2018-2019 Gladstone Regional Council Annual Report

2018/19 Annual Report

Connect. Innovate. Diversify.

Connect. Innovate. Diversify.

Connect. Innovate. Diversify.

Connect. Innovate. Diversify.

VISION

CONNECT. INNOVATE. DIVERSIFY.

MISSION

We are Gladstone Regional Council, working together to balance our region’s lifestyle and opportunity.

VALUES S

SAFE

We are uncompromising in our commitment to safety, which is reflected in our attitude, our decisions and our actions.

E

ETHICAL

We operate with transparency, openness and accountability at the fore.

Gladstone Regional Council 2018/19 Annual Report

R

V

We respond by being present, proactive and solutions-focused, and we deliver on our commitments.

We plan as futuresthinkers and opportunity seekers and we have the courage to shape a better future for our community.

RESPONSIVE VISIONARY

I

C

E

We create and value diversity and we actively demonstrate our commitment to equality and inclusivity.

We care about each other and our environment and we recognise that community is the core of our business.

We deliver; we challenge the status quo and we continually find better ways to reduce cost and improve services.

INCLUSIVE COMMUNITY EFFICIENT

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TABLE OF CONTENTS. Our Charter ............................................................................................................ 2 Welcome .................................................................................................................4 The Gladstone Region ............................................................................................. 5 Community Snapshot ...............................................................................................6 By the Numbers ...................................................................................................... 8 Goals and Strategies ............................................................................................... 9 Mayor’s Report ......................................................................................................10 CEO’s Report ........................................................................................................ 11 Significant Events Calendar ....................................................................................12 Our Councillors ......................................................................................................14 Planning Framework ............................................................................................. 18 Corporate Plan Reporting ...................................................................................... 19 Operational Plan Reporting ................................................................................... 20 Organisational Structure ....................................................................................... 27 Senior Leadership Team ........................................................................................ 28 Council Employees ................................................................................................ 31 Staff Development ................................................................................................ 32 Our Governance .................................................................................................... 33 Community Development ....................................................................................... 36 Economic Opportunity .......................................................................................... 38 Performance Snapshot .......................................................................................... 42 Community Financial Report .................................................................................. 44 2018/19 Budget ................................................................................................... 46 Financial Ratio Performance .................................................................................. 48 Rates in Action ......................................................................................................53 Financial Statements ..............................................................................................54 Statutory Information ...........................................................................................127 List of Acronyms and Abbreviations ......................................................................................................133 List of Graphs and Tables ....................................................................................133 List of Diagrams and Figures ...............................................................................133 Glossary of Terms ...............................................................................................134 Contacts ..............................................................................................................135 Feedback ............................................................................................................136

Flat Rock, one of the regions’ fishing hotspots.

Gladstone Regional Council 2018/19 Annual Report

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WELCOME. Welcome to Gladstone Regional Council’s Annual Report for 2018/19 Our theme for this year’s annual report is “Connect. Innovate. Diversify.” in line with our Corporate Plan 2018-2023. This theme reflects the focus to truly connect with our community and environment and to future-proof our organisation to deliver according to the needs of that community. The intent is to meet these needs in an efficient and responsive manner, embracing innovation and taking a value for money approach to service delivery. The year 2018/19 represents the start of the journey to create a strong fabric of community connectedness; an organisation whose culture is proudly defined by innovation and a region that celebrates the diversification of opportunities and lifestyle.

About this report The Annual Report provides an overview of the activities of Gladstone Regional Council during the 2018/19 financial year, progress toward achieving the Corporate Plan and financial information as at 30 June 2019.

The report also includes governance and statutory information, providing the disclosure requirements regulated under the Queensland Local Government Act 2009 and the Queensland Local Government Regulation 2012.

Feedback We value your feedback on this report as it helps us to make our next report better.

If you would like further information on any of the content of this report or would like to obtain a copy of the report, please contact us.

Email any feedback or requests to info@gladstone.qld.gov.au Speak to a Council Team Member 07 4970 0700

The Gladstone Region, a great place to live, work and play.

Gladstone Regional Council 2018/19 Annual Report

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THE GLADSTONE REGION. From the majestic heights of Kroombit Tops in the west through to the deep coral lagoons of the Southern Great Barrier Reef, the Gladstone Region provides the population of 63,000 people with an enviable lifestyle within a strong and dynamic economy.

The Gladstone Regional Council local government area is located in Central Queensland, about 550 kilometres north of Brisbane. It is bounded by the Coral Sea in the north-east and east, the Bundaberg and North Burnett Regional Council areas in the south, the Banana Shire in the west and the Rockhampton Regional Council area in the north-west.

The region encompasses a total land area of 10,489 square kilometres which includes national parks, state forests, pristine coastline, beaches and islands along with major industry, including three Liquified Natural Gas (LNG) plants on Curtis Island, two of the world’s largest alumina refineries, an aluminium smelter, a power station, cement and chemical manufacturers and Queensland’s largest multi-commodity port, based on volume. The region has also attracted recent announcements to construct renewable energy pilot plants.

In addition, Gladstone has a State Development Area which is positioned to provide a unique and ideal investment location for projects of national and international significance.

The region is well developed and supports a growing residential population, with significant rural, residential and industrial development. The retail and service sector is reinforced by the modern, urbanised city of Gladstone, together with major industry, tourism and primary production, providing abundant choice for workers and opportunities for business people. Infrastructure and services, including a modern regional airport, continue to support the localised identity of the communities across the region.

Balanced with large areas of green open space, including several national parks, historical sites, bush walks, trails and marine and recreational opportunities, residents have a wide choice to explore and experience the great outdoors.

The region boasts an ideal tropical climate; with average temperatures ranging from a moderate 1820 degrees Celsius in winter and up to 27-29 degrees Celsius in summer, it also makes for the perfect holiday destination. On average, the region receives 967mm of rainfall annually.

The Gladstone Region comprises the urban centres of Gladstone, Calliope, Boyne Island/Tannum Sands plus the small towns of Agnes Water, Ambrose, Baffle Creek, Benaraby, Bororen, Builyan, Lowmead, Miriam Vale, Mount Larcom, Many Peaks, Nagoorin, Raglan, Rosedale, Seventeen Seventy, Targinnie, Turkey Beach, Ubobo and Yarwun. Many small localities also exist in between these townships.

The region is the gateway to the majestic Southern Great Barrier Reef, with access points for the iconic Heron and Wilson Islands. Day trips also depart from the Seventeen Seventy marina, allowing residents and visitors to access some of the best parts of the Great Barrier Reef.

The beach at Agnes Water is enticing for surfers, as it is the most northern surf beach on the east coast of Australia. One of Australia’s premier freshwater fishing locations, Lake Awoonga, is also located within the region. Famous for its elusive barramundi, Lake Awoonga’s world-class barramundi fishing draws many fishing enthusiasts to the region.

Like many other local government areas in Queensland, a challenge ahead will be to maintain the standard of our current environment while balancing lifestyle and opportunity.

From coastlines to creeks and major industry, we have it all.

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We are proud to provide residents with enviable parklands.

COMMUNITY SNAPSHOT. Population The estimated resident population for the Gladstone Region as reported by Australian Bureau of Statistics, Regional Population Growth, Australia as at 30 June 2018 was 62,979 residents. This represents a 0.29% increase over the previous year and a 13.6% increase over the last decade. This is the first time since 2015 that the Gladstone Region residential population has recorded positive growth. By comparison Queensland’s annual population growth rate (1.7%) was slightly higher than the national average (1.6%) for the year ending 30 June 2018. The Gladstone Region encompasses a total land area of 1,050,554 hectares with a population density of 0.06 persons per hectare.

0-14 years

15-24 years

25-34 years

35-44 years

45-54 years

55-64 years

65+ years

The median age is 36.1

22%

12%

13.8%

14%

15%

12%

11.2%

years.

Gladstone Region population is projected to be 75,327 persons as at 30 June 2041, an increase of 0.7% per year over 25 years.

Employment In the Gladstone Regional Council area, Manufacturing was the largest employer, generating 3763 local jobs in 2017/18 (most current data available). The three largest employing industry sectors in the Gladstone Regional Council area identified as:

The number of local workers in the Gladstone Regional Council area increased by 883 between 2016/17 and 2017/18.

•

Manufacturing (3763 people or 12.5%)

The largest changes in the jobs held by local workers between 2016/17 and 2017/18 in the Gladstone Regional Council area were for those employed in:

•

Retail Trade (3192 people or 10.6%)

•

Mining (-402 local workers)

•

Construction (2942 people or 9.7%)

•

Retail Trade (+286 local workers)

•

Public Administration and Safety (+235 local workers)

In combination these three industries accounted for 9898 people in total or 32.8% of the local workers.

Gladstone Regional Council 2018/19 Annual Report

•

Health Care and Social Assistance (+234 local workers)

Unemployment In the 2019 March quarter, the unemployment rate in the Gladstone Regional Council area was 7.27%. This marked a steady reduction in unemployment over the four-quarter period from March 2018.

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Residential Approvals

61

870

APPROVED RESIDENTIAL DEVELOPMENTS THE 12 MONTHS ENDING 30.06.2019

$21.206M

OF BUILDING VALUE IN RESIDENTIAL BUILDING APPROVALS

MEDIAN VACANT LAND SALE PRICE

$130,000

99 36

VACANT LAND SALES

NEW HOUSE SALES IN THE 12 MONTHS ENDING 31.03.2019

RESIDENTIAL DWELLING SALES IN THE 12 MONTHS ENDING 31.03.2019

$92.28M

IN NON-RESIDENTIAL DEVELOPMENTS

MEDIAN SALE PRICE

$275,000

MEDIAN NEW HOUSE SALE PRICE

$300,000

20 35

URBAN RESIDENTIAL LOT REGISTRATIONS

RESIDENTIAL LOT REGISTRATIONS IN THE 12 MONTHS ENDING 30.06.2019

*The unemployment rate is derived from the ABS labour force survey and Centrelink data and compiled by the Department of Employment. It is published quarterly in the Small Area Labour Markets publication, for Local Government Areas. The unemployment rate shown here is the proportion of the resident labour force (those in work or looking for work and aged over 15) who are looking for work. Unemployment does not include people who don’t have a job but are not seeking a job.

Gladstone Regional Council 2018/19 Annual Report

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BY THE NUMBERS.

25,253 27 274,002 591 172 59 33 114,222 2594 117 318,603 61,937 230,389 647,426 25,253

NUMBER OF DOMESTIC RECYCLING (YELLOW TOP) WHEELIE BINS OF 240L AND 152 HOUSEHOLDS WITH AN ADDITIONAL YELLOW-TOP WHEELIE BIN

NUMBER OF OUR SPORTS RESERVES COVERING 423 HECTARES

NUMBER OF VISITS TO LIBRARIES

NUMBER OF OUR PARKS AND RESERVES COVERING 682 HECTARES

NUMBER OF KILOGRAMS OF GENERAL WASTE GENERATED PER YEAR PER HOUSEHOLD

NUMBER OF OUR OPEN SPACES COVERING 785 HECTARES

NUMBER OF ITEMS IN THE LIBRARY AVAILABLE FOR LOAN

NUMBER OF ITEMS TAKEN OUT ON LOAN DURING THE YEAR

NUMBER OF OUR ENVIRONMENTAL RESERVES ACROSS 36,371 HECTARES

NUMBER OF KILOMETRES OF COUNCIL MAINTAINED ROADS

NUMBER OF NEW AUSTRALIAN CITIZENS SWORN INTO THE GLADSTONE REGION

NUMBER OF PEOPLE ENGAGED THROUGH SHOWS, FUNCTIONS AND COMMUNITY EVENTS HOSTED BY, OR AT, THE GLADSTONE ENTERTAINMENT CONVENTION CENTRE

NUMBER OF VISITORS TO TONDOON BOTANIC GARDENS INCLUDING SPECIAL EVENTS SUCH AS MARKETS AND ACTIVITY MORNINGS (10,000), LUMINOUS (9000) AND ECOFEST (9000)

NUMBER OF PAGES VIEWED BY CUSTOMERS ON COUNCIL’S WEBSITE

NUMBER OF HOUSEHOLDS WITH RED-TOP WHEELIE BINS OF 240L AND 321 HOUSEHOLDS WITH AN ADDITIONAL RED-TOP WHEELIE BIN, GENERATING 14,845 TONNES OF GENERAL WASTE

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GOALS AND STRATEGIES. There are nine strategic goals which help to guide the organisation through its journey to Connect. Innovate. Diversify.

1.

2.

3.

4.

5.

6.

7.

8.

9.

Engaged, involved and proud communities Healthy environment, healthy community Our people, our values Ethical and responsible government Outstanding customer service Smart asset management Operational excellence Grow the region Smart investment

The achievement of these goals is supported by strategies which outline a course of action to realise the vision of Council and the community, meeting long-term challenges and opportunities. These plans and strategies are under continual review.

Identified Key Strategies include: • • • • • • • • • • • • • • • • • • • •

Community Asset Activation Strategy Strategic Plan for Tondoon Botanic Gardens Regional Events Strategy GRC Libraries Strategic Plan Internal Communications Strategy Return to Insourcing Strategy Apprenticeship, Graduate & Trainee Framework Diversity and Inclusion Framework Leadership Culture Strategy Performance Framework Harbour Arbour Funding Strategy Corporate Business Case Framework Project Management Framework Biofutures Strategy RV strategy ICT Strategic Plan ERP: Technology Plan - Research Waste to Energy Strategy Sustainable Water Management Strategy Asset Information Sharing and Training Strategy

We are committed to maintaining our community assets responsibly.

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MAYOR’S REPORT. The organisational restructure that began during the last financial year was followed in 2018/19 with Council introducing its vision of ‘Connect. Innovate. Diversify’.

Those three words sum up what we, as a Council, intend to do for our ratepayers and customers.

We are working to ‘connect’ with residents by supporting communities to be more engaged, involved and proud. Council committed to investing further in community development, arts and culture programs, library services and more park and open space development during 2018/19.

Projects like the Bray Park pump track/skatepark, the Boyne Tannum Aquatic Recreation Centre feasibility study and concept design, the redevelopment of Tom Jeffery Park at Agnes Water and work starting on the Philip Street Community and Families Precinct demonstrate a commitment to connecting and providing for the community.

We continued to improve our customer service function using face-to-face and technology centred practices to ‘connect’ with customers and resolve queries more quickly.

Council is working to ‘innovate’ more as an organisation through the smart management of our $2.3 billion worth of assets. Our aim is to achieve operational excellence across our significant and diverse work deliveries. We are developing practices that support smart infrastructure decisions and provide reliable, sustainable infrastructure for the Gladstone Region.

We are committed to diversify by growing our region through smart investment and actively promoting and supporting economic development.

That development in the coming year will be reflected in renewable energy projects embracing biofuels and solar energy, and the continued development of effective waste management practices.

A review of the year would not be complete without mentioning the bushfires that impacted the Baffle Creek, Deepwater, Mount Larcom and surrounding areas in late November. These communities had never faced a more challenging time, but we are grateful they came through it with the hard work and dedication of all our Emergency Services.

Council will continue to connect and engage with affected residents to ensure lessons from that period have been well learnt for the future.

I am optimistic that by continuing to work with all levels of government to secure funding opportunities, listening to feedback from our community and focusing on diversifying ways in which we do business, the Gladstone Region will signal a new phase of growth in the coming year.

Cr Matt Burnett Mayor Gladstone Region

Mayor’s Memorable Moments Reflecting on the year that was, Mayor Matt Burnett pinpointed some of the most memorable moments for the Gladstone Region from 2018/19: •

Welcoming 16 new apprentices and trainees to the business, the most Council has employed in the past three years

•

Celebrating Tondoon Botanic Gardens 30th birthday and introducing a new community event, Luminous, a spectacular evening of light, art and entertainment

•

Appointing our new Chief Executive Officer, Leisa Dowling

•

Showcasing our region on Channel 7’s national breakfast TV show, Sunrise, with weather announcer, Sam Mac

Gladstone Regional Council 2018/19 Annual Report

•

Adopting the Boyne Tannum Aquatic Recreation Centre Feasibility Study

•

Unveiling the new Bray Park Pump Track and updated skatepark* *Funding for the two projects is through the Queensland Government’s Works for Queensland program, which contributed $885,000 out of an expenditure cost of $985,000.

•

Hosting the 2019 Local Government Association of Queensland’s (LGAQ) Finance and Strategic Leadership Summit at Gladstone Entertainment Convention Centre

•

Overseeing the Local Disaster response as we faced the unprecedented bushfires in late November and early December 2018 and hosting the community event, ‘Band Together’

•

Hosting the 2018 Planning Institute of Australia Queensland State Conference at Gladstone Entertainment Convention Centre

•

Funding the master plan to detail expansion options of Gladstone’s iconic Marley Brown Oval

•

Hosting the bi-annual 2019 Santos GLNG Mayor’s Charity Ball and surpassing our fundraising total by raising almost $92,000 to share between four local charities

•

Supporting the inaugural Brisbane to Gladstone Village (B2GV) in conjunction with the 71st Brisbane to Gladstone Yacht Race, and promoting Easter in Gladstone as a holiday destination.

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CEO’S REPORT. In August 2018, Council stood up its new organisational structure following a year-long transformation project. The new structure ensured Council was positioned to deliver sustainable and quality services, diversify its income sources, and continue to meet the expectations and values of the communities it serves.

Our organisation has been designed to ensure that we are efficient and effective and has fostered an improved environment for our people and this has ultimately led to improved service delivery to our customers and communities.

Council also adopted its new Corporate Plan, with a fresh Vision, Mission and Values Statement. Our plan was developed in collaboration with Councillors and our Executive Team and sets an inspiring vision, to ‘Connect, Innovate and Diversify’. These three elements were chosen as a source of inspiration, drive and enthusiasm for our workforce.

Throughout this transformation process, fostering a culture of care with a focus on safety has been critical. Safety at work is an issue that is important for every single person because we want to return safely to our family and friends at the end of each day. As an organisation, we are working hard to improve our safety culture and have continued to embed safety as our number one priority as we go about our every day work.

Another initiative I am extremely proud of is the implementation of our SERVICE Awards, our staff reward and recognition program. This monthly program recognises and rewards performance across the organisation and is open to individuals and teams who apply our SERVICE values in everything they do. That means, they display one or more of our SERVICE values of Safe, Ethical, Responsive, Visionary, Inclusive, have a strong sense of Community or are Efficient in their roles. The program is now well established and is giving everyone across the organisation an insight into some of the innovative work people are doing and thoughtful ideas and service being delivered.

In late November and early December 2018, parts of our region were devastated by unprecedented fires in scope and size. The Gladstone Region was disaster declared with many communities impacted.

There were 26 fires burning at one stage in our region alone. I am extremely grateful for the hard work and dedication of the firefighters, volunteers, support agencies, government assistance and the generosity and fighting spirit of our Gladstone Region community as we ‘banded together’ to support one another.

These fires have left a very different landscape in parts of our region and we continued to focus on community recovery and resilience, and will continue to do so, as the long-term impacts of the disaster are still being realised.

We also turned our focus to growing and diversifying the region with a renewed priority on economic development. As the economy is ever changing, we will continue to look forward and ‘Connect, Innovate and Diversify’ our Council to ensure we are meeting our region’s needs.

Stay safe today, for tomorrow.

Leisa Dowling Chief Executive Officer

We are proud to Connect. Innovate.

Diversify. the Gladstone Region.

Gladstone Regional Council 2018/19 Annual Report

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SIGNIFICANT EVENTS CALENDAR. July •

•

October 350 trees planted around the region

by Council’s Conservation team and Conservation Volunteers Australia (CVA) volunteers and school students as part of National Tree Day and Schools Tree Day A pop up public art installation by local artists Belynda (Bindi) Waugh (Iman/ Bundjalung) and Patricia Coleman (Bailai [Byellee]) was installed and revealed in GRAGM’s Air Space, part of NAIDOC Week

•

•

GECC was awarded the Best in Business Award for best Entertainment and Recreational business

•

362 entries were received from around the nation for The 43rd Rio Tinto Martin Hanson Memorial Art Awards 2018 at GRAGM with more than 600 guests attending the opening day events on Saturday, 13 October 2019

August •

•

Thousands of Gladstone Region residents took part in Seniors Week activities across the region

•

GECC hosted their first international conference, Alumina 2018

•

Council paid tribute to the efforts of former Councillor Cindi Bush for her two and a half years on the Council team

•

Pop up public artwork featuring 60 finalists of the 2018 Celebrate Australia Primary School Art Competition was installed at the Agnes Water Library

•

•

Gladstone Regional Libraries hosted Australian Children’s Book Week

September

More than 150 planning professionals attended the Planning Institute of Australia Queensland State Conference at GECC, the first to be hosted in the region by the Planning Institute of Australia (PIA)

Gladstone Regional Council 2018/19 Annual Report

Council adopted amendments to its Commercial Activities on Council Land policy in response to feedback from residents and local business owners

Gladstone Tondoon Botanic Gardens celebrated its 30th birthday with a week of public events and activities including Luminous, an inaugural art and light show

•

New Councillor, Natalia Muszkat, was welcomed by her colleagues after taking her official declaration of office during a ceremony in Council chambers

•

Fire and Emergency Services Minister Craig Crawford declared a disaster situation in response to the CQ bushfires, signing declarations for Baffle Creek, Wartburg, Deepwater, Agnes Water, Round Hill, Miriam Vale and Bororen

December •

Gladstone’s CBD precinct was transformed by a touch of Christmas magic for the annual Christmas Street Party, and the region’s nine-metre Christmas tree was lit

by Mayor Burnett at sunset

•

Boyne Island Library hosted its 17th Christmas Tree Decorating Extravaganza with hundreds of locals turning out for the annual event

•

A total of 4339 visitors attended The 43rd Rio Tinto Martin Hanson Memorial Art Awards 2018 exhibition between 13 October - 9 December 2018, with 544 visitors voted in The 2018 QAL People’s Choice Awards

•

The new Bray Park Pump Track and updated skatepark opened in time for the Summer school holidays

•

A new Indigenous art sculpture, Sea Life, was created in the Hoop Pine bed at Tondoon Botanic Gardens

November •

GRAGM hosted a forum, on behalf of Arts Queensland, for residents to get involved in creating Queensland’s creative and arts future

•

Council announced the appointment of Leisa Dowling to the position of Chief Executive Officer following a comprehensive internal recruitment process

•

New online disaster and emergency dashboard, RegionWatch, was launched to assist the community access vital information in times of disasters or emergencies

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•

A new Herbarium and Workroom was completed at Tondoon Botanic Gardens.

The Herbarium houses the 4000 pressed specimens collection and the workroom is used by volunteers and for community workshops

January •

•

•

•

•

Team Rubicon Australia led a community focused recovery mission to aid those affected by the CQ bushfires GRAGM hosted the popular Kids on Tour program, developed by the Queensland Art Gallery | Gallery of Modern Art

•

SUNfest 2019 youth holiday program was held with activities available across the region

•

Community musical, Anything Goes, entertained audiences at the GECC with an impressive set and live 17-piece orchestra Local Buy, contracts and tenders’ services company, released civil construction tenders for roads, water and sewage work in the Gladstone Region

A Reconciliation Bush Tucker morning tea was held to celebrate Gladstone Region’s Elders and start National Reconciliation Week activities

May

•

•

Saiki Children’s Day 2019 School’s Event attracted more than 1000 children to the Gladstone Regional Art Gallery & Museum

•

The generous contributions volunteers make to the Gladstone Region community were formally acknowledged during a National Volunteer Week event

•

Council adopted a new Community Investment Policy to guide donations, grants and sponsorships

National breakfast TV show, Sunrise, broadcasted from Auckland Hill Lookout and featured weather reporter Sam Mac interviewing Mayor Matt Burnett

•

12-25 year-olds had an ‘unlimited’ number of things to see and do during the annual Youth Week celebrations

•

16 new recruits commenced as trainees and apprentices with Council in the Pest Management, Events, Arts Administration, Conservation and Land Management, Business Admin and Civil Construction areas

June •

Queensland’s largest World Environment Day event, Ecofest, attracted more than 6000 attendees, centred around the theme, ‘Slim Your Bin with a Low Waste Diet’

•

$4.5 million in asphalt resurfacing projects commenced in the Gladstone CBD area, in the Callemondah industrial area, and in West Gladstone and New Auckland

•

Maps & Music, a collaboration with Camerata - Queensland’s Chamber Orchestra, was the first of its kind to happen at GRAGM, where the musicians performed for free in conjunction with the exhibition featuring old maps of the Gladstone Region

•

Council launched a new-look website to help create an improved customer service experience

April •

February •

•

March

Council hosted its annual Australia Day Family Fun Day at Tannum Sands for thousands to enjoy 50 new Australian citizens from 12 countries were welcomed to the Gladstone Region in a public citizenship ceremony

Gladstone Midday Rotary Markets started using Tondoon Botanic Gardens as its new venue for its community markets, attracting large crowds

•

Launched the Easter in Gladstone campaign, promoting the annual Gladstone Harbour Festival, the 71st Brisbane to Gladstone Yacht Race, and the inaugural Council-supported Brisbane to Gladstone Village Council hosted a bushfire benefit concert, Band Together, headlined by Adam Harvey, to recognise the efforts provided by community members, organisations and emergency services during the 2018 bushfires

Luminous lit up the gardens and drew record crowds.

Gladstone Regional Council 2018/19 Annual Report

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OUR COUNCILLORS. The Gladstone Region is served by nine elected representatives who represent the entire region, without divisions. They are responsible for the stewardship and democratic governance of the organisation. Councillors were elected for a four-year term following an election on 19 March 2016.

Cr Matt Burnett, Mayor

First elected: 2000, Mayor 2016 - present Email: mayor@gladstone.qld.gov.au Committee Memberships: Central Queensland Region of Councils Gladstone Foundation Board Local Disaster Management Group (Chair) Local Government Association of Queensland CQ Division 6 Gladstone Region Mayor Matt Burnett is a born and bred resident and his family’s connection with the region extends to five generations. He is a former small business operator and qualified journalist, having started his own newspaper, The Port Curtis Post, at the age of 19.

He has served in Local Government since 2000, including five years as Deputy Mayor prior to his election as Mayor. During his time in Local Government, Cr Burnett served as Chairman of Technical Services with Gladstone City Council and as portfolio representative in Infrastructure Services and Town Planning with Gladstone Regional Council after amalgamation in 2008.

Cr Burnett has always had the best interests of the community at heart and, as Mayor, he draws upon the experience he has gathered over his years in Council to ensure those interests remain a key consideration even as the region continues to grow and develop.

Cr Burnett brings an inclusive style of leadership to Council, making sure the thoughts and views of his fellow Councillors, Council officers, business and industry leaders, community groups and organisations, and members of the community are all heard and taken into consideration.

Cr Burnett represents Central Queensland on the Local Government Association of Queensland Policy Executive, and he also represents LGAQ as an alternate Board member of the Australian Local Government Association.

Councillors are dedicated to representing our diverse region.

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Cr Chris Trevor, Deputy Mayor

First elected: 2016 Email: chris.trevor@gladstone.qld.gov.au Committee Memberships: Gladstone and District Sports Foundation Trust GRC SES Management Group (Chair) GRC Rural Fire Finance Committee (Chair) Local Disaster Management Group (Deputy Chair) Councillor Chris Trevor (CT) has lived in the Gladstone Region for over 50 years. He was educated at Central State School and later Rockhampton Grammar School before completing his high school education at Gladstone State High School. Chris is a solicitor of the Supreme Court of Queensland and High Court of Australia as well as a Justice of the Peace and Senior Counsellor of the Queensland Law Society. He is a former Gladstone City Councillor and the first Federal Member of Parliament for Flynn. He has dedicated his life to family, the law, public service and both charitable and sporting pursuits throughout central Queensland.

Gladstone Regional Council 2018/19 Annual Report

Cr Glenn Churchill F.I.M.l , M.A.I.C.D.

First elected: 2016 Gladstone Regional Council; Banana Shire 1997-2008 Email: glenn.churchill@gladstone.qld.gov.au Committee Memberships: Gladstone PCYC Management Committee Chairman Honorary Member Gladstone Thistle Pipes and Drums Councillor Glenn Churchill is a Gladstone Region and Central Queensland resident of nearly 30 years. He has extensive experience, knowledge and wisdom, with 15 years in Local Government as a Mayor and Councillor.

Together with his wife Sue and family, Glenn has had the great privilege of serving the business, sporting, tourism and community interests of the region through many different avenues in public life. Cr Churchill proudly supports various groups and charities. He is the current long-time Chairman Gladstone PCYC Management Committee, Diamond Life member QPCYWA, Chair Gladstone Regional Arts Development Fund and Chair 2019 Bush Fire Recovery Committee (Infrastructure). Cr Churchill is a Fellow of the Australian Institute of Management and long-time member of the Australian Institute of Company Directors. He is also a life member and volunteer of various local community-based organisations. Cr Churchill believes in working together to help foster a culture of pride, making sustainable decisions for future generations and promoting community inclusivity.

Cr Kahn Goodluck

First elected: 2016 Email: kahn.goodluck@gladstone.qld.gov.au Committee Memberships: Gladstone Region Community Development Committee (Chair) Councillor Kahn Goodluck has been living in Boyne/Tannum for almost eight years and has lived in Queensland his whole life. Cr Goodluck grew up in Kilkivan and as a teenager moved to the Gold Coast where he completed his trade as a Boilermaker. Having lived in both a city and a country town, he believes the Gladstone Region is the perfect combination of both. It offers the services of a city with the benefits of a country lifestyle like a safe community, the great outdoors and opportunities for his three young children. He is the President of the BTABC (Boyne Tannum Arts Business and Community Assoc. Inc.) which is responsible for many great community initiatives in the Boyne Tannum area including, BAM (Beach Arts Music), Under the Trees Music Festival and provides support to local businesses and other community groups and causes. He has been a union delegate and health and safety representative in construction. Cr Goodluck is motivated to engage with working people to ensure everyone in the community gets a fair go.

15

Cr Rick Hansen

First elected: 2006 Email: rick.hansen@gladstone.qld.gov.au Committee Memberships: Business Improvement Committee Education Qld Industry Partnership Board of Management Traffic and Advisory Committee Gladstone Airport Board Gladstone Area Promotion and Development Limited Board Councillor Rick Hansen moved to Gladstone 40 years ago, relocating from Maryborough for work. Cr Hansen is proud of the region with its blend of industry, opportunity and environmental commitment. He believes that we have it all in the Gladstone Region, from the beautiful beaches of Agnes Water/Seventeen Seventy and Tannum Sands to the scenic views of the valleys, mountains and the islands, coupled by the existence and potential of our great harbour. The region has enormous community pride and spirit. Cr Hansen has been involved in the community extensively, worked in major industry for 19 years and owned and managed a small business for 21 years. He has represented the community in Council since being first elected in 2006. Cr Hansen fully understands the business of Council from Strategy and planning to Community and to Finance. Cr Hansen is a member of the Gladstone Community Linking Agency Board, a committee member of the Tanyalla Conference Centre and a member of the PCYC Advisory Board. He is also the patron of the Gladstone Tennis and Squash Association and Patron/ Life Member of the Gladstone Basketball Association and is a member of the Gladstone Sunrise Rotary Club.

Gladstone Regional Council 2018/19 Annual Report

Cr Peter Masters

Cr Natalia Muszkat

Councillor Peter Masters has been a Gladstone Region resident since 1974. Cr Masters places great value on family and on the importance of community. He has always been actively involved in the community through association in various sporting groups and organisations.

Cr Masters has previously worked for Calliope Shire Council in various departments, predominantly in finance and procurement working with contracts and tenders. He has Workplace Health and Safety qualifications extending to training and assessment, rehabilitation and return to work credentials.

During his term as Councillor he will respect the wants and needs of the Gladstone Region people and strive to ensure a sense of pride returns to the community.

Councillor Natalia Muszkat is a young mother of two boys under 13. Cr Muszkat migrated to Australia in 1999 from Argentina and moved to Gladstone in 2007 to raise her young family when she fell in love with the region. She formed immediate connections which led to her founding the award-winning organisation, Welcoming Intercultural Neighbours Inc., a for-purpose organisation born from the needs of the cultural and linguistically diverse local communities. Cr Muszkat has a long list of formal qualifications including a Bachelor in Workplace Health and Safety (with Distinction) and a Diploma in Business Governance. She is also a trained facilitator of evidence-based programs, organisational partnering programs and Social Return on Investment (SROI) practitioner training. Cr Muszkat has a great passion for community and social services and in her years in the Gladstone Region, she has been instrumental in delivering over $4 million in community services locally. She believes that everyone deserves the same opportunities in life and empowering others is what motivates her.

First elected: 2016 Email: peter.masters@gladstone.qld.gov.au Committee Memberships: Capricorn Pest Management Group Traffic and Advisory Committee

First elected: 2018 Email: natalia.muszkat@gladstone.qld.gov.au Committee Memberships: Reconciliation Action Plan Reference Group Chair

16

Cr Desley O’Grady

First elected: 2016 Email: desley.ogrady@gladstone.qld.gov.au Committee Memberships: Gladstone Healthy Harbour Partnership Gladstone Local Marine Advisory Committee Reef Guardians Council Mayor’s Christmas Carols Boyne Burnett Inland Rail Trail Discovery Coast Community Reference Group (Wide Bay Health) Mayor’s Charity Ball Councillor Desley O’Grady has lived in the Gladstone Region for more than 30 years and her family history in the region dates back five generations. She has worked, run successful businesses and been heavily involved in many of the communities in the region. She was also part of the Calliope Rodeo Association team that raised $80,000 for the Boyne Valley community through the 2013 Bulls and Bands Flood Appeal and was a committee member for the Gladstone Region 20 year Vision panel.

Since being on Council Cr O’Grady has attended numerous community functions, meetings and has been very passionate about Council’s vision to Connect, Innovate and Diversify. Cr O’Grady loves that we have such a versatile region, from the hinterland of the Boyne Valley to the Southern Great Barrier Reef, and is dedicated in playing a part in the continued growth and prosperity of this glorious destination, as an elected member. Cr O’Grady has been contributing to the strategic direction of Council and working as a team member with energy and enthusiasm, as well as being a strong and passionate voice for the community.

Cr PJ Sobhanian

First elected: 2015 Email: pj.sobhanian@gladstone.qld.gov.au Committee Memberships: Business Improvement Committee Gladstone Area Water Board Major Events Advisory Panel Safe Night Gladstone CBD Precinct Inc. Councillor PJ Sobhanian’s love of the Gladstone Region environment is one of the reasons he moved to Gladstone, to help reduce the public dental waiting list at the Gladstone Hospital.

After serving at the hospital, he moved to private practice in 2011. Cr Sobhanian is motivated by providing leadership that is driven by community service and creating and maintaining respectful community partnerships. He has served as a Gladstone Region Councillor from 2015 including the representation of the Rural Services Portfolio and service on the Business Improvement Committee. Cr Sobhanian has extensive knowledge and experience gained from serving on various government, non-government and community committees and boards including the Australian Dental Association and University of Queensland, and on the Capricorn Pest Management Group and Gladstone Safe Night Precinct Committee. He has also served as Director of Community Services for the Rotary Club of South Gladstone.

Our Councillors provide a voice for all communities across the region.

Gladstone Regional Council 2018/19 Annual Report

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PLANNING FRAMEWORK. Our planning framework ensures that strategies and financial resources are aligned to achieve Council’s vision to Connect. Innovate. Diversify. The framework includes long, medium and shortterm plans which set direction for what we do and what we aim to achieve as an organisation for our community.

Gladstone Regional Council

Connect.

Innovate.

Diversify.

Long Term Financial Plan (10 Year)

Corporate Plan (5 Year)

Operational Plan and Budget (1 Year)

Annual Report (1 Year)

These plans and reports can be viewed by following the ‘Reports and Publications’ link under the ‘Council’ tab on Council’s website, www.gladstone.qld.gov.au The Annual Report itself is produced as a multi-purpose report for the benefit of each of our stakeholders through the provision of comprehensive, accurate reporting on our strategic, operational and financial performance.

Our stakeholders include: • • • • • • •

Our community, those who call the Gladstone Region home and those who visit us; Ratepayers; Community groups and organisations; Local service providers; Investors, both current and future; Industry and commerce; and, Local, State and Federal Government bodies.

Council values our stakeholders and considers them when making decisions.

Gladstone Regional Council 2018/19 Annual Report

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CORPORATE PLAN REPORTING. We are Gladstone Regional Council, working together to balance our region’s lifestyle and opportunity.

The Corporate Plan sets out Gladstone Regional Council’s commitment to a dynamic, proud and diverse future for the region through to 2023. It serves as the primary strategic planning document to guide us in learning about the needs of our community and in future-proofing our organisation to deliver on them.

The Operational Plan details a 12 month list of Objectives, Actions, Outcomes and Measures which ensure progressive implementation of the five year Corporate Plan for that particular financial year.

The 2018/19 Operational Plan forms Year one of the Corporate Plan and hence is the basis of all Corporate Plan reporting for this Annual Report.

The strategic direction defined in our Corporate Plan 2018-2023 is set against the landscape of our vision:

CONNECT. INNOVATE. DIVERSIFY. These three intentions are woven throughout our strategic goals and community commitments to create a strong fabric of community connectedness; an organisation whose culture is proudly defined by innovation and a region that celebrates the diversification of opportunities and lifestyle.

To that end, over the next five years we will deliver on our nine strategic goals of: • • • • • • • • •

Engaged, involved and proud communities Healthy environment, healthy community Our people, our values Ethical and responsible government Outstanding customer service Smart asset management Operational excellence Grow the region Smart investment

Performance for the year 2018/19 has been reported as:

 Completion Delayed  Completed

Building a dynamic, proud and diverse region.

Gladstone Regional Council 2018/19 Annual Report

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OPERATIONAL PLAN REPORTING. 2018/19 Operational Plan Review HIGHLIGHTS: Gladstone Regional Council achieved a number of notable successes which were linked to the 2018/19 Operational Plan including:

 Completed 77 54%

 Completion Delayed

65 46%

OVERALL PROGRESS

There were 142 Actions set out in the 2018/19 Operational Plan for which a total of 65 items (46%) have been identified as ‘Completed’ as at the end of the 2018/19 year. Of a total of 77 items (54%) identified as no longer being achievable by 30 June 2019, 68%, or 52 items, have been included in the 2019/20 Operational Plan. The balance of these items (19) will continue to be reported against during the 2019/20 year in order to ensure transparency.

•

The successful launch of Council’s new website, involving collaboration across multiple areas of the business, is testament to our new approach toward operations.

•

The achievement of an increase in the rate of recycling compared to 2017/18 baseline, including utilising opportunities to value-add to our recycling waste.

•

A completed review of our methodology for the engagement of apprentices and trainees identifying improvement areas to be included in future programs of work and in the short-term, resulting in the employment of 19 new trainees and apprentices, throughout the financial year.

•

Robust onboarding and training programs which have contributed to the enhancement of first point resolution with our customers.

•

Development of a Methodology for the review of all fees and charges to provide true costs to the business. This methodology has been applied to the Health, Waste and Operational Development Works areas in the formulation of 2019/20 fees and charges with roll-out to other areas planned for the next budget year.

•

A focus on events to increase visitor numbers saw the region experience a revived Easter in Gladstone with the introduction of the B2G Village and the continued evolution of our signature event, Luminous.

•

T wo significant reviews have been undertaken in the ICT space: service delivery and current infrastructure. This work has resulted in the development of a Strategic ICT road map of improvements that support items within the 2019-20 Operational Plan.

Proper planning supports our current and future communities.

Gladstone Regional Council 2018/19 Annual Report

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Our Performance - Status of Operational Plan Action Items - By Strategic Goal  Completed

 STRATEGIC GOAL 1 - ENGAGED, INVOLVED AND PROUD COMMUNITIES

CONNECT

Our community is engaged, involved and proud. They say “Gladstone Regional Council is easy to deal with and understands my needs”. We will be seen by the community to be efficient, financially and socially responsible and provide value for money. We will know people are confident in our engagement processes and actively participate in providing their feedback and contributing to community decisions.

52%

48%

 Completion Delayed

CONNECT

Activity Status Innovative, multi-channel engagement approaches Strong partnerships and resilient communities Activate our public spaces Build community capacity for events Work has continued on the Regional Events Strategy for endorsement by Council.

Development of proposed GAPDL KPI's was delayed in order to ensure alignment with both the GAPDL Destination Tourism Plan and GRC's Visitor Economy Strategy.

Strengthen diversity Library futures Community consultation has yet to begin for the GRC Libraries Strategic Plan 2019-2024. Scope will incorporate all library localities in order to cope with future population demand and State Library requirements.

 STRATEGIC GOAL 2 - HEALTHY ENVIRONMENT, HEALTHY COMMUNITY

CONNECT

To take a leadership role in protecting the environment, using resources efficiently and improving the health and safety of the community.

Activity Target zero waste to landfill Focus on becoming an energy neutral Council The Local Government Association of Queensland LG Sherlock energy detective tool will be utilised to assist with data collation for this project. Work will continue as part of the 2019/20 Operational Plan.

Development of a business case for solar panels at four of our Waste Water Treatment Plants has commenced utilising current available information.

Minimise our environmental impact Promote healthy, active and safe communities Sustainable water management Work has continued to update the population model utilised for water demand modelling to inform the Lake Awoonga Water Asset Growth Strategy. Work on this Strategy will commence in the 2019/20 year with community engagement regarding water price path ramifications also planned in the same timeframe.

The installation of bulk water meters within the Lake Awoonga network for the purpose of better understanding usage has progressed, with the Project team working on the scope document for tender.

Gladstone Regional Council 2018/19 Annual Report

Status

21

 STRATEGIC GOAL 3 - OUR PEOPLE, OUR VALUES

CONNECT

Our success is built on a foundation of safe, engaged, high performing talent and teams. Safe and engaged people ensure we will have a safety culture that underlies how we operate our business. We will have visible and accessible leaders that provide clear direction and purpose, with community engagement at the forefront. We will be accountable, inclusive and collaborative. We will have established programs for learning and development; succession planning; mentoring; talent identification and utilisation; recognition, and our performance management will be meaningful.

Activity Status Improve wellbeing and embed safety An Internal Audit on safety has been completed and a targeted plan is being formulated to address compliance gaps. Implementation will include measurable objectives and increased reporting to the Executive on a monthly basis.

Lead and Lag safety performance metrics which align with the Safety Strategy and Safety Management Plan are in development.

Employer and brand promise to attract right talent A final direction for development of an Employer Value Proposition Strategy will be determined in the coming year.

The People Services Business Partner model is being implemented with further strategic initiatives a consideration of next year’s operational planning cycle.

Progression of an overall talent and retention strategy was not included in budget or scope so has been removed from Operational Plan.

Development of the Diversity and Inclusion Framework has rolled over into the 2019/20 Operational Plan.

Constructive and collaborative leaders High performing culture

 STRATEGIC GOAL 4 - ETHICAL AND RESPONSIBLE GOVERNMENT

CONNECT

To create a culture that minimises risk and maintains compliance by strengthening governance, risk management, and compliance awareness, processes, reporting and accountability.

Activity Contemporary governance practices Efficient and responsible use of resources Local laws that enable stewardship Decision making and support

Status

2018/19 has had a significant focus on improving employees’ wellbeing.

Gladstone Regional Council 2018/19 Annual Report

22

Many Council employees were recognised for their commitment to our community during the bushfires, an event which saw the region band together.

Case Study - Connect Council is focused on recognising and valuing its people and launched a new reward and recognition program in January 2019 to reward all employees who espouse its SERVICE values.

SERVICE stands for Safe, Ethical, Responsive, Visionary, Inclusive, Community, Efficient and employees are encouraged to nominate their peers, either individuals or teams, who display these values and who continue to strive for service excellence.

Since the program launched, 292 employees, or 44 per cent of the workforce, have been nominated for a SERVICE Award, specifically in the ‘Community’ category, and acknowledged for their hard work and dedication to the region.

Gladstone Regional Council 2018/19 Annual Report

Examples of the ways these awards program has enhanced Council’s connectivity with its community are: •

Council teams demonstrated outstanding service to the community during the CQ bushfires. They kept both staff and the community up to date with quality information and were there for the community in so many ways.

•

The Water Program Delivery crew conducted urgent repair work to a burst water main in a busy residential area in Boyne Island on dusk. They not only worked in difficult conditions to repair the water main, but also provided impacted residents with water to make sure families could bath young children, prepare

dinners and received great feedback and appreciation from those residents.

•

A new school program on responsible pet ownership, PetPals, has been implemented with an average of one school visit per week throughout the program. The program has been tailored to ensure schools can easily provide feedback and even includes a visit from PetPals ambassador, Tucker the Dog. Parents have praised the program for both how well it is delivered, and also how beneficial it is to have the dog included, as it has increased many children’s confidence around animals while still reminding them how to identify dangerous situations with animals.

23

 STRATEGIC GOAL 5 - OUTSTANDING CUSTOMER SERVICE

INNOVATE

We have a reputation for being easy to deal with and delivering value for money customer service.

Activity High satisfaction, low effort customer services Listen to, and learn from, our customers Value for money fees and charges

Status

 Completed 60%

40%

 Completion Delayed

 STRATEGIC GOAL 6 - SMART ASSET MANAGEMENT

INNOVATE

Our asset management practices support smart infrastructure decisions and ensure reliable, affordable, safe and sustainable infrastructure is available for the community and supports the lifestyle and economic goals and sustainability of the region for current and future generations.

INNOVATE

Activity Status Transforming asset management: From aware to excellence Work has continued on the implementation of the Asset Management Maturity Transformation Plan although competing priorities and underestimation of the scope of works have had an effect. This item will continue to be progressed as part of the 2019/20 Operational Plan.

Community Centric Practices Launch of the online engagement platform in early 2019/20 will provide an additional tool to converse with the community on service levels for Council’s assets and future designs.

Identification of relevant stakeholders and appropriate events for which to forward notifications and information is part of an ongoing body of work.

Integrated, consistent, trustworthy data Key financial information has been migrated and undergone rationalisation within the Mydata Asset system. Work on the development of Asset Data continues.

Significant review has been undertaken of the Strategic Asset Management Plan (SAMP) with the revised document planned to be presented to the Executive for endorsement in early 2019/20.

Initial asset management plans have been drafted by Asset Class, however will require further data population as this becomes available from other sources. Review will be required in order to ensure alignment with the updated SAMP. The organisation has been tracking with an Asset Sustainability Ratio (ASR) of 90% and appears well placed to achieve the target of > 90% average over five years. Work on the development, and integration, of tools into the asset management and investment prioritisation systems will continue to ensure that an acceptable ASR is maintained.

Optimise asset management decisions Decision making tools which align with ISO55001 principles are being developed as part of the Asset Management System.

The review of Council’s Road and Footpath Hierarchy continues and will inform an analysis of the level of service and Capricorn Municipal Development Guidelines (CMDG) for roads; an Operational Plan item for 2019/20. Data relating to the number of customer complaints and cost to serve for each asset class will be identified and documented as part of the asset management system.

The development of the Asset Investment Review Group is underway with the intent to deliver in conjunction with the Investment Decision Framework and provide additional governance and management of the quality of information provided in the decision-making tools.

Optimise asset management performance Monitoring programs have begun informing maintenance strategies with development of a further six programs to continue over the life of the Corporate Plan.

The scope for modelling Lake Awoonga water supply scheme assets is being finalised, with some changes to the community engagement component due to Council’s increased ability to deliver this component using internal staff.

Build asset management capability In addition to key internal asset management stakeholders at Level 4 of the organisation, 54% of Councillors, Tier 1, 2 and 3 officers, and Operations Team Leaders, have completed Asset Management Awareness Training.

Key information required internally for reporting purposes has been identified however further work, including stakeholder engagement, is required to determine what data is desired to be shared externally.

Gladstone Regional Council 2018/19 Annual Report

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 STRATEGIC GOAL 7 - OPERATIONAL EXCELLENCE

INNOVATE

Strengthen our competitive advantage and achieve industry-leading performance in our operations by continuously improving our ability to consistently and reliably deliver work at lower cost and lower risk.

Activity Leaders in works delivery The engagement of consultants will allow the Planning & Scheduling framework development and review to be completed in line with the 2019/20 Operational Plan.

Limitations on analytical resourcing and available and accurate data impacted on the development of an insourcing plan which has been rescheduled for completion within the 2019/20 Operational Plan.

Value for money sourcing of materials, services and works Competitive indirect costs The development of improvement plans following the review of Support Services requires further work to evaluate the content and will be continued as part of the 2019/20 Operational Plan.

Work to reduce risk associated with the operation of Quarries has been delayed due to budget approvals, with implementation requiring commitment to environmental spend and continuing into the new financial year.

Tightly controlled overheads Identification of appropriate cost methodologies has been awaiting approval for resourcing and will be an ongoing item within the 2019/20 Operational Plan.

Leaders in safety and disaster management and recovery

Status

Case Study - Innovate Council’s Local Laws team had traditionally experienced issues with a high volume of hardcopy paperwork and worked with Council’s Process Improvement Lead in 2018/19 to innovate and become more agile in their work environment.

Local Law Enforcement Officers are required to complete statutory paperwork which needed to be printed off and completed in the office.

This approach resulted in numerous trips between the field and office which reduced proactive patrolling and impacted on Local

Law Enforcement visibility in the community.

After further discussions with the Insights and Innovations team, a new team created in the organisational redesign, the process was reviewed, and a collaborative effort revealed there were tasks that could be done from mobile devices.

Smart devices (iPads) and printers were purchased and installed in a vehicle to pilot the new process. Following lessons learned, the team received training and the new systems were implemented for all the team.

The improvements mean notices can now be issued in the field, customers can complete forms using the Apple Pen, forms and information are available on mobile devices, photos link directly to Council’s systems and it reduces the time between customers reporting issues and Council resolving.

The new process so far has saved 15 days or 127 hours in officer’s time per year.

This case is just one example of the new operating model working to create better efficiencies within Council, which results in better customer service for our community.

The innovative use of iPads have reduced administration hours.

Gladstone Regional Council 2018/19 Annual Report

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 STRATEGIC GOAL 8 - GROW THE REGION

DIVERSIFY

Actively promote and support the Gladstone Region and enable its growth and prosperity.

Activity Advocate for future job creating industries Increase visitation to the region Incentivise investment in the region The Priority Projects Pipeline project has now been scheduled for completion as part of the 2019/20 Operational Plan while work on precursor projects continues.

Promote the region as a destination

Status

 STRATEGIC GOAL 9 - SMART INVESTMENT

 Completed 50%

50%

 Completion Delayed

DIVERSIFY

DIVERSIFY

Continually improve Council’s resilience and sustainability over the long-term to ensure we are strong enough to address future challenges without placing additional burden on ratepayers. We will actively leverage technology to reduce operational costs.

Activity Status Innovate through technology Pursue commercial opportunities to convert cost-centres into profit-centres and gain return on capital Consultants have commenced work on the Waste to Energy Strategy which will now be delivered in accordance with the 2019/20 Operational Plan.

Case Study - Diversify

In 2018/19, Council welcomed capital projects funding of $18.1 million from the Federal and State Governments through various programs including Works for Queensland, Building our Regions and Roads to Recovery.

Council received $5,990,000 from the funding initiative to undertake job creating and/or job sustaining maintenance and minor infrastructure projects on Council owned or controlled assets.

The Gladstone Region’s footpath networks have been renewed with $2.1M in funding Gladstone Regional Council 2018/19 Annual Report

from the State Government’s 2017-19 Works for Queensland program.

Work was carried out in Rosedale, Boyne Island, Tannum Sands, Calliope and Gladstone with some footpaths resurfaced and 560m of concrete footpaths newly constructed.

In total, some 32.5km of crack sealing was used on existing sealed paths prior to the placement of more than 2350 tonnes of asphalt spread over 13.5km of footpaths and cycleways.

The beautification and maintenance of pathways helps connect our community with our assets.

26

ORGANISATIONAL STRUCTURE. Community Our community lies at the heart of everything we do.

Improving our community sets the purpose for our organisation.

Council Our Council is led by our Mayor.

See page 14 to read about our Councillors.

Senior Executive Team

LEISA DOWLING Chief Executive Officer

CARLY QUINN General Manager Strategy & Transformation KYLIE LEE General Manager Community Development & Events

Business Improvement Committee.

See p. 33

JOHN TUMBERS General Manager Operations

ANNA SCOTT General Manager Strategic Asset Performance MARK HOLMES General Manager Finance, Governance & Risk

STACEY HOGARTH Acting General Manager People, Culture & Safety

MARK FRANCIS General Manager Customer Experience

33 Managers & Specialists 35 Team Leaders 587 Workforce

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SENIOR LEADERSHIP TEAM.

Leisa Dowling

Chief Executive Officer Leisa’s local government career commenced with Gladstone Regional Council in September 2010 as Director Environment & Recreation.

Prior to joining Council, Leisa had a lengthy career in State Government, including senior roles in the Department of Local Government.

Leisa held the position of General Manager Strategy and Transformation before being appointed Chief Executive Officer (CEO) in November 2018.

Business responsibilities include: • The CEO is ultimately responsible for the strategic management of the organisation Qualifications and memberships: BLS, Graduate Certificate in Public Sector Management, Member - Local Government Managers Australia

Carly Quinn

General Manager Strategic Asset Performance

Carly moved into this role in September 2018 and has a multi-industry background across Government, Commercial and Not for Profit sectors, with a focus in Strategy, Transformation, Marketing, Events and Community Development. Her strength is in collaborating with multi-functional teams to find pragmatic solutions to complex business problems. Her passion is in building the capability of our people to better deliver services for our community.

Anna joined Council in 2015 as Manager Water Services before moving into this role in February 2018. Prior to joining local government, Anna had spent over 20 years in the asset infrastructure space carrying out a variety of roles in the consulting, utilities and construction sectors.

Business responsibilities include: • Strategy and corporate planning • Strategic information and technology • Transformation program management • Economic development • Strategic funding and grants • Strategic projects Qualifications and memberships: Associate of AusTTA Member - Local Government Managers Australia

Gladstone Regional Council 2018/19 Annual Report

Anna Scott

General Manager Strategy & Transformation

Business responsibilities include: • Asset governance • Asset planning • Design and investigation • Asset performance and monitoring • Environment and conservation • Property acquisition and disposal Qualifications and memberships: M. Eng Sc (Water Care), B Eng (Environment), Cert IV Safety Leadership, Member - Australian Water Association, Member - IPWEA

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John Tumbers

Mark Francis

General Manager Operations

General Manager Customer Experience

John joined Council in March 2019. John has a career background in operations and maintenance in power generation, resource and ports sectors in New South Wales, South Australia, Western Australia and Queensland.

Prior to joining Council John was the Chief Operating Officer for the Gladstone Area Water Board which provides bulk water to Gladstone’s industry and Council.

Mark has 20 years experience improving customer experiences across a range of industries. Prior to joining Council in 2018 he held strategic leadership roles in financial services in Victoria and Local Government and telecoms sectors in the UK. Mark moved into this role in March 2019.

Business responsibilities include: • Works planning and project delivery • Support services (administration, fleet and buildings) • Works delivery teams for Roads, Water and Waste Water, Waste and Parks • Contracts and procurement • Disaster management and response Qualifications and memberships: GradDipMainMgt (Graduate Diploma in Maintenance Management)

Gladstone Regional Council 2018/19 Annual Report

Business responsibilities include: • Customer Experience • Biosecurity and Environmental health • Local laws/animal management • Planning, building and plumbing services • Insights and Innovation Qualifications and memberships: MA(Hons) PgDip (Business Admin)

Kylie Lee

General Manager Community Development & Events Kylie has 20 years’ experience in community relations, communications, events and investment. Prior to joining Council in February 2018, Kylie has held leadership roles in a range of industries including ports, construction, mining, casinos and local government, including eight years at the former Calliope Shire Council.

Business responsibilities include: • Events and entertainment • Communications and brand • Community development and partnerships • Arts and culture • Regional libraries and Tondoon Botanic Gardens Qualifications and memberships: Graduate Diploma (Public Relations) Member - Local Government Managers Australia

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Stacey Hogarth

Mark Holmes

Roslyn Baker

Acting General Manager People, Culture & Safety

General Manager Finance, Governance & Risk

Chief Executive Officer 7.8.17 - 4.9.18

Stacey has worked across multiple community facing organisations and specialises in developing and implementing people and safety strategies, building internal capability and culture change. As an experienced risk, governance and compliance professional, the safety and wellbeing of our employees is a key focus, ensuring that they are capable and supported to deliver services to our community.

Stacey moved into the acting role in June 2019.

Mark has served local government for more than 20 years, commencing with a traineeship at Dalrymple Shire Council. Mark worked at the former Calliope Shire Council for eight years, serving in the role of Manager of Finance and Director of Corporate & Community Services.

Mark was appointed General Manager Finance, Governance & Risk in January 2018.

Richard Pegg

Business responsibilities include: • Industrial relations • Talent management • Health, safety and wellbeing • Remuneration and benefits • Performance framework Qualifications and memberships: BBus Mgmt GradDipAppCorpGov MBA

Gladstone Regional Council 2018/19 Annual Report

Business responsibilities include: • Financial management • Revenue management • Cost accounting • Governance, risk and compliance • Ethics, integrity and audit • Records • Legal

General Manager People, Culture & Safety 12.2.18 - 30.11.18

Peter Billing

General Manager Operations 12.3.18 - 25.1.19

Alistair Burrows

General Manager Customer Experience 5.2.18 - 21.3.19

Terri Pienaar

General Manager People, Culture & Safety 3.12.18 - 26.6.19

Qualifications and memberships: BBus (Acc), GDIP (Acc), GDIP Local Government Australia, CPA

30

COUNCIL EMPLOYEES. As at 30 June 2019 (point in time), Gladstone Regional Council employed a total of 663 people, with a full-time equivalent (FTE) of 628.5. Our staff include engineers, town planners, accountants, tradespeople as well as specialists in a range of disciplines.

APT/TRA A

5 3

28 18 3 3

4 20

27 23

35 16

24 23

116 97

319 344 Workforce by Gender

10 10

22 47

46 84

663

STAFF EMPLOYED WITH A FULL-TIME EQUIVALENT (FTE) OF 628.5

B C D E F G H CONT EXEC Workforce distribution by Classification and Gender

Workforce distribution - age group across tenure

180 160 140 120 100

 Over 70 yrs  60-69 yrs  50-59 yrs  40-49 yrs  30-39 yrs  20-29 yrs  Under 20 yrs

80 60 40 20 0

Under 1

1-5

5-10

10-15

15-20

20-25

25-30

Over 30

Tenure Group

Gladstone Regional Council 2018/19 Annual Report

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STAFF DEVELOPMENT. During the period Council continued to work through its People Culture and Safety strategies and operational plans to deliver outcomes which enable our workforce to deliver positive outcomes for our Community.

Key focus areas include: •

Safety compliance including a further focus on safety conversations (take time for safety) and Take 5 risk assessments

•

Introduction of a revised Code of Conduct which promotes our Vision and Values

•

Introduction of our SERVICE awards, to recognise those staff who are exceptional in living our values

•

Development programs for our leaders focused on leading themselves and their teams

•

Revised performance planning for our staff to ensure alignment with our corporate and operational plans across all levels of Council

•

Review of our mandatory and non-mandatory training requirements

•

Ongoing delivery of our apprenticeship and trainee program

•

Commitments to provide additional support to our team members affected by domestic violence

•

Commenced developing our insourcing plan

•

C onstitution of the Joint Consultative Committee following the approval of the 2019 Certified Agreement.

We are committed to developing the next generation of employees through our apprentice and trainee program.

Gladstone Regional Council 2018/19 Annual Report

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OUR GOVERNANCE. INTERNAL AUDIT Business Improvement Committee Report Background Gladstone Regional Council’s Business Improvement Committee provides an independent forum where representatives of Council, independent members and management work together to fulfil specific governance responsibilities that contribute to compliance responsibilities and improved performance of the organisation.

The Business Improvement Committee is established in accordance with Section 210 of the Local Government Regulation 2012 and Section 105 of the Local Government Act 2009 and operates within the scope of Council’s Business Improvement Committee Policy and the Ethics Integrity and Audit Policy.

The Business Improvement Committee has a key role in assisting Council to fulfil its governance and oversight responsibilities in relation to a number of areas including, financial reporting, legal and regulatory compliance, internal control systems, risk management and audit functions.

The Committee meets quarterly. This report covers the activities of the Committee for the 2018/19 financial year.

being Cr Peter Masters and Cr Desley O’Grady, who will participate only when one of the Member Councillors is absent.

Committee Membership for the 2018/19 financial year has been as follows: • •

Carolyn Eagle, External Member, Committee’s designated Financial Expert (exited December 2018)

•

Kerry Phillips, External Member, Financial Expert from January 2019

•

Stephen Coates, External Member (commenced 20 March 2019)

•

Sandra Collins, External Member (commenced 20 March 2019)

•

Cr Rick Hansen, Councillor

•

Cr Poya John (PJ) Sobhanian, Councillor (exiting 20 August 2019)

•

Cr Kahn Goodluck, Councillor (commencing 21 August 2019)

•

Cr Peter Masters, Councillor (Proxy Delegate for Councillor Members from 6 November 2018)

•

Cr Desley O’Grady, Councillor (Proxy Delegate for Councillor Members from 6 November 2018).

Membership The Committee is bound by legislation to consist of at least three, but no more than six members, one of whom is a designated financial expert. One, but no more than two, of the committee, of whom shall be Elected Representatives of Gladstone Regional Council.

The membership of the Committee has undergone change during the 2018/19 financial year, with two external members reaching their maximum tenure. Carolyn Eagle participated in her final meeting in December 2018, with Ross Cook, as Chair leaving the Committee following the 26 June 2019 meeting. Kerry Phillips is the financial expert on the Committee on exit of Carolyn Eagle and Council welcomed two new external Members to the Committee, being Stephen Coates and Sandra Collins who will provide one additional external representative to the Committee moving forward. Councillor Membership has also rotated this financial year with Cr Sobanian relinquishing his seat at the table to Cr Kahn Goodluck and two proxy delegates nominated, Gladstone Regional Council 2018/19 Annual Report

Ross Cook, External Member, Chairperson (exited 27 June 2019)

Each member of the Business Improvement Committee brings specific skill sets and experience to their role and actively contribute to Committee business.

Council personnel including the Chief Executive Officer, General Manager Finance Governance and Risk, Ethics Integrity and Audit Specialist, Manager Governance and other specific officers attend the Business Improvement Committee Meetings as observers to provide relevant information pertaining to the Committee’s Terms of Reference. Council’s External Auditors are also invited to attend each meeting in person or by teleconference. The Committee continues to benefit from the participation of the Queensland Audit Office who have had an observer at each of the Committee’s meetings via teleconference during the year.

The Committee was delighted to welcome broader Councillor and officer attendance at meetings during the year with a number of Councillors and staff members attending as observers. The Committee will continue to find ways to engage with Council about its needs and to investigate opportunities to improve.

One of the positive initiatives to improve Committee interaction with Council has been Business Improvement Committee external members meeting directly with Council twice per annum at a Councillor Information Session which commenced on 23 April 2019, with the second to be held on the 8 October 2019.

This has allowed external members to discuss relevant issues directly with Councillors.

The Committee continues to meet privately with internal and external auditors at each meeting to allow discussion on any significant issues or areas of interest within the scope of the Committee’s or Auditor’s areas of responsibility.

Summary of Committee Activities The Business Improvement Committee maintains an active monitoring and oversight role over the following matters and provides direction to management where appropriate and as requested: 3.1. Financial Statement Preparation and Disclosure Compliance The Committee reviewed the draft 2018 statutory financial statements, making appropriate enquiries of management to satisfy itself that the Committee’s duties under the Local Government Act 2009 and the Local Government Regulation 2012 had been complied with.

The Committee was disappointed that Council was unable to achieve the deadline of 31 October 2018 for the compilation, approval and presentation of the statutory financial statements to the external auditor.

Significant additional work was put in by the organisation to ensure that Council received an unmodified audit opinion on its statutory financial statements from the Queensland Audit Office signed on 1 April 2019. This signifies that the contents of the financial statements represented a materially true and fair view of Council’s financial position as at 30 June 33

•

Procurement Audit including review of internal controls in relation to the process and delegations for approving maintenance and capital expenditure.

•

The Committee met, and convened teleconferences, with Council’s external auditors as part of its quarterly meeting agenda. General matters of interest and Audit’s findings from the work they conducted to gain assurance over the accuracy of the financial statements for the year ended 30 June 2018 were discussed.

Review of our complaints management processes and customer culture (including for escalated complaints) in relation to the efficiency and effectiveness and include an assessment of how well GRC learns and adjusts processes to mitigate these complaints.

•

Review of internal controls with respect to privacy laws Accounts Receivable processes (debtors).

•

The Committee monitored the implementation of external audit recommendations as part of its quarterly agenda reports.

Review of Implementation of Safety Audit Recommendations.

•

Review of previous Internal Audit Recommendation implementation.

3.3. Internal Audit

•

Unplanned audit activities.

The internal audit function of Council underwent some change due to the restructure of the organisation this year. Internal audit was combined with Ethics, Integrity and Compliance Reporting and Assurance. The team incorporating a Compliance and Assurance Officer and a Compliance and Reporting Officer report to the position of Ethics Integrity and Audit Specialist who in turn reports to the General Manager Finance Governance and Risk.

Reporting directly to the Chief Executive Officer and the Business Improvement Committee is supported by the organisation and the position description of the Ethics Integrity and Audit Specialist.

At the Business Improvement Committee meeting held on 12 December 2018, the Committee supported the following amendments to the plan:

2018. An unmodified audit opinion is the best outcome achievable for an audit of financial statements.

3.2. External Audit The Queensland Audit Office’s appointed external auditors, William Buck continued in the external audit role during 2018/19.

The planned internal audit program for 2018/19 included: •

•

Water & Sewerage Management Practices including a review of our risk assessment in understanding, awareness, prevention and mitigation plans in relation to major asset failures (reservoirs etc).

Essential services Business Continuity Planning (water, waste, roads) readiness, recovery and/or compliance with Disaster Act Requirements. Review ICT BCP Processes.

Gladstone Regional Council 2018/19 Annual Report

•

That the Contracts Administration Internal Audit be recognised as an audit project brought forward from the previous year.

•

That Cybersecurity Governance Risk, Benaraby Landfill External Compliance Assessment, Delegation processes, Payroll and Payment Card Industry Security Standard Assessment projects be added to the audit plan.

•

That the Complaints Management Process audit be deferred until 2019/20.

•

That the internal audit project for procurement be deferred from the 2018/19 audit plan.

The Committee raised concerns about resourcing of the internal audit and compliance assurance functions. The Compliance and Assurance Officer was seconded to the organisation’s workplace health and safety team for four months with no additional resources sourced to complete the planned workload. The Committee accepted that the initial 12 months of the new structure will

entail some bedding down of processes, accountabilities and responsibilities and that effective resources will be prioritised next year.

The Committee continues to monitor the implementation of internal audit recommendations on a quarterly basis and has focused its attention on those audit issues that remain outstanding past accepted due dates and those that have longer due dates for completion. On balance, the Committee is satisfied with management’s attention to the implementation of audit recommendations.

3.4. Risk Management While it is Management’s responsibility to actively manage the organisation’s risks, the Business Improvement Committee provides the additional oversight in this area to challenge the reasonableness of management’s assumptions.

As a result of Council’s Organisation Redesign, the Committee was pleased to note that a Risk Specialist has been engaged to further progress and develop Council’s Risk Management culture. This appointment has also provided the opportunity for Council to again assess its risk management policy, processes and reporting. The Committee at its meeting on 20 March 2019 endorsed the approach to collaboratively review and revise the current Risk Management Policy and Corporate Standard to allow for an integrated risk management approach across Council for the management of strategic, operational and project related risks.

The chair reiterates the Committee’s view from last financial year that Council consider how audit can be further aligned with risk management. One indicator of a mature risk management system is its integration with audit so that the organisation has a more ‘assurance’ based risk management system through a program of regular testing by audit of risk control measures.

3.5. Business Improvement Committee Self-Assessment/Councillor Survey The Business Improvement Committee Charter requires that members assess the Committee’s performance in meeting its objectives.

34

This year the Committee conducted another self-assessment survey and Councillor survey building on the surveys from prior years (2011, 2013, 2014, 2015 and 2016). The results have again been consistent with prior years with positive results in most areas. In response to the feedback that interaction between elected Council and the Committee could be improved, Council has elected to meet directly with BIC external representatives twice per annum.

The next self-assessment and Councillor surveys will be conducted in the second half of 2020.

The Committee did conduct an assessment of its workplan and activities against its responsibilities as defined in Council’s policy.

Members consider that the workplan is meeting all delegated responsibilities under the policy.

3.6. Legal, Legislative and Confidential Matters The Business Improvement Committee sought and received at each meeting, a briefing from the Chief Executive Officer on significant matters facing Council at that time and the actions taken by management in response.

The Committee has requested that moving forward the Chief Executive Officer prepare a brief written synopsis of emerging issues potentially impacting on local government generally and on the organisation specifically, such as significant legislative change, potential risks, non-compliance or legal issues and other high-level strategic issues.

accurate valuation data for the purposes of financial reporting. The Committee is of the view that there is still considerable work to be done in this area however, it was pleased to see Council make a strong commitment through the engagement of contractor to complete the data integrity component of Council infrastructure asset registers to achieve a single source of truth for asset values prior to the end of the 2018/19 financial year.

It is positive that the organisation has recognised that there are issues that need to be addressed and it is prepared to make the changes required to facilitate improvements.

3.9. Procurement and Contracting Practices The Committee again requested quarterly reports on procurement and contracting practices during the financial year as the organisation progresses change as a result of its organisation redesign. The engagement of a Manager responsible for both Contracts and Procurement has seen a more strategic and coordinated approach to Council’s contract and procurement activities which the Committee considers will yield good results for the organisation. The improved reporting to BIC in this area has been most appreciated and the Committee is looking forward to seeing this area of the organisation continue to develop and improve.

The Committee continued to focus increased attention on asset management this financial year through quarterly reports.

Council’s transition to its new Asset Management system identified considerable issues and challenges associated with obtaining

The Committee is looking forward to further periodic briefings as the organisation matures into its new operating model.

Members were afforded the opportunity to review Council’s Business Improvement Committee Policy and the new Ethics, Integrity and Audit Policy and were pleased to provide feedback for Council’s consideration.

3.8. Asset Management

Gladstone Regional Council 2018/19 Annual Report

Statutorily the Business Improvement Committee in its current form is fulfilling the legislative requirements set out in the Local Government Regulation 2012. The Committee is also performing many of the requirements advocated in Better Practice Audit Committees Guidelines and has considered the perspectives of the Queensland Audit Office about Audit Committee effectiveness.

The Committee continues to develop in its role for Council and acquit its responsibilities under its Terms of Reference. Member and observer contributions are valued and are demonstrated through effective, collegiate working relationships supported by appropriate accountability structures.

The Chair expressed his gratitude to Committee members both old and new, and observers for their contribution, transparency and engagement with this important governance process. Without this, the effectiveness of the Committee would be significantly diminished.

3.10. Organisation Redesign The Committee has been progressively briefed on progress with the organisation redesign.

Renewal within an organisation has may positives but also requires the ongoing support of Council’s elected body to be successful.

From the Committee’s observations to date, it is pleasing to see that a number of issues such as risk, asset management, procurement and work health and safety receiving the appropriate levels of attention under the new structure. It is noted that there have been some issues in relation to work health and safety that still require attention. The Committee considers that Council’s approach to achieving improved results via cultural change will yield the improvements necessary.

3.7. Business Improvement Committee Policies

Conclusion

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COMMUNITY DEVELOPMENT. This financial year has presented a range of exciting opportunities and, at times, difficult challenges for the Gladstone Region community.

From devastating bushfires and ongoing drought to the delivery of new and enlivening events that generate community pride and economic benefit for our region.

In November 2018 several communities experienced unprecedented and catastrophic bushfires that destroyed over 82 per cent of the Deepwater National Park, displaced animals and livestock, and in some cases family homes and assets were lost. We are fortunate and grateful to all involved in attending to this natural disaster that we did not experience any loss of life.

Community Engagement Strategic and purposeful community engagement has continued to be a key theme for Council with the development and implementation of a new Community Engagement Policy, Standard and toolkit that will support enhanced engagement and better connect the community and Council.

In an effort to build community engagement capability across the organisation, Council embarked on an education program with the International Association of Public Participation (IAP2). A Community Engagement Working Group has been formed to enable community led decision making across Council’s strategic and operational initiatives.

From this devastation the community banded together to support each other and with assistance from the broader region, Council, support organisations, emergency services and the Local Disaster Management Group, are on the road to recovery and building strong, resilient communities.

Innovation in engagement practices has also been a focus this financial year with a community engagement digital platform being developed. This platform will enable the community to have access to a multitude of information with respect to Council’s initiatives, project planning, services, to seek feedback on our community programs and share stories.

The Central Queensland Bushfires have further provided opportunity to refine disaster management strategies and strengthen the collaborative approach between the parties involved in the Local Disaster Management Group.

In an effort to better connect with communities across our region, Council introduced Conversations with Council, an initiative where elected members and Council officers travel across our region to provide advice, listen to community feedback and to register or solve customer service requests.

A key focus has continued on the recovery of disaster affected communities across the financial year with the appointment of a Community Development Specialist - Recovery & Resilience.

Several key advisory groups and committees continue to provide vital information to Council to shape programs and inform decision making.

During the financial year a Reconciliation Action Plan Committee was formed and the development of Council’s Innovate

Reconciliation Plan is currently underway under advice of this group.

A reinvigorated Youth Council has been active in providing guidance and direction on youth issues and tactics to address these. This Committee has achieved tangible outcomes and are advocating for youth across our region.

Our Valued Volunteers Council is fortunate to have an engaged and loyal volunteer base that support the services, events and initiatives across our community facilities. Our volunteer program provides mutual benefit to both our volunteers and Council with both knowledge shared and the acquisition of new skills.

The ‘Friends Of’ volunteers program provides a diverse range of support from shelving of books, book sales, ushering, community events, tours of our botanic garden, providing visitor information, holiday program activities, bonsai, conservation, curating and hanging works of art and managing our herbarium.

In addition to our Friends Of programs, Council further provides volunteer support for tax returns for residents earning $60,000 or less.

Two volunteers successfully supported 79 people with their returns under the Tax Help program.

Council has five volunteer groups: • • • • •

Friends of Friends of Friends of Friends of Friends of

the Theatre the Tondoon Botanic Gardens the Libraries the Gallery & Museum Community Events

The Reconciliation Action Plan Committee will ensure the culture and history of our community remains embedded in all that we do.

Gladstone Regional Council 2018/19 Annual Report

36

Friends in Numbers

68 + 67 + 40 3,135 3,659 4,262 FRIENDS OF TBG

FRIENDS OF THE GALLERY & MUSEUM

FRIENDS OF THE THEATRE

HRS

HRS

+

83 231

HRS

+

46 4,357 = 304 15,644 FRIENDS OF COMMUNITY EVENTS

FRIENDS OF THE LIBRARIES

+

HRS

HRS

FRIENDS OF GRC

HRS

INVESTMENT OF TIME FROM OUR FRIENDS ACROSS OUR COUNCIL FACILITIES

Gladstone Regional Council 2018/19 Annual Report

37

ECONOMIC OPPORTUNITY. Strategic Goal - Grow the Region Strategic Objectives: • •

Advocate for future job creating industries Incentivise investment in the region

Key Activities:

2. Low emissions facilities

International Zero Waste Study Tour 2018

3. Technology overview.

Councillor Rick Hansen participated in the Peak Services - International Zero Waste Study Tour (24 August to 8 September 2018) with workshops in Denmark, Spain, United Kingdom and United States of America.

Following the Queensland Government’s commitment to zero waste to landfill and waste strategy discussions with the Local Government Association of Queensland (LGAQ), Peak Services (a division of the LGAQ) organised for Councils to attend established and operational facilities researching energy from waste.

Councils have committed through the LGAQ to ensure that Queensland is a world leader in waste management. This commitment has been brought about by the recycling crisis facing Australia.

The tour covered topics such as: 1. Zero Waste - Success principles, procurement and contract strategies, partnerships and share agreement examples, best practice facilities, high efficiency facilities, feedstock and upstream processing requirements, innovations and alternate technologies, strengths and weaknesses of countries globally, policy and market overview – comparison to Australia

Gladstone Regional Council 2018/19 Annual Report

The Study Tour was valuable in framing the principal objectives of the new GRC Waste Strategy that is dedicated to maximising and improving recycling and resource recovery rates, minimising landfill and reducing CO2 emissions. The Gladstone Waste Strategy will seek to develop a realistic pathway to the zero waste to landfill strategy.

The Inland Rail Conference Cr Rick Hansen attended the Australasian Railway Association and the Australian Logistics Council’s Inland Rail Conference on 18-19 July 2018 in Parkes, NSW. The Conference brought together attendees from Governments, Councils, Rail, Freight industries and farming communities to discuss the Inland Rail project. The Inland Rail project, a significant project, connecting regional Australia to domestic and international markets will complete the national freight network between Melbourne and Brisbane via regional Queensland, New South Wales and Victoria. This is the largest freight rail infrastructure project in Australia, with work operational by 2024.

The two-day event covered the importance of the project, how it will transform the movement of freight in Australia and the Federal Government’s National Freight and Supply Chain Strategy due for release later this year.

Rail networks are important to the Gladstone Region and critical to its industry, farming and the economy. The Gladstone Region is lobbying for the Inland Rail to be extended to the Port of Gladstone.

Sport And Recreation Regional Event Funding Program The Regional Sport and Recreation Event Grant Program (the Program) assists sporting clubs, community groups and businesses to deliver quality sport and active recreational events for the Gladstone Region.

The objective of the program is to: •

•

•

•

Assist local organisations to deliver successful sport and active recreation events; Attract, promote and retain quality sport and active recreation events that enhance the reputation and economy of the Gladstone Region; Attract visitors from outside the region who contribute to the region’s economic growth; and Develop opportunities to host and attract events in future years.

The Program has two rounds per year, opening in July and February. Round 1 opened 1 July 2018 and closed 31 July 2018.

38

Round 1 - Council approved 11 applications for funding totalling $12,800.

Round 2 - 13 applications were recommended to receive total of $26,200 funding.

Funds were available within Council’s annual budget for its 2018/19 Sport and Recreation Grant Program.

Gladstone Economic Development Advisory Group This group was established during the year to provide strategic collaborative leadership and coordination for the development of the Gladstone Region as a world class location for large scale sustainable industrial development, including resource processing, manufacturing, tourism and agriculture product value adding.

This is a strategic forum to share information and coordinate between stakeholders for the purpose of capturing and guiding potential developments into the region. The forum and functionality has been administered by GPC with the support and contribution of participants.

This information sharing and coordination has received wonderful feedback from project proponents who attend to update on their activities. The Group includes stakeholder organisations vested in the economic prosperity of the Gladstone Region including the Department of State Development and the Co-ordinator General, GRC and industry participants. Council endorses the participation of the Mayor and Chief Executive Officer as active members of the Gladstone Economic Development Advisory Group.

The group continues to focus on the opportunities offered by establishing Gladstone as the Hydrogen Hub for Queensland as part of the Queensland Governments $19M

Queensland Hydrogen Industry Strategy 2019–2024. Also, the significant development opportunities of the Bio Futures Industry and a vibrant tourist destination with a robust agriculture sector and a strong international trade sector.

Council approved the recruitment of an Economic Development Specialist in March 2019. The purpose of this new in-house position is to facilitate attraction of investment, generate enhanced infrastructure development and support business retention and development in the Gladstone Region. This role leads the implementation of Council’s Economic Development Strategy, including promotion of the Gladstone Region economy and its products and services at a regional, state, national and international level, and provides a central point of contact for all economic development stakeholders.

Bio 2019 & Bio World Congress Council representatives Mayor Matt Burnett and Carly Quinn (General Manager Strategy and Transformation) attended the Bio International Convention (BIO) in Philadelphia USA, 3-6 June and the Bio World Congress – Iowa USA, 8-11 July 2019.

Gladstone Regional Council’s Corporate Plan identifies a strong desire to actively promote and support the region and enable its growth and prosperity, particularly through Strategic Goal 8 - Grow the Region.

Key Activities identified in the Corporate Plan include: • •

Advocate for future job creating industries e.g. bio-fuels Incentivise investment to the region

• •

Promote the region Increase diversity of industries and occupational groups across the region.

One specific action identified in the Operational Plan is the development of a Biofutures Strategy. Another is the continued investment in Economic Development to promote Gladstone as a destination to industries of the future.

Two major Bio Industry conferences were identified as strategic opportunities to promote Gladstone to potential investors, the first of these being held during the 2018/19 year.

Bio International Convention (BIO) – Philadelphia USA, 3-6 June 2019. The Bio International Convention (BIO) attracts 16,000+ biotechnology and pharma leaders who come together for one week of intensive networking to discover new opportunities and promising partnerships. The event is supported as a priority event by the Queensland Government, and in particular, Queensland Premier Annastacia Palaszczuk who led a strong Queensland delegation.

Gladstone Regional Council is a member of the Open Worldwide Innovation Network (OWIN) who hosted a Queensland VIP Reception and a full day of networking/introduction events the day before the conference commenced on 2 June 2019. Mayor Matt Burnett has attended this event in 2017 and 2018, resulting in the attraction of investment from international company Mercurius. Mercurius have now announced they will be proceeding with a Gladstone pilot plant biorefinery.

During a trade mission to San Diego in 2017, Mercurius made it clear they recognised Queensland was committed to developing a biofuels industry. The Gladstone Region is committed to developing and innovating within the energy sectors, whether it be hydrogen,

The Gladstone Region balances an enviable lifestyle within a strong and dynamic economy.

Gladstone Regional Council 2018/19 Annual Report

39

LNG, bio-fuels, coal, solar or other forms for renewables. Projects such as this highlight the region’s strategic advantages and provide an opportunity to attract future projects.

Round Hill Creek Dredging Gladstone Regional Council continued its commitment to investigate options to improve access to Round Hill Creek. At the Council’s 19 February 2019 general meeting, the Round Hill Creek Channel Options report was presented for consideration. This report outlined the options to improve the navigation within the Creek would fall into two broad categories: •

•

hard structural options such as training walls with or without sand bypassing system at a significant capital cost; and soft options, one-off such as dredging at a lower repetitive capital cost.

It should be noted that within the Channel Options report, it is stated that significant work will be required in order to obtain the necessary environmental approvals. The current estimate to obtain these approvals are in the order of $1 million.

Council resolved to accept the Round Hill Creek Channel Options Report for use in advocating for funding to deliver the project and called upon the State and Federal Governments to immediately fund the significant capital cost of the proposed project.

Work continues on gathering statistics and information to clearly demonstrate the access issues within the creek and the impact it is having on existing businesses, or the tourism opportunities that are being missed, as well as the community safety concerns because of the uncertain access.

Tourism Gladstone’s reputation continues to grow as a safe and convenient destination for cruise ships during 2018/19 with the total number of cruise ships for the year at seven. Total number of passengers has been 15,242. Each passenger is estimated to have a daily spend of $141, crew are estimated to spend $66/day with the cruises estimated to inject $200,000 per visit.

Council commenced work on their Visitor Economy Strategy in Q4, 2018/19. The strategy will provide a framework for future tourism activities and specific actions to be implemented. In addition, specific sub-

Gladstone Regional Council 2018/19 Annual Report

strategies were created for the RV market and business tourism. The strategy will align with GAPDL’s Destination Tourism Plan review and the new KPI’s presented to GAPDL for the 2019/20 financial year.

ScUber launched in the Gladstone Region and more than 4000 articles highlighted our Region as a result. In addition, the SGBR Guide was launched.

Business Events and Tourism Significant work has been done in the attraction of business events in the 2018/19 financial year. The introduction of a dedicated Business Development Officer has seen GRC exhibiting at expos across the nation including AIME and Convene Q, showcasing our local region and our conferencing capabilities and facilities. As a result of this focus, four new major clients have been secured over the next two years and negotiations are underway with a further six.

Sports Events Sports Marketing Australia (SMA) have been engaged to conduct an audit of the region’s sporting facilities. SMA have actively pursued a number of sporting events on behalf of GRC with two having been secured. These types of events do not impact GRC resources heavily however have a positive economic impact.

Festivals & Community Events Gladstone Region continued to host a wide range of festivals and events with strong support and partnership of the Gladstone Regional Council. The list of events includes: • • • • • • • • • • • •

Agnes Blues Roots and Rock festival Gladstone Harbour Festival Boyne Tannum Hook Up 1770 Festival Turkey Beach Tractor Bash Mount Larcom & District Show Botanic to Bridge Baffle Creek Car and Bike Muster Brisbane to Gladstone Yacht Race Gladstone Multicultural Festival Day Under the Trees Music & Arts Festival Mayor’s Carols.

In addition, Gladstone Regional Council’s newly developed Community Events Team continued to host, or developed and hosted, a number of events for the region. These included:

• • • • • • • • • • • •

Luminous Children’s Festival Christmas Street Party Ecofest Australia Day Brisbane to Gladstone Village Major sporting events at Marley Brown Oval Mayor’s Charity Ball SUNfest Moonlight Movies Live @ Library Square Christmas Street Party.

A total of 33 events has been delivered by this team in 2018/19.

GRC’s five-year Regional Events Strategy has been adopted which identifies four priorities, four competitive advantages and a number of action items. This tool will be used as a lense for developing event calendars and assessing GRC’s funding/support to an event to ensure maximum outcomes and benefit.

2019 Local Government Finance & Strategic Leadership Summit Gladstone Regional Council hosted the Summit in Gladstone, from Tuesday 26 to Wednesday, 27 February 2019. Gladstone Entertainment Convention Centre (GECC) played host to hundreds of local government delegates from across Queensland for duration of the event.

Mayor Matt Burnett hosted LGA leaders from across the state at the 2019 Local Government Association of Queensland’s (LGAQ) Finance and Strategic Leadership Summit with some of Council’s senior leaders.

Hosting the Summit enabled Council to gain greater insight into important topics for local governments - leadership, culture and governance. The information delivered by industry experts had been specifically designed to assist local government leaders and provides valuable knowledge about strategy and governance; finance and reporting. The Summit had provided an important platform to share information, learn new skills and hear about approaches which could be applied at councils. As an added bonus, the summit provided a great opportunity to showcase the Gladstone Region, boost the regional visitor economy, attract future tourism to the area and to highlight the conference facilities on offer at the GECC.

40

Sunrise in Gladstone On 5 March 2019 Channel 7 program Sunrise broadcast their live weather crosses from Auckland Hill, Gladstone. This opportunity was used to launch the Easter in Gladstone campaign including promotion for the Gladstone Harbour Festival, the Brisbane to Gladstone Yacht Race and the addition of the Brisbane to Gladstone Village.

Works for Queensland The 2017/19 Works for Queensland (W4Q) program supports regional councils to undertake job-creating maintenance and minor infrastructure projects. Council’s 2017/19 W4Q program allocation was $5,990,000, delivered over two years ending in 2018/19. This funding allowed Council to deliver multiple community and infrastructure based projects, including: • • • • • • • • •

Harbour City BMX Club Track Upgrade Western Suburbs Swimming Pool Upgrade Calliope & District Multipurpose Facility Bunting Park Dog Agility Area Various Footpath Renewals and Upgrades Bray Park Pump Track & Skate Park Gladstone Kart Club Canteen Gladstone Rugby League Centre of Excellence Laydown Slab for Recycle Glass for Pipe Bedding at Benaraby Landfill.

Some other key projects completed which were enabled by external funding in the 2018/19 year included: •

•

•

•

Boyne Island Car Park at Beltana Drive Building our Regions funding $250,000 ($500,000 total project cost) Red Rover Road Cycle Lanes - Cycle Network Local Government Grants $120,500 ($241,000 total project cost) Waste Levy Software and Infrastructure at the Benaraby Landfill - Local Government Levy Ready Grant Program $99,875 ($180,000 total project cost) Kirkwood Road & Lavender Boulevard Intersection Upgrade - Black Spot Program $400,275 fully funded.

Council was proud to open Bray Park Pump Track and Skate Park.

Gladstone Regional Council 2018/19 Annual Report

41

PERFORMANCE SNAPSHOT. Measuring organisational sustainability is a key management tool for Council to gauge a solid foundation for our community and to ensure that Council is in a position to meet the needs of the community into the future. To that end, our performance snapshot provides insight into a number of these sustainability measures, grouped according to themes. These include: • • • •

our environmental footprint; our continuous improvement endeavours; the sustainability of our human resources; and our financial sustainability.

Environmental footprint ENERGY CONSUMPTION ($’000)

ENERGY CONSUMPTION (kW)

5000

20

4000

15

3000

10 2000

5 1000

0

2014/15

2015/16

2016/17

2017/18

0

2018/19

The cost of Council’s energy consumption has increased slightly as a result of increased energy demands across the organisation.

2014/15

2015/16

2016/17

2017/18

2018/19

The number of kilowatts consumed has increased compared to the previous year. Council remains committed to reducing the number of kilowatts used for Council operations.

Continuous improvement Customer Service Request (CSR) CLOSEOUT RATE

 Within 0-5 Days  Within 6-10 Days  Within 11-15 Days  Within 16-31 Days  Over 31 Days  Not Yet Closed

25000

20000

15000

10000

5000

0

2014/15

2015/16

2016/17

2017/18

2018/19

Council’s Customer Service Charter specifies the timeframes in which customer service requests (CSR’s) must be dealt with. The graph demonstrates an increase in the number of CSR’s resolved in the minimum timeframe and our strong focus on the customer experience.

Gladstone Regional Council 2018/19 Annual Report

42

Human resource sustainability EMPLOYEE TURNOVER (Number)

LOST TIME INJURIES LTI CLAIMS (Number)

LOST TIME INJURIES (Number of Days Lost)

150

25

500

120

20 375

90

15

60

10

30

5

250

0

2014/15

2015/16

2016/17

2017/18

2018/19

0

125

2014/15

2015/16

2016/17

2017/18

2018/19

0

2014/15

2015/16

2016/17

2017/18

2018/19

There was a 14% improvement in the number of lost time injury claims in the 2018/19 financial year. Lost time injuries indicate the severity of the injuries that occurred and show that Council’s work to increase the focus on health, safety and wellness has helped to drive this trend downwards.

Total number of days lost through injury provides an indication of the severity of the injuries and shows an 18% improvement from the previous year. The average days lost per claim was 21.61 which compares favourably with the average of all Councils in the LGW scheme (average days lost 25.99).

GOVERNMENT FUNDING ($ Million)

CAPITAL EXPENDITURE (%)

OPERATIONAL EXPENDITURE (%)

10.0

100

7.5

75

90

5.0

50

60

2.5

25

30

Council turnover has historically reflected changes within the Gladstone Region and been heavily influenced by movement in the industrial field. The increase in turnover in the 2018/19 year reflects the change to organisational structure and subsequent redundancies.

Financial sustainability

0.0

2014/15

2015/16

2016/17

2017/18

2018/19

This indicator illustrates the pressures on Council’s finances that must be borne through other sources of revenue. There has been a slight increase from 2017/18 to 2018/19 attributable to an increase in the Financial Assistance Grant.

Gladstone Regional Council 2018/19 Annual Report

0

120

2014/15

2015/16

2016/17

2017/18

2018/19

This indicator illustrates Council’s capital spending against the original budget set.

As Council adapted to a new organisational structure, there were delays to the captial works program in 2018/19.

0

2014/15

2015/16

2016/17

2017/18

2018/19

This indicator illustrates Council’s operational spending against the original budget set.

Council has continued to improve budgeting estimates and project management to ensure that operational budgets are not substantially exceeded. Progress has been made and is evident in a decrease in this measure from the 2017/18 year.

43

COMMUNITY FINANCIAL REPORT. This Community Financial Report is included as a key part of Council’s Annual Report to provide members of the community, our business partners, our employees and all relevant stakeholders a better understanding of Council’s financial position and financial performance throughout 2018/19.

Our goal in community financial reporting is to provide a report that is as comprehensive as it is comprehensible and offers an honest, transparent account of our financial performance.

We recognise that a crucial element of financial performance incorporates a blend of retrospective reporting and forecasting.

Information relating to our unconsolidated financial performance and budgeting (that is, Gladstone Regional Council’s performance excluding the performance of the controlled entity Gladstone Airport Corporation) appears on pages 44 - 47. Pages 48 - 52 offer similar consolidated information.

Council’s Revenue and Expenses A snapshot of Council’s revenue and expenses is shown below.

Where does Council revenue come from?

Recurrent Revenue  General rates and service charges

2014/15 2015/16 2016/17 2017/18 2018/19 74% 78% 75% 76% 77%

 Fees and charges

7%

6%

6%

6%

5%

 Other recurrent revenue

10%

7%

11%

8%

8%

 Operating grants and contributions

6%

6%

6%

8%

8%

 Interest

3%

3%

2%

2%

2%

Revenue

The bulk of Council’s operating revenue is generated through general rates and service charges.

General rates are essentially a tax on property and are based on the value of land. Residential properties are assessed by the Valuer General on their ‘site’ value and rural property on their ‘unimproved’ value. Service charges are levied on properties that receive a specific service.

Services that Council provides and levies a charge on rates notices include:

Garbage collection Includes kerbside wheelie bin collection

Water access charge Maintenance, repair and upgrading of the water network

Water consumption charge Per kilolitre charge for water consumed

Sewerage charge Maintenance, repair and upgrading of the sewerage network

Other sources of income include: Fees and charges These are the fees and charges that Council imposes for providing other services to customers, such as development application fees, animal registration costs, licence fees, facility entrance charges and the like.

Grants and subsidies This is generally funding from other sectors of government, both state and federal.

Gladstone Regional Council 2018/19 Annual Report

Recoverable works These are the works that Council undertakes on behalf of others and recovers the costs.

For example, the Department of Transport and Main Roads pays Council to perform maintenance work on some main roads in the region.

Transfers from reserve funds Money that has been put aside in previous years to fund new or replacement infrastructure.

Loan funding Money borrowed from external parties.

Interest Interest earned on money invested.

44

How are Council expenses allocated?

Recurrent Expenses  Materials and services

2014/15 2015/16 2016/17 2017/18 2018/19 42% 41% 41% 42% 43%

 Employee costs

31%

29%

30%

31%

31%

 Depreciation and amortisation

22%

25%

25%

24%

23%

 Finance costs

5%

5%

4%

3%

3%

Expenses

Expenditure by Business Unit Council’s organisation is divided into Business Units and each unit is provided with a budget allocation to maintain and operate existing infrastructure and services, and for new capital projects. As Council redesigned its organisational structure in 2018, the below table contains only two years of comparative data.

Recurrent Expenses by Business Unit  Strategy & Transformation

2017/18 4%

2018/19 7%

 Finance Governance & Risk

1%

3%

 Community Developments & Events

10%

10%

 Operations

24%

12%

 Customer Experience

6%

6%

 Strategic Asset Performance

53%

62%

 People Culture & Safety

2%

-1%

Gladstone Regional Council 2018/19 Annual Report

Expenses by Business Unit

45

2018/19 BUDGET. Council’s budget is informed by its Long Term Financial Plan. This ensures that the long term picture of service levels, rate increases, capital programs and borrowing levels are considered when developing the budget.

Operating versus capital spending - what is the difference?

Council’s budget is considered in two parts:

The operating budget - $233.7 million The operating budget represents the monies required to operate and maintain existing services and infrastructure, such as roads, water, sewerage and parks.

This expenditure includes day-to-day running of the many community and recreation facilities, including Council’s libraries, administration centres, art gallery, community engagement centre, pools and entertainment convention centre.

The capital budget - $103.7 million The capital budget represents money allocated to providing new infrastructure, or adding new components to existing infrastructure. Examples of capital projects include building new parks, roads, bridges and transport facilities; new community centres; or adding new components to existing parks, buildings or water and sewerage networks.

Borrowings were not intended to be used to fund any of Council’s 2018/19 capital works program.

Delivery of significant infrastructure across the region is being partly funded from direct corporate contributors, headworks receipts from developers, as well as partnerships between Council and state and federal governments.

Waste services expenditure is contained within the operating budget.

Gladstone Regional Council 2018/19 Annual Report

46

Budget Funding Snapshot

Connect ARTS & CULTURE

ROADS & DRAINAGE

$7.7M $99.7M $47.8M $16.4M $1M $16M $4M $48.9M $19.7M WATER

DISASTER MANAGEMENT

RECYCLING & WASTE

PARKS & OPEN SPACES

SEWERAGE

CONSERVATION

COMMUNITY DEVELOPMENT & EVENTS

Innovate CURRENT ASSET VALUE

$2.3B Diversify ECONOMIC DEVELOPMENT

MAJOR EVENTS FUNDING

$835K $340K $103.7M CAPITAL INVESTMENTS

Gladstone Regional Council 2018/19 Annual Report

47

FINANCIAL RATIO PERFORMANCE. Financial ratios provide useful a snapshot of Council’s financial status and trends (see pages 49 to 50 for graphical representations and commentary of Council’s 2018/19 performance as informed by financial ratio analysis).

Council aims to operate in a manner that ensures that it is financially sustainable in both the short and long term. As part of monitoring this, Council utilises a series of sustainability ratios that act as a collective guide to the financial health of the organisation.

These indicators are reported monthly to Council as part of its monthly financial statements, ensuring that Council is fully informed and in a position to identify any corrective action necessary.

Individual ratios often do not provide sufficient information to form a comprehensive opinion of Council’s financial position and performance.

However, when the right mix of ratios are considered together, they become an important tool in analysing Council’s results for the

year. Ratios are also useful when comparing Gladstone Regional Council to other councils.

We use a mix of ratios, in combination with bottom line results and long-term financial planning to inform our financial decision making and to ensure sustainable use of finite financial resources now, and into the future.

The indicators that follow show the actual consolidated results for 2018/19 and the next three years’ forecast financial information.

Targets are in line with industry standards.

Each ratio has a target that is determined in line with best practice for local government with Council ratios reported to the Executive Leadership Team and Councillors monthly to provide Council’s decision makers with an ongoing and current snapshot of Council’s sustainability.

Overall, Council’s financial performance remains solid and is currently trending positively.

Council remains in a sound position to deal with any significant emergent financial impacts.

Ratio

Target Target Actual Forecast Forecast Forecast Achieved 2018/19 2019/20 2020/21 2021/22 Infrastructure Capital Sustainability Asset Sustainability Ratio N >90% 40% 66% 102% 94% Net Interest Coverage Ratio Y 0%-10% 1.43% 1.47% 1.46% 1.33% Debt Service Coverage Ratio Y >2x 3.63 3.34 3.53 3.77 Financial Capital Sustainability Operating Surplus Ratio Y 0%-15% 5.07% 0.96% -0.42% -0.29% Working Capital Ratio Y >1:1 4.47 3.47 2.55 2.17 Net Financial Liabilities Ratio Y <60% 1% 36% 41% 40%

Capital budget represents money allocated to providing new infrastructure, or developing existing infrastructure.

Gladstone Regional Council 2018/19 Annual Report

48

Infrastructure Capital Sustainability DEFINITION

Asset Sustainability Ratio

The asset sustainability ratio is an approximation of the extent to which the infrastructure assets managed by Council are being replaced as they come to the end of their useful lives. This ratio indicates whether Council is renewing or replacing existing non-financial assets at the same rate that the overall stock of assets is wearing out.

200

160

120

80

Target Minimum: >90%

COMMENTARY 40

0

2014/15

2015/16

2016/17

2017/18

2018/19

Net Interest Coverage Ratio 10 Target Maximum: 10%

8

6

Expenditure on asset replacement is anticipated to increase in the coming years from the 2018/19 result of 40%. The 2018/19 result is historically low due to delays in delivering Council’s capital program following the organisational restructure in August 2018.

This ratio is expected to increase significantly in 2019/20 and 2020/21 as this expenditure normalises following completion of the deferred asset replacement works, and in line with the projected cyclical investment in the renewal of Council’s asset base. This indicator is closely monitored, however due to the cyclical nature of asset maintenance and renewal, it is anticipated that the ratio will average closer to the benchmark in the longer term. When considering the renewal of Council’s asset base it is expected that there will be periods of heavier investment. It is important to consider the long term trends when looking at this indicator as Council’s infrastructure assets have lives up to, and in some cases exceeding, 100 years.

DEFINITION

COMMENTARY

This ratio provides the share of operating revenue that is committed to covering the gap between interest earned and interest paid. The net interest coverage ratio is an indicator of Council’s ability to meet its interest payments, with a low result being desirable.

Council has currently committed 1.4% of operating revenue to cover interest expenses.

This result is within the target range of 0-10% and has been reducing in line with interest expenditure over the past three years.

DEFINITION

COMMENTARY

The debt service coverage ratio measures Council’s ability to meet its debt servicing obligations from its operating position before depreciation and interest payments.

It indicates the extent to which Council’s operating resources are committed to meeting its debt obligations.

At 3.63x, Council is currently well above the target for this indicator (2x) and is expected to remain in a solid position based on 2019/20 forecasts. This indicates Council is in a position to service its debt obligations 3.63 times from its operating result before depreciation. Council’s consolidated income is utilised to meet debt obligations associated with the borrowings for long term assets such as sewerage treatment plants, trunk water infrastructure and airport infrastructure. No increases in borrowings were incurred and a reducing interest expense is anticipated during the forecast period.

4

2

0

Target Minimum: 0% 2014/15

2015/16

2016/17

2017/18

2018/19

Debt Service Coverage 10

8

6

4

2 Target Minimum: >2

0

2014/15

2015/16

2016/17

2017/18

Gladstone Regional Council 2018/19 Annual Report

2018/19

49

Financial Capital Sustainability Operating Surplus Ratio 15%

Target Maximum: 15%

DEFINITION

COMMENTARY

The operating surplus ratio measures the percentage by which Council’s major income source and operating grants varies from our day-to-day expenses.

Council made an operating surplus of $10.2 million in 2018/19. This result is an increase from the previous financial year and is largely due to an increase in rating revenue as well as a decrease in recurrent expenditure, namely finance costs and depreciation.

DEFINITION

COMMENTARY

The working capital ratio, also commonly known as the liquidity ratio, measures Council’s ability to pay off our current liabilities with current assets.

Council is positioned to continue to fund its current obligations 4.47 times, well in excess of the target ratio of 1:1. These results are strengthened by a healthy cash balance.

Council expects to remain above the target in the 2019/20 and 2020/21 years.

DEFINITION

COMMENTARY

The net financial liabilities ratio indicates the extent to which net financial liabilities could be met by Council’s operational income.

A positive value of less than 60% indicates that Council has the capacity to fund liabilities as well as the capacity to increase its loan borrowings. A positive value greater than 60% indicates that Council has limited capacity to increase its loan borrowings. The 2018/19 position of 1% is within target levels and reflects an ability to service further debt, if necessary. The ratio result is expected to rise over 2019/20 and 2020/21 as the current asset base is reduced due to deferred project completion, however it is still expected to remain within the target range.

10%

5%

Target Minimum: 0%

-0.5%

2014/15

2015/16

2016/17

2017/18

2018/19

Working Capital Ratio 10

8

6

4

2 Target Ratio: 1:1

0

2014/15

2015/16

2016/17

2017/18

2018/19

Net Financial Liabilities Ratio 60

Target Maximum: <60%

48

36

24

12

0

2014/15

2015/16

2016/17

2017/18

Gladstone Regional Council 2018/19 Annual Report

2018/19

50

What were the major sources of income to the consolidated Council? $15.692M

Operating grants and contributions

$4.390M Interest

$16.092M

Other recurrent revenue

Operating Income 2018/19

$17.956M

Fees and charges

$201.402M

$147.272M

General rates and service charges Council received $201.4 million in recurrent revenue in the 2018/19 financial year inclusive of $9.2 million received by the Gladstone Airport Corporation. The greatest contribution was provided by rates and utility charges (73%), followed by user fees and charges (9%) operating grants and subsidies (8%), and other recurrent revenue (8%). The graph depicted above shows the relevant breakdown.

Total operating revenue has increased by $7.4 million (4%) over the previous year and is primarily attributed to an increase in rates and utility charges (5%). Interest received has also increased by $0.1 million (3%).

This graph illustrates that 73% of Council’s total operating revenue comes from rates and utility charges (that is, water, sewerage and cleansing charges).

This demonstrates a clear reliance on general rates and service charges as the predominant income stream to Council.

This percentage is considered normal for councils with a large urban centre.

Generally, the larger the urban base of a local government, the higher the reliance on rating revenue as a source of income.

What were the major expenses of the consolidated Council? $7.786M

Finance costs

$44.019M

Depreciation and amortisation

Operating Expenses 2018/19 $191.185M

$81.625M

Materials and services

$57.755M

Employee costs This chart provides a breakdown of Council’s $191.2 million total operating expenditure. The primary expense components include employee costs, materials and services, finance costs and depreciation.

Total operating expenses decreased by $3.4 million (2%) over the previous year with significant decreases across finance costs (7%), depreciation costs (5%) and employee benefits (4%). Other notable points include: Materials and services totalled $81.6 million, totalling 43% of operating expenses. The largest individual item was $25.8 million on contractors performing works on behalf of Council, with bulk water purchases the next largest at $17.4 million. Together these two line items accounted for 53% of the materials and services expenditure for the year. Other costs included in materials and services are payments to suppliers for the delivery of Council’s vast range of services and projects to the community including roads, parks, water, sewerage, footpaths, bikeways, libraries, pools, airports, community halls and town planning. It also includes payments for bitumen materials, gravel, electricity, petrol and other operational costs.

Gladstone Regional Council 2018/19 Annual Report

Employee benefits accounted for $57.8 million - 30% of operating expenditure.

This includes employee salaries and wages, superannuation, leave entitlements and Councillor remuneration.

Council’s depreciation expense was $44.0 million - 23% of operating expenditure.

While this does not represent cash spent, it recognises the value of our assets ‘consumed’ during the period.

This depreciation charge shows that the community consumed approximately 2% of the asset base over the period.

Finance costs totalled $7.8 million for the year - 4% of total operating expenditure.

As Council continues to pay down its debts, it is anticipated that finance costs will continue to decrease.

51

What is the value of the community’s assets? $1.695M

Cultural Assets

$32.083M

$120.783M

Land and Improvements

$21.071M

Plant and Equipment

Park Furniture and Other Structures

$151.489M Buildings

$374.860M

Sewerage Infrastructure

$1.105B

Road Drainage and Transport Infrastructure

$5.092M

Major Plant and Equipment

Property, Plant and Equipment Asset Classes 2018/19 $2.087B

$61.629M

Work in Progress

$214.653M

Water Infrastructure

Total Council controlled assets had a total value of $2.2 billion as at 30 June 2019, which represented an increase in the community’s assets during 2018/19 of $6.1 million. This graph illustrates the breakdown of Council’s property, plant and equipment asset and classes. In 2018/19 $29.4 million worth of capital works were completed, compared to $47.5 million in 2017/18.

The major components of assets are property, plant and equipment (land, buildings, road network, water and sewerage infrastructure, capital works in progress), which accounted for $2.1 billion. Cash and deposits totalled $116.7 million. A large proportion ($84.1 million) of the cash held is earmarked as reserves for future capital expenditure.

The breakup of the $2.1 billion of property plant and equipment assets controlled by Council can be viewed in the graph.

What is the value of our liabilities? $4.652M

Borrowings - Interest Free

$2.574M Liabilities 2018/19 $150.571M

$114.858M

Borrowings - Interest Bearing

Other Liabilities

$7.915M Provisions

$20.572M

Trade and other payables

Council’s liabilities include loans, amounts owed to suppliers, an advance payment to offset the Waste Levy and provisions for employee leave entitlements as well as the restoration of the Benaraby Landfill. The total liabilities at 30 June 2019 was $150.6 million, a significant decrease from the 2017/18 balance of $163.1 million.

Council’s largest single liability is its interest bearing loans with Queensland Treasury Corporation at $114.9 million as at 30 June 2019 (down $8.8 million from 2018). Council did not borrow any funds in 2018/19 as was the case for the previous three years.

Gladstone Regional Council 2018/19 Annual Report

Other liabilities comprise of an advance payment of $2.6 million which was received from the State Government to mitigate the direct impacts on households of the State Waste Levy, which came into effect from 1 July 2019.

52

RATES IN ACTION. Each year, Council embarks on a comprehensive budgeting process to meet the needs of our community and ensure that the organisation operates in a sustainable way, to continue to meet the needs of this generation and the next. For every $100 of rates actually received, Council delivers a wide range of services, apportioned in 2018/19 as detailed below:

$15.20 Sewer $14.28 Water

$6.48 Waste Spend per $100 of rates 2018/19

$30.97 Roads

$9.26

Parks & Space

$3.03 Asset Management $3.17 Community Wellbeing, incl Sport & Recreation and Pools $4.47 Arts & Culture $13.14 Customer Service, Admin, Property, IT etc.

Rates allow Council to provide services and facilities including our regional libraries.

Gladstone Regional Council 2018/19 Annual Report

53

FINANCIAL STATEMENTS. Each year, Councilâ&#x20AC;&#x2122;s financial statements are audited by an external party to ensure that they are accurate, valid and transparent. An independent audit certificate was received from the Queensland Audit Office in October 2019.

Financial Statements Table of Contents Statements of Statements of Statements of Statements of

Comprehensive Income .............................................................

Financial Position ...................................................................

Changes in Equity ....................................................................

Cash Flows .............................................................................

54 55 56 58

Notes to the Financial Statements 1 Significant accounting policies .................................................................................................... 59 2 Analysis of results by function .................................................................................................... 64 3 Revenue analysis ........................................................................................................................ 67 4 Grants, subsidies, contributions and donations .......................................................................... 69 5 Employee benefits ....................................................................................................................... 70 6 Materials and services ................................................................................................................ 72 7 Finance costs .............................................................................................................................. 72 8 Capital expenses ......................................................................................................................... 73 9 Cash and cash equivalents ......................................................................................................... 73 10 Trade and other receivables ....................................................................................................... 74 11 Land purchased for development and sale ................................................................................ 76 12 Investment in controlled entity .................................................................................................... 76 13 Investment property ................................................................................................................... 77 14 Property, plant and equipment ................................................................................................... 78 15 Trade and other payables ........................................................................................................... 91 16 Other liabilities ............................................................................................................................ 91 17 Borrowings ................................................................................................................................. 92 18 Borrowings - interest bearing .................................................................................................... 93 19 Borrowings - interest free .......................................................................................................... 93 20 Provisions ................................................................................................................................... 94 21 Asset revaluation surplus ........................................................................................................... 95 22 Reserves ..................................................................................................................................... 96 23 Commitments for expenditure .................................................................................................. 100 24 Contingent liabilities ................................................................................................................. 101 25 Superannuation ....................................................................................................................... 102 26 Trust funds ............................................................................................................................... 103 27 Reconciliation of net result for the year to net cash inflow from operating activities ............. 104 28 Reconciliation of liabilities arising from finance activities ........................................................ 105 29 Financial instruments ............................................................................................................... 106 30 National competition policy ...................................................................................................... 110 31 Transactions with related parties ............................................................................................ 112 Management Certificate .............................................................................. 116 Independent Audit Report ........................................................................... 117

We are committed to the responsible management of funds to support our community and community assets.

Gladstone Regional Council 2018/19 Annual Report

54

Statements of Comprehensive Income For the year ended 30 June 2019

Consolidated Note

Income

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

Revenue Recurrent revenue Net rate and utility charges

3(a)

147,272

140,325

147,358

140,412

Fees and charges

3(b)

17,956

18,119

9,707

9,799

Interest received

3(c)

4,390

4,259

4,065

3,965

Other recurrent income

3(d)

16,092

16,230

15,373

15,119

Grants, subsidies, contributions and donations

4(a)

Total recurrent revenue Capital revenue Grants, subsidies, contributions and donations

4(b)

Total capital revenue Total income

15,692

15,066

15,692

15,066

201,402

193,999

192,195

184,361

14,801

14,478

14,801

14,478

14,801

14,478

14,801

14,478

216,203

208,477

206,996

198,839

Expenses Recurrent expenses Employee benefits

5

(57,755)

(60,221)

(56,047)

(56,674)

Materials and services

6

(81,625)

(79,625)

(78,418)

(77,994)

Finance costs

7

(7,786)

(8,335)

(5,620)

(6,228)

(44,019)

(46,406)

(41,470)

(43,969)

(191,185)

(194,587)

(181,555)

(184,865)

(4,721)

(8,962)

(4,731)

(8,784)

(195,906)

(203,549)

(186,286)

(193,649)

Net recurrent result

10,217

(588)

10,640

(504)

Net result

20,297

4,929

20,710

5,190

Depreciation and amortisation Total recurrent expenses 8

Capital expenses Total expenses

Other comprehensive income Items that will not be reclassified to net result

(1,665)

19,730

(1,111)

18,380

Total other comprehensive income for the year

(1,665)

19,730

(1,111)

18,380

Total comprehensive income for the year

18,632

24,659

19,599

23,570

Increase/(decrease) in asset revaluation surplus

21

The above statement should be read in conjunction with the accompanying notes and Significant Accounting Policies

Gladstone Regional Council 2018/19 Annual Report

2

55

Statements of Financial Position As at 30 June 2019

Consolidated Note

Current assets

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

Cash and cash equivalents

9

116,743

112,103

103,412

99,605

Trade and other receivables

10

29,567

24,701

27,249

23,246

1,912

3,116

1,912

3,116

Inventories Land purchased for development and sale

11

148,222

Total current assets Non-current assets

411 140,331

132,573

411 126,378

Investment property

13

3,334

4,056

3,334

4,056

Property, plant and equipment

14

2,087,985

2,089,223

2,001,492

1,999,887

204

314

204

314

-

-

71,854

71,854 33,716

Intangible assets Investment in controlled entity

12

Trade and other receivables

10

-

-

33,716

Land purchased for development and sale

11

255

-

255

-

Total non-current assets

2,091,778

2,093,593

2,110,855

2,109,827

Total assets

2,240,000

2,233,924

2,243,428

2,236,205

Current liabilities Trade and other payables

15

20,572

25,836

19,933

25,004

Borrowings - interest bearing

17

9,607

9,081

9,607

9,081

Borrowings - interest free

17

393

374

393

374

Other liabilities

16

2,574

-

2,574

-

33,146

35,291

32,507

34,459

Total current liabilities Non-current liabilities Borrowings - interest bearing

17

105,251

114,575

105,251

114,575

Borrowings - interest free

17

4,259

4,653

4,259

4,653

Provisions

20

7,915

8,611

7,897

8,606

Total non-current liabilities

117,425

127,839

117,407

127,834

Total liabilities

150,571

163,130

149,914

162,293

2,089,429

2,070,794

2,093,514

2,073,912

Net community assets

Community equity 1,454,630

1,436,438

1,445,559

1,426,954

Asset revaluation surplus

21

550,650

552,315

563,806

564,917

Reserves

22

84,149

82,041

84,149

82,041

2,089,429

2,070,794

2,093,514

2,073,912

Retained surplus

Total community equity

The above statement should be read in conjunction with the accompanying notes and Significant Accounting Policies

Gladstone Regional Council 2018/19 Annual Report

3

56

Statements of Changes in Equity For the year ended 30 June 2019

Consolidated

Note

Retained surplus

Asset revaluation surplus

Reserves

Total

$'000

$'000

$'000

$'000

1,436,438

Balance as at 1 July 2018

3

14

Found assets first recognised

1,436,441

Restated balance as at 1 July 2018

20,297

Net operating result Other comprehensive income for the year Increase / (decrease) in asset revaluation surplus

21

Total comprehensive income for the year Total capital revenue Transfers to / (from) capital

22

Transfers to / (from) reserves

22

Total transfers to / (from) reserves

552,315

82,041

-

2,070,794

-

552,315

82,041

-

3 2,070,797

-

20,297

-

(1,665)

-

(1,665)

20,297

(1,665)

-

18,632

(11,910)

-

11,910

-

9,802

-

(9,802)

-

(2,108)

-

2,108

-

Balance as at 30 June 2019

1,454,630

550,650

84,149

2,089,429

Balance as at 1 July 2017

1,419,895

532,585

90,835

2,043,315

9

Adjustment to reserve balance as at 30 June 2016 Adjustment relating to prior year overstatement 14

Found assets first recognised

Net operating result Other comprehensive income for the year: Increase / (decrease) in asset revaluation surplus

21

Total comprehensive income for the year Total capital revenue

(9)

-

(29)

-

-

(29)

2,849

-

-

2,849

1,422,724

Restated balance as at 1 July 2017

-

532,585

90,826 -

2,046,135

4,929

-

4,929

-

-

-

-

-

-

-

-

19,730

-

19,730

4,929

19,730

-

24,659

Transfers to / (from) capital

22

(10,745)

-

10,745

-

Transfers to / (from) reserves

22

19,530

-

(19,530)

-

8,785

-

(8,785)

-

Total transfers to / (from) reserves

Restated Balance as at 30 June 2018

1,436,438

552,315

The above statement should be read in conjunction with the accompanying notes and Significant Accounting Policies

Gladstone Regional Council 2018/19 Annual Report

82,041

2,070,794

4

57

Statements of Changes in Equity For the year ended 30 June 2019

Council

Note

Retained surplus

Asset revaluation surplus

Reserves

Total

$'000

$'000

$'000

$'000

1,426,954

Balance as at 1 July 2018

3

14

Found assets first recognised

1,426,957

Restated balance as at 1 July 2018

20,710

Net operating result Other comprehensive income for the year Increase / (decrease) in asset revaluation surplus

21

Total comprehensive income for the year Total capital revenue Transfers to / (from) capital

22

Transfers to / (from) reserves

22

Total transfers to / (from) reserves

564,917

82,041

-

2,073,912

-

564,917

82,041

-

3 2,073,915

-

20,710

-

(1,111)

-

(1,111)

20,710

(1,111)

-

19,599

(11,910)

-

11,910

-

9,802

-

(9,802)

-

(2,108)

-

2,108

-

Balance as at 30 June 2019

1,445,559

563,806

84,149

2,093,514

Balance as at 1 July 2017

1,410,150

546,537

90,835

2,047,522

9

Adjustment to reserve balance as at 30 June 2016 Adjustment relating to prior year overstatement 14

Found assets first recognised

Net operating result Other comprehensive income for the year Increase / (decrease) in asset revaluation surplus

21

Total comprehensive income for the year Total capital revenue

(9)

-

(29)

-

-

(29)

2,849

-

-

2,849

1,412,979

Restated balance as at 1 July 2017

-

546,537

90,826 -

2,050,342

5,190

-

5,190

-

-

-

-

-

-

-

-

18,380

-

18,380

5,190

18,380

-

23,570

Transfers to / (from) capital

22

(10,745)

-

10,745

-

Transfers to / (from) reserves

22

19,530

-

(19,530)

-

8,785

-

(8,785)

-

Total transfers to / (from) reserves

Restated Balance as at 30 June 2018

1,426,954

564,917

The above statement should be read in conjunction with the accompanying notes and Significant Accounting Policies

Gladstone Regional Council 2018/19 Annual Report

82,041

2,073,912

5

58

Statements of Cash Flows For the year ended 30 June 2019

Consolidated Note

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

Cash flows from operating activities Receipts from customers Payments to suppliers and employees

181,377

181,027

171,372

171,218

(150,470)

(143,427)

(144,280)

(137,135)

30,907

37,600

27,092

34,083 3,965

Interest received

3(c)

4,390

4,259

4,065

Rental income

3(d)

631

647

631

647

Non capital grants and contributions

4(a)

15,692

15,066

15,692

15,066

27

51,620

57,572

47,480

53,761

(52,275)

(69,231)

(51,937)

(68,874)

14,421

14,305

14,421

Net cash inflow from operating activities Cash flow from investing activities Payments for property, plant and equipment Grants, subsidies, contributions and donations

4(b)

14,305

Controlled entity dividend

3(d)

-

-

Income tax equivalents

3(d)

6,350

8

Proceeds from sale of property, plant and equipment Payments for intangible assets

325

216

5,056

7,039

5,609

1,310

828

1,222

828

-

(91)

-

(91)

(30,310)

(49,017)

(29,046)

(47,891)

7

(7,266)

(7,811)

(5,223)

(5,729)

18,19

(9,404)

(9,016)

(9,404)

(9,015)

Net cash outflow from financing activities

(16,670)

(16,827)

(14,627)

(14,744)

Net increase/(decrease) in cash and cash equivalents held

4,640

(8,272)

3,807

(8,874)

112,103

120,375

99,605

108,479

116,743

112,103

103,412

99,605

Net cash outflow from investing activities Cash flow from financing activities Borrowing costs Repayment of borrowings

Cash and cash equivalents at the beginning of the financial year Cash and cash equivalents at end of the financial year

9

The above statement should be read in conjunction with the accompanying notes and Significant Accounting Policies

Gladstone Regional Council 2018/19 Annual Report

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59

Notes to the Financial Statements For the year ended 30 June 2019

1 Significant Accounting Policies 1.01 Basis of Preparation These general purpose financial statements for the period 1 July 2018 to 30 June 2019 have been prepared in accordance with the requirements of the Local Government Act 2009 and the Local Government Regulation 2012 .

These general purpose financial statements comply with all accounting standards and interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to Council's operations and effective for the current reporting period. Because Council is a not-forprofit entity and the Australian Accounting Standards include requirements for not-for-profit entities which are inconsistent with International Financial Reporting Standards (IFRS), to the extent these inconsistencies are applied, these financial Statements do not comply with IFRS. The main impacts are the offsetting of revaluation and impairment gains and losses within a class of assets, and the timing of the recognition of non-reciprocal grant revenue.

These financial statements have been prepared under the historical cost convention, except for certain classes of property, plant and equipment and investment property which are measured at fair value and land held for sale which is measured at fair value less cost of disposal.

Recurrent/Capital Classification Revenue and expenditure are presented as "recurrent" or "capital" in the Statements of Comprehensive Income on the following basis: Capital revenue includes grants and subsidies received which are tied to specific projects for the replacement or upgrade of existing noncurrent assets and/or investments in new assets. It also includes non-cash contributions which are usually infrastructure assets received from developers.

The following transactions are classified as either "Capital income" or "Capital expenses" depending on whether they result in accounting gains or losses: â&#x20AC;˘ disposal of non-current assets â&#x20AC;˘ discount rate adjustments to restoration provisions â&#x20AC;˘ revaluations of investment property and property, plant and equipment

All other revenue and expenses have been classified as "recurrent".

1.02 Basis of Consolidation The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Gladstone Regional Council as at 30 June 2019 and the results of all controlled entities for the year then ended, where material. The Gladstone Regional Council and its controlled entity together form the economic entity which is referred to in these financial statements as the consolidated entity.

In the process of reporting the Gladstone Regional Council as a consolidated entity, all transactions with entities controlled by Council have been eliminated. In addition, the accounting policies of all controlled entities have been adjusted, where necessary, on consolidation to ensure that the financial report of the consolidated entity is prepared using accounting policies that are consistent with those of the Gladstone Regional Council. Information on controlled entities is included in Note 12.

1.03 Constitution The Gladstone Regional Council is constituted under the Queensland Local Government Act 2009 and is domiciled in Australia.

1.04 Date of Authorisation The financial statements were authorised for issue on the date they were submitted to the Auditor-General for final signature. This is the date the management certificate is signed.

Gladstone Regional Council 2018/19 Annual Report

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60

Notes to the Financial Statements For the year ended 30 June 2019

1 Significant Accounting Policies (cont'd) 1.05 Currency Council uses the Australian Dollar as its functional currency and its presentation currency.

1.06 Adoption of New and Revised Accounting Standards This year Council has applied AASB 9 Financial Instruments for the first time. AASB 9 replaces AASB 139 and relates to the recognition, classification and measurement of financial assets and financials liabilities. AASB 9 introduced a new impairment model that requires impairment provisions to be based on expected credit losses, rather than incurred credit losses.

Council has not restated comparative figures. This means that the new impairment rules are reflected in the receivables balance as at 30 June 2019, but not 30 June 2018. The impact of AASB9 in 2018-19 is immaterial.

At the date of authorisation of the financial report, some Australian Accounting Standards and Interpretations have been issued but are not yet effective. Those standards have not been applied in these financial statements. Council will implement them when they are effective. The standards that are expected to have a potential impact upon Council's future financial statements are: Standard and impact

Date Council will apply the standard

AASB 15 Revenue from Contracts with Customers, AASB 1058 Income of Not-for-Profit Entities and AASB 2016-8 Amendments to Australian Accounting Standards - Australian Implementation Guidance for Not-for-Profit Entities AASB 15 will replace AASB 18 Revenue , AASB 111 Construction Contracts and a number of Interpretations.

01-Jul-19

AASB 2016-8 provides Australian requirements and guidance for not-for-profit entities in applying AASB 9 and AASB 15, and AASB 1058 will replace AASB 1004 Contributions. Together they contain a comprehensive and robust framework for the recognition, measurement and disclosure of income including revenue from contracts with customers.

Council has reviewed the way that revenue is measured and recognised to identify whether AASB 15 will have a material impact. To date potential identifiable impacts as at reporting date are as follows: • Grants received to construct non-financial assets controlled by Council will be recognised as a liability, and subsequently recognised progressively as revenue as the performance obligations under the grant are satisfied. At present, such grants are recognised as revenue upfront.

• Under the new standards, other grants presently recognised as revenue upfront may be eligible to be recognised as revenue progressively as the associated performance obligations are satisfied, but only if the associated performance obligations are enforceable & sufficiently specific.

• Grants that are not enforceable and/or not sufficiently specific will not qualify for deferral, and continue to be recognised as revenue as soon as they are controlled. Council receives several grants for which there are no sufficiently specific performance obligations - these grants are expected to continue being recognised as revenue upfront assuming no change to the current grant arrangements.

• Depending on the respective contractual terms, the new requirements of AASB 15 may potentially result in a change to the timing of revenue from sales of services such that some revenue may need to be deferred to a later reporting period to the extent that Council has received cash but has not met its associated performance obligations (such amounts would be reported as a liability in the meantime).

Gladstone Regional Council 2018/19 Annual Report

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61

Notes to the Financial Statements For the year ended 30 June 2019

1 Significant Accounting Policies (cont'd) 1.06 Adoption of New and Revised Accounting Standards (cont'd) Standard and impact (cont'd)

Date Council will apply the standard

AASB 15 Revenue from Contracts with Customers, AASB 1058 Income of Not-for-Profit Entities and AASB 2016-8 Amendments to Australian Accounting Standards - Australian Implementation Guidance for Not-for-Profit Entities (cont'd) • Council currently recognises amounts received for pre-paid rates as revenue in the year in which it is received. Under AASB 1058, rates received in advance will be required to be recognised as a liability until the rates levy is calculated.

• Based on Councils assessment, if Council had adopted the new standards in the current financial year it would have had the following impacts: • Revenue decrease of $11,838,757.59 due to deferral of grant funding, pre-paid rates, and other sales related revenue (based on the facts available to Council at the date of assessment).

• There would be an equal reduction in the reported equity as the reduced revenue will require an increase in recognition of contract liabilities, and statutory receivables.

• Net result would be lower on initial application as a result of decreased revenue.

Transition method Council intends to apply AASB 15, AASB 1058 and AASB 2016-8 initially on 1 July 2019, using the cumulative effect method. Using this method, Council will recognise the cumulative effect of initially applying the standards by adjusting the opening balance to retained surplus.

Additional disclosures will be made in the 2019-20 financial statements to compare the revenue recognised under the new standards, with the revenue that would have been recognised if the new standards were not applied. This will provide the users of the financial statements with the information needed to compare the revenue between the consecutive reporting periods.

AASB 16 Leases Council has assessed the impacts of the new standard that initial application of AASB 16 will have on its

01-Jul-19

consolidated financial statements, however, the actual impacts may differ as the new accounting policies are subject to change until Council presents its first financial statements that include the date of initial application.

AASB 16 introduces a single, on-balance sheet lease accounting model for lessees. A lessee recognises a right-of-use asset representing its right to use the underlying asset and a lease liability representing its obligation to make lease payments. There are recognition exemptions for short-term leases and leases of lowvalue items. Lessor accounting remains similar to the current standard – i.e. lessors continue to classify leases as finance or operating leases.

Council has some leases that are currently not recognised within the Statement of Financial Position and may need to be included when this standard comes into effect.

Based on Council's assessment, it is expected that the first-time adoption of AASB 16 for the year ending 30 June 2020 will have the following impacts: • Lease assets and financial liabilities on the balance sheet will increase by $325,567 and $338,071 respectively as at 30 June 2020 (based on the facts available to Council at the date of assessment).

• There will be a reduction in the reported equity as the carrying amount of lease assets will reduce more quickly than the carrying amount of lease liabilities.

• Net result will be lower on initial application as depreciation and the lease liability interest will be initially higher than operating lease expenses previously recorded.

Gladstone Regional Council 2018/19 Annual Report

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62

Notes to the Financial Statements For the year ended 30 June 2019

1 Significant Accounting Policies (cont'd) 1.06 Adoption of New and Revised Accounting Standards (cont'd) Standard and impact (cont'd)

Date Council will apply the standard

AASB 16 Leases (cont'd) Peppercorn leases Council is the lesee of a number of Deed of Grant in Trust leases, for which no or little lease payments are made. These have been identified as peppercorn leases which are currently not recognised in Council's financial statements. Council intends to elect not to apply the fair value measurement requirements to these leases until such time as this requirement is mandated.

Transition method Council intends to apply AASB 16 initially on 1 July 2019, using the modified retrospective approach.

Therefore, the cumulative effect of adopting AASB 16 will be recognised as an adjustment to the opening balance of retained earnings at 1 July 2019, with no restatement of comparative information.

Council intends to apply the practical expedient for the definition of a lease on transition. This means that it will apply AASB 16 on transition only to contracts that were previously identified as leases applying AASB 117 Leases and Interpretation 4 Determining whether an Arrangement contains a Lease.

At the date of authorisation of the financial report, the remaining new or amended Australian Accounting Standards with future commencement dates are not likely to have a material impact on the financial statements.

1.07 Critical Accounting Judgements and Key Sources of Estimation Uncertainty In the application of Council's accounting policies, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods as relevant.

Judgements, estimates and assumptions that have a potential significant effect are outlined in the following financial statements notes: • Investment property (Note 13) • Valuation and depreciation of property, plant and equipment (Note 14) • Impairment of non-current assets (Note 14) • Provisions (Note 20) • Contingent liabilities (Note 24) • Financial Instruments (Note 29)

The estimates and assumptions that have the potential to cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year are referred to in the appropriate notes to the financial statements.

1.08 Inventories Stores and raw materials held for resale are valued at the lower of cost and net realisable value and include, where applicable, direct material, direct labour and an appropriate portion of variable and fixed overheads. Costs are assigned on the basis of weighted average cost.

Inventories held for distribution are: • goods to be supplied at no or nominal charge; and • goods to be used for the provision of services at no or nominal, charge.

These goods are valued at cost, adjusted, when applicable, for any loss of service potential.

Gladstone Regional Council 2018/19 Annual Report

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63

Notes to the Financial Statements For the year ended 30 June 2019

1 Significant Accounting Polices (cont'd) 1.09 Financial Assets and Financial Liabilities Council recognises a financial asset or a financial liability in the Statements of Financial Position when, and only when, Council becomes a party to the contractual provisions of the instrument.

Gladstone Regional Council has categorised and measured the financial assets and financial liabilities held at balance date as follows: Financial assets • Cash and cash equivalents - measured at amortised cost (Note 9) • Receivables - measured at amortised cost (Note 10) Financial liabilities • Payables - measured at amortised cost (Note 15) • Borrowings - measured at amortised cost (Note 18 and Note 19) The application of AASB9 has not resulted in any change to the categories listed.

Financial assets and financial liabilities are presented separately from each other and offsetting has not been applied.

The fair value of financial instruments is determined as follows: • The fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities approximate their carrying amounts and are not disclosed separately.

• The fair value of borrowings, as disclosed in Note 17 to the accounts, is determined by reference to published price quotations in an active market and/or by reference to pricing models and valuation techniques. It reflects the value of the debt if Council repaid it in full at balance date. As it is the intention of Council to hold its borrowings for their full term, no adjustment provision is made in these accounts.

• The fair value of trade receivables approximates the amortised cost less any impairment.

• The fair value of payables approximates the amortised cost.

• Council does not recognise financial assets or financial liabilities at fair value in the Statements of Financial Position.

• All other disclosures relating to the measurement and financial risk management of financial instruments are included in Note 29.

1.10 Rounding and Comparatives Amounts included in the financial statements have been rounded to the nearest $1,000 unless otherwise stated. Comparative information has been restated where necessary to be consistent with disclosures in the current reporting period.

1.11 Taxation Income of local authorities and public authorities is exempt from Commonwealth taxation except for Fringe Benefits Tax and Goods and Services Tax ('GST'). The net amount of GST recoverable from the Australian Taxation Office ('ATO') or payable to the ATO is shown as an asset or liability respectively.

The controlled entity of Council pays an income tax equivalent to Council in accordance with the requirements of the Local Government Act 2009 .

Where an activity of the controlled entity of Council is subject to the tax equivalents regime, the income tax expense is calculated on the operating surplus adjusted for permanent differences between taxable and accounting income. These transactions are eliminated upon consolidation.

Council pays payroll tax to the Queensland Government in relation to the following activities: • cemeteries • water supply • sewerage • quarries

Gladstone Regional Council 2018/19 Annual Report

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64

Notes to the Financial Statements For the year ended 30 June 2019

2 Analysis of Results by Function 2(a) Component Functions of Council The activities relating to Council's functions reported on in Note 2 (b) - Analysis of Results by Function are as follows: Strategy and Transformation Strategy and Transformation fulfils the role of developing Council's business strategy, process, innovation and technology agenda and delivering change initiatives that enable Council to execute on plans with a clear focus, sense of shared purpose and agreed-upon priorities, and a basis for measuring progress and impact both organisationally wide and within the wider community. This business unit includes the Mayor, Executive Services, CEO, Elected Members, Strategy and Planning, Strategic Information and Technology, Transformation Program Management, Economic Development and Strategic Funding and Grants.

Strategic Asset Performance Strategic Asset Performance fulfils the Asset Manager role, through strategically managing Council's assets and level of service to optimise the life cycle costs of our assets. This team ensures that services to the community are sustainable, efficient, and affordable and that assets are appropriately planned, built, acquired, used, maintained and disposed of. This business unit includes Asset Governance, Asset Planning, Design and Innovation, Asset Performance and Monitoring, and Environment and Conservation.

Operations The Operations business unit objective is that of a service provider to the asset owner of Council, through ensuring that the right mix of internal and external resources is consistently used to safely deliver the program of work on time, on budget and to the required quality, and the safe and efficient response to disaster and emergency events. This business unit includes Works Planning, Support Services, Works Delivery Teams, Contract and Procurement (Program of Work), and Disaster Management and Response.

Community Development and Events For Community Development and Events the objective is to develop strength in Council's brand, positioning Council as an accountable, transparent business that delivers on its promises. A genuine connection is created between the wider community and Council through a variety of mediums by creating experiences that engage and deliver outcomes for the community and Council, and empower the community, embrace diversity and enhance the social landscape. This business unit includes Events and Entertainment, Brand and Communications, Community Engagement and Partnerships, and Arts and Culture.

Customer Experience For Customer Experience the objective is to transform Council's customer experience, liveability and sustainable development by delivering high quality, low effort, cost effective customer planning and regulatory services. This business unit includes Customer Contact, Customer Experience Insights and Innovation, Biosecurity and Environmental Health, Local Laws and Animal Management, and Planning, Building and Plumbing Services.

Gladstone Regional Council 2018/19 Annual Report

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65

Notes to the Financial Statements For the year ended 30 June 2019

2 Analysis of Results by Function (cont'd) 2(a) Component Functions of Council (cont'd) Finance Governance and Risk The objective of the Finance Governance & Risk business unit as part of the corporate function of Council is to provide the governance, financial, compliance and risk management to build a sustainable business through reporting accurate financial and compliance results, preserving company assets, and supporting the highest standards of Integrity. This business unit includes Financial Management, Revenue Management, Cost Accounting, Governance Risk and Compliance, Ethics Integrity and Audit, Strategic Procurement, Records, and Legal.

People Culture and Safety The objective of the People Culture & Safety business unit as part of the corporate function of Council is to build a safe, healthy, high performance culture across Council that reflects the community and its spirit, organisational values and internal diversity. Council's success is enabled by partnering with people to continually develop their capability, talent and performance. This business unit is made up of Industrial Relations, Talent Management, Health Safety and Wellbeing, Remuneration and Benefits, and Performance Framework.

Gladstone Regional Council 2018/19 Annual Report

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66

Notes to the Financial Statements For the year ended 30 June 2019

2 Analysis of Results by Function

Other

Gross program income Recurring Grants

Capital

Total income

Recurring

Capital

Gross program expenses

2(b) Income and expenses defined between recurring and capital are attributed to the following functions: Year ended 30 June 2019 Function Grants

Total expenses

Net result from recurring operations

$'000

Net result

$'000

Assets

34,827

$'000

81,295

$'000

(23,682)

$'000

81,276

$'000

(33,725)

$'000

(12,871)

$'000

(117,298)

$'000

(24)

$'000

(4,695)

1,849,461

(12,847)

3,466

61,667

(112,603)

(9,543)

93,616

(8,238)

94,166

(9,560)

43

(8,238)

14,738

(22,610)

74,498

(11,501)

85,082

16

4,380

-

9,041

(22,626)

Strategic Asset Performance

(11,501)

Strategy & Transformation

3,263

28

86,533

13,067

(15,145)

-

(15,135)

-

(17,323)

2,768

(29)

12,538

(17,294)

1,655

529

2,178

(5,633)

495

20

1,655

Operations 1,127

(5,633)

Customer Experience 1,031

1,352

Community Developments & Events

(6,035)

207,445

-

(3,428)

2,243,428

-

20,710

1,352

(413)

(6,035)

10,640

20,297

303

(423)

402

(186,286)

10,217

-

(9,620)

-

(4,731)

(195,906)

87

(181,555)

10

402

206,996

(4,721)

2,240,000

(9,630)

-

14,801 14,801

81,128

1,741,960

Assets

(24,740)

Net result

81,128

Net result from recurring operations

(29,634)

Total expenses

(7,320)

Capital

(105,285)

Recurring

Gross program expenses

(191,185)

216

176,503 9,207 185,710

Total income

9,208

People Culture & Safety 15,692 15,692

Grants

Capital

216,203

Finance Governance & Risk Total Council Controlled entity net of eliminations Total consolidated Year ended 30 June 2018

Gross program income Other

-

Recurring

(8,111)

Function Grants

(7,320)

36,065 (97,174)

$'000 88,448

$'000 80,544

$'000 -

$'000 13,005

3,972

170,781

$'000 81,156

(8,409)

(23,106)

$'000 64,638

(8,409)

(23,957)

$'000 7,292

(44,688)

$'000 2,901

(11,320)

$'000

Strategy & Transformation

-

(616)

$'000 Strategic Asset Performance

(44,073)

27

86,422

(11,319)

(14,570)

2,911

(14,521)

21,582

(18,889)

-

(57)

1,466

(18,832)

2,803

4,319

(3,674)

18,100

8

(1,439)

108

1,766

(3,674)

2,016 2,545

(1,439)

196,978

(3,951)

(2,281)

2,236,205

(2,196)

5,190

-

(261)

-

(504)

4,929

(3,951)

(84)

(2,196)

(193,649)

(588)

278

(9,900)

757

(8,784)

(203,549)

-

(178)

-

(184,865)

(8,962)

136

198,839

(9,722)

2,233,924

(194,587)

695

14,478 14,478

9,638

63

169,295 178,933

9,638

15,066 15,066

208,477

142

Operations Customer Experience Community Developments & Events Finance Governance & Risk

People Culture & Safety Total Council Controlled entity net of eliminations Total consolidated

14

67

Gladstone Regional Council 2018/19 Annual Report

Notes to the Financial Statements For the year ended 30 June 2019

3 Revenue analysis (a) Rate and utility charges Where rate monies are received prior to the commencement of the rating/levying period, the amount is recognised as revenue in the period in which they are received, otherwise rates are recognised at the commencement of the rating period.

Consolidated

Rate and utility charges

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

86,995

83,478

87,081

83,565

15,699

15,964

15,699

15,964

16,894

15,141

16,894

15,141

31,416

29,729

31,416

29,729

8,932

8,066

8,932

8,066

Total rates and utility charge revenue

159,936

152,377

160,022

152,465

Less: Discounts

(11,839)

(11,275)

(11,839)

(11,275)

(793)

(747)

(793)

(747)

(32)

(31)

(32)

(31)

147,272

140,325

147,358

140,412

General rates Water Water consumption, rental and sundries Sewerage Waste management

Less: Concessions and pensioner remissions Less: Concealed water concessions

(b) Fees and charges Fees and charges are recognised upon unconditional entitlement to the funds. Generally this is upon lodgement of the relevant applications or documents, issuing of the infringement notice or when the service is provided.

Consolidated 30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

Fees and charges Building and development fees Fees and charges Licences and registration Waste management fees - tipping fees Airport fees and charges

Council

1,603

1,861

1,603

1,861

1,147

1,433

1,147

1,433

759

728

759

728

6,198

5,777

6,198

5,777

8,249

8,320

-

-

17,956

18,119

9,707

9,799

(c) Interest received Interest received from term deposits is accrued over the term of the investment.

Consolidated

Interest received Interest received from investments Interest from overdue rates and utility charges

Gladstone Regional Council 2018/19 Annual Report

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

3,423

3,450

3,098

967

809

967

4,390

4,259

4,065

3,156 809 3,965

15

68

Notes to the Financial Statements For the year ended 30 June 2019

3 Revenue analysis (cont'd) (d) Other recurrent income Dividends Dividends are recognised once they are formally declared by the directors of the controlled entity. A dividend was declared to be paid to Council to the value of at least 50% of the after tax net profit for the preceding year, in accordance with the Statement of Corporate Intent.

Rental Income Rental revenue from investment and other property is recognised as income on a periodic straight line basis over the lease term.

Sales Revenue Sales of goods is recognised when the significant risks and rewards of ownership are transferred to the buyer, generally when the customer has taken undisputed delivery of the goods.

Council generates revenue from a number of services including contracts with the Queensland State Government for road and earthworks, and operation of Council owned facilities.

Revenue from contracts and recoverable works generally comprises a recoupment of material costs together with an hourly charge for the use of equipment and employees. Contract revenue and associated costs are recognised by reference to the stage of completion of the contract activity at the reporting date.

Revenue is measured at the fair value of consideration received or receivable in relation to that activity. Where consideration is received for the service in advance it is included in other liabilities and is recognised as revenue in the period when the service is performed.

Consolidated

Other recurrent income Entertainment Centre income Fines and penalties Commissions Controlled entity dividend Income tax equivalent - state government entity Income tax equivalent - controlled entity Rental income Sales revenue Other

Gladstone Regional Council 2018/19 Annual Report

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

1,100

1,572

1,105

216

92

216

92

219

188

219

188

-

-

6,350

5,056

1,572

325

216

6,350

5,056 553

-

-

689

631

647

631

647

4,370

4,115

4,423

4,115

3,206

4,560

1,415

2,680

16,092

16,230

15,373

15,119

16

69

Notes to the Financial Statements For the year ended 30 June 2019

4 Grants, subsidies, contributions and donations Grants and Subsidies Grants, subsidies and contributions that are non-reciprocal in nature are recognised as revenue in the year in which Council obtains control over them.

Where grants are received that are reciprocal in nature, revenue is recognised as the various performance obligations under the funding agreement are fulfilled. Council does not have any reciprocal grants.

Non-Cash Contributions Non-cash contributions with a value in excess of the recognition thresholds, are recognised as revenue and as non-current assets. Non-cash contributions below the thresholds are recorded as revenue and expenses.

Physical assets contributed to Council by developers in the form of road works, stormwater, water and wastewater infrastructure and park equipment are recognised as revenue when the development becomes "on maintenance" (i.e. Council obtains control of the assets and becomes liable for any ongoing maintenance) and there is sufficient data in the form of drawings and plans to determine the approximate specifications and values of such assets. All non-cash contributions are recognised at the fair value of the contribution received on the date of acquisition.

Cash Contributions Developers pay infrastructure charges for trunk infrastructure, such as pumping stations, treatment works, mains, sewers, water and parks. These infrastructure charges are not within the scope of AASB Interpretation 18 because there is no performance obligation associated with them.

Consequently, the infrastructure charges are recognised as income when received.

Consolidated

(a)

Recurrent

General purpose grants State Government subsidies and grants Commonwealth subsidies and grants

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

7,724

7,282

7,724

7,282

2,343

3,653

2,343

3,653

5,580

3,912

5,580

3,912

1

2

1

2

44

217

44

217

15,692

15,066

15,692

15,066

8,294

8,459

8,294

8,459

5,393

5,492

5,393

5,492

238

132

238

132

380

338

380

338

14,305

14,421

14,305

14,421

Contributions Non-government subsidies and grants

(b)

Council

Capital

(i) Monetary revenue received: State government grants and subsidies Commonwealth subsidies and grants Developer contributions Other contributions

(ii) Non-monetary revenue received: Donated assets contributed by developers at fair value

14

496

Other donated assets

14

-

Gladstone Regional Council 2018/19 Annual Report

14,801

-

496 57

14,478

14,801

57 14,478

17

70

Notes to the Financial Statements For the year ended 30 June 2019

5 Employee benefits Salaries and Wages A liability for salaries and wages is recognised and measured as the amount unpaid at the reporting date at current pay rates in respect of employees' services up to that date. This liability represents an accrued expense and is reported in Note 15 as a payable.

Annual Leave A liability for annual leave is recognised. Amounts expected to be settled within 12 months are calculated on current wage and salary levels and include related employee on-costs. Amounts not expected to be settled within 12 months are calculated on projected future wage and salary levels and related employee on-costs, and are discounted to present values. This liability represents an accrued expense and is reported in Note 15 as a payable.

As Council does not have an unconditional right to defer this liability beyond 12 months annual leave is classified as a current liability.

Sick Leave Council has an obligation to pay 16% on sick leave balances accrued in accordance with the Gladstone Regional Council Enterprise Bargaining Agreement adopted on the 17 January 2019. Some former Calliope Shire Council employees are entitled to a 25% payout on sick leave accrued from 10 May 2006 to 8 September 2008. These liabilities represent an accrued expense and is reported in Note 15 as a payable. Apart from the payout options, Council is not required to payout the sick leave balances as these are not payable upon termination.

Superannuation The superannuation expense for the reporting period is the amount of the contribution Council makes to the superannuation plan which provides benefits to its employees. Details of those arrangements are set out in Note 25.

Long Service Leave A liability for long service leave is measured at the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date. The value of the liability is calculated using current pay rates and projected future increases in those rates and includes related employee on-costs. The estimates are adjusted for the probability of the employee remaining in Council's employment or other associated employment which would result in Council being required to meet the liability. Adjustments are then made to allow for the proportion of the benefit earned to date, and the result is discounted to present value. The interest rates attaching to Commonwealth Government guaranteed securities at the reporting date are used to discount the estimated future cash outflows to their present value. This liability is reported in Note 20 as a provision.

Where employees have met the prerequisite length of service and Council does not have an unconditional right to defer this liability beyond 12 months long service leave is classified as a current liability. Otherwise it is classified as non-current.

Service Entitlement Certain former Gladstone City Council employees are entitled to a service entitlement payment upon departure from employment within Council. This liability is reported in Note 15 as a payable.

Gladstone Regional Council 2018/19 Annual Report

18

71

Notes to the Financial Statements For the year ended 30 June 2019

5 Employee benefits (cont'd) Consolidated

Employee benefits Total staff wages and salaries Councillors' remuneration Employee leave entitlements Redundancy benefits Superannuation

Other employee related expenses

Less: Capitalised employee expenses Total employee benefits

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

47,207

47,467

45,686

44,263

973

931

973

931

6,961

7,099

7,080

7,268

313

3,728

254

3,555

5,799

5,858

5,650

5,657

61,253

65,083

59,643

61,674

426

607

328

469

61,679

65,690

59,971

62,143

(3,924)

(5,469)

(3,924)

(5,469)

57,755

60,221

56,047

56,674

Councillor remuneration represents salary and other allowances paid in respect of carrying out their duties.

Total Council employees and elected members at the reporting date:

Consolidated Elected members Office of the CEO Community Developments and Events Customer Experience Finance Governance and Risk Operations People Culture and Safety Strategic Asset Performance Strategy and Transformation Controlled Entity - Airport Operations Controlled Entity Board members Total full time equivalent employees

Gladstone Regional Council 2018/19 Annual Report

30 June 2019 9

Council

30 June 2018

9

30 June 2019 9

30 June 2018 9

4

3

4

3

90

67

90

94

100

91

100

89

39

30

39

32

302

324

302

297

20

22

20

22

55

29

55

29

14

19

14

16

21

-

-

6

6

-

-

655

621

633

594

19

19

72

Notes to the Financial Statements For the year ended 30 June 2019

6 Materials and services

Consolidated

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

223

208

195

184

Consultants

3,418

2,341

3,234

2,123

Contractors

25,769

21,110

24,198

20,896

Donations and sponsorships

3,118

4,640

3,118

4,640

Equipment and software expenses

4,835

7,436

4,415

7,082

Audit by the Auditor-General of Queensland

Fuel

2,109

2,061

2,095

2,049

Insurance

2,237

2,276

2,060

2,124

Motor vehicle expenses

1,937

2,298

1,913

2,269

Other material and services

6,138

7,268

5,960

7,237

Property expenses

2,949

3,199

2,805

3,042

823

729

823

729

Staff and Councillor associated expenses

2,307

1,671

2,216

1,641

Utility expenses

5,027

4,840

4,701

4,491

Repairs and maintenance

Waste disposal and tipping fees Water purchases

3,310

2,961

3,260

2,900

17,425

16,587

17,425

16,587

81,625

79,625

78,418

77,994

7 Finance costs

Consolidated Note

Finance costs charged by the Queensland Treasury Corporation Fair value adjustment Other

Gladstone Regional Council 2018/19 Annual Report

19

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

7,266

7,811

5,223

5,729

232

250

232

250

288

274

165

249

7,786

8,335

5,620

6,228

20

73

Notes to the Financial Statements For the year ended 30 June 2019

8 Capital expenses Consolidated Note

Loss on disposal of non-current assets Proceeds from sale of property, plant and equipment Less Book value of property, plant and equipment disposed: Plant and equipment

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

(1,310)

Buildings

Council

30 June 2019

(828)

(1,222)

(828)

948

952

870

959

29

167

29

167

Investment property

384

-

384

Parks furniture and other structures

270

87

270

87

3,838

6,411

3,838

6,411

196

988

196

988

4

167

4

167

4,359

7,944

4,369

7,950

24

544

24

359

338

474

338

474

4,721

8,962

4,731

8,784

Roads, drainage and transport infrastructure Sewerage infrastructure Water infrastructure

Loss on write-off of non-current assets Revaluation down of investment property

13

Total capital expenses

-

9 Cash and cash equivalents Cash and cash equivalents includes cash on hand, all cash and cheques receipted but not banked at the year end, deposits held at call with financial institutions, other short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Cash, deposits at call, and term deposits are held at a variety of Australian Banks and Credit Unions and the Queensland Treasury Corporation (QTC) with credit ratings ranging from AAA to BBB- or unrated. All Gladstone Airport Corporation investments are held in the QTC cash management account bearing variable interest rates.

Council may be exposed to credit risk through its investments in the QTC Cash Fund. The QTC Cash Fund is an asset management portfolio that invests with a wide range of high credit rated counterparties.

Deposits with the QTC Cash Fund are capital guaranteed.

Gladstone Regional Council 2018/19 Annual Report

21

74

Notes to the Financial Statements For the year ended 30 June 2019

9 Cash and cash equivalents (cont'd)

Cash and cash equivalents Cash at bank and on hand Deposits at call Term deposits Balance per Statements of Cash Flows Externally imposed expenditure restrictions at the reporting date relate to the following cash assets: Unspent government grants and subsidies Waste levy refund recevied in advance Total unspent restricted cash for capital projects

Consolidated

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

2,955

2,037

1,986

1,849

46,218

36,442

33,856

24,132

67,570

73,624

67,570

73,624

116,743

112,103

103,412

99,605

8,501

10,822

8,501

10,822

2,574

-

2,574

-

11,075

10,822

11,075

10,822

Cash at bank and on hand at 30 June 2019 includes $2,573,883 received from the State government to mitigate the direct impacts on households of the State Waste Levy, which comes into effect from 1 July 2019. This money has been set aside to help fund the Councilâ&#x20AC;&#x2122;s Levy expense in the year ended 30 June 2020.

10 Trade and other receivables Trade receivables are recognised at the amounts due at the time of sale or service delivery i.e. the agreed purchase price/contract price.

Settlement of these amounts is required within 30 days from invoice date.

The collectability of receivables is assessed periodically and if there is objective evidence that Council will not be able to collect all amounts due, the carrying amount is reduced for impairment. The loss is recognised in other finance costs. The amount of the impairment is the difference between the asset's carrying amount and the present value of the estimated cash flows discounted at the effective interest rate.

Interest is charged on outstanding rates at a rate of 11% per annum. No interest is charged on other debtors. There is no concentration of credit risk for rates and utility charges, fees and other debtors receivable.

All known bad debts were written-off at 30 June. Subsequent recoveries of amounts previously written off in the same period are recognised as finance costs in the Statements of Comprehensive Income. If an amount is recovered in a subsequent period it is recognised as revenue.

Because Council is empowered under the provisions of the Local Government Act 2009 to sell an owner's property to recover outstanding rate debts, Council does not impair any rate receivables.

Loans and advances are recognised in the same way as other receivables. Terms are usually a maximum of five years with interest charged at commercial rates. Security is not normally obtained.

Gladstone Regional Council 2018/19 Annual Report

22

75

Notes to the Financial Statements For the year ended 30 June 2019

10 Trade and other receivables (cont'd) Consolidated

Current Rateable revenue and utility charges Water charges not yet levied Other debtors Less: Impairment GST recoverable Interest receivable Accrued revenue Prepayments Gladstone Airport Corporation

Non-current Shareholder loan - Gladstone Airport Corporation

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

11,250

9,480

11,250

9,480

8,839

7,485

8,839

7,485

4,636

2,975

2,525

1,778

(246)

(219)

(150)

(219)

1,672

1,466

1,672

1,530

317

560

317

560

1,443

1,174

1,354

1,088

1,656

1,780

1,514

1,656

-

-

29,567

24,701

(72)

(114)

27,249

23,246

-

-

33,716

33,716

-

-

33,716

33,716

On the 1 July 2012 Gladstone Airport Corporation came into existence under the Local Government (Beneficial Enterprises and Business Activities (Repealed)) Regulation 2010. The Statement of Corporate Intent outlines the acknowledgement of debt which Council currently holds as a QTC liability and controlled entity receivable.

Shareholder loan The loan is secured by a fixed and floating charge over the Gladstone Airport Corporation's assets and undertakings.

For the purposes of completing the maturity analysis, the principal component of these loans has been included in the more than five year time band.

A competitive neutrality margin of 1.5% on the outstanding loan balance is also payable by the Gladstone Airport Corporation to Council, in accordance with the requirements of the Local Government (Beneficial Enterprises & Business Activities (Repealed)) Regulation 2010.

Loans to the Gladstone Airport Corporation are at a fixed rate with an interest rate of 6.06%, together with an administration fee of 0.1% per annum. The facility is an amortising loan with principal repayments commencing from 30 June 2030.

Gladstone Regional Council 2018/19 Annual Report

23

76

Notes to the Financial Statements For the year ended 30 June 2019

11 Land purchased for development and sale Land held for development and sale is classified as inventory. This is valued at the lower of cost and net realisable value.

Land approved by Council for resale is classified and recognised as a current asset where steps have been taken to ready the property for market and it is expected that the property will be sold within a 12 month period. Land for resale is classified as a non-current asset where it is expected that the asset will not be sold within a 12 month period. Costs incurred in preparing land for sale are capitalised at cost and are included in the value of land held for resale.

Profit arising upon resale of land is recognised in the Statements of Comprehensive Income on the signing of a valid unconditional contract of sale.

Consolidated

Opening balance as at 1 July 2018

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

Note

Disposals Transfers from investment land

Council

30 June 2019 411

(156) 13

300 -

-

182

Impairment adjustment in period

-

Closing balance as at 30 June 2019

255

Current

-

Non-current

255 255

411

(156)

300 -

-

182

(71)

-

(71)

411

255

411

411

-

411

-

255

-

411

255

411

Classified as:

This land is freehold land Council has decided to sell to address the market demand for residential allotments. The land is not expected to be sold within the next twelve months. The land is valued at the lower of cost and selling price less cost to sell.

12 Investment in controlled entity - Gladstone Airport Corporation These consolidated financial statements incorporate the assets, liabilities and result of the Gladstone Airport Corporation in accordance with AASB 10 and the accounting policy described in Note 1 (1.02).

Gladstone Airport Corporation is a Local Government owned Corporation wholly owned by Gladstone Regional Council.

Gladstone Airport Corporation became a corporatized entity on 1 July 2012 in the State of Queensland under Local Government (Beneficial Enterprises and Business Activities(Repealed)) Regulation 2010 to administer the for-profit airport activities.

Gladstone Airport Corporation carries out its business at its registered address at Aerodrome Road, Gladstone.

Council's investment in the controlled entity, Gladstone Airport Corporation, is accounted for at cost in Council's separate financial statements.

This investment is eliminated in the financial statements of the economic entity upon consolidation.

Gladstone Regional Council holds 100% of the investment in the controlled entity.

The investment is measured at cost as fair value cannot be reliably measured.

Consolidated

Opening balance as at 1 July 2018 Closing balance as at 30 June 2019

Gladstone Regional Council 2018/19 Annual Report

Council

30 June 2019

30 June 2018

$'000

$'000

-

30 June 2019

30 June 2018

-

$'000 71,854

$'000 71,854

-

71,854

71,854

24

77

Notes to the Financial Statements For the year ended 30 June 2019

13

Investment property

Investment property is property held for the primary purpose of earning rental and/or capital appreciation. This includes property held by Council without any specific purpose (such as land no longer required for its original purpose).

Investment property is measured using the fair value model. This means it is initially recognised at cost including transaction costs. Where investment property is acquired at no or nominal cost it is recognised at fair value. All investment property is subsequently revalued annually at the balance date. Gains or losses arising from changes in the fair value of investment property are included in the Statements of Comprehensive Income in the period in which they arise. Investment property is not depreciated and is not tested for impairment.

Consolidated Note

30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Land - at independent valuation

1,423

1,423

1,423

Buildings - at independent valuation

1,911

2,633

1,911

2,633

3,334

4,056

3,334

4,056

1,423

Investment property reconciliation Fair value at beginning of financial year

4,056

4,712

4,056

4,712

Transfer to land held for resale

11

-

(182)

-

(182)

Sale of investment property

8

(384)

-

(384)

-

Revaluation of investment property

8

(338)

(474)

(338)

(474)

3,334

4,056

3,334

4,056

Fair value at end of financial year

Investment property comprises of commercial properties which are rented out. The income derived from these properties is shown at note 3d.

These properties were valued at fair value by APV Valuers and Asset Management, an independent professionally qualified valuation firm, with a desktop valuation effective as at 30 June 2019. Fair value was determined by reference to market based evidence including observable historical sales data in the relevant market for properties of similar nature and specification.

At reporting date there was no property being constructed or developed for future use as investment property.

No contingent rentals were recognised during the current or prior reporting periods.

Gladstone Regional Council 2018/19 Annual Report

25

78

Notes to the Financial Statements For the year ended 30 June 2019

14 Property, Plant and Equipment Each class of property, plant and equipment is stated at cost or fair value less, where applicable, any accumulated depreciation and accumulated impairment loss. Buildings, parks and office structures with a total value of less than $10,000, plant and equipment with a total value of less than $5,000 and land with a total value of less than $1 are treated as an expense in the year of acquisition. All other items of property, plant and equipment are capitalised.

The classes of property, plant and equipment recognised by Council are: • Land and improvements • Park furniture and other structures • Buildings • Major plant and equipment • Plant and equipment • Cultural assets

• Roads, drainage and transport infrastructure • Water infrastructure • Sewerage infrastructure • Work in progress

Acquisition of Assets Acquisition of assets are initially recorded at cost. Cost is determined as the fair value of the assets given as consideration plus costs incidental to the acquisition, including freight, survey fees, design fees and all other establishment costs.

Non-monetary assets, including property, plant and equipment, received in the form of contributions are recognised as assets and revenues at fair value by Council where that value exceeds the recognition thresholds for the respective asset class. Fair value is the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date.

Capital and Operating Expenditure Wage and materials expenditure incurred for the acquisition or construction of assets are treated as capital expenditure. Routine operating maintenance, repair costs and minor renewals to maintain the operational capacity of the non-current assets are expensed as incurred, while expenditure that relates to the replacement of a major component of an asset to maintain its service potential is capitalised.

Expenditure incurred in accordance with Natural Disaster Relief and Recovery Arrangements on road assets is analysed to determine whether the expenditure is capital in nature. The analysis of the expenditure requires Council engineers to review the nature and extent of expenditure on a given asset. For example, expenditure that patches a road is generally maintenance in nature, whereas a kerb to kerb rebuild is treated as capital. Material expenditure that extends the useful life or renews the service potential of the asset is capitalised.

Valuation Land and improvements, buildings, major plant and equipment and all infrastructure assets are measured on the revaluation basis, at fair value, in accordance with AASB 116 Property, Plant and Equipment and AASB 13 Fair Value Measurement . All other non-current assets, principally plant and equipment are measured at cost.

Non-current physical assets measured at fair value are revalued where required so that the carrying amount of each class of asset does not materially differ from its fair value at the reporting date. This is achieved by comprehensively revaluing these assets at least once every five years with interim valuations, using a suitable index, being otherwise performed on an annual basis where there has been a material variation in the index.

Any revaluation increment arising on the revaluation of an asset is credited to the appropriate class of the asset revaluation surplus, except to the extent it reverses a revaluation decrement for the class previously recognised as an expense. A decrease in the carrying amount on revaluation is charged as an expense, to the extent it exceeds the balance, if any, in the revaluation surplus relating to that asset class.

On revaluation, accumulated depreciation is restated proportionately with the change in the carrying amount of the asset and any change in the estimate of remaining useful life.

Separately identified components of assets are measured on the same basis as the assets to which they relate.

Gladstone Regional Council 2018/19 Annual Report

26

79

Notes to the Financial Statements For the year ended 30 June 2019

14 Property, Plant and Equipment (cont'd) Major Plant and Equipment Council has determined that plant which has an individual cost in excess of $350,000 is of high value to Council. Plant which meets this criteria is major plant if it is prone to a high degree of price fluctuations or in danger of becoming obsolete. The asset class primarily includes specialised earthmoving equipment.

Capital Work in Progress The cost of property, plant and equipment being constructed by Council includes the cost of purchased services, materials, direct labour and an appropriate proportion of labour overheads.

Investment property under construction is classified as investment property. Refer to Note 13 for further information.

Depreciation Land is not depreciated as it has an unlimited useful life. Depreciation on other land improvements and property, plant and equipment is calculated on a straight-line basis so as to write-off the net cost or revalued amount of each depreciable asset, less its estimated residual value, progressively over its estimated useful life to Council. Management believe that the straight-line basis appropriately reflects the pattern of consumption of all Council assets.

Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and commissioned ready for use.

Where assets have separately identifiable components that are subject to regular replacement, these components are assigned useful lives distinct from the asset to which they relate. Any expenditure that increases the originally assessed capacity or service potential of an asset is capitalised and the new depreciable amount is depreciated over the remaining useful life of the asset to Council.

Major spares purchased specifically for particular assets that are above the asset recognition threshold are capitalised and depreciated on the same basis as the asset to which they relate.

The depreciable amount of improvements to or on leasehold land is allocated progressively over the estimated useful lives of the improvements to Council or the unexpired period of the lease, whichever is the shorter.

Depreciation methods, estimated useful lives and residual values of property, plant and equipment assets are reviewed at the end of each reporting period and adjusted where necessary to reflect any changes in the pattern of consumption, physical wear and tear, technical or commercial obsolescence, or management intentions. The condition assessments performed as part of the annual valuation process for assets measured at written down current replacement cost are used to estimate the useful lives of these assets at each reporting date.

Impairment of Non-Current Assets Each non-current physical and intangible asset and group of assets are assessed for indicators of impairment annually. If an indicator of possible impairment exists, Council determines the asset's recoverable amount. Any amount by which the asset's carrying amount exceeds the recoverable amount is recorded as an impairment loss. The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use.

An impairment loss is recognised as an expense in the Statements of Comprehensive Income, unless the asset is carried at a revalued amount. When the asset is measured at a revalued amount, the impairment loss is offset against the asset revaluation surplus of the relevant class to the extent available.

Gladstone Regional Council 2018/19 Annual Report

27

80

Notes to the Financial Statements For the year ended 30 June 2019

14 Property, Plant and Equipment (cont'd) Impairment of Non-Current Assets (cont'd) Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as an asset revaluation surplus increase.

Land Under Roads The Gladstone Regional Council does not control any land under roads. All land under the road network within Council area has been dedicated and opened for public use under the Land Act 1994 or the Land Title Act 1994 and is not controlled by Council but is controlled by the State pursuant to the relevant legislation. Therefore this land is not recognised in these financial statements.

Gladstone Regional Council 2018/19 Annual Report

28

81

Notes to the Financial Statements

Property, plant and equipment (Cont'd)

For the year ended 30 June 2019

14

Consolidated - 30 June 2019 Cultural Assets

Fair Value

Park Furniture & Other Structures

Major Plant & Equipment Fair Value

Plant and Equipment Fair Value

Buildings Cost

Land and Improvements Fair Value

Fair Value

Road, Drainage & Transport Infrastructure

Fair Value

Sewerage Infrastructure

Fair Value

Water Infrastructure

Cost

Work in Progress

-

-

-

145

45,738

$'000 2019

-

287,997

$'000 2019

-

481,903 -

1,535,986

$'000 2019

$'000 2019

-

36,512

Fair Value

$'000 2019 3

-

-

Total

2,741,259

$'000

3

146

-

(17)

(775)

20,887

-

-

-

-

(2,826)

-

1

-

-

1,426

$'000 2019

-

6,904

$'000 2019

-

-

(425)

-

496

52,135

-

-

(7,695)

-

47,542

-

(302)

-

20,337

-

-

-

-

-

-

(726)

-

292

-

(174)

(2,513)

-

812

-

-

(29) -

476

-

-

14

4 (b) -

-

8

-

24

8 (554)

20

Disposals*

(775) -

-

-

-

-

-

-

-

-

(2,336)

-

(2,336)

(174)

(14,533)

Write-offs 21

Assets transferred to inventory

61,629

(29,443)

2,797,109

1,560

652,036

286,731

-

-

-

1,176

71,131

-

43,921

482,654

-

-

-

23,921

102,552

-

1,573,025

-

3,768

1,475

421,574

-

37,699

-

5,471

-

5,001

-

(163)

(9,222)

1,765

-

28,353

-

-

58

-

-

6,990

1,729

-

673

-

(2,821)

123

-

12

-

-

(229)

46,924

24,478

-

-

(3,857)

1,169

-

486

-

(32)

175,809

22,040

-

-

19

-

3,246

-

123,882

3,473 -

-

(569)

Closing gross value as at 30 June 2019

-

2,286

(163)

(1,714)

Internal transfers between WIP and other classes

-

-

Depreciation provided in period

Contributed assets

Found assets first recognised

Opening balance as at 1 July 2018

Accumulated depreciation

(374)

-

-

22,552

-

-

709,124

-

-

2,087,985

8

-

-

8

-

61,629

Depreciation on disposals

-

72,078

Depreciation on write-offs

22,300

-

214,653

-

26

374,860

107,794

-

468,396

252

1,104,629

-

5,616

-

32,083

-

70

(26)

6

1,695

-

(6)

5,092

1,898

-

-

21,071

25,853

Not Depreciated

14

-

-

-

-

-

-

-

-

-

-

47,542

31,258

16,284

52,135

31,527

5-200

-

14

10-200

24

15-100

-

24

5-150

24,320

Not Depreciated 7-16 Excl. Public Artwork : 35

-

$'000 4,257

-

$'000 231

2-52

151,489 6-150

67

4,488

20,608

3,099

Land: Not depreciated Improvements: 7

-

67

-

$'000

120,783

21

4 (b)

20

-

$'000

-

$'000

-

$'000

4,488

44,999

$'000 2019

67

174,602

$'000 2019

-

125,192

$'000 2019

Opening balance adjustment -

Note

Found assets first recognised -

Opening gross value at 1 July 2018

Asset values

Basis of measurement

Additions during period

$'000

Revaluation adjustment due to landfill provisions

Contributed assets

$'000

Revaluation adjustment to the asset revaluation surplus

$'000

Revaluation adjustment to the asset revaluation surplus Internal transfers between classes Consolidated book value at 30 June 2019

Accumulated depreciation as at 30 June 2019

Range of estimated useful life in years * Expensed WIP included in opening balance, included in disposals line

-

$'000

Renewals

-

$'000

Other additions

Additions comprise:

Total additions

29

82

Gladstone Regional Council 2018/19 Annual Report

Notes to the Financial Statements

Note

Property, plant and equipment (Cont'd)

For the year ended 30 June 2019

14

Council - 30 June 2019 Basis of measurement Asset values Opening gross value at 1 July 2018

Land and Improvements

$'000

Fair Value

Buildings

$'000

Cost

Plant and Equipment

$'000

Fair Value

Major Plant & Equipment

$'000

Fair Value

Cultural Assets

$'000

Fair Value

Park Furniture & Other Structures

$'000

Fair Value

Road, Drainage & Transport Infrastructure

$'000

Fair Value

Sewerage Infrastructure

$'000

Fair Value

Water Infrastructure

$'000

Cost

Work in Progress

2019

287,997

2019

Total

$'000

2,635,615

481,903

45,689

2019

142

1,470,626

-

142

2019

-

35,608

-

2019

-

1,426

-

2019

-

6,904

-

2019

-

41,845

-

-

47,227

2019 -

-

146,335 -

-

2019

$'000 117,283

Fair Value 2019 -

-

-

(29) (174)

(2,335)

-

(726)

-

292

-

-

-

-

-

(302)

-

20,337

-

(7,695)

-

-

-

(425)

-

-

-

(2,826)

-

-

-

(17)

(775)

21,441

496

51,793

3

-

-

-

-

812

3

-

-

4 (b) -

-

-

476

-

14

-

-

Opening balance adjustment

24

Found assets first recognised

20

67

-

-

-

-

-

4,461

Additions during period 8

-

Contributed assets 8 -

-

-

-

-

-

-

-

(2,336)

-

(2,336)

(174)

(14,355)

Write-offs

Disposals*

-

-

2,691,851

Assets transferred to inventory

635,728

61,346

-

-

(29,359)

71,131

-

41,372

1,560

-

-

-

286,731

102,552

-

1,176

-

3,768

482,654

413,407

-

23,843

-

5,471

1,507,587

4,802

-

1,552

-

26,778

36,872

58

-

-

1,729

-

590

(163)

(9,130)

1,765

-

12

-

-

-

22,551

-

(2,821)

-

6,990

-

486

(229)

-

-

-

16,024

-

(3,857)

-

-

43,797

-

3,071

(32)

-

-

1,209

3,474 -

-

-

22,300

147,582

-

1,570

(569)

-

-

19

-

(1,622)

-

-

116,527

(374)

-

(163)

252

Closing gross value as at 30 June 2019

-

-

-

Internal transfers between WIP and other classes

8 -

-

Depreciation provided in period

Contributed assets

Found assets first recognised

Opening balance as at 1 July 2018

Accumulated depreciation

Depreciation on disposals 8 -

19,960

23,837

5,092

1,898

1,695

70

31,512

5,359

1,048,959

458,628

374,860

107,794

214,653

72,078

61,346

-

2,001,492

690,359

22,552

Not Depreciated

14

-

-

-

-

-

-

-

-

-

-

47,227

30,943

16,284

51,793

31,185

5-200

-

14

10-200

24

15-100

-

24

5-150

17,595

Not Depreciated 7-16 Excl. Public Artwork : 35

-

$'000 4,257

-

$'000 204

2-52

129,988 6-150

67

4,461

20,608

3,100

Land: Not depreciated Improvements: 7

-

67

-

$'000

113,427

-

Depreciation on write-offs 21

4 (b)

-

$'000

(775)

$'000

21

$'000

20

$'000

Revaluation adjustment due to landfill provisions

$'000

Revaluation adjustment to the asset revaluation surplus

$'000

Revaluation adjustment to the asset revaluation surplus Accumulated depreciation as at 30 June 2019 Consolidated book value at 30 June 2019 Range of estimated useful life in years * Expensed WIP included in opening balance, included in disposals line

-

$'000

Renewals

-

$'000

Other additions

Additions comprise:

Total additions

30

83

Gladstone Regional Council 2018/19 Annual Report

Notes to the Financial Statements

Note

Property, plant and equipment (Cont'd)

For the year ended 30 June 2019

14

Consolidated - 30 June 2018

Asset values

Basis of measurement

Fair Value

Land and Improvements Fair Value

Buildings Cost

Plant and Equipment

2018

$'000

Fair Value

Major Plant & Equipment

2018

$'000

Fair Value

Cultural Assets

2018

$'000

Fair Value

Park Furniture & Other Structures

2018

$'000

Fair Value

Road, Drainage & Transport Infrastructure

2018

$'000

Fair Value

Sewerage Infrastructure

2018

$'000

Fair Value

Water Infrastructure

2018

$'000

Cost

Work in Progress

35,051

2018

277,675

$'000

462,033

2018

1,498,502

$'000

36,523

2018

1,081

$'000 3,665

Total

$'000

-

2,658,652

5,094

44,690

130,530

-

4

(1)

-

1

(2) 4,687

57

(57)

(636)

30,569

(625)

(18,490)

-

-

121

-

168,902

Opening gross value at 1 July 2017

Contributed assets

-

-

(1,633)

Disposals*

-

(1,030)

-

-

173

1

-

-

23

(1,977)

5,337

-

46

-

(398)

1

Opening balance adjustment

8,936

41

Found assets first recognised

-

69,288 (102)

16,899

62,495 -

560

(41)

8 -

-

15 (424)

123

-

2,880

-

-

-

212 (2,446)

154

-

70 (203) -

(185)

50

-

-

4,229

49

-

-

4 (b)

(5,669)

3,509

8 8

(57)

57

21

Additions during period

Write-offs

-

-

(10,675)

Revaluation adjustment to the asset revaluation surplus

-

-

(2,593)

-

(2,593)

-

-

-

-

-

-

-

-

45,738

(47,525)

-

5,889

-

287,997

-

-

13,292

-

-

481,903

-

Assets transferred to inventory

26,572

2,741,259

1,535,986

600,886

(478)

-

36,512

-

-

1

66,510

1,426

(1)

96,336

-

384,489

6,904

-

5,550

(39)

-

44,999

-

1,438

1

1,269

-

3,857

-

-

690

-

-

-

-

-

31

(15)

589

-

-

(4,265)

27,402

-

2,201

(989)

5,366

-

-

(863)

4,155

-

8

-

-

-

-

-

-

(81)

(8,085)

46,232

-

2,245

-

-

22,608

2,274

(259)

-

-

-

-

(1,658)

1,319

(1)

22,549

174,602

Closing gross value as at 30 June 2018 Accumulated depreciation Opening balance as at 1 July 2017 Opening balance adjustment

1,899

(37)

(63)

5

-

1,902

Depreciation provided in period

-

8

-

Contributed assets Depreciation on disposals

2,889

2,890

(2) (511)

27

-

-

7,949

28

-

652,036

-

-

2,089,223

-

-

-

(16)

-

45,738

-

-

71,131

(2,764)

7,949

-

216,866

-

909

379,351

102,552

-

-

421,574

8

-

(609)

1,114,412

21

-

-

5,001

Depreciation on write-offs

-

-

31,511

Revaluation adjustment to the asset revaluation surplus

(313)

58

13

1,368

-

5,175

1,729

Not Depreciated

20,521

5-200

24,478

10-200

50

-

-

-

-

15

15

-

8

8

62,495

42,595

69,288

45,900

15-100

-

50

5-150

22,040

Not Depreciated 7-16 Excl. Public Artwork : 35

49

2-52

1,995

49

6-150

152,562 Land: Not depreciated Improvements: 7

3,473

21

Internal transfers between classes Consolidated book value at 30 June 2018

Accumulated depreciation as at 30 June 2018

* Expensed WIP included in opening balance, included in disposals line

Range of estimated useful life in years

1,513

23,388

1,493

3,509

$'000 1,387

$'000 -

2,880

$'000

121,719

Impairment adjustment to asset revaluation surplus

Found assets first recognised

1,575

851

-

$'000

-

$'000

-

$'000

(636)

$'000

125,192

Assets transferred to intangibles

Revaluation adjustment due to landfill provisions

$'000

Internal transfers between WIP and other classes

4 (b)

$'000 212

$'000 -

212

$'000 70

Additions comprise: Renewals

70

19,900

Other additions

-

Total additions

31

84

Gladstone Regional Council 2018/19 Annual Report

Notes to the Financial Statements

Note

Property, plant and equipment (Cont'd)

For the year ended 30 June 2019

14

Council - 30 June 2018

Asset values

Basis of measurement

Fair Value

Land and Improvements Fair Value

Buildings Cost

Plant and Equipment

2018

Fair Value

Major Plant & Equipment

2018

$'000

Fair Value

Cultural Assets

2018

$'000

Fair Value

Park Furniture & Other Structures

2018

$'000

Fair Value

Road, Drainage & Transport Infrastructure

2018

$'000

Fair Value

Sewerage Infrastructure

2018

$'000

Fair Value

Water Infrastructure

2018

$'000

Cost

Work in Progress

Total

$'000

1

2,552,595

$'000

34,566

2018

277,675

$'000

462,033

2018

1,437,613

$'000

31,667

1

2018

1,081

(2)

$'000 3,665

121

41,295

120,630

4

(1)

5,094

1

57

-

(57)

(636)

31,096

(440)

(18,433)

(57)

-

-

4,687

142,370

Opening gross value at 1 July 2017

Contributed assets

-

-

(1,575)

-

(1,030)

-

-

-

-

173

1

(1,977)

5,337

-

23

(398)

-

46

-

8,936

1

Opening balance adjustment

-

41

Found assets first recognised

(102)

16,899

68,931 -

560

(41)

62,138 -

-

8 (424)

123

15

2,880

-

-

(2,446)

154

-

-

212

-

-

70 (203) -

50

-

-

2,766

49

4 (b) -

-

8 (3,678)

3,509

8

-

57

Disposals* 21

Additions during period

Write-offs

-

(10,675)

Revaluation adjustment to the asset revaluation surplus

-

-

(2,593)

-

(2,593)

-

-

-

-

-

-

-

-

-

45,689

(46,791)

-

-

5,889

-

-

287,997

-

-

13,292

-

Assets transferred to inventory

481,903

2,635,615

22,102

1

585,131

1,470,627

-

3,475

-

35,608

-

66,511

-

96,336

1,426

378,710

-

-

4,789

6,904

-

16

-

41,845

-

1,270

1,167

-

20,568

3,651

-

-

690

-

-

-

-

31

(15)

541

-

-

(4,265)

25,922

-

2,201

(989)

5,366

-

-

(863)

4,155

-

-

-

-

-

(81)

(8,079)

43,796

-

2,245

(1)

2

15,370

-

-

-

-

-

(1)

146,335

Closing gross value as at 30 June 2018 Accumulated depreciation Opening balance as at 1 July 2017

1,571

(259)

-

Opening balance adjustment -

(1,652)

1,319

8

1,899

(37)

(63)

Depreciation provided in period

5

-

1,902

-

8

-

Contributed assets Depreciation on disposals

2,889

4,767

(2) (511)

27

-

7,949

-

-

635,728

28

-

1,999,887

-

-

-

-

-

-

45,689

(16)

7,949

-

71,131

-

-

-

102,552

(887)

-

-

413,407

-

-

-

4,802

5-200

216,866

-

-

-

58

10-200

379,350

8

-

-

1,729

15-100

1,057,220

21

-

-

22,551

5-150

30,806

Depreciation on write-offs

-

16,024

1,368

Revaluation adjustment to the asset revaluation surplus

3,474

5,175

1,995

49

49

-

50

12

38

-

-

-

15

15

-

8

$'000

62,138

42,238

68,931

45,497

19,900

Not Depreciated

19,295

1,513

23,434

130,311

Not Depreciated 7-16 Excl. Public Artwork : 35

1,493

3,509

$'000

113,809 Land: Not depreciated Improvements: 7

1,387

8

2-52

21

Internal transfers between classes Accumulated depreciation as at 30 June 2018 Consolidated book value at 30 June 2018 Range of estimated useful life in years * Expensed WIP included in opening balance, included in disposals line

-

2,880

$'000 212

-

6-150

Impairment adjustment to asset revaluation surplus

Found assets first recognised

1,576

851

-

$'000

-

$'000

-

$'000

(636)

$'000

117,283

Assets transferred to intangibles

Revaluation adjustment due to landfill provisions

$'000

Internal transfers between WIP and other classes

4 (b)

$'000 -

212

$'000 70

$'000

70

Additions comprise: Other additions

Renewals Total additions

32

85

Gladstone Regional Council 2018/19 Annual Report

Notes to the Financial Statements For the year ended 30 June 2019

14 Property, plant and equipment (cont'd) Recognised fair value measurements Council measures and recognises the following assets at fair value on a recurring basis: Investment Property • Investment land • Investment buildings Property, Plant and Equipment • Land and improvements • Buildings

• Major plant and equipment • Cultural assets

• Parks, furniture, and other structures • Road, drainage and transport infrastructure • Sewerage infrastructure • Water infrastructure

Council does not measure any liabilities at fair value on a recurring basis.

Council has assets and liabilities which are not measured at fair value, but for which fair values are disclosed in other notes.

Council borrowings are measured at amortised cost with interest recognised in profit or loss when incurred. The fair value of borrowings disclosed in Note 17 is provided by the Queensland Treasury Corporation and represents the contractual undiscounted cash flows at balance date (level 2).

The carrying amounts of trade receivables and trade payables are assumed to approximate their fair values due to their short-term nature (level 2).

Council also has assets measured at fair value on a non-recurring basis as a result of being reclassified as assets held for sale. A description of the valuation techniques and the inputs used to determine the fair value of this land is included below under the heading "Land (level 2)".

In accordance with AASB 13 fair value measurements are categorised on the following basis: • fair value based on quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1) • fair value based on inputs that are directly or indirectly observable for the asset or liability (level 2) • fair value based on unobservable inputs for the asset and liability (level 3) The following table categorises fair value measurements as either level 2 or level 3 in accordance with AASB 13. Council does not have any assets or liabilities measured at fair value which meet the criteria for categorisation as level 1.

The fair values of the assets are determined using valuation techniques which maximise the use of observable data, where it is available, and minimise the use of entity specific estimates. If all significant inputs required to fair value an asset are observable, the asset is included in level 2. If one or more of the significant inputs is not based on observable market data, the asset is included in level 3. This is the case for Council infrastructure assets, which are of a specialist nature for which there is no active market for similar or identical assets. These assets are valued using a combination of observable and unobservable inputs.

Gladstone Regional Council 2018/19 Annual Report

33

86

Notes to the Financial Statements For the year ended 30 June 2019

14 Property, plant and equipment (cont'd) Recognised fair value measurements (cont'd) The table presents Council's assets and liabilities measured and recognised at fair value at 30 June 2019

Consolidated

Level 2

Level 3

(Significant other observable inputs)

(Significant unobservable inputs)

30 June 2019

30 June 2018

30 June 2019

$'000

Total

30 June 2018

30 June 2019

$'000

30 June 2018

$'000

Recurring fair value measurements Investment property

Note

Investment land

13

1,423

1,423

-

-

1,423

1,423

Investment buildings

13

1,911

2,633

-

-

1,911

2,633

Property, plant and equipment

-

Land and improvements

14

Buildings

14

-

-

Major plant and equipment

14

5,092

5,175

-

-

5,092

5,175

Cultural assets

14

1,695

1,368

-

-

1,695

1,368

Parks, furniture, and other structures

120,783

121,719

-

-

151,489

152,562

120,783

121,719

151,489

152,562

14

-

-

32,083

31,511

32,083

31,511

Road, drainage and transport infrastructure

14

-

-

1,104,629

1,114,412

1,104,629

1,114,412

Sewerage infrastructure

14

-

-

374,860

379,351

374,860

379,351

Water infrastructure

14

-

-

214,653

216,866

214,653

216,866

1,877,714

1,894,701

2,008,618

2,027,019

130,904

Council

Investment property

Level 2

Level 3

(Significant other observable inputs)

(Significant unobservable inputs)

30 June 2019

Recurring fair value measurements

132,318

30 June 2018

30 June 2019

$'000

Total

30 June 2018

$'000

30 June 2019

30 June 2018

$'000

Note

Investment land

13

1,423

1,423

-

-

1,423

1,423

Investment buildings

13

1,911

2,633

-

-

1,911

2,633

Land and improvements

14

113,427

113,809

-

113,427

113,809

Buildings

14

-

-

129,988

130,311

Major plant and equipment

14

5,092

5,175

-

-

5,092

5,175

Cultural assets

14

1,695

1,368

-

-

1,695

1,368

Parks, furniture, and other structures Road, drainage and transport infrastructure

14

-

-

31,512

30,806

31,512

30,806

14

Sewerage infrastructure

14

-

-

1,048,959 374,860

1,057,220 379,350

1,048,959 374,860

1,057,220 379,350

Water infrastructure

14

Property, plant and equipment

123,548

Gladstone Regional Council 2018/19 Annual Report

124,408

129,988

130,311

214,653

216,866

214,653

216,866

1,799,972

1,814,553

1,923,520

1,938,961

34

87

Notes to the Financial Statements For the year ended 30 June 2019

14 Property, plant and equipment (cont'd) Recognised fair value measurements (cont'd) There were no transfers between levels 1 and 2 during the year, nor between levels 2 and 3.

Council's policy is to recognise transfers in and out of the fair value hierarchy levels as at the end of the reporting period. (ii) Valuation techniques used to derive fair values for level 2 and level 3 valuations Specific valuation techniques used to value Council assets comprise: Land and improvements (level 2) Land fair values were reviewed by independent valuer, APV Valuers and Asset Management with a desktop valuation effective 30 June 2019. Level 2 valuation inputs were used to value land held in freehold title as well as land used for special purposes which is restricted in use under current zoning rules. Sales prices of comparable land sites in close proximity are adjusted for differences in key attributes such as property size. The most significant inputs into this valuation approach are price per square metre.

Land classified as held for sale during the reporting period was measured at the lower of its carrying amount and fair value less cost to sell at the time of reclassification.

The fair value of the land is determined using the sales comparison approach outlined above.

An assessment of the valuation movement has been deemed immaterial and therefore, no increment/decrement has been recorded for 30 June 2019.

Buildings, parks and other structures (level 3) The fair value of buildings was reviewed by independent valuer, APV Valuers and Asset Management with a desktop valuation effective 30 June 2019. Where there is a market for Council building assets, fair value has been derived from the sales prices of comparable properties after adjusting for differences in key attributes such as property size. The most significant inputs into this valuation approach were price per square metre.

Specialised buildings were valued using the cost approach using professionally qualified registered valuers. The approach estimated the replacement cost for each building by componentising the buildings into significant parts with different useful lives and taking into account a range of factors. While the unit rates based on square metres could be supported from market evidence (level 2) other inputs (such as estimates of residual value, useful life, pattern of consumption and asset condition) require extensive professional judgement and may impact the final determination of fair value. These assets are classified using level 3 valuation inputs.

In determining the level of accumulated depreciation the asset has been disaggregated into significant components which exhibit useful lives. Allowance has been made for the typical asset life cycle and renewal treatments of each component and residual value at the time the asset is considered to be no longer available for use and the condition of the asset. Condition was assessed taking into account both physical characteristics as well as holistic factors such as functionality, capability, utilisation and obsolescence.

An assessment of the valuation movement has been deemed immaterial and therefore, no increment/decrement has been recorded for 30 June 2019.

Major plant and equipment (Level 2) The fair value of major plant is measured at current market value as at 30 June 2019. This was determined by management on a condition audit and market-based evidence using comparable replacement costs from the most recent price catalogues for specialised earth moving equipment. The key assumptions used in assessing the conditions included site condition, type of usage, major mechanical component condition, and machine hours. The fair value takes into account transport costs to transport the plant to market, but does not include transaction costs.

Infrastructure assets (level 3) The fair value of all Council infrastructure was determined by Council professional officers applying a desktop valuation review. Water and sewerage infrastructure assets were comprehensively valued by APV Valuers and Asset Management effective 30 June 2016. Roads, drainage, and transport infrastructure were fair valued comprehensively by Assetic Pty Ltd effective 30 June 2016. The 2019 desktop revaluation review took into account changes of condition as a result of capital expenditures and expected deterioration.

Gladstone Regional Council 2018/19 Annual Report

35

88

Notes to the Financial Statements For the year ended 30 June 2019

14 Property, plant and equipment (cont'd) Valuation techniques used to derive fair values for level 2 and level 3 valuations (cont'd) Infrastructure assets (level 3) (cont'd) All assets were valued using written down current replacement cost. This valuation comprises the assetâ&#x20AC;&#x2122;s current replacement cost (CRC) less accumulated depreciation calculated on the basis of such cost to reflect the already consumed or expired future economic benefits of the asset. Council first determined the gross cost of replacing the full service potential of the asset and then adjusted this amount to take account of the expired service potential of the asset.

CRC was measured by reference to the lowest cost at which the gross future economic benefits of the asset could currently be obtained in the normal course of business.

Where existing assets were over designed, had excess capacity, or were redundant an adjustment was made so that the resulting valuation reflected the cost of replacing the existing economic benefits based on an efficient set of modern equivalent assets to achieve the required level of service output within Council's planning horizon.

The unit rates (labour and materials) and quantities applied to determine the CRC of an asset or asset component were based on a mixture of "Greenfield" and "Brownfield" assumptions. The CRC was determined using methods relevant to the asset class as described under individual asset categories below.

Road, drainage and transport infrastructure (RDTI) - calculation of current replacement cost Roads Current replacement cost Given the majority of Council's works occur on existing roads and renewals result in similar carriageway widths, Council has utilised a methodology based on the replacement of road pavement and surfaces to current pavement design standards with the same carriageway details. This financial year Council's stereotyping of road type assets has considered high order (collector and above) and low order (access streets and places) roads separately. Council considered that replacement pavements are constructed to a depth standard consistent with Council's Roads and Transport Standards 2005.

The reconstruction approach considers additional resources associated with constructing within constrained 'Brownfield' sites when compared to a 'Greenfield site'. These inputs include the need to dispose existing infrastructure, work in tight conditions, ensure access requirements are met and meet additional safety and traffic control requirements. The reconstruction approach produces a valuation that better represents the current replacement cost of Council's road assets.

Accumulated depreciation In determining the level of accumulated depreciation, roads were disaggregated into significant components which exhibited different useful lives.

As part of the comprehensive revaluation undertaken for the financial year ended 30 June 2016, a condition assessment was undertaken on sealed road assets and a sample of unsealed road assets including a number of metrics. These metrics were utilised, along with other information, to determine the consumption of the component's service potential. For the desktop revaluation review undertaken, the amount of service potential consumed was determined based on the useful lives of components and adjusted to take account for capital expenditure in the financial year.

Bridges Current replacement cost The fair value of bridge assets was determined by Council's professional officers applying a desktop valuation review effective 30 June 2019. CRC was calculated as part of the comprehensive valuation undertaken for the financial year ended 30 June 2016, by reference to asset linear and area specifications, estimated labour and material inputs, service costs and overhead allocations. This included consideration of material type used for construction, the deck area and size.

Gladstone Regional Council 2018/19 Annual Report

36

89

Notes to the Financial Statements For the year ended 30 June 2019

14 Property, plant and equipment (cont'd) Road, drainage and transport infrastructure - calculation of current replacement cost (cont'd) Bridges (cont'd) Accumulated depreciation The remaining useful lives of the bridge asset components were reviewed in the financial year ended 30 June 2016. These metrics were utilised, along with other information, to determine the accumulated consumption of the component's service potential. Through this assessment the remaining useful lives were determined and aligned with actual condition. For the desktop revaluation review undertaken, the amount of service potential consumed was determined based on the useful lives of components and adjusted to take account for capital expenditure in the financial year.

Drainage infrastructure Current replacement cost The fair value of drainage infrastructure was reviewed by Council's professional officers applying a desktop valuation effective 30 June 2019.

Consistent with roads, Council assumes that environmental factors such as soil type, climate and topography are consistent across each segment and that a segment is designed and constructed to the same standard and uses a consistent amount of labour and materials. Construction estimates were determined on a similar basis to sewerage.

Accumulated depreciation In determining the level of accumulated depreciation, drainage assets were disaggregated into significant components which exhibited different useful lives.

As part of the comprehensive revaluation undertaken for the financial year ended 30 June 2016, estimates of expired service potential and remaining useful lives were determined on a sample of assets which had condition assessments. The service potential and remaining useful life were assumed to be in proportion with the sampled assets for all other assets. For the desktop revaluation review undertaken, the amount of service potential consumed was determined based on the useful lives of components and adjusted to take account for capital expenditure in the financial year.

Water and sewerage infrastructure â&#x20AC;&#x201C; calculation of current replacement cost Water and Sewerage Current replacement cost The valuation approach estimated the replacement cost of each asset by componentising the assets into significant parts with different useful lives and taking into account a range of factors. While the unit rates based on square metres or similar capacity could be supported from market evidence (level 2), other inputs (such as estimates of residual value, useful life, pattern of consumption and asset condition) require extensive professional judgement and may impact the final determination of fair value. As such these assets were classified as having been valued using level 3 valuation inputs.

Accumulated depreciation As part of the comprehensive revaluation undertaken in the financial year ended 30 June 2016, in determining accumulated depreciation, assets were either subject to a site inspection or an assessment to determine remaining useful life. Where site inspections were conducted, the assets were allocated a consumption score of between 0 and 5, which was used as an input in estimating the remaining service potential. The higher the condition rating, the lower the fair value. The estimate of the remaining service potential included asset condition, legal and commercial obsolescence and the determination of key depreciation related assumptions such as residual value, useful life and pattern of consumption of the future economic benefit. Where site inspections were not conducted (i.e. for passive assets and active assets), the consumption score was calculated on information contained within Council's asset management system and sampled assets.

For the desktop revaluation review undertaken, the amount of service potential consumed during the financial year was determined based on the useful lives of components and adjusted to take account for capital expenditure in the financial year.

An assessment of the desktop valuation movement has been deemed immaterial and therefore, no increment/decrement has been recorded for 30 June 2019.

Gladstone Regional Council 2018/19 Annual Report

37

90

Notes to the Financial Statements For the year ended 30 June 2019

14 Property, plant and equipment (cont'd) (iii) Valuation processes Council's valuation policies and procedures are reviewed annually taking into consideration an analysis of movements in fair value and other relevant information. Council's current policy for the valuation of property, plant and equipment and investment property (recurring fair value measurements) is set out in Notes 14 and 13 respectively. Nonrecurring fair value measurements are made at the point of reclassification by a registered valuer. (iv) Found assets first recognised As part of ongoing asset data improvements, additional assets not previously recognised were identified and brought to account. This resulted in a net adjustment of $2,500 (2018 - $2,849,201) which is considered immaterial against Council capital and property, plant and equipment balances, hence no adjustment has been made against comparative figures or disclosed as a prior period error as required under AASB108 Accounting Policies, Changes in Accounting Estimates and Errors.

Gladstone Regional Council 2018/19 Annual Report

38

91

Notes to the Financial Statements For the year ended 30 June 2019

15 Trade and other payables Trade creditors are recognised upon receipt of the goods or services ordered and are measured at the agreed purchase/contract price net of applicable discounts other than contingent discounts. Amounts owing are unsecured and are generally settled on 30 day terms.

Consolidated 30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Trade and other payables Current - Trade Creditors and accruals

13,344

13,565

12,897

13,059

13,344

13,565

12,897

13,059

Current - Employee Accrued RDO and leave in lieu Annual leave Service entitlement Sick leave Long service leave Paid parental leave Redundancy benefits

Total current trade and other payables

16 Other liabilities

437

372

437

364

4,783

4,762

4,698

4,647

352

512

352

490

254

553

246

553

1,402

2,571

1,303

2,391

-

3

-

2

-

3,498

-

3,498

7,228

12,271

7,036

11,944

20,572

25,836

19,933

25,004

Consolidated 30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Current Waste levy refund received in advance

2,574 2,574

-

2,574 2,574

-

The State Government made an advance payment to Council in June 2019 to mitigate the impacts on households in relation to the State Waste Levy (the Levy), which takes effect from 1 July 2019. The Council will be liable to the State for payment of the Levy on most forms of commercial and household waste delivered to its disposal sites from 1 July 2019. The State is required to make an annual payment to the Council that essentially refunds the Council for the portion of the Levy that relates to households. Council will fund the portion of the Levy that relates to commercial waste through charges to commercial users of disposal sites from 1 July 2019. As the receipt from the State in June 2019 is for a refund of Councilâ&#x20AC;&#x2122;s Levy expense for the year ended 30 June 2020, the full amount has been recognised as a liability at 30 June 2019.

Gladstone Regional Council 2018/19 Annual Report

39

92

Notes to the Financial Statements For the year ended 30 June 2019

17 Borrowings Borrowings are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition these liabilities are measured at amortised cost.

In accordance with the Local Government Regulation 2012 Council adopts an annual debt policy that sets out Council's planned borrowings for the next nine years. Council's current policy is to only borrow for capital projects and for a term no longer than the expected life of the asset.

Council also aims to comply with the Queensland Treasury Corporation's borrowing guidelines and ensure that sustainability indicators remain within acceptable levels at all times.

Consolidated Note

30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Borrowings Current Loans - Queensland Treasury Corporation

18

9,607

9,081

9,607

Loans - Interest Free - DIP

19

393

374

393

9,081 374

10,000

9,455

10,000

9,455

114,575

Non-current Loans - Queensland Treasury Corporation

18

105,251

114,575

105,251

Loans - Interest Free - DIP

19

4,259

4,653

4,259

4,653

109,510

119,228

109,510

119,228

119,510

128,683

119,510

128,683

Total borrowings

No assets have been pledged as security by Council for any liabilities, however all loans are guaranteed by the Queensland Government.

All borrowings are in $AUD denominated amounts and carried at amortised cost, interest being expensed as it accrues. No interest has been capitalised during the current or comparative reporting period. Expected final repayment dates vary from 15 September 2020 to 15 December 2032.

There have been no defaults or breaches of the loan agreement during the period.

Principal and interest repayments are made quarterly and in arrears.

Gladstone Regional Council 2018/19 Annual Report

40

93

Notes to the Financial Statements For the year ended 30 June 2019

18 Borrowings - interest bearing

Consolidated 30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Queensland Treasury Corporation Opening balance as at 1 July 2018 Principal repayments Closing balance as at 30 June 2019

123,655

131,936

123,655

(8,797)

(8,281)

(8,797)

131,936 (8,281)

114,858

123,655

114,858

123,655

The loan market value at the reporting date was $140,753,970. This represents the value of the debt if Council repaid it at that date.

As it is the intention of Council to hold the debt for its term, no provision is required to be made in these accounts. Principal repayments represent the net payments before interest and administration costs.

19 Borrowings - interest free

Consolidated 30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Department of Infrastructure, Local Government and Planning Opening balance as at 1 July 2018

5,027

5,511

5,027

Fair value adjustment

232

250

232

5,511 250

Principal repayments

(607)

(734)

(607)

(734)

Closing balance as at 30 June 2019

4,652

5,027

4,652

5,027

This loan is guaranteed by the Queensland State Government.

Gladstone Regional Council 2018/19 Annual Report

41

94

Notes to the Financial Statements For the year ended 30 June 2019

20 Provisions Consolidated 30 June 2019 $'000 Non-current

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Long service leave

5,707

5,663

5,689

5,658

Landfill remediation

2,208

2,948

2,208

2,948

7,915

8,611

7,897

8,606

Details of movements in provisions: Long Service Leave (current and non-current) Opening balance as at 1 July 2018

8,233

8,461

8,049

8,216

Long service entitlement arising

1,086

1,433

1,099

1,275

Long service entitlement extinguished Long service entitlement paid Closing balance as at 30 June 2019

(95)

(110)

(42)

(8)

(2,114)

(1,551)

(2,114)

(1,434)

7,110

8,233

6,992

8,049

Landfill remediation A provision is made for the cost of restoration in respect of refuse dumps where it is probable that Council will be liable, or required, to incur such a cost on the cessation of use of these facilities. The provision is measured at the expected cost of the work required, discounted to current day values using the interest rates attaching to Commonwealth Government guaranteed securities with a maturity date corresponding to the anticipated date of the restoration.

The provision represents the present value of the anticipated future costs associated with the closure of the dump sites, decontamination and monitoring of historical residues and leaching on these sites. The calculation of this provision requires assumptions such as application of environmental legislation, site closure dates, available technologies and engineering cost estimates. These uncertainties may result in future actual expenditure differing from amounts currently provided. Because of the long-term nature of the liability, the most significant uncertainty in estimating the provision is the costs that will be incurred.

The provision recognised for dump sites is reviewed at least annually and updated based on the facts and circumstances available at the time.

Refuse dumps are situated on Council controlled land and are classified as land and improvement assets. The provision for restoration is, therefore, included in the cost of the land and amortised over the expected useful life of the refuse dump. Changes in the provision not arising from the passing of time are added to or deducted from the asset revaluation surplus for land. If there is no available revaluation surplus, increases in the provision are treated as an expense and recovered out of future decreases (if any). Changes to the provision resulting from the passing of time (the unwinding of the discount) are treated as a finance cost.

Consolidated 30 June 2019 $'000 Opening balance as at 1 July 2018 Increase in provision - finance cost Increase in provision due to change in discount rate

Council

30 June 2018 $'000

30 June 2019 $'000

2,948

2,885

2,948

35

61

35

196

-

196

30 June 2018 $'000 2,885 61 -

Decrease in provision due to change in projected costs

(971)

2

(971)

2

Closing balance as at 30 June 2019

2,208

2,948

2,208

2,948

This is the present value of the estimated cost of restoring the refuse disposal site to a useable state at the end of its useful life. The projected cost is $2,173,012 with $1,844,908 expected to be incurred in 2021. The remaining costs will be incurred over the next 30 years for monitoring works.

Gladstone Regional Council 2018/19 Annual Report

42

95

Notes to the Financial Statements For the year ended 30 June 2019

21 Asset revaluation surplus The asset revaluation surplus comprises adjustments relating to changes in value of property, plant and equipment that do not result from the use of those assets. Net incremental changes in the carrying value of classes of non-current assets since their initial recognition are accumulated in the asset revaluation surplus.

Increases and decreases upon revaluation are offset within a class of assets.

Where a class of assets is decreased upon revaluation, that decrease is offset first against the amount remaining in the asset revaluation surplus in respect of that class. Any excess is treated as an expense in the Statements of Comprehensive Income.

When an asset is disposed of, the amount reported in surplus in respect of that asset is retained in the asset revaluation surplus and not transferred to retained surplus.

Consolidated 30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Movements in the asset revaluation surplus were as follows: Opening balance as at 1 July

552,315

532,585

564,917

546,537

(554)

(5,669)

-

(3,678)

6,994

-

3,653

Net adjustment to non-current assets at end of period to reflect a change in fair value: Land and improvements Buildings

-

Major plant and equipment

560

Parks furniture and other structures

-

Cultural Roads, drainage and transport infrastructure

126 1,071

560

126

-

1,071

292

96

292

96

(1,963)

14,010

(1,963)

14,010

Sewerage infrastructure

-

7,034

-

7,034

Water infrastructure

-

4,017

-

4,017

Impairment:

-

-

-

Roads, drainage and transport infrastructure

-

Total movement for period Closing balance as at 30 June

Asset revaluation surplus analysis

(7,949)

-

-

(7,949)

(1,665)

19,730

(1,111)

18,380

550,650

552,315

563,806

564,917

Consolidated 30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

The closing balance of the asset revaluation surplus is comprised of the following asset categories: Land and improvements

41,762

42,316

63,890

63,890

Buildings

51,341

51,341

46,374

46,374

993

433

993

433

10,366

10,366

6,946

6,946

Major plant and equipment Parks furniture and other structures Cultural

623

331

623

331

Roads, drainage and transport infrastructure

255,459

257,422

254,832

256,795

Sewerage infrastructure

118,071

118,071

118,113

118,113

Water infrastructure

72,035 550,650

72,035 552,315

72,035 563,806

72,035 564,917

Gladstone Regional Council 2018/19 Annual Report

43

96

Notes to the Financial Statements For the year ended 30 June 2019

22 Reserves The following reserves are cash backed reserves and represent funds that are accumulated within Council to meet anticipated future needs. In each case the amount relates to a perceived future requirement which is not currently a liability.

Emergency Services Reserve Council resolved to establish an emergency services reserve at 15 March 2008. The amounts reported in this reserve at balance date correspond to the amount of cash (reported within cash and cash equivalents) set aside from surplus funding for emergency services activities to be used in the future for capital purposes. Surplus funds are transferred from retained surplus to the emergency services reserve at the end of the financial year. When the capital funds are expended on the respective projects, an equivalent amount is transferred out of the emergency services reserve to retained surplus. Council does not reallocate amounts in this reserve to any other reserve or for any other purpose.

Future Capital Works Reserve Council resolved to establish a future capital reserve at 15 March 2008. The amounts reported in this reserve at balance date correspond to the amount of cash (reported within cash and cash equivalents) set aside from operating funds for future capital acquisitions and infrastructure development. The amount transferred from retained surplus to the future capital reserve will be assessed at the end of the year depending on the operating surplus available and capital funding sources utilised. When the funds are expended on the respective projects, an equivalent amount is transferred out of the future capital reserve to retained surplus. Council does not reallocate amounts in this reserve to any other reserve for any other purpose.

Plant Asset Replacement Reserve Council resolved to establish a plant asset replacement reserve at 15 March 2008. The amounts reported in this reserve at balance date correspond to the amount of cash (reported within cash and cash equivalents) set aside from surplus funds generated by fleet operations to fund the replacement of Council's plant and fleet systems. Surplus funds are transferred from retained surplus to the plant asset replacement reserve at the end of the financial year. When the capital funds are expended on the respective projects, an equivalent amount is transferred out of the plant asset replacement reserve to retained surplus. Council does not reallocate amounts in this reserve to any other reserve or for any other purpose.

Regional Waste Management Reserve Council resolved to establish a regional waste management reserve at 15 March 2008. The amounts reported in this reserve at balance date correspond to the amount of cash (reported within cash and cash equivalents) set aside to fund waste management infrastructure and remediation of existing infrastructure and sites. It also provides a contingency amount to offset any major unforeseen waste management works which are required. Funds are transferred from retained surplus to the regional waste management reserve as determined by the budget. When the funds are expended on the respective projects, an equivalent amount is transferred out of the regional waste management reserve to retained surplus. Council does not reallocate amounts in this reserve to any other reserve or for any other purpose. This reserve also represents any unspent monetary funds on behalf of waste operations.

Parks Constrained Works Reserve Council resolved to establish a parks constrained works reserve at 15 March 2008. The amounts reported in this reserve at balance date correspond to the amount of cash (reported within cash and cash equivalents) set aside for the purpose of funding specific park infrastructure.

It also provides a contingency amount to offset any major unforeseen park works which are required. Funds are transferred from retained surplus to the parks constrained works reserve as determined by the budget. When the funds are expended on the respective projects, an equivalent amount is transferred out of the parks constrained works reserve to retained surplus. Council does not reallocate amounts in this reserve to any other reserve or for any other purpose.

Gladstone Regional Council 2018/19 Annual Report

44

97

Notes to the Financial Statements For the year ended 30 June 2019

22 Reserves (cont'd) Roads Constrained Works Reserve Council resolved to establish a roads constrained works reserve at 15 March 2008. The amounts reported in this reserve at balance date correspond to the amount of cash (reported within cash and cash equivalents) set aside for the purpose of funding specific road infrastructure.

It also provides a contingency amount to offset any major unforeseen road works which are required. Funds are transferred from retained surplus to the roads constrained works reserve as determined by the budget. When the funds are expended on the respective projects, an equivalent amount is transferred out of the roads constrained works reserve to retained surplus. Council does not reallocate amounts in this reserve to any other reserve or for any other purpose.

Water Constrained Works Reserve Council resolved to establish a water constrained works reserve at 15 March 2008. The amounts reported in this reserve at balance date correspond to the amount of cash (reported within cash and cash equivalents) set aside to provide funds for the future construction and replacement of Council's water and supply infrastructure. It also provides a contingency amount to offset any major unforeseen water supply works which are required. Funds are transferred from retained surplus to the water constrained works reserve as determined by the budget.

When the funds are expended on the respective projects, an equivalent amount is transferred out of the water constrained works reserve to retained surplus. Council does not reallocate amounts in this reserve to any other reserve or for any other purpose.

Sewerage Constrained Works Reserve Council resolved to establish a sewerage constrained works reserve at 15 March 2008. The amounts reported in this reserve at balance date correspond to the amount of cash (reported within cash and cash equivalents) set aside to provide funds for the future construction and replacement of Council's sewerage infrastructure. It also provides a contingency amount to offset any major unforeseen sewerage works which are required. Funds are transferred from retained surplus to the sewerage constrained works reserve as determined by the budget. When the funds are expended on the respective projects, an equivalent amount is transferred out of the sewerage constrained works reserve to retained surplus. Council does not reallocate amounts in this reserve to any other reserve or for any other purpose.

Recurrent Grant Funding Reserve Council resolved to establish a recurrent grant funding reserve at 15 March 2008. This reserve represents unexpended non-capital operational grant and subsidy funding. When the funds are expended on the respective projects, an equivalent amount is transferred out of the recurrent grant funding reserve to retained surplus. Council does not reallocate amounts in this reserve to any other reserve or for any other purpose.

Consolidated 30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Summary of reserves held for funding future capital expenditure: Emergency services reserve Future capital works reserve Plant asset replacement reserve Regional waste management reserve Parks constrained works reserve Roads constrained works reserve Water constrained works reserve Sewerage constrained works reserve

Gladstone Regional Council 2018/19 Annual Report

1,321

765

1,321

765

24,905

23,371

24,905

23,371

22,320

23,092

22,320

23,092

9,517

7,104

9,517

7,104

1,339

1,105

1,339

1,105

20,121

19,861

20,121

19,861

716

219

716

219

3,434

6,251

3,434

6,251

83,673

81,768

83,673

81,768

45

98

Notes to the Financial Statements For the year ended 30 June 2019

22 Reserves (cont'd)

Consolidated 30 June 2019 $'000

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

Summary of reserves held for funding future recurrent expenditure: Recurrent grant funding reserve

Total reserves

476

273

476

273

476

273

476

273

84,149

82,041

84,149

82,041

765

461

765

461

556

304

556

304

Movements in capital reserves: Emergency services reserve Opening balance as at 1 July Transfer from retained earnings for future expenditure Transfer to capital for funds expended in the period Closing balance as at 30 June Future capital works reserve Opening balance as at 1 July Transfer from retained earnings for future expenditure

-

-

-

-

1,321

765

1,321

765

23,371

20,741

23,371

20,741

4,390

4,263

4,390

4,263

Transfer to capital for funds expended in the period

(2,856)

(1,633)

(2,856)

(1,633)

Closing balance as at 30 June

24,905

23,371

24,905

23,371

23,092

20,989

23,092

20,989

Plant asset replacement reserve Opening balance as at 1 July Transfer from retained earnings for future expenditure

1,228

3,903

1,228

3,903

Transfer to capital for funds expended in the period

(2,000)

(1,800)

(2,000)

(1,800)

Closing balance as at 30 June

22,320

23,092

22,320

23,092

7,104

8,313

7,104

8,313

2,413

-

2,413

-

Regional waste management reserve Opening balance as at 1 July Transfer from retained earnings for future expenditure Transfer to capital for funds expended in the period Closing balance as at 30 June

Parks constrained works reserve Opening balance as at 1 July Transfer from retained earnings for future expenditure

-

(1,209)

-

(1,209)

9,517

7,104

9,517

7,104

1,105

968

1,105

968

381

389

381

389

Transfer to capital for funds expended in the period

(147)

(252)

(147)

(252)

Closing balance as at 30 June

1,339

1,105

1,339

1,105

Gladstone Regional Council 2018/19 Annual Report

46

99

Notes to the Financial Statements For the year ended 30 June 2019

22 Reserves (cont'd) Movements in capital reserves (cont'd):

Consolidated 30 June 2019 $'000

Roads constrained works reserve Opening balance as at 1 July Transfer from retained earnings for future expenditure Transfer to capital for funds expended in the period Closing balance as at 30 June Water constrained works reserve Opening balance as at 1 July Transfer from retained earnings for future expenditure

Council

30 June 2018 $'000

30 June 2019 $'000

30 June 2018 $'000

19,861

20,351

19,861

20,351

260

155

260

155

-

(645)

-

(645)

20,121

19,861

20,121

19,861

219

10,427

219

10,427

497

110

497

110

Transfer to capital for funds expended in the period

-

Closing balance as at 30 June

716

219

716

219

6,251

8,332

6,251

8,332

1,709

1,339

1,709

1,339

(4,526)

(3,420)

(4,526)

(3,420)

3,434

6,251

3,434

6,251

273

252

273

252

476

273

476

273

(273)

(252)

(273)

(252)

476

273

476

273

Sewerage constrained works reserve Opening balance as at 1 July Transfer from retained earnings for future expenditure Transfer to capital for funds expended in the period Closing balance as at 30 June

(10,318)

-

(10,318)

Movements in recurrent reserves: Recurrent grant funding reserve Opening balance as at 1 July Transfer from retained earnings for future expenditure Transfer to retained earnings for funds expended in the period Closing balance as at 30 June

Gladstone Regional Council 2018/19 Annual Report

47

100

Notes to the Financial Statements For the year ended 30 June 2019

23 Commitments for expenditure

Consolidated 30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

Contractual commitments at balance date but not recognised in the financial report are as follows: Airport capital expenditure Fleet purchases Parks and regulatory services projects Road, drainage and transport infrastructure projects Water and sewerage projects Waste projects Strategic projects Other projects

Operating contractual commitments • Not later than one year • Later than one year and not later than five years • Later than five years

Gladstone Regional Council 2018/19 Annual Report

Council

30 June 2019

6 349

3,285

349

3,285

265

912

265

912

3,019

15,958

3,019

15,958

6,774

13,331

6,774

13,331

1,340

15

1,340

15

525

1,010

525

1,010

66

-

66

-

12,344

34,511

12,338

34,511

4,025

3,858

3,710

3,706

4,197

7,141

3,931

6,774

-

-

-

-

8,222

10,999

7,641

10,480

48

101

Notes to the Financial Statements For the year ended 30 June 2019

24 Contingent liabilities Details and estimates of maximum amounts of contingent liabilities are as follows: Local Government Mutual The Gladstone Regional Council is a member of the local government mutual liability self-insurance pool, LGM Queensland. In the event of the pool being wound up or it is unable to meet its debts as they fall due, the trust deed and rules provide that any accumulated deficit will be met by the individual pool members in the same proportion as their contribution is to the total pool contributions in respect to any year that a deficit arises.

The latest audited financial statements for LGM Queensland are as at 30 June 2018 and report accumulated member funds (equity) of $75,834,341 and it is not anticipated any liability will arise.

Local Government Workcare The Gladstone Regional Council is a member of the Queensland local government workers' compensation self-insurance scheme, Local Government Workcare. Under this scheme Council has provided an indemnity towards a bank guarantee to cover bad debts which may remain should the self insurance licence be cancelled and there was insufficient funds available to cover outstanding liabilities. Only the Queensland Government's workers compensation authority may call on any part of the guarantee should the above circumstances arise. Council's maximum exposure (indemnity amount) to the bank guarantee is $1,552,547.

The latest audited financial statements for Local Government Workcare are as at 30 June 2018 and report accumulated member funds (equity) of $49,693,198 and it is not anticipated any liability will arise.

Bank Guarantees The Gladstone Regional Council has provided a bank guarantee to Queensland Rail Ltd valued at $15,000 as a bond over two blocks of land [LEASE: LOT 40 ON SP129336 AND LEASE B: LOT 8 ON SP121498] being utilised by Gladstone Regional Council. The guarantee expires in 29 February 2028.

The Gladstone Regional Council has provided a bank guarantee to Great Barrier Reef Marine Park Authority valued at $274,353 as an obligation under contract for the Permit G37713.1 - Agnes Water Desalination Plant. The guarantee expires on 30 September 2028.

Gladstone Regional Council 2018/19 Annual Report

49

102

Notes to the Financial Statements For the year ended 30 June 2019

25 Superannuation Council contributes to the LGIAsuper Regional Defined Benefits Fund (the scheme), at the rate of 12% for each permanent employee who is a defined benefit member. This rate is set in accordance with the LGIAsuper trust deed and may be varied on the advice of an actuary. The Regional Defined Benefits Fund is a complying superannuation scheme for the purpose of the Commonwealth Superannuation Industry (Supervision) legislation and is also governed by the Local Government Act 2009.

The scheme is a defined benefit plan, however Council is not able to account for it as a defined benefit plan in accordance with AASB119 because LGIAsuper is unable to account for its proportionate share of the defined benefit obligation, plan assets and costs.

Any amount by which the scheme is over or under funded may affect future benefits and result in a change to the contribution rate, but has not been recognised as an asset or liability of Council.

The last completed actuarial assessment of the scheme was undertaken as at 1 July 2018. The actuary indicated that â&#x20AC;&#x153;At the valuation date of 1 July 2018, the net assets of the scheme exceeded the vested benefits and the scheme was in a satisfactory financial position as at the valuation date." Council is not aware of anything that has happened since that time that indicates the assets of the scheme are not sufficient to meet the vested benefits, as at the reporting date.

No changes have been made to prescribed employer contributions which remain at 12% of employee assets and there are no known requirements to change the rate of contributions.

The next triennial actuarial review is not due until 1 July 2021.

The most significant risks that may result in LGIAsuper increasing the contribution rate, on the advice of the actuary, are: â&#x20AC;˘ Investment risk - The risk that the scheme's investment returns will be lower than assumed and additional contributions are needed to fund the shortfall. â&#x20AC;˘ Salary growth risk - The risk that wages or salaries will rise more rapidly than assumed, increasing vested benefits to be funded.

There are currently 62 entities contributing to the scheme and any changes in contribution rates would apply equally to all 62 entities. Gladstone Regional Council made less than 4% of the total contributions to the plan in the 2018/19 financial year.

Consolidated

Superannuation contributions made to the

Note

Regional Defined Benefits Fund Other superannuation contributions for employees Total superannuation contributions paid by Council for employees

Contributions Council expects to make to the Regional Defined Benefits Fund for the year ended 30 June 2020

Gladstone Regional Council 2018/19 Annual Report

5

30 June 2019

30 June 2018

30 June 2019

$'000

$'000

$'000

Council

30 June 2018 $'000

266

438

266

438

5,533

5,420

5,384

5,219

5,799

5,858

5,650

5,657

Consolidated

Council

30 June 2019 $'000

30 June 2018 $'000

273

273

50

103

Notes to the Financial Statements For the year ended 30 June 2019

26 Trust funds Funds held in the trust account on behalf of outside parties include those funds from the sale of land for arrears in rates, deposits for the contracted sale of land, security deposits lodged to guarantee performance and unclaimed monies paid into the trust account by Council. Council performs only a custodian role in respect of these monies and because the monies cannot be used for Council purposes, they are not considered revenue nor brought to account in the financial statements.

The monies are disclosed for information purposes only.

Consolidated

Trust funds held for outside parties Monies collected or held on behalf of other entities yet to be paid out to or on behalf of those entities Security deposits

Gladstone Regional Council 2018/19 Annual Report

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

466

496

466

496

3,223

3,250

3,223

3,250

3,689

3,746

3,689

3,746

51

104

Notes to the Financial Statements For the year ended 30 June 2019

27 Reconciliation of net result for the year to net cash inflow from operating activities Note

Net result Non-cash operating items:

Consolidated

30 June 2019 $'000

30 June 2018 $'000

30 June 2019 $'000

Council

30 June 2018 $'000

20,297

4,929

20,710

5,190

(496)

(57)

(496)

(57)

Revaluation adjustments

8

338

474

338

474

Change in future rehabilitation costs

20

35

61

35

61

27

1

(69)

(23)

Non-cash contributions included in fixed assets

4(b)

Finance costs Fair value adjustment

7

Depreciation and amortisation

Financing activities Borrowing costs

7

Investing and development activities: Capital grants and contributions

4(b)

Controlled entity dividend

3(d)

Income tax equivalents

3(d)

232

250

232

250

44,019

46,406

41,470

43,969

44,155

47,135

41,510

44,674

7,266

7,811

5,223

5,729

(14,305)

(14,421)

(14,305)

(14,421)

-

-

(325)

(216)

(6,350)

(5,056)

(7,039)

(5,609) 7,950

Net loss on disposal of non current assets

8

4,359

7,944

4,369

Net loss on write-off of non-current assets

8

24

544

24

360

Capital work in progress write off

14

17

1,633

17

1,575

(16,255)

(9,356)

(17,259)

(10,361)

(4,799)

1,356

(3,935)

2,706

3,697

2,027

3,697

2,027

Increase/(decrease) in payables

(4,095)

3,285

(3,984)

3,326

Increase/(decrease) in provisions

(1,220)

386

(1,056)

470

Changes in operating assets and liabilities: (Increase)/decrease in trade and other receivables (Increase)/decrease in inventories

Increase/(decrease) in other liabilities

Net cash inflow from operating activities

Gladstone Regional Council 2018/19 Annual Report

2,574

-

2,574

-

(3,843)

7,054

(2,704)

8,529

51,620

57,572

47,480

53,761

52

105

Notes to the Financial Statements For the year ended 30 June 2019

28 Reconciliation of liabilities arising from finance activities As at

Cash Flows

30 June 2018 30 June 2019 Consolidated

$'000

$'000

Non-cash changes

As at

(fair value adjustment)

30 June 2019

$'000

$'000

128,682

(9,404)

232

119,510

128,682

(9,404)

232

119,510

Loans

137,448

(9,016)

250

128,682

Council Loans

137,448

(9,016)

250

128,682

Loans Council Loans 30 June 2018 Consolidated

Gladstone Regional Council 2018/19 Annual Report

53

106

Notes to the Financial Statements For the year ended 30 June 2019

29 Financial instruments Council's activities expose it to a variety of financial risks including interest rate risk, credit risk, and liquidity risk.

This note provides information (both qualitative and quantitative) to assist statement users evaluate the significance of financial instruments on Council's financial position and financial performance, including the nature and extent of risks and how Council manages these exposures.

Financial risk management Exposure to financial risk is managed in accordance with Council approved policies on financial risk management. These policies focus on managing the volatility of financial markets and seek to minimise potential adverse effects on the financial performance of Council. Council minimises its exposure to financial risk in the following ways: Investments in financial assets are only made where those assets are with a bank or another financial institution in Australia. Council does not invest in derivatives or other high risk investments.

When Council borrows, it borrows from the Queensland Treasury Corporation unless another financial institution can offer a more beneficial rate, taking into account any risk. Borrowing by Council is regulated by the provisions of the Statutory Bodies Financial Arrangements Act 1982 .

Gladstone Regional Council measures risk exposure using a variety of methods as follows:

Credit risk Credit risk is the risk of financial loss if a counterparty to a financial instrument fails to meet its contractual obligations. These obligations arise principally from Council's investments and receivables from customers.

Exposure to credit risk is managed through regular analysis of credit counterparty ability to meet payment obligations. The carrying amount of financial assets represents the maximum credit exposure.

Investments in financial instruments are required to be made with Queensland Treasury Corporation (QTC) or similar state/commonwealth bodies or financial institutions in Australia, in line with the requirements of the Statutory Bodies Financial Arrangements Act 1982 .

No collateral is held as security relating to the financial assets held by Council.

The following table represents the maximum exposure to credit risk based on the carrying amounts of financial assets at the end of the reporting period:

Consolidated

Financial assets

Note

Council

30 June 2019

30 June 2018

30 June 2019

30 June 2018

$'000

$'000

$'000

$'000

Cash and cash equivalents

9

116,743

112,103

103,412

99,605

Receivables - rates

10

20,089

16,965

20,089

16,965

Receivables - other

10

9,478

7,736

7,160

6,281

Guarantees

24

289

589

289

589

Local Government Workcare

24

1,553

1,550

1,553

1,550

148,152

138,943

132,503

124,990

Total financial assets

Gladstone Regional Council 2018/19 Annual Report

54

107

Notes to the Financial Statements For the year ended 30 June 2019

29 Financial instruments (cont'd) Other financial assets Other investments are held with financial institutions, which are rated from AAA to BBB- or unrated are based on rating agency Standards and Poor ratings, and whilst not capital guaranteed, the likelihood of a credit failure is assessed as remote.

Trade and other receivables In the case of rate receivables, Council has the power to sell the property to recover any defaulted amounts. In effect this power protects Council against credit risk in the case of defaults.

In other cases, Council assesses the credit risk before providing goods or services and applies normal business credit protection procedures to minimise the risk.

By the nature of Council's operations, there is a geographical concentration of risk in Council's area. As the area is largely commercial, there is also a concentration in the commercial sector.

Council does not require collateral in respect of trade and other receivables. Council does not have trade receivables for which no loss allowance is recognised because of collateral.

Liquidity risk Liquidity risk refers to the situation where Council may encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset.

Council's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its labilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Council's reputation.

Council is exposed to liquidity risk through its trading in the normal course of business and borrowings from the Queensland Treasury Corporation and the Queensland Government for capital works.

Council manages its exposure to liquidity risk by maintaining sufficient cash deposits and undrawn facilities, both short and long term, to cater for unexpected volatility in cash flows. These facilities are disclosed in Borrowings Note 18 and Note 19.

Gladstone Regional Council 2018/19 Annual Report

55

108

Notes to the Financial Statements For the year ended 30 June 2019

29 Financial instruments (cont'd) Liquidity risk (cont'd) The following table sets out the liquidity risk of financial liabilities held by Council. It represents the remaining contractual cashflows (principal and interest) of financial liabilities at the end of the reporting period, excluding the impact of netting agreements:

Consolidated Note

0 to 1 year

1 to 5 years

Over 5 years

$'000

$'000

$'000

Total contractual cash flows

Discounted to present day

$'000

$'000

30 June 2019 Trade and other payables

15,16

23,146

-

-

23,146

23,146

Loans - QTC

18

16,063

60,591

78,360

155,014

114,858

Loans - other

19

30 June 2018 Trade and other payables

606

2,424

2,727

5,757

4,653

39,815

63,015

81,087

183,917

142,657

15,16

25,836

Loans - QTC

18

16,063

Loans - other

19

606 42,505

Council

-

25,836

25,836

62,200

92,814

171,077

123,655

2,424 64,624

3,333

6,363

5,027

96,147

203,276

154,518

-

0 to 1 year

1 to 5 years

Over 5 years

$'000

$'000

$'000

Total contractual cash flows

Discounted to present day

$'000

$'000

30 June 2019 Trade and other payables

15,16

22,507

-

-

22,507

22,507

Loans - QTC

18

16,063

60,591

78,360

155,014

114,858

Loans - other

19

30 June 2018 Trade and other payables

606

2,424

2,727

5,757

4,653

39,176

63,015

81,087

183,278

142,018

15,16

25,004

-

-

25,004

25,004

Loans - QTC

18

16,063

62,200

92,814

171,077

123,655

Loans - other

19

606

2,424

3,333

6,363

5,027

41,673

64,624

96,147

202,444

153,686

The outflows in the above table are not expected to occur significantly earlier and are not expected to be for significantly different amounts than indicated in the table.

Market risk Market risk is the risk that changes in market prices, such as interest rates, will affect Council's income or the value of its holdings of financial instruments.

Gladstone Regional Council 2018/19 Annual Report

56

109

Notes to the Financial Statements For the year ended 30 June 2019

29 Financial instruments (cont'd) Market risk (cont'd) Interest rate risk Council is exposed to interest rate risk through its borrowings from the Queensland Treasury Corporation (QTC), the Department of Infrastructure and Planning and investments held with financial institutions.

The risk in borrowing is effectively managed by borrowing mainly from the QTC and having access to a mix of floating and fixed funding sources so that the interest rate risk exposure can be minimised. Interest rate risk in other areas is minimal.

Council does not undertake any hedging of interest rate risk.

Sensitivity Sensitivity to interest rate movements is shown for variable financial assets and liabilities based on the carrying amount at reporting date.

Council does not account for any fixed-rate financial assets or financial liabilities at fair value through profit or loss, therefore a change in interest rates at the reporting date would not affect the Statements of Comprehensive Income.

The following interest rate sensitivity analysis depicts what effect a reasonably possible change in interest rates (assumed to be 1%) would have on the profit and equity, based on the carrying values at the end of the reporting period. The calculation assumes that the change in interest rates would be held constant over the period.

Net carrying amount

Consolidated

Note

$'000

Effect on Net Result

Effect on Equity

1% Increase 1% Decrease

1% Increase 1% Decrease

$'000

$'000

$'000

$'000

30 June 2019 Cash assets Interest-bearing loans Net total

9

116,743

1,167

(1,167)

1,167

(1,167)

18

(114,858)

(1,149)

1,149

(1,149)

1,149

1,885

18

(18)

18

(18)

30 June 2018 Cash assets Interest-bearing loans Net total

9

112,103

1,121

(1,121)

1,121

(1,121)

18

(123,655)

(1,237)

1,237

(1,237)

1,237

(11,552)

(116)

116

(116)

116

Council

30 June 2019 Cash assets Interest-bearing loans Net total

9

103,412

1,034

(1,034)

1,034

(1,034)

18

(114,858)

(1,149)

1,149

(1,149)

1,149

(11,446)

(115)

115

(115)

115

30 June 2018 Cash assets Interest-bearing loans Net total

Gladstone Regional Council 2018/19 Annual Report

9

99,605

996

(996)

996

(996)

18

(123,655)

(1,237)

1,237

(1,237)

1,237

(24,050)

(241)

241

(241)

241

57

110

Notes to the Financial Statements For the year ended 30 June 2019

29 Financial instruments (cont'd) Market risk (cont'd) Sensitivity (cont'd) In relation to the QTC loans held by Council, the following has been applied: • QTC Fixed Rate Loan - financial instruments with fixed interest rates which are carried at amortised cost are not subject to interest rate sensitivity.

• QTC Generic Debt Pool - the generic debt pool products approximate a fixed rate loan. There is negligible impact on interest sensitivity from changes in interest rates for generic debt pool borrowings.

Fair value The fair value of trade and other receivables and payables is assumed to approximate the value of the original transaction, less any allowance for impairment.

The fair value of borrowings with QTC is based on the market value of debt outstanding. The market value of a debt obligation is the discounted value of future cash flows based on prevailing market rates and represents the amount required to be repaid if this was to occur at balance date.

The market value of debt is provided by QTC and is disclosed in Note 18.

QTC applies a book rate approach in the management of debt and interest rate risk, to limit the impact of the market value movements to clients' cost of funding. The book value represents the carrying value based on amortised cost using the effective interest method.

30 National Competition Policy a) Activities to which the code of competitive conduct is applied A "business activity" of a local government is divided into two categories: (a) Roads business activity • The construction or maintenance of State controlled roads for which the local government submits an offer to carry out work in response to a tender invitation, other than through a sole supplier arrangement.

• Submission of a competitive tender for construction of road maintenance on the local government's roads which the local government has put out to tender, or called for by another local government. (b) Other business activities • Trading in goods and services to clients in competition with the private sector, or • The submission of a competitive tender in the local government's own tendering process in competition with others for the provision of goods and services to itself.

Excluded activities are; (i) library services, and (ii) an activity or part thereof prescribed by legislation

Gladstone Regional Council 2018/19 Annual Report

58

111

Notes to the Financial Statements For the year ended 30 June 2019

30 National Competition Policy (cont'd) a) Activities to which the code of competitive conduct is applied (cont'd)

Local government may elect to apply a Code of Competitive Conduct (CCC) to their identified business activities. This requires the application of full cost pricing, identifying the cost of community service obligations (CSO) and eliminating the advantages and disadvantages of public ownership within that activity. The application of the CCC to the roads business activity is compulsory.

The CSO value is determined by Council, and represents any activities' cost(s) which would not be incurred if the activities' primary objective was to make a profit. Council provides funding from general revenue to the business activity to cover the cost of providing non-commercial services of costs deemed to be CSO's by Council.

Council applies full cost pricing to its business activities which involves the recognition of both community service obligations and competitive neutrality adjustments.

• Building Certification

• Gladstone Entertainment Convention Centre • Sewerage

• Water

• Waste management

Gladstone Regional Council has identified business activities in the following areas:

• Roads

Details of Council's performance for these business activities are summarised in Note 30 (b).

$'000

30 June 2019

Gladstone Entertainment & Convention Centre

$'000

30 June 2019

Building Certification

$'000

30 June 2019

Roads

$'000

30 June 2019

Waste Management

$'000

30 June 2019

Water

$'000

30 June 2019

Sewerage

(b) The following activity statements are for activities subject to the competitive code of conduct

Revenue

-

17,340

47,795

30,455

-

67,048

37,910

209

17,587

29,138

29,145

17,796

14,933

14,933

68

3,989

11,947

29,213

44,656

288

40,667 -

42,727

12,235

866

123

866

668

42,850

29,999

-

1,305

1,105

8

37,835

200

4,889

676

2,698

Revenue for services provided to Council Revenue for services provided to external clients

96

1,806

CSO activities funded by Council*

Expenditure Operating expenditure

4,985

190

Competitive neutrality adjustments applied

(3,680)

Return/(deficit) for the financial year

* CSO funded activities for the Gladstone Entertainment and Convention Centre included booking fees, venue hire and plant and equipment hire.

59

112

Gladstone Regional Council 2018/19 Annual Report

Notes to the Financial Statements For the year ended 30 June 2019

31 Transactions with related parties (a) Subsidiaries The group consists of Gladstone Regional Council and one subsidiary. The subsidiary, Gladstone Airport Corporation, is consolidated (Note 12).

Controlled Entity Receipts

Goods and services supplied by council, on normal terms and conditions

$'000

30 June 2019

2,043

$'000

30 June 2018

39

$'000

30 June 2019

39

$'000

30 June 2018

71

$'000

30 June 2019

98

$'000

30 June 2018

86

$'000

30 June 2019

83

$'000

30 June 2018

Rates and Water

30 June 2018

2,043

IT and Phone Charges

30 June 2019 533

$'000

Administration Fees

30 June 2018 689

$'000

Interest Received

30 June 2019 216

$'000

Income Tax Equivalent / Competitive Neutrality Margin

325

$'000

Dividends

The following transactions occurred with subsidiaries:

Subsidiary

Gladstone Airport Corporation

30 June 2019

30 June 2018

300

300

$'000 (89)

(89)

$'000

In accordance with the Statement of Corporate Intent, a dividend was deemed to be payable to Council to the value of up to 50% of the net after tax profit for the financial year ended 30 June 2018. (b) Transactions with joint ventures

Gladstone Economic Futures Group

This joint venture was disbanded on 31 December 2018 with Council's share of the remaining funds returned. (c) Transactions with key management personnel (KMP)

30 June 2018

KMP include the Mayor, Councillors, Council's Chief Executive Officer and some executive management. The compensation paid to KMP for 2018/19 comprises: 30 June 2019

2,817 22

276

$'000 342

595

3,005 18

3,710

$'000

535

Short-term employee benefits Long-term benefits

3,900

Post-employment benefits Termination benefits Total

60

113

Gladstone Regional Council 2018/19 Annual Report

Notes to the Financial Statements For the year ended 30 June 2019

31 Transactions with related parties (cont'd) (d) Transactions with other related parties

Other related parties include the close family members of KMP and any entities controlled or jointly controlled by KMP or their close family members. Close family members include a spouse, child and dependent of a KMP or their spouse.

Details of transactions between Council and other related parties are disclosed below:

59

99

68

30 June 2018 '$'000

31(d)(i)

285

3

30 June 2019 '$'000

Fees and charges charged to entities controlled by key management personnel 31(d)(ii)

33

Additional information

Employee expenses for close family members of key management personnel

31(d)(iii)

Details of Transaction

Purchase of materials and services from entities controlled by key management personnel

(i) The fees and charges charged to entities controlled by key management personnel were on an arm's length basis in accordance with the schedule of fees and charges adopted by Council.

The total disclosed includes the following:

30 June 2018 $'000

54

30 June 2019 $'000

49

Details of related party transactions Fees relating to enquiries for outstanding rates & water charges

14

Fees and charges charged to entities controlled by key management personnel Search fees

10

68

Building, development, infrastructure fees

59

Application fees & charges Total

61

114

Gladstone Regional Council 2018/19 Annual Report

Notes to the Financial Statements For the year ended 30 June 2019

31 Transactions with related parties (cont'd) (d) Transactions with other related parties (cont'd)

(ii) All close family members of key management personnel were employed through an armâ&#x20AC;&#x2122;s length process. They are paid in accordance with the Award for the job they perform.

30 June 2019 $'000 251 3

11

30 June 2018 $'000 85

99

5 285

29

Council employs 633 staff of which only 3 are close family members of key management personnel. The total employee expenses disclosed includes the following:

Short-term employee benefits Post-employment benefits Long-term benefits Total

-

30 June 2018 $'000

(iii) The consolidated entity purchased the following material and services from entities that are controlled by members of key management personnel. All purchases were at armâ&#x20AC;&#x2122;s length and were in the normal course of Council operations: Materials and services purchased from entities controlled by key management personnel

30 June 2019 $'000

-

1

7

21

3

2

4

1

Funding awarded - Regional Arts Development Fund

33

Provision of services for community events Construction/ improvements to assets Provision of other services Total

62

115

Gladstone Regional Council 2018/19 Annual Report

Notes to the Financial Statements For the year ended 30 June 2019

31 Transactions with related parties (cont'd) (e) Outstanding balances

Amounts owed to Controlled Entities

Amounts owed to entities controlled by key management personnel

Payables

Amounts owed by Controlled Entities

-

$'000

(114) 33,716

-

$'000 -

$'000 7

7

Amounts owed by entities controlled by key management personnel

-

$'000

Receivables

The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:

Total Owing

Past due 31-60 days Past due 61-90 days More than 90 days overdue

No expense has been recognised in the current year or prior year for bad or doubtful debts in respect of amounts owed by related parties.

The following balances for Controlled Entity transactions are reported separately in note 10:

(72)

30 June 2018

33,716

30 June 2019 10

$'000

10

$'000

Trade receivables - current

Note

Trade receivables - non-current (f) Loans and guarantees to/from related parties

Council does not make loans to or receive loans from related parties. No guarantees have been provided. (g) Transactions with related parties that have not been disclosed

Most of the entities and people that are related parties of council live and operate within the Gladstone region. Therefore, on a regular basis ordinary citizen transactions occur between Council and its related parties.

Some examples include: - Payment of rates - Use of the swimming pool - Dog registration - Borrowing books from a Council library Council has not included these types of transaction in its disclosure, where they are made on the same terms and conditions available to the general public.

63

116

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STATUTORY INFORMATION. State legislation requires Council to include specific information in its annual report. This section provides Council’s response to those requirements in accordance with the relevant Act and legislation.

LOCAL GOVERNMENT ACT 2009

Mayor’s Discretionary Fund

BENEFICIAL ENTERPRISES

Date 1/03/19

Section 41 requires that local governments list all beneficial enterprises conducted during the financial year.

Council conducted the following beneficial enterprises in 2018/19: • •

Gladstone Development Board Gladstone Area Promotion and Development Limited

SIGNIFICANT BUSINESS ACTIVITIES

12/02/19

Section 45 requires that local governments list all business activities that have been conducted during the financial year and to identify any of its significant business activities.

In accordance with the definitions of the Local Government Regulation 2012, Council held the following significant business activities in 2018/19: • • • •

4/09/18

Water Sewerage Waste Management Plant Operations.

12/02/19 16/04/19

4/09/18

The code of competitive conduct was applied to these activities.

13/05/19

No new significant activities were undertaken in 2018/19.

PUBLIC BENEFIT

7/12/18

Section 46 (1) requires Councils to report on public benefit assessment of new significant business activities. No public benefit assessments were conducted in 2018/19 as there was no new significant business activities.

12/07/19

SENIOR EXECUTIVE REMUNERATION

2/07/18

Section 201 requires that certain details of senior executive remuneration packages are disclosed, including the total remuneration for senior executives of the local government.

22/11/18

The total senior executive remuneration is $2,078,942 Remuneration Band $300,000-399,999 $200,000-299,999

Number of Senior Executives 1 7

20/11/18

EXPENDITURE ON GRANTS TO COMMUNITY ORGANISATIONS Section 189 requires Council to provide a summary of the expenditure on grants to community organisations and expenditure from Councillor discretionary funds.

Gladstone Regional Council 2018/19 Annual Report

12/02/19 28/05/19

Organisation Name Gladstone Engineering Alliance Inc Gladstone Municipal Band

Purpose Amount Gladstone Globe - Interactive Visual Walkway $9,091

Assistance for operational expenses and continued services to the Gladstone regional community at Council events Gladstone Bowls Club Open 2 Bowl - Triples Inc Carnival Gladstone Thistle Assistance for purchase of Pipe Band new percussion drums Gladstone Amateur 2019 Season Launch Basketball Gladstone Port City Power Association Gladstone Thistle Assistance for operational Pipe Band expenses to continue to provide its services to the Gladstone regional community Gladstone Junior Cowboy’s NRL Touch Touch Football Football Premiership Association Coaching Clinic/ Training Camp Discovery Coast Discovery Coast Bushfire Bushfire Fund Benefit Bronze Sponsor Gladstone Hospital Retro Revival - Gladstone Fundraising Ball Hospital Fundraising Ball Roseberry Community Driver Awareness Course Services Limited Evenglow Inc Residents from New Auckland Place, Edenvale, and Sundale Bindaree Care Centre, are invited to attend social days organised by Evenglow which is run by a dedicated group of volunteers Rotary Club of Drought Appeal Fundraiser Calliope - City V Country Football Match Purple Turtle Short Purple Turtle Short Film Film Festival Festival Gladstone Area Group Col Brown Memorial Award Apprentices Ltd

$6,000

$5,000 $5,000 $5,000

$2,500

$2,500

$2,000 $1,818 $1,794 $1,200

$1,000

$1,000 $1,000

127

12/07/19 Central Queensland University 21/06/19 Lowmead School

Tech Girls - National Representation School Sporting equipment

20/02/19 Variety - the Children’s Charity of Queensland 25/06/19 Mount Larcom State School

Variety event, 4WD adventure fundraiser 2019

$1,000 $595 $500

Livestock to support Accredited School of $500 Excellence in Agriculture 30/05/19 Rockhampton Lions Circus Quirkus - invitation $420 Club only event for special needs children in our area 16/05/19 Wartburg School Sporting Supplies prep to year 6 $405 23/01/19 South Rockhampton Special Children’s Christmas $360 Rotary Club Film Festival - Gladstone Cinemas 5/03/19 Special Children’s Rockhampton - Special $227 Christmas Party Children’s Christmas Party Ronald McDonald House 9/10/18 Boyne Tannum Men’s Purchase of an automatic Shed Inc emergency defibrillator $200 22/10/18 Australian Red Cross Trauma Teddies Project Society $200 15/04/19 Gladstone Restore More - to assist Multicultural women in rural areas $200 Association receive treatment for breast cancer 17/04/19 MDC Foundation Ltd Mother’s Day Classic Fun Run - Tannum Sands $200 21/06/19 Ambrose School School Sporting equipment $177

Donations Category Category 1 - School/College Bursaries & Awards Category 2 - Heritage Museums Category 3 - Regional Events Support - Australia Day Category 4 - Recreational Event Support Category 5 - Regulatory Fee Reimbursement Category 6 - Use of Council Plant & Equipment Category 7 - Community Hall Subsidy Category 8 - Tidy Towns Entry Fees Category 9 - Waste Tipping Fees Category 10 - Education/Guidance Category 11 - Performing Arts Category 12 - Mayor’s Discretionary Fund Category 13 - Community Services Obligations Works 4 Queensland - Calliope & District Multi Purpose Facility Works 4 Queensland - Harbour City BMX Club Works 4 Queensland - Gladstone Kart Club Works 4 Queensland - Marley Brown Oval Multi Purpose Facility Works 4 Queensland - Western Suburbs Swimming Pool Gladstone Regional Council 2018/19 Annual Report

Amount $14,100 $22,100 $10,000 $1,200 $8,707 $1,440 $31,500 $47,000 $5,000 $49,888 $83,350 $773,803 $191,507 $39,833 $27,713

Sporting Body Subsidies Major Events Advisory Panel Surf Life Saving Rural Fire Brigade Grants Other Donations and Sponsorships Regional Arts Development Fund Annual Prizes Planning Institute of Australia Sponsorship Capricorn Helicopter Rescue RSPCA Operation Wanted 2018-19 Captain Cook Festival Gladstone Engineering Alliance Sponsorship Sponsorship of CQ Environmental Health Conference

$529,400 $336,690 $217,334 $197,000 $181,900 $88,459 $113,757 $39,500 $29,091 $20,000 $15,000 $10,000 $9,455 $1,200

Grants Type of Grant Facility Assistance Grant Program - Community Projects Facility Assistance Grant Program - Strategic Projects Event Sponsorship Program Round 1 Event Sponsorship Program Round 2 Club Development Grant Round 1 Club Development Grant Round 2

Amount $65,430 $58,000 $10,800 $26,100 $9,692 $11,878

MEAP Funding Organisation Name Gladstone Festival & Events Association Queensland Cruising Yacht Club Inc. Events Queensland Discovery Coast Tourism and Commerce Inc. Boyne Tannum Arts Business & Community Association Boyne Tannum Hookup Association Sports Marketing Australia

Rotary Club of Gladstone Midday Inc. Mount Larcom & District Show Society Inc. Turkey Beach Progress Association Inc. Gladstone Multicultural Association Inc. Baffle Creek Men’s Shed Gladstone Entertainment Convention Centre

Purpose Harbour Festival 2019

Amount $63,000

Brisbane to Gladstone Yacht Race Live Stream 2019 Brisbane to Gladstone Yacht Race 90% Funding pledge 1770 Festival 2019 Under the Trees Music Festival Boyne Hook Up 2019

$60,000 $50,000 $36,000 $32,500 $30,000

Capacity & Capability Assessment for Major Sporting Events Funding

$29,500

$11,800 Mt Larcom & District Show 2019 Turkey Beach Tractor Bash 2019 Multicultural Festival 2019

$9,000 $8,820 $2,700

Baffle Creek Car & Bike Muster Bootcamp held July 2018

$2,250 $1,120

$21,820 128

LOCAL GOVERNMENT REGULATION 2012

1.0 PURPOSE:

COUNCILLOR REMUNERATION

To ensure accountability and transparency in the reimbursement of expenses and the provision of facilities provided or incurred by Councillors in the conduct of Council business.

Section 186 (a) requires the disclosure of Councillor remuneration and expenses incurred by, and facilities provided to, Councillors.

This policy is deemed to be a procedure for the purposes of section 176(4)(a) of the Local Government Act 2009.

Total Councillor remuneration is $973,236.

Councillor Burnett, Matthew Bush, Cindi Churchill, Glenn Goodluck, Kahn Hansen, Rick Masters, Peter Muszkat, Natalia O’Grady, Desley Sobhanian, Poya Trevor, Chris

Salary $151,786 $21,446 $87,876 $87,876 $87,876 $87,876 $50,487 $87,876 $87,876 $99,861

Superannuation $18,214 $2,573 $10,545 $20,789 $10,545 $21,442 $5,219 $10,545 $10,545 $11,983

Total $170,000 $24,019 $98,421 $108,665 $98,421 $109,318 $55,706 $98,421 $98,421 $111,844

Total expenses incurred by, and facilities provided to, Councillors is $183,257.50.

-

ICT

Seminars & Conferences

Hospitality -

-

151.63

Total

Bush, Cindi

32,310.52* 3,527.36 1,127.27 959.28

6.0 POLICY STATEMENT: 6.1 PAYMENT OF EXPENSES Expenses will be paid to a Councillor through administrative processes approved by Council’s Chief Executive Officer subject to the limits outlined in this policy.

6.2 C ONFERENCES, PROFESSIONAL DEVELOPMENT AND TRAINING Council will meet or reimburse expenses incurred in relation to the attendance of conferences, professional development and training of Councillors that have been approved by resolution of the Council, or in accord with the criteria contained in this section.

Councillor attendance at a conference or seminar is approved where the following criteria are satisfied:

Vehicle

Burnett, Matthew

Travel & Accommodation

Councillor

Councillor Expenses and Provision of Facilities

This policy does not provide for salaries or other form of Councillor remuneration. Councillor remuneration is in accordance with the determination of the Local Government Remuneration Commission.

9,760.55

47,684.98

848.69

1,000.32

1. The Councillor has attended no more than three conferences/ seminars in the current financial year; and 2. The registration cost of this conference/seminar is no more than $2000; and 3. The seminar/conference is to be held in Queensland.

Churchill, Glenn

3,451.95

256.64

2,286.36 869.86

11,004.69 17,869.50

Where any of the above criteria are not satisfied, Council approval is required in order to attend.

Goodluck, Kahn

1,571.34

14.09

1,754.09 699.60

8,355.41

12,394.53

6.3 T RAVEL AS REQUIRED TO REPRESENT COUNCIL

Hansen, Rick

30,171.22*

-

2,771.81 1,107.47 7,982.36

42,032.86

Masters, Peter

2,481.98

-

2,654.09 635.16

10,109.83 15,881.06

Muszkat, Natalia

1,181.97

85.50

1,000.00 449.39

4,381.05

O’Grady, Desley

2,585.16

297.12

1,950.00 720.21

14,036.09 19,588.58

6.3.2 T ravel within the Gladstone Regional Council Area

873.91

698.16

7,131.89

857.37

10,018.71 11,003.80

Councillors are provided with a Council vehicle for travel within the region.

Where a Councillor is required to attend a meeting within the Gladstone Regional Council area and:-

Sobhanian, Poya

-

Trevor, Chris

-

127.72

-

7,097.91

8,703.96

* includes overseas travel reported separately in annual report.

Section 185 (a) states that the annual report must contain a copy of the resolutions made during the financial year under section 250 (1) adoption of an expenses reimbursement policy.

Elected Member Expenses Reimbursement and Provision of Facilities On 6 November 2018, Council adopted (viz Resolution G/19/3567) a revised Councillor Expenses Reimbursement and Provision of Facilities Policy which included the following content.

Gladstone Regional Council 2018/19 Annual Report

6.3.1 T ravel Outside the Gladstone Regional Council Area Council will meet or reimburse local, interstate and in special cases, overseas travel expenses (e.g. flights, car, accommodation, meals and associated registration fees) deemed necessary to achieve the business of Council where a Councillor is an official representative of Council and the travel is approved by the Mayor and Chief Executive Officer.

a. the meeting does not conclude before 8.30pm, or it commences prior to 7am; and b. the Councillor’s place of residence is more than 60 kilometres from the meeting venue; Council will meet reasonable accommodation costs for the night.

6.3.3 Guidelines The following guidelines to apply: • •

Councillors are to travel via the most practical and direct route, using the most economical and efficient mode of transport.

Council will pay for reasonable expenses incurred for overnight 129

•

•

•

•

accommodation. Where possible the maximum standard for Councillors’ accommodation should be four-star rating however where particular accommodation is recommended by conference organisers, Council will take advantage of the package deal that is the most economical and convenient to the event.

Any fines incurred while travelling in Council-owned vehicles or privately-owned vehicles when attending to Council business, will be the responsibility of the Councillor incurring the fine.

Any travel transfer expenses associated with Councillors travelling for Council approved business will be reimbursed. For example: trains, taxis, buses and ferry fares.

In the unusual circumstance that a Councillor cannot access their Council provided vehicle or another fleet vehicle, they may claim for mileage by submitting a claim based on the rate prescribed by Directive issued by the Minister for Industrial Relations in pursuance of Section 34 (2) of the Public Service Act 1996 for an automobile 2601cc and over (currently 75c/km).

Council will reimburse the actual costs of meals for a Councillor (on the production of receipts) when the Councillor incurs the cost personally and the meal was not provided within the registration costs of the approved activity/event or during a flight. Council will also reimburse any actual incidental costs incurred when a Councillor is away from home overnight. The maximum daily amounts for reimbursement are identified in Table 1 below. These limits are not to be used as an accumulative total (i.e. if the full cost of a particular meal is not spent, it cannot be added to the next meal to increase the amount).

•

•

Maximum Daily Limit $25 $27 $45 $17

Generally, no alcohol will be reimbursed by Council, however the Mayor may exercise discretion and allow on occasions the purchase of limited alcohol where it is deemed appropriate and in the best interest of Councils’ ratepayers.

Corporate Credit Cards cannot be used to bypass compliance with the reimbursement of expenses set out in this policy. All purchases made by the use of a Council Corporate Credit Card are still subject to compliance with this policy and all related procurement policies.

6.4 ENTERTAINMENT OR HOSPITALITY It is recognised that on occasions Councillors may host people in the course of their official duties.

Council will reimburse Councillors’ Entertainment or Hospitality expenses (for example: food and refreshments) for the Councillor and others where the meeting directly relates to Council business and: • • •

All alcohol, whether part of a meal or not, will be deemed personal use, and not eligible for reimbursement; however, the Mayor may exercise discretion and allow the purchase of limited alcohol where it is deemed appropriate.

Councillors must submit a claim for reimbursement as follows: 1. Complete a brief precis of the circumstances where the hospitality expenses were incurred including the following details: (a) Date and time of meeting, function, event or forum; (b) Attendees hosted; (c) Purpose of the meeting, function, event or forum; (d) Any key outcomes/actions discussed; (e) How the topics discussed link to Council’s Corporate or Operational Plan objectives; (f) Name and Signature of the Councillor making the claim.

2. Attach a copy of the tax receipt for the expenses incurred.

Councillors must forward all claims to the Chief Executive Officer for authorisation and processing.

6.5 LEGAL EXPENSES Council will provide reimbursement of legal expenses incurred individually by a Councillor subject to the following guidelines:

Table 1 Expense Item Breakfast Lunch Dinner Incidentals (where attendee is away from home overnight)

•

Council facilities to discuss matters relating to Council’s current, past or future services and facilities; Hosting others during the course of travel for official Council business.

it appears appropriate and reasonable; can withstand the “public defensibility test”; and is in the best interest of Council ratepayers.

•

•

•

Expenses will only be reimbursed where the legal advice is related to conflicts between official duties as a Councillor and duties associated with Council resolved appointments to separate committees and boards; Notification is to be provided to the Chief Executive Officer of the intended external legal firm prior to engagement to ensure relevant procurement processes are met; Reimbursement will not be authorised where the content of the advice has been provided previously (i.e. reimbursement will only occur once for the same subject matter).

6.6 PROVISION OF FACILITIES All facilities provided to Councillors remain the property of Council and must be returned to Council when a Councillor resigns or their term expires.

6.7 PROVISION OF A FULLY SERVICED VEHICLE Council will provide each Councillor with a fully serviced mid-sized SUV (sports utility vehicle) or utility for use on Council business.

Councillors who wish to avail themselves of the opportunity for private use of the vehicle can do so, on the basis that they reimburse Council for 25% of the total running costs of the vehicle. The contribution is calculated based on the annualised whole of life owning and operating cost of the vehicle. While the actual cost will vary depending on the type of vehicle, usage patterns, fuel price and other assumptions, past comparisons have shown the cost to be in the order of $3500 per annum.

Circumstances where it may be appropriate and reasonable for expenses to be reimbursed include:

Addendum 1 shows typical cost vehicle comparisons.

• •

All Councillors are duly authorised officers for the purposes of motor vehicle insurance under Council’s Motor Vehicle Insurance Policy, and where the Councillor has elected to avail themselves of private use, the

Hosting visiting Ministers, Dignitaries and Public Representatives; Meeting with members of the public who wish to meet outside of

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Councillor can nominate to the Chief Executive Officer members of the persons immediate family who will be eligible to use the vehicle in line with the private use entitlement provided to the Councillor.

6.8 ADMINISTRATIVE TOOLS Administrative tools will be provided to Councillors as required to assist them in their role.

Secretariat support may also be provided for Councillors.

Council may provide Councillors with a corporate credit card on the basis that the Councillor will reimburse all expenses not covered by this policy.

6.9 INSURANCE COVER Council will indemnify or insure Councillors in the event of injury sustained while discharging their civic duties.

For clarity, where there is an excess payable with respect to any insurance claim, Council will pay such excess.

6.10 UNIFORM Council will supply each Councillor with one jacket and polo shirt from the Corporate Uniform range, which will be replaced on a fair wear and tear basis.

In the interests of presenting a unified corporate image, Councillors are to also have access to other corporate attire on an as required basis.

COUNCIL MEETINGS Section 186(c) requires Council to disclose the number of government meetings that each Councillor attended during the financial year.

Councillors Burnett, Matthew (Mayor) Bush, Cindi Churchill, Glenn Goodluck, Kahn Hansen, Rick Masters, Peter Muzkat, Natalia Oâ&#x20AC;&#x2122;Grady, Desley Sobhanian, Poya Trevor, Chris

Total 19 4 18 21 21 23 12 21 21 21

ORDERS AND RECOMMENDATIONS Section 186(d) requires Council to disclose the number of orders and recommendations made during the financial year. Section 186(e) requires Council to particularise details of any orders or recommendations made.

There were no orders made against Councillors in 2018/19.

COUNCILLOR COMPLAINTS AND MISCONDUCT Section 186(f) requires Council to disclose the total number of complaints received against Councillors. No complaints were received and assessed by the Chief Executive Officer from July 2018 - December 2018. Legislative changes were enacted on 3 December 2018 whereby the Office of Independent Assessor (OIA) became responsible for the assessment and investigation of Councillor complaints. Two complaints were assessed by the OIA between December 2018 - June 2019. Both complaints were dismissed by the OIA.

Gladstone Regional Council 2018/19 Annual Report

ADMINISTRATIVE ACTION COMPLAINTS Council views complaints handling processes as a valuable tool to identify avenues for continuous improvement. In 2018, Council reviewed its Complaints Management Policy and Corporate Standard to streamline all types of complaints into one process including Administrative Action Complaints (AAC).

An AAC is lodged when Council receives an expression of dissatisfaction by a person who is directly affected by an administrative action of Council or a Council employee, including a failure to take action. Staff are kept informed and updated about the Policy, corporate standard and processes through regular training, emails and reporting.

The tables below offer a snapshot of data for the number of complaints received and the basis of the complaints. In 2018/19, 87.5% of complaints were completed and resolved.

Number Of Complaints 112

Resolved 98

Basis Of Complaint Unhappy with decision / outcome Quality of service / work delivered Inadequate communication Safety risk / concern Policy or procedure not followed Conduct of staff Not noted

Not Resolved 14 Percentage 53.57% 9.82% 9.82% 5.36% 3.57% 12.50% 5.36%

RIGHT TO INFORMATION / INFORMATION PRIVACY APPLICATIONS Council adhered to all statutory timeframes as delineated by the Right to Information Act 2009. In 2018/19, Council received 13 Right to Information applications and 0 Information Privacy Applications compared to 2017/18 which saw 10 and 0 number of applications respectively.

OVERSEAS TRAVEL Section 188 requires Council to disclose information about the overseas travel of staff or Councillors during the financial year.

Councillor Cr Rick Hansen

Destination Denmark, Spain, United Kingdom & USA Mayor Matt Burnett Philadelphia

Purpose Cost International $27,805.46 Zero Waste Tour BIO 2019 Philadelphia

$11,014.19

Employee Carly Quinn General Manager Strategy & Transformation

Purpose BIO 2019 Philadelphia Meeting with TerViva Biofutures opportunities

Cost $10,875.69

Destination Philadelphia & Los Angeles

COMMERCIAL BUSINESS UNIT Section 190(1)(c) requires Council to disclose information in relation to any commercial business unit for the financial year. No commercial business units were undertaken in 2018/19.

131

JOINT GOVERNMENT ACTIVITY Section 190(1)(d) requires Council to detail information supplied by another local government under a joint government activity agreement.

Council has not undertaken any joint local government activities in 2018/19.

INVITATION TO CHANGE TENDERS Section 190(1)(e) requires Council to advise the number of invitations to change tenders under section 228(7). In 2018/19, there was one invitation to change a tender: Tender 104-19 Condition Monitoring for Pump Stations.

REGISTERS Section 190(1)(f) requires Council to provide a list of all the registers kept by the local government.

Register of Roads Register of Assets Register of Pre-Qualified Suppliers Register of Cost Recovery Fees Register of Local Laws Register of Contact with lobbyists Register of Delegations of Authority â&#x20AC;&#x201C; Council to CEO and CEO to officers and/or contractors Register of Financial Delegations Register of Interests for CEO and Senior Executive Employees Register of Interests for Councillors Register of Councillors related persons Register of Councillor Complaints CONCESSIONS FOR RATES AND CHARGES Section 190(1)(g) requires Council to provide a summary of all concessions for rates and charges granted during the financial year. In 2018/19, Council granted concessions in the following categories: Pensioner Remissions - $793,041.02 Water and Sewerage Concessions - $529,399.90 Concealed Water Leak Concessions - $32,349.28 General Rates Discounts - $11,838,542.80 Out of Policy Concessions - $5,474.31 COMPETITIVE NEUTRALITY COMPLAINTS Section 190(1)(i) & (j) requires Council to provide a summary of investigation notices for competitive neutrality complaints during the financial year. No competitive neutrality complaints were received in 2018/19.

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LIST OF ACRONYMS AND ABBREVIATIONS AAC B CBD CEO CFO Cr CQ CSR EEO GAWB GCCI GECC GIS GLNG GPC GRAGM GRC GRP HRIS ICT IIA IPP IPWEA IPWEAQ LDMG LGAQ LGIP LGMA LGW LNG LRRS LTFP LTI M MCU MEAP MOU PCYC PIP QES SCADA SES SMA SME SWIM TEQ WHS WWTP

Administrative action complaint Billion Central business district Chief Executive Officer Chief Financial Officer Councillor Central Queensland Customer service request Equal employment opportunity Gladstone Area Water Board Gladstone Chamber of Commerce and Industry Gladstone Entertainment Convention Centre Graphical information services Gladstone Liquefied Natural Gas Gladstone Ports Corporation Gladstone Regional Art Gallery and Museum Gladstone Regional Council Gross regional product Human resource information system Information community technology Institute of Internal Auditors Internal project planning Institute of Public Works Engineering Australia Institute of Public Works Engineering Australia Queensland Local Disaster Management Group Local Government Association of Queensland Local Government Infrastructure Plan Local Government Managersâ&#x20AC;&#x2122; Association Local Government Workcare Liquefied natural gas Local roads of regional significance Long term financial plan Lost time injury Million Material change of use Major Events Advisory Panel Memorandum of understanding Police Citizens Youth Club Priority Infrastructure Plan Queensland Employment Standards Supervisory Control and Data Acquisition State Emergency Service Sports Marketing Australia Small to medium sized enterprise State wide water information management Tourism and Events Queensland Workplace health and safety Waste water treatment plant

Gladstone Regional Council 2018/19 Annual Report

LIST OF GRAPHS AND TABLES Population 6 Operational Plan Review 20 Operational Plan Action Items 21 Strategic Goal 1 21 Strategic Goal 2 21 Strategic Goal 3 22 Strategic Goal 4 22 Strategic Goal 5 24 Strategic Goal 6 24 Strategic Goal 7 25 Strategic Goal 8 26 Strategic Goal 9 26 Workforce distribution by classification and gender 31 Workforce distribution - age group across tenure 31 Energy consumption $ and kW 42 Customer Service Request closeout rate 42 Employee Turnover 43 Lost time injuries LTI claims 43 Lost time injuries number of days lost 43 Government Funding 43 Capital Expenditure 43 Operational Expenditure 43 Where does Council revenue come from? 44 How are Council expenses allocated? 45 Expenditure by Business Unit 45 Financial Ratio Performance 48 Asset Sustainability Ratio 49 Net Interest Coverage Ratio 49 Debt Service Coverage 49 Operating Surplus Ratio 50 Working Capital Ratio 50 Net Financial Liabilities Ratio 50 Operating Income 2018/19 51 Operating Expenses 2018/19 51 Property, Plant and Equipment Asset Classes 2018/19 52 Liabilities 2018/19 52 Spend per $100 of rates 53 Senior Executive Remuneration 127 Mayorâ&#x20AC;&#x2122;s Discretionary Fund 127 Donations 128 Grants 128 MEAP Funding 128 Councillor Remuneration 129 Elected Member Expenses Reimbursement 130 Council Meetings 131 Administrative Action Complaints 131 Overseas Travel 131

LIST OF DIAGRAMS AND FIGURES Community Snapshot 7

By The Numbers 8 Planning Framework 18 Organisational Structure 27 Council Employees 31 Friends in Numbers 37 Community Financial Report 44 Budget Funding Snapshot 47

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GLOSSARY OF TERMS Advocacy

The act of supporting or arguing in favour of something, such as a cause, project or initiative.

Assessment

Evaluation activities undertaken to determine level of performance.

Audit

This is a business improvement function established by Council to provide independent, objective assurance and consulting services designed to add value and improve the organisation's operations. It helps the organisation accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes.

Best practice

A method or procedure of accomplishing a business function process or outcome/result that is considered as being correct or most effective to all other known methods.

Budget

An estimate of costs, revenues and resources over a specific period, reflecting a reading of future financial conditions and goals for the organisation.

Chief Executive Officer

The CEO is Council's highest ranking executive.

Community engagement

The process of connecting council, citizens and communities on a wide range of policy, program and service issues. It can be formal or informal and operates on the premise that the best decisions are made if those involved in the outcomes are considered.

Community financial report

A report that is produced annually that offers commentary on Council's financial results.

Corporate Plan

A document that sets out the goals and strategies over the medium term (five years). The Corporate Plan will define how Council will meet its responsibilities to the Community and is a legislative requirement.

Culture

Defines who we are as an organisation, our ethics, our institutions, our behaviours and our routines.

Financial year

The financial year we are reporting on in this report is the period from 1 July 2018 to 30 June 2019.

Framework

A structure that shows the linkages between various processes in order to achieve an outcome.

Initiatives

Specific projects or programs undertaken to achieve objectives within a measurable time frame.

Key Performance Indicators

Quantifiable measurements that help an organisation define and measure progress towards organisational goals/ outcomes.

Mission

A declaration of an organisation's core purpose.

Operational Plan

A 12-month document that sets out how to achieve the desired outcomes set out in the Corporate Plan and is a legislative requirement.

Outcomes

Determination and evaluation of the results of an activity, plan, process or program and their comparison with the intended or projected results.

Policy

A set of principles and associated guidelines formulated and enforced at the highest level, to direct and limit an organisation's actions in pursuit of long-term goals.

Service

A group of related activities contributing to a common outcome.

Vision

An aspirational statement that describes what the organisation is working towards.

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CONTACTS Customer Contact Points Gladstone, 101 Goondoon Street Calliope, 5 Don Cameron Drive Miriam Vale, 36 Roe Street

Rural Transaction Centres Agnes Water, 71 Springs Road Mount Larcom, Raglan Street

Community Centres Agnes Water, 71 Springs Road Boyne Tannum, Cnr Wyndham & Hayes Avenue, Boyne Island Calliope, 5 Don Cameron Drive Miriam Vale, 36 Roe Street

General Information Phone 07 4970 0700 Fax 07 4975 8500 Email info@gladstone.qld.gov.au Website www.gladstone.qld.gov.au

Further Copies For additional copies of Gladstone Regional Councilâ&#x20AC;&#x2122;s 2018/19 Annual Report please call Council on 07 4970 0700 or visit www.gladstone.qld.gov.au

Feedback Feedback on this document is welcome.

Please write to: The Chief Executive Officer Gladstone Regional Council PO Box 29 Gladstone DC QLD 4680 email info@gladstone.qld.gov.au or fill out and return the form inside back cover.

Acknowledgements Council would like to thank all those who contributed to the development of the 2018/19 Annual Report.

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Gladstone Regional Council Annual Report 2018/19 Feedback Form Return by mail to: The Chief Executive Officer PO Box 29 Gladstone DC QLD 4680 Email: info@gladstone.qld.gov.au Or drop it into any Council Contact Point My main interest in the report is as a: government body (State)

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Gladstone Regional Council 2018/19 Annual Report

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