City of Melbourne Annual Report 2015-16


Note 2. Budget comparison



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Note 2. Budget comparison

The budget comparison notes compare Council’s financial plan, expressed through its annual budget, with actual performance. The Local Government (Planning and Reporting) Regulations 2014 requires explanation of any material variances. Council has adopted a materiality threshold of the lower of 5 per cent and $1 million where further explanation is warranted. Explanations have not been provided for variations below the materiality threshold unless the variance is considered to be material because of its nature.

The budget figures detailed below are those adopted by Council on 30 June 2015. The Budget was based on assumptions that were relevant at the time of adoption of the Budget. Council sets guidelines and parameters for revenue and expense targets in this budget in order to meet Council’s planning and financial performance targets for both the short and long-term. The budget did not reflect any changes to equity resulting from asset revaluations, as their impacts were not considered predictable.

These notes are prepared to meet the requirements of the Local Government Act 1989 and the Local Government (Planning and Reporting) Regulations 2014.

The budget information provided only relates to Council. No consolidated budget is prepared.



  1. Income and Expenditure

    Council

    Budget

    2016

    $'000

    Actual

    2016

    $'000


    Variance

    2016

    $'000

    Variance

    2016

    %

    Ref

    Income

    N/A

    N/A

    N/A

    N/A

    N/A

    Rates and charges

    243,601

    243,689

    88

    0%

    N/A

    Statutory fees and fines

    N/A

    N/A

    N/A

    N/A

    N/A

    Parking fines

    42,232

    41,573

    (659)

    -2%

    N/A

    Other statutory fees and fines

    8,285

    8,755

    470

    6%


    N/A

    User fees

    N/A

    N/A

    N/A

    N/A

    N/A

    Parking fees

    46,593

    48,386

    1,793

    4%

    N/A

    Other user fees

    16,196

    17,370

    1,174

    7%

    1

    Grants - operating

    9,428

    8,783

    (645)

    -7%

    N/A

    Grants - capital

    8,323

    11,533

    3,210

    39%

    2

    Contributions - monetary

    10,482

    14,118

    3,636


    35%

    3

    Contributions - non monetary

    0

    4,157

    4,157

    100%

    4

    Net gain on disposal of property, infrastructure, plant and equipment

    920

    (526)

    (1,446)

    -157%

    5

    Fair value adjustments for investment properties

    0

    16,849

    16,849

    100%

    6

    Other income

    24,548

    30,579

    6,031

    25%

    7

    Total Income

    410,608

    445,266

    34,658


    8%

    N/A

    Expenses

    N/A

    N/A

    N/A

    N/A

    N/A

    Employee benefit expense

    139,429

    143,292

    (3,863)

    -3%

    N/A

    Materials and services

    161,760

    159,761

    1,999

    1%

    N/A

    Bad and doubtful debts

    6,888

    5,331

    1,557

    23%

    8

    Depreciation and amortisation

    59,749

    58,785

    964

    2%

    N/A

    Other expenses

    5,444


    6,994

    (1,550)

    -28%

    9

    Grants and contributions

    12,533

    12,891

    (358)

    -3%

    N/A

    Total Expenses

    385,803

    387,054

    (1,251)

    0%

    N/A

    Surplus for the year

    24,805

    58,212

    33,407

    135%

    N/A

    Other Comprehensive Income

    N/A

    N/A

    N/A

    N/A

    N/A

    Net asset revaluation increment

    0

    230,771


    230,771

    100%

    10

    Total Other Comprehensive Income

    0

    230,771

    230,771

    100%

    N/A

    Total Comprehensive Result

    24,805

    288,983

    264,178

    1065%

    N/A

    1. Explanation of material variations

      Ref

      Item

      Explanation

      1

      Other user fees

      Mainly due to higher than anticipated hoarding permits, space occupancy revenue, hoarding rental, property and site service fees.

      2

      Grants - capital

      Substantially due to additional funding received, including Docklands Park Enhancement Works - Victoria Harbour ($2.30 million) and VicRoads Blackspot funding ($0.65 million).


      3

      Contributions - monetary

      Due to higher public open spaces contributions ($3.61 million).

      4

      Contributions - non monetary

      Due mainly to external asset contributions on Community Hub in Dockland ($1.23 million), Cardigan Street Chapel ($1.19 million) and Monument Park ($0.84 million).

      5

      Net gain on asset disposal

      Due mainly to loss on artworks and motor vehicles. Net gains on sale of land were not as high as anticipated.

      6

      Fair value adjustments for investment properties

      Due to investment land revaluation.


      7

      Other income

      Due to higher investment interest ($1.67 million) from higher than anticipated cash balance, commercial rent ($1.43 million), grants in kind revenue ($0.97 million), valuation data sales ($0.72 million) and other various sales and cost recoveries.

      8

      Bad and doubtful debts

      Due to lower provision for Parking Infringement Notice doubtful debts as a result of lower PINs revenue and improving recovery rates.

      9

      Other expenses

      Substantially due to land tax for the Munro site ($0.69 million), write-down on investment ($0.27 million), higher insurance provision ($0.24 million) and rent increase of CAE library ($0.20 million).


      10

      Net asset revaluation increment

      Due to gain on fixed asset valuation including land ($188.53 million), building ($26.13 million) and Roads ($13.68 million).

  2. Capital Works

    Council

    Budget

    2016

    $'000

    Actual

    2016

    $'000

    Variance

    2016

    $'000

    Variance

    2016

    %

    Ref

    Buildings

    N/A

    N/A

    N/A

    N/A

    N/A

    Buildings

    8,348

    3,643

    4,705

    56%

    1


    Heritage buildings

    139

    (151)

    290

    209%

    N/A

    Leasehold improvements

    3,689

    5,985

    (2,296)

    (62%)

    2

    Total Buildings

    12,176

    9,477

    2,699

    22%

    N/A

    Plant & Equipment

    N/A

    N/A

    N/A

    N/A

    N/A

    Plant, machinery and equipment

    3,846

    2,906

    940

    24%

    N/A

    Fixtures, fittings and furniture


    230

    87

    143

    62%

    N/A

    Computers and telecommunications

    9,990

    9,082

    908

    9%

    N/A

    Library books

    1,129

    1,132

    (3)

    0%

    N/A

    Total Plant & Equipment

    15,195

    13,207

    1,988

    13%

    N/A

    Infrastructure

    N/A

    N/A

    N/A

    N/A

    N/A

    Roads

    12,871

    13,710


    (839)

    (7%)

    N/A

    Bridges

    843

    169

    674

    80%

    N/A

    Footpaths and cycleways

    4,216

    2,818

    1,398

    33%

    3

    Drainage

    9,280

    7,700

    1,580

    17%

    4

    Recreational, leisure and community facilities

    6,780

    5,578

    1,202

    18%

    5

    Parks, open space and streetscapes

    34,237

    18,535

    15,702


    46%

    6

    Other infrastructure

    6,193

    4,547

    1,646

    27%

    7

    Total Infrastructure

    74,420

    53,057

    21,363

    29%

    N/A

    Total capital works expenditure

    101,791

    75,741

    26,050

    26%

    N/A

    Represented by:

    N/A

    N/A

    N/A

    N/A

    N/A

    New asset expenditure

    46,773

    28,174


    18,599

    40%

    N/A

    Asset renewal expenditure

    39,646

    38,184

    1,462

    4%

    N/A

    Asset expansion expenditure

    10,848

    8,212

    2,636

    24%

    N/A

    Asset upgrade expenditure

    4,524

    1,171

    3,353

    74%

    N/A

    Total capital works expenditure

    101,791

    75,741

    26,050

    26%

    N/A

    1. Explanation of material variations

Ref.


Item

Explanation

1

Buildings

Due mainly to ($4.53 million) works in City Square being cancelled owing to the Melbourne Metro Rail Project progressing and works on the CH1 Precinct being deferred due to the Town Hall Precinct Plan with design work due to commence in 2016-17.

2

Leasehold Improvements

Due mainly to the Queen Victoria Market Precinct Renewal (QVMPR) budgeted to be managed via a separate fund, however in December 2015 Council approved establishment of the City of Melbourne QVMPR Program Reserve. This was offset by various projects carried forward to 2016-17.

3

Footpaths and cycleways

Due to projects ($1.11 million) and Westwood Place public lighting installation ($0.16 million) to be completed in 2016-17.

4

Drainage

Due mainly to Wells Street drain upgrade and stormwater harvesting ($0.94 million), Queensbridge Street upgrade works ($0.40 million), Haig Street/Cardigan Street kerb and channel renewal ($0.17 million) and Rankins Road drain renewal ($0.07 million) carried forward to 2016-17.

5

Recreational, leisure & community facilities

Due mainly to lower than anticipated costs on Carlton Kathleen Syme Library and Community Centre ($1.36 million).


6

Parks, open space & streetscapes

Substantially due to water projects located at University Square as a result of consideration for Melbourne Metro Rail Project and Lincoln Square delayed at the design stage ($5.43 million), upgrade to sports facilities at Princes and Royal Park delayed due to tenders ($2.28 million), Railway Place and Miller Street Reserve Park expansion delayed due to external authority approvals ($1.35 million), Streetscape program adjusted due to the deferral of Elizabeth Street Stage One Masterplan works ($1.19 million), works on various new open spaces delayed to due to scope change ($1.73 million) and Parks Renewal Program delayed due to events in parks in addition to seasonal horticultural and irrigation works planned for winter ($0.96 million) carried forward to 2016-17.

7

Other infrastructure

Substantially due to design and construction of Docklands Park ($0.71 million), street lighting network upgrade to LED lights ($0.62 million) and acquisition of Public Art across various projects including University Square ($0.53 million) carried forward to 2016-17.


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