4.3 ANALYSIS OF STATEMENT OF CHANGES IN EQUITY

Note 4.3.1: Equity ($7.4m increase)

Total equity of $515m will always equal net assets and is made up of the following components: • Committed reserves that Council wishes to separately identify as being set aside to meet specific or statutory purpose in the future. These reserves are derived from items such as developer contributions, specific levies and unexpended projects; • Discretionary reserves are to fund the long term viability of Council. The decisions about future use of any available funds is 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. The funding of the replacement of long term infrastructure assets generally comes from discretionary funds; which is a component of the accumulated surplus. This is the value of all net assets, less reserves that have accumulated over time.

The total Equity is represented by:

Equity 2021-22 Forecast $'000 2022-23 Budget $'000 Variance $'000

Discretionary reserves

2,543 (2,454) (4,997) Committed reserves 3,381 2,870 (510) Non-current assets less non-current liabilities 501,467 514,404 12,937

Total Equity 507,391 514,820 7,430

Note 4.3.2: Retained Earnings

Retained earnings is the working capital of the Council; in other words, current assets less current liabilities. It comprises the accumulated surpluses and deficits from prior accounting periods. Retained earnings are comprised of discretionary funds and committed funds. Committed funds include amounts set aside for long service leave, physical/social infrastructure development (developer contributions) and specific levies. As a matter of good financial management, Council only uses discretionary retained earnings to fund one-off capital community partnership projects. Retained earnings are not used to fund operational expenditure. As at 30 June 2023, Council will have discretionary funds available of negative $2.5m and $2.9m in committed funds.

Discretionary

General Appropriations Bakers Lane VGC Grant Received in Advance Rokewood Pavillion Funds Communications Tower Funds

Sub-total Discretionary Committed

Recreational Lands^ Developer Contributions Employee Entitlements (non-current) Quarry Levy^ Waste Management Gravel Pit Rehabilitation Unexpended Projects

Sub-total Committed Total Retained Earnings

Non-Current Assets and Liabilities

Opening Net Closing Balance Movements Balance 1-Jul-22 30-Jun-23 $’000 $’000 $’000

(1,059) (4,908) (5,967) 6 6 3,198 221 3,418 310 (310) 88 0 88

2,543 (4,997) (2,454)

901 130 1,031 719 (100) 619 522 10 532 290 120 410 949 (670) 278 0 0

0

0

3,381 (510) 2,870 5,924 (5,507) 417

501,467 12,937 514,404

Total Equity 507,391 7,430 514,820

^All funds received in these reserves are budgeted to be 100% expended in the same year of receipt.

The Waste Management Reserve funds relate to waste management charges collected from customers less associated waste management expenses representing the surplus generated from providing waste management services. The funds are committed to future waste management expenses including increased recycling disposal costs, and will also be used to fund landfill rehabilitation works at a number of landfill sites within the Shire.

The Waste Management Reserve has a budgeted opening balance at 1 July 2022 of $949k which will be drawn down on during 2022-23 by $670k to a closing balance at 30 June 2023 of estimated $278k.