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SORELL COUNCILANNUAL REPORT 2015/2016
C O M M U N I T Y C O A S T C O U N T R Y
COUNCIL1862
SORELL
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INTRODUCTION ..................................................................................................................................... 3About Sorell ................................................................................................................................................. 3
Invitation for Submissions ..................................................................................................................... 3
MAYOR'S REPORT ................................................................................................................................ 4
GENERAL MANAGER'S REPORT .................................................................................................... 6
YOUR COUNCILLORS .......................................................................................................................... 8Photos, Terms of Service and Representations ............................................................................... 8
Councillor Attendance ............................................................................................................................. 10
Councillor Allowance and Expenses .................................................................................................... 10
STATUTORY REPORTING .................................................................................................................. 12Enterprise Powers Statement ............................................................................................................... 12
Grants, Assistance and Benefits Provided Under Section 77 (1)................................................... 12
Public Disclosures Act 2002 .................................................................................................................... 13
Contract for the Supply of Goods and Services .............................................................................. 14
Donation of Land Statement .................................................................................................................. 14
Copping Refuse Disposal Site Joint Authority ................................................................................. 14
Senior Management Remuneration .................................................................................................... 14
Public Health Statement, Goals and Objectives ............................................................................. 15
ANNUAL PLAN REPORTING ............................................................................................................ 19Key Focus Areas and Summary of Strategies and Initiatives
for the 2015/2016 financial year. ............................................................................................................ 19
FINANCIAL STATEMENTS/REPORT ............................................................................................ 26Statement of Profit or Loss and Other Comprehensive Income
for the year ended 30 June 2016 ........................................................................................................... 27
Statement of Financial Position as at 30 June 2016........................................................................ 28
Statement of Cash Flows for the year ended 30 June 2016 ......................................................... 29
Statement of Changes in Equity for the year ended 30 June 2016 ............................................ 30
Notes to the Financial Report ................................................................................................................ 31
Certification of the Financial Report .................................................................................................... 80
AUDIT OPINION ..................................................................................................................................... 81
3S O R E L L C O U N C I L
IntroductionABOUT SORELL
Sorell is one of Tasmania’s oldest towns and today it
is popular for its history, beautiful southern beaches,
relaxed rural lifestyle and growing suburbs.
Located just 25 kilometres from Hobart in the coastal
area of south-east Tasmania, the Sorell Municipality
covers some 583 square kilometres and is characterised
by low forested hills and long coastlines filled with
beautiful beaches.
The key entrance points to the municipality are
Midway Point, Dunalley and Orielton. Our municipal
borders extend north through to Orielton and further
south-east around the scenic coastline encompassing
the townships of Dodges Ferry, Lewisham, Carlton,
Primrose Sands, Connelly’s Marsh, Dunalley, Marion Bay
and Boomer Bay. The border extends through rolling
hillsides and unique Tasmanian forests, incorporating
the townships of Bream Creek, Forcett, Copping, Nugent
and Kellevie.
The Sorell Township provides a regional commercial
focus for residents of the municipality, as well as
servicing the Tasman and Forestier Peninsulas and the
east coast as far north as Swansea.
The Southern Beaches, once a traditional shack
settlement, have become increasingly attractive to
retirees and families who are keen to take advantage of
the relaxed beachside lifestyle. In summer, an influx of
shack owners and visitors swells the population of this
area.
Sorell is one of the fastest growing municipalities in
the state and has been for many years. The Sorell
Municipality continues to attract young families with its
affordable housing, natural coastland, rolling hills and
the convenience of major shops and services all within
close proximity to Hobart.
INVITATION FOR SUBMISSIONS
Members of the community are invited to make
submissions on the Annual Report for discussion at
Council’s Annual General meeting which will be held
on 5.00pm on Tuesday 13 December in the Council
Chambers. Any person wishing to make a submission
should do so by close of business 7 December 2016.
DODGES FERRY AERIAL VIEW
4
Mayor's ReportThe relationship between the South East Region
Development Association (SERDA) member Councils has
gone from strength to strength over the past twelve
months.
SERDA’s four member Councils of Sorell, Tasman,
Clarence and Glamorgan Spring Bay are united together
to achieve positive outcomes for the region and the
results are starting to come to fruition. We received
the South East Economic and Infrastructure Strategy
(SEEIS) report in August to overwhelmingly positive
feedback.
The SEEIS aims to bring attention back to the often
forgotten south east region and for our State and
Federal members to work with Local Government in
developing policy, strategy and funding arrangements
to accommodate and facilitate growth and improved
outcomes.
Council was privileged to have the opportunity
to present our municipalities growing hunger for
infrastructure and community facilities to then
Prime Minister Tony Abbott when we hosted a joint
Commonwealth and Tasmanian Economic Council in
August. This facilitated follow on visits from several
Federal Ministers of Parliament, including then
Infrastructure Minister Paul Fletcher.
Council hosted a regional State Cabinet meeting in
October and presented the SEEIS report to them.
Cabinet acknowledged the importance of the SEEIS
report and it has gone on to receive widespread praise
across all levels of Government (and their Agencies)
for its contemporary and evidence based approach to
raising awareness of, and lobbying for, infrastructure
and associated funding requirements.
I was also invited to address the board of Regional
Development Australia on behalf of our Municipality and
region on these issues.
It has been recognised and noted that a collaborative
regional effort is a commendable, fact based and
ultimately preferred way to highlight funding
requirements for infrastructure projects. SERDA
Councils will continue to work closely with relevant
Federal and State Government Departments to identify,
develop and cost both short and long term solutions to
the challenges identified in SEEIS for the benefit of our
towns and region.
LEWISHAM
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Council has made significant progress in our
interactions with the community through the
Community Conversations program throughout
2015/2016. These meetings have been an invaluable
tool for both Council and the community to engage in
positive two-way conversations about what’s happening
at the local level in our townships and where this sits
with State and Federal strategies, policies and budgets.
A new set of meetings will continue through the new
financial year. Council’s use of the tri-annual Community
News newsletter and Facebook continue to grow our
communications about our programs and activities with
the community.
At the August 2015 Council meeting Council resolved
to engage consultants to perform modelling work on
what a future amalgamated Council may look like and
what it may mean for the Sorell Municipality. KPMG
was contracted to conduct the feasibility study into
voluntary amalgamations and shared services. The
study focused on collating and modelling relevant
information on the four SERDA Councils in our south-
east region. The information gathered will allow factual
comparisons between Councils to occur. Whilst Council
is committed to investigating amalgamations there are
guiding principles leading the process. Amalgamations
must be in the best interest of the ratepayer; Improve
the level of service to the community; Preserve and
maintain local representation; and ensure the financial
status of the identity is strengthened. The latter half of
2016 will present us with some solid facts and figures
about what an amalgamation may look like for Sorell
Council. I look forward to sharing these results with the
community.
Once again, Council faces much pressure to meet
the communities demand for new services and
infrastructure whilst keeping rate rises to a minimum.
The challenge of balancing a growing Municipality’s
requirements within the confines of the annual
budget and Long Term Financial Plan comes at a cost.
Council’s finances are fully audited annually by the
Tasmanian Audit Office. This ensures that Council’s
operations are transparent and what we say we have
done has been done and every cent of every dollar is
accounted for.
The current revenue raised through rates covers
Council’s cost of maintaining and renewing current
infrastructure. This revenue does not cover upgrades
or construction of new infrastructure. Additional
funding is required to fund these and in a climate
where grant funding is increasingly harder to come
by, Council continues to investigate ways in which this
can be achieved.
I’d like to close by extending a thank you to Council’s
staff and Councillors. The past twelve months have
been as busy as usual and I appreciate everyone’s
commitment to achieving positive results for the
community. I must acknowledge the growing number
of staff who are doing contract work for other
Councils. This highlights the skill and professionalism
of Sorell’s indoor and outdoor workforce. Well done.
Mayor Kerry Vincent
6
The focus for Council over the past 12 months has
been to build on the momentum generated through
the continual review of our operations and financial
performance whilst ensuring the Municipality and
greater south-east region is at the forefront of our
State and Federal representatives.
Looking back over 2015-2016 and the key focus areas of
the strategic and annual plans, I am proud of what the
organisation has achieved amongst an environment
compromising a Federal election, Local Government
reform, increasing accountability and scrutiny of Council
sustainability and of course, addressing ratepayer,
resident and visitor requirements and expectations.
The work carried out by the SERDA group of south-east
Councils through the development of the Economic
Infrastructure Strategy has been recognised at both
the State and Federal level as the preferred evidence
based and co-operative approach to addressing
regional infrastructure and service requirements. The
maturity of the four Council Mayors is a key to this body
of work achieving outcomes that benefit the region.
It is, however, a lengthy advocacy and engagement
process with both the elected members and their
respective agencies that requires a consistent and
concerted approach to achieve tangible and measurable
outcomes.
There has been a recognised increase in the relevance
of the south-east regarding transport and education
requirements, business investment through the
irrigation scheme and tourism infrastructure and
continuing strong residential growth. Further, that
the south-east plays an increasingly important and
relevant role to the economic performance of the
greater Hobart region. This has resulted in greater
recognition and being evidence based, has demanded
more than just token acknowledgment from those
bodies that have the financial capacity and jurisdiction
to effect positive change and investment in services
and infrastructure.
Whilst not in the glamorous category, the significant
body of work undertaken by the organisation to
accurately determine the short, medium and long term
resourcing requirements of managing $300m of assets
is absolutely vital. This culminated in a new 10 year Long
Term Financial Plan being adopted by Council which
provides a robust framework for informed decision
making into the future. It will be reviewed each year
in the preparation of budgets, capital works programs
and determining the required level of revenue. This
work continues and flows into our scoping, contracting
and procurement approach to ensure the Municipality
receives and generates the best value for money and
achieves full asset component life.
The matter of Local Government reform and how this
organisation has proactively entered into the process
should be commended along with the other south-
east Councils. Whilst the consultants report has been
General Manager's Report
PRIMROSE SANDS BOAT RAMP
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7S O R E L L C O U N C I L
completed on investigating potential savings from a
number of merger and common service scenarios, there
is still a lot of work to be done and broader consultation
to be sought before any of the Councils decide which
way to head before the end of 2016-2017. The process
has also had a subtle but positive influence on our day
to day decisions and ‘keeping an eye’ on what the future
may hold for our residents and ratepayers.
Our financial performance strengthened with solid
results based on robust data which was recognised
through a successful audit. We ended the year with an
operating surplus of $18.303m, however, this included
$15.131m of recognised land under roads value which has
to be reflected in the profit and loss. As a more relevant
comparison, we had budgeted for a $1.581m surplus
but returned a surplus of $3.172m (not including the
land under road figure). In addition, our net assets and
total equity all increased. As expected grant income
reduced at both the Federal and State level. With the
ongoing asset management investigations comprising
location and ownership determination and condition
assessment and revaluation at the component level,
depreciation increased again through 2015-2016 at an
additional $500k out of the P&L. This trend is likely
to continue for 2016-2017 as stormwater, parks and
reserves are finalised.
It has been a financial and operational necessity
to approach the running of the organisation with a
more business minded focus. To this end Council is
generating additional revenue in the order of $400 -
$500k through our involvement in the common service
agreement with a number of other Councils. Some of
the functional services we provide to other Councils
on commercial terms include Human Resources, ICT,
GIS, Development Engineering, Facilities Management,
Works Management, Building Surveying, Environmental
Health and Plant acquisition/utilisation. This is only
possible with staff who have a can do attitude and flows
through our continually improving customer service
performance which has also been recognised at the
national level.
The Copping landfill and Lutana waste transfer station
continued to operate with increased profitability
through Southern Waste Solutions on behalf of the
Joint Authority. Significant development of the C Cell
business model and financing arrangements were
completed with construction to commence and reach
operational status through 2016-2017. The strategic
importance of the site overall but in particular the C
Cell for the south of the State will only become more
relevant over time. Council’s commitment to the
authority will continue into the future and support
best practice in waste management culminating in
the development of the Category C cell and other
improvements to operations.
As I acknowledged each year, Council is grateful
for the efforts of all community, recreational and
volunteer organisations and respective individuals who
continue to play vital roles that assist our operations
and importantly, keep the community together and
engaged.
My thanks again to staff and Councillors who through
hard work, consistent focus and co-operation achieved
continued improvement in what Council did and how
it conducted its business and should be proud of their
efforts. Please contact me if there are any matters you
wish to discuss or seek further clarification on.
Robert Higgins General Manager
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LINDSAY WHITE
Terms as Councillor 2011 – Present
Committee RepresentationsDevelopment Assessment Special Committee
East Coast Fire Management
GRAEME EVANS
Terms as Councillor 1999 – Present
Terms as Deputy Mayor 2001 – 2011
Committee RepresentationsCopping Refuse Disposal Site Joint Authority
Development Assessment Special Committee
Copping Hall and Reserves Committee
PHOTOS, TERMS OF SERVICE AND REPRESENTATIONS
MAYOR KERRY VINCENT
Terms as Councillor 2009 – Present
Terms as Mayor 2012 – Present
Committee RepresentationsMunicipal Emergency Management Committee
South East Region Development Association
Development Assessment Special Committee
Sorell Tasman Affected Area Recovery Committee
TasWater
Local Government Association of Tasmania
Southern Tasmania Councils Authority (STCA)
Sorell Streetscape Committee
Arts and Cultural Working Group Committee
Municipal Alliance Committee
Chair of Waste Strategy South
STCA Economic Committee
STCA Governance and Audit Committee
Chair South East Merger Options Steering Committee
DEPUTY MAYOR BRETT MCDONALD
Terms as Councillor 2007 – Present
Terms as Deputy Mayor 2011 – Present
Committee Representations
Midway Point Hall Committee
Local Government Association of Tasmania
Development Assessment Special Committee
Sorell Code of Conduct Panel
Municipal Alliance Committee
Pembroke Park Advisory Committee
Your Councillors
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9S O R E L L C O U N C I L
KERRY DEGRASSI
Terms as Councillor 1996 – Present
Terms as Mayor 1999 – 2000
Committee RepresentationsSouthern Waste Strategy Authority
Arts and Cultural Working Group Committee
Primrose Sands Community Hall Committee
Development Assessment Special Committee
CARMEL TORENIUS
Terms as Councillor 1991 – 2012 and
2014 – Present
Terms as Mayor 1994 – 1999 and
2000 – 2012
Committee RepresentationsDevelopment Assessment Special Committee
Southern Waste Strategy Authority
Sorell Streetscape Committee
Dunalley Hall and Reserves Committee
NATHAM REYNOLDS
Term as Councillor 2014 – Present
Committee RepresentationsDevelopment Assessment Special Committee
Sorell Code of Conduct Panel
Pembroke Park Advisory Committee
DEBORAH DE WILLIAMS
Term as Councillor 2014 – Present
Committee Representations
Development Assessment Special Committee
Sorell Code of Conduct Panel
Sorell Streetscape Committee
Midway Point Hall Committee
Sorell Audit Committee
VLAD GALA
Term as Councillor 2014 – Present
Committee Representations
Development Assessment Special Committee
Sorell Audit Committee
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COUNCILLOR ATTENDANCE
NAME WORKSHOPS/BRIEFINGS
COUNCIL MEETINGS
AGM DASC MEETINGS
BUDGET MEETINGS
SPECIAL COUNCIL
MEETINGS
OTHER MEETINGS
TOTAL OF MEETINGS FOR
FINANCIAL YEAR
Mayor Kerry Vincent
13 12 1 17 0 2 4 49
Deputy Mayor Brett McDonald
13 10 1 16 0 2 3 45
Clr Kerry Degrassi 6 9 1 8 0 1 2 27
Clr Vlad Gala 12 11 1 13 0 2 3 42
Clr Graeme Evans 12 12 1 14 0 2 2 43
Clr Carmel Torenius
13 11 1 14 0 2 2 43
Clr Natham Reynolds
13 12 1 17 0 2 1 46
Clr Lindsay White 13 11 1 13 0 1 2 41
Clr Deborah De Williams
10 10 1 12 0 2 4 39
Totals 105 98 9 124 0 16 23
COUNCILLOR ALLOWANCE AND EXPENSES
In 2015/2016 Council provided allowances and reimbursement for reasonable expenses to the Mayor, Deputy Mayor
and Councillors.
Councillor Allowance and expenses: $ 182,000
11S O R E L L C O U N C I L
PARK BEACH
12
Statutory Reporting
ENTERPRISE POWERS STATEMENT
Council has not resolved to exercise any powers or
undertaken any activities in accordance with Section 21
of the Local Government Act 1993.
GRANTS, ASSISTANCE AND BENEFITS PROVIDED UNDER SECTION 77 (1)
FUNDING ASSISTANCE FOR SPORTING AND RECREATION REPRESENTATION
State Representation x 5 750.00
National Representation x 3 450.00
Sub Total Funding Assistance 1,200.00
FUNDING ASSISTANCE FOR YOUTH
Midway Point Yacht Club 1,500.00
Okines Community House 1,500.00
Pittwater Community Centre 1,500.00
Primrose Sands Community Youth Group
(230.00)
Sorell Junior Football Club 1,500.00
Sorell on Stage 500.00
South East Districts Little Athletics 1,097.91
Sub Total Youth Grant 7,367.91
COMMUNITY ASSISTANCE GRANTS
Anglican Parish of Sorell, Richmond & Tasman
500.00
Bream Creek Show Society 1,000.00
Carlton Park Surf Life Saving Club 2,500.00
Combined Churches of South East Tasmania
1,000.00
Dodges Ferry Football Club 1,000.00
Dodges Ferry Junior Soccer Association
983.00
Forcett Community Hall 1,100.00
Historical Society of Sorell 750.00
Midway Point Yacht Club 1,000.00
Pittwater Scouts 1,500.00
Primrose Sands Hall Committee 1267.55
Sing Australia Choir Sorell 1,500.00
Sorell & Districts Garden Club 800.00
Sorell Cobras Boxing Club 1,500.00
Sorell Football Club 1,700.00
Sorell Girl Guides 736.00
Sorell Junior Cricket Club 1,000.00
Sorell on Stage 1,187.00
Sorell School – Camkids 900.00
WHALE VIEWING AREA AT SPECTACLE HEAD
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South East Community Band 400.00
South East District Little Athletics 1,500.00
South East Netball Association 2,000.00
South East United Football Club 1,000.00
Southern Beaches Historical Society 1,500.00
Southern Beaches Landcare/Coastcare
1,000.00
Southern Beaches Regional Arts 500.00
Southern Tasmania Country Music Muster
1,200.00
Sub Total Community Assistance 31,023.55
DONATIONS
Art Acquisition Prize 1500.00
Bream Creek Show Society 2,267.91
Dunalley Primary School 60.00
Edmund Rice Camps 5000.00
Garage Sale Trail 645.00
Lions Club of Sorell 200.00
Midway Point Fire Brigade 100.00
Natural Resource Management South World Wetlands Day
5000.00
Sea Rescue 2000.00
Sorell High School 900.00
Yarloop Town Hall Fire Rebuild 1000.00
Sub Total Donations $18,672.91
SCHOOL BURSARIES
Dodges Ferry Primary School 200.00
Dunalley Primary School 100.00
Sorell High School 400.00
Sorell Primary School 200.00
Sub Total School Bursaries $900.00
TOTAL DONATIONS AND GRANTS $59,164.37
PUBLIC DISCLOSURES ACT 2002
Section 86 of the Public Interest Disclosures Act 2002
states that Council as a public body is required by The
Local Government Act 1993 to prepare an Annual Report
and therefore must report on the following:
ü Information as to how persons may obtain or access
copies of the current procedures established by the
public body under the Act – via Council's website and
through direct contact to Council.
ü The number and types of disclosures made to the
relevant public body during the year and the number
of disclosures determined to be a public interest
disclosure – None.
ü The number of disclosures determined by the
relevant public body to be public interest disclosures
that it investigated during the year – None.
ü The number and types of disclosed matters
referred to the public body during the year by the
Ombudsman – None.
ü The number and types of disclosed matters
referred during the year by the public body to the
Ombudsman to investigate – None.
ü The number and types of investigations of disclosed
matters taken over by the Ombudsman from the
public body during the year – None.
ü The number and types of disclosed matters that
the relevant public body has declined to investigate
during the year – None.
ü The number and type of disclosed matters that were
substantiated upon investigation and the action
taken on completion of the investigation – None.
ü Any recommendations made by the Ombudsman
that relate to the relevant public body – None.
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CONTRACT FOR THE SUPPLY OF GOODS AND SERVICES
In accordance with Section 23(1) of the Local Government Act Regulations, below is a list of Goods and Services
valued at or above $250,000 excluding GST where entered into in the 2015-2016 financial year.
ITEM DESCRIPTION OF CONTRACT CONTRACT PERIOD CONTRACT VALUE $ SUCCESSFUL CONTRACTOR/S
1
Reconstruction and Realignment of a segment of Brinktop Road
26 August 2015 – 2 October 2015
$287,365.66Andrew Walters Construction
2
Reconstruction and Realignment of a segment of Fulham Road and Primrose Sands Road
2 November 2015 – 18 December 2015
$1,099,995.52Andrew Walters Construction
DONATION OF LAND STATEMENT
The Council has not resolved to donate any lands in
accordance with Section 177 of the Local Government
Act 1993.
COPPING REFUSE DISPOSAL SITE JOINT AUTHORITY
The Copping Refuse Disposal Site Joint Authority
(Trading as Southern Waste Solutions) was established
under Section 30 of the Local Government Act 1993
by Sorell Council, Clarence City Council and Tasman
Council. Kingborough Council later joined the Authority
in 2009.
ACTIVITIES
The Copping Refuse Disposal Site Joint Authority’s
function is to promote and manage a putrescible
landfill disposal site which conforms to its Development
Proposal and Environmental Management Plan
(DP&EMP) and permit conditions.
BUDGET AND PERFORMANCE
Net Operating result before tax was $499,575 (2015
profit $115,081) which was $124,179 above budget. The
contributing factors to the result were an increase
in gate revenue over budget of $1,090,702 offset by
operating expenditure above budget by $1,025,654.
SENIOR MANAGEMENT REMUNERATION
The table below provides the remuneration for those
positions designated by Council as senior positions
as required under the Local Government Act 1993. The
positions deemed to be senior positions are Manager
Finance and Information, Manager HR, Customer
and Community Services, Manager Engineering and
Regulatory Services.
TOTAL REMUNERATION BAND* NO. OF POSITIONS
$75,001 – $95,000 1
$115,001 – $135,000 1
$155,001 – $175,000 1
*The above includes cash salary, superannuation and
motor vehicle.
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15S O R E L L C O U N C I L
PUBLIC HEALTH STATEMENT, GOALS AND OBJECTIVES
The Environmental Health section is responsible
for public health activities such as food business
regulation, public health risk activities, places of
assembly, water quality, immunisations, animal
management, fire hazard abatement on private land
and caravan licencing. Environmental Health Officers
(“EHO”) assess building, planning and plumbing
applications, investigate pollution complaints, provide
environmental health input into Council business
processes and administers the Environmental
Health and Public Places By-laws. The Senior EHO
administers the waste management contract
services. The Municipal Inspector manages the fire
hazard programme, is the Municipal Emergency
Management Co-ordinator and assists the Animal
Management Officer with animal control.
The section regulates major public events including
the Falls Festival and Bream Creek show. EHO’s
attended and check that permit conditions are
complied with.
Recreational water quality monitoring was completed
at swimming beaches during the summer and all
sites monitored have good water quality with the
exception of Red Ochre Beach (Southern end) which is
moderate quality.
There continued to be a significant number of
complaints about noise, backyard burning, barking
dogs, fire hazards and dog attacks. Council Officers
are using enforcement options including education,
warnings, infringement notices, seizures and formal
orders to manage these complaints.
Enforcement action has been taken for a number
of different environmental issues which resulted in
notices being issued. Council undertook action to
block off a septic tank that was discharging onto the
foreshore.
A number of foodborne illness investigations
were completed which were associated with local
businesses. Immediate public health interventions
were taken and no subsequent complaints have
been received.
The Engineering and Regulatory Services Department
has continued to work with Brighton Council to
enhance the Regulated Entities module of Council
First software used for recording activities such as
food business, public health activities and Aerated
Wastewater Treatment System.
The Senior EHO worked on a project for 3 months
at the Department of Justice preparing guidelines,
determinations, regulations and educational
information necessary for the implementation of the
Building Act 2016.
Green and hard waste booking services were improved
by introducing confirmation receipts and collection
areas and days were simplified.
A new Public Places By-law and policy were approved
for regulating activities on Council land.
There continues to be a high incidence of dogs
attacking people and other animals. Council Officers
typically resolve these incidents by seizing the dog
and/or issuing infringement notices or prosecutions. A
letter template was introduced to enable neighbours
to notify dog owners of nuisance barking. The letter
has assisted residents to resolve a number of problems
in a more amicable manner. There was a large
reduction in the number of dogs impounded compared
to previous years.
The summer and spring of 2015/2016 was very dry
which resulted in lower growth and significantly less
(1/3 less) fire abatement notices were issued.
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PROGRAMME TASKS KPI COMMENTSCOMPLETION DATE
Food Businesses Regulations
Inspections Each business inspected on an average of 1.5 per year
105 inspections completed - 41 for temporary food businesses and 35 food vans
Ongoing
Complaints Investigate as per complaints policy
9 Food complaints were investigated about food products
Ongoing
Asses new food business plans
Assess plans within 14 days as per Directors specified list
3 New food businesses applications were approved
Ongoing
Food sampling Participate in regional food sampling programme
Several food samples were collected most complied with the Food Standards Code
Ongoing
Temporary Food Business
Assess applications and inspect high risk businesses
Inspections completed at Bream Creek Show and the Falls Festival
During event
Food Businesses Food Business registered annually 82 Food Businesses registered, 21 temporary businesses and 24 Food Vans
30 June
Enforcement activities Take enforcement action where the EHO considers appropriate
No infringements notices 1 improvement notice was issued on a food business
Ongoing
Water Quality Monitor Swimming Beaches
Weekly sampling over summer months and report prepared annually by 30 June
Recreational water quality report completed
Completed
Monitor Swimming pools
Collect samples monthly 4 Samples collected at Swimming Pools all samples complied with guidelines
Nil
Infectious Diseases Prevention
Immunisation sessions Conduct monthly infant immunisation sessions and annual school programme
Annual school and monthly infant immunisations completed at Sorell School with statistics notified to DHHS.
Completed
Notifiable disease investigation
Investigate cases within 3 working days when referred by DHHS
13 notifiable diseases were referred for investigation. All investigations were completed but time limits were exceeded in some cases. 100% increase in notifications from last year
Completed
Pollution Prevention
Complaints investigation
Backyard burning
On-site Wastewater
Noise
Odour / dust
Water
Littering
Enforcement actions
Investigate in accordance with Customer Service Charter
Complaints received
25
19
42
7
17
21
2 EPN’s
3 EIN (warnings)
3 littering
Ongoing
Level One activities EMPCA
Monitor and investigate complaints
Level one activities have been included in a register, no routine inspection programme and respond to complaints
ANNUAL PLAN SECTION 9 CONTINUE TO DELIVER VALUED CORE SERVICES
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PROGRAMME TASKS KPI COMMENTSCOMPLETION DATE
Application Assessments SPP’s
DA’s
Assess application within: 14 days
21 days
Applications assessed98
315
subdivisions and rezoning (included in DA numbers)
Ongoing
Public Health Activities
Place of Assembly Assess applications and investigate complaints
Licenses were issued and inspections completed. In 2015 changes were made to guidelines and only mass gatherings >1000 (Falls Festival, Bream Creek Show) now require a Places of Assembly license
Registration by 30 June
Unhealthy housing Investigated as per Customer Service Charter
Complaints received, failing septic tank systems, defective plumbing, damp proofing and electrical safety are the most common. Issued abatement notices and rectification notices
Ongoing
Public Health Risk Activities
Register premises 7 Premises registered 30 June
Regulated systems Inspect and issue a letter of compliance
Registered one cooling tower 30 June
Private water supplies Register water sources Sampling completed and one sample did not comply with guidelines and enforcement action was taken.
30 June
Water carters Inspected and issue letter of compliance every 3 years
Inspection of new vehicles completed. Some follow up inspections required. Commenced registering vehicles to comply with amendments to guidelines
30 June
Annual EH Report
Prepare Annual Health report
Report completed SEHO completed report October 2016
Dog Management
Investigate dog attacks Start investigation within 2 working days
Dog attacks reported:19 on people41 on other animalsInvestigations commenced within 2 days of report.
Ongoing
Barking complaints Start investigation within 7 working days
Council received at least 172 formal complaints for barking and creating a nuisance. 141 dogs impounded and 124 infringement notices issued for dogs at large.
Ongoing
Dog Management Plan Review plan every 5 years Due 2017
Collecting stray dogs Conduct routine patrols and respond to complaints about stray dogs
Minimal Door –to – door registration checks completed
Ongoing
Kennel Licences Kennels licenced annually 40 Licenced Kennels Ongoing
ANNUAL PLAN SECTION 9 CONTINUE TO DELIVER VALUED CORE SERVICES
18
PROGRAMME TASKS KPI COMMENTSCOMPLETION DATE
Fire Management
Inspect properties for Fire Hazards
Conduct fire hazard programme during spring/summer
106 Abatement notices issued which is significantly less than the previous year
Commence October each year
Parking Conduct parking patrols
Patrols conducted infrequently after complaints are received
5 infringement notices issued for parking offences
Ongoing
Littering Investigate littering complaints
Investigate in accordance with Customer Service Charter
Complaints investigated and 4infringement notices issued, focus on rubbish dumping at recycling centres
Ongoing
Conduct littering patrols
Conduct designated patrols each week and as part of other work activities
Occasional patrols at high risk sites such as at recycling centres were completed
Ongoing
Public Places and Street Stalls
Issues permits for activities
Assess applications within 14 days 4 permits were issued for street stalls and 2 for public places permits
Ongoing
Caravans Licencing
Issue licence for caravans
Register caravan annually 73 Caravan licence application were sent out and 20 did not pay licences
30 June
ANNUAL PLAN SECTION 9 CONTINUE TO DELIVER VALUED CORE SERVICES
19S O R E L L C O U N C I L
Annual Plan Reporting KEY FOCUS AREAS AND SUMMARY OF STRATEGIES AND INITIATIVES FOR THE 2015/2016 FINANCIAL YEAR.
1.0 IDENTIFY, SCOPE AND ATTRACT PRIORITY INFRASTRUCTURE PROJECTS
1.1 Coordinate and support grant funding applications to State and Federal Governments as appropriate.
In Progress – as funding programs are released.
Finalise South East Economic Infrastructure Strategy (SEEIS) through SERDA and partner stakeholders and agencies.
Completed – SEEIS finalised August 2015 and delivered to State Cabinet October 2015.
1.2 Irrigation
Assess the supporting infrastructure to maximise benefits of the irrigation scheme e.g. land zoning, power availability, labour availability, water, waste, transport.
In Progress – incorporated into 20 year Land Supply Strategy to be completed in 2016/2017.
1.3 Infrastructure Projects
Commercialise the Council land surrounding the CAC.
In Progress – MOU entered into with adjoining owner and joint Expressions of Interest undertaken for sale and development.
Reinvigorate the Sorell CBD through the continued upgrading of streetscape elements and implementation of contemporary urban design including the resealing of Gordon Street.
In Progress – through Capital Works program.
BONESSED WEEDING WORKING BEE
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1.4 Education
Scope future education requirements for the municipal area including the Trade Training Centre.
In Progress - discussion with Early Education and Care Providers around delivery of services within Sorell, formal engagement with Minister of Education and Minister of Transport on developing a strategic plan for redevelopment of Sorell School, commencement of skills demand audit project through State Growth for South East region (SERDA SEEIS key focus area).
1.5 Health & Housing
Assess Health, Housing and Aged Care development opportunities.
In Progress – incorporated into CAC Expressions of Interest project and through associated advocacy opportunities with developers.
Review with Sorell School and the Department of Education opportunities for residential infill.
In Progress – refer above.
1.6 Recreation
Review and finalise our Tracks and Trails Strategy delivering a prioritised and funded program of asset renewal and provision of upgraded and new facilities.
In Progress – incorporated into maintenance and capital budgets and through engagement with Crown Land Services to formalise existing and upgraded foreshore accessways.
Review and finalise Pembroke Park Master Plan in consultation with key stakeholders and commence implementing actions.
In Progress - @Leisure Planners engaged to provide final master plan business case feasibility and associated costings. Pembroke Park Advisory Committee and Pembroke Park users were engaged in the process.
1.7 Tourism
Explore opportunities associated with proposed airport extension.
In Progress – continued engagement with Hobart Airports Corporation, Destination Southern Tasmania and Office of Co-ordinator General.
1.8 Transport
Assist in progressing solutions to transport corridor blockages.
In Progress – formal and continued engagement with Minister of Transport and State Growth seeking practical and cost effective solutions to growing pressure points – Airport roundabout, Midway Point roundabout (and associated causeways), eastern bypass and additional overtaking opportunities on Arthur Highway.
2.0 IDENTIFY, SCOPE AND ATTRACT NEW INDUSTRY AND BUSINESSES
2.1 Continue direct communication with the Department of State Growth.
In Progress – Transport Division, Economic Development Division, Tourism Tasmania.
2.2 Progress identified industry and business opportunities from continued engagement with the shellfish industry, agriculture industry, TFGA, Tasmanian Irrigation and Hobart Airport Corporation.
In Progress – continued advocacy and engagement with above stakeholders.
KEY FOCUS AREAS AND SUMMARY OF STRATEGIES AND INITIATIVES (CONT.)
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21S O R E L L C O U N C I L
2.3 Investigate and identify opportunities arising from NBN rollout with a continued engagement strategy with NBN Co.
In Progress – continued advocacy and engagement with NBN Co.
2.4 Implement necessary amendments to Interim Planning Scheme to address shortage of industrial land including approval of the Sorell Township Structure Plan.
Desktop audit of development sites, business demographics within the region, available and potential industrial land sites.
Completed – Interim Planning Scheme adopted and operational. Sorell Township Structure Plan review completed. 20 year Land Supply Strategy project commenced to inform Single Statewide Planning Scheme preparation in 2016-2017.
3.0 FORM ALLIANCES BETWEEN PUBLIC AND PRIVATE ORGANISATIONS TO TAKE PROJECTS AND STRATEGIES FORWARD AND ADVOCATE ACCORDINGLY.
3.1 Formalise engagement strategy with targeted public and private organisations.
In progress.
3.2 Form partnership with Department of Education to advocate for Year 11 and 12 at Sorell School.
In Progress - continued discussions with Department of Education, Sorell School and Sorell School Association. Years 11 and 12 to commence at Sorell School in 2017.
3.3 Continue to work with STCA, DST and SERDA.
In progress.
Facilitate a strategic approach to the sustainable growth of sporting clubs through targeted engagement and partnering with Sport and Recreation Tasmania.
In Progress – continued advocacy and engagement with Sport and Recreation Tasmania to deliver assistance and programs to strengthen membership and governance/finance of clubs.
Develop implementation model for SERDA South East Economic Infrastructure Strategy and utilise outcomes of Strategy to advocate for and support funding submissions.
In progress.
Form alliance with both Tas Infrastructure and the Co-ordinator General.
In progress.
Develop engagement and implementation strategy to consider amendments to Interim Planning Scheme and co-submission opportunities with community and development industry.
In Progress – assist and co-ordinate as opportunities arise through continued engagement.
3.4 Continue to explore and implement local government common services and associated opportunities to maximise operational and financial efficiencies (including common software platforms) and profitability.
In Progress – Council formally engaged through Common Service Agreement supplying / receiving services including – General Manager, Works Manager, Facilities Co-ordinator, GIS, Building Surveying, Finance, Environmental Health, Human Resources, ICT, Development Engineering, Plumbing Surveying, Animal Control, Natural Resource Management.
Investigate opportunities to maximise utilisation of CAC through appropriate partnering.
In progress – preliminary discussions with limited service providers and associated market rental assessment of CAC.
KEY FOCUS AREAS AND SUMMARY OF STRATEGIES AND INITIATIVES (CONT.)
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4.0 IDENTIFY, PROMOTE AND MARKET EXISTING LOCAL BUSINESSES, EVENTS AND PLACES OF INTEREST IN THE MUNICIPAL AREA
4.1 Establish partnerships with Sorell Business Council.
In Progress – continued advocacy and engagement as appropriate.
4.2 Establish an alliance with major event holders within the municipal area with a key focus on whole area promotion.
In Progress – Discussions with Ten Days on the Island commenced. Ongoing involvement with the Falls Festival and local events including Jazz By the Sea, SBRA Art Prize and Exhibition.
4.3 Explore opportunities through Destination Southern Tasmania to make Sorell Municipality part of a Historic Trail between Richmond and Port Arthur.
In Progress – continued commitment to Destination Southern Tasmania membership and engagement in strategic work and project assistance/buy in.
5.0 SUPPORT AND ENCOURAGE COMMUNITY PARTICIPATION AND ENGAGEMENT
5.1 Support special committees and community groups.
Continued to support Special Committees and Advisory Groups of Council in undertaking their activities:
Copping Hall & Reserves Committee
Dunalley Hall Committee
Midway Point Hall Committee
Primrose Sands Hall Committee
Pembroke Park Advisory Committee
Arts & Cultural Advisory Committee
Continued support of community groups, including users of Council’s sporting facilities, users of Council Halls, SBRA, Sorell Historic Society and Senior’s Advisory Group.
5.2 Explore opportunities to improve Council’s communications and engagement.
Continued roll out of Community Conversation Program – meetings held in Primrose Sands, Sorell, Nugent, Dodges Ferry, Midway Point, Dunalley and Copping.
5.3 Complete construction of Sorell Youth Centre and develop an operational plan.
Completed – construction completed and planning commenced for an Expression of Interest process to be undertaken for services to operate from the facility.
5.4 Advocate for the provision of Government and non-government youth services within the municipal area.
In Progress - ongoing discussion with various service providers through the Sorell Service Providers Network.
5.5 Continue to encourage the use of the newly completed Park & Ride Facility.
In Progress – bus service providers commenced utilisation of facility.
KEY FOCUS AREAS AND SUMMARY OF STRATEGIES AND INITIATIVES (CONT.)
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23S O R E L L C O U N C I L
5.6 Improve the utilisation and sustainability of Council Community Facilities in conjunction with the user groups and other stakeholders.
In Progress - implemented a more sustainable and equitable fee structure for sporting facilities and Community Halls. Supported South East Suns Netball Club and South East United Football Club in their first year of operation. Continued facilitation of Pembroke Park Advisory Committee. Promotion of Community Halls in Council publications.
Participate in voluntary amalgamation / common service modelling investigations and engage with communities as required throughout process.
In Progress – commenced project through formal engagement with DPAC, SERDA Councils and KPMG as consultant. Scheduled for completion September 2016 and public consultation through 2016/2017.
Support and encourage community organisations in the development of their events.
In Progress - In-kind and financial support provided to: Jazz By the SeaRSL Summer Festival SBRA Art Prize & Exhibition Pembroke Park Multi Sports Clinic DayCombined Churches Christmas FestivalSorell School Fair & Outdoor Cinema.
5.7 Explore opportunities for the concept/feasibility of a Sorell Cultural Precinct, with a focus on Arts, History and Heritage.
Inspiring Place engaged to develop concept plan and consultation with key stakeholders.
6.0 PROMOTE THE SORELL MUNICIPAL AREA AS A GOOD PLACE TO LIVE
6.1 Further develop streetscape concepts for Sorell, Dodges Ferry, Forcett and Dunalley.
In Progress – incorporated where appropriate with annual budget process.
6.2 Upgrade parks with a key focus on Vancouver St and Pembroke Park.
In Progress – incorporated into Capital Budgets.
6.3 Promote the sustainable management of Sorell’s natural environment.
Council’s NRM Officer worked with the various community groups including Friends of Pittwater Orielton Lagoon, Dodges Ferry Board Riders Group, Rotary Club of Sorell, Lions Club or Sorell, Green Army and Conservation Volunteers Australia in a range of environmental activities. Also supported World Wetland Day events, designed and supervised the construction of two outfall improvement projects and proclaimed a cat prohibited area within the Dodges Ferry Recreation Reserve and communicated these projects and activities with the community through various mediums.
KEY FOCUS AREAS AND SUMMARY OF STRATEGIES AND INITIATIVES (CONT.)
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7.0 IDENTIFY, PROMOTE AND MARKET THE POTENTIAL USE OF THE COAST LINE OF THE MUNICIPAL AREA
7.1 Continue to partner with NRM South to house and support the local NRM resource and supplement with the Tasman Council NRM resource.
Completed.
Develop and prioritise a beach access maintenance and upgrade strategy and program.
In Progress – refer 1.6.
7.2 Establish communications and an alliance with:
Crown Land Services;
Southern Beaches Landcare/Coast Care;
Carlton Park Surf Life Saving Clubs;
Athletics South (possible triathlon events);
Recreational Fishing Groups;
Destination Southern Tasmania (tourism opportunities).
In Progress.
8.0 DEVELOP AND IMPLEMENT A LAND ACQUISITION AND DISPOSAL STRATEGY
8.1 Finalise register of Council owned land including current and possible future use.
Completed.
8.2 Develop a strategy to dispose of surplus holdings and that which considers the acquisition of land suitable for future development and investment.
In Progress – project commenced with Council and continuing through 2016/2017 considering associated land categorisation and statutory notification / disposal processes.
9.0 CONTINUE TO DELIVER VALUED CORE SERVICE
9.1 Continue to undertake all regulatory and legislative requirements.
Ongoing.
9.2 Continue to develop our people processes and systems.
In Progress.
9.3 Renew Council’s Customer Services Charter and develop a Customer Service Strategy.
Customer Service Charter has been reviewed. Customer Service Strategy in progress.
KEY FOCUS AREAS AND SUMMARY OF STRATEGIES AND INITIATIVES (CONT.)
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25S O R E L L C O U N C I L
PUBLIC HEALTH
Council will:
ü Conduct monthly immunisation clinics, annual
school immunisations and promote the need for
immunisation.
ü Ensure proper provision of on-site effluent disposal
in compliance with relevant standards.
ü Undertake routine inspection of places of public
assembly, food premises, public health risk activities
and water carters to ensure compliance with relevant
legislation.
ü Promptly investigate environmental health
complaints.
ü Maintain an effective analysis program for food,
recreational waters and general complaints.
RISK MANAGEMENT
Council will:
ü Continue to keep risk exposure to a minimum
by helping reduce injuries and potential loss.
Management practices will involve identifying risks,
analysing and treating by taking appropriate action.
ü Continue to be proactive in inspections and reviews
of roads, footpaths, written agreements with clubs/
user groups, building and financial services, town
planning and recreation functions.
ü Educate community groups on importance and
activities involved with risk management.
SOUTHERN BEACHES
26
Financial Report STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME FOR THE YEAR ENDED 30 JUNE 2016 27
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016 28
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016 29
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016 30
NOTES TO THE FINANCIAL STATEMENTS 31
Note 1 Reporting entity 31
Note 2 Basis of accounting 31
Note 3 Use of judgements and estimates 31
Note 4 Functions/Activities of the Council 32
Note 5 Rates and charges 34
Note 6 Statutory fees and fines 34
Note 7 User fees 35
Note 8 Grants 35
Note 9 Contributions 36
Note 10 Interest 37
Note 11 Other income 37
Note 12 Net gain/(loss) on disposal of property,
infrastructure, plant and equipment 38
Note 13 Investment revenue from
water corporation 38
Note 14 Employee benefits 39
Note 15 Materials and services 39
Note 16 Depreciation and amortisation 40
Note 17 Finance costs 42
Note 18 Other expenses 42
Note 19 Investment in associates 43
Note 20 Investment in water corporation 44
Note 21 Cash and cash equivalents 44
Note 22 Trade and other receivables 45
Note 23 Inventories 45
Note 24 Other assets 45
Note 25 Property, infrastructure,
plant and equipment 46
Note 26 Investment property 52
Note 27 Intangible assets 52
Note 28 Trade and other payables 53
Note 29 Trust funds and deposits 53
Note 30 Provisions 54
Note 31 Interest-bearing loans and borrowings 56
Note 32 Reserves 57
Note 33 Reconciliation of cash flows
from operating activities to surplus (deficit) 59
Note 34 Reconciliation of cash
and cash equivalents 59
Note 35 Superannuation 60
Note 36 Commitments 62
Note 37 Operating leases 62
Note 38 Contingent liabilities and
contingent assets 62
Note 39 Financial Instruments 63
Note 40 Events occuring after balance date 69
Note 41 Related party transactions 69
Note 42 Special committees and other activities 69
Note 43 Significant Business Activities 70
Note 44 Management indicators 70
Note 45 Fair value measurements 73
Note 46 Material budget variations 76
Note 47 Interests in other entities 76
Note 48 Other significant accounting
policies and new accounting standards 76
Certification of the Financial Report 80
Audit Opinion 81
ST GEORGE'S SQUARE
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27S O R E L L C O U N C I L
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016
BUDGET ACTUAL ACTUAL
NOTE 2016 2016 2015
$,000 $,000 $,000
INCOME FROM CONTINUING OPERATIONS
Recurrent Income
Rates and charges 5 11,560 11,573 11,106
Statutory fees and fines 6 325 335 339
User fees 7 715 714 820
Grants 8 1,477 1,636 4,617
Contributions - cash 9 27 118 29
Interest 10 289 261 276
Other income 11 501 1,310 872
Investment revenue from water corporation 13,20 485 495 486
15,379 16,443 18,545
Capital income
Capital grants received specifically for new or upgraded assets 8 1,386 1,362 1,798
Contributions - non-monetary assets 9 - 2,099 -
Net gain/(loss) on disposal of property, infrastructure, plant and equipment
12 - (768) (3)
Recognition of Land Under Roads 25 - 15,131 -
De-recognition of Property and Infrastructure Assets 12 - (5,680) -
Share of net profits/(losses) of associates and joint ventures accounted for by the equity method
19 - 81 34
1,386 12,225 1,829
Total income from continuing operations 16,765 28,668 20,374
EXPENSES FROM CONTINUING OPERATIONS
Employee benefits 14 (5,271) (5,478) (5,010)
Materials and services 15 (4,105) (4,385) (3,895)
Depreciation and amortisation 16 (4,207) (4,639) (4,185)
Finance costs 17 (175) (173) (203)
Other expenses 18 (1,426) (1,369) (1,255)
Total expenses from continuing operations (15,184) (16,044) (14,548)
Result from continuing operations 1,581 12,624 5,826
Net result for the year 1,581 12,624 5,826
Other comprehensive income
Items that will not be reclassified to surplus or deficit
Net asset revaluation increment/(decrement) 32(a) - - 2,242
- - 2,242
Items that may be reclassified subsequently to surplus or deficit
Financial assets available for sale reserve
- Fair Value adjustment on Available for Sale Assets 20,32(b) - 417 187
- 417 187
Total Other Comprehensive Income - 417 2,429
Total Comprehensive result 1,581 13,041 8,255
The above statement should be read in conjunction with the accompanying notes.
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NOTE 2016 2015
$,000 $,000
ASSETS
Current assets
Cash and cash equivalents 21 6,680 6,548
Trade and other receivables 22 1,656 797
Inventories 23 129 49
Other assets 24 108 69
Total current assets 8,573 7,464
Non-current assets
Trade and other receivables 22 65 51
Investments in associates accounted for using the equity method 19 989 907
Investment in water corporation 20 24,566 24,149
Property, infrastructure, plant and equipment 25 207,456 195,483
Investment property 26 297 1,127
Intangible assets 27 238 230
Total non-current assets 233,611 221,946
Total assets 242,184 229,409
LIABILITIES
Current liabilities
Trade and other payables 28 880 832
Trust funds and deposits 29 465 579
Provisions 30 960 912
Interest-bearing loans and borrowings 31 163 271
Total current liabilities 2,468 2,594
Non-current liabilities
Provisions 30 114 93
Interest-bearing loans and borrowings 31 2,442 2,605
Other 28 8 4
Total non-current liabilities 2,564 2,702
Total liabilities 5,032 5,298
Net Assets 237,152 224,111
EQUITY
Accumulated surplus 85,714 73,090
Reserves 32 151,438 151,021
Total Equity 237,152 224,111
The above statement should be read in conjunction with the accompanying notes.
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016
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29S O R E L L C O U N C I L
NOTE
2016 2015
INFLOWS/(OUTFLOWS)
INFLOWS/(OUTFLOWS)
$,000 $,000
Cash flows from operating activities
Rates 11,502 11,103
Statutory fees and fines 335 339
User charges and other fines (inclusive of GST) 714 827
Grants (inclusive of GST) 1,636 4,637
Developer contributions (inclusive of GST) 75 29
Interest 265 278
Investment revenue from water corporation 486 498
Other receipts (inclusive of GST) 1,235 1,570
Net GST refund/payment 1,050 925
Payments to suppliers (inclusive of GST) (6,583) (7,336)
Payments to employees (including redundancies) (5,405) (4,941)
Finance costs (173) (195)
Net cash provided by (used in) operating activities 33 5,137 7,734
Cash flows from investing activities
Payments for property, infrastructure, plant and equipment (6,294) (6,831)
Proceeds from sale of property, infrastructure, plant and equipment 199 19
Net cash provided by (used in) investing activities (6,095) (6,812)
Cash flows from financing activities
Capital grants (inclusive of GST) 1,362 1,798
Repayment of interest bearing loans and borrowings (272) (349)
Net cash provided by (used in) financing activities 1,090 1,449
Net increase (decrease) in cash and cash equivalents 132 2,371
Cash and cash equivalents at the beginning of the financial year 6,548 4,177
Cash and cash equivalents at the end of the financial year 34 6,680 6,548
Restrictions on cash assets 21
The above statement should be read in conjunction with the accompanying notes.
STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016
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2016 NOTE TOTAL
2016
ACCUMULATEDSURPLUS
2016
ASSETREVALUATION
RESERVE2016
FAIRVALUE
RESERVE2016
OTHERRESERVES
2016
$,000 $,000 $,000 $,000 $,000
Balance at beginning of the financial year
224,111 73,090 155,129 (5,158) 1,050
Surplus / (deficit) for the year 12,624 12,624 - - -
- Fair Value adjustment on Available for Sale Assets
20 417 - - 417 -
Net asset revaluation increment/(decrement)
32 - - - - -
Transfers between reserves - - - - -
Balance at end of the financial year 237,152 85,714 155,129 (4,741) 1,050
2015 NOTE TOTAL
2015
ACCUMULATEDSURPLUS
2015
ASSETREVALUATION
RESERVE2015
FAIRVALUE
RESERVE2015
OTHERRESERVES
2015
$,000 $,000 $,000 $,000 $,000
Balance at beginning of the financial year
215,856 67,264 152,887 (5,345) 1,050
Surplus / (deficit) for the year 5,826 5,826 - - -
- Fair Value adjustment on Available for Sale Assets
20 187 - - 187 -
Net asset revaluation increment/(decrement) reversals
32 2,242 - 2,242 - -
Balance at end of the financial year 224,111 73,090 155,129 (5,158) 1,050
The above statement should be read with the accompanying notes.
STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016
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31S O R E L L C O U N C I L
NOTE 1: REPORTING ENTITY
(a) The Sorell Council was established in 1862 and is a body
corporate with perpetual succession and a common seal.
Council's main office is located at 47 Cole Street, Sorell,
Tasmania.
(b) The purpose of the Council is to:
provide for health, safety and welfare of the community;
to represent and promote the interests of the community;
provide for the peace, order and good government in the
municipality.
NOTE 2: BASIS OF ACCOUNTING
These financial statements are a general purpose financial
report that consists of a Statement of Profit and Loss and
Other Comprehensive Income, Statement of Financial Position,
Statement of Changes in Equity, Statement of Cash Flows,
and notes accompanying these financial statements. The
general purpose financial report complies with Australian
Accounting Standards, other authoritative pronouncements
of the Australian Accounting Standards Board, and the Local
Government Act 1993 (LGA1993) (as amended).Council has
determined that it does not have profit generation as a prime
objective. Consequently, where appropriate, Council has
elected to apply options and exemptions within accounting
standards that are applicable to not-for-profit entities.
This financial report has been prepared on the accrual and
going concern basis.
All amounts are presented in Australian dollars and unless
stated, have been rounded to the nearest thousand dollars.
This financial report has been prepared under the historical
cost convention, except where specifically stated in notes 20,
25, 26, 30, 31, and 48(d).
Unless otherwise stated, all accounting policies are consistent
with those applied in the prior year. Where appropriate,
comparative figures have been amended to accord with
current presentation, and disclosure has been made of any
material changes to comparatives.
All entities controlled by Council that have material assets or
liabilities, such as Special Committees of Management, and
material subsidiaries or joint ventures, have been included in
this financial report.
All transactions between these entities and Council have been
eliminated in full.
NOTE 3: USE OF JUDGEMENTS AND ESTIMATES
Judgements and Assumptions
In the application of Australian Accounting Standards, Council
is required to make judgements, estimates and assumptions
about carrying values of assets and liabilities that are not
readily apparent from other sources. The estimates and
associated assumptions are based on historical experience
and various other factors that are believed to be reasonable
under the circumstances, the results of which form the basis of
making the judgements. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the
revision affects only that period or in the period of the revision
and future periods if the revision affects both current and
future periods.
Council has made no assumptions concerning the future that
may cause a material adjustment to the carrying amounts
of assets and liabilities within the next reporting period.
Judgements made by Council that have significant effects
on the financial report are disclosed in the relevant notes as
follows:
Employee entitlements
Assumptions are utilised in the determination of Council’s
employee entitlement provisions. These assumptions are
discussed in note 30.
Defined benefit superannuation fund obligations
Actuarial assumptions are utilised in the determination of
Council’s defined benefit superannuation fund obligations. These
assumptions are discussed in note 35.
Fair value of property, plant & equipment
Assumptions and judgements are utilised in determining the
fair value of Council’s property, plant and equipment including
useful lives and depreciation rates. These assumptions are
discussed in note 25.
NOTES TO THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2016
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NOTE 4: FUNCTIONS/ACTIVITIES OF THE COUNCIL
(a) Revenue, expenditure and assets attributable to each function as categorised in (c) below:
GRANTS OTHERTOTAL
REVENUETOTAL
EXPENDITURESURPLUS/
(DEFICIT) ASSETS
Government and administration
2015-2016 1,186 22,620 23,806 7,456 16,350 69,652
2014-2015 2,720 10,865 13,585 8,649 4,936 75,775
Roads, streets and bridges
2015-2016 1,277 8 1,285 4,466 (3,181) 148,004
2014-2015 1,832 - 1,832 3,894 (2,062) 131,642
Drainage
2015-2016 - - - - - 16,698
2014-2015 - - - - - 16,455
Waste management
2015-2016 - 1,937 1,937 1,227 710 1,356
2014-2015 1,815 1,382 3,197 - 3,197 1,408
Environmental health
2015-2016 10 249 259 655 (396) -
2014-2015 - 196 196 395 (199) -
Planning services
2015-2016 - 205 205 348 (143) -
2014-2015 - 194 194 383 (189) -
Building control
2015-2016 - 285 285 366 (81) -
2014-2015 - 272 272 281 (9) -
Community amenities
2015-2016 1 54 55 722 (667) 6,474
2014-2015 25 230 255 200 55 4,129
Community services
2015-2016 525 310 835 803 32 -
2014-2015 23 819 842 746 96 -
TOTAL
2015-2016 2,999 25,668 28,667 16,043 12,624 242,184
2014-2015 6,415 13,958 20,373 14,548 5,826 229,409
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(b) Reconciliation of Assets from note 4(a) with the Statement
of Financial Position at 30 June:
2016 2015
Current assets 8,573 7,464
Non-current assets 233,611 221,946
242,184 229,409
(c) Governance and administration
Operation and maintenance of council chambers,
administration offices, and councillors.
Roads, streets and bridges
Construction, maintenance and cleaning of road, streets,
footpaths, bridges, parking facilities and street lighting.
Drainage
Operation and maintenance of open or deep drainage systems
in urban areas, including the lining of piping of creeks but
excludes drainage associated with road works, flood mitigation
and agriculture.
Waste Management
Collection, handling, processing and disposal of all waste
materials.
Environmental Health/Environmental Management
Environmental Health includes disease control, food
surveillance, public-use building standards, health education
and promotion, water quality, workplace safety and cemeteries.
Environmental management includes strategies and programs
for the protection of the environment and regulations of
activities affecting the environment.
Planning Services
Administration of the town planning scheme, subdivisions and
urban and rural renewal programs.
Building control
The development and maintenance of building constructions
standards.
Community amenities
Operation and maintenance of housing for aged persons and
persons of limited means, Civic Centre, Council halls (excluding
indoor sports complexes).
Community services
Administration and operation of dog registration, operation
of pounds, control of straying stock, and noxious weeds.
Operation of the Child Care Centre, operation and support
of the performing arts, museum and the presentation of
festivals. Community Development which provides for the
implementation of a process by which strategies and plans
can be developed so that the Council can fulfil their general
responsibility for enhancing the quality of life of the whole
community.
Recreation facilities
Operation and maintenance of sporting facilities (includes
swimming pools, active and passive recreation and recreation
centres).
Economic development
Maintenance and marketing of tourist facilities, property
development and operation of caravan parks.
Other - not attributable
Rates and charges and work not attributed elsewhere.
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NOTE 5 RATES AND CHARGES
Council uses Adjusted Capital Value as the basis of valuation of all properties within the municipality. The Adjusted Capital Value of a property is its Capital Value with an adjustment factor set for periods between revaluations, as determined by the Valuer General.
The valuation base used to calculate general rates for 2015-16 was $2,367 million (2014-15 $2,303 million). The 2015-16 general rate is a two tiered rating system with 41% (2014-15 42%) of the general rate generated by a fixed rate of $440.13 (2014-15 $434.48) and remaining by a rate of $0.002 (2014-15 $0.002) of the ACV, varied based on land use.
Rate Revenue 9,957 9,541
Fire Levy 410 378
Garbage charge 1,873 1,810
Less: Remissions (667) (623)
Total rates and charges 11,573 11,106
The date of the latest general revaluation of land for rating purposes within the municipality was 1 July 2010, and the valuation was first applied in the rating year commencing 1 July 2011.
ACCOUNTING POLICY
Rates and charges income
Rate income is recognised as revenue when Council obtains control over the assets comprising the receipt.
Control over assets acquired from rates is obtained at the commencement of the rating year as it is an enforceable debt linked to the rateable property or, where earlier, upon receipt of the rates. A provision for impairment on rates has not been established as unpaid rates represents a charge against the rateable property that will be recovered when the property is next sold.
NOTE 6 STATUTORY FEES AND FINES
Infringements and costs 20 22
Town planning fees 174 196
Land information certificates 139 118
Permits 2 3
Total statutory fees and fines 335 339
ACCOUNTING POLICY
Statutory fee and fine income
Fees and fines (including parking fees and fines) are recognised as revenue when the service has been provided, the payment is received, or when the penalty has been applied, whichever first occurs. A provision for impairment is recognised when collection in full is no longer probable.
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NOTE 7 USER FEES
Animal 75 84
Building services fees 108 135
Caravan licenses 17 21
Child care 308 311
Fire abatement 6 12
Health 30 44
Recreational vehicles 4 4
Kennel Licences 2 -
Plumbing Application and Inspection Fees 160 163
Other fees and charges 4 46
Total user fees 714 820
Ageing analysis of contractual receivables
Please refer to note 39(c) for the ageing analysis of contractual receivables.
ACCOUNTING POLICY
User fee income
Fee income is recognised as revenue when the service has been provided, or the payment is received, whichever first occurs. A provision for impairment is recognised when collection in full is no longer probable.
NOTE 8 GRANTS
Grants were received in respect of the following:
Summary of grants
Federally funded grants 2,406 4,714
State funded grants 79 678
Other 513 1,024
Total 2,998 6,416
Grants - Recurrent
Commonwealth Government Financial Assistance Grants - General Purpose 558 2,050
Commonwealth Government Financial Assistance Grants - Roads 461 1,406
Commonwealth Government - training subsidy 10 10
Commonwealth Government - sustainability children 53 48
Commonwealth Government - child care benefit 461 443
Commonwealth Government - health 3 2
Commonwealth Government - other - 168
Transport 12 12
Bushfire recovery 65 40
Other 13 438
Total recurrent grants 1,636 4,617
The Australian Commonwealth Government provides Financial Assistance Grants to Council for general purpose use and the provision of local roads. In 2014-15 the Commonwealth made early payment of the two quarterly instalments for the following year. In accordance with AASB1004 Contributions, Council recognises these grants as revenue when it receives the funds and obtains control. The early receipt of instalments resulted in Commonwealth Government Financial Assistance Grants being above that originally budgeted in 2014-15 by $1.144m. This has impacted the Statement of Profit or Loss and Other Comprehensive Income resulting in the Surplus being higher in 2014-15 by $1.144m.
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NOTE 8 GRANTS (CONT.)
Capital grants received specifically for new or upgraded assets
Commonwealth Government - roads to recovery 816 286
Commonwealth Government - culture, sport and recreation 50 310
Other 496 1,202
Total capital grants 1,362 1,798
Conditions on grants
Non-reciprocal grants recognised as revenue during the year that were obtained on condition that they be expended in a specified manner that had not occurred at balance date were:
Community Services - 288
Total - 288
Net increase (decrease) in non-reciprocal grant revenues for the year: - 288
ACCOUNTING POLICY
Grant income - operating and capital
Grant income is recognised as revenue when Council obtains control over the assets comprising the receipt.
Control over granted assets is normally obtained upon their receipt (or acquittal) or upon earlier notification that a grant has been secured, and are valued at their fair value at the date of transfer.
Where grants recognised as revenues during the financial year were obtained on condition that they be expended in a particular manner or used over a particular period and those conditions were undischarged at balance date, the unused grant is also disclosed. The note also discloses the amount of unused grant or contribution from prior years that was expended on Council’s operations during the current year.
A liability is recognised in respect of revenue that is reciprocal in nature to the extent that the requisite service has not been provided at balance date and conditions include a requirement to refund unused contributions. Revenue is then recognised as the various performance obligations under an agreement are fulfilled. Council does not currently have any reciprocal grants
Unreceived contributions over which Council has control are recognised as receivables.
NOTE 9 CONTRIBUTIONS
(a) Cash
Roads 30 -
Stormwater 5 -
Car Parking - 25
Parks, open space and streetscapes 27 4
Other 56 -
Total 118 29
(b) Non-monetary assets
Roads 1,755 -
Kerb & Channel 188 -
Footpaths and cycleways 156 -
Total 2,099 -
Total contributions 2,217 29
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ACCOUNTING POLICY
Contribution income
Contributions are recognised as revenue when Council obtains control over the assets comprising the receipt.
Revenue is recognised when Council obtains control of the contribution or the right to receive the contribution, it is probable that the economic benefits comprising the contribution will flow to Council and the amount of the contribution can be measured reliably. Control over granted assets is normally obtained upon their receipt (or acquittal) or upon earlier notification that a grant has been secured, and are valued at their fair value at the date of transfer.
Where contributions recognised as revenues during the financial year were obtained on condition that they be expended in a particular manner or used over a particular period and those conditions were undischarged at balance date, the unused contribution is also disclosed. The note also discloses the amount of unused contribution from prior years that was expended on Council’s operations during the current year.
Unreceived contributions over which Council has control are recognised as receivables.
Non-monetary contributions (including developer contributions) with a value in excess of the recognition thresholds, are recognised as revenue and as non-current assets.
NOTE 10 INTEREST
Interest on rates 100 108
Interest on cash and cash equivalents 161 168
Total 261 276
ACCOUNTING POLICY
Interest income
Interest is recognised progressively as it is earned.
NOTE 11 OTHER INCOME
Investment property rental 67 55
Copping Refuse land rental 63 53
Leased properties rental income 83 108
Donation received 197 228
Diesel fuel rebate 10 9
Distribution from Liquidators - Lehmann Brothers 263 -
Workers Compensation Reimbursements 142 67
External Labour Hire Recoveries 194 30
Other 291 322
Total other income 1,310 872
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ACCOUNTING POLICY
Rental income
Rents are recognised as revenue when the payment is due or the payment is received, whichever first occurs. Rental payments received in advance are recognised as a prepayment until they are due.
Donations Received
Donations are recognised as revenue when the payment is received.
Operating leases as lessor
Council is a lessor and enters into agreements with a number of lessees. These include commercial and non-commercial agreements.
Where leases are non-commercial agreements, these are generally with not for profit, such as sporting, organisations. In these cases subsidised or peppercorn rents are charged because Council recognises part of its role is community service and community support. In these situations, Council records lease revenue on an accruals basis and records the associated properties as part of land and buildings within property, plant and equipment. Buildings are recognised at depreciated replacement cost.
Where leases are commercial agreements, but properties leased are part of properties predominantly used by Council for its own purposes, Council records lease revenue on an accruals basis and records the associated properties as part of land and buildings within property, plant and equipment. Buildings are recognised at depreciated replacement cost.
NOTE 12 NET GAIN/(LOSS) ON DISPOSAL OF PROPERTY, INFRASTRUCTURE, PLANT AND EQUIPMENT
Proceeds of sale 998 17
Write down value of assets disposed (1,766) (20)
Total (768) (3)
De-recognition of Property and Infrastructure Assets
Buildings (2,091) -
Roads (1,623) -
Bulk Earthworks (1,966) -
(5,680) -
ACCOUNTING POLICY
Gains and losses on asset disposals
The profit or loss on sale of an asset is determined when control of the asset has irrevocably passed to the buyer.
De-recognition of Property and Infrastructure Assets
Council regularly reviews the assets recognised on the balance sheet and where it identifies that assets do not meet the recognition criteria they are derecognised in accordance with AASB 116
NOTE 13 INVESTMENT REVENUE FROM WATER CORPORATION
Dividend revenue received 330 358
Tax equivalent received 126 90
Guarantee fee received 39 38
Total investment revenue from water corporation 495 486
ACCOUNTING POLICY
Dividend and other revenue
Dividend revenue is recognised when Council's right to receive payment is established.
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NOTE 14 EMPLOYEE BENEFITS
Wages and salaries 4,041 3,961
Workers compensation 138 121
Annual leave and long service leave 445 346
Superannuation 649 543
Fringe benefits tax 57 25
Employee associated costs 51 28
Recruitment costs 11 8
Training costs 58 27
Payroll tax 266 238
5,716 5,298
Less amounts capitalised (238) (288)
Total employee benefits 5,478 5,010
ACCOUNTING POLICY
Employee benefits
Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably.
Employee benefits include, where applicable, entitlements to wages and salaries, annual leave, sick leave, long service leave, superannuation and any other post-employment benefits.
NOTE 15 MATERIALS AND SERVICES
Computers and associated costs 102 166
Consultants 181 445
Contracts 114 33
Fire reduction - 2
Legal 86 110
Maintenance 1,438 1,092
Materials 281 291
Utilities 406 273
Valuation costs 62 40
Waste 1,212 1,299
Other 503 143
Total materials and services 4,385 3,895
ACCOUNTING POLICY
Materials and services expense
Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably.
Routine maintenance, repair costs, and minor renewal costs are expensed as incurred. Where the repair relates to the replacement of a component of an asset and the cost exceeds the capitalisation threshold the cost is capitalised and depreciated. The carrying value of the replaced asset is expensed.
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NOTE 16 DEPRECIATION AND AMORTISATION
Property
Land improvements 229 168
Buildings
Buildings (including Marine Structures) 560 242
Leasehold improvements 25 24
Plant and Equipment
Plant, machinery and equipment 343 332
Fixtures, fittings and furniture 151 152
Computers and telecommunications 123 139
Infrastructure
Roads 2,536 2,385
Bridges 165 146
Footpaths and cycleways 122 124
Kerb and channel 75 133
Waste 52 52
Stormwater 258 256
Intangible assets
Intangible assets - 32
Total depreciation and amortisation 4,639 4,185
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ACCOUNTING POLICY
Depreciation and amortisation expense
Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably.
Buildings, land improvements, plant and equipment, infrastructure and other assets having limited useful lives are systematically depreciated over their useful lives to Council in a manner which reflects consumption of the service potential embodied in those assets. Estimates of remaining useful lives and residual values are made on a regular basis with major asset classes reassessed annually. Depreciation rates and methods are reviewed annually.
Where assets have separate identifiable components that are subject to regular replacement, these components are assigned distinct useful lives and remaining values and a separate depreciation rate is determined for each component.
Land and road earthwork assets are not depreciated on the basis that they are assessed as not having a limited useful life.
Straight line depreciation is charged based on the residual useful life as determined each year.
Major depreciation periods used are listed below and are consistent with the prior year unless otherwise stated:
Period
Land improvements 10-50 years
Buildings
buildings 30-100 years
building improvements 15-100 years
Leasehold improvements
leasehold building improvements 15-30 years
Plant and Equipment
plant, machinery and equipment 3-15 years
fixtures, fittings and furniture 3-30 years
computers and telecommunications 3-10 years
Roads
road pavements and seals 15-30 years
road substructure 100 years
road formation and earthworks non-depreciable
road kerb, channel and minor culverts 60 years
Bridges
bridges deck 20-80 years
bridges substructure 20-80 years
Other Infrastructure
footpaths and cycleways 10-50 years
drainage 40-100 years
waste management 10-50 years
parks, open space and streetscapes 15-30 years
off street car parks 15-30 years
Intangible assets
intangible assets 5 years
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NOTE 17 FINANCE COSTS
Bank overdraft charges
Interest - Borrowings 173 203
Total finance costs 173 203
ACCOUNTING POLICY
Finance expense
Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably.
Finance costs are recognised as an expense in the period in which they are incurred, except where they are capitalised as part of a qualifying asset constructed by Council. Where specific borrowings are obtained for the purpose of specific asset acquisition, the weighted average interest rate applicable to borrowings at balance date, excluding borrowings associated with superannuation, is used to determine the borrowing costs to be capitalised. No borrowing costs were capitalised during the period, ($0).
Borrowing costs include interest on bank overdrafts, interest on borrowings, unwinding of discounts, and finance lease charges.
NOTE 18 OTHER EXPENSES
External auditors' remuneration (Tasmanian Audit Office) 40 18
Internal auditors' remuneration (Audit Panel Members) 2 -
Councillors' allowances 178 173
Other
Bad debts 24 1
Children services expenses 32 28
Collection costs 46 31
Community development 6 17
Donations section 77 56 47
Government fire contributions 388 360
Insurance 192 184
Land tax 61 52
Operating leases 26 19
Other 318 325
Total other expenses 1,369 1,255
Audit Fees for the 2015/16 financial year were $23,650 with the balance representing accrual movements
ACCOUNTING POLICY
Other expenses
Expenses are recognised in the Statement of Profit or Loss and Other Comprehensive Income when a decrease in future economic benefits related to a decrease in asset or an increase of a liability has arisen that can be measured reliably.
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NOTE 19 INVESTMENT IN ASSOCIATES
The Copping Refuse Disposal Site Joint Authority (Trading as Southern Waste Solutions) was established under section 30 of the Local Government Act 1993 by the Sorell Council, Clarence City Council and Tasman Council. Kingborough Council joined the authority in 2009. The Copping Refuse Disposal Site Joint Authroity's function is to promote and manage a putrescible landfill disposal site which conforms to its Development Proposal and Environmetnal Management Plan (DP&EMP) and permit conditions.
Investments in associates accounted for by the equity method are:
- Waste - Southern Waste Solutions 989 907
Total 989 907
Waste - Southern Waste Solutions
BackgroundSorell Council in financial year ending 30 June 2009 maintained an ownership interest of 30%, however as a result of the buyout of equity from Kingborough Council in July 2009, Council now maintains an ownership interest of 24%
Council's share of accumulated surplus(deficit)
Council's share of accumulated surplus(deficit) at start of year 616 597
Reported surplus (deficit) for year 81 19
Council's share of accumulated surplus(deficit) at end of year 698 616
Council's share of reserves
Council's share of reserves at start of year 150 150
Council's share of reserves at end of year 150 150
Movement in carrying value of specific investment
Carrying value of investment at start of year 907 873
Share of surplus (deficit) for year 81 19
Equity Injection - 15
Carrying value of investment at end of year 989 907
ACCOUNTING POLICY
Accounting for investments in associates
Council's investment in associates is accounted for by the equity method as Council has the ability to influence rather than control the operations of the entities. The investment is initially recorded at the cost of acquisition and adjusted thereafter for post-acquisition changes in Council's share of the net assets of the entities. Council's share of the financial result of the entities is recognised in the Statement of Profit or Loss and Other Comprehensive Income.
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NOTE 20 INVESTMENT IN WATER CORPORATION
Opening Balance 24,149 23,962
Fair Value adjustments on Available-for-Sale Assets 417 187
Total investment in water corporation 24,566 24,149
Council has derived returns from the water corporation as disclosed in note 13.
A State-wide water and sewerage corporation trading as "TasWater", commenced on 1 July 2013 in accordance with the Water and Sewerage Corporation Act 2012. TasWater took over the water and sewerage services and assets previously operated by Ben Lomon Water, Cradle Mountain Water and Southern Water.
ACCOUNTING POLICY
Investment assets
Council's investment in TasWater is valued at its fair value at balance date. Fair value was determined by using Council's ownership interest against the water corporation's net asset value at balance date. At 30 June 2016, Council held a 1.56% (2015:1.56%) ownership interest in TasWater which is based on Schedule 2 of the Corporation's Constitution which reflects the council's voting rights. Any unrealised gains and losses are recognised through the Statement of Profit or Loss and Other Comprehensive Income to a Financial assets available for sale Reserve each year (refer note 32).
NOTE 21 CASH AND CASH EQUIVALENTS
Cash on hand 3 2
Cash at bank 334 1,382
Term Deposit 6,343 5,164
Total cash and cash equivalents 6,680 6,548
Council's cash and cash equivalents are subject to a number of internal and external restrictions that limit amounts available for discretionary or future use. These include:
- Trust funds and deposits (Note 29) 465 579
- Leave provisions (Note 30) 1,074 1,005
Restricted funds 1,539 1,584
Total unrestricted cash and cash equivalents 5,141 4,964
The restrictions on the funds above are detailed in the respective notes
ACCOUNTING POLICY
Cash and cash equivalents
For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand, deposits at call, and other highly liquid investments with original maturities of three months or less, net of outstanding bank overdrafts.
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NOTE 22 TRADE AND OTHER RECEIVABLES
Current
Rates debtors 222 151
Other debtors 1,421 496
Net GST receivable 5 143
MPIA debtors 8 7
Total 1,656 797
Non-current
MPIA debtors 38 51
Long Term Recoverable Property Debt 27 -
Total 65 51
Total trade and other receivables 1,721 848
ACCOUNTING POLICY
Trade and other receivables
Receivables are carried at amortised cost using the effective interest rate method. A provision for impairment is recognised when there is objective evidence that an impairment loss has occurred.
NOTE 23 INVENTORIES
Inventories held for distribution 129 47
Inventories held for sale - 2
Total inventories 129 49
ACCOUNTING POLICY
Inventories
Inventories held for distribution are measured at cost adjusted when applicable for any loss of service potential. Other inventories are measured at the lower of cost and net realisable value.
Where inventories are acquired at no cost, or for nominal consideration, the cost shall be the current replacement cost as at the date of acquisition.
NOTE 24 OTHER ASSETS
Current
Prepayments 51 52
Accrued income 57 17
Total 108 69
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NOTE 25 PROPERTY, INFRASTRUCTURE, PLANT AND EQUIPMENT
Summary
at cost 20,268 13,722
Less accumulated depreciation (4,285) (3,936)
15,983 9,786
at fair value as at 30 June 291,606 286,242
Less accumulated depreciation (100,133) (100,545)
191,473 185,697
Total 207,456 195,483
Property
Land
at cost as at 30 June 592 353
at fair value as at 30 June 10,675 10,674
11,267 11,026
Land under roads
at fair value at 30 June 15,408 347
15,408 347
Land improvements
at cost as at 30 June 2,763 431
at fair value at 30 June 4,354 4,355
Less accumulated depreciation (886) (657)
6,231 4,129
Total Land 32,906 15,502
Buildings
at cost as at 30 June 710 229
at fair value as at 30 June 22,058 23,268
Less accumulated depreciation (3,230) (2,813)
19,538 20,684
Leasehold improvements
at fair value as at 30 June 545 545
Less accumulated amortisation (165) (140)
380 405
Total Buildings 19,918 21,089
Total Property 52,824 36,591
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NOTE 25 PROPERTY, INFRASTRUCTURE, PLANT AND EQUIPMENT (CONT.)
Plant and Equipment
Plant, machinery and equipment
at cost as at 30 June 3,423 3,249
Less accumulated depreciation (1,649) (1,573)
1,774 1,676
Fixtures, fittings and furniture
at cost as at 30 June 2,202 2,114
Less accumulated depreciation (693) (542)
1,509 1,572
Computers and telecommunications
at cost as at 30 June 2,295 2,177
Less accumulated depreciation (1,944) (1,821)
351 356
Total Plant and Equipment 3,634 3,604
Infrastructure
Roads
at cost as at 30 June 4,916 1,126
at fair value as at 30 June 125,512 132,034
Less accumulated depreciation (74,499) (76,255)
55,928 56,905
Bridges
at cost as at 30 June 356 356
at fair value as at 30 June 12,509 12,509
Less accumulated depreciation (6,603) (6,438)
6,262 6,427
Footpaths and cycleways
at cost as at 30 June 771 249
at fair value as at 30 June 4,492 4,492
Less accumulated depreciation (2,047) (1,924)
3,217 2,817
Kerb and channel
at cost as at 30 June 271 -
at fair value as at 30 June 4,287 4,287
Less accumulated depreciation (1,660) (1,584)
2,898 2,702
Stormwater
at cost as at 30 June 554 70
at fair value as at 30 June 26,539 26,539
Less accumulated depreciation (10,412) (10,154)
16,680 16,455
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NOTE 25 PROPERTY, INFRASTRUCTURE, PLANT AND EQUIPMENT (CONT.)
Waste
at fair value as at 30 June 1,987 1,987
Less accumulated depreciation (631) (579)
1,356 1,408
Bulk earthworks
at cost as at 30 June 662 -
at fair value as at 30 June 63,240 65,206
63,902 65,206
Total Infrastructure 150,244 151,920
Works in progress
Buildings at cost 329 3,178
Office equipment, furnishings and fittings at cost 20 99
Road Transport Infrastructure at cost 344 50
Stormwater at cost 18 41
Bridges at cost 43 -
Total Works in progress 754 3,368
Total property, infrastructure, plant and equipment 207,456 195,483
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NOTE 25 PROPERTY, INFRASTRUCTURE, PLANT AND EQUIPMENT (CONT.)
Reconciliation of property, plant and equipment and infrastructure
2016
BALANCE AT BEGINNING
OF FINANCIAL YEAR
ACQUISITION OF ASSETS
REVALUATION INCREMENTS
(DECREMENTS)(NOTE 32)
DEPRECIATION AND
AMORTISATION(NOTE 16)
WRITTEN DOWN VALUE
OF DISPOSALS
IMPAIRMENT LOSSES
RECOGNISED IN PROFIT OR
LOSS TRANSFERS
BALANCE AT END OF FINANCIAL
YEAR
(a)
$,000 $,000 $,000 $,000 $,000 $,000 $,000 $,000
Property
land 11,026 - - - - - 241 11,267
land under roads 346 15,131 - - (70) - 1 15,408
land improvements 4,129 - - (229) - - 2,331 6,231
Total land 15,502 15,131 - (229) 70 - 2,573 32,906
buildings 20,684 - - (560) (2,091) - 1,505 19,538
leasehold improvements 405 - - (25) - - - 380
Total buildings 21,089 - - (585) (2,091) - 1,505 19,918
Total property 36,591 15,131 - (813) (2,161) - 4,078 52,824
Plant and Equipment
plant, machinery and equipment
1,677 - - (343) (262) - 702 1,774
fixtures, fittings and furniture
1,572 - - (151) - - 88 1,509
computers and telecommunications
356 - - (123) - - 118 351
Total plant and equipment 3,605 - - (617) 262 - 908 3,634
Infrastructure
roads 56,906 1,755 - (2,536) (2,230) - 2,033 55,928
bridges 6,427 - - (165) - - - 6,262
footpaths and cycleways 2,817 156 - (122) - - 366 3,217
kerb and channel 2,702 188 - (75) - - 83 2,898
stormwater 16,454 - - (258) - - 484 16,680
waste 1,409 - - (52) - - (1) 1,356
bulk earthworks 65,205 - - - (1,966) - 663 63,902
Total infrastructure 151,920 2,099 - (3,208) (4,196) - 3,628 150,244
Works in progress
buildings 3,178 1,717 - - - - (4,566) 329
office equipment 99 613 - - - - (692) 20
roads 50 3,167 - - - - (2,873) 344
bridges - 43 - - - - - 43
stormwater 41 460 - - - - (483) 18
Total works in progress 3,368 6,000 - - - - (8,614) 754
Total property, plant and equipment, infrastructure
195,483 23,230 - (4,639) (6,619) - - 207,456
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NOTE 25 PROPERTY, INFRASTRUCTURE, PLANT AND EQUIPMENT (CONT.)
Reconciliation of property, plant and equipment and infrastructure
2015
BALANCE AT BEGINNING
OF FINANCIAL YEAR
ACQUISITION OF ASSETS
REVALUATION INCREMENTS
(DECREMENTS)(NOTE 32)
DEPRECIATION AND
AMORTISATION(NOTE 16)
WRITTEN DOWN VALUE OF
DISPOSALS
IMPAIRMENT LOSSES
RECOGNISED IN PROFIT OR LOSS TRANSFERS
BALANCE AT END OF FINANCIAL
YEAR
(a)
$,000 $,000 $,000 $,000 $,000 $,000 $,000 $,000
Property
land 11,052 - - - - - (26) 11,026
land under roads 346 - - - - - - 346
land improvements 3,841 431 - (168) - - 25 4,129
Total land 15,239 431 - (168) - - (1) 15,501
Buildings 8,623 223 11,278 (242) - - 802 20,684
leasehold improvements 429 - - (24) - - - 405
Total buildings 9,052 223 11,278 (266) - - 802 21,089
Total property 24,291 654 11,278 (434) - - 801 36,590
Plant and Equipment
plant, machinery and equipment
1,704 156 - (332) (21) - 170 1,677
fixtures, fittings and furniture
1,722 2 - (152) - - - 1,572
computers and telecommunications
465 30 - (139) - - - 356
Total plant and equipment 3,891 188 - (623) (21) - 170 3,605
Infrastructure
roads 102,618 - (45,329) (2,385) - - 2,002 56,906
bridges 6,217 - - (146) - - 356 6,427
footpaths and cycleways 3,719 71 (893) (124) - - 44 2,817
kerb and channel 3,891 - (1,218) (133) - - 162 2,702
stormwater 16,640 - - (256) - - 70 16,454
waste 1,461 - - (52) - - - 1,409
bulk earthworks 26,745 56 38,404 - - - - 65,205
Total infrastructure 161,291 127 (9,036) (3,096) - - 2,634 151,920
Works in progress
buildings 764 3,216 - - - - (802) 3,178
office equipment 1 268 - - - - (170) 99
roads 99 2,514 - - - - (2,563) 50
stormwater 115 (4) - - - - (70) 41
Total works in progress 979 5,994 - - - - (3,605) 3,368
Total property, plant and equipment, infrastructure
190,452 6,963 2,242 (4,153) (21) - - 195,483
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ACCOUNTING POLICY
Recognition and measurement of assets
Acquisitions of assets are initially recorded at cost. Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition.
Property, infrastructure, plant and equipment received in the form of contributions, are recognised as assets and revenues at fair value by Council valuation where that value exceeds the recognition thresholds for the respective asset class. Fair value is the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date.
Where assets are constructed by Council, cost includes all materials used in construction, direct labour, borrowing costs incurred during construction, and an appropriate share of directly attributable variable and fixed overheads.
The following classes of assets have been recognised. In accordance with Council's policy, the threshold limits detailed below have applied when recognising assets within an applicable asset class and unless otherwise stated are consistent with the prior year:
Threshold
$,000
Plant, Equipment and Intangibles 5
All other assets 10
Subsequent to the initial recognition of assets, non-current physical assets, other than plant and equipment, furniture, and fixtures and fittings, are measured at their fair value in accordance with AASB 116 Property, Plant & Equipment and AASB 13 Fair Value Measurement. At balance date, Council reviewed the carrying value of the individual classes of assets measured at fair value to ensure that each asset class materially approximated its fair value. Where the carrying value materially differed from the fair value at balance date the class of asset was revalued.
In addition, Council undertakes a formal revaluation of land, buildings, and infrastructure assets on a regular basis to ensure valuations represent fair value. The valuation is performed either by experienced Council officers or independent experts.
Fair value valuations are determined in accordance with a valuation hierarchy. Changes to the valuation hierarchy will only occur if an external change in the restrictions or limitations of use on an asset result in changes to the permissible or practical highest and best use of the asset.
Where the assets are revalued, the revaluation increments are credited directly to the asset revaluation reserve except to the extent that an increment reverses a prior year decrement for that class of asset that had been recognised as an expense in which case the increment is recognised as revenue up to the amount of the expense. Revaluation decrements are recognised as an expense except where prior increments are included in the asset revaluation surplus for that class of asset in which case the decrement is taken to the reserve to the extent of the remaining increments. Within the same class of assets, revaluation increments and decrements within the year are offset.
Impairment of assets
Impairment losses are recognised in the statement of comprehensive income under other expenses.
Reversals of impairment losses are recognised in the statement of comprehensive income under other revenue.
Land under roads
Council recognised the value of land under roads it controls at fair value. This valuation was undertaken at 30 June 2016 and was based on land rates as provided by the State Valuer General.
NOTE 25 PROPERTY, INFRASTRUCTURE, PLANT AND EQUIPMENT (CONT.)
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2016 2015
$,000 $,000
NOTE 26 INVESTMENT PROPERTY
Balance at beginning of financial year 1,127 1,127
Disposals (830) -
Balance at end of financial year 297 1,127
ACCOUNTING POLICY
Investment Property
Investment property is held to generate long-term rental yields. Investment property is measured initially at cost, including transaction costs. Costs incurred subsequent to initial acquisition are capitalised when it is probable that future economic benefit in excess of the originally assessed performance of the asset will flow to Council. Subsequent to initial recognition at cost, investment property is carried at fair value, determined annually by independent valuers. Changes to fair value are recorded in the Statement of Profit or Loss and Other Comprehensive Income in the period that they arise. Rental income from the leasing of investment properties is recognised in the Statement of Comprehensive Income on a straight line basis over the lease term.
Investments, other than investments in associates and property, are measured at cost.
NOTE 27 INTANGIBLE ASSETS
Municipal revaluation 8 -
Water rights 230 230
Total intangible assets 238 230
Reconciliation of intangible assets MUNICIPAL REVALUATION
WATER RIGHTS
ROAD REVALUATION TOTAL
$,000 $,000 $,000 $,000
Gross carrying amount
Balance at 1 July 2014 160 23 70 253
Additions from internal developments - 207 - 207
Balance at 1 July 2015 160 230 70 460
Other 8 - - 8
Balance at 1 July 2016 168 230 70 468
Accumulated amortisation and impairment
Balance at 1 July 2014 128 - 70 198
Amortisation expense 32 - - 32
Balance at 1 July 2015 160 - 70 230
Amortisation expense - - - -
Balance at 1 July 2016 160 - 70 230
Net book value at 30 June 2015 - 230 - 230
Net book value at 30 June 2016 8 230 - 238
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2016 2015
$,000 $,000
ACCOUNTING POLICY
Intangible assets
Intangible assets with finite lives that are acquired separately are carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.
The estimated useful lives for current and comparative periods are as follows:
Municipal Revaluation 5 years
Water Rights 5 years
Roads Revaluation 5 years
NOTE 28 TRADE AND OTHER PAYABLES
Current
Goods and services 338 123
Accrued expenses 458 674
Other 84 35
Total 880 832
Non-current
Other 8 4
Total 8 4
Total trade and other payables 888 836
NOTE 29 TRUST FUNDS AND DEPOSITS
Refundable application deposits 290 318
Retention amounts 175 112
Other refundable deposits - 149
Total trust funds and deposits 465 579
ACCOUNTING POLICY
Tender and other deposits
Amounts received as tender deposits and retention amounts controlled by Council are recognised as Trust funds until they are returned or forfeited.
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NOTE 30 PROVISIONS
ANNUAL LEAVE
LONG SERVICE LEAVE RDO'S ADO'S TOTAL
$,000 $,000 $,000 $,000 $,000
2016
Balance at beginning of the financial year 424 557 24 - 1,005
Additional provisions 338 162 48 19 567
Amounts used (367) (95) (36) - (498)
Balance at the end of the financial year 395 624 36 19 1,074
2015
Balance at beginning of the financial year 382 571 20 - 973
Additional provisions 209 99 87 - 395
Amounts used (167) (113) (83) - (363)
Balance at the end of the financial year 424 557 24 - 1,005
2016 2015
$,000 $,000
(a) Employee benefits
(i) Current
Annual leave 395 424
Long service leave 510 464
Rostered days off 36 24
Other (Accrued day off) 19 -
960 912
(ii) Non-current
Long service leave 114 93
114 93
Aggregate carrying amount of employee benefits:
Current 960 912
Non-current 114 93
1,074 1,005
The following assumptions were adopted in measuring the present value of employee benefits:
Weighted average increase in employee costs 2.50% 3.40%
Weighted average discount rates 1.72% 3.00%
Weighted average settlement period 12 12
(iii) Current
All annual leave and the long service leave entitlements representing 10 or more years of continuous service
- Short-term employee benefits, that fall due within 12 months after the end of the period measured at nominal value
960 912
960 912
(iv) Non-current
Long service leave representing less than 10 years of continuous service measured at present value 114 93
(v) Employee Numbers 67 65
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ACCOUNTING POLICY
Employee benefits
i) Short term obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave expected
to be wholly settled within 12 months after the end of the period in which the employees render the related service are
recognised in respect of employees' services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The liability for annual leave is recognised in the provision for
employee benefits. All other short-term employee benefit obligations are presented as payables.
ii) Other long term employee benefit obligations
The liability for long service leave and annual leave which is not expected to be wholly settled within 12 months after
the end of the period in which the employees render the related service is recognised in the provision for employee
benefits and measured as the present value of expected future payments to be made in respect of services provided
by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of employee departures and periods of service. Expected future
payments are discounted using market yields at the end of the reporting period on national government bonds with
terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.
The obligations are presented as current liabilities in the statement of financial position if the entity does not have an
unconditional right to defer settlement for at least twelve months after the reporting date, regardless of when the
actual settlement is expected to occur.
iii) Sick leave
No accrual is made for sick leave as Council experience indicates that, on average, sick leave taken in each reporting
period is less than the entitlement accruing in that period, and this experience is expected to recur in future reporting
periods. Council does not make payment for untaken sick leave.
iv) Defined benefit 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 which 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. However, when this information is not reliably
available, Council accounts for its obligations to defined benefit plans on the same basis as its obligations to defined
contribution plans i.e as an expense when it becomes payable.
Council makes superannuation contributions for a number of its employees to the Tasplan Defined Benefits Fund,
which is a sub fund of the Tasplan Superannuation Scheme. The Tasplan Defined Benefits Fund has been classified as a
multi-employer sponsored plan. As the Fund’s assets and liabilities are pooled and are not allocated by employer, the
Actuary is unable to allocate benefit liabilities, assets and costs between employers. As provided under paragraph 30(a)
of AASB 119 Employee Benefits, Council does not use defined benefit accounting for these contributions.
v) Defined contribution plans
Contributions to defined contribution plans are recognised as an expense as they become payable. Prepaid
contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is
available.
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2016 2015
$,000 $,000
NOTE 31 INTEREST-BEARING LOANS AND BORROWINGS
Current
Borrowings - secured 163 271
163 271
Non-current
Borrowings - secured 2,442 2,605
2,442 2,605
Total 2,605 2,876
BorrowingsBorrowings are secured by a Deed of Negative Pledge that prevents the Council from creating or allowing a security interest over any of its assets unless the existing lender also has a similar, or equivalent, security interest.The maturity profile for Council's borrowings is:
Not later than one year 163 271
Later than one year and not later than five years 776 725
Later than five years 1,666 1,880
Total 2,605 2,876
ACCOUNTING POLICY
Interest bearing liabilities
The borrowing capacity of Council is limited by the Local Government Act 1993. Interest bearing liabilities are initially recognised at fair value, net of transaction costs incurred. Subsequent to initial recognition these liabilities are measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in the Statement of Profit or Loss and Other Comprehensive Income over the period of the liability using the effective interest method.
Leases
i) Operating leases as lessee
Leases in which a significant portion of the risks and rewards of ownership are not transferred to Council as lessee are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the income statement on a straight-line basis over the period of the lease.
Council leases several parcels of Crown land under lease agreements with the State Government. These leases, in general, do not reflect commercial arrangements, are long-term and have minimal lease payments. Crown land is recognised as an asset in the Statement of Financial Position and carried at fair value when Council establishes that (i) it has control over the land and (ii) it will derive economic benefits from it.
Lease income from operating leases where Council is a lessor is recognised in income on a straight-line basis over the lease term.
ii) Leasehold improvements
Leasehold improvements are recognised at cost and are amortised over the unexpired period of the lease or the estimated useful life of the improvement, whichever is the shorter. At balance date, leasehold improvements are amortised over a 15 to 30 year period.
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NOTE 32 RESERVES
BALANCE AT BEGINNING
OF REPORTING
YEAR
INCREMENT (DECREMENT) BALANCE AT END OF
REPORTING YEAR
$,000 $,000 $,000 $,000
(a) Asset revaluation reserve
2016
Property
Land 8,589 - - 8,589
Land under roads 10 - - 10
Buildings 11,487 - - 11,487
20,086 - - 20,086
Infrastructure
Roads 121,014 - - 121,014
Bridges 3,925 - - 3,925
Waste 642 - - 642
Stormwater 9,407 - - 9,407
134,988 - - 134,988
Council equity interest
Southern Waste Solutions 55 - - 55
55 - - 55
Total asset revaluation reserve 155,129 - - 155,129
2015
Property
Land 8,589 - - 8,589
Land under roads 10 - - 10
Buildings 208 11,279 - 11,487
8,807 11,279 - 20,086
Infrastructure
Roads 130,051 - (9,037) 121,014
Bridges 3,925 - - 3,925
Waste 642 - - 642
Stormwater 9,407 - - 9,407
144,025 - (9,037) 134,988
Council equity interest
Southern Waste Solutions 55 - - 55
55 - - 55
Total asset revaluation reserve 152,887 11,279 (9,037) 155,129
The asset revaluation reserve was established to capture the movements in asset valuations upon the periodic revaluation of Council's assets.
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NOTE 32 RESERVES (C0NT.)
BALANCE AT BEGINNING OF
REPORTING YEAR
INCREMENT (DECREMENT) BALANCE AT END OF
REPORTING YEAR
$,000 $,000 $,000 $,000
(b) Fair value reserve
2016
Available-for-sale assets
Investment in water corporation (5,158) 417 - (4,741)
Total fair value reserve (5,158) 417 - (4,741)
2015
Available-for-sale assets
Investment in water corporation (5,345) 187 - (5,158)
Total fair value reserve (5,345) 187 - (5,158)
The available for sale financial asset reserve was established to capture the fair value movements in Council's Water Corporation investment.
BALANCE AT BEGINNING OF REPORTING YEAR
TRANSFER FROM ACCUMULATED SURPLUS
TRANSFER TO ACCUMULATED SURPLUS
BALANCE AT END OF REPORTING YEAR
$,000 $,000 $,000 $,000
(c) Other reserves
2016
Plant replacement 5 - - 5
Childrens services 56 - - 56
Tracks and trails 23 - - 23
Stormwater Southern Beaches 900 - - 900
Land 66 - - 66
Total Other reserves 1,050 - - 1,050
2015
Plant replacement 5 - - 5
Childrens services 56 - - 56
Tracks and trails 23 - - 23
Stormwater Southern Beaches 900 - - 900
Land 66 - - 66
Total Other reserves 1,050 - - 1,050
Other reserves represent the appropriation of surplus to reserves for the near future council capital works projects.
2016 2015
$,000 $,000
Total Reserves 151,438 151,021
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NOTE 33 RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES TO SURPLUS (DEFICIT)
2016 2015
$,000 $,000
Result from continuing operations 12,624 5,826
Depreciation/amortisation 4,639 4,185
(Profit)/Loss on disposal of property, plant and equipment, infrastructure
768 3
(Gain)/Loss on interest on associate (81) (34)
Developer Contributions (2,099) -
Recognition of Land Under Roads (15,131)
De-recognition of Property and Infrastructure Assets 5,680
Capital grants received specifically for new or upgraded assets (1,362) (1,798)
Change in assets and liabilities:
Decrease/(increase) in trade and other receivables (108) (54)
Decrease/(increase) in other assets (19) 157
Decrease/(increase) in inventories (81) -
Increase/(decrease) in trade and other payables 190 (627)
Increase/(decrease) in provisions 117 77
Increase/(decrease) in other liabilities - -
Net cash provided by/(used in) operating activities 5,137 7,734
NOTE 34 RECONCILIATION OF CASH AND CASH EQUIVALENTS
Cash and cash equivalents (see note 21) 6,680 6,548
Total reconciliation of cash and cash equivalents 6,680 6,548
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NOTE 35: SUPERANNUATION
Council makes superannuation contributions for a number
of its employees to the Quadrant Defined Benefits Fund
(the Fund). The Fund was a sub fund of the Quadrant
Superannuation Scheme (the Scheme) up to 30 November
2015. At this date the Quadrant Superannuation Scheme
merged (via a Successor Fund Transfer) into the Tasplan Super
and the Quadrant Defined Benefits Fund became a sub fund
of Tasplan Super (Tasplan) from that date. The Quadrant
Defined Benefits Fund has been classified as a multi-employer
sponsored plan. As the Fund’s assets and liabilities are pooled
and are not allocated by employer, the Actuary is unable to
allocate benefit liabilities, assets and costs between employers.
As provided under paragraph 34 of AASB 119 Employee Benefits,
Council does not use defined benefit accounting for these
contributions.
For the year ended 30 June 2016 Council contributed 14.5% of
employees’ gross income to the Fund. Assets accumulate in
the fund to meet member benefits as they accrue, and if assets
within the fund are insufficient to satisfy benefits payable,
Council is required to meet its share of the deficiency.
Rice Warner Pty Ltd undertook the last actuarial review of the
Fund at 30 June 2014. The review disclosed that at that time
the net market value of assets available for funding member
benefits was $66,310,000, the value of vested benefits was
$57,475,000, the surplus over vested benefits was $8,835,000,
the value of total accrued benefits was $58,093,000, and the
number of members was 187. These amounts relate to all
members of the fund at the date of valuation and no asset or
liability is recorded in the Quadrant Superannuation Scheme’s
financial statements for Council employees.
The financial assumptions used to calculate the Accrued
Benefits for the Fund were:
Net Investment Return 7.0% p.a.
Salary Inflation 4.0%p.a.
Price Inflation n/a
The actuarial review concluded that:
The value of assets of the Fund was adequate to meet the
liabilities of the Fund in respect of vested benefits as at 30
June 2014.
The value of assets of the Fund was adequate to meet the
value of the liabilities of the Fund in respect of accrued
benefits as at 30 June 2014.
Based on the assumptions used, and assuming the
Employer contributes at the levels described below, the
value of the assets is expected to continue to be adequate
to meet the value of the liabilities of the Fund in respect
of vested benefits at all times during the period up to 30
June 2017.
The Actuary recommended that in future the Council
contribute 11.0% of salaries in 2014/15 and 9.5% of salaries
thereafter.
The Actuary will continue to undertake a brief review of the
financial position the Fund at the end of each financial year
to confirm that the contribution rates remain appropriate.
The next full triennial actuarial review of the Fund will have an
effective date of 30 June 2017 and is expected to be completed
late in 2017.
Council also contributes to other accumulation schemes on
behalf of a number of employees; however the Council has no
ongoing responsibility to make good any deficiencies that may
occur in those schemes.
During the year Council made the required superannuation
contributions for all eligible employees to an appropriate
complying superannuation fund as required by the
Superannuation Guarantee (Administration) Act 1992.
As required in terms of paragraph 148 of AASB 119 Employee
Benefits, Council discloses the following details:
The 2014 actuarial review used the “aggregate” funding
method. This is a standard actuarial funding method. The
results from this method were tested by projecting future
fund assets and liabilities for a range of future assumed
investment returns. The funding method used is different
from the method used at the previous actuarial review in
2011.
Under the aggregate funding method of financing the
benefits, the stability of Councils’ contributions over time
depends on how closely the Fund’s actual experience
matches the expected experience. If the actual experience
differs from that expected, Councils’ contribution rate
may need to be adjusted accordingly to ensure the Fund
remains on course towards financing members’ benefits.
In terms of Rule 27.4 of the Tasplan Trust Deed (Trust Deed),
there is a risk that employers within the Fund may incur an
additional liability when an Employer ceases to participate
in the Fund at a time when the assets of the Fund are
less than members’ vested benefits. Each member of the
Fund who is an employee of the Employer who is ceasing
to Participate is required to be provided with a benefit at
least equal to their vested benefit in terms of Rule 27.4
(b) (A). However there is no provision in the Trust Deed
requiring an employer to make contributions other than
its regular contributions up to the date of cessation of
contributions. This issue can be resolved by the Trustee
seeking an Actuarial Certificate in terms of Rule 26.5
identifying a deficit and the Trustee determining in terms
of Rule 26.3(c) that the particular employer should make
the payment required to make good any shortfall before
the cessation of participation is approved.
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NOTE 35: SUPERANNUATION (CONT.)
The application of Fund assets on Tasplan being wound-
up is set out in Rule 41.4. This Rule provides that expenses
and taxation liabilities should have first call on the
available assets. Additional assets will initially be applied
for the benefit of the then remaining members and/
or their Dependants in such manner as the Trustee
considers equitable and appropriate in accordance with
the Applicable Requirements (broadly, superannuation and
taxation legislative requirements and other requirements
as determined by the regulators).
The Trust Deed does not contemplate the Fund
withdrawing from Tasplan. However it is likely that Rule 27.4
would be applied in this case (as detailed above).
The Fund is a defined benefit Fund.
The Quadrant Defined Benefits Fund has been classified
as a multi-employer sponsored plan. As the Fund’s
assets and liabilities are pooled and are not allocated
by employer, the Actuary is unable to allocate benefit
liabilities, assets and costs between employers. Thus the
Fund is not able to prepare standard AASB119 defined
benefit reporting.
During the reporting period the amount of contributions
paid to defined benefits schemes was $37k (2014-15, $43k),
and the amount paid to accumulation schemes was $529k
(2014-15, $500k).
During the next reporting period the expected amount
of contributions to be paid to defined benefits schemes
is $40k , and the amount to be paid to accumulation
schemes is $550k .
As reported on the first page of this note, Assets exceeded
accrued benefits as at the date of the last actuarial review,
30 June 2014. Moderate investment returns, since that
date, make it quite probable that this is still the position.
The financial position of the Fund will be fully investigated
at the actuarial review as at 30 June 2017.
An analysis of the assets and vested benefits of Funds
participating in the Scheme, prepared by Rice Warner Pty
Ltd as at 30 June 2014, showed that the Fund had assets
of $66.3 million and members’ Vested Benefits were
$57.5 million. These amounts represented 8.4% and 7.5%
respectively of the corresponding total amounts for the
Scheme.
As at 30 June 2015 the fund had 164 members and the total
employer contributions and member contributions for the
year ending 30 June 2015 were $2,083,883 and $325,833
respectively.
2016$'000
2015$'000
Fund
Defined benefits fund
Employer contributions to Quadrant Defined Benefits Fund
37 43
37 43
Accumulation funds
Employer contributions to Quadrant Defined Benefits Fund
37 43
Employer contributions to other funds 529 457
566 500
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2016 2015
$,000 $,000
NOTE 36 COMMITMENTS
Capital Expenditure Commitments
Buildings 136 580
Roads 73 34
Total Capital expenditure commitments 209 614
Contractual commitments
Contractual commitments at end of financial year but not recognised in the financial report are as follows:
Garbage & recycling collection contract 943 114
Green Waste and hard waste contract 105 -
Recycling centre management 100 -
Cleaning contract 129 -
Total contractual commitments 1,277 114
NOTE 37 OPERATING LEASES
(a) Operating lease commitments
Sorell Council as lesseeAt the reporting date, Council had the following obligations under non-cancellable operating leases for the lease of equipment and land and buildings for use within Council's activities (these obligations are not recognised as liabilities):
Not later than one year 7 -
Later than one year and not later than five years 23 -
Later than five years - -
30 -
(b) Operating lease receivables
Sorell Council as lessorCommunity amenities, recreational facilities, land below communication facilities and walkwaysFuture minimum rentals receivable under non-cancellable operating leases are as follows:
Not later than one year 15 15
Later than one year and not later than five years 20 20
Later than five years - -
35 35
NOTE 38 CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent liabilities
Council is presently involved in several confidential legal matters, which are being conducted through Council's solicitors.
As these matters are yet to be finalised, and the financial outcomes are unable to be reliably estimated, no allowance for these contingencies has been made in the financial report.
Contingent assets
Council will receive developer contributions for estates currently under development, however the amount cannot be determined as it will be based upon the Government Valuation of the completed development.
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NOTE 39 FINANCIAL INSTRUMENTS
(a) Accounting Policy, terms and conditions
RECOGNISED FINANCIAL INSTRUMENTS
NOTE ACCOUNTING POLICY TERMS AND CONDITIONS
Financial assets
Cash and cash equivalents 21 Cash on hand and at bank and money market call accounts are valued at face value.
On call deposits returned a floating interest rate of 1.33% (1.97% in 2014-15). The interest rate at balance date was 1.03% (1.97%).
Interest is recognised as it accrues. Funds returned fixed interest rate of between 2.15% (2.7%), and 3.09% (3.1% ) net of fees.
Investments and bills are valued at cost.
Investments are held to maximise interest returns of surplus cash.
Interest revenues are recognised as they accrue.
Managed funds are measured at market value.
Trade and other receivables
Other debtors 22 Receivables are carried at amortised cost using the effective interest method. A provision for impairment is recognised when there is objective evidence that an impairment loss has occurred. Collectability of overdue accounts is assessed on an ongoing basis.
General debtors are unsecured and arrears attract an interest rate of 3.0% (3.0%). Credit terms are based on 30 days.
Financial Liabilities
Trade and other payables 28 Liabilities are recognised for amounts to be paid in the future for goods and services provided to Council as at balance date whether or not invoices have been received.
General Creditors are unsecured, not subject to interest charges and are normally settled within 30 days of invoice receipt.
Interest-bearing loans and borrowings
31 Loans are carried at their principal amounts, which represent the present value of future cash flows associated with servicing the debt. Interest is accrued over the period it becomes due and recognised as part of payables.
Borrowings are secured by way of mortgages over the general rates of the Council. The weighted average interest rate on borrowings is 6.17% (6.25% in 2014-15).
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NOTE 39 FINANCIAL INSTRUMENTS (CONT.)
(b) Interest Rate Risk
The exposure to interest rate risk and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised, at balance date are as follows:
FIXED INTEREST MATURING IN:
WEIGHTED AVERAGE INTEREST
RATE
FLOATING INTEREST
RATE1 YEAR OR
LESSOVER 1 TO 5
YEARSMORE THAN
5 YEARS
NON-INTEREST BEARING TOTAL
2016 $,000 $,000 $,000 $,000 $,000 $,000
Financial assets
Cash and cash equivalents 2.08% 6,680 - - - - 6,680
Trade and other receivables 0.00% - - - - 1,648 1,648
Midway Point Improvement loan receivable
9.765% - - - 46 - 46
Investment in water corporation - - - - 24,566 24,566
Total financial assets 6,680 - - 46 26,214 32,940
Financial liabilities
Trade and other payables - - - - 888 888
Trust funds and deposits - - - - 465 465
Interest-bearing loans and borrowings
6.17% - 163 776 1,666 - 2,605
Total financial liabilities - 163 776 1,666 1,353 3,958
Net financial assets (liabilities) 6,680 (163) (776) (1,620) 24,861 28,982
2015
Financial assets
Cash and cash equivalents 1.97% 6,548 - - - - 6,548
Trade and other receivables 0.00% - - - - 790 790
Midway Point Improvement loan receivable
9.765% - - - 58 - 59
Investment in water corporation - - - - 24,149 24,149
Total financial assets 6,548 - - 58 24,939 31,545
Financial liabilities
Trade and other payables - - - - 836 836
Trust funds and deposits - - - - 579 579
Interest-bearing loans and borrowings
6.27% - 271 725 1,880 - 2,876
Total financial liabilities - 271 725 1,880 1,415 4,291
Net financial assets (liabilities) 6,548 (271) (725) (1,822) 23,524 27,254
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NOTE 39 FINANCIAL INSTRUMENTS (CONT.)
(c) Fair ValueThe aggregate net fair values of financial assets and financial liabilities, both recognised and unrecognised, at balance date are as follows:
FINANCIAL INSTRUMENTSTOTAL CARRYING AMOUNT AS
PER BALANCE SHEET AGGREGATE NET FAIR VALUE
2016 2015 2016 2015
$,000 $,000 $,000 $,000
Financial assets
Cash and cash equivalents 6,680 6,548 6,680 6,548
Trade and other receivables 1,721 848 1,721 848
Investment in water corporation 24,566 24,149 24,566 24,149
Total financial assets 32,967 31,545 32,967 31,545
Financial liabilities
Trade and other payables 888 836 888 836
Trust funds and deposits 465 579 465 579
Interest-bearing loans and borrowings 2,605 2,876 2,605 2,876
Total financial liabilities 3,958 4,291 3,958 4,291
(d) Credit RiskThe maximum exposure to credit risk at balance date in relation to each class of recognised financial asset is represented by the carrying amount of those assets as indicated in the Statement of Financial Position.
(e) Risks and mitigation
The risks associated with our main financial instruments and our policies for minimising these risks are detailed below.
Market risk
Market risk is the risk that the fair value or future cash flows of our financial instruments will fluctuate because of changes in market prices. Council's exposures to market risk are primarily through interest rate risk with only insignificant exposure to other price risks and no exposure to foreign currency risk. Components of market risk to which we are exposed are discussed below.
Interest rate risk
Interest rate risk refers to the risk that the value of a financial instrument or cash flows associated with the instrument will fluctuate due to changes in market interest rates. Interest rate risk arises from interest bearing financial assets and liabilities that we use. Non derivative interest bearing assets are predominantly short term liquid assets. Our interest rate liability risk arises primarily from long term loans and borrowings at fixed rates which exposes us to fair value interest rate risk.
Our loan borrowings are sourced from major Australian banks by a tender process. Finance leases are sourced from major Australian financial institutions. Overdrafts are arranged with major Australian banks. We manage interest rate risk on our net debt portfolio by:
- ensuring access to diverse sources of funding;
- reducing risks of refinancing by managing in accordance with target maturity profiles; and
- setting prudential limits on interest repayments as a percentage of rate revenue.
Investment of surplus funds is made with approved financial institutions under the Local Government Act 1993. We manage interest rate risk by adopting an investment policy that ensures:
• conformity with State and Federal regulations and standards,
• capital protection,
• appropriate liquidity,
• diversification by credit rating, financial institution and investment product,
• monitoring of return on investment,
• benchmarking of returns and comparison with budget.
Maturity will be staggered to provide for interest rate variations and to minimise interest rate risk.
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NOTE 39 FINANCIAL INSTRUMENTS (CONT.)
Credit risk
The maximum exposure to credit risk at balance date in relation to each class of recognised financial asset is represented by the carrying amount of those assets as indicated in the Statement of Financial Position. To help manage this risk:
• we have a policy for establishing credit limits for the entities we deal with;
• we may require collateral where appropriate; and
• we only invest surplus funds with financial institutions which have a recognised credit rating specified in our
Investment policy.
Credit risk arises from Council's financial assets, which comprise cash and cash equivalents, and trade and other receivables. Council's exposure to credit risk arises from potential default of the counterparty, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed in each applicable policy note. Council generally trades with recognised, creditworthy third parties, and as such collateral is generally not requested, nor is it Council's policy to securitise its trade and other receivables. It is Council's policy that some customers who wish to trade on credit terms are subject to credit verification procedures including an assessment of their credit rating, financial position, past experience and industry reputation. In addition, receivable balance are monitored on an ongoing basis with the result that Council's exposure to bad debts is not significant.
Council may also be subject to credit risk for transactions which are not included in the Statement of Financial Position, such as when Council provides a guarantee for another party. Details of our contingent liabilities are disclosed in note 38.
Credit quality of contractual financial assets that are neither past due nor impaired
FINANCIAL INSTITUTIONS
GOVERNMENT AGENCIES OTHER TOTAL
2016 (AAA CREDIT RATING)
(BBBB CREDIT RATING)
(MIN BBB CREDIT
RATING)
Cash and cash equivalents 6,680 - - 6,680
Trade and other receivables - - - -
Investments and other financial assets - - - -
Total contractual financial assets 6,680 - - 6,680
2015
Cash and cash equivalents 6,548 - - 6,548
Trade and other receivables - - - -
Investments and other financial assets - - - -
Total contractual financial assets 6,548 - - 6,548
Ageing of Trade and Other Receivables
At balance date other debtors representing financial assets were past due but not impaired. These amounts relate to a number of independent customers for whom there is no recent history of default. The ageing of the Council's Trade and Other Receivables was:
2016 2015
$,000 $,000
Rates, secured on property 222 151
Current (not yet due) 1,003 154
Past due by up to 30 days 54 318
Past due between 31 and 180 days 38 20
Past due between 181 and 365 days 326 19
Past due by more than 1 year 78 186
Total Trade & Other Receivables 1,721 848
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NOTE 39 FINANCIAL INSTRUMENTS (CONT.)
Liquidity risk
Liquidity risk includes the risk that, as a result of our operational liquidity requirements:
• we will not have sufficient funds to settle a transaction on the date;
• we will be forced to sell financial assets at a value which is less than what they are worth; or
• we may be unable to settle or recover a financial assets at all.
To help reduce these risks we:
• have a liquidity policy which targets a minimum and average level of cash and cash equivalents to be
maintained;
• have readily accessible standby facilities and other funding arrangements in place;
• have a liquidity portfolio structure that requires surplus funds to be invested within various bands of liquid
instruments;
• monitor budget to actual performance on a regular basis; and
• set limits on borrowings relating to the percentage of loans to rate revenue and percentage of loan principal
repayments to rate revenue.
The Council's exposure to liquidity risk is deemed insignificant based on prior periods' data and current assessment of risk.
The table below lists the contractual maturities for Financial Liabilities.These amounts represent the discounted cash flow payments (ie principal only).
6 MTHSOR LESS
6-12MONTHS
1-2YEARS
2-5YEARS
>5YEARS
CONTRACTEDCASH FLOW
CARRYINGAMOUNT
$,000 $,000 $,000 $,000 $,000 $,000 $,000
2016
Trade and other payables 888 - - - - 888 888
Trust funds and deposits - 465 - - - 465 465
Interest-bearing loans and borrowings
75 79 154 502 1,566 2,314 2,604
Total financial liabilities 963 544 154 502 1,566 3,729 3,957
2015
Trade and other payables 836 - - - - 836 836
Trust funds and deposits - 579 - - - 579 579
Interest-bearing loans and borrowings
133 122 303 331 1,716 2,552 2,876
Total financial liabilities 969 701 303 331 1,716 3,967 4,291
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NOTE 39 FINANCIAL INSTRUMENTS (CONT.)
(f) Sensitivity disclosure analysis
Taking into account past performance, future expectations, economic forecasts, and management's knowledge and experience of the financial markets, the Council believes the following movements are 'reasonably possible' over the next 12 months (Base rates are sourced from Reserve Bank of Australia):
• A parallel shift of + 1% and -2% in market interest rates (AUD) from year-end rates of 4.4%.
The table below discloses the impact on net operating result and equity for each category of financial instruments held by Council at year-end, if the above movements were to occur.
INTEREST RATE RISK
-2 % -200 BASIS POINTS
+1%+100 BASIS POINTS
PROFIT EQUITY PROFIT EQUITY
$,000 $,000 $,000 $,000 $,000
2016
Financial assets:
Cash and cash equivalents
6,680 (134) 134 67 (67)
Financial liabilities:
Interest-bearing loans and borrowings 2,605 (52) 52 26 (26)
INTEREST RATE RISK
-2 % -200 BASIS POINTS
+1%+100 BASIS POINTS
PROFIT EQUITY PROFIT EQUITY
$,000 $,000 $,000 $,000 $,000
2015
Financial assets:
Cash and cash equivalents
6,548 (131) 131 65 (65)
Financial liabilities:
Interest-bearing loans and borrowings 2,876 (58) 58 29 (29)
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NOTE 40 EVENTS OCCURING AFTER BALANCE DATE
(a) No significant events affecting these accounts occured after balance date
NOTE 41 RELATED PARTY TRANSACTIONS
(i) Responsible Persons
Names of persons holding the position of a Responsible Person at the Council at any time during the year are:
Councillors Councillor Kerry Vincent (Mayor 2012 to current)
Councillor Brett McDonald (Deputy Mayor 2011 to current)
Councillor Lyndsay White (Councillor 2011 to current)
Councillor Graham Evans (Councillor 1999 to current)
Councillor Kerry Degrassi (Councillor 1996 to current)
Councillor Deborah De Williams (Councillor 2014 to current)
Councillor Vlad Gala (Councillor 2014 to current)
Councillor Natham Reynolds (Councillor 2014 to current)
Councillor Carmel Torenius (Councillor 2014 to current)
General Manager Robert Higgins (September 2013 to current)
Manager Human and Community Services Jessica Radford (August 2013 to current)
Manager Engineering and Regulatory Services
Russell Fox (April 2014 to current)
Manager Finance and Information Tina House (March 2015 to current)
2016 2015
$,000 $,000
Total Remuneration for the reporting year for Councillors' Emoluments and reimbursements included above amounted to:
182 175
Total Remuneration for the reporting year for key management personnel included above included Salary and Wages, Superannuation and Car Benefits.
368 434
(v) In accordance with s84(2)(b) of the Local Goverment Act 1993, no interests have been notified to the General Manager in respect of any body or organisation with which the Council has major financial dealings.
NOTE 42 SPECIAL COMMITTEES AND OTHER ACTIVITIES
Council has the following Special Committees:
Copping Hall and Reserves Committee
Dunalley Hall and Reserves Committee
Midway Point Hall Committee
Primrose Sands Hall Committee
The above Special Committees financial transactions were included with Councils and resulted in Consolidated Financial Statements being prepared for the year ended 30 June 2016.
NOTE 43 SIGNIFICANT BUSINESS ACTIVITIES
Council has assessed the Significant Business Activities regulations and found there to be no activities that meet the regulations.
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NOTE 44 MANAGEMENT INDICATORS
BENCHMARK 2016 2015 2014 2013
$,000 $,000 $,000 $,000
(a) Underlying surplus or deficit
Recurrent income* less 17,588 17,434 17,484 16,728
Recurrent expenditure 16,812 14,551 15,177 15,700
Underlying surplus/deficit 0 776 2,883 2,307 1,028
* Recurrent income excludes income received specifically for new or upgraded assets, physical resources received free of charge or other income of a capital nature.
Positive surpluses continue.
(b) Underlying surplus ratio
Underlying surplus or deficit 776 2,883 2,307 1,028
Recurrent income* 17,588 17,434 17,484 16,728
Underlying surplus ratio % 0% 4% 17% 13% 6%
This ratio serves as an overall measure of financial operating effectiveness.
Council maintains results above benchmark.
(c) Net financial liabilities
Liquid assets less 8,336 7,345 4,919 9,161
Total liabilities 5,032 5,298 5,860 7,138
Net financial liabilities 0 3,304 2,047 (941) 2,023
This measure shows whether Council's total liabilities can be met by its liquid assets. An excess of total liabilities over liquid assets means that, if all liabilities fell due at once, additional revenue would be needed to fund the shortfall.During 2013/14 Council completed the new Administration Centre with payments reducing the cash position. Since this time Council has maintained positive cash surpluses.
(d) Net financial liabilities ratio
Net financial liabilities 3,304 2,048 (941) 2,023
Recurrent income* 17,588 17,434 17,484 16,728
Net financial liabilities ratio % 0% - (50%) 19% 12% -5% 12%
This ratio indicates the net financial obligations of Council compared to its recurrent income.
Liquid assets have continued to increase during the 2015/16 financial year, recovering after expenditure and borrowings incurred for the construction of the Council Administration Centre during 2013/14.
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NOTE 44 MANAGEMENT INDICATORS (CONT.)
BENCHMARK 2016 2015 2014 2013
$,000 $,000 $,000 $,000
(e) Asset consumption ratio
An asset consumption ratio has been calculated in relation to each asset class required to be included in the long-term strategic asset management plan of Council.
Transport Infrastructure
Depreciated replacement cost 132,208 134,057 143,190 139,000
Current replacement cost 216,745 220,259 179,650 172,446
Asset consumption ratio % 40%-60% 61% 61% 80% 81%
Buildings
Depreciated replacement cost 19,918 21,089 9,051 4,103
Current replacement cost 23,313 24,042 11,257 6,115
Asset consumption ratio % 40%-60% 85% 88% 80% 67%
Drainage
Depreciated replacement cost 16,680 16,455 16,640 15,434
Current replacement cost 27,093 26,609 26,538 24,858
Asset consumption ratio % 40%-60% 62% 62% 63% 62%
This ratio indicates the level of service potential available in Council's existing asset base.Council has well maintained assets that meet the benchmark.
(f) Asset renewal funding ratio
An asset renewal funding ratio has been calculated in relation to each asset class required to be included in the long-term strategic asset management plan of Council.
Transport Infrastructure
Projected capital funding outlays** 31,500 35,000 35,675 N/A
Projected capital expenditure funding*** 29,748 29,957 31,167 N/A
Asset renewal funding ratio % 90-100% 106% 117% 114% N/A
Buildings
Projected capital funding outlays** 850 900 2,269 N/A
Projected capital expenditure funding*** 648 424 1,196 N/A
Asset renewal funding ratio % 90-100% 131% 212% 190% N/A
Drainage
Projected capital funding outlays** 395 0 563 N/A
Projected capital expenditure funding*** 260 259 289 N/A
Asset renewal funding ratio % 90-100% 152% 0% 195% N/A
** Current value of projected capital funding outlays for an asset identified in Council's long-term financial plan.
*** Value of projected capital expenditure funding for an asset identified in Council's long-term strategic asset management plan.
This ratio measures Council's capacity to fund future asset replacement requirements.
Council has had Asset Management and Long Term Financial Plans in place since June 2014. The funding requirements for all categories of assets are reviewed on an annual basis.
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NOTE 44 MANAGEMENT INDICATORS (CONT.)
BENCHMARK 2016 2015 2014 2013
$,000 $,000 $,000 $,000
(g) Asset sustainability ratio
Capex on replacement/renewal of existing assets 2,337 3,220 4,229 4,318
Annual depreciation expense 4,639 4,185 3,924 3,891
Asset sustainability ratio % 100% 50% 77% 108% 111%
This ratio calculates the extent to which Council is maintaining operating capacity through renewal of their existing asset base.
Council invested significant expenditure in prior years (including the construction of the Administration Centre, which has resulted in the annual depreciation expense increasing above the amount expended on replacement / renewal of existing assets, resulting in this ratio not meeting benchmark for the financial year. Over a five year rolling period Council is forecasting to maintain an average in line with the benchmark.
CAPITAL RENEWAL
EXPENDITURE
CAPITAL NEW /UPGRADE
EXPENDITURE
TOTAL CAPITAL EXPENDITURE
$,000 $,000 $,000
2016
By asset class
Transport 1,392 1,827 3,219
Stormwater - 438 438
Land & Buildings 452 1,157 1,609
Other 493 467 960
Total 2,337 3,889 6,226
CAPITAL RENEWAL
EXPENDITURE
CAPITAL NEW /UPGRADE
EXPENDITURE
TOTAL CAPITAL EXPENDITURE
$,000 $,000 $,000
2015
By asset class
Transport 1,397 1,507 2,904
Stormwater - - -
Land & Buildings 361 2,345 2,706
Other 1,462 289 1,751
Total 3,220 4,141 7,361
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NOTE 45 FAIR VALUE MEASUREMENTS
Council measures and recognises the following assets at fair value on a recurring basis:Investment propertyInvestment in water corporationProperty, infrastructure plant and equipment
• Land
• Buildings, including footpaths & cycleways
• Roads
• Bridges
• Other infrastructure
Council does not measure any liabilities at fair value on a recurring basis.
(a) Fair Value HierarchyAASB 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 Unobservable inputs for the asset or liability.
The table below shows the assigned level for each asset and liability held at fair value by the Council. The table presents the Council’s assets and liabilities measured and recognised at fair value at 30 June 2016.
The fair values of the assets are determined using valuation techniques which maximise the use of observable data, where it is available, and minimise the use of entity specific estimates. If one or more of the significant inputs is not based on observable market data, the asset is included in level 3. This is the case for Council infrastructure assets, which are of a specialist nature for which there is no active market for similar or identical assets. These assets are valued using a combination of observable and unobservable inputs.
As at 30 June 2016
NOTE LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Recurring fair value measurements $,000 $,000 $,000 $,000
Investment property 26 - - 297 297
Investment in water corporation 20 - - 24,566 24,566
Land 25 - - 30,437 30,437
Buildings 25 - - 22,603 22,603
Roads, including footpaths & cycleways 25 - - 197,531 197,531
Bridges 25 - - 12,509 12,509
Drainage 25 - - 26,539 26,539
Other Infrastructure 25 - - 1,987 1,987
- - 316,469 316,469
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(b) Highest and best use
All assets valued at fair value in this note are being used for their
highest and best use.
(c) Valuation techniques and significant inputs used to derive fair
values
Level 2 Measurements (recurring and non-recurring) - assets in this
category have been valued by independent external valuation in
June 2011.
Level 3 Measurements (recurring and non-recurring) - same as
Level 2 above.
Investment property and Investment in water corporation
Refer to Notes 26 and 20 respectively for details of valuation
techniques used to derive fair values.
Land
Land fair values were determined from the Valuer General’s
valuation of the 1 July 2010 and with an adjustment factor set
for periods between revaluations, as determined by the Valuer
General. There was no adjustment for 2015/16.
Land under roads
Land under roads is based on Council valuations at 30 June
2016 using site values adjusted for englobo (undeveloped and/
or unserviced) characteristics, access rights, private interests
of other parties and entitlements of infrastructure assets
and services. This adjustment is an unobservable input in the
valuation.
Buildings
The fair value of buildings were also determined by a qualified
independent valuer Assetic Pty Ltd effective 30 June 2015. Where
there is a market for Council building assets, fair value has been
derived from the sales prices of comparable properties after
adjusting for differences in key attributes such as property size.
The most significant input into this valuation approach was price
per square metre.
In determining the level of accumulated depreciation the asset
has been disaggregated into significant components which
exhibit useful lives. Allowance has been made for the typical asset
life cycle and renewal treatments of each component, residual
value at the time the asset is considered to be no longer available
for use.
While the unit rates based on square metres can be supported
by market evidence (level 2), the estimates of residual value and
useful life that are used to calculate accumulated depreciation
comprise unobservable inputs (level 3). Where these other inputs
are significant to the valuation the overall valuation has been
classified as level 3. The table at (d) below summarises the effect
that changes in the most significant unobservable inputs would
have on the valuation.
NOTE 45 FAIR VALUE MEASUREMENTS (CONT.)
As at 30 June 2015
NOTE LEVEL 1 LEVEL 2 LEVEL 3 TOTAL
Recurring fair value measurements $,000 $,000 $,000 $,000
Investment property 26 - 830 297 1,127
Investment in water corporation 20 - - 24,149 24,149
Land 25 - - 15,375 15,375
Buildings 25 - - 23,813 23,813
Roads, including footpaths & cycleways 25 - - 206,019 206,019
Bridges 25 - - 12,509 12,509
Drainage 25 - - 26,539 26,539
Other Infrastructure 25 - - 1,987 1,987
- 830 310,688 311,518
Transfers between levels of the hierarchyThere were no transfers between levels 1 and 2 during the year, nor between levels 2 and 3.
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NOTE 45: FAIR VALUE MEASUREMENTS (CONT.)
Infrastructure assets
All Council infrastructure assets were fair valued using written
down current replacement cost. This valuation comprises
the asset’s current replacement cost (CRC) less accumulated
depreciation calculated on the basis of such cost to reflect the
already consumed or expired future economic benefits of the
asset. Council first determined the gross cost of replacing the full
service potential of the asset and then adjusted this amount to
take account of the expired service potential of the asset.
CRC was measured by reference to the lowest cost at which
the gross future economic benefits of the asset could currently
be obtained in the normal course of business. The resulting
valuation reflects the cost of replacing the existing economic
benefits based on an efficient set of modern equivalent assets to
achieve the required level of service output.
The unit rates (labour and materials) and quantities applied
to determine the CRC of an asset or asset component were
based on a “Greenfield” assumption meaning that the CRC was
determined as the full cost of replacement with a new asset
including components that may not need to be replaced, such as
earthworks.
The level of accumulated depreciation for infrastructure assets
was determined based on the age of the asset and the useful life
adopted by Council for the asset type. Estimated useful lives and
residual values are disclosed in Note 16.
The methods for calculating CRC are described under individual
asset categories below.
Roads, including footpaths & cycleways
Council categorises its road infrastructure into urban and rural
roads and then further sub-categorises these into sealed and
unsealed roads. Urban roads are managed in segments based
on defined boundaries such as intersections with other roads.
All road segments are then componentised into formation,
pavement, sub-pavement and seal (where applicable). Council
assumes that environmental factors such as soil type, climate
and topography are consistent across each segment. Council
also assumes a segment is designed and constructed to the
same standard and uses a consistent amount of labour and
materials.
CRC is based on the road area multiplied by a unit price; the
unit price being an estimate of labour and material inputs,
services costs, and overhead allocations. Council assumes
that pavements are constructed to depths of 3.5 cms for high
traffic areas and 3 cms for lower traffic locations. For internal
construction estimates, material and services prices are based
on existing supplier contract rates or supplier price lists and
labour wage rates are based on Council’s Enterprise Bargaining
Agreement (EBA). Where construction is outsourced, CRC is
based on the average of completed similar projects over the last
few years.
Bridges
A full valuation of bridges assets was undertaken by independent
valuers, Tasspan effective 30 June 2014. Each bridge is assessed
individually and componentised into sub-assets representing the
deck and sub-structure.The valuation is based on the material
type used for construction and the deck and sub-structure area.
Construction estimates for material and services prices are
based on movements in bridge construction costs as published
by the ABS, and labour wage rates are based on Council’s
Enterprise Bargaining Agreement (EBA).
Stormwater
A full valuation of stormwater infrastructure was undertaken
by Council, effective 30 June 2014. Similar to roads, stormwater
assets are managed in segments; pits and pipes being the major
components.
Consistent with roads, Council assumes that environmental
factors such as soil type, climate and topography are consistent
across each segment and that a segment is designed and
constructed to the same standard and uses a consistent amount
of labour and materials.
CRC is based on the unit price for the component type. For pipes,
the unit price is multiplied by the asset’s length. The unit price for pipes is based on the construction material as well as the depth the pipe is laid.
Other InfrastructureOther infrastructure is not deemed to be significant in terms of Council’s Statement of Financial Position.
(d) Changes in recurring level 3 fair value measurements
The changes in level 3 property plant and equipment assets with recurring fair value measurements are detailed in note 25 (Property, infrastructure, plant and equipment). Investment in water corporation, which is classified as level 3 has been separately disclosed in note 20 and Investments classified as Level 3 has been separately disclosed in Note 26.
There have been no transfers between level 1, 2 or 3
measurements during the year.
(e) Valuation processes
Council’s current policy for the valuation of property,
infrastructure, plant and equipment, investment in water
corporation and investment property (recurring fair value
measurements) is set out in notes 25, 20, and 26 respectively.
Non-recurring fair value measurements are made at the point of
reclassification by a registered valuer.
(f) Assets and liabilities not measured at fair value but for which
fair value is disclosed
Council has assets and liabilities which are not measured at fair
value, but for which fair values are disclosed in other notes. (refer
note 39)
Council borrowings are measured at amortised cost with interest
recognised in profit or loss when incurred. The fair value of
borrowings disclosed in note 39 is provided by Tascorp (level 2).
The carrying amounts of trade receivables and trade payables are
assumed to approximate their fair values due to their short-term
nature (Level 2).
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NOTE 48: OTHER SIGNIFICANT ACCOUNTING POLICIES
AND NEW ACCOUNTING STANDARDS
(a) Taxation
Council is exempt from all forms of taxation except Fringe
Benefits Tax, Payroll Tax and the Goods and Services Tax.
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the
amount of GST, except where the amount of GST incurred
is not recoverable from the Australian Tax Office. In these
circumstances the GST is recognised as part of the cost of
acquisition of the asset or as part of an item of the expense.
Receivables and payables in the balance sheet are shown
inclusive of GST.
Cash flows are presented in the Statement of Cash Flows on
a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
(b) Impairment of assets
At each reporting date, Council reviews the carrying value of
its assets to determine whether there is any indication that
these assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s
fair value less costs to sell and value in use, is compared to the
assets carrying value. Any excess of the assets carrying value
over its recoverable amount is expensed to the Statement of
Profit or Loss and Other Comprehensive Income, unless the asset
is carried at the revalued amount in which case, the impairment
loss is recognised directly against the revaluation reserve
in respect of the same class of asset to the extent that the
impairment loss does not exceed the amount in the revaluation
surplus for that same class of asset. For non-cash generating
assets of Council such as roads, drains, public buildings and the
like, value in use is represented by the deprival value of the asset
approximated by its written down replacement cost.
(c) Allocation between current and non-current
In the determination of whether an asset or liability is current
or non-current, consideration is given to the time when each
asset or liability is expected to be settled. The asset or liability is
classified as current if it is expected to be settled within the next
twelve months, being Council’s operational cycle, or if Council
does not have an unconditional right to defer settlement of a
liability for at least 12 months after the reporting date.
NOTE 46: MATERIAL BUDGET VARIATIONS
Council’s original budget was adopted by the Council on 17th
June 2015. The original projections on which the budget was
based have been affected by a number of factors. These include
State and Federal Government decisions including new grant
programs, changing economic activity, the weather, and by
decisions made by the Council. Material variations of more than
10% are explained below:
Revenues
1. Grants
Grant Revenue was up $159K on budget (10.8%) due mainly to a
very conservative estimate being made in the budget. Additional
grants for tthe Dunalley Skate Park ($65k)and for Child Care
Subsidies resulted in a result greater than budget expectations.
2. Cash Contributions
The increase of $91k budget (337%) was due to additional
ratepayer contributions being made towards infrastructure
installations.
3. Other
The increase of $714k (142%) was as a result of increased
Donations ($197k), Copping Tip Lease Fees ($63k) omitted from
the budget, increased external labour hire recoveries of $35k as
a result of services provided through the Joint Venture, increased
workers compensation claim reimbursements ($92k), distribution
from the administrators of Lehmann Brothers of $206k and
miscellaneous sundry revenue of $88k
4. Contributions - non monetary assets
As a result of detailed analysis of the transport infrastructure
network, additional assets have been identified and included
in Council’s database, resulting in a one-off non monetary
contribution increase that was not budgeted for.
Expenses
1. Depreciation and Amortisation
The increase on budget for this non cash expenditure is as a
result of the transition to the Assetic data services and the
revaluation of assets during the financial year, resulting in a
more detailed and accurate expectation of depreciation budget
requirements from 2016-17 onwards.
NOTE 47: INTERESTS IN OTHER ENTITIES
Interests in subsidiaries
Council does not have any interests in any other entities other
than those disclosed at Note 19 and Note 20.
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NOTE 48: OTHER SIGNIFICANT ACCOUNTING POLICIES
AND NEW ACCOUNTING STANDARDS (CONT.)
(d) Financial guarantees
Financial guarantee contracts are recognised as a liability at the
time the guarantee is issued. The liability is initially measured at
fair value, and if there is material increase in the likelihood that
the guarantee may have to be exercised, at the higher of the
amount determined in accordance with AASB 137 Provisions,
Contingent Liabilities and Contingent Assets and the amount
initially recognised less cumulative amortisation, where
appropriate. In the determination of fair value, consideration
is given to factors including the probability of default by the
guaranteed party and the likely loss to Council in the event of
default.
(e) Contingent assets, contingent liabilities and commitments
Contingent assets and contingent liabilities are not recognised
in the Statement of Financial Position, but are disclosed by way
of a note and, if quantifiable, are measured at nominal value.
Contingent assets and liabilities are presented inclusive of GST
receivable or payable respectively.
Commitments are not recognised in the Statement of Financial
Position. Commitments are disclosed at their nominal value
inclusive of the GST payable.
(f) Budget
The estimated revenue and expense amounts in the Statement
of Profit or Loss and Other Comprehensive Income represent
revised budget amounts and are not audited.
(g) Adoption of new and amended accounting standards
(i) AASB 2015-3 Amendments to Australian Accounting Standards
arising from the Withdrawal of AASB 1031 Materiality (effective
from 1 July 2015)
The completion of AASB project to remove Australian guidance
on materiality from Australian Accounting Standards with the
issue of the final amending standard to effect the withdrawal of
AASB 1031 Materiality. Guidance on materiality is now located in
AASB 101 Presentation of Financial Statements.
The adoption of this standard has not changed the reported
financial position and performance of Council.
(ii) AASB 2015-2 Amendments to Australian Accounting Standards
- Disclosure Initiative: Amendments to AASB 101 (effective from 1
January 2016)
The amendments do not require any significant change to
current practice, but should facilitate improved reporting,
including an emphasis on only including material disclosures,
clarity on the aggregation and disaggregation of line items,
the presentation and subtotals, the ordering of notes and the
identification of significant accounting policies.
The adoption of this standard has not changed the reported
financial position and performance of Council.
(iii) AASB 2015-7 Amendments to Australian Accounting Standards
- Fair Value Disclosures of Not-for-Profit Public Sector Entities
(effective from 1 July 2016)
The amendment provides relief to not-for-profit public
sector entities from certain disclosures about the fair value
measurement of property, plant and equipment held for their
current service potential rather than to generate net cash
inflows that is categorised within Level 3 of the fair value
hierarchy.
The adoption of this standard has reduced the level of disclosure
within the financial statements.
(h) Pending Accounting Standards
Certain new accounting standards and interpretations have been
published that are not mandatory for 30 June 2016 reporting
periods. Council’s assessment of the impact of the relevant new
standards and interpretations is set out below. (Note: standards
are applicable to reporting periods beginning on or after to
effective date referred to below).
(i) AASB 2014-3 Amendments to Australian Accounting Standards
- Accounting for Acquisitions of Interests in Joint Operations
(effective from 1 January 2016)
Under AASB 2014-3 business combination accounting is required
to be applied to acquisitions of interests in a joint operation
that meets the definition of a ‘business’ under AASB 3 Business
Combinations.
The adoption of this standard has not changed the reported
financial position and performance of Council.
(ii) AASB 2014-4 Amendments to Australian Accounting Standards
- Clarification of Acceptable Methods of Depreciation and
Amortisation (effective from 1 January 2016)
This amendment introduces a rebuttable presumption that
the use of revenue-based amortisation methods for intangible
assets is inappropriate. In addition to this, there is limited
opportunity for presumption to be overcome and clarifies that
revenue-based depreciation for property, plant and equipment
cannot be used.
The adoption of this standard has not changed the reported
financial position and performance of Council.
(iii) AASB 2014-9 Amendments to Australian Accounting Standards
- Equity method in Separate Financial Statements (effective from 1
January 2016)
Under this amendment, the use of the equity method in separate
financial statements in accounting for associates, joint ventures
and subsidiaries is allowed.
The adoption of this standard has not changed the reported
financial position and performance of Council.
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NOTE 48: OTHER SIGNIFICANT ACCOUNTING POLICIES
AND NEW ACCOUNTING STANDARDS (CONT.)
(iv) AASB 2015-1 Amendments to Australian Accounting Standards
- Annual Improvements to Australian Accounting Standards 2012-
2014 Cycle (effective from 1 January 2016)
Amendments to existing accounting standards, particularly in
relation to:
IFRS 5 - guidance on changes in method of disposal;
IFRS 7 - clarifies ‘continuing involvement for service contracts and
also clarifies offsetting disclosures are not specifically required in
interim financial statements, but may be included under general
requirements of IAS 34;
IAS 19 - clarifies that discount rates used should be in the same
currency as the benefits are to be paid; and
IAS 34 - clarifies that disclosures may be incorporated in the
interim financial statements by cross-reference to another part
of the interim financial report.
The adoption of this standard has not changed the reported
financial position and performance of Council.
(v) AASB 2015-6 Amendments to Australian Accounting Standards -
Extending Related Party Disclosures to Not-for-Profit Public Sector
Entities (effective from 1 July 2016)
The amendment extends the scope of AASB 124 Related Party
Disclosures to include not-for-profit public sector entities.
Council has not adopted this standard for the year ended 30th
June 2016. Council is reviewing the requirements of the standard
to ensure compliance for the next financial year.
(vi) AASB 1057 Application of Australian Accounting Standards,
AASB 2015-9 Amendments to Australian Accounting Standards -
Scope and Application Paragraphs (effective from 1 January 2016)
The AASB has reissued most of its Standards (and
Interpretations) that incorporate IFRSs to make editorial
changes. The editorial changes will enable the AASB to issue
Australian versions of IFRS more efficiently. As part of the
reissuance, the AASB has moved the application paragraphs
that identify the reporting entities and general purpose
financial statements to which the pronouncements apply to a
new Standard, AASB 1057 Application of Australian Accounting
Standards. However, the technical application requirements have
not been amended.
The adoption of this standard has not changed the reported
financial position and performance of Council.
(viii) AASB 9 Financial Instruments and the relevant amending
standards (effective from 1 January 2018)
AASB 9 is one of a series of amendments that are expected
to replace AASB 139 Financial Instruments: Recognition and
Measurement. The main impact of the standard is to change the
requirements for the classification, measurement and disclosures
associated with financial assets. Under the new requirements
the four categories of financial assets in AASB 139 will be replaced
with two measurement categories: fair value and amortised cost.
Amortised cost is to be used for assets with contractual terms
giving rise to principal and interest payments.
Fair value is to be used for all other financial assets. Gains or
losses on financial assets at fair value are to be recognised in
profit and loss unless the asset is part of a hedging relationship
or an irrevocable election has been made to present in other
comprehensive income changes in the fair value of an equity
instrument not held for trading .
When adopted, the standard will affect, in particular, Council’s
accounting for its available-for-sale financial assets. Currently,
Council recognises changes in the fair value of its available-for-
sale assets through other comprehensive income. Under AASB 9
fair value gains and losses on available-for-sale assets will have to
be recognised directly in profit or loss.
However, investments in equity instruments can be designated
as ‘fair value through other comprehensive income’ assets.
This designation is irrevocable. Council is likely to designate
its investment in TasWater as ‘fair value through other
comprehensive income’ and therefore the adoption of this
standard will not impact the way movements in the fair value are
accounted for.
There will be no impact on Council’s accounting for financial
liabilities, as the new requirements only affect the accounting
for financial liabilities that are designated at fair value through
profit or loss and Council does not have any such liabilities.
The derecognition rules have been transferred from AASB 139
Financial Instruments: Recognition and Measurement and have not
been changed.
(ix) AASB 15 Revenue from Contracts with Customers, and AASB
2014-5 Amendments to Australian Accounting Standards arising
from AASB 15 (effective from 1 January 2018)
Under the new standard, a single model that applies to contracts
with customers and two approaches to recognising revenue, at
a point in time or over time is proposed. The model features a
contract-based five-step analysis of transactions to determine
whether, how much and when revenue is recognised.
The new standard will apply to contracts of not-for-profit entities
that are exchange contracts. AASB 1004 Contributions will
continue to apply to non-exchange transactions until the Income
from Transactions of Not-for-Profit Entities project is completed.
The adoption of this standard has not changed the reported
financial position and performance of Council.
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79S O R E L L C O U N C I L
NOTE 48: OTHER SIGNIFICANT ACCOUNTING POLICIES
AND NEW ACCOUNTING STANDARDS (CONT.)
(x) AASB 2014-10 Amendments to Australian Accounting Standards
- Sale or Contribution of Assets between an Investor and its
Associate or Joint Venture, AASB 2015-9 Amendments to Australian
Accounting Standards - Effective Date of Amendments to AASB10
and AASB 128 (effective 1 January 2018)
AASB 2014-10 amendments require the full gain or loss to be
recognised when the assets transferred meet the definition of a
‘business’ under AASB 3 Business Combinations(whether housed
in a subsidiary or not).
AASB 2015-10: the IASB postponed the effective date of this
amendment indefinitely pending the outcome of its research
project on the equity method of accounting. Deferring the
effective date indefinitely in the Australian jurisdiction may
have unintended legal consequences given AASBs are legislative
instruments. Accordingly, the AASB has deferred the effective
date of the amendments to 1 January 2018.
The adoption of this standard has not changed the reported
financial position and performance of Council.
(xii) Disclosure Initiative - Amendments to AASB 107 (effective from
1 January 2017)
Amendments to AASB 107 will see the introduction of additional
disclosures to evaluate changes in liabilities arising from
financing activities, including both changes arising from cash
flows and non-cash changes (such as effects of changes in
foreign exchange rates and changes in fair values).
The adoption of this standard has not changed the reported
financial position and performance of Council.
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The financial report presents fairly the financial position of the Sorell Council as at 30 June 2016, the results of its operations for the year then ended and the cash flows of the Council, in accordance with the Local Government Act 1993 (as amended), Australian Accounting Standards (including interpretations) and other authoritative pronouncements issued by the Australian Accounting Standards Board.
Robert Higgins General Manager
Dated 19 September 2016
Certification of the Financial Report
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81S O R E L L C O U N C I L
Audit Opinion
…1 of 2
Independent Auditor’s Report To the Councillors of Sorell Council Financial Report for the Year Ended 30 June 2016 Report on the Financial Report I have audited the accompanying financial report (the financial report) of Sorell Council (Council), which comprises the statement of financial position as at 30 June 2016 and the statements of comprehensive income, changes in equity and cash flows for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the General Manager’s statement. Auditor’s Opinion In my opinion Council’s financial report:
(a) presents fairly, in all material respects, its financial position as at 30 June 2016 and financial performance, cash flows and changes in equity for the year then ended
(b) is in accordance with the Local Government Act 1993 and Australian Accounting Standards. The Responsibility of the General Manager for the Financial Report The General Manager is responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards and Section 84 of the Local Government Act 1993. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. Auditor’s Responsibility My responsibility is to express an opinion on the financial report based upon my audit. My audit was conducted in accordance with Australian Auditing Standards. These Auditing Standards require that I comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance as to whether the financial report is free of material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on my judgement, including the assessment of risks of material misstatement of the financial report, whether due to fraud or error. In making those
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…2 of 2
risk assessments, I considered internal control relevant to the General Manager’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate to the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Council’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the General Manager, as well as evaluating the overall presentation of the financial report. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion. My audit responsibility does not extend to the budget figures included in the statement of comprehensive income and the budget disclosures in note 46, the asset renewal funding ratio disclosed in note 44. Furthermore, I express no opinion on the General Manager’s determination that Council did not have any Significant Business Activities for inclusion in the financial report as required by Section 84(2)(da) of the Local Government Act 1993. Independence In conducting this audit, I have complied with the independence requirements of Australian Auditing Standards and other relevant ethical requirements. The Audit Act 2008 promotes the independence of the Auditor-General. The Auditor-General is the auditor of all Tasmanian public sector entities and can only be removed by Parliament. The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any person about the way in which audit powers are to be exercised. The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can report to Parliament matters which in the Auditor-General’s opinion are significant. Tasmanian Audit Office
Derek S Burns Acting Group Leader Financial Audit Delegate of the Auditor-General Hobart 20 September 2016
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83S O R E L L C O U N C I L
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47 Cole Street, Sorell TAS 7172PO Box 126, Sorell TAS 7172P H O N E 6269 0000FA X 6269 0014E M A I L [email protected]
W W W. S O R E L L .TA S . G O V. A U
COUNCIL1862
SORELL