Post on 12-May-2020
ATTACHMENT 2
WMRLC Draft Budget 2018/19
Whitehorse Manningham Regional Library Corporation
DRAFT BUDGET 2018/2019
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1 WMRLC Draft Budget 2018/19
CONTENTS Page 1 Introduction 2
2 Executive summary 3
3 Link to the Library Plan 5
Budget Analysis
4 Budget principles 9
5 Budget influences 9
6 Analysis of operating budget 10
7 Analysis of budgeted cash position 15
8 Analysis of budgeted financial position 19
9 Strategic Resource Plan and Key Financial Indicators 20
10 Financial Statements 24
Appendices
A Fees and charges schedule 30
B Budget process 31
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2 WMRLC Draft Budget 2018/19
1 Introduction
Whitehorse Manningham Regional Library Corporation (WMRLC) is a Library
Corporation under section 196 of the Local Government Act 1989. The Corporation
provides a public library service to the municipalities of Whitehorse and Manningham
(the member Councils), which have a combined estimated residential population of
299,045.
The Corporation is governed by a Board comprising two Councillor Representatives
from each of the member Councils, the Chief Executive Officers from the member
Councils and two community representatives. The Corporation’s Chief Executive
Officer reports to the Board and is responsible for the management of the
Corporation.
The Library Plan 2017-2021 sets out the strategic plan to deliver the Corporation’s
vision over the four year period. The proposed budget 2018/2019 details the
resources required over the next year to achieve the Library Plan actions. The budget
supports the continued transformation to a 21st century library service that embraces
the possibilities of new technology, while continuing to strengthen the reading and
learning services and resources most valued by our community.
The proposed 2018/2019 budget is presented in a format which demonstrates the
proposed 2018/2019 Cash Budget, the 2018/2019 Budget and anticipated final
results for the 2017/2018 Budget. A Budgeted Income Statement, Budgeted
Statement of Capital Works, Budgeted Balance Sheet and Budgeted Cash Flow
Statement are provided.
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2 Executive Summary
The Corporation has prepared a Budget for 2018/19 which is aligned to the vision in
the Library Plan 2017-2021. It seeks to maintain and improve library services that are
valued by our community. It has been developed to ensure the Corporation is
financially sustainable, while also ensuring it can deliver the strategic objectives and
actions set out in the Library Plan.
The Corporation continues to strive to contain costs through system improvements,
respects the financially constrained environment and takes opportunities to explore
additional revenue sources where possible. Expenditure in all areas has been
reviewed and is considered realistic.
This Budget projects a small surplus of $3,000 for the 2018/2019 financial year.
2.1 Key things we are funding
Strategy 1. Read, Learn and Discover
1) Increase collection resource allocation to allow for growth in e-resources while
maintaining the size of the physical collection
2) Funding to support the delivery of a Young Adult Literature festival and a
program of reading and literature events for all ages
3) Funding for the achievement of the Literacy Strategy actions including
collections and programs to support early literacy and English as an Additional
Language
Strategy 2. Connect, Collaborate and Participate
1) Additional funding for participatory programs in response to community
demand; includes funding for more Makerspace and youth programs
2) Extension of the Community Stories project
3) Support for volunteer engagement; includes funding for human resource to
support the coordination of an increased number of volunteers
Strategy 3. Experience
1) Continued investment in the People and Skills Strategy to ensure the
employment and development of a workforce with capacity to support delivery
of Library Plan objectives.
2) Significant upgrade of the Wide Area Network to ensure the network enables
the delivery of modern library services.
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4 WMRLC Draft Budget 2018/19
3) IT replacement schedule includes the staged replacement of RFID equipment
at library branches and $40K towards the RFID replacement reserve.
4) Improvements to internal signage and way finding at library branches
Strategy 4. Value
1) Funding for the third year of the Internal Audit Strategy with three audits
scheduled
2) Implement software solutions to effectively manage electronic corporate
information and records
3) Discontinue the provision of refunds for payment of lost collection items;
saving significant staff time spent processing refund claims
4) Fund the development of a strategy to support the delivery of outreach
services to the most disadvantage and vulnerable members of our community
2.2 Key Statistics
Total Income $10,989,958 (2017/18 = $10,759,159)
Total Expenditure $10,282,564 (2017/18 = $10,139,724)
Accounting Result* $707,394 Surplus (2017/18 = $619,435 Anticipated Surplus)
(Refer to Income Statement in Section 11.1)
Total Capital Works $1,957,944 (2017/18 = $1,894,450)
* The methodology used to treat discarded collection items in the accounting system was
altered in the 2016/17 financial year, resulting in a reduction in the value of the collection by
$600,000. As a consequence, depreciation is significantly less than anticipated and a large
operating surplus will be realised. However a very small cash surplus is expected.
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3 Links to the Library Plan
This section describes how the Annual Budget links to the achievement of the Library
Plan.
3.1 Planning and accountability framework
The Strategic Resource Plan is a rolling four year plan that outlines the financial and
non-financial resources that the Corporation requires to achieve the strategic
objectives described in the Library Plan. The Annual Budget is framed within the
Strategic Resource Plan, taking into account the services and initiatives which
contribute to achieving the strategic objectives specified in the Library Plan. The
Annual Report includes a report on operations, financial statements and performance
results.
The Library Plan, including the Strategic Resource Plan is required to be completed
by 30 June following the general election of Councillors. The Strategic Resource Plan
is reviewed each year in advance of the commencement of the Annual Budget
process.
3.2 Our purpose
Whitehorse Manningham Libraries – Open for Discovery
Our vision
A library open for all to discover a world of possibilities.
Our mission
To provide opportunities that inspire our community to read, learn, connect and
create.
Our values
Respect
We acknowledge our diverse community and support equal access to services by all.
Integrity
We are open, honest and accountable in the way we conduct our business.
Community Driven
Our services and the way we deliver them are shaped by the needs and aspirations
of our community.
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Collaboration
Together we develop positive relationships and partnerships that strengthen our
services and their impact.
Excellence
We aim for excellence and strive to find new ways to improve how we work and
deliver services.
3.3 Strategic objectives
The following table lists the four strategic goals as described in the Library Plan 2017-
2021
Strategic Objective Description
1. Read, Learn and Discover
Our library has a critical role in contributing to
community and individual wellbeing by
providing accessible and engaging collections,
resources and programs that encourage life-
long learning and reading for pleasure.
2. Connect, Collaborate and
Participate
Our library provides opportunities for social
connection and community engagement. We
actively invite and develop collaborative
community partnerships to achieve mutual
benefits.
3. Experience
Our libraries are important civic spaces where
all in the community should feel welcome. We
strive for excellence in all aspects of our
services to ensure a positive and responsive
experience for all customers.
4. Value We apply best practice principles to the way we
work to ensure our services continue to be
relevant and sustainable.
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3.4 Service Performance indicators – four year trends
-
500,000
1,000,000
1,500,000
2,000,000
2,500,000
3,000,000
3,500,000
2012/13 2013/14 2014/15 2015/16 2016/17
Total Loans and Branch Visits
Visits to branches Loans of collection items
131,458
136,429
143,467
149,162
2013/14 2014/15 2015/16 2016/17
Tota
l En
qu
irie
s
Financial Year
Information Enquiries responded to by staff
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8 WMRLC Draft Budget 2018/19
77 81
97
118
2014/15 2015/16 2016/17 As of January 2018
Number of volunteers
-
100,000
200,000
300,000
400,000
500,000
600,000
700,000
2013/14 2014/15 2015/16 2016/17
Public Internet Sessions
Fixed PC Wifi
67,578
69,765 69,800
71,051
2013/14 2014/15 2015/16 2016/17
Program Attendance
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Budget Analysis
4 Budget principles
The preparation of the 2018/2019 budget is informed by the following overarching
principles:
Service levels to be maintained at 2017/2018 levels with some service
improvements to be achieved through efficiency and innovation
Alternative revenue sources to be identified where possible
Alignment of budget to the delivery of the Library Plan objectives
Alignment of service delivery to community need and expectation
Review of all areas of expenditure against anticipated service needs and
market trends and containing increases as much as possible.
Warrandyte Library is funded by Manningham City Council outside of the
Regional Library Agreement and is not reflected in this budget.
5 Budget Influences
The preparation of this budget is influenced by an number of internal and external
factors including the following:
Victorian State Government rate cap amount of 2.25% for the 2018-2019
financial year.
Anticipated Enterprise Agreement increase (not finalised at the time of
preparing the budget).
Revenue from user fees and charges is forecast to decline by 1.7% compared
to the previous years budgeted revenue from this source. This sustained
downward trend is being experienced industry wide.
Contributions from member Councils are forecast to increase by 2.25% in line
with the rate cap percentage amount.
State government grant is forecast to increase by 1.8% based on the previous
years’ experience.
Based on forecasting from Trading Economics, interest rates are anticipated
to increase to 2% (currently 1.5%) by the end of 2018 and to 3% by the end of
2020.
Increased cost of collection materials, ICT, program and marketing.
Reduction in water costs associated with a correction resulting from the
identification of a supplier billing error.
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10 WMRLC Draft Budget 2018/19
Demographic trends including increased cultural diversity and ageing
population. Along with a forecast 1.78% increase in the Whitehorse
Manningham population in 2018 compared to 2017.
6 Analysis of operating budget
This section of the report analyses the operating budget including the expected
income and expenses of the Corporation for the 2018/2019 financial year.
The following notes are presented to demonstrate the key parameters and
assumptions underpinning the budget and to provide additional explanatory
information.
6.1 Income
The Corporation receives funds through member Council contributions and State
Government funding. The Corporation generates small amounts through user fees,
charges and interest earned on investments.
Income type Forecast
Actual
2017/2018
Budget
2018/2019
Variance
Council Contributions 8,428,088 8,617,720 189,632
State government Public Libraries Funding 1,705,023 1,735,713 30,690
Other Grants 125,559 127,174 1,615
Fees/Charges 331,951 378,200 46,249
Income from Investments 79,246 75,000 (4,246)
Cash Surplus c/fwd 157,133 56,151 (100,982)
Total Income 10,827,000 10,989,958 162,958
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11 WMRLC Draft Budget 2018/19
Council Contributions
Member Council contributions are in accordance with the agreed funding formula set
out in the Regional Library Agreement. The increase in contributions for the
2018/2019 financial year is 2.25% in line with the rate cap percentage amount.
Member Council Contributions Budget
2017/2018
Budget
2018/2019
Variance
City of Whitehorse 5,064,104 5,178,046 113,942
Manningham City Council 3,363,984 3,439,674 75,690
Total contributions 8,428,088 8,617,720 189,632
Grants
The State Government recurrent core and local priorities funding is forecast to
increase by 1.8%; the increase is confirmed by the State Government in June. No
increase is forecast for the Premiers Reading Challenge grant; the funding amount is
usually confirmed in December.
Income from other grants and donations is not included in the budget unless it is
known at the time of the budget preparation.
78%
16%
1% 3%
1% 1% Total Income 2018/19
Council Contributions
State government PublicLibraries Funding
Other Grants
Fees/Charges
Income from Investments
Cash Surplus c/fwd
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12 WMRLC Draft Budget 2018/19
Recurrent grants Forecast Actual
2017/2018
Budget
2018/2019
Variance
State Public Libraries - Core 1,705,023 1,735,713 30,690
State Local Priorities 89,738 91,353 1,615
Premiers Reading Challenge 35,821 35,821 0
Other 0 0 0
Total recurrent grants 1,830,582 1,862,887 32,305
User Fees and Charges ($6,500 decrease)
User fees and charges includes income from lost, damaged, overdue and reservation
charges, printing and copying, meeting room hire and sale of products. User fees and
charges have been reviewed and benchmarked against those of other public library
services. Total revenue from user fees and charges is forecast to decrease by 1.69%
compared to the previous year’s budgeted income due to the continued decline in
revenue from overdue and reservation charges.
The schedule of Fees and Charges is detailed at Appendix A.
Interest from Investments ($3,600 increase)
Interest from investments includes interest earned on available cash throughout the
year. Cash funds and cash requirements are reviewed on a daily basis to identify
funds available and required to meet the Corporation’s obligations and surplus cash
funds are identified for investment availability. The Corporation received more than
budgeted in 2017/2018 due to shopping around for the best interest rates and being
vigilant with cash flows.
6.2 Operating Expenditure
Expense types Forecast Actual
2017/2018
Budget
2018/2019
Variance
Employee costs 7,288,189 7,354,389 89,069
Grant expenditure 125,559 127,174 1,834
Other expenses 1,462,650 1,420,329 77,400
Total Expenses 8,876,399 8,901,892 168,303
Total operating expenditure is projected to increase by $168,303 over budgeted
expenditure for 2017/2018.
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Employee costs ($89,069 increase)
Employee costs comprise 82% of total operating expenditure.
Employees costs include all labour related expenditure such as salaries and on costs
including allowances, banding increments, leave entitlements, employer
superannuation guarantee, Workcover, penalty payments for weekend work, staff
development, Employee Assistance Program, relief staff to cover leave absences and
engagement of external specialist resources where required.
Employee costs are forecast to increase by 1.23% or $89,069 compared to
2017/2018. This increase relates to three key factors:
Renegotiation of the Enterprise Agreement
Anticipated changes in staff composition including the reduction in casual
shelver requirements and a small reduction in back of house requirements
Maintaining staff development expenditure at the same level as in 2017/2018
Utilities ($7,420 decrease)
A decrease in utility costs is forecast due to the following key factors:
Anticipated savings resulting from the installation by the City of Whitehorse of
energy efficient lighting at the Box Hill Library will help to offset anticipated
increases in electricity charges
82%
3%
3%
4% 7%
1%
Operating Expenditure 2018/2019
Employee costs
Utilities
Collection Resources
Information Services andTecnhology
Other expenses
Grant Expenditure
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14 WMRLC Draft Budget 2018/19
Reduction in water costs resulting from the correction in a supplier’s billing
error
Information services ($15,500 overall increase)
Included in this budget is the Library Management System, Debt Recovery and
Libraries Australia costs. The increase in this budget reflects the transfer of Libraries
Australia costs to this budget from the Collection Resources (non-capital) budget. The
Libraries Australia membership provides the Corporation with access to some
cataloguing and inter library loan services.
Information technology ($17,500 increase)
Increased to meet anticipated costs associated with the Wide Area Network upgrade
and new electronic records management system licence and support. Some savings
have been achieved through consolidation of other licences.
Collection resources (non- capital) ($21,960 increase)
Included in this budget are periodicals, newspapers and some electronic collection
resources (e-magazines, online newspapers, databases). These types of items are
non-depreciable and therefore not regarded as assets. Increased to respond to
demand for digital collection formats.
Other expenses ($38,529 overall increase) includes:
Professional services ($10,000 decrease)
Decreased following the completion of a number of risk management projects
in the previous year.
Programs ($12,000 increase)
Increased to respond to community demand for library programs and events
including Makerspace and youth programs.
Marketing ($20,000 increase)
Increased to enable improvements to internal signage at library branches and
the development of other marketing collateral.
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15 WMRLC Draft Budget 2018/19
7 Analysis of Budgeted Cash Position
This section of the report analyses the expected cash flows from the operating,
investing and financing activities of the Corporation for the 2018/19 year. Budgeting
cash flows for the Corporation is a key factor in ensuring it can meet its strategic and
financial commitments, and provides a guide to the level of capital expenditure that
can be sustained with or without using existing cash reserves.
Forecast Actual
2017-2018
Budget 2018-2019
Variance
Cash flows from operating activities
Contributions Received 8,428,088 8,617,720 (189,632)
Grants Received 1,830,582 1,862,887 (32,305)
Interest Received 76,015 76,131 (116) User Fees and Charges
489,084 438,388 50,696
10,823,769 10,995,126 (171,357)
Payments to Employees / Suppliers (8,711,263) (9,071,027) (359,764)
Net cash provided by operating activities
2,112,506 1,924,099 188,407
Cash flows from Investing Activities
Payments for Collection Resources, Equipment and Furniture
(1,896,831) (1,957,944) (61,113)
Proceeds from Sale of Equipment
Net cash provided by investing activities
(1,896,831) (1,957,944) (66,113)
Net increase (decrease) in cash held 215,675 (33,845) 249,520
Cash at the beginning of the year 3,912,390 4,128,065 (215,675)
Cash at the end of the year 4,128,065 4,094,220 33,845
Cash flows from Operating Activities
Operating activities refer to the cash generated by or used in the normal
service delivery functions of the Corporation.
Payments from Operating Activities
Employee costs comprise approximately 80% of the total cash expenditure
Small increases in payments to suppliers based on the anticipated budget
result for 2017/18.
Overall, a small increase in Net Cash Flow from Operating Activities is
anticipated
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Net Cash used in Investing Activities
The main impact on Investing Activities is increases in Collection Resources.
Cash at End of Financial Year
It is anticipated that at the end of the 2019 the total cash will slightly increase.
Restricted Funds and working Capital
The cash flow statements show that the Corporation is estimating at 30 June 2019 to
have cash and cash investments of $4,094,000 of which some investments are
restricted:
Employee Benefits – current $1,559,311
Employee Benefits – non-current $ 83,660
These funds are separately identified as restricted to ensure there are sufficient funds
to meet the Corporation’s obligations as set out in the Local Government (Long
Service Leave) Regulations 2002.
The Corporation also have monies set aside in a reserve account to assist with the
replacement of the Radio Frequency Identification (RFID) equipment.
8 Analysis of Capital Works
This section of the report analyses the planned capital expenditure budget for the
2018/19 year and the sources of funding for the capital budget.
Budgeted Statement of Capital Works
2017-2018 2018-2019 Variance
Capital Works
Collection Resources 1,616,450 1,664,944 48,494
Furniture and Equipment 58,000 58,000 0
Motor Vehicle Replacement 25,000 25,000 0
IT Replacement 195,000 210,000 15,000
Total Capital Works 1,894,450 1,957,944 63,494
Represented by:
Asset renewal expenditure 1,894,450 1,957,944 63,494
Total capital works expenditure 1,894,450 1,957,944 63,494
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17 WMRLC Draft Budget 2018/19
2017-2018 2018-2019 Variance
Sources of Funding
Council Contributions 1,536,700 1,593,754 57,054
Public Libraries Funding 357,750 364,190 6,440
Total 1,894,450 1,957,944 63,494
Collection Resources ($48,494 increase)
Collection Resources includes capital items such as physical books, audio-visual
resources, e-books and end processing costs. Collection resources are a major
asset. The Corporation continues to focus on improving the relevance and quality of
the collection by regularly evaluating collection borrowing trends and collection
condition and content and replacing the stock. Increased to accommodate CPI and a
small growth in the size of the e-book collection.
Furniture and Equipment (no increase)
This provides for the purchase of replacement furniture in branch library public areas
and upgrades required to meet current ergonomic and OH&S standards. Smaller
items of equipment are covered in the operating budget under equipment
maintenance and replacement. No increase due to budget constraints.
85%
3% 1%
11%
Capital Expenditure 2018/2019
Collection Resources
Furniture and Equipment
Motor Vehicle Replacement
IT Replacement
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Information Technology Replacement ($15,000 increase)
Information Technology capital expenditure covers the upgrade and replacement of
computer hardware, servers, RFID equipment, network hardware, printers and other
minor hardware items and the purchase of new software. The delivery of a modern
library service requires an IT network and equipment that can support service level
expectations. Increased to allow for the rolling replacement of computers, scheduled
replacement of RFID equipment and other expected cost increases.
Motor Vehicles (no increase)
The Corporation has a small fleet of cars that are used by all staff when moving
between branches or attending meetings. IT staff regularly use these vehicles when
providing support to branch libraries. The Home Library Service staff use vehicles on
a daily basis for deliveries. 1 vehicle scheduled for replacement.
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19 WMRLC Draft Budget 2018/19
9 Analysis of Budgeted Financial position
This section of the budget report analyses the movements in assets, liabilities and
equity between 2017/18 and 2018/19.
Budgeted Balance Sheet 2017-2018 2018-2019 Variance
Current assets
Cash assets 4,128,065 4,109,727 (18,338)
Receivables 66,131 65,000 (1,131)
Accrued Income 128,619 105,000 (23,619)
Prepayments 39,037 35,000 (4,037)
Total current assets 4,361,852 4,314,727 (47,125)
Non-current assets
Collection Resources 6,090,561 6,815,909 725,348
IT Equipment, Furniture and Equipment 981,058 960,156 (20,902)
Total non-current assets 7,071,619 7,776,065 704,446
Total assets 11,433,471 12,090,792 657,321
Current liabilities
Payables 667,734 585,044 (82,690)
Employee benefits 1,532,345 1,562,992 30,647
Other
Total current liabilities 2,200,079 2,148,036 (52,043)
Non-current liabilities
Employee benefits 98,517 100,487 1,970
Total non-current liabilities 98,517 100,487 1,970
Total liabilities 2,298,596 2,248,523 (50,073)
Net assets 9,134,875 9,842,269 707,394
Equity
Accumulated surplus 5,212,832 5,920,226 707,394
Members Contribution 3,922,043 3,922,043
Total equity 9,134,875 9,842,269 707,394
Cash assets reducing 2018/2019 marginally decreasing as a result of the
Living Libraries grant which increased our cash assets in 2017/2018.
The Collection amount decreased in 2016/2017 due to writing off a large
proportion of items that had been deleted from the Library Management
System but not written off in the fixed assets. The depreciation for the
collection resources has reduced also as a consequence.
Equity – the net increase in equity represents the surplus for 2017/2018.
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10 Strategic Resource Plan and Key Financial Indicators
10.1 Plan Development
A four year strategic financial plan is developed and adopted in conjunction with the
annual budget. This strategic financial plan is fundamentally premised on the
Corporation’s strategic commitment to continue the Regional Library’s operations
on a financially sustainable basis and restricting Council contribution increases
(operational and capital).
Underpinning this commitment are the following objectives:
Restricting salary increases to industry standard Enterprise Bargaining
increases and corresponding increases in statutory on-costs.
Continuous pursuit of innovation and efficiency measures to reduce other
expenditure.
Lobbying wherever possible for increased government funding.
Maintaining existing service levels with the introduction of affordable service
initiatives.
Maintaining information communication technology systems within the
parameters of affordability.
Maintaining a capital expenditure on Collection Resources that meets the
objectives of the Collection Management Strategy and industry standards.
Prudently managing financial risks relating to assets and liabilities.
Providing full, accurate and timely disclosure of financial information.
10.2 Funding Strategies
The current four year plan is presented on an accrual basis. It reflects projected
income and expenditure in both capital and operational areas.
The plan is currently premised on the following key parameters:
Indexation of Council contributions by 2.25% each year
Indexation of State Government core and local priorities grants by 1.8%
each year
No increases to the Premier’s Reading Challenge grant
Interest on investments increases by 2% each year
Operating income continues to decline in each year by 2.5%
Total operating expenditure to increase by 2% each year
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3% increase in Year One and 2% increase in Collection Resources each
subsequent year.
Increases in Information Technology in the first and third year.
No increase in Furniture and Equipment
No increase in Motor Vehicles.
The Corporation reviews these financial parameters each year as part of the annual
budget process and adjusts the financial plan accordingly wherever parameters
have changed.
The Corporation has a tight financial position and limited opportunity to identify
compensatory discretionary cost items within the operating expenditure budget to
offset lost revenue. While the Corporation is continually reviewing ways to identify
savings, the ongoing reduction of revenue from user charges and interest presents
challenges when looking to fund major projects from within current budgets.
The Corporation endeavours to identity additional income sources to delivery
extension services and programs.
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22 WMRLC Draft Budget 2018/19
10.3 Four Year Financial Plan
2018/2019 2019/2020 2020/2021 2021/2022
Financial Financial Financial Financial
Plan Plan Plan Plan
INCOME
Council Contribution
Whitehorse 5,178,046 5,286,971 5,405,928 5,527,562
Manningham 3,439,674 3,524,648 3,603,952 3,685,041
Total 8,617,720 8,811,619 9,009,880 9,212,604
Public Libraries Grant 1,735,713 1,766,956 1,798,761 1,831,139
Surplus Carried Forward (Operating) 56,151 10,000 10,000 10,000
Operating Income - WMRLC 453,200 414,880 406,410 405,971
Grants Local Priorities Funding 91,353 92,997 94,671 96,375
Premiers Reading Challenge 35,821 35,821 35,821 35,821
TOTAL INCOME 10,989,959 11,132,274 11,355,544 11,591,910
EXPENDITURE
Operational 8,901,892 9,079,930 9,261,530 9,485,017
Depreciation 1,253,498 1,398,615 1,507,298 1,660,133
Grants Local Priorities Funding 91,353 92,997 94,671 96,375
Premiers Reading Challenge 35,821 35,821 35,821 35,821
TOTAL EXPENDITURE 10,282,564 10,607,363 10,899,320 11,277,346
Net Surplus (Deficit) 707,394 524,910 456,224 314,564
Adjustments to AAS27 Budget
Depreciation (1,253,498) (1,398,615) (1,507,298) (1,660,133)
Total less depreciation 9,029,066 9,208,748 9,392,022 9,617,213
Collection Resources 1,664,944 1,698,243 1,732,208 1,766,852
Furniture & Fittings 210,000 58,000 58,000 58,000
Motor Vehicle Replacement 25,000 25,000 25,000 25,000
IT Replacement 58,000 212,000 215,000 215,000
NET SURPLUS (DEFICIT) 2,949 (59,718) (57,586) (80,156)
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23 WMRLC Draft Budget 2018/19
10.4 Financial Resources
Strategic Plan Projections
2018/2019 2019/2020 2020/2021 2021/2022
Operating result 707,394 524,910 456,224 314,564 o
Cash & Cash Investments 4,094,218 4,029,818 4,019,283 3,963,750 o
Cash Flow from Operations 1,924,099 1,927,021 2,019,673 2,009,319 +
Capital Works 1,957,944 1,993,243 2,030,208 2,064,852 +
Key to Forecast Trend: + Forecasts improvement in the Corporation's financial performance/financial position indicator o Forecasts that the Corporation’s financial performance/financial position indicator will be steady - Forecasts deterioration in the Corporation’s financial performance/financial position indicator
The key outcomes of the Plan are as follows:
Financial Sustainability
Cash and investments are forecast to reduce over the four year period to fund library
materials and technology.
Council Contributions Strategy
Indexation of member Council contributions is based on the 2018/2019 rate cap
percentage amount set by the State Government.
Capital Works Strategy
Capital expenditure over the four year period will total $8 million with $6.8 million being
spent on library collection materials and $852,000 on Information Technology. This
allows for continued renewal of the collection, and IT and RFID equipment.
Service Delivery Strategy
Existing service levels will be maintained throughout the four year period.
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24 WMRLC Draft Budget 2018/19
10.5 Non-Financial Resources
Salary expenses and on-costs represent approximately 83% of the Corporation’s total
operating expenditure (excluding depreciation).
Statement of Human Services For the years ending 30 June 2019 - 30 June 2022 Forecast
Actual Budget Strategic Resource Plan
2017/18 2018/19 2019/20 2020/21 2021/22 Staff expenditure
Employee costs –operating
7,288,189 8,617,720 8,811,619 9,009,880 9,212,602 Employee costs –capital
0 0 0 0 0
Total staff expenditure
8,617,720 8,811,619 9,009,880 9,212,602
EFT EFT EFT EFT EFT Staff numbers
Employees 74 74 74 74 74
Total staff numbers
74 74 74 74 74
11 Financial Statements
This section presents information in regard to the Financial Statements. The budget
information for the years 2018/19 to 2021/22 has been extracted from the Strategic
Resource Plan.
This section includes the following financial statements and the following budgeted
information:
Budgeted Comprehensive Income Statement
Budgeted Balance Sheet
Statement of Changes in Equity
Budgeted Statement of Cash Flows
Budgeted Statement of Capital Works
ATTACHMENT 2
25 WMRLC Draft Budget 2018/19
11.1 Budgeted Comprehensive Income Statement For the years ending 30 June 2019 – 30 June 2022
2018/19 2019/20 2020/21 2021/22
Revenue
Council Contributions 8,617,720 8,811,619 9,009,880 9,212,602
State Government Grant 1,735,713 1,766,956 1,798,761 1,831,139
Other Grants 127,174 128,818 130,492 132,196
Interest from Investments 75,000 76,500 78,030 79,591
Fees and charges 434,351 348,380 338,380 336,380
Proceeds from sale of assets 0 0 0 0
Total Revenue 10,989,958 11,132,272 11,355,543 11,591,908
Expenses
Employee costs 7,354,389 7,501,476 7,651,506 7,842,794
Financial Expenses 35,000
35,700
36,414
37,142
Utilities 253,000
258,060
263,221
268,486
Office Expenses 486,644
496,377
506,304
516,430
Collection Resources 249,960
254,959
260,058
265,260
Information Services 105,500
107,610
109,762
111,957
Information Technology 269,500
274,890
280,388
285,996
Promotions and Marketing 72,900
74,358
75,846
77,362
Headquarters Costs 75,000
76,500
78,030
79,589
Grant Expenditure 127,174 128,818 130,492 132,196
Depreciation 1,253,498 1,398,615 1,507,298 1,660,133
Written down value of assets sold 0 0 0 0
Total Expenses
10,282,564
10,607,363
10,899,319
11,277,346
Net Gain (Loss) on disposal of property, plant and equipment 0 0 0 0
PROFIT/(DEFICIT) FOR THE PERIOD
707,394
524,909
456,224
314,562
ATTACHMENT 2
26 WMRLC Draft Budget 2018/19
11.2 Budgeted Balance Sheet For the years ending 30 June 2019 – 30 June 2022
2018/19 2019/20 2020/21 2021/22
Current Assets
Cash assets
4,109,727
4,024,819
4,017,219
3,963,750
Receivables 65,000 65,000 65,000 65,000
Prepayments 105,000 105,000 105,000 105,000
Accrued Income 35,000 35,000 35,000 35,000
Total Current assets 4,314,727 4,229,819 4,222,219 4,168,750
Non-Current assets
Collection Resources 6,815,909 7,432,719 7,977,831 8,408,256
IT Equipment, Furniture and Equipment 960,156 936,154 913,952 888,246
Total Non-Current assets 7,776,065 8,368,873 8,891,783 9,296,502
Total Assets 12,090,792 12,598,692 13,114,002 13,465,252
Current Liabilities
Payables 585,044 534,763 559,913 561,988
Provisions 1,562,992 1,594,252 1,626,137 1,658,659
Other 0 0 0 0
Total Current Liabilities 2,148,036 2,129,015 2,186,050 2,220,647
Non-Current Liabilities
Provisions 100,487 102,497 104,547 106,638
Other 0 0 0 0
Total Non-Current Liabilities 100,487 102,497 104,547 106,638
Total liabilities 2,248,523 2,231,512 2,290,597 2,327,285
Net assets 9,842,269 10,367,180 10,823,405 11,137,967
Equity
Accumulated surplus 5,920,226 6,445,137 6,901,362 7,215,924
Members Contribution on Formation 3,922,043 3,922,043 3,922,043 3,922,043
Total equity 9,842,269 10,367,180 10,823,405 11,137,967
ATTACHMENT 2
27 WMRLC Draft Budget 2018/19
11.3 Statement of Changes in Equity
For the years ending 30 June 2019 – 30 June 2022
Accumulated Members
Total Surplus Contribution
2018 Budget
Balance at beginning of the financial year 8,465,069 4,473,026 3,992,043
Surplus (deficit) for the year 669,807 669,807 0
Balance at end of the financial year 9,134,876 5,142,833 3,992,043
Budget 2019
Balance at beginning of the financial year 9,134,876 5,142,833 3,992,043
Surplus (deficit) for the year 707,393 707,393 0
Balance at end of the financial year 9,842,269 5,850,226 3,992,043
2020 - SRP
Balance at beginning of the financial year 9,842,269 5,850,226 3,922,043
Surplus (deficit) for the year 524,911 524,911 0
Balance at end of the financial year 10,367,180 6,375,137 3,922,043
2021 - SRP
Balance at beginning of the financial year 10,367,180 6,375,137 3,922,043
Surplus (deficit) for the year 456,225 456,225 0
Balance at end of the financial year 10,823,405 6,831,362 3,922,043
2022 - SRP
Balance at beginning of the financial year 10,823,405 6,831,361 3,922,043
Surplus (deficit) for the year 314,562 314,562 0
Balance at end of the financial year 11,137,967 7,145,923 3,922,043
ATTACHMENT 2
28 WMRLC Draft Budget 2018/19
11.4 Budgeted Statement of Cash Flows For the years ending 30 June 2019 – 30 June 2022
2018/19 2019/20 2020/21 2021/22
Cash flows from Operating Activities
Contributions Received 8,617,720 8,811,618 9,009,880 9,212,603
Grants Received 1,735,713 1,766,956 1,798,761 1,831,139
Interest received 76,131 76,500 78,030 79,591
Library Fees 438,388 348,380 338,380 336,380
Other Grants 127,174 128,818 130,492 132,196
Payments to Employees/Supplies (9,071,027) (9,205,251) (9,335,870) (9,582,590)
Net cash provided by operating activities 1,924,099 1,927,021 2,019,673 2,009,319
Cash flows from Investing Activities Payments for Library Collection, Furniture
and IT Equipment (1,957,944) (1,991,423) (2,030,208) (2,064,852)
Proceeds from sale of collection Resources and furniture 0 0 0 0
Net cash from Investing Activities (1,957,944) (1,991,423) (2,030,208) (2,064,852)
Cash flows from Financing Activities Proceeds from borrowings 0 0 0 0
Repayment of borrowings 0 0 0 0
Net cash from Financing Activities 0 0 0 0
Net increase (decrease) in cash held (33,845) (64,402) (10,535) (55,533)
Cash at the beginning of the year 4,128,065 4,094,220 4,029,818 4,019,283
Cash at the end of the year 4,094,220 4,029,818 4,019,283 3,963,750
Reconciliation of Operating Result and Net Cash Flows from Operating Activities For the year ending 30 June
Net surplus (deficit) from operations 707,394 524,909 456,225 314,563
Depreciation 1,253,498 1,398,615 1,507,298 1,660,133
(Profit) Loss on sale of Library Collection, Furniture and IT Equipment 0 0 0 0 Net movement in current assets and liabilities (36,793) 3,497 56,150 34,623
Net cash inflow (outflow) from operating activities 1,924,099
1,927,021 2,019,673
2,009,319
Cash Resourcing
Cash Assets 4,094,218 4,029,818 4,019,283 3,963,750 Less Bank Overdraft at the end of the year 0 0 0 0
Cash at end of the year 4,094,218
4,029,818 4,019,283
3,963,750
ATTACHMENT 2
29 WMRLC Draft Budget 2018/19
11.5 Budgeted Statement of Capital Works For the years ending 30 June 2019 – 30 June 2022
2018/19 2019/20 2020/21 2021/22
Collection Resources 1,664,944 1,698,243 1,732,208 1,766,852
IT Replacement 210,000 212,000 215,000 215,000
Motor Vehicles Replacement 25,000 25,000 25,000 25,000
Furniture and Equipment 58,000 58,000 58,000 58,000
Total capital works
1,957,944
1,993,243
2,030,208
2,064,852
Represented by:
Asset Renewal 1,957,944 1,993,243 2,030,208 2,064,852
Total capital works
1,957,944
1,993,243
2,030,208
2,064,852
Reconciliation of net movement in Collection Resources Equipment and Furniture
2018/19 2019/20 2020/21 2021/22
The movement between the previous year and the current year in Library Collections; Furniture and IT Equipment as shown in the Balance Sheet links to the following items;
Total capital works
1,957,944
1,993,243
2,030,208
2,064,852
Asset revaluation movement 0 0 0 0
Depreciation and amortisation
(1,253,498)
(1,398,615)
(1,507,298)
(1,660,133)
Written down value of assets sold 0 0 0 0
Net movement in Library Collection, Furniture and IT Equipment
704,446
594,628
522,910
404,719
ATTACHMENT 2
30 WMRLC Draft Budget 2018/19
Appendix A: Fees and Charges Schedule
2017/2018 Draft 2018/2019 Notes
Overdue Charges - Adult items 35c per day 35c per day Increased in
2016/17
Overdue Charges - Children items 20c per day 20c per day
Maximum Overdue charge per item cost of item cost of item
Maximum Overdue charge per Member no limit no limit
Lost/totally damaged items Item cost plus $15.10 admin
charge
Item cost plus $15.10 admin
charge
Refund of payment for lost items Refund item cost No refund Policy change
Damaged Items (minor repairs inc. RFID tag replacement) $5.10 $5.20
Increase
Debt Collection Charge (plus debt) $17.20 $17.50 Increase
Replacement Membership Card $3.50 $3.50
Reservations $2.20 $2.20
Inter Library Loans – standard fee $11.10 $11.10 Inter Library Loans – from State, University or Special Library $27.50 $27.50
Fax Services - Victoria
$3.00 first page, $1.10 ea following
page
$3.00 first page, $1.10 ea following
page
Fax Services - Interstate
$3.30 first page, $1.10 ea following
page
$3.30 first page, $1.10 ea following
page
Fax Services - International
$5.00 first page, $3.30 ea following
page
$5.00 first page, $3.30 ea following
page
Received fax 50c per page 50c per page
Photocopying/Printing - Black & White A4 30c A3 50c
A4 30c A3 50c
Photocopying/Printing - Colour A4 $1.30 A3 $2.00
A4 $1.30 A3 $2.00
Scanning 20c per page 20c per page
Library Bags $2.00 $2.00
Earbuds $2.00 $2.00 USB 8G $6.50 $8.00 Increase
Page markers $1.00 New product
Microfiche Reader Printing A4 30c A3 50c
A4 30c A3 50c
Meeting Rooms Set Up fees $52 per session $52 per session
Meeting Room AV Hire $42 per session $42 per session
Training Room PC Setup $165 per hour $165 per hour
Training Room PC Hire per session $14.50 per PC $14.50 per PC
Meeting Room/Training Room Hire
1.4% increase Community &
Commercial Rates
2% increase Community &
Commercial Rates
Increase
Administration fee for room bookings $25.00 $25.50 Increase Booking fee: Children’s School Holiday Programs
Up to $4.00 per child
Up to $4.00 per child
Excludes regular programs
Booking fee: Adult Programs – selected special events and high profile authors
Up to $10.00 per booking
Up to $10.00 per booking
ATTACHMENT 2
31 WMRLC Draft Budget 2018/19
Appendix B: Budget Process
This section lists the budget processes to be undertaken in order to adopt the Budget in
accordance with the Local Government Act 1989 (the Act) and Local Government (Planning
and Reporting) Regulations 2014 (the Regulations).
Under the Act, the Corporation is required to prepare and adopt an annual budget for each
financial year. The budget is required to include certain information about the fees and
charges that the Corporation intends to levy as well as a range of other information required
by the Regulations which support the Act.
The 2017/18 budget, which is included in this report, is for the year 1 July 2017 to 30 June
2018 and is prepared in accordance with the Act and Regulations. The budget includes
financial statements being a Comprehensive Income Statement, Balance Sheet, Statement of
Changes in Equity, Statement of Cash Flows and Statement of Capital Works. These
statements have been prepared for the year ending 30 June 2018 in accordance with the Act
and Regulations, and consistent with the annual financial statements which are prepared in
accordance with Australian Accounting Standards. The budget also includes information
about the fees and charges to be levied, the capital works program to be undertaken, the
human resources required, and other financial information the Board requires in order to
make an informed decision about the adoption of the budget.
In advance of preparing the budget, officers first review and update the Corporation's long
term financial projections. Financial projections for at least four years are ultimately included
in the Corporation’s Strategic Resource Plan, which is the key medium-term financial plan
produced by the Corporation on a rolling basis. The preparation of the budget, within this
broader context, begins with officers preparing the operating and capital components of the
annual budget during December to February.
With the introduction of the State Government Rate Capping legislation in 2015, the annual
rate cap percentage amount forms the basis of the indexation of the member Councils annual
contributions to the regional library.
A ‘proposed’ budget is prepared in accordance with the Act and submitted to the Board
meeting in February whereby the Board approves the draft budget, in principle, which is then
forwarded to the member Councils and advertised publically. Following Council deliberations,
the Board considers the budget, having made any necessary changes.
ATTACHMENT 2
32 WMRLC Draft Budget 2018/19
The draft budget is placed on public exhibition seeking submissions from the community. Any
person has a right to make a submission on any proposal contained in the budget under
Section 221 of the Act.
The final step is for the Board to adopt the budget after receiving and considering any
submissions from interested parties. The budget is required to be adopted by 30 June and a
copy submitted to the Minister within 28 days after adoption. The key dates for the budget
process are summarised below:
Minister of Local Government announces maximum rate
increase.
Dec
Budget preparation by Corporation officers Dec/Feb
Proposed budget presented to the Board for approval to
advertise
February
Public notice advising intention to adopt budget 2018
Budget available for public inspection and comment April/May
Submission period closes (28 days) May
Budget and submissions presented to the Board for
adoption
May
Copy of adopted budget submitted to the Minister June