What do we owe ?
Liabilities are the amounts Council owes to suppliers , employees and lenders both now and in the future . This also includes provisions for future entitlements which comprise of money which will pay our employees in the future ( e . g . Long Service Leave ); and amounts set aside to fund the future rehabilitation of our refuse and quarry sites .
Long-term loans are taken out to undertake the construction and purchase of community assets . Council reviews its loan requirements on an annual basis . No loans were drawn down during the year . Total liabilities as at 30 June 2017 were $ 342M .
What do we owe
Borrowings 51 % Other 1 % Trade & other payables 11 % Provisions 37 %
Statement of Changes in Equity
The difference between assets and liabilities is the total community equity or the net wealth of the Council . The Statement of Changes in Equity shows the overall change in Council ’ s “ net wealth ” over the year . At 30 June 2017 this was an amount of $ 4,316M ( that is , Assets of $ 4,659M less Liabilities of $ 342M ).
This community equity consists of an asset revaluation reserve and retained surpluses which increased by $ 10.6M and $ 27.3M respectively this year .
The asset revaluation surplus comprises amounts representing the change in the value of Council ’ s assets over time . Asset revaluations are completed on a cyclical basis per asset class .
Statement of Cash Flows
The Statement of Cash Flows shows where Council ’ s cash came from and how it was spent throughout the year . This differs from the earlier reports as “ non-cash items ”, such as depreciation and donated assets , are excluded .
$’ 000 ’ s |
Opening Balance |
155,242 |
Plus Cash Received |
394,379 |
Less Cash Spent |
385,294 |
Cash Available at End of Year |
164,327 |
Cash available is used to invest and utilise for future outlays . Much of this is restricted for specific purposes , such as future infrastructure . Council ’ s cash is wisely invested in accordance with our investment policy , so the interest earned contributes to the funding of operational expenses .
Financial Sustainability Measures
The financial sustainability statement and the associated measures ( ratios ) provide evidence of Council ’ s ability to continue operating and provide an acceptable level of service and infrastructure to the community both now and into the future . Section 169 ( 5 ) of Local Government Regulation 2012 outlines the three relevant measures of financial sustainability on which Council must report . In addition , the Department of Local Government , Community Recovery and Resilience sets target ranges for each of these measures .
As part of Council ’ s 2014-2019 Corporate Plan we aim to implement sustainable financial management . Council ’ s performance in these three key measures is an indication of whether we are delivering on this goal .
1 . Asset Sustainability Ratio
This indicates if Council is renewing or replacing existing infrastructure assets at the same rate that the assets are wearing out . The target for 2017 is a ratio of greater than 90 %. If the target ratio is not reached over the medium to long term , Council may face a reduction in the asset ’ s service levels and / or useful lives which would create a burden on future ratepayers .
Council ’ s retained surplus represents amounts available to be invested into assets ( now or in the future ) to provide services to the community . With good planning , surpluses can be used to place less reliance on loans and withstand any unforeseen financial shocks or adverse changes to our business , as seen this financial year with the reduction in the Financial Assistance Grant income . A portion of our retained surplus is cash-backed by an appropriate level of internally imposed restrictions to limit amounts available for future use . |
120.00 %
100.00 %
80.00 %
60.00 %
40.00 %
20.00 %
|
44.27 % |
55.10 % |
58.73 % |
Asset Sustainability Ratio Target range = > 90 %
52.34 % 48.44 %
49.70 % 46.38 %
43.78 %
|
47.18 % |
42.51 % |
68.39 % |
0.00 % 2016 / 17 2017 / 18 2018 / 19 2019 / 20 2020 / 21 2021 / 22 2022 / 23 2023 / 24 2024 / 25 2025 / 26 2026 / 27
Equity ( net wealth )
Investment in capital assets 59 % Asset revaluation surplus 41 %
A higher proportion of new and upgrade projects , such as the Toowoomba City Library , Highfields Sports Park , and road projects relating to the Second Range Crossing have been undertaken this financial year . This has resulted in a lower amount of renewal projects being undertaken and the current year result of 44.27 % being below the target range . Council believes that its assets are being renewed at an appropriate time .
Integration of Council ’ s current focus on asset management planning and continued long-term financial planning will improve Council ’ s ability to make informed decisions regarding asset management into the future .
36 TOOWOOMBA REGIONAL COUNCIL I Annual Report 2016 - 2017