Flinders Council Annual Report 2015-2016

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FLINDERS ISLAND ANNUAL REPORT 2015/2016

FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Table of Contents

Strategic Objectives 3

Strategic Focus Areas 4

Council Services 5

Councillors and Council Meetings 6

Community Representation and Committees 7

Flinders Council Organisational Chart 10

Mayor’s Report 13

General Manager’s Report 15

Legislative Requirements 19

2015- 2016 Progress on Annual Plan Actions 23

Financial Outcomes at a Glance 53

Financial Report 59

PAGE 2 FLINDERS ISLAND ANNUAL REPORT 2015/2016

STRATEGIC OBJECTIVES

Flinders Council’s Vision

To retain our lifestyle and unique landscapes through positive leadership that encourages innovation, population growth, asset attraction, partnerships, and improved health and wellbeing for our community. Our Mission

To provide leadership, services and support which contribute to the wellbeing and sustainability of the Furneaux Community and its environment. Our Core Values

Flinders Council has designed its strategies by carefully considering the match between the Municipality’s current characteristics and the future ambitions, underlying values and desired characteristics identified by the community over a number of years. From this Council has refined its focus and how it can best deliver services and support to progress these needs and ambitions. Using a local/regional development approach, Council has sought to define how it can best focus and apply its resources to:

• effectively deliver essential services and legislative obligations;

• provide a framework of plans and policy that assists the Community to progress; and

• play a beneficial problem solving and opportunity realisation role, as appropriate.

Each of Council’s programs is designed to help us progress as a community and achieve important outcomes. Council has defined five program areas that, in combination, contribute to Flinders’ preferred future. They are our Strategic Focus Areas.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT STRATEGIC FOCUS AREAS

Population • Focusing on strategies, projects and policy initiatives that support the community, economic development Growth and investment attraction.

Infrastructure • An Islands’ specific approach to planning and delivery to ensure community and environmental values are and Services maintained.

Access and • Work with service providers and other relevant stakeholders to improve security, reliability and cost Connectivity effectiveness.

Strategic, Efficient and Effective • Responding to risks and opportunities. Organisation

• Protect, improve and promote the health and Livability wellbeing of the Islands’ communities.

PAGE 4 FLINDERS ISLAND ANNUAL REPORT 2015/2016

COUNCIL SERVICES

COUNCIL OFFICE 4 Davies Street, Whitemark TAS 7255

OFFICE HOURS AIRPORT Monday to Friday 9.00am - 4.30pm Palana Road, Whitemark TAS 7255 Telephone: (03) 6359 5001 Hours: Weekdays 8.00am - 4.30pm Facsimile: (03) 6359 2211 Telephone: (03) 6359 2144 Email: [email protected] Facsimile: (03) 6359 2145 e-mail: [email protected] POSTAL ADDRESS WORKS DEPOT All Correspondence to the 21 Patrick Street, Whitemark TAS 7255 General Manager Hours: Weekdays 8.00am - 5.00pm PO Box 40, Whitemark Telephone: (03) 6359 5020 / 5021 TASMANIA 7255 Facsimile: (03) 6359 2069 AFTER HOURS EMERGENCY VISITOR INFORMATION Works & Sevices Manager 4 Davies Street, Whitemark TAS 7255 Mobile: 0427 592 069 Hours: Monday to Friday 9.00am-4.30pm Telephone: (03) 6359 5002 Facsimile: (03) 6359 2211

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT COUNCILLORS AND COUNCIL MEETINGS

Flinders Council is represented by seven Councillors and is led by the Mayor and the Deputy Mayor. The Council is elected to represent the Community and its aspirations and needs. The Council is authorised by the Local Government Act 1993, as amended, to make a broad range of decisions. The scope of the Council’s responsibilities includes:

. the allocation of resources and the determination of funding priorities; . policy determination and the establishment of corporate goals and objectives; . reviewing and monitoring performance of the Council management structure and team; . overall performance of the corporate body; and . reporting to and liaising with the Community.

Your Councillors

Cr Gerald Willis, Cr Chris Rhodes, Cr David Williams, Mayor Carol Cox, Cr Ken Stockton, Deputy Mayor Marc Cobham, Cr Peter Rhodes

Council Meetings

Ordinary Meetings of Council are usually held on the third Thursday of each month. Meetings commence at 1.00 pm and are open to the public. A listof Ordinary Meeting dates for the year ahead is available from Council Offices after the November meeting each year.

PAGE 6 FLINDERS ISLAND ANNUAL REPORT 2015/2016 COMMUNITY REPRESENTATION AND COMMITTEES 1 JULY 2015 – 30 JUNE 2016

Special Committees

. Furneaux Community Health Special Committee Cr G Willis (Chair) and Mayor C Cox

. Furneaux (Emita) Hall and Recreation Ground Special Deputy Mayor M Cobham (Chair) Committee Cr K Stockton (01/07/2015 – 27/03/2016)

Mayor C Cox (Chair), Cr P Rhodes . Furneaux Group Aviation Special Committee and Cr K Stockton

Mayor C Cox (Chair), Deputy Mayor . Furneaux Group Shipping Special Committee M Cobham and Cr P Rhodes

. Lady Barron Hall & Recreational Special Committee Cr D Williams (Chair)

Council Committees

Mayor C Cox (Chair), Cr K Stockton . General Manager Performance Review Committee and Cr G Willis

Cr G Willis (Chair), Cr C Rhodes, . Ideas and Innovations Committee Cr P Rhodes and Cr K Stockton

Legislated Committee

Deputy Mayor M Cobham, . Code of Conduct Committee (01/07/2015 – 19/05/2016) Cr D Williams and Cr G Willis

. Flinders Council Audit Panel Cr K Stockton and Cr G Willis

. Municipal Emergency Management Committee Mayor C Cox

Local Government Organisations

Mayor C Cox, Deputy Mayor M Cobham and General . Local Government Association of Tasmania Manager R Harper

. Northern Tasmanian Development Representative Mayor C Cox and General Manager R Harper

General Manager Raoul Harper (01/07/2015 . OTTER Customer Consultative Committee – 21/01/2016) Cr P Rhodes (21/01/2016 – - Office of the [Tasmanian] Economic Regulator 30/06/2016)

. TasWater Owners’ Representative Cr G Willis

Community Organisations

. Clean Up Australia Day Cr P Rhodes and Cr K Stockton

. Flinders Island District High School Association Cr P Rhodes

Cr C Rhodes (01/07/2015 – 19/05/2016) Position . Flinders Island Tourism and Business Association vacant (19/05/2016 – 30/06/16)

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT COUNCILLOR ALLOWANCES 2015-2016 Allowances and Expenses Statement (under the Local Government Act 1993) In 2015/16 the Council provided allowances and reimbursements for reasonable expenses to the Mayor, Deputy Mayor and Councillors. The total amount of these allowances and expenses is shown below.

ALLOWANCES $ 91,356 EXPENSES $ 24,419

PAGE 8 FLINDERS ISLAND ANNUAL REPORT 2015/2016 COUNCILLOR MEETING ATTENDANCE REGISTER 2015-2016

Ordinary Council Meetings

Deputy Ordinary Mayor Cr Cr Cr Cr Cr Mayor Meetings C Cox C Rhodes P Rhodes K Stockton D Williams G Willis M Cobham

16.07.15 √ √ √ X √ √ √

20.08.15 √ √ √ √ √ √ √

24.09.15 √ √ √ √ √ √ √

22.10.15 √ √ X √ √ √ √

24.11.15 √ √ √ √ √ √ √

17.12.15 √ √ √ √ √ √ √

21.01.16 √ √ √ √ √ √ √

18.02.16 √ √ X √ X √ √

17.03.16 √ √ √ √ √ √ √

28.04.16 √ √ √ √ √ √ √

19.05.16 √ √ √ √ X √ √

16.06.16 √ √ √ √ √ √ √

Totals 12 12 10 11 10 12 12

Special Meetings

Deputy Special Mayor Cr Cr Cr Cr Cr Mayor Meetings C Cox C Rhodes P Rhodes K Stockton D Williams G Willis M Cobham

27.06.16 X √ √ √ √ √ √

Totals 0 1 1 1 1 1 1

Annual General Meeting

Deputy Mayor Cr Cr Cr Cr Cr Mayor C Cox C Rhodes P Rhodes K Stockton D Williams G Willis M Cobham

09.12.15 √ √ X √ √ √ √

Totals 1 1 0 1 1 1 1

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT FLINDERS COUNCIL ORGANISATIONAL CHART 2015 – 2016 COUNCILLORS

* GENERAL MANAGER

AIRPORT COMMUNITY CORPORATE DEVELOPMENT GOVERNANCE WORKS & & ECONOMIC SERVICES SERVICES SERVICES DEVELOPMENT

*Airport *Community & *Corporate Development Executive *Works & Manager Economic Services Services Officer Services (Vacant as from Development Manager Coordinator Manager 16.12.15) Manager (Environmental Health Officer)

Operations Community Services Strategic Workshop Officer Development Coordinator Planner Coordinator Officer

Reporting Corporate Works Foreman Officer (2)** Finance Officer (2)

Finance Works Officers Officer/ (5) Reception (2)

Maintenance Staff

* SENIOR POSITIONS AS DESIGNATED BY COUNCIL FOR REMUNERATION REPORTING ** A NUMBER OF WORKS OFFICERS ARE TRAINED AS REPORTING OFFICERS TO COVER AS AND WHEN NEEDED.

PAGE 10 FLINDERS ISLAND ANNUAL REPORT 2015/2016

CORPORATE MANAGEMENT TEAM

Governance Manager Raoul Harper

Corporate Manager Sophie Pitchford

Community & Economic Development Manager Jana Harper

Development Services Coordinator Jacci Viney

Strategic Planner Robyn Cox

Works and Services Manager Brian Barnewall

Airport Manager Jeff Grace (01.07.15 - 15.12.15)

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT THE YEAR IN REVIEW The following reports have been prepared in accordance with the requirements of the Local Government Act 1993. The matters reported are to a large extent prescribed in the Act. The reports relate to Council’s Annual and Strategic Plans and refer to the Financial Year ending 30th June 2016, providing an overview of Council’s operations and achievements during this period.

PAGE 12 FLINDERS ISLAND ANNUAL REPORT 2015/2016

MAYOR’S REPORT

The 2015/16 year has been an extremely productive one for the Flinders Council, with staff not only tackling the tasks set out in the Annual Plan but also rising to the challenge of adding unexpected, necessary work to their schedules.

A quick look at Council’s Annual Plan identifies the myriad of tasks and programs that Council undertakes, not only for community benefit but to comply with the detailed legislation and reporting requirements that Local Government is governed by. This year I want to especially thank the Airport and Works and Services staff for willingly and professionally undertaking the repair work on the long runway, often at weekends, to ensure that the runway could remain open.

The freeze on the value of the Federal Assistance Grants (FAGs) made it a little harder for Flinders to balance its books but in reality the small and contained Mayor Carol Cox rates base will always see this Municipality reliant on FAGs to provide services, roads and other infrastructure. The income recovered from rates only covers the annual depreciation commitment which transfers in practice to expenditure on capital programs. Council relies on the annual grants and other sources of income to fund its operational activities.

I would like to note here that as well as the standard income from grants and other sources there has been some exceptional income and assistance received for programs and projects and I thank the staff and community members who have sought and achieved this assistance for Council which includes, but is not limited to: the $160,000 grant from the Tasmanian Community Fund for the addition of a fitness annex to the Lady Barron Hall, volunteer input to the upgrade of the Furneaux (Emita) Hall, $42,500 from the MAST Recreational Boating Fund for the Whitemark boat ramp, $40,000 to match Council’s allocation to investigate a safe harbour option, $264,924 from Regional Aviation Access Programme (RAAP) to assist with long runway maintenance and help from Regional Assistance Australia (Tasmania) for the Fert-ISLE Forum, etc.

This year Council took out a substantial loan to fund the purchase of a new bitumen truck taking advantage of the very low set interest rates being offered. This action has proved to be a positive one for Council, not only in a practical sense, but also economically with the cost of resealing being reduced and income being generated from private works such as the work on the section of state-owned road.

The Federal Government’s increased allocation of funds for Roads to Recovery has put Council in the position of needing to spend more of its own source funds on roads to be able to claim the full amount, thus you will see an increased allocation to road expenditure in the 2017 year which includes a stabilisation trial on sections of our gravel roads.

The Council’s Strategic Plan was approved early in the election period and has as one of its focus points the need to encourage population growth for the Islands. To this end Council has continued to upgrade its infrastructure facilities and provide community programs that support the livability of the Island. The Acting General Manager’s report details the extensive works program and achievements of the Council staff and I congratulate and thank the entire Council workforce for their achievements during the year.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT The Community also got behind inviting Bendigo Bank to open an agency on the Island when Westpac could not be persuaded to continue their Instore Agency service.

Along with visits from individual politicians throughout the year, I was extremely privileged to welcome the full State Cabinet to the Island for its first ever full Cabinet Meeting in this Municipality, which was followed by tours of interest for each cabinet member.

There has been much talk about amalgamation and Flinders Council continues to advocate for resource sharing. Council is now using the West Tamar Council as its permit authority for building and plumbing and as its consultant provider for Planning. Amalgamation is not on our agenda.

Council continues its active membership of state and regional bodies, such as the Local Government Association of Tasmania, Northern Tasmania Development and Tourism Northern Tasmania.

The 2015 Council Citizenship Award was presented to Mr John Gardner, of the Corner, Cape Barren Island. John moved back to the Islands around 5 years ago, had an idea born out of frustration and made it work. The resultant golf course has greatly benefited the small island community. John has been the lobbyist and the worker behind the golf course which has become a focal social point. No more need to hit golf balls on the beach. John is a true example of how an individual can make a difference.

Towards the end of the 2015 year it was becoming evident that the working relationship between some Councillors and our General Manager was not as productive as it could be and this culminated in the separation of Council and Raoul Harper very early in the 2016/17 financial year.

I think it is timely that I acknowledge here the work that Raoul undertook and accomplished during his 7 year tenure of the position. Raoul was appointed by the Councillors of the time who were looking for a General Manager who had the enthusiasm and ability to support and assist them in their desire to drive economic growth and thus population growth in the Municipality. Raoul undertook this role positioning Flinders Council to proactively promote island attributes and encourage investment. Raoul, with his extreme connectivity to Tasmania, was able to easily infiltrate the state political and public sector and argue strongly in support of the Islands. There has been huge public sector investment on Flinders in recent years, somewhat due to the fact that Council has sold Flinders as a can-do place that is an important part of Tasmania. Thank you Raoul - you leave Council in a good position to encourage future population growth and economic development on the Islands.

Flinders Council is very active in the support of its Community and this is now being rewarded by increasing interest in private sector investment which will continue to drive growth in the economy and population of the Islands.

In closing I thank my fellow Councillors as your representatives on Council, for the work that they have undertaken throughout the year and in 2017. I look forward to continuing with the programs Council has put in place, and meeting some of the challenges that it still has to overcome in infrastructure provision.

Carol Cox Mayor

PAGE 14 FLINDERS ISLAND ANNUAL REPORT 2015/2016

GENERAL MANAGER’S REPORT I am pleased to present the Flinders Council Annual Report 2015-2016.

The Flinders Council’s Annual Report presents the extent to which strategies, as outlined in its Strategic Plan, have been addressed for the financial year. The Strategic Plan is a statement of Council’s agreed direction. In a small but diverse organisation such as ours, the Strategic Plan is an important policy document that guides how best to apply limited resources to meet the expectations of our Community.

In delivering on the directions outlined in the Strategic Plan, Council sets an Annual Plan that provides details of programs, their strategies and performance measures, while the Annual Budget determines how these operations will be financed. The Annual Report presented is the culmination of both the planning and reporting cycles of Council and provides an opportunity to outline to the Acting General Manager Sophie Pitchford Community the efforts of staff and Councillors for the year past.

During the 2015/16 year, Council continued its focus on infrastructure development and asset renewal during the year. The main focal point was the delivery of the identified priority repairs program to runway 14/32. Council has submitted a Preliminary Business Case seeking Government support for the funding of a new runway or the rebuild of the current runway. As part of the business case, financial modelling was carried out on the impact of a new runway on the long term financial sustainability of Council. The modelling will be very important in discussions to be held around alternate ownership models.

Council conducted a major resealing program which saw the resealing of 20 kilometres of road and 1.4 kilometres of reconstruction and seal. The purchase of a new bitumen truck and automated spreader boxes proved to be very cost effective and allowed for more precise management of bitumen and aggregate quantities.

The completion of the redevelopment of the Furneaux (Emita) Hall was achieved in 2016. Since the completion a number of events have taken place in the Hall including: an Acoustic Dinner as part of the Furneaux Islands Festival; a newly reinvigorated Emita Sports Day which saw record numbers; school holiday activities and a school camp, amongst many other activities.

Continuing the upgrade of assets, a new Whitemark boat ramp was completed with the assistance of a MAST Grant. The old jetty has been replaced with a prestressed concrete structure which will provide a safer facility for the many boat owners on the Island.

The completion of new public toilets took place during the year with the installation of new facilities at the following sites: Whitemark, Yellow Beach and Lady Barron. The Killiecrankie public toilet was delayed due to an appeal, however a new development application has now been submitted and approved. Council will proceed with the completion of the Killiecrankie public toilet in the second half of 2016.

The Lady Barron Hall upgrade progressed during the year with the final plans, drawings, development and building applications being approved. A tender process was carried out however the project did not proceed further due to the

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT value of the tendered works being well outside available funds for the project. Council will be releasing documents for a new tender in 2016.

A successful application to the Australian Government’s Tourism Driver Infrastructure Grant procured funds for the development of a preliminary business case for a Flinders Island Marine Access and Safe Harbour. The delivery of the project will commence in 2016/17.

The construction of two new water treatment plants by TasWater began early in the new financial year. This is a major investment into the Island’s infrastructure, an estimated $8 million dedicated to the delivery of potable water to our main towns for the first time. The commissioning of the two water treatment plants will commence in the second half of 2016.

Hydro Tasmania commenced the development of a “Hybrid Energy Hub” on Flinders Island which will see a significant increase in renewable energy use on the Island and reduce the use and importation of diesel. Supported by up to $5.5 million in funding from the Australian Renewable Energy Agency, the $12.88 million project will see a significant off-grid hybrid system developed. It is a major investment to the Island’s future and potential economic growth.

While infrastructure and investment are significant contributors to the Island’s economic sustainability and future prosperity, it is the Community and people of the Islands that are our greatest asset. During the year Council continued to deliver a range of projects to support the Community.

Council continues to be actively involved in the primary health care area utilising Federal Government grant funds to co- fund community nurses on Flinders and Cape Barren Islands. These important positions provide a range of non-hospital based services to community members often in their own home.

Council staff continue to initiate, facilitate and support health promotion programs to the Community, often through the attraction of small grants. Examples this year have been the very successful Mums on the Move program - a partnership between Council, the Northern Children’s Network (Duck Pond Child Care) and Women Sport & Recreation Tasmania which has provided new mums with a weekly session that covered everything from yoga to pump and boxing, as well as discussing healthy eating and lifestyle choices.

Staff were instrumental in assisting the Active Tasmania’s ‘Active Island’ program. The program was based on a number of Active Tasmania Programs with outcomes around social connections; increasing awareness of the importance of physical activity; increasing self-esteem; and health benefits that compliment regular physical activity.

The annual School Holiday Program was again a well received and popular program delivered during all school holiday breaks and made available to young people from age 6 to 25 years. Flinders Council along with the Flinders Island Aboriginal Association Incorporated provided many activities throughout the holidays including community barbeques; amazing races; island chef cook offs; creative arts; glow in the dark disco and surf school. The program was open to locals, visitors and returning students who reside off Island.

Council supported a series of walks that included Mt Strzelecki and Killiecrankie to The Docks as part of the spring School Holiday Program. The walks were an initiative of Alexandra Anderson as part of her Inspiring Year 8 Project for Scotch Oakburn College. As part of the project, $1,720 was raised for the Royal Flying Doctor Service.

Council continues to provide in-kind support for the Transition Program, which is run by the Flinders Island District High School. Council staff facilitated and coordinated the Work Placement Program and this year it had a focus on Try-A-Skill.

PAGE 16 FLINDERS ISLAND ANNUAL REPORT 2015/2016

The program is now in its fifth year.

A four year Marketing Strategy was completed and endorsed by the Council with the assistance of an Election Commitment grant. The Marketing Strategy provides a set of marketing tools, strategies and actions that will deliver improved recognition of the Furneaux Islands and boost investment in Flinders Island products, services and experiences specifically. The Flinders Island Tourism and Business Association will present to Council in 2016/17 on the strategy and subsequent Council investment to implement the strategy.

Council delivered the successful Fert-ISLE Forum in 2016. The forum brought ideas, possibilities and opportunities together to meet and stimulate new business enterprise, investment and employment for the Furneaux Islands. The forum was a two day inspiring event, with local and off-island speakers contributing to the experience. A significant outcome of the forum has been the relationship building and new ambassadors developed for Flinders Island.

Council along with the Flinders Island Aboriginal Association Incorporated delivered the third successful Furneaux Islands Festival with greater attendance at all festival events than in previous years. The Festival is a celebration of the shared cultural history of the Community within the Furneaux Islands and being Australian. I would like to take this opportunity to thank all of our community volunteers and organisations that helped to create such a successful event.

Council has completed the Local Area Planning as part of the Strategic Framework which will form the submission report accompanying the planning scheme when it is submitted. The Statewide Scheme is expected to be declared in 2017.

At a financial level the reporting period saw an underlying operating deficit. The Federal Assistance Grants which were part prepaid in 2014/15, had a negative impact on the 2015/16 results.

Council continues to work towards an operating surplus position, however due to a very small rate base and a large suite of assets including an airport under our control the ability and capacity of ratepayers to fully fund a pure operational surplus is questionable at best. Population growth and investment are critical aspects to not only the Island’s long term sustainability but also to Council. Council continues to strive to do “more with less”, but given the Local Government reform process being driven by the State Government, continuing to improve the operational performance of Council and grow our rate or revenue base must be key priorities moving forward if Flinders is to remain as a stand-alone entity.

Given the investment into the runway priority repairs and the ongoing development of the community infrastructure investments, the final operating deficit was within the budgeted estimates. Council continued to improve its Sustainability Indicators, in particular with the investment into assets beginning to reverse the poor performance of the past 5 years. While indicators often don’t compare “apples with apples”, given our remote island nature they do provide the Community with a benchmark of our performance in specific areas of organisational service and asset delivery and for the reporting period Flinders Council improved in all areas under review.

The continued low interest rate returns available in the market contributed to low returns from Council’s investments. Council developed a new investment policy during the year and market assessment was well advanced at the end of the reporting period. The year ahead will see a change of approach to investing Council funds in an effort to drive higher returns. This will be tempered by the fact that the investment of public funds requires diligence and a high aversion to risk.

Council is required to report the operating, capital and competitive neutrality costs in respect of each significant business activity undertaken by the Council. At the direction of the Auditor General, Council has determined, based upon materiality, that the operation of the Flinders Island Airport and Private Works activities as defined in the Annual Financial Report are

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT significant business activities.

Council continues to have healthy cash reserves and has taken the opportunity to use debt to fund key revenue generating assets in 2015/16. The prudent use of debt given the low cost of finance is seen as an area that could drive benefit for Council in the years ahead.

Private investment into the Island continues to grow, as does visitation. The efforts of private industry in stimulating brand awareness and interest in the Islands and its produce are important elements supporting the future growth of not only industry but also visitation and confidence in the Islands as a place to live, work and invest.

It is with great sadness that we farewelled a long serving staff member, Jeff Grace, who was with Council for 19 years and 10 months with his last position being Council’s Airport Manager.

I would like to thank the Management team and all staff for their hard work and passion and especially their ongoing support throughout the year.

Sophie Pitchford Acting General Manager

PAGE 18 FLINDERS ISLAND ANNUAL REPORT 2015/2016 LEGISLATIVE REQUIREMENTS

Flinders Council has prepared its Annual Report in accordance with Section 72 of the Local Government Act 1993, which can be accessed at www.thelaw.tas.gov.au.

Public Interest Disclosure Statement Flinders Council is committed to the aims and objectives of thePublic Interest Disclosures Act 2002. It does not tolerate improper conduct by its employees, officers or members, nor the taking of reprisals against those who come forward to disclose such conduct. It also recognises the value of transparency and accountability in its administrative and management practices and supports the making of disclosures that reveal corrupt conduct involving a substantial mismanagement of public resources or conduct involving a substantial risk to public health and safety or the environment.

Flinders Council procedures in relation to the Public Interest Disclosures Act 2002 are available on Council’s website at www.flinders.tas.gov.au/public-interest-disclosure.

The following is a summary of Council’s Public Interest Disclosure activity during 2015/16:

• There were no disclosures made to Council;

• There were no public interest disclosures investigated;

• There were no disclosed matters referred to Council by the Ombudsman;

• There were no disclosed matters referred by Council to the Ombudsman to investigate;

• There were no investigations of disclosed matters taken over by the Ombudsman from Council;

• There were no disclosed matters that Council decided not to investigate; and

• There were no disclosed matters that were substantiated on investigation.

Senior Officer Remuneration In accordance with Section 72(1)(cd) of the Local Government Act 1993, Council is required to report the total annual remuneration paid to employees who hold positions designated by Council as senior positions, as per the following table. Remuneration includes salary, employer contribution to superannuation, the value of the use of motor vehicles and the value of allowances and/or benefits provided to the employee.

Remuneration Band Number of Positions Remuneration Band Number of Positions

$100,001 - $120,000 1 $140,001 - $160,000 0

$120,001 - $140,000 3 $160,001 - $180,000 1

Donation of Land Statement Under Section 177 of the Local Government Act 1993, Council is required to report on any land donated by Council during the year. Council did not resolve to donate any land in accordance with the Act during the 2015-16 year.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Right to Information Statement During the year Council received no requests for information under the Right to Information Act 2009.

Public Tenders The Local Government (General) Regulations 2005 requires Council to report any contract for the supply or provision of goods and services valued at or above $100,000 (excluding GST) during the financial year.

Council conducted a Request for Tender (RFT) to identify a preferred tenderer to supply and deliver 280,000L of bitumen (Product) to Council over a period of 3 weeks commencing in February 2016. The bitumen was used by Council as part of a major road resealing and upgrade project on Flinders Island. This project involved roads owned by both Council and the Department of State Growth. The bitumen supplied to Council consisted of 240,000L of C170 and 40,000L of S35 PMB. The winning contractor was Venarchie Contracting of 11 Calvary Road, Mowbray, Tasmania for a total cost of $446,800.00 delivered on site to Council’s Depot. The contract duration was from February 1st to February 22nd 2016.

Council called for tenders for the Lady Barron Hall alterations and additions project however the tender was not awarded as estimates were way above budget.

Public Health Statement Section 72(1)(ab) of the Local Government Act 1993 requires a statement of the Council’s goals and objectives in relation to public health activities to be included in the Annual Report. Council’s Development Services Department also includes all Environmental Health functions and Council employs an Environmental Health Officer. Utilisation of the Island’s doctor also complemented resources allocated to immunisation functions.

The Public Health and Environmental Management programs address a range of functions under the Local Government Act 1993, Public Health Act 1997, Food Act 2003, Burial & Cremation Act 2002, Litter Act 2007, Dog Control Act 2000 and the Environmental Management & Pollution Control Act 1994. These functions include:

• Food Safety • Unhealthy Premises • Disease Prevention and Control • Warm Water Systems • Public Health Education and Promotion • Recreational and Bathing Water Quality • Public Health Risk Activities • Public Health Nuisances • Immunisations • Air, Water and Soil Pollution • Burials • Public Health Emergency Management Fire • Exhumations Hazard Abatement • On-Site Waste Disposal Systems • Nuisances and complaints • Dog Control

PAGE 20 FLINDERS ISLAND ANNUAL REPORT 2015/2016

Audit Panel Statement The Flinders Council Audit Panel has not met since the financials have been audited and has not supplied a statement on the financial position of the Flinders Council.

Policies of Council During the 2015-16 year, Council reviewed and amended the following polices:

• Aviation; • Code of Tender and Contracts; • Council Policy Manual; and • Investment; adopted the following new policies:

• Postponement of Rates & Charges; • Remission or Rebate of Rates & Charges; and • Writing Off of Bad Debts; adopted the Local Government Association of Tasmania (LGAT) suite of Operational Behavioural Policies and Procedures provided to all Tasmanian Councils:

• Employee Code of Conduct; • Disciplinary Procedure; • Performance Management; • Communication; • Performance Management Procedure; • Work Health and Safety (W2); • Fitness for Work; • IssueResolution; • Fitness for Work Procedure; • Issue Resolution Procedure; and • Disciplinary; • Workplace Behaviour; and rescinded the following policies:

• Advertising Signs – Airport; • Staff – Sun Protection; • Aerodrome Upgrade; • Workplace Health and Safety (W7); • Flinders Island Airport – Charges; • Equal Employment Opportunity; • Leasing Land for Aircraft at Flinders Island • Staff Development; Aerodrome; • Antidiscrimination, Harassment and Bullying; • Disciplinary Policy; • Staff Code of Conduct; • Employee Personal Development Appraisal; • Disciplinary; • Personal Protective Equipment; • Rehabilitation; and • Smoke Free Environment; • Computer and Telephone Usage Policy.

Sophie Pitchford Acting General Manager

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 2015-2016 PROGRESS ON ANNUAL PLAN ACTIONS

PAGE 22 FLINDERS ISLAND ANNUAL REPORT 2015/2016

1. Population Growth - Focusing on strategies, projects and policy initiatives that support the community, economic development, innovation and investment attraction.

Strategic Direction: 1.1 Increase the supply of affordable housing.

Annual Plan Actions Progress on Actions Status

1.1.1 Land use planning This action was deferred as it was transformed by the December Deferred policy that provides an 2015 legislation that established the new Statewide Planning enabling environment for Scheme. Preparation of a new Flinders Planning Scheme will housing and investments. commence after the Statewide scheme has been declared by the Minister (not expected to be before December 2016).

1.1.2 A strategy and This action will not commence until work on the Planning Scheme is Not started action plan that identifies completed. affordable housing options.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Strategic Direction: 1.2 Increase “the working age” population.

Annual Plan Actions Progress on Actions Status

1.2.1 Services and Newstead College, Flinders Council and Flinders Island District High Complete activities for young School (FIDHS) facilitated the Work Placement program for Newstead people that also aim to College students in July 2015. Three students spent a week on Flinders attract and retain young Island gaining experience in a variety of local businesses and participated families to the Islands. in social events.

Flinders Council and Scotch Oakburn College worked together to develop Complete the “Little Big Islands Project”. Scotch Oakburn’s art department staff and two year 10 students delivered three days of contemporary art workshops including light photography and ephemeral art for the young people of Flinders Island. They also created eight large stencil art murals that now decorate the entrance to the Whitemark Showgrounds.

Summer School Holiday Program activities were linked with the Furneaux Complete Islands Festival to provide opportunities for the youth of Flinders and Cape Barren Islands to participate in the Festival. A youth from Cape Barren Island participated in the summer workshops, made possible by the Flinders Island Aboriginal Association Incorporated.

Council facilitated driving lessons for three students during the FIDHS Complete transition trips to Launceston.

1.2.2 An islands specific Engagement in the development of the Tasmanian Government Population Complete population growth Growth Strategy has occurred as an outcome of the development and and strategy. planning for the FertISLE Flinders Forum (refer 1.3.1.1). Council staff will ongoing continue to work with the Department of State Growth to explore the development of a localised Population Growth Strategy.

1.2.3 Study the existing The FertISLE Forum (refer 1.3.1.1) provided a platform to investigate Complete constraints to increasing barriers and drivers for increasing the level of ‘on Island’ population. and the level of the locally Regional Development Australia (Tasmania) sponsored a number of ongoing based population. FertISLE Forum participants. The CEO, Northern Strategic Development Officer and a primary producer board member attended. This generated strong ties and an understanding of Flinders Island’s challenges anda respect for the innovation and breadth of the Island’s residents.

It is expected that the outcomes of the Flinders Island Marketing Strategy Ongoing will also identify barriers and address drivers for population growth.

A funding application to the National Stronger Community Fund Round Complete 3 was submitted by Council and outlined connectivity as a key barrier and to population growth. If successful the grant will be used to address ongoing telecommunications connectivity which will provide a key driver for population growth and business development.

1.2.4 A banking model Westpac Bank confirmed that they would close their Flinders Island agency Complete that supports community in September 2016. Council set up a working group to work through the aspirations. options for the Community and contacted a number of banks to ascertain interest in establishing an agency on Island. Bendigo Bank expressed an interest and held a public forum in January 2016. A banking survey was sent out to all residents to determine whether there would be the level of support required to set up an agency. Bendigo Bank achieved the level of support required and although there was no formal announcement, the application was approved.

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Strategic Direction: 1.3 Valueadd to local commodities.

Annual Plan Actions Progress on Actions Status

1.3.1 Opportunities Council staff and the economic development consultant developed a Local Complete for valueadding of Producers Database which includes businesses and expressions of interest and local commodities are in businesses/investment from onIslanders. Staff acted as an enabler for ongoing identified and promoted. idea incubation and development.

Council supported the attendance of three local producers/growers at Complete the Sprout Tasmania – Cross Pollinate Conference. Attendees gained an enormous amount from networking and information sharing. Ideas and feedback were gathered to help inform the development of a Flinders- based business and producer event to encourage networking with successful small to medium businesses from ‘off Island’.

The FertISLE Flinders Forum was delivered in June 2016 which aimed Complete to bring ideas, possibilities and opportunities together to stimulate new business enterprise, investment and employment for the Furneaux Islands. Over 60 participants shared business experiences and knowledge. Feedback from participants was very positive and the Forum exceeded expectations from both on and offIsland participants. The networking opportunities resulted in strong relationship building and ongoing mentoring between the on and offIsland participants.

1.3.2 Support the growth At the FertISLE Flinders Forum, connections between offIsland and local Complete of local sustainable seafood processing and retail businesses were made with ongoing support and fishing and aquaculture provided through mentoring. ongoing enterprises.

1.3.3 Promote Flinders The economic development consultant met with key external stakeholders Complete Island as a high quality from various sectors to promote the Island’s clean, green image, including: and food producing region State Government Premier’s Office, UTAS School of Business, (Innovation ongoing with a clean, green image. Place and Entrepreneurship) UTAS Tourism TREND (Tourism Research and Education Network),UTAS Arts Faculty Deputy Dean, Brand Tasmania Deputy Chair, State Growth Trade and Investment Director of International Trade and Investment, Events Tasmania CEO, Launceston Harvest Market Chair/Stillwater/Black Cow CoOwner and Ferment Tasmania committee member. Many of the off-Island participants in the FertISLE Flinders Forum were stimulated to attend based on these discussions.

Federal and state ‘startup’ grant funding opportunities as well as marketing Complete and coinvestment grants for larger projects were brought to the attention and of the Community. ongoing

1.3.4 Productive and Council provided a meeting space for the Farming Productivity Group Complete sustainable agricultural meetings. No other requests by the Farming Productivity Group were and sector. made to Council. ongoing

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 1.3.5 A strong Flinders A Flinders Island Brand Working Group was established with representation Complete Island Brand that from Flinders Island Tourism and Business Incorporated (FITBI), Tourism and underpins growth and Northern Tasmania (TNT) and Council with an aim to review, make ongoing development of local recommendations and inform the Request for Proposal for a Branding value added commodities. and Marketing Strategy. The conglomerate would also be a part of the selection of the consultant.

Council’s economic development consultant created a Draft Request For Proposal (RFP) which was reviewed and amended before being endorsed by the FITBI Executive Committee.

The consultancy firm “Jim Jam” was engaged to deliver the branding and four year marketing strategy. FITBI members endorsed the strategy and the Executive presented to Council at two Council Budget workshops on the strategy and subsequent need for Council investment to implement.

FITBI will coordinate the implementation of the strategy, working with industry partners and Council. FITBI also appointed a Brand Ambassador, Jo Youl, to project manage the branding work and subsequent activation.

Strategic Direction: 1.4 Foster and support entrepreneurial activity.

Annual Plan Actions Progress on Actions Status

1.4.1 Streamlined Prelodgement advice remains available to those wishing to develop land, Complete and customer purchase land or for general enquiries. Pre-lodgement information packs and focused development for building and planning were developed and are provided to those ongoing application and seeking advice. assessment processes, including prelodgement Discussions with service provider West Tamar Council identified areas of Complete information and advisory expansion to explore and changes/improvements to implement. Improved and services. communication and administration enhanced the service and levels of ongoing efficiency. The ‘Permit Authority’ role was also included in the service agreement.

1.4.2 Build local Staff supported Tourism North Tasmania to deliver tourism and business Complete entrepreneurial skills workshops in October 2015 to encourage and support entrepreneurial and capability. activity. ongoing

Council’s economic development consultant continued to have formal and informal discussions with key government and business people; in particular Tourism Northern Tasmania, Adrian Christian (Peter Gutwein’s Chief of Staff), and the Tas Walking Company’s Walks Project Manager.

As part of the ongoing work to address sustainability, value adding and industry development, the economic development consultant met the new TasFoods Company to introduce the opportunity to partner and/ or purchase the Flinders Island Meat abattoir and butchery. An EOI was presented and introductions made to the Maddens who are now pursuing the opportunity.

As a result of the FertISLE Forum: • Salty Seas (St Helens) has established a relationship with Peter Place and his fish processing plant at Lady Barron. • Shene Distillery has formed relationships with Kate Mooney and others for gin distilling and interpretation on the Island. • The Launceston Harvest Market is keen to support a Flinders Island only stall at the Launceston Harvest Market. Negotiations are underway with Flinders Island Fresh. • Other informal networks and resource sharing was established.

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1.4.3 Promotion of the A continued relationship with Flinders Island Tourism and Business Complete region’s natural and Incorporated (FITBI) occurred with regular meetings between the Mayor, and cultural environment. General Manager and Council representative and the President and Vice ongoing President of FITBI to discuss ways of improving the working relationship between the two organisations. There is now a clear understanding of the roles of each organisation and the processes required to successfully work together. Parties agreed to meet bimonthly to review progress.

1.4.4 Employment Discussions commenced with the Flinders Island District High School Complete opportunities are Principal on utilising the School Pool to deliver a Community Water Safety and enhanced through Program. ongoing development of projects and initiatives with The Mums on the Move program was delivered to new mothers assisting education service to build capacity through training in health and wellbeing. This program providers and employers. inspired a new program, Working on Women (WoW), which will run for 6 weeks.

Council staff supported Tourism Northern Tasmania in the delivery of tourism and business skills workshops and negotiated the opportunity for Flinders Island Running Festival organisers to attend the skills workshops at no cost.

Council staff supported the St John Ambulance First Aid Training held in November 2015 and June 2016.

The economic development consultant negotiated for the State Government to fund an intensive Digital Ready Program for the Island, scheduled for October 2016. This will be a free series of workshops for any business on the Island or those aiming to develop a business.

As part of the Cross Pollinated Conference, delegates connected with federal and state bodies who offer support for training and development in value-adding local commodities. Of particular interest was the school/ community gardens development and funding program.

The Fert-ISLE Forum was an opportunity to build community capacity and for Islanders to access training and skills development and to identify future community training and education needs. Feedback received from the Forum will help inform the development of content for a future Forum noting needs and areas of interest, especially for upskilling, training and funding.

Council assisted TasTAFE in a community expression of interest process for an accredited Chainsaw Course on Flinders Island.

Staff provided support to Tas Police to help promote the Boatwise/MAST Complete Safety night with representatives attending from MAST, Surf Life Saving Tas and and others about boat safety. ongoing

Opportunities for expansion of the School Holiday Program were developed in conjunction with Scotch Oakburn College through the delivery ofa series of arts workshops and building a new relationship with this College. Discussions regarding the potential for the college students to deliver outdoor activities for the October School Holiday program are ongoing.

The partnership with Meander Valley Council (MVC) and their Youth Leadership Group continued to grow providing opportunities for both our local young people and visitors over the school holidays.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 1.4.5 Tourism and In conjunction with Tourism North Tasmania (TNT), Tourism Tasmania and Complete development is promoted the Flinders Island Tourism and Business Incorporated (FITBI), Council and through a focus on high assisted the coordination of the planned Visitor Journalist Program (VJP) ongoing quality food production, and other marketing and media promotional activities. niche enterprises and clean, green image and Marketing and media opportunities were responded to when presented sustainable farming including cross-promotional support for the Flinders Island Tourism & practices associated with Business Incorporated’s #eatflindersisland Instagram campaign. A number Flinders Island. of articles were published promoting Flinders and the region including articles about Deal Island.

Tourism Australia launched a special promotion focused on coastal Australia designed to attract more overseas visitors to Australia. As part of this promotion, Tourism Tasmania in conjunction with Tourism Northern Tasmania supported Sean Scott to visit Flinders Island to capture specific activities to be used on social media. As a result of Scott’s visit and sharing of short videos taken of ‘Derek the Wombat’ posted on social media, within days the videos had a combined total of over 75,000 views. Tourism Australia promoted “5 Reasons to visit Flinders Island” and the related Derek the Wombat competition built global awareness for Flinders Island.

The winner of the competition arrived on the Island late June for four days accompanied by a friend and a Tourism Tasmania film crew. The competition attracted 12,500 entries, a record for Tourism Tasmania, along with some 45,000 hits on the site. This makes for a great promotion of the Island. Some people will travel the world to see Derek! In early June FITBI hosted two Canadian friends who flew directly to the Island to spend time with Derek.

The Flinders Council Facebook page continues to grow, with the majority Complete of posts based around local achievements, projects and news articles that and have a relevance to Flinders Island. With an active weekly online presence ongoing via Facebook and an ever growing number of followers derived from all around the world, Flinders Council is able to successfully and promote any number of events or activities.

1.4.6 A place based Back ground work was completed, however the place based strategy will Ongoing strategy developed not be completed until the Specific Plan ordinance has been prepared around housing, living for the west coast enterprise areas and the planning scheme has been and niche non grazing submitted. types of primary production and lifestyle development.

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2. Infrastructure and Services - An Islands’ specific approach to planning and delivery to ensure community and environmental values are maintained.

Strategic Direction: 2.1 Plan, deliver and operate community infrastructure to provide levels of service that align with community needs and demand.

Annual Plan Actions Progress on Actions Status

2.1.1 Recreational Maintenance works at the Furneaux Museum consisted of stabilisation of Complete and community the retaining wall at the front of the main building, gravel for the driveway and facilities upgraded and re sanding and sealing of the wooden floors in the main building. ongoing as recommended by the Recreational and Maintenance at the Whitemark Showground was undertaken on an as Complete Community Facilities needs basis. and Assessment and ongoing Infrastructure Plan. Recycling was trialled at the Lady Barron Transfer Station. Green waste Ongoing was mulched to be used for erosion control. Inappropriate disposal of other types of materials in with the green waste made this unviable and added to the cost of disposal and processing of green waste.

A feasibility study is being undertaken by consultants into redeveloping Ongoing the golf club site.

Council was successful in securing matching grant funding from the State Ongoing Government Tourism Drivers grant program to undertake a preliminary business case of the provision of a safe harbour at Lady Barron. Upon receipt of proposals from consultants, it became clear that enough funding was available to deliver a full business case on the project. Burbury Consulting was appointed to develop the business case which will be completed in the next financial year.

The Public Toilet Revitalisation Amenity Project (PTRAP) was partially Complete completed. Public Toilets at Whitemark Foreshore, Lady Barron and Yellow and Beach were completed apart from disabled access provisions including car ongoing parking, lighting and signage. These items will be finalised by the Works and Services Department in the next financial year. The Killiecrankie toilet was appealed during the planning approval process. As per the Tribunal process, Council had the opportunity to make a second application for the Killiecrankie toilet which was approved. This project will be progressed in the next financial year.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 2.1.1 Recreational The Lady Barron Hall Special Committee in partnership with Council Ongoing and community successfully received a $160,000 grant from the Tasmanian Community facilities upgraded Fund to contribute to the upgrade of the Lady Barron Hall. The grant will as recommended by provide the funds for the addition of a fitness annex and a remodel of the the Recreational and kitchen. Community Facilities Assessment and The Tender/Expression of Interest was advertised for the GMP (Guaranteed Infrastructure Plan. Maximum Price) for the renovations and additions to the Lady Barron Hall. (cont....) Due to a lack of interest Council was not able to award the contract. The tender was re advertised and Council received three (3) return tenders. The value of the tendered works was well outside available funds for this project and as such the project was shelved. CMK Architects revised the design for the kitchen refurbishment and the fitness annex addition, based on feedback and guidance from the Project Steering Committee. A new Development Application was lodged with Council.

A successful application to the Australian Government's Stronger Communities programme provided additional funds for remote access to the hall on completion and for the purchase of a removable & portable stage for community use and benefit; particularly as the Lady Barron Hall's stage was planned for removal as part of the original renovation design. Both successful applications provided an approximate $20,000 of additional funds for community benefit.

Work continued on the Whitemark Foreshore improvements to enhance Ongoing public access and increase public amenity. The new toilet was completed; the gravel path was laid between the BBQ and the toilet; and clearing and planting commenced at the “Exersite” area and between the BBQ and new toilet. Plantings continued along the walking track and a watering system, solar lighting and signage were installed at the toilet. The construction of stairs and windbreaks did not occur due to extreme weather conditions and the limited capacity of Works and Services staff.

After refurbishments conducted over the last two years, the upgrade Complete works to the Furneaux (Emita) Hall were completed and the hall is now available again for hire by the Community.

2.1.2 An efficient and Mineral Resources Tasmania issued the mining lease for Lughrata Gravel Ongoing sustainable source of Quarry. The boundary lines were cleared and fencing was undertaken by resource materials to neighbouring landholders of the property. The 2.5 kilometre access road support public and was cleared of vegetation in readiness for road construction. The Quarry private works. face was cleared and stripped of vegetation and overburden in readiness to gravel the access road. Work was then halted as emergency remedial work was required on the Island’s road network.

A potential source of aggregates has been identified on the Island and a Ongoing large sample was sent to Nabowla Quarry for crushing and testing by ADG Laboratories, Launceston. Tests were conducted for wet/dry strength variation which indicated a relatively strong, fine grained aggregate that complies with Department of State Growth's requirements for sub base and base B. A further sample was sent to Mineral Resources Tasmania for x ray diffraction analysis to determine the mineral composition and offer guidance on future uses e.g. concrete and sealing aggregates. The report will be forthcoming.

2.1.3 Public open The Public Open Space Policy is yet to be finalised. Not started space fund to support community recreation and access opportunities.

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2.1.4 Asset Management Capital works activities at the airport were deferred due to the need to allocate Deferred Plan implemented. funds to priority pavement repairs on the main runway.

The road resealing program was undertaken resulting in over 20 kilometres Complete of Council road being completed and approximately 1.4 kilometres of road and reconstructed and sealed. Venarchie Contracting supplied 280,000 litres of ongoing bitumen and a new bitumen sprayer truck and automated aggregate spreader boxes were purchased to assist with resealing.

Along with additional Roads to Recovery funding, the cost of resealing Ongoing was under budget, therefore a larger program was delivered than originally anticipated. The new sprayer truck and automated spreader boxes were very cost effective and operator friendly allowing for more precise management of bitumen and aggregate quantities.

Roadside and culvert drainage spraying took place, however due to severe Deferred weather conditions and priority runway repair work, bridges and culverts were only maintained in a band aid way.

Further development of the Lughrata Gravel Quarry and subsequent resheeting Ongoing program were deferred due to emergency airport runway repairs and the severe weather conditions during summer.

A preliminary plan to provide drainage, kerbing and footpath to West Street, Ongoing Lady Barron was developed. Investigations showed that the purchase of a second hand kerbing machine would be the cheapest and preferred option for kerbing.

Bridge railings were purchased and delivered for Red Creek on Coast Rd, Completed Samphire Creek on Darts Rd and Bootjack Drain on Coast Rd, however installation did not occur due to other work commitments and poor weather conditions.

A new Volvo FMX11 Truck was purchased and two lawn tractors were replaced. Completed

2.1.5 Crown owned land A ‘wish list’ of Crown owned land desired for Council/Community need has Ongoing is obtained for Council/ been provided to Crown Land Services and an officer has visited the Island to Community need. discuss the matter. The survey of the land containing the Council Offices, Duck Pond, playground on the corner of James and Davies Streets and half of the hall has been completed. This will be issued to Crown Land Services and the transfer finalised as soon as possible.

2.1.6 Stormwater Brighton Council completed data collection on this project. The findings will be Deferred Management Plan used to create a Stormwater Management Plan for Flinders Island townships. developed. It has been discovered that Natural Resource Management (NRM) North had produced a Stormwater Management Plan for 2014 2017 so this matter will be deferred until a subsequent plan is required.

2.1.7 Lagoon Road A landscape master plan for the Lagoon road site that incorporates water Deferred Recreational Facility and sensitive urban design principles will be scoped after the Stormwater Plan has stormwater management been completed. area established.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Strategic Direction: 2.2 Explore alternative investment and operating models for core and critical Island infrastructures and services.

Annual Plan Actions Progress on Actions Status

2.2.1 Alternate Council commissioned a preliminary business case on options for replacing Complete operational structures the long runway which also considered the impacts a new runway would and for the delivery of have on the long financial sustainability of Council. The report was ongoing infrastructure based received by Council and forwarded to the Minister for Infrastructure services are explored. for consideration. Alternate ownership and operating models will bea cornerstone of discussions between the State Government and Council in the period ahead.

The General Manager met with the Minster for Infrastructure and Ongoing discussed the desire of Council for the State Road to be expanded to 90kms which would see Flinders Island come into line with the length of State Road on King Island.

The State Government issued guidelines for strategic road ‘swaps’ with Local Government. A project proposal will be submitted to Council for consideration early in the year ahead.

Strategic Direction: 2.3 Minimise environmental and health risks from waste collection and disposal and maximise opportunities to reduce, reuse or recycle resources.

Annual Plan Actions Progress on Actions Status

2.3.1 Waste Killiecrankie and Lady Barron Waste Transfer Stations are operational. Complete Management Strategy The Lady Barron Transfer Station has been highly problematic with the and Implemented. Community not using the bins correctly and vandalising the equipment. ongoing Additional signage, education and surveillance will need to be addressed in the future.

The putrescible cell is compacted and covered as and when required. A Complete consultant will be engaged to develop a long term plan to conform to and Environmental Protection Agency requirements. ongoing

Recycling was trialled at the Lady Barron Transfer Station. Green waste Ongoing was mulched to be used for erosion control. Inappropriate disposal of other types of materials in with the green waste made this unviable and added to the cost of disposal and processing of green waste.

Strategic Direction: 2.4 Develop and implement solutions that mitigate environmental and health risks from wastewater treatment and disposal.

Annual Plan Actions Progress on Actions Status

2.4.2 A “pump out” A business case for the development of a wastewater pump out, treatment Ongoing based wastewater and disposal system for Flinders Island commenced. collection, transport, treatment and disposal system.

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Strategic Direction: 2.5 Work proactively with other infrastructure service providers.

Annual Plan Actions Progress on Actions Status

2.5.1 Infrastructure As a contractor for the State Government, the resealing of Lady Barron Rd Complete services that are was undertaken with almost 5 kilometres of road completed along with and appropriate for island double seals on intersections. Due to some failure of aggregate binding on ongoing conditions, sustainable the Poly Modified Binder sections of Lady Barron Road, further remedial and are accepted and reseals have taken place to stop aggregate loss and preserve the initial valued by the local seal. community.

2.5.2 Increased The Hydro Tasmania renewable energy project is under construction and Ongoing penetration of renewable staff have been actively engaged with Hydro providing support as required energy into the Island’s and discussing opportunities to add value to the project. Hydro will hold a energy systems. conference on Flinders Island in November 2016 and also officially launch the new project.

Strategic Direction: 2.6 Protect and enhance high quality natural values and environmental assets.

Annual Plan Actions Progress on Actions Status

2.6.1 Parks and Wildlife A Memorandum of Understanding between Council and Parks and Ongoing Services (PWS) and Wildlife Services was in place for the first quarter but then expired. A Council cooperatively new agreement was not reached as budget cuts etc. have hampered an operate and maintain agreement being made at grass roots level. relevant facilities (toilets, camp grounds, picnic areas etc.).

2.6.2 A plan for the A project proposal for the Dock to Killiecrankie walking trail was com- Ongoing expansion of the walking pleted and onground works commenced. The project finalisation report trails network on Flinders will include identifying key processes that can be employed when working Island. with Parks and Wildlife Services (PWS).

The consultation draft of the Structure Plan identifies areas where access and tracks could be included as part of a walking trail network and can also be used to prioritise tracks; in particular for track works using funds already held by Council for the purpose of the Flinders Trail.

2.6.3 Advocacy A sectorial submission from the Local Government Association of Tasma- Complete for higher levels of nia on funding for the maintenance of existing walking trails and assets and maintenance and funding was provided to the Parks and Wildlife staff and Minister. At a local level, ongoing for walking trails and the General Manager had discussions with the Regional Manager of the associated assets. Parks and Wildlife Service on funding and service provision on the Islands. The State Government budget included an allocation for the upgrade of the Mt Strzelecki walking trail.

2.6.4 Planning scheme The local area objectives have been completed. Staff are now waiting for Ongoing supports visual amenity the new statewide planning zones and codes to be released to enable and open space, reworking of the overlays. contributing to recreation and tourism experiences.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 3. Access and Connectivity - Work with service providers and other relevant stakeholders to improve security, reliability and cost effectiveness.

Strategic Direction: 3.1 Maintain or better the standard of sea access to the Islands.

Annual Plan Actions Progress on Actions Status

3.1.1 Advocacy for The Furneaux Group Shipping Special Committee of Council was active Complete improved port and and functioned well in supporting community ideas and concerns as they and freighting operations. relate to shipping. ongoing

Council is of the understanding that the shipping contingency fund is no Complete longer available for project based funding.

3.1.2 Economic via- A successful application to the Australian Government’s Tourism Driver Complete bility of developing an Infrastructure grant program procured funds for the development of a and allweather recreational preliminary business case for a Flinders Island Marine Access and Safe ongoing and leisure vessel harbour Harbour. Consultancy firm Burbury Consulting were engaged to deliver a investigated. detailed Business Case for a Flinders Island Marine Access & Safe Harbour including detailed site studies, engineering, and environmental approvals for a “shovel ready” project.

Burbury Consulting project team visited Flinders Island in May to meet with stakeholders and key Council staff. A progress report to the State Government was submitted along with the Grant Deed requirements. It is estimated the project will be complete by 31st October 2016.

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Strategic Direction: 3.2 Maintain air access to the Island and improve performance of the airport.

Annual Plan Actions Progress on Actions Status

3.2.1 Improved A CASA audit identified that immediate repair work was required in Complete operation and financial the touchdown area of the long runway, Runway14/32. CASA placed and performance of airport. restrictions on the runway (5000kg weight limit and not available if 5mm of ongoing rain had fallen in previous 24 hours) until priority patching was completed. This work was undertaken in September 2015 when 94 square metres of runway were dug out and replaced with cement stabilised Base A material with an emulsion and 7mm metal seal.

Consulting engineers Aurecon prepared a report on the condition of the runway and developed a priority repair program for areas needing urgent attention. Council’s Works and Service staff carried out the priority repair program and a new sealing truck was purchased to enable staff to undertake the sealing works. CASA restrictions on the runway were lifted during the second quarter.

Further pavement repairs continued throughout the remainder of the year to reconstruct the areas identified as being at risk of failure. Daily inspections ensured early identification of pavement failures and rectification works continued as required to maintain the serviceability of the runway.

Council staff were actively engaged with Registered Passenger Transport Complete (RPT) Sharp Airlines due to the runway pavement failure and the and subsequent CASA restrictions. Communications focussed on how travel ongoing plans and disruptions could be minimised in the case of a rainfall event. Fortunately, disruptions to travel only occurred for one day.

A concept plan for the development of a General Aviation Hangar Precinct Ongoing was completed and ownership models and development considerations assessed.

The Furneaux Group Aviation Special Committee was active and Complete functioned well in supporting community ideas and concerns as they relate and to aviation. The Special Committee reviewed the Aviation Policy and the ongoing preliminary business case on the runway and provided comment to Council for consideration.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Strategic Direction: 3.2 Maintain air access to the Island and improve performance of the airport.

Annual Plan Actions Progress on Actions Status

A concept plan for the development of a General Aviation Hangar Precinct Ongoing was completed and ownership models and development considerations assessed.

The Furneaux Group Aviation Special Committee was active and Complete functioned well in supporting community ideas and concerns asthey and relate to aviation. The Special Committee reviewed the Aviation Policy and ongoing the preliminary business case on the runway and provided comment to Council for consideration.

Strategic Direction: 3.3 Improved telecommunications for the benefit of local community and economy.

Annual Plan Actions Progress on Actions Status

3.3.1 Improved Staff were actively engaged with Telstra in delivering and commissioning Complete communications with a Feasibility Study on the requirements to upgrade the Island’s and telecommunication telecommunications systems. An application for grant funding was made ongoing service providers in to the Federal Government Stronger Regions Fund and if successful, a order to encourage new major telecommunications upgrade for the Islands will occur in the year investment and improved ahead. services. The General Manager was also active in highlighting the problems with the Islands’ systems with Ministers and advisors.

Council lodged a “Technology Choice” application with NBN Co that Complete requested they consider other options such as fixed wireless delivery in and combination with satellite for Flinders and Cape Barren Islands. NBN Co ongoing chose to utilise a satellite only service for Flinders. Staff discussed the importance of having trained and available installers on island to assist in the rapid deployment of the service when it became available and these discussions with NBN Co were ongoing. The NBN CO Satellite service became available in the fourth quarter.

3.3.2 Major upgrades Council engaged consultants Elan Project to assess alternate options Complete to telecommunication to support local telecommunications improvements and/or ownership and infrastructure and models. The report was completed and presented to Council. ongoing services on the Islands.

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4. Strategic, Efficient and Effective Organisation - Responding to risks and opportunities.

Strategic Direction: 4.1 Remain actively engaged with internal and external stakeholders providing regional leadership.

Annual Plan Actions Progress on Actions Status

4.1.1 The Furneaux Northern Tasmania Development (NTD) staff continued to work closely Complete Islands’ unique with Council on a range of ideas and projects including the Regional and circumstances, isolated Futures Project and a joint procurement and contractor management ongoing community and specific framework. financial needs are understood by key Staff provided support for the delivery of a skills workshop for small external stakeholders. businesses on covering topics that included: •Website design and SEO (Search Engine Optimisation) • Reinvesting in your small business • Planning how to market a small business • Leveraging events • Organising small events

TNT provided advice and guidance on the implementation and delivery of the Marketing Strategy and played an active support role in the FertISLE Flinders Forum.

In conjunction with the Flinders Island Tourism and Business Association, Complete staff assisted to coordinate the Tourism Northern Tasmania “Investing in our and Tourism Future” workshop to identify what ‘game changing’ and ‘enabling’ ongoing infrastructure projects on Flinders would grow tourism in the region. 22 Flinders residents attended and 2 main projects were highlighted: a Safe Harbour at Lady Barron and the Flinders Island Trail.

Flinders Council was successful in gaining Local Government Association Complete of Tasmania’s (LGAT) support in lobbying the State Government to not and forward pay Financial Assistance Grants in the year before they are due. ongoing LGAT was active in developing budget submissions on behalf of the sector and a range of other collective projects such as the standardisation of policies across Councils.

LGAT delivered a range of training programs for Council elected members and staff including the General Managers’ Workshop attended bythe General Manager. LGAT was active in developing sectorial responses to government policy and provided management with regular updates on developments in the sector.

Maintain representation Staff worked closely with TasWater on the planning and construction of Complete and engagement with the Flinders Island water treatment plants in Whitemark and Lady Barron. and TasWater. TasWater held a number of community information sessions and was in ongoing contact with management on a very regular basis.

Staff worked with TasWater on the plumbing changes required for residents once the treatment plants come online. A support package for residents was agreed whereby reduced application fees will be applied to those that seek to have their plumbing changed to suit the new potable water service. The water treatment plants will be fully operational in the next financial year.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 4.1.2 Cooperative and Council provided information to the State Government to inform a Complete coordinated delivery of report on proposed initiatives in relation to the Indigenous Advancement and Indigenous community Strategy. This report has yet to be completed. ongoing services. Waste management on Cape Barren Island is a key area of focus and Council continued to explore what opportunities may be available to improve this service. Once the final report by the State is provided and they engage a consultant, work should progress quickly to improve the long standing issues with waste management on the Island.

Telecommunications upgrade is another area of focus and Council continued to work on projects that if funded would improve telecommunications in Lady Barron and on Cape Barren Island.

Strategic Direction: 4.2 Support processes, accountability and project delivery through transparent reporting.

Annual Plan Actions Progress on Actions Status

4.2.1 Priorities, actions Council’s new Strategic Plan and the 201516 Annual Plan actions were Complete and achievements are entered into Council’s reporting system, Interplan. Progress updates on and planned and reported all Annual Plan actions were recorded into Interplan and quarterly reports ongoing through an integrated generated. governance and management framework.

4.2.2 Efficient and A project delivery team was established and was supported by a virtual Complete coordinated delivery project management office (vPMO) that assists tracking delivery, providing and of projects across the support and ultimately delivering more efficient, higher standard projects. ongoing organisation. The vPMO approach builds improved processes, risk mitigation and accountability into all major project delivery. Staff are also tracking time allocated to each project in order to better appreciate the time required for staff to deliver projects which will inform staff work plans for 2016/2017 and seek to mitigate the risk of staff over load at a project level.

Some deficiencies were highlighted during the implementation of the process and further training, mentoring and process improvements were provided to mitigate these in the future. Council lacks sufficient staff with direct project management skills, in particular at an infrastructure level, and this may need to be addressed if these types of projects are to be delivered to a high standard in the year ahead. Project delivery and management has improved significantly on previous years.

The project management framework and associated procedures are being Complete used and now inform the vPMO and the work of the project team in and delivering projects. ongoing

PAGE 38 FLINDERS ISLAND ANNUAL REPORT 2015/2016

4.2.3 Administrative Agendas and minutes for 12 Council Meetings and 1 Special Council Complete support provided to Meeting and agendas for 13 workshops were prepared and distributed. and Council. Staff acted as minute secretary for all meetings of Council and for four ongoing Special Committee Meetings.

All public documents and reports were uploaded to Council’s website in Complete a timely manner including the new Strategic Plan, 201516 Annual Plan and and Budget Estimates and Revised Budget; Council Meeting Agendas ongoing and Minutes, Airport Runway reports, Annual Report and Unconfirmed Minutes of the Flinders Council Annual General Meeting and policies under review.

Council considered applications to the Community Grants and Gunn Complete Bequest funding program at the May Ordinary Meeting of Council. A and total of $5,000 was allocated to community groups from the 201617 ongoing Community Grants fund being $250 to the Sew ’n’ Sews, $750 to the Acappelicans, $2,000 to the Show Society and $2000 to the Furneaux Islands Motor Cross. $1,500 was available from the 201617 Gunn Bequest and Council which was allocated $300 to Goju Karate Jutsu, $300 to the Flinders Island Pony & Riding Club, $600 to the Flinders Island Golf Club and $300 to Flinders Island Women’s Golf.

Four nominations for the Citizen of the Year award were received by Complete Council. Council selected John Gardner of Cape Barren Island as the and Citizen of the Year. The Mayor presented the award to John at the Flinders ongoing Island Show on 16th October. The Citizen Award Honour Board was updated with John Gardner’s name.

Strategic Direction: 4.3 Ensure Council meets its statutory obligations and manages corporate and community risk.

Annual Plan Actions Progress on Actions Status

4.3.1 Development Non-compliant buildings and structures or illegal works were investigated Complete undertaken in by Council as allegations were received. All investigations were heavily and accordance with supported by West Tamar Council. ongoing relevant development standards and legislative requirements.

4.3.2 Regulatory building No contact was received from the Department of Justice regarding Ongoing processes comply with auditing Council’s systems and processes. Department of Justice requirements.

4.3.3 Annual Plans The Annual Plan was adopted by Council and the Annual Report was Complete and Reports prepared received and accepted at the Flinders Council Annual General Meeting. and in accordance with the ongoing Local Government Act 1993.

4.3.4 Code of Conduct The code of conduct review was not required as a new code of conduct Complete reviewed as per S28 2 (c) for all Local Government was developed and passed through Parliament. of the Local Government Council adopted the new Code of Conduct at its June Ordinary meeting. Act 1993.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 4.3.5 Requirements of A shipping container was purchased as a records storage facility for Complete the Archives Act 1983 Council’s archives that were previously stored in the old house at the substantially complied Airport. with through improved records management Computers and software were upgraded according to the IT schedule. A Complete processes. formal agreement was entered into with Another Computer Store with a and pricing structure to suit the reduced level of IT support currently required ongoing by Council.

The Information Management Policy was developed in draft form. Ongoing

4.3.6 Register of Interests Staff and Elected Members’ Registers of Interests were maintained and Complete for staff and Elected updated as and when required. and members maintained as ongoing required under the Local Government Act 1993.

4.3.7 General Manager’s The listings in the General Manager’s Roll were compared with Council’s Complete Roll maintained for property database to ensure eligibility and correct postal addresses. and election purposes as Letters were sent to confirm some entries. The General Manager’s Roll ongoing required under the Local was updated to match Council’s property database. Four new people were Government Act 1993. added to the roll.

4.3.8 Municipal A review of all property details at a municipal level to assess the accuracy Complete Revaluation and and currency of data in PropertyWise was undertaken. The review and valuation adjustment highlighted areas needing updating or amending and identified areas ongoing factors. where staff needed additional training.

Council’s development system (RegApps) maintains a register of Complete development and improvements. This information is sent to the Office and of the Valuer General so that they are made aware of improvements. If ongoing needed they implement greater values which in turn provides for greater rates revenue for Council.

Supplementary Valuations Lists (SVLs) and random enquiries were provided to the Valuer General’s Office as a way to ensure that properties are valued, and therefore rated appropriately. Processes around reporting properties requiring supplementary valuation have been included in the monthly levy payment schedule, as done by building administration, and is working well.

4.3.9 Maintain Council’s A complete review of the Instrument of Delegation was undertaken by Completed Policy Manual and Council’s legal consultants Page Seager and continued to be reviewed by and Instrument of Delegation. staff. ongoing

During the 2015/16 year, Council reviewed,amended and introduced Completed policies as reported in the Policies of Council section of this report. and ongoing

4.3.10 Requirements No Public Interest Disclosure applications were received during this Completed of the Public Interest reporting period and no training opportunities became available. and Disclosure Act 2002 ongoing complied with by responding to disclosures.

4.3.11 Requirements of No applications for information disclosure under the Right to Information Completed the Right to Information Act 2009 were received. and Act 2009 complied ongoing with by responding to applications for information disclosure.

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4.3.12 Annual budget The 2015/16 Budget was adopted in July. Due to a number of key items Completed estimates and reviews. coming to Council’s attention post the adoption of the budget, a revised and version was adopted at the August Council Meeting. Workshops on the ongoing 2016/17 budget were completed enabling budget consideration at the July 2016 Council Meeting.

4.3.13 Financial The 2014/15 Financials were submitted on time and were signed off in Completed management accordance with the Local Government Act 1993 and Australian Accounting and processes comply with Standards. ongoing Tasmanian Audit Office requirements.

4.3.14 Input into the The Local Government Division (LGD) Consolidated Data Collection Completed State Government (CDC) 2014/15 for Flinders Council was submitted within the required and “Sustainability Indicators” timeframe. ongoing project provided.

4.3.15 Flinders Council The Audit Panel held four meetings in accordance with the panel’s work Completed Audit Panel functions plan. The Panel reviewed the Budget, Annual and Strategic Plans and the and effectively and efficiently. 2014/15 audited financials. They also reviewed issues arising from the ongoing Tasmanian Audit Office and the signed audited 2014/15 financials.

At a meeting in February 2016 a new work plan and meeting dates were set for the year. The two scheduled meetings for the fourth quarter were cancelled by the Chairperson.

4.3.16 Enterprise An internal review of staff and resource requirements was undertaken Completed Agreement 20162019 to help inform negotiations prior to entering into the next Enterprise and that complies with Fair Agreement in 2016/2017. ongoing Work Act 2009.

4.3.17 Public officers All staff undertook an online training module in ethical conduct provided Completed educated and trained in by the Integrity Commission. and ethical conduct to comply ongoing with Section 32 of the Integrity Commission Act 2009.

4.3.18 Furneaux Fire Council supported the functions of the Furneaux Fire Management Area Completed Area Management Committee (FMAC) by attending regular meetings; attending briefings on and Committee functions bushfire season; assisting with the review of the Furneaux Fire Manage- ongoing efficiently and effectively. ment Area Plan which was sent to the State Fire Management Council (SFMC) for approval and working through strategic water points on the Island and the fire trail network.

A number of wildfires occurred during the year, mainly on the east coast of Completed Flinders. Council supplied staff and equipment to assist in the firefighting and activities and the area in question was flagged for reduction burning in ongoing the future within the FMAC plan. It was agreed that the strategic fire trail network is a major project to be worked in the future.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 4.3.19 Appropriate plans A Municipal Emergency Management Committee meeting was held in Completed and available resources August 2015. Items discussed at this meeting were - communication and in place to where possible issues as well as the Flinders emergency communications plan; Natural ongoing mitigate and respond Disaster Resilience Program (NDRP) Funding; upcoming training such as to identified risks and the Red Cross training that took place late August; upcoming exercises; incidents. risk register; and the new State Emergency Services (SES) truck. Special guests from SES and Tasmanian Fire Service also attended the meeting informing the committee of works that would take place on Flinders Island particularly around fire safety and community awareness.

Flinders SES unit visited Cape Barren Island to conduct a test of all Completed communication equipment on the Island. The information collected will and inform a plan around communications in emergencies on Cape Barren ongoing Island as well as communication from Flinders to Cape Barren Island. The information will be overlaid on the existing UHF communications map of Flinders for the Emergency Management Committee’s reference.

A list of available resources for use in emergencies was commenced. The Ongoing list will contain ownership, availability, type and size of resource and will be a valuable reference for emergency service agencies.

A meeting took place early in the year to establish commitment from local Ongoing businesses to be involved in the recovery process of major incidents. From this meeting a list of resources available, mainly for catering purposes, was formed. Red Cross training in August defined the structure and role of a Recovery Committee for Flinders Island.

The Flinders Recovery Plan was reviewed and updated as a sub-plan for Completed the Municipal Emergency Management Plan (MEMP). and ongoing

Red Cross training conducted in 2015 identified the need for more Completed continuous training around social and psychological recovery. Several and courses were held for interested members of the community and ongoing stakeholders in Emergency Management and Recovery to increase awareness around the impacts of disasters in communities and how to combat those impacts. The courses were well attended and with further work Flinders will have its own Ready Support Team capable of responding to assist the community in times of need.

The Biosecurity Tasmania (BT) Regional Manager, Kiowa Fenner, met with Completed Council officers on two occasions and presented at a weeds meeting in and Whitemark. Plans have been made for Regional Director, Rae Burrows, to ongoing meet with staff to discuss what is to be included in the Biosecurity Plan for the Furneaux Islands.

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4.3.20 Compliance of The annual Technical Inspection was carried out in December 2015 through Completed airport operations with a joint procurement process with King Island Airport, with Aerodrome and requirements of CASA Operation Support engaged to conduct the inspection. Corrective actions ongoing and other regulators. recommended were implemented. A full review of the Airport Manual was undertaken and sent to CASA as required.

The annual Lighting and Electrical Inspection was conducted in December Completed 2015 by a certified electrician with minimal issues raised. The Obstacle and Limitation Survey was also conducted in December 2015 with minimal ongoing tree removal works required.

The Safety Management System review was completed with a series of Completed possible improvements put forward to management for consideration. and ongoing

The Drug and Alcohol Management Plan (DAMP) for the airport was Completed reviewed and updated. and ongoing

4.3.21 An integrated A full review of the Long Term Financial Plan was undertaken in accordance Completed and strategic approach with the audited financials and the 2015/16 adopted budget. The plan and to financial and asset was updated and is now complete. The review highlighted the significant ongoing management. challenges Council faces in relation to asset renewals and financial sustainability, particularly in the light of the runway replacement project. Council will need to review this work in the coming period and make appropriate decisions about the organisation’s approach and ability to renew and operate high cost assets.

A review of the Long Term Asset Management Plan was undertaken. The Completed plan was updated and is now complete. and ongoing

4.3.22 Financial The Financial and Asset Management Sustainability Indicators were Completed Statements include finalised as part of the 2014/15 Audited Financials. and Financial and ongoing Asset Management Sustainability Indicators in accordance with the Local Government Act 1993.

4.3.23 Create The 2015/16 rates were raised in accordance with the Local Government Completed annual rates invoice, Act 1993. The initial rates notices were required to be revised due to the and supplementary valuations incorrect adjustment factors applied in the Valuer Generals Valuation of ongoing and annual adjustment Land Report. The revised rates were processed by the required due date. factors processed. Supplementary valuations were processed as and when received.

4.3.24 Roads to Quarterly reports were submitted on time and the Annual Report for Roads Completed Recovery reporting to Recovery was audited by the Tasmanian Audit Office and submitted by and requirements met. the 30th October. ongoing

4.3.25 Mineral Resource Quarterly reports to Mineral Resource Tasmania on Mineral Resource Completed returns to Mineral returns were submitted on time. and Resource Tasmania. ongoing

4.3.26 Superannuation Business Activity Statements, Superannuation contributions and Payroll Completed and Taxation obligations Tax were all prepared and reported monthly. The annual Fringe Benefits and met. Tax Return was submitted in April 2016. ongoing

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 4.3.27 Annual Fire Levy The annual fire levy return was submitted in August 2015 asper Completed returns submitted to the requirements. and State Fire Commission. ongoing

4.3.28 Requirements of Private water suppliers are required to be registered in accordance with Completed the Public Health Act the Drinking Water Quality Guidelines. Monthly samples were taken by and 1997 are met. Council of those on Flinders Island, which are the school and the Multi- ongoing Purpose Centre.

Another private water supply was identified on the Island. The water supply has been operational for many years and is deemed to be low risk. The supplier of the water has met with the Environmental Health Officer (EHO) and has been requested to register. Council’s EHO continued to pursue registration.

The MultiPurpose Centre (MPC) is the Municipality’s only supplier of Completed warm water. Testing revealed some past issues which appear to have been and addressed. The MPC is now on a routine testing regime. ongoing

The annual recreational water sampling program was completed for anoth- Completed er season. Allports, Killiecrankie, Whitemark (jetty) and Lady Barron (slip) and were in perfect condition for the season. ongoing

Council provides a structured inspection program for all environmental Completed health related facilities and activities and provides support as required. and The inspection program is primarily for food and food registration falls due ongoing on the 1st of August each year. All food premises - being full registration, minimal operations or temporary food - requiring reregistration were completed and no notices were issued. Volunteer food safety seminars were conducted.

A new software module known as Regulated Entities, was provided to Council to run in conjunction with other modules in PropertyWise and link to the rates systems. This will enable a more structured management of food, private water suppliers and warm water suppliers.

The immunisation program for the 2015 year was completed. The 2016 Complete year’s program commenced in February 2016 and was conducted by the and Doctor’s Surgery staff. Records are maintained by Council. ongoing The program will finish in the next financial year.

4.3.29 Requirements Primary functions of the Dog Control Act such as registration, microchip- Completed of the Dog Control Act ping, dogs at large and dog nuisances, were prioritised and upheld as much and 2000 are met. as possible. 10 dog infringement notices were sent to those who failed ongoing to register their dogs. One dog barking letter was sent with a threat to infringe at the time of writing.

The delegated consultant dog officer visited the Island and issued infringement notices for “Dog at Large”. All but two were paid and those were issued to the State Government for collection via the Monetary Penalties Enforcement System (MPES). Despite infringements being issued, a small number of dog owners have failed to register, microchip and pay the fines.

4.3.30 Requirements of With the change to Place of Assembly licensing under the Public Health Completed the Building Control Act Act, Council buildings are now assessed for compliance under the Building and 2000 are met. Act and Form 49 ‘Essential Safety and Health Measures’. ongoing

A new inspection regime was finalised with the Services Coordinator and reporting will be submitted to the newly created Work Health and Safety Committee.

PAGE 44 FLINDERS ISLAND ANNUAL REPORT 2015/2016

4.3.31 Requirements No assessments of asbestos transport operations and disposal were Complete of the Environment required. and Protection Agency (EPA) ongoing regulations are met. Work continued to substantially comply with the Environmental Protec- Complete tion Agency’s (EPA) Notice relating to the operation of the Whitemark and waste resource centre. ongoing Council was granted a time extension until 1st August to submit the final Environmental Management Plan review.

A new EPA Notice is pending and work has commenced on detailing to the EPA what the future processes of the Whitemark tip are desired to be.

Strategic Direction: 4.4 Drive continuous improvement through a focus on customer service, community engagement, efficient systems and processes, innovation, capacity building and workforce development.

Annual Plan Actions Progress on Actions Status

4.4.1 A healthy and safe First Aid Training was conducted for the Service Delivery Team in October Completed place to work. 2015. The Risk Register was approved in December 2015. A Draft Internal and Audit Schedule was developed and the Internal Audit Project commenced ongoing early 2016.

The Local Government Association of Tasmania Policy Suite was implemented and training conducted for Office and Airport staff in February 2016 and Works and Services staff in April 2016.

Ethical Decisions in the Workplace training was conducted for all Council staff.

Ergonomic assessments were conducted for all office-based work stations.

Staff attended the OzHelp Tasmania’s Mental Health and Wellbeing Cluster Completed in March 2016. Work commenced on aligning mental health and wellbeing and with Work Health and Safety systems and plans. ongoing

A Mental Health and Wellbeing Staff Survey was sent to all Flinders Council Staff with a 60% response rate. Survey results helped inform a Mental Health and Wellbeing Policy which is in draft form.

12 Council office employees participated in the Ritualize 8 Week Positive Change Challenge supported by Worksafe TAS.

4.4.2 Continuous Event Management Guidelines were developed to document processes Completed improvement program. for Council and the Community to follow for events held on Council land and or property. The Council Halls and Grounds application form was updated ongoing and the Planning and Building Info Pack was finalised.

4.4.3 A skilled workforce Staff received professional development opportunities during the year and Completed that provides core this will continue as opportunities arise. and strategic, planning and ongoing operational capability.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 4.4.4 Compliance with The LGAT Policy Suite Stage 2 has been released and will be reviewed for Completed the requirements of approval next financial year. and the Work Health and ongoing Safety Act 2012. A safe Council’s Volunteer Registration and Safety Induction process has been working environment reviewed with new procedures and forms implemented. A Council where staff, volunteers Volunteer Safety Information Session for the community was conducted. and contractors understand safety issues, Emergency Evacuation Plans for the Furneaux Arts and Entertainment are supported and take Centre, Whitemark Showgrounds, Duckpond Child Care Centre and Emita individual responsibility Hall were drafted and submitted to TasFire for approval. for safety. The Risk Register was approved by the General Manager and newly Completed identified risks added (playground maintenance and safety). and ongoing A Risk and Safety Management Committee/Reference Group of key staff was established to discuss risk treatment options and general safety matters and to review and update the Risk Register on an ongoing basis.

A treatment option is now in place for the newly identified risk of excessive wallabies on the airstrip at the Flinders Airport.

Council owned building inspections were scheduled for 2016/17 and will be reported as an agenda item to the Risk and Safety Management Committee/Reference Group.

Due to an increase in incident reports, a Work Health and Safety meeting Completed was scheduled with the Council Works and Services staff in April/May and 2016 to reinforce safe working practices. Incident/accident/hazard ongoing reporting processes were finalised including a reporting box set up at the Works & Services Depot for staff to record hazards/accidents/incidents anonymously.

New Contractor, New Employee and New Volunteer induction processes Completed and documentation were finalised and are in use. and ongoing

4.4.5 An effective and A review of the website content was undertaken and changes were made Complete dynamic online presence to bring the content up to date. and (Council website). ongoing

A schedule was created assigning responsibility to staff for uploading and Complete updating information onto Council’s website. and ongoing

4.4.6 A central source of The Visitor Information service was provided throughout the year. The Completed information for tourists number of inquiries and time spent providing visitor information is now and and visitors to the Island. being captured on a daily basis. ongoing

4.4.7 New Residents No progress on this action. Not started Kits.

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Strategic Direction: 4.5 Build financial and organisational resilience and maximise returns from Council’s capital resources.

Annual Plan Actions Progress on Actions Status

4.5.1 Resources utilised A replacement Investment Policy was developed and adopted by Council. Completed to maximise financial and A new Investment Strategy was formulated based on the revised policy and community returns. and is in draft form. ongoing

4.5.2 Sustainable An internal audit schedule was created and audits commenced. The audits Completed organisation. were spread over the year to allow for participating staff to complete and audits in addition to their existing workload. ongoing

A Business Continuity Plan was developed for consideration at the July Complete 2016 Council Meeting.

A 20 year financial assessment was conducted and key funding Complete requirements were identified.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 5. Livability - Protect, improve and promote the safety, creativity, health and wellbeing of the Islands’ communities.

Strategic Direction: 5.2 Support cultural activities that foster social engagement and emotional wellbeing and provide opportunities for creative expression.

Annual Plan Actions Progress on Actions Status

5.1.1 Integrated delivery Staff worked alongside Womensport and Recreation, Actively Flinders Complete of health promotion and the Northern Children’s Network (Duckpond) to create a health and and activities. wellbeing workshop for young/new mums on the Island called “Mums ongoing on the Move”. The 2.5 hour program consisted of free childcare for the participant, with an exercise and education component to support mums and families to manage their own health and wellbeing as well as providing a supportive network for the participants. Three rounds of the program were delivered and were such a success that many of the mums went on to run and win prizes in the Flinders Five, part of the Flinders Island Running Festival.

Staff assisted with the Active Tasmania’s ‘Active Island’ program funded by the Federal Government’s TAZREACH. This 6 week free program was specifically designed for mothers (childcare included and supported by Council through the Medibank Award monies received in the previous year) and older adults (50 years+). The key outcomes expected from this program were creating social connections, increasing awareness of the importance of physical activity and the opportunities available, along with increasing self esteem and the health benefits of engaging in regular physical activity.

Council and the Flinders Island Aboriginal Association Inc. (FIAAI) partnered to deliver the Winter School Holiday Program. Activities included a Community BBQ with FIAAI as part of the NAIDOC week celebrations, a movie day, an Amazing Race (Flinders Island style), creative arts with Maria LaGrue, a youth drop in day and an Island Chef Cook Off. FIAAI also ran a Golf Clinic and Scavenger Hunt independently to the Council program. All events received 100% attendance rate.

PAGE 48 FLINDERS ISLAND ANNUAL REPORT 2015/2016

5.1.1 Integrated delivery Council partnered with Scotch Oakburn College to bring the “Little Big Complete of health promotion Islands Project” to Flinders Island for the Spring School Holiday Program. and activities. (cont...) Members of Scotch Oakburn’s art department delivered 3 days of art ongoing activities and workshops. FIAAI provided their mini bus so that participants could be transported from one workshop to another without parent/ guardian involvement.

Council also supported and mentored local young off island secondary student Alex Anderson to promote and facilitate a series of walks around Flinders Island that she had planned as her Inspire Year 8 project for Scotch Oakburn College. The walks were delivered as part of the Spring School Holiday Program and $1720 raised from donations went to the Royal Flying Doctor Service. The Spring School Holiday Program attracted a total attendance of 204 participants across all activities.

Council delivered the Summer School Holiday Program which included the 2016 Island Chef Cook Off Championship, a ‘Boat Building Day’ to create boats for the Emita Sports Day’s boat race and parade and the popular ‘Learn to Surf School’ was held twice. Thanks to significant support from FIAAI, two days of dance/comedy workshops by Sean Choolburra were offered as part of the program. The dance creations were showcased during the Furneaux Islands Festival with a ‘flash mob’ dance at the market day and performances during the concert day.

Planning for the Winter School Holiday Program to be delivered in July sees Council in partnership with FIAAI providing junior footy clinics with North Launceston Football Club, dance sessions with Dance Fit instructors from Launceston, movie matinees, NAIDOC Week celebrations and the ever popular Glowing in the Dark party.

Council was successful in receiving a grant to facilitate the training of Complete Kathleen Ives Heap though Womensport and Recreation which lead to the introduction of the “Mums on the Move” program. A small grant was received from the Women Get Active Program to deliver a third round of the Mums on the Move Program.

Staff participated in Northern Regional Sport & Recreation Committee Complete meetings held throughout the year. and ongoing

Staff worked cooperatively with FIAAI to deliver School Holiday Program Complete activities and to obtain a small grant from the State Australia Day Council and for the Furneaux Islands Festival. Council and FIAAI built a steady and ongoing strong relationship throughout the year and delivered many of the school holiday activities together to benefit the youth of Flinders Island.

5.1.2 Rural Primary The Rural Primary Health Service (RPHS) program was successfully Complete Health Service program delivered. RPHS contributes funding towards the community development and funding is administered officer position, youth health services, school holiday program andthe ongoing for delivery of health community nursing positions on both Flinders and Cape Barren Islands. All services to the required reporting was achieved. Community.

5.1.2 Rural Primary Staff participated in the RPHS Community Conversations Consultations Complete Health Service program project in cooperation with the Multi Purpose Centre and the Flinders funding is administered Island Aboriginal Association Incorporated to look at improving the for delivery of health coordination of care for people in the health system. services to the Community. (cont...)

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 5.1.3 Improved health Council and Womensport and Recreation implemented the “Mums on Complete and wellbeing of the the Move” 8 week program consisting of a 2 hour fitness program with and community supported activities ranging from yoga and Pilates to boxing workouts and nutrition, ongoing through education and free childcare and a bit of social ‘me time’. health services. Three rounds of this program were offered throughout the year.

A 6 week “Working on Women” (WoW) lunch time exercise program was also delivered.

Planning for the Winter School Holiday Program includes a variety of Ongoing activities to get young people moving including junior footy clinics with North Launceston Football Club, dance workshops with Dance Fit instructors from Launceston, NAIDOC Week celebrations and Zorb Ball games at FIAAI and the ever popular Glowing in the Dark party.

The funeral service was maintained to meet community need. After ten Complete years of service to the Community, Dianne Walsh stepped down from the and role of Funeral Director and was succeeded by Vicki Warden. ongoing

5.1.4 Water supply free Staff supported TasWater with the development of the new Lady Barron Ongoing from contaminants. and Whitemark water treatment plants.

Building permits were issued and construction neared completion. TasWater undertook a series of information sessions with Community and Council to provide an understanding of future water quality.

Strategic Direction: 5.2 Support cultural activities that foster social engagement and emotional wellbeing and provide opportunities for creative expression.

Annual Plan Actions Progress on Actions Status

5.2.1 Arts and cultural Staff worked with community groups, businesses and organisations to Complete activities are encouraged foster and support cultural activities when required including the Regional and and supported. Arts FLAK performance, the Journey to Healing Tasmanian Association ongoing for Hospice and Palliative Care funded project, the Matthew Ives Big Band and CROON event, the Deal Island: Eight Artists, Eight Perspectives exhibition, the Flinders Island Running Festival and the Furneaux Islands Festival 2016

5.2.2 Community Council and the Flinders Island Aboriginal Association Inc. partnered to Complete events and activities are deliver the third Furneaux Islands Festival in January 2016 with greater and supported, encouraged attendance at all festival events than in previous years. ongoing and delivered. A Furneaux Islands Festival website, Facebook page and Instagram account were created specifically for the promotion and advertising of the event. Radio interviews and more traditional forms of advertising were also used.

A successful grant application submitted to the Australia Day ‘Great Ideas’ grant program 2016 secured $2,500 to cover the costs of the ‘Kup Murri’ traditional Aboriginal earth oven lunch as part of the Community Day.

Council’s Volunteer Registration and Safety Induction process was Complete reviewed and updated. and ongoing

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Strategic Direction: 5.3 Land use planning conserves natural and cultural values and addresses natural hazards and climate adaption.

Annual Plan Actions Progress on Actions Status

5.3.1 Municipal climate Climate change strategy for the Municipality is in draft form. This will not Ongoing change strategy. be finalised until the main body of planning scheme work is completed.

5.3.3 Biosecurity risks This action relates to cooperating with Biosecurity Tasmania identifying Not started identified and a program Furneaux specific risks to biosecurity e.g. agricultural practices, private air- to address those risks fields, weeds. This action will not commence until Planning Scheme work developed. is submitted.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT FINANCIAL OUTCOMES AT A GLANCE

PAGE 52 FLINDERS ISLAND ANNUAL REPORT 2015/2016

FINANCIAL SUMMARY Actual Budget

Results from ordinary activities Income 3,952,000 3,929,000 Expenditure 5,498,000 5,053,000 Results from ordinary activities (1,775,000) (1,697,167) Items related to Capital 2,840,421 1,007,883 Surplus for the year 2,980,669 (689,284)

Financial Position 2016 2015 Total Assets 56,526,000 56,265,000 Total Liabilities* 1,744,000 766,000 Net Community Equity 54,782,000 55,498,000

* Includes Loan with Tascorp and a provision for the rehabilitation of the Whitemark landfill site.

Key Assets (included in Financial Position) Community Infrastructure & Assets 49,851,000 48,688,000

Cash Assets 6,675,000 7,577,000

Operating Income - 2016

GrantsGrants 25%25%

RatesRates && Charges 38% 38% OtherOther Income 2%2%

InvestmentInvestment RevenueRevenue 5% 5% FeesFees && User ChargesCharges 30% 30% Operating Income Chart - This chart depicts Council’s operating income by source for the 2015/16 Financial Year.

Operating Expenditure - 2016

Depreciation Depreciation26% 26% Employee Employee Benefits 38% Benefits 38% Materials & Materials & Contracts 26% Contracts 34% Other 2%Other 2%

Operating Expenditure Chart – This chart depicts Council’s operating expenditure by type for the 2015/16 Financial Year.

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT FINANCIAL SUMMARY Actual Budget

Capital Expenditure Airport 723,000 801,122 Plant & Equipment 805,310 51,000 Roads/Transport 689,929 1,058,664 Town Maintenance 335,000 944,383 Waste Management 35,000 101,262 Other 1,761 5,000 2,590,000 2,961,431

* A variance in the Town Maintenance budget was due to the delay with the Lady Barron Hall Project. * Plant & Equipment was above budget due to the purchase of the Bitumen & Volvo trucks, which were funded by a loan with Tascorp. * Roads were under budget due to other priority works carried out at the Airport.

Capital Expenditure - 2016

Airport 28%Airport 28% Plant & Equipment 31%Plant and Equipment 31% Roads/Transport 27%Roads/Transport 27% Town Maintenance 13%Town Maintenance 13% Waste Management 1%Waste Management 1% Other 0%Other 0%

Capital Expenditure Chart – This chart depicts Council’s capital expenditure by asset type for the 2015/16 Financial Year.

2009-10 10,000,000 FLINDERS COUNCIL CASH FLOW 2010-11 8,000,000 2011-12 6,000,000 2012-13 4,000,000 2013-14

2,000,000 2014-15

0 2015-16 1 2 3 4 5 6 7 8 9 10 11 12

PAGE 54 FLINDERS ISLAND ANNUAL REPORT 2015/2016

Underlying Surplus Ratio

0% 2011 2012 2013 2014 2015 2016 -10%

-20%

-30%

-40%

-50%

-60%

Underlying Surplus Ratio

Figure 1 This ratio serves as an overall measure of financial operating effectiveness. The 2016 figures have been heavily influenced by the prepayment of Financial Assistance Grants in the 2015 year.

The Underlying Surplus Ratio highlights that the cost of services provided to the community exceeds revenue generated. Negative indicators show the percentage increase in total rates that would have been required to achieve a breakeven operating result.

Council’s current position has been impacted by the prepayment of the 2015/16 Financial Assistance Grants in the previous year. Council needs to be achieving a benchmark of 0% to be deemed to be sustainable.

Government Grants

3000000

2500000

2000000

1500000 Operating Grants

1000000 Capital Grants

500000

0 2010 2011 2012 2013 2014 2015 2016

Figure 2 This Graph highlights how the contraction of Government Grants has influenced the Underlying Surplus Ratio.

The Federal Government forward payment of Federal Assistance Grants in 2014/15 has had a negative impact in 2015/16 with a sharp decrease in Operating Grants.

PAGE 55

FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Net Financial Liabilities Ratio

200%

150%

100% Net Financial Liabilities Ratio 50%

0% 2011 2012 2013 2014 2015 2016

Figure 3 This ratio measures the net financial obligations of Council compared to its recurrent income.

Net Financial Liabilities is a broader measure of indebtedness than the level of borrowings, because it includes items such as employee long service leave entitlements and other amounts payable, as well as taking account of Council’s cash and investments.

In 2015/16 Council took advantage of the low interest rate environment and borrowed funds to purchase key road assets. Positive indicators show that the Council is placed well with the level of cash reserves, as the benchmark is 0% to negative 50%. Due to the uniqueness of the ownership of the Flinders Island Airport, Council is in a position of having to build up its cash reserves to meet ongoing commitments to maintain the airport. Council’s static rate base also necessitates that investment revenue from cash reserves is utilised to offset the minimal amount of funds (when compared to operational expenditure) collected in rate revenue.

Asset Consumption Ratio

120%

100%

80% Transport 60% Buildings

40% Stormwater

20%

0% 2011 2012 2013 2014 2015 2016

Figure 4 This ratio indicates the level of service potential available in Council's existing asset base.

The Asset Consumption Ratio seeks to highlight the aged condition of the Council’s stock of physical assets. The ratio measures the extent to which depreciable assets have been consumed by comparing their written down value to their replacement cost.

The ratio highlights that the Council is maintaining, renewing and replacing its assets in accordance with the Asset Management Plan and meets the benchmark of greater than 60%.

PAGE 56 FLINDERS ISLAND ANNUAL REPORT 2015/2016

Asset Renewal Funding Ratio

120%

100%

80% Transport Infrastructure 60% Buildings

40% Stormwater

20%

0% 2013 2014 2015 2016

Figure 5 This Ratio measures Council's capacity to fund future asset replacement requirements.

The Asset Renewal Funding Ratio indicates whether the Council has the financial capacity to fund asset renewal as required, and can continue to provide existing levels of services in future, without additional operating income; or reduction in operating expenses.

The ratio highlights that the Council is well positioned to fund asset renewals as required and meets the required benchmark of at least 90%.

Asset Sustainability Ratio

140% 120% 100% 80% 60% 40% 20% 0% 2011 2012 2013 2014 2015 2016

Asset Sustainability Ratio

Figure 6 This ratio calculates the extent to which Council is maintaining operating capacity through renewal of their existing asset base.

The Asset Sustainability Ratio indicates the extent to which existing non-financial assets are being reviewed and replaced, compared with what is needed to cost-effectively maintain service levels. A declining indicator shows that capital expenditure levels are not being optimised so as to minimise life cycle costs of assets.

There has been an increase in the Asset Sustainability Ratio with the purchase of key road assets, namely the Bitumen and Volvo Truck. Three of the four new Public Toilets have been completed during the financial year and considerable work has been carried out at the Airport carrying out the priority repair program.

The benchmark is set at 100%, which Council has exceeded in the 2015/16.

PAGE 57

FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Flinders Council Annual Financial Report year ended 30 June 16 PAGE 58 Flinders Council Financial Report Table of Contents Flinders Council Financial Report

FINANCIAL REPORT Page Financial Statements Statement of Profit or Loss and Other Comprehensive Income 1 Statement of Financial Position 2 Statement of Changes in Equity 3 Statement of Cash Flows 4 Notes to Financial Statements Note 1 Reporting entity 5 Note 2 Basis of accounting 5 Note 3 Use of estimates and judgements 5 Note 4 Functions/Activities of the Council 6 Note 5 Rates and charges 8 Note 6 Statutory fees and fines 8 Note 7 User fees 8 Note 8 Grants 9 Note 9 Contributions 10 Note 10 Interest 10 Note 11 Other income 11 Note 12 Net gain/(loss) on disposal of property, infrastructure, plant and 11 Note 13 Investment revenue from water corporation 11 Note 14 Employee benefits 12 Note 15 Materials and services 12 Note 16 Impairment of receivables 12 Note 17 Depreciation and amortisation 12 Note 18 Finance costs 13 Note 19 Other expenses 14 Note 20 Investment in water corporation 15 Note 21 Cash and cash equivalents 15 Note 22 Trades and other receivables 15 Note 23 Financial assets 15 Note 24 Inventories 15 Note 25 Other assets 15 Note 26 Property, infrastructure, plant and equipment 16 Note 27 Intangible assets 22 Note 28 Trade and other payables 22 Note 29 Trust funds and deposits 23 Note 30 Provisions 23 Note 31 Interest bearing loans and borrowings 25 Note 32 Reserves 27 Note 33 Reconciliation of cash flows from operating activities to surplus or deficit 28 Note 34 Reconciliation of cash and cash equivalents 28 Note 35 Financing arrangements 28 Note 36 Superannuation 29 Note 37 Operating leases 30 Note 38 Contingent liabilities and contingent assets 30 Note 39 Financial instruments 31 Note 40 Events occurring after balance date 37 Note 41 Related party transactions 37 Note 42 Special committees and other activities 39 Note 43 Significant Business Activities 40 Note 44 Management indicators 41 Note 45 Fair value measurements 43 Note 46 Material budget variations 47 Note 47 Other significant accounting policies and new accounting standards 48 Certification of the Financial Report 52

PAGE 59

FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Flinders Council Flinders Council 2015-2016 Financial Report 2015-2016 Financial Report

StatementStatement of Profit of Profit or or Loss andand Other Other Comprehensive Comprehensive Income Income Statement of Financial Position For theFor the Year Year Ended Ended 30 30 June June 2016 2016 As at 30 June 2016

Budget Actual Actual Note 2016 2015 Note 2016 2016 2015 $'000 $'000 $'000 $'000 $'000 Income from continuing operations Recurrent Income Assets Rates and charges 5 1,490 1,501 1,421 Current assets Statutory fees and fines 6 61 49 50 Cash and cash equivalents 21 5,197 2,192 User fees 7 1,045 1,118 653 Trade and other receivables 22 358 239 Grants 8 967 976 2,275 Financial assets 23 890 4,615 Contributions - cash 9 33 26 98 Interest 10 205 161 241 Inventories 24 224 464 Other income 11 74 67 84 Other assets 25 6 67 Investment revenue from water corporation 13, 20 54 54 54 Total current assets 6,675 7,577 3,929 3,952 4,876 Capital income Non-current assets Capital grants received specifically for new or upgraded assets 8 1,064 876 1,036 Investment in water corporation 20 3,307 3,252 Contributions - non-monetary assets 9 - 10 - Property, infrastructure, plant and equipment 26 46,485 45,377 Net gain/(loss) on disposal of property, infrastructure, plant and equipment 12 60 (111) (122) Recognition of land under roads - - 1,926 Intangible assets 27 - - 1,124 775 2,840 Other assets 25 59 59 Total non-current assets 49,851 48,688 Total income from continuing operations 5,053 4,727 7,716 Total assets 56,526 56,265

Expenses from continuing operations Liabilities Employee benefits 14 (2,135) (2,087) (1,686) Current liabilities Materials and services 15 (2,083) (1,855) (1,445) Trade and other payables 28 411 270 Impairment of debts 16 - - (30) Trust funds and deposits 29 67 45 Depreciation and amortisation 17 (1,470) (1,431) (1,460) Finance costs 18 (28) (17) - Provisions 30 204 249 Other expenses 19 (115) (109) (115) Interest-bearing loans and borrowings 31 36 - Total current liabilities 718 564 Total expenses from continuing operations (5,831) (5,498) (4,736) Non-current liabilities Result from continuing operations (778) (771) 2,980 Provisions 30 379 202 Interest-bearing loans and borrowings 31 647 - Net result for the year (778) (771) 2,980 Total non-current liabilities 1,026 202 Other comprehensive income Total liabilities 1,744 766 Items that will not be reclassified to surplus or deficit Fair value adjustments for financial assets at fair value - - - Net Assets 54,782 55,498 Net asset revaluation increment/(decrement) 32 - - 44 - - 44 Equity Items that may be reclassified subsequently to surplus or deficit Accumulated surplus 41,781 42,552 Financial assets available for sale reserve Reserves 32 13,001 12,946 ─ Fair Value adjustment on Available for Sale Assets 32 - 55 26 - 55 26 Total Equity 54,782 55,498 Total Other Comprehensive Income - 55 70

Total Comprehensive result (778) (717) 3,050 The above statement should be read in conjunction with the accompanying notes. The above statement should be read in conjunction with the accompanying notes.

PAGE 60 PAGE 1

35 36 Flinders Council Flinders Council 2015-2016 Financial Report 2015-2016 Financial Report

Statement of Profit or Loss and Other Comprehensive Income StatementStatement of of Financial Position Position For the Year Ended 30 June 2016 AsAs at at 30 30 JuneJune 2016 2016

PAGE 61 PAGE 2

35 FLINDERS36 ISLAND 2016 ANNUAL GENERAL REPORT Flinders Council Flinders Council 2015-2016 Financial Report 2015-2016 Financial Report

StatementStatement of of Changes in Equityin Equity Statement of Cash Flows For theFor the Year Year Ended Ended 30 30 June June 2016 2016 For the Year Ended 30 June 2016

2016 2015 Inflows/ Inflows/ Asset Fair (Outflows) (Outflows) Accumulated Revaluation Value Other Note $'000 $'000 Note Total Surplus Reserve Reserve Reserves Cash flows from operating activities 2016 2016 2016 2016 2016 2016 $'000 $'000 $'000 $'000 $'000 Rates 1,440 1,372 Statutory fees and fines 49 42 Balance at beginning of the financial year 55,498 42,552 8,720 (162) 4,388 User charges and other fines (inclusive of GST) 1,134 750 Grants (inclusive of GST) 991 2,285 Adjustment due to compliance with revised accounting standard - - - - - Interest 161 241 Adjustment on change in accounting policy - - - - - Investment revenue from water corporation 54 54 - Other receipts (inclusive of GST) 93 235 Surplus / (deficit) for the year (771) (771) - Net GST refund/payment 23 3 Other Comprehensive Income: - Payments to suppliers (inclusive of GST) (1,518) (1,753) Fair value adjustments for financial assets at fair value - - - - - Payments to employees (including redundancies) (2,071) (1,626) Financial assets available for sale reserve Other payments (inclusive of GST) (109) - Finance costs (17) - ─ Fair Value adjustment on Available for Sale Assets 20 55 - - 55 - Net cash provided by (used in) operating activities 33 230 1,602 Net asset revaluation increment/(decrement) 32 - - - Transfers between reserves - - - - - Cash flows from investing activities Balance at end of the financial year 54,782 41,781 8,720 (107) 4,388 Payments for property, infrastructure, plant and equipment (2,595) (3,577) Asset Fair Proceeds from sale of property, infrastructure, plant and equipment 86 157 Accumulated Revaluation Value Other Capital grants (inclusive of GST) 876 1,036 Proceeds from sale of other financial assets 3,725 818 Total Surplus Reserve Reserve Reserves Net cash provided by (used in) investing activities 2,092 (1,566) 2015 2015 2015 2015 2015 2015 $'000 $'000 $'000 $'000 $'000 Cash flows from financing activities

Balance at beginning of the financial year 52,448 39,572 8,676 (188) 4,388 Proceeds from interest bearing loans and borrowings 700 - Adjustment due to compliance with revised accounting standard - - - - - Repayment of interest bearing loans and borrowings (17) - Adjustment on change in accounting policy - - - - - Net cash provided by (used in) financing activities 683 - - - Net increase (decrease) in cash and cash equivalents 3,005 37 Surplus / (deficit) for the year 2,980 2,980 - Cash and cash equivalents at the beginning of the financial year 2,192 2,155 Other Comprehensive Income: - - Fair value adjustments for financial assets at fair value - - - - - Cash and cash equivalents at the end of the financial year 34 5,197 2,192 Financial assets available for sale reserve ─ Fair Value adjustment on Available for Sale Assets 20 26 - - 26 - Financing arrangements 35 10 6 Net asset revaluation increment/(decrement) 32 44 - 44 - - Restrictions on cash assets 21 650 498 Transfers between reserves - - - - Balance at end of the financial year 55,498 42,552 8,720 (162) 4,388 The above statement should be read in conjunction with the accompanying notes. The above statement should be read with the accompanying notes.

PAGE 62 PAGE 3

37 38 Flinders Council Flinders Council 2015-2016 Financial Report 2015-2016 Financial Report

Statement of Changes in Equity StatementStatement of Cash Cash Flows Flows For the Year Ended 30 June 2016 For theFor the Year Year Ended Ended 30 30 June June 2016 2016

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37 FLINDERS38 ISLAND 2016 ANNUAL GENERAL REPORT FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Flinders Council Notes to the NotesFinancial to the Financial Report Report 2015-2016 Financial Report For the Year EndedFor the Year 30 Ended June 30 June 2016 2016 Note 4 Functions/Activities of the Council (a) Revenue, expenditure and assets attributable to each function as categorised in (c) below:

Note 1 Reporting entity Total Total Surplus/ (a) The Flinders Council was established on 26 February 1908 and is a body corporate with perpetual succession and a Grants Other Revenue Expenditure (Deficit) Assets common seal. Council's main office is located at 4 Davies S, Whitemark, Tasmania. Government and administration 2015 - 2016 365 1,377 1,742 1,577 165 18,393 (b) The purpose of the Council is to: 2014 - 2015 1,179 1,563 2,742 1,509 1,233 18,792 - provide for health, safety and welfare of the community; - to represent and promote the interests of the community; - provide for the peace, order and good government in the municipality. Roads, streets and bridges 2015 - 2016 1,145 767 1,912 1,517 395 31,449 Note 2 Basis of accounting 2014 - 2015 1,307 1,797 3,104 1,316 1,789 31,785 These financial statements are a general purpose financial report that consists of a Statement of Profit or Loss and Other Comprehensive Income, Financial Position, Statement of Changes in Equity, Statement of Cash Flows, and notes Waste management accompanying these financial statements. The general purpose financial report complies with Australian Accounting 2015 - 2016 - 181 181 140 41 557 Standards, other authoritative pronouncements of the Australian Accounting Standards Board, and the Local Government 2014 - 2015 - 175 175 88 87 397 Act 1993 (LGA1993) (as amended). Council has determined that it does not have profit generation as a prime objective. Consequently, where appropriate, Council has elected to apply options and exemptions within accounting standards that are Enviornmental health, building & planning services applicable to not-for-profit entities. 2015 - 2016 - 102 102 365 (263) - This financial report has been prepared on the accrual and going concern basis. 2014 - 2015 50 192 242 265 (23) - All amounts are presented in Australian dollars and unless stated, have been rounded to the nearest thousand dollars. Town maintenance 2015 - 2016 - 94 94 204 (110) - This financial report has been prepared under the historical cost convention, except where specifically stated in notes 20 and 2014 - 2015 - 60 60 357 (297) - 26.

Unless otherwise stated, all accounting policies are consistent with those applied in the prior year. Where appropriate, Depot & plant comparative figures have been amended to accord with current presentation, and disclosure has been made of any material 2015 - 2016 - 41 41 754 (713) 2,226 changes to comparatives. 2014 - 2015 - 281 281 460 (178) 1,996 All entities controlled by Council that have material assets or liabilities, such as Special Committees of Management, and material subsidiaries or joint ventures, have been included in this financial report. All transactions between these entities and Airport Council have been eliminated in full. Details of entities not included in this financial report based on their materiality are 2015 - 2016 238 305 543 574 (31) 3,901 detailed in Note 42. 2014 - 2015 629 321 950 477 473 3,295

Note 3 Use of judgements and estimates Community & economic development Judgements and Assumptions 2015 - 2016 104 8 112 367 (255) - In the application of Australian Accounting Standards, Council is required to make judgements, estimates and assumptions 2014 - 2015 146 16 162 264 (102) - about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the Total circumstances, the results of which form the basis of making the judgements. Actual results may differ from these estimates. 2015 - 2016 1,852 2,875 4,727 5,498 (771) 56,526 2014 - 2015 3,311 4,405 7,716 4,736 2,981 56,265 The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

Council has made no assumptions concerning the future that may cause a material adjustment to the carrying amounts of assets and liabilities within the next reporting period. Judgements made by Council that have significant effects on the financial report are disclosed in the relevant notes as follows: Employee entitlements Assumptions are utilised in the determination of Council’s employee entitlement provisions. These assumptions are discussed in note 30.

Fair value of property, plant & equipment Assumptions and judgements are utilised in determining the fair value of Council’s property, plant and equipment including useful lives and depreciation rates. These assumptions are discussed in note 26.

Investment in water corporation Assumptions utilised in the determination of Council’s valuation of its investment in TasWater are discussed in note 20.

Quarry rehabilition Assumptions and judgements are utilised in determining the provision for quarry rehabilition are discussed in note 30. Landfill rehabilitation Assumptions and judgements are utilised in determining the provision for landfill rehabilition are discussed in note 30.

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39 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 Note 4 Functions/Activities of the Council (a) Revenue, expenditure and assets attributable to each function as categorised in (c) below:

Investment in water corporation Assumptions utilised in the determination of Council’s valuation of its investment in TasWater are discussed in note 20.

PAGE 65 PAGE 6

FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 40

39 Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

(b) Reconciliation of Assets from note 4(a) with the Statement of Financial Position at 30 June:

2016 2015 Current assets 6,675 7,577 Non-current assets 49,851 48,688 56,526 56,265

(c) Governance and administration Operation and maintenance of council chambers, administration offices, and councillors.

Roads, streets and bridges Construction, maintenance and cleaning of road, streets, footpaths, bridges, parking facilities and street lighting.

Waste Management Collection, handling, processing and disposal of all waste materials.

Enviornmental health, building & planning services Environmental health includes disease control food surveillance, public-use building standards, health education and promotion, water quality, workplace safety and cemeteries. Environmental management includes strategies and programs for the protection of the environment and regulations of activities affecting the environment. Building includes the development and maintenance of building construction standards. Planning includes the administration of the town planning scheme, sundivisions and urban and rural renewal programs.

Town maintenance Operation and maintenance of all recreational and sporting facilities (including community halls & playgrounds). Operation and maintenance of Council owned buildings, public land and facilities to a standard expected within the local community.

Depot & plant Operation and maintenance of all plant times, equipment, machinery, council workshop and supplies.

Airport Operation and maintenance of the Flinders Island Airport with all required aviational standards and procedures.

Community & economic development Operation and support of health services, performing arts & culture, youth services and the presentation of community events. Economic Development which provides the implementation of a process and marketing support by which strategies and plans can be developed so that the Council can fulfil their general responsibility for enhancing the quality of life of the whole community.

PAGE 66 PAGE 7

41 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report 2016 2015 For the Year Ended 30 June 2016 $'000 $'000

(b) Reconciliation of Assets from note 4(a) with the Statement of Financial Position at 30 June: Note 5 Rates and charges

Council uses Assessed Annual Valuation as the basis of valuation of all properties within the municipality. The Assessed 2016 2015 Annual Value of a property is its rental capacity value for each given year. Current assets 6,675 7,577 Non-current assets 49,851 48,688 The valuation base used to calculate general rates for 2015-16 was $14.54 million (2014-15 $13.69 million). The 2015-16 56,526 56,265 rate in the Assessed Annual Value dollar was $0.094704 (2014-15, $0.094704 ).

General rates 1,260 1,183 (c) Governance and administration Fire levy 60 57 Operation and maintenance of council chambers, administration offices, and councillors. Waste management charges 181 175 Rates and charges in advance - 7 Total rates and charges 1,501 1,421 Roads, streets and bridges Construction, maintenance and cleaning of road, streets, footpaths, bridges, parking facilities and street lighting. The date of the latest general revaluation of land for rating purposes within the municipality was 1 October 2010, and the valuation was first applied in the rating year commencing 1 July 2011. Adjusted Assessed Annual Values were last applied for rating purposes on 1 July 2015. Waste Management

Collection, handling, processing and disposal of all waste materials. Accounting policy

Enviornmental health, building & planning services Rates and charges income Rate income is recognised as revenue when Council obtains control over the assets comprising the receipt. Environmental health includes disease control food surveillance, public-use building standards, health education and promotion, water Control over assets acquired from rates is obtained at the commencement of the rating year as it is an enforceable debt quality, workplace safety and cemeteries. Environmental management includes strategies and programs for the protection of the linked to the rateable property or, where earlier, upon receipt of the rates. A provision for impairment on rates has not been environment and regulations of activities affecting the environment. Building includes the development and maintenance of building established as unpaid rates represents a charge against the rateable property that will be recovered when the property is next sold. construction standards. Planning includes the administration of the town planning scheme, sundivisions and urban and rural renewal programs. Note 6 Statutory fees and fines

Infringements and costs 1 1 Town maintenance Town planning fees 32 40 Operation and maintenance of all recreational and sporting facilities (including community halls & playgrounds). Operation and Land information certificates 9 1 maintenance of Council owned buildings, public land and facilities to a standard expected within the local community. Permits 7 8 Total statutory fees and fines 49 50

Accounting policy Depot & plant Operation and maintenance of all plant times, equipment, machinery, council workshop and supplies. Statutory fee and fine income Fees and fines are recognised as revenue when the service has been provided, the payment is received, or when the penalty has been applied, whichever first occurs. A provision for impairment is recognised when collection in full is no Airport longer probable. Operation and maintenance of the Flinders Island Airport with all required aviational standards and procedures. Note 7 User fees Community & economic development Operation and support of health services, performing arts & culture, youth services and the presentation of community events. Community facilities hire fees 4 2 Dog registration fees 6 5 Economic Development which provides the implementation of a process and marketing support by which strategies and plans can be Food premises registrations 4 4 developed so that the Council can fulfil their general responsibility for enhancing the quality of life of the whole community. Building services fees 24 33 Airport fees and charges 298 307 DIER contract 155 129 Private works 612 150 Cemetery fees 13 21 Other fees and charges 2 2 Total user fees 1,118 653

Ageing analysis of contractual receivables Please refer to note 39(c) for the ageing analysis of contractual receivables.

Accounting policy

User fee income Fee income is recognised as revenue when the service has been provided, or the payment is received, whichever first occurs. A provision for impairment is recognised when collection in full is no longer probable.

PAGE 67 PAGE 8

41 FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

2016 2015 $'000 $'000

Note 8 Grants Grants were received in respect of the following: Summary of grants Federally funded grants 1,490 2,827 State funded grants 362 484 Total 1,852 3,311

Grants - Recurrent Commonwealth Government Financial Assistance Grants - General Purpose (relating to 2014/15) - 673 Commonwealth Government Financial Assistance Grants - Roads (relating to 2014/15) - 648 Commonwealth Government Financial Assistance Grants - (received in advance for 2015/16) - 653 Commonwealth Government Financial Assistance Grants - General Purpose (relating to 2015/16) 296 - Commonwealth Government Financial Assistance Grants - Roads (relating to 2015/16) 369 - Community Health 100 94 Transport 209 207

Other 2 - Total recurrent grants 976 2,275

The Australian Commonwealth Government provides Financial Assistance Grants to Council for general purpose use and the provision of local roads. In 2014-15 the Commonwealth made early payment of the two quarterly instalments for the following year. In accordance with AASB1004 Contributions , Council recognises these grants as revenue when it receives the funds and obtains control. The early receipt of instalments resulted in Commonwealth Government Financial Assistance Grants being above that originally budgeted in 2014-15 by $653,136. This has impacted the Statement of Profit or Loss and Other Comprehensive Income resulting in the Surplus/(deficit) being higher in 2014-15 by $653,136.

Capital grants received specifically for new or upgraded assets Commonwealth Government - roads to recovery 567 130 Shipping - 50 Airport Upgrade 238 629 Marine safety & access 51 - Other 20 227 Total capital grants 876 1,036

Conditions on grants

Non-reciprocal grants recognised as revenue during the year that were obtained oncondition that theybe expended in aspecified manner that had not occurred at balance date were:

Community health - 94 Shipping - 235 Emergency services - 3 Marine safety & access 8 - Other - election commitment grant 43 250 Total 51 582

Non-reciprocal grants which were recognised as revenue in prior years and were expended during the current year in the manner specified by the grantor were:

Community health 94 109 Shipping 110 - Emergency services 3 - Other - election commitment grant 207 - Total 414 109

Net increase (decrease) in non-reciprocal grant revenues for the year: (363) 473

Accounting policy

Grant income - operating and capital Grant income is recognised as revenue when Council obtains control over the assets comprising the receipt. Control over granted assets is normally obtained upon their receipt (or acquittal) or upon earlier notification that a grant has been secured, and are valued at their fair value at the date of transfer. Where grants recognised as revenues during the financial year were obtained on condition that they be expended in a particular manner or used over a particular period and those conditions were undischarged at balance date, the unused grant is also disclosed. The note also discloses the amount of unused grant or contribution from prior years that was expended on Council’s operations during the current year.

A liability is recognised in respect of revenue that is reciprocal in nature to the extent that the requisite service has not been provided at balance date and conditions include a requirement to refund unused contributions. Revenue is then recognised as the various performance obligations under an agreement are fulfilled. Council does not currently have any reciprocal grants. Unreceived contributions over which Council has control are recognised as receivables.

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43 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

2016 2015 $'000 $'000

Note 9 Contributions

(a) Cash Parks, open space and streetscapes 26 98 Total 26 98 (b) Non-monetary assets Land 10 - Total 10 -

Total contributions 36 98

Accounting policy

Contribution income Contributions are recognised as revenue when Council obtains control over the assets comprising the receipt. Revenue is recognised when Council obtains control of the contribution or the right to receive the contribution, it is probable that the economic benefits comprising the contribution will flow to Council and the amount of the contribution can be measured reliably. Control over granted assets is normally obtained upon their receipt (or acquittal) or upon earlier notification that a grant has been secured, and are valued at their fair value at the date of transfer. Where contributions recognised as revenues during the financial year were obtained on condition that they be expended in a particular manner or used over a particular period and those conditions were undischarged at balance date, the unused contribution is also disclosed. The note also discloses the amount of unused contribution from prior years that was expended on Council’s operations during the current year. Unreceived contributions over which Council has control are recognised as receivables. Non-monetary contributions (including developer contributions) with a value in excess of the recognition thresholds, are recognised as revenue and as non-current assets.

Note 10 Interest

Interest on financial assets 102 172 Interest on rates 32 28 Interest on cash and cash equivalents 27 41 Total 161 241

Accounting policy

Interest income Interest is recognised progressively as it is earned.

PAGE 69 PAGE 10

FLINDERS44 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

2016 2015 $'000 $'000

Note 11 Other income

Rent 14 22 Reimbursements 1 3 Other 52 59 Total other income 67 84

Accounting policy

Rental income Rents are recognised as revenue when the payment is due or the payment is received, whichever first occurs. Rental payments received in advance are recognised as a prepayment until they are due.

Reversal of impairment income Reversals of impairment losses are recongised when payment is received.

Other income Other income is recognised when the payment is due or received, whichever first occurs.

Operating leases as lessor Council is a lessor and enters into agreements with a number of lessees. These include commercial and non-commercial agreements. Where leases are non-commercial agreements, these are generally with not for profit, such as sporting, organisations. In these cases subsidised or peppercorn rents are charged because Council recognises part of its role is community service and community support. In these situations, Council records lease revenue on an accruals basis and records the associated properties as part of land and buildings within property, plant and equipment. Buildings are recognised at depreciated replacement cost. Where leases are commercial agreements, but properties leased are part of properties predominantly used by Council for its own purposes, Council records lease revenue on an accruals basis and records the associated properties as part of land and buildings within property, plant and equipment. Buildings are recognised at depreciated replacement cost.

Where leases are commercial agreements, and properties leased are predominantly used for leasing to third parties, Council records lease revenue on an accruals basis and records the associated properties as investment property in accordance with AASB 140. These properties are recognised at fair value. These leases may include incentives which have not been recognised in the statement of financial position, on the basis the amounts are unlikely to be material and could be reliably measured at balance date.

Note 12 Net gain/(loss) on disposal of property, infrastructure, plant and equipment Proceeds of sale 87 154 Write down value of assets disposed (198) (276) Total (111) (122)

Accounting policy

Gains and losses on asset disposals The profit or loss on sale of an asset is determined when control of the asset has irrevocably passed to the buyer.

Note 13 Investment revenue from water corporation

Dividend revenue received 37 40 Tax equivalent received 13 10 Guarantee fee received 4 4 Total investment revenue from water corporation 54 54

Accounting policy

Investment revenue Dividend revenue is recognised when Council's right to receive payment is established.

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45 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Flinders Council Notes to the Financial Report Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 2015-2016 Financial Report For the Year Ended 30 June 2016

2016 2015 2016 2015 $'000 $'000 $'000 $'000

Note 11 Other income Note 14 Employee benefits

Rent 14 22 Wages and salaries (incl. leave) 1,869 1,536 Reimbursements 1 3 Workers compensation 35 29 Other 52 59 Superannuation 194 169 Total other income 67 84 Fringe benefits tax 8 2 Other employee related expenses 126 53 Accounting policy 2,232 1,789 Less amounts capitalised (145) (103) Rental income Total employee benefits 2,087 1,686 Rents are recognised as revenue when the payment is due or the payment is received, whichever first occurs. Rental payments received in advance are recognised as a prepayment until they are due. Accounting policy

Employee benefits Reversal of impairment income Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future Reversals of impairment losses are recongised when payment is received. economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably.

Other income Employee benefits include, where applicable, entitlements to wages and salaries, annual leave, sick leave, long service Other income is recognised when the payment is due or received, whichever first occurs. leave, superannuation and any other post-employment benefits.

Operating leases as lessor Note 15 Materials and services Council is a lessor and enters into agreements with a number of lessees. These include commercial and non-commercial agreements. Consultant & contractor payments 356 396 Where leases are non-commercial agreements, these are generally with not for profit, such as sporting, organisations. In Materials, supplies & services 967 560 these cases subsidised or peppercorn rents are charged because Council recognises part of its role is community service Plant and equipment maintenance & operating costs 112 110 and community support. In these situations, Council records lease revenue on an accruals basis and records the associated Insurance 81 58 properties as part of land and buildings within property, plant and equipment. Buildings are recognised at depreciated Utilities, internet & phone 111 103 replacement cost. Councillors' expenses 24 21 Leases & licences 82 71 Where leases are commercial agreements, but properties leased are part of properties predominantly used by Council for Donations & gifts 21 29 its own purposes, Council records lease revenue on an accruals basis and records the associated properties as part of land Fire service levy 53 51 and buildings within property, plant and equipment. Buildings are recognised at depreciated replacement cost. Land tax 31 30 Settlement discount on rates 17 16 Where leases are commercial agreements, and properties leased are predominantly used for leasing to third parties, Total materials and services 1,855 1,445 Council records lease revenue on an accruals basis and records the associated properties as investment property in accordance with AASB 140. These properties are recognised at fair value. These leases may include incentives which Accounting policy have not been recognised in the statement of financial position, on the basis the amounts are unlikely to be material and could be reliably measured at balance date. Materials and services expense Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future Note 12 Net gain/(loss) on disposal of property, infrastructure, plant and equipment economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably. Proceeds of sale 87 154 Routine maintenance, repair costs, and minor renewal costs are expensed as incurred. Where the repair relates to the Write down value of assets disposed (198) (276) replacement of a component of an asset and the cost exceeds the capitalisation threshold the cost is capitalised and Total (111) (122) depreciated. The carrying value of the replaced asset is expensed.

Accounting policy Note 16 Impairment of receivables Gains and losses on asset disposals The profit or loss on sale of an asset is determined when control of the asset has irrevocably passed to the buyer. Sundry debtors - 30 Total impairment of receivables - 30 Note 13 Investment revenue from water corporation Accounting policy Dividend revenue received 37 40 Tax equivalent received 13 10 Impairment expense Guarantee fee received 4 4 Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future Total investment revenue from water corporation 54 54 economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably. An impairment expense is recognised when there is objective evidence that amounts owed to Council are not probable of collection and resulting impairment loss has occurred. Accounting policy Note 17 Depreciation and amortisation Investment revenue Dividend revenue is recognised when Council's right to receive payment is established. Property Buildings Building improvements 73 74 Leasehold improvements 47 46 Plant and Equipment Plant, machinery and equipment 285 262 Fixtures, fittings and furniture 19 18 Infrastructure Roads 772 785 Bridges 78 80 Footpaths and cycleways 28 28 Stormwater 4 5 Waste management 8 7 Airport infrastructure 117 146 Intangible Assets Municipal valuation ammoritisation - 9 Total depreciation and amortisation 1,431 1,460

PAGE 71 PAGE 12

45 FLINDERS46 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

2016 2015 $'000 $'000

Accounting policy

Depreciation and amortisation expense Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably.

Buildings, land improvements, plant and equipment, infrastructure and other assets having limited useful lives are systematically depreciated over their useful lives to Council in a manner which reflects consumption of the service potential embodied in those assets. Estimates of remaining useful lives and residual values are made on a regular basis with major asset classes reassessed annually. Depreciation rates and methods are reviewed annually.

Where assets have separate identifiable components that are subject to regular replacement, these components are assigned distinct useful lives and remaining values and a separate depreciation rate is determined for each component.

Land, heritage, artwork and road earthwork assets are not depreciated on the basis that they are assessed as not having a limited useful life. The non-depreciation of road earthwork assets shall be reviewed at least at the end of each reporting period, to ensure that the accounting policy applied to particular earthwork assets reflects the most recent assessment of the useful lives of the assets, having regard to factors such as asset usage, physical deterioration and technical and commercial obsolescence.

Straight line depreciation is charged based on the residual useful life as determined each year. Major depreciation periods used are listed below and are consistent with the prior year unless otherwise stated:

Period Buildings buildings 50 years Leasehold improvements leasehold building improvements 40-50 years Plant and Equipment plant, machinery and equipment 10-15 years fixtures, fittings and furniture 4-10 years computers and telecommunications 4 years Roads road seals 10-15 years road pavement 70 years road substructure 50 years road formation and earthworks not road kerb, channel and minor culverts 50-80 years Bridges bridges deck 40-80 years bridges substructure 40-80 years bridges guards 10 years Other Infrastructure footpaths and cycleways 40 years drainage 50-100 years recreational, leisure and community facilities 40 years waste management 50 years parks, open space and streetscapes 40 years airport 10-50 years Intangible assets intangible assets 5 years

Note 18 Finance costs

Interest - Borrowings 17 - Interest - Finance leases - - Total 17 - Less capitalised borrowing costs on qualifying assets - - Total finance costs 17 -

Accounting policy

Finance expense Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably. Finance costs are recognised as an expense in the period in which they are incurred, except where they are capitalised as part of a qualifying asset constructed by Council. Where specific borrowings are obtained for the purpose of specific asset acquisition, the weighted average interest rate applicable to borrowings at balance date, excluding borrowings associated with superannuation, is used to determine the borrowing costs to be capitalised. No borrowing costs were capitalised during the period. Finance costs are expensed as incurred using the effective interest method. Borrowing costs include interest on bank overdrafts, interest on borrowings, unwinding of discounts, and finance lease charges.

PAGE 72 PAGE 13

47 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

2016 2015 2016 2015 $'000 $'000 $'000 $'000

Accounting policy Note 19 Other expenses

Depreciation and amortisation expense External auditors' remuneration (Tasmanian Audit Office) 25 26 Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future Councillors' allowances 84 89 economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably. Total other expenses 109 115 * Includes base audit fee for 2015-16 audit of $21(2014-15 $21) Buildings, land improvements, plant and equipment, infrastructure and other assets having limited useful lives are systematically depreciated over their useful lives to Council in a manner which reflects consumption of the service potential Accounting policy embodied in those assets. Estimates of remaining useful lives and residual values are made on a regular basis with major asset classes reassessed annually. Depreciation rates and methods are reviewed annually. Other expenses Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future Where assets have separate identifiable components that are subject to regular replacement, these components are economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably. assigned distinct useful lives and remaining values and a separate depreciation rate is determined for each component.

Note 18 Finance costs

Interest - Borrowings 17 - Interest - Finance leases - - Total 17 - Less capitalised borrowing costs on qualifying assets - - Total finance costs 17 -

Accounting policy

PAGE 73 PAGE 14

47 FLINDERS48 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

2016 2015 $'000 $'000

Note 20 Investment in water corporation

Opening Balance 3,252 3,226 Fair Value adjustments on Available-for-Sale Assets 55 26 Total investment in water corporation 3,307 3,252

Council has derived returns from the water corporation as disclosed at note 13.

Accounting policy

Investment assets Council's investment in TasWater is valued at its fair value at balance date. Fair value was determined by using Council's ownership interest against the water corporation's net asset value at balance date. At 30 June 2016, Council held a 0.21% (2015: 0.21%) ownership interest in TasWater which is based on Schedule 2 of the Corporation's Constitution which reflects the council's voting rights. Any unrealised gains and losses are recognised through the Statement of Profit or Loss and Other Comprehensive Income to a Financial assets available for sale Reserve each year (refer note 32).

Council has classified this asset as an Available-for-Sale financial asset as defined in AASB 139 Financial Instruments: Recognition and Measurement and has followed AASB 132 Financial Instruments: Presentation and AASB 7 Financial Instruments: Disclosures to value and present the asset in the financial report.

Note 21 Cash and cash equivalents Cash at bank 4,688 1,692 Money market call account 509 500 Total cash and cash equivalents 5,197 2,192

Council's cash and cash equivalents are subject to a number of internal and external restrictions that limit amounts available for discretionary or future use. These include: - Trust funds and deposits (note 29) 67 45 - Leave provisions (note 30) 325 333 - Quarry reinstatement & redevelopment provision (note 30) 125 118 - Landfill restoration provision (note 30) 133 - Restricted funds 650 496 Total unrestricted cash and cash equivalents 4,547 1,696

Accounting policy

Cash and cash equivalents For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand, deposits at call, and other highly liquid investments with original maturities of three months or less, net of outstanding bank overdrafts.

Note 22 Trade and other receivables Current Rates debtors 159 97 Other debtors 196 90 Provision for impairment - other debtors (1) (1) Net GST receivable 4 53 Total 358 239

Accounting policy

Trade and other receivables Receivables are carried at amortised cost using the effective interest rate method. A provision for impairment is recognised when there is objective evidence that an impairment loss has occurred.

Note 23 Financial assets

Current Term Deposits 890 4,615 Total financial assets 890 4,615

Note 24 Inventories Inventories held for distribution 224 464 Total inventories 224 464

Accounting policy

Inventories Inventories held for distribution are measured at cost adjusted when applicable for any loss of service potential.

Where inventories are acquired at no cost, or for nominal consideration, the cost shall be the current replacement cost as at the date of acquisition.

Note 25 Other assets

Current Prepayments 3 33 Accrued income 3 34 Total 6 67 Non-current Other 59 59 Total 59 59 * Accrued income only includes items that are reciprocal in nature. PAGE 74 PAGE 15

49 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Flinders Council Notes to the Financial Report 2015-2016 Financial Report Notes to the Financial Report For the Year Ended 30 June 2016 For the Year Ended 30 June 2016 2016 2015 $'000 $'000

Note 20 Investment in water corporation

Opening Balance 3,252 3,226 Note 26 Property, infrastructure, plant and equipment Fair Value adjustments on Available-for-Sale Assets 55 26 2016 2015 Total investment in water corporation 3,307 3,252 $'000 $'000 Council has derived returns from the water corporation as disclosed at note 13. Summary at cost 10,140 9,166 Accounting policy Less accumulated depreciation 3,206 3,527 Investment assets 6,934 5,639 Council's investment in TasWater is valued at its fair value at balance date. Fair value was determined by using Council's ownership interest against the water corporation's net asset value at balance date. At 30 June 2016, Council held a 0.21% at fair value as at 30 June 52,745 52,356 (2015: 0.21%) ownership interest in TasWater which is based on Schedule 2 of the Corporation's Constitution which reflects the council's voting rights. Any unrealised gains and losses are recognised through the Statement of Profit or Loss and Less accumulated depreciation 13,194 12,618 Other Comprehensive Income to a Financial assets available for sale Reserve each year (refer note 32). 39,551 39,738 Total 46,485 45,377 Council has classified this asset as an Available-for-Sale financial asset as defined in AASB 139 Financial Instruments: Recognition and Measurement and has followed AASB 132 Financial Instruments: Presentation and AASB 7 Financial Instruments: Disclosures to value and present the asset in the financial report. Property Land at fair value as at 30 June 2,528 2,528 Note 21 Cash and cash equivalents Cash at bank 4,688 1,692 2,528 2,528 Money market call account 509 500 Land under roads Total cash and cash equivalents 5,197 2,192 at fair value at 30 June 1,928 1,928 Council's cash and cash equivalents are subject to a number of internal and external restrictions that limit amounts 1,928 1,928 available for discretionary or future use. These include: Total Land 4,456 4,456 - Trust funds and deposits (note 29) 67 45 - Leave provisions (note 30) 325 333 Buildings - Quarry reinstatement & redevelopment provision (note 30) 125 118 - Landfill restoration provision (note 30) 133 - at fair value as at 30 June 3,702 3,632 Restricted funds 650 496 Less accumulated depreciation 317 244 Total unrestricted cash and cash equivalents 4,547 1,696 3,385 3,388

Accounting policy Leasehold improvements at fair value as at 30 June 2,527 2,315 Cash and cash equivalents Less accumulated amortisation 183 136 For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand, deposits at call, and other highly liquid investments with original maturities of three months or less, net of outstanding bank overdrafts. 2,344 2,179 Total Buildings 5,729 5,567

Note 22 Trade and other receivables Current Total Property 10,185 10,023 Rates debtors 159 97 Other debtors 196 90 Provision for impairment - other debtors (1) (1) Net GST receivable 4 53 Total 358 239

Accounting policy

Note 23 Financial assets

Current Term Deposits 890 4,615 Total financial assets 890 4,615

Note 24 Inventories Inventories held for distribution 224 464 Total inventories 224 464

Accounting policy

Inventories Inventories held for distribution are measured at cost adjusted when applicable for any loss of service potential.

Where inventories are acquired at no cost, or for nominal consideration, the cost shall be the current replacement cost as at the date of acquisition.

Note 25 Other assets

Current Prepayments 3 33 Accrued income 3 34 Total 6 67 Non-current Other 59 59 Total 59 59 * Accrued income only includes items that are reciprocal in nature. PAGE 75 PAGE 16

49 FLINDERS50 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 For the Year Ended 30 June 2016

Note 26 Property, infrastructure, plant and equipment (cont.) 2016 2015 Note 26 Property, plant and equipment, infrastructure (cont.) $'000 $'000 Reconciliation of property, plant and equipment and infrastructure Plant and Equipment

Impairment Plant, machinery and equipment Balance at Revaluation Written down Newly losses Balance at at cost 3,916 3,274 beginning of Acquisition of increments Depreciation and value of recognised recognised in end of Less accumulated depreciation 1,914 1,742 2016 financial year assets (decrements) amortisation disposals assets profit or loss Transfers financial year 2,002 1,532 (note 32) (note 17) (a) Fixtures, fittings and furniture $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 at cost 267 239 Property Less accumulated depreciation 207 188 land 2,528 - - - 15 15 - - 2,528 60 51 land under roads 1,928 ------1,928 Total land 4,456 - - - 15 15 - - 4,456 Total Plant and Equipment 2,062 1,583 buildings 3,388 - - 73 - - - 70 3,385 leasehold improvements 2,179 - - 47 - - - 212 2,344 Infrastructure Total buildings 5,567 - - 120 - - - 282 5,728 Roads Total property 10,023 - - 120 15 15 - 282 10,185 at fair value as at 30 June 34,138 34,031 Less accumulated depreciation 9,963 9,617 Plant and Equipment 24,175 24,414 plant, machinery and equipment 1,532 805 - 285 50 - - - 2,002 Bridges fixtures, fittings and furniture 51 28 - 19 - - - - 60 at fair value as at 30 June 6,250 6,250 Total plant and equipment 1,583 833 - 304 50 - - - 2,062 Less accumulated depreciation 2,155 2,077 Infrastructure 4,095 4,173 roads 24,414 - - 772 133 - - 666 24,175 Footpaths and cycleways bridges 4,173 - - 78 - - - - 4,095 at fair value as at 30 June 1,231 1,231 footpaths and cycleways 784 - - 28 - - - - 756 Less accumulated depreciation 475 447 756 784 stormwater 344 - - 4 - - - - 340 waste management 382 - - 8 - 133 - 19 526 Stormwater airport infrastructure 3,250 - - 117 - - - 629 3,762 at fair value as at 30 June 441 441 Total infrastructure 33,347 - - 1,007 133 133 - 1,315 33,654 Less accumulated depreciation 101 97 340 344 Works in progress Waste Management buildings & leasehold improvements 222 296 - - - - - (282) 236 at cost 553 401 footpaths and cycleways 2 5 ------7 Less accumulated depreciation 27 19 land improvements - 24 ------24 526 382 roads 37 629 - - - - - (666) - bridges 103 45 ------148 Airport Infrastructure waste management 15 35 - - - - - (19) 31 at cost 4,820 4,828 airport infrastructure 45 723 - - - - - (629) 139 Less accumulated depreciation 1,058 1,578 Total works in progress 424 1,757 - - - - - (1,597) 584 3,762 3,250 Total property, plant and equipment, 45,377 2,590 - 1,431 198 148 - - 46,485 infrastructure Total Infrastructure 33,654 33,347

Works in progress Roads - 37 Buildings 85 87 Land improvements 24 - Aiport infrastructure 139 45 Bridges at cost 148 103 Footpath 7 2 Leasehold improvements 150 135 Waste management 31 15 Total Works in progress 584 424

Total property, infrastructure, plant and equipment 46,485 45,377

PAGE 76 PAGE 17

52 51 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT Flinders Council Notes to the Financial Report Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 For the Year Ended 30 June 2016

Total property, infrastructure, plant and equipment 46,485 45,377

PAGE 77 PAGE 18

52 51 FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 26 Property, plant and equipment, infrastructure (cont.) Reconciliation of property, plant and equipment and infrastructure

Impairment Balance at Revaluation Written down Newly losses beginning of Acquisition of increments Depreciation and value of recognised recognised in Balance at end of 2015 financial year assets (decrements) amortisation disposals asset profit or loss Transfers financial year (note 32) (note 17) (a) $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Property land 2,346 265 - - 83 - - - 2,528 land under roads - - 2 - - 1,926 - - 1,928 Total land 2,346 265 2 - 83 1,926 - - 4,456

buildings 3,288 - - 74 122 - - 296 3,388 leasehold improvements 2,107 - - 46 - - - 118 2,179 Total buildings 5,395 - - 120 122 - - 414 5,567 Total property 7,741 265 2 120 205 1,926 - 414 10,023 Plant and Equipment plant, machinery and equipment 1,442 352 - 262 - - - - 1,532 fixtures, fittings and furniture 61 8 - 18 - - - - 51 Total plant and equipment 1,503 360 - 280 - - - - 1,583 Infrastructure roads 25,107 - 34 785 71 - - 129 24,414 bridges 4,247 - 6 80 - - - - 4,173 footpaths and cycleways 811 - 1 28 - - - - 784 stormwater 348 - 1 5 - - - - 344 waste management 307 - - 7 - - - 82 382 airport infrastructure 1,774 - - 146 - - - 1,622 3,250 Total infrastructure 32,594 - 42 1,051 71 - - 1,833 33,347

Works in progress buildings 7 629 - - - - - (414) 222 footpaths and cycleways - 2 ------2 roads - 167 - - - - - (129) 37 bridges 54 49 ------103 waste management - 97 - - - - - (82) 15 airport infrastructure 82 1,585 - - - - - (1,622) 45 Total works in progress 143 2,529 - - - - - (2,247) 424 Total property, plant and equipment, 41,981 3,154 44 1,451 276 1,926 - - 45,377 infrastructure

PAGE 78 PAGE 19

53 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Note 26 Property, plant and equipment, infrastructure (cont.) Note 26 Property, plant and equipment, infrastructure (cont.) Accounting policy Reconciliation of property, plant and equipment and infrastructure Recognition and measurement of assets

Impairment Acquisitions of assets are initially recorded at cost. Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition. Balance at Revaluation Written down Newly losses beginning of Acquisition of increments Depreciation and value of recognised recognised in Balance at end of Property, infrastructure, plant and equipment received in the form of contributions, are recognised as assets and revenues at fair value by Council valuation where that 2015 financial year assets (decrements) amortisation disposals asset profit or loss Transfers financial year value exceeds the recognition thresholds for the respective asset class. Fair value is the price that would be received to sell the asset in an orderly transaction between (note 32) (note 17) (a) market participants at the measurement date. $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Where assets are constructed by Council, cost includes all materials used in construction, direct labour, borrowing costs incurred during construction, and an Property appropriate share of directly attributable variable and fixed overheads. land 2,346 265 - - 83 - - - 2,528 land under roads - - 2 - - 1,926 - - 1,928 The following classes of assets have been recognised. In accordance with Council's policy, the threshold limits detailed below have applied when recognising assets Total land 2,346 265 2 - 83 1,926 - - 4,456 within an applicable asset class and unless otherwise stated are consistent with the prior year: buildings 3,288 - - 74 122 - - 296 3,388 leasehold improvements 2,107 - - 46 - - - 118 2,179 Threshold Total buildings 5,395 - - 120 122 - - 414 5,567 $'000 Total property 7,741 265 2 120 205 1,926 - 414 10,023 Land land 1 Plant and Equipment land under roads 1 plant, machinery and equipment 1,442 352 - 262 - - - - 1,532 land improvements 1 fixtures, fittings and furniture 61 8 - 18 - - - - 51 Buildings Total plant and equipment 1,503 360 - 280 - - - - 1,583 buildings 1 Infrastructure building improvements 1 roads 25,107 - 34 785 71 - - 129 24,414 leasehold building improvements 1 bridges 4,247 - 6 80 - - - - 4,173 Plant and Equipment footpaths and cycleways 811 - 1 28 - - - - 784 plant, machinery and equipment 1 stormwater 348 - 1 5 - - - - 344 fixtures, fittings and furniture 1 waste management 307 - - 7 - - - 82 382 computers and telecommunications 1 airport infrastructure 1,774 - - 146 - - - 1,622 3,250 leased plant and equipment 1 Total infrastructure 32,594 - 42 1,051 71 - - 1,833 33,347 Roads road pavements and seals 1 Works in progress road substructure 1 buildings 7 629 - - - - - (414) 222 road formation and earthworks 1 footpaths and cycleways - 2 ------2 road kerb, channel and minor culverts 1 roads - 167 - - - - - (129) 37 Bridges bridges 54 49 ------103 bridges deck 1 waste management - 97 - - - - - (82) 15 bridges substructure 1 airport infrastructure 82 1,585 - - - - - (1,622) 45 bridges guards 1 Total works in progress 143 2,529 - - - - - (2,247) 424 Other Infrastructure Total property, plant and equipment, footpaths and cycleways 1 41,981 3,154 44 1,451 276 1,926 - - 45,377 infrastructure drainage 1 recreational, leisure and community facilities 1 waste management 1 parks, open space and streetscapes 1 aiport 1 Intangible assets intangible assets 1

Revaluation Council has adopted the following valuation bases for its non-current assets:

Land fair value Plant and machinery cost Furniture, fittings and office equipment cost Stormwater and drainage infrastructure fair value Roads and streets infrastructure fair value Bridges fair value Buildings fair value Intangibles cost Parks, recreation facilities and community amenities cost Leasehold improvements cost Investment in water corporation fair value Airport cost Waste Management cost

PAGE 79 PAGE 20

53 FLINDERS54 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 2015-2016 Financial Repor For the Year Ended 30 June 2016

2016 2015 $'000 $'000 Note 26 Property, plant and equipment, infrastructure (cont.) Note 27 Intangible assets Municipal revaluation - - Accounting policy (cont.) Total intangible assets - - Subsequent to the initial recognition of assets, non-current physical assets, other than plant and equipment, furniture, fixtures and fittings, parks, recreation facilities and community amenities, and leasehold improvements, are measured at their fair value in accordance with AASB 116 Property, Plant & Equipment and AASB 13 Fair Reconciliation of intangible assets Other Total Value Measurement. At balance date, Council reviewed the carrying value of the individual classes of assets measured at fair value to ensure that each asset class materially approximated its fair value. Where the carrying value materially differed from the fair value at balance date the class of asset was revalued. $'000 $'000 Gross carrying amount In addition, Council undertakes a formal revaluation of land, buildings, and infrastructure assets on a regular basis to ensure valuations represent fair value. The valuation is performed either by experienced Council officers or independent experts. Balance at 1 July 2014 43 43 Balance at 1 July 2015 43 43 Fair value valuations are determined in accordance with a valuation hierarchy. Changes to the valuation hierarchy will only occur if an external change in the Balance at 1 July 2016 43 43 restrictions or limitations of use on an asset result in changes to the permissible or practical highest and best use of the asset. Accumulated amortisation and impairment Where the assets are revalued, the revaluation increments are credited directly to the asset revaluation reserve except to the extent that an increment reverses a prior Balance at 1 July 2014 34 34 year decrement for that class of asset that had been recognised as an expense in which case the increment is recognised as revenue up to the amount of the expense. Amortisation expense 9 9 Revaluation decrements are recognised as an expense except where prior increments are included in the asset revaluation surplus for that class of asset in which case Balance at 1 July 2015 43 43 the decrement is taken to the reserve to the extent of the remaining increments. Within the same class of assets, revaluation increments and decrements within the Amortisation expense - - year are offset. Balance at 1 July 2016 43 43 Net book value at 30 June 2015 - - Impairment of assets Net book value at 30 June 2016 - - Impairment losses are recognised in the statement of comprehensive income under other expenses. Reversals of impairment losses are recognised in the statement of comprehensive income under other revenue. Accounting policy

Land under roads Intangible assets Council recognises the value of land under roads it controls at fair value. Intangible assets with finite lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

The estimated useful lives for current and comparative periods are as follows:

Municipal revaluation 5 years

Note 28 Trade and other payables

Trade payables 367 229 Accrued expenses 44 41 Total trade and other payables 411 270

PAGE 80 PAGE 21

55 56 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Flinders Council Notes to the Financial Report 2015-2016 Financial Repor For the Year Ended 30 June 2016

2016 2015 $'000 $'000 Note 27 Intangible assets Municipal revaluation - - Total intangible assets - -

Reconciliation of intangible assets Other Total

$'000 $'000 Gross carrying amount

Balance at 1 July 2014 43 43 Balance at 1 July 2015 43 43 Balance at 1 July 2016 43 43 Accumulated amortisation and impairment Balance at 1 July 2014 34 34 Amortisation expense 9 9 Balance at 1 July 2015 43 43 Amortisation expense - - Balance at 1 July 2016 43 43 Net book value at 30 June 2015 - - Net book value at 30 June 2016 - -

Accounting policy

Intangible assets Intangible assets with finite lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

The estimated useful lives for current and comparative periods are as follows:

Municipal revaluation 5 years

Note 28 Trade and other payables

Trade payables 367 229 Accrued expenses 44 41 Total trade and other payables 411 270

PAGE 81 PAGE 22

FLINDERS56 ISLAND 2016 ANNUAL GENERAL REPORT FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Flinders Council Notes to the Financial Report 2015-2016 Financial Repor For the Year Ended 30 June 2016

2016 2015 $'000 $'000 Note 29 Trust funds and deposits

Refundable building deposits 2 2 Refundable airport terminal deposits 2 2 Retention amounts - prepaid funerals & grave sites 41 31 Public open space 1 1 Other refundable deposits 21 9 Total trust funds and deposits 67 45

Note 30 Provisions Annual leave Long service Quarry Landfill Other Total leave restoration restoration 2016 $ '000 $ '000 $ '000 $ '000 $ '000 $ '000 Balance at beginning of the financial year 130 153 118 - 51 452 Additional provisions 122 42 - 133 1 298 Amounts used (151) (32) (10) - (193) Increase in the discounted amount arising because of time and the effect of any change in the discount rate 8 17 - - 26 Balance at the end of the financial year 101 171 125 133 52 583 2015 Balance at beginning of the financial year 98 184 108 - 39 429 Additional provisions 122 (15) 10 - 27 144 Amounts used (90) (16) - - (15) (121) Increase in the discounted amount arising because of time and the effect of any change in the discount rate ------Balance at the end of the financial year 130 153 118 - 51 452 2016 2015 (a) Employee benefits $'000 $'000 (i) Current Annual leave 101 130 Long service leave 70 76

Superannuation 21 20 Other 12 23 204 249 (ii) Non-current Long service leave 101 76 Oncosts 21 8 121 84 Aggregate carrying amount of employee benefits: Current 204 249 Non-current 121 84 325 333 The following assumptions were adopted in measuring the present value of employee benefits:

Weighted average increase in employee costs 4.50% 4.00% Weighted average discount rates 1.65% 2.27% Weighted average settlement period 12 12

(iii) Current All annual leave and the long service leave entitlements representing 10 or more years of continuous service - Short-term employee benefits, that fall due within 12 months after the end of the period measured at nominal value 164 198 - Other long-term employee benefits that do not fall due within 12 months after the end of the period measured at present value 40 52 204 249 (iv) Non-current Long service leave representing less than 10 years of continuous service measured at present value 121 84

(v) Employee Numbers Total number of staff (including fulltime, part-time & casual) 29 28 Full time equivalent 22 20

PAGE 82 PAGE 23

57 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Flinders Council Notes to the Financial Report 2015-2016 Financial Repor For the Year Ended 30 June 2016

Note 30 Provisions (cont.)

b) Other provisions Non-current - quarry pit reinstatement & redevelopment 125 118 Landfill restoration 133 - Total other provisions 258 118

Accounting policy

Employee benefits i) Short term obligations Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected to be wholly settled within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for employee benefits. All other short-term employee benefit obligations are presented as payables.

ii) Other long term employee benefit obligations The liability for long service leave and annual leave which is not expected to be wholly settled within 12 months after the end of the period in which the employees render the related service is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

The obligations are presented as current liabilities in the statement of financial position if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the actual settlement is expected to occur.

iii) Sick leave No accrual is made for sick leave as Council experience indicates that, on average, sick leave taken in each reporting period is less than the entitlement accruing in that period, and this experience is expected to recur in future reporting periods. Council does not make payment for untaken sick leave.

(b) Land fill restoration Under Environmental Management and Pollution Control Act 1994and Council'sEnvironmental Protection Noticed, issued by theEnvironmental Protection Authority, Council is obligated to restore the Whitemark landfill site to a particular standard. Current engineering projectionsindicate that theputresciblecellat Whitemark landfillsite willcease operation in 2017/18and restorationwork is expected to commence shortlythereafter, therefore no provision has been made for this work. The forecast life of the putresciblecell is based oncurrent estimates of remaining capacity and theforecast rateof infill. Currentprojections indicatethat theinert cellat Whitemark landfill site will continue operating until 2036 (20 years). Theprovision forlandfillrestorationhasbeencalculated basedonthepresentvalueof theexpectedcost of worksto be undertaken,this hasbeen inflated by 3.0% and discounted using the 20 year bond rate of 3.75%. The expected cost of works has been estimated based on current understanding of work required to reinstate the site to a suitable standard and independent specialist advice. Accordingly, theestimation of the provision required is dependent on the accuracy of the forecast timing of the work, work required and related costs.

Council does not expect to receive reimbursement from a third party.

(c) Quarry Reinstatement Mineral Resource Tasmania requires that the initial estimate of the costs of future reinstatements of a site be recognised as part of the cost of the asset. A provision for reinstatement for Flinders Council's Quarries has been recognised and measured in accordance with AASB 137 Provision, Contingent Liabilities and Contingent Assets.

Flinders Council recognises the provision as the best estimate of the expenditure required to settle the present obligation at the reporting date. In doing so, Council has inflated the liability by 3% and discounted by the 10 year Government Bond Rate.

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FLINDERS58 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

2016 2015 $'000 $'000

Note 31 Interest-bearing loans and borrowings

Current Borrowings - secured 36 - 36 -

Non-current Borrowings - secured 647 - 647 -

Total 683 -

Borrowings

Borrowings are with Tasmanian Public Finance Corporation for a term of 10 years with a balloon payment

The maturity profile for Council's borrowings is:

Not later than one year 36 - Later than one year and not later than five years 201 - Later than five years 446 - Total 683 -

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59 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

2016 2015 Note 31 Interest-bearing loans and borrowings (cont.) $'000 $'000 Accounting policy Note 31 Interest-bearing loans and borrowings Interest bearing liabilities Current The borrowing capacity of Council is limited by the Local Government Act 1993. Interest bearing liabilities are initially Borrowings - secured 36 - recognised at fair value, net of transaction costs incurred. Subsequent to initial recognition these liabilities are measured at 36 - amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit or Loss and Other Comprehensive Income over the period of the liability using the effective interest method. Non-current Borrowings - secured 647 - Leases 647 - i) Finance leases as lessee Leases of assets where substantially all the risks and rewards incidental to ownership of the asset, are transferred to the Total 683 - Council are classified as finance leases. Finance leases are capitalised, recording an asset and a liability at the lower of the fair value of the asset and the present value of the minimum lease payments, including any guaranteed residual value. Lease Borrowings payments are allocated between the reduction of the lease liability and the interest expense. Leased assets are depreciated on a straight line basis over their estimated useful lives to Council where it is likely that Council will obtain ownership of the asset Borrowings are with Tasmanian Public Finance Corporation for a term of 10 years with a balloon payment or over the term of the lease, whichever is the shorter. Council does not have any finance leases. The maturity profile for Council's borrowings is: ii) Operating leases as lessee Not later than one year 36 - Leases in which a significant portion of the risks and rewards of ownership are not transferred to Council as lessee are Later than one year and not later than five years 201 - classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease. Later than five years 446 - Total 683 - Council leases several parcels of Crown land under lease agreements with the State Government. These leases, in general, do not reflect commercial arrangements, are long-term and have minimal lease payments. Crown land is recognised as an asset in the Statement of Financial Position and carried at fair value when Council establishes that (i) it has control over the land and (ii) it will derive economic benefits from it. Lease income from operating leases where Council is a lessor is recognised in income on a straight-line basis over the lease term. iii) Leasehold improvements Leasehold improvements are recognised at cost and are amortised over the unexpired period of the lease or the estimated useful life of the improvement, whichever is the shorter. At balance date, leasehold improvements are amortised over a 40 to 50 year period.

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59 FLINDERS60 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 32 Reserves

Balance at Balance at end of beginning of reporting year Increment (Decrement) reporting year

(a) Asset revaluation reserve $'000 $'000 $'000 $'000

2016

Property Land 481 - - 481 Land under roads 2 - - 2 Buildings 1,664 - - 1,664 2,147 - - 2,147 Infrastructure Roads 4,550 - - 4,550 Bridges 1,973 - - 1,973 Footpaths and cycleways 40 - - 40 Stormwater 10 - - 10 6,573 - - 6,573

Total asset revaluation reserve 8,720 - - 8,720

2015 Property Land 481 - - 481 Land under roads - 2 - 2 Buildings 1,664 - - 1,664 2,145 2 - 2,147 Infrastructure Roads 4,516 34 - 4,550 Bridges 1,967 6 - 1,973 Footpaths and cycleways 39 1 - 40 Stormwater 9 1 - 10 6,531 42 - 6,573 Total asset revaluation reserve 8,676 44 - 8,720

The asset revaluation reserve was established to capture the movements in asset valuations upon the periodic revaluation of Council's assets.

Balance at Balance at end of beginning of reporting year Increment (decrement) reporting year (b) Fair value reserve $'000 $'000 $'000 $'000

2016

Available-for-sale assets Investment in water corporation (162) 55 - (107) Total fair value reserve (162) 55 - (107)

2015

Available-for-sale assets Investment in water corporation (188) 26 - (162) Total fair value reserve (188) 26 - (162)

The available-for-sale financial asset reserve was established to capture the fair value movements in Council's Water Corporation investment.

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61 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Note 32 Reserves Note 32 Reserves (cont) Transfer from Transfer to Balance at Balance at end of Balance at accumulated accumulated Balance at end of beginning of reporting year Increment (Decrement) reporting year beginning of reporting year surplus surplus reporting year

(a) Asset revaluation reserve $'000 $'000 $'000 $'000 (c) Other reserves $'000 $'000 $'000 $'000

2016 2016 Property Asset replacement reserves 4,280 - - 4,280 Land 481 - - 481 Gunn bequest reserve 108 - - 108 Land under roads 2 - - 2 Total Other reserves 4,388 - - 4,388 Buildings 1,664 - - 1,664 2015 2,147 - - 2,147 Asset replacement reserves 4,280 - - 4,280 Infrastructure Gunn bequest reserve 108 - - 108 Roads 4,550 - - 4,550 Total Other reserves 4,388 - - 4,388 Bridges 1,973 - - 1,973 Footpaths and cycleways 40 - - 40 Stormwater 10 - - 10 6,573 - - 6,573

Total asset revaluation reserve 8,720 - - 8,720 2016 2015 $'000 $'000 2015 Total Reserves 13,001 12,946 Property Land 481 - - 481 Land under roads - 2 - 2 Note 33 Reconciliation of cash flows fromoperating Buildings 1,664 - - 1,664 activities to surplus (deficit) 2,145 2 - 2,147 Result from continuing operations (771) 2,980 Infrastructure Roads 4,516 34 - 4,550 Depreciation/amortisation 1,431 1,460 Bridges 1,967 6 - 1,973 (Profit)/loss on disposal of property, plant and equipment, infrastructure 111 122 Footpaths and cycleways 39 1 - 40 Recognition of land under roads - (1,926) Stormwater 9 1 - 10 Contributions - non-monetary assets (10) - 6,531 42 - 6,573 Recognition of make-good asset (133) - Total asset revaluation reserve 8,676 44 - 8,720 Capital grants received specifically for new or upgraded assets (876) (1,036) Change in assets and liabilities: The asset revaluation reserve was established to capture the movements in asset valuations upon the periodic revaluation of Council's assets. Decrease/(increase) in trade and other receivables (119) 23 Decrease/(increase) in other assets 61 16 Decrease/(increase) in inventories 241 - Balance at Balance at end of Increase/(decrease) in trade and other payables 141 23 beginning of reporting year Increment (decrement) reporting year Increase/(decrease) in provisions 132 22 (b) Fair value reserve Increase/(decrease) in trust funds 22 (83) $'000 $'000 $'000 $'000 Net cash provided by/(used in) operating activities 230 1,602

2016 Note 34 Reconciliation of cash and cash equivalents Available-for-sale assets Investment in water corporation (162) 55 - (107) Cash and cash equivalents (see note 21) 5,197 2,192 Total fair value reserve (162) 55 - (107) Less bank overdraft - - Total reconciliation of cash and cash equivalents 5,197 2,192 2015 Note 35 Financing arrangements Available-for-sale assets Investment in water corporation (188) 26 - (162) Credit Cards 13 19 Total fair value reserve (188) 26 - (162) Used facilities (3) (13)

The available-for-sale financial asset reserve was established to capture the fair value movements in Council's Water Corporation investment. Unused facilities 10 6

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61 FLINDERS62 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 #REF! Notes to the Financial Report #REF! #REF!

Note 36 Superannuation

Council contributes to Quadrant, TasPlan and other accumulation schemes on behalf of a number of employees; however the Council has no ongoing responsibility to make good any deficiencies that may occur in those schemes. During the year Council made the required superannuation contributions for all eligible employees to an appropriate complying superannuation fund as required by the Superannuation Guarantee (Administration) Act 1992 .

2016 2015 Fund $'000 $'000 Accumulation funds Employer contributions to Quadrant 54 104 Employer contributions to Tasplan 86 12 Employer contributions to other funds 80 53 220 169

Employer contributions payable to Tasplan at reporting date 11 - Employer contributions payable to other funds at reporting date 12 - 23 -

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63 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

#REF! Notes to the Financial Report Flinders Council Notes to the Financial Report #REF! #REF! 2015-2016 Financial Report For the Year Ended 30 June 2016 Note 36 Superannuation 2016 2015 $'000 $'000 Council contributes to Quadrant, TasPlan and other accumulation schemes on behalf of a number of employees; however the Council has no ongoing responsibility to make good any deficiencies that may occur in those schemes. Note 37 Operating leases During the year Council made the required superannuation contributions for all eligible employees to an appropriate complying superannuation fund as required by the Superannuation Guarantee (Administration) Act 1992 . (a) Operating lease commitments Flinders Council has an equipment lease with Macquarie Equipment Finance Pty Ltd and three At the reporting date, Council had the following obligations under non-cancellable operating leases for the lease 2016 2015 Fund $'000 $'000 of equipment for use within Council's activities (these obligations are not recognised as liabilities): Accumulation funds Employer contributions to Quadrant 54 104 Not later than one year 7 4 Employer contributions to Tasplan 86 12 Later than one year and not later than five years 3 5 Employer contributions to other funds 80 53 Later than five years - - 220 169 10 9 Employer contributions payable to Tasplan at reporting date 11 - Employer contributions payable to other funds at reporting date 12 - 23 - Note 38 Contingent liabilities and contingent assets

Contingent liabilities

Council is presently involved a confidential legal matters, which are being conducted through Council's solicitors.

As these matters are yet to be finalised, and the financial outcomes are unable to be reliably estimated, no allowance for these contingencies has been made in the financial report.

The current projection for the putrecible cell at the Whitemark Landfill, is that it will require rehabilition in the next 1-2 years. The estimated current cost for these works is $199,680. No provision has been made for these works given that they will occur in the near future. The expected cost of works has been estimated based on current understanding of work required to reinstate the site to a suitable standard and independent specialist advice. Accordingly, the estimation of the provision required is dependent on the accuracy of the forecast timing of the work, work required and related costs.

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63 FLINDERS64 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 39 Financial Instruments

(a) Accounting Policy, terms and conditions Recognised financial instruments Note Accounting Policy Terms and Conditions Financial assets

Cash and cash 21 Cash on hand and at bank and money market On call deposits returned a floating interest rate of equivalents call accounts are valued at face value. 2.25% (2.5% in 2014-15). The interest rate at balance date was 2% '(2.5% in 2014/15).

Interest is recognised as it accrues.

Investments and bills are valued at cost. Term deposits provided return of 2.36% (2.51 % in 2014/15) excluding unrealised gains/losses Investments are held to maximise interest returns of surplus cash. Interest revenues are recognised as they accrue.

Trade and other receivables

Other debtors 22 Receivables are carried at amortised cost General debtors are unsecured and arrears attract using the effective interest method. A provision an interest rate of 0% (0% in 2014/15). Credit for impairment is recognised when there is terms are based on 30 days. objective evidence that an impairment loss has occurred. Collectability of overdue accounts is assessed on an ongoing basis. Available for sale financial assets Investment in 20 The investment in TasWater is valued at its fair Investment in TasWater provided return of 1.63% Water value at balance date. Fair value was (1.66 % in 2014/15) excluding unrealised Corporation determined by using Council's ownership gains/losses interest against the water corporation's net asset value at balance date. Financial Liabilities Trade and other 28 Liabilities are recognised for amounts to be General Creditors are unsecured, not subject to payables paid in the future for goods and services interest charges and are normally settled within 14 provided to Council as at balance date whether days of invoice receipt. or not invoices have been received.

Interest-bearing 31 Loans are carried at their principal amounts, Borrowings are secured by way of mortgages over loans and which represent the present value of future the general rates of the Council. borrowings cash flows associated with servicing the debt. The weighted average interest rate on borrowings Interest is accrued over the period it becomes is 3.9% (n/a in 2014-15). due and recognised as part of payables.

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65 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Flinders Council Notes to the Financial Report Flinders Counc Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 39 Financial Instruments Note 39 Financial Instruments (cont.)

(a) Accounting Policy, terms and conditions (b) Interest Rate Risk Recognised financial Theexposureto interest raterisk and theeffectiveinterest ratesof financial assets and financial liabilities, both recognised and unrecognised, instruments Note Accounting Policy Terms and Conditions at balance date are as follows: Financial assets

Cash and cash 21 Cash on hand and at bank and money market On call deposits returned a floating interest rate of 2016 equivalents call accounts are valued at face value. 2.25% (2.5% in 2014-15). The interest rate at Weighted Floating Fixed interest maturing in: balance date was 2% '(2.5% in 2014/15). average interest 1 year or Over 1 to 5 More than Non-interest interest rate less years 5 years bearing Total Interest is recognised as it accrues. rate $'000 $'000 $'000 $'000 $'000 $'000 Financial assets Cash and cash equivalents Investments and bills are valued at cost. Term deposits provided return of 2.36% (2.51 % in 2.25% 5,197 - - - - 5,197 2014/15) excluding unrealised gains/losses Other financial assets 2.45% - 890 - - - 890 Investments are held to maximise interest Trade and other receivables 18.43% 159 - - - 199 358 returns of surplus cash. Investment in water corporation - - - - 3,307 3,307 Total financial assets 5,356 890 - - 3,506 9,752 Interest revenues are recognised as they accrue. Financial liabilities Trade and other payables - 3 - - 408 411 Trust funds and deposits - - - - 67 67 Trade and other receivables Interest-bearing loans and borrowings 3.90% - 36 201 446 - 683 Other debtors 22 Receivables are carried at amortised cost General debtors are unsecured and arrears attract Total financial liabilities - 39 201 446 475 1,161 using the effective interest method. A provision an interest rate of 0% (0% in 2014/15). Credit for impairment is recognised when there is terms are based on 30 days. Net financial assets (liabilities) 5,356 851 (201) (446) 3,031 8,591 objective evidence that an impairment loss has occurred. Collectability of overdue accounts is assessed 2015 on an ongoing basis. Weighted Floating Fixed interest maturing in: Available for sale financial assets average interest 1 year or Over 1 to 5 More than Non-interest Investment in 20 The investment in TasWater is valued at its fair Investment in TasWater provided return of 1.63% interest rate less years 5 years bearing Total Water value at balance date. Fair value was (1.66 % in 2014/15) excluding unrealised rate $'000 $'000 $'000 $'000 $'000 $'000 Corporation determined by using Council's ownership gains/losses Financial assets interest against the water corporation's net Cash and cash equivalents 1.88% 2,192 - - - - 2,192 asset value at balance date. Other financial assets 3.73% - 4,615 - - - 4,615 Financial Liabilities Trade and other receivables 18.47% 97 - - - 142 239 Investment in water corporation - - - - 3,252 3,252 Trade and other 28 Liabilities are recognised for amounts to be General Creditors are unsecured, not subject to Total financial assets 2,289 4,615 - - 3,394 10,298 payables paid in the future for goods and services interest charges and are normally settled within 14 provided to Council as at balance date whether days of invoice receipt. Financial liabilities or not invoices have been received. Trade and other payables - 6 - - 264 270 Interest-bearing 31 Loans are carried at their principal amounts, Borrowings are secured by way of mortgages over Trust funds and deposits - - - - 45 45 loans and which represent the present value of future the general rates of the Council. Total financial liabilities - 6 - - 309 315 borrowings cash flows associated with servicing the debt. The weighted average interest rate on borrowings Interest is accrued over the period it becomes is 3.9% (n/a in 2014-15). Net financial assets (liabilities) 2,289 4,609 - - 3,085 9,983 due and recognised as part of payables.

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65 FLINDERS66 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 39 Financial Instruments (cont.)

(c) Fair Value The aggregate net fair values of financial assets and financial liabilities, both recognised and unrecognised, at balance date are as follows: Total carrying amount as per Aggregate net fair value Financial Instruments Balance Sheet 2016 2015 2016 2015 $'000 $'000 $'000 $'000

Financial assets Cash and cash equivalents 5,197 2,192 5,197 2,192 Other financial assets 890 4,615 890 4,615 Trade and other receivables 358 239 358 239 Investment in water corporation 3,307 3,252 3,307 3,252 Total financial assets 9,752 10,298 9,752 10,298

Financial liabilities Trade and other payables 411 270 411 270 Trust funds and deposits 67 45 67 45 Interest-bearing loans and borrowings 683 - 723 - Total financial liabilities 1,161 315 1,201 315

(d) Credit Risk

The maximum exposure to credit risk at balance date in relation to each class of recognised financial asset is represented by the carrying amount of those assets as indicated in the Statement of Financial Position.

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67 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Note 39 Financial Instruments (cont.) (e) Risks and mitigation

(c) Fair Value The risks associated with our main financial instruments and our policies for minimising these risks are detailed The aggregate net fair values of financial assets and financial liabilities, both recognised and unrecognised, at below. balance date are as follows: Total carrying amount as per Aggregate net fair value Market risk Financial Instruments Balance Sheet Market risk is the risk that the fair value or future cash flows of our financial instruments will fluctuate because of 2016 2015 2016 2015 changes in market prices. Council's exposures to market risk are primarily through interest rate risk with only $'000 $'000 $'000 $'000 insignificant exposure to other price risks and no exposure to foreign currency risk. Components of market risk to which we are exposed are discussed below. Financial assets Cash and cash equivalents 5,197 2,192 5,197 2,192 Interest rate risk Other financial assets 890 4,615 890 4,615 Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the Trade and other receivables 358 239 358 239 instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing Investment in water corporation 3,307 3,252 3,307 3,252 financial assets and liabilities that we use. Non derivative interest bearing assets are predominantly short term Total financial assets 9,752 10,298 9,752 10,298 liquid assets. Our interest rate liability risk arises primarily from long term loans and borrowings at fixed rates which exposes us to fair value interest rate risk. Financial liabilities Trade and other payables 411 270 411 270 Our loan borrowings are sourced from Tasmanian Public Finance Corporation. We manage interest rate risk on Trust funds and deposits 67 45 67 45 our net debt portfolio by: Interest-bearing loans and borrowings 683 - 723 - - ensuring access to diverse sources of funding; Total financial liabilities 1,161 315 1,201 315 - reducing risks of refinancing by managing in accordance with target maturity profiles; and - setting prudential limits on interest repayments as a percentage of rate revenue. (d) Credit Risk We manage the interest rate exposure on our debt portfolio by appropriate budgeting strategies and obtaining The maximum exposure to credit risk at balance date in relation to each class of recognised financial asset is approval for borrowings from the Department of Treasury and Finance each year. represented by the carrying amount of those assets as indicated in the Statement of Financial Position. Investment of surplus funds is made with approved financial institutions under the Local Government Act 1993 . We manage interest rate risk by adopting an investment policy that ensures: - conformity with State and Federal regulations and standards, - capital protection, - appropriate liquidity, - diversification by credit rating, financial institution and investment product, - monitoring of return on investment, - benchmarking of returns and comparison with budget.

Maturity will be staggered to provide for interest rate variations and to minimise interest rate risk.

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67 FLINDERS68 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Credit risk Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and cause Council to make a financial loss. Council have exposure to credit risk on some financial assets included in our Statement of Financial Position. To help manage this risk we only invest surplus funds with financial institutions which have a recognised credit rating specified in our Investment policy.

Credit risk arises from Council's financial assets, which comprise cash and cash equivalents, and trade and other receivables. Council's exposure to credit risk arises from potential default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable policy note. Council generally trades with recognised, creditworthy third parties, and as such collateral is generally not requested, nor is it Council's policy to securitise its trade and other receivables. It is Council's policy that some customers who wish to trade on credit terms are subject to credit verification procedures including an assessment of their credit rating, financial position, past experience and industry reputation. In addition, receivable balance are monitored on an ongoing basis with the result that Council's exposure to bad debts is not significant.

Council may also be subject to credit risk for transactions which are not included in the Statement of Financial Position, such as when Council provides a guarantee for another party. Details of our contingent liabilities are disclosed in note 38.

Credit quality of contractual financial assets that are neither past due nor impaired Financial Government Other Total Institutions agencies (AAA credit (BBBB credit (min BBB credit 2016 rating) rating) rating) Cash and cash equivalents 5,197 - - 5,197 Trade and other receivables - - 358 358 Investments and other financial assets 890 3,307 - 4,197 Total contractual financial assets 6,087 3,307 358 9,752

2015 Cash and cash equivalents 2,192 - - 2,192 Trade and other receivables - - 239 239 Investments and other financial assets 4,615 3,252 - 7,868 Total contractual financial assets 6,807 3,252 239 10,299

Movement in Provisions for Impairment of Trade and Other Receivables 2016 2015 $'000 $'000 Balance at the beginning of the year 1 1 New Provisions recognised during the year - - Amounts already provided for and written off as uncollectible - - Amounts provided for but recovered during the year - - Balance at end of year 1 1

Ageing of Trade and Other Receivables At balance date other debtors representing financial assets were past due but not impaired. These amounts relate to a number of independent customers for whom there is no recent history of default. The ageing of the Council's Trade and Other Receivables was: 2016 2015 $'000 $'000 Current (not yet due) 121 90 Past due by up to 30 days 23 22 Past due between 31 and 180 days 123 127 Past due between 181 and 365 days - - Past due by more than 1 year 91 - Total Trade & Other Receivables 358 239

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69 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT

Credit risk Ageing of individually impaired Trade and Other Receivables Credit risk is the risk that a contracting entity will not complete its obligations under a financial instrument and cause Council to At balance date, other debtors representing financial assets with a nominal value of $1,336 (2014-15: $1,336) make a financial loss. Council have exposure to credit risk on some financial assets included in our Statement of Financial were impaired. The amount of the provision raised against these debtors was $1,336 (2014-15: $1,336). The Position. To help manage this risk we only invest surplus funds with financial institutions which have a recognised credit rating individually impaired debtors relate to general and sundry debtor and have been impaired as a result of their specified in our Investment policy. doubtful collection. Many of the long outstanding past due amounts have been lodged with Council's debt collectors or are on payment arrangements. Credit risk arises from Council's financial assets, which comprise cash and cash equivalents, and trade and other receivables. Council's exposure to credit risk arises from potential default of the counterparty, with a The ageing of Trade and Other Receivables that have been individually determined as impaired at reporting date maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in 2016 2015 each applicable policy note. Council generally trades with recognised, creditworthy third parties, and as such $'000 $'000 collateral is generally not requested, nor is it Council's policy to securitise its trade and other receivables. Current (not yet due) - - It is Council's policy that some customers who wish to trade on credit terms are subject to credit verification Past due by up to 30 days - - procedures including an assessment of their credit rating, financial position, past experience and industry Past due between 31 and 180 days - - reputation. Past due between 181 and 365 days - - In addition, receivable balance are monitored on an ongoing basis with the result that Council's exposure to bad Past due by more than 1 year 1 1 debts is not significant. Total Trade & Other Receivables 1 1

Council may also be subject to credit risk for transactions which are not included in the Statement of Financial Liquidity risk Position, such as when Council provides a guarantee for another party. Details of our contingent liabilities are Liquidity risk includes the risk that, as a result of our operational liquidity requirements: disclosed in note 38. - we will not have sufficient funds to settle a transaction on the date; - we will be forced to sell financial assets at a value which is less than what they are worth; or Credit quality of contractual financial assets that are neither past due nor impaired - we may be unable to settle or recover a financial assets at all. Financial Government Other Total Institutions agencies To help reduce these risks we: (AAA credit (BBBB credit (min BBB credit - have readily accessible standby facilities and other funding arrangements in place; 2016 rating) rating) rating) - have a liquidity portfolio structure that requires surplus funds to be invested within various bands of liquid Cash and cash equivalents 5,197 - - 5,197 - monitor budget to actual performance on a regular basis; and Trade and other receivables - - 358 358 - set limits on borrowings relating to the percentage of loans to rate revenue and percentage of loan principal Investments and other financial assets 890 3,307 - 4,197 repayments to rate revenue. Total contractual financial assets 6,087 3,307 358 9,752 The Council's exposure to liquidity risk is deemed insignificant based on prior periods' data and current assessment of risk. 2015 Cash and cash equivalents 2,192 - - 2,192 Trade and other receivables - - 239 239 The table below lists the contractual maturities for Financial Liabilities. Investments and other financial assets 4,615 3,252 - 7,868 Total contractual financial assets 6,807 3,252 239 10,299 These amounts represent the discounted cash flow payments (ie principal only).

2016 6 mths 6-12 1-2 2-5 >5 Contracted Carrying or less months years years years Cash Flow Amount $'000 $'000 $'000 $'000 $'000 $'000 $'000 Movement in Provisions for Impairment of Trade and Other Receivables 2016 2015 Trade and $'000 $'000 other payables Balance at the beginning of the year 1 1 411 - - - - 411 New Provisions recognised during the year - - Trust funds Amounts already provided for and written off as uncollectible - - and deposits 5 - 2 31 30 67 Amounts provided for but recovered during the year - - Interest- Balance at end of year 1 1 bearing loans and Ageing of Trade and Other Receivables borrowings 18 18 37 121 489 683 At balance date other debtors representing financial assets were past due but not impaired. These amounts Total financial relate to a number of independent customers for whom there is no recent history of default. The ageing of the liabilities 433 18 39 152 519 - 1,161 Council's Trade and Other Receivables was: 2016 2015 $'000 $'000 2015 6 mths 6-12 1-2 2-5 >5 Contracted Carrying Current (not yet due) 121 90 or less months years years years Cash Flow Amount Past due by up to 30 days 23 22 $'000 $'000 $'000 $'000 $'000 $'000 $'000 Past due between 31 and 180 days 123 127 Trade and Past due between 181 and 365 days - - other payables Past due by more than 1 year 91 - 270 270 Total Trade & Other Receivables 358 239 Trust funds and deposits 4 2 21 19 46 Total financial liabilities 274 - 2 21 19 - 316

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69 FLINDERS70 ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

(f) Sensitivity disclosure analysis

Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, the Council believes the following movements are 'reasonably possible' over the next 12 months (Base rates are sourced from Reserve Bank of Australia): - A parallel shift of + 1% and -1% in market interest rates (AUD) from year-end rates of 2%. The table below discloses the impact on net operating result and equity for each category of financial instruments held by Council at year-end, if the above movements were to occur.

Interest rate risk -1 % +1%

-100 basis points +100 basis points Profit Equity Profit Equity

2016 $'000 $'000 $'000 $'000 $'000 Financial assets: Cash and cash equivalents 5,197 (52) (52) 52 52 Term Deposits 890 (9) (9) 9 9 Trade and other receivables 358 (4) (4) 4 4 Financial liabilities: Interest-bearing loans and 683 (7) (7) 7 7 borrowings

Interest rate risk -1 % +1%

-100 basis points +100 basis points Profit Equity Profit Equity

2015 $'000 $'000 $'000 $'000 $'000 Financial assets: Cash and cash equivalents 2,192 (22) (22) 22 22 Term Deposits 4,615 (46) (46) 46 46 Trade and other receivables 239 (2) (2) 2 2 Financial liabilities: Interest-bearing loans and - - - - - borrowings

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Flinders Council Notes to the Financial Report Flinders Council 2015-2016 Financial Report For the Year Ended 30 June 2016 Notes to the Financial Report 2015-2016 Financial Repor For the Year Ended 30 June 2016

(f) Sensitivity disclosure analysis Note 40 Events occurring after balance date

Taking into account past performance, future expectations, economic forecasts, and management's knowledge (a) Since the 30th of June, the General Manager's employment with Council has ceased. Council is in the process of reruiting a new General Manager. and experience of the financial markets, the Council believes the following movements are 'reasonably possible' over the next 12 months (Base rates are sourced from Reserve Bank of Australia): Note 41 Related party transactions

- A parallel shift of + 1% and -1% in market interest rates (AUD) from year-end rates of 2%. (i) Responsible Persons The table below discloses the impact on net operating result and equity for each category of financial Names of persons holding the position of a Responsible Person at the Council at any time during the year are: instruments held by Council at year-end, if the above movements were to occur. Councillors Councillor Carol Cox (Mayor 01/11/05 to current) Councillor David Williams (Deputy Mayor 01/11/11 to current) Interest rate risk Councillor Mark Cobham (Councillor 01/11/09 to current) -1 % +1% Councillor Peter Rhodes (Councillor 01/11/11 to current) Councillor Chris Rhodes (Councillor 1/11/14 to current) Councillor Gerald Willis (Councillor 01/11/11 to current) -100 basis points +100 basis points Councillor Ken Stockton (Councillor 01/11/14 to current) Profit Equity Profit Equity General Manager Mr Raoul Harper

2016 $'000 $'000 $'000 $'000 $'000 2016 2015 Financial assets: $'000 $'000 Total Remuneration for the reporting year for Councillors' Emoluments and reimbursements included above amounted Cash and cash equivalents 5,197 (52) (52) 52 52 to: 100 96 Term Deposits 890 (9) (9) 9 9 Total Remuneration for the reporting year for key management personnel included above amounted to: 551 506 Trade and other receivables 358 (4) (4) 4 4 Financial liabilities: (ii) Councillor Remuneration Interest-bearing loans and 683 (7) (7) 7 7 Non- borrowings 2016 Other monetary Reimburse- Total Allowances Vehicles2 Benefits3 Benefits4 ments $ $ $ $ $ $ Interest rate risk -1 % +1% Councillor Carol Cox (Mayor 01/11/05 to current) 30,291 - - - 3,946 34,237 Councillor Marc Cobham (Deputy Mayor 01/11/11 to current) 17,790 - - - - 17,790 Councillor David Williams (Councillor 01/11/09 to current) 8,655 - - - - 8,655 -100 basis points +100 basis points Councillor Peter Rhodes (Councillor 01/11/11 to current) 8,655 454 9,109 Profit Equity Profit Equity Councillor Chris Rhodes (Councillor 1/11/14 to current) 8,655 - 8,655 Councillor Gerald Willis (Councillor 01/11/11 to current) 8,655 2,630 11,285 2015 $'000 $'000 $'000 $'000 $'000 Councillor Ken Stockton (Councillor 01/11/14 to current) 8,655 1,610 10,265 Financial assets: Total 91,356 - - - 8,640 99,996 Cash and cash equivalents 2,192 (22) (22) 22 22 Term Deposits 4,615 (46) (46) 46 46 Trade and other receivables 239 (2) (2) 2 2 Non- 2015 Other monetary Reimburse- Total Financial liabilities: Allowances Vehicles2 Benefits3 Benefits4 ments Interest-bearing loans and - - - - - $ $ $ $ $ $ borrowings Councillor Carol Cox (Mayor 01/11/05 to current) 29,571 - - - 2,712 32,283 Councillor Marc Cobham (Deputy Mayor 01/11/11 to current) 14,439 - - - - 14,439 Councillor David Williams (Councillor 01/11/09 to current) 11,377 - - - 861 12,238 Councillor Peter Rhodes (Councillor 01/11/11 to current) 7,687 - - - 98 7,785 Councillor Chris Rhodes (Councillor 1/11/14 to current) 5,675 - - - 360 6,035 Councillor Gerald Willis (Councillor 01/11/11 to current) 8,449 - - - 2,022 10,471 Councillor Ken Stockton (Councillor 01/11/14 to current) 5,675 - - - 1,012 6,687 Councillor Ronald Wise (Term completed 01/11/14) 2,774 - - - - 2,774 Councillor Mary-Anne Roberts (Term completed 01/11/14) 2,774 - - - 664 3,438 Total 88,421 - - - 7,729 96,150

2 Includes total cost of providing and maintaining vehicles provided for private use, including registration, insurance, fuel and other consumables, maintenance cost and parking (including notional value of parking provided at premises that are owned or leased and fringe benefits tax). 3 Other benefits includes all other forms of allowances (excludes reimbursements such as travel, accommodation or meals) and any other compensation paid and payable. 4 Other non-monetary benefits (such as housing, subsidised goods or services etc)

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71 FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT 72 Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report 2015-2016 Financial Repor For the Year Ended 30 June 2016

(iii) Key Management Personnel Remuneration

2016

Remumeration Band Number of Staff $100,0000 - $120,000 1 $120,000 - $140,000 2 $140,000 - $160,000 0 $160,000 - $180,000 1 2015 Remumeration Band Number of Staff $100,0000 - $120,000 3 $120,000 - $140,000 0 $140,000 - $160,000 0 $160,000 - $180,000 1

The remuneration band is based on total remumeration including any of the following, where applicable: - Gross Salary includes all forms of consideration paid and payable for services rendered, compensated absences during the period and salary

- Short term incentive payments are non-recurrent payments which depend on achieving specified performance goals within specified timeframes. - Termination benefits include all forms of benefit paid or accrued as a consequence of termination. - Superannuation means the contribution to the superannuation fund of the individual. - Includes total cost of providing and maintaining vehicles provided for private use, including registration, insurance, fuel and maintenance. - Other non-monetary benefits include annual and long service leave movements.

(iv) Remuneration Principles

Councillors Remuneration for Councillors is set in accordance with the Local Government Act 1993 as prescribed in Schedule 4 of the Local Government (General) Regulations 2005 .

Executives Remuneration levels for key management personnel are set in accordance with industry standards, individual performance, experience and qualifications. For Senior Executives (excluding the General Manager) this is linked to bands within the Flinders Council Enterprise Agreement. The employment terms and conditions of the Generall Manager are contained in an individual employment contract that prescribes total remuneration, superannuation, annual and long service leave, vehicle and salary sacrifice provisions. The employment terms and conditions for all other Senior Executives are contained in the Flinders Council Enterprise Agreement.

The performance of each senior executive, including the General Manager, is reviewed annually which includes a review of their remuneration package. The terms of employment of each senior executive, including the General Manager, contain a termination clause that requires the senior executive or Council to provide a minimum notice period of up to 6 months prior to termination of the contract. Whilst not automatic, contracts can be extended.

Short term incentive payments The Council sets fixed performance targets with goals and indicators aligned to Council's Annual Plan.

No short term incentive payments were awarded during the current year.

Termination benefits No termination payments were paid to during the current year to key management personnel.

(v) In accordance with s84(2)(b) of the Local Government Act 1993 , no interests have been notified to the General Manager in respect of any body or organisation with which the Council has major financial dealings.

Note 42 Special committees and other activities Council have the following Special Committees: Furneaux Group Shipping Special Committee Furneaux Group Aviation Special Committee Lady Barron Hall & Recreation Special Committee Furneaux (Emita) Hall & Recreation Ground Special Committee Furneaux Community Health Special Committee Audit Panel

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Flinders Council Notes to the Financial Report Flinders Council Notes to the Financial Report 2015-2016 Financial Repor For the Year Ended 30 June 2016 2015-2016 Financial Report For the Year Ended 30 June 2016

(iii) Key Management Personnel Remuneration Note 43 Significant Business Activities

2016 The operating capital and competitive neutrality costs of the Council's significant business activities:

Remumeration Band Number of Staff Aiport Private Works $100,0000 - $120,000 1 2016 2015 2016 2015 $120,000 - $140,000 2 $'000 $'000 $'000 $'000 $140,000 - $160,000 0 Revenue $160,000 - $180,000 1 2015 Rates - - - - Remumeration Band Number of Staff User Changes 275 283 767 279 $100,0000 - $120,000 3 Grants 269 667 - - $120,000 - $140,000 0 $140,000 - $160,000 0 Total Revenue 544 950 767 279 $160,000 - $180,000 1 Expenditure

The remuneration band is based on total remumeration including any of the following, where applicable: Direct - Gross Salary includes all forms of consideration paid and payable for services rendered, compensated absences during the period and salary Employee Costs 320 206 92 45 - Short term incentive payments are non-recurrent payments which depend on achieving specified performance goals within specified timeframes. Materials and Contacts 128 120 230 30 - Termination benefits include all forms of benefit paid or accrued as a consequence of termination. Interest - - - - - Superannuation means the contribution to the superannuation fund of the individual. Utilities - - - - - Includes total cost of providing and maintaining vehicles provided for private use, including registration, insurance, fuel and maintenance. - Other non-monetary benefits include annual and long service leave movements. Indirect Engineering & Administration - - - - (iv) Remuneration Principles Total Expenses 449 326 322 75 Councillors Remuneration for Councillors is set in accordance with the Local Government Act 1993 as prescribed in Schedule 4 of the Local Government (General) Notional cost of free services received Regulations 2005 .

Capital Costs Executives Remuneration levels for key management personnel are set in accordance with industry standards, individual performance, experience and Depreciation and amortisation 126 150 25 - qualifications. For Senior Executives (excluding the General Manager) this is linked to bands within the Flinders Council Enterprise Agreement. Opportunity cost of capital 91 325 5 - The employment terms and conditions of the Generall Manager are contained in an individual employment contract that prescribes total remuneration, superannuation, annual and long service leave, vehicle and salary sacrifice provisions. The employment terms and conditions for all other Senior Total Capital Costs 217 475 30 - Executives are contained in the Flinders Council Enterprise Agreement. The performance of each senior executive, including the General Manager, is reviewed annually which includes a review of their remuneration package. Competitive neutrality adjustments The terms of employment of each senior executive, including the General Manager, contain a termination clause that requires the senior executive or Rates and land tax 18 - - - Council to provide a minimum notice period of up to 6 months prior to termination of the contract. Whilst not automatic, contracts can be extended. Loan guarantee fees - - - - 18 - - -

Short term incentive payments Calculated Surplus/(Deficit) (49) (126) 419 204 The Council sets fixed performance targets with goals and indicators aligned to Council's Annual Plan. Tax Equivalent rate - - 0.30 0.30 Taxation equivalent - - 126 61 No short term incentive payments were awarded during the current year.

Termination benefits Total fully attributable costs 684 801 478 136 No termination payments were paid to during the current year to key management personnel. Accounting policy (v) In accordance with s84(2)(b) of the Local Government Act 1993 , no interests have been notified to the General Manager in respect of any body or organisation with which the Council has major financial dealings. Significant business activities Council is required to report the operating, capital and competitive neutrality costs in respect of each significant business activity Note 42 Special committees and other activities undertaken by the Council. Council's disclosure is reconciled above. Council has determined, based upon materiality that the Council have the following Special Committees: operation of the Flinders Island Airport and Private Works activities as defined above are considered significant business activities. Furneaux Group Shipping Special Committee Competitive neutrality costs include notional costs i.e. income tax equivalent, rates and loan guarantees. In preparing the information Furneaux Group Aviation Special Committee disclosed in relation to significant business activities, the following assumptions have been applied: Lady Barron Hall & Recreation Special Committee • Opportunity costs based on 2.36% Furneaux (Emita) Hall & Recreation Ground Special Committee Furneaux Community Health Special Committee Audit Panel

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73 FLINDERS74 ISLAND 2016 ANNUAL GENERAL REPORT FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT Notes Flindersto the Council Financial Report Notes to the Financial Report For the2015-2016 Year Ended Financial 30 Report June 2016 For the Year Ended 30 June 2016

Note 44 Management indicators Benchmark 2016 2015 2014 2013 $'000 $'000 $'000 $'000 (a) Underlying surplus or deficit Recurrent income* less 4,605 4,223 3,814 4,475 recurrent expenditure 5,609 4,858 5,697 4,934 Underlying surplus/deficit - (1,004) (635) (1,883) (459) * Recurrent income excludes income received specifically for new or upgraded assets, physical resources received free of charge or other income of a capital nature.

The early receipt of instalments resulted in Commonwealth Government Finanicial Assistant Grants being above the originally budgeted in 2014-15 by $653,136. This has impacted the Statement of Profit or Loss and Other Comprehensible income resulting in the Surplus/(deficit) being higher in 2014-15 by $653,136.

(b) Underlying surplus ratio Underlying surplus or deficit (1,004) (635) (1,883) (459) Recurrent income* 4,605 4,223 3,814 4,475 Underlying surplus ratio % 0% -22% -15% -49% -10% This ratio serves as an overall measure of financial operating effectiveness. Flinders Councils current position is not favourable as it raises the question of sustainability.

(c) Net financial liabilities Liquid assets less 6,445 6,993 7,797 8,865 total liabilities 1,744 714 752 731 Net financial liabilities - 4,701 6,279 7,045 8,134 This measure shows whether Council's total liabilities can be met by its liquid assets. An excess of total liabilities over liquid assets means that, if all liabilities fell due at once, additional revenue would be needed to fund the shortfall.

Council has sufficient surplus funds to meet total lliabilities as they fall due.

(d) Net financial liabilities ratio Net financial liabilities 4,701 6,279 7,046 8,134 Recurrent income* 4,605 4,223 3,814 4,475 Net financial liabilities ratio % 0% - (50%) 102% 149% 185% 182% This ratio indicates the net financial obligations of Council compared to its recurrent income. Flinders Council is placed well with the level of cash reserves. Council has identified that the ratio is outside of the desired benchmark and has accessed borrowings in 2015-16 to fund capital equipment to bring the ratio more in line with the desired result.

Note 44 Management indicators (cont.) 2016 2015 2014 2013 $'000 $'000 $'000 $'000 (e) Asset consumption ratio An asset consumption ratio has been calculated in relation to each asset class required to be included in the long- term strategic asset management plan of Council.

Transport Infrastructure Depreciated replacement cost 29,366 29,371 30,165 66,661 Current replacement cost 42,060 41,512 41,471 88,169 Asset consumption ratio % 70% 71% 73% 76% Buildings Depreciated replacement cost 5,728 5,567 5,396 4,391 Current replacement cost 6,229 5,947 5,664 4,546 Asset consumption ratio % 92% 94% 95% 97%

Stormwater Depreciated replacement cost 340 344 348 N/a Current replacement cost 441 441 441 N/a Asset consumption ratio % 77% 78% 79% N/a This ratio indicates the level of service potential available in Council's existing asset base. The asset consumption ratio highlights that the Council is maintaining, renewing and replacing its assets in accordance with the Asset Management Plan and is in line with the benchmark.

PAGE 100 PAGE 41 1 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 44 Management indicators (cont.) 2016 2015 2014 2013 $'000 $'000 $'000 $'000 (f) Asset renewal funding ratio An asset renewal funding ratio has been calculated in relation to each asset class required to be included in the long-term strategic asset management plan of Council. Transport Infrastructure Projected capital funding outlays** 6,827 7,426 7,320 7,727 Projected capital expenditure funding*** 6,827 7,426 7,320 7,727 Asset renewal funding ratio % 90-100% 100% 100% 100% 100% Buildings Projected capital funding outlays** 450 725 900 1,104 Projected capital expenditure funding*** 450 725 900 1,104 Asset renewal funding ratio % 90-100% 100% 100% 100% 100% Stormwater Projected capital funding 90 100 90 90 Projected capital expenditure 90 100 90 90

Asset renewal funding ratio % 90-100% 100% 100% 100% 100%

** Current value of projected capital funding outlays for an asset identified in Council's long-term financial plan.

*** Value of projected capital expenditure funding for an asset identified in Council's long-term strategic asset management plan. This ratio measures Council's capacity to fund future asset replacement requirements.

Council is well positioned to fund future asset replacement requirements.

(g) Asset sustainability ratio Capex on replacement/renewal of existing assets 1,762 1,016 722 1,362 Annual depreciation expense 1,431 1,460 1,437 1,798 Asset sustainability ratio % 100% 123% 70% 50% 76%

This ratio calculates the extent to which Council is maintaining operating capacity through renewal of their existing asset base.

The asset sustainability ratio has increased in 2015-16 due to the extensive emergency repairs carried out at the airport.

Captial Capital new Total Capital 2016 renewal /upgrade Expenditure expenditure expenditure $'000 $'000 $'000 Land - - - Land under roads - - - Bridges 45 45 Buildings 296 - 296 Leasehold improvements 24 - 24 Fixtures, fittings and furniture - 28 28 Footpath 5 5 Plant & equipment - 805 805 Roads 634 634 Waste management 35 35 Infrastructure 723 - 723 Total 1,762 833 2,595

Captial Capital new Total Capital 2015 renewal /upgrade Expenditure expenditure expenditure $'000 $'000 $'000 Land - 265 265 Land under roads - - - Buildings 379 - 379 Leasehold improvements - 252 252 Fixtures, fittings and furniture - 8 8 Plant & equipment - 352 352 Roads 588 - 588 Footpaths - 2 2 Bridges 49 - 49 Waste management - 96 96 Infrastructure - 1,585 1,585 Total 1,016 2,561 3,577

PAGE 101 PAGE 42 2 FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT Notes to the Financial Report FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT For the Year Ended 30 June 2016 Flinders Council Notes to the Financial Report Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 45 Fair Value Measurements Note 45 Fair Value Measurements (cont.) Council measures and recognises the following assets at fair value on a recurring basis: Investment in water corporation Transfers between levels of the hierarchy Property, infrastructure plant and equipment Council's policy is to recognise transfers in and out of the fair value hierarchy levels as at the end of the reporting period. - Land, including land under roads There were no transfers between levels 1 and 2 during the year, nor between levels 2 and 3. - Buildings, including leasehold improvements - Stormwater (b) Highest and best use - Roads, including footpaths & cycleways All assets valued at fair value in this note are being used for their highest and best use. - Bridges

Council does not measure any liabilities at fair value on a recurring basis. (c) Valuation techniques and significant inputs used to derive fair values (a) Fair Value Hierarchy Investment in water corporation Refer to Note 20 for details of valuation techniques used to derive fair values." AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a level in Council's investment is not traded in an active market and is only sensitive to fluctuations in the value of TasWater's net the fair value hierarchy as follows: assets. Level 1 Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. Land Level 2 Inputs other than quoted prices included within Level 1 that are Land was valued utilising the municpal valuations undertaken by the Office of the Valuer General as at 30 June 2015. observable for the asset or liability, either directly or indirectly. The valuations of buildings is at fair value less accumulated depreciation at the date of the valuation. The valuation of Level 3 Unobservable inputs for the asset or liability. land is at Fair Value based on highest and best use permitted by relevant land planning provisions.

The table below shows the assigned level for each asset and liability held at fair value by the Council. The table Land under roads presents the Council's assets and liabilities measured and recognised at fair value at 30 June 2016. Land under roads is based on Council valuations at 30 June 2015 using site values adjusted for englobo (undeveloped The fair values of the assets are determined using valuation techniques which maximise the use of observable data, and/or unserviced) characteristics, access rights, private interests of other parties and entitlements of infrastructure where it is available, and minimise the use of entity specific estimates. If one or more of the significant inputs is not assets and services. This adjustment is an unobservable input in the valuation. based on observable market data, the asset is included in level 3. This is the case for Council infrastructure assets, which are of a specialist nature for which there is no active market for similar or identical assets. These assets are Buildings valued using a combination of observable and unobservable inputs. The fair value of buildings were also determined by the Office of the Valuer General as at 30 June 2015. Where there is As at 30 June 2016 a market for Council building assets, fair value has been derived from the sales prices of comparable properties after Note Level 1 Level 2 Level 3 Total adjusting for differences in key attributes such as property size. The most significant input into this valuation approach Recurring fair value measurements $'000 $'000 $'000 $'000 was price per square metre. While the unit rates based on square metres can be supported by market evidence (level 2), the estimates of residual Investment in water corporation 20 - - 3,307 3,307 value and useful life that are used to calculate accumulated depreciation comprise unobservable inputs (level 3). Where Land, including land under roads 26 - 2,528 1,928 4,456 these other inputs are significant to the valuation the overall valuation has been classified as level 3. Buildings, including leasehold improvements 26 - 3,385 2,344 5,729 Roads, including footpaths & cycleways 26 - - 24,931 24,931 Bridges 26 - - 4,095 4,095 Stormwater 26 - - 340 340 - 5,913 36,945 42,858

As at 30 June 2015 Note Level 1 Level 2 Level 3 Total Recurring fair value measurements $'000 $'000 $'000 $'000 Investment in water corporation 20 - - 3,252 3,252 Land, including land under roads 26 - 2,528 1,928 4,456 Buildings, including leasehold improvements 26 - 3,388 2,179 5,567 Roads, including footpaths & cycleways 26 - - 25,198 25,198 Bridges 26 - - 4,173 4,173 Stormwater 26 - - 344 344 - 5,916 37,074 42,990

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Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 45 Fair Value Measurements (cont.)

Transfers between levels of the hierarchy Council's policy is to recognise transfers in and out of the fair value hierarchy levels as at the end of the reporting period. There were no transfers between levels 1 and 2 during the year, nor between levels 2 and 3.

(b) Highest and best use All assets valued at fair value in this note are being used for their highest and best use.

Investment in water corporation Refer to Note 20 for details of valuation techniques used to derive fair values." Council's investment is not traded in an active market and is only sensitive to fluctuations in the value of TasWater's net assets.

Land Land was valued utilising the municpal valuations undertaken by the Office of the Valuer General as at 30 June 2015. The valuations of buildings is at fair value less accumulated depreciation at the date of the valuation. The valuation of land is at Fair Value based on highest and best use permitted by relevant land planning provisions.

Land under roads Land under roads is based on Council valuations at 30 June 2015 using site values adjusted for englobo (undeveloped and/or unserviced) characteristics, access rights, private interests of other parties and entitlements of infrastructure assets and services. This adjustment is an unobservable input in the valuation.

Buildings The fair value of buildings were also determined by the Office of the Valuer General as at 30 June 2015. Where there is a market for Council building assets, fair value has been derived from the sales prices of comparable properties after adjusting for differences in key attributes such as property size. The most significant input into this valuation approach was price per square metre. While the unit rates based on square metres can be supported by market evidence (level 2), the estimates of residual value and useful life that are used to calculate accumulated depreciation comprise unobservable inputs (level 3). Where these other inputs are significant to the valuation the overall valuation has been classified as level 3.

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Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 45 Fair Value Measurements (cont.)

Infrastructure assets All Council infrastructure assets, except Flinders Airport and Waste Management, were fair valued using written down current replacement cost. This valuation comprises the asset's current replacement cost (CRC) less accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset. Council first determined the gross cost of replacing the full service potential of the asset and then adjusted this amount to take account of the expired service potential of the asset. CRC was measured by reference to the lowest cost at which the gross future economic benefits of the asset could currently be obtained in the normal course of business. The resulting valuation reflects the cost of replacing the existing economic benefits based on an efficient set of modern equivalent assets to achieve the required level of service output. The unit rates (labour and materials) and quantities applied to determine the CRC of an asset or asset component were based on a "Greenfield" assumption meaning that the CRC was determined as the full cost of replacement with a new asset including components that may not need to be replaced, such as earthworks.

The level of accumulated depreciation for infrastructure assets was determined based on the age of the asset and the useful life adopted by Council for the asset type. Estimated useful lives and residual values are disclosed in Note 17. The calculation of DRC involves a number of inputs that require judgement and are therefore classed as unobservable. While these judgements are made by qualified and experienced staff, different judgements could result in a different valuation. The methods for calculating CRC are described under individual asset categories below.

Roads, including footpaths & cycleways Council categorises its road infrastructure as rural roads and then further sub-categorises these into sealed and unsealed roads. Rural roads are managed in 2km segments. All road segments are then componentised into formation, pavement, sub-pavement and seal (where applicable). Council assumes that environmental factors such as soil type, climate and topography are consistent across each segment. Council also assumes a segment is designed and constructed to the same standard and uses a consistent amount of labour and materials. CRC is based on the road area multiplied by a unit price; the unit price being an estimate of labour and material inputs, services costs, and overhead allocations. For internal construction estimates, material and services prices are based on existing supplier contract rates or supplier price lists and labour wage rates are based on Council's Enterprise Agreement (EA). Where construction is outsourced, CRC is based on the average of completed similar projects over the last few years. Roads were valued at 01/07/2013 by the Council's Engineer - Gavin Boyd (Brighton Council) and indexed at 30/06/2015.

Bridges A full valuation of bridges assets was undertaken by independent valuers - AusSpan effective 30 June 2014. Each bridge is assessed individually and componentised into sub-assets representing the deck and sub-structure.The valuation is based on the material type used for construction and the deck and sub-structure area.

Stormwater A full valuation of stormwater infrastructure was undertaken by Council's Technic Consultant - Simon Pullford (Brighton Council), effective 30 June 2014. Similar to roads, stormwater assets are managed in segments; pits and pipes being the major components. Consistent with roads, Council assumes that environmental factors such as soil type, climate and topography are consistent across each segment and that a segment is designed and constructed to the same standard and uses a consistent amount of labour and materials. CRC is based on the unit price for the component type. For pipes, the unit price is multiplied by the asset's length. The unit price for pipes is based on the construction material as well as the depth the pipe is laid.

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Note 45 Fair Value Measurements (cont.) Note 45 Fair Value Measurements (cont.)

Infrastructure assets (d) Changes in recurring level 3 fair value measurements All Council infrastructure assets, except Flinders Airport and Waste Management, were fair valued using written down There has been no changes in fair value of level 3 infrastructure assets during the year. Investment in water current replacement cost. This valuation comprises the asset's current replacement cost (CRC) less accumulated corporation, which is classified as level 3 has been separately disclosed in note 20. depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset. Council first determined the gross cost of replacing the full service potential of the asset and then adjusted There have been no transfers between level 1, 2 or 3 measurements during the year. this amount to take account of the expired service potential of the asset. CRC was measured by reference to the lowest cost at which the gross future economic benefits of the asset could (e) Valuation processes currently be obtained in the normal course of business. The resulting valuation reflects the cost of replacing the existing Council's current policy for the valuation of property, infrastructure, plant and equipment and investment in water economic benefits based on an efficient set of modern equivalent assets to achieve the required level of service output. corporation (recurring fair value measurements) is set out in notes 26 and 20 respectively. The unit rates (labour and materials) and quantities applied to determine the CRC of an asset or asset component were Non-recurring fair value measurements are made at the point of reclassification by a registered valuer. based on a "Greenfield" assumption meaning that the CRC was determined as the full cost of replacement with a new asset including components that may not need to be replaced, such as earthworks. (f) Assets and liabilities not measured at fair value but for which fair value is disclosed Council has assets and liabilities which are not measured at fair value, but for which fair values are disclosed in other The level of accumulated depreciation for infrastructure assets was determined based on the age of the asset and the useful life adopted by Council for the asset type. Estimated useful lives and residual values are disclosed in Note 17. notes. (refer note 39) The calculation of DRC involves a number of inputs that require judgement and are therefore classed as unobservable. Council borrowings are measured at amortised cost with interest recognised in profit or loss when incurred. The fair While these judgements are made by qualified and experienced staff, different judgements could result in a different value of borrowings disclosed in note 39 is provided by Tascorp (level 2). valuation. The carrying amounts of trade receivables and trade payables are assumed to approximate their fair values due to their The methods for calculating CRC are described under individual asset categories below. short-term nature (Level 2).

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80 FLINDERS81 ISLAND 2016 ANNUAL GENERAL REPORT FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT FlindersNotes Council to the Financial Report Notes to the Financial Report 2015-2016For the FinancialYear Ended Report 30 June 2016 For the Year Ended 30 June 2016

Note 46 Material Budget Variations

Council’s original budget was adopted by the Council on 16 July 2015. The original projections on which the budget was based have been affected by a number of factors. These include State and Federal Government decisions including new grant programs, changing economic activity, the weather, and by decisions made by the Council. Material variations of more than 10% are explained below:

Revenues

1 Interest Council predominately invests surplus funds in term deposits. Due to low interest rates returns have been lower than anticipated.

2 Capital Grants The variation for Capital Grants is due to a grant that has not been received by Council as a result of a delay in a project. Council is in the process of tendering for the upgrade of the Lady Barron Hall. Once the tenders have been received and a contract awarded, the Grant of $160,000 will be received.

3 Materials and Services Due to the large volume of emergency capital works required to be undertaken on the Flinders Island Airport, there was less capacity to undertake planned maintenance works during the year.

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82 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT Flinders Council Notes to the Financial Report Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 46 Material Budget Variations Note 47 Other significant accounting policies and new accounting standards Council’s original budget was adopted by the Council on 16 July 2015. The original projections on which the budget was based have been affected by a number of factors. These include State and Federal (a) Taxation Government decisions including new grant programs, changing economic activity, the weather, and by Council is exempt from all forms of taxation except Fringe Benefits Tax, Payroll Tax and the Goods decisions made by the Council. Material variations of more than 10% are explained below: and Services Tax.

Revenues Goods and services tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the 1 Interest amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances Council predominately invests surplus funds in term deposits. Due to low interest rates returns have been the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the lower than anticipated. expense. Receivables and payables in the balance sheet are shown inclusive of GST.

2 Capital Grants Cash flows are presented in the Statement of Cash Flows on a gross basis, except for the GST The variation for Capital Grants is due to a grant that has not been received by Council as a result of a component of investing and financing activities, which are disclosed as operating cash flows. delay in a project. Council is in the process of tendering for the upgrade of the Lady Barron Hall. Once the tenders have been received and a contract awarded, the Grant of $160,000 will be received. (b) Impairment of assets 3 Materials and Services At each reporting date, Council reviews the carrying value of its assets to determine whether there Due to the large volume of emergency capital works required to be undertaken on the Flinders Island is any indication that these assets have been impaired. If such an indication exists, the recoverable Airport, there was less capacity to undertake planned maintenance works during the year. amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, is compared to the assets carrying value. Any excess of the assets carrying value over its recoverable amount is expensed to the Statement of Profit or Loss and Other Comprehensive Income, unless the asset is carried at the revalued amount in which case, the impairment loss is recognised directly against the revaluation reserve in respect of the same class of asset to the extent that the impairment loss does not exceed the amount in the revaluation surplus for that same class of asset. For non-cash generating assets of Council such as roads, drains, public buildings and the like, value in use is represented by the deprival value of the asset approximated by its written down replacement cost.

(c) Allocation between current and non-current 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 twelve months, being Council's operational cycle, or if Council does not have an unconditional right to defer settlement of a liability for at least 12 months after the reporting date.

(d) Financial guarantees Financial guarantee contracts are recognised as a liability at the time the guarantee is issued. The liability is initially measured at fair value, and if there is material increase in the likelihood that the guarantee may have to be exercised, at the higher of the amount determined in accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets and the amount initially recognised less cumulative amortisation, where appropriate. In the determination of fair value, consideration is given to factors including the probability of default by the guaranteed party and the likely loss to Council in the event of default.

(e) Contingent assets, contingent liabilities and commitments Contingent assets and contingent liabilities are not recognised in the Statement of Financial Position, but are disclosed by way of a note and, if quantifiable, are measured at nominal value. Contingent assets and liabilities are presented inclusive of GST receivable or payable respectively.

Commitments are not recognised in the Statement of Financial Position. Commitments are disclosed at their nominal value inclusive of the GST payable.

(f) Budget The estimated revenue and expense amounts in the Statement of Profit or Loss and Other Comprehensive Income represent revised budget amounts and are not audited. PAGE 107 PAGE 48

82 83 FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT Flinders CouncilNotes to the Financial Report Notes to the Financial Report 2015-2016 FinancialFor the ReportYear Ended 30 June 2016 For the Year Ended 30 June 2016

Note 47 Other significant accounting policies and new accounting standards (cont)

(g) Adoption of new and amended accounting standards (i) AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality (effective from 1 July 2015) The completion of AASB project to remove Australian guidance on materiality from Australian Accounting Standards with the issue of the final amending standard to effect the withdrawal of AASB 1031 Materiality. Guidance on materiality is now located in AASB 101 Presentation of Financial Statements. The withdrawal of this standard is not expected to be a material change and therefore no changes are expected to Council's financial statements.

(ii) AASB 2015-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments to AASB 101 (effective from 1 January 2016) The amendments do not require any significant change to current practice, but should facilitate improved reporting, including an emphasis on only including material disclosures, clarity on the aggregation and disaggregation of line items, the presentation and subtotals, the ordering of notes and the identification of significant accounting policies. Council has amended its notes to the financial statements which should increase readability and end user understandability. (iii) AASB 2015-7 Amendments to Australian Accounting Standards - Fair Value Disclosures of Not-for-Profit Public Sector Entities (effective from 1 July 2016) The amendment provides relief to not-for-profit public sector entities from certain disclosures about the fair value measurement of property, plant and equipment held for their current service potential rather than to generate net cash inflows that is categorised within Level 3 of the fair value hierarchy.

The impact of adoption of this standard is less disclosure in Note 45 - Fair Value Measurements regarding the unobservable inputs and sensitivities of level 3 assets not held for net investment returns.

(h) Pending Accounting Standards Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2016 reporting periods. Council's assessment of the impact of the relevant new standards and interpretations is set out below.

(i) AASB 2014-4 Amendments to Australian Accounting Standards - Clarification of Acceptable Methods of Depreciation and Amortisation (effective from 1 January 2016)

This amendment introduces a rebuttable presumption that the use of revenue-based amortisation methods for intangible assets is inappropriate. In addition to this, there is limited opportunity for presumption to be overcome and clarifies that revenue-based depreciation for property, plant and equipment cannot be used.

There is not likely to be any impact from this change.

(ii) AASB 2015-1 Amendments to Australian Accounting Standards - Annual Improvements to Australian Accounting Standards 2012-2014 Cycle (effective from 1 January 2016) Amendments to existing accounting standards, particularly in relation to: IFRS 5 - guidance on changes in method of disposal; IFRS 7 - clarifies 'continuing involvement for service contracts and also clarifies offsetting disclosures are not specifically required in interim financial statements, but may be included under general requirements of IAS 34;

IAS 19 - clarifies that discount rates used should be in the same currency as the benefits are to be paid; and IAS 34 - clarifies that disclosures may be incorporated in the interim financial statements by cross-reference to another part of the interim financial report. There is not likely to be any impact from this change.

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84 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT Flinders Council Notes to the Financial Report Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 47 Other significant accounting policies and new accounting standards (cont) Note 47 Other significant accounting policies and new accounting standards (cont)

(iii) AASB 2015-6 Amendments to Australian Accounting Standards - Extending Related Party Disclosures to (g) Adoption of new and amended accounting standards Not-for-Profit Public Sector Entities (effective from 1 July 2016) (i) AASB 2015-3 Amendments to Australian Accounting Standards arising from the Withdrawal of AASB 1031 Materiality (effective from 1 July 2015) The amendment extends the scope of AASB 124 Related Party Disclosures to include not-for-profit public sector entities. The completion of AASB project to remove Australian guidance on materiality from Australian Accounting Standards with the issue of the final amending standard to effect the withdrawal of Further detail will be required to be discolsed for key management personnel. AASB 1031 Materiality. Guidance on materiality is now located in AASB 101 Presentation of Financial Statements. (iv) AASB 1057 Application of Australian Accounting Standards, AASB 2015-9 Amendments to Australian Accounting Standards - Scope and Application Paragraphs (effective from 1 January The withdrawal of this standard is not expected to be a material change and therefore no changes 2016) are expected to Council's financial statements. The AASB has reissued most of its Standards (and Interpretations) that incorporate IFRSs to make (ii) AASB 2015-2 Amendments to Australian Accounting Standards - Disclosure Initiative: Amendments editorial changes. The editorial changes will enable the AASB to issue Australian versions of IFRS to AASB 101 (effective from 1 January 2016) more efficiently. As part of the reissuance, the AASB has moved the application paragraphs that The amendments do not require any significant change to current practice, but should facilitate identify the reporting entities and general purpose financial statements to which the improved reporting, including an emphasis on only including material disclosures, clarity on the pronouncements apply to a new Standard, AASB 1057 Application of Australian Accounting aggregation and disaggregation of line items, the presentation and subtotals, the ordering of notes Standards. However, the technical application requirements have not been amended. and the identification of significant accounting policies. The amended standard has no effect on the current financial statements. Council will monitor the Council has amended its notes to the financial statements which should increase readability and effects of this standard on future financial statements. end user understandability. (v) AASB 9 Financial Instruments and the relevant amending standards (effective from 1 January (iii) AASB 2015-7 Amendments to Australian Accounting Standards - Fair Value Disclosures of Not-for-Profit AASB 9 is one of a series of amendments that are expected to replace AASB 139 Financial Public Sector Entities (effective from 1 July 2016) Instruments: Recognition and Measurement. The main impact of the standard is to change the The amendment provides relief to not-for-profit public sector entities from certain disclosures about the fair requirements for the classification, measurement and disclosures associated with financial assets. value measurement of property, plant and equipment held for their current service potential rather than to Under the new requirements the four categories of financial assets in AASB 139 will be replaced generate net cash inflows that is categorised within Level 3 of the fair value hierarchy. with two measurement categories: fair value and amortised cost. The impact of adoption of this standard is less disclosure in Note 45 - Fair Value Measurements regarding the unobservable inputs and sensitivities of level 3 assets not held for net investment returns. Amortised cost is to be used for assets with contractual terms giving rise to principal and interest payments.

(h) Pending Accounting Standards Fair value is to be used for all other financial assets. Gains or losses on financial assets at fair value Certain new accounting standards and interpretations have been published that are not mandatory are to be recognised in profit and loss unless the asset is part of a hedging relationship or an for 30 June 2016 reporting periods. Council's assessment of the impact of the relevant new irrevocable election has been made to present in other comprehensive income changes in the fair standards and interpretations is set out below. value of an equity instrument not held for trading . When adopted, the standard will affect, in particular, Council’s accounting for its available-for-sale (i) AASB 2014-4 Amendments to Australian Accounting Standards - Clarification of Acceptable financial assets. Currently, Council recognises changes in the fair value of its available-for-sale Methods of Depreciation and Amortisation (effective from 1 January 2016) assets through other comprehensive income. Under AASB 9 fair value gains and losses on available-for-sale assets will have to be recognised directly in profit or loss. This amendment introduces a rebuttable presumption that the use of revenue-based amortisation methods for intangible assets is inappropriate. In addition to this, there is limited opportunity for However, investments in equity instruments can be designated as ‘fair value through other presumption to be overcome and clarifies that revenue-based depreciation for property, plant and comprehensive income’ assets. This designation is irrevocable. Council is likely to designate its equipment cannot be used. investment in TasWater as ‘fair value through other comprehensive income’ and therefore the There is not likely to be any impact from this change. adoption of this standard will not impact the way movements in the fair value are accounted for.

(ii) AASB 2015-1 Amendments to Australian Accounting Standards - Annual Improvements to Australian There will be no impact on Council’s accounting for financial liabilities, as the new requirements only Accounting Standards 2012-2014 Cycle (effective from 1 January 2016) affect the accounting for financial liabilities that are designated at fair value through profit or loss and Council does not have any such liabilities. The derecognition rules have been transferred from Amendments to existing accounting standards, particularly in relation to: AASB 139 Financial Instruments: Recognition and Measurement and have not been changed. IFRS 5 - guidance on changes in method of disposal; IFRS 7 - clarifies 'continuing involvement for service contracts and also clarifies offsetting disclosures are not specifically required in interim financial statements, but may be included under general requirements of IAS 34;

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84 85 FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT Flinders CouncilNotes to the Financial Report Notes to the Financial Report 2015-2016 FinancialFor the ReportYear Ended 30 June 2016 For the Year Ended 30 June 2016

Note 47 Other significant accounting policies and new accounting standards (cont)

(vi) AASB 15 Revenue from Contracts with Customers, and AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 (effective from 1 January 2018)

Under the new standard, a single model that applies to contracts with customers and two approaches to recognising revenue, at a point in time or over time is proposed. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised. The new standard will apply to contracts of not-for-profit entities that are exchange contracts. AASB 1004 Contributions will continue to apply to non-exchange transactions until the Income from Transactions of Not-for-Profit Entities project is completed. Further clarification will be required before Council can assess likely impact.

(vii) AASB 16 Leases (effective from 1 January 2019) AASB 16 introduces a single lessee accounting model and requires a lessee to recognise assets and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligations to make lease payments. The impact has been assessed and it is deemed to be immaterial.

(viii) Disclosure Initiative - Amendments to AASB 107 (effective from 1 January 2017) Amendments to AASB 107 will see the introduction of additional disclosures to evaluate changes in liabilities arising from financing activities, including both changes arising from cash flows and non- cash changes (such as effects of changes in foreign exchange rates and changes in fair values). There are additional disclosures anticipated in the financial statements regarding movements in financial liabilities

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86 FLINDERS COUNCIL 2015/2016 - FINANCIAL REPORT Flinders Council Notes to the Financial Report 2015-2016 Financial Report For the Year Ended 30 June 2016

Note 47 Other significant accounting policies and new accounting standards (cont)

(vi) AASB 15 Revenue from Contracts with Customers, and AASB 2014-5 Amendments to Australian Accounting Standards arising from AASB 15 (effective from 1 January 2018)

Under the new standard, a single model that applies to contracts with customers and two approaches to recognising revenue, at a point in time or over time is proposed. The model features a contract-based five-step analysis of transactions to determine whether, how much and when revenue is recognised. The new standard will apply to contracts of not-for-profit entities that are exchange contracts. AASB Flinders Council 1004 Contributions will continue to apply to non-exchange transactions until the Income from 2015-2016 Financial Report Certification of the Financial Report Transactions of Not-for-Profit Entities project is completed. Further clarification will be required before Council can assess likely impact. Certification of the Financial Report

(vii) AASB 16 Leases (effective from 1 January 2019) AASB 16 introduces a single lessee accounting model and requires a lessee to recognise assets The financial report presents fairly the financial position of the Flinders Council as at 30 June 2016, the results of its operations for the year Local Government Act 1993 and liabilities for all leases with a term of more than 12 months, unless the underlying asset is of low then ended and the cash flows of the Council, in accordance with the (as amended), Australian Accounting Standards (including interpretations) and other authoritative pronouncements issued by the Australian Accounting Standards Board. value. A lessee is required to recognise a right-of-use asset representing its right to use the underlying leased asset and a lease liability representing its obligations to make lease payments. The impact has been assessed and it is deemed to be immaterial.

Date : 26/09/2016

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FLINDERS ISLAND 2016 ANNUAL GENERAL REPORT