Annual Report 2014-15

Financial Statements 2015
City of Wanneroo
Notes to the Financial Statements
for the year ended 30 June 2015
Note 15. Contingent Liabilities
$
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.
LIABILITIES NOT RECOGNISED:
(i) Guarantees
a) In line with the other equity holders in the Mindarie Regional Council (MRC) the City has accepted the contingent
liability resulting from the provision of an irrevocable financial guarantee on behalf of Mindarie Regional Council
(MRC) for its contractual liability to the Contractor undertaking the development of the Resource Recovery Facility.
The extent of the City's contingent liability is proportional and several (not joint and several) and is limited to 1/6 of
any subsequent payment to the Contractor. The maximum amount that may be payable by the City under the
Guarantee is 1/6 of $163.9m amounting to $27.3m. The term of the guarantee is 20 years unless the MRC liability
under the agreement with the contractor is fully extinguished earlier. This guarantee expires on 15 July 2019.
b) The City compulsorily acquired a portion of land at Lot 3 (185) Mary Street Wanneroo under the Land City's
valuation (expert and legal advice) is in the vicinity of $1,239,000, however the claimants' claim for compensation is
$2,150,000. The City has paid $1,156,850 on 24 August 2012 yet the claimant is pursuing their claim. The matter has
been mediated without resolution and will be scheduled for hearing in the Supreme Court. Subject to the decision of
the Supreme Court, the City could be liable to pay the claimant the difference between what the City has already paid
and the amount the claimant has claimed.
c) The City compulsorily acquired a portion of land at Lot 6 (359) Gnangara Road Wangara under the Land
Administration Act 1997 (WA) on 3 November 2010. The City's valuation (expert and legal advice) is in the vicinity of
$1,623,000 however the claimants' claim for compensation is $5,110,600. The City has been paid $1,460,790 on 29
July 2011 yet the claimant has been pursuing their claim. The matter has been mediated without resolution and will be
scheduled for hearing in the Supreme Court. Subject to the decision of the Supreme Court, the City could be liable to
pay the claimant the difference between what the City has already paid and the amount the claimant has claimed.
(ii) Bank Guarantees
The City of Wanneroo currently holds bank guarantees of $28,218,132 (2014: $20,334,232) with respect to
commercial customers and property developers.
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