At the end of March 31, the Council had an extra $24.8M in the coffers thanks to the sale of land parcels as part of Council’s financial recovery plan.
It also had an additional $1.7M in tipping income, due to waste received from Sydney Councils following the March storms.
And due to the difficulty in hiring staff, Council is flagging even more savings to come.
The actual surplus, known as the operating result (EX-cluding capital grants and contributions) at the end of the third quarter was $138.6M which was $50M than it had budgeted for.
The YTD operating result (IN-cluding capital grants and contributions) is showing a favourable variance of $53.2M, consisting of an actual surplus of $176.1M compared to a budgeted surplus.
Proposed Q3 adjustments will move the 2021-2022 budgeted operating surplus (excluding capital grants and contributions) from $6.0M to an operating surplus (excluding capital grants and contributions) of $40.4M.
“This result may improve further during Q4 if the difficulty Council is having recruiting vacant positions and supply chain management issues impacting resource availability continue,” Council said.
Employee Costs are down by $8.1M (or 6.3% of YTD budget) despite overtime costs up mainly due to responding to weather events in February and March.
“In the current economic climate Council is experiencing difficulties filling vacant positions, as candidates often have several flexible opportunities available to them,” Council said.
Employee costs recovered from capital projects are unfavourable by $1.6M due to disruptions to capex projects as a result of the weather and supply chain issues.
The proposed Q3 adjustments will move the entire 2021-2022 full year’s approved operating surplus (including capital grants and contributions) from $68.5M to an operating surplus (including capital grants and contributions) of $96.7M.
Council’s year to date capital expenditure is $65.8M compared to a year to date budget of $89.5M.
That is expected to result in a revised 2021-2022 full year capital works program of $136.7M, down from $158.9M.
A proposed net budget increase of $6.1M is included in this Q3 budget review to address the timing of grant income receipts and additional prepaid Financial Assistance Grant (FAG) .
At the beginning of April 2022, the Federal Government announced that it was changing the timing of the payment of the FAG.
Specifically, the Federal Government announced that three-quarters of the FAG amount for 2022-2023 would be paid early in June 2022.
Historically the Federal Government has prepaid half of the following years FAG each June.
This change will have a favourable impact on the operating result in 2021-2022 of $8.2M.
The nature of the FAG, and the accounting rules that apply to it means that Council must recognise this additional income in 2021-2022.
In the absence of any further changes to the timing of future grants, the decision to increase the prepayment of the FAG will be that Council will actually receive $8.2M less income in 2022-2023 and have an unfavourable impact in that year.
The same overall amount of income will be received, it is just the timing of payments between financial years.
The Q3 report will be tabled at the May 24 meeting.