LONG TERM FINANCIAL PLAN 2024-2035 DRAFT
CEO FINANCIAL SUSTAINABILITY STATEMENT
Financial Sustainability (FS) is where long-term financial performance and position is sustainable through planned long-term service and infrastructure levels and standards being met without unplanned increases or volatile changes in rates or disruptive cuts to services.
Related to FS is the legislative obligation for council to take into account the financial effects on future generations in making any decision. Meeting this expectation has become more difficult in recent years with extreme volatility in annual property valuations, a key ingredient in the determination of rates ‘bills.’
Draft Long Term Financial Plan 2024-2025 2
Infrastructure Assets
Councils are the custodians of a substantial investment in infrastructure assets. LRC analysis indicates that approximately 60% of total capital and operating outlays are related to this infrastructure. LRC approves a long-term Infrastructure Asset Management Plan (IAMP) to ensure that it is aware of the need to develop and replace its infrastructure assets to meet the service delivery expectations of the community. The IAMP is integrated into the Long Term Financial Plan (LTFP) and amended annually. Council also monitors relevant Key Performance Indicators (KPI) to keep abreast of its infrastructure developments and ambitions. For example, the required ‘Asset Renewal Funding Ratio’ is forecast, but also the relationship being depreciation expense (the measure of the annual consumption of assets) and annual asset renewal expenditure are monitored.
Funding of Infrastructure Expenditure
Funding level is a fundamental component of the sustainability equation. Funding comprises ‘internally generated funds’ from operations (mainly sourced from Council rate revenue), grants from other governments, capital contributions from other sources (e.g. property developers), asset sales, and borrowing. At least a small surplus shown on Statement of Financial Performance ‘budget’, and a high level of rates and other debtors’ collection, ensures that non-cash depreciation expense provides the funds to replace existing assets. The LTFP contains several funding elements that are carefully monitored to ensure medium and long-term financial sustainability including:
• A small ‘operating’ surplus, historically and into the future
• High levels of collection of revenue due
• Avoidance of borrowing for operating purposes, except in-year cash flow variability
• Use of long-term borrowing only for the purpose of new community organisation assets, ratepayers fairly share in the costs and benefits of new infrastructure assets (i.e. long-lived assets are not funded in the short term) and ensuring that future generations are not left with borrowing liabilities from immediate asset consumption.
Although the LTFP provides useful information for financial sustainability measurement the LRC also produces a strategic 10-year summary of capital expenditure ‘outlays’ and funding. This is a useful tool to ensure that capital outlays will be fully funded, effective management of short-term borrowing (cash advance debentures) and it highlights any annual volatility in borrowing needs for intergenerational assets. Refer Annual Business Plan.
Population Growth
Regional growth, especially in the area surrounding Roseworthy, will result in a substantial increase in population in the next decade. Residential subdivisions bring significant hand-over of infrastructure assets from developers for safekeeping, maintenance, and renewal. To ensure that this growth does not threaten financial sustainability, LRC management has several control mechanisms, including a task team to engage and monitor the developments and the service levels being produced, as well as regular financial forecasting to understand the impact on the LTFP of both operating and renewal expenditure but also understanding rate revenue growth.
3 Light Regional Council
Financial Indicators
Refer to the LTFP document for the Financial indicator forecast and analysis.
A series of financial indicators, explained below have been developed by the Local Government sector to assist in assessing whether a council is financially sustainable, or moving to a position of financial sustainability:
1 Operating Surplus Ratio – Desired level is between 0% and 5% on average. Long-term financial sustainability is dependent upon ensuring that, on average over time, its operating income is higher than operating expenses (i.e. an operating surplus). The Operating Surplus Ratio is the operating surplus (or deficit) expressed as a percentage of operating income. A positive ratio indicates the percentage of operating income available to help fund capital expenditure. A negative ratio indicates the percentage increase in operating income or the approximate decrease in operating expenses required to achieve a break-even operating result. Council’s Operating Surplus Ratio over the life of the long-term financial plan indicates a continuing sustainable operating result and has been confirmed by the ESCOSA review.
Financial Ratios
2 Asset Renewal Funding Ratio - Desired level is greater than 90% but less than 110% on average. Councils are the custodians of significant infrastructure assets that require renewal from time-to-time. The Infrastructure and Asset Management Plan (IAMP) provides a guide on when assets should be renewed. Net asset renewals expenditure is defined as net capital expenditure on the renewal and replacement of existing assets and excludes new capital expenditure on the acquisition of additional assets. This ratio is calculated as capital expenditure on renewal of existing assets divided by renewal expenditure from the IAMP and current budget for those asset classes without a completed IAMP. The ratio in individual financial years can vary significantly from the long-term average due to the volatility of assets being renewed.
3 Net Financial Liabilities Ratio - Desired level is greater than 0% but no more than 100% on average.
Net Financial Liabilities are defined as total liabilities less non-equity financial assets. Total operating revenue excludes profit on disposal of non-current assets. This ratio is a measure of Council’s total indebtedness.
Financial Ratios Target 2019/20 2020/21 2021/22 2022/23 2023/24 2024/25 Operating Surplus Ratio 0% - 5% 5.8% (1.8%) (1.6%) 3.3% 1.2% .01% Asset Renewal Funding Ratio 90% - 110% 125% 155% 63% 178% 151% 100% Net Financial Liabilities Ratio 0% - 100% 28% 23% 55% 52% 59% 66.5% Draft Long Term Financial Plan 2024-2025 4
5 Light Regional Council
LONG TERM FINANCIAL PLAN 2024-2035
Background
Section 122 (1a) of the Local Government Act requires councils to develop and adopt:
a) a Long-Term Financial Plan (LTFP) for a period of at least 10 years; and b) an Infrastructure and Asset Management Plan (IAMP), relating to the management and development of infrastructure and major assets by the council for a period of at least 10 years (and these plans will also be taken to form part of the Council’s strategic management plans).
Section 122(4)(a)(i) of the Act requires that the LTFP should be reviewed as soon as practical after the adoption of the ABP. However, Section 122(4)(b) of the Act specifies that the Council must undertake a comprehensive review of its Long-Term Financial Plans within 2 years after each general election of the council.
The purpose of a Council’s LTFP is to express, in financial terms, the activities that it proposes to undertake over the medium to longer term to achieve its stated objectives. It is like, but usually less detailed than, the annual budget. Just like the budget, it is a guide for future action although its preparation requires Council to think about not just one year but the longer-term impact of revenue and expenditure proposals. The aggregation of future strategic plans, business initiatives and their intended outlays and anticipated revenues, enables the accumulating overall financial and economic implications to be readily identified and, if warranted, future activities to be revised. The LTFP should specify and take account of:
• Expected expenses and capital outlays for each year of the plan
• Expected revenues for each year and their source
• Any variations in net debt required because of expected cash flow needs
• Performance measures to enable assessment of Council’s financial sustainability over the period of the plan.
Draft Long Term Financial Plan 2024-2025 6
Long Term Financial Objective
The Long-Term Financial Objective is to be “a Council that delivers on its strategic objectives by managing its financial resources in a sustainable and equitable manner by incremental growth and service cost containment to reduce the operating deficit over time; as opposed to burdening the ratepayers of the Council with short-term excessive increases to their annual Council rate bill”.
Financial sustainability means having a financial position capable of meeting long-term service and infrastructure levels and standards, acceptable to the community, without substantial increases in rates or cuts to services. The Long-Term Financial Plan has been developed based on the following budget principles:
Principle 1: Breakeven Budget
Annual cost of services and programs, including depreciation of assets, are fully funded by the current ratepayers, who are the consumers of those services, programs and assets.
Principle 2: Rate Stability
Annual rate collections are fair and equitable for the ratepayers with the aim to keep rate revenue increases stable over the medium term.
Principle 3: Infrastructure and Asset Management
Maintain Infrastructure and Assets in line with the Council’s Infrastructure Asset Management Plans.
Principle 4: Prudent Debt Management
Prudent use of debt to invest in new, long-term assets to ensure intergenerational equity between current and future users.
7 Light Regional Council
Assumptions
used in the preparation
of Long-Term Financial Plan 2024/2025 to 2033/2034
The LTFP provides the financial projections and budget framework to guide the development of the detailed annual budget and provide a level of assurance to elected members and the community on the sustainability of operations. A 10-year LTFP summarises the financial impacts of strategic directions and provides an indication of the sustainability of those plans. By evaluating financial strategies over a planning horizon of 10 years Council can determine how decisions made now and for the 2024/2025 budget will impact on the future and ensure the impact of rates is spread equitably across generations of ratepayers, so that planned service standards over the long term and infrastructure levels can be met without unplanned increases in rates or cuts to services. The LTFP is prospective information. Actual results are likely to vary from the information presented. Consequently, the information presented is prepared based on best estimate assumptions as to future events that Council expects are likely to take place. These estimates arise from information known as of 9 April 2024 (at week 40).
Assumptions used in preparation of the 2024/2025 Budget & 10-year LTFP
Description
General Rates
CWMS Charge
Refuse Collection Charges
Landscape Levy (formally NRM Levy)
Minimum Rates
Statutory Charges
User Charges
Grants, Subsidies & Contributions
Investment Income
Reimbursements
Other Income
Employee Costs
Materials, Contracts & Other Expenses
Depreciation, Amortisation & Impairment
Finance Costs
Assumptions
2024/2025 total rates revenue increases are estimated at 4.7% achieved by an average rate in-the-dollar reduction of 10%, a minimum rate at $965 (from $925 in 2023/2024), and growth provided by 423 new assessments.
$630 per CWMS unit from 2023/2024 at $600.
3% per annum (p.a.) average over the LTFP (and assume ratio of 3-bin and 2-bin ‘service’ level remains the same). Hard waste service availability the same as 2023/24
4% p.a. average over the LTFP
4.3% p.a. in 2024/2025 to $965, and 3% over the LTFP (from year two).
3% p.a. average over the LTFP (where set by Council)
3% p.a. average over the LTFP
Based on confirmed grant funding for 2024/2025 and conservatively estimated over the LTFP
Nominal average over the LTFP based on minimal invested funds. Surplus cash used to minimise cash advance debenture balances.
2% p.a. average over the LTFP
2% p.a. average over the LTFP
95% of full cost (due to staff turnover) the first year and forecast wage-price index over the remaining nine years
3% p.a. average over the LTFP (greater than Reserve Bank forecast).
Known increases in 2024/25, i.e. electricity and diesel fuel
As per LTFP model based on capital expenditure and useful lives by asset category.
Actual interest payable on existing loans and the estimated cost of cash advance debenture utilisation
Draft Long Term Financial Plan 2024-2025 8
Long Term Financial Statements
Council forecasts surplus operating budgets for the financial year 2024/2025 through to 2033/2034. However, this is not taking into consideration the net expenditure of Bunyip 2 which is identified separately.
Current financial modelling indicates that over the 10-year LTFP the operating results of Light Regional Council continue to be sustainable. Over time the additional projects will impact the LTFP, however a sustainable financial outcome remains.
Council’s Long Term Financial Plan financial statements and financial ratio information are included on the following pages.
9 Light Regional Council
Scenario: Draft plan 2023/24 BUD $ 2024/25 $ 2025/26 $ 2026/27 $ 2027/28 $ 2028/29 $ 2029/30 $ 2030/31 $ 2031/32 $ 2032/33 $ 2033/34 $ Income Projected Years Rates 23,381,515 25,422,300 26,952,700 28,099,000 29,242,300 30,574,600 31,909,900 32,546,200 34,400,500 36,415,800 38,459,100 Statutory Charges 627,080 737,000 758,000 777,000 796,000 816,000 836,000 857,000 878,000 900,000 923,000 User Charges 506,884 524,000 539,000 552,000 566,000 580,000 595,000 610,000 625,000 641,000 657,000 Grants, Subsidies and Contributions 2,057,166 2,764,000 2,953,000 3,140,000 3,322,000 3,006,000 2,976,000 3,049,000 3,124,000 3,201,000 3,281,000 Investment Income 33,240 30,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 51,000 51,000 Reimbursements 236,551 244,000 251,000 257,000 263,000 270,000 277,000 284,000 291,000 298,000 353,000 Other Income 382,000 395,000 406,000 416,000 426,000 437,000 448,000 11,459,000 470,000 482,000 494,000 Total Income 27,224,436 30,116,300 31,883,700 33,265,000 34,639,300 35,707,600 37,065,900 48,829,200 39,812,500 41,988,800 44,218,100 Expenses Employee Costs 10,562,423 10,572,000 10,996,000 11,384,000 11,718,000 12,102,000 12,493,000 12,886,000 13,299,000 13,723,000 14,159,000 Materials, Contracts & Other Expenses 9,387,253 10,213,500 10,252,100 10,510,900 10,911,000 11,355,300 11,850,900 12,251,700 12,877,700 13,555,000 14,285,600 Depreciation, Amortisation & Impairment 8,242,909 8,659,231 8,861,909 9,338,909 9,987,909 10,696,909 11,421,909 12,158,909 12,929,909 13,731,909 14,568,909 Finance Costsgeneral 24,610 312,900 231,800 173,500 54,000 (58,700) (56,600) (66,800) (161,200) 34,800 30,200 Finance CostsBunyip 2 water scheme 364,000 324,000 256,000 256,000 256,000 256,000 256,000-Net lossEquity Accounted Council Businesses-----Total Expenses 28,581,195 30,081,631 30,597,809 31,663,309 32,926,909 34,351,509 35,965,209 37,229,809 38,945,409 41,044,709 43,043,709 Operating Surplus / (Deficit) (1,356,759) 34,669 1,285,891 1,601,691 1,712,391 1,356,091 1,100,691 140,391 867,091 944,091 1,174,391 Net Impact of Bunyip 2 383,000 310,000 302,000 305,000 297,000 289,000 11,459,000-Operating Surplus / (Deficit) after Bunyip 2 417,669 1,595,891 1,903,691 2,017,391 1,653,091 1,389,691 11,599,391 867,091 944,091 1,174,391 Asset Disposal & Fair Value Adjustments(2,000,000) (2,000,000) (2,000,000) (2,000,000)--Amounts Received Specifically for New or Upgraded Assets 2,360,000 3,888,000 4,634,000 2,685,000 3,000,000 3,075,000 3,152,000 3,231,000 3,312,000 3,395,000 3,479,000 Physical Resources Received Free of Charge (from development)21,511,000 24,150,000 31,372,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 5,000,000 Net Surplus / (Deficit) 1,003,241 23,433,669 28,069,891 33,658,691 7,712,391 9,431,091 9,252,691 8,371,391 9,179,091 9,339,091 9,653,391 Statement of Comprehensive Income Financial
for the
30
Draft Long Term Financial Plan 2024-2025 10
Plan
Years ending
June 2034
Scenario: Draft plan 2023/24 BUD $ 2024/25 $ 2025/26 $ 2026/27 $ 2027/28 $ 2028/29 $ 2029/30 $ 2030/31 $ 2031/32 $ 2032/33 $ 2033/34 $ Assets Projected Years Current Assets Cash & Cash Equivalents-----Trade & Other Receivables (Note 1) 2,536,000 3,045,000 3,089,000 3,122,000 3,200,000 3,282,000 14,365,000 3,449,000 3,504,000 3,559,000 3,648,000 Inventories 25,000 26,000 27,000 28,000 29,000 30,000 31,000 32,000 33,000 34,000 35,000 Total Current Assets 2,561,000 3,071,000 3,116,000 3,150,000 3,229,000 3,312,000 14,396,000 3,481,000 3,537,000 3,593,000 3,683,000 Non-Current Assets Financial Assets 525,000 542,000 558,000 572,000 586,000 601,000 616,000 631,000 647,000 663,000 680,000 Financial AssetsBunyip 211,000,000 11,000,000 11,000,000 11,000,000 11,000,000-Equity Accounted Investments in Council Businesses 2,224,000 2,297,000 2,364,000 2,423,000 2,484,000 2,546,000 2,610,000 2,675,000 2,742,000 2,811,000 2,881,000 Infrastructure, Property, Plant & Equipment 241,608,000 299,588,091 323,138,091 353,547,091 357,491,091 361,822,091 365,180,091 367,300,091 368,954,091 370,008,091 370,548,091 Other Non-Current Assetsincluding WIP 1,231,000 4,517,000 4,689,000 4,806,000 4,926,000 5,049,000 5,175,000 5,304,000 5,437,000 5,573,000 5,712,000 Total Non-Current Assets 245,588,000 317,944,091 341,749,091 372,348,091 376,487,091 381,018,091 373,581,091 375,910,091 377,780,091 379,055,091 379,821,091 Total Assets 248,149,000 321,015,091 344,865,091 375,498,091 379,716,091 384,330,091 387,977,091 379,391,091 381,317,091 382,648,091 383,504,091 Liabilities Current Liabilities Trade & Other Payables 5,214,000 3,306,000 3,402,000 3,487,000 3,574,000 3,663,000 3,755,000 3,849,000 3,945,000 4,044,000 4,145,000 BorrowingsCF debenture (loans) 527,000 137,000 142,000 148,000 153,000 159,000 165,000 139,000 112,000 117,000 122,000 BorrowingsCash advance debentures-----BorrowingsLease liabilities26,000----Provisions 2,382,000 2,357,000 2,517,000 2,564,000 2,613,000 2,662,000 2,742,000 2,824,000 2,908,000 2,995,000 3,085,000 Total Current Liabilities 8,123,000 5,826,000 6,061,000 6,199,000 6,340,000 6,484,000 6,662,000 6,812,000 6,965,000 7,156,000 7,352,000 Non-Current Liabilities Trade & Other Payables-----BorrowingsCF debenture (loans) 2,065,000 1,928,000 1,786,000 1,638,000 1,485,000 1,326,000 1,161,000 1,022,000 910,000 793,000 671,000 BorrowingsCash advance debentures 7,838,000 15,596,000 25,246,000 20,743,000 19,505,000 8,610,000 8,050,000 9,361,000 7,633,000BorrowingsLease liabilities-----Provisions 273,000 277,000 287,000 296,000 305,000 314,000 323,000 333,000 343,000 353,000 364,000 Other Non-Current LiabilitiesBunyip 2 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000 11,000,000-Total Non Current Liabilities 10,176,000 28,801,000 38,319,000 33,677,000 32,295,000 21,250,000 20,534,000 10,716,000 8,886,000 1,146,000 1,035,000 Total Assets 18,299,000 34,627,000 44,380,000 39,876,000 38,635,000 27,734,000 27,196,000 17,528,000 15,851,000 8,302,000 8,387,000 Net Assets 229,850,000 286,388,091 300,485,091 335,622,091 341,081,091 356,596,091 360,781,091 361,863,091 365,466,091 374,346,091 375,117,091 Equity Accumulated Surplus 54,491,000 64,802,460 76,921,060 111,675,429 115,132,029 130,240,398 132,397,998 133,018,367 134,566,967 142,957,336 141,644,936 Asset Revaluation Reserves 173,730,000 219,597,000 219,597,000 219,597,000 219,597,000 219,597,000 219,597,000 219,597,000 219,597,000 219,597,000 219,597,000 Other Reserves 1,629,000 1,988,631 3,967,031 4,349,662 6,352,062 6,758,693 8,786,093 9,247,724 11,302,124 11,791,755 13,875,155 Total Equity 229,850,000 286,388,091 300,485,091 335,622,091 341,081,091 356,596,091 360,781,091 361,863,091 365,466,091 374,346,091 375,117,091 Statement of Financial Position Financial Plan for the Years ending 30 June 2034 11 Light Regional Council
Payments Expenditure on Renewal/Replacement of Assets (4,204,000) (5,853,000) (4,452,000) (6,822,000) (7,052,000) (8,126,000) (8,855,000) (8,331,000) (8,613,000) (8,791,000) (9,088,000) Expenditure on New/Upgraded Assets (1,060,000) (1,000,000) (1,000,000) (1,000,000) (1,000,000) (1,000,000)
Expenditure on New/Upgraded Assets (grant funded) (5,909,000) (7,616,000) (3,356,000) (4,000,000) (4,100,000) (4,203,000) (4,308,000) (4,416,000) (4,526,000) (4,639,000) Expenditure on other assets (975,400) (680,000) (120,000) (120,000) (120,000)
Loans Made to Community Groups
Other Investing Activity Payments
(3,872,000) (4,545,000) (5,284,300) Net Cash provided (or used in) Investing Activities (1,843,400) (9,504,000) (4,832,000) (8,559,000) (4,786,000) (10,093,000) (9,846,000) (9,346,000) (13,557,000) (14,467,000) (15,532,300) Cash Flows from Financing Activities Receipts Proceeds from
Scenario: Draft plan 2023/24 BUD $ 2024/25 $ 2025/26 $ 2026/27 $ 2027/28 $ 2028/29 $ 2029/30 $ 2030/31 $ 2031/32 $ 2032/33 $ 2033/34 $ Cash Flows from Operating Activities Projected Years Receipts Rate Receipts 23,888,000 24,943,300 26,884,700 28,037,000 29,187,300 30,518,600 31,851,900 32,487,200 34,339,500 36,353,800 38,395,100 Statutory Charges 629,000 737,000 758,000 777,000 796,000 816,000 836,000 857,000 878,000 900,000 923,000 User Charges 635,000 524,000 539,000 552,000 566,000 580,000 595,000 610,000 625,000 641,000 657,000 Grants, Subsidies and Contributions (operating purpose) 2,852,000 2,764,000 2,953,000 3,140,000 3,322,000 3,006,000 2,976,000 3,049,000 3,124,000 3,201,000 3,281,000 Investment Receipts 17,000 30,000 24,000 24,000 24,000 24,000 24,000 24,000 24,000 51,000 51,000 Reimbursements 214,000 244,000 251,000 257,000 263,000 270,000 277,000 284,000 291,000 298,000 353,000 Other Revenue 326,000 395,000 406,000 416,000 426,000 437,000 448,000 11,459,000 470,000 482,000 494,000 Payments Payments to Employees
(10,572,000) (10,996,000) (11,384,000) (11,718,000) (12,102,000) (12,493,000) (12,886,000) (13,299,000) (13,723,000) (14,159,000) Payments for Materials, Contracts & Other Expenses (12,940,000) (10,213,500) (10,252,100) (10,510,900) (10,911,000) (11,355,300) (11,850,900) (12,251,700) (12,877,700) (13,555,000) (14,285,600) Finance Payments (153,000) (636,900) (487,800) (429,500) (310,000) (197,300) (199,400) 66,800 161,200 (34,800) (30,200) Net Cash provided (or used in) Operating Activities 4,953,000 8,214,900 10,079,800 10,878,600 11,645,300 11,997,000 12,464,600 23,699,300 13,736,000 14,614,000 15,679,300 Cash Flows from Investing Activities Receipts Amounts Received Specifically for New/Upgraded Assets 2,360,000 3,888,000 4,634,000 2,685,000 3,000,000 3,075,000 3,152,000 3,231,000 3,312,000 3,395,000 3,479,000 Sale of Surplus Assets-----Sale of non Current Assets “Held for Sale” 1,980,0003,670,0004,330,000--Repayments of Loans by Community Groups 56,000 50,000 52,000 54,000 56,000 58,000 60,000 62,000 32,000-
--
---
------
----
(14,141,300) Repayments of Borrowings (Debentures principal) (449,000) (212,000) (212,000) (212,000) (212,000) (212,000) (212,000) (212,000) (179,000) (147,000) (147,000) Repayment of Finance Lease Liabilities (86,000) (86,000)----Net Cash Flows provided (or used in) Financing Activities (3,109,600) 1,289,100 (5,247,800) (2,319,600) (6,859,300) (1,904,000) (2,618,600) (14,353,300) (179,000) (147,000) (147,000) Net Increase/(Decrease)
Cash & Cash Equivalents-----plus Cash & Cash Equivalentsbeginning of year-----Cash & Cash Equivalentsend of the year-----Statement of Cash Flows Financial Plan for the Years ending 30 June 2034 Draft Long Term Financial Plan 2024-2025 12
(10,515,000)
-
-
-
CAD 1,587,100 Proceeds from BorrowingsPayments Repayments of CAD (2,574,600)(5,035,800) (2,107,600) (6,647,300) (1,692,000) (2,406,600)
in
Uniform Presentation of FinancesGeneral Fund Financial Plan for the Years ending 30 June 2034
add back Proceeds from Sale of Replaced Assets
(Net Outlays) on Existing Assets
less (Net Outlays) on New and Upgraded Assets Capital Expenditure on New and Upgraded Assets (including Investment Property & Real Estate Developments) (7,577,620) (5,909,000) (7,616,000) (3,356,000) (4,000,000) (4,100,000) (4,203,000) (4,308,000) (4,416,000) (4,526,000) (4,639,000)
add back Amounts Received Specifically for New and Upgraded Assets 2,360,000
add back Proceeds from Sale of Surplus Assets
(Net Outlays) on New and Upgraded Assets (5,217,620) (2,021,000) 688,000 (671,000) 3,330,000 (1,025,000) (1,051,000) (1,077,000) (1,104,000) (1,131,000) (1,160,000)
Net Lending / Borrowing for Financial Year (8,934,470) (2,201,100) 2,401,800 1,776,600 5,978,300 877,000 1,565,600 13,273,300 2,976,000 3,623,000 4,335,300
RB = Revised Budget
Scenario: Draft plan 2023/24 RB $ 2024/25 $ 2025/26 $ 2026/27 $ 2027/28 $ 2028/29 $ 2029/30 $ 2030/31 $ 2031/32 $ 2032/33 $ 2033/34 $ Operating Activities Projected Years Income 27,224,436 30,116,300 31,883,700 33,265,000 34,639,300 35,707,600 37,065,900 48,829,200 39,812,500 41,988,800 44,218,100 less Expenses (28,581,195) (30,081,631) (30,597,809) (31,663,309) (32,926,909) (34,351,509) (35,965,209) (37,229,809) (38,945,409) (41,044,709) (43,043,709) Operating Surplus / (Deficit) (1,356,759) 34,669 1,285,891 1,601,691 1,712,391 1,356,091 1,100,691 11,599,391 867,091 944,091 1,174,391 Capital Activities less (Net Outlays) on Existing Assets Capital Expenditure on Renewal and Replacement of Existing Assets (10,603,000) (8,874,000) (8,434,000) (8,493,000) (9,052,000) (10,151,000) (9,906,000) (9,408,000) (9,717,000) (9,922,000) (10,248,000) add back Depreciation, Amortisation and Impairment 8,242,909 8,659,231 8,861,909 9,338,909 9,987,909 10,696,909 11,421,909 12,158,909 12,929,909 13,731,909 14,568,909
-----
(2,360,091) (214,769) 427,909 845,909 935,909 545,909 1,515,909 2,750,909 3,212,909 3,809,909 4,320,909
3,888,000 4,634,000 2,685,000 3,000,000 3,075,000 3,152,000 3,231,000 3,312,000 3,395,000 3,479,000
-
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3,670,0004,330,000
13 Light Regional Council
LONG TERM FINANCIAL RATIOS
The following figures show the long-term financial ratios as recommended by Local Government Financial Management Regulation 2011 over the life of the 2024-2034 LTFP.
Financial Sustainability Information Paper 9 of the LGA recommended an Operating Surplus Ratio of between 0% and 5% on average over long term. Council’s estimate of operating results for the long term does not include the likelihood of future new initiatives and programs impacting future returns. Council’s LTFP forecasts sustainable operating results from years 1 to 10. Reduction in 2030 relates to the end of the Bunyip 2 separate rate.
Operating
Impact of no Bunyip 2 separate rate Bunyip 2 ‘take-out’
Asset renewal funding ratio Draft Long Term Financial Plan 2024-2025 14 0% 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 20% 40% 60% 80% 100% 120% 0.0% 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 4.0% 4.8% 4.9% 3.8% 3.0% 2.2% 2.2% 2.7% 0.3% 0.1%
surplus as a % of total revenue
Financial Sustainability Information Paper 9 of the LGA recommended an Asset Renewal Funding Ratio of greater than 90% but less than 110% on average over long term. Information contained in its Infrastructure and Asset Management Plan (IAMP) has been used to inform and calculate the asset renewal funding ratio, for the term of the current IAMP. Beyond the horizon of the current IAMP (2031), future annual depreciation estimates are used to calculate the asset renewal funding ratio. Estimates of Asset Sustainability beyond year 5 of the LTFP fall outside of the current IAMP and these will be updated in the future revision of the LTFP accordance with a review and update of the IAMP.
Net financial liabilities (Total Liabs - financial assets/revenue)
Financial Sustainability Information Paper 9 of the LGA recommended a Net Financial Liabilities Ratio of greater than zero but no more than 100% of total operating revenue on average over long term.
GHG emitted - tonnes
Borrowing as a % of total revenue
0 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34
1,000 500 2,500 3,000
4,000
2,000 1,500
3,500
4,500
15 Light Regional Council 0% 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 40% 30% 20% 10% 50% 60% 70% 80% 90% 0% 24/25 25/26 26/27 27/28 28/29 29/30 30/31 31/32 32/33 33/34 40% 30% 20% 10% 50% 60% 70% 80% 90%
PO Box 72
Kapunda SA 5373
(08) 8525 3200
light@light.sa.gov.au
www.light.sa.gov.au