in this issue - Sunshine Coast Council

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How council monitors its
BUDGET
Managing a budget of more than $750 million of
other people’s money calls for strong financial
management, and constant monitoring of what is
spent and what is earned.
Our focus on being financially sustainable and
complying with Local Government Finance Standards
requires council to amend the budget if there are
material changes to expected revenue or expenses.
In doing this, council produces a monthly financial
report and if any emerging minor issues are identified,
the budget is amended. Council also undertakes two
full budget reviews each financial year with the first
major review held towards the end of 2009. At present,
council is working on the second and final review for this
financial year.
Financial Management Portfolio holder, Chris
Thompson, said major budget reviews of all budgeted
revenue and expenditure may result in council adopting
changes to the 2009-2010 Budget.
“For example, with the December review the net
result was an increase in council’s operating deficit
from $7.6 million to $12.7 million with our Operating
Position Indicator standing at 2.8 per cent. This is still
comfortably within the Queensland Treasury minimum
indicator of 4 per cent,” Cr Thompson said.
“However, council’s target is to have a balanced
operating result for the financial year. And we adjusted
all the known one-off or extra-ordinary items, including
works funded from previous years (carry-overs) of $7.6
million, works funded from reserves of $1.9 million and
the early part-payment of the financial assistance grant
(under the federal government stimulus package) of
$2.8 million, the forecast operating result was a deficit of
$400,000.
“Council was also on track to achieve its efficiency
dividend with the realisation of $4.8 million, or 36 per
cent of the $13.5 million target.”
Examples of possible risks
► Lower than the forecast 2.4 per cent growth
in rateable assessments.
► The impacts of the economic downturn on
revenue from development-related fees and
charges.
► Potential significant increases in legal
expenses.
► Increased costs associated with water
reform.
“With the community in mind, the significant
benefit of this rigorous budget review process
is that we are continually aware of our financial
situation, which in turn assists in preparations
for the 2010-2011 Budget,” Cr Thompson said.
Steps in the budget review process
1 Council receives and reviews monthly
Board and Financial Management reports.
2 Council’s budget is adjusted for emerging
minor issues.
3 The major reviews (October/November and
February/March) are when all budgeted
revenue and expenditure is reviewed to
determine if material changes are required
to council’s budget.
4 Budget adjustments are collated
and presented to council’s Executive
Leadership Team.
5 Budget adjustments are subsequently
presented to either council’s Organisational
Performance Committee or General
Committee Meeting.
6 The budget is formally amended by council
at an Ordinary Meeting.
Encompass March 2010
10
Other key changes incorporated into the 2009-2010 December review include:
► Increased airport terminal
revenue and recoveries from
Sunshine Coast Enterprises.
► The recognition of increased
water base and consumption
charges offset by lower than
anticipated general rates
and Tourism and Economic
Development Levy income
Sunshine Coast Council
► Increased revenue and
expenditure associated with
additional trainees under
the Green Army and a SEQ
Catchment Grant.
► Increased capital works of
$2.8 million, taking the 2009-
2010 capital works program
to $306.4 million.
“Council remains on target
to achieve an adjusted
balanced operating result
after adjustments for impacts
from prior years and reserve
transfers; however, the final
result is being closely monitored
for changes in any known risks,”
Cr Thompson said.
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