BUDGET REVIEW 2 (BR2) FOR THE 2022/23 FINANCIAL YEAR

Executive summary

The Local Government Act 2009 and Local Government Regulation 2012 require Council to undertake regular reviews of the adopted budget to ensure it remains reflective of planned activities to be funded through the financial year. This second budget review for the 2022/23 financial year

1. incorporates any new or emergent actions arising from Council resolution, Executive Team or Capital Works Executive Committee action, reallocation of funds or realised revenue variance since the adoption of the current BR1 budget in August 2022. In summary the budget review is proposing a net improvement of $880k to Council’s operating position, resulting in the operating deficit increasing from $718k to a $162k surplus. This includes a range of emergent costs that have been funded through additional revenue and grants received year to date. The capital expenditure program has decreased from $57.1 million down to $56.6 million. Item Current Budget Proposed Revised Budget

(BR1)

Adjustments

(BR2)

($’000) ($’000) ($’000) $118,417 $4,263 $122,679 Operating Revenue $119,135 $3,383 $122,517 Operating Expenditure (718) $880 $162 Operating Result Capital Grants and Contributions $14,506 $20,635 $35,141 Revenue ($471) Capital Works Expenditure $57,113 $56,642

Recommendation

That Council note the report by the Manager Financial Services (Acting) to the General Committee Meeting dated 17 April 2023 and approve the proposed changes to the budget for the 2022/23 financial year as outlined in the revised Budget Financial Statements attached to the report.

Report

Proposed Operating Budget Adjustments A proposed 69 operational budget adjustments will result in a $880k improvement to the operating deficit. The following table summarises the operational submissions by type of funding, with a detailed list contained in Attachment 1. The financial statements in Attachments 4 and 5 outline the revised budget position as a result of these proposed adjustments.

Proposed Capital Budget Adjustments A total of 81 budget review submissions were received for capital works projects, with a proposed decrease of $2.9 million to the 2022/23 capital works program and an offsetting increase of $2.5 million for QRA funded disaster projects arising from the February 2022 flood event. All capital submissions have been reviewed by the Capital Works Executive. The following table summarises the proposed revised 2022/23 capital budget. Total Capital Budget Amount ($'000) Original Budget $42,024 BR1 Adjustments $15,089 Current Capital Expenditure Budget $57,113 Proposed BR2 Adjustments ($2,971) QRA Disaster Project Adjustment $2,500 Revised BR2 Capital Expenditure Budget $56,642 The following table summarises the budget submissions by program and categorised as: •

Emergent Works & Variations: Initiation of new capital works items which have arisen since BR1 and the acceptance of tender, change in scope, reallocation of funds or savings realised upon completion with project being under budget. •

Timing Delay to FY 2023/24 (Multiyear Projects): Where timing of design and construction works for major projects straddle multiple financial years, or commencement has been delayed, and the budget has been moved to the 2023/24 financial year to reflect revised timing. •

Project Savings, Overruns & Transfers: Represents project savings which are offset against cost overruns, variations, and emergent works, as well as budget transfer between capital projects. The full list of submissions is contained in Attachment 2. The following table summarises the proposed revised 2022/23 capital budget by program, with the full program contained in Attachment 3.

Previous Council Consideration

The 2022/23 original budget was adopted by Council resolution on 28 June 2022 (Ref. Special Meeting Minutes, 28 June 2022, Item 5, Page 4). The 2022/23 budget review 1 (BR1) was adopted by Council resolution on 18 August 2022 (Ref. Ordinary Meeting Minutes, 18 August 2022, Item 3, Page 27).

Report details

Index: ECM/ Subject/ 7.33 – 2022-2023 Budget