AGENDA


Finance and Governance Committee

 

Monday, 09 August 2021

6.00pm

 

Skype Online Meeting

 

 

 

 

 

 

 

 

 

 


Georges River Council – Finance and Governance Committee -  Monday, 9 August 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

FIN035-21         Confirmation of the Minutes of the Finance and Governance Committee meeting held on 12 July 2021

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

8.      COMMITTEE REPORTS

FIN036-21         Administrative Matter - Execution of Documents Under Delegated Authority (1 July 2021 to 31 July 2021)

(Report by Manager, Office of the General Manager)............................................. 8

FIN037-21         Report on Outstanding Council Resolutions (Period up to and including 30 June 2021)

(Report by Executive Services Officer).................................................................... 10

FIN038-21         Investment Report as at 30 June 2021

(Report by Coordinator, Financial Management)................................................... 40

FIN039-21         Adoption of Georges River Council Information Guide 2021

(Report by Governance and Risk Specialist).......................................................... 55

 

 


Georges River Council – Finance and Governance Committee -  Monday, 9 August 2021                                           Page 4

CONFIRMATION OF MINUTES OF PREVIOUS MEETINGS

Item:                   FIN035-21     Confirmation of the Minutes of the Finance and Governance Committee meeting held on 12 July 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 12 July 2021 be confirmed.

 

 

ATTACHMENTS

Attachment 1

Unconfirmed Minutes - Finance and Governance Committee 12 July 2021


Georges River Council - Finance and Governance Committee - Monday, 9 August 2021

FIN035-21              Confirmation of the minutes of the previous meeting held on 12 July 2021

[Attachment 1]        Unconfirmed Minutes - Finance and Governance Committee 12 July 2021

 

 

Page 6

 

 



Georges River Council – Finance and Governance Committee -  Monday, 9 August 2021                                           Page 8

COMMITTEE REPORTS

Item:                   FIN036-21          Administrative Matter - Execution of Documents Under Delegated Authority (1 July 2021 to 31 July 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 July 2021 to 31 July 2021, there were four (4) 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 July 2021 to 31 July 2021 the following documents have been executed by the General Manager under Delegation.

Community Leases

Date Executed

Document Type

Premises

7 July 2021

Lease Renewal

49 English Street, Kogarah

Premium Facilities

Date Executed

Document Type

Premises

28 July 2021

Deed of Variation (naming rights)

Netstrata Jubilee Stadium

Licence Agreement

Date Executed

Document Type

Premises

9 July 2021

Licence Agreement (Douglas Hanly Moir)

Morshead Rd, Poulton Park

30 July 2021

Licence Agreement (Medlab Pathology)

Kingsgrove Community Centre

 


Financial Implications

No budget impact for this report.

Risk Implications

No risks identified.

File Reference

D21/184015

 

 

 

  


Georges River Council – Finance and Governance Committee -  Monday, 9 August 2021                                           Page 10

Item:                   FIN037-21     Report on Outstanding Council Resolutions (Period up to and including 30 June 2021) 

Author:              Executive Services Officer

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

 

 

 

RECOMMENDATION:

That the report on Outstanding Council Resolutions (period up to and including 30 June 2021), be received and noted.

 

EXECUTIVE SUMMARY

1.      This report provides progress on outstanding resolutions up to and including 30 June 2021.

BACKGROUND

2.      Attachment 1 contains all Council resolutions that remain outstanding or require further action. 

3.      Completed items have been marked accordingly and will be removed from future reports. 

FINANCIAL IMPLICATIONS

4.      There are no budget implications for this report.

RISK IMPLICATIONS

5.      The Enterprise Risk Management Strategy contains relevant actions in regard to the provision of an open, accessible and transparent decision making and meeting process.  The quarterly consideration of this report ensures that Councillors and members of the community are informed regarding the status of implementation of council resolutions.  Operational risk/s identified, and management process applied.

 

COMMUNITY ENGAGEMENT                             

6.      Members of the community can attend and address Council meetings in accordance with Council’s Code of Meeting Practice.

 

FILE REFERENCE

D21/165788

 

 

 

ATTACHMENTS

Attachment 1

Outstanding Council and Committee Resolutions - up to and including 30 June 2021- MASTER DOCUMENT

 


Georges River Council - Finance and Governance Committee - Monday, 9 August 2021

FIN037-21              Report on Outstanding Council Resolutions (Period up to and including 30 June 2021)

[Attachment 1]        Outstanding Council and Committee Resolutions - up to and including 30 June 2021- MASTER DOCUMENT

 

 

Page 12

 


Georges River Council – Finance and Governance Committee -  Monday, 9 August 2021                                           Page 1

Item:                   FIN038-21     Investment Report as at 30 June 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 June 2021.

 

Executive Summary

1.      This report details Council’s performance of its investment portfolio as at 30 June 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 1.35% which is 1.29% above benchmark. Income from interest on investments totals $1.69 million which is $344,000 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 June 2021, are as follows:

 

1 Month

3 Month

12 Month

Portfolio Performance

0.07%

0.24%

1.35%

Performance Index

0.00%

0.01%

0.06%

Excess

0.07%

0.23%

1.29%

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 June 2021 was as follows:

Security Type

Market Value $000's

% Total Value

At Call Deposit

                            11,067

6.9%

Consolidated Cash Fund

                            13,898

8.7%

Flexi Deposit (Fix/Float)

                              6,000

3.7%

Floating Rate Deposit

                              7,000

4.4%

Floating Rate Note

                            31,534

19.6%

Term Deposit

                            84,013

52.3%

Fixed Rate Deposit

                              7,000

4.4%

Portfolio Total

                         160,512

100.00%

7.      At the end of May 2021, total cash and Investments were $159 million which has increased by $1.5 million at the end of June 2021.

8.      Council continues to utilise the Federal Government’s current guarantee ($250,000) 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).

Policy Limits

9.      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.

 

 

Investment Income

10.    Income from interest on investments to 30 June 2021 is $1.69 million which is $344k lower than the 2020/21 year-to-date adopted budget.

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

Type of Investments

12.    The majority of Council’s investment portfolio is made up of fixed term deposits, which account for approximately 52% of total investments.

13.    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).

14.    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.

Analysis of Investments

15.    Investment Duration

Investment Term

Market Value $000's

% Total Value

Policy Limits %

0 to < 1 Year

                  99,513

62.00%

100

1 to < 3 Years

                  49,315

30.72%

70

3 to < 5 Years

                  11,684

7.28%

50

Portfolio Total

                 160,512

100.00%

 

16.    Council’s portfolio is liquid, with 62% 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:  


 

Credit Rating

18.    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.

19.    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.

20.    The credit quality of Council’s portfolio is relatively high with approximately 97% of assets rated ‘A’ or higher. The ‘AAA’ assets represent the deposit investments covered by the Federal Government’s Financial Claims Scheme (FCS).

21.    The remaining 3% rated ‘BBB’ or ‘unrated’ reflects the deposit and FRN investments with the regional and unrated ADIs.

Council’s Investment Powers

22.    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.

23.    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.

Legal Matters

24.    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.

25.    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

26.    Council’s loan liability, as of 30 June 2021, was $625,000 which represents the balance of a $5 million/10-year loan drawn down on 16 November 2012 for the Jubilee Park upgrade in Mortdale. The next repayment of $125,000 is due on 24 September 2021.

27.    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 1.98% pa.

28.    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.

Financial Implications

29.    Income from interest on investments totals $1.69 million which is $344k lower than the 2020/21 year-to-date adopted budget.

Risk Implications

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

31.    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

32.    No community consultation is required because of this report. Members of the community can register to speak on this matter at a meeting of Council. With consideration to the current COVID-19 restrictions, registered speakers have the option of addressing the meeting remotely or providing a written submission for staff to read to the relevant meeting. 

File Reference

D21/133333

 

 

ATTACHMENTS

Attachment 1

Investment Report - as at 30 June 2021

 


Georges River Council - Finance and Governance Committee - Monday, 9 August 2021

FIN038-21              Investment Report as at 30 June 2021

[Attachment 1]        Investment Report - as at 30 June 2021

 

 

Page 1

 









Georges River Council – Finance and Governance Committee -  Monday, 9 August 2021                                           Page 1

Item:                   FIN039-21     Adoption of Georges River Council Information Guide 2021 

Author:              Governance and Risk Specialist

Directorate:      Business and Corporate Services

Matter Type:     Committee Reports

 

 

 

Recommendation:

That Council adopt the Georges River Council Information Guide 2021 and the Guide be placed on Council’s website.

 

Executive Summary

1.      The Government Information (Public Access) Act 2009 (the GIPA Act), prescribes that Council must undertake a review of Council’s Information Guide and notify the Information Commissioner prior to adopting or amending the Information Guide. 

2.      The attached Georges River Council Information Guide 2021 is submitted to Council for adoption.

Background

3.      The aim of Council’s Information Guide is to allow the public to identify and access government information held by an agency. The Information Guide promotes the objectives of the GIPA Act by opening government information to the public at the lowest possible cost and encouraging public participation in Council’s functions and decision making process.

4.      Sections 20 and 21 of the GIPA Act prescribe that council must develop and adopt an Information Guide and undertake regular reviews. 

5.      From this review the changes made include:

·        Grammatical amendments

·        Illustration and layout updates

·        Expansion of information on how the public can engage on planning and the decision making process (i.e. Your Say Georges River feedback forum and Community E-Newsletter).

6.      Section 22 of the GIPA Act prescribes that Council must notify the Information Commissioner before adopting or amending an agency information guide.  Council has updated its Information Guide. 

7.      The Information Commissioner assessed Council’s Information Guide against the requirements of the GIPA Act and its own guide (Guideline 6: Agency Information Guides) and provided feedback which will assist Council when it next reviews the Information Guide in 2022. 

Financial Implications

8.      No budget impact for this report.

Risk Implications

9.      No risks identified.

File Reference

D21/172415

 

 

 

ATTACHMENTS

Attachment 1

Georges River Council Information Guide - August 2021

 


Georges River Council - Finance and Governance Committee - Monday, 9 August 2021

FIN039-21              Adoption of Georges River Council Information Guide 2021

[Attachment 1]        Georges River Council Information Guide - August 2021

 

 

Page 1