AGENDA


Finance and Governance Committee

 

Tuesday, 15 June 2021

6.00pm

 

BLENDED MEETING

 

Dragon Meeting Room (First Floor, Georges River Civic Centre Hurstville)

and

Skype Online Meeting

 

 

 

 

 

 

 

 

 

 


Georges River Council – Finance and Governance Committee -  Tuesday, 15 June 2021                                             Page 2

 

 

 

 

 

 

 

 

 

OATH OF OFFICE OR AFFIRMATION OF OFFICE

All Georges River Councillors are reminded of their Oath of Office or Affirmation of Office made at the time of their swearing into the role of Councillor.

All Councillors are to undertake the duties of the office of Councillor in the best interests of the people of the Georges River Council area and are to act faithfully and impartially carry out the functions, powers, authorities and discretions vested in them under the Local Government Act 1993 or any other Act to the best of their ability and judgement.

 

 

DISCLOSURES OF INTEREST

All Georges River Councillors are reminded of their obligation to declare any conflict of interest (perceived or otherwise) in a matter being considered by Council or at any meeting of Council.

 

 

 

 

 

 


 

          Finance and Governance Committee

ORDER OF BUSINESS

 

1.      OPENING

2.      ACKNOWLEDGEMENT OF COUNTRY

3.      APOLOGIES / LEAVE OF ABSENCE

4.      NOTICE OF WEBCASTING

5.      DISCLOSURES OF INTEREST

6.      PUBLIC FORUM

7.      CONFIRMATION OF MINUTES OF PREVIOUS MEETING

FIN028-21         Confirmation of the minutes of the Finance and Governance Committee meeting held on 10 May 2021

(Report by Executive Services Officer)....................................................................... 4

8.      COMMITTEE REPORTS

FIN029-21         Administrative Matter - Execution of Documents Under Delegated Authority (1 May 2021 to 31 May 2021)

(Report by Manager, Office of the General Manager)........................................... 11

FIN030-21         Community Strategic Plan Review - Community Engagement Strategy 2021

(Report by Integrated Planning and Reporting Officer)......................................... 13

FIN031-21         Investment Report as at 30 April 2021

(Report by Coordinator, Financial Management)................................................... 25

 

 


Georges River Council – Finance and Governance Committee -  Tuesday, 15 June 2021                                             Page 4

CONFIRMATION OF MINUTES OF PREVIOUS MEETINGS

 

Item:                   FIN028-21     Confirmation of the minutes of the Finance and Governance Committee meeting held on 10 May 2021 

Author:              Executive Services Officer

Directorate:      Office of the General Manager

Matter Type:    Previous Minutes

 

 

RECOMMENDATION:

That the Minutes of the Finance and Governance Committee Meeting held on 10 May 2021 be confirmed.

 

 

ATTACHMENTS

Attachment 1

UNCONFIRMED Minutes - Finance and Governance Committee - 10 May 2021


Georges River Council -            Finance and Governance Committee - Tuesday, 15 June 2021

FIN028-21              Confirmation of the minutes of the previous meeting held on 10 May 2021

[Appendix 1]           UNCONFIRMED Minutes - Finance and Governance Committee - 10 May 2021

 

 

Page 6

 

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Georges River Council – Finance and Governance Committee -  Tuesday, 15 June 2021                                             Page 1

COMMITTEE REPORTS

 

Item:                   FIN029-21  Administrative Matter - Execution of Documents Under Delegated Authority (1 May 2021 to 31 May 2021) 

Author:              Manager, Office of the General Manager

Directorate:      Office of the General Manager

Matter Type:    Committee Reports

 

 

 

Recommendation:

That Council note, for the period 1 May 2021 to 31 May 2021, there were four documents executed by the General Manager under delegation.

 

Executive Summary

At its meeting on 24 February 2020, Council resolved that the General Manager report to Council any lease, contract or hire agreement (excluding staff contracts) executed under delegation.

REPORT

Council at its meeting on 24 September 2018, delegated to the General Manager the General Manager’s Delegations (Instrument of Delegation).

During the period 1 May 2021 to 31 May 2021 the following documents have been executed by the General Manager under Delegation.

Community Leases

Date Executed

Document Type

Premises

27 May 2021

Deed of Licence

 

Kingsgrove Community Centre, 30 Morgan Street, Kingsgrove (part)

Commercial Leases

Date Executed

Document Type

Premises

14 May 2021

Lease

Shop 3b, 34 MacMahon Street (Hurstville House)

20 May 2021

Deed of Consent (Assignment of Lease)

Shop 3, 34 MacMahon Street (Hurstville House)

Contracts

Date Executed

Document Type

 

17 May 2021

SSROC Contract

Waste (Clean Up)

Financial Implications

No budget impact for this report.

Risk Implications

No risks identified.

File Reference

D21/70880

 

 

 

  


Georges River Council – Finance and Governance Committee -  Tuesday, 15 June 2021                                             Page 1

Item:                   FIN030-21     Community Strategic Plan Review - Community Engagement Strategy 2021 

Author:              Integrated Planning and Reporting Officer

Directorate:      Office of the General Manager

Matter Type:    Committee Reports

 

 

 

Recommendation:

(a)     That Council endorse the Community Strategic Plan Review – Community Engagement Strategy 2021 attached to this report.

(b)     That the General Manager be delegated authority to make any necessary minor editorial changes prior to the commencement of community engagement.

 

Executive Summary

1.      This report is seeking Council endorsement of the Community Strategic Plan Review - Engagement Strategy 2021. 

2.      The Local Government Act 1993 stipulates that councils must establish and implement a Community Engagement Strategy, based on social justice principles, for engagement with the local community when developing the Community Strategic Plan.

3.      Georges River Council is committed to providing opportunities for consultation and participation and the Community Strategic Plan Review – Engagement Strategy 2021 will be used to guide the development of the Community Strategic Plan 2022-2032, undertaken by Georges River Council.

4.      Councillors were briefed on the Strategy (Attachment 1) and Priority List (Attachment 2) to be used for community engagement and feedback, at a Councillor Workshop in June 2021.

Background

5.      Local councils in NSW are required to undertake planning and reporting activities as part of an integrated planning framework in accordance with the Local Government Act 1993 and the Local Government (General) Regulation 2005. The integrated planning framework requires councils to prepare a long-term Community Strategic Plan, a Resourcing Strategy, a four (4) year Delivery Plan, an annual Operational Plan, an Annual Report and an End of Term Report.

6.      Under Section 402(4) of the Local Government Amendment (Planning and Reporting) Act 2009 councils are required to “establish and implement a strategy (its community engagement strategy) for engagement with the local community in connection with the development of the community strategic plan.”

7.      The Community Strategic Plan will be a long-term plan for the Georges River Community covering a period of at least ten (10) years. It is not expected that the plan will remain unchanged for that period and it is a requirement of the Local Government Act 1993 that the Community Strategic Plan is reviewed every four (4) years. Each council will complete the review of its Community Strategic Plan by 30 June in the year the review takes place and will roll forward the planning period by at least four (4) years so that it is always a ten (10) year minimum plan.

Financial Implications

8.      There is an allocated budget of $50,000 in the current financial year (2020/21) and a proposed budget of $30,000 for the ensuing financial year (2021/22).

Risk Implications

9.      There is a reputational risk for Council if the community doesn’t feel there’s been sufficient opportunity to contribute and/or the community needs are not addressed.

10.    The impact of COVID-19 and opportunities to undertake face to face targeted community engagement prior to the Local Government election in September 2021.

Community Engagement

11. Community engagement is detailed in the attachment to this report.

File Reference

21/473

 

 

 

ATTACHMENTS

Attachment 1

Community Strategic Plan Review - Engagement Strategy 2021

Attachment 2

Priorities list for Community Survey

 


Georges River Council -            Finance and Governance Committee - Tuesday, 15 June 2021

FIN030-21              Community Strategic Plan Review - Community Engagement Strategy 2021

[Appendix 1]           Community Strategic Plan Review - Engagement Strategy 2021

 

 

Page 1

 

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Georges River Council -            Finance and Governance Committee - Tuesday, 15 June 2021

FIN030-21              Community Strategic Plan Review - Community Engagement Strategy 2021

[Appendix 2]           Priorities list for Community Survey

 

 

Page 1

 

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Georges River Council – Finance and Governance Committee -  Tuesday, 15 June 2021                                             Page 1

Item:                   FIN031-21     Investment Report as at 30 April 2021 

Author:              Coordinator, Financial Management

Directorate:      Business and Corporate Services

Matter Type:    Committee Reports

 

 

 

Recommendation:

That Council receives and notes the contents of the Investment Report as at 30 April 2021.

 

Executive Summary

1.      This report details Council’s performance of its investment portfolio as at 30 April 2021 and compares it against key benchmarks.

2.      This report also includes the estimated market valuation of Council’s investment portfolio, loan liabilities and any required update on Council’s legal action against various parties.

3.      Council’s annualised rate of return is 1.56% which is 1.49% above benchmark. Income from interest on investments totals $1.45m which is $243k lower than the 2020/21 year-to-date adopted budget.

Background

4.      Council’s Responsible Accounting Officer is required to report monthly on Council’s Investment Portfolio and certify that the Investments are held in accordance with Council’s Investment Policy, Section 625 of the Local Government Act 1993 and Local Government (General) Regulation 2005.

Investment Performance Commentary

5.      Council’s performance against the benchmark for returns of its investment portfolio for April 2021, are as follows:

 

1 Month

3 Month

12 Month

Portfolio Performance

0.08%

0.25%

1.56%

Performance Index

0.00%

0.01%

0.07%

Excess

0.08%

0.24%

1.49%

Notes:                                                      

(a)     Portfolio performance is the rate of return of the portfolio over the specified period.

(b)     The Performance Index is the Bloomberg Ausbond Bank Bill Index.   

(c)     Excess performance is the rate of return of the portfolio in excess of the (b) Performance Index.

6.     
Council’s investment portfolio as at the end of April 2021 was as follows:

Security Type

Market Value $000's

% Total Value

At Call Deposit

11,061

7.17%

Consolidated Cash Fund

10,803

7.00%

Covered Floating Bond

1,007

0.65%

Flexi Deposit (Fix/Float)

6,000

3.89%

Floating Rate Deposit

7,000

4.54%

Floating Rate Note

33,455

21.68%

Term Deposit

                        78,013

   50.55%

Fixed Rate Deposit

7,000

4.54%

Total Cash and Investments

154,339

100.00%

7.      At the end of March 2021, Total Cash and Investments were $158.2 million which have decreased by $3.9m at the end of April 2021.

8.      Council continues to utilise the Federal Government’s current guarantee ($250k) investing in Term Deposits with a range of Authorised Deposit Taking Institutions (ADI’s) on short to medium term investments (generally 30 days to 180 days maturity).

Legal Matters

9.      Georges River Council is participating in a Group Class Action against Fitch Ratings Inc., in respect to losses suffered on the Corsair (Cayman Islands) No.4 Ltd Series 6 Kakadu Collateralised Debt Obligation (CDO) notes. Council suffered a capital loss of $214,812 on these investments dating back to December 2006 and will seek damages of the capital loss, including lost interest, as part of the action.

Banton Group are the legal firm working on the matter and have been investigating a new potential issue with Fitch’s ratings model since last November. Banton have continued to confer with counsel to discuss the best option in the potential commencement of proceedings against Fitch Ratings Inc. in the near term. Further updates will be presented to Council as they are received.

Borrowings

10.    Council’s loan liability, as of 30 April 2021 was $750k, which represents the balance of a $5m/10-year loan drawn down on 16 November 2012 for the Jubilee Park upgrade in Mortdale. The next repayment of $125k is due on 24 June 2021.

11.    The outstanding balance on this facility is at a variable interest rate of 195 basis points above the three-month BBSW. At the current three-month BBSW rate, the interest rate payable is 1.99% pa.

12.    Council receives a 4% p.a. interest subsidy under the NSW Government’s Local Infrastructure Renewal Scheme funding agreement for the Jubilee Park upgrade facility. It is intended to continue this financially advantageous arrangement through to full term in 2022.

Policy Limits

13.    The graph below shows the Investment Rating limits, as a percentage of total cash investments, which are allowed under Council’s Investment policy. It also compares them to the amounts invested, as a percentage of the total cash investments. It shows that the funds invested are within the limits set in the Investment Policy.

 

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Investment Income

14.    Income from interest on investments to 30 April 2021 is $1.45m which is $243k lower than the 2020/21 year-to-date adopted budget.

15.    Investments have been made in accordance with the Local Government Act 1993, Minister’s Guidelines, Regulations and Council’s Investment Policy.

Analysis of Investments

Investment Duration

Investment Term

Market Value ‘000

% Total Value

Policy Limits

0 to < 1 Year

85,458

55.37%

100%

1 to < 3 Years

57,316

37.14%

70%

3 to < 5 Years

11,565

7.49%

50%

Portfolio Total

154,339

100.00%

 

 

16.    Council’s portfolio is liquid, with 55.37% of assets maturing within 12 months. FRNs, At-Call Funds and Fixed Bonds also provide additional liquidity in an emergency.

17.    The following graphs show analysis of the total cash investment by institution:  

 

 

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Type of Investments

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18.    The majority of Council’s investment portfolio is made up of fixed term deposits, which account for approximately 51% of total investments.

19.    Bank Floating Rate Notes (FRN) can offer liquidity and a higher rate of income accrual, which is highly recommended by our Investment Advisors (CPG Research & Advisory).

20.    The following are the types of investments held by Council:

a)      Cash and Call Accounts refer to funds held at a financial institution and can be recalled by Council either same day or on an overnight basis.

b)      An FRN is a debt security issued by a company with a variable interest rate. This can either be issued as Certificates of Deposit (CD) or as Medium-Term Notes (MTN). The interest rate can be either fixed or floating, where the adjustments to the interest rate are usually made quarterly and are tied to a certain money market index such as the Bank Bill Swap Rate.

c)      A Fixed Term Deposit is a debt security issued by a company with a fixed interest rate over the term of the deposit.

d)      A Fixed Rate Deposit is a debt security issued by a government in a form of fixed rate of interest at a specified time.

Credit Rating

21.    Credit ratings are generally a statement as to an institution’s credit quality. Council’s Investment Advisors (CPG Research & Advisory) use Standard & Poor’s Credit ratings to classify the investments held by Council. Ratings ranging from AA to BBB (Short Term) & AA to BBB (long term) are considered investment grade.

22.    A general guide as to the meaning of each credit rating that Council deals with is as follows:

Short-term

AA:            The best quality companies, reliable and stable. An obligor’s capacity to meet its financial commitments on the obligation is very strong.

A:               The obligor’s capacity to meet its financial commitments on the obligation is still strong but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions.

BBB:          Adequate capacity to meet financial commitments, but adverse economic conditions or changing circumstances are more likely to weaken the obligor’s capacity to meet its financial commitments.

Unrated:   This category includes unrated Authorised Deposit-Taking Institutions (ADI’s) such as some Credit Unions and Building Societies to the extent not Commonwealth-guaranteed. No rating has been requested, or there is insufficient information on which to base a rating.      

Long-term

AA:            Quality companies, a bit higher risk than AAA. An obligor has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors only to a small degree.

A:               Economic situation can affect finance. An obligor has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in higher-rated categories.

BBB:          Medium class companies, which are satisfactory at the moment. An obligor has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.

Unrated:  This category includes unrated Authorised Deposit-Taking Institutions (ADI’s) such as some Credit Unions and Building Societies to the extent not Commonwealth-guaranteed. No rating has been requested, or there is insufficient information on which to base a rating.

23.    The credit quality of Council’s portfolio is relatively high with approximately 94% of assets rated ‘A’ or higher. The ‘AAA’ assets represent the deposit investments covered by the Federal Government’s Financial Claims Scheme (FCS).

24.    The remaining 6% rated ‘BBB’ or ‘unrated’ reflects the deposit and FRN investments with the regional and unrated ADIs.

Council’s Investment Powers

25.    Council’s investment powers are regulated by Section 625 of the NSW Local Government Act 1993, which states:

·        A council may invest money that is not, for the time being, required by the council for any other purpose.

·        Money may be invested only in a form of investment notified by order of the Minister published in the Gazette.

·        An order of the Minister notifying a form of investment for the purposes of this section must not be made without the approval of the Treasurer.

·        The acquisition, in accordance with Section 358, of a controlling interest in a corporation or an entity within the meaning of that section is not an investment for the purposes of this section.

26.    Council’s investment policy and strategy requires that all investments are to be made in accordance with:

·        Local Government Act 1993 - Section 625.

·        Local Government Act 1993 - Order (of the Minister) dated 12 January 2011.

·        The Trustee Amendment (Discretionary Investments) Act 1997 - Sections 14A (2), 14C (1) & (2).

·        Local Government (Financial Management) Regulation 1993.

·        Investment Guidelines issued by the Department of Local Government.

Financial Implications

27.    Income from interest on investments totals $1.45m which is $243k lower than the 2020/21 year-to-date adopted budget.

Risk Implications

28.    Enterprise risk/s identified, and management process applied.

29.    Council’s enterprise risk identified was ‘poor financial management adversely impacts Council’s long-term financial sustainability’. The risk has been managed by Council’s management of investments in accordance with the relevant act and regulations, along with Council adopted Investment Policy. To further minimise the risk, Council will progressively move towards the placement of investments only in investments rated A or above.

COMMUNITY ENGAGEMENT

30.    No community consultation is required as a result of this report. Members of the community can attend and address Council at the Council meeting in relation to this matter in accordance with Council’s Code of Meeting Practice.

File Reference

D21/124152

 

 

ATTACHMENTS

Attachment 1

Investment Report - As at 30 April 2021 (2)