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Making this the most liveable, people friendly community in Australia.

Ordinary Council Meeting

SUPPLEMENTARY AGENDA

5.00pm Thursday 27 August 2015

Council and Committee Room 76-84 Deakin Avenue, Mildura

Cr Glenn Milne Mayor Cr John Arnold Deputy Mayor Cr Greg Brown Cr Ali Cupper Cr Mark Eckel Cr Judi Harris Cr Jill Joslyn Cr Sharyon Peart Cr Max Thorburn

INDEX

13 MANAGEMENT REPORTS .........................................................................................3

13.5 QUARTERLY FINANCIAL MANAGEMENT REPORT - JUNE 2015................3

13.6 VARIATION REQUEST FOR EVENT FUNDING ...........................................11

Supplementary Agenda - Ordinary Council Meeting Thursday 27 August 2015

13 MANAGEMENT REPORTS

13.5 QUARTERLY FINANCIAL MANAGEMENT REPORT - JUNE 2015

File Number: 02/01/07 Officer: General Manager Corporate

1. Summary This report presents Council’s draft financial position for the year ended 30 June 2015 through a number of standard reports that have been prepared using generally accepted accounting principles.

In summary, these reports show:

a surplus of $22.288 million;

capital expenditure of $26.533 million;

a cash balance of $36.388 million; and

investments of $2.288 million.

2. Recommendation That Council note the contents of the Quarterly Financial Management Report for 30 June 2015.

3. Background Financial regulations require certain reports comparing actual data against the Annual Budget to be prepared and presented to Council to facilitate decision making. Reports provided are:

draft Income Statement;

draft Balance Sheet;

draft Cash Flow Statement; and

draft Statement of Capital Works.

4. Discussion The budget process begins in December in order to meet required timeframes for the Annual Budget to be completed by 30 June. The figures in the Annual Budget are decided upon in February and March. This means that events occurring after this time, but prior to June, will not always be reflected in the Annual Budget and can cause variances to occur. The Annual Budget for 2014/15 was impacted by the forward payment of the Victorian Grants Commission (VGC) 2015/16 funding of $6.609 million into 2014/15. This artificially inflated Council’s operating result and is purely a timing issue due to the requirement to recognise grant income on the timing of the receipt.


Further to this significant savings have been evident in major utilities and service contracts which have also made a positive impact the year end result although these have been partially offset by a one-off write down of the value of Council’s land under roads and a delay in the receipt of a significant portion of budgeted capital funding. The June review of the annual budget is currently in progress. The annual financial statements are also being prepared in preparation of the audit visit on Wednesday 26 to Friday 28 August 2015. The annual financial statements along with the performance statements form part of Council’s Annual Report which is to be submitted to the Minister by the 30 September 2015. Income Statement Council’s operating gross turnover to the end of June 2015 is $99.655 million, which is $8.931 million above the budgeted forecast or ten per cent. As mentioned this is primarily due to a forward payment of VGC funding and a delay in Mildura Riverfront Precinct Redevelopment grant funding. Council’s expenditure to the end of June 2015 is $0.510 million above the budgeted forecast or one per cent. This has been impacted by savings resulting from better than anticipated utility and service cost contract rates although partially offset by asset value write downs. Overall, the operating result due to the above factors is $8.421 million ahead of budget expectation for the end of the financial year. A large portion of this additional surplus is required to be set aside for use in the 2015/16 year as it relates to unexpended grant funding. The net surplus for the period ended 30 June 2015 is $5.402 million above budget expectation. Balance Sheet Council’s balance sheet is $3.240 million or 0.5 per cent above the 30 June forecast. Cash Flow Statement Council’s cash balance for the period ending 30 June 2015 is $36,388 million, which is ahead of budget expectations. This is impacted by a change in the accounting treatment of short-term deposits, the forward payment of VGC funding and the timing in completion of the annual Capital Works Program. Statement of Capital Works Council is $10.876 million behind target for the year ending 30 June 2015 with total expenditure for the year of $26.533 million. However, additional commitments raised were $3.719 million. Therefore, total capital outlaid and committed at the 30 June 2015 is $30.252 million. The major impact on the capital works program was the timing of completion of parts of the Mildura Riverfront Precinct Redevelopment.

5. Time Frame This report relates to Council’s financial position as at 30 June 2015.


6. Strategic Plan Links This report relates to the Council Plan in the Key Result Area: 4.4 Financial Sustainability Goals to be achieved: financial sustainability; and meet the community’s needs in a financially responsible manner.

7. Asset Management Policy/Plan Alignment

There are no asset management implications associated with this report.

8. Consultation Proposed/Undertaken There are no consultation implications associated with this report.

9. Implications Policy Implication This report has been prepared in line with current Council policies. Legal/Statutory Implications The information in this report is dictated by Australian Accounting Standards and Best Practice Financial Reporting. Financial Implications The information provided in this report indicates that Council remains in a sound financial position. Environmental Implications There are no environmental implications associated with this report. Social Implications There are no social implications associated with this report.

10. Risk Assessment By adopting the recommendation, Council will not be exposed to any significant risk.

11. Conflicts of Interest

No conflicts of interest were declared during the preparation of this report.

12. Conclusion Council operating result has come in slightly ahead of budget expectation for the year ending 30 June 2015.

Attachments 1 Quarterly Financial Management Report - 30 June 2015


13.6 VARIATION REQUEST FOR EVENT FUNDING

File Number: 16/02/03 Officer: General Manager Community

1. Summary This report considers requests for variation to funding agreements for events planned for Mildura City Heart in October and November 2015.

2. Recommendation That Council approve variation to grants for the following events:

Event Date Previously

Approved Grant (GST excl.)

Additional Grant

(GST excl.)

Mildura Country Music Festival

Friday 25 September – Sunday 4 October 2015

$45,000.00 $10,000.00

Goanna Run Friday 23 October – Sunday 25 October 2015

$6,700.00 $5,368.00

Jazz Food and Wine Festival

Friday 30 October – Monday 2 November 2015

$20,000.00 $8,500.00

3. Background

Council has previously approved grants for the three events planned for Mildura City Heart (MCH) as identified above and Councillors are aware of circumstances which have led to the Mildura City Heart Board advising organisers that it cannot provide the funding support for these events in 2015.

As a result, event organisers have made formal requests for a variation to their initial grant agreement to enable these events to continue as planned. This process has been initiated to identify the shortfall in funding for the respective events and enable Council to consider additional assistance necessary to ensure the events can proceed.

4. Discussion

Discussions have been held between Council staff and event organisers and requests for variations have been received for Council’s consideration as follows:

Mildura Country Music Festival

This request for variation includes a description of alternatives which have been considered by the organising committee.


The alternatives considered were:

1. To move the event from the Mildura City Mall. This would have a dramatic effect on the traders’ sales during the 10 days of the Festival. If this was to occur and on being made public it would have had a significant flow on to those who were intending to travel to Mildura for the Festival and potentially reduce the number attending.

2. Reduce the number of days of performances by half in the Mildura City Mall. This would have the same effect as outlined in alternative consideration 1. Under this scenario, the artists that were to perform on the other days would still be under contract, required to be paid and would become frustrated with having nothing to do.

3. Absorb the non-payment and continue as planned. This deficit, added to the default of contract by the Mildura Workingman’s Club for entertainment at Wentworth Club (now closed) would put the future of the Festival at risk.

The Festival Committee have some reserve funds in place, but these are required to pay for day to day operations and advertising in advance prior to receiving funding from sponsors and venues.

Consideration of risks of not proceeding with the event as follows:

1. The risks of not continuing with the Mall entertainment are that the reputation of the Festival and Mildura as an event destination will be compromised.

2. There is a risk of people deciding not to attend the Festival if the Mall entertainment does not go ahead and this will flow on to the accommodation industry.

3. The program has been advised (sic) for many months and visitors would have made plans for accommodation and travel based on that information.

A contract of $20,000 was in place between the Country Music Festival and Mildura City Heart.

This request is for an additional $10,000 to be allocated for the event as Mildura City Heart has already paid 50 per cent of its agreed contribution.

Goanna Run

Organisers have included in their request that the only alternative considered is to cancel the event and the financial impact will render future events not viable.

The request is for an additional $5,000 to cover costs of the sound and light equipment for bands, entertainment costs and SES to supervise road closures.

Mildura City Heart (MCH) has advised that their costs last year for this event were $4,433. The event organiser has advised that the additional costs this year is due to payments for bands which have increased.

Discussions with the event organiser also considered a separate component of the Goanna Run which is normally held along Hugh King Drive at the riverfront on the morning of the first day of the event.


This discussion was based on the possibility that some works will still be being undertaken in the on-street parking normally used along the riverfront and a proposal was considered to park all vehicles on the grassland at Nowingi Place instead of using the roadway.

It was discussed how this would be an improvement for the display of vehicles for locals attending the show and shine part of this event, but this would also be a better outlook for visitors to the region who participate in the event. Consideration to this proposal also factored in the safety of participants, the exposure of the riverfront improvements and the increased activation of this part of the riverfront.

The additional cost involved with this would be the hire fee of Nowingi Place, which for this type of event is $368, bringing the total variation request to $5,368.

Mildura Jazz Food and Wine Festival

This request includes consideration of alternatives which included discontinuing the event, the feast street component of this festival and redesigning the event within the existing budget.

The request also included risks to be considered, being the ability of the Mildura City Heart to assist in the logistics and administration for the event.

The requested variation is an additional $12,855 and a detailed budget has been provided including the costs of audio and sound equipment, infrastructure and band costs, in addition to road closure costs and associated public liability contribution and risk assessments. Band performance fees are also included. The budget also includes $1,800 for a marketing contribution such as event design printing, distribution and administration costs of $1,500.

Mildura City Heart has advised that costs for the Jazz Food and Wine event last year were $8,075 and that their initial budget to contribute to this event for 2015 was $8,000. As this variation request is significantly higher than these amounts, discussions were held with the event organiser to clarify the budget. An opportunity was also provided to revise the requested amount. The organisers’ response was that the budget was developed to identify the real costs to Arts Mildura under their formal budgeting model.

This report has been developed for Council to consider funding to replace the shortfall experienced by each of the event organisations therefore, the recommended funding variation is based on the initial commitments expected to be provided by MCH.

Discussions with MCH Manager during the development of this report indicate that the logistical support and staffing assistance they normally provide for these events will continue.

5. Time Frame

As these events are planned for October and November 2015, planning for the events has progressed to a point where it would be difficult to cancel the events at this time. Applicants will be advised of the outcome of this report as soon as possible after a decision is made.


6. Strategic Plan Links This report relates to the Council Plan in the Key Result Area: 3.2 Tourism and Events

Goals to be achieved:

quality tourism services, experiences and events to attract visitors; and quality events and festivals.

7. Asset Management Policy/Plan Alignment

There are no asset management implications associated with this report.

8. Consultation Proposed/Undertaken Consultation has been undertaken between representatives of MCH, Council staff and event organisers. Further communication will continue pending the outcome of this report.

9. Implications Policy Implication The community grant program aligns with Council’s Grants Policy CP021 and requests for variation are in accordance with the Events & Festivals Grants Scheme. Legal/Statutory Implications Compliance with Disclosure of Interest Section 79 – Local Government Act. Financial Implications The recommended grant variations will be allocated from Council’s operational budget 2015/16. Enabling these events to proceed as planned will support event organisers to achieve the economic benefits for the community, in particular the traders of MCH. Environmental Implications There are no environmental implications associated with this report. Social Implications Supporting these additional grants recognises that events are a key ingredient to our social and economic fabric. They bring communities together, provide entertainment, fundraising opportunities and an opportunity to celebrate our heritage and special interests. They contribute to residents having a sense of pride in our community and can drive facility improvements creating long term legacies for the community.


10. Risk Assessment By adopting the recommendation, Council will be exposed to the following risks:

Risks Controls Residual Risk

Inappropriate use of Council funding

Funding allocated in accordance with Council Policy.

Successful applicants will be required to complete reporting and evaluation forms detailing expenditure and providing all receipts for monies spent after the events are held in accordance with original funding agreements.

Low

11. Conflicts of Interest

No conflicts of interest were declared during the preparation of this report. 12. Conclusion

Council’s approval of variation to the funding for these grants will demonstrate its ongoing support for the conduct of events in our community and will enable the traders of Mildura City Heart to take advantage of the events to derive additional business and economic benefits.

Attachments There are no attachments for this report.

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