants, Donations and Other Contributions Rates, grants, donations and other contributions are recognised as revenues when the local government obtains control over the assets comprising the contributions. Control over assets acquired from rates is obtained at the commencement of the rating period or, where earlier, upon receipt of the rates.
Where contributions recognised as revenues during the reporting period were obtained on the condition that they be expended in a particular manner or used over a particular period, and those conditions were undischarged as at the reporting date, the nature of and amounts pertaining to those undischarged conditions are disclosed in Note 2(c). That note also discloses the amount of contributions recognised as revenues in a previous reporting period which were obtained in respect of the local government's operations for the current reporting period.
(q) Superannuation The Council contributes to a number of Superannuation funds on behalf of employees. All funds to which the Council contributes are defined contribution plans.
(r) Current and Non-Current Classification In the determination of whether an asset or liability is current or non-current, consideration is given to the time when each asset or liability is expected to be settled. The asset or liability is classified as current if it is expected to be settled within the next 12 months, being the Council’s operational cycle. In the case of liabilities where Council does not have the unconditional right to defer settlement beyond 12 months, such as vested long service leave, the liability is classified as current even if not expected to be settled within the next 12 months. Inventories held for trading are classified as current even if not expected to be realised in the next 12 months except for land held for resale where it is
(s) Rounding Off Figures All figures shown in this annual financial report, other than a rate in the dollar, are rounded to the nearest dollar.
(t) Comparative Figures Where required, comparative figures have been adjusted to conform with changes in presentation for the current financial year. When the Council applies an accounting policy retrospectively, makes a retrospective restatement or reclassifies items in its financial statement, a statement of financial position as at the beginning of the earliest period will be disclosed.
(u) Budget Comparative Figures Unless otherwise stated, the budget comparative figures shown in this annual financial report relate to the original budget estimate for the relevant item of disclosure.
Page 14 Annual Financial Report Statement of Changes in Equity For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(v) New Accounting Standards and Interpretations for Application in Future Periods
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet effective have not been adopted by the Council for the annual reporting period ending 30 June 2012.
Council’s assessment of these new standards and interpretations is set out below:
Title and Topic Issued Applicable (*) Impact
(i) AASB 9– Financial Instruments December 2009 01 January 2013 Nil – The objective of this Standard is to improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. Given the nature of the financial assets of the Council, it is not anticipated the standard will have any material effect.
Nil – Due to its nature and statutory requirements the (ii) AASB 1053– Application of June 2010 01 July 2013 Council will be deemed a Tier 1 entity and will Tiers of Australian Accounting continue to prepare general purpose financial Standards statements. (iii) AASB 2009 - 11 Amendments December 2009 01 January 2013 Nil – The revisions embodied in this standard give to Australian Accounting effect to the consequential changes arising from the Standards arising from AASB issuance of AASB 9 which is not anticipated to have 9 [AASB 1, 3, 4, 5, 7, 101, 102, any material effect on the Council (refer (i) above). 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12]
Page 15 Annual Financial Report Statement of Changes in Equity For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(v) New Accounting Standards and Interpretations for Application in Future Periods (Continued)
Title and Topic Issued Applicable (*) Impact
(iv) AASB 2010-2 Amendments to June 2010 01 July 2013 Nil – None of these amendments will have any effect Australian Accounting on the financial report as the standard does not apply Standards arising from in the case of general purpose financial statements. Reduced Disclosure Requirements [AASB 1, 2, 3, 5, 7, 8, 101, 102, 107, 108 ,110, 111, 112, 116, 117, 119, 121, 123, 124, 127, 128, 131, 133, 134, 136, 137, 138, 140, 141, 1050 & 1052 and Interpretations 2, 4, 5, 15, 17, 127, 129, & 1052]
(v) AASB 2010 - 7 Amendments to December 2010 1 January 2013 Nil - The revisions embodied in this standard give Australian Accounting effect to the consequential changes arising from the Standards arising from AASB issuance of AASB 9 which is not anticipated to have 9 (December 2010) [AASB 1, any material effect on the Council (refer (i) above). 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19,& 127]
(vi) AASB 2010 - 8 Amendments to December 2010 1 January 2012 Nil - None of these amendment wills have any effect Australian Accounting on the financial report as none of the topics are Standards - Deferred Tax: relevant to the operations of the Council. Recovery of Underlying Assets [AASB 112]
Page 16 Annual Financial Report Statement of Changes in Equity For the year ended 30th June 2012 2011-12
1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(v) New Accounting Standards and Interpretations for Application in Future Periods (Continued)
Title and Topic Issued Applicable (*) Impact
(vii) AASB 2010 - 10 Further December 2010 1 January 2013 Nil – None of these amendments will have any effect Amendments to Australian on the financial report as none of the topics are Accounting Standards - relevant to the operations of the Council. Removal of Fixed Dates for First-time Adopters [AASB 2009-11 & AASB 2010-7]
(viii) AASB 2011 - 2 Amendments May 2011 1 July 2013 Nil - None of these amendments will have any to Australian Accounting effect on the financial report as none of the topics Standards - Arising from are relevant to the operations of the Council. the Trans - Tasman Consequence Project - Reduced Disclosure Requirements [AASB 101 & AASB 1054]
AASB 2011 - 3 Amendments May 2011 1 July 2012 to Australian Accounting Standards - Orderly Adoption of Changes to ABS GFS manual and related Amendments. [AASB 1049]
AASB 2011 - 6 Amendments July 2011 1 July 2013 to Australian Accounting Standards - Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation - Reduced Disclosure Requirements [AASB 127, 128 & 131]
Page 17 Annual Financial Report Statement of Changes in Equity For the year ended 30th June 2012 2011-12 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(v) New Accounting Standards and Interpretations for Application in Future Periods (Continued)
Title and Topic Issued Applicable (*) Impact
(ix) AASB 10 - Consolidated August 2011 1 January 2013 Nil - None of these except for AASB 128, are Financial Statements expected to have significant application to the AASB 11 - Joint Arrangements operations of the Council. With respect to AASB AASB 12 - Disclosure of 128, where the Council has an interest in a Joint Interests in Other Entities Venture, the requirements of AASB 128 supercede AASB 127 - Separate Financial those of the current Joint Venture Standard AASB Statements 131. The new standard more clearly defines the AASB 128 - Investments in accounting treatment and disclosure in relation to Associates and Joint Ventures it. Due to the nature of the Joint Venture, it is not AASB 2011 - 7 Amendments to expected to have a significant impact on the Australian Accounting Council. Standards arising from the Consolidation and Joint Arrangement Standards [AASB 1, 2, 3, 5, 7, 9, 2009-11, 101, 107, 112, 118, 121, 124, 132, 133, 131, 138, 139, 1023 & 1038 and Interpretations 5, 9, 16 & 17] AASB 13 defines fair value, establishes a framework for measuring fair value and requires disclosures about fair (x) September 2011 1 January 2013 value measurements. AASB 13 requires: AASB 13 - Fair Value - Inputs to all fair value measurement to be categorised in accordance with a fair value hierarchy; and Measurement AASB 2011 - - Enhanced disclosures regarding all assets and liabilities 8 Amendments to (including, but not limited to financial assets and financial Australian Accounting liabilities) measured at fair value. Standards arising from AASB 13 will have particular relevance to the process of the AASB 13 [AASB 1, 2, 3, 4, 5, Council adopting fair value methodology in relation to its 7 ,9, 2009-11, 2010-7, 101, fixed assets as mandated from 1 July 2012. Apart from the changes in value in relation to assets to be revalued (which 102, 108, 110, 116, 117, are mandated by legislation and not changes to the 118, 119, 120, 121, 128, standard) it is not expected to significantly impact the 131, 132, 133, 134, 136, Council as the framework embodied in AASB 13 does not 138, 139, 140, 1004, 1023 & differ significantly from that which is present in existing 1038 and Interpretations 2, standards. The amendments to the legislation requires the phasing in of fair value in relation to fixed assets over the 4, 12, 13, 14, 17, 19, 131 & three years from 1 July 2012. It is not possible to estimate 132] the likely amount of any revaluations. Page 18 Annual Financial Report Statement of Changes in Equity For the year ended 30th June 2012 2011-12 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(v) New Accounting Standards and Interpretations for Application in Future Periods (Continued)
Title and Topic Issued Applicable (*) Impact
(xi) AASB 2011 - 9 Amendments September 2011 1 July 2013 The main change embodied in this standard is the to Australian Accounting requirement to group items presented in other Standards - Presentation of comprehensive income on the basis of whether Items of Other they are potentially reclassifiable to profit or loss Comprehensive Income subsequently. It effects presentation only and is [AASB 1, 5, 7, 101, 112, 120, not expected to significantly impact the Council. 121, 132, 133, 134, 1039 & 1049]
(xii) AASB 119 - Employee September 2011 1 January 2013 Benefits AASB 2010 - 10 The changes in relation to defined benefit plans Amendments to Australian contained in this standard are not expected to Accounting Standards significantly impact the Council nor are the arising from AASB 119 changes to AASBs in relation to termination [AASB 1, 8, 101, 124, 134, benefits. 1049 & 2011 - 8 and Notes:Interpretation 14]
Page 19 Annual Financial Report Statement of Changes in Equity For the year ended 30th June 2012 2011-12 1. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(v) New Accounting Standards and Interpretations for Application in Future Periods (Continued)
Title and Topic Issued Applicable (*) Impact
(xiii) AASB 2011 - 11 Amendments September 2011 1 July 2013 to AASB 119 (September Nil - None of these amendments will have any 2011) arising from Reduced effect on the financial report as none of the topics Disclosure Requirements are relevant to the operations of the Council.
AASB 2011 - 12 Amendments November 2011 1 January 2013 to Australian Accounting Standards arising from Interpretation 20 [AASB 1]
December 2011 1 July 2012 AASB 2011 - 13 Amendments to Australian Accounting Standards - Improvements to AASB 1049
(w) Adoption of New and Revised Accounting Standards During the current year, the Council adopted all of the new and revised Australian Accounting Standards and Interpretations which became mandatory and which were applicable to its operations.
These new and revised standards were:
AASB 124 AASB 1054 AASB 2009-12 AASB 2010-4 AASB 2010-5 AASB 2010-6 AASB 2010-9 AASB 2010-14 AASB 2011-1
The standards adopted had a minimal effect on the accounting and reporting practices of the Council as they were either largely editorial in nature, were revisions to help ensure consistency with presentation, recognition and measurement criteria of IFRSs or related to topics not relevant to operations. Page 20 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2. REVENUE AND EXPENSES 2012 2011 Actual Actual $ $ (a) Net Result
The Net Result includes:
(i) Charging as an Expense:
Auditors Remuneration - Audit 33,909 23,850 - Other Services 18,000 2,945
Depreciation Buildings 618,927 610,513 Furniture and Equipment 43,409 37,676 Plant and Equipment 1,249,025 1,208,822 Construction other than Building 169,909 151,634 Roads 5,802,398 5,625,435 Lighting 23,617 21,240 Footpaths 214,952 198,436 Parks and Reserves 5,478 313,426 Drainage 108,679 100,499 Pipes 112,652 112,654 Other 75,149 69,377 Tourist Signs 2,453 2,237 Airport 132,732 126,122 Parking 28,637 28,033 8,588,017 8,606,104 Interest Expenses (Finance Costs) Debentures (refer Note 21(a)) 54,999 43,600
Rental Charges - Operating Leases 83,846 128,481
(ii) Crediting as Revenue: 2012 2012 2011 Actual Budget Actual $ $ $ Interest Earnings - Municipal Funds 438,891 294,000 396,165 - Reserve Funds 659,501 400,000 498,232 - Other Interest Revenue (refer note 24) 91,633 78,000 85,880 1,190,025 772,000 980,277
Significant Income Economic Services Supertowns Project Funding 13,222,867 0 0
The significant income relates to Royalties for Regions funding through Supertowns for the Esperance Waterfront, Economic Development & Town Centre Revitalisation Project.
Page 21 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2. REVENUE AND EXPENSES (Continued)
(b) Statement of Objective
COMMUNITY VISION : We make IT happen! The spirit of Esperance is unique, we take pride in being a creative, caring and supportive community. We live in a diverse and dynamic region with outstanding opportunities for all. As custodians, we are committed to protect our spectacular natural environment. Esperance has a sense of community ownership with commitment to determine is own direction.
The Shire of Esperance is dedicated to providing high quality services to the community through the various service orientated programs which it has established.
GOVERNANCE Objective : To provide a decision making process for the efficient allocation of scarce resources Activities : Includes the activities of members of council (Councillors) and the administrative support available to the Council for the provision of governance of the district. Other costs relate to the tasks of assisting elected members and ratepayers on matters which do not concern specific council services.
GENERAL PURPOSE FUNDING Objective : To collect revenue to allow for the provision of services. Activities : Rates, general purpose government grants, and interest revenue.
LAW, ORDER, PUBLIC SAFETY Objective: To provide services to help ensure a safer and environmentally conscious community. Activities : Supervision and enforcement of various local laws relating to fire prevention, animal control and protection of the environment other aspects of public safety including emergency services.
HEALTH Objective: To provide an operational framework for good community health Activities : Inspection of food outlets and their control as well as provision of meat inspection services, noise control, and waste disposal compliance.
EDUCATION AND WELFARE Objective: To provide services to disadvantaged persons, the elderly, children and youth Activities : Maintenance of child minding centre, playgroup centre, senior citizens centre and aged care centre. Provision and maintenance of home & community care programs and youth support services.
COMMUNITY AMENITIES Objective : To provide services required by the community Activities : Rubbish collection services, operation of rubbish disposal sites, litter control, construction and maintenance of urban storm water drains, protection of the environment and administration of town planning schemes, cemetery and public conveniences.
RECREATION AND CULTURE Objective : To establish and effectively manage infrastructure and resources which will help the social well being of the community Activities : Maintenance of public halls, civic centre, aquatic centre, beaches, recreation centres and various sporting facilities. Provision and maintenance of parks, gardens and playgrounds. Operation of library, museum and other cultural facilities.
Page 22 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2. REVENUE AND EXPENSES (Continued)
(b) Statement of Objective (continued)
TRANSPORT Objective : To provide safe, effective and efficient transport services to the community. Activities : Construction and maintenance of roads, streets, footpaths, depots, cycleways, parking facilities and traffic control. Cleaning of streets and maintenance of street trees, street lighting etc. Provision and operation of airport.
ECONOMIC SERVICES Objective: To help promote the shire and it's economic wellbeing. Activities : Tourism and area promotion including the maintenance and operation of a caravan park. Provision of rural services including weed control, vermin control and standpipes. Building control.
OTHER PROPERTY AND SERVICES Objective: To monitor and control Council's overheads operating accounts. Activities : Private works operation, plant repair and operation costs and engineering operation costs.
Page 23 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2. REVENUE AND EXPENSES (Continued)
(c) CONDITIONS OVER CONTRIBUTIONS 2011 2012 Opening Recognised Spent Restricted Opening Recognised Spent Restricted Balance (1) as Revenue (2) or Used (3) Reserve Balance (1) as Revenue (2) or Used (3) Reserve 1/07/2010 30/06/2011 1/07/2011 30/06/2012 General Purpose Funding Royalties for Regions 601,676 - (265,501) 336,175 336,175 - (336,175) - Governance & Administration Forward Capital Works Plan Grant 35,000 - (35,000) - - - - - Law, Order & Public Safety Grant - Co-Location Facility 460,018 379,187 (839,205) - - - - - FESA - Fire Prevention FESA - - - - - 194,716 (187,256) 7,460 LEMC - BHP Sponsorship 43,465 - (40,023) 3,442 3,442 - (1,547) 1,895 Safer WA Committee Subsidy 2,346 - (2,346) - - - - - Horizon Power Sponsorship - - - - - 10, 000 - 10,000 State Graffiti Fund - - - - - 13, 627 - 13,627 Education & Welfare Grant - Disability & Inclusion Plan 1,653 - (1,653) - - - - - Grant - HACC Seniors Leisure Link 4,000 - - 4, 000 4,000 - - 4,000 Grant - Hearing Impaired Pilot Project 4,417 - - 4, 417 4,417 - - 4,417 Grant - Other Programs - 13,868 - 13,868 13,868 12,665 - 26,533 Grant - HACC Operating 11/12 18,732 6,385 - 25,117 25, 117 34, 019 - 59,136 Grant - HACC Capital 126,054 99,213 (9,554) 215,713 215,713 22, 651 (185,829) 52,535 Grant - VMP CPO 17,734 - (4,665) 13,069 13, 069 4, 442 - 17,511 Grant - NRCP Capital 7,000 - (7,000) - - - - - Grant - NRCP Operating 652 - ( 652) - - - - - Grant - CACP 1,954 - (1,954) - - - - - Grant - EACH Capital 19,041 - (19,041) - - - - - Grant - EACH Operating 5,794 - (5,794) - - - - - Grant - Seniors Project 9,300 - (9,300) - - - - - Community Amenities Grant - SCNRM Environmental Weed Project 4,772 - (66) 4, 706 4,706 - - 4,706 Grant - Dieback Works #1 & 2 36,000 - (31,515) 4,485 4,485 - - 4,485 Grant - Lovers Cove - - - - - 5,835 (4,709) 1,126 Balance carried to next page 1,399,608 498,653 (1,273,269) 624,992 624,992 297,955 (715,516) 207, 431 Notes (1) Grants/contributions recognised as revenues in a previous reporting period which were not expended at the close of the previous reporting period. (2) New grants/contributions which were recognised as revenues during the reporting period and which had not yet been fully expended in the manner specified by the contributor. (3) Grants/contributions which have been recognised as revenues in a previous reporting period or received in the current reporting period and which were expended in the current reporting period in the manner specified by the contributor.
Page 24 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2. REVENUE AND EXPENSES (Continued)
(c) CONDITIONS OVER CONTRIBUTIONS (Continued) 2011 2012 Opening Recognised Spent Restricted Opening Recognised Spent Restricted Balance (1) as Revenue (2) or Used (3) Reserve Balance (1) as Revenue (2) or Used (3) Reserve 1/07/2010 30/06/2011 1/07/2011 30/06/2012 $ $ $ $ $ $ $ $ Balance from previous page 1,399,608 498,653 (1,273,269) 624,992 624,992 297,955 (715,516) 207,431 Recreation & Culture Grant - RLCIP Solar Panals 88,995 126,841 (199,492) 16,344 16, 344 - - 16,344 Grant - Southcoast NRM Castletown Quays 2,128 - (2,128) - - - - - Grant - Magellan - Lions Playground Equipme 28,000 - (28,000) - - - - - Grant - Magellan - Lions Playground Equipme - - - - - 15,000 (10,985) 4,015 TRust - POS - Treasure Road Park Upgrade 61,000 - (61,000) - - - - - Grant - WALGA Physical Activity 29,653 - (29,653) - - - - - Grant - Tanker Jetty Structural Assessment 38,265 - (20,050) 18,215 18, 215 - (11,202) 7,013 Grant - National Science Week - Library 909 909 (1,058) 760 760 - (760) - Grant - Telstra Connected Seniors - - - - - 5,000 ( 167) 4,833 Grant - PLA Storytime on Stage - - - - - 500 - 500 Grant - RLCIP - Walker Street Playground - 115,000 (3,465) 111,535 111,535 - (111,535) - Grant - Accessible Communities - 11,615 - 11,615 11,615 - (11,615) - Grant - Department of Agriculture - 21,805 (3,996) 17,809 17, 809 - (17,809) - Grant - NRM Walker Street Fencing & Signage - - - - - 20, 000 - 20,000 Grant - Dept of Sport & Rec Kidsport Grant - - - - - 52, 000 (14,451) 37,549 Grant - Dept of Regional Dev & Lands - Foresh - - - - - 1,045,000 - 1,045,000 Grant - Community Arts Catalyst - Walker St P - - - - - 10, 000 (9,805) 195 Grant - Club Development Officer - - - - - 50, 000 (49,175) 825 Transport Grant - Roadwise #491 6,423 - (580) 5,843 5,843 - (5,843) - Grant - Road Safety #286 - 17,050 (15,013) 2, 037 2, 037 - (2,037) - Grant - Roadwise Action Plan - 1,000 ( 657) 343 343 1, 000 ( 580) 763 Contribution - DEC - Lake Road Floodway 20,589 - (20,589) - - - - - Contribution - Jetrio Pty Ltd - Footpath 15,000 - - 15,000 15,000 - - 15,000 Grant - DOT - Transport Security Screen Equip - - - - - 650,000 (218,214) 431, 786 Economic Services Contribution - Wild Dog Control 110,246 164,074 (168,318) 106,002 106,002 155,932 (145,595) 116, 339 Supertowns Grant - - - - - 13,942,867 (484,113) 13,458,754 Grant - Department of Agriculture - 20,000 (16,000) 4,000 4,000 - (4,000) - 1,800,816 976,947 (1,843,268) 934,495 934,495 16,245,254 (1,813,402) 15 ,366,347 Notes (4) (1) Grants/contributions recognised as revenues in a previous reporting period which were not expended at the close of the previous reporting period. (2) New grants/contributions which were recognised as revenues during the reporting period and which had not yet been fully expended in the manner specified by the contributor. (3) Grants/contributions which have been recognised as revenues in a previous reporting period or received in the current reporting period and which were expended in the current reporting period in the manner specified by the contributor. (4) All of the unspent grants/contributions are held as unrestricted cash in Unspent Grants & Contributions Reserve.
Page 25 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2012 2011 Actual Actual $ $ 3. CASH AND CASH EQUIVALENTS
Unrestricted 3,183,644 299,633 Restricted 29,763,070 13,674,589 32,946,714 13,974,222 The following restrictions have been imposed by regulations or other externally imposed requirements:
Cash Reserves: Land Purchase & Development Reserve 890,054 777,983 Council Buildings Construction Reserve 174,378 16,125 Eastern Suburbs Water Pipeline Reserve 79,413 136,683 Jetty Reserve 696,877 1,552,851 Aerodrome Reserve 1,454,520 1,842,733 Salmon Gums Quarry Reserve 9,134 8,718 Municipal Museum Reserve - 2,597 Meat Inspection Reserve - - Off Street Parking Reserve 128,252 122,417 Sanitation (Rubbish Removal) Services Reserve 1,620,206 1,368,867 Esperance Home Care Fundraising Reserve 62,111 62,762 HACC Asset Replacement Reserve 191,935 126,963 Gravel Resources Compensation Reserve 49,382 47,135 Southern Suburbs Water Supply Reserve 34,649 38,756 Cemetery Reserve 32,103 27,778 Unspent Grants & Contributions Reserve 17,724,018 2,129,275 Historical Village Reserve 1,839 1,756 Plant Replacement Reserve 1,105,304 626,023 Employee Entitlements- Annual Leave Reserve - - Employee Entitlements- Long Service Leave Reserve 746,481 712,515 History Book Reserve 16,597 15,803 Tanker Jetty Donations Reserve 34,480 30,521 Library Reserve 32,541 28,805 Drainage Reserve 220,566 210,529 Building Maintenance Reserve 2,771,970 2,348,036 Community Bus Maintenance & Replacement Reserve 73,020 65,965 Governance & Workers Compensation Reserve 307,099 249,873 Shark Lake Industrial Park - Environmental Monitoring and Landscape/Drainage Maintenance Reserve 68,990 54,397 Staff Retention & Attraction Reserve 641,730 584,850 IT System & Process Development Reserve 316,506 246,520 Esperance Home Care Annual Leave Reserve 139,844 118,722 Esperance Home Care Long Service Leave Reserve 139,071 118,631 Total Reserves 29,763,070 13,674,589
Page 26 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12 2012 2011 Actual Actual $ $ 4. TRADE AND OTHER RECEIVABLES
Current Rates & Rubbish 134,030 179,232 General Receivables 1,786,687 1,785,315 Goods & Services Tax - 20,440 Interest 111,894 4,024 Self Supporting Loan Debtors 127,779 76,541 2,160,390 2,065,552 Non-Current Self Supporting Loan Debtors 736,244 791,746 Rates Outstanding - Pensioners 69,214 54,161 General Receivable 40,000 80,000 845,458 925,907
5. INVENTORIES
Current Roadmaking Materials 96,731 101,349 Fuel & Oils 36,995 39,613 Goods Held for Resale 81,339 65,504 Land Held for Resale (Shark Lake Industrial Park) - - Land Held for Resale (Flinders) 180,748 188,337 395,813 394,803 Non-Current Land Held for Resale (Shark Lake Industrial Park) 2,553,709 2,515,625 Land Held for Resale (Flinders) 8,051,243 7,895,368 10,604,952 10,410,993
Page 27 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2012 2011 Actual Actual $ $ 6. PROPERTY, PLANT AND EQUIPMENT (a) Land and Buildings - Cost 34,698,847 33,434,666 Less Accumulated Depreciation (9,051,259) (8,432,333) 25,647,588 25,002,333
Office Furniture - Cost - - Less Accumulated Depreciation - - - -
Office Equipment - Cost 70,147 58,381 Less Accumulated Depreciation (33,017) (23,126) 37,130 35,255
Other Furniture and Equipment - Cost 447,069 286,882 Less Accumulated Depreciation (132,368) (98,851) 314,701 188,031
Plant and Equipment - Cost 1,800,215 1,724,533 Less Accumulated Depreciation (1,230,852) (1,157,965) 569,363 566,568
Motor Vehicles - Cost 3,765,703 3,673,281 Less Accumulated Depreciation (1,567,896) (1,337,252) 2,197,807 2,336,029
Construction other than buildings - Cost 3,884,028 3,204,824 Less Accumulated Depreciation (1,763,067) (1,593,158) 2,120,961 1,611,666
Road Making Plant - Cost 8,970,835 8,817,517 Less Accumulated Depreciation (3,644,236) (3,390,078) 5,326,599 5,427,439
Total Property Plant & Equipment 36,214,149 35,167,321
Page 28 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
6. PROPERTY, PLANT AND EQUIPMENT (Continued)
(b) Movements in Carrying Amounts
Movement in the carrying amounts of each class of property, plant and equipment between the beginning and the end of the current financial year.
Land Other Plant Construction Road & Office Office Furniture & & Motor other than Making Buildings Furniture Equipment Equipment Equipment Vehicles Buildings Plant Total $ $ $ $ $ $ $ $ $
Balance as at 1 July 2011 25,002,333 - 35,255 188,031 566,568 2,336,029 1,611,666 5,427,439 35,167,321
Additions 1,264,182 - 11,766 160,188 75,682 377,569 679,204 831,809 3,400,400
(Disposals) - - - - (134,052) - (138,250) (272,302)
Impairment - (losses) ------reversals
Depreciation (Expense) (618,927) - (9,891) (33,518) (72,887) (381,739) (169,909) (794,399) (2,081,270)
Other Movements ------
Balance as at 30 June 2012 25,647,588 - 37,130 314,701 569,363 2,197,807 2,120,961 5,326,599 36,214,149
Page 29 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2012 2011 Actual Actual $ $ 7. INFRASTRUCTURE
(a) Roads - cost 296,754,133 290,248,431 Less Accumulated Depreciation (115,872,713) (110,070,315) 180,881,420 180,178,116
Footpaths - cost 6,779,008 6,448,595 Less Accumulated Depreciation (2,282,774) (2,067,821) 4,496,234 4,380,774
Drainage - cost 4,775,393 4,347,164 Less Accumulated Depreciation (1,494,150) (1,385,471) 3,281,243 2,961,693
Culverts & Pipes - cost 4,506,113 4,506,113 Less Accumulated Depreciation (3,951,602) (3,838,950) 554,511 667,163
Parks & Ovals - Cost 6,268,506 6,268,506 Less Accumulated Depreciation (6,268,506) (6,263,028) - 5,478
Street Lighting - Cost 720,264 681,001 Less Accumulated Depreciation (162,776) (139,159) 557,488 541,842
Tourist Road Signs - Cost 80,937 80,937 Less Accumulated Depreciation (17,129) (14,676) 63,808 66,261
Esperance Airport - Cost 5,028,769 4,606,255 Less Accumulated Depreciation (969,842) (837,110) 4,058,927 3,769,145
Parking - Cost 640,841 420,500 Less Accumulated Depreciation (345,415) (316,778) 295,426 103,722
Other - Cost 2,605,594 2,405,826 Less Accumulated Depreciation (525,714) (450,565) 2,079,880 1,955,261
Total Infrastructure Assets 196,268,937 194,629,455
Page 30 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
7. INFRASTRUCTURE (Continued)
(b) Movements in Carrying Amounts
Movement in the carrying amounts of each class of infrastructure between the beginning and the end of the current financial year.
Culverts Parks Street Tourist Road Esperance Roads Footpaths Drainage & Pipes & Ovals Lighting Signs Airport Parking Other Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Infrastructure Total $ $ $ $ $ $ $ $ $ $ $
Balance as at 1 July 2011 180,178,116 4,380,774 2,961,693 667,163 5,478 541,842 66,261 3,769,145 103,722 1,955,261 194,629,455
Additions 6,505,702 330,412 428,229 - - 39,263 - 422,514 220,341 199,768 8,146,229
(Disposals) ------
Impairment - (losses) ------reversals
Depreciation (Expense) (5,802,398) (214,952) (108,679) (112,652) (5,478) (23,617) (2,453) (132,732) (28,637) (75,149) (6,506,747)
Other Movements ------
Balance as at 30 June 2012 180,881,420 4,496,234 3,281,243 554,511 - 557,488 63,808 4,058,927 295,426 2,079,880 196,268,937
Page 31 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2012 2011 Actual Actual $ $ 8. TRADE AND OTHER PAYABLES
Current Sundry Creditors 1,143,474 677,500 Accrued Interest on Long Term Borrowings 11,931 6,403 Accrued Salaries & Wages 303,082 219,724 Goods & Services Tax 1,179,713 - 2,638,200 903,627
9. LONG TERM BORROWINGS
(a) Current Secured by Floating Charge Debentures 127,779 76,541 127,779 76,541
(b) Non-Current Secured by Floating Charge Debentures 8,973,938 8,840,972 8,973,938 8,840,972
Additional detail on borrowings is provided in Note 21.
10. PROVISIONS
(a) Current Provision for Employee Annual Leave 839,611 770,632 Provision for Employee Long Service Leave 751,861 763,517 1,591,472 1,534,149 (b) Non-Current Provision for Employee Long Service Leave 219,170 181,621 219,170 181,621
11. RESERVES - ASSET REVALUATION
Asset revaluation reserves arose on initial revaluation of asset classifications in prior years as follows: $ (a) Land and Buildings 14,914,317
(b) Roads 89,470,833
TOTAL 104,385,150
In 2011 (and previous years), these balances were disclosed as part of the Asset Revaluation Reserve balance despite th Council resolving to revert to deemed cost in accordance with the transition to AASB 1041 'Revaluation of Non-Current A effective from 1 July 2001. At the time of reverting to deemed cost the Asset Revaluation Reserve should have been trans to Retained Surplus.
This prior period adjustment is necessary to reflect this correction.
Page 32 Annual Financial Report Notes to and forming part of the For the year ended 30th June 2012 Financial Report 2011-12
2012 2012 2011 Actual Budget Actual $ $ $ 12. RESERVES - CASH BACKED
(a) Land Purchase & Development Reserve Opening Balance 777,983 777,983 810,516 Transfer to Reserve 165,294 33,716 44,467 Transfer from Reserve (53,223) (106,000) (77,000) Closing Balance 890,054 705,699 777,983
(b) Council Buildings Construction Reserve Opening Balance 16,125 16,125 15,220 Transfer to Reserve 158,253 651 905 Transfer from Reserve - - - Closing Balance 174,378 16,776 16,125
(c) Eastern Suburbs Water Pipeline Reserve Opening Balance 136,683 136,683 202,748 Transfer to Reserve 6,515 7,667 12,052 Transfer from Reserve (63,785) (73,700) (78,117) Closing Balance 79,413 70,650 136,683
(d) Jetty Reserve Opening Balance 1,552,851 1,552,851 1,413,334 Transfer to Reserve 144,026 59,845 154,017 Transfer from Reserve (1,000,000) - (14,500) Closing Balance 696,877 1,612,696 1,552,851
(e) Aerodrome Reserve Opening Balance 1,842,733 1,842,733 1,465,380 Transfer to Reserve 87,845 497,618 377,353 Transfer from Reserve (476,058) (1,452,063) - Closing Balance 1,454,520 888,288 1,842,733
(f) Salmon Gums Quarry Reserve Opening Balance 8,718 8,718 8,229 Transfer to Reserve 416 352 489 Transfer from Reserve - - - Closing Balance 9,134 9,070 8,718
(g) Municipal Museum Reserve Opening Balance 2,597 2,597 2,451 Transfer to Reserve 124 105 146 Transfer from Reserve (2,721) - - Closing Balance - 2,702 2,597
(h) Meat Inspection Reserve Opening Balance - - - Transfer to Reserve - - - Transfer from Reserve - - - Closing Balance - - -
(i) Off Street Parking Reserve Opening Balance 122,417 122,417 102,621 Transfer to Reserve 5,835 4,140 19,796 Transfer from Reserve - - - Closing Balance 128,252 126,557 122,417
Page 33 Annual Financial Report Notes to and forming part of the For the year ended 30th June 2012 Financial Report 2011-12
2012 2012 2011 Actual Budget Actual $ $ $ 12. RESERVES - CASH BACKED (Continued)
(j) Sanitation (Rubbish Removal) Services Reserve Opening Balance 1,368,867 1,368,867 887,337 Transfer to Reserve 251,339 411,342 481,530 Transfer from Reserve - (734,074) - Closing Balance 1,620,206 1,046,135 1,368,867
(k) HACC Asset Replacement Reserve Opening Balance 126,963 126,963 56,387 Transfer to Reserve 64,972 2,412 70,576 Transfer from Reserve - - - Closing Balance 191,935 129,375 126,963
(l) Esperance Home Care Fundraising Reserve Opening Balance 62,762 62,762 19,468 Transfer to Reserve 2,993 3,874 43,294 Transfer from Reserve (3,644) (2,009) - Closing Balance 62,111 64,627 62,762
(m) Gravel Resources Compensation Reserve Opening Balance 47,135 47,135 44,490 Transfer to Reserve 2,247 1,861 2,645 Transfer from Reserve - (1,000) - Closing Balance 49,382 47,996 47,135
(n) Southern Suburbs Water Supply Reserve Opening Balance 38,756 38,756 56,684 Transfer to Reserve 1,847 2,373 8,133 Transfer from Reserve (5,954) (7,365) (26,061) Closing Balance 34,649 33,764 38,756
(o) Cemetery Reserve Opening Balance 27,778 27,778 23,624 Transfer to Reserve 4,325 3,614 4,154 Transfer from Reserve - - - Closing Balance 32,103 31,392 27,778
(p) Unspent Grants & Contributions Reserve Opening Balance 2,129,275 2,129,275 2,950,164 Transfer to Reserve 17,724,018 - 2,129,275 Transfer from Reserve (2,129,275) (2,129,275) (2,950,164) Closing Balance 17,724,018 - 2,129,275
(q) Historical Village Reserve Opening Balance 1,756 1,756 1,657 Transfer to Reserve 83 71 99 Transfer from Reserve - - - Closing Balance 1,839 1,827 1,756
(r) Plant Replacement Reserve Opening Balance 626,023 626,023 454,033 Transfer to Reserve 479,281 18,506 171,990 Transfer from Reserve - (76,800) - Closing Balance 1,105,304 567,729 626,023
(s) Employee Entitlements- Annual Leave Reserve Opening Balance - - 154,969 Transfer to Reserve - - 875 Transfer from Reserve - - (155,844) Closing Balance - - -
Page 34 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2012 2012 2011 Actual Budget Actual $ $ $ 12. RESERVES - CASH BACKED (continued)
(t) Employee Entitlements- Long Service Leave Reserve Opening Balance 712,515 712,515 714,268 Transfer to Reserve 33,966 28,480 40,216 Transfer from Reserve - - (41,969) Closing Balance 746,481 740,995 712,515
(u) History Book Reserve Opening Balance 15,803 15,803 14,654 Transfer to Reserve 794 1,460 1,149 Transfer from Reserve - - - Closing Balance 16,597 17,263 15,803
(v) Tanker Jetty Donations Reserve Opening Balance 30,521 30,521 26,738 Transfer to Reserve 3,959 3,747 3,783 Transfer from Reserve - - - Closing Balance 34,480 34,268 30,521
(w) Library Reserve Opening Balance 28,805 28,805 25,986 Transfer to Reserve 3,736 2,882 2,819 Transfer from Reserve - - - Closing Balance 32,541 31,687 28,805
(x) Drainage Reserve Opening Balance 210,529 210,529 165,194 Transfer to Reserve 10,037 7,065 45,335 Transfer from Reserve - - - Closing Balance 220,566 217,594 210,529
(y) Building Maintenance Reserve Opening Balance 2,348,036 2,348,036 939,065 Transfer to Reserve 640,781 709,031 1,408,971 Transfer from Reserve (216,847) (75,000) - Closing Balance 2,771,970 2,982,067 2,348,036
(z) Community Bus Maintenance & Replacement Reserve Opening Balance 65,965 65,965 58,511 Transfer to Reserve 7,055 9,793 7,454 Transfer from Reserve - - - Closing Balance 73,020 75,758 65,965
(aa) Governance & Workers Compensation Reserve Opening Balance 249,873 249,873 170,048 Transfer to Reserve 99,726 7,273 79,825 Transfer from Reserve (42,500) - - Closing Balance 307,099 257,146 249,873
(ab) Shark Lake Industrial Park - Environmetal Monitoring and Landscape/Drainage Maintenance Reserve Opening Balance 54,397 54,397 40,018 Transfer to Reserve 14,593 1,712 14,379 Transfer from Reserve - - - Closing Balance 68,990 56,109 54,397
Page 35 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2012 2012 2011 Actual Budget Actual $ $ $ 12. RESERVES - CASH BACKED (Continued)
(ac) Staff Retention & Attraction Reserve Opening Balance 584,850 584,850 363,256 Transfer to Reserve 56,880 14,873 221,594 Transfer from Reserve - (73,000) - Closing Balance 641,730 526,723 584,850
(ad) IT System & Process Development Reserve Opening Balance 246,520 246,520 176,054 Transfer to Reserve 81,751 80,017 70,466 Transfer from Reserve (11,765) - - Closing Balance 316,506 326,537 246,520
(ae) Esperance Home Care Annual Leave Reserve Opening Balance 118,722 118,722 - Transfer to Reserve 21,122 4,501 118,722 Transfer from Reserve - - - Closing Balance 139,844 123,223 118,722
(af) Esperance Home Care Long Service Leave Reserve Opening Balance 118,631 118,631 - Transfer to Reserve 20,440 4,194 118,631 Transfer from Reserve - - - Closing Balance 139,071 122,825 118,631
Total Cash Backed Reserves 29,763,070 10,867,478 13,674,589
All of the reserve accounts are supported by money held in financial institutions and match the amount shown as restricted cash in Note 3 to this financial report.
In accordance with council resolutions in relation to each reserve account, the purpose for which the reserves are set aside are as follows:
Land Purchase & Development Reserve Established to fund land improvements and sub-division development. Funded by land sales.
Council Buildings Construction Reserve Established to provide a fund for the construction of new community facilities and upgrading of existing Council owned buildings. Funded from General Purpose Income.
East Suburbs Water Pipeline Reserve Established to provide funds to recycle waste water to recreation grounds. Funded by the proceeds from the sale of water.
Jetty Reserve Established to provide funds for future maintenance and repair of the main jetty opposite Gladstone Street. Funded from General Purpose Income.
Aerodrome Reserve Established to fund future development and upgrades of the airport facility. Funded by the annual surplus derived from operation of the airport.
Salmon Gums Quarry Reserve Established to fund the rehabilitation of the Salmon Gums Quarry following exhaustion of its gravel reserves. Funded from General Purpose Income.
Municipal Museum Reserve Established to provide funds for future major repairs or renovations to the museum building. Funded from the annual surplus derived from museum entrance fees after expenses.
Page 36 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12 12. RESERVES - CASH BACKED (Continued)
Meat Inspection Reserve A contingency fund for the purpose of employing a meat inspector if the existing contracted meat inspection service failed to fulfil its obligations.
Off Street Parking Reserve Established to provide funds for the future development of central business car parking in order to make provisions for future business expansion of the CBD. Funded from General Purpose Income.
Sanitation (Rubbish Removal) Services Reserve Established to fund the purchase of major sanitation equipment and for the future development of waste disposal facilities. Funded from the annual surplus derived from property rubbish disposal/ collection fees after expenses.
HACC Asset Replacement Reserve Established for the purpose of holding surplus cash from the operation of HACC activities by Esperance Home Care in accordance with HACC guidelines.
Esperance Home Care Fundraising Reserve Established for the purpose of holding the net proceeds of volunteer fundraising activities relating to the operation of Esperance Home Care.
Gravel Resources Compensation Reserve Established for the purpose of paying compensation to land owners for damages and inconvenience. caused by Council accessing gravel supplies on private property under the provisions of the Local Government and Public Works Act Legislation. Also used to fund works provided by Council by agreement with the landowner in lieu of a compensation payment. Funded from General Purpose Income.
Southern Suburbs Water Supply Reserve Established to provide funds to recycle waste water to recreation grounds. Funded by the proceeds of the sale of water.
Cemetery Reserve Established to fund Maintenance at the Shire of Esperance Cemetery
Unspent Grants & Contributions Reserve Established for the purpose of containing funds that are derived from unspent or prepaid grants and contribution from external parties. Funded from external sources.
Historical Village Reserve Established to fund future improvements and major building repairs at the historical village. Funded from the surplus derived from on site property rentals after operating and maintenance expenses.
Plant Replacement Reserve Council’s Policy is to minimise and if possible eliminate any need to rely upon loan finance or unreasonable rate increases to finance the acquisition of major plant items. Funding is from the General Purpose Income. Amounts allocated will be re-assessed annually in response to revisions of the five year plant replacement program and the associated forward cost estimates.
Employee Entitlements- Annual Leave Reserve During the year this reserve was closed with the funds transferred to EHC Employee A/Leave Entitlements Reserve and EHC Employee Long Service Leave Entitlements Reserve.
Employee Entitlements- Long Service Leave Reserve The purpose of this Reserve is to fund a portion of future commitments for employee entitlements incurred as a result of employing staff and workers in relation to Long Service Leave.
History Book Reserve Established to accumulate the proceeds from the sale of the Shire of Esperance history book. The accumulated funds are intended to offset future printing costs of the history book.
Tanker Jetty Donations Reserve Established to accumulate donated funds for the restoration and maintenance of the tanker jetty.
Page 37 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
12. RESERVES - CASH BACKED (Continued)
Library Reserve Established to hold the net proceeds from computer user charges at the Library to be used for the future replacement and improvement of computer facilities to the general public.
Drainage Reserve Established to hold contributions made to the Council by Developers for the establishment of Drainage within the Esperance District.
Building Maintenance Reserve Established to hold unexpended funds from the Building Maintenance Program for the use of building maintenance and refurbishment of Council buildings.
Community Bus Maintenance & Replacement Reserve Established to provide funds for the replacement and major maintenance of the Seniors Community Bus. Funded from the revenue received from the hire of the Seniors Community Bus.
Governance & Workers Compensation Reserve Established for the purpose of future workers compensation insurance costs under the performance based contribution scheme; or cyclical gross rental valuation cost for rating purposes; or unforeseen legal costs.
Shark Lake Industrial Park - Environmental Monitoring and Landscape/Drainage Maintenance Reserve Direct contribution of $10,000 each by the Shire of Esperance, Esperance Port Authority and CBH and any subsequent Specified Area Rate applied to landowners within the Shark Lake Industrial Park, to cover costs of undertaking water sampling and environmental monitoring as well as maintaining landscape areas and drainage.
Staff Retention & Attraction Reserve Established to assist with the funding of future employment initiatives linked to the Enterprise Bargaining Agreement or other staff related matters. Funded from savings within the wage and salary budget.
IT System & Process Development Reserve Established to finance the acquisition and enhancement of information technology across the Shire. Ongoing appropriations from the Municipal Fund are provided as and when needed.
Esperance Home Care Annual Leave Reserve Established to fund future commitments for annual leave entitlements as a result of employing staff. Funded from external grant funding.
Esperance Home Care Long Service Leave Reserve Established to fund future commitments for long service leave entitlements as a result of employing staff. Funded from external grant funding.
Expected Usage The Reserves have funds applied to projects and may be reimbursed from the Municipal Fund on an ongoing basis each year as determined by Council during the budget process. The current year's movements in to or out of reserves are disclosed at Note 12 above. Any change in the purpose of reserve funds is made in accordance with the Local Government Act and Local Government Financial Management Regulations.
Page 38 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
13. NOTES TO THE CASH FLOW STATEMENT
(a) Reconciliation of Cash
For the purposes of the statement of cash flows, cash includes cash and cash equivalents, net of outstanding bank overdrafts. Cash at the end of the reporting period is reconciled to the related items in the Statement of Financial Position as follows: 2012 2012 2011 Actual Budget Actual $ $ $ Cash and Cash Equivalents 32,946,714 11,167,479 13,974,222
(b) Reconciliation of Net Cash Provided By Operating Activities to Net Result
Net Result 19,854,511 2,103,065 2,867,427
Depreciation 8,588,017 8,579,880 8,606,104 (Profit)/Loss on Sale of Asset (312,993) (801) (353,809) (Increase)/Decrease in Receivables (18,653) 242,579 259,076 (Increase)/Decrease in Inventories (8,599) (24,054) (986) Increase/(Decrease) in Payables 1,734,573 955,309 (650,625) Increase/(Decrease) in Employee Provisions 94,872 199,555 147,685 Grants/Contributions for the Development of Assets (19,398,853) (5,421,445) (3,789,965) Net Cash from Operating Activities 10,532,875 6,634,088 7,084,907
(c) Undrawn Borrowing Facilities Credit Standby Arrangements Bank Overdraft limit 200,000 200,000 200,000 Bank Overdraft at Balance Date - - - Credit Card Facility 40,000 40,000 40,000 Credit Card Balance at Balance Date (69) (2,000) (2,810) Total Amount of Credit Unused 239,931 238,000 237,190
The above overdraft is secured by way of floating debenture over the Shire's income.
(d) Loan Facilities Loan Facilities - Current 127,779 76,541 Loan Facilities - Non-Current 8,973,938 8,840,972 Total Facilities in Use at Balance Date 9,101,717 8,917,513 Un-used Loan Facilities at Balance Date 962,305 1,150,773
Page 39 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
14. CAPITAL AND LEASING COMMITMENTS
(a) Finance Lease Commitments
The Shire of Esperance has no current finance leasing or hire purchase commitments.
2012 2011 Actual Actual $ $ (b) Operating Lease Commitments
Non-cancellable operating leases contracted for but not capitalised in the accounts.
Payable: - not later than one year 32,779 71,284 - later than one year but not later than five years 25,704 39,808 58,483 111,092
(c) Capital Expenditure Commitments
The Shire has no capital expenditure commitments as at the current reporting date.
15. CONTINGENT LIABILITIES
The Shire of Esperance is unaware of any contingent liabilities at the current reporting date.
16. JOINT VENTURE
The Shire of Esperance together with the Shires of Coolgardie, Dundas, Laverton, Leonora, Menzies, Ngaanyatjarraku, Ravensthorpe, Wiluna and City of Kalgoorlie Boulder have a joint venture arrangement with regard to the provision of a Regional Records Service. The only asset is a building. Council's one-tenth share of this asset is included in Land and Buildings as follows:
2012 2011 Actual Actual $ $ Non-Current Assets Land & Buildings 68,000 - Less; Accumulated Depreciation 75 - 67,925 -
Page 40 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2012 2011 Actual Actual $ $
17. TOTAL ASSETS CLASSIFIED BY FUNCTION AND ACTIVITY
General Purpose Funding 2,447,392 1,680,239 Governance 3,304,077 3,210,491 Law, Order, Public Safety 1,326,993 1,610,761 Health 60,323 24,489 Education and Welfare 4,011,321 3,912,522 Community Amenities 3,134,724 2,930,896 Recreation and Culture 24,247,540 23,607,463 Transport 208,844,661 205,789,067 Economic Services 13,871,593 448,685 Other Property and Services 11,990,382 11,412,066 Unallocated 6,197,407 2,941,574 279,436,413 257,568,253
2012 2011 2010 Actual Actual Actual
18. FINANCIAL RATIOS
Current Ratio 1.656 1.691 0.451 Untied Cash to Trade Creditors Ratio 2.784 0.442 0.603 Debt Ratio 0.048 0.045 0.045 Debt Service Ratio 0.011 0.011 0.038 Gross Debt to Revenue Ratio 0.310 0.326 0.292 Gross Debt to Economically Realisable Assets Ratio 0.109 0.142 0.138 Rate Coverage Ratio 0.252 0.368 0.318 Outstanding Rates Ratio 0.011 0.015 0.016
The above rates are calculated as follows: Current Ratio Current assets minus restricted assets Current liabilities minus liabilities associated with restricted assets
Untied Cash to Trade Creditors Ratio Untied cash Unpaid trade creditors
Debt Ratio Total liabilities Total assets
Debt Service Ratio Debt Service Cost Available operating revenue
Gross Debt to Revenue Ratio Gross debt Total revenue
Gross Debt to Gross debt Economically Realisable Assets Ratio Economically realisable assets
Rate Coverage Ratio Net rate revenue Operating revenue
Outstanding Rates Ratio Rates outstanding Rates collectable
Page 41 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
19. TRUST FUNDS
Funds held at balance date over which the Council has no control and which are not included in the financial statements are as follows:
Balance Amounts Amounts Balance 1-Jul-11 Received Paid 30-Jun-12 Details $ $ $ $ Town Planning Development Bonds 102,509 4,017 (13,570) 92,956 Caravan Park Lease Bonds 47,663 1,989 - 49,652 TransWA Bus Transport 19,693 15,716 (19,693) 15,716 Dept of Transport Licensing Agency 84,853 97,168 (84,853) 97,168 Air BP Fuel Agency 6,207 167 (235) 6,139 Builders Reinstatement Bonds 25,200 500 (4,400) 21,300 BCITF Levy 1,207 1,545 (1,207) 1,545 Staff Housing Bonds 9,617 6,920 (5,190) 11,347 Subdivision Bonds 1,984 83 - 2,067 Homecare Bus Bonds 1,000 1,000 (200) 1,800 Civic Centre Bonds - 2,240 (2,240) - Senior Citizens Centre Bonds - 1,122 (1,122) - Builders Reg. Board Levy - - - - Engineering Sub-division Bonds 150,211 7,711 (31,819) 126,103 Other 8,848 17,454 (23,833) 2,469 Commercial Building Bonds 1,453 - - 1,453 Contributions to Public Open Space 176,843 7,381 - 184,224 General Deposits 44,239 42,326 (44,238) 42,327 681,527 207,339 (232,600) 656,266
20. DISPOSALS OF ASSETS - 2011/12 FINANCIAL YEAR
The following assets were disposed of during the year.
Net Book Value Sale Price Profit (Loss) Actual Budget Actual Budget Actual Budget $ $ $ $ $ $ Law Order & Public Safety LV499 Mitsubishi Triton Dual Cab 18,929 22,646 14,546 20,000 (4,384) (2,646) LV518 Mitsubishi Triton Dual Cab 17,540 19,766 17,000 20,000 (540) 234 Education & Welfare IVH2 Toyota Hi-Ace Mini Bus - - 909 - 909 - Community Amenities FL2 Caterpillar Forklift 4,849 7,516 15,000 12,000 10,151 4,484 Transport LV496 Mitsubishi Triton Dual Cab 18,740 18,163 14,545 19,000 (4,195) 837 LV545 Holden Colorado Dual Cab 18,347 25,270 24,000 25,000 5,654 (270) LV508 Toyota Hiace Bus 25,374 26,458 24,996 26,000 (377) (458) G36 Caterpillar Motor Grader 84,834 102,004 140,000 120,000 55,166 17,996 T94 Mitsubishi FS52 Tip Truck 48,567 63,483 104,545 85,000 55,979 21,517 T86 Isuzu NPR 300 tip Truck - 2,598 24,546 22,000 24,545 19,402 T87 Isuzu NPR 300 tip Truck - 2,598 25,455 22,000 25,455 19,402 MR6 Collins 12T Roller - - 750 - 750 - D10 Bulldozer - 218,690 - 150,000 - (68,690) TR59, TR60 Traffic Lights - 8,466 - 2,000 - (6,466) Sundry Equipment - - - 2,000 - - Economic Services LV501 Mitsubishi Triton Ute 13,692 13,839 7,000 10,000 (6,691) (3,839) Other Property & Services Flinders Subdivision 283,071 - 432,165 104,262 149,092 - LV514 Toyota Hilux Dual Cab 21,430 24,202 22,909 23,500 1,479 (702)
555,373 513,287 868,366 662,762 312,993 801
Page 42 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
21. INFORMATION ON BORROWINGS
(a) Repayments - Debentures Borrowing Interest Maturity Principal New Interest Repayments Principal Principal Institution Rate Date 1-Jul-11 Loans Repayments 30-Jun-12 Particulars % Actual Budget Actual Budget Actual Budget Recreation & Culture Loan 261 - Pink Lake Country Club * WATC 6.65 07/22 198,029 - 12,687 12,867 12,273 12,273 185,756 185,756 Loan 265 - Esp. Indoor Sport * WATC 6.59 04/12 11,576 - 429 605 11,576 11,576 - - Loan 285 - Esp. Speedway * WATC 6.36 02/17 16,488 - 971 1,026 2,337 2,337 14,151 14,151 Loan 286 - Esp. Bowling Club * WATC 6.51 06/17 179,651 - 11,440 11,446 12,476 25,359 167,175 154,292 Loan 287 - Esp Seafarers Centre * WATC 7.01 8/13 37,328 - 2,459 2,520 5,242 5,242 32,086 32,086 Loan 290 - Cascade Town Rec Assoc * WATC 5.65 12/14 21,866 - 1,115 1,130 5,816 5,816 16,050 16,050 Loan 291 - Recherche Aged Welfare * WATC 6.36 12/30 345,570 - 21,944 21,973 9,290 9,290 336,280 336,280 Loan 292 - Esp Squash Club * WATC 6.05 12/20 57,778 - 3,413 3,425 4,649 4,649 53,128 53,129 Loan 294 - Scaddan Country Club * WATC 3.25 06/13 - 59,395 33 2,769 - 2,069 59,395 62,261 Other Property & Services Loan 288 - SLIP/Flinders WATC 3.60 06/13 8,049,227 388,468 508 - 200,000 - 8,237,696 8,049,226 8,917,513 447,863 54,999 57,761 263,659 78,611 9,101,717 8,903,231 Funding of Borrowings * Self Supporting Loan financed by payments from third parties. All other loan repayment were financed by general purpose revenue.
Page 43 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
21. INFORMATION ON BORROWINGS (CONTINUED)
(b) New Borrowings - 2011/12
Amount Borrowed Institution Loan Term Total Interest Amount Used Balance $ Type (Years) Interest & Rate $ Unspent Particulars/Purpose Actual Budget Charges Actual Budget $ Loan 294 - Scaddan Country Club 59,395 64,330 WATC Debenture 1 1,990 3.25 59,395 64,330 - Short Term Loan 288 - SLIP/Flinders 388,468 - WATC Lending Revolving 75,990 3.60 388,469 - - Facility 447,863 64,330 77,980 447,864 64,330 -
(c) Unspent Loans
The Shire does not have any unspent loans as at 30 June 2012.
(d) Overdraft
Council established an overdraft facility of $200,000 on 12 July 2000 to assist with short term liquidity requirements. The balance of the bank overdraft at 1 July 2011 and 30 June 2012 was $nil.
Page 44 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
22. RATING INFORMATION - 2011/12 FINANCIAL YEAR
(a) Rates
Rate in Number Rateable Rate Interim Back Total Budget Budget Budget Budget dollar of Value Revenue Rates Rates Revenue Rate Interim Back Total RATE TYPE Properties Actual Revenue Rate Rate Revenue General Rate GRV - Residential 0.076081 3,498 45,892,984 3,491,585 47,161 604 3,539,350 3,520,347 10,000 - 3,530,347 GRV - Commercial 0.076081 371 19,194,673 1,460,350 (3,250) - 1,457,100 1,448,250 10,000 - 1,458,250 GRV - Vacant 0.076081 210 3,601,780 274,027 (6,875) 838 267,990 288,916 - - 288,916 UV - Rural 0.006143 1,130 845,749,000 5,195,436 (4,307) (5) 5,191,124 5,193,381 - - 5,193,381 UV - Commercial/Industrial 0.006143 2 275,000 1,689 (768) - 921 1,689 - - 1,689 Sub-Totals 5,211 914,713,437 10,423,087 31, 961 1, 437 10, 456,485 10,452,584 20,000 - 10,472,584 Minimum Minimum Rates $ GRV - Residential 700.00 1,275 9,722,574 892,501 (1,639) (53) 890,809 872,200 - - 872,200 GRV - Commercial 700.00 80 476,355 56,000 (1,752) (751) 53,497 56,000 - - 56,000 GRV - Vacant 700.00 675 3,679,139 472,500 (17,404) (1,126) 453,970 490,700 - - 490,700 GRV - Lesser Service 350.00 71 13,496 24,850 - - 24,850 25,200 - - 25,200 UV - Lesser Service 350.00 1 11,000 350 - - 350 - - - - UV - Rural 700.00 52 3,295,900 36,400 - - 36,400 37,800 - - 37,800 UV - Mining 700.00 159 2,348,325 111,300 (4,841) (391) 106,068 120,400 - - 120,400 UV - Commercial/Industrial 700.00 1 78,000 700 - - 700 700 - - 700 Sub-Totals 2,314 19,624,789 1,594,601 ( 25,636) (2,321) 1,566,644 1,603,000 - - 1,603,000 12,023,129 12,075,584
Prepaid Rates 4,064 - Ex Gratia Rates 160,503 161,277 Totals 12,187,696 12,236,861
Page 45 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
22. RATING INFORMATION - 2011/12 FINANCIAL YEAR (CONTINUED)
(b) Information on Surplus/(Deficit) Brought Forward 2012 2011 (1 July 2011 B/F) (30 June 2011 C/F) $ $ Surplus/(Deficit) 1 July 2011 Brought Forward 939,573 939,573
Comprises:
Cash - Unrestricted 299,633 299,633 Cash - Restricted 13,674,589 13,674,589 Rates - Current 179,232 179,232 Sundry Debtors 1,785,315 1,785,315 Interest Receivable 4,024 4,024 GST Receivable 20,440 20,440 Inventories 206,466 206,466
Less: Reserves - Restricted Cash
Land Purchase & Development Reserve 777,983 777,983 Council Buildings Construction Reserve 16,125 16,125 Eastern Suburbs Water Pipeline Reserve 136,683 136,683 Jetty Reserve 1,552,851 1,552,851 Aerodrome Reserve 1,842,733 1,842,733 Salmon Gums Quarry Reserve 8,718 8,718 Municipal Museum Reserve 2,597 2,597 Meat Inspection Reserve - - Off Street Parking Reserve 122,417 122,417 Sanitation (Rubbish Removal) Services Reserve 1,368,867 1,368,867 Esperance Home Care Fundraising Reserve 62,762 62,762 HACC Asset Replacement Reserve 126,963 126,963 Gravel Resources Compensation Reserve 47,135 47,135 Southern Suburbs Water Supply Reserve 38,756 38,756 Cemetery Reserve 27,778 27,778 Unspent Grants & Contributions Reserve 2,129,275 2,129,275 Historical Village Reserve 1,756 1,756 Plant Replacement Reserve 626,023 626,023 Employee Entitlements- Annual Leave Reserve - - Employee Entitlements- Long Service Leave Reserve 712,515 712,515 History Book Reserve 15,803 15,803 Tanker Jetty Donations Reserve 30,521 30,521 Library Reserve 28,805 28,805 Drainage Reserve 210,529 210,529 Building Maintenance Reserve 2,348,036 2,348,036 Community Bus Maintenance & Replacement Reserve 65,965 65,965 Governance & Workers Compensation Reserve 249,873 249,873 Shark Lake Industrial Park - Environmental Monitoring and Landscape/Drainage Maintenance 54,397 54,397 Staff Retention & Attraction Reserve 584,850 584,850 IT System & Process Development Reserve 246,520 246,520 EHC Employee Entitlements A/Leave Reserve 118,722 118,722 EHC Employee Entitlements LS/Leave Reserve 118,631 118,631 13,674,589 13,674,589
Subtotal 2,495,110 2,495,110
Page 46 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
22. RATING INFORMATION - 2011/12 FINANCIAL YEAR (CONTINUED)
(b) Information on Surplus/(Deficit) Brought Forward (Continued) 2012 2011 (1 July 2011 B/F) (30 June 2011 C/F) $ $
Balance Brought Forward (from previous page) 2,495,110 2,495,110
Less: Sundry Creditors (677,500) (677,500) Accrued Interest on Debentures (6,403) (6,403) Accrued Salaries and Wages (219,724) (219,724) Provisions of Annual Leave (770,632) (770,632) Non-cash backed Staff Leave Liability 118,722 118,722
Surplus/(Deficit) 939,573 939,573
Difference: There was no difference between the Surplus/(Deficit) 1 July 2011 Brought Forward position used in the 2012 audited financial report and the Surplus/(Deficit) Carried Forward position as disclosed in the 2011 audited financial report.
Page 47 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
23. DISCOUNTS, INCENTIVES, CONCESSIONS & WRITE-OFFS (2011/12 FINANCIAL YEAR)
Total Budget Cost/ Cost/ (a) Write-Offs Value Value General Debtors 220 - Rate Assessments 3,645 1,000 3,865 1,000
(b) Waivers A waiver of rates in relation to commercial leases entered into with tenants of the Museum Village Park has been granted. This waiver is granted as part of a tenancy lease negotiated with each tenant.
(c) Concessions The Council offers those residents who hold a current valid seniors concession card, a concession in respect of the following services: (I) Rubbish Collection Services, 50% of the normal fee applicable. (II) Dog registration fees, 50% of the normal fee applicable. (III) Various concessions on user charges at the Bay of Isles Leisure Centre (see below)
A concession of $40.00 is offered to Schools using the Shire Civic Centre for conventions, meetings and prize nights etc. on those fees normally charged.
Concessions of various fees are offered to holders of student cards, health care cards and pensioner cards. These concessions are available on pool/spa/sauna entry, health and fitness memberships to the gymnasium, aquatic area or whole complex, health and fitness classes and sport hall hire. These concessions are available only upon presentation of a relevant card and are offered to make the Bay of Isles Leisure Centre financially accessible to everyone in the community.
(d) Incentives A prize is offered to ratepayers whose payment of the full amount owing, including arrears, is received on or before 31st August 2011 or 35 days after the date of service appearing on the rate notice, whichever is the later. The total value of the rate incentive scheme is $25,000.
24. INTEREST CHARGES AND INSTALMENTS (2011/12 FINANCIAL YEAR)
Interest Admin. Revenue Budgeted Rate (%) Charge Revenue $ $ $ Interest on Unpaid Rates (note 2a) 11.00% - 36,006 29,000 Interest on Instalments Plan (note 2a) 5.50% - 55,627 45,000 91,633 74,000
Ratepayers had the option of paying rates in four equal instalments, due on 21st September 2011, 23rd November 2011, 25th January 2012 and 28th March 2012. Interest was applied on the final three instalments.
Page 48 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
2012 2012 2011 Actual Budget Actual 25. FEES & CHARGES $ $ $
Governance 10,410 13,250 11,050 General Purpose Funding 24 1,300 591 Law, Order, Public Safety 38,362 39,720 37,041 Health 136,769 154,853 161,395 Education & Welfare 234,582 220,800 209,054 Community Amenities 2,560,991 2,267,350 2,527,254 Recreation & Culture 1,227,878 1,174,834 1,134,536 Transport 1,261,264 1,053,450 1,089,186 Economic Services 509,906 331,833 506,499 Other Property & Services 415,187 430,500 851,726 6,395,373 5,687,890 6,528,332
2012 2011 Actual Actual 26. GRANT REVENUE $ $
Grants, subsidies and contributions are included as operating revenues in the Statement of Comprehensive Income:
(a) By Nature/Type: Operating Grants, Subsidies & Contributions 9,230,839 8,032,526 Non-Operating Grants, Subsidies & Contributions 19,398,853 3,789,965 28,629,692 11,822,491 (b) By Reporting Program: General Purpose Funding 5,269,309 4,003,339 Governance 211,237 205,938 Law, Order, Public Safety 339,720 759,939 Health 21,637 - Education & Welfare 2,141,612 2,108,340 Community Amenities 95,653 39,354 Recreation and Culture 2,047,100 857,955 Transport 4,107,572 3,415,119 Economic Services 14,123,087 204,656 Other Property & Services 272,765 227,851 28,629,692 11,822,491
27. EMPLOYEE NUMBERS 2012 2011 2010 Actual Actual Actual The number of full-time equivalent employees at balance date. 192 178 177
2012 2012 2011 Actual Budget Actual $ $ $ 28. ELECTED MEMBERS REMUNERATION The following fees, expenses and allowances were paid to council members and/or the president.
Meeting Fees 71,000 78,000 79,450 President’s Allowance 15,000 15,000 14,600 Deputy President's Allowance 3,750 3,750 3,650 Travelling Expenses 11,197 10,000 4,345 Telecommunications Allowance 14,250 14,250 16,500 IT (Information Technology) Allowance 4,614 4,750 5,500 119,811 125,750 124,045
Page 49 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
29. MAJOR LAND TRANSACTIONS
(a) Flinders Residential Subdivision
(i) Details The Council owns land, freehold at East Location 18, Lot 3 which is bounded by Ormonde Street and Goldfields Road. During 2003/04 the Council created 33 blocks from part of Lot 3. These blocks were sold at auction and the profit transferred into a Cash Reserve established for Land Development. The Council developed a further 90 Lots as Stage 2 during 2009/10. 21 Lots have been sold with the remainder to be progressively sold subject to market demand. The Council has developed a Business Plan in relation to this development a copy of which is available on request from the Council Administration Office.
2012 2011 Actual Actual $ $ (ii) Current Year Transactions Operating Income Loan Interest Written Back - 5,233 Profit on Sale of Land 149,092 386,280 149,092 391,513 Operating Expense Other Expenses - (4,424) Advertising & Promotion - (19,795) Administration Allocation (508) - (508) (24,219) Capital Income Loan Proceeds 350,384 348,454 Land Sale Proceeds 432,163 845,292 782,547 1,193,746 Capital Expense Marketing & Legal Expenses - - Interest Capitalised (350,384) (348,454) Project Management & Design - - Development Costs (80,971) (736,570) Loan Principal Repayments (200,000) (131,706) (631,355) (1,216,730)
Total 299,776 344,310
2013 2014 2015 2016 Budget Budget Budget Budget (iii) Expected Future Cashflows $ $ $ $ Inflows/(Outflows) Cash Inflows Land Sales 320,000 4,200,000 3,360,000 3,840,000 320,000 4,200,000 3,360,000 3,840,000 Cash Outflows Printing & Stationery (3,000) (3,000) (3,000) (3,000) Interest Expense (430,000) (455,000) (331,000) (171,646) Development Expenses - - - - Marketing & Selling Costs (19,200) (252,000) (201,600) (230,400) GST (32,000) (420,000) (336,000) (384,000) Repayment of Borrowings - (2,520,000) (3,000,000) (3,032,408)
(484,200) (3,650,000) (3,871,600) (3,821,454) Net Cash Flows (164,200) 550,000 (511,600) 18,546
The net cash flows to 30 June 2012 in relation to this sub division is an outflow (or cost) of ($6,901,747). The net cash flows of the entire land transaction is expected to result in a net outflow of $107,254.
Page 50 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
29. MAJOR LAND TRANSACTIONS (Continued)
(b) Shark Lake Industrial Park - Shire Subdivision.
(i) Details
During the 2010-11 financial year the Council continued to undertake a major land transaction as defined under the Local Government Act, 1995.
With the Superlot Stage of the Shark Lake Industrial Park subdivision complete, Council has further subdivided the acquired superlot into approximately 90 general industrial lots of varying sizes.
Stage 1 consisting of 28 lots has been completely developed at a total capital cost of $1,037,953 excluding the costs associated with acquiring the superlot.
Stage 1 lots were auctioned in May 2010 with no sales resulting.
All stage 1 lots remain listed for sale with local real estate agents with Council taking a longer term view with this strategic industrial development site.
2012 2011 Actual Actual $ $ (ii) Current Year Transactions Operating Income - - - - Operating Expense Advertising & Promotions (3,525) Administration Allocation - - - (3,525)
Operating Result - (3,525)
Capital Income Loan Proceeds 38,084 51,424 38,084 51,424 Capital Expense Electricity Connection - - Interest (38,084) (51,424) Other Expenses - - Survey - - (38,084) (51,424)
Non-Operating Result - -
Total Net Result - (3,525)
Page 51 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12 29. MAJOR LAND TRANSACTIONS (Continued)
(b) Shark Lake Industrial Park - Shire Subdivision (Continued).
(iii) Expected Future Cashflows Inflows/(Outflows)
Operating Cash Inflows Profit on Disposal - Transfer from Land Development Reserve -
Operating Cash Outflows Advertising & Promotion - Interest on Borrowings - Legal Expenses - Administration Allocation - Net Operating Cash Inflows/(Outflows) -
Capital Cash Inflows Loan Borrowings - Land Sales -
Capital Cash Outflows Land Development Costs - Loan Repayments - Transfer to Reserves - Net Capital Cash Inflows/(Outflows) -
Net Operating/Capital Cash Flows -
Page 52 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
30. MAJOR TRADING UNDERTAKINGS
Esperance Aerodrome Council's objective is to maintain a safe landing airstrip and functional airport amenities conducive to the promotion of the district as a tourist and business destination. Operating costs are met by landing fees charged. Annual surpluses are transferred to reserve funds to finance future improvements to the facility. 2012 2012 2011 Actual Budget Actual $ $ $ (a) Operating Statement
Operating Revenues Passenger Landing Fees 955,847 760,000 801,336 Commissions Fuel Agency 38,712 35,000 21,843 Rentals 16,641 13,000 16,411 Grants & Subsidies - - 45,000 Other Sundry Income 4,374 5,450 3,481 Gain on Disposal of Asset - - - Reimbursement Operating Expenses 2,037 1,000 1,385 1,017,611 814,450 889,456 Less Operating Expenses Employee Expenses (229,620) (205,972) (188,908) Insurance (8,580) (8,590) (7,810) Building Expenses (36,623) (26,316) (36,735) Grounds & Strip Maintenance (38,157) (65,929) (70,636) Fuel Agency Expense - (4,960) (2,852) Marketing - (2,000) (57) Security Screening (13,148) (100,000) - Airport Identification Expenses (2,758) (6,000) (1,741) Administration Overheads (52,891) (56,600) (32,739) Depreciation (172,936) (160,600) (162,835) Other (39,307) (48,220) (135,468) (594,020) (685,187) (639,781)
Operating Result 423,591 129,263 249,675
2012 2012 2011 Actual Budget Actual $ $ $ (b) Non-Operating Income & Expenditure
Capital Revenue Grants & Subsidies 767,625 1,781,000 51,670 Transfer From Reserve Fund 401,058 1,377,063 - 1,168,683 3,158,063 51,670 Less Capital Expenditure Infrastructure (1,146,497) (2,508,063) (105,883) Plant & Equipment (218,214) (650,000) (25,794) (1,364,711) (3,158,063) (131,677)
Non-Operating Result (196,028) - (80,007)
TOTAL NET TRADING UNDERTAKING 227,563 129,263 169,668
Page 53 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
30. MAJOR TRADING UNDERTAKINGS (continued)
Esperance Aerodrome (Continued) 2012 2011 Actual Actual $ $ (c) Financial Position
CURRENT ASSETS Cash Assets 1,456,123 1,844,252 Receivables 319,668 230,452 TOTAL CURRENT ASSETS 1,775,791 2,074,704
NON-CURRENT ASSETS Property Plant and Equipment 1,978,916 1,076,923 Infrastructure 4,058,927 3,769,145 TOTAL NON CURRENT ASSETS 6,037,843 4,846,068
TOTAL ASSETS 7,813,634 6,920,772
CURRENT LIABILITIES Payables (Creditors and Wages Payable) 11,795 6,959 Provisions (Employee Entitlements) 36,737 38,716 TOTAL CURRENT LIABILITIES 48,532 45,675
NON CURRENT LIABILITIES Provisions (Employee Entitlements) 342 - TOTAL NON CURRENT LIABILITIES 342 -
NET ASSETS 7,764,760 6,875,097
EQUITY Accumulated Surplus 5,978,189 4,700,312 Revaluation Reserve - Non Cash 332,051 332,051 Reserves - Cash Backed 1,454,520 1,842,734 TOTAL EQUITY 7,764,760 6,875,097
Page 54 Annual Financial Report Notes to and forming part of the For the year ended 30th June 2012 Financial Report 2011-12
31. FINANCIAL RISK MANAGEMENT Council’s activities expose it to a variety of financial risks including price risk, credit risk, liquidity risk and interest rate risk. The Council’s overall risk management focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Council.
Council does not engage in transactions expressed in foreign currencies and is therefore not subject to foreign currency risk.
Financial risk management is carried out by the finance area under policies approved by the Council.
The Council held the following financial instruments at balance date:
Carrying Value Fair Value 2012 2011 2012 2011 $ $ $ $ Financial Assets Cash and cash equivalents 32,946,714 13,974,222 32,946,714 13,974,222 Receivables 1,061,848 2,991,460 1,061,848 2,991,460 34,008,562 16,965,682 34,008,562 16,965,682 Financial Liabilities Payables 2,638,200 903,627 2,638,200 903,627 Borrowings 9,101,717 8,917,513 8,618,053 8,178,768 11,739,917 9,821,140 11,256,253 9,082,395
Fair value is determined as follows:
• Cash and Cash Equivalents, Receivables, Payables – estimated to the carrying value which approximates net market value.
• Borrowings – estimated future cash flows discounted by the current market interest rates applicable to assets and liabilities with similar risk profiles.
(a) Cash and Cash Equivalents
Council's objective is to maximise its return on cash whilst maintaining an adequate level of liquidity and preserving capital. The finance area manages the cash portfolio with the assistance of independent advisers (where applicable).
Council has an investment policy and the policy is subject to review by Council. An Investment Report is provided to Council on a monthly basis setting out the make-up and performance of the portfolio.
The major risk associated with investments is price risk - the risk that the capital value of investments may fluctuate due to changes in market prices, whether these changes are caused by factors specific to individual financial instruments of their issuers or factors affecting similar instruments traded in a market.
Cash and investments are also subject to interest rate risk - the risk that movements in interest rates could affect returns.
Another risk associated with cash is credit risk - the risk that a contracting entity will not complete its obligations under a financial instrument resulting in a financial loss to Council.
Council manages these risks by diversifying its portfolio and only purchasing investments with high credit ratings or capital guarantees. Council also seeks advise from independent advisers (where applicable) before placing any cash and investments.
Page 55 Annual Financial Report Notes to and forming part of the For the year ended 30th June 2012 Financial Report 2011-12
31. FINANCIAL RISK MANAGEMENT (Continued)
(a) Cash and Cash Equivalents (Continued)
30-Jun-12 30-Jun-11 Impact of a 1% (¹) movement in interest rates on cash $ $ and cash equivalents: - Equity 207,849 158,466 - Income Statement 207,849 158,466 Notes: (¹) Sensitivity percentages based on management’s expectation of future possible market movements. Recent market volatility has seen large market movements for certain types of investments.
(b) Receivables
Council’s major receivables comprise rates and annual charges and user charges and fees. The major risk associated with these receivables is credit risk – the risk that the debts may not be repaid. Council manages this risk by monitoring outstanding debt and employing debt recovery policies. It also encourages ratepayers to pay rates by the due date through incentives.
Credit risk on rates and annual charges is minimised by the ability of Council to recover these debts as a secured charge over the land – that is, the land can be sold to recover the debt. Council is also able to charge interest on overdue rates and annual charges at higher than market rates, which further encourages payment.
The level of outstanding receivables is reported to Council monthly and benchmarks are set and monitored for acceptable collection performance.
Council makes suitable provision for doubtful receivables as required and carries out credit checks on most non-rate debtors.
There are no material receivables that have been subject to a re-negotiation of repayment terms.
The profile of the Council’s credit risk at balance date was:
30-Jun-12 30-Jun-11 Percentage of Rates and Annual Charges $ $
- Current 0.00% 0.00% - Overdue 100.00% 100.00%
Percentage of Other Receivables
- Current 74.57% 89.17% - Overdue 25.43% 13.83%
Page 56 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
31. FINANCIAL RISK MANAGEMENT (Continued)
(c) Payables/Borrowings
Payables and borrowings are both subject to liquidity risk – that is the risk that insufficient funds may be on hand to meet payment obligations as and when they fall due. Council manages this risk by monitoring its cash flow requirements and liquidity levels and maintaining an adequate cash buffer. Payment terms can be extended and overdraft facilities drawn upon if required.
The contractual undiscounted cash flows of Council’s Payables and Borrowings are set out in the Liquidity Sensitivity Table below:
Due Due Due Total Carying within between after contractual values 1 year 1 & 5 years 5 years cash flows $ $ $ $ $ 2012
Payables 2,638,200 - - 2,638,200 2,638,200 Borrowings 484,699 10,185,213 582,298 11,252,210 9,101,717 3,122,899 10,185,213 582,298 13,890,410 11,739,917
2011
Payables 907,627 - - 907,627 903,622 Borrowings 559,216 8,626,798 686,942 9,872,956 8,917,513 1,466,843 8,626,798 686,942 10,780,583 9,821,135
Page 57 Annual Financial Report Notes to and forming part of the Financial Report For the year ended 30th June 2012 2011-12
31. FINANCIAL RISK MANAGEMENT (Continued)
(c) Payables/Borrowings (Continued)
Borrowings are also subject to interest rate risk – the risk that movements in interest rates could adversely affect funding costs. Council manages this risk by borrowing long term and fixing the interest rate to the situation considered the most advantageous at the time of negotiation.
The following tables set out the carrying amount, by maturity, of the financial instruments exposed to interest rate risk: Weighted Average Effective <1 year >1<2 years >2<3 years >3<4 years >4<5 years >5 years Total Interest Rate $ $ $ $ $ $ $ % Year Ended 30 June 2012
Borrowings
Fixed Rate Debentures 59,395 8,269,781 16,050 - 181,327 575,164 9,101,717 Weighted Average 3.94% Effective Interest Rate 3.35% 3.71% 5.65% 0.00% 6.50% 6.43%
Year Ended 30 June 2011
Borrowings
Fixed Rate Debentures 11,576 8,049,227 37,328 21,866 - 797,516 8,917,513 5.29% Weighted Average Effective Interest Rate 6.59% 5.17% 7.01% 5.65% 0.00% 6.44%
Page 58 Shire of Esperance Windich Street Po Box 507 Esperance WA 6450 P: 08 9071 0666 F: 08 9071 0600 E: [email protected] W: www.esperance.wa.gov.au
Shire of Esperance Annual Report 2011/2012 Published November 2012 Photo credit: Dan Paris, Lynda Horn