Central Coast Council finished last financial year with a budget surplus of $62.4M, $14.9M more than it had budgeted for ($48.5M).
The council received more grants and contributions than expected and if you take the grants away, council recorded a net operating deficit of $5.1M
A faulty electricity meter giving incorrect readings from August, 2015, for more than three years, was blamed for part of this operating deficit.
The dodgy meter at Mooney Water Treatment Plant saw ERM Energy and Origin Energy demand $1.3M in electricity back charges.
An increase in employee costs of $1.4M due to back pay and industrial claims ($2.8M) added another $4.2M to the deficit.
Council said the industrial claims related to a large number of employees engaged at 38 hours per week, successfully seeking a review under the award to 35 hours per week.
Employee costs were higher than budgeted by $14.6M, with lower than expected reductions in overdue leave balances, additional superannuation costs of $1.8M, and workers’ compensation of $2M.
The total cost of employees was almost $200M, representing one third of operational costs.
Rates and other annual charges brought in $362.706M.
Total income for the year from normal operations was $637M, while total expenses for normal operations was $575M.
On the balance sheet, Council’s net asset value increased from $7.1B in 2018 to $7.2B in 2019, an increase of $104M.
Council received less money in user charges and fees than expected.
The report said that an “unfavourable variance of $6.6M for user fees and charges is largely attributable to underperformance in tipping fees of $6.9M, water usage charges of $1.6M, $1.3M in development related fees, $0.7M in Leisure and Lifestyle fees and charges (pools and theatres), and, $0.7M in Child Care fees.
These variances are partially offset by an additional $5M received for Roads and Maritime Services (RMS) user charges for works completed on State roads.
Grant funds of $2.3M for Bushfire and Emergency Services and $1M for Stronger Community Fund programs were received and these were not in the original budget adopted in June, 2018.
Council received more in rates and annual charges than expected, with an extra $6.8M against what was budgeted.
This was attributed to water, sewer and drainage charges of $3.3M, domestic waste annual charges of $2.8M, and half a million extra in rates income.
It received $2.5M more in interest and investment revenue than expected, which it attributed to tighter cash flow management resulting in higher cash and investment balances.
The report noted there was also a small movement in interest rates during the year at times of reinvestment that increased interest earnings.
Council also received an added $4M in “other revenue” due to favourable variations in property and rental income, insurance recoveries, fines, section 355 committee income, and landfill gas royalty payments.
It reduced its consolidated external debt by $31.7M from the year before, to be $233.2M at June 30, 2019.
These are long term loans from external financial institutions.
Traditionally, Council has utilised long term loans to finance large capital expenditures, particularly related to major water and sewerage network projects.
The Council also publicly reported its Water Supply Authority’s financial performance from July 1, 2018, and financial position to June 30, 2019.
These showed an operating surplus of $5.4M before capital grants and contributions income, compared to $18M the year before.
The net assets for Central Coast Council Water Supply Authority at June 30, 2019, was $3.6B.
The final financial reports are due to be presented to council on Monday, March 9, along with the auditor’s report.
The public can make submissions on the report, but only for seven days.
Source:
Draft Consolidated Financial Statements 2018-2019
Agenda item 2.9
Central Coast Council meeting Feb 24
Reporter: Merilyn Vale