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FINANCIAL PERFORMANCE REPORT – JUN 2025

Financial Services Manager, Pauline Coles · Financial Services | Corporate Services Department

Executive summary

Financial performance for the 2024/25 year has resulted in an interim operating position of $7.3 million, total capital revenue of $66.7 million and base capital expenditure of $27.3 million with a further $48.5 million expended on QRA funded disaster projects. Note, these interim 2024/25 financial year results are still subject to year-end financial adjustments. A further report on the final 2024/25 financial performance will be provided to Council in November 2025 following the finalisation and independent audit of the financial statements in October 2025. YTD Financial Performance Summary Budget Actual Variance Variance Status $m $m $m % Operating Revenue $141.3 $143.1 $1.8 1.3% Above Budget Operating Expense $141.2 $135.8 $5.4 3.8% Below budget Operating Position $0.1 $7.3 $7.2 Capital Revenue $93.4 $66.7 ($26.7) -28.6% Behind Budget Capital Expenditure* $124.9 $75.7 $49.2 39.4% Below Budget

  • Reflects constructed assets and intangibles only (excludes contributed), also includes QRA disaster funded projects, resulting from the February 2022 flood event. The $7.2 million full year positive interim operating variance comprises $5.0 million general operating surplus from activities that are funded through Council’s general rate, regulatory fees and sales of goods and services; as well as an additional $0.7 million from commercial operations with Waste operations contributing $0.6 million and a further $0.1 million from Holiday Parks. A further $1.5 million is contributed from unspent levy and separate charge funds which are constrained in reserve for future use where they are not fully utilised in a given year. Budget Variance Actual YTD Item

YTD

YTD

$m $m $m General business operating position (unconstrained funds) ($2.7) $2.3 $5.0 Commercial operations (constrained funds) * $3.1 $3.8 $0.7 Unspent levies (constrained funds) ($0.3) $1.2 $1.5 Total Council Operating Position $0.1 $7.3 $7.2

  • Includes Waste and Holiday Park operations as shown in the table below Council elects to apply National Competition Policy (NCP) reforms to its Waste Management and Holiday Parks which provides greater transparency and assists with removing anti-competitive conduct and ensures the best allocation of Councils limited resources. A summary of the YTD operational performance of these business activities are outlined below. Waste Operations Holiday Parks Budget Actual Variance Budget Actual Variance

YTD

YTD

YTD

YTD

YTD

YTD

$m $m $m $m $m $m Revenue 25.8 26.1 0.3 4.3 4.6 0.3 Expenditure 23.4 23.1 0.3 3.6 3.8 (0.2) Net Operating Position 2.4 3.0 0.6 0.7 0.8 0.1 Financial statements including Statement of Income & Expenditure, Statement of Financial Position (balance sheet), and Statement of Cash Flows are included as attachments for information for Council. Figure 1: Actual Performance Compared to Budget Council’s interim performance against key measures of financial sustainability has been calculated as at June 2025. These statutory indicators enable the reader to assess Council’s success in managing its budget, cash and debt as well as undertaking sustainable asset management. The table below contains a snapshot of a number of key measures, with full detail included in the report. YTD Measures of Financial Sustainability Current Target Actual YTD Status Budget Operating Surplus Ratio On Track 0-10% 0.1% 5.1% Net Financial Liabilities Ratio On Track <60% (7.0%) (36.2%) Cash Cover Ratio On Track 3 months 9.5 months 11.1 months Asset Sustainability Ratio Behind Budget > 90% 116.6% 80.7%

Recommendation

That Council note the report by the Financial Services Manager to the General Committee Meeting dated 14 July 2025 outlining the interim 2024/25 full year financial performance against budget, including changes to the financial performance report with the inclusion of key financial sustainability indicators.

Report

Operating Revenue (YTD Benchmark 100.0%) Council has received 101.3% ($143.1 million) of its operating revenue budget ($141.3 million). Commentary on each revenue category is provided below.

Category

Summary

Comments • Waste utility charges $77.1k above FY budget

Rates and Levies $94.0 million (99.7%) (100.0% or $17.1 million of $17.0 million of the annual budget of annual budget earned) $94.3 million has been • earned General rate (net of discounts) $323.3k below FY budget (99.5% or $70.9 million of $71.2 million annual budget earned) • Waste $62.4k above FY budget (209.6% or

Fees and Charges $9.6 million (87.2%) of $119.3k of $57.0k annual budget earned) the annual budget of • $11.0 million has been Cemeteries $54.6k above FY budget (115.6% earned or $404.4k of $349.8k annual budget earned) • Plumbing Compliance $53.2k above FY budget (103.7% or $1.5 million of $1.4 million annual budget earned) • Development Assessment $836.5k below FY budget (76.7% or $2.7 million of $3.6 million annual budget earned) • Local Laws $418.3k below FY budget (80.5% or $1.7 million of $2.1 million annual budget earned) • Building Compliance $262.1k below FY budget (77.5% or $903.8k of $1.2 million annual budget earned) • Sports facilities revenue $420.8k above FY

Sale of Goods and $16.5 million (103.4%) budget (114.1% or $3.4 million of $3.0 million

Services of the annual budget of annual budget earned). $15.9 million has been • earned Holiday Park revenue $299.9k above FY budget (106.9% or $4.6 million of $4.3 million annual budget earned), however any revenue upside will be generally offset by a corresponding increase in associated operating costs • Waste Management revenue $216.9k below FY budget (97.2% or $7.5 million of $7.7 million annual budget earned). Sales of recyclables revenue down due to market conditions and timing of sales. • Interest revenue has continued to track above

Interest Received $6.6 million (178.1%) budget with investment in higher yielding term of the $3.7 million deposits maximising the return on surplus annual budget has cash holdings. Cash holdings remain high due been earned to the advanced payment of grants & subsidies, restricted levy balances, future provision balances and delays in the delivery of the capital works program.

Category

Summary

Comments • Plant recharge revenue is $120.1k above

Other Revenue $3.4 million (106.3%) budget due to internal plant being utilised for of the $3.2 million the delivery of disaster funded capital projects annual budget has • been earned $95.0k recoupment of legal costs from development assessment appeal • $92.9k partnership revenue for Cascading Climate risk project • Royalty income from landfill gas $21.8k above budget (137.6% or $79.9k of $58.1k annual budget earned) • Recoupment of Waste Bin (SULO) purchases $62.1k above budget (160.1% or $165.5k of $103.3k annual budget earned). • $67.8k proceeds from Insurance claim for damage to Council property • Ferry Service revenue $432k below YTD budget (61.3% or $683.7k of $1.1 million annual budget earned) • $1.4 million of the FY 2025 financial assistance

Operating Grants, $7.0 million (98.1%) of grant allocation was received in July

Subsidies the $7.1 million annual

This is a change from the previous budget has been approach of prepaying part or all of the grant received in the preceding year. • Prepayment of the financial assistance grant has been consistent over the past 7 years • Council received a 50% prepayment of the 2025/26 financial assistance grant of $884.6k in June 2025. As a result, funding from the financial assistance grant is showing $442.9k over budget for the year. Note however this is a timing issue only. • This has been offset by the timing of receipt of QCoast, Housing Support Program and Flood Risk Mitigation Program grant funds. • Unitywater distributions are fixed each year so

Unitywater On track there is limited budget variance risk

Distributions

Figure 2: Operating Revenue Position by Type (Excluding Rates)

Operating Expenditure (YTD Benchmark 100.0%) Actual operating expenditure is currently 96.2% ($135.7 million) of the full year budget ($141.1 million). Detailed commentary for each expenditure category is provided below.

Category

Summary

Comments • Expenditure for permanent staff salaries

Employee Costs $52.2 million (98.2%) of the and wages underspent ($2.5 million) due annual budget of $53.1 to position vacancies and the recoupment million has been expended of vacancy dividend. This underspend is offset by additional spend on casual staff and external labour hire ($1.7 million). • The renegotiation of the Council's certified agreement is ongoing, although unions have agreed in principle to Council’s Certified Agreement offer. Accordingly, backpay commencing March 2025 consistent with this offer has been accrued and is reflected in the interim results. Noting, that further year end adjustment and provisions will be processed as part of Council Annual Financial Statements. • Training costs are at $449.8k YTD or 116.5% of the annual budget spent ($386.1k) • Civil Operations $803.1k above FY budget

Materials and $59.2 million (94.3%) of the (108.7% or $10.1 million of $9.3 million

Services $62.8 million annual budget annual budget spent) has been expended. • Utilities Management $182.9k above FY budget (116.3% or $1.3 million of $1.1 million annual budget spent) • Holiday Parks $129.6k above FY budget (105.1% or $2.7 million of $2.6 million annual budget spent) however this is offset by additional revenue • Disaster Management $89.9k above FY budget (245.4% or $151.9k of $61.9k annual budget spent) This includes costs relating to local disaster coordination centre established for Tropical Cyclone Alfred. • Fleet $69.7k above YTD budget (104.3% or $1.7 million of $1.6 million annual budget spent) • Strategic Land Use Planning $908.4k below YTD budget (50.0% or $907.9k of $1.8 million annual budget spent) $703.1k relates to grant funded programs yet to be delivered • Environmental Services (excluding environment levy programs) $284.6k below FY budget (77.5% or $982.1k of $1.3 million annual budget spent). • Waste Management $301.1k below YTD budget (98.0% or $14.5 million of $14.8 million annual budget spent)

Category

Summary

Comments • Property and Facilities $251.3k below FY budget (91.1% or $2.6 million of $2.8 million annual budget spent) • Corporate Services $172.9k below FY budget (31.9% or $81.2k of $254.2k annual budget spent) • Arts & Culture $207.7k below FY budget (91.4% or $2.2 million of $2.4 million annual budget spent) • Canals & Waterways $162.9k below FY budget (52.9% or $183.3k of $346.2k annual budget spent) • Financial Services $154k below FY budget (64.11% or $276.4k of $431.0k annual budget spent) • Community Development $141.4k below FY budget (87.6% or $994.2k of $1.2k annual budget spent) This variance relates primarily to the timing of the payment of community grants. • Buildings & Facilities $139.8k below FY budget (88.7% or $1.1 million of $1.2 million annual budget spent) • Development & Assessment $124.8k below FY budget (90.5% or $1.2 million of $1.3 million annual budget spent) • Digital Hub $104.5k below FY budget (79.9% or $414.1k of $518.5k annual budget spent) The majority of this underspend relates to grant funded projects. • Levy funded materials & services $1.4m below FY budget (70.0% or 3.2 million of $4.5 million annual budget spent) Unspent levy funds are held in reserve for future use where they are not fully utilised in a given year • Whilst existing loan borrowings are set

Finance Costs Currently on track with fixed interest rates, any further RBA rate rises will impact finance costs on new loan borrowings. FY underspend also relates to the timing of drawdown of forecast borrowings for FY 2025 and finalisation of year end adjustments.

Depreciation Currently on track Nil

Other Expenses Currently on track Nil

Figure 3: Operating Expenditure Position by Type

Tourism and Economic Development Investment Summary Council resolved to report on a monthly basis, investment details for tourism and economic development. Tourism and economic development activity is funded through the general rates revenue. Expenditure as of 30 June 2025 is outlined below:

Expenditure

YTD Budget

YTD Actual

Variance

$’000 $’000

$’000 Tourism Noosa Funding Agreement $2,520.0 $2,520.0 - Economic Development $1,299.3 $1,165.0 $134.3

Total

$3,819.3

$3,685.0

$134.3 All instalments payable under the Tourism Noosa agreement for the 2024-25 financial year have been made. The Tourism Noosa agreement was renewed for 12 months in May 2025 (ending 30 June 2026). • Employee Costs $21.3k below FY budget (96.7% or $633.4k of $654.6k annual budget spent) • Materials & Services are $115.0k below FY budget (96.1% or $2.9m of $3.0m annual budget spent)

Legal Costs Summary An update on legal costs and associated expenditure is provided on a quarterly basis. Legal and associated costs are $126.1k over budget YTD (108.9% or $1.5 million of $1.4 million annual budget spent). Legal and associated expenditure is dependent on the type and specialist nature of appeals being undertaken and costs and timing may fluctuate as a result. Full year interim expenditure at 30 June 2025 is outlined below:

Figure 4: Legal Costs (including legal consultancy) over time

Figure 5: Legal Expenditure by Department – 5 year trend

Consultancy Cost Summary An update on consultancy costs is provided on a quarterly basis. Consultancy costs are $194.3k over budget YTD (109.3% or $2.3 million of $2.1 million annual budget spent). Consultancy expenditure varies across Council and is generally of a specialist nature to supplement or complement existing resources or is required in order to undertake specific project works, as a result expenditure may fluctuate at different times.

Figure 6: Consultancy Costs over time

Figure 7: Consultancy Expenditure by Department – 5 Year trend

Capital Revenue Year to date Capital revenue of $66.7 million received comprises cash contributions from developers ($1.4 million) and capital grants ($63.5million). Note that the timing of capital grant receipts are generally dependent on the timing of grant conditions and also capital delivery performance, and that the timing of the receipt of developer contributions (both cash and contributed) is unpredictable. Grants and subsidies are higher than prior years due to the receipt of funding from the Queensland Reconstruction Authority for reconstruction works relating to the Black Mountain landslip and several other flood impacted sites, which are currently under construction. $27.9 million of the FY capital revenue shortfall relates to QRA disaster funding which is dependent on the timing of delivery and final project costs.

Figure 8: Capital Revenue by Type

Capital Program Actual capital expenditure (excluding commitments and disaster projects) is $27.3 million (YTD budget $46.0 million). Expenditure on disaster projects (excluding commitments) is $48.5 million (YTD budget $78.9 million). Detailed discussion of progress in the delivery of the capital works program is provided through a separate quarterly report by the infrastructure team.

Figure 9: Capital Program Delivery Performance

Cash Management and Investment Performance Total cash on hand at the end of June was $108.0 million. Included in this balance are funds held in trust and for restricted purposes (e.g. unexpended levy and grant funds), prepaid grants including the financial assistance grant, QRA disaster funding and other capital works grants, prepayment of Waste Levy subsidy (3 years), and unspent monies committed for funding capital projects which are underway and will continue during the financial year. The following pie charts present the mix of cash held at June 2025 by agency (graph on the left) and by credit risk rating (graph on the right). All funds have been invested in accordance with the Investment Policy and in consideration of the principles of ethical investment, preservation of capital, return on investment and counterparty thresholds.

Figure 10: Closing Cash Held by Agency and Credit Rating The following chart monitors the 12-month trend on total cash and the agencies invested. To maximise the return on in its cash holdings Council has invested $25.8 million in higher yielding term deposits. These investments were made in line with Council’s investment policy.

Figure 11: 12 Month Trend of Cash Invested by Agency

Quarterly Supplementary Information - Cash Components An update detailing the composition of Council’s cash reserves is provided quarterly. Council’s cash balance comprises a number of components – restricted cash (reserves), committed cash, financial sustainability requirements and unrestricted cash. These are outlined below.

Restricted Cash - In accordance with Council’s Management of Restricted Cash Policy, funds are set aside and restricted for a specific purpose. This can be either to meet regulatory requirements, allocate against specific future projects and activities, and to ensure sufficient working capital to meet current and long term financial obligations.

Committed Cash - A portion of cash reserves are committed to undertake current year capital works. At the start of the financial year, this commitment will be increased for any unfinished capital works from previous year which are carried over as part of the budget review process to ensure the projects can be completed.

Sustainability Requirement – Cash expense cover is a key statutory indicator to measure liquidity, ensure going concern and is a key measure considered in Council achieving its current credit rating (Sound with a Neutral Outlook) to ensure borrowing capacity. Cash expense cover calculates how long Council can continue to pay its day-to-day expenses without needing to seek borrowings or other external funding. A target minimum of three month’s cash cover is to be held in any given financial year to minimise financial risk.

Unrestricted Cash – These are funds where there is no regulatory, policy or budgetary commitment to retain funds for specific purposes. These funds can be separated into the following:

  • Working Capital – The cycle of revenue received twice yearly through rates that is held in the bank and spent over the following six months on operations and capital.
  • Long Term Surplus – Uncommitted cash set aside to fund the 10-year capital works program. Overall, Council’s $108.0 million total cash balance compromises:
  • $49.2 million (45.5%) in restricted cash. This includes unspent levy funds, advance grant & subsidy payments, developer contributions, natural disaster provision and future landfill rehabilitation provision
  • $15.2 million (14.1%) committed for the delivery of capital works projects
  • $29.0 million (26.9%) to meet sustainability requirements, equivalent to 3 months cash cover.
  • $7.7 million (7.1%) in working capital to pay for operations through to the next rating cycle
  • $6.9 million (6.3%) in unrestricted free cash, which is the cash available to fund emergent or new capital works projects. There is no funding to replenish this unless Council generates a surplus operating position

Figure 12: Allocation of Cash Balances

Measures of Financial Sustainability The following table incorporates a set of financial sustainability indicators to further assist in managing Council financial performance. There are no significant emerging risks regarding performance identified at this stage, however the delay in the delivery of the capital program may impact Council’s asset sustainability and renewal targets.

Category

Comments •

Intent: Identifies the extent

Operating Surplus Ratio to which revenues cover operational expenses, to ensure community equity is not degraded •

Target: Greater than 0% •

Result: 5.1% •

Comment: With the second rates cycle occurring in January, this ratio will slowly decline as expenditure on operations occurs through to the end of the financial year at 30 June 2025. •

Intent: Indicates how long

Cash Expense Cover council can continue paying its day-to-day expenses from cash at bank without needing additional cash flows •

Target: > 3 months •

Result: 11.1 months •

Comment: Cash cover remains above target, while business as usual expenditure through to 30 June 2025 will degrade Council’s cash holdings, albeit not below the target range of 3 – 6 months. Cash balances include funding for capital programs, unspent grant monies paid in advance, Waste Levy subsidy prepayments and QRA advance payments for disaster projects which are restricted for specific purposes and inflate the ratio. •

Intent: Measures the extent

Asset Sustainability Ratio to which assets are being replaced as their condition degrades to ensure service potential is maintained •

Target: 80% of depreciation budget spent on renewals annually •

Result: 80.7% achieved, however below forecast result due to project delays and scheduling. •

Comment: The ratio progressively increases each month as expenditure on renewals occurs as part of the capital works program. For transparency

QRA

Category

Comments disaster projects have been excluded from the ratio calculations. •

Intent: Outlines the level

Net Financial Liabilities Ratio that net Council debt can be serviced by operating revenues. A ratio below zero implies that liabilities are less than cash (and other current assets) and there is adequate borrowing capacity available if needed. •

Target: less than 60% •

Result: -36.2% •

Comment: Council has low debt levels and strong cash holdings which are reflected in the annual result. •

Intent: Ensure appropriate

Investment Return return on investment yield for cash at bank. •

Target: 0.25% above current Bloomberg commonwealth 10-year bond rate yield (4.39%) •

Result: 4.71% •

Comment: Council has invested surplus cash in higher yielding term deposits to maximise returns. Council’s investment returns remain above target. •

Intent: Ensuring that the

Rates in Arrears amount of unpaid rates remains sustainable and does not negatively impact cash flows •

Target: 5% industry benchmark •

Result: 4.9% •

Comment: Rates arrears are in line with performance for the previous 6 and 12 monthly cycles. Recovery action may be considered where appropriate.

Report details

Index: ECM/ Subject / 22.09 – Monthly Financial Performance Report