Annual Plan and Budget Estimates 2011-2012 - King Island Council

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Annual Plan and Budget Estimates 2011-2012 - King Island Council

KING ISLAND COUNCIL

ANNUAL PLAN & BUDGET

ESTIMATES 2011/2012

King Island Council Estimates 2011-2012 Page 1 of 53


Table of Contents

Mayor’s Introduction .......................................................................................... 3

The Council ......................................................................................................... 5

Organisational Chart ........................................................................................... 7

General Manager’s Summary ............................................................................. 8

Budget Funding ................................................................................................... 9

Five Year Projected Cash Flow .......................................................................... 10

Projection on Reserves ..................................................................................... 11

Rates & Special Charges 2011/12 ..................................................................... 12

Rates Receivable Analysis ................................................................................. 14

Ten Year Rating Summary ................................................................................. 15

Capital Works Program 2011/12 ....................................................................... 16

Summary of Employment Costs ........................................................................ 19

Loan Schedule ................................................................................................... 20

Estimated Salaries and Wages 2011/12 ............................................................ 21

BUDGET ESTIMATES BY COST CENTRE .............................................................. 23

Overall Directorate Summary ........................................................................... 23

Some Key Trends .............................................................................................. 43

Budget Influences ............................................................................................. 47

Analysis of Operating Estimates ........................................................................ 49

Estimates Analysis ............................................................................................. 51

Key Financial Indicators .................................................................................... 53

King Island Council Estimates 2011-2012 Page 2 of 53


Mayor’s Introduction

It gives me great pleasure to present the Annual Plan and Budget Estimates for 2011/12 to the community of the

King Island Municipality.

The Council adopted the King Island –2013 – Strategic Plan 2004-2009 in June 2004. This Plan was developed

following the Future Search Conference where seventy-four members of the community attended a three-day

workshop. The King Island Future Search conference provided the future direction for the King Island community.

We will shortly engage with the community on a revised Strategic Plan. This will also include a scorecard on the

plan adopted in 2004.

Council will continue to work with the community on the agreed future directions, to assist the community meet

the ideals that were suggested during the King Island Future Search Conference and those that will arise from the

coming revised plan.

Vision Statement for King Island

The vision of King Island was developed and agreed at the King Island Search Conference held on 5-7 December

2003 at the Currie Town Hall.

To preserve and improve the “King Island Way” including freedom of opportunities, community friendliness

along with personal and industry security in an environmentally sustainable way appropriate to King Island.

The King Island Way:

Describes the uniqueness of the island, its place, pace and lifestyle. It captures the value and spirit of the King

Island community and guided the work undertaken by the community members in developing its future direction.

Vision Statement for King Island Council

The King Island Council is a strong advocate for the “King Island Way” and a leader in the community promoting

the economic, social and environmental welfare of the Island.

To assist the community fulfil its future directions the Council will show strong leadership and provide the

organisation with sufficient resources to fulfil the sustainable expectations of the community from the funds

available.

Our Purpose

The purpose of the Council is to provide the delivery of local government services and affordable infrastructure

to support the community in its endeavours and to be an advocate for the Island with Governments and other

organisations.

King Island Council Estimates 2011-2012 Page 3 of 53


The King Island –2013 – Strategic Plan 2004-2009 includes the following guiding principles: The principles recognise

that the primary role of the Council is to serve the community in a timely manner and the organisation will strive to

achieve this as:

• We provide a safe, clean and healthy environment in which all people have equal rights.

• We have integrity and consistency in all dealings with other government agencies and the community

generally.

• We promote the team approach to management and work to meet the achievable expectations of the

community.

• We work with other local government organisations and recognise their service and support when

appropriate.

• We represent the interests of all residents in dealings with other spheres of government and agencies.

• We balance the level and range of services to be provided against the ability of the community to afford

them.

• We enforce all relevant statutory obligations, rules and regulations in a professional and consistent

manner.

• We work to clear principles, goals and objectives and develop policies that can be clearly understood and

consistently applied.

KEY PRIORITIES FOR 2011/2012

1. Ensure through advocacy that appropriate sea links and air links to mainland Tasmania and Australia are

maintained at an equitable cost.

2. Ensure that the two mines (Naracoopa and Grassy) are assisted to achieve production levels which make

them viable within their own business plans and at the same time ensure that a commercial and social

benefit is received by King Island. The required Council provided infrastructure will be evaluated and

funded appropriately.

3. Work with Industry leaders, Government, Migrant Resource Centre and the community to actively grow

the population.

4. Actively seek ‘outside funding’ to provide further project based services to the community. Actively seek an

increase in recurring income to provide a permanent increased cash flow

5. Continue to develop the quality of life of the King Island community through the delivery of facilities and

services.

6. Support current businesses and encourage new businesses. Council has been instrumental in establishing a

Chamber of Commerce and will continue to support this.

7. Look at ways to increase the island’s economy. Council is positioning itself to be ‘open for businesses and

investor friendly’.

8. Provide services, on a commercial basis, to Cradle Mountain Water and DIER to maintain all non Council

owned infrastructure on King Island to an appropriate standard and at a commercial benefit to the island.

9. To increase the level of maintenance on Council owned buildings over recent years with a view to

developing a long term plan on building maintenance.

These estimates were developed through a rigorous process of consultation and review and Council

endorses them as financially responsible.

Cr. Charles Arnold

Mayor

King Island Council Estimates 2011-2012 Page 4 of 53


The Council

Mayor Charles Arnold

Term of Office: 2000-2011

- Budget Review Group

- Cradle Coast Authority Reps Committee

- King Island Climate Change Working Group

- King Island Cultural Centre Committee

- King Island Fire Management Area Committee

- King Island Multi Purpose Health Centre Advisory Committee

- King Island Scheelite – Consultative Committee

- King Island Supporting Disabilities Committee

- Local Government Association of Tasmania Annual and General Meetings

Deputy Mayor Royce Conley

Term of Office: 1999-2011

- Budget Review Group

- Cradle Coast Authority Reps Committee

- King Island Historical Society Committee

- Tasmanian Titanium – Consultative Committee

Councillor Vernon Philbey

Term of Office: 1991-2011

- Airport Advisory Committee

- Australian Airport Association

- Budget Review Group

- Brand King Island Management Group

- Code of Conduct Panel

- King Island Fire Management Area Committee

- Youth Centre Management Committee (Chairman)

Councillor Greg Barratt

Term of Office: 1993-2011

- Budget Review Group

- Code of Conduct Panel

- King Island Recreation Complex Committee

- King Island Game Bird Association

King Island Council Estimates 2011-2012 Page 5 of 53


Councillor David Brewster

Term of Office: 1993-2011

- Airport Advisory Committee

- Australian Airport Association

- Budget Review Group

Councillor Duncan McFie

Term of Office: 2006-2011

- Budget Review Group

- Code of Conduct Panel

- King Island Climate Change Working Group

- King Island Tourism Incorporated

- King Island Youth Advisory Committee

- Waste Management Working Group

Councillor Peter Youd

Term of Office: 1991-2005, 2008-2011

- Budget Review Group

- King Island Natural Resource Management Group Committee

- King Island Recreation Complex Committee

- Waste Management Working Group

Councillor Jacqueline Beckman

Term of Office: 2009-2011

- Australia Day Committee

- Budget Review Group

- King Island Multi Purpose Health Centre Advisory Committee

Councillor Joris Weitjens

Term of Office: 1975-1982, 2009-2011

- Budget Review Group

- King Island Natural Resource Management Committee

- King Island Regional Development Organisation Committee

- King Island Shipping Group Committee

King Island Council Estimates 2011-2012 Page 6 of 53


Organisational Chart

King Island Council

Elected Members

Mayor

General Manager

Executive Assistant

Director Corporate &

Community Services

Development Services

Co-ordinator

Director Works

& Engineering Services

Payroll

& Creditor

Services

Customer

Service

Officer

Community

Development Manager

Technical

Services

Officer

Airport

Officer

Rates

Officer

Economic

Development

Officer

Youth

Development

Officer

Works

Foreman

Depot

Officer

Phoenix

House

Coordinator

Arts &

Cultural

Centre

Co-ordinator

Plant

Operators

Water &

Sewerage

General

Labourers

King Island Council Estimates 2011-2012 Page 7 of 53


General Manager’s Summary

The Annual Plan and Budget Estimates have been prepared in accordance with Section 71 of the Local

Government Act 1993 and sets the direction for the Council in the coming period. The Act prescribes that the

Annual Plan & Budget Estimates must be consistent with Council's Strategic Plan and states the manner in

which Council is to meet the goals and objectives of the Strategic Plan.

Our priorities for 2011/2012 have been framed within a ‘balanced budget’ with the maintenance of all existing

services. A rate increase of 4.5% has been applied which is consistent with prior years. Council believes that

the capital items proposed for 2011/2012 continue to balance the needs of the community with the financial

capability of Council.

A key focus of the past 12 months, and continuing into the future, is the development of new industry and

business on King Island. These new businesses will provide a stronger economy for the community, while

providing increased revenue for Council to deliver works and services.

KEY FINANCIAL OBJECTIVES

1. Generate new income by attracting new industry such as mining and other major developments

2. $1.452 million Capital Works Program including the following major projects.

Plant Replacement Program $571,400.*

• Roads to Recovery $240,900

• Road Re-sheeting Program $232,100

• Road Sealing Program $135,800

• Airport Capital Works $ 59,600

• Bridge Reconstruction – Barrier Creek and Millwood Road $110,000

3. Continue to provide services, on a commercial basis, to Cradle Mountain Water and DIER to maintain

all non Council owned infrastructure on King Island to an appropriate standard and at a commercial

benefit to the island.

4. To increase the level of maintenance on Council owned buildings over recent years with a view to

developing a long term plan for building maintenance. An additional $60,000 has been included in the

2011/2012 budget.

I commend this Budget to Council and believe that it is a responsible budget that has taken into account

future directions for the King Island community as listed in the King Island –2013 – Strategic Plan 2004-

2010.

Mark Goode

General Manager

* The year will see two important items of plant being commissioned – the rubbish truck and a new track loader for

excavating road material at the quarries.

King Island Council Estimates 2011-2012 Page 8 of 53


Budget Funding

Budget Funding Summary

Budget

2010/11

Forecast

2010/11

Budget

2011/12

Variance

Revenue from operating activities

Statutory Charges 87,205 96,620 76,590 -10,615

User Charges 296,706 326,751 385,932 89,226

General Grants 1,611,430 2,216,101 1,439,323 -172,107

Interest 153,393 118,737 173,000 19,607

Reimbursements 1,056,501 1,130,292 1,053,232 -3,269

Other Revenues 54,285 63,841 43,000 -11,285

Rates & Special charges 1,652,332 1,662,386 1,637,887 -14,445

Capital Grants 269,218 186,628 224,000 -45,218

Total Revenues 5,181,070 5,801,356 5,032,964 -148,106

Expenses from operating activities

Employee Costs 1,899,925 1,866,681 1,987,485 87,560

Contracts 813,052 860,370 517,333 -295,719

Materials 671,627 900,370 623,523 -48,104

Other Expenses 622,674 667,160 564,276 -58,398

Finance Costs 39,909 46,356 56,871 16,962

Total Expenses 4,047,187 4,340,937 3,749,488 -297,699

Capital Expenditure

Infrastructure Assets - New 235,000 404,917 224,700 -10,300

Infrastructure Assets - Renewal 776,400 958,805 657,250 -119,150

Plant & Equipment 270,400 481,501 571,000 300,600

Total Capital Expenditure 1,281,800 1,845,223 1,452,950 171,150

Financing

Loans 220,000 377,000 0

Drawdowns from Reserves to off set

above items as per resolutions* 557,460 118,119 -439,341

Transfers to Reserves re depreciation 43,000 70,000 27,000

Debt Repayment 142,257 142,257 126,055 -16,202

Net Financing 77,743 749,203 -77,936

Cash Surplus/ (Deficit) -70,084 364,399 -247,410

*The draw down is a carryover from 2010/11 regarding the rubbish collection truck.

King Island Council Estimates 2011-2012 Page 9 of 53


Five Year Projected Cash Flow

Indicative Funding Summary

For the years ended 30 June 2015

Forecast

2010/11

Budget

2011/12

Budget

2012/13

Budget

2013/14

Budget

2014/15

Revenue from operating activities

Statutory Charges 96,620 76,590 79,271 82,045 84,917

User Charges 326,751 385,932 399,440 413,420 427,890

General Grants 2,216,101 1,439,323 1,489,699 1,541,839 1,595,803

Interest 118,737 173,000 179,055 185,322 191,808

Reimbursements 1,130,292 1,053,232 1,090,095 1,128,248 1,167,737

Other Revenues 63,841 43,000 44,505 46,063 47,675

Rates & Special charges 1,662,386 1,637,887 1,711,592 1,788,614 1,869,101

Capital Grants 186,628 224,000 231,840 239,954 248,353

Total Revenues 5,801,356 5,032,964 5,225,497 5,425,505 5,633,284

Expenses from operating activities

Employee Costs 1,866,681 1,987,485 2,057,047 2,129,044 2,203,560

Contracts 860,370 517,333 535,440 554,180 573,576

Materials 900,370 623,523 645,346 667,933 691,311

Other Expenses 667,160 564,276 584,026 604,467 625,623

Finance Costs 46,356 56,871 46,776 32,598 22,179

Total Expenses 4,340,937 3,749,488 3,868,635 3,988,222 4,116,249

Capital Expenditure

Infrastructure Assets - New 404,917 224,700 300,000 300,000 300,000

Infrastructure Assets - Renewal 958,805 657,250 600,000 600,000 600,000

Plant & Equipment 481,501 571,000 300,000 300,000 300,000

Total Capital Expenditure 1,845,223 1,452,950 1,200,000 1,200,000 1,200,000

Financing

Loans 377,000 0 0 0 0

Drawdowns from Reserves to off set

above items as per resolutions* 557,460 114,000 0 0 0

Transfers to Reserves re depreciation 43,000 70,000 123,000 123,000 123,000

Debt Repayment 142,257 126,055 128,438 158,078 138,314

Net Financing 749,203 -82,055 -251,438 -281,078 -261,314

Cash Surplus/ (Deficit)** 364,399 -251,529 -94,576 -43,795 55,720

Cumulative Balance 343,000 91,471 -3,105 -46,900 8,821

This must be considered as indicative only, and does not allow for any significant new

projects or loans.

It is based on 3.5% CPI, and 4.5% per annum rates increases.

King Island Council Estimates 2011-2012 Page 10 of 53


Projection on Reserves

PROJECTION ON RESERVES

Reserves to 30/6/2011

OPERATIONAL INFRASTRUCTURE OTHER

Waste

Staff

Airport Light House Airport Community Jetty

Management

Entitlements

Restricted Total

Audited Balance 1/7/2010 114,698 0 152,350 652,815 1,277,899 209,795 486,477 489,796 3,383,830

Drawn Down as per resolutions 118,119 0 165,434 10,000 489,796 783,349

To Draw Down 0

Interest Estimate 3,421 0 7,618 32,641 63,895 10,490 24,324 24,490 166,878

Forecast Profit(2010-2011) 0

Forecast Depreciation minus Capex 0 0 43,000

Entitlements Adjustment*

Anticipated Balance 30/6/2011 0 0 159,968 520,022 1,331,794 263,285 510,801 24,490 2,767,359

* To be calculated at time of audit

Reserves to 30/6/2012

Anticipated Balance 1/07/2011 0 0 159,968 520,022 1,331,794 263,285 510,801 24,490 2,767,359

Interest Estimate 0 0 9,598 31,201 79,908 15,797 30,648 1,469 168,622

Forecast Profit(2010-2011) 0 0 0

Forecast Depreciation minus Capex 27,000 0 43,000 0 70,000

Entitlements Adjustment* 0

Anticipated Balance 30/6/2011 0 0 169,566 578,223 1,411,702 322,082 541,449 25,959 3,005,980

King Island Council Estimates 2011-2012 Page 11 of 53


Rates & Special Charges 2011/12

1. GENERAL RATE

That pursuant to the provisions of the Local Government Act 1993 Council makes a general rate

of 6.295 cents in the dollar of Adjusted Assessed Annual Value on all rateable land (excluding

land which is exempt pursuant to the provisions of section 87 of the Local Government Act 1993)

within the King Island municipal area subject to a minimum charge of $236.00 for the period 1

July 2011 to 30 June 2012.

2. SERVICE RATES AND CHARGES

That pursuant to the provisions of the Local Government Act 1993 Council makes the following

service rates and charges in respect of all rateable land (including land which is otherwise exempt

from rates pursuant to section 87 of the Local Government Act 1993) within the King Island

municipal area for the period 1 July 2011 to 30 June 2012:

2.1 WASTE MANAGEMENT

2.1.1 Subject to sub-clause (2.1.2), a charge is made on each tenement on each of the lands

to which the Council makes a kerbside garbage collection service available as at 1 July

2011.

3. FIRE

2.1.2 Where the land referred to in subclause (2.1.1) is vacant (no buildings or structures

erected on it) there is no charge.

A waste management service charge of $105 for the collection of each 120-litre bin,

which is collected not more than once per fortnight.

A waste management service charge of $105 for the collection of each 240-litre bin,

which is collected not more than once per fortnight.

A waste management service charge of $460 for the collection of each 240-litre bin,

which is collected, more than once per week but not more than three times per week.

A waste management service charge of $834 for the collection of each 660-litre bin,

which is collected, more than once per week but not more than three times per week.

A waste management service charge of $410 for the collection of each 660-litre bin,

which is collected not more than once per week.

That Council makes the following fire rates in accordance with the provisions of the Fire Service

Act 1979 upon all land within the King Island municipal area where such a charge is applicable for

the period 1 July 2011 to 30 June 2012:

3.1 A fire rate of 0.47384 cents in the dollar of Adjusted Assessed Annual Value on all

properties within the Currie Volunteer Brigade Rating District subject to a minimum

charge of $35.00.

King Island Council Estimates 2011-2012 Page 12 of 53


3.2 A fire rate of 0.37538 cents in the dollar of Adjusted Assessed Annual Value on all

properties outside the Currie Volunteer Brigade Rating District subject to a minimum

charge of $35.00.

4. INTEREST

That pursuant to the provisions of the Local Government Act 1993 Council will impose daily

interest at the rate calculated in accordance with Section 128 on any outstanding instalment

amount notwithstanding that interest will also be applied at the same rate on any arrears on a

monthly basis.

5. INSTALMENTS

Council may under Section 124 of the Local Government Act 1993 permit ratepayers to pay by

instalment. Instalment payments will be the default option for ratepayers and instalments are

due on;

6. SEPARATE APPORTIONMENT

First Instalment: 31 August 2011

Second Instalment: 31 October 2011

Third Instalment: 31 January 2012

Fourth Instalment: 30 April 2012

That for the purposes of these resolutions rates and charges shall apply to each parcel of land

which is shown as being separately valued in the valuation list prepared, and currently in force for

the King Island municipal area, under the Valuation of Land Act 2001.

7. ADJUSTMENT OF VALUATIONS

That for the purposes of these resolutions any reference to Assessed Annual Value includes a

reference to that value as adjusted pursuant to Section 89 of the Local Government Act 1993.

King Island Council Estimates 2011-2012 Page 13 of 53


Rates Receivable Analysis

RATES ANALYSIS

2010-2011 2011-2012

Cents Min Total Cents Min Total %

GENERAL RATE

6.325 $225 1,395,686 6.295 $236 1,459,058 4.54

FIRE

Urban 0.42395 $34 20,470 0.47834 $35 23,698 15.77

Rural 0.33857 $34 65,859 0.37538 $35 65,341 -0.79

Total 86,329 89,039 3.14

FORTNIGHTLY GARBAGE

Residential

Currie $100 42,100 $105 44415 5.50

Grassy $100 12,500 $105 13125 5.00

Naracoopa $100 4,900 $105 5250 7.14

Rural $100 36,100 $105 38325 6.16

Total 95,600 101115 5.77

COMMERCIAL GARBAGE

Weekly*3 240 Litre $440 27,720 $460 28,980 4.55

Weekly*3 240 Litre $798 47,880 $834 50,040 4.51

Weekly*1 240 Litre $392 6,664 $410 6,970 4.59

Total 82,264 85,990 4.53

TOTAL WASTE MANAGEMENT

177,864 187,105 5.20

TOTAL NEW RATES LEVIED FOR

THE YEAR

1,659,879 1,735,202 4.54

*Fire Levies are collected on behalf of the Tasmanian Fire Service and are not shown as revenue in the budget

summaries.

King Island Council Estimates 2011-2012 Page 14 of 53


Ten Year Rating Summary

KING ISLAND COUNCIL

10 YEAR COMPARISON

Property Details

DESCRIPTION

AAV

Rate Years

AREA

HECTARES 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12 %

Residence/Farm - Reekara Road 46,000 225.1000 1769.55 1964.37 2128.00 2374.98 2494.10 2609.12 2735.86 2858.72 3161.89 10.61

Residential House - Beach Road 11,400 0.1318 1354.91 1407.37 1422.71 1319.78 1356.10 706.25 696.98 729.54 872.65 19.62

Housing Comm House - Jaycee Ave 6,360 0.0593 1248.36 1292.88 1306.45 1054.09 1088.65 506.00 507.83 531.97 540.36 1.58

Commercial Property - Main Street 16,600 0.0183 3179.19 3412.97 3437.44 2930.96 2996.76 1740.10 1794.03 1885.93 1951.81 3.50

State Offices – Currie 14,400 0.2846 1326.52 2790.08 2820.30 1909.28 1973.89 877.84 920.06 963.23 1011.48 5.01

Residence/Farm - Wicks Road 16,400 40.1000 840.97 890.82 907.65 929.53 969.60 1014.31 1062.68 1111.53 1194.85 7.50

House - Blackwood Street 5,020 0.0458 913.51 907.23 912.94 902.00 932.00 338.00 342.00 359.00 456.01 27.03

Vacant Lot - Currie Road 2,000 0.3647 615.94 644.20 649.60 699.00 724.00 247.00 248.00 259.00 271.00 4.64

House - Myrtle Street 9,000 0.1592 1212.45 1252.58 1265.34 1155.56 1193.54 598.25 602.25 630.64 706.55 12.04

Residential House – Naracoopa 10,000 0.2509 693.41 720.36 733.71 609.44 625.20 655.63 659.63 690.60 769.54 11.44

Farm - Lancaster Road 44,000 210.2000 1488.38 1717.12 1739.18 2364.25 2487.34 2602.06 2729.92 2850.68 2923.98 2.58

Land - Pegarah Road 6,600 35.1400 208.13 237.10 242.35 313.15 322.64 338.26 353.06 368.46 450.47 22.26

Vacant Lot – Naracoopa 2,800 0.1542 185.56 200.64 205.92 230.00 237.00 247.00 248.00 259.00 271.00 4.64

Note: Significant reduction to rate revenue occurred when Cradle Mountain Water assumed ownership of water and sewerage assets.

Property revaluation occurred in 2011/12.

King Island Council Estimates 2011-2012 Page 15 of 53


Capital Works Program 2011/12

Forecast

Activity Budget 2010/2011

Budget 2011/20012

2010/2011

Airport Capital Works

Plane-Itinerant parking-gravel 15,000 22,000 -

Extend long term car park 15,000

Main Runway Drainage upgrade/investigation 20,000 8,000 15,000

Main carpark drainage - repair and reseal 17,000 - 20,000

RASP project net of grant - 330,000

Reseal apron extension - - 9,600

Total Airport Capital Works 52,000 360,000 59,600

Corporate Capital Works

Furniture & Fittings - 12,000 -

Solar hot water units - carry overs 12,000 6,000 18,000

IT Hardware 15,000 15,000 25,000

Total Corporate Capital Works 15,000 33,000 43,000

Engineering Capital Works

Bridge Reconstruction - Barrier Creek and Milwood Rd. 45,000 85,000 110,000

Pearshape Quarry 20,000 28,000 -

Bitumen Facility 30,000 15,000 17,000

Plant Replacement Program 270,400 481,501 571,000

Resheeting Program 202,500 100,000 246,100

Roads to Recovery 224,000 110,760 211,200

Sealing Program 114,400 68,978 135,800

Coastal Access Program 50,000 118,369 15,000

Culvert Marking Program 7,500 2,000 -

RLCIP Walkway 30,000 30,373 -

Total Engineering Capital Works 993,800 1,039,981 1,306,100

Regulatory & Community Services

Cemetery Graves-Double Depth Box 10,000 - -

Town Hall ventilation 4,000 - -

Naracoopa Jetty - 11,000 -

Total Regulatory & Community Services 14,000 11,000 -

Sports Grounds & Reserves Capital

Bell Hill -carry over 20,000 10,000

Replacement Fencing/Seating at Grassy Oval - - 3,500

Total Sports Grounds & Reserves 20,000 - 13,500

Community Housing

CHP - Affordabale Housing - Snodgrass Park 165,000 371,917 -

Total Community Housing 165,000 371,917

Waste Management

Solar Pump - - 8,750

Parenna Cell Construction 22,000 29,325 22,000

Total Waste Management 22,000 29,325 30,750

Total 1,281,800 1,845,223 1,452,950

King Island Council Estimates 2011-2012 Page 16 of 53


Roads Capital Works Program 2011-12

Sealing Program

M2

Budget Forecast Budget

2010/2011 2010/2011 2011/20012

Forrest Street[R] 1,620 7,836 -

Horace St[R] 2,500 7,081 6,700 -

Don Kendall Drive[R] 11,200 54,172 54,278 5,800

Woods Street[P & S] 1,100 - 22,000

Old Grassy Road[P & S] 2,900 - 35,000

Grassy Harbour Rd[R] 4,816 - 23,000

Naracoopa Esplanade[R] 9,368 45,311 8,000 50,000

TOTAL 114,400 68,978 135,800

Length

Coastal Access

(Km)

Red Hut Road 1 15,000

Disappointment Bay Road 2.6 50,000 118,369 -

TOTAL 50,000 118,369 15,000

Length

Resheeting Program

(Km)

Hardys Rd carry over 10/11 1 27,000 29,700

Rocky Point Rd carry over 10/11 1.2 27,000 35,750

Manana Rd 2.4 71,500

Fraser Rd 1.2 27,000 13,000 35,750

Heddles Rd 1 27,000 14,000 29,700

Skipworths Rd 1 27,000 17,000 -

Robbins Rd carry over 10/11 1 27,000 13,000 14,000

Marshalls Rd 1 29,700

South Rd 2 40,500 38,000 -

TOTAL 202,500 95,000 246,100

Length

Roads To Recovery

(Km)

Browns Rd 1 54,000 92 29,700

Nth Pegarah Rd 1 - 29,700

South Rd 2 - 59,400

Millwood Rd 2 - 59,400

Ridges Rd(Single) 2 - 33,000

Cape Wickham Rd 2.4 62,000 64,000

Tin Mine Rd 2 54,000 3,168

Grahams Rd 1 27,000 36,000

Brumbys Rd 1 27,000 7,500

TOTAL 224,000 110,760 211,200

King Island Council Estimates 2011-2012 Page 17 of 53


Plant Replacement Program 2011-12

Plant Replacement Program 2011/2012 Budget 2011/20012

Grader 315,000

Mower 6,000

Small Plant 15,000

Rubbish Collection Truck 235,000

(carried over from 2010/11 due to late delivery)

TOTAL 571,000

King Island Council Estimates 2011-2012 Page 18 of 53


Summary of Employment Costs

- Establishment Size

The budget estimates have been developed to allow for the employment of (33.5) full time

equivalent employees (FTE).

Total wages and employment overheads estimated by Council for 2011/2012 is $2,289,252 at an

average of $69,371.

Responsibility level

Number

FTE

Annual

$

Average

$

Senior Management 3.0 388,744 129,580

Administration 11.5 770,740 67,020

Works Department 19.0 1,129768 59,461

Total 33.5 2,289,252 69,371

This table includes all employment costs including overheads (annual leave, sick leave, long service

leave, workers compensation, superannuation, protective clothing and public holidays etc.) for the

total workforce. ’Skilled’ who have previously provided additional persons will now be used to

supply either project based personnel for which additional funding has been received or

absenteeism of the designated establishment size. Included is an allowance for additional

assistance to complete a number of outstanding projects such as the DMEMP for Reekara Quarry

and offer support for the depot whilst the DWES is on long service leave.

Of the total wages and employment cost $192,000 has been allocated to capital expenditure which

stands outside of the income and expenditure statement. There will be some carryover from

2010/11 of capital expenditure but this will be funded out of the cash surplus from that year.

King Island Council Estimates 2011-2012 Page 19 of 53


Loan Schedule

2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19

Interest 57,441 54,378 46,776 32,598 22,179 13,514 5,385 1,107

Principal 126,055 128,438 158,078 138,314 86,605 88,377 23,832 22,352

Debt 910,947 754,015 561,666 382,954 249,452 107,284 22,352 0

Loans are in place for financing Parenna Waste Facility, Baling and handling equipment at the transfer station, bridge reconstruction and the

Traxcavator. This is existing loans only, but in the normal course of events, further loans would be expected to be drawn upon. It should be read

in conjunction with Council’s Cash Flow and Reserves position.

1,000,000

900,000

800,000

700,000

600,000

500,000

400,000

Interest

Principal

Debt

300,000

200,000

100,000

0

2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21

King Island Council Estimates 2011-2012 Page 20 of 53


Estimated Salaries and Wages 2011/12

Directorate / Activity

FTE

Budget Forecast Budget

2010/11 2010/11 2011/12

Variance

Corporate 6.2 496,251 537,178 546,397 2%

Regulatory 0.6 164,825 118,357 35,002 -70%

Community and Economic Development 3.2 228,877 228,872 229,197 0%

Phoenix Community House 1.1 67,574 58,456 74,385 27%

Depot Administration 3.4 286,075 279,541 274,502 -2%

Commercial Undertaking 303,291 322,358 295,978

Workforce including hands on supervision-Ops 19 462,120 492,886 678,791

Workforce including hands on supervision- Cap 179,929 192,000 155,000

Total workforce 945,340 1,007,244 1,129,769 12%

Total by broad category 33.5 2,188,942 2,229,648 2,289,252 3%

Plant Clearing Account

Labour including oncosts

Depreciation

Fuel

Registration

Insurance

Material and stores

Total plant costs

Recovered as follows

Shown as plant hire in cost centres

Capital Budget

Quarry

Total recovery

Budget Forecast Budget

2010/11 2010/11 2011/12

Variance

46,556 102,884 90,000 -13%

300,000 300,000 330,000 10%

202,931 206,200 220,000 7%

34,206 38,833 40,000 3%

16,440 15,372 17,000 11%

183,045 141,780 120,000 -15%

783,178 805,069 817,000 1%

433,000

208,000

176,000

783,178 805,069 817,000

King Island Council Estimates 2011-2012 Page 21 of 53


Quarry Clearing Account

Budget Forecast Budget

2010/2011 2010/2011 2011/20012 Variance

Labour including oncosts 110,000 87,000 55,000 -37%

Contractors 100,898 50,000 75,000 50%

Other External Serv/Repairs&Mtce 0 0 2,000

Laboratory Testing 1,238 0 1,000

Freight 0 1,075 1,000 -7%

Materials Purchased 14,594 8,000 10,000 25%

Other Sundry Expenses 1,168 1,500 2,000 33%

Licences and Permits 10,085 12,000 12,000 0%

Royalties 19,002 6,000 8,000 33%

Land Tax 11,576 12,000 12,000 0%

Plant Hire - Internal Usage 176,839 176,000 176,000 0%

Total quarry costs 445,400 353,575 354,000 0%

Recovered Funds

Roads Maintenance 46,575

Capital Expenditure on Roads 162,000

Private works 150,425

Total recovery 445,400 353,575 359,000 2%

King Island Council Estimates 2011-2012 Page 22 of 53


BUDGET ESTIMATES BY COST CENTRE

Overall Directorate Summary

For the year ending 30 June 2012

Service area

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Corporate Services

Corporate Services 927,265 1,006,809 1,470,245 463,436

Elected Members -131,487 -142,177 -150,750 -8,573

Total Corporate Services 795,778 864,632 1,319,495 454,863

Regulatory and Community Services

-147,178 -203,235 -125,949 77,286

Engineering

Depot Operations -177,463 -180,974 -180,303 671

Building and Property -89,686 -97,270 -170,550 -73,280

Parks and Reserves -76,000 -70,179 -79,446 -9,267

Roads Bridges and Footpaths -439,426 -439,426 -458,096 -18,670

Sport and Recreation Facilities -59,538 -55,448 -67,521 -12,073

Storm water Drainage -38,245 -42,695 -39,606 3,089

Waste Management 60,462 74,227 -217,024 -291,251

Total Engineering -819,896 -811,765 -1,212,545 -400,780

Commercial Undertaking

Private Works

305,088 263,527 299,096 35,569

King Island Aerodrome -15,931 -18,153 -27,330 -9,177

Total Commercial Undertakings 289,158 245,374 271,765 26,391

Community and Economic Development

Cultural Centre

-41,524 -41,673 -44,324 -2,651

PCH

18,505 -1450 -3,480 -2,030

Youth

-16,815 -14,950 20,440 35,390

Manager Community Services -122,232 -100,102 -166,383 -66,281

Economic Development -52,153 -75,366 -58,910 16,456

Total Community and Eco Development -214,218 -233,541 -252,657 -19,116

Report Total

-96,357 -138,535 109 138,644

King Island Council Estimates 2011-2012 Page 23 of 53


Governance and Corporate Services Budget

Estimates

For the year ending 30 June 2012

Corporate Services

Income

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

General/Ordinary/Residential 1,110,960 1,110,511 1,455,352 344,841

Lease/Rent Fees Received 200 1,200 8,000 6,800

Photocopy Charges 3,800 4,000 6,000 2,000

Rental / Lease Properties Income 4,800 15,760 9,000 -6,760

Grants

345,000 345,000 416,000 71,000

Interest Received 127,000 100,000 140,000 40,000

Other Sundry Income 9,000 0 0 0

Dividends Received 42,925 42,925 43,000 75

Rates Council Pensioner Concession 22,998 0 24,000 24,000

Non Rateable Government or Authority -23,710 0 -24,000 -24,000

Rates Interest Penalty 4,200 8,000 6,000 -2,000

Recovery of Debt Collection 7,000 7,000

Rates Search/Certificate Fee 14,000 23,000 25,000 2,000

Total Income

1,661,173 1,650,396 2,115,352 464,956

King Island Council Estimates 2011-2012 Page 24 of 53


Forecast Budget Budget

Expenditure

2010/11 2010/11 2011/12

Variance

Labour including oncosts 519,691 496,251 545,397 49,146

Contractors 17,487 2,000 10,000 8,000

Solicitors Fees 13,494 4,500 8,000 3,500

Consultants Other 13,469 6,500 8,000 1,500

Debt Collection Services 1,642 2,000 7,000 5,000

IT Consultants and software license 3,054 8,000 10,000 2,000

Valuation Expenses 80,000 80,000 5,000 -75,000

Other External Serv/Repairs&Mtce 0 883 0 -883

Freight Delivery 98 0 0 0

Cleaning Contract 11,785 11,275 12,500 1,225

Stationery & Office Consumables 13,118 9,000 14,000 5,000

Printing & Photocopying Costs 31,869 19,157 25,000 5,843

Subscriptions Reference Materials 40 50 50 0

Materials Purchased 15,970 5,500 12,000 6,500

Inventory Issued From Store 430 500 0 -500

Uniforms / Clothes Purchased 688 500 500 0

Newspapers Purchases 487 450 500 50

Electricity 13,507 5,253 13,000 7,747

Furniture & Equip under Expensed 48 0 0 0

Computer Hardware Expensed 4,036 1,000 0 -1,000

Software Purchase & Upgrade - Expensed 928 0 0 0

Software Purchase & Upgrade - Assets 240 1,800 0 -1,800

Postage 5,473 4,500 5,500 1,000

Advertising Press 18,851 15,000 11,000 -4,000

Other Sundry Expenses 1,689 2,750 1,000 -1,750

Audit Services Financial Reports 25,600 25,600 26,000 400

Bank Fees & Charges 5,255 1,000 5,500 4,500

Corporate Card Expenses 6,829 150 600 450

Food & Catering Costs 7,171 2,350 2,000 -350

Sponsorships Paid 2,000 500 0 -500

Community Grants 26,976 20,000 0 -20,000

Public Liability Insurance 6,388 2,689 3,500 811

Fidelity Guarantee & Prof. Indemnity Ins 7,573 8,050 8,000 -50

Other Insurance 11,032 5,000 11,000 6,000

Licenses & Permits 6,068 12,070 6,000 -6,070

Subscriptions Memberships 35,601 28,800 37,000 8,200

Telephone Charges 9,576 13,120 14,500 1,380

Internet & Other Communication Charges 40 4,500 0 -4,500

Course Seminar & Conference Registration 0 0 1,000 1,000

Air Travel 4,079 17,000 5,000 -12,000

Travel Accommodation 2,392 12,700 3,000 -9,700

Travel Related Costs Other 3,323 1,500 3,000 1,500

Training 606 1,000 1,000 0

Land Tax 5,852 0 6,000 6,000

Rates Paid 6,934 7,821 7,000 -821

Interest Payment Loans 0 0 50,771 50,771

Depn Expense 11,772 11,775 12,400 625

Plant Hire - Internal Usage 65 10,400 0 -10,400

Overheads Internal Recharge -219,324 -219,307 -246,611 -27,304

Total Expenditure 733,908 643,587 645,107 1,520

Report Total

927,265 1,006,809 1,470,245

King Island Council Estimates 2011-2012 Page 25 of 53


GOVERNANCE

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Reimbursements Other 0 0 0

Total Income

0 0 0 0

Expenditure

Consultants Other 0 1,500 1,500 0

Stationery & Office Consumables 0 500 500 0

Materials Purchased 112 0 0 0

Software Purchase & Upgrade - Expensed 0 500 0 -500

Other Sundry Expenses 397 0 500 500

Election Expenses 791 0 7,500 7,500

Corporate Card Expenses 0 0 0 0

Elected Members Allowances 70,404 70,404 73,000 2,596

Elected Members Vehicle Allowance 11,290 13,000 13,000 0

Food & Catering Costs 878 2,700 3,000 300

Entertainment Costs 527 0 0 0

Mayoral Allowance 17,793 17,793 18,000 207

Public Liability Insurance 1,752 1,750 2,000 250

Fidelity Guarantee & Prof. Indemnity Ins 1,040 1,050 1,150 100

Other Insurance 1,952 2,000 2,000 0

Telephone Charges 2,340 2,330 2,500 170

Mobile Phone Charges 1,570 1,950 2,000 50

Course Seminar & Conference Registration 677 3,600 3,500 -100

Air Travel 11,306 10,500 11,000 500

Travel Accommodation 4,330 8,000 5,000 -3,000

Travel Related Costs Other 4,328 4,600 4,600 0

Total Expenditure 131,487 142,177 150,750 8,573

Report Total

-131,487 -142,177 -150,750

King Island Council Estimates 2011-2012 Page 26 of 53


DEVELOPMENT & ENVIRONMENTAL SERVICES

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Development Act Fees 25,000 16,000 26,125 10,125

Subdivision Fees 1,123 1,500 1,173 -327

Certificate of Likely Compliance 13,558 15,000 14,168 -832

Building Permit Fees 9,070 11,000 9,478 -1,522

Dog Control Infringement & Fines 1,803 3,100 1,885 -1,215

Dog Impounding Fees 223 100 233 133

Dog Registration & Renewal 10,187 10,500 10,645 145

"Septic , Plumbing &Sewerage Fees" 7,755 3,000 8,104 5,104

Septic Tank Inspection Fees 0 300 0 -300

Licenses & Permits 1,829 2,700 1,911 -789

Wood heater Inspection Fees 0 305 0 -305

Cemetery Fees 2,743 8,500 2,866 -5,634

Other 3,000 0 0 0

Total Income

76,292 72,005 76,590 4,585

Expenditure

Labour including oncosts 118,357 163,734 35,000 -128,734

Consultants

0 7,000 50,000 43,000

Solicitors Fees 1,343 2,000 0 -2,000

Planning Consultant Fees 7,000 1,000 0 -1,000

Stationery & Office Consumables 396 0 450 450

Subscriptions Reference Materials 738 0 800 800

Materials Purchased 1,047 450 1,200 750

Advertising Press 7,830 9,000 10,000 1,000

Other Sundry Expenses 76 168 500 332

Legal Costs Other 10,000 15,000 10,000 -5,000

Other Levies Paid to Government 0 550 0 -550

Subscriptions Memberships 955 1,750 1,750 0

Telephone Charges 1,663 2,332 0 -2,332

Mobile Phone Charges 343 363 0 -363

Course Seminar & Conference Registration 536 0 0 0

Air Travel 1,415 900 1,500 600

Travel Accommodation 843 400 11,000 10,600

Training

479 400 5,000 4,600

Immunizations 257 0 269 269

Internal overheads Charge 70,193 70,193 75,071 4,878

Total Expenditure

Report Total

223,470 275,240 202,540 -72,700

-147,178 -203,235 -125,949

King Island Council Estimates 2011-2012 Page 27 of 53


Workshop & Engineering Summary 2011-12

Forecast

2010/11

Budget

2010/11

Budget

2011/12 Variance

Income

Depot Operations 0 0 0 0

Building and Property 35,856 42,175 26,393 -15,782

Parks and Reserves 0 0 0 0

Roads Bridges and Footpaths 392,712 1,073,269 1,073,081 -188

Sport and Recreation Facilities 14,693 14,693 0 -14,693

Storm water Drainage 0 0 0 0

Waste Management 503,565 510,095 464,388 -45,707

Total Income

946,826 1,640,232 1,563,862 -76,370

Expenditure

Depot Operations 134,984 177,463 180,974 3,511

Building and Property 109,884 131,861 123,663 -8,198

Parks and Reserves 62,451 76,000 70,179 -5,821

Roads Bridges and Footpaths 1,194,058 1,512,695 1,512,507 -188

Sport and Recreation Facilities 61,859 74,231 55,448 -18,783

Storm Water Drainage 33,573 38,245 42,695 4,450

Waste Management 295,360 449,633 390,161 -59,472

Total Expenditure 1,892,170 2,460,128 2,375,627 -84,501

Report Total

-945,344 -819,896 -811,765 8,131

By Sector Total

Depot Operations -134984 -177,463 -180794 -3,331

Building and Property -74028 -89,686 -97270 -7,584

Parks and Reserves -62,451 -76,000 -70,179 5,821

Roads Bridges and Footpaths -801,346 -439,426 -439,426 0

Sport and Recreation Facilities -47,166 -59,538 -55,448 4,090

Storm water Drainage -33,573 -38,245 -42,695 -4,450

Waste Management 208,205 60,462 74,227 13,765

-945,344 -819,896 -811,765 8,131

King Island Council Estimates 2011-2012 Page 28 of 53


DEPOT ADMINISTRATION

Income

Total Income

Forecast Budget Budget

2010/11 2010/11 2011/12 Variance

0 0 0 0

0 0 0 0

Expenditure

Labour including on costs 2,795,414 296,811 274,502 -22,309

Medicals 0 100 500 400

Contractors 19,760 6,700 17,000 10,300

Other External Serv/Repairs&Mtce 623 850 1,000 150

Freight Delivery 13,841 10,150 12,000 1,850

Motor Vehicle External Repair Costs 17 0 0 0

Cleaning Contract 4,071 4,200 4,200 0

Stationery & Office Consumables 1,484 500 1,000 500

Printing & Photocopying Costs 686 700 1,000 300

Reference Materials 455 0 0 0

Subscriptions Reference Materials 473 0 0 0

Materials Purchased 37,055 20,200 20,000 -200

Inventory Issued From Store 502 1,670 1,000 -670

Protective Clothing & Accessories 8,418 4,000 7,000 3,000

Uniforms / Clothes Purchased 1,026 2,500 1,500 -1,000

Electricity 8,412 11,250 9,000 -2,250

Software Purchase & Upgrade - Assets 0 2,000 0 -2,000

Advertising Press 0 300 0 -300

Other Sundry Expenses 7 0 0 0

Food & Catering Costs 703 800 500 -300

Public Liability Insurance 3,210 3,860 3,210 -650

Other Insurance 2,040 2,000 2,000 0

Licenses & Permits 1,379 250 1,500 1,250

Subscriptions Memberships 67 600 0 -600

Telephone Charges 3,191 4,040 0 -4,040

Mobile Phone Charges 2,273 2,750 2,200 -550

Course Seminar & Conference Registration 2,170 1,500 1,000 -500

Air Travel 2,280 1,550 1,000 -550

Travel Accommodation 3,837 1,050 1,000 -50

Travel Related Costs Other 2,131 650 0 -650

Meal Reimbursements 0 200 0 -200

Training 0 1,500 1,500 0

Land Tax 1,501 0 1,600 1,600

Rates Paid 2,295 2,707 2,398 -309

Building and Tower Maintenance 0 0 35,000 35,000

Interest Loan Bitumen Facility 0 3,263 0 -3,263

Depn Expense Buildings & Other Structure 9,468 9,468 9,500 32

Depn Expense Plant & Equipment 10,572 10,572 20,000 9,428

Depn Expense Furniture & Fittings 1,548 1,548 1,500 -48

Plant Hire - Internal Usage 3,730 2,915 4,000 1,085

Overheads Internal Recharge -251,304 -232,180 -257,307 -25,127

Total Expenditure

Report Total

177,463 180,794 180,303 -491

-177,463 -180,794 -180,303

King Island Council Estimates 2011-2012 Page 29 of 53


ROADS MAINTENANCE

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Grants

492,269 503,081 507,000 3,919

Motor Tax Refund 330,000 330,000 330,000 0

Fuel Rebate

20,000 16,000 25,000 9,000

Other

7,000 0 0 0

Roads to Recovery 224,000 224,000 224,000 0

Total Income

1,073,269 1,073,081 1,086,000 12,919

Expenditure

Labour including on costs 306,372 286,000 317,095 31,095

Contractors 77,676 48,000 80,395 32,395

Freight Delivery 230 3,500 238 -3,262

Materials Purchased 4,182 76,000 4,328 -71,672

Inventory Issued From Store 58,675 30,000 60,729 30,729

Gravel Issues 45,000 45,000 46,575 1,575

Electricity 29,588 38,250 30,623 -7,627

Public Liability Insurance 7,009 5,900 7,254 1,354

Interest Payment on Other Loans 167 -237 8,013 0 -8,013

Depn Expense Buildings & Other Structure 1,860 1,860 1,925 65

Depn Expense Roads 655,800 656,070 658,000 1,930

Plant Hire - Internal Usage 155,000 157,000 160,425 3,425

Overheads Internal Recharge 171,540 156,914 176,508 19,594

Total Expenditure 1,512,695 1,512,507 1,544,096 31,589

Report Total

-439,426 -439,426 -458,096

King Island Council Estimates 2011-2012 Page 30 of 53


BUILDINGS AND PROPERTY

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Hall Hire 3,200 3,500 3,500

Other Income 475 3,000 0 -3,000

Interest Received - Reserves Investment 36,000 23,393 0 -23,393

Reimbursements Other 2,500 0 0 0

Total Income

42,175 26,393 3,500 -22,893

Expenditure

Labour including oncosts 5,200 4,700 10,000 5,300

Contractors 11,498 6,750 46,000 39,250

Freight Delivery 27 0 0 0

Cleaning Contract 1,887 2,250 2,250 0

Materials Purchased 2,700 1,500 0 -1500

Inventory Issued From Store 553 1,000 0 -1000

Electricity 4,341 1,300 5,000 3,700

Gas Charges 0 200 0 -200

Advertising Press 0 100 0 -100

Public Liability Insurance 6,739 8,848 9,000 152

638 - Licenses & Permits 191 200 -200

Land Tax 3,126 800 3,500 2,700

Rates Paid 5,587 5,085 5,800 715

Depn Expense Buildings & Other Structure 54,720 54,723 55,000 277

Depn ExpenseFurniture & Fittings 33,384 33,387 34,000 613

Plant Hire - Internal Usage 1,655 2,365 3,000 635

Total Expenditure

Report Total

131,861 123,663 174,050 50,387

-89686 -97270 -170,550 -73280

King Island Council Estimates 2011-2012 Page 31 of 53


PARKS AND RESERVES

Forecast

2010/11

Budget

2010/11

Budget

2011/12 Variance

Total Income

0 0 0 0

Expenditure

Labour including on costs 15,842 12,469 16,397 3,928

Contractors 2,000 2,000 2,070 70

Cleaning Contract 11,146 11,170 11,536 366

Materials Purchased 24 350 25 -325

Inventory Issued From Store 5,786 650 5,989 5,339

Electricity 245 100 253 153

Other Levies Paid To Govt Build Permits 0 300 0 -300

Public Liability Insurance 1,850 1,865 1,915 50

Land Tax 983 750 1,017 267

Rates Paid 1,875 2,523 1,941 -582

Depn Expense Buildings & Other Structure 1,176 1,765 1,176 -589

Depn Expense Other Assets 0 564 0 -564

Plant Hire - Internal Usage 6,860 8,723 7,101 -1622

Overheads Internal Recharge 28,212 26,950 30,027 3,077

Total Expenditure 76,000 70,179 79,446 9,267

Report Total

-76,000 -70,179 -79,446

King Island Council Estimates 2011-2012 Page 32 of 53


SPORT AND RECREATION

Forecast

2010/11

Budget

2010/11

Budget

2011/12 Variance

Income

Reimbursements Other 383 0 0 0

Reimbursements for Private Works 14,310 0 0 0

Total Income

14,693 0 0 0

Expenditure

Labour including on costs 19,613 14,111 20,299 6,188

Contractors 1,605 5,000 1,662 -3338

Freight Delivery 5,465 0 5,656 5,656

Cleaning Contract 6,484 6,450 6,711 261

Materials Purchased 14,724 3,350 6,239 2,889

Inventory Issued From Store 3,037 2,614 3,144 530

Public Liability Insurance 2,906 2,825 3,008 183

Other Insurance 510 200 527 327

Rates Paid 1,893 2,510 1,959 -551

Depn Expense Buildings & Other Structure 8,808 8,808 8,808 0

Plant Hire - Internal Usage 9,186 9,580 9,508 -72

Overheads Internal Recharge 0 0 0 0

Total Expenditure

74,231 55,448 67,521 12,073

Report Total

-59538 -55448 -67521

King Island Council Estimates 2011-2012 Page 33 of 53


STORMWATER DRAINAGE

Income

Total Income

Forecast

2010/11

Budget

2010/11

Budget

2011/12 Variance

0 0 0 0

0 0 0 0

Expenditure

Labour including on costs 2,511 3,610 2,599 -1,011

Contractors 1,250 500 1,294 794

Freight Delivery 0 120 120 0

Materials Purchased 55 2,300 100 -2,200

Inventory Issued From Store 9 0 0

Electricity 1,241 1,379 1,379 0

Insurance 491 780 780 0

Depn Expense Stormwater Drainage 27,792 27,792 27,792 0

Plant Hire - Internal Usage 536 1,227 555 -672

Overheads Internal Recharge 4,360 4,987 4,987 0

Total Expenditure

38,245 42,695 39,606 -3,089

Report Total

-38,245 -42,695 -39,606 3,089

King Island Council Estimates 2011-2012 Page 34 of 53


WASTE MANAGEMENT

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Special Charge

179,650 455,492 182,535 -272,957

Allocation of Rates 282,023 8,896 0 -8,896

User Fees

45,000 0 45,000 45,000

Interest

3,422 0 0

Total Income

510,095 464,388 227,535 -236,853

Expenditure

Labour including on costs 143,348 131,369 167,400 36,031

Contractors 22,610 19,200 20,064 864

Consultants Other 5,000 0 0 0

Laboratory Testing 0 9,268 5,000 -4,268

Freight Delivery 1,938 1,347 2,025 678

Cleaning Contract 1,396 1,400 1,463 63

Materials Purchased 17,451 16,818 10,000 -6,818

Inventory Issued From Store 12,113 0 12,500 12,500

Protective Clothing & Accessories 391 0 500 500

Electricity 1,848 1,400 2,000 600

Advertising Press 1,176 200 1,000 800

Public Liability Insurance 1,735 2,216 2,000 -216

Licenses & Permits 3,046 6,800 12,000 5,200

Telephone Charges 400 470 500 30

Land Tax 161 0 200 200

Rates Paid 212 291 200 -91

Interest Payments 36,563 28,363 0 -28,363

Depn Expense Buildings & Other Structure 18,511 20,568 30,000 9,432

Plant Hire - Internal Usage 125,479 95,943 131,125 35,182

Overheads Internal Recharge 56,256 54,508 46,582 -7,926

Total Expenditure

449,633 390,161 444,559 54,398

Report Total

60,462 74,227 -217,024

COMMERCIAL UNDERTAKINGS

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Commercial Undertaking

Private Works

305,088 263,527 299,096 35,569

King Island Aerodrome -15,931 -18,153 -27,330 -9,177

Total Commercial Undertakings 289,158 245,374 271,765 26,391

King Island Council Estimates 2011-2012 Page 35 of 53


KING ISLAND AERODROME

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Administrative Fees - Other 2,394 0 2,500 2,500

Car Parking fees 3,900 3,500 4,100 600

Airport Pay Phone 200 0 210 210

Landing Charges RPT 228,465 210,000 239,000 29,000

Landing Charges Other 30,000 27,000 31,350 4,350

Rental / Lease Properties Income 4,000 12,000 12,000 0

State Grants & Subsidies 0 26,250 0 -26,250

Interest Received - Reserves Investment 38,000 30,000 27,000 -3,000

Reimbursements Other 260 0 272 272

Total income

307,219 308,750 316,432 7,682

Expenses

Labour including oncosts 67,409 68,732 81,061 12,329

Contractors 17,156 9,035 10,000 965

Consultants Other 13,776 10,500 10,000 -500

Buildings Maintenance 0 0 10,000 10,000

Freight Delivery 336 300 500 200

Cleaning Contract 8,640 12,120 12,000 -120

Subscriptions Reference Materials 79 0 200 200

Materials Purchased 9,409 10,831 8,000 -2,831

Inventory Issued From Store 1,585 11,698 2,000 -9,698

Electricity 7,788 7,536 8,000 464

Advertising Press 528 200 500 300

Food & Catering Costs 216 0 0 0

Public Liability Insurance 9,000 11,900 8,715 -3,185

Other Insurance 13,107 9,800 10,500 700

Licenses & Permits 256 0 250 250

Subscriptions Memberships 2,200 1,650 2,000 350

Telephone Charges 1,371 3,522 3,000 -522

Mobile Phone Charges 973 650 1,000 350

Internet & Other Communication Charges 619 541 650 109

Travel Accommodation 3,918 500 2,000 1,500

Travel Related Costs Other 1,808 0 1,500 1,500

Land Tax 9,432 9,800 10,000 200

Rates Paid 13,000 12,867 13,500 633

Depn Expense Buildings & Other Structure 81,804 81,800 87,000 5,200

Depn Expense 4 Furniture & Fittings 2,460 2,460 2,460 0

Plant Hire - Internal Usage 24,593 29,857 25,000 -4,857

Plant Hire Recovered 330 0 0

Overheads Internal Recharge 31,356 30,604 33,926 3,322

Total Expenses

323,150 326,903 343,762 16,859

Report Total

-15,931 -18,153 -27,330

King Island Council Estimates 2011-2012 Page 36 of 53


PRIVATE WORKS

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Total Income

1,036,180 1,038,162 988,232 -49,930

1,036,180 1,038,162 988,232 -49,930

Expenditure

Labour inc oncosts 254,949 303,898 241,629 -62,269

Contractors

66,665 87,466 57,549 -29,917

Materials Purchased 135,069 56,840 93,789 36,949

Inventory issued from store 120,727 126,931 119,489 -7,442

Plant Hire

85,787 126,434 91,212 -35,222

Internal

67,906 72,866 85,469 12,603

Total Expenditure

731,103 774,435 689,137 -85,298

Report Total

305,077 263,727 299,096

King Island Council Estimates 2011-2012 Page 37 of 53


COMMUNITY DEVELOPMENT

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Comm'th Grants & Subsidies 0 0 0 0

State Grants & Subsidies 0 0 0 0

Other Grants & Subsidies 0 0 0 0

Sundry Income 0 0 0 0

Total Income

0 0 0 0

Expenditure

Labour including oncosts 76,689 89,623 79,328 -10,295

Contractors 920 0 1,000 1,000

Consultants

0 0 0

Stationery & Office Consumables 322 0 0 0

Materials Purchased 83 500 500 0

Advertising Press 1,519 0 0 0

Other Sundry Expenses 2,499 0 0 0

Food & Catering Costs 1,023 0 0 0

Community Grants 30,103 0 74,000 74,000

Event Attraction 0 0 0

Existing Events Support 0 0 0

Public Liability Insurance 973 730 730 0

Mobile Phone Charges 465 800 500 -300

Air Travel 525 300 1,000 700

Travel Accommodation 166 400 1,000 600

Course Seminar & Conference Registration 166 0 1,000 1,000

Training 873 2,000 750 -1,250

Plant Hire - Internal Usage 157 0 0 0

Overheads Allocated 5,748 5,749 6,575 826

Total Expenditure

122,231 100,102 166,383 66,281

Report Total

-122,231 -100,102 -166,383

King Island Council Estimates 2011-2012 Page 38 of 53


YOUTH

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Comm'th Grants & Subsidies 41,323 41,323 41,323 0

Other Grants & Subsidies 2,412 0 57,000 57,000

Reimbursement Joint Undertakings 27,000 14,609 30,000 15,391

Sundry Income 110 0 0 0

Total Income

70,845 55,932 128,323 72,391

Expenditure

Labour including on costs 72,582 61,068 63,755 2,687

Rentals/Leases Office Equipment 3,000 3,000 14,500 11,500

Stationery & Office Consumables 1,462 0 1,506 1,506

Materials Purchased 5,091 0 20,000 20,000

Electricity 365 539 500 -39

Advertising Press 811 0 835 835

Other Sundry Expenses 291 1,000 300 -700

Audit Services Financial Reports 0 500 1,000 500

Food & Catering Costs 194 0 200 200

Telephone Charges 1,672 900 0 -900

Mobile Phone Charges 109 300 1,200 900

Air Travel 0 350 0 -350

Travel Accommodation 0 400 0 -400

Course, Seminar and Conferences 1,000 1,000

Training 0 750 750 0

Plant Hire - Internal Usage 7 0 0 0

Overheads Allocated 2,076 2,075 2,338 263

Total Expenditure

87,660 70,882 107,883 37,001

Report Total

-16,815 -14,950 20,440

King Island Council Estimates 2011-2012 Page 39 of 53


CULTURAL CENTRE

Forecast

2010/11

Budget

2010/11

Budget

2011/12 Variance

Income

Rental / Lease Properties Income 255 440 0 -440

Sales - Other General 0 2,500 3,000 500

State Grants & Subsidies 33,275 0 0 0

Reimbursements Other 0 0 0 0

Other Sundry Income 1,800 0 0 0

Commissions Received 3,200 0 0 0

Total Income

38,530 2,940 3,000 60

Expenditure

Labour including oncosts 36,787 35,404 38,418 3,014

Contractors 5,000 500 600 100

Repairs and Maintenance 500 500 0

Stationery & Office Consumables 321 200 350 150

Materials Purchased 31,275 500 550 50

Inventory Issued From Store 33 0 50 50

Electricity 1,203 1,300 1,250 -50

Furniture & Equip under $ - Expensed

0 400 0 -400

Advertising Press 500 500 500 0

Other Sundry Expenses 500 100 270 170

Food & Catering Costs 265 500 300 -200

Subscriptions Memberships 27 25 30 5

Telephone Charges 1,380 1,500 0 -1,500

Air Travel 464 350 500 150

Travel Accommodation 0 400 500 100

Courses Seminars and Conferences 0 100 0 -100

Training

750 750

Rates Paid 627 662 873 211

Overheads Internal Recharge 1,672 1,672 1,883 211

Total Expenditure

80,054 44,613 47,324 2,711

Report Total

-41,524 -41,673 -44,324

King Island Council Estimates 2011-2012 Page 40 of 53


ECONOMIC DEVELOPMENT

Forecast

2010/11

Budget

2010/11

Budget

2011/12 Variance

Income

Total Income

3,656 0 0 0

3,656 0 0 0

Expenditure

Labour including oncosts 42,814 45,628 47,696 2,068

Contractors 229 7,000 0 -7,000

Consultants Other 0 7,500 0 -7,500

Materials Purchased 136 0 500 500

Uniforms / Clothes Purchased 0 150 150 0

Advertising Press 7,000 7,580 0 -7,580

Subscriptions Memberships 333 0 0 0

Mobile Phone Charges 716 370 750 380

Air Travel 0 700 1,000 300

Travel Accommodation 0 700 1,000 300

Course, Seminar and Conferences 0 1,250 2,000 750

Training

750 750

Plant Hire - Internal Usage 93 0 0 0

Overheads Allocated 4,488 4,488 5,064 576

Total Expenditure 55,809 75,366 58,910 -16,456

Report Total

-52,153 -75,366 -58,910

King Island Council Estimates 2011-2012 Page 41 of 53


PHOENIX COMMUNITY HOUSE

Forecast

2010/11

Budget

2010/11

Budget

2011/12

Variance

Income

Comm'th Grants & Subsidies 67,574 67,574 70,000 2,426

State Grants & Subsidies 19,798 0 18,000 18,000

Sundry Income 0 0 0 0

Total Income

87,372 67,574 88,000 20,426

Expenditure

Labour including on costs 58,456 64,728 74,385 9,657

Overtime 0

Contractors 0

Other External Serv/Repairs&Mtce 193 0 0 0

Cleaning Contract 417 0 0 0

Stationery & Office Consumables 380 0 2,000 2,000

Printing & Photocopying Costs 8 0 0 0

Materials Purchased 160 0 0 0

Electricity 424 0 1,800 1,800

Tools/ Equipment Expensed 0 0 0 0

Postage 97 0 0 0

Advertising Press 196 0 250 250

Other Sundry Expenses 1,932 0 0 0

Food & Catering Costs 1,394 0 0 0

Telephone Charges 916 0 1,500 1,500

Air Travel

0 0 1,000 1,000

Travel Accomodation 0 0 0 0

Course, Seminar and Conferences 0 0 0 0

Training

500 500

Overheads Allocated 4,294 4,296 9,895 5,599

Total Expenditure 68,867 69,024 91,330 22,306

Total Report

18,505 -1,450 -3,330

King Island Council Estimates 2011-2012 Page 42 of 53


Some Key Trends

1. RATES

rate increase %

5.00%

4.50%

4.00%

3.50%

3.00%

2.50%

2.00%

1.50%

1.00%

0.50%

0.00%

General Rates Increase

2008/9 2009/10 F2010/11 B2011/2012

General rates will increase by 4.5%.for the year. The 4.5% increase will go toward maintaining

service levels and additional costs of Council. The CPI (Hobart) increase was 3.2% for the year

ended March 2011 and the Council cost index released to assist Councils with their rate setting

deliberations was 3.18% Rate increases have been consistent since the one off introduction of a

waste collection special charge in 2007/2008.

2. OPERATING RESULT

surplus/ -deficit

$500,000

$450,000

$400,000

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000

$-

2. Operating Result

2008/9 2009/10 F2010/11 B2011/12

The expected operating result for 2011/12 is to break even. The budget has only included grants

which are certain and has not speculated on winning funding. Council would however expect to win

a number of specific grants throughout the year. In the coming year and future years capital income

will not be considered as operating revenue.

King Island Council Estimates 2011-2012 Page 43 of 53


3. SERVICES

net cost

$4,300,000

$4,200,000

$4,100,000

$4,000,000

$3,900,000

$3,800,000

$3,700,000

$3,600,000

$3,500,000

Services

2008/9 2009/10 F2010/11 B2011/12

The net cost of services delivered to the community for 2011/12 year is expected to be $3.8M

which is consistent with 2010/2011. Any additional services which are delivered will be grant

supported. The business delivery model has been consistent in recent years.

4. CASH AND INVESTMENTS

cash on hand

$4,000,000

$3,900,000

$3,800,000

$3,700,000

$3,600,000

$3,500,000

$3,400,000

$3,300,000

$3,200,000

$3,100,000

$3,000,000

Cash & Investments

2008/2009 2009/2010 F2010/2011 B2011/2012

No major draw downs on Reserves are planned and consequently they will increase by interest and

depreciation added back under the Reserves Policy. The increase in operational cash balance is

generated by financing a new equipment item and receiving the cash ‘up front’ rather than paying

it over the life of the asset. This style of financing was the most cost effective available at the time

of purchase. An offsetting liability matches the cash received.

King Island Council Estimates 2011-2012 Page 44 of 53


5. CAPITAL WORKS ( INCLUDING PLANT)

$2,500,000

Capital Works

$2,000,000

capital works

$1,500,000

$1,000,000

$500,000

$-

2008/9 2009/10 F2010/11 B2011/12

The capital works program for 2011/12 is expected to be $1,452,950 of which $326,000 relates to

projects which will be carried forward from 2010/11. No projects are subject to borrowing plans

but will be funded out of the year’s operations. The equipment financing referred to was settled in

the last week of 2010/11. In addition to the above, Council saw settlement on the new traxcavator.

6. FINANCIAL SUSTAINABILITY

underlying surplus/(deficit)

$500,000

$450,000

$400,000

$350,000

$300,000

$250,000

$200,000

$150,000

$100,000

$50,000

$-

-$50,000

Financial Sustainability

2008/9 2009/2010 F2010/11 B2011/2012

The underlying result is the net surplus or deficit for the year adjusted for non-recurring or once-off

amounts such as capital grant funding and gain on the sale of assets. It is prudent that Council over

the medium to long term aims to achieve an underlying surplus.

King Island Council Estimates 2011-2012 Page 45 of 53


Whilst the above analysis for financial sustainability only takes into consideration Council’s net

operating performance, if Council’s capital expenditure and loan repayments exceed the funds

derived from operating activities then financial sustainability will decline over the long term.

Council’s cash position is currently sound. However, the cost of providing services and maintaining

its current capital expenditure level and debt financing is exceeding Council’s revenues.

Council needs to identify new revenue opportunities to support existing activities where possible,

and to review provision of services to either increase efficiency or reduce cost.

King Island Council Estimates 2011-2012 Page 46 of 53


Budget Estimates Analysis

Budget Influences

Property Profile

As at 30 June 2012, the municipality has 1,567 rateable properties distributed as follows:

Suburb Number of Properties Assessed Annual Value

BUNGAREE 36 853,680

CURRIE 568 5,414,890

EGG LAGOON 57 837,892

GRASSY 146 775,490

LOORANA 122 2,692,346

LYMWOOD 104 2,317,700

NARACOOPA 124 753,152

NUGARA 108 1,365,429

PEARSHAPE 28 383,548

PEGARAH 134 3,017,160

REEKARA 34 1,065,112

SEA ELEPHANT 25 343,988

SURPRISE BAY 2 174,968

WICKHAM 23 291,484

YAMBACOONA 63 1,028,148

YARRA CREEK 21 496,760

OTHER 3 109,560

King Island Council Estimates 2011-2012 Page 47 of 53


1.1 External Influences

In preparing the 2011/12 estimates, a number of external influences have been taken into

consideration as they are likely to significantly impact the services delivered by Council in the

estimates period. These include:

• Increasing construction costs and rising operational costs – the Local Government

Association of Tasmania (LGAT) Council Cost Index increase for the year was 3.655%. CPI

increase for Hobart for the year was 3.2% ending March Quarter.

1.2 Budget Principles

In response to these influences and in the interests of responsible and sustainable financial

management, the following key estimates principles were agreed upon and distributed to all

Council officers with estimates responsibilities:

• Identify new non-rate revenue opportunities to support existing activities where possible

• Review provision of services for opportunities to increase efficiency and quality

• All new initiatives and capital works are justified through a business case process including

alignment to Council’s strategic plan, risk minimisation and cost-benefit analysis

• Services provided are actively reviewed through annual departmental business planning and

consultation to ensure service levels match community need

• Recommendations for service level amendments are presented for consideration by Council

as part of the budget development process

• The long term financial strategy and principles provide a firm foundation for business

decisions and resource allocation

1.5 Legislative Requirements

Under the Local Government Act 1993 (the Act), Council is required to prepare and adopt an

Annual Plan and Budget for each financial year. The budget is required to include estimated

revenue, expenditure, borrowings, capital works and any other detail required by the Minister.

The first step in the budget process is for the Officers to prepare a first draft of the annual

estimates in accordance with the Act and submit the draft to Council for discussion,

amendment and eventual adoption. The budget must be adopted by an absolute majority and

adopted before 31 August, but not more than one month before the start of the relevant

financial year. The related Annual Plan must be provided to the Director of Local Government

and the Director of Public Health.

The 2011/12 estimates, which are included in this report are for the year 1 July 2011 to 30 June

2012 and are prepared in accordance with the Act. The estimates include a budgeted Income

Statement, Statement of Cash Flows and budgeted capital works. These statements have been

prepared for the year ended 30 June 2012 in accordance with Accounting Standards and other

mandatory professional reporting requirements, and in accordance with the Act. They also

include detailed information about the rates and charges to be levied, the capital works

program to be undertaken and other financial information required by Council in order to make

an informed decision about the adoption of the budget.

King Island Council Estimates 2011-2012 Page 48 of 53


Analysis of Operating Estimates

Comparison to 2010/21011 Estimates

OPERATING REVENUE

2010/11 2011/12 $ Variance

Revenue Type $ $ $

Rates 1,563,550 1,637,887 74,337

General Grants 1,611,430 1,439,323 -171,107

Capital Grants 269,218 224,000 -45,218

Interest 153,393 173,000 19,607

Statutory Charges 87,205 76,590 -10,615

User Charges 296,796 385,932 89,136

Reimbursements 1,056,501 1,053,232 -3,269

Other Revenues 54,285 43,000 -11,285

Total Operating Revenue 5,092,378 5,032,964 -59,414

Expenditure Type

Employee Costs 1,899,925 1,987,585 97,660

Contracts 813,052 517,332 -295,670

Materials 671,627 623,523 -48,204

Other Expenses 543,892 568,084 24,192

Finance Costs 39,909 56,871 16,962

Depreciation 1,227,127 1,279,561 52,434

Total Operating Expenditure 5,274,314 5,032,856 -152,676

Operating Surplus/ (Deficit) (93,154) (108) 93,262

Estimates Comments

Rates (Increase $74,337)

Rates and special charges have been budgeted to increase by 4.5% for the year, raising rate

revenue of $1,644,360, an increase of $74,337. The 4.5% increase will go toward maintaining

service levels and additional expenditure. The CPI Hobart increase was 3.2% for the year ended

March 2010 and the Council cost index released to assist Council’s with their rate setting

deliberations was 3.655%.

Grants – General ($216,325 decrease)

Operating grants include all monies received from the State and Federal Governments to assist

with funding delivery of Council services to ratepayers. In order to allow Phoenix Community

House to have ownership over its programs the smaller grants will now be accounted for

directly by them. Timing issues may arise with Roads to Recovery funding until the reference

amount is resolved. The Rural Primary Health funding has been accounted for at net value to

King Island Council as our function is as a virtual broker with 75% of the grant value being

managed by the Department of Health and Human Services.

The 2011/12 budget is markedly different to the 2010/11 cash forecast. The Federal

Government again elected to bring forward one quarter’s FAGS payments which are reflected in

the Funding forecast for 2011/12. This will account for carry forward cash at 30/06/2011 which

is recommended to be reviewed at November 30th. 2011

King Island Council Estimates 2011-2012 Page 49 of 53


Only grants known to have been secured are included in these estimates. When won the

appropriate expenditure allowances will be adjusted accordingly. Our new approach to grant

funding is to ensure recovery of internal costs with an adequate cover for overheads.

Grant Funding Type

Forecast

2010/11

Budget

2011/12

Grants Commissions – Roads Grant 656,122 507,000

Grants Commission – Base Grant 562,808 416,000

Motor Tax Refund 372,000 330,000

Rural Primary Health Services 45,637 45,637

Community Investment Program (Phoenix

House)

69,262 70,000

Preventative Health Initiative 16,680 0

Food & Recreation Trial 96,000 0

Fuel Tax Credit 20,156 0

Small DIER Grants 5,000 -

PCH Small Grants 14,103 -

Federal Stimulus Package 30,000

Cultural Centre Ten Days 33,725

Snodgrass Park 45,218

Youth Week 8,480

Roads To Recovery 224,000 224,000

RASP 160,454

Binge Drinking 19,915

AGD Victims of Crime 57,000

Tasmanian Government PCH ‘top up’ 19,800 18,000

2,402,729 1,667,637

King Island Council Estimates 2011-2012 Page 50 of 53


Estimates Analysis

Interest ($19,607 increase)

Council earns interest on its cash and investments as well as the Local Government Act allowing

Council to charge interest on overdue rates. Council runs minimal working balances with its cash

need supported by an overdraft limit of $220,000. The Reserve funds are supported by cash held in

bank investment term deposits. A schedule of anticipated movements in these balances appears

earlier in this document. It is anticipated that investments will attract 6% interest in the year

2011/2012.

User Fees and Statutory Charges ($78,521 increase)

Council has reviewed its fees in detail. On balance fees have been increased in line with rates i.e

4.5%. However, planning and building fees in some instances have been restructured to eliminate

some that were under charged in relation to other Councils. This review was flagged in last year’s

budget document.

Reimbursements ($3,269 decrease)

Reimbursements include income derived from Council undertaking works for the Department of

Infrastructure, Energy and Resources (DIER) for the state owned roads, Cradle Mountain Water for

water and sewerage works and private works for the community. Income is dependent on contracts

with DIER and cradle mountain water and the community demand for works in general. The pricing is

subject to escalation clauses. Gravel sales will be lower in 2011/12 due to low availability.

Other Revenue ($11,285)

Council’s other revenue for 2011/12 mostly consists of the dividends and other payments from its

investment in Cradle Mountain Water, which is estimated at $43,000. The dividend stream is below

initial expectations.

Employee Costs

An establishment size has been set and is shown in the table on page 9. The Enterprise Bargaining

Agreement which was finalised through the year ended 2010 has allowed for 4.5%.

Contracts ($295,670 decrease)

The setting of the establishment size has reduced this line significantly as it is our intention to directly

employ rather than use SKILLED. The outsourced portion of the RPHS grant has also been eliminated

in this year’s budget as Council is simply a broker in that arrangement.

Materials ($48,204 decrease)

Expenditure under materials includes all costs incurred for operating plant & equipment, gravel

issues, inventory issues and merchandise purchased for various projects. The decrease is mainly due

to Council purchasing less merchandise. The figure will vary upwards as projects are won.

Other Expenses ($24,192 increase)

King Island Council Estimates 2011-2012 Page 51 of 53


Other expenses include insurance, travel and accommodation, elected members expenses,

emergency services levy community grants, telephone and land tax expenditure amongst others. The

2011/12 Budget has estimated an increase in other expenditure which is mainly due to an increase in

community grants. These are detailed in the department’s individual budget.

Borrowing Costs ($16,692 increase)

Borrowing costs relate to interest charged by financial institutions on funds borrowed. The increase

in borrowing costs results from the new loan on the traxcavator. No new loans are budgeted for

2011/2012.

Depreciation ($52,434 increase)

Depreciation is an accounting measure which attempts to measure the usage of Council’s property,

plant and equipment including infrastructure assets such as roads and bridges. The increase is

mainly due to the acquisition of new plant and an allowance for the effect of the revaluation of

infrastructure assets.

King Island Council Estimates 2011-2012 Page 52 of 53


Key Financial Indicators

Financial Resources

The following table summarises the estimated key financial results for the 2011/12 year as

compared to the 2010/11 forecast results.

Financial Resources

OPERATING REVENUE

Forecast Actual

2010/11

Estimate

2011/12

Trend

+/0/-

Indicator $ $ $

Operating Result -11,000 109 +

Underlying Operating Result 0 109 +

Cash and Investments 3,000,000 3,000,000 +

Cash Flow from Operations 1,400,000, 1,200,000 -

King Island Council Estimates 2011-2012 Page 53 of 53

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