Annual Report 2020 3 Chairman’S Review the Board
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ANNUAL2020 REPORT Member Councils Contents As at 30 June 2020 Adelaide City Council City of Mount Gambier Chair’s Review 2 Adelaide Hills Council District Council of Mount Remarkable The Board 4 Adelaide Plains Council Rural City of Murray Bridge CEO's Report 6 Alexandrina Council Naracoorte Lucindale Council Economic conditions 6 The Barossa Council Northern Areas Council Lending activities 8 Barunga West Council City of Norwood, Payneham & St Peters COVID-19 support package 8 Berri Barmera Council City of Onkaparinga Investment activity 9 Information technology 10 City of Burnside District Council of Orroroo Carrieton Compliance 10 Campbelltown City Council District Council of Peterborough Our organisation 11 District Council of Ceduna City of Playford The Authority Profile 13 City of Charles Sturt City of Port Adelaide Enfield The Authority 13 Clare & Gilbert Valleys Council Port Augusta City Council Members 13 District Council of Cleve City of Port Lincoln Guarantee 13 District Council of Coober Pedy Port Pirie Regional Council Income tax equivalents 13 Profit DIstribution 14 Coorong District Council City of Prospect Vale John Keough 14 Copper Coast Council Renmark Paringa Council District Council of Elliston District Council of Robe Profit Before Income Tax Equivalents 15 The Flinders Ranges Council Municipal Council of Roxby Downs Case Studies 17 District Council of Franklin Harbour City of Salisbury City of Whyalla - Whyalla Jetty Project 18 Town of Gawler Southern Mallee District Council City of Salisbury - Salisbury Community Hub 22 Goyder Regional Council District Council of Streaky Bay Financial Report 27 Tatiara District Council District Council of Grant Statement of comprehensive income 28 City of Holdfast Bay City of Tea Tree Gully Statement of financial position 29 Kangaroo Island Council District Council of Tumby Bay Statement of changes in equity 30 Statement of cash flows 31 District Council of Karoonda East Murray The City of Unley District Council of Kimba City of Victor Harbor Notes to the Financial Statements 32 Kingston District Council Wakefield Regional Council Light Regional Council Corporation of the Town of Walkerville Certification of the Financial Statements 61 District Council of Lower Eyre Peninsula Wattle Range Council Independent Auditor’s Report 62 District Council of Loxton Waikerie City of West Torrens Corporation of the City of Marion City of Whyalla Mid Murray Council Wudinna District Council City of Mitcham District Council of Yankalilla Mount Barker District Council Yorke Peninsula Council Chair’s Review The LGFA continued most of this year’s growth was attributed to the to fulfil its vision of convertible cash advance debenture (CCAD), being the preferred floating rate debt product. The LGFA have been financial partner of the actively promoting the use of the CCAD facility South Australian Local as its use allows for a contemporary treasury Government sector over management approach that saves councils the past year and what money by reducing their interest costs. Total a challenging year it loan funds held by councils at year end increased was. from $799 million to $829 million. Despite strong Financial performance this year has been competition from excellent, with a $7.0 million pre-tax profit Mr John Comrie banks and other being generated, which was mainly attributed Chair financial institutions, to typical margin-based banking and the return we continued to write 100% of the loan business on our capital reserves. This profit was achieved and estimate our share of available deposits was while still reducing our convertible cash advance in excess of 90%. Thank you again members for debenture rate out of cycle with the Reserve your continued support. Bank of Australia (and prior to and in addition to the specific COVID related discount highlighted The 2019-20 financial year will no doubt be above). remembered for a long time to come. During the first half of the financial year the LGFA continued The income tax equivalent of $2.1 million will be to promote the responsible use of debt and paid to the State Government for use by local contemporary treasury management while the government to fund research and development second half of the financial year was dominated projects. A bonus to councils and prescribed by the coronavirus COVID-19 pandemic that local government bodies of $2.5 million has forced the world into social isolation which been approved for distribution by the board of fund possible rate deferrals or to bring forward I wish to recognise the continuing support of resulted in high levels of unemployment and trustees. This bonus takes the total bonuses paid warranted projects in an effort to stimulate local the State Government by providing funding via lower levels of economic activity. since inception to $47 million. economies. Davin has made a very encouraging committed facilities administered by SAFA and start to his new role and his performance has importantly the Treasurer’s guarantee of our In early May, the LGA wrote to the LGFA and Long serving CEO Paul Slater’s term concluded been complimented by the continual good work liabilities (including deposits from councils). asked if the LGFA could assist its members in on 31 December 2019. Paul fulfilled the role for of the LGFA’s great team of staff. The Board supporting their communities during and after over 22 years with genuine ongoing passion acknowledges and thanks them for their efforts. Finally, I would also like to acknowledge the very the coronavirus COVID-19 emergency. The to see the LGFA succeed in assisting councils considerable and always valuable efforts of my LGFA Board workshopped a number of options to help them serve their communities to the The Board continued to focus on updating our fellow Board members throughout the year. I that could help councils and agreed that the greatest extent possible. The Board sincerely corporate governance and our risk management have been fortunate to have such a team to serve best approach was to provide discounted loan appreciates his contribution and wishes him well frameworks where appropriate over the past with me. facilities and increase the at call deposit rate we for the future. year. The coronavirus COVID-19 crisis was pay to all our customers. The LGFA Board felt challenging for the organisation and I would that this approach was an equitable way to help In late 2019, the Board started a recruitment like to congratulate our CEO Davin Lambert councils as the discounted loan funding is not process to fill the CEO role and following a and his team on how they continued to service linked to a particular project and instead can be rigorous process assisted by an independent the sector seamlessly in a remote manner. We used by a council as they see fit over the 3-year recruitment agency appointed an internal anticipate that the Board formulated support John Comrie discounting period. This will have an impact on candidate, Davin Lambert. Davin has worked for package announced in mid-May will really benefit September 2020 LGFA profitability but the Board believes it is the LGFA since 2013 and is already well known the sector over the next 3 years. affordable and will provide an equitable financial to many in the sector. Davin started in the benefit to all councils. role on 1/1/2020 and was immediately thrown I am very pleased to report that the Auditor- into the challenging coronavirus COVID-19 General’s Department and Galpins (Auditors), The LGFA have been promoting the responsible environment. He worked with the LGA and who review our Financial Management use of debt for a number of years now and spoke to the sector on zoom video conference Compliance Program, have both given the it was encouraging to see the debt portfolio calls and recommended that councils set up LGFA a very good report card. There were no increase this year and also pleasing to see that contingent cash advance debenture facilities to qualifications in the audit of our financial report. 2 LGFA Annual Report 2020 3 Chairman’s Review The Board Mr John Comrie Dr Andrew Johnson Mr Matt Pinnegar Ms Annette Martin Mr Michael Sedgman Ms Heather Watts Chair Deputy Chair JAC Comrie Pty Ltd Audit & Risk Committee Chair Chief Executive Officer Manager Financial Services Chief Executive Officer Director Commercial Projects LGA Nominee Chief Executive Officer Local Government Association City of Charles Sturt Rural City of Murray Bridge Department of Treasury and Finance LGASA Mutual Pty Ltd Deputy: Ms Lisa Teburea LGFA Elected Member LGFA Elected Member Appointee of the Treasurer Executive Director Corporate Executive Director – Public Affairs Audit & Risk Committee Member Audit & Risk Committee Member Governance Local Government Association LGA Nominee The Authority is managed by a board of trustees, The appointee of the Minister position was still Board meetings attended by board members which consists of seven members, plus up to two vacant as of 30 June 2020. independent members, who can be appointed by Number of meetings held: 6 the board from time to time as required. The board continues to use a balanced scorecard to complement the CEO’s report, which is produced Mr John Comrie 6 Every two years the board is subject to election, monthly for board trustees and highlights appointment or re-appointment of various the LGFA’s continuing achievement of its key Dr Andrew Johnson 6 members. Two trustees are nominated by the Local performance indicators. Mr Matt Pinnegar 5 Government Association of South Australia (LGA), Ms Annette Martin 5 one trustee is the CEO of the LGA, two members The LGFA trustee handbook has also been Mr Michael Sedgman 5 are elected by councils, one trustee is appointed updated, combined with the LGFA management by the Treasurer and the other is the Minister’s handbook to provide clarity and consistency with all Ms Heather Watts 6 representative.