Tuesday 24th September 9:00am - Monday 7th October 4:00pm
Wednesday 25th September 3:30pm - 8:00pm
Council Meeting 25 September
Council’s most recent externally audited financial reports stated that Council held cash reserves of $154.6 million. How are these funds used and why can’t they be used to fund existing debt?
Council's cash and investments (cash reserves) as at June 2018 was $154.6 million. This is made up of a combination of externally and internally restricted reserves.
Externally restricted cash reserves relate to Council’s water fund, sewer fund, developer contributions, domestic waste management, grant funding and the Environment Levy. These funds can only be used for the purpose for which they were collected. For example, income from developer contributions can only be used for the purpose for which it was collected (i.e. infrastructure relating to urban development). Externally restricted cash reserves totalled $120 million as at 30 June 2018.
Internally restricted cash reserves are created following agreement by Council and are generally established on the basis of robust financial planning principles. These include reserves established to ensure Council has sufficient funds available to meet its future employee leave entitlements and replacement of major plant and equipment. It also includes reserves created to fund works Council has committed to undertake such as the Civic Centre refurbishment and other capital projects. Internally restricted cash reserves totalled $34.3 million as at 30 June 2018.
Taking into account both internal and external restrictions, Council's unrestricted balance of cash as at 30 June 2018 was $253,000. In conjunction with other current assets, this provides an appropriate level of Working Capital to ensure Council has sufficient liquidity to fund it operations.
In short, while the level of cash reserves held by Council may appear to be high, it is either a case that the funds have been allocated to future commitments (internal reserves) or cannot be used for any purpose other than what it has been collected for (external reserves).