Gawler 2012-13 Annual Report - page 21

Town of Gawler Annual Report 2012/13
Page 21
introduction •
summary
• strategic directions • statutory information • index
context, it is important to note that the 2012/2013 adopted budget provided for a reduction of $2.7m in cash);
(b) A reduction in Trade & Other receivables based on an increased focus on timely debt recovery;
(c) A further $920k reduction in Council’s long term debt, thereby importantly providing an increasing capacity for Council to
fund the purchase and/or construction of new/upgraded assets;
(d) Whilst the increase in employee leave entitlements was maintained to a reasonable level (6.5% increase compared to
13.5% in 2011/12), similar to 2011/12 there was a marked increase in the component classified as ‘Current’ liability (this
was primarily as a result of a marked increase in the number of staff with greater than 7 years continual Local Government
service).
3. Asset Sustainability Ratio – 23% (65% 2011/12)
The Asset Sustainability Ratio compares Council’s net capital expenditure on the replacement / renewal of existing assets as a
percentage of the value identified and required for such purposes within Council’s Asset Management Plan.
Whilst Council’s initial Asset Management Plan was adopted in late 2009, it has only very recently been updated, such that
it could not be used as the basis of the ratio calculation for the 2012/13 financial year. As a result, the ratio result has been
determined based on net capital expenditure as a percentage of depreciation instead.
The policy position of Council is that the ratio result should equal 90-100% over a three year period, thereby ensuring that
Council is investing an appropriate financial contribution relating to the replacement / renewal of its existing fixed asset stock.
The unfavourable result of 23% for the 2012/13 financial year is due to the substantial level of work-in-progress as at 30 June
2013 ($1.85M as compared to $0.76M as at 30 June 2012) relating to capital projects.
From the 2013/14 financial year, the Asset Management Plan will be utilised as the basis for the ratio result. Based on this, it is
forecasted within the Long Term Financial Plan that Council will in future years achieve its policy target for this ratio.
2009/10
Actual
2010/11
Actual
2011/12
Actual
10%
20%
40%
50%
0
Net Financial Liabilities Ratio
30%
60%
70%
2012/13
Actual
2012/13
Budget
2012/13
Forecast
80%
90%
2009/10
Actual
2010/11
Actual
2011/12
Actual
10%
20%
40%
50%
0
Asset Sustainability Ratio
30%
60%
70%
2012/13
Actual
2012/13
Budget
2012/13
Forecast
80%
90%
Net Fina cial Liabilit es Ratio
Asset Sustainability Ratio
1...,11,12,13,14,15,16,17,18,19,20 22,23,24,25,26,27,28,29,30,31,...175
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