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FB CTE MINS 5 MARCH 2013

MINUTES

FINANCE AND BUDGET COMMITTEE

5 MARCH 2013

THESE MINUTES ARE HEREBY CERTIFIED AS CONFIRMED

PRESIDING MEMBER’S

SIGNATURE

-----------------------------------

DATE:----------------------------



INDEX

Item Description Page

FB46/13 DECLARATION OF OPENING 1

FB47/13 APOLOGIES AND MEMBERS ON LEAVE OF ABSENCE 1

FB48/13 CONFIRMATION OF MINUTES 1

FB49/13 CORRESPONDENCE 2

FB50/13 DISCLOSURE OF MEMBERS’ INTERESTS 2

FB51/13 FINANCIAL STATEMENTS AND FINANCIAL ACTIVITY STATEMENT FOR THE PERIOD ENDED 31 JANUARY 2013 2

FB52/13 WRITE-OFF OF UNRECOVERABLE PARKING FINES AND COSTS 3

FB53/13 REVIEW OF THE CASH BACKED RESERVES OF THE CITY OF PERTH 6

FB54/13 REVIEW OF THE CITY OF PERTH VISION2029 STRATEGIC COMMUNITY PLAN AND CORPORATE BUSINESS PLAN 12

FB55/13 LORD MAYOR TRAVEL TO EUROPEAN CONFERENCES 15

FB56/13 MOTIONS OF WHICH PREVIOUS NOTICE HAS BEEN GIVEN 18

FB57/13 GENERAL BUSINESS 18

FB58/13 ITEMS FOR CONSIDERATION AT A FUTURE MEETING 18

FB59/13 CLOSE OF MEETING 18


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Minutes of the meeting of the City of Perth Finance and Budget Committee held in Committee Room 1, Ninth Floor, Council House, 27 St Georges Terrace, Perth on Tuesday, 5 March 2013.

MEMBERS IN ATTENDANCE

Cr Davidson - Presiding Member Cr Butler Cr Adamos

OFFICERS

Mr Stevenson - Chief Executive Officer Mr Mianich - Director Corporate Services Mr Mileham - Director Planning and Development Mr Dunne - Director Service Units Mr Forster - Director Business Units Mr Berry - Manager Finance Mr White - Chief Accountant Mr Mulcahy - Senior Management Accountant Ms Payne - Corporate Planning Coordinator Ms Fogg - Governance Coordinator Ms Honmon - Governance Officer

FB46/13 DECLARATION OF OPENING

The Presiding Member declared the meeting open at 4.00pm.

FB47/13 APOLOGIES AND MEMBERS ON LEAVE OF ABSENCE

Nil

FB48/13 CONFIRMATION OF MINUTES

Moved by Cr Butler, seconded by Cr Adamos That the minutes of the meeting of the Finance and Budget Committee held on 12 February 2013 be confirmed as a true and correct record. The motion was put and carried


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The votes were recorded as follows: For: Crs Davidson, Adamos and Butler Against: Nil

FB49/13 CORRESPONDENCE

Nil

FB50/13 DISCLOSURE OF MEMBERS’ INTERESTS

Nil

FB51/13 FINANCIAL STATEMENTS AND FINANCIAL ACTIVITY STATEMENT FOR THE PERIOD ENDED 31 JANUARY 2013

BACKGROUND:

FILE REFERENCE: P1014149-25 REPORTING OFFICER: Ian Berry, Manager Finance RESPONSIBLE DIRECTOR: Robert Mianich, Director Corporate Services DATE: 20 February 2013 MAP / SCHEDULE: Schedule 1 – Financial Statements and Financial Activity

Statement for the seven months ended 31 January 2013 with Graphs and Commentary

The Local Government (Financial Management) Regulations 1996 require the City to produce monthly Financial Statements, including a Financial Activity Statement in rate setting format. LEGISLATION / STRATEGIC PLAN / POLICY: Legislation

Section 6.4(1) and (2) of the Local Government Act 1995 Regulation 34(1) of the Local Government (Financial Management) Regulations 1996

Strategic Plan City Management Principles

The Finances of the City will be Managed Prudently. DETAILS: The Financial Activity Statement is presented together with a commentary on variances from the budget.


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FINANCIAL IMPLICATIONS: There are no direct financial implications arising from this report.

COMMENTS:

The Financial Activity Statement commentary compares the actual results for January 2013 with the revised budget as approved by Council at its meeting held on 11 December 2012. Moved by Cr Adamos, seconded by Cr Butler That the Council approves the Financial Statements and the Financial Activity Statement for the period ended 31 January 2013 as detailed in Schedule 1. The motion was put and carried The votes were recorded as follows: For: Crs Davidson, Adamos and Butler Against: Nil

FB52/13 WRITE-OFF OF UNRECOVERABLE PARKING FINES AND COSTS

BACKGROUND:

Offences under the City of Perth Parking Local Law result in a parking infringement being issued. Regardless of the collection processes in place at the Fines Enforcement Registry, a percentage of the infringements issued cannot be enforced. It has been practice at the City of Perth to write-off infringements with an offence date equal to or greater than five years. The Fines Enforcement Registry also periodically

FILE REFERENCE: P1001812-3 REPORTING OFFICER: Dennis Stevens, Manager Compliance Services RESPONSIBLE DIRECTOR: Garry Dunne, Director Service Units DATE: 20 February 2013 MAP / SCHEDULE: N/A


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advises the City of Perth of Category 3 non-enforceable infringements recommended for write-off, through the issue of Non-enforceable Fines and Costs reports.

LEGISLATION / STRATEGIC PLAN / POLICY:

Legislation Section 6.12(1)(c) of the Local Government Act 1995 Strategic Plan City Management Principles

The finances of the City will be managed prudently. Policy Policy No and Name: 9.1 – Budget Policies

DETAILS:

Where possible, infringements that remain outstanding after two months are lodged with the Fines Enforcement Registry (FER) for collection or to commence enforcement action. Enforcement action normally relates to the suspension of either the owner’s driver’s licence or the vehicle registration. Offenders who have a parking infringement lodged with the FER are liable for additional costs to the City associated with seeking payment. After the matter has been lodged with the FER for a minimum period of five years since the offence date, and all collection action by the FER has failed to obtain payment, the matter is retired by FER and no further recovery action is taken. The FER considers that monetary recovery is negligible and recommends that the matter be written-off. The total maximum value of infringements older than five years that remain outstanding as 20 February 2013 (issued between 1 January 2008 and 31 March 2008), is $133,968.04. This is 6.56% of the total value of infringements and costs issued for the same period. The FER also determine some infringements to be non-enforceable due to administrative or legislative reasons and a recommendation is made to the City to write-off these particular infringements. This recommendation is received in the form of “Non-enforceable Fines and Costs – Category 3” reports prepared by the FER periodically. Category 3 reasons for non-enforcement include, but are not limited to: An alleged offender is deceased. The remaining balance of a part-paid infringement is uneconomical to enforce. There are insufficient details to enforce the fine as determined under the

regulation by which the FER operates. The City has received the FER Quarter 2 2012/13 Non Enforceable Fines and Costs – Category 3 report for enforcement activity during the period. This report has been reconciled against the parking infringements held by the City of Perth and resulted in the confirmation of $8,385.10 of infringements recommended by the FER to be


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written off. This represents 0.16% of all parking fines and costs currently registered by the City at the FER. Each year the City makes a provision for doubtful debts within its budget to allow for unrecoverable parking infringements. The current amount provided for is $2,726,202.94.

FINANCIAL IMPLICATIONS:,

ACCOUNT NO: 1BS0001591 – Provision for Doubtful Debt

BALANCE TO DATE: $ 2,726,202.94 PROPOSED COST: $ 133,968.04

$ 8,385.10 BALANCE: $ 2,583,849.80 All figures quoted in this report are exclusive of GST.

COMMENTS:

It is recommended that the Council resolves to write-off outstanding parking infringements that have either been with the FER for a period of no less than five years (in this instance, for the quarter 1 January 2008 through 31 March 2008), and infringements deemed as non-enforceable Category Three write offs by the FER. Moved by Cr Butler, seconded by Cr Adamos That Council approves: 1. write-off of $133,968.04 (excluding GST), representing unrecoverable

parking fines and costs issued between 1 January 2008 and 31 March 2008, referred to the Fines Enforcement Registry for collection that remains outstanding;

2. write-off of $8,385.10 (excluding GST), representing the Fines

Enforcement Registry 2012/13 Category Three non-enforceable fines and costs for Quarter Two of the 2012/13 financial year (1 January 2008 to 31 March 2018).

The motion was put and carried The votes were recorded as follows:- For: Crs Davidson, Adamos and Butler Against: Nil


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FB53/13 REVIEW OF THE CASH BACKED RESERVES OF THE CITY OF PERTH

BACKGROUND:

FILE REFERENCE: P1027617 REPORTING OFFICER: Ian Berry, Manager Finance RESPONSIBLE DIRECTOR: Robert Mianich, Director Corporate Services DATE: 25 February 2013 MAP / SCHEDULE: N/A The purpose of this report is to review the adequacy of the reserves, to identify any redundant reserves, to contemplate new reserves that may be required and to investigate whether any reserves require rationalisation or consolidation. The reserves were last reported in detail in January 2008. This report does not deal with the non cash-backed asset revaluation reserve. As at 31 December 2012, the following reserves were in existence totalling $59,556,285.

Purpose of Reserve Fund

Balance

30/06/2012

Transfer from Accumulated Surplus YTD

Transfer to Accumulated Surplus YTD

Balance

31/12/2012 $ $ $ $ Refuse Disposal and Treatment 6,377,496 256,615 - 6,634,111Concert Hall - Refurbishment and Maintenance 4,476,288 179,925

(18,000) 4,638,213

Asset Enhancement 28,889,402 727,375 (14,198,938) 15,417,839Community Recreation Centres / Facilities 344,752 13,871

- 358,623

Street Furniture Replacement 876,399 29,880 (542,529) 363,750Art Acquisition 124,228 4,998 - 129,226Heritage Incentive 654,230 26,324 - 680,554Parking Facilities Development 31,056,193 1,028,051 (1,515,439) 30,568,805David Jones Bridge 224,993 9,053 - 234,046Bonus Plot Ratio 510,573 20,545 531,118 73,534,554 2,296,637 (16,274,906) 59,556,285

Reserves which totalled $128.9 million in June 2007 have been eroded considerably over the past five years with heavy funding of new infrastructure and a contribution of $25.6 million to the Perth City Link project. The current Strategic Financial Plan demonstrated further reduction in the level of reserves to a projected low point of $11.9 million in June 2015 with appropriation and more restrained capital spending funding resulting in a recovery to $27.1 million in the following year.


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Legislation Local Government Act 1995 Local Government (Financial Management) Regulations 1996

Strategic Plan City Management Principle

The finances of the City will be managed prudently.

DETAILS:

The major challenge with the City’s reserves is that calls on them will extinguish certain reserves, particularly the Asset Enhancement Reserve, which is used to fund large projects, whereas healthy balances will simultaneously remain in other reserves. In order to assess the viability of the City’s reserves, it is necessary to examine the purpose of each reserve and its current and projected status. To change the purpose of a reserve involves entering into consultation with ratepayers involving advertisements and responses over a period lasting around three months. Changes of purpose can be effected during the budget process with inclusion of new purposes more expediently. Refuse Disposal and Treatment Reserve This Reserve allows for the development, construction and purchase of facilities and plant for the treatment transportation and treatment of non-industrial refuse. It is also utilised to assist with the phasing in of significant increases in standard rubbish service charges anticipated when recycling processes are extended.

Balance as at 31 December 2012 $ 6,634,111 Anticipated utilisation – capital funding $ (544,000) – operating deficit $ 698,000 Investment earnings in six months to 30 June 2013 $ 120,189 Projected balance at 30 June 2013 $ 5,512,300

The funds set aside to support the increase in fees arising from the introduction of the new composting plant are now being utilised. The sanitation deficits are to be absorbed through utilisation of the reserve. It is anticipated at this stage that this subsidy will amount to approximately $4,018,000 over three years from 2013/14. This reserve will be extinguished in 2015/16.


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Concert Hall – Refurbishment and Maintenance Reserve This Reserve provides for the future maintenance of the Perth Concert Hall and the replacement of existing plant, furniture and carpets. The Reserve also provides for the design and construction of the new West Australian Symphony Orchestra (WASO) facility.

Balance as at 31 December 2012 $ 4,638,213 Investment earnings in six months to 30 June 2013 $ 90,877 Drawdown anticipated to 30 June 2013 $ (188,722) Balance at 30 June 2013 $ 4,540,368

The Perth Concert Hall was built in 19731 and this Reserve is used to fund the cost of major infrastructure replacement and capital expenditure. In November 2010 the Council gave in-principle support for a new home for WASO at the Perth Concert Hall site. The State Government is currently undertaking a feasibility study into a new home for WASO. Asset Enhancement Reserve This Reserve provides for the enhancement, replacement, refurbishment and purchase of new assets or project works in the city. The project works funded may not necessarily belong to the City but may be carried out for the ultimate benefit of the City.

Balance as at 31 December 2012 $ 15,417,839 Drawdown anticipated in six months to 30 June 2013 $ (4,659,741) Appropriation per budget $ 5,000,000 Investment earnings in six months to 30 June 2013 $ 311,759 Projected balance at 30 June 2013 $ 16,069,857

The Reserve is close to becoming exhausted with a commitment in 2013/14 of $13 million representing the City’s final cash contribution to the Perth City Link project. Further appropriations are required to maintain this Reserve at a desired and useful level. Community Recreation Centres and Facilities Reserve This Reserve provides for the development of Community Recreation Centres and Facilities.

Balance as at 31 December 2012 $ 358,623 Drawdown anticipated $ - Investment earnings in six months to 30 June 2013 $ 7,172 Balance at 30 June 2013 $ 365,795

1 Typographical error amended. 1963 deleted.


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This Reserve should be fully utilised in 2013/14 as partial funding for a suitable capital project(s). This reserve will be exhausted through usage. Street Furniture Replacement Reserve This Reserve is funded mainly out of a street furniture advertising contract which currently generates $45,000 per annum and provides for the purchase of the City’s street furniture including water features and public art.

Balance as at 31 December 2012 $ 363,750 Drawdown anticipated in six months to 30 June 2013 $ (257,471) Investment earnings in six months to 30 June 2013 $ 4,700 Balance at 30 June 2013 $ 110,979

This is a minor reserve following its utilisation as part of the funding for the Forrest Place upgrade. It is recommended that the balance be utilised in 2013/14 as partial funding for the street furniture component of a suitable project to extinguish the reserve. Subject to contract continuity, the income of $45,000 can be reattached to the Asset Enhancement Reserve in the future. There is no material purpose in retaining this reserve and it is expected to be exhausted through usage. Art Acquisition Reserve This Reserve provides for future additions to the art collection of the City. It is funded from the sale of artworks and the transfer of the unexpended allocation from art acquisitions.

Balance as at 31 December 2012 $ 129,226 Drawdown anticipated in six months to 30 June 2013 $ (60,000) Appropriation per budget $ 60,000 Investment earnings in six months to 30 June 2013 $ 2,585 Balance at 30 June 2013 $ 131,811

This Reserve should be maintained. Heritage Incentive Reserve This Reserve provides the funding of heritage incentives to benefit properties on the City of Perth Register of Places of Cultural Heritage Significance.

Balance as at 31 December 2012 $ 680,554 Drawdown anticipated in six months to 30 June 2013 $ (560,000) Appropriation to be allocated $ 400,000 Investment earnings in six months to 30 June 2013 $ 11,611 Balance at 30 June 2013 $ 592,165

It is prudent to maintain this Reserve as the grants are often for works involving capital expenditure which may occur beyond the financial year that the funding is committed.


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Parking Facilities Development Reserve This Reserve enables parking facilities within the City and parking equipment to be developed and purchased.

Balance as at 31 December 2012 $ 30,568,805 Drawdown projected to 30 June 2013 $ (3,373,634) Investment earnings in six months to 30 June 2013 $ 577,640 Balance at 30 June 2013 $ 27,772,811

This Reserve has been built up over a number of years and is required to fund investment in parking facilities, particularly new multi-storey parking sites. The City has several open-air car parks which are under-utilised in comparison to their valuations. As financial feasibilities and demand studies permit, consideration should be given to optimising the value of these properties through redevelopment. Traditional funding of major new parking projects is based on 50% borrowings and 50% from the Parking Facilities Development Reserve. To accommodate anticipated demand for new facilities in the future, it is recommended that this Reserve be built up by appropriation of part of future parking profits. This Reserve should be retained. David Jones Bridge Reserve This Reserve provides funding for major repairs, renovations or replacement of the pedestrian bridge over Murray Street Mall.

Balance as at 31 December 2012 $ 234,056 Drawdown anticipated in six months to 30 June 2013 $ (25,000) Appropriation $ 42,000 Investment earnings in six months to 30 June 2013 $ 4,851 Balance at 30 June 2013 $ 255,907

This Reserve serves the purpose of segregating unutilised maintenance payments on the pedestrian bridge and provides for its eventual replacement or refurbishment. This Reserve should be retained. Bonus Plot Ratio Reserve This Reserve was established to hold contributions in respect of Bonus Plot Ratio entitlements pending expenditure on streetscape improvements and / or public art.

Balance as at 31 December 2012 $ 531,118 Investment earnings in six months to 30 June 2013 $ 10,622 Balance at 30 June 2013 $ 541,740

A significant proportion of this Reserve is allotted to social and civic infrastructure at Point Fraser. This Reserve is yet to be utilised. A review of the Reserve is necessary as it can only be utilised to fund projects in the approximate vicinity of the development that relates to the bonus plot ratio paid. Priority should be given to extinguishing this Reserve over the next two to three years.


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New Reserves The Department of Local Government interpretation of the Local Government Act and Financial Management Regulations implies that in order for non-current liabilities to be taken into account in rate setting statements, they must be placed into separate cash backed reserves. If this is accepted, it will involve the creation of two new reserves being Non-Current Long Service Leave and a Provision for Replacement of the Perth Convention and Exhibition Centre Infrastructure Equipment. Reserve balances taken up as liabilities on these accounts at 31 December 2012 amount to $890,263 and $3,591,190 respectively and would be transferred out of Accumulated Surplus.

FINANCIAL IMPLICATIONS:

Financial implications are inherent in the report. This review will contribute to the Strategic Financial Plan and assist in the efficient funding of especially large capital projects, providing prudent reserves to assist with the future development of the City’s assets.

COMMENTS:

The City must use its funds in the most effective manner. The Asset Enhancement Reserve will be unable to fund major projects after 2013/14 and priority will be given to increasing appropriations to this reserve in the Strategic Financial Plan. The Parking Facilities Development Reserve, subject to strategic and budgeting considerations, should be maintained as a substantial reserve to fund investment in the parking business and appropriations to this reserve will also be considered in the Strategic Financial Plan. Certain smaller reserves will be exhausted through expenditure as noted in the report. Moved by Cr Adamos, seconded by Cr Butler That Council receives this report on the review of cash backed reserves which are a major source of funding for Council projects, the sustainable use of which forms an important part of the financial strategy of the City. The motion was put and carried The votes were recorded as follows: For: Crs Davidson, Adamos and Butler Against: Nil


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FB54/13 REVIEW OF THE CITY OF PERTH VISION2029 STRATEGIC COMMUNITY PLAN AND CORPORATE BUSINESS PLAN

BACKGROUND:

FILE REFERENCE: P1028706 REPORTING OFFICER: Tiffany Payne, Corporate Planning Coordinator RESPONSIBLE DIRECTOR: Gary Stevenson, Chief Executive Officer DATE: 25 February 2013 MAP / SCHEDULE: N/A In 2008, the City of Perth undertook a community engagement process to seek community views about their vision for the future of the city and ideas about how that vision could be implemented. The outcome of the process was a shared vision articulated in City of Perth Vision2029. Given four years have passed since the Vision document was developed, it is considered timely to review it with the community to confirm it remains relevant and continues to reflect the community’s aspirations. The review is also timely as the State Government has recently introduced the Integrated Planning and Reporting Framework which provides local government with comprehensive guidance and legislation for undertaking strategic and corporate planning. The outcomes of the review, as required by the legislation, will be a Strategic Community Plan and a Corporate Business Plan (previously Four Year Strategic Plan). The City of Perth will use Vision2029 as the basis for the development of the Strategic Community Plan. A suite of supporting strategies is also required and includes a Long Term Financial Plan, Workforce Plan and Community Asset Management Plan. The Framework and legislation require these plans to be in place by 1 July 2013 with the understanding that strategic and corporate planning is an evolving process and local governments will continue to improve over time.


Legislation Section 5.56 of the Local Government Act 1995 Section 19C and 19D of the Local Government (Administration) Regulations 1996

Strategic Plan Leadership The City of Perth has a distinct leadership role as the capital city of Western Australia, providing open and accountable government and playing an integral role in the lives of the people that make up the city’s community.


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Policy Policy No and Name: 1.2 – Community Consultation

9.1 – Budget Policies As the City of Perth continues to mature in strategic and corporate planning it will be necessary to review the abovementioned policies, amongst others, to ensure they are consistent with and meet the requirements of the framework.

DETAILS:

At the Strategic Workshop held on 7 February 2013, Elected Members were asked to consider whether the Vision2029 document reflects current community aspirations and provide input as to the extent of the review required. It was agreed that the general direction outlined in Vision2029 remains valid, however, there has been significant change within the City of Perth since the consultation was undertaken in 2008 and there may be a need to change the emphasis of some aspects and more clearly articulate others. A summary of Elected Member feedback as follows: Increase focus on economic development – business attraction and investment,

diversification;

Maximise benefits of new developments (Elizabeth Quay, Perth City Link, Riverside);

Environment – increase the focus on residential as well as business community;

Increase focus on the night-time economy;

Broaden some aspects to reflect city wellness and lifestyle;

River connection;

Place making and activation;

Integrated Movement Network – identification of light rail as a transport mode;

Broaden focus on Civic leadership; and

Increased focus on the City of Perth’s role as a capital city.

The feedback gathered from Elected Members and summarised above, will provide guidance for the topics to be discussed as part of the community engagement process. Given the extent of the consultation undertaken in 2008 it is not considered necessary or appropriate to undertake a new community visioning process and instead use the existing Vision2029 as a basis for the review. However, it is important to note that the abovementioned feedback is preliminary and not necessarily exhaustive and the Strategic Community Plan will be developed using an open engagement process with the community. Community engagement is a requirement of the Integrated Planning and Reporting Framework and associated legislation. A variety of community engagement methods, including online and face to face consultation, are proposed to ensure a broad range of people are involved and the opportunity to provide input is open and accessible. A project specific website will be


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set up as the City’s primary point of contact for information collection. The website will provide the community with the opportunity to contribute in a number of ways such as discussion forums, surveys and polls. The Vision2029 website will be supported by a social media campaign, ongoing media relations and a marketing strategy that seeks to maximise the use of existing publications and communication tools. To complement the broad engagement outlined above, specific stakeholders, including those that participated in the development of Vision2029 in 2008, will be targeted and also invited to be involved. A series of face to face workshops will be run with identified segments of the community which may include retailers, residents and community service providers.


A cost of $103,600 has been budgeted for the current financial year to undertake the development of the Strategic Community Plan and Corporate Business Plan. This includes all costs associated with the process such as communications, printing and advertising, project specific website, workshops and events, and consultant costs as required.

COMMENTS:

The output of the Vision2029 community engagement and review process will be a Strategic Community Plan which meets the legislative requirements and sets the direction for the City of Perth and the community. It is critical that the community is given the opportunity to be involved in the development of the Strategic Community Plan in an open and transparent fashion. Whilst the recommendation asks Council to note the process for the review of Vision2029 and development of a Strategic Community Plan and Corporate Business Plan, should Council wish to provide guidance on a particular aspect it should consider doing so through an amended recommendation. Moved by Cr Butler, seconded by Cr Adamos That Council notes the community engagement strategy and approach outlined in this report for the review of City of Perth Vision2029 and the development of a Strategic Community Plan and Corporate Business Plan. The motion was put and carried The votes were recorded as follows: For: Crs Davidson, Adamos and Butler Against: Nil


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FB55/13 LORD MAYOR TRAVEL TO EUROPEAN CONFERENCES

BACKGROUND:

FILE REFERENCE: P1028374 REPORTING OFFICER: Wendy Earl, Manager Economic Development RESPONSIBLE DIRECTOR: Martin Mileham, Director Planning and Development DATE: 28 February 2013 MAP / SCHEDULE: N/A This report was distributed as a late item by the Chief Executive Officer on Friday, 1 March 2013.


Strategic Plan Leadership Improve communications and promote the city within the

State, nationally and internationally.

Build Perth’s capital city status and use it effectively to support initiatives of the City and the Council of Capital City Lord Mayors in partnership with the State and Federal governments, private industry and community organisations.

Business Promote the city’s safe, politically stable and liveable

environment to encourage foreign business to locate in the city.

Policy Policy No and Name: 10.3 – Elected Members – Interstate and Overseas

Travel and Expenses

DETAILS:

The Lord Mayor has received invitations to attend two conferences in Europe. The first invitation is a request for her attendance at the “Smart to Future Cities” Conference in London on 11 until 12 June 2013. The second invitation is a request for her attendance at the World Cities Summit Mayor’s Forum to be held in Bilbao, Spain from 13 until 15 June 2013. As the two conferences fall on consecutive days, it would be opportune to combine the two conferences into one single trip. If the trip is approved by Council, the Lord


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Mayor will be provided with accommodation throughout the duration of the two conferences. Airfare costs will need to be covered by the City. Smart to Future Cities Conference 11-12 June 2013 The conference organisers have extended an invitation to the Lord Mayor to present a case study on Perth as a “smart and future city”. Participating in this conference are high level government and private sector leaders from around the world. The Microsoft Corporation is a Gold Member sponsor of the event. The conference provides an excellent opportunity for the Lord Mayor to showcase Perth to a wide and influential international audience and raise Perth’s international profile. Over 80 international case studies from government, energy, healthcare, transport, retail, and building control will be presented at the conference. The Government of Western Australia (European Office) has negotiated with the organisers to provide the Lord Mayor with one night’s accommodation during her stay in London. That office considers this conference to be significant priority and will be attending the conference with the Lord Mayor. World Cities Summit (WCS) Mayors Forum 13-15 June 2013 The Mayors Forum has become one of the most important and biggest platforms in the world for city leaders to come together to discuss urban issues. The Lord Mayor attended in 2012 and her participation was well received. At last year’s event, the Lord Mayor joined almost 100 other civic leaders from around the world and participated in a high-level round-table meeting focusing on challenges facing modern cities and discussing potential solutions to those problems. The forum provided an unparalleled opportunity to share experiences with other cities, consider strategies and solutions for the future, and to build Perth’s international profile. The theme for the 2013 forum is “Liveable and Sustainable Cities: Common Challenges, Shared Solutions”. The forum will cover issues of relevance and interest to these regions from urban rejuvenation, economic resilience, to sustaining the urban environment and managing diversity. It presents a unique opportunity for city leaders to share governance practices. The forum will focus on five sub-themes of the Liveability Framework: Competitive economy:

Sustainable environment;

High quality of life;

Integrated master planning; and

Dynamic urban governance.


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The organisers have agreed to offer the following hospitality package to Lord Mayor: Up to four nights accommodation at either Meliá Bilbao Hotel or Hotel Carlton;

and

Airport transfers to-and-from Bilbao Airport to the chosen hotel.


Budget Item where monies have been / will be fully expended: ACCOUNT NO: CL42A08000 BUDGET ITEM: Governance – Governance – General –

International Relations Program BUDGET PAGE NUMBER: 7 BUDGETED AMOUNT: $ 486,036 AMOUNT SPENT TO DATE: $ 225,767 PROPOSED COST: $ 10,400 (including air fares and miscellaneous

expenses) BALANCE: $ 215,367 All figures quoted in this report are exclusive of GST.

COMMENTS:

It is recommended that travel expenditure for the Lord Mayor to attend two European conferences to the amount of $10,400 be approved. The Lord Mayor has received several invitations to attend international conferences this year. The administration recommends that these two conferences have the greatest potential to increase the City’s profile internationally and the themes of the two conferences appear to be the most relevant for the City of Perth. The Lord Mayor has recently been awarded winner of the 2012 World Mayor Commendation and runner-up to the 2012 World Mayor Prize. It is important that the City continues to leverage the Lord Mayor’s recent achievements to build Perth’s profile internationally. Moved by Cr Davidson, seconded by Cr Butler That Council approves travel expenditure for the Lord Mayor to attend both the ‘Smart to Future Cities Conference’ and the ‘World Cities Summit’ in Europe from 11-15 June 2013. The motion was put and carried


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The votes were recorded as follows: For: Crs Davidson, Adamos and Butler Against: Nil

FB56/13 MOTIONS OF WHICH PREVIOUS NOTICE HAS BEEN GIVEN

Nil

FB57/13 GENERAL BUSINESS

Responses to General Business from a Previous Meeting Nil New General Business 1. City of Perth Rate Setting Statement – Department of Local Government

referral to the State Administrative Tribunal The Manager Financial Services updated the Committee on legal advice received regarding the City's rate setting statement for its 2012/13 Budget and the likely course of action to be taken.

FB58/13 ITEMS FOR CONSIDERATION AT A FUTURE MEETING

Strategic Property Review (FB 29/05/12).

FB59/13 CLOSE OF MEETING

There being no further business the Presiding Member declared the meeting closed at 4.53pm.

CITY OF PERTH

FINANCIAL ACTIVITY STATEMENT for the 7 months ended 31 January 2013

Revised Budget Revised Budget YTD Actual YTD Variance YTD2012/13 31-Jan-13 31-Jan-13 31-Jan-13

Proceeds from Operating Activities $ $ $ $

Operating RevenueNature of IncomeParking Fees 67,020,502 38,947,012 38,696,540 (250,472)Fines and Costs 9,402,983 5,561,224 5,799,735 238,511 Investment Income and Interest 7,383,986 5,294,828 5,645,819 350,990 Community Service Fees 1,240,319 790,848 729,069 (61,780)Rubbish Collection 5,434,561 5,408,254 5,408,201 (53)Rentals and Hire Charges 4,647,567 2,692,355 2,623,219 (69,136)Recurrent Grants 1,303,070 461,098 902,859 441,761 Contributions, Donations and Reimbursements 406,984 243,815 268,837 25,022 Profit on Disposal of Investments 170,926 170,926 170,926 - Other Income 4,476,191 2,973,488 2,954,708 (18,780)

101,487,089 62,543,849 63,199,912 656,063

Less: Operating ExpenditureNature of ExpenditureEmployee Costs 54,573,522 31,976,903 31,275,141 701,762

Materials and Contracts 46,851,783 26,041,781 23,332,499 2,709,282 Utilities 2,890,836 1,650,971 1,727,876 (76,905)Insurance Expenditure 1,226,496 703,234 695,548 7,686

Depreciation and Amortisation 23,586,547 12,700,480 12,634,291 66,189 Interest Expenses 2,189,933 1,241,315 1,147,200 94,115 Expense Provisions 902,250 521,578 529,747 (8,169)Loss on Disposal of Assets 542,157 188,159 (34,779) 222,938 Other Expenditure 16,672,077 9,958,731 9,293,869 664,862

149,435,600 84,983,152 80,601,392 4,381,760Add back Depreciation (23,586,547) (12,700,480) (12,634,291) (66,189) (Loss) / Profit on Disposals (371,231) (17,233) 205,705 (222,938)

125,477,822 72,265,439 68,172,806 4,092,633

Net Surplus/(Deficit) from Operations (23,990,733) (9,721,590) (4,972,894) 4,748,696

Investing ActivitiesCapital Expenditure (102,778,555) (66,631,883) (44,122,090) 22,509,793 Repayment of Borrowings (5,610,409) (3,430,777) (3,430,777) - Transfers to Reserves (20,633,894) (12,154,212) (2,886,459) 9,267,753

(129,022,858) (82,216,872) (50,439,326) 31,777,546

Financing ActivitiesTransfer from Reserves 27,711,426 20,823,169 16,595,164 (4,228,005)Proceeds from Borrowings 23,788,520 23,788,520 23,788,520 - Proceeds from Disposal of Assets 1,184,950 697,984 1,029,454 331,470 Capital Grants 3,130,872 1,491,581 1,209,700 (281,881)

55,815,768 46,801,254 42,622,838 (4,178,416)

Net Surplus/(Deficit) before Rates (97,197,823) (45,137,208) (12,789,382) 32,347,825

Add: Opening Funds 31,534,716 31,534,716 27,417,973 (4,116,743)

Less: Closing Funds 1,476,643 53,390,458 81,656,140 28,265,682

Amount Sourced from Rates 67,139,750 66,992,950 67,027,549 34,600

58,527,863 58,491,248

Net Cash on HandCash On Hand 123,005 3,445,619 2,480,580 (965,039)Money Market Investments 108,234,585 101,862,766 136,995,781 35,133,015 Funds on Hand 108,357,590 105,308,385 139,476,361 34,167,976

Analysis of Funds on HandReserves 59,878,048 40,934,290 47,532,531 6,598,242 Provisions 11,605,238 10,494,042 9,947,662 (546,380)Carry forwards - 14,853,542 16,499,524 1,645,983 Restricted Grants not yet utilised 632,996 252,581 690,750 438,169 General Funds 36,241,308 38,773,931 64,805,894 26,031,963

Funds on Hand 108,357,590 105,308,385 139,476,361 34,167,976

I:\FIN\ACCOUNTS\Mths13\FAS\Jan\4. FBC January 2013.xls

MapsFebruary/FAS January 2013.pdf

SCHEDULE 1

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I:\FIN\ACCOUNTS\Mths13\FAS\Jan\6. FAS Explanatory Notes.doc

EXPLANATORY NOTES – FINANCIAL ACTIVITY STATEMENT

BACKGROUND

Regulation 34 of the Local Government (Financial Management) Regulations 1996 was amended effective from 1 July 2005.

The amendment prescribes a monthly Financial Activity Statement (FAS) reporting the sources and application of funds, as set out in the Rate Setting Statement which is included in the Annual Budget.

PURPOSE

The FAS reports the actual financial performance of the City in relation to its adopted budget, which has been structured on financial viability and sustainability principles.

The FAS is intended to act as a guide to Council of the impact of financial activities and the reasons for major variances to the annual budget estimates.

PRESENTATION

Regulation 34 prescribes the minimum detail to be included in the FAS. These are listed below. - Annual Budget estimates, and approved revisions to these, are to be included for comparison purposes. - Actual amounts of income and expenditure to the end of the month of the FAS. - Material variances between the comparable amounts and commentary on reasons for these. - The net current assets at the end of the month to which the FAS relates.

An explanation of the composition of the net current assets at the end of the month to which the FAS relates; less committed and restricted assets.

Councils are given the option of adopting a format which is considered most appropriate to their needs. These options are listed below. - According to nature and type classification, - by program, or - by business unit.

It is recommended that while the information presented by cost objects (programs and activities) or by cost centres (business units) are useful for expense allocation and cost centre accountability purposes, they are less informative and difficult to comprehend in matters of disclosure and less effective in cost management and control.

The FAS has therefore been presented in the format using nature and type classification as the most meaningful disclosure to the Council and public.

FORMAT

The FAS is formatted to align with the Rate Setting Statement. The first part deals with operating income and expenditure, excluding rate revenue. The next classification is the amount spent on capital expenditure and debt repayments. The classification ‘Financing Activities’ provides a statement of sources of funds other than from operating or

rates revenue, which are usually associated with capital expenditure. Attached to the FAS is a statement of ‘Net Current Assets’ for the budget and actual expenditure to the end of

the month to which the FAS relates. Opening and closing funds represent the balance of ‘Net Current Assets’, not including any funds which are

committed or restricted. “Committed assets” means revenue unspent but set aside under the annual budget for a specific purpose. “Restricted assets” means those assets the uses of which are restricted, wholly or partially, by regulations or

other externally imposed requirements”, e.g. reserves set aside for specific purposes. To avoid duplication in calculating ‘Closing Funds on hand’, certain balances, such as provisions and

borrowings, are also deducted. The total Closing Funds on hand are to be taken into account when calculating the amount to be raised by rates

each year. The classification “Net Cash on Hand” represents the balances of funds held in cash or invested and the analysis

into those funds reserved, carried forward or remaining unspent at the end of the month to which the FAS relates.


FINANCIAL ACTIVITY STATEMENT FOR THE SEVEN MONTHS TO 31 JANUARY 2013

REPORT OF VARIANCES TO BUDGET

I:\CPS\Admin Services\AGENDAS\Reports\MAPS FEBRUARY\3. FAS Comments doc Jan 2013 (Amended variances).docx

This report compares actual performance for the seven months to 31 January 2013 with the revised budget approved by Council on 11 December 2012. Operating Revenue Parking fees were ($250,000) below the revised budget figures

mainly due to delays in opening Goderich Street car park ($111,000); lower revenue from Convention Centre ($72,000) and Pier Street ($42,000) car parks, plus marginally lower income at various undercover and open air car parks amounting to ($74,000) and partly offset by additional Kerbside parking revenue $49,000.

Fines continued to exceed budget for the period achieving additional revenue of $239,000 reflecting estimates of parking infringements revenue being understated in the revised budget. These are to be reviewed in the March budget review.

Investment income is $351,000 above budget due to cash holdings being higher than expected and continuing favourable returns from balanced investments.

Community Service Fees were ($62,000) under the revised forecasts mainly for the Citiplace Child Care Centre, due to a reduction in utilisation of the occasional child care service by the Adult Migrant Education Program providers making alternative child care arrangements for migrant children.

Grants were $442,000 higher than revised budget due mainly to the Lotteries West Skyworks grant of $500,000, being received earlier than expected.

Operating Expenditure

Employee costs were $702,000 under the revised budget for the period. Staff costs are generally inline with overall estimates apart from differences arising from vacancies in areas of compliance, parking, health, cultural and community services. These variances are partly due to phasing differences and also partly dependant on timing of events.

Materials and contracts were substantially under revised budget by $2,709,000 with the principal program being Transport. Areas of underspend include footpaths, roads, overpasses and underpasses, parking facilities and other transport services $1,625,000. The balance is spread in other areas relating to timing of events such as Skyworks, which occurred late in the period, and property and

FINANCIAL ACTIVITY STATEMENT FOR THE SEVEN MONTHS TO 31 JANUARY 2013

REPORT OF VARIANCES TO BUDGET

I:\CPS\Admin Services\AGENDAS\Reports\MAPS FEBRUARY\3. FAS Comments doc Jan 2013 (Amended variances).docx

equipment maintenance, professional fees, advertising and promotions.

Utilities were ($77,000) over the revised budget mainly being power costs for various car parks, street lighting, and water charges.

Interest Expenses were $94,000 below the revised budget due to capitalisation of interest during the period on the Goderich Street Car Park loan, which is still in construction.

A variance of $223,000 on disposal of assets arose for the seven months, which includes the profit on realisation of investments $171,000, and proceeds from insurance claims paid on disposals of assets previously written off being parking equipment and a kiosk.

Other expenditure was $665,000 under the revised budget, principally for donations and sponsorships in areas of marketing promotions, cultural events and economic development.

Investing Activities

Capital expenditure is running below the revised budget by $22.5 million. Continuing major works include Affordable Housing/Goderich Street car park; Cathedral Square - Library and Plaza projects; Council House new office layouts; various car parks; infrastructure works, plus fleet and plant replacements.

Transfers to Reserves were $9.3 million lower owing to later transfers of monies to the Asset Enhancement Reserve than anticipated, in the revised budget.

Financing Activities Transfers from Reserves were ($4.2 million) below the revised

budget in line with the lower level of on-going capital works being experienced.

Grants were ($282,000) below budget due to timing delays in claims. Amounts sourced from Rates

Rates revenue raised is in line with the revised budget.

Financial�A

ctivity

�Statemen

t

Ann

ual

Rev

ised

Bud

get

2012

/13

$000

s

Rev

ised

Bud

get $

000s

Act

ual $

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Var

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00s

101,487

62,544

63,200

656

149,436

84,983

80,601

4,382

�23,587

�12,700

�12,634

�66

�371

�17

206

�223

�23,991

�9,722

�4,973

4,749

�102,779

�66,632

�44,122

22,510

�5,610

�3,431

�3,431

0

�20,634

�12,154

�2,886

9,268

27,711

20,823

16,595

�4,228

23,789

23,789

23,789

0

1,185

698

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331

3,131

1,492

1,210

�282

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32,348

31,535

31,535

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2012/13

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Cash

Bud

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$'00

0sY

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Act

ual

$'00

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2012

/201

3JA

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165,787

124,025

‐119,707

‐71,057

46,080

52,968

‐60,234

‐43,093

18,267

20,358

2,316

2,057

101,929

107,187

6,429

32,290

108,358

139,476

Paym

ents to

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pliers and

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Net In

crease (D

ecrease) in

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Cash at 3

1 Janu

ary 2013

Net Cash Inflo

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cing

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Cash Flows from Governm

ent a

nd Other Partie

sSUMMAR

Y CA

SH FLO

W STA

TEMEN

T JAN‐13

Receipts from

Customers

‐40,00

0‐20,00

00

20,000

40,000

60,000

80,000

Rates

Fees and

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rges

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Other

Employee

Costs

Materials and

Con

tracts

Interest

Other

Cash Flows from Ope

ratin

g Ac

tivities $'000

s

‐50,000 ‐

50,000

100,000

150,000

200,000

Jul‐1

2Au

gSep

Oct

Nov

Dec

Jan‐13

Feb

Mar

Apr

May

Jun‐13

Mon

thly Cash Movem

ents to

30 June

2013

Cash at E

nd of P

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Net Increase/Decrease

‐50,00

0‐40,00

0‐30,00

0‐20,00

0‐10,00

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10,000

20,000

30,000

Proceeds from

Dispo

sal of Investm

ents

Proceeds from

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ssets

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se Plant and

Mob

ile Equ

ipmen

t

Work in Progress

Proceeds from

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Repa

ymen

t of B

orrowings

Cash Flows from Investing Ac

tivities $'000

s

Map

sFeb

ruar

y/FA

S J

anua

ry 2

013.

pdf

Summary Ope

ratin

g Statem

ent

2012

/13

Ori

gin

al

Bu

dge

t $0

00R

evis

ed

Bu

dge

t $0

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ual

$00

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165,95

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9,36

613

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370

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66,855

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43,533

58,512

63,202

4,69

0

2,31

71,24

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22,142

12,700

12,634

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19,074

44,571

49,421

4,85

0

1,00

61,49

21,21

0‐282

20,080

46,063

50,631

4,56

8

‐480

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100

171

171

0

00

315

315

19,700

46,046

51,152

5,10

6

Yea

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ate

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Ope

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0 40,00

0 60,00

0 80,00

0

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ndCo

ntrib

ution for N

onCa

pital Purpo

ses

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ns and

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bursem

ents

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Interest and

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t Incom

e

Other Reven

ue

Ope

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venu

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0s

Actual YTD

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dget

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0 20,00

0 30,00

0 40,00

0

Employee

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Insurance

Expe

nses Provisio

n

Other Expen

ses from

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Ope

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nditu

re YTD

JAN‐13 $'00

0s

Actual YTD

$

Revised Bu

dget

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Map

sFeb

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S J

anua

ry 2

013.

pdf

Summary Statem

ent o

f Financial Position

TOTA

L LIAB

ILITIES

NET

ASSETS

Accumulated

Surplus

TOTA

L AS

SETS

55

,468

37,2

59

COMMUNITY EQ

UITY

1

,049

,590

35

,778

91

,246

958

,345

976

,001

31

,817

69

,076

906

,925

Total Current Liabilities

Total N

on Current Liabilities

906

,925

523

,009

375

,509

59

,826

958

,345

TO

TAL CO

MMUNITY EQ

UITY

857

,963

8

89,6

44

457

,881

375

,509

73

,535

Total N

on Current Assets

Asset R

evalua

tion Re

serve

Reserves (C

ash Ba

cked

)

Total Current Assets

31-J

an-1

330

-Jun

-12

Act

ual $

000s

118

,038

Act

ual $

000s

159

,946

Cash and

Cash

Equivalents $2.5

1.6%

Depo

sits/Prep

aym

ents $5.9 3.7%

Investmen

ts

$137.0 85.6%

Trade and Other

Receivables $10.3

6.4%

Rates R

eceivable

$3.2 2.0%

Work in Progress ‐

Recoverable

Works $0.2 0.1%

Inventories $0.9

0.6%

Curren

t Assets Jan

‐13

($m / % Actua

ls)

Investmen

ts $13.5

1.5%

Prop

erty, P

lant

and Equipm

ent

$799.6 89.9%

Capital W

ork in

Progress $76.5

8.6%

Non

‐Current Assets Jan

‐13

($m / % Actua

ls)

Employee

Ben

efits

$0.9 2%

Provision

s $3.6 6%

Loan

Liability $51.0

92%

Non

‐Current Liab

ilitie

s Jan

‐13

($m / % Actua

ls)

$19.7 55.2%

Employee

Ben

efits

$9.9 27.7%

Provision

s $0.4

1.1%

Loan

Liability $5.7

16.0%

Curren

t Liabilities Jan

‐13

($m / % Actua

ls)

Map

sFeb

ruar

y/FA

S J

anua

ry 2

013.

pdf

Ratio

Analysis

Ability to

gen

erate working

cap

ital to meet o

ur com

mitm

ents

Target is greater th

an 2.00

Ability to

fund

cap

ital and

excep

tiona

l expen

diture

Target is greater th

an 1.5

Ability to

redu

ce ra

tes to ratepa

yers

Target is less th

an 40.00

% ‐ Th

e pe

rcen

tage

will dim

inish as th

e bu

lk of the

rates a

re ra

ised

in Ju

ly

Ability to

service loan

s including

prin

cipa

l and

interest

Target is less th

an 10.0%

Ability to

man

age cashflo

wTarget is greater th

an 2.0 m

onths

Ability to

retire de

bt from

read

ily re

alisab

le assets

Taget is less th

an 30.0%

Ability to

service de

bt out of total re

venu

eTaget is less th

an 60.0%

Deb

t Service Ratio (Interest a

nd prin

cipa

l rep

aymen

ts/A

vailable

Ope

ratin

g Re

venu

e)3.61

%3.87

%

Cash Cap

acity

in M

onths (Ca

sh < 90 da

ys invest / (C

ash Ope

ratin

g Co

sts d

ivided

by 7 mon

ths)

N/A

Rev

ised

Bu

dge

t 20

12/2

013

2.34

3.13

4.54

Gross Deb

t to Econ

omically Realisab

le Assets R

atio (G

ross Deb

t /

Econ

omically Realisab

le Assets)

5.00

%6.46

%

Gross Deb

t to Re

venu

e Ra

tio (G

ross Deb

t / Total Reven

ue)

40.00%

43.57%

Ope

ratin

g Surplus R

atio (R

even

ue YTD

/Ope

ratin

g Surplus Y

TD)

2.81

2.57

Rate Coverage Ra

tio (N

et Rate Re

venu

e/Ope

ratin

g Re

venu

e)52

.38%

52.10%

Jan

-13

Curren

t Ratio (C

urrent Assets m

inus Restricted Assets/Current

Liab

ilitie

s minus Liabilities a

ssociated with

Restricted Assets)

‐

1.50

3.00

Nov

‐12

Dec‐12

Jan‐13

0.00

%20

.00%

40.00%

60.00%

80.00%

Nov

‐12

Dec‐12

Jan‐13

0.00

%5.00

%10

.00%

15.00%

Nov

‐12

Dec‐12

Jan‐13

‐ 2.00

4.00

6.00

Nov

‐12

Dec‐12

Jan‐13

‐

2.00

4.00

Nov

‐12

Dec‐12

Jan‐13

0.00

%10

.00%

20.00%

30.00%

Nov

‐12

Dec‐12

Jan‐13

0.00

%20

.00%

40.00%

60.00%

Nov

‐12

Dec‐12

Jan‐13

Map

sFeb

ruar

y/FA

S J

anua

ry 2

013.

pdf

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