Reserve strategy
LONG TERM FINANCIAL PLAN 2022 - 2031
Victorian local government councils have traditionally operated with reserve funds that are amounts of money set aside for specific purposes in later years. In general, these funds do not have bank accounts of their own but are a theoretical split up of the cash surplus that Council has on hand. The following sections provide a picture of what reserve funds Council holds and their purpose. Refer to Appendix I for the financial projections of Council’s reserves over the next ten years.
Nature and purpose of current reserves The following summary outlines the purpose of each current reserve, its typical inflows and outflows and projected reserve balances at 30 June 2021 (where relevant these balances have been updated to reflect 2020-21 current forecast movements).
Major Projects Reserve Purpose This reserve has been established to provide a source of funding for major infrastructure projects. Typical sources of inflows and outflows Inflows to this reserve will typically be from the sale of Council land. Further inflows may occur periodically if Council achieves a surplus outcome at the conclusion of the financial year and resolves to transfer surplus funds into this reserve. An extract from Appendix I(a) of the Major Projects Reserve transfers is included below.
Forecast 2020-21 $'000
Budget 2021-22 $'000
Opening balance
26,250
22,938
15,366
10,866
2,337
3,209
Transfer to reserve
1,108
1,308
2,200
1,072
871
1,457
Transfer from reserve
(4,420)
(8,880)
(6,700)
(9,600)
0
0
Closing balance
22,938
15,366
10,866
2,337
3,209
4,666
Reserves
Financial Plan Projections 2022-23 2023-24 2024-25 2025-26 $'000 $'000 $'000 $'000
Major Projects
Projected inflows into this reserve in 2020-21 are derived from annual funding previously transferred to the DCP reserve ($1.11 million). Inflows across the LTFP relate to a combination of funding previously transferred to the DCP reserve and any applicable LTFP surplus amounts. Outflows from this reserve over the 2021-22 to 2023-24 financial years relate to funding for major projects including: • •
Redevelopment of Dandenong Oasis major project ($19.6 million) Noble Park Aquatic Centre (NPAC) Stage 1 redevelopment (gym) ($3.9 million)
LONG TERM FINANCIAL PLAN 2022 - 2031 CITY OF GREATER DANDENONG
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