City of Melbourne Annual Report 2015-16


City of Melbourne 2015–16 performance statement



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City of Melbourne 2015–16 performance statement

For the year ended 30 June 2016

References

Regulation = R

Better Practice = BP


Description of municipality

R17(1)

  • The Melbourne municipality covers the central city and 16 inner city suburbs from South Yarra to Parkville. It is estimated that around 129,000 people called the municipality home in 2015 and a further 741,000 people visit every day for work and play. The Melbourne Local Government Area is the central precinct for Greater Melbourne and is a thriving residential, entertainment, cultural and educational precinct with a rapidly growing population as more people seek its many business, work, study and social opportunities.

  • Melbourne is one of the fastest growing municipalities in Australia with unprecedented population growth expected over the next decade and beyond. This is expected to grow to more than 200,000 by 2030. Daily users are expected to increase almost 22 per cent by 2024.

  • The Local Government Area covers an area of 37.7 square kilometres and in 2016 has 579.8 hectares of parkland.

Sustainable Capacity Indicators


For the year ended 30 June 2016

References

Regulation = R

Better Practice = BP

Indicator


Measure

Results 2015

Results 2016

Material Variations

R15(3)

Sch3


R16(1)

R17(2)


Population

Expenses per head of municipal population

[Total expenses / Municipal population]



$3,074

$3,000

No material variation.

R15(3)

Sch3


R16(1)

R17(2)


Population

Infrastructure per head of municipal population

[Value of infrastructure / Municipal population]



$14,894

$14,513

No material variation.

R15(3)

Sch3


R16(1)

R17(2)


Population

Population density per length of road

[Municipal population / Kilometres of local roads]

492


519

Our estimated residential population has increased from 122,207 last year to almost 129,000, leading to a higher population density per km of road.

R15(3)

Sch3


R16(1)

R17(2)


Own-source revenue

Own-source revenue per head of municipal population

[Own-source revenue / Municipal population]



$3,099

$3,153

No material variation.

R15(3)

Sch3


R16(1)

R17(2)


Recurrent grants

Recurrent grants per head of municipal population

[Recurrent grants / Municipal population]



$147

$123

No material variation.

R15(3)

Sch3


R16(1)

R17(2)


Disadvantage

Relative socio-economic disadvantage

[Index of Relative Socio-economic Disadvantage by decile]


8

8

No material variation.

Definitions

"adjusted underlying revenue" means total income other than:

(a) non-recurrent grants used to fund capital expenditure; and

(b) non-monetary asset contributions; and

(c) contributions to fund capital expenditure from sources other than those referred to above

"infrastructure" means non-current property, plant and equipment excluding land

"local road" means a sealed or unsealed road for which the council is the responsible road authority under the Road Management Act 2004

"population" means the resident population estimated by council

"own-source revenue" means adjusted underlying revenue other than revenue that is not under the control of council (including government grants)

"relative socio-economic disadvantage", in relation to a municipality, means the relative socio-economic disadvantage, expressed as a decile for the relevant financial year, of the area in which the municipality is located according to the Index of Relative Socio-Economic Disadvantage (Catalogue Number 2033.0.55.001) of SEIFA

"SEIFA" means the Socio-Economic Indexes for Areas published from time to time by the Australian Bureau of Statistics on its Internet website

"unrestricted cash" means all cash and cash equivalents other than restricted cash.


Service Capacity Indicators


For the year ended 30 June 2016

References

Regulation = R

Better Practice = BP


Service

Indicator

Measure

Results 2015

Results 2016

Material Variations

R15(1)

Sch3


R16(1)

R17(2)


Aquatic facilities

Utilisation

Utilisation of aquatic facilities

[Number of visits to aquatic facilities / Municipal population]



1.62

1.57

No material variation.

R15(1)

Sch3


R16(1)

R17(2)


Animal management

Health and safety

Animal management prosecutions

[Number of successful animal management prosecutions]



1

4

Two of the prosecutions reported were for the same accused and carried forward from the previous year due to adjournments at the request of the accused.

R15(1)

Sch3

R16(1)

R17(2)


Food safety

Health and safety

Critical and major non-compliance notifications

[Number of critical non-compliance notifications and major non-compliance notifications about a food premises followed up / Number of critical non-compliance notifications and major non-compliance notifications about food premises] x100



95%

100%

No material variation.

R15(1)

Sch3


R16(1)

R17(2)


Governance

Satisfaction

Satisfaction with council decisions

[Community satisfaction rating out of 100 with how council has performed in making decisions in the interest of the community]



60

62

No material variation.

R15(1)

Sch3


R16(1)

R17(2)


Home and community care

Participation

Participation in HACC service

[Number of people that received a HACC service / Municipal target population for HACC services] x100



19%

20%

No material variation.


R15(1)

Sch3


R16(1)

R17(2)


Home and community care

Participation

Participation in HACC service by CALD people

[Number of CALD people who receive a HACC service / Municipal target population in relation to CALD people for HACC services] x100



15%

17%

There was a 15 per cent increase in the number of CALD clients who received a HACC service in 2015-16 compared to last year, or 33 people. As a demand-based service, results may vary from one year to the next without the active influence of Council.

R15(1)

Sch3


R16(1)

R17(2)


Libraries

Participation

Active library members

[Number of active library members / Municipal population] x100



34%

35%

While this result is not materially different to 2014-15, the 2015-16 active library users also include those who borrow ebooks and eAudiobooks (eContent) through two of our many online lending platforms.

4.5 per cent of our active users only borrow eContent, and 16 per cent of our active users borrow both physical and eContent.



R15(1)

Sch3


R16(1)

R17(2)


Maternal and child health

Participation

Participation in the MCH service

[Number of children who attend the MCH service at least once (in the year) / Number of children enrolled in the MCH service] x100



81%

84%

No material variation.

R15(1)

Sch3


R16(1)

R17(2)


Maternal and child health

Participation

Participation in the MCH service by Aboriginal children

[Number of Aboriginal children who attend the MCH service at least once (in the year) / Number of Aboriginal children enrolled in the MCH service] x100



56%

81%

In the last 12 months, participation and engagement of Aboriginal children in the MCH service has increased from 56 per cent (less than 8 children) to 81 per cent (15 children).

As a demand-based service, results may vary from one year to the next without the active influence of Council.



R15(1)

Sch3

R16(1)

R17(2)


Roads

Satisfaction

Satisfaction with sealed local roads

[Community satisfaction rating out of 100 with how council has performed on the condition of sealed local roads]



76

75

No material variation.

R15(1)

Sch3


R16(1)

R17(2)


Statutory Planning

Decision making

Council planning decisions upheld at VCAT

[Number of VCAT decisions that did not set aside council’s decision in relation to a planning application / Number of VCAT decisions in relation to planning applications] x100



66%

62%

While this result is not materially different to 2014-15, it represents a large increase in the number of VCAT decisions from the previous year. In 2015-16, 42 out of 68 council decisions were not set aside by VCAT, compared to 21 out of 32 decisions in 2014-15.

Council does not influence the number of applications that are lodged with VCAT each year.



R15(1)

Sch3


R16(1)

R17(2)


Waste Collection

Waste diversion

Kerbside collection waste diverted from landfill

[Weight of recyclables and green organics collected from kerbside bins / Weight of garbage, recyclables and green organics collected from kerbside bins] x100


23%

26%

Recycling tonnages have increased over the past year, while total garbage tonnages have reduced over the same period. This has led to a higher overall percentage of kerbside waste being diverted from landfill.

Definitions:

"Aboriginal child" means a child who is an Aboriginal person

"Aboriginal person" has the same meaning as in the Aboriginal Heritage Act 2006

"active library member" means a member of a library who has borrowed a book from the library

"annual report" means an annual report prepared by a council under sections 131, 132 and 133 of the Act

"CALD" means culturally and linguistically diverse and refers to persons born outside Australia in a country whose national language is not English

"class 1 food premises" means food premises, within the meaning of the Food Act 1984, that have been declared as class 1 food premises under section 19C of that Act

"class 2 food premises" means food premises, within the meaning of the Food Act 1984 , that have been declared as class 2 food premises under section 19C of that Act

"Community Care Common Standards" means the Community Care Common Standards for the delivery of HACC services, published from time to time by the Commonwealth

"critical non-compliance outcome notification" means a notification received by council under section 19N(3) or (4) of the Food Act 1984 , or advice given to council by an authorized officer under that Act, of a deficiency that poses an immediate serious threat to public health

"food premises" has the same meaning as in the Food Act 1984

"HACC program" means the Home and Community Care program established under the Agreement entered into for the purpose of the Home and Community Care Act 1985 of the Commonwealth

"HACC service" means home help, personal care or community respite provided under the HACC program

"local road" means a sealed or unsealed road for which the council is the responsible road authority under the Road Management Act 2004

"major non-compliance outcome notification" means a notification received by a council under section 19N(3) or (4) of the Food Act 1984, or advice given to council by an authorized officer under that Act, of a deficiency that does not pose an immediate serious threat to public health but may do so if no remedial action is taken

"MCH" means the Maternal and Child Health Service provided by a council to support the health and development of children within the municipality from birth until school age

"population" means the resident population estimated by council

"target population" has the same meaning as in the Agreement entered into for the purposes of the Home and Community Care Act 1985 of the Commonwealth

"WorkSafe reportable aquatic facility safety incident" means an incident relating to a council aquatic facility that is required to be notified to the Victorian WorkCover Authority under Part 5 of the Occupational Health and Safety Act 2004.

Financial Performance Indicators


For the year ended 30 June 2016

Reference

Dimension

Indicator

Measure

Results

2015


Results

2015


Forecasts

2017


Forecasts 2018

Forecasts 2019

Forecasts 2020

Material Variations

R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Efficiency

Revenue level

Average residential rate per residential property assessment

[Residential rate revenue / Number of residential property assessments]



$1,086

$1,130

$1,146


$1,175

$1,188

$1,209

No material variation.

R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Efficiency

Expenditure level

Expenses per property assessment

[Total expenses / Number of property assessments]



$3,954

$3,950

$3,793

$3,687

$3,509

$3,419

There is a higher forecast growth rate in property assessments compared with expenditure over the forecast years.

R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Efficiency

Workforce turnover

Resignations and terminations compared to average staff

[Number of permanent staff resignations and terminations / Average number of permanent staff for the financial year] x100


11.91%

8.41%

8.39%

8.63%

8.87%

9.16%

The number of resignations/terminations has decreased during 2015-16, while the number of permanent filled positions has increased by close to 6 per cent. This is partly due to the organisational realignment that occurred in July 2015.

R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Liquidity

Working capital

Current assets compared to current liabilities

[Current assets / Current liabilities] x100



163.60%

141.28%

68.27%

31.35%

34.53%

29.28%

The settlement of the Munro site in 2015-16 had a material impact on the City Of Melbourne’s cash balance. The Council’s forecast cash balance will be impacted by the timing of QVM Renewal project expenditure in the four-year forecast.


R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Liquidity

Unrestricted cash

Unrestricted cash compared to current liabilities

[Unrestricted cash / Current liabilities] x100



81.38%

48.48%

28.88%

0%

0%

0%

The settlement of the Munro site in 2015-16 had a material impact on the City Of Melbourne’s cash balance. The Council’s forecast cash balance will be impacted by the timing of QVM Renewal project expenditure in the four-year forecast. No unrestricted cash balances projected in 2018-2020.

R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Obligations

Asset renewal

Asset renewal compared to depreciation

[Asset renewal expenses / Asset depreciation] x100




73.54%

68.82%

86.13%


88.70%

94.37%

101.16%

The decrease in ratio is due to slight reduction in renewal expenditure in 2015-16 due to timing of projects.

R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Obligations

Loans and borrowings

Loans and borrowings compared to rates

[Interest bearing loans and borrowings / Rate revenue] x100



0%

12.31%

11.66%

11.02%

47.57%

76.50%

Council borrowed funds with Clean Energy Finance Corporation (CEFC) in 2015-16 to fund sustainability initiatives. Council is forecasted to have higher borrowings over the medium term to fund QVM Renewal Expenditure.


R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Obligations


Loans and borrowings

Loans and borrowings repayments compared to rates

[Interest and principal repayments on interest bearing loans and borrowings / Rate revenue] x100



0%

0.37%

0.51%

0.83%

1.84%

2.23%

Council borrowed funds with Clean Energy Finance Corporation (CEFC) in 2015-16 to fund sustainability initiatives. Council is forecasted to have higher borrowings over the medium term to fund QVM Renewal Expenditure.

R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Obligations

Indebtedness

Non-current liabilities compared to own source revenue

[Non-current liabilities / Own source revenue] x100





0.77%

8.19%

9.34%

9.08%

33.44%

53.80%

Council borrowed funds with Clean Energy Finance Corporation (CEFC) in 2015-16 to fund sustainability initiatives. Council is forecasted to have higher borrowings over the medium term to fund QVM Renewal Expenditure.


R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Operating position

Adjusted underlying result

Adjusted underlying surplus (or deficit)

[Adjusted underlying surplus (deficit)/ Adjusted underlying revenue] x100



6.24%

9.53%

4.96%

6.50%

6.56%

5.40%

No material variation.

R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Stability

Rates concentration

Rates compared to adjusted underlying revenue

[Rate revenue / Adjusted underlying revenue] x100



57.71%

56.96%

60.84%

61.10%


62.36%

64.06%

No material variation.

R15(2)

Sch3


R16(1) R16(2)

R17(2)


R17(3)

Stability

Rates effort

Rates compared to property values

[Rate revenue / Capital improved value of rateable properties in the municipality ] x100



0.26%

0.27%

0.27%

0.27%

0.27%

0.27%

No material variation.

Definitions:

"adjusted underlying revenue" means total income other than:

(a) non-recurrent grants used to fund capital expenditure; and

(b) non-monetary asset contributions; and

(c) contributions to fund capital expenditure from sources other than those referred to above

"adjusted underlying surplus (or deficit)" means adjusted underlying revenue less total expenditure

"asset renewal expenditure" means expenditure on an existing asset or on replacing an existing asset that returns the service capability of the asset to its original capability

"current assets" has the same meaning as in the AAS

"current liabilities" has the same meaning as in the AAS

"non-current assets" means all assets other than current assets

"non-current liabilities" means all liabilities other than current liabilities

"non-recurrent grant" means a grant obtained on the condition that it be expended in a specified manner and is not expected to be received again during the period covered by a council's Strategic Resource Plan

"own-source revenue" means adjusted underlying revenue other than revenue that is not under the control of council (including government grants

"population" means the resident population estimated by council

"rate revenue" means revenue from general rates, municipal charges, service rates and service charges

"recurrent grant" means a grant other than a non-recurrent grant

"residential rates" means revenue from general rates, municipal charges, service rates and service charges levied on residential properties

"restricted cash" means cash and cash equivalents, within the meaning of the AAS, that are not available for use other than for a purpose for which it is restricted, and includes cash to be used to fund capital works expenditure from the previous financial year

"unrestricted cash" means all cash and cash equivalents other than restricted cash.


Other Information


For the year ended 30 June 2016

1. Basis of preparation

Council is required to prepare and include a performance statement within its annual report. The performance statement includes the results of the prescribed sustainable capacity, service performance and financial performance indicators and measures together with a description of the municipal district and an explanation of material variations in the results. This statement has been prepared to meet the requirements of the Local Government Act 1989 and Local Government (Planning and Reporting) Regulations 2014.

Where applicable the results in the performance statement have been prepared on accounting bases consistent with those reported in the Financial Statements. The other results are based on information drawn from council information systems or from third parties (e.g. Australian Bureau of Statistics).

The performance statement presents the actual results for the current year and for the prescribed financial performance indicators and measures, the results forecast by the council’s strategic resource plan. The Local Government (Planning and Reporting) Regulations 2014 requires explanation of any material variations in the results contained in the performance statement. The City of Melbourne has adopted materiality thresholds relevant to each indicator and measure according to the range of results we are prepared to accept based on the known changes that have occurred during the year. Explanations have not been provided for variations within the materiality thresholds unless the variance is considered to be of interest to the public for other reasons.

The forecast figures included in the performance statement are those adopted by council in its strategic resource plan on 28 June 2016 and which forms part of the council plan. The strategic resource plan includes estimates based on key assumptions about the future that were relevant at the time of adoption and aimed at achieving sustainability over the long term. Detailed information on the actual financial results is contained in the General Purpose Financial Statements. The strategic resource plan can be obtained by contacting council.


Certification of the performance statement


In my opinion, the accompanying Performance Statement has been prepared in accordance with the Local Government Act 1989 and the Local Government (Planning and Reporting) Regulations 2014.

Sam Rumoro

Acting Principal Accounting Officer

Dated: 06/09/2016

In our opinion, the accompanying Performance Statement of the Melbourne City Council for the year ended 30 June 2016 presents fairly the results of the council’s performance in accordance with the Local Government Act 1989 and the Local Government (Planning and Reporting) Regulations 2014.

The Performance Statement contains the relevant performance indicators, measures and results in relation to service performance, financial performance and sustainable capacity.

At the date of signing, we are not aware of any circumstances that would render any particulars in the Performance Statement to be misleading or inaccurate.

We have been authorised by the council and by the Local Government (Planning and Reporting) Regulations 2014 to certify this Performance Statement in its final form.

Robert Doyle, Lord Mayor, Dated:6 September 2016

Stephen Mayne, Councillor, Dated: 6 September 2016

Martin Cutter, Acting Chief Executive Officer, Dated: 6 September 2016

Victorian Auditor-General’s Office

Level 24, 35 Collins Street Melbourne VIC 3000

Telephone 61 3 8601 7000 Facsimile 61 3 8601 7010

Email comments@audit.vic.gov.au

Website: www.audit.vic.gov.au


Independent Auditor’s Report

To the Councillors, Melbourne City Council



The Performance Statement

I have audited the accompanying performance statement for the year ended 30 June 2016 of the Melbourne city Council which comprises the statement, the related notes and the certification of the performance statement.



The Councillors' Responsibility for the Performance Statement

The Councillors of the Melbourne City Council are responsible for the preparation and fair presentation of the performance statement in accordance with the Local Government Act 1989 and for such internal control as the Councillors determine is necessary to enable the preparation and fair presentation of the performance statement that is free from material misstatement, whether due to fraud or error.


Auditor's Responsibility

As required by the Local Government Act 1989, my responsibility is to express an opinion on the performance statement based on the audit, which has been conducted in accordance with Australian Auditing Standards. Those standards require compliance with relevant ethical requirements relating to audit engagements and that the audit be planned and performed to obtain reasonable assurance about whether the performance statement is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the performance statement. The audit procedures selected depend on judgement, including the assessment of the risks of material misstatement of the performance statement, whether due to fraud or error. In making those risk assessments, consideration is given to the internal control relevant to the entity's preparation and fair presentation of the performance statement in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the overall presentation of the performance statement.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my audit opinion.


Independence

The Auditor-General's independence is established by the Constitution Act 1975. The Auditor- General is not subject to direction by any person about the way in which his powers and responsibilities are to be exercised. In conducting the audit, I and my staff and delegates complied with all applicable independence requirements of the Australian accounting profession.



Auditor's Opinion

In my opinion, the performance statement of the Melbourne City Council in respect of the 30 June 2016 financial year presents fairly, in all material respects, in accordance with the Local Government Act 1989.

Dr Peter Frost

Acting Auditor – General

Melbourne 9 September 2016

Annual Financial Report


2015-2016


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