Cardinia Shire Council - Annual Report 2017-18

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Cardinia Shire Council Notes to the Financial Report 2017/2018 Financial Report For the Year Ended 30 June 2018 8.2 Reconciliation of cash flows from operating activities to surplus / (deficit) 2018 2017 $'000 $'000 Surplus for the year 87,143 89,711 Depreciation/amortisation 20,847 19,681 Proceeds from sale of assets - investing activity, not operating activity (2,032) (18,155) Written down book value (WDBV) of assets sold - non-cash 3,473 14,462 Contributions - non-monetary (39,579) (45,669) Capital grants- non-monetary (1,200) - Interest costs - financing, not operating activity 2,937 3,279 Share of net (gain)/loss of associates - non-cash 62 (5) Impairment (gain)/loss - non-cash - 35 Net asset revaluation (increment)/decrement (329) (1,961) Change in assets and liabilities: Increase in trade and other receivables (13,861) (1,678) Increase in prepayments 292 (489) Increase in accrued income 5 (134) Increase in trade and other payables 1,206 (303) Iincrease in other liabilities (463) 1,508 Increase in inventories (20) 8 Increase in provisions 216 129 Increase in income in advance (318) 586 Net cash provided by operating activities 58,379 61,005 Page 43
Cardinia Shire Council Notes to the Financial Report 2017/2018 Financial Report For the Year Ended 30 June 2018 8.3 Superannuation Council makes all of its employer superannuation contributions in respect of its employees to the Local Authorities Superannuation Fund (the Fund). This Fund has two categories of membership, accumulation and defined benefit, each of which is funded differently. Obligations for contributions to the Fund are recognised as an expense in the Comprehensive Income Statement when they are made or due. Accumulation The Fund's accumulation categories, Vision MySuper/Vision Super Saver, receive both employer and employee contributions on a progressive basis. Employer contributions are normally based on a fixed percentage of employee earnings (for the year ended 30 June 2018, this was 9.5% as required under Superannuation Guarantee legislation). Defined Benefit Council does not use defined benefit accounting for its defined benefit obligations under the Fund's Defined Benefit category. This is because the Fund's Defined Benefit category is a pooled multi-employer sponsored plan. There is no proportional split of the defined benefit liabilities, assets or costs between the participating employers as the defined benefit obligation is a floating obligation between the participating employers and the only time that the aggregate obligation is allocated to specific employers is when a call is made. As a result, the level of participation of Council in the Fund cannot be measured as a percentage compared with other participating employers. Therefore, the Fund Actuary is unable to allocate benefit liabilities, assets and costs between employers for the purposes of AASB 119. Funding arrangements Council makes employer contributions to the Defined Benefit category of the Fund at rates determined by the Trustee on the advice of the Fund Actuary. As at 30 June 2017, a full triennial actuarial investigation was completed. The vested benefit index (VBI) of the Defined Benefit category of which Council is a contributing employer was 103.1%. To determine the VBI, the Fund Actuary used the following long-term assumptions: Net investment returns 6.5% pa Salary information 3.5% pa Price inflation (CPI) 2.5% pa. Vision Super has advised that the estimated VBI at 30 June 2018 was 106%. The VBI is to be used as the primary funding indicator. Because the VBI was above 100%, the 30 June 2017 actuarial investigation determined the Defined Benefit category was in a satisfactory financial position and that no change was necessary to the Defined Benefit category’s funding arrangements from prior years. Employer contributions Regular contributions On the basis of the results of the 2017 actuarial investigation conducted by the Fund Actuary, Council makes employer contributions to the Fund’s Defined Benefit category at rates determined by the Fund’s Trustee. For the year ended 30 June 2018, this rate was 9.5% of members' salaries (9.5% in 2016/17). This rate will increase in line with any increase to the contribution rate. In addition, Council reimburses the Fund to cover the excess of the benefits paid as a consequence of retrenchment above the funded resignation or retirement benefit. Funding calls If the Defined Benefit category is in an unsatisfactory financial position at an actuarial investigation or the Defined Benefit category‘s VBI is below its shortfall limit at any time other than the date of the actuarial investigation, the Defined Benefit category has a shortfall for the purposes of SPS 160 and the Fund is required to put a plan in place so that the shortfall is fully funded within three years of the shortfall occurring. The Fund monitors its VBI on a quarterly basis and the Fund has set its shortfall limit at 97%. In the event that the Fund Actuary determines that there is a shortfall based on the above requirement, the Fund’s participating employers (including Council) are required to make an employer contribution to cover the shortfall. Using the agreed methodology, the shortfall amount is apportioned between the participating employers based on the pre-1 July 1993 and post-30 June 1993 service liabilities of the Fund’s Defined Benefit category, together with the employer’s payroll at 30 June 1993 and at the date the shortfall has been calculated. Due to the nature of the contractual obligations between the participating employers and the Fund, and that the Fund includes lifetime pensioners and their reversionary beneficiaries, it is unlikely that the Fund will be wound up. If there is a surplus in the Fund, the surplus cannot be returned to the participating employers. In the event that a participating employer is wound-up, the defined benefit obligations of that employer will be transferred to that employer’s successor. 2017 Triennial Actuarial investigation surplus amounts The Fund’s triennial investigation as at 30 June 2017 identified the following in the defined benefit category of which Council is a contributing employer: A VBI surplus of $40.3 million; and A total service liability surplus of $156 million. The VBI surplus means that the market value of the fund’s assets supporting the defined benefit obligations exceed the vested benefits that the defined benefit members would have been entitled to if they had all exited on 30 June 2017. The total service liability surplus means that the current value of the assets in the Fund’s Defined Benefit category plus expected future contributions exceeds the value of expected future benefits and expenses. Council was notified of the 30 June 2017 VBI during August 2017. 2018 interim actuarial investigation An interim actuarial investigation will be conducted for the Fund’s position as at 30 June 2018. It is anticipated that this actuarial investigation will be completed in October 2018. Page 44
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Cardinia Shire Council Annual Repor
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Contents Report of operations INTRO
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Introduction Introduction Year in r
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Adopting key strategies Council int
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Achieving organisation excellence C
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Your rates at work Dollar amounts r
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Council Plan key challenges Council
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Year in review Introduction Year in
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Challenges • Managing one of the
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The Cardinia Youth Support Program
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Our community highlights We will fo
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Developing community leaders Counci
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Our environment highlights We will
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trialled the use of CCTV cameras at
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Cardinia Shire. In 2017-18, Council
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Engaging with our community We regu
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Lang Lang Community and Recreation
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Emerald Lake Park dam wall reinstat
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Financial summary Comprehensive Inc
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Our Council Introduction Year in re
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Population Cardinia Shire is one of
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Council wards Cardinia Shire is div
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Our organisation Introduction Year
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Senior Leadership Team Garry McQuil
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Andrew Paxton - General Manager Pla
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Detailed staffing breakdown Employe
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Our performance Introduction Year i
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Our people performance We support a
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Access to support services and prog
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Variety of recreation and leisure o
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Variety of recreation and leisure o
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Increased awareness of safety (cont
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Minimised impact of emergencies (co
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Animal management Service indicator
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Libraries Service indicator 2014-15
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Our community performance We will f
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Increased levels of community parti
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Our environment performance We will
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Transport linkages connecting towns
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Enhanced natural environment (cont.
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Natural and built environments supp
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Performance indicators Roads Servic
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Waste collection Service indicator
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Increased business diversity in Car
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Our governance performance We will
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Performance indicators Governance S
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Governance and management Introduct
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Management Audit committee The Audi
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Governance and management checklist
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Item Assessment Yes/No Performance
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Statutory information Information a
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Development contribution plans (DCP
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Land, works, services or facilities
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Land, works, services or facilities
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Performance statement
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Description of municipality Cardini
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Indicator 2015 2016 2017 2018 Mater
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Service Indicator 2015 2016 2017 20
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Service Indicator 2015 2016 2017 20
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Indicator Result Forecasts Material
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Indicator Result Forecasts Material
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Other information For the year ende
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Page 141 and 142: Cardinia Shire Council 2017/2018 Fi
Page 143 and 144: Auditor's responsibilities for the
Page 155 and 156: Cardinia Shire Council Notes to the
Page 170: Cardinia Shire Council 2017/2018 Fi
Page 174: Cardinia Shire Council 2017/2018 Fi
Page 192: Cardinia Shire Council Civic Centre
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Cardinia Shire Council - Annual Report 2017-18

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