GPFS YE 1718

FINANCIALSTATEMENTS2017/18

Adopted 17 October 2018

Blacktown City Council and its subsidiary CONSOLIDATED FINANCIAL STATEMENTS for the year ended 30 June 2018

Consolidated Financial Statements 2018

Blacktown City Council and its subsidiary

Consolidated Financial Statements for the year ended 30 June 2018

Contents

1. Understanding Council’s Consolidated Financial Statements

2. Statement by Councillors and Management

3. Consolidated Primary Financial Statements:

– Consolidated Income Statement– Consolidated Statement of Comprehensive Income– Consolidated Statement of Financial Position– Consolidated Statement of Changes in Equity– Consolidated Statement of Cash Flows

4. Notes to the Consolidated Financial Statements

5. Independent Auditor’s Reports:

– On the Consolidated Financial Statements (Sect 417 [2])– On the Conduct of the Audit (Sect 417 [3])

Overview

of business at:

62 Flushcombe RoadBlacktown NSW 2148

Council’s guiding principles are detailed in Chapter 3 of the LGA and includes:

principles applying to the exercise of functions generally by councilprinciples to be applied when making decisionsprinciples of community participationprinciples of sound financial managementprinciples for strategic planning relating to the development of an integrated planning and reporting framework.

A description of the nature of Council’s operations and its principal activities are provided in Note 2(b).

Through the use of the internet, we have ensured that our reporting is timely, complete and available at minimumcost. All press releases, financial statements and other information are publicly available on our website:www.blacktown.nsw.gov.au.

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Blacktown City Council is constituted under the Local Government Act 1993 (NSW) and has its principal place

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Consolidated Financial Statements 2018_

Blacktown City Council and its subsidary

Consolidated Financial Statementsfor the year ended 30 June 2018

Understanding Council’s consolidated financial statements

Introduction Each year, individual local governments across New South Wales are required to present a set of audited financial statements to their council and community.

What you will find in the statements The consolidated financial statements set out the financial performance, financial position and cash flows of Council and its subsidiary for the financial year ended 30 June 2018.

The format of the financial statements is standard across all NSW Councils and complies with both the accounting and reporting requirements of Australian Accounting Standards and requirements as set down by the Office of Local Government.

About the Councillor/Management Statement The financial statements must be certified by senior staff as ‘presenting fairly’ the Council’s financial results for the year and are required to be adopted by Council – ensuring both responsibility for and ownership of the financial statements.

About the consolidated primary financial statements

The consolidated financial statements incorporate five ‘primary’ financial statements:

1. The Consolidated Income Statement

Summarises Council and its subsidiary, financial performance for the year, listing all income and expenses.

This statement also displays Council's original adopted budget to provide a comparison between what was projected and what actually occurred.

2. The Consolidated Statement of Comprehensive Income

Primarily records changes in the fair value of Council's Infrastructure, Property, Plant and Equipment.

3. The Consolidated Statement of FinancialPosition

A 30 June snapshot of Council's consolidated financial position indicating its assets, liabilities and “net wealth”.

4. The Consolidated Statement of Changes inEquity

The overall change for the year (in dollars) of Council’s “net wealth”.

5. The Consolidated Statement of Cash Flows

Indicates where Council's cash came from and where it was spent. This statement also displays Council's original adopted budget to provide a comparison between what was projected and what actually occurred.

About the Notes to the Consolidated Financial Statements

The Notes to the Consolidated Financial Statements provide greater detail and additional information on the five primary financial statements.

About the Auditor’s Reports

Council’s annual consolidated financial statements are required to be audited by the NSW Audit Office. In NSW the auditor provides 2 audit reports:

1. an opinion on whether the consolidated financialstatements present fairly the Council’s financialperformance and position, and

2. their observations on the conduct of the audit,including commentary on the Council’sconsolidated financial performance and financialposition.

Who uses the consolidated financial statements?

The consolidated financial statements are publicly available documents and must be presented at a Council meeting between seven days and five weeks after the date of the Audit Report.

The public can make submissions to Council up to seven days subsequent to the public presentation of the financial statements.

Council is required to forward an audited set of financial statements to the Office of Local Government.

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Tony Bleasdale


This statement should be read in conjunction with the accompanying notes.


Consolidated Income Statement for the year ended 30 June 2018

$ ’000

Income from continuing operationsRevenue:Rates and annual chargesUser charges and feesInterest and investment revenueOther revenuesGrants and contributions provided for operating purposesGrants and contributions provided for capital purposesOther income:Net gains from the disposal of assetsFair value increment on investment propertyNet share of interests in joint ventures andassociates using the equity method

Total income from continuing operations

Expenses from continuing operationsEmployee benefits and on-costsMaterials and contractsDepreciation and amortisationOther expensesFair value decrement on investment property

Total expenses from continuing operations

Operating result from continuing operations

Net operating result for the year

Net operating result attributable to Council

Net operating result for the year before grants andcontributions provided for capital purposes

303,103

8,884 –

637,064

2,338

594,298

280,520

unaudited

–

–

75,463 78,936

10

306,879

Original

3e,f

4c

5

–

4b

36,174

16,885

3b

16

4a

3e,f

42,417

145,478

57,200

10

67,644

4d348

333,961

35,600

207,830

Notes

3a

3d3c

2018

10,817

26,706 271,972

612,801

2018

39,934 12,383 19,066

54,441

131,926 142,602

36,612

22,209

303,103

75,373 70,548

– 35,931

35,832

280,520 303,103

2017

201,572

11,105 19,274

280,520

313,778

1,414 1,274

38,422

300,765 244,688

14,638

28,816

212,477

306,879

Actual Restated budget

306,879

34,907

305,922

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Consolidated Statement of Comprehensive Income for the year ended 30 June 2018

$ ’000

Net operating result for the year (as per Income Statement)

Other comprehensive income:

Amounts that will not be reclassified subsequently to the operating result

Gain (loss) on revaluation of IPP&ETotal items which will not be reclassified subsequentlyto the operating result

Total other comprehensive income for the year

Total comprehensive income for the year

Total comprehensive income attributable to Council

Restated2017

250,698

2018

303,103

Notes

280,520

365,820 (29,822) 9

(29,822) 365,820

668,923

365,820

250,698

(29,822)

668,923

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This Statement should be read in conjunction with the accompanying Notes.


Consolidated Statement of Financial Position as at 30 June 2018

$ ’000

ASSETSCurrent assetsCash and cash equivalentsInvestmentsReceivablesInventoriesOtherNon-current assets classified as ‘held for sale’Total current assets

Non-current assetsInvestmentsReceivablesInventoriesInfrastructure, property, plant and equipmentInvestments accounted for using the equity methodInvestment propertyIntangible assetsTotal non-current assets

TOTAL ASSETS

LIABILITIESCurrent liabilitiesPayablesIncome received in advanceProvisionsTotal current liabilities

Non-current liabilitiesProvisionsTotal non-current liabilities

TOTAL LIABILITIES

Net assets

EQUITYAccumulated surplusRevaluation reserves

Total equity

14 3,222,582 14

127,132

13 9,073 6,482

4,566,293

159,926

6,482

3,525,685 674,788 1,040,608

161,562

3,897,370 4,566,293

9,073

3,897,370

4,058,932

96,414

52,985 150,853

7889 –

514,616

31,156

1,928

9,573 16

12 6,112 13

Notes

6a6b

44,916

976

77,000

–

11,942

5,681 54,052

18,940

50,590 1,865

14,767 3,485,597

92,000

391,070

2,009

75,168 75,409

155,080

96,238 230,000

2018

165,590

Restated2017

304,000

4,699

78

8,622 3,978,754

6b

9

11

7,710 10

3,412

12 90,689

4,726,219

3,667,862 4,211,603

Restated1 July 2016

89,004 217,500

5,643

52,000

3,266,885

350,976

18,924 19,022

6,011

883

13,682

3,646,672

3,646,672

2,942,062 704,610

6,052

70,986 5,554

64,471

52,352 121,080

6,052

3,773,804

3,422,828

4,257

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Consolidated Statement of Changes in Equity for the year ended 30 June 20182018

$ ’000

Opening balanceCorrection of prior period errorsRestated opening balance

Correction of prior period errorsRestated net operating result for the year

Other comprehensive income– Gain (loss) on revaluation of IPP&E

Other comprehensive income

Total comprehensive income (c&d)

Equity – balance at end of the reporting period

Net operating result for the year prior to correction of errors and changes in accounting policies

Accumulated Accumulated

365,820

303,103

365,820

668,923

3,897,370 674,788 3,222,582

(29,822)

280,520 (29,822)

– (29,822)

250,698

– (29,822)

280,520

(29,822)

280,520 –

2,942,062 704,610 3,646,672

– 11,350 – 269,170

equity

3,615,418 31,254 – 31,254

surplus

2,910,808 704,610

reserverevaluation Total

IPP&E Restated2017

3,525,685 1,040,608 4,566,293

– 365,820

303,103 365,820

9 – 365,820

3,222,582 674,788 14 (b) – – –

2018

3,222,582 674,788 3,897,370

revaluation TotalNotes surplus reserve

IPP&E

equity

3,897,370

– 11,350 303,103 –

14 (b)303,103 – 303,103 269,170

– –

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Consolidated Statement of Cash Flows for the year ended 30 June 2018

$ ’000

Cash flows from operating activitiesReceipts:Rates and annual chargesUser charges and feesInvestment and interest revenue receivedGrants and contributionsBonds, deposits and retention amounts receivedOtherPayments:Employee benefits and on-costsMaterials and contractsOtherNet cash provided (or used in) operating activities

Cash flows from investing activitiesReceipts:Sale of investment securitiesSale of real estate assetsSale of infrastructure, property, plant and equipmentDistributions received from joint ventures and associatesPayments:Purchase of investment securitiesPurchase of investment propertyPurchase of infrastructure, property, plant and equipmentPurchase of intangible assetsPurchase of real estate assetsNet cash provided (or used in) investing activities

Cash flows from financing activitiesNil

Net increase/(decrease) in cash and cash equivalents

Plus: cash and cash equivalents – beginning of year

Cash and cash equivalents – end of the year

Additional Information:

plus: Investments on hand – end of year

Total cash, cash equivalents and investments

11,167

199,877 211,493 39,918

41,680

2018 2017Actual

–

(12,122)

17,180

2018

35,853

205,215 9,811

(27,507)

(144,903)

–

(231,232)

–

(166,653)

–

103,512

61,402

42,110 15a

Notes

207,537

Original

budget unaudited

–

– 64,579

(75,131)

–

228,055

(130,212)

10,175 172,879

(221,257) –

(89,274)

7,965 43,031

254,778

Actual

42,917

(66,260) (141,816)

(160,243) –

(25,868)

(42)

362

(547)

(527,500)

490,000

(186,264)

561,590

(379,000)

96,238

307,000

89,004

7,234

96,238

69,352

(206,287)

403,238

165,590 15a

396,000

15b 275,639

51,610 – 2,734

290,000

228,491 (83,025)

3,594 463

(589)

4,703

6b

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Notes to the Consolidated Financial Statements for the year ended 30 June 2018

Contents of the notes accompanying the consolidated financial statements

Details

Basis of preparationCouncil functions/activities – financial informationCouncil functions/activities – component descriptionsIncome from continuing operationsExpenses from continuing operationsGains or losses from the disposal of assetsCash and cash equivalent assetsInvestmentsRestricted cash, cash equivalents and investments – detailsReceivablesInventories and other assetsInfrastructure, property, plant and equipmentInvestment propertyIntangible assetsPayables and borrowingsProvisions

Statement of cash flows – additional informationInterests in other entitiesCommitments for expenditureContingencies and other liabilities/assets not recognisedFinancial risk managementMaterial budget variationsFair value measurementRelated party transactionsStatement of developer contributionsStatement of performance measures – consolidated results

Additional council disclosures (unaudited)

Statement of performance measures – consolidated results (graphs)

24(a)23

83

24(b) 84

6(a)

4

6(c)

15

22

35

1817

Note

10

12

Page

12(a)

32(b)

6(b)

5

32

41

Accumulated surplus, revaluation reserves, changes in accounting policies, changes in accounting estimates and errors

21

13

6320

5516

19

14

50

5660

28

2930

33

1015161824

28

789

11 40

65

76

47

43

38

50

73

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Notes to the Consolidated Financial Statementsfor the year ended 30 June 2018

Note 1. Basis of preparation

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Council consisting of Blacktown City Council and its subsidiary.

(a) Basis of preparation

These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and Australian Accounting Interpretations, the Local Government Act 1993 (NSW) and Regulations, and the Local Government Code of Accounting Practice and Financial Reporting. Council is a not for-profit entity for the purpose of preparing these financial statements.

(b) New and amended standards adopted by Council

There have been no new (or amended) accounting standards adopted by Council in this year’s financial statements which have had any material impact on reported financial position, performance or cash flows.

(c) Historical cost convention

These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities and certain classes of infrastructure, property, plant and equipment and investment property.

(d) Significant accounting estimates and judgements

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Council's accounting policies.

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the Council and that are believed to be reasonable under the circumstances.

(e) Critical accounting estimates and assumptions

Council makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year include:

(i) Estimated fair values of investment properties

(ii) Estimated fair values of infrastructure, property, plant and equipment,

(f) Significant judgements in applying the Council's accounting policies

Impairment of Receivables - Council makes significant judgements about the impairment of a number of its receivables in Note 7.

(g) User charges and fees

User charges and fees (including parking fees and fines) are recognised as revenue when the service has been provided or when the penalty has been applied, whichever first occurs.

(h) Sale of infrastructure, property, plant and equipment

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

(i) Interest

Interest income is recognised using the effective interest rate at the date that interest is earned.

(j) Rent

Rental income is accounted for on a straight-line basis over the lease term.

(k) Dividend income

Revenue is recognised when the Council’s right to receive the payment is established, which is generally when shareholders approve the dividend.

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Note 1. Basis of preparation (continued)

(l) Other income

Other income is recorded when the payment is due, the value of the payment is notified, or the payment is received, whichever occurs first.

(m) Contributions under Section 94 of the Environmental Planning and Assessment Act

The Council has obligations to provide facilities from contribution revenues levied on developers under the provisions of s94 of the EPA Act 1979.

Whilst Council generally incorporates these amounts as part of a Development Consents Order, such developer contributions are only recognised as income upon their physical receipt by Council, due to the possibility that individual development consents may not be acted upon by the applicant and accordingly would not be payable to Council.

Developer contributions may only be expended for the purposes for which the contributions were required but the Council may apply contributions according to the priorities established in work schedules.

A detailed note relating to developer contributions can be found at Note 23.

The Council has obligations to provide facilities from contributions required from developers under the provisions of S94 of the Environmental Planning & Assessment Act. Contributions received each year are required to be held as restricted assets until used for the purposes designated in formal contribution plans.

Amounts may be expended only for the purposes for which the contributions were required, but the Council may, within each area of benefit, apply contributions according to the priorities established in the relevant contributions plan and accompanying works schedules.

The following contributions plans have been adopted by Council and are available for public inspection free of cost.

CP No. 1 – 1980’s Release Area Date of latest enforced Plan – 15/12/2010 Trunk Drainage Flood Mitigation Major Roads Overbridges Open Space Community Facilities CP No. 2 – Local Roadworks Date of latest enforced Plan – 04/02/2015 Roadworks CP No. 3 – Open Space in the Established Residential Areas Date of latest enforced Plan – 07/12/2016 Land Acquisitions Playgrounds Playing Fields Landscaping Amenities Buildings Fencing Car parking Lighting Picnic Facilities CP No. 4 – Mount Druitt Development Area Date of latest enforced Plan – 04/02/2015 Trunk Drainage Local Roads CP No. 5 – Parklea Release Area Date of latest enforced Plan – 04/02/2015 Trunk Drainage Tributary Trunk Drainage Major Roads Local Roads Open Space Community Facilities CP No. 15 – Metella Road Floodplain Date of latest enforced Plan – 07/03/2018 Compensatory Works to the Floodplain CP No. 17 – Quakers Hill Commercial Precinct Date of latest enforced Plan – 15/06/2016 Traffic Management Facilities CP No. 18 – Eastern Creek Stage 3 Date of latest enforced Plan – 22/06/2016 Roads Drainage

CP No. 19 – Blacktown Growth Precinct Date of latest enforced Plan – 30/09/2015 Local Road Construction Streetscape Facilities Traffic Management Facilities Open Space Community Facilities Drainage

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CP No. 20 – Riverstone & Alex Avenue Precincts Date of latest enforced Plan – 09/12/2015 Roads Drainage Open Space Environmental Conservation Community Facilities CP No. 21 – Marsden Park Date of latest enforced Plan – 14/12/2016 Roads Drainage Open Space Environmental Conservation Community Facilities CP No. 22 – Rouse Hill (Land & Works) Date of latest enforced Plan – 07/03/2018 Roads Drainage Open Space Environmental Conservation Community Facilities CP No. 23 – Riverstone West Precinct Date of latest enforced Plan – 03/08/2010 Roads Drainage CP No. 24 – Schofields Precinct Date of latest enforced Plan – 27/05/2015 Roads Drainage Open Space Environmental Conservation Aquatic Centre Community Facilities

Council also holds contributions, which were obtained prior to the requirement to have contribution plans in place. These moneys must be applied only for purposes for which they were obtained.

Council has identified the need for supplementary funding to ensure all contribution plan commitments are met. To achieve this, Council has established an Infrastructure Sinking Fund to which it makes annual contributions.

(n) Principles of consolidation

(i) Subsidiary

Subsidiaries are all entities over which the Council has control. The Council controls an entity when the Council is exposed to, variable returns from its involvement with the entity and has the ability to

affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Council. They are deconsolidated from the date that control ceases.

Inter-entity transactions and balances on transactions between Council entities are eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Council.

As at 30 June 2018 and 2017, the Council only have one subsidiary, Blacktown Venue Management Ltd.

(ii) Joint arrangements

Under AASB 11 Joint Arrangements investments in joint arrangements are classified as either joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. On all years presented, the Council only have investment in joint ventures,

Interests in joint ventures area accounted for using the equity method, after initially being recognised at cost in the consolidated balance sheet.

(iii) The Consolidated Fund

In accordance with the provisions of Section 409(1) of the Local Government Act 1993 (NSW), all money and property received by Council is held in the Council’s consolidated fund unless it is required to be held in the Council’s trust fund.

Cash and other assets of the following entities have been included as part of the consolidated fund:

General purpose operations Civic Risk West (joint venture) Civic Risk Mutual (joint venture) Blacktown Venue Management Ltd (subsidiary)

Due to their immaterial value and nature, the following committees, entities and operations have been excluded from consolidation:

Hall Management Committees Park Management Committees

Council controls approximately ninety four (94) Park and Hall Management Committees under Section

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355 of the Local Government Act 1993. Forty (40) of these committees maintain their own funds and were instructed to provide Council with audited financial statements for the accounting year ended 31 March 2018. Of the forty (40) Committees, twenty (20) complied and provided their financial statements.

The (i) total income and expenditure from continuing operations and (ii) net assets held by these excluded committees and operations is as follows:

Total income from continuing operations $937,019.21

Total expenditure from continuing operations $572,262.94

Total net assets held (i.e. equity) $2,455,309.00

(ii) The Trust Fund

In accordance with the provisions of Section 411 of the Local Government Act 1993 (NSW) (as amended), a separate and distinct trust fund is maintained to account for all money and other assets received by the Council in trust which must be applied only for the purposes of, or in accordance with the trusts relating to those monies. Trust monies and other assets subject to Council’s control have been included in these reports.

Trust monies and property held by Council but not subject to the control of Council have been excluded from these reports. A separate statement of monies held in the trust fund is available for inspection at the Council office by any person free of charge.

(o) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to the taxation authority is included with other receivables or payables in the Statement of Financial Position.

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or

financing activities which that are recoverable from, or payable to the taxation authority are presented as operating cash flows.

(p) New accounting standards and interpretations issued not yet effective

Certain new accounting standards and interpretations have been published that are not mandatory for the current reporting period and which have not been applied.

As at the date of authorisation of these financial statements, Council considers that the standards and interpretations listed below will have an impact upon future published financial statements ranging from additional and / or revised disclosures to actual changes as to how certain transactions and balances are accounted for.

Effective for annual reporting periods beginning on or after 1 July 2018

AASB 9 Financial Instruments

This replaces AASB 139 Financial Instruments: Recognition and Measurement, and addresses the classification, measurement and disclosure of financial assets and liabilities.

The standard introduces a new impairment model that requires impairment provisions to be based on expected credit losses, rather than incurred credit losses.

Based on assessments to date, Council expects a small increase to impairment losses however the standard is not expected to have a material impact overall.

Effective for annual reporting periods beginning on or after 1 July 2019

AASB 15 Revenue from Contracts withCustomers, AASB 1058 Income of Not-for-ProfitEntities and AASB 2016-8 Amendments toAustralian Accounting Standards - AustralianImplementation Guidance for Not-for-ProfitEntities

AASB 15 will replace AASB 118 Revenue, AASB 111 Construction Contracts and a number of Interpretations. AASB 2016-8 provides Australian requirements and guidance for not-for-profit entities

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in applying AASB 9 and AASB 15, and AASB 1058 will replace AASB 1004 Contributions.

Together they contain a comprehensive and robust framework for the recognition, measurement and disclosure of income including revenue from contracts with customers.

While Council is still reviewing the way that income is measured and recognised to identify whether there will be any material impact arising from these standards, these standards may affect the timing of the recognition of some grants and donations.

AASB 16 Leases

Council is currently a party to leases that are not recognised in the Statement of Financial Position. It is likely that some of these leases will need to be included in the Statement of Financial Position when this standard comes into effect.

A lease liability will initially be measured at the present value of the lease payments to be made over the lease term.

A corresponding right-of-use asset will also be recognised over the lease term. Council has not elected to apply any pronouncements before their operative date in these financial statements.

(q) Rounding of amounts

Unless otherwise indicated, amounts in the financial statements have been rounded off to the nearest thousand dollars.

(r) Comparative figures

To ensure comparability with the current reporting period’s figures, some comparative period line items and amounts may have been reclassified or individually reported for the first time within these financial statements and/or the notes.

(s) Disclaimer

Nothing contained within these statements may be taken to be an admission of any liability to any person under any circumstance.

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Note 2(a). Council functions/activities – financial information

Total functions and activities 594,298 333,961 637,064 4,058,932 4,726,219 303,103 313,778 44,121 280,520 37,272

159,150 145,166

1,834,140

12,807

115,663

1,537,535 17,883 27,510

191

902,132

1,049,024 196,397

17,855

68,426

1,884,888 40,543 157,722

337,114

(5,555)

93,182 (13,333)

(22,709)

2018 2017

2,171

49 129,218

947,002 1,135 1,808

7,008 (20,581) 5,692

(17,818) (24,052)

(30,600)

(13,505) 69

22 A sporting and active city

46,034 115,248

A smart and prosperous economy

A growing city supported by accessible infrastructure

88,777

4,901

79,849 A clean, sustainable and healthy environment

A vibrant and inclusive community

8,166

238,324 46,065

2,473 10,456

30,425

452,362 242,431

86,608

A leading city

22,409 45,764 23,055

12,607

42,990

58,177

32,218

80,602

15,978

Income from continuing operations

Income, expenses and assets have been directly attributed to the following functions/activities.Details of these functions/activities are provided in Note 2(b).

Expenses from continuing operations

Operating result from continuing operations

$ ’000

Total assets held (current and non-

current) Functions/activities

2017

Grants included in income from continuing

operations

201720182018 2017 2018 2018 2017

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Note 2(b). Council functions/activities – component descriptions

Details relating to the Council’s functions/activities as reported in Note 2(a) are as follows:

A vibrant and inclusive community

Includes costs relating to:Arts and cultural development Economic developmentChildrens services Emergency services supportCity events and partnerships LibrariesCity marketing and promotions Property maintenanceCommunity development Strategic planningCommunity facility construction and maintenance Transport infrastructure construction and maintenanceCommunity regulation

A clean, sustainable and healthy environment

Includes costs relating to:Blacktown International Sportspark and other key venues Open space improvements and maintenanceBuilding and development assessment Property maintenanceCity design Recreation planningCommunity development Strategic planningCommunity regulation Street cleaningDrainage, catchment and stormwater management Urban animal managementEnvironmental protection Waste managementHealth regulation

A smart and prosperous economy

Includes costs relating to:Building and development assessment Environmental protectionCity design GovernanceCity events LibrariesCity marketing Property management and developmentCommunity development Strategic planningCommunity regulation Transport infrastructure construction and maintenanceEconomic development Transport planning

Community outcome: Our local communities are welcoming, vibrant and inclusive, enabling individuals and groups to achieve their potential and the City to prosper as a centre of culture, creativity and learning.

Community outcome: Our local places and spaces are clean and healthy, turning sustainability awareness into action to halt or reverse negative impacts on our built and natural environment.

Community outcome: Strategic economic opportunities and partnerships facilitate sustainable growth of our local and regional economy, attract investment to our City and foster local business and employment.

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Note 2(b). Council functions/activities – component descriptions (continued)

Details relating to the Council’s functions/activities as reported in Note 2(a) are as follows:

A growing city supported by accessible infrastructure

Includes costs relating to:Asset management Financial managementBuilding and development assessment Open spaceCity design Property management and developmentCommunity development Strategic planningCommunity facility construction and maintenance Transport infrastructure construction and maintenanceCommunity regulation Transport planningDrainage, catchment and stormwater management

A sporting and active city

Includes costs relating to:Aquatic and leisure centres Community developmentAsset management Economic developmentBlacktown International Sportspark and other key venues Open space improvements and maintenanceCity events and partnerships Property management and developmentCity marketing and promotions Recreation planning

A leading city

Includes costs relating to:Asset management Corporate strategyBlacktown City Information Centre Financial managementBusiness technology Fleet managementCity events and partnerships Governance and corporate support servicesCity marketing and promotions Human resourcesCorporate buildings Property management and development

Community outcome: Blacktown City leads through a shared vision, engaged civic governance and excellent services and systems.

Community outcome: Our neighbourhoods are well planned and liveable with housing, transport and infrastructure that meets the diverse needs of our growing community.

Community outcome: Blacktown City is the recognised sporting capital of Western Sydney with world standard sporting venues and events and community participation in local sports supporting an active and healthy lifestyle.

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Note 3. Income from continuing operations

$ ’000

(a) Rates and annual charges

Ordinary ratesResidentialFarmlandBusinessLess: pensioner rebates (mandatory)Less: pensioner rebates (Council policy)Total ordinary rates

Annual charges (pursuant to s.496, s.496A, s.496B, s.501 & s.611)Domestic waste management servicesStormwater management servicesWaste management services (non-domestic)Section 611 chargesTotal annual charges

TOTAL RATES AND ANNUAL CHARGESCouncil has used 2016 year valuations provided by the NSW Valuer General in calculating its rates.

Accounting policy for rates and annual chargesRates, annual charges, grants and contributions (including developer contributions) are recognised as revenuewhen the Council obtains control over the assets comprising these receipts. Developer contributions may onlybe expended for the purposes for which the contributions were required, but the Council may apply contributionsaccording to the priorities established in work schedules.

Control over assets acquired from rates and annual charges is obtained at the commencement of the ratingyear as it is an enforceable debt linked to the rateable property or, where earlier, upon receipt of the rates.

(b) User charges and fees

Specific user charges (per s.502 – specific ‘actual use’ charges)Sullage and septic tank chargesTotal specific user charges

Other user charges and fees(i) Fees and charges – statutory and regulatory functions (per s.608)Building construction / compliance certificate feesEngineering construction / compliance certificate feesPlanning and building regulationRegistration feesSection 603 certificatesSection 735a certificate feesSubdivision certificate feesZoning certificatesTotal fees and charges – statutory/regulatory

474

14,061

1,016 847 887 868

135

2,848 2,279

135

1,595

1,465 6,421

831

201 49,758

5,994

48,836

207 1,152

116,072

47,275 320

158,965

2018 2017

(3,512)

110,923

46,206 631

(2,745)

151,814 (2,434) (1,957)

1,095

45,204

201,572

3,317 3,258

53,512

1,294

212,477

94 92 463

112

13,407

112

18




Note 3. Income from continuing operations (continued)

$ ’000

(b) User charges and fees (continued)

(ii) Fees and charges – other (incl. general user charges (per s.608))Animal controlCemeteriesChild care / pre schoolFire and emergency services levy (FESL) implementationHall hireHealth and fitnessHealth licences and feesInspections – vehicle crossingsLaneway closure application feesLibrary – photocopier / fax chargesParking feesSwimming centresOtherTotal fees and charges – other

TOTAL USER CHARGES AND FEESAccounting policy for user charges and feesUser charges and fees are recognised as revenue when the service has been provided.

(c) Interest and investment revenue (including losses)

Interest– Overdue rates and annual charges (incl. special purpose rates)– Cash and investments

TOTAL INTEREST AND INVESTMENT REVENUE

Interest revenue is attributable to:Unrestricted investments/financial assets:Overdue rates and annual charges (general fund)General Council cash and investmentsRestricted investments/funds – external:Development contributions– Development contributions

Other externally restricted assetsRestricted investments/funds – internal:Internally restricted assetsTotal interest and investment revenue recognised

Accounting policy for interest and investment revenueInterest income is recognised using the effective interest rate at the date that interest is earned.

159

3,332

7

205

11,105

25,761

38,422

2018

176

1,186

513

845

2,603 2,279

175

108

2017

6,178

24,880 590

598 323

89 78

222

229

880

6,106 95

13,879

182

13,747

10

513

526 2,782

3,753

526 10,579

525

712

3,956 12,383

11,870

2,648

39,934

12

12,383

4,421

11,105

19





$ ’000

(d) Other revenues

Rental income – investment propertyRental income – other council propertiesFinesLegal fees recovery – rates and charges (extra charges)Legal fees recovery – otherAnimal controlCommunity services / child careDiesel rebateEmployee contributionsInsurance claim recoveriesPark hireReinstatement of roads and footpathsSales – generalTenant licencesOtherTOTAL OTHER REVENUE

Accounting policy for other revenueCouncil recognises revenue when the amount of revenue can be reliably measured, it is probable that futureeconomic benefits will flow to the Council and specific criteria have been met for each of the Council’s activitiesas described below. Council bases its estimates on historical results, taking into consideration the type ofcustomer, the type of transaction and the specifics of each arrangement.

Parking fees and fines are recognised as revenue when the service has been provided, or when the penalty hasbeen applied, whichever occurs first.

Rental income is accounted for on a straight-line basis over the lease term.

Miscellaneous sales are recognised when physical possession has transferred to the customer which isdeemed to be the point of transfer of risks and rewards.

Other income is recorded when the payment is due, the value of the payment is notified, or the payment isreceived, whichever occurs first.

2,552

1,574 1,508

1,804

2,690

311

784

273 100 272

1,479

287

141

5,526

2,442

264

2017Notes

702

1,910

111

2018

19,274 881 752

976

5,283 1,974

19,066

655

779

324

1,537

295

154

10

20





$ ’000

(e) Grants

General purpose (untied)Current year allocationFinancial assistancePayment in advance – future year allocationFinancial assistanceOtherPensioners’ rates subsidies – general componentTotal general purpose

Specific purposePensioners’ rates subsidies:– Domestic waste management

Better waste and recyclingBushfire and emergency servicesCommunity care servicesCommunity centresEmployment and training programsEnvironmental protectionHeritage and culturalLibraryLibrary – per capitaParks and reservesStreet lightingTransport (roads to recovery)Transport (other roads and bridges funding)OtherTotal specific purposeTotal grants

Grant revenue is attributable to:– Commonwealth funding– State funding

–

–

–

730

1,361

–

– 780

184

221

–

–

8,837

4,117

326 663

114

17,657 –

–

Capital 2017

17,511

17,511

827 827

–

–

– 219

–

32 643

2018

–

545 430

–

200

55

827

178

–

16,650

–

–

– –

–

–

– –

–

1,238

28,776

8

– 1,214

13 146

– 81

20 65

1,440

17,118

27,330 1,375

2018Capital

–

Operating Operating

–

8,561

2017

286 –

4,238

450

7,656 –

79 175

61

676

8,288 18,322

346

36,445

36,445 26,610

9,115

74

8,953 26,610

5

7,669

–

17,479

589

–

53

17,511

21





$ ’000

(f) Contributions

Developer contributions:(s7.4 & s7.11 – EP&A Act, s64 of the LGA):Cash contributionsS 7.11 – contributions towards amenities/servicesVoluntary planning agreementsNSW local infrastructure growth schemeTotal developer contributions – cash

Non-cash contributionsS 7.11 – contributions towards amenities/servicesTotal developer contributions – non-cashTotal developer contributions

Other contributions:Cash contributionsAnimal controlCleaningContributions to outgoings – investment propertiesParks and reservesPavingRoads and bridgesRMS contributions (regional roads, block grant)Waste services NSWOtherTotal other contributions – cash

Non-cash contributionsDedicationsDrainageKerb and gutterRecreation and cultureRoads and bridgesTotal other contributions – non-cashTotal other contributionsTotal contributions

TOTAL GRANTS AND CONTRIBUTIONSAccounting policy for contributionsControl over grants and contributions is normally obtained upon their receipt (or acquittal) and is valued at thefair value of the granted or contributed asset at the date of transfer.

Where grants or contributions recognised as revenues during the financial year were obtained on condition thatthey be expended in a particular manner or used over a particular period and those conditions wereun-discharged at reporting date, the unused grant or contribution is disclosed above.

A liability is recognised in respect of revenue that is reciprocal in nature to the extent that the requisite servicehas not been provided at reporting date.

–

–

–

–

1,013

–

– –

283,254

–

– –

2,206

– –

– 4,948

–

37 95 466 225

–

268 15,816 –

112

– 370 611 –

2,206 17,996 16,433 10,794

– –

953

1,192

23

2,945

–

17,996

–

7,547

17,996

18,893

243,861

–

– –

– – 64,882 81,880

54,441

99,625

–

– 4,633

54,018 54,018

95,352 1,817

6,409 23,396

–

8,269

92,689

414 835

329

–

2,206

28,816

–

–

–

192,785

–

3,683

2018Capital

699

Notes Operating

–

Operating 2018 2017

244,688

31,312

81,315

97,169

9,154

2017Capital

151,187 – 9,154

471 – –

300,765

2,899 11,012

8,613

28,412

–

201,939

–

1,011

6,774

92,674

22





$ ’000

(g) Unspent grants and contributions

Certain grants and contributions are obtained by Council on conditionthat they be spent in a specified manner:

Operating grantsUnexpended at the close of the previous reporting period

Add: operating grants recognised in the current period but not yet spent

Less: operating grants recognised in a previous reporting period now spent

Unexpended and held as restricted assets (operating grants)

Capital grantsUnexpended at the close of the previous reporting period

Add: capital grants recognised in the current period but not yet spent

Less: capital grants recognised in a previous reporting period now spent

Unexpended and held as restricted assets (capital grants)

ContributionsUnexpended at the close of the previous reporting period

Add: contributions recognised in the current period but not yet spent

Less: contributions recognised in a previous reporting period now spent

Unexpended and held as restricted assets (contributions)

(161,997)

5,245

(955)

(24,023)

165,717

751

5,591

9,991

609

10,030

154,453

5,245

1,058

(559)

15,659

165,717

173,261

(712)

20172018

247,502

20,345

105,808

10,030

7,703

(3,385)

23




Note 4. Expenses from continuing operations

$ ’000

(a) Employee benefits and on-costs

Salaries and wagesTravel expensesEmployee leave entitlements (ELE)SuperannuationWorkers’ compensation insuranceFringe benefit tax (FBT)Training costs (other than salaries and wages)OtherTotal employee costsLess: capitalised costsTOTAL EMPLOYEE COSTS EXPENSED

Number of ‘full-time equivalent’ employees (FTE) at year end

Accounting policy for employee benefits and on-costsEmployee benefit expenses are recorded when the service has been provided by the employee.

Retirement benefit obligationsAll employees of the Council are entitled to benefits on retirement, disability or death. Council contributes tovarious defined benefit plans and defined contribution plans on behalf of its employees.

Superannuation plansContributions to defined contribution plans are recognised as an expense as they become payable. Prepaidcontributions are recognised as an asset to the extent that a cash refund or a reduction in the future paymentsis available.

Council participates in a Defined Benefit Plan under the Local Government Superannuation Scheme, however,when sufficient information to account for the plan as a defined benefit is not available and therefore Councilaccounts for its obligations to defined benefit plans on the same basis as its obligations to defined contributionplans, i.e. as an expense when it becomes payable – refer to Note 18 for more information.

16,750

108,595

146,242 178

3,351

542

2018

102,450

231

131,926 (3,640)

142,602

1,364 1,384

12,168

135,342 (3,416)

497 267

948

6,267 11,492

1,295

15,484

2017

1,069

24




Note 4. Expenses from continuing operations (continued)

$ ’000

(b) Materials and contracts

Raw materials and consumablesContractor and consultancy costs– Cleaning– Computer support– Garbage and recycling– Repairs and maintenance– Waste disposal contract (reclasssifed from (d) Other expenses)

Auditors remuneration (2)

Legal expenses:– Legal expenses: planning and development– Legal expenses: other

Operating leases:– Operating lease rentals: minimum lease payments (1)

TOTAL MATERIALS AND CONTRACTS

Operating leasesLeases in which a significant portion of the risks and rewards of ownership arenot transferred to Council as lessee are classified as operating leases. Paymentsmade under operating leases (net of any incentives received from the lessor) arecharged to the income statement on a straight-line basis over the period of the lease.

1. Operating lease payments are attributable to:Motor vehiclesOther

2. Auditor remunerationDuring the year the following fees were paid or payable for services provided by theauditor of Council, related practices and non-related audit firms

Auditors of the Council – NSW Auditor-General:

Audit and other assurance servicesAudit and review of financial statementsRemuneration for audit and other assurance services

Total Auditor-General remuneration

Non NSW Auditor-General audit firms:

Audit and other assurance servicesAudit and review of financial statementsRemuneration for audit and other assurance servicesTotal remuneration of non NSW Auditor-General audit firms

Total Auditor remuneration

144

5,978 15,988

2,564 3,763

500

11,611

144

143

–

75,373

–

–

143

10

71

405

2018

153

420

14,300

741

2,821

1,203

18,653

144

420

144

2,246

1,019

21,676

10

2,281

21,278

12,971

405

361

153

143

144

334

78,936

13,594

10

59

2017

25





$ ’000

(c) Depreciation, amortisation and impairment

Depreciation and amortisationPlant and equipmentOffice equipmentFurniture and fittingsLand improvements (depreciable)Infrastructure:– Buildings – non-specialised– Buildings – specialised– Other structures– Roads– Stormwater drainage

Other assets:– Library books– Other

Intangible assetsTotal depreciation and amortisation costs

TOTAL DEPRECIATION, AMORTISATION AND IMPAIRMENT /REVALUATION DECREMENT COSTS EXPENSED

Accounting policy for depreciation, amortisation and impairment expenses

Depreciation and amortisationDepreciation and amortisation are calculated using the straight line method to allocate their cost over theirestimated useful lives. Useful lives are included in Note 9 for IPPE assets and Note 11 for intangible assets.

Impairment of non-financial assetsIntangible assets that have an indefinite useful life or are not yet available for use are not subject to amortisationand are tested annually for impairment, or more frequently if events or changes in circumstances indicate thatthey might be impaired. Other assets are tested for impairment whenever events or changes in circumstancesindicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount bywhich the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of anasset’s fair value less costs to sell and value in use.

For the purposes of assessing impairment, assets are grouped at the lowest levels for which there areseparately identifiable cash inflows that are largely independent of the cash inflows from other assets or groupsof assets (cash-generating units). Non-financial assets that suffered an impairment are reviewed for possiblereversal of the impairment at each reporting date.

Impairment losses for revalued assets are firstly offset against the amount in the revaluation surplus for theclass of asset, with only the excess to be recognised in the Income Statement.

Impairment of financial assetsCouncil assesses at the end of each reporting period whether there is objective evidence that a financial asset orgroup of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairmentlosses are incurred only if there is objective evidence of impairment as a result of one or more events thatoccurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact onthe estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

140 37,756

983

1,403

347 908

6,525

3

6,849

8,072

5,718

2,715

68

2,715

2018

317

5,687

70,548

1,419 75,463

2017

70,548

3 736

139

Notes

39,739

11

6,539

8,512

75,463

8,718

26





$ ’000

(d) Other expenses

Bad and doubtful debtsBank charges / credit card chargesContributions/levies to other levels of government– Department of planning levy– Emergency services levy (includes FRNSW, SES, and RFS levies)– Waste levy

Councillor expenses – mayoral feeCouncillor expenses – councillors’ feesCouncillors’ expenses (incl. mayor) – other (excluding fees above)Donations, contributions and assistance to other organisations (Section 356)– Hawkesbury River County Council

Election expensesElectricity and heatingFee relief advance to carersInsuranceMarketing / promotionsParking patrolPost office agency chargesPostage, courier and freightStreet lightingTelephone and communicationsValuation feesWater rates and chargesOtherTOTAL OTHER EXPENSES

Accounting policy for other expensesOther expenses are recorded on an accruals basis as the Council receives the goods or services.

453 –

233 2,829

2,988

2017

82

36,612

638 1,671

420

284

5,938

35,931 1,783

286 321

1,841

711

3,263

5,298 888

1,852

756

1,339

1,541

365 294

1,951

403

8,304

392

2018

434

3,230

238

84

301

565

–

322

165

390

3,361

2,020

653 676

172 169

1,509

2,895 8,235

Notes

27




Note 5. Gains or losses from the disposal of assets

$ ’000

Plant and equipmentProceeds from disposal – plant and equipmentLess: carrying amount of plant and equipment assets sold/written offNet gain/(loss) on disposal

InfrastructureLess: carrying amount of infrastructure assets sold/written offNet gain/(loss) on disposal

Real estate assets held for saleProceeds from disposal – real estate assetsLess: carrying amount of real estate assets sold/written offNet gain/(loss) on disposal

Financial assets (1)

Proceeds from disposal/redemptions/maturities – financial assetsLess: carrying amount of financial assets sold/redeemed/maturedNet gain/(loss) on disposal

NET GAIN/(LOSS) ON DISPOSAL OF ASSETS

Accounting policy for disposal of assetsThe gain or loss on sale of an asset is determined when control of theasset has irrevocably passed to the buyer and the asset is derecognised.

Note 6(a). Cash and cash equivalent assets

Cash and cash equivalentsCash on hand and at bankCash-equivalent assets– Deposits at call– Short-term deposits

Total cash and cash equivalents

Accounting policy for cash and cash equivalentsFor Statement of Cash Flow presentation purposes, cash and cash equivalents includes cash on hand; depositsheld at call with financial institutions; other short-term, highly liquid investments with original maturities of threemonths or less that are readily convertible to known amounts of cash and which are subject to an insignificantrisk of changes in value; and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilitieson the Statement of Financial Position.

31,596

2018

35,461

3,169

– (1,710)

9

Notes

(13,490)

238

2,920

249 (2,671)

9

(2,931)

21,971

(1,710)

(15,497)

2017

–

8

290,000 (490,000)

–

6

(290,000)

–

16,099

490,000

60,000 165,590

12,548

131,000 22,042

96,238

15,487

14,638

20,751

22,209

28




Note 6(b). Investments

$ ’000

Investments‘Held to maturity’Total investments

TOTAL CASH ASSETS, CASHEQUIVALENTS AND INVESTMENTS

Held to maturity investmentsLong term depositsNCD’s, FRN’s (with maturities > 3 months)Total

Accounting policy for investments

ClassificationCouncil classifies its financial assets in the following categories: financial assets at fair value through profit orloss; loans and receivables; held-to-maturity investments; and available-for-sale financial assets. Theclassification depends on the purpose for which the investments were acquired. Management determines theclassification of its investments at initial recognition and, in the case of assets classified as held-to-maturity,re-evaluates this designation at each reporting date.

Held to maturity investmentsHeld-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixedmaturities that Council’s management has the positive intention and ability to hold to maturity. Assets in thiscategory are measured at amortised cost.

Recognition and de-recognition Regular purchases and sales of financial assets are recognised on trade-date: the date on which Councilcommits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costsfor all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value throughprofit or loss are initially recognised at fair value and transaction costs are expensed in the income statement.Investments are derecognised when the rights to receive cash flows from the financial assets have expired orhave been transferred and Council has transferred substantially all the risks and rewards of ownership.

20172018Current

92,000 304,000 92,000

–

Current

230,000

469,590

Non-current

304,000 230,000

–

Non-current 20172018

304,000 92,000

304,000

230,000 77,000

77,000 326,238

230,000 62,000 15,000

92,000

30,000

77,000 77,000

62,000

29




Note 6(c). Restricted cash, cash equivalents and investments – details

$ ’000

Total cash, cash equivalentsand investments

attributable to:External restrictions (refer below)Internal restrictions (refer below)Unrestricted

$ ’000

Details of restrictions

External restrictions – otherDeveloper Contributions - generalSecond Ponds Creek voluntary planning agreementVoluntary planning agreementsRMS (formerly RTA) contributionsSpecific purpose unexpened grantsDomestic waste managementStormwater managementSubdivider contributionsContribution to worksOtherExternal restrictions – otherTotal external restrictions

77,000

Non-current Current

92,000

92,000

32,000

43,928

25,630

220,792

469,590

181,071 118,826

15,275 28,048

19,798 3,254

–

1,038

3,349 17,971

2,053 732

3,095

2017Non-current

2017

77,000

209,728 103,046

1,134

204,870

Notes

2018

92,000

77,000 326,238 – –

11,739

195,826 296,870 195,826

Current

–

929 6,923 6,954

2017

26,341 469,590

2018

–

2018

296,870

326,238

30




Note 6(c). Restricted cash, cash equivalents and investments – details (continued)

$ ’000

Internal restrictionsAquatics reserveAsbestos removal crisis reserveAsset renewal reserveBadgerys Creek airport reserveBlacktown leisure centre, Stanhope *Blacktown venue management Ltd reserveBusiness technology reserveChildcare centres improvementCivicRisk reserveCompanion animal reserveDeposits, retentions and bonds *Deregulated approvals reserveE-business strategy reserve'Employees' leave entitlement *Energy and water fund reserveEquipment replacement reserveFamily day careFuture election expensesHistorical buildings restorationInfrastructure sinking fundInternal s7.11 contributionsLand projects reservesMajor parks reserveNurragingy reserveNWGC voluntary stormwater treatmentOtherOther plant replacementPC replacement reservePlayground replacement reservePrinting equipment replacementRiverstone cemetery reserveSecond Ponds Creek trunk drainage and bushcareSt Bartholomew’s church restorationStreet lighting reserveTransformational Projects ReserveUrgent works reserveWoodcroft reserveWorkers compensation self insurance claimsTotal internal restrictionsTOTAL RESTRICTIONS

* Council approved the acquisition of 81-85 Flushcombe Road in February 2016 based on a funding strategy that utilised a combination ofinternal loans from both externally and internally restricted reserves. In total, $18 million was borrowed comprising, $6 million from theDomestic Waste Reserve, $5 million from the 'Employee' Leave Entitlements Reserve, $5 million from the Deposits, retentions and bondsreserve and $2 million from the Blacktown leisure centre, Stanhope Reserve. Each of these borrowings will be repaid over the next 9years from surplus rental income generated from the building.

181,071

1,027

220,792 376,897

1,641 1,350

5,128

167

8,352

1,049

–

354

3,417 1,727

761

1,968

4,586

1,440

30,776

623

4,066

223

555

23

357

4,931

24

1,727

11,728

3,159

1,000

31 2,869

895

41

33,678

211

60,365

40

652

215 2,084

1,000

15,895 2,254

725

15,605

29,786

2,137

2,250 2,250 1,686

59

6,360

2017

218

3,557

508

1,463

4,125

Notes

517,662

2018

31

1,168

1,084

38,381 625

860

263 818

11,638

832

26,211

1,898

5,094

734 11,360

3,535 1,395

598

11,264

956

31




Note 7. Receivables

$ ’000

PurposeRates and annual chargesInterest and extra chargesUser charges and feesCapital debtors (being sale of assets)– Sale of land– Other asset sales

Accrued revenues– Interest on investments

Government grants and subsidiesLegal costs on outstanding ratesNet GST receivableRestorationsSection 611 chargesOther debtorsTotal

Less: provision for impairmentRates and annual chargesInterest and extra chargesOther debtorsTotal provision for impairment – receivables

TOTAL NET RECEIVABLES

Externally restricted receivablesDomestic waste managementTotal external restrictionsInternally restricted receivablesCapital – sale of landInternally restricted receivablesUnrestricted receivablesTOTAL NET RECEIVABLES

Movement in provision for impairment of receivablesBalance at the beginning of the year+ new provisions recognised during the year– amounts already provided for and written off this yearBalance at the end of the year

6,441

2017Notes

– –

96

–

(358)

(249)

2,209

–

2,303 158 443

(149)

(753)

(68)

–

(258)

561

1,242

1,865

(427)

2017

(359)

256 – 535 207 –

139 –

–

Current

5,851

Non-current

5,451 158

6,364

31,909

4,760

425 22,000 –

2,134

1,354

3,658

7,567

3,672 –

2,292

(146)

31,156

45,540

–

2,461 –

–

201 1,192

1,920

(624)

– –

1,865 –

23,096

162 227 (40)

5,851

889

1,865

2,209

– –

(58)

20181,076

–

1,886

3,114

2018

(75)

–

(452)

(377)

(217)

–

–

Current

–

– –

–

Non-current

22,000

2,009

– 5,851

1,180

21,030 31,156

2,009

2,009

44,916

22,000

–

–

44,916

1,076

– 1,886

32




Note 7. Receivables (continued)

Accounting policy for receivables

Recognition and measurementLoans and receivables are non-derivative financial assets with fixed or determinable payments that are notquoted in an active market. They are included in current assets, except for those with maturities greater than12 months after the reporting date which are classified as non-current assets. Loans and receivables areincluded in other receivables (Note 8) and receivables (Note 7) in the Statement of Financial Position.Receivables are recognised initially at fair value and subsequently measured at amortised cost using theeffective interest method, less provision for impairment. Receivables are generally due for settlement within30 days.Cash flows relating to short-term receivables are not discounted if the effect of discounting is immaterial.

ImpairmentFor loans and receivables the amount of the loss is measured as the difference between the asset’s carryingamount and the present value of estimated future cash flows (excluding future credit losses that have not beenincurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset isreduced and the amount of the loss is recognised in profit or loss.

Collectability of receivables is reviewed on an on-going basis. Debts that are known to be uncollectible arewritten off by reducing the carrying amount directly. An allowance account (provision for impairment ofreceivables) is used when there is objective evidence that Council will not be able to collect all amounts dueaccording to the original terms of the receivables.

Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financialreorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicatorsthat the receivable is impaired. When a receivable for which an impairment allowance had been recognisedbecomes uncollectable in a subsequent period it is written off against the allowance account. Subsequentrecoveries of amounts previously written off are credited against other expenses in the Income statement.

Note 8. Inventories and other assets

$ ’000

(a) Inventories

Inventories at costReal estate for resale (refer below)Stores and materialsTotal inventories at costTOTAL INVENTORIES

(b) Other assets

PrepaymentsLand acquisition in progressTOTAL OTHER ASSETS

Externally restricted assetsThere are no restrictions applicable to the above assets.

Non-current

14,767

11,942

2018 2017

3,232 8,710

Current

50,590 18,940

Notes

–

–

–

1,928 1,030 –

–

14,767

294 898

11,942

976 682 –

50,590

50,590

Current 2018

– – 14,767

Non-current

2,874 16,066

18,940

2017

33




Note 8. Inventories and other assets (continued)

$ ’000

Other disclosures

Details for real estate developmentResidentialIndustrial/commercialOther propertiesTotal real estate for resale(Valued at the lower of cost and net realisable value)

Represented by:Acquisition costsDevelopment costsTotal costsTotal real estate for resale

Movements:Real estate assets at beginning of the year– Purchases and other costs– Transfers in from (out to) Note 9– WDV of sales (expense)– Transfers in from (out to) Note 10– Transfers in from (out to) Note 9Total real estate for resale

Accounting policy

Raw materials and stores, work in progress and finished goodsRaw materials and stores, work in progress and finished goods are stated at the lower of cost and netrealisable value. Costs are assigned to individual items of inventory on basis of weighted average costs. Costsof purchased inventory are determined after deducting rebates and discounts. Net realisable value is theestimated selling price in the ordinary course of business less the estimated costs of completion and theestimated costs necessary to make the sale.

Inventory held for distributionInventory held for distribution is held at cost, adjusted where applicable for any loss of service potential.

Land held for resale/capitalisation of borrowing costsLand held for resale is stated at the lower of cost and net realisable value. Cost is assigned by specificidentification and includes the cost of acquisition, and development and borrowing costs during development.When development is completed borrowing costs and other holding charges are expensed as incurred.

Borrowing costs included in the cost of land held for resale are those costs that would have been avoided if theexpenditure on the acquisition and development of the land had not been made. Borrowing costs incurred whileactive development is interrupted for extended periods are recognised as expenses.

– – 4,745 –

16,066

50,590

4,734 8,311

– –

50,590

27,512 1,085

–

14,767

100

14,767

7,422

Non-current

16,341

–

16,066 50,590

16,066

6,822

Non-current

16,066

14,767

2,892 –

8,710

10,490

8,644

16,066

8,710 16,066

(15,497) (13,490) 5

2017

11,810

Notes

8,710 4,615

–

3,811

Current

63 –

Current

23,781 26,809 7,945

65 –

2018

50,590

8,647 40,100

14,767

14,767

4,095

13,682

– – 5,643 8,710

2,323

34




Note 9. Infrastructure, property, plant and equipment

Asset class

$ ’000

Capital work in progress 78,194 – 78,194 7,260 44,356 – – (41,362) – – – – 88,448 – 88,448 Plant and equipment 72,813 44,147 28,666 7,198 – (2,770) (5,718) – – – – – 74,781 47,405 27,376 Office equipment 23,167 18,687 4,480 737 – – (908) – – – – – 23,904 19,595 4,309 Furniture and fittings 9,091 7,592 1,499 168 – – (317) – – – – – 9,259 7,909 1,350 Land:

– Operational land 323,676 – 323,676 – 6,432 – – 4,555 (1,589) (28,264) – 421,331 726,141 – 726,141 – Community land 731,617 – 731,617 – 64,073 – – 4,348 1,589 (1,435) (36,698) – 763,494 – 763,494 – Land under roads (post 30/6/08) 67,240 – 67,240 – 8,269 – – – – (136) – – 75,373 – 75,373

Land improvements – non-depreciable 3,204 – 3,204 176 368 – – – – – – – 3,748 – 3,748 Land improvements – depreciable 177,482 60,150 117,332 2,662 5,827 – (8,718) 1,936 – – – – 183,472 64,433 119,039 Infrastructure:

– Buildings – non-specialised 140,928 51,116 89,812 660 88 – (2,715) – – – (14,275) – 115,860 42,290 73,570 – Buildings – specialised 368,680 95,505 273,175 1,869 2,325 – (6,539) 14 – – (4,538) – 341,159 74,853 266,306 – Other structures 5,437 1,955 3,482 – – – (139) – – – – – 5,437 2,094 3,343 – Roads 1,913,539 724,698 1,188,841 22,787 34,822 – (39,739) 10,943 – – – – 1,971,702 754,048 1,217,654 – Bulk earthworks (non-depreciable) 25,869 – 25,869 2,129 – – – – – – – – 27,998 – 27,998 – Stormwater drainage 721,934 212,163 509,771 2,150 10,293 – (8,512) 19,566 – – – – 753,933 220,665 533,268 – Stormwater drainage (non-depreciable) 36,168 – 36,168 – 8,770 – – – – – – – 44,938 – 44,938

Other assets:– Library books 12,555 10,010 2,545 – 728 (161) (736) – – – – – 11,656 9,280 2,376 – Other 101 75 26 – – – (3) – – – – – 101 78 23

TOTAL INFRASTRUCTURE,PROPERTY, PLANT AND EQUIP.

Renewals are defined as the replacement of existing assets (as opposed to the acquisition of new assets).

– – 47,796 (2,931) 186,351 (74,044) 4,711,695 1,226,098 3,485,597 3,978,754 (29,835) (55,511) 421,331 5,221,404 1,242,650

as at 30/6/2018

Net carrying amount

Asset movements during the reporting period

Accumulated depreciation

and impairment

Restated as at 30/6/2017Tfrs

from/(to) real estate assets

(Note 8)

WIPtransfers

Adjustmentsand transfers

Additionsnew assets

Additionsrenewals

Carrying value

of disposals

Revaluation decrements

to equity (ARR)

Revaluation increments

to equity (ARR)

Net carrying amount


and impairment

Gross carrying amount

Gross carrying amount

Depreciation expense

35




Note 9. Infrastructure, property, plant and equipment (continued)

Asset class

$ ’000

Capital work in progress 59,727 – 59,727 14,940 42,788 (1) – (39,257) (3) – – – 78,194 – 78,194 Plant and equipment 68,879 42,119 26,760 – 10,120 (2,569) (5,687) 42 – – – – 72,813 44,147 28,666 Office equipment 22,580 17,704 4,876 – 587 – (983) – – – – – 23,167 18,687 4,480 Furniture and fittings 8,869 7,246 1,623 – 223 – (347) – – – – – 9,091 7,592 1,499 Land:

– Operational land 323,776 – 323,776 – – – – – – (100) – – 323,676 – 323,676 – Community land 642,798 – 642,798 – 128,494 – – 9,279 – – (48,954) – 731,617 – 731,617 – Land under roads (post 30/6/08) 39,495 – 39,495 – 8,613 – – – – – – 19,132 67,240 – 67,240

Land improvements – non-depreciable – – – – 3,182 – – 22 – – – – 3,204 – 3,204 Land improvements – depreciable 169,690 53,852 115,838 1,687 6,656 – (6,849) – – – – – 177,482 60,150 117,332 Infrastructure:

– Buildings – non-specialised 140,423 49,075 91,348 2,314 – (1,134) (2,715) – – – – – 141,603 51,790 89,813 – Buildings – specialised 348,860 90,504 258,356 4,154 7,335 (576) (6,525) 10,430 – – – – 370,203 97,029 273,174 – Other structures 5,437 1,815 3,622 – – – (140) – – – – – 5,437 1,955 3,482 – Roads 1,857,672 698,812 1,158,860 22,511 25,742 – (37,756) 19,484 – – – – 1,913,539 724,698 1,188,841 – Bulk earthworks (non-depreciable) 25,869 – 25,869 – – – – – – – – – 25,869 – 25,869 – Stormwater drainage 691,037 204,127 486,910 24 30,909 – (8,072) – – – – – 721,934 212,163 509,771 – Stormwater drainage (non-depreciable) 24,866 – 24,866 – 11,302 – – – – – – – 36,168 – 36,168

Other assets:

– Heritage collections 7 7 – – – – – – – – – – – – – – Library books 13,357 11,226 2,131 – 583 (101) (68) – – – – – 12,555 10,010 2,545 – Other 101 72 29 – – – (3) – – – – – 101 75 26

TOTAL INFRASTRUCTURE,PROPERTY, PLANT AND EQUIP. 3,485,597 19,132 4,713,893 1,228,296 (48,954) – (3) (100)

Netcarryingamount

4,443,443 1,176,559 3,266,884 45,630 276,534

Revaluation decrements

to equity (ARR)

Revaluation increments

to equity (ARR)

Grosscarryingamount


and impairment

(4,381) (69,145)

Grosscarryingamount


and impairment

Netcarryingamount

Tfrs from/(to) real

estate assets

(Note 8)

Restated as at 30/6/2016

Adjustmentsand transfers

Additionsrenewals

Additionsnew assets

Carrying value

of disposals

Depreciation expense

Asset movements during the reporting periodRestated as at 30/6/2017

WIPtransfers

36





Accounting policy for infrastructure, property, plant and equipment

Infrastructure, property, plant and equipment are held at fair value. Independent valuations are performed atleast every five years, however the carrying amount of assets is assessed at each reporting date to confirm that it is not materially different from current fair value.

Increases in the carrying amounts arising on revaluation are credited to the asset revaluation reserve. To theextent that the increase reverses a decrease previously recognising profit or loss relating to that asset class, theincrease is first recognised as profit or loss. Decreases that reverse previous increases of assets in the sameclass are first charged against revaluation reserves directly in equity to the extent of the remaining reserveattributable to the class; all other decreases are charged to the Income Statement.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,only when it is probable that future economic benefits associated with the item will flow to Council and the costof the item can be measured reliably. All other repairs and maintenance are charged to the income statementduring the financial period in which they are incurred.

Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocatetheir cost, net of their residual values, over their estimated useful lives as follows:

Plant and equipment Years Other equipment YearsOffice equipment 5 to 10 Playground equipment 10 to 25 Office furniture 10 to 20 Other land improvements 10 to 100 Computer equipment 4Vehicles 5 to 8 BuildingsHeavy plant/road making equipment 5 to 10 Buildings 25 to 384 Other plant and equipment 5 to 10 Buildings: substructure - concrete Infinite

Transportation assets Other infrastructure assetsRoad: surface 10 to 50 Bulk earthworks InfiniteRoad: structure 15 to 115Bridges 15 to 100Bus shelters 10 to 30Car parking 30 to 60Drainage - Pollution Control Devices 10 to 50Footpaths 50 to 60Traffic Control Devices 10 to 50

The assets’ useful lives are reviewed, and adjusted if appropriate, at each reporting date. Gains and losses ondisposals are determined by comparing proceeds with carrying amount. These are included in the Incomestatement.

Land under roadsLand under roads is land under roadways and road reserves including land under footpaths, nature strips andmedian strips.

Council has elected not to recognise land under roads acquired before 1 July 2008 in accordance withAASB 1051 Land Under Roads.

Land under roads acquired after 1 July 2008 is recognised in accordance with AASB 116 Property, Plantand Equipment.

37





Accounting policy for infrastructure, property, plant and equipment (continued)

Crown reservesCrown Reserves under Council’s care and control are recognised as assets of the Council. While ownership ofthe reserves remains with the Crown, Council retains operational control of the reserves and is responsible fortheir maintenance and use in accordance with the specific purposes to which the reserves are dedicated.Improvements on Crown Reserves are also recorded as assets, while maintenance costs incurred by Counciland revenues relating to the reserves are recognised within Council’s Income Statement.Representations are being sought across state and local government to develop a consistent accounting treatment for Crown Reserves across both tiers of government.

Rural Fire Service assetsUnder section 119 of the Rural Fire Services Act 1997 (NSW) , “all fire fighting equipment purchased orconstructed wholly or from money to the credit of the Fund is to be vested in the council of the area for or onbehalf of which the fire fighting equipment has been purchased or constructed”.

Council recognises rural fire service assets including land, buildings, plant and vehicles.

Note 10. Investment property

$ ’000

(a) Investment property at fair value

Investment property on hand

Reconciliation of annual movement:Opening balance– Capitalised expenditure – this year– Net gain/(loss) from fair value adjustments– Transfers from/(to) inventories (Note 8)CLOSING BALANCE – INVESTMENT PROPERTY

589

75,409 75,168

(4,745) –

2017

42

2018Restated

75,168 70,987

8,884 (348)

75,409 75,168

38




Note 10. Investment property (continued)

(b) Valuation basis

The basis of valuation of investment property is fair value, being the amounts for which the properties couldbe exchanged between willing parties in arms length transaction, based on current prices in an active marketfor similar properties in the same location and condition and subject to similar leases.

The 2017 revaluations were based on independent assessments made by:APV Valuers & Assets Management Pty Ltd. The 2018 revaluations are based on movements in a relevant property price index.

(c) Leasing arrangements – Council as lessor

The investment property are leased to tenants under long-term operatingleases with rentals payable monthly.

Future minimum lease payments receivable under non-cancellableinvestment property operating leases not recognised in thefinancial statements are receivable as follows:Within 1 yearLater than 1 year but less than 5 yearsLater than 5 yearsTotal minimum lease payments receivable

(d) Investment property income and expenditure – summary

Rental income from investment property:– Minimum lease payments– Other incomeDirect operating expenses on investment property:– that generated rental incomeNet revenue contribution from investment propertyplus:Fair value movement for yearTotal income attributable to investment property

Accounting policy for investment propertyInvestment property, principally comprising freehold office buildings, is held for long-term rental yields and is notoccupied by the Council. Changes in fair values are recorded in the income statement as part of other income.

Investment property is carried at fair value, which is based on active market prices, adjusted, if necessary, for any difference in the nature, location or condition of the specific asset. If this information is not available, Council uses alternative valuation methods such as recent prices in less active markets, or discounted cash flow projections. Changes in fair values are recorded in the Income Statement as part of other income.

Properties that are under construction for future use as investment property are regarded as investment property.These are also carried at fair value unless the fair value cannot yet be reliably determined. Where that is thecase, the property will be accounted for at cost until either the fair value becomes reliably determinable orconstruction is complete.

(348) 3,236

3,584

2,980

5,526

3,945

247

6,573

4,887

5,283

8,884

518

(2,023) 3,750

(2,217)

12,634

2018

271

2017

450 9,282

3,322

39




Note 11. Intangible assets

$ ’000

Intangible assets represent identifiable non-monetary assets without physical substance.

Intangible assets are as follows:

Opening values:Gross book value (1/7)Accumulated amortisation (1/7)Net book value – opening balance

Movements for the year– Purchases– Amortisation charges

Closing values:Gross book value (30/6)Accumulated amortisation (30/6)

TOTAL INTANGIBLE ASSETS – NET BOOK VALUE 1

1. The net book value of intangible assets represent:

Software

Accounting policy for intangible assets

IT development and software Costs incurred in developing products or systems and costs incurred in acquiring software and licenses that willcontribute to future period financial benefits through revenue generation and/or cost reduction are capitalised tosoftware and systems. Costs capitalised include external direct costs of materials and service, direct payroll,and payroll related costs of employees’ time spent on the project. Amortisation is calculated on a straight linebasis over periods generally ranging from three to five years.

IT development costs include only those costs directly attributable to the development phase and are onlyrecognised following completion of technical feasibility, and where Council has an intention and ability to usethe asset.

5,554

(1,419)

3,412 3,412

(1,459)

3,412

4,699

(1,402) 547

4,699

4,699

7,692 (2,861)

7,560

132

(2,861)

2017

7,560

4,699

(4,280)

7,013

2018

40




Note 12. Payables and borrowings

$ ’000

PayablesGoods and services – operating expenditureAccrued expenses:– Salaries and wages

Security bonds, deposits and retentionsSection 7.11 Landcom second ponds creekOtherTotal payables

Income received in advancePayments received in advanceTotal income received in advance

TOTAL PAYABLES AND BORROWINGS

(a) Payables and borrowings relating to restricted assets

Externally restricted assetsDomestic waste management

TOTAL PAYABLES AND BORROWINGS

$ ’000

(b) Current payables and borrowings not anticipated to be settled within the next twelve months

The following payables and borrowings, even though classified as current, are notexpected to be settled in the next 12 months.

Payables – security bonds, deposits and retentions

Total payables and borrowings relating to unrestricted assets

Total payables and borrowings relating to restricted assets

6,112

2017

–

102,095

21,782

–

5,681

–

6,112

3,340

Current Non-current Current

–

1,258

–

–

Non-current

5,681

– 2,701

43,381 – 1,253

Current 2018

–

32,000 –

– –

42,710

2017

–

4,958

102,095

4,958

–

Current

2017

–

–

90,689

–

96,414

97,026

10,025

–

–

–

– 38,678

–

2018

–

91,843

–

8,980

–

5,069

96,801

8,980

5,069

96,801 –

10,025

2018

Non-current Non-current

–

41




Note 12. Payables and borrowings (continued)

$ ’000

(c) Financing arrangements

Unrestricted access was available at balance date to thefollowing lines of credit:

Bank overdraft facilitiesCredit cards/purchase cardsTotal financing arrangements

Drawn facilities as at balance date:– Credit cards/purchase cardsTotal drawn financing arrangements

Undrawn facilities as at balance date:– Bank overdraft facilitiesTotal undrawn financing arrangements

Accounting policy for payables and borrowings

PayablesThese amounts represent liabilities for goods and services provided to the Council prior to the end of financialyear that are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

BorrowingsBorrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequentlymeasured at amortised cost. Any difference between the proceeds (net of transaction costs) and theredemption amount is recognised in the income statement over the period of the borrowings using the effectiveinterest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of theloan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee isdeferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of thefacility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over theperiod of the facility to which it relates.Borrowings are removed from the Statement of Financial Position when the obligation specified in the contractis discharged, cancelled or expired. The difference between the carrying amount of a financial liability that hasbeen extinguished or transferred to another party and the consideration paid, including any non-cash assetstransferred or liabilities assumed, is recognised in other income or finance cost.Borrowings are classified as current liabilities unless Council has an unconditional right to defer settlement ofthe liability for at least 12 months after the reporting date.

Finance leasesLeases of property, plant and equipment where Council, as lessee, has substantially all the risks and rewardsof ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at thefair value of the leased property or, if lower, the present value of the minimum lease payments. Thecorresponding rental obligations, net of finance charges, are included in other short-term and long-termpayables. Each lease payment is allocated between the liability and finance cost. The finance cost is chargedto the income statement over the lease period so as to produce a constant periodic rate of interest on theremaining balance of the liability for each period. The property, plant and equipment acquired under finance leases is depreciated over the asset's useful life orover the shorter of the asset’s useful life and the lease term if there is no reasonable certainty that Councilwill obtain ownership at the end of the lease term.

– –

78 98 78

78 98

–

2018

98

2017

78

–

98

42




Note 13. Provisions

$ ’000

ProvisionsEmployee benefits:Annual leaveSick leaveLong service leaveSub-total – aggregate employee benefits

Other provisions:Self insurance – workers compensationOtherSub-total – other provisionsTOTAL PROVISIONS

(a) Provisions relating to restricted assetsThere are no restricted assets (external or internal) applicable to the above provisions

(b) Current provisions not anticipated to be settled within the next twelve months

The following provisions, even though classified as current, are notexpected to be settled in the next 12 months.

Provisions – employees benefits

(c) Description of and movements in provisions

At beginning of yearOther

2017At beginning of yearOther

–

53,147

– 17,138

52,220 1,380

29,551

–

– 18,518

Other employee

benefits

ELE provisions

5,531

–

2017

Non-current

97 2,408 5,300

1,182

2018

28,549

2017

54,052

Current

51,644

1,850

–

Sick leave ELE on-costs

Long service leave

29,551 52,220

29,551

36,110 36,110

36,289

17,138

5,531 –

5,531

–

4,577

51,038 1,503

–

Non-current

2018

36,289

501

30,052

– –

–

–

927 – (954)

17,138 – Total ELE provisions at end of year

Current

7,570 1,947

Total

7,570

17,138 4,577

1,182

– –

5,531 28,369 1,503

5,300

–

2018

52,985

Annual leave

18,518

68 2,340

6,482

–

9,073

–

Total ELE provisions at end of year

52,220

–

–

43




Note 13. Provisions (continued)

$ ’000

(c) Description of and movements in provisions (continued)

At beginning of yearChanges to provision:Other

2017At beginning of yearChanges to provision:Additional provisionsAmounts used (payments)

Accounting policy for provisionsProvisions are recognised when Council has a present legal or constructive obligation as a result of past events,it is probable that an outflow of resources will be required to settle the obligation, and the amount has beenreliably estimated.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement isdetermined by considering the class of obligations as a whole. A provision is recognised even if the likelihoodof an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditure required tosettle the present obligation at the reporting date. The discount rate used to determine the present valuereflects current market assessments of the time value of money and the risks specific to the liability. Theincrease in the provision due to the passage of time is recognised as interest expense.

Total other provisions at end of year

2,760

Other Self-insurance

Other provisions

7,360

Asset remediation

9,910

Total

– – 97 7,150

2018

68

– 2,731

–

– –

435

–

– –

(3,933) 3,351 – 3,385 34

7,150 Total other provisions at end of year 97 7,247

–

(29)

(372)

–

(3,561)

7,795

– 7,247

9,978

44





Employee benefits

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

Other long-term employee benefit obligationsThe liability for long service leave and annual leave that is not expected to be wholly settled within 12 monthsafter the end of the period in which the employees render the related service is recognised in the provision foremployee benefits and measured as the present value of expected future payments to be made in respect ofservices provided by employees up to the end of the reporting period using the projected unit credit method.

Consideration is given to expected future wage and salary levels, experience of employee departures, andperiods of service. Expected future payments are discounted using market yields at the end of the reportingperiod on national government bonds with terms to maturity and currency that match, as closely as possible,the estimated future cash outflows.

The obligations are presented as current liabilities in the Statement of Financial Position if the Council doesnot have an unconditional right to defer settlement for at least 12 months after the reporting date, regardless ofwhen the actual settlement is expected to occur.

Provisions for close-down and restoration, and environmental clean-up costs – tips and quarries

RestorationClose down and restoration costs include the dismantling and demolition of infrastructure and the removal ofresidual materials and remediation of disturbed areas. Estimated close down and restoration costs are providedfor in the accounting period when the obligation arising from the related disturbance occurs, whether this occursduring the development or during the operation phase, based on the net present value of estimated future costs.

Provisions for close down and restoration costs do not include any additional obligations which are expected toarise from future disturbance. The costs are estimated on the basis of a closure plan. The cost estimates are calculated annually during the life of the operation to reflect known developments, eg updated cost estimatesand revisions to the estimated lives of operations, and are subject to formal review at regular intervals

45





RehabilitationWhere rehabilitation is conducted systematically over the life of the operation, rather than at the time of closure,provision is made for the estimated outstanding continuous rehabilitation work at each reporting date and thecost is charged to the Income Statement.

Provision is made for the estimated present value of the costs of environmental clean up obligations outstandingat the reporting date. These costs are charged to the Income Statement. Movements in the environmental cleanup provisions are presented as an operating cost, except for the unwinding of the discount which is shown as a borrowing cost.

Remediation procedures generally commence soon after the time the damage, remediation process and estimated remediation costs become known, but may continue for many years depending on the nature of the disturbance and the remediation techniques.

As noted above, the ultimate cost of environmental remediation is uncertain and cost estimates can vary inresponse to many factors including changes to the relevant legal requirements, the emergence of newrestoration techniques or experience at other locations. The expected timing of expenditure can also change, forexample in response to changes in quarry reserves or production rates. As a result there could be significantadjustments to the provision for close down and restoration and environmental clean up, which would affectfuture financial results.

Other movements in the provisions for close down and restoration costs, including those resulting from newdisturbance, updated cost estimates, changes to the estimated lives of operations and revisions to discountrates are capitalised within property, plant and equipment. These costs are then depreciated over the lives of theassets to which they relate.

Close down and restoration costs are a normal consequence of tip and quarry operations, and the majority ofclose down and restoration expenditure is incurred at the end of the life of the operations. Although the ultimatecost to be incurred is uncertain, Council estimates the respective costs based on feasibility and engineeringstudies using current restoration standards and techniques.

Self-insuranceCouncil has decided to self-insure for various risks, including workers compensation, public liability andprofessional indemnity. A provision for self-insurance has been made to recognise outstanding claims. Forpublic liability insurance and professional indemnity insurance, Council has an interest in the Local Governmentinsurance pool CivicRisk West & CivicRisk Mutual, which substantially mitigate Council's risk, whilst Council'srisk can also be escalated by exposure to the risks of the other pool members. Council also maintains cashand investments to meet expected future claims; refer to Note 6 (c) with further details regarding the bankguarantee at Note 18.

46




Note 14. Accumulated surplus, revaluation reserves, changes in accounting policies, changes in accounting estimates and errors

(a) Nature and purpose of reserves

Infrastructure, property, plant and equipment revaluation reserveThe infrastructure, property, plant and equipment revaluation reserve is used to record increments /decrements of non-current asset values due to their revaluation.

(b) Correction of errors relating to a previous reporting period

Operational Land / Community Land

Buildings

Infrastructure

Investment propertyIt has been identified that certain investment properties were recorded as having been disposed in error totalling $9,515,308. The fair value amount of this property has been restated with a correction against retained earnings.

The errors identified above have been corrected by restating the balances at the beginning of the earliestperiod presented (1 July 2016) and taking the adjustment through to accumulated surplus at that date.Comparatives have been changed to reflect the correction of errors. The impact on each line item is shownin the tables below.

It has been identified that certain infrastructure assets that were dedicated to Council in previous financial years also had an amount totalling $4,386,127 in capital works in progress. This adjustment recognises this movement and ensures a double recognition does not occur. This error has been adjusted against retained earnings to correct the error.

As part of the revaluation of Operational Land for 2017/18 it was identified that certain properties Council owns were not previously recognised. The error amounted to a restatement of $22,301,620. This error has been adjusted against retained earnings to correct the error.Crown Land that was not previously recognised in Council's Community Land register has now been recognised. The error amounted to a restatement of $1,188,011. This error has been adjusted against retained earnings to correct the error.

As part of the revaluation of Buildings for 2017/18 it was identified that certain properties Council owns were not previously recognised. The error amounted to a restatement of $11,972,766. This error has been adjusted against retained earnings to correct the error.

47




Note 14. Accumulated surplus, revaluation reserves, changes in accounting policies, changes in accounting estimates and errors (continued)

$ ’000

(b) Correction of errors relating to a previous reporting period (continued)

Changes to the opening Statement of Financial Position at 1 July 2016

Statement of Financial Position

Non-current assets classified as ‘held for sale’Investment propertyTotal Assets

Total Liabilities

Total equity

Adjustments to the comparative figures for the year ended 30 June 2017

Statement of Financial Position

Investment propertyTotal assets

Total liabilities

Total equity

Balance1 July, 2016

2,942,062

4,058,932

–

31,254

3,854,766

161,562

Balance

63,640 11,528

OriginalIncrease/

Impact Restated

3,454,521

Balance

42,604

–

75,168

3,222,582

3,646,672

(decrease) 30 June, 2017

3,897,370 3,179,978

4,016,328

31,254

161,562

Impact

31,254

3,266,885 15,158 (9,515)

Balance

9,515

3,235,631

70,986

Original

Infrastructure, property, plant and equipment5,643

127,132

31,076 3,485,597

Retained earnings

Infrastructure, property, plant and equipment

42,604

42,604

Increase/

127,132

61,471 3,742,550

3,615,418

3,773,804

30 June, 2017

Retained earnings

1 July, 2016(decrease)

2,910,808 31,254

Restated

48




Note 14. Accumulated surplus, revaluation reserves, changes in accounting policies, changes in accounting estimates and errors (continued)

$ ’000

(b) Correction of errors relating to a previous reporting period (continued)

Income Statement

Fair value increment on investment propertyNet gains from the disposal of assetsTotal income from continuing operations

Total expenses from continuing operations


Statement of Comprehensive Income


Other comprehensive income

Total comprehensive income for the year

70,371

30 June, 2017(decrease)

582,771

280,520

Balance

5,123

BalanceOriginal

Balance Increase/

6,872 9,515 14,638

239,348

2,012

(decrease) 30 June, 2017

8,884

Increase/

70,548

Balance

Impact

11,527 594,298

30 June, 2017

Original

313,601 177 313,778

269,170

177

250,698

– (29,822)

11,350

(29,822)

280,520

Restated

30 June, 2017

Impact Restated

11,350

Depreciation and amortisation

269,170

11,350

49




Note 15. Statement of cash flows – additional information

$ ’000

(a) Reconciliation of cash assets

Total cash and cash equivalent assetsBalance as per the Statement of Cash Flows

(b) Reconciliation of net operating result to cash provided from operating activities

Net operating result from Income StatementAdjust for non-cash items:Depreciation and amortisationNet losses/(gains) on disposal of assetsNon-cash capital grants and contributionsLosses/(gains) recognised on fair value re-measurements through the P&L:– investment property

Share of net (profits) or losses of associates/joint ventures

+/- Movement in operating assets and liabilities and other cash items:Decrease/(increase) in receivablesIncrease/(decrease) in provision for doubtful debtsDecrease/(increase) in inventoriesDecrease/(increase) in other assetsIncrease/(decrease) in payablesIncrease/(decrease) in other accrued expenses payableIncrease/(decrease) in other liabilitiesIncrease/(decrease) in employee leave entitlementsIncrease/(decrease) in other provisionsNet cash provided from/(used in)operating activities from the Statement of Cash Flows

(c) Non-cash investing and financing activitiesDeveloper contributions ‘in kind’Other dedicationsOther infrastructure assetsTotal non-cash investing and financing activities

Note 16. Interests in other entities

$ ’000

Joint venturesTotal

2018

104

(135,898)

8,622

(93) (6,443)

96,238

1,414

Council’s share of net assets 2018

2018

(5,542)

9,135

62,255

Council’s share of net income

8,269

(358)

(548) 1,611

(8,884) 348

70,548

927

20,928

275,639

(1,274) (1,414)

438

187

303,103 280,520

165,590

(14,638)

2017

(74,036)

5

Notes

75,463

(2,774)

2,731

(22,209)

96,238 165,590

19,625

39,372 (26,227)

228,491

56,613 135,898

54,018

1,414 9,573 1,274 1,274 9,573

20178,622 2017

(952)

9,154

6a

74,036

50




Note 16. Interests in other entities (continued)

$ ’000

(a) Controlled entities (subsidiaries) – being entities and operations controlled by Council

Council’s consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with AASB 10 and the accounting policy described below.

Name of operation/entity Principal activity

Blacktown Venue Management Ltd

Blacktown International Sportspark – SydneyCnr Eastern Road & Phillip Parkway, Rooty Hill NSW 2766

Interests in SubsidiaryCouncil’s interest in Subsidiary

Blacktown Venue Management LtdIn 2001/02, Council assumed responsibility for Blacktown International Sportspark, Sydney. Council established Blacktown Venue Management Ltd (ACN 098 490 978), as a separate legal entity responsible for the operational management of the venue. Blacktown Venue Management Ltd is a public company limited by guarantee and is fully owned by Blacktown City Council. The company was issued a certificate of registration from the Australian Securities and Investments Commission on 19 October, 2001, and commenced operations from January 2002, following the appointment of a Chief Executive Officer. Funding for Blacktown Venue Management Ltd is by way of revenue generated from operations, and a subsidy from Council. For the purpose of financial reporting in accordance with the Corporations legislation, Council considers Blacktown Venue Management Ltd to be a non-reporting entity. A separate set of financial statements for Blacktown Venue Management Ltd is prepared and audited annually on this basis. For the purposes of Council’s Consolidated Financial Statements, all transactions associated with Blacktown Venue Management Ltd have been consolidated into Council’s accounts.

The nature and extent of significant restrictions relating to the SubsidiaryThere are no significant restrictions outside of meeting the requirements of the Local Government Act.

The nature of risks associated with Council’s interests in the Subsidiary

Other disclosuresCouncil holds 100% interest in Blacktown Venue Management Ltd.

Reporting dates of SubsidiaryBlacktown Venue Management Ltd prepares Special Purpose Financial Statements with a year end reporting date of 30 June Statements are prepared to ensure compliance with ASIC.

2017

The company's principal continuing activities during the year consisted of operational management and development of Key venues Blacktown International Sportspark - Sydney, located on Eastern Road, Doonside, NSW . From 1 July 2015 activities includes Blacktown aquatic centre, Blacktown leisure centre Stanhope, Emerton leisure centre, Mount Druitt and Riverstone swimming centres.

Blacktown Venue Management Ltd is a company limited by guarantee, incorporated and domiciled in Australia. Blacktown City Council is fully responsible now and for the foreseeable future for all debts of Blacktown Venue Management Ltd should Blacktown Venue Management Ltd be unable to meet these obligations. Blacktown City Council provides a contribution to enable Blacktown Venue Management Ltd to operate which represents the variance between operating revenue generated by Blacktown Venue Management Ltd and expenses less amounts released from reserves. The contribution made by Blacktown City Council for the 17/18 financial year was $7,371,954.

2017Voting rights

2018Ownership

2018100% 100% 100%100%

51





$ ’000

(a) Controlled entities (subsidiaries) – being entities and operations controlled by Council (cont'd)

Summarised financial information for the Subsidiary

Summarised statement of comprehensive incomeRevenueExpensesProfit for the periodTotal comprehensive income (1)

Summarised statement of financial positionCurrent assetsTotal assets

Current liabilitiesTotal liabilities

Net assets (2)

Summarised statement of cash flowsCash flows from operating activitiesNet increase (decrease) in cash and cash equivalents

Accounting policy for subsidiariesSubsidiaries are all entities (including structured entities) over which the Council has control. Control isestablished when the Council is exposed to, or has rights to variable returns from its involvement with the entityand has the ability to affect those returns through its power to direct the relevant activities of the entity.

These consolidated financial statements include the financial position and performance of controlled entitiesfrom the date on which control is obtained until the date that control is lost. Intragroup assets, liabilities,equity, income, expenses and cash flows relating to transactions between entities in the consolidated entityhave been eliminated in full for the purpose of these financial statements. Appropriate adjustments have beenmade to a controlled entity’s financial position, performance and cash flows where the accounting policies usedby that entity were different from those adopted by the consolidated entity. All controlled entities have a Junefinancial year end.

2018

(18,709)

475

491

1,141

762

1,533

771

(829) 1,141

2017

2018

475

966

2018

270

19,158

966

270 – –

2017

(18,888)

(829)

1,533

18,709

2017

771

52





$ ’000

(b) Joint arrangements

(i) Joint ventures

Council has incorporated the following joint ventures into its consolidated financial statements.

Civic Risk West and Civic Risk MutualBlacktown City Council’s interests in the Local Government Insurance Pools “Civic Risk West" and "CivicRisk Mutual” have been recognised as a Joint Venture in the financial statements using the EquityAccounting method. The proportionate interests in the assets, liabilities and expenses of Civic Risk Westand Civic Risk Mutual have been incorporated in the financial statements under the appropriate headings.

(a) Net carrying amounts – Council’s share

Name of entityCivicRisk West & CivicRisk MutualTotal carrying amounts – material joint ventures

(b) Details

Name of entity Principal activitySelf Insurance

(c) Relevant interests and fair values

Name of entityCivicRisk West & CivicRisk Mutual

(d) Summarised financial information for joint ventures

Statement of financial positionCurrent assetsOther current assetsNon-current assets

Current liabilitiesOther current liabilitiesNon-current liabilities

Net assets

2018

17,060

Interest in

2018

2018relationship

fair value2017

Nature of

ownership

Joint Venture

outputs2017

44,467

8,999

19%

47,729

2017

29,381

19%19%

9,820

19% 19%

8,622

2017

business

2018

Quoted Interest in

23,259

Measurement

Proportion of

2017

CivicRisk West & CivicRisk Mutual

9,573

50,230

Non-current financial liabilities (excluding trade and other payables and provisions)

9,573

Penrith NSW

Equity

voting power

method

53,323 23,402

2018

8,622


19%

Place of

2017

2018

53





$ ’000

(b) Joint arrangements (continued)

(d) Summarised financial information for joint ventures (continued)

Reconciliation of the carrying amountOpening net assets (1 July)Profit/(loss) for the periodDividends paidClosing net assets

Council’s share of net assets (%)Council’s share of net assets ($)

Statement of comprehensive incomeIncomeOther expensesProfit/(loss) for periodTotal comprehensive income

Share of income – Council (%)Profit/(loss) – Council ($)Total comprehensive income – Council ($)

Dividends received by Council

(i) County Councils

Council is a member of Hawkesbury County Council.

Council is of the opinion that it does not control the above county council/s and accordingly these entities havenot been consolidated or otherwise included within these financial statements.

Accounting policy for joint arrangementsThe Council has determined that it has only joint ventures

Joint venturesInterests in joint ventures are accounted for using the equity method in accordance with AASB128Investments in Associates and Joint Ventures . Under this method, the investment is initially recognised as acost and the carrying 'amount is increased or decreased to recognise the Council’s share of the profit or lossand other comprehensive income of the joint venture after the date of acquisition.

If the Council’s share of losses of a joint venture equals or exceeds its interest in the joint venture, the Councildiscontinues recognising its share of further losses.

The Council’s share in the joint venture’s gains or losses arising from transactions between itself and its jointventure are eliminated.

Adjustments are made to the joint venture’s accounting policies where they are different from those of theCouncil for the purpose of the consolidated financial statements.

1,414

44,467

50,230

6,658

44,467 (1,673)

8,622 19.4%

9,573 19.1%

2017


39,482 7,890

(11,311)

(2,127)

6,658

1,414

7,890

17.9%

7,890

463

19,708 (13,050)

1,274

19,201

362

6,658

1,274

19.1%

2018

54




Note 17. Commitments for expenditure

$ ’000

(a) Capital commitments (exclusive of GST)

Capital expenditure committed for at the reporting date but notrecognised in the financial statements as liabilities:

Property, plant and equipmentBuildingsPlant and equipmentRoads, bridges and drainageOffice equipmentLand developmentLand acquisitions Library booksFurniture and fittingsInformation TechnologyLand ImprovementsOtherTotal commitments

These expenditures are payable as follows:Within the next yearTotal payable

Sources for funding of capital commitments:Unrestricted general fundsExternally restricted reservesInternally restricted reservesTotal sources of funding

(b) Operating lease commitments (non-cancellable)

a. Commitments under non-cancellable operating leases at thereporting date, but not recognised as liabilities are payable:

Within the next yearLater than one year and not later than 5 yearsTotal non-cancellable operating lease commitments

b. Non-cancellable operating leases include the following assets:Photocopiers, gym equipment and electric cars.Contingent rentals may be payable depending on the condition of items or usage during the lease term.

Conditions relating to operating leases:– All operating lease agreements are secured only against the leased asset.– No lease agreements impose any financial restrictions on Council regarding future debt etc.

966

792 – 75 810

158 270 21

70,633

2017

71,764

1,300

43,510

3,525 22

2018

351

29 33,702

–

9,757

269

420 558 289

53,616

1,489

143

19

53,616 10,198 82,988

53,616 82,988 53,616

82,988

82,988

4,891

9,514

7,894

349 1,026

101 319

55




Note 18. Contingencies and other liabilities/assets not recognised

The following assets and liabilities do not qualify for recognition in the Statement of Financial Position, but their knowledge and disclosure is considered relevant to the users of Council’s financial report.

LIABILITIES NOT RECOGNISED:

1. Guarantees

(i) Defined benefit superannuation contribution plans

A liability or asset in respect of defined benefit superannuation plans would ordinarily be recognised in the Statement of Financial Position, and measured as the present value of the defined benefit obligation at the reporting date plus unrecognised actuarial gains (less unrecognised actuarial losses) less the fair value of the superannuation fund’s assets at that date and any unrecognised past service cost.

The present value of the defined benefit obligation is based on expected future payments that arise from membership of the fund to the reporting date, calculated annually by independent actuaries using the projected unit credit method.

Consideration is given to expected future wage and salary levels, experience of employee departures, and periods of service.

Council is party to an Industry Defined Benefit Plan under the Local Government Superannuation Scheme, named the ‘Local Government Superannuation Scheme – Pool B’.

Council participates in an employer-sponsored defined benefit superannuation scheme, and makes contributionsas determined by the superannuation scheme’s trustees.

Member councils bear responsibility of ensuring there are sufficient funds available to pay out the required benefitsas they fall due.

The scheme administrators have advised Council's estimated share of the deficit is $3.831 million as at 30 June2018. However, they may call Council to make an immediate payment sufficient to offset this deficit at any time.As the scheme is a mutal arrangement where assets and liabilities are pooled together for all member councils,the amount of such a payment is not able to be reliably quantified.

Future contributions made to the defined benefit scheme to rectify the net deficit position will be recognised as anexpense when they become payable – similar to the accounting for defined contributions plans.

(ii) Other guarantees

Council has provided no other guarantees other than those listed above.

56




Note 18. Contingencies and other liabilities/assets not recognised (continued)

LIABILITIES NOT RECOGNISED (continued):

2. Other liabilities

(i) Third party claims

The Council is involved from time to time in various claims incidental to the ordinary course of business includingclaims for damages relating to its services.

Council believes that it is appropriately covered for all claims through its insurance coverage and does not expectany material liabilities to eventuate.

(ii) Contribution Plans

Council levies Section 7.11 contributions upon various development across the Council area through therequired Contributions Plans.

As part of these Plans, Council has received funds for which it will be required to expend the monies inaccordance with those Plans.

As well, these Plans indicate proposed future expenditure to be undertaken by Council, which willbe funded by making levies and receipting funds in future years or where a shortfall exists by the use ofCouncil's General Funds. The NSW State Government's Local Infrastructure Growth Scheme (LGIS)currently fills the gap between the maximum contribution of $40,000 per lot that councils can chargedeveloper and what is actually costs to deliver infrastructure under a contributions plan, for Plans assessed by IPART. Ant shortfall in the payment from this scheme will also need to be considered for funding from Council's General Funds.This cap increases incrementally beginning 1 July 2018 at $35,000, to 1 July 2020 at $45,000.

These future expenses do not yet qualify as liabilities as of the Reporting Date, but represent Councilsintention to spend funds in the manner and timing set out in those Plans.

(iii) Potential land acquisitions due to planning restrictions imposed by Council

Council has classified a number of privately owned land parcels as local open space or bushland.

As a result, where notified in writing by the various owners, Council will be required to purchase these land parcels.

57





LIABILITIES NOT RECOGNISED (continued):

(iii) Potential land acquisitions due to planning restrictions imposed by Council (continued)

At reporting date, reliable estimates as to the value of any potential liability (and subsequent land asset) from suchpotential acquisitions has not been possible.

(iv) Workers Compensation Insurance – Bank Guarantee

Since 1 September 1991, Council has been self insured for workers compensation. A condition of being approvedto hold a self insurance licence is that Council must either lodge a security deposit with the State Insurance Regulatory Authority or provide a bank guarantee to secure total outstanding claims liabilities.

The State Insurance Regulatory Authority has determined Council's bank guarantee to be $9.08 Million for the2018/19 financial year upon reviewing the report from Council's actuary.

The bank guarantee for the 2017/18 financial year was $6.5 million.

Council has supported this bank guarantee with an internally restricted investment with a value of $2.25 Million asat 30 June 2018.

(v) Potential future remediations

Council may in the future need to undertake rehabilitation of Council's sites.

Accordingly the rehabilitation is considered as a potential contingent liability in relation to possible future remediation costs which at this stage cannot be determined.

(vi) Open Space Recreation Facilities

Depending upon the outcome of future investigations into Council's various parks and reserves, it is possiblethat future remediation may be required at some locations. Neither the scope or actual cost of such remediationworks is certain at this stage.

In relation to an area of land which Council has leased for a number of years from Sydney Water at Prospect, ithas been identified that remediation work will be required in the future.

Again neither the scope or actual cost of the works required is certain at this stage.

58





ASSETS NOT RECOGNISED (continued):

(i) Land under roads

As permitted under AASB 1051, Council has elected not to bring to account land under roads that it owned orcontrolled up to and including 30/6/08.

(ii) Infringement notices/fines

Fines and Penalty income, the result of Council issuing Infringement Notices is followed up and collected bythe State Debt Recovery Office which is the fines division of the Office of State Revenue.

Council’s Revenue Recognition policy for such income is to account for it as revenue on receipt.

Accordingly, at Year End, there is a potential asset due to issued but unpaid Infringement Notices.

Due to the limited information available on the status, value and duration of outstanding Notices, Council isunable to determine the value of outstanding income.

59




Note 19. Financial risk management

$ ’000

Risk management

Council’s activities expose it to a variety of financial risks including (1) price risk, (2) credit risk, (3) liquidity riskand (4) interest rate risk.

The Council’s overall risk management program focuses on the unpredictability of financial markets and seeksto minimise potential adverse effects on the financial performance of the Council.

Council does not engage in transactions expressed in foreign currencies and is therefore not subject to foreigncurrency risk.

Financial risk management is carried out by Council’s finance section under policies approved by the Council.

The fair value of Council’s financial assets and financial liabilities approximates their carrying amount.

Council’s objective is to maximise its return on cash and investments whilst maintaining an adequate level ofliquidity and preserving capital.

Council’s finance area manages the cash and Investments portfolio with the assistance of independentadvisors.

Council has an investment policy which complies with the Local Government Act 1993 and MinisterialInvestment Order 625. This policy is regularly reviewed by Council and its staff and a monthly Investment reportis provided to Council setting out the make-up and performance of the portfolio as required by LocalGovernment regulations.

The risks associated with the investments held are:

– Price risk – the risk that the capital value of Investments may fluctuate due to changes in market prices,whether there changes are caused by factors specific to individual financial instruments or their issuersor are caused by factors affecting similar instruments traded in a market.

– Interest rate risk – the risk that movements in interest rates could affect returns and income.– Credit risk – the risk that the investment counterparty will not complete their obligations particular to afinancial instrument, resulting in a financial loss to Council – be it of a capital or income nature.

Council manages these risks (amongst other measures) by diversifying its portfolio and only purchasinginvestments with high credit ratings or capital guarantees.

Council also seeks advice from independent advisers before placing any funds in cash equivalents andinvestments.

(a) Market risk – price risk and interest rate riskThe following represents a summary of the sensitivity of Council’s Income Statement and accumulated surplus(for the reporting period) due to a change in either the price of a financial asset or the interest rates applicable.

It is assumed that the change in interest rates would have been constant throughout the reporting period.

2018Possible impact of a 10% movement in market valuesPossible impact of a 1% movement in interest rates

2017Possible impact of a 10% movement in market valuesPossible impact of a 1% movement in interest rates

Equity Profit

4,032 4,032

5,616

Decrease of values/rates

56,159 56,159 56,159

4,032 40,324

Increase of values/rates

5,616

40,324

56,159

40,324

Equity

5,616 5,616

4,032

Profit

40,324

60




Note 19. Financial risk management (continued)

$ ’000

(b) Credit risk

Council’s major receivables comprise (i) rates and annual charges and (ii) user charges and fees.

The major risk associated with these receivables is credit risk – the risk that debts due and payable to Councilmay not be repaid in full.

Council manages this risk by monitoring outstanding debt and employing stringent debt recovery procedures.It also encourages ratepayers to pay their rates by the due date through incentives.

Credit risk on rates and annual charges is minimised by the ability of Council to secure a charge over the landrelating to the debts – that is, the land can be sold to recover the debt. Council is also able to charge intereston overdue rates and annual charges at higher than market rates which further encourages the payment of debt.

There are no significant concentrations of credit risk, whether through exposure to individual customers,specific industry sectors and/or regions.

The level of outstanding receivables is reported to Council monthly and benchmarks are set and monitored foracceptable collection performance.

Council makes suitable provision for doubtful receivables as required and carries out credit checks on mostnon-rate debtors.

There are no material receivables that have been subjected to a re-negotiation of repayment terms.

A profile of Council’s receivables credit risk at balance date follows:

(i) Ageing of receivables – %Current (not yet overdue)Overdue

(ii) Ageing of receivables – valueRates and annual charges< 1 year overdue1 – 2 years overdue2 – 5 years overdue> 5 years overdue

Other receivablesCurrent0 – 30 days overdue31 – 60 days overdue61 – 90 days overdue> 91 days overdue

35,723

8,190

685

91

331

501

135 189

1,730 598

Other

10,420

100%8%

0%

2017

100%

20,757

13%

annual

2017

2017

charges

699

2018

1,304

87%0% 92%

347

23,781

1,014

1,214

9,345

896

38,656

100%

7,798

2018

receivables

2018

100%

receivables

100%

Other annual Rates and

100%

charges

Rates and

61




Note 19. Financial risk management (continued)

$ ’000

(c) Liquidity risk

Payables and borrowings are both subject to liquidity risk – the risk that insufficient funds may be on handto meet payment obligations as and when they fall due.

Council manages this risk by monitoring its cash flow requirements and liquidity levels and maintaining anadequate cash buffer.

Payment terms can (in extenuating circumstances) also be extended and overdraft facilities utilised as required.

Borrowings are also subject to interest rate risk – the risk that movements in interest rates could adverselyaffect funding costs and debt servicing requirements. Council manages this risk by borrowing long term andfixing the interest rate on a 4-year renewal basis. The Finance Section regularly reviews interest ratemovements to determine if it would be advantageous to refinance or renegotiate part or all of the loan portfolio.

The contractual undiscounted cash outflows (ie. principal and interest) of Council’s payables and borrowingsare set out in the maturity table below:

$ ’000

Trade/other payablesTotal financial liabilities

Trade/other payablesTotal financial liabilities 38,678 96,414

38,678 96,414

–

43,381

≤ 1 Year

47,308 90,689 2018

2017

57,736

90,689 – 90,689

96,414

– –

Actualcash

1 – 5 Years

43,381

maturity

Total

–

–

payable in:

96,414

valuescarrying

> 5 Years outflows

47,308

–

to noSubject

57,736

90,689

–

62




Note 20. Material budget variations

$ ’000

While the Income Statement included in this General Purpose Financial Report must disclose the originalbudget adopted by Council, the Local Government Act 1993 requires Council to review its financial budgeton a quarterly basis, so that it is able to manage the various variations between actuals versus budget thatinvariably occur throughout the year.

This note sets out the details of material variations between Council’s original budget and its actualresults for the year as per the Income Statement – even though such variations may have been adjusted forduring each quarterly budget review.

Note that for variations* of budget to actual :Material variations represent those variances that amount to 10% or more of the original budgeted figure.F = Favourable budget variation, U = Unfavourable budget variation

$ ’000

REVENUESRates and annual chargesUser charges and feesCouncil processed a large amount of development and subdivision applications, together with planning and buildingregulation applications as a result of high levels of development in the local government area. The resulting revenuerevenue received created a favourable variance to budget.Interest and investment revenueCouncil's interest and investment revenue exceeded the original budget due to higher than anticipated average investment portfolio balance during the financial year than was originally anticipated, along with the average return on investments for the financial year higher than forecast.Other revenuesThis favourable variance to budget is due to Council's review of its past fuel tax credit claims. This resulted in an additional claim of $580k which was not in Council's original budget for 2017/18.Operating grants and contributionsCapital grants and contributionsThis favourable variance to budget is due to large amount of development occuring within the region which is difficult to accurately budget for. This can be seen by the drastic increase in Section 7.11 contributions revenue compared with prior year results. This has also been impacted by the dedicated assets which have been completed and handed over to Council.Net gains from disposal of assetsActual results are unfavourable due to the George Street sale of properties that forms part of the Warrick Lane Development Strategy that was recognised in 2016/17 but had originally been budgeted in 2017/18. There have also been a number of other land related sales which have been moved from the originally budgeted sale in 2017/18 to 2018/19 financial year.Joint ventures and associates - net profitsThis is related to Council's share of profit in Civic Risk Mutual and Civic Risk West. These are separate entities set up as joint ventures with a number of other Councils for self-insurance purposes. Council is unable to reliably forecast the claims for the year or the size of the surplus/deficit and therefore, no estimate was included in the original budget for 2017/18.

12,383 14%

F

28,793

1,414

271,972

42,417 22,209

0%

300,765

–

(20,208)

26,706

Budget ---------- Variance* ----------

207,830 36,174

10,817 1,566 F

2,181

212,477 10%

11%

2018

16,885

2018

Council’s original financial budget for 17/18 was adopted by the Council on 28 June 2018 and is not required to be audited.

2018

F4,647

8%

3,760

28,816

U

2%

F13%

1,414

Actual

F

19,066

39,934

FF

2,110

(48%)

63




Note 20. Material budget variations (continued)

$ ’000

EXPENSESEmployee benefits and on-costsMaterials and contractsThis unfavourable variance is largely related to the operational expenditure budget revotes and carry forwards from the prior financial year, additional expenditure approved during each review period and expenditure required for works related to increasing revenue.Depreciation and amortisationThis unfavourable variance to budget is due to an increase in the amount of depreciable assets constructed or dedicated in the North West Growth Centre during 2016/17 financial year that are being depreciated for the firsttime during 2017/18 financial year. Along with park assets that were disposed of during 2017/18 as a result of inspections conducted by the Council staff on assets held in Council's park reserves. Other expenses (1,012) (3%)36,612

U

(32%)

35,600

57,200

(17%)

145,478

2018

F(11,292)

2,876 142,602

Actual

67,644

2018Budget

78,936 2%

U

(18,263) U75,463

2018---------- Variance* ----------

64




Note 21. Fair value measurement

$ ’000

The Council measures the following asset and liability classes at fair value on a recurring basis:

– Infrastructure, property, plant and equipment– Investment property

The fair value of assets and liabilities must be estimated in accordance with various accounting standards foreither recognition and measurement requirements or for disclosure purposes.The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date.The fair value of financial instruments that are not traded in an active market is determined using valuation techniques.Council uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments.The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Council for similar financial instruments.

AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a‘level’ in the fair value hierarchy as follows:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).

(1) The following table presents all assets and liabilities that have been measured and recognised at fair values:

2018

Recurring fair value measurements

Investment propertiesInvestment propertiesTotal investment properties 75,409 –

75,409

inputsinputsunobservable

QuotedDate Significantprices in

Significantobservableof latest

valuation active mkts

75,409 – 75,409 –

30/06/18 –

Level 3 TotalFair value measurement hierarchy

Level 1 Level 2

65




Note 21. Fair value measurement (continued)

$ ’000

(1) The following table presents all assets and liabilities that have been measured and recognised at fair values: (continued)

2018

Recurring fair value measurements

Infrastructure, property, plant and equipmentPlant and equipmentOffice equipmentFurniture and fittingsOperational landCommunity landLand under roads (post 30/06/08)Land improvements – non-depreciableLand improvements – depreciableBuildings – non-specialisedBuildings – specialisedOther structuresRoads, bridges, footpathsBulk earthworks (non-depreciable)Stormwater drainageStormwater drainage (non-depreciable)Library booksOtherTotal infrastructure, property, plant and equipment

2017

Investment propertiesInvestment propertiesTotal investment properties

Infrastructure, property, plant and equipmentPlant and equipmentOffice equipmentFurniture and fittingsOperational landCommunity landLand under roads (post 30/06/08)Land improvements – non-depreciableLand improvements – depreciableBuildings – non-specialisedBuildings – specialisedOther structuresRoads, bridges, footpathsBulk earthworks (non-depreciable)Stormwater drainageStormwater drainage (non-depreciable)Library booksOtherTotal infrastructure, property, plant and equipment

75,373

266,306

–

Quoted Significant

2,545

323,676

75,168

–

36,168

–

3,407,402

– –

75,168

4,480

273,174

25,869

26

30/06/13 – 323,676 – 323,676

30/06/15

117,332 117,332 30/06/16 –

67,240

28,666 4,480

–

30/06/15 – – 3,482

–

1,188,841

731,617 30/06/14 67,240

731,617

3,482

30/06/16

30/06/17

3,204 3,204

89,812 –

–

Total

–

– – 1,499

–

– 89,812

–

– –

– 119,039

– 30/06/15

3,164,165

30/06/16

75,373

30/06/1830/06/16 – – 763,494

726,141 – 726,141

119,039

30/06/15

30/06/16 –

3,343

27,998

3,748 3,748

1,217,654

30/06/18 – – 73,570 73,570

– – – 27,998

1,217,654

266,306 30/06/15 – – 3,343

30/06/16 –

30/06/16 –

763,494

4,309

inputs

30/06/16

Significantof latest prices in

2,376

30/06/18 –

3,890,306

30/06/15 –

30/06/14 – –

–

30/06/16 1,499

726,141 23

–

27,376 27,376

valuation

– 30/06/17

–

– 273,174

2,376

4,309

–

Fair value measurement hierarchyLevel 1 Level 2 Level 3

–

1,350

44,938 44,938 533,268 –

23

533,268

–

– – – 1,350

–

– –

active mkts

– 30/06/16

Date

–

28,666

36,168

30/06/17 –

75,168

–

509,771 25,869

30/06/16

30/06/16–

30/06/15 –

2,545 30/06/16

–

30/06/15

– 26

30/06/15–

1,188,841 –

– 509,771

3,083,726

75,168

– 30/06/16 – –

–

unobservableinputs

observable

–

30/06/15

30/06/1630/06/16

–

–

66





(2) Transfers between level 1 and level 2 fair value hierarchies

During the year, there were no transfers between level 1 and level 2 fair value hierarchies for recurring fairvalue measurements.

(3) Valuation techniques used to derive level 2 and level 3 fair values

Where Council is unable to derive fair valuations using quoted market prices of identical assets (i.e. level 1 inputs), Council instead utilises a spread of both observable inputs (level 2 inputs) and unobservable inputs (level 3 inputs).

The fair valuation techniques Council has employed while utilising level 2 and level 3 inputs are as follows:

Investment properties

Investment property comprises land & buildings that are principally held for long-term rental yields, capitalgains, or both, that is not occupied by Council. Full revaluations are carried out every three years by a memberof the Australian Property Institute with an appropriate index utilised each year in between the full revaluations.A revaluation of Council’s Investment Properties by APV Valuers & Asset Management Pty Ltd was performedfor 30 June 2017.

On a triennial basis, the Council engages external, independent and qualified valuers to determine the fair value ofits investment properties. The last full revaluation of Council's Investment Properties was as at 30 June 2017 andwas determined by APV Valuers & Asset Management Pty Ltd. The value of investment property as at 30 June2017 was determined using the market approach. The 2018 revaluations are based on movements in a relevantproperty price index.

All investment property valuations are included in level 2 of the fair value hierarchy.

Infrastructure, property, plant and equipment (IPP&E)

Council’s non-current assets are continually revalued (over a 5 year period) in accordance with the fair valuation policy as mandated by the Office of Local Government.

Plant & Equipment, Office Equipment and Furniture & FittingsPlant & Equipment, Office Equipment and Furniture & Fittings assets are recognised and valued at cost.Council assumes that the carrying amount reflects the fair value of the assets due to the nature of the items.Therefore these assets are disclosed at fair value in the notes.These asset categories include:• Plant & Fleet• Major Plant Items – tractors, excavators, street sweepers, tippers, rollers, forklifts, back hoes and wood chippers• Minor Plant and Equipment Items – generators, mowers, weed harvester, trailers, chainsaws, wood chippers, power hand tools, CCTV and portable air conditioning units• Fleet Vehicles – trucks, commercial vehicles and passenger vehicles• Office Equipment – computer hardware, communications equipment, digital cameras and photocopiers• Furniture & Fittings – work stations, storage cabinets, tables and chairsThe unobservable level 3 inputs used include:• Straight line pattern of consumption• Useful life• No residual valueCouncil reviews the value of these assets based on the gross replacement cost of similar assets. There has been no change in the valuation process during the reporting period.

67





(3) Valuation techniques used to derive level 2 and level 3 fair values (continued)

Land (Operational, Community and Land under Roads)Valuations for Council’s Community Land have been based on either the Valuer General's most recent valuationfor rating purposes where available, or the average of the Community Land purchases during the 2015/16 financialyear, discounted by 50%. The 50% discount was used for community land in order to reflect fair value of land that isnot able to be sold in an active market without any restrictions as requested by Council's external auditors and torepresent half the value of operational land.The fair value assessment of Operational Land was performed by Council's Liquid Pacific and has been determined by referencing it to current prices in an active market for similar properties. Where such information is not available, current prices in an active market for properties of a different nature or recent prices of similar properties in less active markets, adjusted to reflect those differences, are considered. Appropriate adjustmentsare also made for the inherent features of the property such as fire-prone, flood zonings and usability of the land.The fair value for Land under Roads has been determined using a unit rate per square metre, derived from theValuer General’s valuation performed for rating purposes, and applying a discount of 90%. Given the nature of Land under Roads, comparable sales data is generally not available. As the Valuer General’s valuation considers land in all zoning, average unit derived from the Valuer’s General’s valuation is considered the most practicable approach to valuing Land under Roads. The 90% discounting method relates to the Englobo valuation methodology and recognises the restricted use of land under roads but using the average values of surrounding properties.Community Land was last revalued as at 30 June 2016, Operational Land was last revalued as at 30 June 2018 and Land under Roads was last revalued as at 30 June 2017.The key unobservable input to the valuation is the rate per square metre. Total assets value of Council's assets only recognised land under roads acquired after the 1 July 2008. Council originally elected not to recognise the value of land under roads acquired before the 1 July 2008, worth approximately$3 billion. Community land purchases for 2016/17 and 2017/18 have been discounted by $36.698 million and $48.954million respectively. If these amounts were included, Council's infrastructure, property, plant and equipment net carrying amount would be $7.1 billion instead of $4 billion.

Land ImprovementsThis asset class is comprised of landscaping, cycle ways, estuary protection works, paved public areas in open space, playground equipment, field lighting, irrigation and other assets generally within the Open Space areas.Council's internal engineering services performed a revaluation of Land Improvements as at 30 June 2016.The revaluation was determined by applying unit rates derived from Council's contracts, third party publications (such as Rawlinson's and Cordell's) and actual costs of recent works performed.

BuildingsFor 30 June 2018, a desktop review of Council's Buildings was undertaken by APV Valuers & Asset Management Pty Ltd , based on revaluation work by the same company commissioned in September 2017, using the cost approach.This method is based on determining the Replacement Cost of the modern equivalent (or cost of reproductionwhere relevant) and then adjusting for the level of consumed future economic benefit and impairment.In accordance with the depreciation requirements of the Property, Plant and Equipment standard, “complex assets” are componentised and depreciated separately. This may include further splitting each component into the short-life and long-life parts to differentiate between that part of the component that is renewed and that part which is recycled. As they have a different useful life they are to be depreciated separately.This asset class is categorised as level 3 as some of the inputs used in the valuation of these assets requiresignificant professional judgment and are unobservable.There has been no change in the valuation process during the reporting period.

Other StructuresThis asset class is comprised of car parking buildings, shade shelters, retaining walls, fencing, fountains, and otherstructures which did not meet the definition of a building.The cost approach has been utilised to value Other Structures. There has been no change in the valuation process during the reporting period.

68





(3) Valuation techniques used to derive level 2 and level 3 fair values (continued)

Infrastructure Assets- Roads, Bridges and FootpathsThis asset class includes kerb and gutter, car parking, path and cycleways, guard rails, mediums, bus shelters, bridges and footpaths.Council’s roads are componentised into formation, base pavement, sub-base payment, surface and kerb and gutter and further separated into segments for inspection and valuation.The formation costs of roads are recognised and valued at cost. Council assumes that the carrying amount reflects the fair value of the assets due to the nature of the items. The formation of road bulk earthworks are non-depreciable.This asset class is categorised as Level 3 as some of the above mentioned inputs used in the valuation of these assets require significant professional judgement and are therefore observable.The fair value of these assets was based on their current replacement costs.

- Stormwater DrainageThe Stormwater Drainage asset class consists of basins, pits and pipes, gross pollutant traps, open channels andculverts. This includes formation of drainage areas which include bulk earthworks that are non-depreciable.A valuation of the Infrastructure assets was performed by the Council’s internal engineering team. The gross value of the infrastructure assets is determined using rates stipulated in contracts with third party suppliers, which is a key observable input. Infrastructure assets were last valued as at 30 June 2015. The valuations also included assessment of the overall useful life of each type of asset and the subsequent determination of the remaining useful life of each asset.This asset class is categorised as Level 3 as some of the above mentioned inputs used in the valuation of these assets require significant professional judgement and are therefore observable. There has been no change in the valuation process during the reporting period.

Other Assets- Library BooksAssets included in this asset category consist of library books, Ebooks, Online, journals, magazines, CDs andDVDs which are recognised and valued at cost. Council assumes that the carrying amount reflects the fair value of the assets due to the nature of the items. There are no major variances between the fair value and carrying amount of these assets. Therefore these assets are disclosed at fair value in the notes.Whilst these assets are recognised at cost with supporting supplier invoices (observable input) the remaining significant inputs (useful life, pattern of consumption, asset condition and residual values) are unobservable andtherefore categorised as level 3.

There has been no change in the valuation process during the reporting period.

69





$ ’000

(4). Fair value measurements using significant unobservable inputs (level 3)

a. The following tables present the changes in level 3 fair value asset classes.

otal

Opening balance – 1/7/16

Purchases (GBV)Disposals (WDV)Depreciation and impairmentWip transfersAdjustments and transfersTfrs from/(to) real estate assets held for resaleRevaluation increments to equity (ARR)

Closing balance – 30/6/17

Purchases (GBV)Disposals (WDV)Depreciation and impairmentWip transfersTfrs from/(to) real estate assets held for resaleRevaluation increments to equity (ARR)

Closing balance – 30/6/18

3,207,156

–

–

–

–

–

19,132

(69,145)

–

–

–

(100)

182,531

(29,835)

(4,381)

–

– 39,257 –

– (2,931)

(74,044) –

– –

264,437

–

–

– –

– –

(48,954)

–

– –

– –

–

–

–

– –

–

365,821

–

–

–

–

IPPE

41,362

3,407,402

– – –

–

–

– –

–

– –

– –

3,890,306

70





$ ’000

(4). Fair value measurements using significant unobservable inputs (level 3) (continued)

b. Significant unobservable valuation inputs used (for level 3 asset classes) and their relationship to fair value.

The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various level 3 asset class fair values.

IPP&E

Plant, equipment, furniture, fittings and office equipment

Community land

Land under roads

Land improvements

Buildings

Other structures

Roads, bridges & footpaths

Stormwater drainage

Library books

Other

ClassFair

value(30/6/18)

$’000

Valuationtechnique/s

Unobservableinputs

33,035 Cost approach Current replacement cost of modern equivalent asset, asset condition, useful life and residual value

763,494 Land values obtained from the NSW Valuer-General, discounted at 50% Land value, land area

75,373 Land values obtained from the NSW Valuer-General, discounted at 90%Extent and impact of use, market cost of land per square metre.The market value of land varies significantly depending on the location of the land and current market conditions.

122,788 Cost approach Current replacement cost of modern equivalent asset, asset condition, remaining lives, residual value


1,217,654 Unit rates per m2 or length Asset condition, remaining lives


578,206 Unit rates per m2 or length Asset condition, remaining lives


23 Cost approach used to approximate fair value The level of appreciation of the asset, current replacement/ replication cost of equivalent asset, asset condition

71





(4). Fair value measurements using significant unobservable inputs (level 3) (continued)

c. The valuation process for level 3 fair value measurements

The valuation process for each asset class that uses level 3 fair value measurements are discussed above in section 3.

The main unobservable (level3) inputs of useful life, pattern of consumption and asset condition are based on industry averages and historical patterns, as well as physical inspections for asset condition, and we ensure that any assets that are impaired outside of these assumptions are written off and replaced as required.

The valuations for buildings and operational land have been undertaken externally, with the other valuations being performed internally.

The external valuations are reviewed by both the Asset Management team and Finance to determine if there are any concerns that need to be addressed or clarifications made.

(5). Highest and best use

All of Council’s non-financial assets are considered to being utilised for their highest and best use.

72




Note 22. Related party transactions

$

a. Key management personnel

Key management personnel (KMP) of the Council are those persons having the authority and responsibility for planning, directing and controlling the activities of thecouncil, directly or indirectly.

The aggregate amount of KMP compensation included in the Income Statement is:

Compensation:Short-term benefitsPost-employment benefitsOther long-term benefitsTotal

b. Other transactions with KMP and their related parties

Council has determined that transactions at arm’s length between KMP and Council as part of Council delivering a public service objective (e.g. access to libraryor Council swimming pool by KMP) will not be disclosed.

Nature of the transaction

2018Purchase of Council land from KMP related partySalary of close family member of KMP Lease of Council property to KMPs

1. Purchase of Council land by a KMP related party. Transaction undertaken through public auction to ensure arms-length transaction.2. A close family member of a KMP was employed by Council during the financial year. This person was employed under the relevant conditions and Award.3. Council owns numerous properties held for rental and other investment purposes. There are currently two properties owned by Council which are being leased to twoKMPs. These properties are currently managed by a third party property management company.

20182,595,427

285,979 86,183

20172,411,045

271,184 170,128

2,852,357

672,000 –

2,967,589

Value of Outstanding

during year (incl. loans andcommitments)

1Actual $ Actual $

Per settlement termsRef Actual $ Actual $

outstanding recognised

3 33,000 – 30 days – –2 7,000 – Per award and conditions – –

– –

debts expense

Terms and conditions Provisions Doubtfultransactions balance for doubtful debts

73




Note 22. Related party transactions (continued)

$

b. Other transactions with KMP and their related parties (continued)


2017Sale of low value equipment from Council to KMPLease of Council property to KMP or KMP related party

Council use of food/catering service of KMP related partyCouncil functions/events using a KMP related partyCouncil purchase of event tickets from KMP related partySalary of close family members of KMPs employed by CouncilUse of KMP owned veterinary servicePurchase of property from KMP

1. Council provided an option for Councillors to purchase low value equipment at the end of the term ended 9 September 2016. This value represents the total takeup of this offer to purchase the low value equipment items from Council by KMP.

3. Council receives numerous sponsorships and donations from the community for various purposes. During the 2016/17 financial year, a KMP related party paid to Councilamounts for sponsorship/donation.4. As a part of Council operations, various functions and events occur where room hire, catering and entertainment is requried. A KMP related party of Council was engaged toundertake these operations. Engagement and award of these services followed procurement requirements.5. A close family member of a KMP was employed by Council during the financial year. This person was employed under the relevant conditions and Award.6. Veterinary services provided to Council for three distinct services from a KMP owned and operated business. Preferred supplier award with procurement guidelines followed.7. Purchase of property for development related purpose from KMP. Required processes followed with independent valuations to ensure arms length transaction.

– Per settlement terms – – 7 3,162,000

Per award and conditions – – 6 111,000 – 30 days – –

30 days – – 4 1,000 – 30 days – –

30 days – – 4 3,000 – 30 days – –

30 days – – 2 37,000 – 30 days – –

outstanding recognisedRef Actual $ Actual $ Actual $ Actual $

Terms and conditions Provisions Doubtfultransactions balance for doubtful debts

during year (incl. loans and debts expense

2. Council owns numerous properties held for rental and other investment purposes. There are currently two properties owned by Council which are being leased to a KMPor a related party of a KMP. These properties are currently managed by a third party property management company.

Value of Outstanding

commitments)

1 2,000 –

3 19,000 –

4 31,000 –

5 20,000 –

Sponsorship/donations received by Council from KMP related party

74




Note 22. Related party transactions (continued)

$

c. Other related party transactions


2018Council contribution to subsidiary Blacktown Venue Mgt LtdDistribution of equity and revenue from joint ventureInter-entity payable to Blacktown Venue Mgt Ltd

2017Council contribution to subsidiary Blacktown Venue Mgt LtdDistribution of equity and revenue from joint ventureInter-entity payable to Blacktown Venue Mgt Ltd

The inter-entity payable is due to the timing of payments made for and on behalf of the subsidiary where a cash refund did not occur prior to the closing of banking day.

Council owns and operates a subsidiary by the name of Blacktown Venue Management Ltd whereby Council provides a contribution to this subsidiary to ensure continued operations. Further details of this related entity are included at Note 16.Council is involved in a joint venture for self-insurance purposes with Civic Risk Mutual and Civic Risk West. Council received a distribution of revenue and a distribution of equity in the current financial year from this. Further details regarding this related entity are included at Note 16.

6 – 418,000 30 days – –

Ref Actual $ Actual $ Actual $ Actual $4 7,407,000 – 30 days – – 5 1,274,000 – 30 days – –

4

5

6

6 – 108,000 30 days – – 5 1,414,000 – 30 days – – 4 7,372,000 – 30 days – –

Ref Actual $ Actual $ Actual $ Actual $

during year (incl. loans and debts expensecommitments) outstanding recognised

Provisions Doubtfultransactions balance for doubtful debts

Value of Outstanding Terms and conditions

75




Note 23. Statement of developer contributions

$ ’000

Under the Environmental Planning and Assessment Act 1979 , Council has significant obligations to provide Section 7.11 (contributions towards provision orimprovement of amenities or services) infrastructure in new release areas.

It is possible that the funds contributed may be less than the cost of this infrastructure, requiring Council to borrow or use general revenue to fund the difference.

SUMMARY OF CONTRIBUTIONS AND LEVIES

DrainageRoadsTraffic facilitiesParkingOpen spaceCommunity facilitiesTree plantingOverbridgesE2 conservationOther

(291) – 222 –

(32,000) – –

1,266 3,662 8 87 (23) – 5,000 11,000 964 12 – 14 – – 990 –

Cumulative internal

borrowings due/(payable)

16,100 (25,700) (1,200)

– 1,600

(1,800)

– – – –

–

(99,207) 192,314

–

3,671

1,498 6 574

– 587

30,010 –

– 9,154

Non-cash

2 9,154 4,411 102,613

Total contributions

S7.11 contributions – under a plan

PURPOSE Openingbalance

1,116

– –

45,827 81,395

Voluntary planning agreements – Second Ponds Creek 32,000 – – –

505 1 – 7

earned

528

Contributionsreceived during the year

Interest

7,441

(2)

year

–

14,691

Cash73,563

141,999

434

2 248

25,034

10 102,613

(131,708)

–

11,755

– 545

asset

(1,200)

60,847

–

in year

87,533

–

6,923

(4) –

(99,207) 4,411

(10,000)

4,421

209,285 209,285

443

–

216,651

–

–

–

24

Held as

300 529

(1,800)

12,900

16,836

Internal

3 (32,259) 1,983

1,487

Expenditureborrowing

100

restricted(to)/from

during

(7,072) 36,483 (59,578)

(500) S7.11 not under plans

6,952

Total S7.11 and S7.12 revenue under plans192,314

Voluntary planning agreements

9,154 192,785

471 –

545 (2)

(1)

76




Note 23. Statement of developer contributions (continued)

$ ’000

S7.11 CONTRIBUTIONS – UNDER A PLAN

CONTRIBUTION PLAN NUMBER 1 – 1980's Release Area

DrainageRoadsOpen spaceCommunity facilitiesOverbridges

CONTRIBUTION PLAN NUMBER 2 – Local Roadworks

Roads

CONTRIBUTION PLAN NUMBER 3 – Open Space in Established Residential Areas

Open space

Cumulative internal


Cumulative internal


Cumulative internal


– –

–

– –

– – – – –

1,106

Contributions

balancePURPOSE

Non-cash

Internalborrowing

2,211

– 14,063

(to)/from

–

earned

–

(to)/from

2,224 (1)

Opening

777

received during the year

14,063 – Total 13,778 320

Non-cash in year

(1)

Expenditure

(951) (951)

14

borrowing

70 12,892

Interest

in year

–

2,211 (2,830) –

(1) 12,161

990

yearduring

(1)

916 – 13,778 –

964 19,985

Opening

–

745

Total

PURPOSE

916

Interest

320

–


103

PURPOSE

–

Non-cash

1,365 10,448

Cash

Expenditure

12

Total

173

Cash

Contributionsreceived during the year

4,864 –

Cash

Expenditure

103 2,053

balance year

(4,036) –

–

101

Interest

11,244

2,053

221

Opening earned

(4)

restrictedInternal

(to)/from55

balance assetearned

579

in yearborrowing

Contributions

2,211 –

restricted

Held as

asset

Held as

– 55

during

–

25,424

–

assetrestricted

–

Internal Held as

–

–

–

–

duringyear

77





$ ’000


CONTRIBUTION PLAN NUMBER 4 – Mount Druitt Development Area

DrainageRoads

CONTRIBUTION PLAN NUMBER 5 - Parklea Release Area

DrainageRoadsOpen spaceCommunity facilities

CONTRIBUTION PLAN NUMBER 10 - Tree Planting on Nature Strips

Tree planting

3,338 –

Cumulative internal


Cumulative internal


Cumulative internal


– –

– (14,800)

– – –

– (14,800)

–

Held as

6,434 asset

restricted

(2,255) –

1,738 8,687

–

asset

–

restricted

–

borrowing(to)/from

3,303

4,179

Held as

3,098

222 –

Held asrestricted

asset

Internal

Total

balanceOpening

–

Opening

2,783

1,240

–

PURPOSE

PURPOSE

9,701

(2,255) 6,363

–

balance

4,108

Contributions

222

Expenditure

16,826

–

Expenditure

(to)/from

151

1

(22)

–

Non-cash

Internal

Expenditure

in yearreceived during the year

(to)/fromborrowing

Interest

(4,855)

477

7

– 474

–

in year

in year

(14)

631

during

(5)

(22) year

Cash

– 4,440

Cash

Contributions

(4,796)

earned

75

earnedInterest

83 444

7

year(291)

Interest

29

–

Contributions

year

–

93

Internal

–

(291)

during borrowing

–

– 505

16,610 Total

PURPOSE

Total1

CashOpening

505

–

(40)

balance

2,886

93 –

during

– –

Non-cash

–

earnedNon-cash



–

78





$ ’000


CONTRIBUTION PLAN NUMBER 15 - Metella Road Floodplain

Drainage

CONTRIBUTION PLAN NUMBER 17 - Quakers Hill Commercial Precinct

Traffic facilities

CONTRIBUTION PLAN NUMBER 18 - Eastern Creek Stage 3

DrainageRoads

Cumulative internal


Cumulative internal


Cumulative internal


– – –

–

– –

–

668

Held as

464

Interestborrowing

10

asset

–


(1) Cash (to)/from

duringin year

Expenditure Held as

asset464

Cash

1,935

received during the year earned

in year

(1,841)

68 (1,847)

–

285

Internal

Non-cash

PURPOSE

(to)/from

(1)

in year

–

Cash

–

Openingbalance

–

122

Contributions

1 –


10

Internal

2,041 106

29

Total2

1,946 1,661

–

666 1,074 1,802

during

2,876

year asset

39 –

(to)/from

(6)

restricted

balanceearned

year

–

borrowing

Contributions

Non-cashearned

restricted

restricted

Interest

44

Opening

Interest

–

borrowingbalance

Expenditure

during

333

44

Opening

Total

–

Internal

43

Held as

– – 43

Expenditure

1 –

Non-cash year–

Contributions

333 Total

122

PURPOSE

PURPOSE

79





$ ’000


CONTRIBUTION PLAN NUMBER 19 - Blacktown Growth Precinct

DrainageRoadsTraffic facilitiesParkingOpen spaceCommunity facilitiesOther

CONTRIBUTION PLAN NUMBER 20 - Riverstone & Alex Avenue Precincts

DrainageRoadsOpen spaceCommunity facilitiesE2 conservation

Cumulative internal


Cumulative internal


(40,000) –

11,000 (40,000)

(4,000) (1,200)

– 7,000

(1,800) – –

– (11,000)

–

22,224

Non-cash

(19) 7

3

duringExpenditure

(1,800)

2,091

897 3,222

Non-cash

306

in year

Cash

–

–

52

–

565

–

–

70

(2) –

1,455 528

in yearreceived during the year

–

26

24,991 862

3,209

2,552

62,462

–

1,904

(1,842)

balance

Contributions

4,919

2

60,560

42

borrowing

(1,200)

borrowingduring

–

– 776

2,750

(10)

62

7,058

Opening

8 –

15,062

–

545

188 –

received during the yearCash

(2)

balance

8

Interest

(9) (7,409)

Total

Total

2,387 1,538 –

PURPOSE Opening

28,623

Internal

(1,800)

24,741

545 88

(to)/from

Internal

351

year

37,091 (1,483)

(4)

asset

–

earned

46

5

(to)/from

178 7,000

– – 840

(44,376)

21 1,463 (6)

256

Held asrestricted

Expenditure

(40,000) 2,036

– (39,188)

restricted

(40,000)

asset

–

2

Held as

(3,732)

3,899

year

–

95,815 153,126 (15) –

Interest

3,324

earnedContributions

(4,000) 1,616

529

PURPOSE

827

80





$ ’000


CONTRIBUTION PLAN NUMBER 21 - Marsden Park


CONTRIBUTION PLAN NUMBER 22 - Area 20 Precinct


Cumulative internal


Cumulative internal


38,100

– 16,700

15,700 600

21,800 – –

400 3,500

12,800 –

Opening

(226) 633

4,149 4,145

Total

year

(4,231)

received during the yearNon-cash

PURPOSEContributions

balance

7,760

Held as

Internal

737 36

4,420

Contributions

64

191 595 (5,099)

–

8,988

12,900

553

borrowing

(2,479)

6,684

– in year

restrictedearned borrowingInterest

(718)

14,738 195

600 1,414

56

restrictedasset

43

6,731

(38,623)

6,200 –

Internal

–

during

(13,318)


– 6

assetduring

Expenditure

768

(to)/from

(2)

3,697

–

– 197

Cash

Held as

– 3,500

5,122

114 –

90

–

1,270 694

– –

(148)

50

30,300

Cash

–

9,700

(to)/from

–

16,800 –

(22,824)

–

Non-cash

– (2) 1,316

50

309

PURPOSEInterest

526

Total

6

year

–

earned

–

in year

481

160

(989)

312

–

Expenditure

(3,569)

–

– 243

balance

–

Opening

33 27

2,141

81





$ ’000


CONTRIBUTION PLAN NUMBER 24 - Schofields Precinct *


S7.11 CONTRIBUTIONS – NOT UNDER A PLAN

Roads

Cumulative internal


– –

Cumulative internal


– – – – – –

in year(1) 434 –

Cash Non-cashreceived during the year

balance–

Contributions Held asrestricted

Internalborrowingduring

yearOpening earned

443 –

asset(to)/from443

10 10

–

Interest Expenditure

(1)

141

Cash

Total 434 – –

PURPOSE

5,462 (1,300) 1,049

–

7,672

2,569

Internal

–

(3)

Opening

345 – balance

643

26,383

restricted(to)/from

(328)

asset

7,911 –

17,229 –

928

Expenditure Held as

– (4) (1,296)

during

(77)

year

– (256)

– (956)

borrowing

14,131 in year

136

510 –

–

204

Contributions

711 19,497

17 493

3,709

Total

PURPOSEInterestearned

–

12

received during the yearNon-cash

–

–

82




Note 24(a). Statement of performance measures – consolidated results

$ ’000

Local government industry indicators – consolidated

1. Operating performance ratioTotal continuing operating revenue (1) excluding capitalgrants and contributions less operating expensesTotal continuing operating revenue (1) excluding capitalgrants and contributions

2. Own source operating revenue ratioTotal continuing operating revenue (1)

excluding all grants and contributionsTotal continuing operating revenue (1)

3. Unrestricted current ratioCurrent assets less all external restrictions (2)

Current liabilities less specific purpose liabilities (3, 4)

4. Debt service cover ratioOperating result (1) before capital excluding interestand depreciation/impairment/amortisationPrincipal repayments (Statement of Cash Flows)plus borrowing costs (Income Statement)

5. Rates, annual charges, interest andextra charges outstanding percentage

Rates, annual and extra charges outstandingRates, annual and extra charges collectible

5a. Rates outstanding percentage (recoverable)Rates, annual and extra charges outstanding minusamounts not recoverable Gross rates, annual and extra charges collectible

6. Cash expense cover ratioCurrent year’s cash and cash equivalentsplus all term depositsMonthly payments from cash flow of operatingand financing activitiesNotes

(1) Excludes fair value adjustments and reversal of revaluation decrements, net gain/(loss) on sale of assets and the net share of interests in joint ventures and associates.

(2) Refer Notes 6-8 inclusive. Also excludes any real estate and land for resale not expected to be sold in the next 12 months.(3) Refer to Notes 12 and 13.(4) Refer to Note 12(b) and 13(b) – excludes all payables and provisions not expected to be paid in the next 12 months (incl. ELE).

< 5% metro

6,747 3.08% 3.66% 2.16%218,779

4.06%

x12

0.00x

24,258 531,590

221,630

21.91 mths

9,598

–

19.0 mths > 3 mths

47.48%

3.17x > 1.5x

0.00x > 2x

< 5% metro

0.00x

16.8 mths

3.41%

613,441

Indicator

(20,937)

283,860

Amounts

312,676

2018 20162018Benchmark

> 0.00%

4.33%

46.27%

Prior periods

100,805 307,537

54,526

2017

2.61x

46.09%

3.05x

-2.61%3.40%-6.70%

> 60.00%

83




Note 24(b). Statement of performance measures – consolidated results (graphs)

Benchmark: ――― Minimum >=0.00% Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark

Benchmark: ――― Minimum >=60.00% Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark

Benchmark: ――― Minimum >=1.50 Ratio achieves benchmarkSource for benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside benchmark

To assess the adequacy of working capital and its ability to satisfy obligations in the short term for

the unrestricted activities of Council.

A ratio of 3.05x indicates that Council has a sound liquidity position, meaning there are

sufficient liquid assets to meet current liabilities as they fall due. A ratio of less than 1.5x is deemed unsatisfactory as a Council may be unable to meet its short

term financial commitments.

Purpose of own source operating

revenue ratio

Commentary on 2017/18 result

2017/18 ratio 46.27%

This ratio measures fiscal flexibility. It is

the degree of reliance on external funding

sources such as operating grants and

contributions.

This indicator is largely affected by Council's high level of development activity,

which means a significant proportion of Council's revenue is from Section 7.11 developer contributions and non-cash

contributions (works in kind). Council did not meet the target of 60% for this ratio for

2017/18

Purpose of unrestricted current

ratio


2017/18 ratio 3.05x

Purpose of operating

performance ratio


2017/18 ratio -6.70%

This ratio measures Council’s

achievement of containing operating expenditure within operating revenue.

Council's ratio is negative 6.7%, which has not met the benchmark of 0% or better. The

negative result is due to less operating revenue in comparison with 2016/17, of

the first year impact of the Federal Assistance grant which was received in

advance ($8.837 million received in 2016/17), Payment from UrbanGrowth

NSWS for the ongoing maintenance of the Second Ponds Trunk Drainage

corridor($15.7 million received in 2016/17) and increased depreciation of $5 million in

2017/18.

3.4%

-4.5%-2.6%

-6.7%

-8%

-6%

-4%

-2%

0%

2%

4%

2015 2016 2017 2018

Rat

io %

1. Operating performance ratio

49% 46% 47% 46%

0%10%20%30%40%50%60%70%80%90%

100%

2015 2016 2017 2018

Rat

io %

2. Own source operating revenue ratio

4.3

3.22.6

3.1

0.00.51.01.52.02.53.03.54.04.55.0

2015 2016 2017 2018

Rat

io (x

)

3. Unrestricted current ratio

84




Note 24(b). Statement of performance measures – consolidated results (graphs)


Benchmark: ――― Maximum <5.00% Ratio is within BenchmarkSource for Benchmark: Code of Accounting Practice and Financial Reporting #26 Ratio is outside Benchmark


Purpose of cash expense cover ratio


2017/18 ratio 21.91 mths

This liquidity ratio indicates the number of months a Council can continue paying

for its immediate expenses without

additional cash inflow.

The ratio calculated by dividing a Council's Cash and Cash Equivalents as per the

Statement of Cash Flows by the net of the operational expensesless depreciation and borrowing costs,and multiplying the result

by 12. The benchmark for this ratio is greater than 3 months. For 2017/18,

Council exceeded the benchmark with a ratio of 21.91.

To assess the impact of uncollected rates and annual charges on Council’s liquidity and the adequacy of

recovery efforts.

This measure of 4.33% reflects that Council has been able to continue to

maintain this ratio well below the industry benchmark of 5%.

Purpose of debt service cover ratio


2017/18 ratio 0.00x

This ratio measures the availability of operating cash to

service debt including interest, principal and

lease payments

Council has a Debt Service Cover Ratio of zero.

Purpose of rates and annual charges

outstanding ratio


2017/18 ratio 4.33%

0.0 0.0 0.0 0.00.0

0.5

1.0

1.5

2.0

2.5

2015 2016 2017 2018

Rat

io (x

)

4. Debt service cover ratio

3.10% 3.41%4.06% 4.33%

0%

1%

2%

3%

4%

5%

6%

2015 2016 2017 2018

Rat

io %

5. Rates, annual charges, interest andextra charges outstanding percentage

18.6 16.819.0

21.9

0.0

5.0

10.0

15.0

20.0

25.0

2015 2016 2017 2018

Rat

io (m

ths)

6. Cash expense cover ratio

85

INDEPENDENT AUDITOR’S REPORT

Report on the general purpose financial report

Blacktown City Council

To the Councillors of Blacktown City Council

Opinion

I have audited the accompanying financial report of Blacktown City Council (the Council), which

comprise the Income Statement and Statement of Comprehensive Income for the year ended

30 June 2018, the Statement of Financial Position as at 30 June 2018, the Statement of Changes in

Equity and Statement of Cash Flows for the year then ended, notes comprising a summary of

significant accounting policies and other explanatory information, and the Statement by Councillors

and Management. The financial report includes the consolidated financial report of the Council and the

entities it controlled at the year’s end or from time to time during the year.

In my opinion,

• the Council’s accounting records have been kept in accordance with the requirements of the

Local Government Act 1993, Chapter 13, Part 3, Division 2 (the Division)

• the financial report:

- has been presented, in all material respects, in accordance with the requirements of this

Division

- is consistent with the Council’s accounting records

- presents fairly, in all material respects, the financial position of the Council as at

30 June 2018, and of its financial performance and its cash flows for the year then ended

in accordance with Australian Accounting Standards

• all information relevant to the conduct of the audit has been obtained

• no material deficiencies in the accounting records or financial report have come to light during

the audit.

My opinion should be read in conjunction with the rest of this report.

Basis for Opinion

I conducted my audit in accordance with Australian Auditing Standards. My responsibilities under the

standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Report’ section

of my report.

I am independent of the Council in accordance with the requirements of the:

• Australian Auditing Standards

• Accounting Professional and Ethical Standards Board’s APES 110 ‘Code of Ethics for

Professional Accountants’ (APES 110).

I have fulfilled my other ethical responsibilities in accordance with APES 110.

86

Parliament promotes independence by ensuring the Auditor-General and the Audit Office of

New South Wales are not compromised in their roles by:

• providing that only Parliament, and not the executive government, can remove an

Auditor-General

• mandating the Auditor-General as auditor of councils

• precluding the Auditor-General from providing non-audit services.

I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my

audit opinion.

Other Information

Other information comprises the information included in the Council’s annual report for the year ended

30 June 2018, other than the financial report and my Independent Auditor’s Report thereon. The

Councillors are responsible for the other information. At the date of this Independent Auditor’s Report,

the other information I have received comprise the special purpose financial statements and Special

Schedules (the Schedules).

My opinion on the financial report does not cover the other information. Accordingly, I do not express

any form of assurance conclusion on the other information. However, as required by the Local

Government Act 1993, I have separately expressed an opinion on the special purpose financial

statements and Special Schedule 2 - Permissible income for general rates.

In connection with my audit of the financial report, my responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial

report or my knowledge obtained in the audit, or otherwise appears to be materially misstated.

If, based on the work I have performed, I conclude there is a material misstatement of the other

information, I must report that fact.

I have nothing to report in this regard.

The Councillors’ Responsibilities for the Financial Report

The Councillors are responsible for the preparation and fair presentation of the financial report in

accordance with Australian Accounting Standards and the Local Government Act 1993, and for such

internal control as the Councillors determine is necessary to enable the preparation and fair

presentation of the financial report that is free from material misstatement, whether due to fraud or

error.

In preparing the financial report, the Councillors are responsible for assessing the Council’s ability to

continue as a going concern, disclosing, as applicable, matters related to going concern and using the

going concern basis of accounting except where the Council will be dissolved or amalgamated by an

Act of Parliament, or otherwise cease operations.

Auditor’s Responsibilities for the Audit of the Financial Report

My objectives are to:

• obtain reasonable assurance about whether the financial report as a whole is free from material

misstatement, whether due to fraud or error

• issue an Independent Auditor’s Report including my opinion.

87

Reasonable assurance is a high level of assurance, but does not guarantee an audit conducted in

accordance with Australian Auditing Standards will always detect material misstatements.

Misstatements can arise from fraud or error. Misstatements are considered material if, individually or

in aggregate, they could reasonably be expected to influence the economic decisions users take

based on the financial report.

A description of my responsibilities for the audit of the financial report is located at the Auditing and

Assurance Standards Board website at: www.auasb.gov.au/auditors_responsibilities/ar3.pdf. The

description forms part of my auditor’s report.

My opinion does not provide assurance:

• that the Council carried out its activities effectively, efficiently and economically

• on the Original Budget information included in the Income Statement, Statement of Cash Flows,

and Note 20 Material budget variations

• on the Special Schedules. A separate opinion has been provided on Special Schedule 2 -

Permissible income for general rates

• about the security and controls over the electronic publication of the audited financial report on

any website where it may be presented

• about any other information which may have been hyperlinked to/from the financial report.

Renee Meimaroglou

Director, Financial Audit Services

23 October 2018

SYDNEY

88

http://www.auasb.gov.au/auditors_responsibilities/ar3.pdf

Stephen Bali

Mayor


62 Flushcombe Rd

BLACKTOWN NSW 2148

23 October 2018

Dear Mayor

Report on the Conduct of the Audit

for the year ended 30 June 2018


I have audited the general purpose financial statements of Blacktown City Council (the Council) for the

year ended 30 June 2018 as required by section 415 of the Local Government Act 1993 (the Act).

I expressed an unmodified opinion on the Council’s general purpose financial statements.

This Report on the Conduct of the Audit (the Report) for the Council for the year ended 30 June 2018

is issued in accordance with section 417 of the Act. This Report should be read in conjunction with my

audit opinion on the general purpose financial statements issued under section 417(2) of the Act.

INCOME STATEMENT

Operating result

2018 2017 Variance

$m $m %

Rates and annual charges revenue

212.5 201.6

Grants and

contributions revenue 329.6 299.1

Operating result

for the year 303.1 280.5

Net operating result

before capital amounts 2.3 35.8

5.4

10.2

8.1

93.5

Contact: Renee Meimaroglou

Phone no: 02 9275 7389

Our ref: D1824852/1693

89

Our insights inform and challenge government to improve outcomes for citizens

Council’s operating result of $303.1 million (including the effect of depreciation and amortisation

expense of $75.5 million) was $22.6 million higher than the 2016–17 result. This is mainly due to an

increase of $30.5 million in grants and contributions, offset by a $10.7 million increase in employee

benefits and on-costs.

The net operating result before capital grants and contributions of $2.3 million was $33.5 million lower

than the 2016–17 result. This is mainly due to a decrease of $25.6 million in operating grants and

contributions and a decrease of $8.9 million in fair value increments on investment properties.

Rates and annual charges revenue was $212.5 million in 2017–2018, an increase of $10.9 million

(5.4 per cent) from the previous year. This increase is due to Council receiving a 1.5 per cent rate peg

increase and an expanding rates base resulting from development activity during the year.

Grants and contributions revenue was $329.6 million in 2017–18, increasing by $30.5 million

(10.2 per cent) since last year. This is mainly due to an increase in NSW local infrastructure growth

Scheme contributions ($92.7 million) offset by a reduction in s7.11 contributions ($44.7 million).

STATEMENT OF CASH FLOWS

The Statement of Cash Flows

illustrates the flow of cash and cash

equivalents moving in and out of

Council during the year and reveals

that cash increased from $96.2 million

to $165.6 million at 30 June 2018.

Operating activities contributed net cash inflow of $275.6 million (2017: $228.5 million). The increase

is mainly due to higher grants and contributions received in 2017–18. Net cash used in investing

activities was $206 million in 2017–18, $14.9 million lower than the previous year.

FINANCIAL POSITION

Cash and Investments

Cash and Investments 2018 2017 Commentary

$m $m

External restrictions 296.9 195.8 Cash and investments amounted to $561.6 million at

30 June 2018 (2017: $403.2 million). The increase in

external restrictions is mainly due to a $106.7 million

increase in developer contributions.

Internal restrictions 220.8 181.1

Unrestricted 43.9 26.3

Cash and investments 561.6 403.2

Externally restricted cash and investments are restricted in their use by externally imposed

requirements. These include unspent development contributions and specific purpose grants,

unexpended loans and domestic waste charges.

-300

-200

-100

0

100

200

300

400

2016 2017 2018

$ m

illi

on

Year ended 30 June

Net cash flows for the year

Operating activities Investing activitiesFinancing activities

90


Internally restricted cash and investments have been restricted in their use by resolution or policy of

Council to reflect forward plans and identified programs of works. These totalled $220.8 million and

their purpose is fully disclosed in Note 6 of the financial statements.

The Council’s unrestricted cash and investments amounted to $43.9 million, which is available to

provide liquidity for day to day operations.

PERFORMANCE RATIOS

The definition of each ratio analysed below (except for the ‘building and infrastructure renewals ratio’)

is included in Note 24 of the Council’s audited general purpose financial statements. The ‘building and

infrastructure renewals ratio’ is defined in Council’s Special Schedule 7 which has not been audited.

Operating performance ratio

The ‘operating performance ratio’

measures how well council contained

operating expenditure within operating

revenue (excluding capital grants and

contributions, fair value adjustments,

and reversal of revaluation

decrements). The benchmark set by

the Office of Local Government (OLG)

is greater than zero per cent.

Council’s operating performance indicator of negative 6.7 per cent has decreased from the 2017

indicator of 3.4 per cent. The 2017 indicator included $8.8 million in 2018 Financial Assistance Grants

received in advance and fair value increments resulting from the revaluation of investment properties

of $8.9 million, which did not occur in 2017–18. These are the main drivers of the lower net operating

result before capital grants and contributions.

Own source operating revenue ratio

The ‘own source operating revenue

ratio’ measures council’s fiscal

flexibility and the degree to which it

relies on external funding sources

such as operating grants and

contributions. The benchmark set by

OLG is greater than 60 per cent.

Council’s own source operating revenue ratio was 46.3 per cent in 2017–18 (2017: 47.5 per cent),

which is below the benchmark of 60 per cent.

-8

-6

-4

-2

0

2

4

2016 2017 2018

Ratio%

Year ended 30 June



Industry benchmark > 0%

0

10

20

30

40

50

60

70

2016 2017 2018

Ratio%

Year ended 30 June




91


The Council has a high level of development activity and therefore a significant portion of revenue is

from section 94 contributions and non-cash contributions.

Unrestricted current ratio

The ‘unrestricted current ratio’ is

specific to local government and

represents council’s ability to meet its

short-term obligations as they fall due.

The benchmark set by OLG is greater

than 1.5 times.

Council’s unrestricted current ratio increased to 3.1 as at 30 June 2018 (2017: 2.6) and exceeded the

benchmark of 1.5 times.

Debt service cover ratio

The Council has been debt free for over two decades and therefore no debt cover ratio is reported.

Rates and annual charges outstanding ratio

The ‘rates and annual charges

outstanding ratio’ assesses the impact

of uncollected rates and annual

charges on council’s liquidity and the

adequacy of debt recovery efforts.

The benchmark set by OLG is less

than 5 per cent for metro councils.

The rates and annual charges outstanding ratio was 4.3 per cent at 30 June 2018 (2017: 4.1 per cent)

and continues to be lower than the industry benchmark of 5 per cent.

0

0.5

1

1.5

2

2.5

3

3.5

2016 2017 2018

Ratiox

Year ended 30 June



Industry benchmark > 1.5x

0

1

2

3

4

5

6

2016 2017 2018

Ratio%

Year ended 30 June



Industry benchmark < 5%

92


Cash expense cover ratio

This liquidity ratio indicates the

number of months the council can

continue paying for its immediate

expenses without additional cash

inflow. The benchmark set by OLG is

greater than three months.

Council’s cash expense cover ratio was 21.9 months at 30 June 2018 (2017: 19.0 months) and

continues to exceed the benchmark of three months.

Building and infrastructure renewals ratio (unaudited)

The ‘building and infrastructure

renewals ratio’ assesses the rate at

which these assets are being renewed

against the rate at which they are

depreciating. The benchmark set by

OLG is greater than 100 per cent.

This ratio is sourced from Council’s

Special Schedule 7 which has not

been audited.

Special Schedule No. 7 disclosed infrastructure renewals for 2018 represented 63.9 per cent (2017:

79.6 per cent) of the depreciation charges for those assets, which is lower than the benchmark of

100 per cent.

OTHER MATTERS

New accounting standards implemented

AASB 2016-2 ‘Disclosure Initiative – Amendments to AASB 107’

Effective for annual reporting periods

beginning on or after 1 January 2017

This Standard requires entities to provide disclosures that

enable users of financial statements to evaluate changes (both

cash flows and non-cash changes) in liabilities arising from

financing activities.

Council’s disclosure of the changes in their liabilities arising

from financing activities is disclosed in Note 13.

0

5

10

15

20

25

2016 2017 2018R

ati

o(m

on

ths

)Year ended 30 June



Industry benchmark > 3 months

0

20

40

60

80

100

120

2016 2017 2018

Ratio%

Year ended 30 June

Building and infrastructure renewals ratio

Building and infrastructure renewals ratio


93


Council entities

Blacktown Venue Management Limited (BVM) is a council entity. An unqualified opinion is expected to

be issued by PwC on the BVM financial statements or the year ended 30 June 2018.

Asset revaluations

Council’s infrastructure, property, plant and equipment are required to be carried at fair value with

revaluations of each asset class to be performed at least every five years.

During the year, operational land and buildings were revalued. This resulted in a net increase of

$365.8 million recognised in the Infrastructure, Property, Plant and Equipment Reserve and disclosed

in the Statement of Changes in Equity.

Prior period errors

During the revaluation process for 2017–18, operational land parcels with a total value of

$22.3 million, and buildings with a total carrying value of $11.9 million, were identified as not being

previously recorded by Council. Infrastructure assets totalling $4.4 million were identified to be

duplicated in the financial statements. Council also identified one investment property with a cost of

$9.5 million (fair value $11.5 million) which was reported incorrectly as a disposal in previous years.

These errors have been corrected by restating the beginning balances of relevant affected line items

in the Statement of Financial Position for the earliest prior period, being 1 July 2016 and taking the

adjustment through to accumulated surplus at that date.

Comparatives have been restated to reflect the correction of the error.

Legislative compliance

My audit procedures did not identify any instances of non-compliance with legislative requirements or

a material deficiency in the Council’s accounting records or financial reports. The Council’s:

• accounting records were maintained in a manner and form to allow the general purpose

financial statements to be prepared and effectively audited

• staff provided all accounting records and information relevant to the audit.

Renee Meimaroglou


cc: Kerry Robinson, General Manager

Tim Hurst, Acting Chief Executive of the Office of Local Government

94

Blacktown City Council and its subsidiary SPECIAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2018

0

95

SPFS 2018


Special Purpose Financial Statements for the year ended 30 June 2018

Contents

1. Statement by Councillors and Management

2. Special Purpose Financial Statements:

Income Statement – Other Business Activities

Statement of Financial Position – Other Business Activities

3. Notes to the Special Purpose Financial Statements

4. Auditor’s Report

Background

These Special Purpose Financial Statements have been prepared for the use by both Council and the Office ofLocal Government in fulfilling their requirements under National Competition Policy.

The principle of competitive neutrality is based on the concept of a ‘level playing field’ between persons/entitiescompeting in a market place, particularly between private and public sector competitors.

Essentially, the principle is that government businesses, whether Commonwealth, state or local, should operatewithout net competitive advantages over other businesses as a result of their public ownership.

For Council, the principle of competitive neutrality and public reporting applies only to declared business activities.

These include (a) those activities classified by the Australian Bureau of Statistics as business activities beingwater supply, sewerage services, abattoirs, gas production and reticulation, and (b) those activities with a turnoverof more than $2 million that Council has formally declared as a business activity (defined as Category 1 activities).

In preparing these financial statements for Council’s self-classified Category 1 businesses and ABS-definedactivities, councils must (a) adopt a corporatisation model and (b) apply full cost attribution including tax-equivalentregime payments and debt guarantee fees (where the business benefits from Council's borrowing position bycomparison with commercial rates).

(iv)

102

100

(i)

(ii)

106

(iii)

Page

98

97

96

97

Tony Bleasdale

SPFS 2018


Income Statement of Council's Other Business Activities for the year ended 30 June 2018

$ ’000

Income from continuing operationsUser chargesProfit from the sale of assetsOther incomeTotal income from continuing operations

Expenses from continuing operationsEmployee benefits and on-costsMaterials and contractsDepreciation, amortisation and impairmentCalculated taxation equivalentsOther expensesTotal expenses from continuing operationsSurplus (deficit) from continuing operations before capital amounts

Surplus (deficit) from continuing operations after capital amounts

Surplus (deficit) from all operations before taxLess: corporate taxation equivalent (27.5%) [based on result before capital]

SURPLUS (DEFICIT) AFTER TAX

Plus opening retained profitsPlus adjustments for amounts unpaid:– Taxation equivalent payments– Corporate taxation equivalent– Dividends paid back to CouncilAdd:– Subsidy paid/contribution to operationsLess:– Dividend paidClosing retained profits

Return on capital %

Category 1 Category 1

(1,948) –

360 4,562

– –

74

2,088 1,413

158 –

1236.1%

2,772

1450.6%

1,413

6,904

n/a

1,117

56,313

810

–

(360) (307)

5,544

125,514

24,741

79,043

10,646 14,616

(5,544)

1,900 13

1,570

– 307

84 618

1,117

618

– – –

3,822

–

20,160

20,160

20,160

79,043

1,570

839

112

4,141

16,099

22,060

242

– 81 510

106

957 16

369

–

2018 2017 20172018

16,165

– 21,971

89

205

3,822

2,623 11 31

1,199

3,024

–

15,208

2,293

–

n/a

15,208

15,208 (4,562)

4,141

1,117 1,199

84

Land Developments Deregulated Approvals

1,199

2,106

63

66

74

–

98

SPFS 2018


Income Statement of Council's Other Business Activities for the year ended 30 June 2018

$ ’000

Income from continuing operationsAccess chargesUser chargesInterestOther incomeTotal income from continuing operations

Expenses from continuing operationsEmployee benefits and on-costsMaterials and contractsDepreciation, amortisation and impairmentFair valuation decrementCalculated taxation equivalentsOther expensesTotal expenses from continuing operationsSurplus (deficit) from continuing operations before capital amounts

Surplus (deficit) from continuing operations after capital amounts

Surplus (deficit) from all operations before taxLess: corporate taxation equivalent (27.5%) [based on result before capital]

SURPLUS (DEFICIT) AFTER TAX

Plus opening retained profitsPlus adjustments for amounts unpaid:– Taxation equivalent payments– Corporate taxation equivalent–Dividends paid back to CouncilLess:– Dividend paidClosing retained profits

Return on capital %Subsidy from Council

80

6

2,388

8,686

193

33,566 (253)

–

193

Category 2 Category 2

110 – –

573

–

446

(22)

6,080

40,135 (8,696) (20,165)

158

80

–

7

643

(58)

7

1,164

709

14,783 – 6,914

1,084 910 207

6

80

168

135

840

1,394 109

348 1,554

–

606

193

–

2,343

1,103

12 7,869

2017

– 8,005

2018

– –

Property Management

– 1,152

8

Commercial Waste

737 –

954

1,554

40,135

8,686 573

6,097

2017

1,095

7,432

500

(2,606) (158)

415

573 8,686

22 58

58

446

2,606

2018

– –

1,299

–

135

8,005

21.0%

669

956

21

669 1,003

50,945

– 17.1% 47.9% 1.0%

–

– 26

99

SPFS 2018


Statement of Financial Position – Council's Other Business Activities as at 30 June 2018

$ ’000

ASSETSCurrent assetsCash and cash equivalentsInvestmentsInventoriesTotal Current Assets

Non-current assetsInventoriesInfrastructure, property, plant and equipmentTotal non-current assetsTOTAL ASSETS

LIABILITIESCurrent liabilitiesPayablesProvisionsTotal current liabilities

Non-current liabilitiesProvisionsTotal non-current liabilitiesTOTAL LIABILITIESNET ASSETS

EQUITYAccumulated surplusTOTAL EQUITY 1,413

– –

2,772

–

–

–

66

1,413 2,772

8

66

1,363

20172017

79,044

4,201

125,515 125,515

–

50,590 – – 77

2,772

Land Developments

14,767

–

Category 1

–

Deregulated Approvals

Category 1

–

2018

4,124

–

79,044

1,355 56

2,798

97

–

14,767 50,590 125,515

–

–

97

2,798

77

2018

66,215 48,211

4,124

–

64,277

–

1,482 1,413

55

1,371

55

1,427

2,895

– 1,429

79,044

–

79,044 125,515

–

– 8,710 74,925

16,066 –

100

SPFS 2018


Statement of Financial Position – Council's Other Business Activities as at 30 June 2018

$ ’000

ASSETSCurrent assetsInvestmentsReceivablesTotal Current Assets

Non-current assetsInfrastructure, property, plant and equipmentInvestment propertyTotal non-current assetsTOTAL ASSETS

LIABILITIESCurrent liabilitiesPayablesProvisionsTotal current liabilities

Non-current liabilitiesNilTOTAL LIABILITIESNET ASSETS

EQUITYAccumulated surplusRevaluation reservesTOTAL EQUITY 105,104 553 133,793 815

113

643

126 815 553

179 124 133,793

100,227 33,566 446

172

–

50

23 49

126 130 103 179 124 113

928

59 22

677

54 102

468 403 133,560

Category 2

412

63,640 75,409

2018

58,151

412

41,280

310

Commercial Waste

310

2017

104,920 –

274 38

Property Management

– – 410

Category 2

236

2018 2017

468 403

460

33,223 71,881

105,104

133,972

107

105,230

101

SPFS 2018


Special Purpose Financial Statements for the year ended 30 June 2018

Contents of the notes accompanying the financial statements

Details

Summary of significant accounting policies

Note Page

1 103

102

SPFS 2018


Notes to the Special Purpose Financial Statementsfor the year ended 30 June 2018

Note 1. Significant accounting policies

A statement summarising the supplemental accounting policies adopted in the preparation of the Special Purpose Financial Statements (SPFS) for National Competition Policy (NCP) reporting purposes follows.

These financial statements are SPFS prepared for use by Council and the Office of Local Government. For the purposes of these statements, the Council is a non-reporting not-for-profit entity.

The figures presented in these Special Purpose Financial Statements have been prepared in accordance with the recognition and measurement criteria of relevant Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board (AASB) and Australian Accounting Interpretations.

The disclosures in these Special Purpose Financial Statements have been prepared in accordance with the Local Government Act 1993 (NSW), the Local Government (General) Regulation, and the Local Government Code of Accounting Practice and Financial Reporting.

The statements are prepared on an accruals basis. They are based on historic costs and do not take into account changing money values or, except where specifically stated, current values of non-current assets. Certain taxes and other costs, appropriately described, have been imputed for the purposes of the National Competition Policy.

The Statement of Financial Position includes notional assets/liabilities receivable from/payable to Council's general fund. These balances reflect a notional intra-entity funding arrangement with the declared business activities.

National Competition Policy

Council has adopted the principle of ‘competitive neutrality’ in its business activities as part of the National Competition Policy which is being applied throughout Australia at all levels of government.

The framework for its application is set out in the June 1996 NSW government policy statement titled 'Application of National Competition Policy to Local Government'.

The Pricing and Costing for Council Businesses, A Guide to Competitive Neutrality issued by the Office of Local Government in July 1997 has also been adopted.

The pricing and costing guidelines outline the process for identifying and allocating costs to activities and provide a standard for disclosure requirements.

These disclosures are reflected in Council’s pricing and/or financial reporting systems and include taxation equivalents, Council subsidies, return on investments (rate of return), and dividends paid.

Declared business activities

In accordance with Pricing and Costing for Council Businesses – A Guide to Competitive Neutrality, Council has declared that the following are to be considered as business activities:

Category 1

a. Land Development

The development and marketing of residential and commercial land throughout the City

b. Deregulated ApprovalsThe provision of Contestable Development Services relating to the approval and inspection of building andengineering works

103

SPFS 20187



Note 1. Significant accounting policies (continued)

Category 2

a. Commercial WasteThe provision of waste removal services to the commercial sections of the City

b. Property ManagementThe protection of Council’s commercial and residential assets and maximisation of returns from Council’slease portfolio

Monetary amounts

Amounts shown in the financial statements are in Australian currency and rounded to the nearest thousand dollars.

(i) Taxation-equivalent charges

Council is liable to pay various taxes and financial duties. Where this is the case, they are disclosed as a cost of operations just like all other costs.

However, where Council does not pay some taxes which are generally paid by private sector businesses, such as income tax, these equivalent tax payments have been applied to all Council-nominated business activities and are reflected in Special Purpose Financial Statements.

For the purposes of disclosing comparative information relevant to the private sector equivalent, the following taxation equivalents have been applied to all Council-nominated business activities (this does not include Council’s non-business activities):

Notional rate applied (%)

Corporate income tax rate – 27.5%

Land tax – the first $629,000 of combined land values attracts 0%. For the combined land values in excess of $629,001 up to $3,846,000 the rate is 1.6% + $100. For the remaining combined land value that exceeds $3,846,000 a premium marginal rate of 2.0% applies.

Payroll tax – 5.45% on the value of taxable salaries and wages in excess of $750,000.

Income tax

An income tax equivalent has been applied on the profits of the business activities.

Whilst income tax is not a specific cost for the purpose of pricing a good or service, it needs to be taken into account in terms of assessing the rate of return required on capital invested.

Accordingly, the return on capital invested is set at a pre-tax level - gain/(loss) from ordinary activities before capital amounts, as would be applied by a private sector competitor. That is, it should include a provision equivalent to the corporate income tax rate, currently 27.5%.

Income tax is only applied where a gain/ (loss) from ordinary activities before capital amounts has been achieved.

Since the taxation equivalent is notional – that is, it is payable to Council as the ‘owner’ of business operations - it represents an internal payment and has no effect on the operations of the Council. Accordingly, there is no need for disclosure of internal charges in the SPFS.

104

SPFS 20187



Note 1. Significant accounting policies (continued)

The rate applied of 27.5% is/is not the equivalent company tax rate prevalent at reporting date. No adjustments have been made for variations that have occurred during the year.

Local government rates and charges

A calculation of the equivalent rates and charges payable on all category 1 businesses has been applied to all land assets owned or exclusively used by the business activity.

Loan and debt guarantee fees

The debt guarantee fee is designed to ensure that council business activities face ‘true’ commercial borrowing costs in line with private sector competitors.

In order to calculate a debt guarantee fee, Council has determined what the differential borrowing rate would have been between the commercial rate and Council’s borrowing rate for its business activities.

(ii) Subsidies

Government policy requires that subsidies provided to customers, and the funding of those subsidies, must be explicitly disclosed.

Subsidies occur when Council provides services on a less-than-cost-recovery basis. This option is exercised on a range of services in order for Council to meet its community service obligations.

Accordingly, ‘subsidies disclosed’ (in relation to National Competition Policy) represents the difference between revenue generated from ‘rate of return’ pricing and revenue generated from prices set by Council in any given financial year.

The overall effect of subsidies is contained within the Income Statement of each reported business activity.

(iii) Return on investments (rate of return)

The NCP policy statement requires that councils with Category 1 businesses ‘would be expected to generate a return on capital funds employed that is comparable to rates of return for private businesses operating in a similar field’.

Funds are subsequently available for meeting commitments or financing future investment strategies.

The actual rate of return achieved by each business activity is disclosed at the foot of each respective Income Statement.

The rate of return is calculated as follows:

Operating result before capital income + interest expense

Written down value of I,PP&E as at 30 June

As a minimum, business activities should generate a return equal to the Commonwealth 10 year bond rate which is 2.63% at 30/6/18.

(iv) Dividends

Council is not required to pay dividends to either itself (as owner of a range of businesses) or to any external entities.

105


Report on the special purpose financial report


To the Councillors of the Blacktown City Council

Opinion

I have audited the accompanying special purpose financial report (the financial report) of Blacktown

City Council’s (the Council) Declared Business Activities, which comprise the Income Statement of

each Declared Business Activity for the year ended 30 June 2018, the Statement of Financial Position

of each Declared Business Activity as at 30 June 2018, notes comprising a summary of Significant

accounting policies and other explanatory information for the Business Activities declared by Council,

and the Statement by Councillors and Management.

The Declared Business Activities of the Council are:

• Land Development

• Deregulated Approvals

• Commercial Waste

• Property Management

In my opinion, the financial report presents fairly, in all material respects, the financial position of the

Council’s declared Business Activities as at 30 June 2018, and its financial performance for the year

then ended, in accordance with the Australian Accounting Standards described in Note 1 and the

Local Government Code of Accounting Practice and Financial Reporting (LG Code).


Basis for Opinion


standards are described in the ‘Auditor’s Responsibilities for the Audit of the Financial Report’ section

of my report.






106




Auditor-General

• mandating the Auditor-General as the auditor of councils


I believe the audit evidence I have obtained is sufficient and appropriate to provide a basis for my

audit opinion.

Emphasis of Matter - Basis of Accounting

Without modifying my opinion, I draw attention to Note 1 to the financial report which describes the

basis of accounting. The financial report has been prepared for the purpose of fulfilling the Council’s

financial reporting responsibilities under the LG Code. As a result, the financial report may not be

suitable for another purpose.

Other Information


30 June 2018, other than the financial report and my Independent Auditor’s Report thereon. The

Councillors are responsible for the other information. At the date of this Independent Auditor’s Report,

the other information I have received comprise the general purpose financial statements and Special

Schedules (the Schedules).

My opinion on the financial report does not cover the other information. Accordingly, I do not express

any form of assurance conclusion on the other information. However, as required by the Local

Government Act 1993, I have separately expressed an opinion on the general purpose financial

statements and Special Schedule 2 - Permissible income for general rates.

In connection with my audit of the financial report, my responsibility is to read the other information

and, in doing so, consider whether the other information is materially inconsistent with the financial

report or my knowledge obtained in the audit, or otherwise appears to be materially misstated.




The Councillors’ Responsibilities for the Financial Report

The Councillors are responsible for the preparation and fair presentation of the financial report and for

determining that the accounting policies, described in Note 1 to the financial report, are appropriate to

meet the requirements in the LG Code. The Councillors’ responsibility also includes such internal

control as the Councillors determine is necessary to enable the preparation and fair presentation of

the financial report that is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the Councillors are responsible for assessing the Council’s ability to


going concern basis of accounting, unless it is not appropriate to do so.

107

Auditor’s Responsibilities for the Audit of the Financial Report


• obtain reasonable assurance about whether the financial report as a whole is free from material







based on the financial report.

A description of my responsibilities for the audit of the financial report is located at the Auditing and





• about the security and controls over the electronic publication of the audited financial report on

any website where it may be presented

• about any other information which may have been hyperlinked to/from the financial report.

Renee Meimaroglou


23 October 2018

SYDNEY

108


Blacktown City Council and its subsidiary SPECIAL SCHEDULES for the year ended 30 June 2018

0

109

Special Schedules 2018


Special Schedules for the year ended 30 June 2018

Contents

Special Schedules 1

Net Cost of Services

Permissible income for general ratesIndependent Auditors Report

Report on Infrastructure Assets

1 Special Schedules are not audited (with the exception of Special Schedule 2).

Background

These Special Schedules have been designed to meet the requirements of special purpose users such as:

the NSW Grants Commissionthe Australian Bureau of Statistics (ABS)the NSW Office of Water (NOW)the Office of Local Government (OLG).

The financial data is collected for various uses including:

the allocation of Financial Assistance Grantsthe incorporation of Local Government financial figures in national statisticsthe monitoring of loan approvalsthe allocation of borrowing rights the monitoring of the financial activities of specific services.

Special Schedule 1

Special Schedule 2 113Special Schedule 2 114

Page

111

117Special Schedule 7

(ii)

(i)

110



Special Schedule 1 – Net Cost of Services for the year ended 30 June 2018

$’000

Governance

Administration

Public order and safety

Beach controlEnforcement of local government regulationsAnimal controlOtherTotal public order and safety

Health

EnvironmentNoxious plants and insect/vermin controlOther environmental protectionSolid waste managementStreet cleaningDrainageStormwater managementTotal environment

Community services and educationAdministration and educationSocial protection (welfare)Aged persons and disabledChildren’s servicesTotal community services and education

Housing and community amenitiesPublic cemeteriesPublic conveniencesStreet lightingTown planningOther community amenitiesTotal housing and community amenities

–

2,944 –

–

– (1,062)

(7,419)

–

(2,012) –

–

(342)

2,412

(8,478)

(7,134)

– 4,424

–

7,508 7,756

48,099

66,538 2,100

–

360

25,953

181

18 30

– –

20,123

67

Net cost.of services.

165 –

(3,138)

73,249

68,974 1,262

3,824 28 – (3,796)

(1,761) – –

(27,004)

–

1,272

–

Function or activity

–

Fire service levy, fire protection, emergency services

–

21,169

5,790 14,085

54,950

3,419

27,946

524 (2,859) (7,593)

– (40)

61

41

3,033 3,383

12,195 –

–

220

–

174

11,645

–

–

107 (181)

(3,852) (4,552)

(4,780) 30

–

61

–

–

– –

–

10,233

18,789 16,359

1,238

81,005

81,005 –

Expenses from. continuing. operations. Non-capital.

2,360

89

3,362 –

Capital.

Income fromcontinuing operations

2,525

1

13 –

51,043

4,541

54,507

1,075

111



Special Schedule 1 – Net Cost of Services (continued) for the year ended 30 June 2018

$’000

Recreation and culturePublic librariesMuseumsArt galleriesCommunity centres and hallsPerforming arts venuesOther performing artsOther cultural servicesSporting grounds and venuesSwimming poolsParks and gardens (lakes)Other sport and recreationTotal recreation and culture

Fuel and energy

Agriculture

Mining, manufacturing and constructionBuilding controlOther mining, manufacturing and constructionTotal mining, manufacturing and const.

Transport and communicationUrban roads (UR) – localUrban roads – regionalSealed rural roads (SRR) – localSealed rural roads (SRR) – regionalUnsealed rural roads (URR) – localUnsealed rural roads (URR) – regionalBridges on UR – localBridges on SRR – localBridges on URR – localBridges on regional roadsParking areasFootpathsAerodromesOther transport and communicationTotal transport and communication

Economic affairsCamping areas and caravan parksOther economic affairsTotal economic affairs

Totals – functionsGeneral purpose revenues (1)

NET OPERATING RESULT (2)

(1) Includes: rates and annual charges (including ex gratia, excluding water and sewer), non-capital general purpose (2) As reported in the Income Statement

grants, interest on investments (excluding externally restricted assets) and interest on overdue rates and annual charges

Share of interests – joint ventures and associates using the equity method

3,740

–

(2,125)

780

(13,667)

4,562

–

Net cost.of services.

–

780

4,460

–

63,764

5,277

–

(1,019) 57,045

183,739

10,048 –

–

(9,148) –

300,765

482 1,475 (998) (561)

303,103

1,414

117,950 7,608

–

63,487 (10,539)

7,608

–

(96)

–

–

– 223

(2,683)

– (1,819)

–

31,146

86,075 571

–

Capital.

–

7,838

–

998

782 1,461 14

7 –

– –

40,642 968

307

2,811

1,544

8,560

–

2,031

2,031

2,843 68 3,363 80

2,162

–

Non-capital.

–

Expenses from. continuing. operations.

29,601

15,261 12,961

3,509

464

1,690 –

–

–

–

29

–

–

–

–

– 12

– 93,992 78,336

1,054 6 15,490

– –

Function or activity

2,811

7,235

–

103,438

–

– –

–

–

50

– –

300,765

–

108

506

775 –

–

– 511

204

11,556 –

4,235 3,683

–

573

– –

125,677

333,961

–

64,721 2,531

5,249 5,249

336,299

12,857

– –

183,739 333,961

12,857

1,414

151,146

10,278

900

37

Income fromcontinuing operations

– – –

112



Special Schedule 2 – Permissible income for general rates for the year ended 30 June 2019

$’000

Notional general income calculation (1)

Last year notional general income yieldPlus or minus adjustments (2)

Notional general income

Permissible income calculation

Special variation percentage (3)

Or rate peg percentageOr crown land adjustment (incl. rate peg percentage)

Less expiring special variation amountPlus special variation amount

Or plus rate peg amountOr plus Crown land adjustment and rate peg amount

Sub-total

Plus (or minus) last year’s carry forward totalLess valuation objections claimed in the previous yearSub-total

Total permissible income

Less notional general income yieldCatch-up or (excess) result

Plus income lost due to valuation objections claimed (4)

Less unused catch-up (5)

Carry forward to next year

Notes

(1) The notional general income will not reconcile with rate income in the financial statements in the correspondingyear. The statements are reported on an accrual accounting basis which include amounts that relate to prior years’rates income.

(2) Adjustments account for changes in the number of assessments and any increase or decrease in land value occurringduring the year. The adjustments are called ‘supplementary valuations’ as defined in the Valuation of Land Act 1916 .

(3) The ‘special variation percentage’ is inclusive of the rate peg percentage and where applicable Crown land adjustment.

(4) Valuation objections are unexpected changes in land values as a result of land owners successfully objecting to theland value issued by the Valuer-General. Councils can claim the value of the income lost due to valuation objections inany single year.

(5) Unused catch-up amounts will be deducted if they are not caught up within 2 years. Usually councils will have anominal carry forward figure. These amounts can be adjusted for in setting the rates in a future year.

(6) Carry forward amounts which are in excess (an amount that exceeds the permissible income) require ministerial approval by order published in the NSW Government Gazette in accordance with section 512 of the Local Government Act 1993 . The OLG will extract these amounts from Council’s Special Schedule 2 in the financial data return (FDR) to administer this process.

3,010 4,376 156,483 163,103

153,473 158,727

0.00%0.00%1.50%2.30%0.00%0.00%

– – – –

23 13

2,347 3,751 – –

158,830 166,854

(150) (37) (127) (24)

166,831

158,727 166,837

a

13 8

Calculation Calculation2017/182018/19

– –

(24) (6)

37 14

158,703

lm

n = (l + m)

o = k + n

g

k = (c + g + h + i + j)

b

def

j = c x fi = c x e

h = d x (c – g)

c = (a + b)

pq = o – p

rs

t = q + r – s

113


Special Schedule 2 - Permissible Income for general rates


To the Councillors of Blacktown City Council

Opinion

I have audited the accompanying Special Schedule 2 – Permissible Income for general rates (the

Schedule) of Blacktown City Council (the Council) for the year ending 30 June 2019.

In my opinion, the Schedule of the Council for the year ending 30 June 2019 is prepared, in all

material respects in accordance with the requirements of the Local Government Code of Accounting

Practice and Financial Reporting (LG Code) issued by the Office of Local Government (OLG), and is

in accordance with the books and records of the Council.


Basis for Opinion


standards are described in the ‘Auditor’s Responsibilities for the Audit of the Schedule’ section of my

report.









Auditor-General

• mandating the Auditor-General as auditor of councils


I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my

audit opinion.

Emphasis of Matter – Basis of Accounting

Without modifying my opinion, I draw attention to the special purpose framework used to prepare the

Schedule. The Schedule had been prepared for the purpose of fulfilling the Council’s reporting

obligations under the LG Code. As a result, the Schedule may not be suitable for another purpose.

114

Other Information


30 June 2018, other than the Schedule and my Independent Auditor’s Report thereon. The Councillors

are responsible for the other information. At the date of this Independent Auditor’s Report, the other

information I have received comprise the general purpose financial statements, special purpose

financial statements and the Special Schedules excluding Special Schedule 2 (the other Schedules).

My opinion on the Schedule does not cover the other information. Accordingly, I do not express any

form of assurance conclusion on the other information. However, as required by the Local

Government Act 1993, I have separately expressed an opinion on the general purpose financial

statements and the special purpose financial statements.

In connection with my audit of the Schedule, my responsibility is to read the other information and, in

doing so, consider whether the other information is materially inconsistent with the Schedule or my

knowledge obtained in the audit, or otherwise appears to be materially misstated.




The Councillors’ Responsibilities for the Schedule

The Councillors are responsible for the preparation of the Schedule in accordance with the LG Code.

The Councillors’ responsibility also includes such internal control as the Councillors determine is

necessary to enable the preparation of the Schedule that is free from material misstatement, whether

due to fraud or error.

In preparing the Schedule, the Councillors are responsible for assessing the Council’s ability to


going concern basis of accounting, unless it is not appropriate to do so.

Auditor’s Responsibilities for the Audit of the Schedule


• obtain reasonable assurance whether the Schedule as a whole is free from material







based on the Schedule.

A description of my responsibilities for the audit of the Schedule is located at the Auditing and



115




• about the security and controls over the electronic publication of the audited Schedule on any

website where it may be presented

• about any other information which may have been hyperlinked to/from the Schedule.

Renee Meimaroglou


23 October 2018

SYDNEY

116



Special Schedule 7 – Report on Infrastructure Assets as at 30 June 2018

$’000

Notes:a Required maintenance is the amount identified in Council’s asset management plans.

Infrastructure asset condition assessment ‘key’

Excellent/very good No work required (normal maintenance) Condition Description here…Good Only minor maintenance work required Condition Description here…Satisfactory Maintenance work required Condition Description here…Poor Renewal required Condition Description here…Very poor Urgent renewal/upgrading required Condition Description here…

4321 6

10987

2,209,837 TOTAL – ALL ASSETS 48,795 62,992

0%1% 93%

14,494

62,724 3,366,126 26.5% 47.4% 24.8% 0.8% 0.5%

Assets in condition as a percentage of gross replacement cost

Net carryingamount

339,876

48,795

1,223 438

11%

0%3%

0%155,725 52,163

3.0%

26,855

Land Land Improvements & Parks 2,635 22,455 22,387 183,472 40% 57% 3% 0% 0%

0%

55

22,455

84%

5,170 16,015 4.0%

Stormwater drainage57.0% 0.0%3.0%2,485 0.0%3,239

40%3,239 2,485 0%0%533,268 3%drainage 753,933 Sub-total 40.0%533,268 2,296

2,296 2,296 753,933

1,217,654 43.0% 1.0%13%

41.0%

0%

Bridges

2,635 119,039

1,053,350 1,023

36,742 92,240 7,444

improvements

9%4%80%

73.0%

70%9%

25%

339,876

119,039

Unsealed roads

2,635

34,402 4 –

Buildings

21

4%

0.0%

0%

Sealed roads

Sub-total

Asset class

Buildings

to bring assetsEstimated cost

2017/18to bring to the 2017/18 Gross

standard maintenanceAsset categoryRequired Actual replacement

cost (GRC)maintenanceato satisfactory

Estimated cost

agreed level ofservice set by

Council

5,170 0.0%

53%Roads

Sub-total4%

4

2%73%457,019

53

21.0%5,170 0%16,015 16,394 21%5,170

438 4 37

2,627

1%

– 4

1,706,954 2,581

16,336 0% 6%

1%

3,521

Carpark

2,627

38,694

FootpathsPathways

Sub-total

457,019 2.0%

18%27%

57.0%2,635

16,394

– 883

1,223

20,904 38,694

72

21,837

40.0%

34,402

2,760

1,038 1%

14.0%

183,472 0.0%

39,785 17% 70% 0%1,971,702

22,387

16,997 1,038

1.0%

5

2,296 Stormwater 57%

117



Special Schedule 7 – Report on Infrastructure Assets (continued) for the year ended 30 June 2018

$ ’000

Infrastructure asset performance indicators * consolidated

1. Buildings and infrastructure renewals ratio (1)

Asset renewals (2)

Depreciation, amortisation and impairment

2. Infrastructure backlog ratio (1)

Estimated cost to bring assets to a satisfactory standardNet carrying amount of infrastructure assets

2a. Infrastructure backlog ratio (1)

Estimated cost to bring assets to a satisfactory standardTotal value of infrastructure and building assets

3. Asset maintenance ratioActual asset maintenanceRequired asset maintenance

4. Cost to bring assets to agreed service level

Gross replacement cost

Notes

* All asset performance indicators are calculated using the asset classes identified in the previous table.

(1) Includes Work In Progress (WIP)

(2) Asset renewals represent the replacement and/or refurbishment of existing assets to an equivalent capacity/performance as opposed to the acquisition of new assets (or the refurbishment of old assets) thatincreases capacity/performance.

48,795 1.45% 1.55% 1.67%3,366,126

1.45% 1.55% 0.00%48,795

62,724

3,366,126

Estimated cost to bring assets toan agreed service level set by Council

62,992

Amounts Prior periods

99.57% 99.30% 98.56%

2018

>= 100%

< 2.00%

> 100%

BenchmarkIndicator

63.94% 79.60% 69.73%

2018 2017 2016

36,855

48,795 2.18% 2.36% 2.53%2,241,178

57,644

118

GPFS YE 1718

Documents

Transcript of GPFS YE 1718