Moree Plains Shire Council GENERAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2015
Leading the Way to a Better Community
Financial Statements 2015
Moree Plains Shire Council General Purpose Financial Statements for the financial year ended 30 June 2015
Contents
Page
1. Understanding Council's Financial Statements
2
2. Statement by Councillors & Management
3
3. Primary Financial Statements: - Income Statement - Statement of Comprehensive Income - Statement of Financial Position - Statement of Changes in Equity - Statement of Cash Flows
4 5 6 7 8
4. Notes to the Financial Statements
9
5. Independent Auditor's Reports: - On the Financial Statements (Sect 417 [2]) - On the Conduct of the Audit (Sect 417 [3])
84 86
Overview (i)
These financial statements are General Purpose Financial Statements and cover the consolidated operations for Moree Plains Shire Council.
(ii)
Moree Plains Shire Council is a body politic of NSW, Australia - being constituted as a Local Government area by proclamation and is duly empowered by the Local Government Act (LGA) 1993 of NSW. Council's Statutory Charter is detailed in Paragraph 8 of the LGA and includes giving Council; ď Š the ability to provide goods, services & facilities, and to carry out activities appropriate to the current & future
needs of the local community and of the wider public, ď Š the responsibility for administering regulatory requirements under the LGA and ď Š a role in the management, improvement and development of the resources in the area.
A description of the nature of Council's operations and its principal activities are provided in Note 2(b). (iii)
All figures presented in these financial statements are presented in Australian Currency.
(iv)
These financial statements were authorised for issue by the Council on 30 October 2015. Council has the power to amend and reissue these financial statements.
page 1
Financial Statements 2015
_
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Understanding Council's Financial Statements Introduction Each year, individual Local Governments across NSW are required to present a set of audited financial statements to their Council & Community.
What you will find in the Statements The financial statements set out the financial performance, financial position & cash flows of Council for the financial year ended 30 June 2015. The format of the financial statements is standard across all NSW Councils and complies with both the accounting & reporting requirements of Australian Accounting Standards and requirements as set down by the Office of Local Government.
About the Councillor/Management Statement
5. The Statement of Cash Flows Indicates where Council's cash came from and where it was spent. This statement also displays Council's original adopted budget to provide a comparison between what was projected and what actually occurred.
About the Notes to the Financial Statements The Notes to the financial statements provide greater detail and additional information on the 5 primary financial statements.
About the Auditor's Reports Council's financial statements are required to be audited by external accountants (that generally specialize in Local Government).
The financial statements must be certified by Senior staff as "presenting fairly" the Council's financial results for the year, and are required to be adopted by Council - ensuring both responsibility for & ownership of the financial statements.
In NSW, the Auditor provides 2 audit reports:
About the Primary Financial Statements
2. Their observations on the conduct of the Audit including commentary on the Council's financial performance & financial position.
The financial statements incorporate 5 "primary" financial statements: 1. The Income Statement Summarises Council's financial performance for the year, listing all income & expenses. This statement also displays Council's original adopted budget to provide a comparison between what was projected and what actually occurred. 2. The Statement of Comprehensive Income Primarily records changes in the fair values of Council's Infrastructure, Property, Plant & Equipment. 3. The Statement of Financial Position
1. An opinion on whether the financial statements present fairly the Council's financial performance & position, &
Who uses the Financial Statements ? The financial statements are publicly available documents & must be presented at a Council meeting between 7 days & 5 weeks after the date of the Audit Report. Submissions from the public can be made to Council up to 7 days subsequent to the public presentation of the financial statements. Council is required to forward an audited set of financial statements to the Office of Local Government.
A 30 June snapshot of Council's financial position indicating its Assets, Liabilities & “Net Wealth�.
More information
4. The Statement of Changes in Equity
A review of Council's financial performance and position for the 14/15 financial year can be found at Note 28 of the financial statements.
The overall change for the year (in dollars) of Council's "Net Wealth".
page 2
Financial Statements 2015
Moree Plains Shire Council Income Statement for the financial year ended 30 June 2015 Budget 2015
1
Actual 2015
Actual 2014
27,009 13,262 823 1,417 11,151 3,868
26,180 15,939 857 1,239 17,498 2,832
-
540
57,530
65,085
17,321 2,946 15,032 13,417 2,784 223
17,698 2,561 26,865 10,583 3,209 -
51,723
60,916
5,807
4,169
5,807
4,169
Net Operating Result attributable to Council
5,807
4,169
Net Operating Result for the year before Grants and Contributions provided for Capital Purposes
1,939
1,337
$ '000
Notes
Income from Continuing Operations 27,206 10,254 944 1,079 9,718 3,780 -
Revenue: Rates & Annual Charges User Charges & Fees Interest & Investment Revenue Other Revenues Grants & Contributions provided for Operating Purposes Grants & Contributions provided for Capital Purposes Other Income: Net gains from the disposal of assets
52,981
Total Income from Continuing Operations
17,773 3,546 13,005 10,936 2,925 1,000
Employee Benefits & On-Costs Borrowing Costs Materials & Contracts Depreciation & Amortisation Other Expenses Net Losses from the Disposal of Assets
49,185
Total Expenses from Continuing Operations
3a 3b 3c 3d 3e,f 3e,f 5
2
Expenses from Continuing Operations
3,796
3,796 3,796
16 1 2
Operating Result from Continuing Operations
Net Operating Result for the Year
4a 4b 4c 4d 4e 5
Original Budget as approved by Council - refer Note 16 Financial Assistance Grants for 13/14 were lower reflecting one off timing differences due to a change in how the grant was paid in prior years - refer Note 3 (e)
This Statement should be read in conjunction with the accompanying Notes.
page 4
Financial Statements 2015
Moree Plains Shire Council Statement of Comprehensive Income for the financial year ended 30 June 2015
$ '000
Notes
Net Operating Result for the year (as per Income statement)
Actual 2015
Actual 2014
5,807
4,169
13,464 -
45,992 10,806
13,464
56,798
109
-
109
-
13,573
56,798
19,380
60,967
19,380
60,967
Other Comprehensive Income: Amounts which will not be reclassified subsequently to the Operating Result Gain (loss) on revaluation of I,PP&E Impairment (loss) reversal relating to I,PP&E Total Items which will not be reclassified subsequently to the Operating Result
20b (ii) 20b (ii)
Amounts which will be reclassified subsequently to the Operating Result when specific conditions are met Other Movements in reserves 20b (ii) Total Items which will be reclassified subsequently to the Operating Result when specific conditions are met
Total Other Comprehensive Income for the year
Total Comprehensive Income for the Year
Total Comprehensive Income attributable to Council
This Statement should be read in conjunction with the accompanying Notes.
page 5
Financial Statements 2015
Moree Plains Shire Council Statement of Financial Position as at 30 June 2015
$ '000
ASSETS Current Assets Cash & Cash Equivalents Investments Receivables Inventories Other Total Current Assets Non-Current Assets Infrastructure, Property, Plant & Equipment Total Non-Current Assets
Notes
6a 6b 7 8 8
9
TOTAL ASSETS LIABILITIES Current Liabilities Payables Borrowings Provisions Total Current Liabilities Non-Current Liabilities Borrowings Provisions Total Non-Current Liabilities
10 10 10
10 10
TOTAL LIABILITIES
Net Assets
Actual 2015
Actual 2014
15,415 12,000 5,483 3,220 77 36,195
14,116 6,989 7,389 1,588 468 30,550
506,107 506,107
481,894 481,894
542,302
512,444
5,574 1,159 6,576 13,309
5,975 1,058 5,924 12,957
52,502 1,593 54,095
41,261 2,708 43,969
67,404
56,926
474,898
455,518
121,752 353,146 474,898
115,945 339,573 455,518
474,898
455,518
EQUITY Retained Earnings Revaluation Reserves Council Equity Interest
Total Equity
This Statement should be read in conjunction with the accompanying Notes.
20 20
page 6
Financial Statements 2015
Moree Plains Shire Council Statement of Changes in Equity for the financial year ended 30 June 2015
$ '000
Notes
Retained Reserves Earnings (Refer 20b)
NonCouncil controlling Interest Interest
Total Equity
2015 Opening Balance (as per Last Year's Audited Accounts)
115,945
339,573
455,518
-
455,518
a. Correction of Prior Period Errors
20 (c)
-
-
-
-
-
b. Changes in Accounting Policies (prior year effects)
20 (d)
115,945
339,573
455,518
-
455,518
5,807
-
5,807
-
5,807
Revised Opening Balance (as at 1/7/14) c. Net Operating Result for the Year
-
d. Other Comprehensive Income - Revaluations : IPP&E Asset Revaluation Rsve
20b (ii)
-
13,464
13,464
-
13,464
- Other Reserves Movements
20b (ii)
-
109 13,573
109 13,573
-
13,573
5,807
13,573
19,380
-
19,380
e. Distributions to/(Contributions from) Non-controlling Interests
-
-
-
-
-
f. Transfers between Equity
-
-
-
-
-
121,752
353,146
474,898
-
474,898
Other Comprehensive Income Total Comprehensive Income (c&d)
Equity - Balance at end of the reporting period
$ '000
Notes
Retained Reserves Earnings (Refer 20b)
NonCouncil controlling Interest Interest
109
Total Equity
2014 Opening Balance (as per Last Year's Audited Accounts)
111,776
282,775
394,551
-
394,551
a. Correction of Prior Period Errors
20 (c)
-
-
-
-
-
b. Changes in Accounting Policies (prior year effects)
20 (d)
111,776
282,775
394,551
-
394,551
4,169
-
4,169
-
4,169
Revised Opening Balance (as at 1/7/13) c. Net Operating Result for the Year
-
d. Other Comprehensive Income - Revaluations : IPP&E Asset Revaluation Rsve
20b (ii)
-
45,992
45,992
-
45,992
- Impairment (loss) reversal relating to I,PP&E
20b (ii)
-
10,806 56,798
10,806
10,806
56,798
-
4,169
56,798
60,967
-
60,967
e. Distributions to/(Contributions from) Non-controlling Interests
-
-
-
-
-
f. Transfers between Equity
-
-
-
-
-
115,945
339,573
455,518
-
455,518
Other Comprehensive Income Total Comprehensive Income (c&d)
Equity - Balance at end of the reporting period
This Statement should be read in conjunction with the accompanying Notes.
56,798
page 7
Financial Statements 2015
Moree Plains Shire Council Statement of Cash Flows for the financial year ended 30 June 2015 Budget 2015
$ '000
Notes
Actual 2015
Actual 2014
27,124 14,559 965 15,326 5,948
26,308 16,708 768 23,056 6 4,316
(17,223) (17,269) (3,531) (153) (4,862)
(17,283) (30,739) (2,492) (5,627)
20,884
15,022
1,000 757
1,414 1,006
(6,000) (25,157) (1,527)
(6,000) 145 (27,123) (145)
(30,927)
(30,703)
Cash Flows from Operating Activities Receipts:
27,209 10,254 944 13,498 1,079
Rates & Annual Charges User Charges & Fees Investment & Interest Revenue Received Grants & Contributions Bonds, Deposits & Retention amounts received Other Payments:
(17,773) (12,463) (3,546) (3,467)
Employee Benefits & On-Costs Materials & Contracts Borrowing Costs Bonds, Deposits & Retention amounts refunded Other
15,735
Net Cash provided (or used in) Operating Activities
11b
Cash Flows from Investing Activities Receipts:
629
Sale of Investment Securities Sale of Infrastructure, Property, Plant & Equipment Payments:
(36,962) -
(36,333)
Purchase of Investment Securities Purchase of Investment Property Purchase of Infrastructure, Property, Plant & Equipment Purchase of Real Estate Assets Net Cash provided (or used in) Investing Activities
Cash Flows from Financing Activities Receipts:
18,500
12,400
Proceeds from Borrowings & Advances
9,105
Payments:
(1,197)
(1,058)
Repayment of Borrowings & Advances
17,303
Net Cash Flow provided (used in) Financing Activities
(3,295)
Net Increase/(Decrease) in Cash & Cash Equivalents
20,475
plus:
17,180
(959)
11,342
8,146
1,299
(7,535)
Cash & Cash Equivalents - beginning of year
11a
14,116
21,651
Cash & Cash Equivalents - end of the year
11a
15,415
14,116
6b
12,000
6,989
27,415
21,105
Additional Information: plus:
Investments on hand - end of year
Total Cash, Cash Equivalents & Investments Please refer to Note 11 for additional cash flow information This Statement should be read in conjunction with the accompanying Notes.
page 8
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Contents of the Notes accompanying the Financial Statements Note
Details
Page 10 26 27 28 33 35 36 36 38 40 41 43 44 44 45 46 47 49
14 15 16 17 18 19 20
Summary of Significant Accounting Policies Council Functions / Activities - Financial Information Council Functions / Activities - Component Descriptions Income from Continuing Operations Expenses from Continuing Operations Gains or Losses from the Disposal of Assets Cash & Cash Equivalent Assets Investments Restricted Cash, Cash Equivalents & Investments - Details Receivables Inventories and Other Assets Infrastructure, Property, Plant & Equipment Externally Restricted Infrastructure, Property, Plant and Equipment Infrastructure, Property, Plant and Equipment - Current Year Impairments Payables, Borrowings and Provisions Description of (and movements in) Provisions Statement of Cash Flows - Additional Information Commitments for Expenditure Statement of Performance Measures: 13a (i) Local Government Industry Indicators (Consolidated) 13a (ii) Local Government Industry Graphs (Consolidated) 13b Local Government Industry Indicators (by Fund) Investment Properties Financial Risk Management Material Budget Variations Statement of Developer Contributions Contingencies and Other Liabilities/Assets not recognised Interests in Other Entities Equity - Retained Earnings and Revaluation Reserves
51 52 54 55 56 60 62 63 64 n/a 65
21 22 23 24 25 26 27
Financial Result & Financial Position by Fund "Held for Sale" Non Current Assets & Disposal Groups Events occurring after the Reporting Date Discontinued Operations Intangible Assets Reinstatement, Rehabilitation and Restoration Liabilities Fair Value Measurement
66 68 n/a 68 n/a 68 n/a 68 n/a 69 70
1 2(a) 2(b) 3 4 5 6(a) 6(b) 6(c) 7 8 9(a) 9(b) 9(c) 10(a) 10(b) 11 12 13
Additional Council Disclosures 28 29
Financial Review Council Information and Contact Details
81 83
n/a - not applicable page 9
Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies The principal accounting policies adopted by Council in the preparation of these consolidated financial statements are set out below in order to assist in its general understanding. Under Australian Accounting Standards (AASBs), accounting policies are defined as those specific principles, bases, conventions, rules and practices applied by a reporting entity (in this case Council) in preparing and presenting its financial statements.
Under the Local Government Act (LGA), Regulations and Local Government Code of Accounting Practice & Financial Reporting, it should be noted that Councils in NSW only have a requirement to comply with AASBs. (iii) New and amended standards adopted by Council There were no accounting standards that became mandatory this year which materially impacted on Council’s financial statements.
(a) Basis of preparation (iv) Early adoption of Accounting Standards (i) Background These financial statements are general purpose financial statements which have been prepared in accordance with;
Australian Accounting Standards and Australian Accounting Interpretations issued by the Australian Accounting Standards Board,
Council has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2014. Refer further to paragraph (ab) relating to a summary of the effects of Standards with future operative dates. (v) Basis of Accounting
the Local Government Act (1993) & Regulation, and the Local Government Code of Accounting Practice and Financial Reporting. For the purpose of preparing these financial statements, Council has been deemed to be a notfor-profit entity. (ii) Compliance with International Financial Reporting Standards (IFRSs) Because AASBs are sector neutral, some standards either: local Australian content and prescription that is specific to the Not-ForProfit sector (including Local Government) which are not in compliance with IFRS’s, or
These financial statements have been prepared under the historical cost convention except for: (i)
certain financial assets and liabilities at fair value through profit or loss and available-forsale financial assets which are all valued at fair value,
(ii) the write down of any Asset on the basis of Impairment (if warranted) and (iii) certain classes of non current assets (eg. Infrastructure, Property, Plant & Equipment and Investment Property) that are accounted for at fair valuation.
(a) have
The accrual basis of accounting has also been applied in their preparation. (vi) Changes in Accounting Policies
(b) specifically exclude application by Not for
Profit entities. Accordingly in preparing these financial statements and accompanying notes, Council has been unable to comply fully with International Accounting Standards, but has complied fully with Australian Accounting Standards.
Council’s accounting policies have been consistently applied to all the years presented, unless otherwise stated. There have also been no changes in accounting policies when compared with previous financial statements unless otherwise stated [refer Note 20(d)].
page 10
Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies (vii) Critical Accounting Estimates
criteria have been met for each of the Council’s activities as described below.
The preparation of financial statements requires the use of certain critical accounting estimates (in conformity with AASBs). Accordingly this requires management to exercise its judgement in the process of applying the Council's accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on Council and that are believed to be reasonable under the circumstances. Critical accounting estimates and assumptions Council makes estimates concerning the future.
and
assumptions
The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out below: (i)
Estimated fair values of investment properties
(ii)
Estimated fair values of infrastructure, property, plant and equipment.
(iii) Estimated remediation provisions. Critical judgements accounting policies
in
applying
Council's
(i)
Impairment of Receivables - Council has made a significant judgement about the impairment of a number of its receivables in Note 7.
(ii)
Projected Section 94 Commitments - Council has used significant judgement in determining future Section 94 income and expenditure in Note 17.
Council bases any estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement. Revenue is measured at the fair value of the consideration received or receivable. Revenue is measured on major income categories as follows: Rates, Annual Charges, Grants and Contributions Rates, annual charges, grants and contributions (including developer contributions) are recognised as revenues when the Council obtains control over the assets comprising these receipts. Control over assets acquired from rates and annual charges 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. Control over granted assets is normally obtained upon their receipt (or acquittal) or upon earlier notification that a grant has been secured, and is valued at their fair value at the date of transfer. Revenue from Contributions is recognised when the Council either obtains control of the contribution or the right to receive it, (i) it is probable that the economic benefits comprising the contribution will flow to the Council and (ii) the amount of the contribution can be measured reliably. Where grants or 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 reporting date, the unused grant or contribution is disclosed in Note 3(g).
(b) Revenue recognition
Note 3(g) also discloses the amount of unused grant or contribution from prior years that was expended on Council’s operations during the current year.
Council recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefits will flow to it and specific
The Council has obligations to provide facilities from contribution revenues levied on developers under the provisions of S94 of the EPA Act 1979. page 11
Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies Whilst Council generally incorporates these amounts as part of a Development Consents Order, such developer contributions are only recognised as income upon their physical receipt by Council, due to the possibility that individual Development Consents may not be acted upon by the applicant and accordingly would not be payable to Council.
Other Income Other income is recorded when the payment is due, the value of the payment is notified or the payment is received, whichever occurs first.
(c) Principles of Consolidation Developer contributions may only be expended for the purposes for which the contributions were required but the Council may apply contributions according to the priorities established in work schedules. A detailed Note relating to developer contributions can be found at Note 17. User Charges, Fees and Other Income User charges, fees and other income (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 the impairment of these receivables is recognised when collection in full is no longer probable.
These financial statements incorporate (i) the assets and liabilities of Council and any entities (or operations) that it controls (as at 30 June 2015) and (ii) all the related operating results (for the financial year ended the 30th June 2015). In the process of reporting on Council’s activities as a single unit, all inter-entity year end balances and reporting period transactions have been eliminated in full between Council and its controlled entities. (i) The Consolidated Fund In accordance with the provisions of Section 409(1) of the LGA 1993, all money and property received by Council is held in the Council’s Consolidated Fund unless it is required to be held in the Council’s Trust Fund.
A liability is recognised in respect of revenue that is reciprocal in nature to the extent that the requisite service has not been provided as at reporting date.
The Consolidated Fund and other entities through which the Council controls resources to carry on its functions have been included in the financial statements forming part of this report.
Sale of Infrastructure, Equipment
The following entities have been included as part of the Consolidated Fund:
Property,
Plant
and
The profit or loss on sale of an asset is determined when control of the asset has irrevocably passed to the buyer. Interest and Rents Rental income is accounted for on a straight-line basis over the lease term. Interest Income from Cash & Investments is accounted for using the effective interest rate at the date that interest is earned. Dividend Income Revenue is recognised when the Council’s right to receive the payment is established, which is generally when shareholders approve the dividend.
General Purpose Operations Water Supply Fund Sewerage Fund Gwydir Day Care Centre Max Centre
(ii) The Trust Fund In accordance with the provisions of Section 411 of the Local Government Act 1993 (as amended), a separate and distinct Trust Fund is maintained to account for all money and property received by the Council in trust which must be applied only for the purposes of or in accordance with the trusts relating to those monies. Trust monies and property subject to Council’s control have been included in these statements. page 12
Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies Trust monies and property held by Council but not subject to the control of Council, have been excluded from these statements. A separate statement of monies held in the Trust Fund is available for inspection at the Council office by any person free of charge. (iii) Joint Arrangements Council participates in a number of cooperative arrangements with other Councils and other bodies. Council’s equity share in joint ventures is considered to be immaterial and has not been included in Council’s accounts.
Finance Leases Leases of property, plant and equipment where the Council has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s inception at the lower of the fair value of the leased property and the present value of the minimum lease payments. The corresponding rental obligations, net of finance charges, are included in borrowings. Each lease payment is allocated between the liability outstanding and the recognition of a finance charge.
Big Sky Library The Big Sky Library is a contractual association between the Council’s of Moree Plains, Walgett and Brewarrina to carry out jointly a library service in there respective areas under the provision of Section 11 of the Library Act 1939. (iv) Associates Where Council has the power to participate in the financial and operating decisions of another entity, (ie. where Council is deemed to have “significant influence” over another entities operations but neither controls nor jointly controls the entity), then Council accounts for such interests using the equity method of accounting – in a similar fashion to Joint Ventures.
The interest element of the finance charge is costed to the income statement over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. Property, plant and equipment acquired under finance leases is depreciated over the shorter of each leased asset’s useful life and the lease term. Operating Leases Leases in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Such entities are usually termed Associates.
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.
Any interests in Associates are accounted for using the equity method and are carried at cost.
Lease income from operating leases is recognised in income on a straight-line basis over the lease term.
(v) County Councils Council is not a member of any County Councils.
(d) Leases All Leases entered into by Council are reviewed and classified on inception date as either a Finance Lease or an Operating Lease.
(e) Cash and Cash Equivalents For Statement of Cash Flows (and Statement of Financial Position) presentation purposes, cash and cash equivalents includes; cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash page 13
Financial Statements 2015
_
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies and which are subject to an insignificant risk of changes in value, and Bank overdrafts are shown within borrowings in current liabilities on the statement of financial position but are incorporated into Cash & Cash Equivalents for presentation of the Statement of Cash Flows.
(f) Investments and Other Financial Assets Council (in accordance with AASB 139) classifies each of its investments into one of the following categories for measurement purposes: financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, and available-for-sale financial assets. Each classification depends on the purpose/intention for which the investment was acquired & at the time it was acquired. Management determines each Investment classification at the time of initial recognition and reevaluates this designation at each reporting date. (i) Financial assets at fair value through profit or loss Financial assets at fair value through profit or loss include financial assets that are “held for trading”. A financial asset is classified in the “held for trading” category if it is acquired principally for the purpose of selling in the short term.
They arise when the Council provides money, goods or services directly to a debtor with no intention (or in some cases ability) of selling the resulting receivable. They are included in current assets, except for those with maturities greater than 12 months after the reporting date which are classified as non-current assets. (iii) Held-to-maturity investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Council’s management has the positive intention and ability to hold to maturity. In contrast to the “Loans & Receivables” classification, these investments are generally quoted in an active market. Held-to-maturity financial assets are included in noncurrent assets, except for those with maturities less than 12 months from the reporting date, which are classified as current assets. (iv) Available-for-sale financial assets Available-for-sale financial assets are non-derivatives that are either designated in this category or not classified in any of the other categories. Investments must be designated as available-for-sale if they do not have fixed maturities and fixed or determinable payments and management intends to hold them for the medium to long term. Accordingly, this classification principally comprises marketable equity securities, but can include all types of financial assets that could otherwise be classified in one of the other investment categories.
Assets in this category are primarily classified as current assets as they are primarily held for trading &/or are expected to be realised within 12 months of the reporting date.
They are generally included in non-current assets unless management intends to dispose of the investment within 12 months of the reporting date or the term to maturity from the reporting date is less than 12 months.
(ii) Loans and receivables
Financial Assets – Reclassification
Loans and receivables are non derivative financial assets with fixed or determinable payments that are not quoted in an active market.
Council may choose to reclassify a non-derivative trading financial asset out of the held-for-trading category if the financial asset is no longer held for the purpose of selling it in the near term. page 14
Financial Statements 2015
_
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies Financial assets other than loans and receivables are permitted to be reclassified out of the held-fortrading category only in rare circumstances arising from a single event that is unusual and highly unlikely to recur in the near term. Council may also choose to reclassify financial assets that would meet the definition of loans and receivables out of the held-for-trading or availablefor-sale categories if it has the intention and ability to hold these financial assets for the foreseeable future or until maturity at the date of reclassification. Reclassifications are made at fair value as of the reclassification date. Fair value becomes the new cost or amortised cost as applicable, and no reversals of fair value gains or losses recorded before reclassification date are subsequently made. Effective interest rates for financial assets reclassified to loans and receivables and held-tomaturity categories are determined at the reclassification date. Further increases in estimates of cash flows adjust effective interest rates prospectively. General Accounting & Measurement of Financial Instruments: (i) Initial Recognition Investments are initially recognised (and measured) at fair value, plus in the case of investments not at “fair value through profit or loss”, directly attributable transactions costs
Loans and receivables and held-to-maturity investments are carried at amortised cost using the effective interest method. Realised and unrealised gains and losses arising from changes in the fair value of the financial assets classified as “fair value through profit or loss” category are included in the income statement in the period in which they arise. Unrealised gains and losses arising from changes in the fair value of non monetary securities classified as "available-for-sale" are recognised in equity in the available-for-sale investments revaluation reserve. When securities classified as "available-for-sale" are sold or impaired, the accumulated fair value adjustments are included in the income statement as gains and losses from investment securities. Impairment Council assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated. (iii) Types of Investments
Purchases and sales of investments are recognised on trade-date - the date on which the Council commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Council has transferred substantially all the risks and rewards of ownership. (ii) Subsequent Measurement Available-for-sale financial assets and financial assets at fair value through profit and loss are subsequently carried at fair value.
Council has an approved Investment Policy in order to undertake its investment of money in accordance with (and to comply with) Section 625 of the Local Government Act and S212 of the LG (General) Regulation 2005. Investments are placed and managed in accordance with the Policy and having particular regard to authorised investments prescribed under the Ministerial Local Government Investment Order. Council maintains its investment Policy in compliance with the Act and ensures that it or its representatives exercise care, diligence and skill that a prudent person would exercise in investing Council funds.
page 15
Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies (g) Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. The fair value of financial instruments that are not traded in an active market is determined using valuation techniques. Council uses a variety of methods and makes assumptions that are based on market conditions existing at each reporting date. Quoted market prices or dealer quotes for similar instruments are used for long-term debt instruments held. If the market for a financial asset is not active (and for unlisted securities), the Council establishes fair value by using valuation techniques. These include reference to the fair values of recent arm’s length transactions, involving the same instruments or other instruments that are substantially the same, discounted cash flow analysis, and option pricing models refined to reflect the issuer’s specific circumstances. The nominal value less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Council for similar financial instruments.
(h) Receivables Receivables are initially recognised at fair value and subsequently measured at amortised cost, less any provision for impairment. Receivables (excluding Rates & Annual Charges) are generally due for settlement no more than 30 days from the date of recognition.
The collectibility of receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off in accordance with Council’s policy. A provision for impairment (ie. an allowance account) relating to receivables is established when there is objective evidence that the Council will not be able to collect all amounts due according to the original terms of each receivable. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate. Impairment losses are recognised in the Income Statement within other expenses. When a receivable for which an impairment allowance had been recognised becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against other expenses in the income statement.
(i) Inventories Raw Materials and Stores, Work in Progress and Finished Goods Raw materials and stores, work in progress and finished goods in respect of business undertakings are all stated at the lower of cost and net realisable value. Cost comprises direct materials, direct labour and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Costs are assigned to individual items of inventory on the basis of weighted average costs. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale. Inventories held in respect of non-business undertakings have been valued at cost subject to adjustment for loss of service potential. page 16
Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies Land Held for Resale/Capitalisation of Borrowing Costs Land held for resale is stated at the lower of cost and net realisable value.
-
Bulk Earthworks (Internal Valuation)
-
Stormwater Drainage (Internal Valuation)
-
Water and Sewerage Networks (Internal Valuation)
Cost is assigned by specific identification and includes the cost of acquisition, and development and borrowing costs during development. When development is completed borrowing costs and other holding charges are expensed as incurred. Borrowing costs included in the cost of land held for resale are those costs that would have been avoided if the expenditure on the acquisition and development of the land had not been made.
-
Swimming Pools (External Valuation)
-
Other Infrastructure (Internal Valuation)
-
Other Assets (as approximated by depreciated historical cost)
-
Investment Properties – refer Note 1(p),
Initial Recognition Borrowing costs incurred while active development is interrupted for extended periods are recognised as expenses.
(j) Infrastructure, Property, Plant and Equipment (I,PP&E) Acquisition of assets Council’s non current assets are continually revalued (over a 5 year period) in accordance with the fair valuation policy as mandated by the Office of Local Government. At reporting date, the following classes of I,PP&E were stated at their Fair Value; -
Plant and Equipment (as approximated by depreciated historical cost)
-
Operational Land (External Valuation)
-
Community Land (External Valuation)
-
Land Improvements
On initial recognition, an assets cost is measured at its fair value, plus all expenditure that is directly attributable to the acquisition. Where settlement of any part of an asset’s cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of recognition (ie. date of exchange) of the asset to arrive at fair value. The discount rate used is the Council’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions. Where infrastructure, property, plant and equipment assets are acquired for no cost or for an amount other than cost, the assets are recognised in the financial statements at their fair value at acquisition date - being the amount that the asset could have been exchanged between knowledgeable willing parties in an arm’s length transaction. Subsequent costs
(as approximated by depreciated historical cost)
-
Buildings – Specialised/Non Specialised (External Valuation)
-
Other Structures (as approximated by depreciated historical cost)
-
Roads Assets incl. roads, bridges & footpaths (Internal Valuation)
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to Council and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.
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Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies Asset Revaluations (including Indexation) In accounting for Asset Revaluations relating to Infrastructure, Property, Plant & Equipment: Increases in the combined carrying amounts of asset classes arising on revaluation are credited to the asset revaluation reserve.
Buildings & Land Improvements Park Furniture & Equipment
> $2,000
Building - construction/extensions - renovations
> $10,000 > $10,000
Other Structures
> $2,000
To the extent that a net asset class increase reverses a decrease previously recognised via the profit or loss, then increase is first recognised in profit or loss.
Water & Sewer Assets Reticulation extensions Other
> $1,000 > $1,000
Net decreases that reverse previous increases of the same asset class are first charged against revaluation reserves directly in equity to the extent of the remaining reserve attributable to the asset, with all other decreases charged to the Income statement.
Stormwater Assets Drains & Culverts Other
> $1,000 > $1,000
Transport Assets Road construction & reconstruction Reseal/Re-sheet & major repairs:
> $1,000 > $1,000
Bridge construction & reconstruction
> $1,000
Water and sewerage network assets are indexed annually between full revaluations in accordance with the latest indices provided in the NSW Office of Water - Rates Reference Manual. For all other assets, Council assesses at each reporting date whether there is any indication that a revalued asset’s carrying amount may differ materially from that which would be determined if the asset were revalued at the reporting date.
Other Infrastructure Assets Swimming Pools Other Open Space/Recreational Assets
> $10,000 > $10,000
Other Infrastructure
> $10,000
Depreciation If any such indication exists, Council determines the asset’s fair value and revalues the asset to that amount. Full revaluations are undertaken for all assets on a 5 year cycle.
Depreciation on Council's infrastructure, property, plant and equipment assets is calculated using the straight line method in order to allocate an assets cost (net of residual values) over its estimated useful life.
Capitalisation Thresholds
Land is not depreciated.
Items of infrastructure, property, plant and equipment are not capitalised unless their cost of acquisition exceeds the following;
Estimated useful lives for Council's I,PP&E include:
Land - council land - open space - land under roads (purchases after 30/6/08)
Plant & Equipment Office Furniture Office Equipment Other Plant &Equipment
100% Capitalised 100% Capitalised 100% Capitalised
> $1,000 > $1,000 > $1,000
Plant & Equipment - Office Equipment - Office furniture - Vehicles - Heavy Plant/Road Making equip. - Other plant and equipment
5 to 10 years 10 to 20 years 5 to 8 years 5 to 8 years 5 to 15 years
Other Equipment - Playground equipment - Benches, seats etc
5 to 15 years 10 to 20 years
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Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies Buildings - Buildings :Masonry - Buildings :Other
50 to 100 years 20 to 40 years
Stormwater Drainage - Drains - Culverts - Flood Control Structures
100 years 60 years 100 years
Transportation Assets - Sealed Roads: Formation - Sealed Roads: Pavement - Sealed Roads: Surface - Unsealed roads
120 years 40 years 10 years 100 years
- Bridge Concrete
100 years
- Road Pavements - Kerb, Gutter - Footpaths
30 years 40 years 40 years
(k) Land Land (other than Land under Roads) is in accordance with Part 2 of Chapter 6 of the Local Government Act (1993) classified as either Operational or Community. This classification of Land is disclosed in Note 9(a).
(l) Land under roads
Water & Sewer Assets - Dams and reservoirs - Bores
100 years 30 years
- Reticulation pipes: PVC - Reticulation pipes: Other - Pumps and telemetry
70 years 25 to 75 years 5 to 15 years
All asset residual values and useful lives are reviewed and adjusted (if appropriate), at each reporting date. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount – refer Note 1(s) on Asset Impairment. Disposal and De-recognition An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in Council’s Income Statement in the year the asset is derecognised.
Land under roads is land under roadways and road reserves including land under footpaths, nature strips and median strips. Council has elected not to recognise land under roads acquired before 1 July 2008 in accordance with AASB 1051. Land under roads acquired after 1 July 2008 is recognised in accordance with AASB 116 – Property, Plant and Equipment.
(m) Intangible Assets Council has not classified any assets as Intangible.
(n) Crown Reserves Crown Reserves under Council’s care and control are recognised as assets of the Council. While ownership of the reserves remains with the Crown, Council retains operational control of the reserves and is responsible for their maintenance and use in accordance with the specific purposes to which the reserves are dedicated. Improvements on Crown Reserves are also recorded as assets, while maintenance costs incurred by Council and revenues relating the reserves are recognised within Council’s Income Statement. Representations are currently being sought across State and Local Government to develop a consistent accounting treatment for Crown Reserves across both tiers of government.
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Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies (o) Rural Fire Service assets Under section 119 of the Rural Fires Act 1997, “all fire fighting equipment purchased or constructed wholly or from money to the credit of the Fund is to be vested in the council of the area for or on behalf of which the fire fighting equipment has been purchased or constructed”.
occurs, whether this occurs during the development or during the operation phase, based on the net present value of estimated future costs. Provisions for close down and restoration costs do not include any additional obligations which are expected to arise from future disturbance. Costs are estimated on the basis of a closure plan.
At present, the accounting for such fire fighting equipment is not treated in a consistent manner across all Councils. Until such time as discussions on this matter have concluded and the legislation changed, Council will continue to account for these assets as it has been doing in previous years, which is to exclude the assets, their values and depreciation charges from these financial statements.
(p) Investment property Investment property comprises land &/or buildings that are principally held for long-term rental yields, capital gains or both that is not occupied by Council.
The cost estimates are calculated annually during the life of the operation to reflect known developments, eg updated cost estimates and revisions to the estimated lives of operations, and are subject to formal review at regular intervals. Close down, Restoration and Remediation costs are a normal consequence of tip and quarry operations, and the majority of close down and restoration expenditure is incurred at the end of the life of the operations. Although the ultimate cost to be incurred is uncertain, Council estimates the respective costs based on feasibility and engineering studies using current restoration standards and techniques.
Investment property is carried at fair value, representing an open-market value determined annually by external valuers.
The amortisation or ‘unwinding’ of the discount applied in establishing the net present value of provisions is charged to the income statement in each accounting period.
Annual changes in the fair value of Investment Properties are recorded in the Income Statement as part of “Other Income”.
This amortisation of the discount is disclosed as a borrowing cost in Note 4(b).
The last full revaluation for Council’s Investment Properties was dated 30/06/15.
Other movements in the provisions for Close down, Restoration and Remediation costs including those resulting from new disturbance, updated cost estimates, changes to the estimated lives of operations and revisions to discount rates are capitalised within property, plant and equipment.
(q) Provisions for close down, restoration and for environmental clean up costs – including Tips and Quarries
These costs are then depreciated over the lives of the assets to which they relate.
Close down, Restoration and Remediation costs include the dismantling and demolition of infrastructure, the removal of residual materials and the remediation of disturbed areas.
Where rehabilitation is conducted systematically over the life of the operation, rather than at the time of closure, provision is made for the estimated outstanding continuous rehabilitation work at each reporting date and the cost is charged to the income statement.
Full revaluations are carried out every year.
Estimated close down and restoration costs are provided for in the accounting period when the obligation arising from the related disturbance
Provision is made for the estimated present value of the costs of environmental clean up obligations page 20
Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies outstanding at the reporting date. These costs are charged to the income statement.
were already purchased and accounted for as at 30 June.
Movements in the environmental clean up provisions are presented as an operating cost, except for the unwind of the discount which is shown as a borrowing cost.
For any assets or disposal groups classified as NonCurrent Assets “held for sale”, an impairment loss is recognised at any time when the assets carrying value is greater than its fair value less costs to sell.
Remediation procedures generally commence soon after the time the damage, remediation process and estimated remediation costs become known, but may continue for many years depending on the nature of the disturbance and the remediation techniques.
Non-current assets “held for sale” are not depreciated or amortised while they are classified as “held for sale”.
As noted above, the ultimate cost of environmental remediation is uncertain and cost estimates can vary in response to many factors including changes to the relevant legal requirements, the emergence of new restoration techniques or experience at other locations. The expected timing of expenditure can also change, for example in response to changes in quarry reserves or production rates. As a result there could be significant adjustments to the provision for close down and restoration and environmental clean up, which would affect future financial results. Specific Information relating to Council's provisions relating to Close down, Restoration and Remediation costs can be found at Note 26.
(r) Non-Current Assets (or Disposal Groups) “Held for Sale” & Discontinued Operations Non-current assets (or disposal groups) are classified as held for sale and stated at the lower of either (i) their carrying amount and (ii) fair value less costs to sell, if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. The exception to this is plant and motor vehicles which are turned over on a regular basis. Plant and motor vehicles are retained in Non Current Assets under the classification of Infrastructure, Property, Plant and Equipment - unless the assets are to be traded in after 30 June and the replacement assets
Non-current assets classified as “held for sale” are presented separately from the other assets in the Statement of Financial Position. A Discontinued Operation is a component of Council that has been disposed of or is classified as “held for sale” and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the income statement.
(s) Impairment of assets All Council's I,PP&E is subject to an annual assessment of impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. Where an asset is not held principally for cash generating purposes (for example Infrastructure Assets) and would be replaced if the Council was deprived of it then depreciated replacement cost is used as value in use, otherwise value in use is estimated by using a discounted cash flow model. Non-financial assets (other than goodwill) that suffered a prior period impairment are reviewed for page 21
Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies possible reversal of the impairment at each reporting date.
Council has a present legal or constructive obligation as a result of past events;
Goodwill & other Intangible Assets that have an indefinite useful life and are not subject to amortisation are tested annually for impairment.
it is more likely than not that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated.
(t) Payables These amounts represent liabilities and include goods and services provided to the Council prior to the end of financial year which are unpaid. The amounts for goods and services are unsecured and are usually paid within 30 days of recognition.
(u) Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Amortisation results in any difference between the proceeds (net of transaction costs) and the redemption amount being recognised in the Income Statement over the period of the borrowings using the effective interest method. Borrowings are removed from the Statement of Financial Position when the obligation specified in the contract is discharged, cancelled or expired. Borrowings are classified as current liabilities unless the Council has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.
(v) Borrowing costs Borrowing costs are expensed.
(w) Provisions Provisions for legal claims, service warranties and other like liabilities are recognised when:
Provisions are not recognised for future operating losses. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense.
(x) Employee benefits (i) Short Term Obligations Short term employee benefit obligations include liabilities for wages and salaries (including nonmonetary benefits), annual leave and vesting sick leave expected to be wholly settled within the 12 months after the reporting period. Leave liabilities are recognised in the provision for employee benefits in respect of employees’ services up to the reporting date with other short term employee benefit obligations disclosed under payables. These provisions are measured at the amounts expected to be paid when the liabilities are settled.
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Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies All other short-term employee benefit obligations are presented as payables. Liabilities for non vesting sick leave are recognised at the time when the leave is taken and measured at the rates paid or payable, and accordingly no Liability has been recognised in these reports. Wages & salaries, annual leave and vesting sick leave are all classified as Current Liabilities. (ii) Other Long Term Obligations The liability for all long service and annual leave in respect of services provided by employees up to the reporting date (which is not expected to be wholly settled within the 12 months after the reporting period) are recognised in the provision for employee benefits. These liabilities are measured at the present value of the expected future payments to be made 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 then discounted using market yields at the reporting date based on national government bonds with terms to maturity and currency that match as closely as possible the estimated future cash outflows. Due to the nature of when and how Long Service Leave can be taken, all Long Service Leave for employees with 4 or more years of service has been classified as Current, as it has been deemed that Council does not have the unconditional right to defer settlement beyond 12 months – even though it is not anticipated that all employees with more than 4 years service (as at reporting date) will apply for and take their leave entitlements in the next 12 months.
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 can account for its obligations to defined benefit plans on the same basis as its obligations to defined contribution plans – i.e. as an expense when they become payable. Council is party to an Industry Defined Benefit Plan under the Local Government Superannuation Scheme, named the “Local Government Superannuation Scheme – Pool B” This Scheme has been deemed to be a “multi employer fund” for the purposes of AASB 119. Sufficient information is not available to account for the Scheme as a defined benefit plan (in accordance with AASB 119) because the assets to the scheme are pooled together for all Councils. Defined Contribution Plans
(iii) Retirement benefit obligations
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.
All employees of the Council are entitled to benefits on retirement, disability or death.
(y) Self insurance
Council contributes to various defined benefit plans and defined contribution plans on behalf of its employees.
Council does not self insure.
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Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies (z) Allocation between current and non-current assets & liabilities In the determination of whether an asset or liability is classified as 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 12 months, being the Council’s operational cycle.
Operating cash flows within the Statement of Cash Flow are on a gross basis, ie. they are inclusive of GST where applicable. Investing and Financing cash flows are treated on a net basis (where recoverable form the ATO), ie. they are exclusive of GST. Instead, the GST component of investing and financing activity cash flows which are recoverable from or payable to the ATO are classified as operating cash flows.
Exceptions
Commitments and contingencies are disclosed net of the amount of GST recoverable from (or payable to) the ATO.
In the case of liabilities where Council does not have the unconditional right to defer settlement beyond 12 months (such as vested long service leave), the liability is classified as current even if not expected to be settled within the next 12 months.
(ab) New accounting standards and interpretations
In the case of inventories that are “held for trading”, these are also classified as current even if not expected to be realised in the next 12 months.
Certain new (or amended) accounting standards and interpretations have been published that are not mandatory for reporting periods ending 30 June 2015.
(aa) Taxes
Council has not adopted any of these standards early.
The Council is exempt from both Commonwealth Income Tax and Capital Gains Tax.
Council’s assessment of the impact of these new standards and interpretations is set out below.
Council does however have to comply with both Fringe Benefits Tax and Goods and Services Tax (GST).
Apart from the AASB disclosures below, there are no other standards that are “not yet effective” which are expected to have a material impact on Council in the current or future reporting periods and on foreseeable future transactions.
Goods & Services Tax (GST) Income, expenses and assets are all recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office (ATO). In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the revenue / expense. Receivables and payables within the Statement of Financial Position are stated inclusive of any applicable GST. The net amount of GST recoverable from or payable to the ATO is included as a current asset or current liability in the Statement of Financial Position.
Applicable to Local Government: AASB 9 - Financial Instruments (and associated amending standards) AASB 9 replaces AASB 139 Financial Instruments: Recognition and Measurement and has an effective date for reporting periods beginning on or after 1 January 2018 (and must be applied retrospectively). The overriding impact of AASB 9 is to change the requirements for the classification, measurement and disclosures associated with financial assets. Under the new requirements the four current categories of financial assets stipulated in AASB 139 will be replaced with two measurement categories: page 24
Financial Statements 2015
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Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 1. Summary of Significant Accounting Policies 
fair value and

amortised cost (where financial assets will only be able to be measured at amortised cost where very specific conditions are met).
AASB 15 - Revenue from contracts with customers and associated amending standards AASB 15 will introduce a five step process for revenue recognition with the core principle of the new Standard being that entities recognise revenue so as to depict the transfer of goods or services to customers in amounts that reflect the consideration (that is, payment) to which the entity expects to be entitled in exchange for those goods or services.
(ac) Rounding of amounts Unless otherwise indicated, amounts in the financial statements have been rounded off to the nearest thousand dollars.
(ad) Comparative Figures To ensure comparability with the current reporting period’s figures, some comparative period line items and amounts may have been reclassified or individually reported for the first time within these financial statements and/or the notes.
The changes in revenue recognition requirements in AASB 15 may cause changes to accounting policies relating to the timing and amount of revenue recorded in the financial statements as well as additional disclosures. The full impact of AASB 15 has not yet been ascertained or quantified. AASB 15 will replace AASB 118 which covers contracts for goods and services and AASB 111 which covers construction contracts. The effective date of this standard is for annual reporting periods beginning on or after 1 January 2017. AASB 124 - Related Party Disclosures From 1 July 2016, AASB 124 Related Party Disclosures will apply to Council. This means that Council will be required to disclose information about related parties and Council transactions with those related parties. Related parties will more than likely include the Mayor, Councillors and certain Council staff. In addition, the close family members of those people and any organisations that they control or are associated with will be classified as related parties (and fall under the related party reporting requirements). Not applicable to Local Government per se; None
page 25
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 2(a). Council Functions / Activities - Financial Information $ '000
Income, Expenses and Assets have been directly attributed to the following Functions / Activities. Details of these Functions/Activities are provided in Note 2(b).
Functions/Activities
Income from Continuing Operations Original
Governance Administration Public Order & Safety Health Environment Community Services & Education Housing & Community Amenities Water Supplies Sewerage Services Recreation & Culture Mining, Manufacturing & Construction Transport & Communication Economic Affairs
Total Functions & Activities
Expenses from Continuing Operations
Operating Result from Continuing Operations
Original
Grants included in Income from Continuing Operations
Total Assets held (Current & Non-current)
Original
Budget
Actual
Actual
Budget
Actual
Actual
Budget
Actual
Actual
Actual
Actual
Actual
2015
2015
2014
2015
2015
2014
2015
2015
2014
2015
2014
2015
Actual 2014
570 720 10 4,424 1,299 634 4,835 3,478 1,889 6,784 586
680 884 76 4,580 1,249 460 5,808 3,691 1,399 10,409 666
33 1,121 900 138 4,019 1,066 818 5,682 3,152 1,159 22,381 636
954 6,538 1,526 279 4,709 1,888 3,108 4,733 3,027 4,586 170 15,780 1,887
931 7,564 1,626 311 3,910 1,708 1,906 4,583 2,450 4,824 363 19,767 1,780
698 6,035 1,635 354 3,997 1,523 1,592 4,772 3,152 5,084 318 30,298 1,458
(954) (5,968) (806) (269) (285) (589) (2,474) 102 451 (2,697) (170) (8,996) (1,301)
(931) (6,884) (742) (235) 670 (459) (1,446) 1,225 1,241 (3,425) (363) (9,358) (1,114)
(665) (4,914) (735) (216) 22 (457) (774) 910 (3,925) (318) (7,917) (822)
17 598 365 592 274 151 1,365 65 4
140 531 189 415 120 25 38 284 10,534 -
1 61,258 5,124 3 3,021 24,116 50,974 29,345 32,652 138 310,171 25,499
64,019 55,407 5,224 4 2,480 24,195 50,820 28,562 39,840 150 228,430 13,313
25,229
29,902
41,105
49,185
51,723
60,916
(23,956)
(21,821)
(19,811)
3,431
12,276
542,302
512,444
27,752
27,628
23,980
-
-
-
27,752
27,628
23,980
6,599
3,307
-
-
52,981
57,530
65,085
49,185
51,723
60,916
3,796
5,807
4,169
10,030
15,583
542,302
512,444
Share of gains/(losses) in Associates &
page 26
1. Includes: Rates & Annual Charges (incl. Ex-Gratia), Untied General Purpose Grants & Unrestricted Interest & Investment Income.
Financial Statements 2015
Joint Ventures (using the Equity Method)
General Purpose Income 1 Operating Result from Continuing Operations
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 2(b). Council Functions / Activities - Component Descriptions Details relating to the Council's functions / activities as reported in Note 2(a) are as follows: GOVERNANCE Costs relating to the Council’s role as a component of democratic government, including elections, members’ fees and expenses, subscriptions to local authority associations, meetings of council and policy making committees, area representation and public disclosure and compliance. ADMINISTRATION Corporate Support and Other Support Services (not otherwise attributed to the listed functions / activities). PUBLIC ORDER & SAFETY Fire protection, animal control, enforcement of local government regulations, emergency services, other. HEALTH Inspection, immunisations, food control, health centres, other, administration. ENVIRONMENT Noxious plants and insect/vermin control, other environmental protection, solid waste management, street cleaning, drainage, stormwater management. COMMUNITY SERVICES & EDUCATION Administration, family day care, child care, youth services, other family and children, aged and disabled, migrant services, Aboriginal services, other community services, education. HOUSING & COMMUNITY AMENITIES Housing, town planning, street lighting, other sanitation and garbage, public cemeteries, public conveniences, WATER SUPPLIES SEWERAGE SERVICES RECREATION & CULTURE Public libraries, museums, art galleries, community centres, public halls, other cultural services, swimming pools, sporting grounds, parks and gardens (lakes), other sport and recreation. MINING, MANUFACTURING & CONSTRUCTION Building control, abattoirs, quarries & pits, other. TRANSPORT & COMMUNICATION Urban roads, sealed rural roads, unsealed rural roads, bridges, footpaths, aerodromes, parking areas, bus shelters and services, water transport, RMS works, other. ECONOMIC AFFAIRS Camping areas, caravan parks, tourism and area promotion, industrial development promotion, saleyards and markets, real estate development, commercial nurseries, other business undertakings.
page 27
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 3. Income from Continuing Operations $ '000
Notes
Actual 2015
Actual 2014
4,229 14,137 2,331 20,697
4,064 13,885 2,266 20,215
1,973 1,388 2,613 338 6,312
1,868 1,413 2,335 349 5,965
27,009
26,180
(a) Rates & Annual Charges Ordinary Rates Residential Farmland Business Total Ordinary Rates Special Rates Nil Annual Charges (pursuant to s.496, s.496A, s.496B, s.501 & s.611) Domestic Waste Management Services Water Supply Services Sewerage Services Waste Management Services (non-domestic) Total Annual Charges
TOTAL RATES & ANNUAL CHARGES
Council has used 2015 year valuations provided by the NSW Valuer General in calculating its rates.
page 28
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 3. Income from Continuing Operations (continued) $ '000
Notes
Actual 2015
Actual 2014
921 3,347 329 4,597
907 3,835 395 5,137
176 228 404
260 123 383
637 174 634 548 5,451 16 750 51 8,261
363 199 580 615 7,186 801 625 50 10,419
13,262
15,939
(b) User Charges & Fees Specific User Charges (per s.502 - Specific "actual use" charges) Domestic Waste Management Services Water Supply Services Sewerage Services Total User Charges Other User Charges & Fees (i) Fees & Charges - Statutory & Regulatory Functions (per s.608)
Planning & Building Regulation Private Works - Section 67 Total Fees & Charges - Statutory/Regulatory (ii) Fees & Charges - Other (incl. General User Charges (per s.608)
Aerodrome Cemeteries Child Care Rent and Hire of Council Property RMS (formerly RTA) Charges (State Roads not controlled by Council) Swimming Centres Waste Disposal Tipping Fees Other Total Fees & Charges - Other
TOTAL USER CHARGES & FEES
page 29
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 3. Income from Continuing Operations (continued) $ '000
Notes
Actual 2015
Actual 2014
142 600 72 9
162 539 84 16
(c) Interest & Investment Revenue (incl. losses) Interest & Dividends - Interest on Overdue Rates & Annual Charges (incl. Special Purpose Rates) - Interest earned on Investments (interest & coupon payment income) - Interest on Overdue User Charges and Fees - Interest & Dividend Income (Other) Fair Value Adjustments - Fair Valuation movements in Investments (at FV or Held for Trading)
-
56
823
857
Unrestricted Investments/Financial Assets: Overdue Rates & Annual Charges (General Fund) General Council Cash & Investments
101 208
97 361
Restricted Investments/Funds - External: Development Contributions - Section 94 - Section 64 Water Fund Operations Sewerage Fund Operations Domestic Waste Management operations Gwydir Day Care & Preschool Total Interest & Investment Revenue Recognised
23 14 179 206 80 12 823
13 12 125 190 59 857
135 158 204 173 175 93 223 256
118 221 27 124 195 68 221 265
1,417
1,239
TOTAL INTEREST & INVESTMENT REVENUE Interest Revenue is attributable to:
(d) Other Revenues Fines Legal Fees Recovery - Rates & Charges (Extra Charges) Insurance Premium Refunds and Incentive Payments Water Services Weight of Loads Sewer Services Sales - General Other
TOTAL OTHER REVENUE
page 30
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 3. Income from Continuing Operations (continued) $ '000
2015 Operating
2014 Operating
2015 Capital
2014 Capital
3,828 2,712 59 6,599
1,912 1,333 62 3,307
-
-
(e) Grants General Purpose (Untied) Financial Assistance - General Component Financial Assistance - Local Roads Component Pensioners' Rates Subsidies - General Component Total General Purpose 1
1 1
The Financial Assistance Grant for the comparative 13/14 year reflects a one off timing difference (reduction). This grant ceased being paid in advance in the 13/14 year by up to 50% as had occurred in previous years.
Specific Purpose Pensioners' Rates Subsidies: - Water - Sewerage - Domestic Waste Management Water Supplies Sewerage Services Bushfire & Emergency Services Child Care Community Care Services Employment & Training Programs Heritage & Cultural Noxious Weeds Recreation & Culture Street Lighting Transport (Other Roads & Bridges Funding) Other Total Specific Purpose
Total Grants
22 21 16 331 471 41 51 22 251 129 219 166 1,740 8,339
25 22 21 329 319 23 87 37 107 61 10,736 357 12,124 15,431
252 130 1,236 73 1,691 1,691
16 136 152 152
7,138 1,201 8,339
3,738 11,693 15,431
1,691 1,691
136 16 152
Grant Revenue is attributable to:
- Commonwealth Funding - State Funding - Other Funding
page 31
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 3. Income from Continuing Operations (continued) 2015 Operating
2014 Operating
2015 Capital
2014 Capital
86 134 149 369
263 24 31 318
-
-
888 17 1,538 2,443
22 1,615 112 1,749
1,635 256 286 2,177
2,644 36 2,680
2,812
2,067
2,177
2,680
11,151
17,498
3,868
2,832
Actual 2015
Actual 2014
Unexpended at the Close of the Previous Reporting Period
1,981
2,749
add: Grants & contributions recognised in the current period but not yet spent:
3,174
847
$ '000
(f) Contributions Developer Contributions: (s93 & s94 - EP&A Act, s64 of the LGA):
S 94A - Fixed Development Consent Levies S 64 - Water Supply Contributions S 64 - Sewerage Service Contributions Total Developer Contributions Other Contributions: Public Works Flood Damage Roads & Bridges RMS Contributions (Regional Roads, Block Grant) Other Total Other Contributions
Total Contributions TOTAL GRANTS & CONTRIBUTIONS
17
$ '000
(g) Restrictions relating to Grants and Contributions Certain grants & contributions are obtained by Council on condition that they be spent in a specified manner:
less: Grants & contributions recognised in a previous reporting period now spent:
Net Increase (Decrease) in Restricted Assets during the Period Unexpended and held as Restricted Assets Comprising: - Specific Purpose Unexpended Grants - Developer Contributions
(487) 2,687
(1,615) (768)
4,668
1,981
3,229 1,439 4,668
949 1,032 1,981
page 32
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 4. Expenses from Continuing Operations $ '000
Notes
Actual 2015
Actual 2014
12,190 3,088 1,127 386 539 168 45 398 244 18,185 (864)
12,099 3,193 1,073 404 665 156 46 393 295 18,324 (626)
(a) Employee Benefits & On-Costs Salaries and Wages Employee Leave Entitlements (ELE) Superannuation - Defined Contribution Plans Superannuation - Defined Benefit Plans Workers' Compensation Insurance Fringe Benefit Tax (FBT) Payroll Tax Training Costs (other than Salaries & Wages) Other Total Employee Costs less: Capitalised Costs
TOTAL EMPLOYEE COSTS EXPENSED Number of "Equivalent Full Time" Employees at year end
17,321
17,698
222
220
3,054 3,054
2,496 2,496
(b) Borrowing Costs (i) Interest Bearing Liability Costs Interest on Loans Total Interest Bearing Liability Costs Expensed (ii) Other Borrowing Costs Discount adjustments relating to movements in Provisions (other than ELE) - Remediation Liabilities Total Other Borrowing Costs
TOTAL BORROWING COSTS EXPENSED
26
(108) (108)
65 65
2,946
2,561
14,435 92 84
26,229 45 75
36 191 110
22 298 147
(c) Materials & Contracts Raw Materials & Consumables Contractor & Consultancy Costs Auditors Remuneration (1) Legal Expenses: - Legal Expenses: Planning & Development - Legal Expenses: Debt Recovery - Legal Expenses: Other Operating Leases: - Operating Lease Rentals: Minimum Lease Payment (2)
TOTAL MATERIALS & CONTRACTS
84
49
15,032
26,865 page 33
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 4. Expenses from Continuing Operations (continued) $ '000
Notes
Actual 2015
Actual 2014
49 35 84 84
59 16 75 75
84 84
49 49
(c) Materials & Contracts (continued) 1. Auditor Remuneration During the year, the following fees were incurred for services provided by the Council's Auditor (& the Auditors of other Consolidated Entities): (i) Audit and Other Assurance Services
- Audit & review of financial statements: Council's Auditor - Auditors Remuneration - Council's Internal Auditor Remuneration for audit and other assurance services Total Auditor Remuneration 2. Operating Lease Payments are attributable to:
Other
Impairment Costs $ '000
Notes
Depreciation/Amortisation
Actual 2015
Actual 2014
Actual 2015
Actual 2014
-
-
1,873 269 50 429 352 341
1,349 259 46 365 344 317
7,258 318 185 213 1,039 1,029 34 27 13,417 -
5,260 246 100 207 1,028 1,003 22 37 10,583 -
13,417
10,583
(d) Depreciation, Amortisation & Impairment Plant and Equipment Office Equipment Furniture & Fittings Buildings - Non Specialised Buildings - Specialised Other Structures Infrastructure: - Roads - Bridges - Footpaths - Stormwater Drainage - Water Supply Network - Sewerage Network - Other Infrastructure Asset Reinstatement Costs 9 & 26 Total Depreciation & Impairment Costs less: Impairments (to)/from ARR [Equity] 9a
TOTAL DEPRECIATION & IMPAIRMENT COSTS EXPENSED
-
-
(10,806) (10,806) 10,806
-
page 34
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 4. Expenses from Continuing Operations (continued) $ '000
Notes
Actual 2015
Actual 2014
333 24 97 123 98 938 642 249 280
124 267 23 95 107 107 1,255 588 350 293
2,784
3,209
Actual
Actual
757 (991) (234)
1,006 (1,193) (187)
(e) Other Expenses Other Expenses for the year include the following: Bad & Doubtful Debts Contributions/Levies to Other Levels of Government - NSW Rural Fire Service Levy Councillor Expenses - Mayoral Fee Councillor Expenses - Councillors' Fees Councillors' Expenses (incl. Mayor) - Other (excluding fees above) Donations, Contributions & Assistance to other organisations (Section 356) Electricity & Heating Insurance Street Lighting Telephone & Communications
TOTAL OTHER EXPENSES
Note 5. Gains or Losses from the Disposal of Assets Plant & Equipment Proceeds from Disposal - Plant & Equipment less: Carrying Amount of P&E Assets Sold / Written Off Net Gain/(Loss) on Disposal
Infrastructure Proceeds from Disposal - Infrastructure less: Carrying Amount of Infrastructure Assets Sold / Written Off Net Gain/(Loss) on Disposal
-
(9) (9)
Financial Assets* Proceeds from Disposal / Redemptions / Maturities - Financial Assets less: Carrying Amount of Financial Assets Sold / Redeemed / Matured Net Gain/(Loss) on Disposal
1,000 (989) 11
1,414 (678) 736
NET GAIN/(LOSS) ON DISPOSAL OF ASSETS
(223)
540
* Financial Assets disposals / redemptions include: - Net Gain/(Loss) from Financial Instruments "At Fair Value through profit & loss"
Net Gain/(Loss) on Disposal of Financial Instruments
11
736
11
736
page 35
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 6a. - Cash Assets and Note 6b. - Investments
$ '000
Notes
2015
2015
2014
2014
Actual Current
Actual Non Current
Actual Current
Actual Non Current
3,415
-
6,116
-
12,000 15,415
-
8,000 14,116
-
12,000 12,000
-
6,000 989 6,989
-
27,415
-
21,105
-
15,415
-
14,116
-
12,000 12,000
-
5,989 1,000 6,989
-
Cash & Cash Equivalents (Note 6a) Cash on Hand and at Bank Cash-Equivalent Assets 1 - Short Term Deposits Total Cash & Cash Equivalents
Investments (Note 6b) - Long Term Deposits - Equity Linked Notes/Capital Protected Notes Total Investments
TOTAL CASH ASSETS, CASH EQUIVALENTS & INVESTMENTS 1
Those Investments where time to maturity (from date of purchase) is < 3 mths.
Cash, Cash Equivalents & Investments were classified at year end in accordance with AASB 139 as follows: Cash & Cash Equivalents a. "At Fair Value through the Profit & Loss" Investments a. "At Fair Value through the Profit & Loss" - "Held for Trading"
6(b-i)
b. "Held to Maturity"
6(b-ii)
Investments
Refer to Note 27 - Fair Value Measurement for information regarding the fair value of investments held.
page 36
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 6b. Investments (continued) 2015
2015
2014
2014
$ '000
Actual Current
Actual Non Current
Actual Current
Actual Non Current
Note 6(b-i) Reconciliation of Investments classified as "At Fair Value through the Profit & Loss" Balance at the Beginning of the Year Revaluations (through the Income Statement) Additions Disposals (sales & redemptions) Transfers from/(to) "Held to Maturity" Balance at End of Year
5,989 6,000 (989) 1,000 12,000
-
1,611 56 5,000 (678) 5,989
-
Total
12,000 12,000
-
989 5,000 5,989
-
Note 6(b-ii) Reconciliation of Investments classified as "Held to Maturity" Balance at the Beginning of the Year Additions Transfers from/(to) "At Fair Value" Balance at End of Year
1,000 (1,000) -
-
1,000 1,000
-
-
1,000 1,000
-
Comprising: - Equity Linked Notes - Other Long Term Financial Assets
Comprising: - Other Long Term Financial Assets
Total
-
page 37
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 6c. Restricted Cash, Cash Equivalents & Investments - Details
$ '000
Total Cash, Cash Equivalents and Investments
2015
2015
2014
2014
Actual Current
Actual Non Current
Actual Current
Actual Non Current
27,415
-
21,105
-
17,275 7,052 3,088 27,415
-
12,076 6,745 2,284 21,105
-
Opening Balance
Transfers to Restrictions
2,928 803 147 3,878
11,400 243 11,643
(13,642) (13,642)
686 1,046 147 1,879
612 170 250 949 682 4,617 918 8,198 12,076
110 140 157 9,899 138 130 2,418 1,123 1,444 15,559 27,202
(7,849) (38) (474) (8,361) (22,003)
722 310 407 2,999 138 92 3,100 5,740 1,444 444 15,396 17,275
attributable to:
External Restrictions (refer below) Internal Restrictions (refer below) Unrestricted
2015 $ '000
Transfers from Restrictions
Closing Balance
Details of Restrictions External Restrictions - Included in Liabilities Specific Purpose Unexpended Loans-General (A) Specific Purpose Unexpended Loans-Water (A) Specific Purpose Unexpended Loans-Sewer (A) External Restrictions - Included in Liabilities External Restrictions - Other Developer Contributions - General Developer Contributions - Water Fund Developer Contributions - Sewer Fund Specific Purpose Unexpended Grants
(D) (D) (D) (F) Specific Purpose Unexpended Grants-Water Fund (F) Specific Purpose Unexpended Grants-Sewer Fund (F) Water Supplies (G) Sewerage Services (G) Domestic Waste Management (G) Northern Regional Library External Restrictions - Other Total External Restrictions
A Loan moneys which must be applied for the purposes for which the loans were raised. D Development contributions which are not yet expended for the provision of services and amenities in accordance
with contributions plans (refer Note 17). F Grants which are not yet expended for the purposes for which the grants were obtained. (refer Note 1) G Water, Sewerage, Domestic Waste Management (DWM) & other Special Rates/Levies/Charges are externally restricted assets and must be applied for the purposes for which they were raised. page 38
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 6c. Restricted Cash, Cash Equivalents & Investments - Details (continued) 2015 $ '000
Internal Restrictions Plant & Vehicle Replacement Employees Leave Entitlement Dhiiyaan Unit GAR Reserve Council Various Projects Revotes Sportsground Improvements Saleyards Reserve RMS Contract Retention Waste Asset Replacement Reserve Road Sustainability Fund Regional and Local Infrastructure Program Property Acquisitions Onsite Effluent Occupational Health and Safety Medical Accommodation Jellicoe Park Gravel Pits Election Reserve Economic Development Special Rate Levy (SRL) Capital Replacement Sewer Aerodromes Total Internal Restrictions TOTAL RESTRICTIONS
Opening Balance
Transfers to Restrictions
Transfers from Restrictions
Closing Balance
200 900 100 10 92 12 83 1,073 130 544 7 300 80 31 38 42 584 80 211 1,832 396 6,745
1,299 30 137 50 60 115 667 880 140 16 11 27 324 342 4,098
(70) (92) (701) (130) (163) (300) (13) (4) (6) (334) (1,832) (146) (3,791)
1,499 930 137 150 115 12 83 1,039 1,261 7 140 80 18 50 47 611 80 201 592 7,052
18,821
31,300
(25,794)
24,327
page 39
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 7. Receivables $ '000
Notes
Purpose Rates & Annual Charges Interest & Extra Charges User Charges & Fees Interest & Extra Charges (User Charges) Accrued Revenues - Interest on Investments - Other Income Accruals Net GST Receivable Other Debtors Total
2015 Current Non Current
2014 Current Non Current
1,839 99 2,399 38
-
2,105 286 2,833 79
-
86 870 336 71 5,738
-
41 2,360 95 7,799
-
less: Provision for Impairment
Rates & Annual Charges User Charges & Fees Total Provision for Impairment - Receivables
TOTAL NET RECEIVABLES
(139) (116) (255)
-
(290) (120) (410)
-
5,483
-
7,389
-
202 1,409
-
197 1,784
-
443 222 2,276
-
454 156 2,591
-
3,207
-
4,798
-
5,483
-
7,389
-
Externally Restricted Receivables Water Supply
- Rates & Availability Charges - Other Sewerage Services
- Rates & Availability Charges - Other Total External Restrictions Internally Restricted Receivables Nil Unrestricted Receivables TOTAL NET RECEIVABLES
Notes on Debtors above: (i) Rates & Annual Charges Outstanding are secured against the property. (ii) Doubtful Rates Debtors are provided for where the value of the property is less than the debt outstanding. An allowance for other doubtful debts is made when there is objective evidence that a receivable is impaired. (iii) Interest was charged on overdue rates & charges at 8.50% (2014 9.00%). Generally all other receivables are non interest bearing. (iv) Please refer to Note 15 for issues concerning Credit Risk and Fair Value disclosures.
page 40
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 8. Inventories & Other Assets $ '000
Notes
Inventories Real Estate for resale (refer below) Stores & Materials Total Inventories
2015 Current Non Current
2014 Current Non Current
1,672 1,548 3,220
-
145 1,443 1,588
-
77 77
-
468 468
-
3,297
-
2,056
-
Water Stores & Materials Prepayments Total Water
115 115
-
105 1 106
-
Sewerage Stores & Materials Total Sewerage
115 115
-
105 105
-
230 3,067 3,297
-
211 1,845 2,056
-
Other Assets Prepayments Total Other Assets
TOTAL INVENTORIES / OTHER ASSETS
Externally Restricted Assets
Domestic Waste Management Nil Other Nil Total Externally Restricted Assets Total Internally Restricted Assets Total Unrestricted Assets TOTAL INVENTORIES & OTHER ASSETS
page 41
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 8. Inventories & Other Assets (continued) $ '000
2015 Current Non Current
2014 Current Non Current
Other Disclosures (a) Details for Real Estate Development Industrial/Commercial Total Real Estate for Resale
1,672 1,672
-
145 145
-
1,527 145 1,672 1,672
-
145 145 145
-
145 1,527 1,672
-
145 145
-
(Valued at the lower of cost and net realisable value)
Represented by:
Development Costs Other Properties - Book Value Total Costs Total Real Estate for Resale Movements: Real Estate assets at beginning of the year
- Purchases and other costs - Other Total Real Estate for Resale
(b) Inventory Write Downs There were no amounts recognised as an expense relating to the write down of Inventory balances held during the year. Refer to Note 27 - Fair Value Measurement for information regarding the fair value of other assets held.
page 42
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 9a. Infrastructure, Property, Plant & Equipment Asset Movements during the Reporting Period as at 30/6/2014
$ '000 Plant & Equipment Plant & Equipment (WIP) Office Equipment Office Equipment (WIP) Furniture & Fittings Furniture & Fittings (WIP)
At
At
Cost
Fair Value
as at 30/6/2015
Accumulated Dep'n
Carrying
Impairment
Reinstatement Costs for Impaired Assets
Asset Additions
Value
WDV of Asset Disposals
Depreciation Expense
WIP Transfers
Adjustments & Transfers
-
22,911 5 4,353 242 1,389 13
10,538 3,054 951 -
-
12,373 5 1,299 242 438 13
1,526 199 18 40 3
-
(873) -
(1,873) (269) (50) -
335 (5) 152 (39) 155 (13)
-
-
9,005 45 4,169 220 35,839 141 32,882 10 16,037 10,812
7,045 5,445 2,644 -
-
9,005 45 4,169 220 28,794 141 27,437 10 13,393 10,812
20 339 959 40 60 212 2,996
-
(118) -
(429) (352) (341) -
41 (41) 30 (220) 49 (142) 78 (7) 351 (724)
(3) -
-
307,837 6,049 49,417 10,162 20,803 630 73,774 3,638 53,121 1,099 1,182
83,294 5,111 2,399 7,541 30,003 27,488 414
-
224,543 6,049 44,306 7,763 13,262 630 43,771 3,638 25,633 1,099 768
125 16,587 226 283 75 58 19 881 972 39 13
-
-
(7,258) (318) (185) (213) (1,039) (1,029) (34)
167 (167) 58 (58) 998 (998) -
(24) -
-
365
1
-
364
-
-
-
-
3,265 66
1,638 21
-
1,627 45
7 2
(504) (11)
-
669,481
187,587
-
481,894
25,699
(515)
Revaluation Revaluation Decrements Increments to Equity to Equity (ARR) (ARR)
-
At
At
Cost
Fair Value
Accumulated Dep'n
Carrying
Impairment
Value
-
-
23,494 4,704 221 1,585 3
12,006 3,323 1,002 -
-
11,488 1,381 221 583 3
-
-
8,948 4 4,538 36,846 39 33,020 16,600 5,503
7,473 5,797 2,985 -
-
8,948 4 4,538 29,373 39 27,223 13,615 5,503
-
19,646 652 747 -
-
330,395 22,636 49,644 10,445 21,045 521 74,957 4,461 55,916 140 1,195
93,363 5,430 2,584 7,754 31,496 28,595 448
-
237,032 22,636 44,214 7,861 13,291 521 43,461 4,461 27,321 140 747
Land:
- Operational Land - Operational Land (WIP) - Community Land - Community Land (WIP) Buildings - Non Specialised Buildings - Non Specialised (WIP) Buildings - Specialised Buildings - Specialised (WIP) Other Structures Other Structures (WIP)
(7,581)
Infrastructure:
-
Roads Roads (WIP) Bridges Footpaths Stormwater Drainage Stormwater Drainage (WIP) Water Supply Network Water Supply Network (WIP) Sewerage Network Sewerage Network (WIP) Other Infrastructure
Other Assets:
- Other
-
-
-
-
-
-
365
1
-
364
(25) (2)
-
-
-
-
-
2,785 55
1,680 21
-
1,105 34
(13,417)
-
21,045
-
710,065
203,958
-
506,107
Reinstatement, Rehabilitation & Restoration Assets (refer Note 26):
- Tip Assets - Quarry Assets
TOTAL INFRASTRUCTURE, PROPERTY, PLANT & EQUIP.
(991)
(27)
(7,581)
Additions to Buildings & Infrastructure Assets are made up of Asset Renewals ($15.950M) and New Assets ($9.749M). Renewals are defined as the replacement of existing assets (as opposed to the acquisition of new assets). Refer to Note 27 - Fair Value Measurement for information regarding the fair value of other Infrastructure, Property, Plant & Equipment.
page 43
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 9b. Externally Restricted Infrastructure, Property, Plant & Equipment $ '000
Actual
Actual
2015
Class of Asset
2014
Carrying Value Fair Value Impairm't
At
At
Cost
A/Dep &
At
At
Cost
A/Dep &
Fair Value Impairm't
Carrying Value
Water Supply Plant & Equipment
-
380
281
99
-
372
261
111
Office Equipment
-
86
67
19
-
75
64
11
Furniture & Fittings
-
7
6
1
-
7
6
1
- Operational Land
-
1,211
-
1,211
-
1,211
-
1,211
- Community Land
-
5
-
5
-
5
-
5
Land
Buildings
-
89
20
69
-
89
19
70
Infrastructure (WIP)
-
4,461
-
4,461
-
3,638
-
3,638
Infrastructure Total Water Supply
-
74,852
31,469
73,670
29,982
81,091
31,843
43,383 49,248
-
-
-
79,067
30,332
43,688 48,735
Plant & Equipment
-
304
120
184
-
294
101
193
Office Equipment
-
28
12
16
-
28
10
18
Furniture & Fittings
-
1
-
1
-
1
-
1
-
860
-
860
-
860
-
860
Buildings
-
61
12
49
-
61
11
50
Other Structures
-
50
10
40
-
50
9
41
Infrastructure (WIP)
-
142
-
142
-
1,099
-
1,099
Infrastructure Total Sewerage Services
-
55,865
28,592
-
53,070
27,485
-
57,311
28,746
27,273 28,565
-
55,463
27,616
25,585 27,847
-
138,402
60,589
77,813
-
134,530
57,948
76,582
Sewerage Services
Land - Operational Land
TOTAL RESTRICTED I,PP&E
Note 9c. Infrastructure, Property, Plant & Equipment - Current Year Impairments $ '000
Notes
Actual 2015
Actual 2014
-
10,806 10,806
-
10,806
Reversals of Impairment Losses previously recognised direct to Equity (ARR): - Impaired Road Asset reversal
Total Impairment Reversals
IMPAIRMENT of ASSETS - DIRECT to EQUITY (ARR)
20 (ii)
page 44
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 10a. Payables, Borrowings & Provisions $ '000
Notes
2015 Current Non Current
2014 Current Non Current
Payables Goods & Services - operating expenditure Accrued Expenses: - Borrowings - Other Expenditure Accruals Security Bonds, Deposits & Retentions Northern Regional Library Total Payables
3,122
-
3,751
-
370 1,273 350 459 5,574
-
340 463 503 918 5,975
-
1,159 1,159
52,502 52,502
1,058 1,058
41,261 41,261
1,661 387 2,409 119
89 -
1,522 364 2,407 131
89 -
Borrowings Loans - Secured 1 Total Borrowings
Provisions Employee Benefits;
Annual Leave Sick Leave Long Service Leave Other Leave Sub Total - Aggregate Employee Benefits
Asset Remediation/Restoration (Future Works)
4,576
89
4,424
89
2,000 6,576
1,504 1,593
1,500 5,924
2,619 2,708
13,309
54,095
12,957
43,969
26
Total Provisions
Total Payables, Borrowings & Provisions
(i) Liabilities relating to Restricted Assets 2015 Current Non Current
2014 Current Non Current
Externally Restricted Assets
631 692 1,323
9,944 3,232 13,176
527 301 828
9,149 3,374 12,523
1,323 11,986
13,176 40,919
828 12,129
12,523 31,446
13,309
54,095
12,957
43,969
Water Sewer Liabilities relating to externally restricted assets Internally Restricted Assets
Nil Total Liabilities relating to restricted assets Total Liabilities relating to Unrestricted Assets TOTAL PAYABLES, BORROWINGS & PROVISIONS 1.
Loans are secured over the General Rating Income of Council Disclosures on Liability Interest Rate Risk Exposures, Fair Value Disclosures & Security can be found in Note 15. page 45
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 10a. Payables, Borrowings & Provisions (continued) $ '000
Actual 2015
Actual 2014
2,785 2,785
2,896 2,896
(ii) Current Liabilities not anticipated to be settled within the next 12 months The following Liabilities, even though classified as current, are not expected to be settled in the next 12 months. Provisions - Employees Benefits
Note 10b. Description of and movements in Provisions 2014
Class of Provision Annual Leave Sick Leave Long Service Leave Other Leave (enter deta Asset Remediation
TOTAL
Opening Balance as at 1/7/14
1,522 364 2,496 131 4,119 8,632
2015 Additional Decrease due to Provisions Payments
912 9 390 132 1,443
(937) (13) (436) (163) (1,549)
Remeasurement effects due to Discounting
164 27 48 19 (615) (357)
Unused amounts reversed
Closing Balance as at 30/6/15
-
1,661 387 2,498 119 3,504 8,169
a. Employees Leave Entitlements & On-Costs represents those benefits accrued and payable and an estimate of those that will become payable in the future as a result of past service. b. Asset Remediation, Reinstatement & Restoration Provisions represent the Present Value estimate of future costs Council will incur in order to remove, restore & remediate assets &/or activities as a result of past operations.
page 46
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 11. Statement of Cash Flows - Additional Information $ '000
Notes
Actual 2015
Actual 2014
15,415 15,415
14,116 14,116
5,807
4,169
13,417 223
10,583 (540)
(a) Reconciliation of Cash Assets Total Cash & Cash Equivalent Assets Less Bank Overdraft BALANCE as per the STATEMENT of CASH FLOWS
6a 10
(b) Reconciliation of Net Operating Result to Cash provided from Operating Activities Net Operating Result from Income Statement Adjust for non cash items:
Depreciation & Amortisation Net Losses/(Gains) on Disposal of Assets Losses/(Gains) recognised on Fair Value Re-measurements through the P&L: - Investments classified as "At Fair Value" or "Held for Trading" Unwinding of Discount Rates on Reinstatement Provisions
(615)
(56) 65
2,061 (155) (105) 391 (629) 30 810 (612) 152 -
1,093 (366) (63) (826) 4 203 106 482 168
+/- Movement in Operating Assets and Liabilities & Other Cash Items:
Decrease/(Increase) in Receivables Increase/(Decrease) in Provision for Doubtful Debts Decrease/(Increase) in Inventories Decrease/(Increase) in Other Assets Increase/(Decrease) in Payables Increase/(Decrease) in accrued Interest Payable Increase/(Decrease) in other accrued Expenses Payable Increase/(Decrease) in Other Liabilities Increase/(Decrease) in Employee Leave Entitlements Increase/(Decrease) in Other Provisions NET CASH PROVIDED FROM/(USED IN) OPERATING ACTIVITIES from the STATEMENT of CASH FLOWS
20,884
15,022
page 47
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 11. Statement of Cash Flows - Additional Information (continued) $ '000
Notes
Actual 2015
Actual 2014
10 75 85
10 75 85
8 8
6 6
(c) Non-Cash Investing & Financing Activities Nil
(d) Financing Arrangements (i) Unrestricted access was available at balance date to the following lines of credit: Bank Overdraft Facilities (1) Credit Cards / Purchase Cards Total Financing Arrangements Amounts utilised as at Balance Date: - Credit Cards / Purchase Cards Total Financing Arrangements Utilised 1. The Bank overdraft facility may be drawn at any time and may be terminated by the bank without notice. Interest rates on overdrafts are Interest Rates on Loans & Other Payables are disclosed in Note 15.
(ii) Secured Loan Liabilities Loans are secured by a mortgage over future years Rate Revenue only.
page 48
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 12. Commitments for Expenditure $ '000
Notes
Actual 2015
Actual 2014
5,051 26,972 1,024 90 100,576 15,259 6,800 35,987 7,807 199,566
2,875 27,068 5,601 340 107,172 8,550 6,200 10,711 10,722 360 179,599
44,567 105,175 49,824 199,566
36,963 63,690 78,946 179,599
114,094 53,667 1,046 414 5,174 17,200 7,971 199,566
112,741 24,464 1,446 7,888 24,321 8,739 179,599
(a) Capital Commitments (exclusive of GST) Capital expenditure committed for at the reporting date but not recognised in the financial statements as liabilities: Property, Plant & Equipment Buildings Plant & Equipment Other Structures Land Engineering Infrastructure Sewer Infrastructure Waste Infrastructure Water Infrastructure Other Infrastructure Other Total Commitments These expenditures are payable as follows:
Within the next year Later than one year and not later than 5 years Later than 5 years Total Payable Sources for Funding of Capital Commitments:
Unrestricted General Funds Future Grants & Contributions Sect 64 & 94 Funds/Reserves Unexpended Grants Internally Restricted Reserves Unexpended and New Loans (to be raised) Other Funding Total Sources of Funding
page 49
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 12. Commitments for Expenditure (continued) $ '000
Notes
Actual 2015
Actual 2014
83 286 369
49 344 393
(b) Finance Lease Commitments Nil
(c) Operating Lease Commitments (Non Cancellable) a. Commitments under Non Cancellable Operating Leases at the Reporting date, but not recognised as Liabilities are payable: Within the next year Later than one year and not later than 5 years Later than 5 years Total Non Cancellable Operating Lease Commitments
b. Non Cancellable Operating Leases include the following assets: Computer Equipment, Miscellaneous Plant & Equipment Contingent Rentals may be payable depending on the condition of items or usage during the lease term. Conditions relating to Operating Leases: - All Operating Lease Agreements are secured only against the Leased Asset. - No Lease Agreements impose any financial restrictions on Council regarding future debt etc.
(d) Investment Property Commitments Nil
page 50
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 13a(i). Statement of Performance Measurement - Indicators (Consolidated) Amounts 2015
$ '000
Indicator 2015
Prior Periods 2014 2013
Local Government Industry Indicators - Consolidated 1. Operating Performance Ratio Total continuing operating revenue (1) (excl. Capital Grants & Contributions) - Operating Expenses
Total continuing operating revenue (1)
2,162 53,662
4.03%
1.20%
3.91%
42,511 57,530
73.89%
68.48%
51.08%
16,414 9,201
1.78x
1.70
2.29
18,525 4,004
4.63x
3.94
4.84
1,799 29,410
6.12%
7.31%
7.85%
27,415 3,675
7.46 mths
4.23
3.97
(excl. Capital Grants & Contributions)
2. Own Source Operating Revenue Ratio Total continuing operating revenue (1) (excl. ALL Grants & Contributions)
Total continuing operating revenue
(1)
3. Unrestricted Current Ratio Current Assets less all External Restrictions (2) Current Liabilities less Specific Purpose Liabilities
(3, 4)
4. Debt Service Cover Ratio Operating Result (1) before capital excluding interest and depreciation / impairment / amortisation Principal Repayments (from the Statement of Cash Flows) + Borrowing Costs (from the Income Statement)
5. Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage Rates, Annual and Extra Charges Outstanding Rates, Annual and Extra Charges Collectible
6. Cash Expense Cover Ratio Current Year's Cash and Cash Equivalents + All Term Deposits Payments from cash flow of operating and
x12
financing activities Notes (1)
Excludes fair value adjustments and reversal of revaluation decrements, net gain/(loss) on sale of assets and the net share of interests in joint ventures & associates.
(2)
Refer Notes 6-8 inclusive. Also excludes any real estate & land for resale not expected to be sold in the next 12 months
(3)
Refer to Note 10(a).
(4)
Refer to Note 10(a)(ii) - excludes all payables & provisions not expected to be paid in the next 12 months (incl. ELE). page 51
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 13a(ii). Local Government Industry Indicators - Graphs (Consolidated) 1. Operating Performance Ratio
Purpose of Operating Performance Ratio
5.0%
Commentary on 2014/15 Result 2014/15 Ratio
4.03%
Ratio %
4.0% 3.0% 2.0%
4.03%
3.91%
1.0%
1.20%
1.10%
0.0%
2012
2013
―――
Benchmark:
2014
This ratio measures Council’s achievement of containing operating expenditure within operating revenue.
Council is reporting a strong consolidated surplus this financial year. This is reflected in a ratio of 4.03%. This strong result is attributable to the Water and Sewer operations of Council (see ratio by fund). Work will continue to ensure General fund operations improve in future years.
2015
Ratio is within Benchmark
Minimum >=0.00%
Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 2. Own Source Operating Revenue Ratio 100% 90%
Purpose of Own Source Operating Revenue Ratio
Ratio is outside Benchmark Commentary on 2014/15 Result 2014/15 Ratio
73.89%
Ratio %
80% 70% 60% 50% 40% 30%
62.55%
20%
68.48%
73.89%
2014
2015
51.08%
10% 0%
2012
Benchmark:
2013
―――
This ratio measures fiscal flexibility. It is the degree of reliance on external funding sources such as operating grants & contributions.
Ratio is within Benchmark
Minimum >=60.00%
Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 3. Unrestricted Current Ratio
Purpose of Unrestricted Current Ratio
3.0
Council again exceeded the benchmark of 60% for this ratio and expects to continue doing so in future years.
Ratio is outside Benchmark Commentary on 2014/15 Result 2014/15 Ratio
1.78x
Ratio (x)
2.5 2.0 1.5
2.55
1.0
2.29 1.70
1.78
2014
2015
0.5 0.0
2012
Benchmark:
2013
―――
To assess the adequacy of working capital and its ability to satisfy obligations in the short term for the unrestricted activities of Council.
Minimum >=1.50
Source for Benchmark: Code of Accounting Practice and Financial Reporting #23
Council continues to maintain a satisfactory level of working capital to ensure it can meet short term debt obligations.
Ratio is within Benchmark Ratio is outside Benchmark
page 52
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 13a(ii). Local Government Industry Indicators - Graphs (Consolidated) Commentary on 2014/15 Result
4. Debt Service Cover Ratio
Purpose of Debt Service Cover Ratio
6.0
2014/15 Ratio
4.63x
Ratio (x)
5.0 4.0 3.0 2.0
4.84
4.26
4.63
3.94
1.0 0.0
2012
Benchmark:
2013
―――
2014
This ratio measures the availability of operating cash to service debt including interest, principal and lease payments
2015
Ratio is within Benchmark
Minimum >=2.00
Source for Benchmark: Code of Accounting Practice and Financial Reporting #23
10%
This ratio was expected to decline in the current financial year as a result of additional debt to be taken on for projects. Deferral of some projects has seen postponement of loan draw downs, resulting in a higher than expected ratio. These loans will be drawn down next financial year to complete projects.
5. Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage
9%
Purpose of Rates & Annual Charges Outstanding Ratio
Ratio is outside Benchmark Commentary on 2014/15 Result 2014/15 Ratio
6.12%
Ratio %
8% 7% 6% 5% 4%
9.15%
7.85%
3%
7.31%
6.12%
2% 1% 0%
2012
2013
2014
To assess the impact of uncollected rates and annual charges on Council's liquidity and the adequacy of recovery efforts.
Continued efforts in debt recovery has seen a very positive trend in this ratio over the previous 3 years. Provision for doubtful debts was reduced by $151,000 for the current year - without this reduction the ratio would have been 5.6%. Efforts will continue in order to maintain this ratio at current levels.
2015
6. Cash Expense Cover Ratio
Purpose of Cash Expense Cover Ratio
10.0 9.0
Commentary on 2014/15 Result 2014/15 Ratio
7.46 mths
Ratio (mths)
8.0 7.0 6.0 5.0 4.0
7.46
3.0 2.0 1.0 0.0
3.74
3.97
4.23
2012
2013
2014
Benchmark:
―――
This liquidity ratio indicates the number of months a Council can continue paying for its immediate expenses without additional cash inflow.
Council continues to maintain a strong cash position. Deferral of some projects saw a higher than expected cash balance at year end however these projects will be undertaken in the coming financial year.
2015
Minimum >=3.00
Source for Benchmark: Code of Accounting Practice and Financial Reporting #23
Ratio is within Benchmark Ratio is outside Benchmark
page 53
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 13b. Statement of Performance Measurement - Indicators (by Fund) $ '000
Water 2015
Sewer 2015
General 5 2015
21.29%
28.81%
-0.19%
22.36%
-0.31%
-1.25%
90.97%
92.04%
70.15%
99.22%
97.89%
63.23%
7.65x
9.42x
1.78x
5.25
17.71
1.70
3.47x
6.17x
4.78x
4.21
3.37
3.95
12.79%
16.59%
4.59%
12.40%
19.08%
5.85%
14.83 mths
36.25 mths
5.15 mths
4.97
26.21
3.18
Local Government Industry Indicators - by Fund 1. Operating Performance Ratio Total continuing operating revenue (1) (excl. Capital Grants & Contributions) - Operating Expenses
Total continuing operating revenue (1) (excl. Capital Grants & Contributions)
prior period:
2. Own Source Operating Revenue Ratio Total continuing operating revenue (1) (excl. ALL Grants & Contributions)
Total continuing operating revenue (1)
prior period:
3. Unrestricted Current Ratio Current Assets less all External Restrictions (2) Current Liabilities less Specific Purpose Liabilities (3, 4) prior period:
4. Debt Service Cover Ratio Operating Result (1) before capital excluding interest and depreciation / impairment / amortisation Principal Repayments (from the Statement of Cash Flows) + Borrowing Costs (from the Income Statement)
prior period:
5. Rates, Annual Charges, Interest & Extra Charges Outstanding Percentage Rates, Annual and Extra Charges Outstanding Rates, Annual and Extra Charges Collectible prior period:
6. Cash Expense Cover Ratio Current Year's Cash and Cash Equivalents + All Term Deposits Payments from cash flow of operating and financing activities
x12 prior period:
Notes (1) - (4) (5)
Refer to Notes at Note 13a(i) above. General Fund refers to all of Council's activities except for its Water & Sewer activities which are listed separately. page 54
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 14. Investment Properties $ '000
Notes
Actual 2015
Actual 2014
-
-
(a) Investment Properties at Fair value Investment Properties on Hand Reconciliation of Annual Movement: Opening Balance
- Transfers from/(to) Inventories (Note 8) CLOSING BALANCE - INVESTMENT PROPERTIES
-
145 (145) -
(b) Valuation Basis The basis of valuation of Investment Properties is Fair Value, being the amounts for which the properties could be exchanged between willing parties in arms length transaction, based on current prices in an active market for similar properties in the same location and condition and subject to similar leases. The 2015 revaluations were based on Independent Assessments made by: APV Valuers & Asset Management (Registered Valuers, Engineers and CPA's)
(c) Contractual Obligations at Reporting Date Refer to Note 12 for disclosures relating to any Capital and Service obligations that have been contracted.
Refer to Note 27- Fair Value Measurement for information regarding the fair value of investment properties held.
page 55
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 15. Financial Risk Management $ '000
Risk Management Council's activities expose it to a variety of financial risks including (1) price risk, (2) credit risk, (3) liquidity risk and (4) interest rate risk. The Council's overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Council. Council does not engage in transactions expressed in foreign currencies and is therefore not subject to foreign currency risk. Financial risk management is carried out by Council's Finance Section under policies approved by the Council. A comparison by category of the carrying amounts and fair values of Council's Financial Assets & Financial Liabilities recognised in the financial statements is presented below. Carrying Value
Financial Assets Cash and Cash Equivalents Investments - "Held for Trading" - "Held to Maturity" Receivables Total Financial Assets Financial Liabilities Payables Loans / Advances Total Financial Liabilities
Fair Value
2015
2014
2015
2014
15,415
14,116
15,415
14,116
12,000 5,483 32,898
5,989
12,000 5,483 32,898
5,989
5,574 53,661 59,235
1,000 7,389
28,494
5,975 42,319
48,294
5,574 53,661 59,235
1,000 7,389
28,494
5,975 42,319
48,294
Fair Value is determined as follows: - Cash & Cash Equivalents, Receivables, Payables - are estimated to be the carrying value which approximates mkt value. - Borrowings & Held to Maturity Investments - are based upon estimated future cash flows discounted by the current market interest rates applicable to assets & liabilities with similar risk profiles, unless quoted market prices are available. - Financial Assets classified (i) "at fair value through profit & loss" or (ii) Available for Sale - are based upon quoted market prices (in active markets for identical investments) at the reporting date or independent valuation. Refer to Note 27 - Fair Value Measurement for information regarding the fair value of financial assets & liabilities
page 56
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 15. Financial Risk Management (continued) $ '000
(a) Cash & Cash Equivalents, Financial assets 'at fair value through the profit & Loss' "Available-for-sale" financial assets & "Held-to-maturity" Investments Council's objective is to maximise its return on cash & investments whilst maintaining an adequate level of liquidity and preserving capital. Council's Finance area manages the Cash & Investments portfolio with the assistance of independent advisors. Council has an Investment Policy which complies with the Local Government Act & Minister's Investment Order. This Policy is regularly reviewed by Council and it's staff and an Investment Report is tabled before Council on a monthly basis setting out the portfolio breakup and its performance. The risks associated with the investments held are: - Price Risk - the risk that the capital value of Investments may fluctuate due to changes in market prices, whether there changes are caused by factors specific to individual financial instruments or their issuers or are caused by factors affecting similar instruments traded in a market. - Interest Rate Risk - the risk that movements in interest rates could affect returns and income. - Credit Risk - the risk that the investment counterparty) will not complete their obligations particular to a financial instrument, resulting in a financial loss to Council - be it of a capital or income nature. Council manages these risks (amongst other measures) by diversifying its portfolio and only purchasing investments with high credit ratings or capital guarantees. Council also seeks advice from independent advisers before placing any funds in Cash Equivalents & Investments. The following represents a summary of the sensitivity of Council's Income Statement and Accumulated Surplus (for the reporting period) due to a change in either the price of a financial asset or the interest rates applicable. It is assumed that the change in interest rates would have been constant throughout the reporting period. Increase of Values/Rates 2015 Possible impact of a 10% movement in Market Values Possible impact of a 1% movement in Interest Rates
Decrease of Values/Rates
Profit
Equity
Profit
Equity
271
271
(271)
(271)
9 212
9 212
(9) (212)
(9) (212)
2014 Possible impact of a 10% movement in Market Values Possible impact of a 1% movement in Interest Rates
page 57
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 15. Financial Risk Management (continued) $ '000
(b) Receivables Council's major receivables comprise (i) Rates & Annual charges and (ii) User Charges & Fees. The major risk associated with these receivables is credit risk - the risk that debts due and payable to Council may not be repaid in full. Council manages this risk by monitoring outstanding debt and employing stringent debt recovery procedures. It also encourages ratepayers to pay their rates by the due date through incentives. Credit risk on rates and annual charges is minimised by the ability of Council to secure a charge over the land relating to the debts - that is, the land can be sold to recover the debt. Council is also able to charge interest on overdue rates & annual charges at higher than market rates which further encourages the payment of debt. There are no significant concentrations of credit risk, whether through exposure to individual customers, specific industry sectors and/or regions. The level of outstanding receivables is reported to Council monthly and benchmarks are set and monitored for acceptable collection performance. Council makes suitable provision for doubtful receivables as required and carries out credit checks on most non-rate debtors. There are no material receivables that have been subjected to a re-negotiation of repayment terms. A profile of Council's receivables credit risk at balance date follows: 2015
2015
Rates &
(i) Ageing of Receivables - % Current (not yet overdue) Overdue
Rates & Annual Charges
Other Receivables
Current
Current
> 5 years overdue
> 90 days overdue
(iii) Movement in Provision for Impairment of Receivables Balance at the beginning of the year - amounts already provided for & written off this year Balance at the end of the year
2014
Annual
Other
Annual
Other
Charges
Receivables
Charges
Receivables
0% 100% 100%
94% 6% 100%
0% 100% 100%
94% 6% 100%
Rates &
(ii) Ageing of Receivables - value
2014 Rates &
Rates &
Annual
Other
Annual
Other
Charges
Receivables
Charges
Receivables
1,839 1,839
3,665 234 3,899
2,105 2,105
5,328 366 5,694
2015
2014
410 (155) 255
410 410
page 58
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 15. Financial Risk Management (continued) $ '000
(c) Payables & Borrowings Payables & Borrowings are both subject to liquidity risk - the risk that insufficient funds may be on hand to meet payment obligations as and when they fall due. Council manages this risk by monitoring its cash flow requirements and liquidity levels and maintaining an adequate cash buffer. Payment terms can (in extenuating circumstances) also be extended & overdraft facilities utilised as required. The contractual undiscounted cash outflows (ie. principal and interest) of Council's Payables & Borrowings are set out in the maturity table below: $ '000
Subject to no
payable in:
Total
Actual
Cash
Carrying
Outflows
Values
maturity
â&#x2030;¤ 1 Year
1-2 Yrs
2-3 Yrs
3-4 Yrs
4-5 Yrs
> 5 Yrs
350
5,224
-
-
-
-
-
5,574
5,574
-
6,387
3,812
16,312
3,772
3,732
56,794
90,809
53,661
350
11,611
3,812
16,312
3,772
3,732
56,794
96,383
59,235
503
5,472
-
-
-
-
-
5,975
5,975
-
3,430
3,758
3,758
3,682
3,682
78,112
96,422
42,319
503
8,902
3,758
3,758
3,682
3,682
78,112
102,397
48,294
2015 Trade/Other Payables Loans & Advances Total Financial Liabilities
2014 Trade/Other Payables Loans & Advances Total Financial Liabilities
Borrowings are also subject to interest rate risk - the risk that movements in interest rates could adversely affect funding costs & debt servicing requirements. Council manages this risk through the diversification of borrowing types, maturities & interest rate structures. The following interest rates were applicable to Council's Borrowings at balance date: Trade/Other Payables Loans & Advances - Fixed Interest Rate
2015
2014
Carrying
Average
Carrying
Average
Value
Interest Rate
Value
Interest Rate
5,574 53,661 59,235
0.0% 6.9%
5,975 42,319 48,294
0.0% 7.0%
page 59
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 16. Material Budget Variations $ '000
Council's Original Financial Budget for 14/15 was adopted by the Council on 25 June 2015. While the Income Statement included in this General Purpose Financial Report must disclose the Original Budget adopted by Council, the Local Government Act requires Council to review its Financial Budget on a Quarterly Basis, so that it is able to manage the various variations between actuals versus budget that invariably occur throughout the year. This Note sets out the details of MATERIAL VARIATIONS between Council's Original Budget and its Actual results for the year as per the Income Statement - even though such variations may have been adjusted for during each Quarterly Budget Review. Note that for Variations* of Budget to Actual :
Material Variations represent those variances that amount to 10% or more of the original budgeted figure. F = Favourable Budget Variation, U = Unfavourable Budget Variation
$ '000
2015 Budget
2015 Actual
REVENUES Rates & Annual Charges
27,206
27,009
User Charges & Fees
10,254
13,262
2015 ---------- Variance* ----------
(197) 3,008
(1%)
U
29%
F
Fees received for work undertaken on State Roads for the Roads and Maritime Services (RMS) for ordered work exceeded the original budget by approximately $2.8m. The value of these works is unknown at the time of budget adoption.
Interest & Investment Revenue
944
823
(121)
(13%)
U
338
31%
F
The fall in interest rates saw a reduction in interest revenue for the financial year.
Other Revenues
1,079
1,417
The favourable result in this area primarily relates to higher than expected insurance premium refunds of approximately $170,000 and increase in general sales.
9,718 11,151 1,433 Operating Grants & Contributions 15% There was no advance payment made in the 2013/14 financial year. This was paid in the 2014/15 financial year. The original budget was resolved by Council prior to advice received regarding the advance payment. Capital Grants & Contributions
3,780
3,868
88
2%
F
F
page 60
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 16. Material Budget Variations (continued) $ '000
EXPENSES Employee Benefits & On-Costs Borrowing Costs
2015 Budget
2015 Actual
2015 ---------- Variance* ----------
17,773
17,321
452
3%
F
3,546
2,946
600
17%
F
Loan funded projects were commenced late in the financial year. Draw down of funds was deferred until projects commenced to minimise interest expense for the year.
13,005 15,032 (2,027) U Materials & Contracts (16%) Additional expenditure in this area largely relates to work Council is contracted to underte on State Roads for the Roads and Maritime Services (RMS) for ordered works. Revenue generated from this work is recognised under User Charges and Fees. 10,936 13,417 (2,481) Depreciation & Amortisation (23%) This is the first year the 2014 revaluation of transport infrastructure assets impacting depreciation expense.
U
Other Expenses
2,925
2,784
141
5%
F
Net Losses from Disposal of Assets
1,000
223
777
78%
F
An audit is being undertaken on engineering infrastructure assets. Capitalisation of reseals and rehabilitation works on roads have been treated as work in progress in the 2015 financial year. This work will be capitalised next financial year and any loss on disposal will be recognised at that time.
Budget Variations relating to Council's Cash Flow Statement include: Cash Flows from Operating Activities
15,735
20,884
5,149
32.7%
F
Increased cashflow from operating activites is attributed to a better than expected result for the year in addition to a significant reduction in outstanding debt as a result of ongoing efforts in debt recovery.
(36,333) (30,927) 5,406 Cash Flows from Investing Activities (14.9%) Capital works budget was not fully expended. Imcomplete projects will carry over to next financial year. Cash Flows from Financing Activities
17,303
11,342
(5,961)
(34.5%)
F
U
Proceeds from borrowings down on budget. Loans for carry over projects not drawn down on in current financial year. These loans will be drawn down as required in next financial year.
page 61
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 17. Statement of Developer Contributions $ '000
Council recovers contributions, raises levies & enters into planning agreements on development works that are subject to a development consent issued by Council. All contributions must be spent/utilised for the specific purpose they were levied and any interest applicable to unspent funds must be attributed to remaining funds. The following tables detail the receipt, interest and use of the above contributions & levies and the value of all remaining funds which are "restricted" in their future use.
SUMMARY OF CONTRIBUTIONS & LEVIES PURPOSE
Opening Balance
Contributions
Interest
Expenditure
Internal
Held as
Exp
Over or
Internal
received during the Year
earned
during
Borrowing
Restricted
Future
still
(under)
Borrowings
in Year
Year
(to)/from
Asset
income
outstanding
Funding
due/(payable)
Cash
Non Cash
S94A Levies - under a Plan
612
87
-
23
-
-
722
Total S94 Revenue Under Plans
612
87
-
23
-
-
722
S64 Contributions
420
283
-
14
-
-
717
100
(817)
1,032
370
-
37
-
-
1,439
600
(2,039)
Total Contributions
Cumulative
Projections
500
(1,222)
-
-
-
S94A LEVIES - UNDER A PLAN CONTRIBUTION PLAN NUMBER XX
Projections Contributions
PURPOSE
Opening Balance
Public Amenities Total
received during the Year Cash
Non Cash
Expenditure
Internal
Held as
earned
during
Borrowing
Restricted
Future
still
(under)
Borrowings
in Year
Year
(to)/from
Asset
income
outstanding
Funding
due/(payable)
612
87
-
23
-
-
722
612
87
-
23
-
-
722
Exp
Cumulative
Interest
-
Over or
Internal
-
-
page 62
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 18. Contingencies & Other Assets/Liabilities Not Recognised $ '000
The following assets and liabilities do not qualify for recognition in the Statement of Financial Position, but their knowledge & disclosure is considered relevant to the users of Council's Financial Report.
(ii) Statewide Limited
LIABILITIES NOT RECOGNISED:
Membership includes the potential to share in either the net assets or liabilities of the fund depending on its past performance. Councilâ&#x20AC;&#x2122;s share of the Net Assets or Liabilities reflects Councils contributions to the pool and the result of insurance claims within each of the Fund Years.
1. Guarantees (i) Defined Benefit Superannuation Contribution Plans Council participates in an employer sponsored Defined Benefit Superannuation Scheme, and makes contributions as determined by the Superannuation Scheme's Trustees. Member Councils bear responsibility of ensuring there are sufficient funds available to pay out the required benefits as they fall due. The Schemes most recent full actuarial review indicated that the Net Assets of the Scheme were not sufficient to meet the accrued benefits of the Schemes Defined Benefit member category with member Councils required to make significantly higher contributions in future years. The Local Government Superannuation Scheme however is unable to provide Council with an accurate estimate of its share of the net deficit and accordingly Council has not recorded any net liability from it's Defined Benefit Scheme obligations in accordance with AASB 119. Future contributions made to the defined benefit scheme to rectify the net deficit position will be recognised as an expense when they become payable - similar to the accounting for Defined Contributions Plans.
Council is a member of Statewide Mutual, a mutual pool scheme providing liability insurance to Local Government.
The future realisation and finalisation of claims incurred but not reported to 30/6 this year may result in future liabilities or benefits as a result of past events that Council will be required to fund or share in respectively. (iii) StateCover Limited Council is a member of StateCover Mutual Limited and holds a partly paid share in the entity. StateCover is a company providing workers compensation insurance cover to the NSW Local Government Industry and specifically Council. Council has a contingent liability to contribute further equity in the event of the erosion of the Company's capital base as a result of the company's past performance and/or claims experience or as a result of any increased prudential requirements from APRA. These future equity contributions would be required to maintain the companyâ&#x20AC;&#x2122;s minimum level of Net Assets in accordance with its Licence Requirements. (iv) Other Guarantees Council has provided no other Guarantees other than those listed above.
page 63
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 18. Contingencies & Other Assets/Liabilities Not Recognised (continued) $ '000
LIABILITIES NOT RECOGNISED (continued):
(iii) Potential Land Acquisitions due to Planning Restrictions imposed by Council (continued)
2. Other Liabilities (i) Third Party Claims The Council is involved from time to time in various claims incidental to the ordinary course of business including claims for damages relating to its services. Council believes that it is appropriately covered for all claims through its Insurance Coverage and does not expect any material liabilities to eventuate.
As a result, where notified in writing by the various owners, Council will be required to purchase these land parcels. At reporting date, reliable estimates as to the value of any potential liability (& subsequent land asset) from such potential acquisitions has not been possible. ASSETS NOT RECOGNISED:
(ii) S94 Plans
(i) Land Under Roads
Council levies Section 94/94A Contributions upon various development across the Council area through the required Contributions Plans.
As permitted under AASB 1051, Council has elected not to bring to account Land Under Roads that it owned or controlled up to & including 30/6/08.
As part of these Plans, Council has received funds for which it will be required to expend the monies in accordance with those Plans.
(ii) Infringement Notices/Fines
As well, these Plans indicate proposed future expenditure to be undertaken by Council, which will be funded by making levies and receipting funds in future years or where a shortfall exists by the use of Council's General Funds. These future expenses do not yet qualify as liabilities as of the Reporting Date, but represent Councils intention to spend funds in the manner and timing set out in those Plans. (iii) Potential Land Acquisitions due to Planning Restrictions imposed by Council
Fines & Penalty Income, the result of Council issuing Infringement Notices is followed up and collected by the Infringement Processing Bureau. Councils Revenue Recognition policy for such income is to account for it as revenue on receipt. Accordingly, at Year End, there is a potential asset due to Council representing issued but unpaid Infringement Notices. Due to the limited information available on the status, value and duration of outstanding Notices, Council is unable to determine the value of outstanding income.
Council has classified a number of privately owned land parcels as Local Open Space or Bushland.
Note 19. Interests in Other Entities Council has no interest in any Controlled Entities, Joint Arrangements or Associates. page 64
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 20. Equity - Retained Earnings and Revaluation Reserves $ '000
Notes
Actual 2015
Actual 2014
115,945 5,807
111,776 4,169
121,752
115,945
(a) Retained Earnings Movements in Retained Earnings were as follows: Balance at beginning of Year (from previous years audited accounts) a. Net Operating Result for the Year
Balance at End of the Reporting Period
(b) Reserves (i) Reserves are represented by: - Infrastructure, Property, Plant & Equipment Revaluation Reserve Total
353,146
339,573
353,146
339,573
339,573 13,464 353,146
282,775 45,992 10,806 339,573
353,146
339,573
(ii) Reconciliation of movements in Reserves: Infrastructure, Property, Plant & Equipment Revaluation Reserve - Opening Balance - Revaluations for the year 9(a) - (Impairment of revalued assets) / Impairment reversals 9(a),(c) - Balance at End of Year TOTAL VALUE OF RESERVES (iii) Nature & Purpose of Reserves Infrastructure, Property, Plant & Equipment Revaluation Reserve
- The Infrastructure, Property, Plant & Equipment Revaluation Reserve is used to record increments/decrements of Non Current Asset values due to their revaluation.
(c) Correction of Error/s relating to a Previous Reporting Period Council made no correction of errors during the current reporting period.
(d) Voluntary Changes in Accounting Policies Council made no voluntary changes in any accounting policies during the year.
page 65
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 21. Financial Result & Financial Position by Fund Income Statement by Fund
Actual 2015
Actual 2015
Actual 2015
Actual 2015
Other
Water
Sewer
General1
969 12 471 1,452
1,579 3,798 185 249 157 421 6,389
2,671 395 214 191 170 130 3,771
22,938 8,510 412 977 10,353 3,317 46,507
801 225 267 159 1,452
877 675 1,617 1,037 372 4,578
470 233 416 1,032 322 2,473
15,173 1,813 13,321 11,348 1,931 223 43,809
Operating Result from Continuing Operations
-
1,811
1,298
2,698
Net Operating Result for the Year
-
1,811
1,298
2,698
Net Operating Result attributable to each Council Fund
-
1,811
1,298
2,698
Net Operating Result for the year before Grants and Con and Contributions provided for Capital Purposes
-
1,390
1,168
$ '000
Continuing Operations Income from Continuing Operations Rates & Annual Charges User Charges & Fees Interest & Investment Revenue Other Revenues Grants & Contributions provided for Operating Purposes Grants & Contributions provided for Capital Purposes
Total Income from Continuing Operations Expenses from Continuing Operations Employee Benefits & on-costs Borrowing Costs Materials & Contracts Depreciation & Amortisation Other Expenses Net Losses from the Disposal of Assets
Total Expenses from Continuing Operations
1
(619)
General Fund refers to all Council's activities other than Water, Sewer & Other NB. All amounts disclosed above are Gross - that is, they include internal charges & recoveries made between the Funds.
page 66
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements as at 30 June 2015
Note 21. Financial Result & Financial Position by Fund (continued) Statement of Financial Position by Fund
Actual 2015
Actual 2015
Actual 2015
Actual 2015
Other
Water
Sewer
General1
348 348
4,594 1,611 115 6,320
6,386 665 115 7,166
4,435 12,000 2,859 2,990 77 22,361
TOTAL ASSETS
4,292 4,292 4,640
49,248 49,248 55,568
28,565 28,565 35,731
424,002 424,002 446,363
LIABILITIES Current Liabilities Payables Borrowings Provisions Total Current Liabilities
3,270 72 284 3,626
152 205 274 631
416 143 133 692
1,736 739 5,885 8,360
3,147 3,147 6,773
9,944 9,944 10,575
3,232 3,232 3,924
36,179 1,593 37,772 46,132
(2,133)
44,993
31,807
400,231
565 (2,698)
10,782 34,211
20,294 11,513
90,111 310,120
(2,133)
44,993
31,807
400,231
$ '000
ASSETS Current Assets Cash & Cash Equivalents Investments Receivables Inventories Other Total Current Assets Non-Current Assets Infrastructure, Property, Plant & Equipment Total Non-Current Assets
Non-Current Liabilities Borrowings Provisions Total Non-Current Liabilities
TOTAL LIABILITIES
Net Assets EQUITY Retained Earnings Revaluation Reserves
Total Equity 1
General Fund refers to all Council's activities other than Water, Sewer & Other NB. All amounts disclosed above are Gross - that is, they include internal receivables & payables between the Funds.
page 67
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 22. "Held for Sale" Non Current Assets & Disposal Groups $ '000
Council did not classify any Non Current Assets or Disposal Groups as "Held for Sale".
Note 23. Events occurring after the Reporting Date Events that occur between the end of the reporting period (ending 30 June 2015) and the date when the financial statements are "authorised for issue" have been taken into account in preparing these statements. Council has adopted the date of receipt of the Auditors' Report as the applicable "authorised for issue" date relating to these General Purpose Financial Statements. Accordingly, the "authorised for issue" date is 30/10/15. Events that occur after the Reporting Period represent one of two types: (i) Events that provide evidence of conditions that existed at the Reporting Period These financial statements (and the figures therein) incorporate all "adjusting events" that provided evidence of conditions that existed at 30 June 2015. (ii) Events that provide evidence of conditions that arose after the Reporting Period These financial statements (& figures therein) do not incorporate any "non-adjusting events" that have occurred after 30 June 2015 and which are only indicative of conditions that arose after 30 June 2015. Council is unaware of any material or significant "non-adjusting events" that should be disclosed.
Note 24. Discontinued Operations Council has not classified any of its Operations as "Discontinued".
Note 25. Intangible Assets Actual
Actual
Intangible Assets represent identifiable non-monetary asset without physical substance. Council is unaware of any control over Intangible Assets that warrant recognition in the Financial Statements, including either internally generated and developed assets or purchased assets. page 68
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 26. Reinstatement, Rehabilitation & Restoration Liabilities $ '000
Council has legal/public obligations to make restore, rehabilitate and reinstate the following assets/operations: Estimated year of Asset/Operation
NPV of Provision
restoration
Tips Quarries
Balance at End of the Reporting Period
10(a)
2015
2014
3,091 413
3,527 592
3,504
4,119
Under AASB 116 - Property, Plant & Equipment, where the use of an asset results in the obligation to dismantle or remove the asset and restore the site on which the asset stands, an estimate of such costs is required to be included in the cost of the asset. An equivalent liability must be recognised under AASB 137 - Provisions, Contingent Liabilities and Contingent Assets. The provision has been calculated by determining the present value of the future expenditures expected to be incurred. The discount rate used is the risk free borrowing rate applicable to Council. Reconciliation of movement in Provision for year: Balance at beginning of year Amounts capitalised to new or existing assets: Effect of a change in discount rates used in PV calculations Effect of a change in other calculation estimates used Amortisation of discount (expensed to borrowing costs) Total - Reinstatement, rehabilitation and restoration provision
4,119 (507) (108)
3,504
3,886 168 65
4,119
page 69
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement $ '000
The Council measures the following asset and liability classes at fair value on a recurring basis: - Infrastructure, Property, Plant and Equipment - Financial Assets & Liabilities The fair value of assets and liabilities must be estimated in accordance with various Accounting Standards for either recognition and measurement requirements or for disclosure purposes. AASB 13 Fair Value Measurement requires all assets and liabilities measured at fair value to be assigned to a "level" in the fair value hierarchy as follows: Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date. Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 3: Inputs for the asset or liability that are not based on observable market data (unobservable inputs).
(1) The following table presents all assets and liabilities that have been measured & recognised at fair values: Fair Value Measurement Hierarchy Level 1 Level 2 Level 3 Total 2015 Recurring Fair Value Measurements Financial Assets Investments - "Held for Trading" Receibables Cash on Hand and at Bank Total Financial Assets Financial Liabilities Loans / Advances Payables Total Financial Liabilities Infrastructure, Property, Plant & Equipment Plant & Equipment Office Equipment Furniture & Fittings Land Operational Land Community Building Non Specialised Building Specialised Other Structures Roads
Date of latest Valuation
Quoted prices in active mkts
30/06/15 30/06/15 30/06/15
12,000 5,483 15,415 32,898
30/06/15 30/06/15
30/06/15 30/06/15 30/06/15 30/06/14 30/06/14 30/06/14 30/06/14 30/06/14 30/06/15
53,661 5,574 59,235
11,488 1,602 587 8,952 4,538 29,411 27,223 19,118 -
Significant observable inputs
-
-
Significant unobservable inputs
-
12,000 5,483 15,415
32,898
-
-
59,235
-
259,668
11,488 1,602 587 8,952 4,538 29,411 27,223 19,118 259,668
-
53,661 5,574
(continued on the next pageâ&#x20AC;Ś)
page 70
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(1) The following table presents all assets and liabilities that have been measured & recognised at fair values (continued): Fair Value Measurement Hierarchy Level 1 Level 2 Level 3 Total 2015 Recurring Fair Value Measurements
Date of latest Valuation (continued) 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15 30/06/15
Infrastructure, Property, Plant & Equipment Bridges Footpaths Stormwater Drainage Water Supply Network Sewerage Network Other Infrastructure Other Assets RR & R Assets - Tip RR & R Assets - Quarry Total Infrastructure, Property, Plant & Equipment 2014
Financial Liabilities Loans / Advances Payables Total Financial Liabilities
364 103,283 Level 1
Date
Financial Assets Investments - "Held for Trading" - "Held to Maturity" Receivables Cash on Hand and at Bank Total Financial Assets
Quoted prices in active mkts
30/06/14 30/06/14 30/06/14 30/06/14
dd/mm/yy dd/mm/yy
Infrastructure, Property, Plant & Equipment Plant & Equipment 30/06/14 Office Equipment 30/06/14 Furniture & Fittings 30/06/14 Land Operational 30/06/14 Land Community 30/06/14 Building Non Specialised 30/06/14 Building Specialised 30/06/14 Other Structures 30/06/14 Roads 30/06/14 Bridges 30/06/14 Footpaths 30/06/14 Stormwater Drainage 30/06/14 Water Supply Network 30/06/14 Sewerage Network 30/06/14 Other Infrastructure 30/06/14 Other Assets 30/06/14 RR & R Assets - Tip 30/06/14 RR & R Assets - Quarry 30/06/14 Total Infrastructure, Property, Plant & Equipment
Quoted
6,000 8,000 7,799 6,116 27,915 42,319 5,975 48,294 12,378 1,541 451 9,050 4,389 28,935 27,447 24,205 364 108,760
Significant observable inputs
Significant unobservable inputs
44,215 7,861 13,812 47,922 27,461 746 1,105 34 402,824
506,107
Level 2
Level 3
Total
Significant
Significant
-
-
989 -
989 -
-
-
230,592 44,306 7,763 13,892 47,409 26,732 768 1,627 45 373,134
44,215 7,861 13,812 47,922 27,461 746 364 1,105 34
6,989 8,000 7,799 6,116
28,904 42,319 5,975
48,294 12,378 1,541 451 9,050 4,389 28,935 27,447 24,205 230,592 44,306 7,763 13,892 47,409 26,732 768 364 1,627 45
481,894 page 71
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(2) Transfers between Level 1 & Level 2 Fair Value Hierarchies During the year, there were no transfers between Level 1 and Level 2 Fair Value hierarchies for recurring fair value measurements.
(3) Valuation techniques used to derive Level 2 and Level 3 Fair Values Where Council is unable to derive Fair Valuations using quoted market prices of identical assets (ie. Level 1 inputs) Council instead utilises a spread of both observable inputs (Level 2 inputs) and unobservable inputs (Level 3 inputs). The Fair Valuation techniques Council has employed while utilising Level 2 and Level 3 inputs are as follows: Financial Assets Councilâ&#x20AC;&#x2122;s financial assets are Cash and Cash Equivalents, Term Deposits and Receivables. The Term Deposits (Held to Maturity), Cash at Bank and Receivables are reported at face value.
Infrastructure, Property, Plant & Equipment Land Level 2 valuation inputs were used to value land held in freehold title (investment and noninvestment) as well as land used for special purposes which is restricted in use under current zoning rules. Sales prices of comparable land sites in close proximity are adjusted for differences in key attributes such as property size. The most significant inputs into this valuation approach are price per square metre. There were also some parks and reserves for which there was no observable market evidence of sales prices for comparable sites in close proximity. These were subsequently valued at the level 3 valuation input hierarchy by using the professional judgment of a Registered Valuer who adjusted the price per square metre of sales from sites not in close proximity which provided only a low level of comparability.
page 72
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(3) Valuation techniques used to derive Level 2 and Level 3 Fair Values (continued) Infrastructure, Property, Plant & Equipment (continued) Buildings Level 2 valuation inputs These were used to determine the fair value of a range of properties. This included the bulk of residential and commercial properties. The residential properties fair value has been derived from sales prices of comparable properties after adjusting for differences in key attributes such as property size. The most significant inputs into this valuation approach are price per square metre. Level 3 valuation inputs Specialised buildings were valued using the cost approach using professionally qualified Registered Valuers. The approach estimated the replacement cost for each building by componentising the buildings into significant parts with different useful lives and taking into account a range of factors. While the unit rates based on square metres could be supported from market evidence (level 2) other inputs (such as estimates of residual value, useful life, pattern of consumption and asset condition) required extensive professional judgement and impacted significantly on the final determination of fair value. As such these assets were classified as having been valued using level 3 valuation inputs. Roads As at 01 July 2013 a comprehensive revaluation was undertaken by APV only for all sealed road assets and associated classes. The main level 3 inputs used are derived and evaluated as follows – Asset Condition – APV inspected 100% sample of each asset type of this comprehensive valuation. Relationship between asset consumption rating scale and the level of consumed service potential – Under the cost approach the estimated cost to replace the asset is calculated and then adjusted to take account of an accumulated depreciation. In order to achieve this valuer determines an asset consumption rating scale for each asset type based on the inter-relationship between a range of factors. These factors and their relationship to the fair value require professional judgment and include asset condition, legal and commercial obsolescence and the determination of key depreciation related assumptions such as residual value, useful life and pattern of consumption of the future economic benefit. The consumption rating scales were based initially on the past experience of the valuation firm and industry guides and were then updated to take into account the experience and understanding of council’s own engineers, asset management and finance staff. The results of the valuation were further evaluated by confirmation against council’s own understanding of the assets and the level of remaining service potential. Water and Sewer Council completed a revaluation of its water supply, sererage and stormwater assets in 2007 using the unit rate as published in the Department of Primary Industries - Office of Water - NSW Reference Rates Manual of valuation. The 2015 Reference Rates Manual for Valuation of Water Supply, Sewerage and Stormwater Assets updates the 2003 edition of the manual and was prepared by the Urban Water branch of the NSW Office of Water. NSW Local Water Utilities are required to determine the fair value and current replacement cost depreciation for their water supply, sewerage and stormwater assets in accordance with this Manual. The Reference Rates shown are for June 2015 and are based on competitive contract prices obtained by NSW Public Works for water supply and sewerage projects within NSW, supplemented by published rates for water supply, sewerage and stormwater works and also rates obtained from a number of Local Water Utilities and other agencies. page 73
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(4). Fair value measurements using significant unobservable inputs (Level 3) a. The following tables present the changes in Level 3 Fair Value Asset Classes.
Roads
Opening Balance - 1/7/13
-
Purchases (GBV) Disposals (WDV) Depreciation & Impairment FV Gains - Other Comprehensive Income WIP Movements
-
Closing Balance - 30/6/14
-
Purchases (GBV) Disposals (WDV) Depreciation & Impairment FV Gains - Other Comprehensive Income WIP Movements
-
Closing Balance - 30/6/15
-
184,920 15,258 (5,260) 35,589 85 230,592 16,712 (24) (7,258) 19,646 259,668
Bridges
Footpaths
23,472
5,063
102 (246) 20,978 -
395 (100) 2,405 -
44,306
7,763
226 (318) 44,214
283 (185) 7,861
Stormwater Drainage
13,958 141 (207) 13,892 133 (213) 13,812
Water Supply Network
Sewerage Other Network Infrastructure
44,211
26,127
1,478
2,899 (1,028) 1,327 -
867 (9) (1,003) 750 -
74 (22) (762) -
47,409
26,732
768
900 (1,039) 652 -
1,011 (1,029) 747 -
13 (34) -
47,922
27,461
747
Total 299,229 19,736 (9) (7,866) 60,287 85
371,462 19,278 (24) (10,076) 21,045 -
401,685
page 74
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(4). Fair value measurements using significant unobservable inputs (Level 3) continued a. The following tables present the changes in Level 3 Fair Value Asset Classes. (continued) Class Here
Class Here
Class Here
Class Here
Class Here
Class Here
Opening Balance - 1/7/13
-
-
-
-
-
-
Purchases (GBV) Depreciation & Impairment
-
-
-
-
-
-
Closing Balance - 30/6/14
-
-
-
-
-
-
Purchases (GBV) Depreciation & Impairment
-
-
-
-
-
-
Closing Balance - 30/6/15
-
-
-
-
-
-
Tip Assets
1,496 165 (34) 1,627 7 (529) 1,105
Quarry
47 1 (3) 45 2 (13) 34
Total 1,543 166 (37)
1,672 9 (542)
1,139
page 75
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(4). Fair value measurements using significant unobservable inputs (Level 3) (continued) b. Significant unobservable valuation inputs used (for Level 3 asset classes) and their relationship to fair value. The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.
Class
Fair Value (30/6/15) $'000
Valuation Technique/s
Unobservable Inputs
Range of Inputs (incl. probable)
Relationship of unobservable inputs to Fair Value
I,PP&E
Roads
259,688 Cost Approach
Unit Rates Asset Condition Useful Life
Bridges
44,215 Cost Approach
Unit Rates Asset Condition Useful Life
Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years
Any change in the component pricing and asset condition will have an impact on fair value
Any change in the component pricing and asset condition will have an impact on fair value
page 76
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(4). Fair value measurements using significant unobservable inputs (Level 3) (continued) b. Significant unobservable valuation inputs used (for Level 3 asset classes) and their relationship to fair value (continued). The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.
Class
Fair Value (30/6/15) $'000
Valuation Technique/s
Unobservable Inputs
Range of Inputs (incl. probable)
Relationship of unobservable inputs to Fair Value
I,PP&E (continued)
Footpaths
Stormwater Drainage
7,861 Cost Approach
Unit Rates Asset Condition Useful Life
13,812 Cost Approach
Unit Rates Asset Condition Useful Life
Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years
Any change in the component pricing and asset condition will have an impact on fair value
Any change in the component pricing and asset condition will have an impact on fair value
page 77
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(4). Fair value measurements using significant unobservable inputs (Level 3) (continued) b. Significant unobservable valuation inputs used (for Level 3 asset classes) and their relationship to fair value (continued). The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.
Class
Fair Value (30/6/15) $'000
Valuation Technique/s
Unobservable Inputs
Range of Inputs (incl. probable)
Relationship of unobservable inputs to Fair Value
I,PP&E (continued)
Water Supply Network
47,922 Cost Approach
Unit Rates Asset Condition Useful Life
Sewerage Network
27,461 Cost Approach
Unit Rates Asset Condition Useful Life
Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years Unit Rates Vary from asset to asset Asset Condition 1-5 representing excellent to very poor Useful Life 15-40 years
Any change in the component pricing and asset condition will have an impact on fair value
Any change in the component pricing and asset condition will have an impact on fair value
page 78
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(4). Fair value measurements using significant unobservable inputs (Level 3) (continued) b. Significant unobservable valuation inputs used (for Level 3 asset classes) and their relationship to fair value (continued). The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.
Class
Fair Value (30/6/15) $'000
Valuation Technique/s
Unobservable Inputs
Range of Inputs (incl. probable)
Relationship of unobservable inputs to Fair Value
I,PP&E (continued)
Other Infrastructure
747 Cost Approach
Unit Rates Asset Condition Useful Life
Unit Rates Vary from asset to asset Asset Any change in the component pricing and Condition 1-5 asset condition will have an impact on fair representing value excellent to very poor Useful Life 15-40 years
3% Inflation Rate
Tip
1,105 Cost Approach
Discount Future Cashflows
Any change in the future cost estimates and discount rate will have an impact on 3% Discount fair value Rate
page 79
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 27. Fair Value Measurement (continued) $ '000
(4). Fair value measurements using significant unobservable inputs (Level 3) (continued) b. Significant unobservable valuation inputs used (for Level 3 asset classes) and their relationship to fair value (continued). The following table summarises the quantitative information relating to the significant unobservable inputs used in deriving the various Level 3 Asset Class fair values.
Class
Fair Value (30/6/15) $'000
Valuation Technique/s
Unobservable Inputs
Range of Inputs (incl. probable)
Relationship of unobservable inputs to Fair Value
I,PP&E (continued)
3% Inflation Rate
Quarry
34 Cost Approach
Discount Future Cashflows
Any change in the future cost estimates and discount rate will have an impact on 3% Discount fair value Rate
(5). Highest and best use All of Council's non financial assets are considered to being utilised for their highest and best use.
page 80
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 28. Financial Review Amounts 2015
$ '000
Indicator 2015
Prior Periods 2014 2013
Further to the Note 13(a) Industry Performance Measures, Council monitors the following : 1. Council Graph 1 - Debt Service Ratio 4,112 49,110
Debt Service Cost Income from Continuing Operations
1. Council Graph 1 - Debt Service Ratio 15.0 %
Ratio %
13.0 %
8.4 %
Purpose of 1. Council Graph 1 Debt Service Ratio
7.2 %
7.0 %
Commentary on 2014/15 Result 2014/15 Ratio
8.4 %
11.0 % 9.0 % 7.0 %
7.0 %
7.2 %
2013
2014
8.4 %
To assess the impact of loan principal and interest repayments on the discretionary revenue of Council.
5.0 % 3.0 % 1.0 % -1.0 %
Council aims to maintain this ratio at around 10%. The ratio has increased on previous years as a result of borrowings for capital projects. The ratio will continue an upward trend as further new loans are drawn down to complete significant capital works on water and sewer infrastructure and waste management activities.
2015
page 81
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 28. Financial Review (continued) $ '000
Key Financial Figures of Council over the past 5 years (consolidated) 2015
2014
2013
2012
2011
Inflows: Rates & Annual Charges Revenue User Charges Revenue Interest & Investment Revenue (Losses) Grants Income - Operating & Capital Total Income from Continuing Operations
27,009 13,262 823 10,030 57,530
26,180 15,939 857 15,583 65,085
25,017 13,358 2,279 31,660 80,568
23,309 11,434 946 15,031 55,400
21,517 10,655 2,063 9,351 48,490
Sale Proceeds from I,PP&E New Loan Borrowings & Advances
757 12,400
1,006 9,105
543 1,030
1,193 -
635 6,825
Outflows: Employee Benefits & On-cost Expenses Borrowing Costs Materials & Contracts Expenses Total Expenses from Continuing Operations
17,321 2,946 15,032 51,723
17,698 2,561 26,865 60,916
17,227 2,625 39,407 74,093
15,695 2,624 21,718 54,579
14,635 2,476 14,174 46,345
Total Cash purchases of I,PP&E Total Loan Repayments (incl. Finance Leases)
25,157 1,058
27,123 959
16,940 876
17,700 807
16,347 680
Operating Surplus/(Deficit) (excl. Capital Income)
1,939
1,337
4,126
467
(1,789)
Financial Position Figures
2015
2014
2013
2012
2011
36,195 13,309 22,886
30,550 12,957 17,593
33,226 12,906 20,320
25,447 10,286 15,161
26,567 9,921 16,646
3,111
2,280
2,270
6,453
4,056
Cash & Investments - Unrestricted Cash & Investments - Internal Restrictions Cash & Investments - Total
3,088 7,052 27,415
2,284 6,745 21,105
1,131 11,490 23,262
1,283 7,217 16,358
2,800 10,347 22,901
Total Borrowings Outstanding
53,661
42,319
34,173
34,019
34,826
696,579
656,307
583,781
518,651
537,204
203,958
187,587
187,194
186,222
179,370
Financial Performance Figures
Current Assets Current Liabilities Net Current Assets Available Working Capital (Unrestricted Net Current Assets)
(Loans, Advances & Finance Leases)
Total Value of I,PP&E (excl. Land & Earthworks) Total Accumulated Depreciation Indicative Remaining Useful Life (as a % of GBV)
71%
71%
68%
64%
67%
Source: Published audited financial statements of Council (current year & prior year) page 82
Financial Statements 2015
Moree Plains Shire Council Notes to the Financial Statements for the financial year ended 30 June 2015
Note 29. Council Information & Contact Details Principal Place of Business: 21 Auburn Street Moree NSW 2400 Contact Details Mailing Address: PO Box 420 Moree NSW 2400
Opening Hours: 9am to 5pm Monday to Friday
Telephone: Facsimile:
Internet: Email:
02 6757 3222 02 6752 3934
http://www.mpsc.nsw.gov.au council@mpsc.nsw.gov.au
Officers GENERAL MANAGER L Rodgers
Elected Members MAYOR K Humphries
RESPONSIBLE ACCOUNTING OFFICER L Rodgers
COUNCILLORS S Price R Brazel M Cikota C Gall B Munn J Tramby J von Drehnen T Zannes
PUBLIC OFFICER M Johnson AUDITORS Luka Group 2 River Road Dubbo
Other Information ABN: 46 566 790 582
page 83
page 84
page 85
page 86
page 87
page 88
page 89
page 90
page 91
page 92
Moree Plains Shire Council SPECIAL PURPOSE FINANCIAL STATEMENTS for the year ended 30 June 2015
Leading the Way to a Better Community
SPFS 2015
Moree Plains Shire Council Special Purpose Financial Statements for the financial year ended 30 June 2015
Contents 1. Statement by Councillors & Management
Page 2
2. Special Purpose Financial Statements: Income Statement - Water Supply Business Activity Income Statement - Sewerage Business Activity Income Statement - Other Business Activities
3 4 5
Statement of Financial Position - Water Supply Business Activity Statement of Financial Position - Sewerage Business Activity Statement of Financial Position - Other Business Activities
6 7 8
3. Notes to the Special Purpose Financial Statements
9
4. Auditor's Report
18
Background (i)
These Special Purpose Financial Statements have been prepared for the use by both Council and the Division of Local Government in fulfilling their requirements under National Competition Policy.
(ii)
The principle of competitive neutrality is based on the concept of a "level playing field" between persons/entities competing in a market place, particularly between private and public sector competitors. Essentially, the principle is that government businesses, whether Commonwealth, State or Local, should operate without net competitive advantages over other businesses as a result of their public ownership.
(iii)
For Council, the principle of competitive neutrality & public reporting applies only to declared business activities. These include (a) those activities classified by the Australian Bureau of Statistics as business activities being water supply, sewerage services, abattoirs, gas production and reticulation and (b) those activities with a turnover of over $2 million that Council has formally declared as a Business Activity (defined as Category 1 activities).
(iv)
In preparing these financial statements for Council's self classified Category 1 businesses and ABS defined activities, councils must (a) adopt a corporatisation model and (b) apply full cost attribution including tax equivalent regime payments & debt guarantee fees (where the business benefits from councils borrowing position by comparison with commercial rates).
page 1
SPFS 2015
Moree Plains Shire Council Income Statement of Council's Water Supply Business Activity for the financial year ended 30 June 2015
$ '000
Actual 2015
Actual 2014
Income from continuing operations Access charges User charges Fees Interest Grants and contributions provided for non capital purposes Profit from the sale of assets Other income Total income from continuing operations
1,579 3,737 61 185 157 249 5,968
1,589 4,271 49 130 49 206 6,294
877 675 1,617 1,037 14 372 4,592 1,376
1,071 564 1,746 1,027 14 455 4,877 1,417
421 1,797
1,417
Surplus (deficit) from ALL Operations before tax less: Corporate Taxation Equivalent (30%) [based on result before capital]
1,797 (413)
1,417 (425)
SURPLUS (DEFICIT) AFTER TAX
1,384
992
plus Opening Retained Profits plus/less: Prior Period Adjustments plus Adjustments for amounts unpaid: - Taxation equivalent payments - Debt guarantee fees - Corporate taxation equivalent less: - Tax Equivalent Dividend paid - Surplus dividend paid Closing Retained Profits
9,239 -
7,822 -
14 413
14 425
Expenses from continuing operations Employee benefits and on-costs Borrowing costs Materials and contracts Depreciation and impairment Water purchase charges Loss on sale of assets Calculated taxation equivalents Debt guarantee fee (if applicable) Other expenses Total expenses from continuing operations Surplus (deficit) from Continuing Operations before capital amounts
Grants and contributions provided for capital purposes Surplus (deficit) from Continuing Operations after capital amounts
Surplus (deficit) from discontinued operations
Return on Capital % Subsidy from Council Calculation of dividend payable: Surplus (deficit) after tax less: Capital grants and contributions (excluding developer contributions) Surplus for dividend calculation purposes Potential Dividend calculated from surplus
(14) (254) 10,782
(14) 9,239
4.2% -
4.1% -
1,384 (421) 963 482
992 992 496 page 3
SPFS 2015
Moree Plains Shire Council Income Statement of Council's Sewerage Business Activity for the financial year ended 30 June 2015
$ '000
Actual 2015
Actual 2014
Income from continuing operations Access charges User charges Liquid Trade Waste charges Fees Interest Grants and contributions provided for non capital purposes Profit from the sale of assets Other income Total income from continuing operations
2,671 350 45 214 170 191 3,641
2,379 421 1 197 53 155 3,206
470 233 416 1,032 13 322 2,486 1,155
688 242 760 1,004 9 13 470 3,186 20
130 1,285
16 36
1,285 (347)
36 (6)
939
30
19,141 -
19,105 -
13 347
13 6
Expenses from continuing operations Employee benefits and on-costs Borrowing costs Materials and contracts Depreciation and impairment Loss on sale of assets Calculated taxation equivalents Debt guarantee fee (if applicable) Other expenses Total expenses from continuing operations Surplus (deficit) from Continuing Operations before capital amounts
Grants and contributions provided for capital purposes Surplus (deficit) from Continuing Operations after capital amounts
Surplus (deficit) from discontinued operations Surplus (deficit) from ALL Operations before tax less: Corporate Taxation Equivalent (30%) [based on result before capital]
SURPLUS (DEFICIT) AFTER TAX plus Opening Retained Profits plus/less: Prior Period Adjustments plus Adjustments for amounts unpaid: - Taxation equivalent payments - Debt guarantee fees - Corporate taxation equivalent less: - Tax Equivalent Dividend paid - Surplus dividend paid Closing Retained Profits
(13) (132) 20,294
(13) 19,141
Return on Capital % Subsidy from Council
4.9% -
0.9% 729
Calculation of dividend payable: Surplus (deficit) after tax less: Capital grants and contributions (excluding developer contributions) Surplus for dividend calculation purposes Potential Dividend calculated from surplus
939 (130) 809 404
30 (16) 14 7 page 4
SPFS 2015
Moree Plains Shire Council Income Statement of Council's Other Business Activities for the financial year ended 30 June 2015 GWYDIR DAY CARE
MAX CENTRE
Category 2
Category 2
$ '000
Actual 2015
Actual 2014
Actual 2015
Actual 2014
Income from continuing operations Access charges User charges Fees Interest Grants and contributions provided for non capital purposes Profit from the sale of assets Other income Total income from continuing operations
634 12 471 1,117
580 12 319 911
335 335
319 319
801 36 163 34 1,034 83
683 10 111 30 834 77
189 104 125 418 (83)
194 142 137 473 (154)
83
77
(83)
(154)
83 (25)
77 (23)
(83) -
(154) -
58
54
(83)
(154)
403 -
326 -
162 -
316 -
25
23
-
-
-
-
-
-
-
-
-
-
486
403
79
162
11.1% -
17.0% -
3.3% -
1.2% 78
Expenses from continuing operations Employee benefits and on-costs Borrowing costs Materials and contracts Depreciation and impairment Loss on sale of assets Calculated taxation equivalents Debt guarantee fee (if applicable) Other expenses Total expenses from continuing operations Surplus (deficit) from Continuing Operations before capital amounts
Grants and contributions provided for capital purposes Surplus (deficit) from Continuing Operations after capital amounts
Surplus (deficit) from discontinued operations Surplus (deficit) from ALL Operations before tax less: Corporate Taxation Equivalent (30%) [based on result before capital]
SURPLUS (DEFICIT) AFTER TAX plus Opening Retained Profits plus/less: Prior Period Adjustments plus Adjustments for amounts unpaid: - Taxation equivalent payments - Debt guarantee fees - Corporate taxation equivalent add: - Subsidy Paid/Contribution To Operations less: - TER dividend paid - Dividend paid Closing Retained Profits Return on Capital % Subsidy from Council
page 5
SPFS 2015
Moree Plains Shire Council Statement of Financial Position - Council's Water Supply Business Activity as at 30 June 2015
$ '000
Actual 2015
Actual 2014
ASSETS Current Assets Cash and cash equivalents Investments Receivables Inventories Other Non-current assets classified as held for sale Total Current Assets
4,594 1,611 115 6,320
1,655 1,981 105 1 3,742
49,248 49,248 55,568
48,732 48,732 52,474
152 205 274 631
118 177 232 527
9,944 9,944 10,575
9,149 9,149 9,676
44,993
42,798
10,782 34,211 44,993 -
9,239 33,559 42,798 -
44,993
42,798
Non-Current Assets Investments Receivables Inventories Infrastructure, property, plant and equipment Investments accounted for using equity method Investment property Intangible Assets Other Total non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Bank Overdraft Payables Interest bearing liabilities Provisions Total Current Liabilities Non-Current Liabilities Payables Interest bearing liabilities Provisions Total Non-Current Liabilities TOTAL LIABILITIES
NET ASSETS EQUITY Retained earnings Revaluation reserves Council equity interest Non-controlling equity interest
TOTAL EQUITY
page 6
SPFS 2015
Moree Plains Shire Council Statement of Financial Position - Council's Sewerage Business Activity as at 30 June 2015
$ '000
Actual 2015
Actual 2014
ASSETS Current Assets Cash and cash equivalents Investments Receivables Inventories Other Non-current assets classified as held for sale Total Current Assets
6,386 665 115 7,166
5,014 610 105 5,729
28,565 28,565 35,731
27,849 27,849 33,578
416 143 133 692
113 135 53 301
3,232 3,232 3,924
3,374 3,374 3,675
31,807
29,903
20,294 11,513 31,807 -
19,141 10,762 29,903 -
31,807
29,903
Non-Current Assets Investments Receivables Inventories Infrastructure, property, plant and equipment Investments accounted for using equity method Investment property Intangible Assets Other Total non-Current Assets TOTAL ASSETS LIABILITIES Current Liabilities Bank Overdraft Payables Interest bearing liabilities Provisions Total Current Liabilities Non-Current Liabilities Payables Interest bearing liabilities Provisions Total Non-Current Liabilities TOTAL LIABILITIES
NET ASSETS EQUITY Retained earnings Revaluation reserves Council equity interest Non-controlling equity interest
TOTAL EQUITY
page 7
SPFS 2015
Moree Plains Shire Council Statement of Financial Position - Council's Other Business Activities as at 30 June 2015 GWYDIR DAY CARE
MAX CENTRE
Category 2
Category 2
Actual 2015
Actual 2014
Actual 2015
Actual 2014
326 326
740 740
22 22
30 1 31
1,068 1,068 1,394
512 512 1,252
3,224 3,224 3,246
3,307 3,307 3,338
LIABILITIES Current Liabilities Bank Overdraft Payables Interest bearing liabilities Provisions Total Current Liabilities
3 22 284 309
3 20 206 229
3,267 50 3,317
3,207 48 3,255
Non-Current Liabilities Payables Interest bearing liabilities Provisions Other Liabilities Total Non-Current Liabilities TOTAL LIABILITIES
554 554 863
576 576 805
2,593 2,593 5,910
2,643 2,643 5,898
531
447
(2,664)
(2,560)
486 45 531 -
403 44 447 -
79 (2,743) (2,664) -
162 (2,722) (2,560) -
531
447
(2,664)
(2,560)
$ '000
ASSETS Current Assets Cash and cash equivalents Investments Receivables Inventories Other Non-current assets classified as held for sale Total Current Assets Non-Current Assets Investments Receivables Inventories Infrastructure, property, plant and equipment Investments accounted for using equity method Investment property Other Total Non-Current Assets TOTAL ASSETS
NET ASSETS EQUITY Retained earnings Revaluation reserves Council equity interest Non-controlling equity interest
TOTAL EQUITY
page 8
SPFS 2015
Moree Plains Shire Council Special Purpose Financial Statements for the financial year ended 30 June 2015
Contents of the Notes accompanying the Financial Statements Note
Details
Page
1
Summary of Significant Accounting Policies
10
2
Water Supply Business Best Practice Management disclosure requirements
13
3
Sewerage Business Best Practice Management disclosure requirements
15
page 9
SPFS 2015
_
Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015
Note 1. Significant Accounting Policies These financial statements are a Special Purpose Financial Statements (SPFS) prepared for use by Council and the Office of Local Government. For the purposes of these statements, the Council is not a reporting not-for-profit entity. The figures presented in these special purpose financial statements, unless otherwise stated, have been prepared in accordance with:
the recognition and measurement criteria of relevant Australian Accounting Standards,
other authoritative pronouncements of the Australian Accounting Standards Board (AASB) &
The pricing & costing guidelines outline the process for identifying and allocating costs to activities and provide a standard of disclosure requirements. These disclosures are reflected in Council’s pricing and/or financial reporting systems and include taxation equivalents; council subsidies; return on investments (rate of return); and dividends paid. Declared Business Activities In accordance with Pricing & Costing for Council Businesses - A Guide to Competitive Neutrality, Council has declared that the following are to be considered as business activities: Category 1
Australian Accounting Interpretations.
(where gross operating turnover is over $2 million)
The disclosures in these special purpose financial statements have been prepared in accordance with:
a. Moree Water Supplies
the Local Government Act and Regulation, and the Local Government Code of Accounting Practice and Financial Reporting. The statements are also prepared on an accruals basis, based on historic costs and do not take into account changing money values nor current values of non-current assets (except where specifically stated). Certain taxes and other costs (appropriately described) have been imputed for the purposes of the National Competition Policy. National Competition Policy Council has adopted the principle of ‘competitive neutrality’ to its business activities as part of the national competition policy which is being applied throughout Australia at all levels of government. The framework for its application is set out in the June 1996 Government Policy statement on the “Application of National Competition Policy to Local Government”. The “Pricing & Costing for Council Businesses A Guide to Competitive Neutrality” issued by the Office of Local Government in July 1997 has also been adopted.
Comprising the net assets & operations of the water supply systems servicing the towns of Moree, Mungindi, Boggabilla, Pallamallawa and surrounding villages of Moree Plains Shire, each of which is established as a separate Special Rate Fund. b. Moree Sewerage Service Comprising the net assets & operations of the sewerage reticulation and treatment system servicing the towns of Moree, Mungindi, and surrounding villages of Moree Plains Shire, which is established as a separate Special Rate Fund. Category 2 (where gross operating turnover is less than $2 million)
a. Gwydir Day Care Centre Comprising the net assets & operations of Gwydir Day Care which provides low cost day care services to the town of Moree. b. Max Centre Comprising the net assets & operations of the Max Centre which is a large commercial building containing retail outlets, service providers and restaurants that provides rental income to the Council. Monetary Amounts Amounts shown in the financial statements are in Australian currency and rounded to the nearest one page 10
SPFS 2015
_
Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015
Note 1. Significant Accounting Policies thousand dollars, with the exception of some figures disclosed in Note 2 (Water Supply Best Practice Management Disclosures) and Note 3 (Sewerage Best Practice Management Disclosures). As required by the NSW Office of Water (Department of Primary Industries) the amounts shown in Notes 2 and Note 3 are disclosed in whole dollars.
equivalent”, may be applied for any purpose allowed under the Local Government Act, 1993. Achievement of substantial compliance against the guidelines for Best Practice Management of Water Supply and Sewerage is not a prerequisite for the payment of the tax equivalent charges, however the payment must not exceed $3 per assessment. Income Tax
(i) Taxation Equivalent Charges Council is liable to pay various taxes and financial duties in undertaking its business activities. Where this is the case, they are disclosed in these statements as a cost of operations just like all other costs. However, where Council is exempt from paying taxes which are generally paid by private sector businesses (such as income tax), equivalent tax payments have been applied to all Council nominated business activities and are reflected in these financial statements. For the purposes of disclosing comparative information relevant to the private sector equivalent, the following taxation equivalents have been applied to all council nominated business activities (this does not include council’s non-business activities): Notional Rate Applied % Corporate Income Tax Rate – 30% Land Tax – The first $432,000 of combined land values attracts 0%. From $432,001 to $2,641,000 the rate is 1.6% + $100. For the remaining combined land value that exceeds $2,641,000, a premium marginal rate of 2.0% applies. Payroll Tax – 5.45% on the value of taxable salaries and wages in excess of $750,000. In accordance with the guidelines for Best Practice Management of Water Supply and Sewerage, a payment for the amount calculated as the annual tax equivalent charges (excluding income tax) must be paid from Water Supply and Sewerage Business activities. The payment of taxation equivalent charges, referred in the Best Practice Management of Water Supply and Sewerage Guides to as a “Dividend for Taxation
An income tax equivalent has been applied on the profits of each reported Business Activity. Whilst income tax is not a specific cost for the purpose of pricing a good or service, it needs to be taken into account of in terms of assessing the rate of return required on capital invested. Accordingly, the return on capital invested is set at a pre-tax level (gain/(loss) from ordinary activities before capital amounts) as would be applied by a private sector competitor – that is, it should include a provision equivalent to the corporate income tax rate, currently 30%. Income Tax is only applied where a positive gain/(loss) from ordinary activities before capital amounts has been achieved. Since this taxation equivalent is notional - that is, it is payable to the “Council” as the owner of business operations, it represents an internal payment and has no effect on the operations of the council. Accordingly, there is no need for disclosure of internal charges in Council's General Purpose Financial Statements. The rate applied of 30% is the equivalent company tax rate prevalent as at reporting date. Local Government Rates & Charges A calculation of the equivalent rates and charges payable on all Category 1 businesses has been applied to all land assets owned or exclusively used by the Business Activity. Loan & Debt Guarantee Fees The debt guarantee fee is designed to ensure that council business activities face “true” commercial borrowing costs in line with private sector competitors. page 11
SPFS 2015
_
Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015
Note 1. Significant Accounting Policies In order to calculate a debt guarantee fee, council has determined what the differential borrowing rate would have been between the commercial rate and the council’s borrowing rate for its business activities.
The actual rate of return achieved by each Business Activity is disclosed at the foot of each respective Income Statement.
(iv) Dividends (ii) Subsidies Government policy requires that subsidies provided to customers and the funding of those subsidies must be explicitly disclosed. Subsidies occur where council provides services on a less than cost recovery basis. This option is exercised on a range of services in order for council to meet its community service obligations. Accordingly, Subsidies disclosed (in relation to National Competition Policy) represents the difference between revenue generated from ‘rate of return’ pricing and revenue generated from prices set by the council in any given financial year. The overall effect of subsidies is contained within the Income Statement of each reported Business Activity.
(iii) Return on Investments (Rate of Return) The Policy statement requires that councils with Category 1 businesses “would be expected to generate a return on capital funds employed that is comparable to rates of return for private businesses operating in a similar field”.
Council is not required to pay dividends to either itself (as owner of a range of businesses) or to any external entities. Local Government Water Supply and Sewerage Businesses are permitted to pay an annual dividend from its water supply or sewerage business surplus. The dividend, calculated and approved in accordance with the Best Practice Management Guidelines, must not exceed either: (i)
50% of this surplus in any one year, or
(ii) the number of water supply or sewerage assessments at 30 June 2015 multiplied by $30 (less the payment for tax equivalent charges, not exceeding $3 per assessment).
In accordance with the guidelines for Best Practice Management of Water Supply and Sewerage, a Dividend Payment form, Statement of Compliance, Unqualified Independent Financial Audit Report and Compliance Audit Report are required to be submitted to the NSW Office of Water prior to making the dividend and only after it has approved the payment.
Such funds are subsequently available for meeting commitments or financing future investment strategies. The Rate of Return on Capital is calculated as follows: Operating Result before Capital Income + Interest Expense Written Down Value of I,PP&E as at 30 June
As a minimum, business activities should generate a return equal to the Commonwealth 10 year bond rate which is 3.02% at 30/6/15.
page 12
SPFS 2015
Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015
Note 2. Water Supply Business Best Practice Management disclosure requirements 2015
Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)
1. Calculation and Payment of Tax-Equivalents [All Local Government Local Water Utilities must pay this dividend for tax-equivalents]
(i)
Calculated Tax Equivalents
14,000
(ii)
No of assessments multiplied by $3/assessment
14,175
(iii)
Amounts payable for Tax Equivalents [lesser of (i) and (ii)]
14,000
(iv)
Amounts actually paid for Tax Equivalents
14,000
2. Dividend from Surplus (i) 50% of Surplus before Dividends
481,600
[Calculated in accordance with Best Practice Management for Water Supply and Sewerage Guidelines]
(ii)
No. of assessments multiplied by $30/assessment, less tax equivalent charges/assessment
(iii)
Cumulative surplus before Dividends for the 3 years to 30 June 2015, less the cumulative dividends paid for the 2 years to 30 June 2014 & 30 June 2013 2015 Surplus
963,200
991,900 -
2014 Surplus 2014 Dividend
2013 Surplus 2013 Dividend
127,750
2,030,000
74,900 -
(iv)
Maximum dividend from surplus [least of (i), (ii) and (iii) above]
127,750
(v)
Dividend actually paid from surplus [refer below for required pre-dividend payment Criteria]
253,880
3. Required outcomes for 6 Criteria [To be eligible for the payment of a "Dividend from Surplus", ALL the Criteria below need a "YES"]
(i) (ii)
Completion of Strategic Business Plan (including Financial Plan)
YES
Full Cost Recovery, without significant cross subsidies
YES
[Refer Item 2(a) in Table 1 on page 22 of the Best Practice Guidelines]
- Complying charges [Item 2(b) in Table 1]
YES
- DSP with Commercial Developer Charges [Item 2(e) in Table 1]
YES
- If Dual Water Supplies, Complying Charges [Item 2(g) in Table 1]
YES
(iii)
Sound Water Conservation and Demand Management implemented
YES
(iv)
Sound Drought Management implemented
YES
(v)
Complete Performance Reporting Form
YES
(vi)
a. Integrated Water Cycle Management Evaluation
YES
b. Complete and implement Integrated Water Cycle Management Strategy
YES
(by 15 September each year)
page 13
SPFS 2015
Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015
Note 2. Water Supply Business Best Practice Management disclosure requirements (continued) 2015
Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)
National Water Initiative (NWI) Financial Performance Indicators NWI F1
Total Revenue (Water)
$'000
5,785
Total Income (w13) - Grants for the Acquisition of Assets (w11a) - Interest Income (w9) - Aboriginal Communities W&S Program Income (w10a)
NWI F4
Revenue from Residential Usage Charges (Water)
%
74.79%
Income from Residential Usage Charges (w6b) x 100 divided by the sum of [Income from Residential Usage Charges (w6a) + Income from Residential Access Charges (w6b)]
NWI F9
Written Down Replacement Cost of Fixed Assets (Water)
$'000
49,148
$'000
2,751
$'000
77
Written down current cost of system assets (w47)
NWI F11
Operating Cost (OMA) (Water) Management Expenses (w1) + Operational & Maintenance Expenses (w2)
NWI F14
Capital Expenditure (Water) Acquisition of fixed assets (w16)
NWI F17
Economic Real Rate of Return (Water)
%
4.05%
[Total Income (w13) - Interest Income (w9) - Grants for acquisition of assets (w11a) Operating Costs (NWI F11) - Current Cost Depreciation (w3)] x 100 divided by [Written Down Current Cost of System Assets (w47) + Plant & Equipment (w33b)]
NWI F26
Capital Works Grants (Water)
$'000
421
Grants for the Acquisition of Assets (w11a)
Notes:
1.
References to w (eg. w12) refer to item numbers within Special Schedules No. 3 & 4 of Council's Annual Financial Statements.
2.
The NWI Performance Indicators are based upon the National Performance Framework Handbook for Urban Performance Reporting Indicators & Definitions. page 14
SPFS 2015
Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015
Note 3. Sewerage Business Best Practice Management disclosure requirements 2015
Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)
1. Calculation and Payment of Tax-Equivalents [All Local Government Local Water Utilities must pay this dividend for tax-equivalents]
(i)
Calculated Tax Equivalents
13,000
(ii)
No of assessments multiplied by $3/assessment
12,231
(iii)
Amounts payable for Tax Equivalents [lesser of (i) and (ii)]
12,231
(iv)
Amounts actually paid for Tax Equivalents
13,000
2. Dividend from Surplus (i)
404,250
50% of Surplus before Dividends [Calculated in accordance with Best Practice Management for Water Supply and Sewerage Guidelines]
(ii)
No. of assessments x ($30 less tax equivalent charges per assessment)
110,079
(iii)
Cumulative surplus before dividends for the 3 years to 30 June 2015, less the cumulative dividends paid for the 2 years to 30 June 2014 & 30 June 2013
853,300
2015 Surplus
808,500
2014 Surplus 2014 Dividend
14,000 -
2013 Surplus 2013 Dividend
30,800 -
(iv)
Maximum dividend from surplus [least of (i), (ii) and (iii) above]
110,079
(v)
Dividend actually paid from surplus [refer below for required pre-dividend payment Criteria]
132,479
3. Required outcomes for 4 Criteria [To be eligible for the payment of a "Dividend from Surplus", ALL the Criteria below need a "YES"]
(i) (ii)
Completion of Strategic Business Plan (including Financial Plan)
YES
Pricing with full cost-recovery, without significant cross subsidies
YES
[Refer Item 2(a) in Table 1 on page 22 of the Best Practice Guidelines]
Complying charges
(a)
Residential [Item 2(c) in Table 1]
YES
(b)
Non Residential [Item 2(c) in Table 1]
YES
(c)
Trade Waste [Item 2(d) in Table 1]
YES
DSP with Commercial Developer Charges [Item 2(e) in Table 1]
YES
Liquid Trade Waste Approvals & Policy [Item 2(f) in Table 1]
YES
(iii)
Complete Performance Reporting Form
YES
(iv)
a. Integrated Water Cycle Management Evaluation
YES
b. Complete and implement Integrated Water Cycle Management Strategy
YES
(by 15 September each year)
page 15
SPFS 2015
Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015
Note 3. Sewerage Business Best Practice Management disclosure requirements (continued) 2015
Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)
National Water Initiative (NWI) Financial Performance Indicators NWI F2
Total Revenue (Sewerage)
$'000
3,959
$'000
28,381
$'000
1,753
$'000
1,978
Total Income (s14) - Grants for Acquisition of Assets (s12a) - Interest Income (s10) - Aboriginal Communities W&S Program Income (w10a)
NWI F10
Written Down Replacement Cost of Fixed Assets (Sewerage) Written down current cost of system assets (s48)
NWI F12
Operating Cost (Sewerage) Management Expenses (s1) + Operational & Maintenance Expenses (s2)
NWI F15
Capital Expenditure (Sewerage) Acquisition of Fixed Assets (s17)
NWI F18
Economic Real Rate of Return (Sewerage)
%
4.11%
[Total Income (s14) - Interest Income (s10) - Grants for acquisition of Assets (s12a) - Operating cost (NWI F12) - Current cost depreciation (s3)] x 100 divided by [Written down current cost (ie. WDCC) of System Assets (s48) + Plant & Equipment (s34b)]
NWI F27
Capital Works Grants (Sewerage)
$'000
130
$'000
9,744
Grants for the Acquisition of Assets (12a)
National Water Initiative (NWI) Financial Performance Indicators Water & Sewer (combined) NWI F3
Total Income (Water & Sewerage) Total Income (w13 + s14) + Gain/Loss on disposal of assets (w14 + s15) minus Grants for acquisition of assets (w11a + s12a) - Interest Income (w9 + s10)
NWI F8
Revenue from Community Service Obligations (Water & Sewerage)
%
0.44%
Community Service Obligations (NWI F25) x 100 divided by Total Income (NWI F3)
NWI F16
Capital Expenditure (Water & Sewerage)
$'000
2,055
Acquisition of Fixed Assets (w16 + s17)
NWI F19
Economic Real Rate of Return (Water & Sewerage)
%
4.08%
[Total Income (w13 + s14) - Interest Income (w9 + s10) - Grants for acquisition of assets (w11a + s12a) - Operating Cost (NWI F11 + NWI F12) - Current cost depreciation (w3 + s3)] x 100 divided by [Written down replacement cost of fixed assets (NWI F9 + NWI F10) + Plant & equipment (w33b + s34b)]
NWI F20
Dividend (Water & Sewerage)
$'000
386
Dividend paid from surplus (2(v) of Note 2 + 2(v) of Note 3)
NWI F21
Dividend Payout Ratio (Water & Sewerage)
%
15.43%
Dividend (NWI F20) x 100 divided by Net Profit after tax (NWI F24)
page 16
SPFS 2015
Moree Plains Shire Council Notes to the Special Purpose Financial Statements for the financial year ended 30 June 2015
Note 3. Sewerage Business Best Practice Management disclosure requirements (continued) 2015
Dollars Amounts shown below are in WHOLE DOLLARS (unless otherwise indicated)
National Water Initiative (NWI) Financial Performance Indicators Water & Sewer (combined) NWI F22
Net Debt to Equity (Water & Sewerage)
%
3.31%
Overdraft (w36 + s37) + Borrowings (w38 + s39) - Cash & Investments (w30 + s31) x 100 divided by [Total Assets (w35 + s36) - Total Liabilities (w40 + s41)]
NWI F23
6
Interest Cover (Water & Sewerage) Earnings before Interest & Tax (EBIT) divided by Net Interest Earnings before Interest & Tax (EBIT):
3,040
Operating Result (w15a + s16a) + Interest expense (w4a + s4a) - Interest Income (w9 + s10) - Gain/Loss on disposal of assets (w14 + s15) + Miscellaneous Expenses (w4b + w4c + s4b + s4c) Net Interest:
509
Interest Expense (w4a + s4a) - Interest Income (w9 + s10)
NWI F24
Net Profit After Tax (Water & Sewerage)
$'000
2,504
$'000
43
Surplus before dividends (w15a + s16a) - Tax equivalents paid (Note 2-1(iv) + Note 3-1(iv))
NWI F25
Community Service Obligations (Water & Sewerage) Grants for Pensioner Rebates (w11b + s12b)
Notes:
1.
References to w (eg. s12) refer to item numbers within Special Schedules No. 5 & 6 of Council's Annual Financial Statements.
2.
The NWI Performance Indicators are based upon the National Performance Framework Handbook for Urban Performance Reporting Indicators & Definitions. page 17
page 18
page 19
Moree Plains Shire Council SPECIAL SCHEDULES for the year ended 30 June 2015
Leading the Way to a Better Community
Special Schedules 2015
Moree Plains Shire Council Special Schedules for the financial year ended 30 June 2015
Contents
Page
Special Schedules1 - Special Schedule No. 1
Net Cost of Services
- Special Schedule No. 2(a) - Special Schedule No. 2(b)
Statement of Long Term Debt (all purposes) Statement of Internal Loans (Sect. 410(3) LGA 1993)
4 n/a
- Special Schedule No. 3 - Special Schedule No. 4
Water Supply Operations - incl. Income Statement Water Supply - Statement of Financial Position
5 9
- Special Schedule No. 5 - Special Schedule No. 6
Sewerage Service Operations - incl. Income Statement Sewerage Service - Statement of Financial Position
10 14
2
15
- Notes to Special Schedules No. 3 & 5 - Special Schedule No. 7
Report on Infrastructure Assets (as at 30 June 2015)
16
- Special Schedule No. 8
Financial Projections
n/a
- Special Schedule No. 9
Permissible Income Calculation
22
1
Special Schedules are not audited (with the exception of Special Schedule 9).
Background (i)
These Special Schedules have been designed to meet the requirements of special purpose users such as;
(ii)
the NSW Grants Commission the Australian Bureau of Statistics (ABS), the NSW Office of Water (NOW), and the Office of Local Government (OLG).
The financial data is collected for various uses including;
the allocation of Financial Assistance Grants, the incorporation of Local Government financial figures in national statistics, the monitoring of loan approvals, the allocation of borrowing rights, and the monitoring of the financial activities of specific services.
page 1
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 1 - Net Cost of Services for the financial year ended 30 June 2015
$'000 Function or Activity
Expenses from. Continuing. Operations.
Income from continuing operations Non Capital.
Net Cost. of Services. Capital.
931
-
-
(931)
Administration
7,564
680
-
(6,884)
Public Order and Safety Fire Service Levy, Fire Protection, Emergency Services Beach Control Enforcement of Local Govt. Regulations Animal Control Other Total Public Order & Safety
707 521 283 115 1,626
331 513 29 873
11 11
(365) (8) (254) (115) (742)
311
76
-
(235)
Environment Noxious Plants and Insect/Vermin Control Other Environmental Protection Solid Waste Management Street Cleaning Drainage Stormwater Management Total Environment
306 340 3,111 153 3,910
273 107 4,083 4,463
117 117
(33) (116) 972 (153) 670
Community Services and Education Administration & Education Social Protection (Welfare) Aged Persons and Disabled Children's Services Total Community Services & Education
576 79 14 1,039 1,708
121 10 1 1,117 1,249
-
(455) (69) (13) 78 (459)
Total Housing and Community Amenities
297 64 249 558 738 1,906
191 269 460
-
(106) (64) (249) (289) (738) (1,446)
Water Supplies
4,583
5,387
421
1,225
Sewerage Services
2,450
3,561
130
1,241
Governance
Health
Housing and Community Amenities Public Cemeteries Public Conveniences Street Lighting Town Planning Other Community Amenities
page 2
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 1 - Net Cost of Services (continued) for the financial year ended 30 June 2015
$'000 Expenses from. Continuing. Operations.
Function or Activity
Recreation and Culture Public Libraries Museums Art Galleries Community Centres and Halls Performing Arts Venues Other Performing Arts Other Cultural Services Sporting Grounds and Venues Swimming Pools Parks & Gardens (Lakes) Other Sport and Recreation Total Recreation and Culture
Income from continuing operations Non Capital.
Net Cost. of Services. Capital.
(540) (229) (286) (13) 326 (1,329) (1,499) 145 (3,425)
714 229 308 20 568 1,345 1,538 102 4,824
16 22 7 16 37 2 100
158 894 2 245 1,299
Fuel & Energy
-
-
-
-
Agriculture
-
-
-
-
163 200 363
-
-
(163) (200) (363)
1,774 3 7,599 1,107 2,589 53 38 181 376 6,047 19,767
5 1,538 637 6,339 8,519
675 559 400 256 1,890
(1,094) (3) (7,040) 831 (2,589) (53) (38) 75 261 292 (9,358)
16 1,764 1,780
666 666
-
(16) (1,098) (1,114)
51,723
26,034
3,868
(21,821)
Mining, Manufacturing and Construction
Building Control Other Mining, Manufacturing & Construction Total Mining, Manufacturing and Const. Transport and Communication Urban Roads (UR) - Local Urban Roads - Regional Sealed Rural Roads (SRR) - Local Sealed Rural Roads (SRR) - Regional Unsealed Rural Roads (URR) - Local Unsealed Rural Roads (URR) - Regional Bridges on UR - Local Bridges on SRR - Local Bridges on URR - Local Bridges on Regional Roads Parking Areas Footpaths Aerodromes Other Transport & Communication Total Transport and Communication Economic Affairs Camping Areas & Caravan Parks Other Economic Affairs Total Economic Affairs
Totals â&#x20AC;&#x201C; Functions General Purpose Revenues
(2)
Share of interests - joint ventures & associates using the equity method
27,628
27,628
-
-
-
51,723
53,662
NET OPERATING RESULT
(1)
(1) As reported in the Income Statement
(2) Includes: Rates & Annual Charges (incl. Ex Gratia, excl. Water & Sewer), Non Capital General Purpose Grants,
3,868
5,807
Interest on Investments (excl. Ext. Restricted Assets) & Interest on overdue Rates & Annual Charges
page 3
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 2(a) - Statement of Long Term Debt (all purpose) for the financial year ended 30 June 2015
$'000 Principal outstanding at beginning of the year
Other Long Term Debt Ratepayers Advances Government Advances Finance Leases Deferred Payments Total Long Term Debt
Total Debt
From Revenue
Sinking Funds
Principal outstanding
Debt redemption during the year
Transfers Interest to Sinking applicable for Year Funds
Current
Non Current
1,058 1,058
41,261 41,261
42,319 42,319
12,400 12,400
1,058 1,058
-
-
-
-
-
-
-
-
1,058
41,261
42,319
12,400
1,058
-
Classification of Debt Loans (by Source) Commonwealth Government Treasury Corporation Other State Government Public Subscription Financial Institutions Other Total Loans
New Loans raised during the year
Total
at the end of the year Current
Non Current
3,054 3,054
1,159 1,159
52,502 52,502
53,661 53,661
-
-
-
-
-
-
3,054
1,159
52,502
53,661
Total
Notes: Excludes (i) Internal Loans & (ii) Principal Inflows/Outflows relating to Loan Re-Financing. This Schedule is prepared using the face value of debt obligations, rather than fair value (which are reported in the GPFS). page 4
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 3 - Water Supply Income Statement Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2015
$'000
Actuals 2015
Actuals 2014
A
Expenses and Income Expenses
1.
Management expenses a. Administration b. Engineering and Supervision
871 85
1,188 102
Operation and Maintenance expenses - Dams & Weirs a. Operation expenses b. Maintenance expenses
319 65
369 92
- Mains c. Operation expenses d. Maintenance expenses
738
712
- Reservoirs e. Operation expenses f. Maintenance expenses
11
12
- Pumping Stations g. Operation expenses (excluding energy costs) h. Energy costs i. Maintenance expenses
25 21
2 40 34
357 41 131 181
350 53 114 154
18 19 -
30 34 -
1,017 20
1,007 20
675 -
564 -
4,594
4,877
2.
- Treatment j. Operation expenses (excluding chemical costs) k1. Energy costs k2. Chemical costs l. Maintenance expenses - Other m. Operation expenses n. Maintenance expenses o. Purchase of water 3.
4.
5.
Depreciation expenses a. System assets b. Plant and equipment Miscellaneous expenses a. Interest expenses b. Revaluation Decrements c. Other expenses d. Impairment - System assets e. Impairment - Plant and equipment f. Aboriginal Communities Water & Sewerage Program g. Tax Equivalents Dividends (actually paid) Total expenses
page 5
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 3 - Water Supply Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2015 Actuals 2015
Actuals 2014
Residential charges a. Access (including rates) b. Usage charges
1,036 3,074
1,062 3,258
Non-residential charges a. Access (including rates) b. Usage charges
544 799
527 1,144
-
-
185
130
10. Other income 10a. Aboriginal Communities Water and Sewerage Program
176 -
124 -
11. Grants a. Grants for acquisition of assets b. Grants for pensioner rebates c. Other grants
421 22 -
25 -
12. Contributions a. Developer charges b. Developer provided assets c. Other contributions
134 -
24 -
6,391
6,294
-
-
15. Operating Result
1,797
1,417
15a. Operating Result (less grants for acquisition of assets)
1,376
1,417
$'000
Income 6.
7.
8.
Extra charges
9.
Interest income
13. Total income 14. Gain (or loss) on disposal of assets
page 6
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 3 - Water Supply Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2015
$'000
B
Actuals 2015
Actuals 2014
77 -
1 226 -
177 -
145 -
-
-
254
372
-
-
719 -
2,640 -
-
-
719
2,640
3,885 840 -
3,899 218 529 25
Capital transactions Non-operating expenditures
16. Acquisition of Fixed Assets a. New Assets for Improved Standards b. New Assets for Growth c. Renewals d. Plant and equipment 17. Repayment of debt a. Loans b. Advances c. Finance leases 18. Transfer to sinking fund 19. Totals
Non-operating funds employed 20. Proceeds from disposal of assets 21. Borrowing utilised a. Loans b. Advances c. Finance leases 22. Transfer from sinking fund 23. Totals
C
Rates and charges
24. Number of assessments a. Residential (occupied) b. Residential (unoccupied, ie. vacant lot) c. Non-residential (occupied) d. Non-residential (unoccupied, ie. vacant lot)
36
25. Number of ETs for which developer charges were received 26. Total amount of pensioner rebates (actual dollars)
$
ET
42,415
$
ET
43,815
page 7
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 3 - Water Supply Cross Subsidies for the financial year ended 30 June 2015
$'000
D
Yes
No
Amount
Best practice annual charges and developer charges*
27. Annual charges a. Does Council have best-practice water supply annual charges and usage charges*?
Yes
If Yes, go to 28a. If No, please report if council has removed land value from access charges (ie rates)? NB. Such
charges for both residential customers and non-residential customers comply with section 3.2 of Water Supply, Sewerage and Trade Waste Pricing Guidelines, NSW Office of Water, December, 2002. Such charges do not involve significant cross subsidies.
b. Cross-subsidy from residential customers using less than allowance (page 25 of Guidelines) c. Cross-subsidy to non-residential customers (page 24 of Guidelines) d. Cross-subsidy to large connections in unmetered supplies (page 26 of Guidelines) 28. Developer charges a. Has council completed a water supply Development Servicing** Plan?
Yes
b. Total cross-subsidy in water supply developer charges for 2014/15 (page 47 of Guidelines) ** In accordance with page 9 of Developer Charges Guidelines for Water Supply, Sewerage and Stormwater, NSW Office of Water, December, 2002. 29. Disclosure of cross-subsidies Total of cross-subsidies (27b +27c + 27d + 28b)
-
* Councils which have not yet implemented best practice water supply pricing should disclose cross-subsidies in items 27b, 27c and 27d above. However, disclosure of cross-subsidies is not required where a Council has implemented best practice pricing and is phasing in such pricing over a period of 3 years. page 8
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 4 - Water Supply Statement of Financial Position Includes INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. as at 30 June 2015 Actuals Current
Actuals Non Current
Actuals Total
ASSETS 30. Cash and investments a. Developer charges b. Special purpose grants c. Accrued leave d. Unexpended loans e. Sinking fund f. Other
310 138 1,046 3,100
-
310 138 1,046 3,100
31. Receivables a. Specific purpose grants b. Rates and Availability Charges c. User Charges d. Other
202 1,289 120
-
202 1,289 120
115
-
115
33. Property, plant and equipment a. System assets b. Plant and equipment
-
49,148 100
49,148 100
34. Other assets
-
-
-
35. Total assets
6,320
49,248
55,568
152
-
152
205 -
9,944 -
10,149 -
39. Provisions a. Tax equivalents b. Dividend c. Other
274
-
274
40. Total liabilities
631
9,944
10,575
5,689
39,304
44,993
$'000
32. Inventories
LIABILITIES 36. Bank overdraft 37. Creditors 38. Borrowings a. Loans b. Advances c. Finance leases
41. NET ASSETS COMMITTED EQUITY 42. Accumulated surplus 43 Asset revaluation reserve
10,782 34,211
44. TOTAL EQUITY
44,993
45. 46. 47.
Note to system assets: Current replacement cost of system assets Accumulated current cost depreciation of system assets Written down current cost of system assets
80,710 (31,562) 49,148 page 9
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 5 - Sewerage Service Income Statement Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2015
$'000
Actuals 2015
Actuals 2014
A
Expenses and Income Expenses
1.
Management expenses a. Administration b. Engineering and Supervision
447 67
370 94
Operation and Maintenance expenses - Mains a. Operation expenses b. Maintenance expenses
350
260
- Pumping Stations c. Operation expenses (excluding energy costs) d. Energy costs e. Maintenance expenses
95 73 189
107 104 231
- Treatment f. Operation expenses (excl. chemical, energy, effluent & biosolids management costs) g. Chemical costs h. Energy costs i. Effluent Management j. Biosolids Management k. Maintenance expenses
55 193 14 3 217
46 275 1 3 218
50 -
220 -
1,013 19
986 18
233 -
242 -
3,018
3,175
2.
- Other l. Operation expenses m. Maintenance expenses 3.
4.
5.
Depreciation expenses a. System assets b. Plant and equipment Miscellaneous expenses a. Interest expenses b. Revaluation Decrements c. Other expenses d. Impairment - System assets e. Impairment - Plant and equipment f. Aboriginal Communities Water & Sewerage Program g. Tax Equivalents Dividends (actually paid) Total expenses
page 10
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 5 - Sewerage Service Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2015
$'000
Actuals 2015
Actuals 2014
2,158
1,920
Income 6.
Residential charges (including rates)
7.
Non-residential charges a. Access (including rates) b. Usage charges
514 350
458 418
Trade Waste Charges a. Annual Fees b. Usage charges c. Excess mass charges d. Re-inspection fees
236 -
159 -
-
-
10. Interest income
214
197
11. Other income 11a. Aboriginal Communities Water & Sewerage Program
531 -
-
12. Grants a. Grants for acquisition of assets b. Grants for pensioner rebates c. Other grants
130 21 -
22 -
13. Contributions a. Developer charges b. Developer provided assets c. Other contributions
149 -
46 -
4,303
3,220
8.
9.
Extra charges
14. Total income 15. Gain (or loss) on disposal of assets
-
(9)
16. Operating Result
1,285
36
16a. Operating Result (less grants for acquisition of assets)
1,155
36
page 11
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 5 - Sewerage Service Income Statement (continued) Includes ALL INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. for the financial year ended 30 June 2015 Actuals 2015
Actuals 2014
1,978 -
54 74 -
135 -
125 -
-
-
2,113
253
21. Proceeds from disposal of assets
-
-
22. Borrowing utilised a. Loans b. Advances c. Finance leases
-
-
23. Transfer from sinking fund
-
-
24. Totals
-
-
3,484 593 -
3,496 161 520 25
$'000
B
Capital transactions Non-operating expenditures
17. Acquisition of Fixed Assets a. New Assets for Improved Standards b. New Assets for Growth c. Renewals d. Plant and equipment 18. Repayment of debt a. Loans b. Advances c. Finance leases 19. Transfer to sinking fund 20. Totals Non-operating funds employed
C
Rates and charges
25. Number of assessments a. Residential (occupied) b. Residential (unoccupied, ie. vacant lot) c. Non-residential (occupied) d. Non-residential (unoccupied, ie. vacant lot)
36
26. Number of ETs for which developer charges were received 27. Total amount of pensioner rebates (actual dollars)
$
ET
38,730
$
ET
39,462
page 12
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 5 - Sewerage Service Cross Subsidies for the financial year ended 30 June 2015
$'000
D
Yes
No
Amount
Best practice annual charges and developer charges*
28. Annual charges a. Does Council have best-practice sewerage annual charges, usage charges and trade waste fees & charges*?
Yes
If Yes, go to 29a. If No, please report if council has removed land value from access charges (ie rates)? NB. Such
charges for both residential customers and non-residential customers comply with section 4.2 & 4.3 of the Water Supply, Sewerage and Trade Waste Pricing Guidelines, NSW Office of Water, December, 2002. Such charges do not involve significant cross subsidies.
b. Cross-subsidy to non-residential customers (page 45 of Guidelines) c. Cross-subsidy to trade waste discharges (page 46 of Guidelines) 29. Developer charges a. Has council completed a sewerage Development Servicing** Plan?
Yes
b. Total cross-subsidy in sewerage developer charges for 2014/15 (page 47 of Guidelines) ** In accordance with page 9 of Developer Charges Guidelines for Water Supply, Sewerage and Stormwater, NSW Office of Water, December, 2002. 30. Disclosure of cross-subsidies Total of cross-subsidies (28b + 28c + 29b)
-
* Councils which have not yet implemented best practice sewer pricing & liquid waste prising should disclose cross-subsidies in items 28b and 28c above. However, disclosure of cross-subsidies is not required where a Council has implemented best practice sewerage and liquid waste pricing and is phasing in such pricing over a period of 3 years. page 13
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 6 - Sewerage Service Statement of Financial Position Includes INTERNAL TRANSACTIONS, ie. prepared on a Gross Basis. as at 30 June 2015 Actuals Current
Actuals Non Current
Actuals Total
407 92 147 5,740
-
407 92 147 5,740
32. Receivables a. Specific purpose grants b. Rates and Availability Charges c. User Charges d. Other
443 221 1
-
443 221 1
33. Inventories
115
-
115
34. Property, plant and equipment a. System assets b. Plant and equipment
-
28,381 184
28,381 184
35. Other assets
-
-
-
36. Total Assets
7,166
28,565
35,731
416
-
416
143 -
3,232 -
3,375 -
40. Provisions a. Tax equivalents b. Dividend c. Other
133
-
133
41. Total Liabilities
692
3,232
3,924
6,474
25,333
31,807
$'000
ASSETS 31. Cash and investments a. Developer charges b. Special purpose grants c. Accrued leave d. Unexpended loans e. Sinking fund f. Other
LIABILITIES 37. Bank overdraft 38. Creditors 39. Borrowings a. Loans b. Advances c. Finance leases
42. NET ASSETS COMMITTED EQUITY 42. Accumulated surplus 44. Asset revaluation reserve
20,294 11,513
45. TOTAL EQUITY
31,807
46. 47. 48.
Note to system assets: Current replacement cost of system assets Accumulated current cost depreciation of system assets Written down current cost of system assets
57,007 (28,626) 28,381 page 14
Special Schedules 2015
Moree Plains Shire Council Notes to Special Schedule No.'s 3 & 5 for the financial year ended 30 June 2015
Administration
(1)
Engineering and supervision
(1)
(item 1a of Special Schedules 3 and 5) comprises the following:
(item 1b of Special Schedules 3 and 5) comprises the following:
•
Administration staff: − Salaries and allowance − Travelling expenses − Accrual of leave entitlements − Employment overheads.
•
Engineering staff: − Salaries and allowance − Travelling expenses − Accrual of leave entitlements − Employment overheads.
•
Meter reading.
•
•
Bad and doubtful debts.
•
Other administrative/corporate support services.
Other technical and supervision staff: − Salaries and allowance − Travelling expenses − Accrual of leave entitlements − Employment overheads.
Operational expenses (item 2 of Special Schedules 3 and 5) comprise the day to day operational expenses excluding maintenance expenses. Maintenance expenses (item 2 of Special Schedules 3 and 5) comprise the day to day repair and maintenance expenses. (Refer to Section 5 of the Local Government Asset Accounting Manual regarding capitalisation principles and the distinction between capital and maintenance expenditure). Other expenses (item 4c of Special Schedules 3 and 5) includes all expenses not recorded elsewhere. Revaluation decrements (item 4b of Special Schedules 3 and 5) is to be used when I,PP&E decreases in FV. Impairment Losses (item 4d & 4e of Special Schedules 3 and 5) are to be used when the carrying amount of an asset exceeds its recoverable amount (refer to page D-31). Aboriginal Communities Water and Sewerage Program (item 4f of Special Schedules 3 and 5) is to be used when operation and maintenance work has been undertaken on behalf of the Aboriginal Communities Water and Sewerage Program. Similarly, income for item 11a of Special Schedule 3 and item 12a of Special Schedule 5 are for services provided to the Aboriginal Communities Water and Sewerage Program and is not part of Council’s water supply and sewerage revenue. Residential charges (2) (items 6a, 6b and item 6 of Special Schedules 3 and 5 respectively) include all income from residential charges. Item 6 of Schedule 3 should be separated into 6a Access Charges (including rates if applicable) and 6b Usage Charges. Non-residential charges (2) (items 7a, 7b of Special Schedules 3 and 5) include all income from non-residential charges separated into 7a Access Charges (including rates if applicable) and 7b Usage Charges. Trade waste charges (item 8 of Special Schedule 5) include all income from trade waste charges separated into 8a Annual Fees, 8b Usage Charges and 8c Excess Mass Charges and 8d Re-inspection Fees. Other income (items 10 and 11 of Special Schedules 3 and 5 respectively) include all income not recorded elsewhere. Other contributions (items 12c and 13c of Special Schedules 3 and 5 respectively) incl. capital contributions for water supply or sewerage services received by Council under Section 565 of the Local Government Act. Notes: Administration and engineering costs for the development of capital works projects should be reported as part of the capital cost of the project and not as part of the recurrent expenditure (ie. in item 16 for water supply and item 17 for sewerage, and not in items 1a and 1b).
(1)
(2)
To enable accurate reporting of residential revenue from usage charges, it is essential for councils to accurately separate their residential (item 6) charges and non-residential (item 7) charges. page 15
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets as at 30 June 2015
$'000
Asset Class
Buildings
Asset Category Council Offices / Administration Centres Council Houses Libraries Cultural Facilities Other Buildings Other sub total
Other Structures Other Structures sub total Roads
Sealed Roads Surface Sealed Roads Structure Unsealed Roads Bridges Footpaths Kerb and Gutter Carparks Other sub total
Estimated cost to bring up to a satisfactory standard refer (1)
Required Annual Maintenance refer (2)
Actual Maintenance 2014/15 refer (3)
Written Down Value (WDV) refer (4)
24 24
165 24 48 40 10 492 779
28 21 23 49 22 488 631
12,877 1,655 2,775 3,018 1,346 34,925 56,596
1% 0.7%
98% 98.9%
-
341 341
196 196
13,615 13,615
7% 7.1%
93% 92.9%
716 6,490 129 186 7,521
2,110 178 2,439 86 110 164 10 68 5,165
2,110 178 1,913 86 110 164 10 68 4,639
25,775 99,565 98,065 44,215 7,861 11,864 312 1,450 289,107
24%
38%
24%
71%
0%
21%
16%
70%
39%
24%
19%
Assets in Condition as a % of WDV 1
2
3 refer (4) & (5)
4
5
100%
0%
100%
0%
100%
0%
100%
0%
100%
0% 0% 0.3%
0% 0.0%
0% 0.1%
0.0%
0.0%
0% 0.0%
32%
4%
2%
5%
0%
0%
53%
25%
0%
14%
0%
0%
31%
6%
0%
40%
37%
2%
1%
0%
64%
36%
0%
0%
14% 14.7%
64% 48.5%
23% 27.4%
0% 9.2%
0% 0.2%
page 16
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) as at 30 June 2015
$'000 Estimated cost to bring up to a satisfactory standard refer (1)
Required Annual Maintenance refer (2)
Actual Maintenance 2014/15 refer (3)
Written Down Value (WDV) refer (4)
Asset Class
Asset Category
Water Supply Network
Dams/Weirs Mains Reservoirs Treatment sub total
-
155 325 394 164 1,038
64 741 11 154 970
3,643 12,536 23,871 3,411 43,461
Mains Pumping Station/s Treatment sub total
-
551 197 281 1,029
350 164 203 717
15,907 4,419 6,995 27,321
Sewerage Network
Assets in Condition as a % of WDV 1
2
3 refer (4) & (5)
4
5
8%
35%
24%
20%
13%
8%
20%
39%
20%
13%
8%
35%
32%
15%
10%
0% 7.4%
35% 30.7%
32% 33.3%
20% 17.3%
13% 11.4%
26%
7%
47%
10%
10%
26%
7%
40%
17%
10%
26% 26.0%
7% 7.0%
50% 46.6%
17% 12.9%
0% 7.4%
page 17
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) as at 30 June 2015
$'000
Asset Class
Asset Category
Stormwater Drainage
Other sub total
Estimated cost to bring up to a satisfactory standard refer (1)
Required Annual Maintenance refer (2)
Actual Maintenance 2014/15 refer (3)
Written Down Value (WDV) refer (4)
421 421
213 213
265 265
13,291 13,291
7,966
8,565
7,418
443,391
TOTAL - ALL ASSETS
Assets in Condition as a % of WDV 1
2
3 refer (4) & (5)
4
5
7% 7.0%
78% 78.0%
8% 8.0%
4% 4.0%
3% 3.0%
12.4%
52.9%
24.3%
8.6%
1.8%
Notes: (1).
(4).
Satisfactory is defined as “satisfying expectations or needs, leaving no room for complaint, causing satisfaction, adequate”. The estimated cost to bring assets to a satisfactory standard is the amount of money that is required to be spent on an asset to ensure that it is in a satisfactory standard. This estimated cost should not include any planned enhancements (ie.to heighten, intensify or improve the facilities). Required Annual Maintenance is “what should be spent to maintain assets in a satisfactory standard. Actual Maintenance is what has been spent in the current year to maintain the assets. Actual Maintenance may be higher or lower than the required annual maintenance due to the timing of when the maintenance actually occurs. Written Down Value is in accordance with Note 9 of Council's General Purpose Financial Statements
(5).
Infrastructure Asset Condition Assessment "Key"
(2). (3).
1
Excellent
2
Good
3
Average
4
Poor
5
Very Poor
No work required (normal maintenance) Only minor maintenance work required Maintenance work required Renewal required Urgent renewal/upgrading required
6
Condition
7
Condition
8
Condition
9
Condition
10
Condition
Description here… Description here… Description here… Description here… Description here…
page 18
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) for the financial year ended 30 June 2015
$ '000
Amounts 2015
Indicator 2015
Prior Periods 2014 2013
Infrastructure Asset Performance Indicators Consolidated 1. Building, Infrastructure & Other Structures Renewals Ratio Asset Renewals (Building, Infrastructure & Other Structures) (1) Depreciation, Amortisation & Impairment
142.44%
216.60%
129.53%
1.79%
2.56%
6.00%
7,418 8,565
0.87
0.79
0.66
24,193 13,417
1.80
2.45
1.38
15,950 11,198
2. Infrastructure Backlog Ratio Estimated Cost to bring Assets to a Satisfactory Condition Total value(2) of Infrastructure, Building, Other Structures & depreciable Land Improvement Assets
7,966 444,138
3. Asset Maintenance Ratio Actual Asset Maintenance Required Asset Maintenance
4. Capital Expenditure Ratio Annual Capital Expenditure Annual Depreciation
Notes (1)
Asset Renewals represent the replacement &/or refurbishment of existing assets to an equivalent capacity/performance as opposed to the acquisition of new assets (or the refurbishment of old assets) that increases capacity/performance. Asset Renewals include building, infrastructure & Other Structure assets only.
(2)
Written Down Value
page 19
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) for the financial year ended 30 June 2015
250%
1. Building, Infrastructure & Other Structures Renewals Ratio
Commentary on 2014/15 Result Purpose of Asset Renewals Ratio
2014/15 Ratio
142.44%
Ratio %
200% 150% 216.60%
100% 50% 0%
131.53%
129.53%
2012
2013
142.44%
2014
To assess the rate at which these assets are being renewed relative to the rate at which they are depreciating.
2015
Benchmark: ――― Minimum >=100.00% Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 Purpose of Infrastructure Backlog Ratio
2. Infrastructure Backlog Ratio 12.0%
Ratio %
10.0% 8.0% 6.0%
11.0%
4.0%
6.0%
2.0% 0.0%
2012
2013
2.6%
1.8%
2014
2015
This ratio shows what proportion the backlog is against the total value of a Council’s infrastructure.
Benchmark: ――― Maximum <0.02 Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 Purpose of Asset Maintenance Ratio
1.20
Ratio (x)
1.00 0.80 0.60 0.20 0.00
0.51
2012
0.66
2013
0.79
0.87
2014
2015
Compares actual vs. required annual asset maintenance. A ratio above 1.0 indicates Council is investing enough funds to stop the Infrastructure Backlog growing.
Benchmark: ――― Minimum >1.00 Source for Benchmark: Code of Accounting Practice and Financial Reporting #23 Purpose of Capital Expenditure Ratio
3.00
Ratio (x)
2.50 2.00 1.00 0.50 0.00
2.45 1.38
1.38
2012
2013
2014
Commentary on 2014/15 Result 2014/15 Ratio
1.79%
This ratio continues to improve, with the majority of the backlog in the unsealed roads area. As detailed in Council's Fit for the Future submission backlog works will no longer be undertaken on gravel roads allowing them to revert to natural surface roads. The backlog figure in this schedule will continue to reduce as gravel roads become reclassified to natural surface roads over the next three years. Ratio is within Benchmark Ratio is outside Benchmark
2014/15 Ratio
0.87 x
While this ratio continues to improve there remains a shortfall in maintenance funding over several asset classes. This will continue to be addressed and improved into the future.
Ratio is within Benchmark Ratio is outside Benchmark Commentary on 2014/15 Result
4. Capital Expenditure Ratio
1.50
Ratio is within Benchmark Ratio is outside Benchmark
Commentary on 2014/15 Result
3. Asset Maintenance Ratio
0.40
This ratio continues to be high due to significant capital works on the road network and the finalisation of the Moree Artesian Acquatic Centre project. Expected to reduce in future years.
1.80
2015
To assess the extent to which a Council is expanding its asset base thru capital expenditure on both new assets and the replacement and renewal of existing assets.
Benchmark: ――― Minimum >1.10 Source for Benchmark: Code of Accounting Practice and Financial Reporting #23
2014/15 Ratio
1.80 x
Significant investment in Council's existing assets and the construction of new assets has seen this ratio remain high. This ratio will continue to decrease as major projects are completed.
Ratio is within Benchmark Ratio is outside Benchmark page 20
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 7 - Report on Infrastructure Assets (continued) for the financial year ended 30 June 2015
$ '000
Water 2015
Sewer 2015
General(1) 2015
77.29%
60.54%
159.08%
221.60%
68.59%
236.63%
0.00%
0.00%
2.13%
0.00%
0.00%
3.05%
0.93
0.70
0.88
0.94
0.68
0.78
0.07
1.92
1.95
0.22
0.13
2.99
Infrastructure Asset Performance Indicators By Fund 1. Building, Infrastructure & Other Structures Renewals Ratio Asset Renewals (Building, Infrastructure & Other Structures) (2) Depreciation, Amortisation & Impairment prior period:
2. Infrastructure Backlog Ratio Estimated Cost to bring Assets to a Satisfactory Condition Total value(3) of Infrastructure, Building, Other Structures & Depreciable Land Improvement Assets
prior period:
3. Asset Maintenance Ratio Actual Asset Maintenance Required Asset Maintenance prior period:
4. Capital Expenditure Ratio Annual Capital Expenditure Annual Depreciation prior period:
Notes (1)
General Fund refers to all of Council's activities except for its Water & Sewer activities which are listed separately.
(2)
Asset Renewals represent the replacement &/or refurbishment of existing assets to an equivalent capacity/performance as opposed to the acquisition of new assets (or the refurbishment of old assets) that increases capacity/performance. Asset Renewals include building, infrastructure & Other Structure assets only.
(3)
Written Down Value
page 21
Special Schedules 2015
Moree Plains Shire Council Special Schedule No. 9 - Permissible Income Calculation for the financial year ended 30 June 2016 Calculation 2014/15
$'000
Calculation 2015/16
Notional General Income Calculation (1) Last Year Notional General Income Yield Plus or minus Adjustments (2) Notional General Income
a b c = (a + b)
20,582 (13) 20,569
20,967 20,967
Permissible Income Calculation Special variation percentage (3) or Rate peg percentage or Crown land adjustment (incl. rate peg percentage)
d
expiring Special variation amount plus Special variation amount or plus Rate peg amount or plus Crown land adjustment and rate peg amount sub-total
g
less
(or minus) last year's Carry Forward Total less Valuation Objections claimed in the previous year sub-total plus
Total Permissible income Notional General Income Yield Catch-up or (excess) result less
Income lost due to valuation objections claimed (4) (5) less Unused catch-up Carry forward to next year plus
e f
0.00% 2.30% 0.00%
0.00% 2.40% 0.00%
473 21,043
503 21,470
15 15
91 91
o=k+n
21,058
21,561
p
20,967 91
21,257 304
h = d x (c-g) i=cxe j=cxf k = (c+g+h+i+j) l m n = (l + m)
q=o-p r s t=q+r-s
91
(16) 288
Notes 1
The Notional General Income will not reconcile with rate income in the financial statements in the corresponding year. The statements are reported on an accrual accounting basis which include amounts that relate to prior years' rates income.
2
Adjustments account for changes in the number of assessments and any increase or decrease in land value occurring during the year. The adjustments are called "supplementary valuations" as defined in the Valuation of Land Act 1916.
3
The Special Variation Percentage is inclusive of the Rate Peg percentage and where applicable crown land adjustment.
4
Valuation objections are unexpected changes in land values as a result of land owners successfully objecting to the land value issued by the Valuer-General. Councils can claim the value of the income lost due to valuation objections in any single year.
5
Unused catch-up amounts will be deducted if they are not caught up within 2 years. Usually councils will have a nominal carry forward figure. These amounts can be adjusted for in setting the rates in a future year.
6
Carry forward amounts which are in excess (an amount that exceeds the permissible income) require Ministerial approval by order published in the NSW Government Gazette in accordance with section 512 of the Local Government Act 1993. The OLG will extract these amounts from councilsâ&#x20AC;&#x2122; Special Schedule 9 in the Financial Data Return (FDR) to administer this process. page 22
page 23
page 24