4.4 ANALYSIS OF STATEMENT OF CASH FLOWS

This section of the Budget analyses the expected cash flows from the operating, investing and financing activities of Council. The cash balance at year end is budgeted to decrease by $3.9m to $8.8m.

Note 4.4.1: Operating activities ($12m cash inflow)

Operating activities refer to the cash generated or used in the normal service delivery functions of Council and include: • Receipts from ratepayers of $27.8m • Grants of $17m to fund operating expenses and capital works • User fees $3.1m • Contributions and recoupments of $1.7m • Payments to employees $18.8m and • Payments to suppliers $19.9m

Reconciliation of Surplus to Net Cash Inflow from Operations

Surplus for Period Forecast 2021-22 $’000

Budget 2022-23 $’000 6,608 7,429

Depreciation Net Gain on Disposals

9,239 9,268 (2,000) (3,936)

Subdivisions - Roads Handed to Council Borrowing Costs

(1,125) (1,125) 270 227 Decrease/(Increase) in Receivables (464) 336 Increase/(Decrease) in Operating Creditors and Provisions (1,457) 20

Net Cash Inflow from Operations 11,071 12,220

Note 4.4.2: Investing activities ($14.6m cash outflow)

Investing activities refer to cash used in the purchase, enhancement or creation of property, plant and equipment and infrastructure. These activities also include the sale of non-current assets.

Note 4.4.3: Financing activities ($1.86m cash outflow)

Financing activities generally refer to borrowings used in the financing of capital projects and movements in funds held in trust. The net outflow of $1.86m includes the repayment of the principal component of borrowings $1.63m and interest expenditure $227k.

Note 4.4.4: Restricted and unrestricted cash and investments

Cash and cash equivalents held by Council are restricted in part and not fully available for Council’s operations. The budgeted cash flow statement indicates that Council is estimating at 30 June 2023 it will have cash and cash equivalents of $8.8m, which has been restricted as shown in the following table:

Total Cash and Cash Equivalents

Restricted cash and investments -Statutory Reserves -Other Committed Reserves

Unrestricted Cash and Cash Equivalents Forecast Budget 2021-22 2022-23 $’000 $’000 12,741 8,753

719 619 2,661 2,251 9,360 5,883

Statutory Reserves ($619k)

These funds must be applied for specified statutory purposes in accordance with various legislative requirements. While these funds earn interest revenues for Council, the funds are not available for other purposes. During the 202223 year $250k is budgeted to be transferred to and $100k from Statutory Reserves.

Other Committed Reserves ($2,251k)

These funds are shown as other commited reserves, although not restricted by a statutory requirement, Council has made decisions regarding the future use of these funds and unless there is a Council resolution these funds should be used for those earmarked purposes. During the 2022-23 year $150k is budgeted to be transferred from Commited Reserves. The decisions about future use of these funds has been reflected in Council’s Financial Plan and any changes in future use of the funds will be made in the context of the future funding requirements set out in the plan.

Unrestricted Cash and Cash Equivalents ($5.9m)

These funds are free of all specific Council commitments and represent funds available to meet daily cash flow requirements, unexpected short term needs and any budget commitments which will be expended in the following year, such as grants and contributions. Council regards these funds as the minimum necessary to ensure that it can meet its commitments, as and when they fall due, without borrowing further funds.