BUDGET 2018/2019 - wml.vic.gov.au · The proposed 2018/2019 budget is presented in a format which demonstrates the proposed 2018/2019 Cash Budget, the 2018/2019 Budget and anticipated

WMRLC Draft Budget 2018/19

Whitehorse Manningham Regional Library Corporation

BUDGET 2018/2019 Adopted 30 May 2018

1 WMRLC Budget 2018/19

CONTENTS Page 1 Introduction 2

2 Executive summary 3

3 Link to the Library Plan 5

Budget Analysis

4 Budget principles 9

5 Budget influences 9

6 Analysis of operating budget 10

7 Analysis of budgeted cash position 15

8 Analysis of budgeted financial position 19

9 Strategic Resource Plan and Key Financial Indicators 20

10 Financial Statements 24

Appendices

A Fees and charges schedule 30

B Budget process 31


1 Introduction

Whitehorse Manningham Regional Library Corporation (WMRLC) is a Library

Corporation under section 196 of the Local Government Act 1989. The Corporation

provides a public library service to the municipalities of Whitehorse and

Manningham (the member Councils), which have a combined estimated residential

population of 299,045.

The Corporation is governed by a Board comprising two Councillor Representatives

from each of the member Councils, the Chief Executive Officers from the member

Councils and two community representatives. The Corporation’s Chief Executive

Officer reports to the Board and is responsible for the management of the

Corporation.

The Library Plan 2017-2021 sets out the strategic plan to deliver the Corporation’s

vision over the four year period. The proposed budget 2018/2019 details the

resources required over the next year to achieve the Library Plan actions. The

budget supports the continued transformation to a 21st century library service that

embraces the possibilities of new technology, while continuing to strengthen the

reading and learning services and resources most valued by our community.

The proposed 2018/2019 budget is presented in a format which demonstrates the

proposed 2018/2019 Cash Budget, the 2018/2019 Budget and anticipated final

results for the 2017/2018 Budget. A Budgeted Income Statement, Budgeted

Statement of Capital Works, Budgeted Balance Sheet and Budgeted Cash Flow

Statement are provided.


2 Executive Summary

The Corporation has prepared a Budget for 2018/19 which is aligned to the vision in

the Library Plan 2017-2021. It seeks to maintain and improve library services that

are valued by our community. It has been developed to ensure the Corporation is

financially sustainable, while also ensuring it can deliver the strategic objectives

and actions set out in the Library Plan.

The Corporation continues to strive to contain costs through system improvements,

respects the financially constrained environment and takes opportunities to explore

additional revenue sources where possible. Expenditure in all areas has been

reviewed and is considered realistic.

This Budget projects a small surplus of $3,000 for the 2018/2019 financial year.

2.1 Key things we are funding

Strategy 1. Read, Learn and Discover

1) Increase collection resource allocation to allow for growth in e-resources

while maintaining the size of the physical collection

2) Funding to support the delivery of a Young Adult Literature festival and a

program of reading and literature events for all ages

3) Funding for the achievement of the Literacy Strategy actions including

collections and programs to support early literacy and English as an

Additional Language

Strategy 2. Connect, Collaborate and Participate

1) Additional funding for participatory programs in response to community

demand; includes funding for more Makerspace and youth programs

2) Extension of the Community Stories project

3) Support for volunteer engagement; includes funding for human resource to

support the coordination of an increased number of volunteers

Strategy 3. Experience

1) Continued investment in the People and Skills Strategy to ensure the

employment and development of a workforce with capacity to support

delivery of Library Plan objectives.

2) Significant upgrade of the Wide Area Network to ensure the network

enables the delivery of modern library services.


3) IT replacement schedule includes the staged replacement of RFID

equipment at library branches and $40K towards the RFID replacement

reserve.

4) Improvements to internal signage and way finding at library branches

Strategy 4. Value

1) Funding for the third year of the Internal Audit Strategy with three audits

scheduled

2) Implement software solutions to effectively manage electronic corporate

information and records

3) Discontinue the provision of refunds for payment of lost collection items;

saving significant staff time spent processing refund claims

4) Fund the development of a strategy to support the delivery of outreach

services to the most disadvantage and vulnerable members of our

community

2.2 Key Statistics

Total Income $10,989,958 (2017/18 = $10,759,159)

Total Expenditure $10,282,564 (2017/18 = $10,139,724)

Accounting Result* $707,394 Surplus (2017/18 = $619,435 Anticipated Surplus)

(Refer to Income Statement in Section 11.1)

Total Capital Works $1,957,944 (2017/18 = $1,894,450)

* The methodology used to treat discarded collection items in the accounting system was

altered in the 2016/17 financial year, resulting in a reduction in the value of the collection by

$600,000. As a consequence, depreciation is significantly less than anticipated and a large

operating surplus will be realised. However a very small cash surplus is expected.


3 Links to the Library Plan

This section describes how the Annual Budget links to the achievement of the

Library Plan.

3.1 Planning and accountability framework

The Strategic Resource Plan is a rolling four year plan that outlines the financial and

non-financial resources that the Corporation requires to achieve the strategic

objectives described in the Library Plan. The Annual Budget is framed within the

Strategic Resource Plan, taking into account the services and initiatives which

contribute to achieving the strategic objectives specified in the Library Plan. The

Annual Report includes a report on operations, financial statements and

performance results.

The Library Plan, including the Strategic Resource Plan is required to be completed

by 30 June following the general election of Councillors. The Strategic Resource

Plan is reviewed each year in advance of the commencement of the Annual Budget

process.

3.2 Our purpose

Whitehorse Manningham Libraries – Open for Discovery

Our vision

A library open for all to discover a world of possibilities.

Our mission

To provide opportunities that inspire our community to read, learn, connect and

create.

Our values

Respect

We acknowledge our diverse community and support equal access to services by

all.

Integrity

We are open, honest and accountable in the way we conduct our business.


Community Driven

Our services and the way we deliver them are shaped by the needs and aspirations

of our community.

Collaboration

Together we develop positive relationships and partnerships that strengthen our

services and their impact.

Excellence

We aim for excellence and strive to find new ways to improve how we work and

deliver services.

3.3 Strategic objectives

The following table lists the four strategic goals as described in the Library Plan

2017-2021

Strategic Objective Description

1. Read, Learn and Discover

Our library has a critical role in contributing to

community and individual wellbeing by

providing accessible and engaging collections,

resources and programs that encourage life-

long learning and reading for pleasure.

2. Connect, Collaborate and

Participate

Our library provides opportunities for social

connection and community engagement. We

actively invite and develop collaborative

community partnerships to achieve mutual

benefits.

3. Experience

Our libraries are important civic spaces where

all in the community should feel welcome. We

strive for excellence in all aspects of our

services to ensure a positive and responsive

experience for all customers.

4. Value We apply best practice principles to the way we

work to ensure our services continue to be

relevant and sustainable.


3.4 Service Performance indicators – four year trends

-

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

2012/13 2013/14 2014/15 2015/16 2016/17

Total Loans and Branch Visits

Visits to branches Loans of collection items

131,458

136,429

143,467

149,162

2013/14 2014/15 2015/16 2016/17

Tota

l En

qu

irie

s

Financial Year

Information Enquiries responded to by staff


77 81

97

118

2014/15 2015/16 2016/17 As of January 2018

Number of volunteers

-

100,000

200,000

300,000

400,000

500,000

600,000

700,000

2013/14 2014/15 2015/16 2016/17

Public Internet Sessions

Fixed PC Wifi


Budget Analysis

4 Budget principles

The preparation of the 2018/2019 budget is informed by the following overarching

principles:

Service levels to be maintained at 2017/2018 levels with some service

improvements to be achieved through efficiency and innovation

Alternative revenue sources to be identified where possible

Alignment of budget to the delivery of the Library Plan objectives

Alignment of service delivery to community need and expectation

Review of all areas of expenditure against anticipated service needs and

market trends and containing increases as much as possible.

Warrandyte Library is funded by Manningham City Council outside of the

Regional Library Agreement and is not reflected in this budget.

5 Budget Influences

The preparation of this budget is influenced by an number of internal and external

factors including the following:

Victorian State Government rate cap amount of 2.25% for the 2018-2019

financial year.

Anticipated Enterprise Agreement increase (not finalised at the time of

preparing the budget).

67,578

69,765 69,800

71,051

2013/14 2014/15 2015/16 2016/17

Program Attendance


Revenue from user fees and charges is forecast to decline by 1.7%

compared to the previous years budgeted revenue from this source. This

sustained downward trend is being experienced industry wide.

Contributions from member Councils are forecast to increase by 2.25% in

line with the rate cap percentage amount.

State government grant is forecast to increase by 1.8% based on the

previous years’ experience.

Based on forecasting from Trading Economics, interest rates are anticipated

to increase to 2% (currently 1.5%) by the end of 2018 and to 3% by the end

of 2020.

Increased cost of collection materials, ICT, program and marketing.

Reduction in water costs associated with a correction resulting from the

identification of a supplier billing error.

Demographic trends including increased cultural diversity and ageing

population. Along with a forecast 1.78% increase in the Whitehorse

Manningham population in 2018 compared to 2017.

6 Analysis of operating budget

This section of the report analyses the operating budget including the expected

income and expenses of the Corporation for the 2018/2019 financial year.

The following notes are presented to demonstrate the key parameters and

assumptions underpinning the budget and to provide additional explanatory

information.

6.1 Income

The Corporation receives funds through member Council contributions and State

Government funding. The Corporation generates small amounts through user fees,

charges and interest earned on investments.

Income type Forecast

Actual

2017/2018

Budget

2018/2019

Variance

Council Contributions 8,428,088 8,617,720 189,632

State government Public Libraries Funding 1,705,023 1,735,713 30,690

Other Grants 125,559 127,174 1,615


Fees/Charges 331,951 378,200 46,249

Income from Investments 79,246 75,000 (4,246)

Cash Surplus c/fwd 157,133 56,151 (100,982)

Total Income 10,827,000 10,989,958 162,958

Council Contributions

Member Council contributions are in accordance with the agreed funding formula set

out in the Regional Library Agreement. The increase in contributions for the

2018/2019 financial year is 2.25% in line with the rate cap percentage amount.

Member Council Contributions Budget

2017/2018

Budget

2018/2019

Variance

City of Whitehorse 5,064,104 5,178,046 113,942

Manningham City Council 3,363,984 3,439,674 75,690

Total contributions 8,428,088 8,617,720 189,632

Grants

The State Government recurrent core and local priorities funding is forecast to

increase by 1.8%; the increase is confirmed by the State Government in June. No

increase is forecast for the Premiers Reading Challenge grant; the funding amount is

usually confirmed in December.

78%

16%

1%3%

1%1% Total Income 2018/19

Council Contributions

State government PublicLibraries Funding

Other Grants

Fees/Charges

Income from Investments

Cash Surplus c/fwd


Income from other grants and donations is not included in the budget unless it is

known at the time of the budget preparation.

Recurrent grants Forecast Actual

2017/2018

Budget

2018/2019

Variance

State Public Libraries - Core 1,705,023 1,735,713 30,690

State Local Priorities 89,738 91,353 1,615

Premiers Reading Challenge 35,821 35,821 0

Other 0 0 0

Total recurrent grants 1,830,582 1,862,887 32,305

User Fees and Charges ($6,500 decrease)

User fees and charges includes income from lost, damaged, overdue and

reservation charges, printing and copying, meeting room hire and sale of products.

User fees and charges have been reviewed and benchmarked against those of other

public library services. Total revenue from user fees and charges is forecast to

decrease by 1.69% compared to the previous year’s budgeted income due to the

continued decline in revenue from overdue and reservation charges.

The schedule of Fees and Charges is detailed at Appendix A.

Interest from Investments ($3,600 increase)

Interest from investments includes interest earned on available cash throughout the

year. Cash funds and cash requirements are reviewed on a daily basis to identify

funds available and required to meet the Corporation’s obligations and surplus cash

funds are identified for investment availability. The Corporation received more than

budgeted in 2017/2018 due to shopping around for the best interest rates and being

vigilant with cash flows.

6.2 Operating Expenditure

Expense types Forecast Actual

2017/2018

Budget

2018/2019

Variance

Employee costs 7,288,189 7,354,389 89,069

Grant expenditure 125,559 127,174 1,834

Other expenses 1,462,650 1,420,329 77,400


Total Expenses 8,876,399 8,901,892 168,303

Total operating expenditure is projected to increase by $168,303 over budgeted

expenditure for 2017/2018.

Employee costs ($89,069 increase)

Employee costs comprise 82% of total operating expenditure.

Employees costs include all labour related expenditure such as salaries and on costs

including allowances, banding increments, leave entitlements, employer

superannuation guarantee, Workcover, penalty payments for weekend work, staff

development, Employee Assistance Program, relief staff to cover leave absences and

engagement of external specialist resources where required.

Employee costs are forecast to increase by 1.23% or $89,069 compared to

2017/2018. This increase relates to three key factors:

Renegotiation of the Enterprise Agreement

Anticipated changes in staff composition including the reduction in casual

shelver requirements and a small reduction in back of house requirements

Maintaining staff development expenditure at the same level as in 2017/2018

Utilities ($7,420 decrease)

82%

3%

3%

4%7%

1%

Operating Expenditure 2018/2019

Employee costs

Utilities

Collection Resources

Information Services andTecnhology

Other expenses

Grant Expenditure


A decrease in utility costs is forecast due to the following key factors:

Anticipated savings resulting from the installation by the City of Whitehorse of

energy efficient lighting at the Box Hill Library will help to offset anticipated

increases in electricity charges

Reduction in water costs resulting from the correction in a supplier’s billing

error

Information services ($15,500 overall increase)

Included in this budget is the Library Management System, Debt Recovery and

Libraries Australia costs. The increase in this budget reflects the transfer of Libraries

Australia costs to this budget from the Collection Resources (non-capital) budget. The

Libraries Australia membership provides the Corporation with access to some

cataloguing and inter library loan services.

Information technology ($17,500 increase)

Increased to meet anticipated costs associated with the Wide Area Network upgrade

and new electronic records management system licence and support. Some savings

have been achieved through consolidation of other licences.

Collection resources (non- capital) ($21,960 increase)

Included in this budget are periodicals, newspapers and some electronic collection

resources (e-magazines, online newspapers, databases). These types of items are

non-depreciable and therefore not regarded as assets. Increased to respond to

demand for digital collection formats.

Other expenses ($38,529 overall increase) includes:

Professional services ($10,000 decrease)

Decreased following the completion of a number of risk management projects

in the previous year.

Programs ($12,000 increase)

Increased to respond to community demand for library programs and events

including Makerspace and youth programs.

Marketing ($20,000 increase)

Increased to enable improvements to internal signage at library branches and

the development of other marketing collateral.


7 Analysis of Budgeted Cash Position

This section of the report analyses the expected cash flows from the operating,

investing and financing activities of the Corporation for the 2018/19 year. Budgeting

cash flows for the Corporation is a key factor in ensuring it can meet its strategic and

financial commitments, and provides a guide to the level of capital expenditure that

can be sustained with or without using existing cash reserves.

Forecast Actual

2017-2018

Budget 2018-2019

Variance

Cash flows from operating activities

Contributions Received 8,428,088 8,617,720 (189,632)

Grants Received 1,830,582 1,862,887 (32,305)

Interest Received 76,015 76,131 (116) User Fees and Charges

489,084 438,388 50,696

10,823,769 10,995,126 (171,357)

Payments to Employees / Suppliers (8,711,263) (9,071,027) (359,764)

Net cash provided by operating activities

2,112,506 1,924,099 188,407

Cash flows from Investing Activities

Payments for Collection Resources, Equipment and Furniture

(1,896,831) (1,957,944) (61,113)

Proceeds from Sale of Equipment

Net cash provided by investing activities

(1,896,831) (1,957,944) (66,113)

Net increase (decrease) in cash held 215,675 (33,845) 249,520

Cash at the beginning of the year 3,912,390 4,128,065 (215,675)

Cash at the end of the year 4,128,065 4,094,220 33,845

Cash flows from Operating Activities

Operating activities refer to the cash generated by or used in the normal

service delivery functions of the Corporation.

Payments from Operating Activities

Employee costs comprise approximately 80% of the total cash expenditure


Small increases in payments to suppliers based on the anticipated budget result

for 2017/18.

Overall, a small increase in Net Cash Flow from Operating Activities is

anticipated

Net Cash used in Investing Activities

The main impact on Investing Activities is increases in Collection Resources.

Cash at End of Financial Year

It is anticipated that at the end of the 2019 the total cash will slightly increase.

Restricted Funds and working Capital

The cash flow statements show that the Corporation is estimating at 30 June 2019 to

have cash and cash investments of $4,094,000 of which some investments are

restricted:

Employee Benefits – current $1,559,311

Employee Benefits – non-current $ 83,660

These funds are separately identified as restricted to ensure there are sufficient funds

to meet the Corporation’s obligations as set out in the Local Government (Long

Service Leave) Regulations 2002.

The Corporation also have monies set aside in a reserve account to assist with the

replacement of the Radio Frequency Identification (RFID) equipment.

8 Analysis of Capital Works

This section of the report analyses the planned capital expenditure budget for the

2018/19 year and the sources of funding for the capital budget.

Budgeted Statement of Capital Works

2017-2018 2018-2019 Variance

Capital Works

Collection Resources 1,616,450 1,664,944 48,494

Furniture and Equipment 58,000 58,000 0

Motor Vehicle Replacement 25,000 25,000 0

IT Replacement 195,000 210,000 15,000

Total Capital Works 1,894,450 1,957,944 63,494


Represented by:

Asset renewal expenditure 1,894,450 1,957,944 63,494

Total capital works expenditure 1,894,450 1,957,944 63,494

2017-2018 2018-2019 Variance

Sources of Funding

Council Contributions 1,536,700 1,593,754 57,054

Public Libraries Funding 357,750 364,190 6,440

Total 1,894,450 1,957,944 63,494

Collection Resources ($48,494 increase)

Collection Resources includes capital items such as physical books, audio-visual

resources, e-books and end processing costs. Collection resources are a major

asset. The Corporation continues to focus on improving the relevance and quality of

the collection by regularly evaluating collection borrowing trends and collection

condition and content and replacing the stock. Increased to accommodate CPI and a

small growth in the size of the e-book collection.

Furniture and Equipment (no increase)

This provides for the purchase of replacement furniture in branch library public areas

and upgrades required to meet current ergonomic and OH&S standards. Smaller

items of equipment are covered in the operating budget under equipment

maintenance and replacement. No increase due to budget constraints.

85%

3%1%

11%

Capital Expenditure 2018/2019

Collection Resources

Furniture and Equipment

Motor Vehicle Replacement

IT Replacement


Information Technology Replacement ($15,000 increase)

Information Technology capital expenditure covers the upgrade and replacement of

computer hardware, servers, RFID equipment, network hardware, printers and other

minor hardware items and the purchase of new software. The delivery of a modern

library service requires an IT network and equipment that can support service level

expectations. Increased to allow for the rolling replacement of computers, scheduled

replacement of RFID equipment and other expected cost increases.

Motor Vehicles (no increase)

The Corporation has a small fleet of cars that are used by all staff when moving

between branches or attending meetings. IT staff regularly use these vehicles when

providing support to branch libraries. The Home Library Service staff use vehicles on

a daily basis for deliveries. 1 vehicle scheduled for replacement.


9 Analysis of Budgeted Financial position

This section of the budget report analyses the movements in assets, liabilities and

equity between 2017/18 and 2018/19.

Budgeted Balance Sheet 2017-2018 2018-2019 Variance

Current assets

Cash assets 4,128,065 4,109,727 (18,338)

Receivables 66,131 65,000 (1,131)

Accrued Income 128,619 105,000 (23,619)

Prepayments 39,037 35,000 (4,037)

Total current assets 4,361,852 4,314,727 (47,125)

Non-current assets

Collection Resources 6,090,561 6,815,909 725,348

IT Equipment, Furniture and Equipment 981,058 960,156 (20,902)

Total non-current assets 7,071,619 7,776,065 704,446

Total assets 11,433,471 12,090,792 657,321

Current liabilities

Payables 667,734 585,044 (82,690)

Employee benefits 1,532,345 1,562,992 30,647

Other

Total current liabilities 2,200,079 2,148,036 (52,043)

Non-current liabilities

Employee benefits 98,517 100,487 1,970

Total non-current liabilities 98,517 100,487 1,970

Total liabilities 2,298,596 2,248,523 (50,073)

Net assets 9,134,875 9,842,269 707,394

Equity

Accumulated surplus 5,212,832 5,920,226 707,394

Members Contribution 3,922,043 3,922,043

Total equity 9,134,875 9,842,269 707,394

Cash assets reducing 2018/2019 marginally decreasing as a result of the

Living Libraries grant which increased our cash assets in 2017/2018.

The Collection amount decreased in 2016/2017 due to writing off a large

proportion of items that had been deleted from the Library Management

System but not written off in the fixed assets. The depreciation for the

collection resources has reduced also as a consequence.

Equity – the net increase in equity represents the surplus for 2017/2018.


10 Strategic Resource Plan and Key Financial Indicators

10.1 Plan Development

A four year strategic financial plan is developed and adopted in conjunction with the

annual budget. This strategic financial plan is fundamentally premised on the

Corporation’s strategic commitment to continue the Regional Library’s operations

on a financially sustainable basis and restricting Council contribution increases

(operational and capital).

Underpinning this commitment are the following objectives:

Restricting salary increases to industry standard Enterprise Bargaining

increases and corresponding increases in statutory on-costs.

Continuous pursuit of innovation and efficiency measures to reduce other

expenditure.

Lobbying wherever possible for increased government funding.

Maintaining existing service levels with the introduction of affordable service

initiatives.

Maintaining information communication technology systems within the

parameters of affordability.

Maintaining a capital expenditure on Collection Resources that meets the

objectives of the Collection Management Strategy and industry standards.

Prudently managing financial risks relating to assets and liabilities.

Providing full, accurate and timely disclosure of financial information.

10.2 Funding Strategies

The current four year plan is presented on an accrual basis. It reflects projected

income and expenditure in both capital and operational areas.

The plan is currently premised on the following key parameters:

Indexation of Council contributions by 2.25% each year

Indexation of State Government core and local priorities grants by 1.8%

each year

No increases to the Premier’s Reading Challenge grant

Interest on investments increases by 2% each year

Operating income continues to decline in each year by 2.5%

Total operating expenditure to increase by 2% each year


3% increase in Year One and 2% increase in Collection Resources each

subsequent year.

Increases in Information Technology in the first and third year.

No increase in Furniture and Equipment

No increase in Motor Vehicles.

The Corporation reviews these financial parameters each year as part of the annual

budget process and adjusts the financial plan accordingly wherever parameters

have changed.

The Corporation has a tight financial position and limited opportunity to identify

compensatory discretionary cost items within the operating expenditure budget to

offset lost revenue. While the Corporation is continually reviewing ways to identify

savings, the ongoing reduction of revenue from user charges and interest presents

challenges when looking to fund major projects from within current budgets.

The Corporation endeavours to identity additional income sources to delivery

extension services and programs.


10.3 Four Year Financial Plan

2018/2019 2019/2020 2020/2021 2021/2022

Financial Financial Financial Financial

Plan Plan Plan Plan

INCOME

Council Contribution

Whitehorse 5,178,046 5,286,971 5,405,928 5,527,562

Manningham 3,439,674 3,524,648 3,603,952 3,685,041

Total 8,617,720 8,811,619 9,009,880 9,212,604

Public Libraries Grant 1,735,713 1,766,956 1,798,761 1,831,139

Surplus Carried Forward (Operating) 56,151 10,000 10,000 10,000

Operating Income - WMRLC 453,200 414,880 406,410 405,971

Grants Local Priorities Funding 91,353 92,997 94,671 96,375

Premiers Reading Challenge 35,821 35,821 35,821 35,821

TOTAL INCOME 10,989,959 11,132,274 11,355,544 11,591,910

EXPENDITURE

Operational 8,901,892 9,079,930 9,261,530 9,485,017

Depreciation 1,253,498 1,398,615 1,507,298 1,660,133

Grants Local Priorities Funding 91,353 92,997 94,671 96,375

Premiers Reading Challenge 35,821 35,821 35,821 35,821

TOTAL EXPENDITURE 10,282,564 10,607,363 10,899,320 11,277,346

Net Surplus (Deficit) 707,394 524,910 456,224 314,564

Adjustments to AAS27 Budget

Depreciation (1,253,498) (1,398,615) (1,507,298) (1,660,133)

Total less depreciation 9,029,066 9,208,748 9,392,022 9,617,213

Collection Resources 1,664,944 1,698,243 1,732,208 1,766,852

Furniture & Fittings 210,000 58,000 58,000 58,000

Motor Vehicle Replacement 25,000 25,000 25,000 25,000

IT Replacement 58,000 212,000 215,000 215,000

NET SURPLUS (DEFICIT) 2,949 (59,718) (57,586) (80,156)


10.4 Financial Resources

Strategic Plan Projections

2018/2019 2019/2020 2020/2021 2021/2022

Operating result 707,394 524,910 456,224 314,564 o

Cash & Cash Investments 4,094,218 4,029,818 4,019,283 3,963,750 o

Cash Flow from Operations 1,924,099 1,927,021 2,019,673 2,009,319 +

Capital Works 1,957,944 1,993,243 2,030,208 2,064,852 +

Key to Forecast Trend: + Forecasts improvement in the Corporation's financial performance/financial position indicator o Forecasts that the Corporation’s financial performance/financial position indicator will be steady - Forecasts deterioration in the Corporation’s financial performance/financial position indicator

The key outcomes of the Plan are as follows:

Financial Sustainability

Cash and investments are forecast to reduce over the four year period to fund library

materials and technology.

Council Contributions Strategy

Indexation of member Council contributions is based on the 2018/2019 rate cap

percentage amount set by the State Government.

Capital Works Strategy

Capital expenditure over the four year period will total $8 million with $6.8 million being

spent on library collection materials and $852,000 on Information Technology. This

allows for continued renewal of the collection, and IT and RFID equipment.

Service Delivery Strategy

Existing service levels will be maintained throughout the four year period.


10.5 Non-Financial Resources

Salary expenses and on-costs represent approximately 83% of the Corporation’s total

operating expenditure (excluding depreciation).

Statement of Human Services For the years ending 30 June 2019 - 30 June 2022 Forecast

Actual Budget Strategic Resource Plan

2017/18 2018/19 2019/20 2020/21 2021/22 Staff expenditure

Employee costs –operating

7,288,189 8,617,720 8,811,619 9,009,880 9,212,602 Employee costs –capital

0 0 0 0 0

Total staff expenditure

8,617,720 8,811,619 9,009,880 9,212,602

EFT EFT EFT EFT EFT Staff numbers

Employees 74 74 74 74 74

Total staff numbers

74 74 74 74 74

11 Financial Statements

This section presents information in regard to the Financial Statements. The budget

information for the years 2018/19 to 2021/22 has been extracted from the Strategic

Resource Plan.

This section includes the following financial statements and the following budgeted

information:

Budgeted Comprehensive Income Statement

Budgeted Balance Sheet

Statement of Changes in Equity

Budgeted Statement of Cash Flows

Budgeted Statement of Capital Works


11.1 Budgeted Comprehensive Income Statement For the years ending 30 June 2019 – 30 June 2022

2018/19 2019/20 2020/21 2021/22

Revenue

Council Contributions 8,617,720 8,811,619 9,009,880 9,212,602

State Government Grant 1,735,713 1,766,956 1,798,761 1,831,139

Other Grants 127,174 128,818 130,492 132,196

Interest from Investments 75,000 76,500 78,030 79,591

Fees and charges 434,351 348,380 338,380 336,380

Proceeds from sale of assets 0 0 0 0

Total Revenue 10,989,958 11,132,272 11,355,543 11,591,908

Expenses

Employee costs 7,354,389 7,501,476 7,651,506 7,842,794

Financial Expenses 35,000

35,700

36,414

37,142

Utilities 253,000

258,060

263,221

268,486

Office Expenses 486,644

496,377

506,304

516,430

Collection Resources 249,960

254,959

260,058

265,260

Information Services 105,500

107,610

109,762

111,957

Information Technology 269,500

274,890

280,388

285,996

Promotions and Marketing 72,900

74,358

75,846

77,362

Headquarters Costs 75,000

76,500

78,030

79,589

Grant Expenditure 127,174 128,818 130,492 132,196

Depreciation 1,253,498 1,398,615 1,507,298 1,660,133

Written down value of assets sold 0 0 0 0

Total Expenses

10,282,564

10,607,363

10,899,319

11,277,346

Net Gain (Loss) on disposal of property, plant and equipment 0 0 0 0

PROFIT/(DEFICIT) FOR THE PERIOD

707,394

524,909

456,224

314,562


11.2 Budgeted Balance Sheet For the years ending 30 June 2019 – 30 June 2022

2018/19 2019/20 2020/21 2021/22

Current Assets

Cash assets

4,109,727

4,024,819

4,017,219

3,963,750

Receivables 65,000 65,000 65,000 65,000

Prepayments 105,000 105,000 105,000 105,000

Accrued Income 35,000 35,000 35,000 35,000

Total Current assets 4,314,727 4,229,819 4,222,219 4,168,750

Non-Current assets


IT Equipment, Furniture and Equipment 960,156 936,154 913,952 888,246

Total Non-Current assets 7,776,065 8,368,873 8,891,783 9,296,502

Total Assets 12,090,792 12,598,692 13,114,002 13,465,252

Current Liabilities

Payables 585,044 534,763 559,913 561,988

Provisions 1,562,992 1,594,252 1,626,137 1,658,659

Other 0 0 0 0

Total Current Liabilities 2,148,036 2,129,015 2,186,050 2,220,647

Non-Current Liabilities

Provisions 100,487 102,497 104,547 106,638

Other 0 0 0 0

Total Non-Current Liabilities 100,487 102,497 104,547 106,638

Total liabilities 2,248,523 2,231,512 2,290,597 2,327,285

Net assets 9,842,269 10,367,180 10,823,405 11,137,967

Equity

Accumulated surplus 5,920,226 6,445,137 6,901,362 7,215,924

Members Contribution on Formation 3,922,043 3,922,043 3,922,043 3,922,043

Total equity 9,842,269 10,367,180 10,823,405 11,137,967


11.3 Statement of Changes in Equity

For the years ending 30 June 2019 – 30 June 2022

Accumulated Members

Total Surplus Contribution

2018 Budget

Balance at beginning of the financial year 8,465,069 4,473,026 3,992,043

Surplus (deficit) for the year 669,807 669,807 0

Balance at end of the financial year 9,134,876 5,142,833 3,992,043

Budget 2019




2020 - SRP




2021 - SRP




2022 - SRP





11.4 Budgeted Statement of Cash Flows For the years ending 30 June 2019 – 30 June 2022

2018/19 2019/20 2020/21 2021/22

Cash flows from Operating Activities

Contributions Received 8,617,720 8,811,618 9,009,880 9,212,603

Grants Received 1,735,713 1,766,956 1,798,761 1,831,139

Interest received 76,131 76,500 78,030 79,591

Library Fees 438,388 348,380 338,380 336,380

Other Grants 127,174 128,818 130,492 132,196

Payments to Employees/Supplies (9,071,027) (9,205,251) (9,335,870) (9,582,590)

Net cash provided by operating activities 1,924,099 1,927,021 2,019,673 2,009,319

Cash flows from Investing Activities Payments for Library Collection, Furniture and IT Equipment (1,957,944) (1,991,423) (2,030,208) (2,064,852)

Proceeds from sale of collection Resources and furniture 0 0 0 0

Net cash from Investing Activities (1,957,944

) (1,991,423) (2,030,208) (2,064,852

)

Cash flows from Financing Activities

Proceeds from borrowings 0 0 0 0

Repayment of borrowings 0 0 0 0

Net cash from Financing Activities 0 0 0 0

Net increase (decrease) in cash held (33,845) (64,402) (10,535) (55,533)

Cash at the beginning of the year 4,128,065 4,094,220 4,029,818 4,019,283

Cash at the end of the year 4,094,220 4,029,818 4,019,283 3,963,750

Reconciliation of Operating Result and Net Cash Flows from Operating Activities For the year ending 30 June

Net surplus (deficit) from operations 707,394 524,909 456,225 314,563

Depreciation 1,253,498 1,398,615 1,507,298 1,660,133

(Profit) Loss on sale of Library Collection, Furniture and IT Equipment 0 0 0 0 Net movement in current assets and liabilities (36,793) 3,497 56,150 34,623

Net cash inflow (outflow) from operating activities 1,924,099

1,927,021 2,019,673

2,009,319

Cash Resourcing

Cash Assets 4,094,218 4,029,818 4,019,283 3,963,750 Less Bank Overdraft at the end of the year 0 0 0 0


Cash at end of the year 4,094,218

4,029,818 4,019,283

3,963,750

11.5 Budgeted Statement of Capital Works For the years ending 30 June 2019 – 30 June 2022

2018/19 2019/20 2020/21 2021/22


IT Replacement 210,000 212,000 215,000 215,000

Motor Vehicles Replacement 25,000 25,000 25,000 25,000

Furniture and Equipment 58,000 58,000 58,000 58,000

Total capital works

1,957,944

1,993,243

2,030,208

2,064,852

Represented by:

Asset Renewal 1,957,944 1,993,243 2,030,208 2,064,852

Total capital works

1,957,944

1,993,243

2,030,208

2,064,852

Reconciliation of net movement in Collection Resources Equipment and

Furniture

2018/19 2019/20 2020/21 2021/22

The movement between the previous year and the current year in Library Collections; Furniture and IT Equipment as shown in the Balance Sheet links to the following items;

Total capital works

1,957,944

1,993,243

2,030,208

2,064,852

Asset revaluation movement 0 0 0 0

Depreciation and amortisation

(1,253,498)

(1,398,615)

(1,507,298)

(1,660,133)

Written down value of assets sold 0 0 0 0

Net movement in Library Collection, Furniture and IT Equipment

704,446

594,628

522,910

404,719


Appendix A: Fees and Charges Schedule

2017/2018 Draft 2018/2019 Notes

Overdue Charges - Adult items 35c per day 35c per day Increased in

2016/17

Overdue Charges - Children items 20c per day 20c per day

Maximum Overdue charge per item cost of item cost of item

Maximum Overdue charge per Member no limit no limit

Lost/totally damaged items Item cost plus $15.10 admin

charge

Item cost plus $15.10 admin

charge

Refund of payment for lost items Refund item cost No refund Policy change

Damaged Items (minor repairs inc. RFID tag replacement) $5.10 $5.20

Increase

Debt Collection Charge (plus debt) $17.20 $17.50 Increase

Replacement Membership Card $3.50 $3.50

Reservations $2.20 $2.20

Inter Library Loans – standard fee $11.10 $11.10 Inter Library Loans – from State, University or Special Library $27.50 $27.50

Fax Services - Victoria

$3.00 first page, $1.10 ea following

page


page

Fax Services - Interstate


page


page

Fax Services - International


page


page

Received fax 50c per page 50c per page

Photocopying/Printing - Black & White A4 30c A3 50c

A4 30c A3 50c

Photocopying/Printing - Colour A4 $1.30 A3 $2.00

A4 $1.30 A3 $2.00

Scanning 20c per page 20c per page

Library Bags $2.00 $2.00

Earbuds $2.00 $2.00 USB 8G $6.50 $8.00 Increase

Page markers $1.00 New product

Microfiche Reader Printing A4 30c A3 50c

A4 30c A3 50c

Meeting Rooms Set Up fees $52 per session $52 per session

Meeting Room AV Hire $42 per session $42 per session

Training Room PC Setup $165 per hour $165 per hour

Training Room PC Hire per session $14.50 per PC $14.50 per PC

Meeting Room/Training Room Hire

1.4% increase Community &

Commercial Rates

2% increase Community &

Commercial Rates

Increase

Administration fee for room bookings $25.00 $25.50 Increase Booking fee: Children’s School Holiday Programs

Up to $4.00 per child

Up to $4.00 per child

Excludes regular programs

Booking fee: Adult Programs – selected special events and high profile authors

Up to $10.00 per booking

Up to $10.00 per booking


Appendix B: Budget Process

This section lists the budget processes to be undertaken in order to adopt the Budget in

accordance with the Local Government Act 1989 (the Act) and Local Government (Planning

and Reporting) Regulations 2014 (the Regulations).

Under the Act, the Corporation is required to prepare and adopt an annual budget for each

financial year. The budget is required to include certain information about the fees and

charges that the Corporation intends to levy as well as a range of other information required

by the Regulations which support the Act.

The 2017/18 budget, which is included in this report, is for the year 1 July 2017 to 30 June

2018 and is prepared in accordance with the Act and Regulations. The budget includes

financial statements being a Comprehensive Income Statement, Balance Sheet, Statement of

Changes in Equity, Statement of Cash Flows and Statement of Capital Works. These

statements have been prepared for the year ending 30 June 2018 in accordance with the Act

and Regulations, and consistent with the annual financial statements which are prepared in

accordance with Australian Accounting Standards. The budget also includes information

about the fees and charges to be levied, the capital works program to be undertaken, the

human resources required, and other financial information the Board requires in order to

make an informed decision about the adoption of the budget.

In advance of preparing the budget, officers first review and update the Corporation's long

term financial projections. Financial projections for at least four years are ultimately included

in the Corporation’s Strategic Resource Plan, which is the key medium-term financial plan

produced by the Corporation on a rolling basis. The preparation of the budget, within this

broader context, begins with officers preparing the operating and capital components of the

annual budget during December to February.

With the introduction of the State Government Rate Capping legislation in 2015, the annual

rate cap percentage amount forms the basis of the indexation of the member Councils annual

contributions to the regional library.

A ‘proposed’ budget is prepared in accordance with the Act and submitted to the Board

meeting in February whereby the Board approves the draft budget, in principle, which is then

forwarded to the member Councils and advertised publically. Following Council deliberations,

the Board considers the budget, having made any necessary changes.


The draft budget is placed on public exhibition seeking submissions from the community. Any

person has a right to make a submission on any proposal contained in the budget under

Section 221 of the Act.

The final step is for the Board to adopt the budget after receiving and considering any

submissions from interested parties. The budget is required to be adopted by 30 June and a

copy submitted to the Minister within 28 days after adoption. The key dates for the budget

process are summarised below:

Minister of Local Government announces maximum rate

increase.

Dec

Budget preparation by Corporation officers Dec/Feb

Proposed budget presented to the Board for approval to

advertise

February

Public notice advising intention to adopt budget 2018

Budget available for public inspection and comment April/May

Submission period closes (28 days) May

Budget and submissions presented to the Board for

adoption

May

Copy of adopted budget submitted to the Minister June

Documents

BUDGET 2018/2019 - wml.vic.gov.au · The proposed 2018/2019 budget is presented in a format which demonstrates the proposed 2018/2019 Cash Budget, the 2018/2019 Budget and anticipated