Water and Waste Committee - City of Gold Coast · 8/23/2018 · WW18.0823.001. moved Cr Tozer...

760 Adopted Report

of the

Water and Waste Committee Meeting

held on

Thursday 23 August 2018 at

10 am

City of Gold Coast Council Chambers 135 Bundall Road Surfers Paradise

760th Council Meeting 28 August 2018 2 Water And Waste Committee Meeting 23 August 2018 Adopted Report

Index 760 Adopted Report

Water and Waste Committee Meeting Thursday 23 August 2018

Item Direct. File Page Subject

1 WW CM787/788/06/01(P1) 4 Water and Waste Committee Action List and Forward Planning Schedule

2 WW WSS1125/1227/02(P1) 7 Water and Waste Annual Register of Council Directions

3 WW FN334/252/19(P2) / WSS382/343/08(P1)

9 Water and Sewerage Services Financial Performance as at 31 July 2018

4 WW FN334/176/18(P1) / WSS382/343/08/(P1)

32 Waste Services Financial Performance as at 31 July 2018

Closed Session

PRESENTATION: 2017 Customer Satisfaction Survey

General Business

5 WW WSS1125/213/01(P1) 55 Customer Hardship and Assistance Programs

6 WW WSS1125/324(P1) 56 2017 Customer Satisfaction Survey

7 WW WSS1125/343(P1) 57 Water And Sewerage Asset Management

KEY: OCEO - Office of the Chief Executive Officer OCOO Office of the Chief Operating Officer EPE - Economy, Planning and Environment OS - Organisational Services LC - Lifestyle and Community TI - Transport and Infrastructure WW - Water and Waste

760th Council Meeting 28 August 2018 3 Water And Waste Committee Meeting 23 August 2018 Adopted Report ADOPTION BY COUNCIL 28 AUGUST 2018 RESOLUTION G18.0828.022 moved Cr Taylor seconded Cr La Castra That the Report of the Water & Waste Committee’s Recommendations of Thursday, 23 August 2018, numbered WW18.0823.001 to WW18.0823.007, be adopted.

CARRIED ATTENDANCE Cr P Taylor (Chairperson) Cr K Boulton Cr R La Castra Cr PJ Young Cr G Tozer Cr W Owen-Jones Visitor Mr P Heaton Director Water and Waste Ms C Freeman Acting Coordinator Customer Management APOLOGIES PROCEDURAL MOTION moved Cr PJ Young seconded Cr Boulton That the apology of Cr PC Young be noted. CARRIED PRESENTATION 2017 Customer Satisfaction Survey Ms Carley Freeman Acting Coordinator Customer Management

760th Council Meeting 28 August 2018 4 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 1 WATER AND WASTE WATER AND WASTE COMMITTEE ACTION LIST AND FORWARD PLANNING SCHEDULE CM787/788/06/01(P1)

Proposed Date Subject Action Officers

Action

September 2018

Smart Metering of Community Title Scheme (units and complexes).

Scott Emmonds/ Chris Owen

September 2018

Improved Control and Access to Waste and Recycling Facilities Resolution: G17.0621.014

Mairead Lenihan/ Chris Owen

2 That Council endorses assessment of the potential for designation of waste and recycling centres into domestic waste only, and full waste facilities, with a report to be presented on the proposal by the end of 2017-18 financial year.

September 2018

Proposed State Government Landfill Waste Levy Recommendation: WW18.0620.005

Mairead Lenihand / Chris Owen

3 That Council note a further Report will be provided on the proposed introduction of the Waste Levy and implications for Councils before the September Budget Review 2018-19.

September 2018

Metering and Leakage Recommendation: WW16.0720.004

Scott Emmonds/ Chris Owen

Council notes that further consideration is being given to residential meter location and other issues to support ongoing development of Council’s Concealed Leakage Remission Policy, which will be brought to Council at a later date.

September 2018

Scientific Services Delivery Model – Implementation Plan

Tim Beales/ Chris Owen

That the Director Gold Coast Water and Waste report back to Council in July 2018 on progress associated with the Scientific Services Implementation Plan.

October 2018 Implementing a City Wide Food Organics, Green Organics (FOGO) service


That a report addressing FOGO recovery including anticipated implementation as part of Solid Waste Strategy 2024.

760th Council Meeting 28 August 2018 5 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 1 (Continued) WATER AND WASTE COMMITTEE ACTION LIST AND FORWARD PLANNING SCHEDULE CM787/788/06/01(P1)


Action

November 2018 Project update Long Term Recycled Water Release Plan

Mark Herrmann/ Brett Lawrence

November 2018 Improved Control and Access to Waste and Recycling Centres Recommendation: WW18.0125.008


4 That Council notes a further report will be provided in late 2018 on the preferred method for control of access and use at waste and recycling facilities.

December 2018 Alternate Billing Options for Water and Sewerage Utility Charges Recommendation: WW17.0426.006

Karen O’Brien 2 That in view of the benefits to customers, Council endorses a future transition to rolling billing for water and sewerage utility charges with both fixed and variable charges billed in arrears.

3 The proposed future transition to rolling billing to be scheduled to align with the establishment of a new utility billing system.

4 That a report to be provided back to Council by December 2018 providing details of on the proposed transition plan.

December 2018 Catchment Management Community Partnerships Framework Recommendation: WW17.1205.003

Joshua Evans / Kathy Baker

That Council notes the framework will be developed in conjunction with and align to the current Water Strategy (under development) which recognises Community partnerships as a key objective.

760th Council Meeting 28 August 2018 6 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 1 (Continued) WATER AND WASTE COMMITTEE ACTION LIST AND FORWARD PLANNING SCHEDULE CM787/788/06/01(P1)


Action

December 2018 Local Government Platform Stage Three Recommendation: WW18.0320.005

Karen O’Brien 2 That Council note that a decision on LGP Stage Three is deferred until February 2019 due to items outlined in this report.

3 That Council note that a Business Case will be bought back to Water and Waste Committee in late 2018 on the preferred approach for LGP Stage Three.

December 2019 Introduction of Commercial Food Waste Pilot Recommendation: WW18.0320.003


That a report brought back to Council on the outcome of the trial.

RECOMMENDATION It is recommended that Council resolve as follows: That the Action List and Forward Planning Schedule for Water and Waste Committee be noted. Authorised by: Paul Heaton iSPOT#37409759 Director Water and Waste COMMITTEE RECOMMENDATION WW18.0823.001 moved Cr Tozer seconded Cr La Castra That the Action List and Forward Planning Schedule for Water and Waste Committee be noted.

CARRIED

760th Council Meeting 28 August 2018 7 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 2 WATER AND WASTE WATER AND WASTE ANNUAL REGISTER OF COUNCIL DIRECTIONS WSS1125/1227/02(P1)

STANDING AGENDA ITEM: Committee Recommendation: WS14.0430.007 / Council Resolution: G14.0506.025 “That Gold Coast Water establish a standing item on the Water Services Committee Agenda which is a register (and thus an agreed record) of any “directions” that Council gives Gold Coast Water for reporting in the annual operations report.” That is: - a resolution that goes against or substantially modifies the recommendations of the Officers and;

- has a (or potential to have a) material/commercial impact on the business unit. Council Meeting

Council Resolution

Description 2017-18

2018-19 progressive

686 G14.0916.004 That the adopted infrastructure charges are adjusted so that there is a 100% discount for family accommodation dwellings of 100m2 GFA or less for any approvals issued on or after 1 July 2014 through the remainder of this Council’s term. Permanent changes to Adopted Infrastructure Charges Resolution (AICR):

Nil Nil to date

1. Existing building: no infrastructure charges levied for any change in non-residential land use (ongoing).

2. Expansion: for non-residential land uses, up to an additional 50 per cent of GFA or a maximum of 500m², whichever is the lower, will be exempt from infrastructure charges (ongoing).

3. Family accommodation: no charge for family accommodation dwellings of 100m² GFA or less. Family accommodation dwellings greater than 100m² GFA will be charged at 40 per cent of the relevant AICR charge (ongoing).

4. Not-for-profit community groups: rebates for the water and wastewater networks will be restored, following the return of responsibility to the City (ongoing). Recommendation: WW16.12.05.003 Resolution: G16.1207.018

760th Council Meeting 28 August 2018 8 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 2 (Continued) WATER AND WASTE ANNUAL REGISTER OF COUNCIL DIRECTIONS WSS1125/1227/02(P1) RECOMMENDATION It is recommended that Council resolve as follows: That the Water and Waste Annual Register of Council Directions be noted. Authorised by: Paul Heaton iSPOT#43956542 Director Water and Waste COMMITTEE RECOMMENDATION WW18.0823.002 moved Cr Tozer seconded Cr La Castra That the Water and Waste Annual Register of Council Directions be noted.

CARRIED

760th Council Meeting 28 August 2018 9 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Attachment 1: Detailed Income Statement 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT The purpose of this report is to provide the Water and Waste Committee with an update of Water and Sewerage Services financial performance as at 31 July 2018. Comparisons are to the City’s 2018-19 Adopted Budget. 4 PREVIOUS RESOLUTIONS Not Applicable. 5 DISCUSSION 5.1 High Level Financial Summary

Table 1 – Water and Sewerage Services - Year to Date Financial Summary

Table 1 above shows the financial position for Water and Sewerage Services as at 31 July is 5.8% or $1.31 million below forecast. This is predominantly the result of: § Operating revenue being $1.01 million (2.2%) lower than forecast; and

§ Capital revenue being $0.23 million (5.9%) lower than forecast.

Actual Initial Budget Var Var

Initial Budget

31 July 2018 ($M) ($M) ($M) % ($M)Operating Revenue 42.01 42.95 (0.94) (2.2%) 528.27Flow -Dependant Expenditure 16.23 16.15 (0.08) (0.5%) 204.40Operating Revenue net of Flow Dependant Expenditure 25.79 26.80 (1.01) (3.8%) 323.87Gross Margin 0.65 0.66 0.65

Total Controllable Operating Expenditure 8.41 8.35 (0.06) (0.8%) 108.53

Loss on Sale of Assets 0.00 0.00 0.00 0.0% 5.00

Net Profit before Capital Revenue 17.38 18.46 (1.08) (5.8%) 210.34

Total Capital Revenue 3.66 3.89 (0.23) (5.9%) 86.63

EBITDA 21.03 22.34 (1.31) (5.8%) 296.97

Year to Date Full YearWater & Sewerage Services Financial Summary

760th Council Meeting 28 August 2018 10 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Major variances will be discussed in the following paragraphs with a detailed Income Statement contained in Attachment 1 to the report. 5.2 Operating Revenue ($0.94 million Unfavourable) 5.2.1 Rates Revenue Financial Summary ($0.92 million Unfavourable)

Table 2 – Water and Sewer Rates Revenue Forecast

Rates revenue is $0.92 million (2.2%) lower than revised budget, with service charges being $0.04 million (0.2%) below forecast and volumetric charges being $0.88 million (4.2%) below forecast. Service Charges § Year-to-date water service charges revenue recorded is $0.03 million higher than

initial budget. Total water service connections at 31 July 2018 are 261,351.

§ Year-to-date sewerage service charges revenue recorded is $0.07 million lower than the initial budget. Actual service connections at 31 July 2018 are 246,415, representing an increase of 0.02% from the beginning of the financial year.

Water & Sewerage Rates RevenueActual Initial

Budget Var VarInitial

Budget

31 July 2018 ($M) ($M) ($M) % ($M)Service Charges

Water 5.76 5.73 0.03 0.5% 68.00Sew erage 15.07 15.14 (0.07) (0.5%) 179.98

Total Service Charges 20.83 20.87 (0.04) (0.2%) 247.98

Volumetric ChargesWater - gross 17.15 17.77 (0.63) (3.5%) 226.53Sew erage - gross 2.84 3.12 (0.28) (9.0%) 39.45Recycled Class A 0.08 0.09 (0.01) (13.2%) 0.97Less: Concealed Leakage (0.16) (0.20) 0.04 20.6% (2.50)

Total Volumetric Charges 19.91 20.79 (0.88) (4.2%) 264.45

Total Rates Revenue 40.74 41.66 (0.92) (2.2%) 512.43

Full YearYear to Date

760th Council Meeting 28 August 2018 11 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Volumetric Revenue Volumetric revenue is recorded as being 1.2% or $0.18 million below forecast whilst bulk water demand to July is 47 ML (0.95%) lower than initial forecast. At the time of writing this report, revenue accruals are yet to be finalised for 2017-18. These accruals will impact 2018-19 initial data. 5.3 Other Operating Revenue ($0.02 million Unfavourable) At this very early stage of the year, fees and charges revenue is lower than projections, with this being offset by Interest on Outstanding Rates being higher than projected. These areas will be monitored throughout the year. 5.4 Flow Dependant Expenditure ($0.08 million Unfavourable) Bulk Water Purchases ($0.18 million Unfavourable) Actual bulk water purchased for the month of July 2018 was marginally higher than revised forecast by 48 ML (0.95%). Rainfall for July 2018 was 42% of the long term average, with only 30.88mm recorded at the Gold Coast Seaway. The average temperature at the Gold Coast Seaway for July was recorded at 22.3 degrees Celsius, which is 1.2 degrees higher than the long term average for July. Graph 2 below compares water supplied versus the demand forecast adopted for revised budget. Rainfall recorded for the month is also incorporated.

760th Council Meeting 28 August 2018 12 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1)

Graph 2 Analysis of Water Supplied versus Demand Forecast

Electricity (0.15 million Favourable) Electricity charges are $0.15 million or 16% below forecast. Forecast electricity charges assumed a 16% price increase for small meters and a 3.85% increase for large meters for the full year. Actual electricity prices remain unchanged from 2017-18 rates at this stage of the year, with price increases expected later in the year. In addition, expected growth at the Pimpama sewage treatment plant is not yet reflected in electricity consumption.

760th Council Meeting 28 August 2018 13 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) 5.5 Controllable Expenditure ($0.06 million Unfavourable) At a whole of business unit level, Controllable Expenses are $0.06 million (0.8%) above year to date forecast. Variances at individual line item level will be further explained below. Employee Expenses ($0.40 million Favourable) Employee expenses are $0.40 million or 10.1% below forecast. This favourable variance mainly results from some vacancies across the business and labour rates remaining unchanged. Materials and Services ($0.46 million Unfavourable) Materials and services are $0.46 million or 27.0% above forecast. The main influencing factors to this variance are: § Internal water usage was billed in July, this was not expected to occur until August,

and,

§ Water reticulation corrective maintenance is above budget due a combination of:

o Measured increase in the number of broken water mains over the past two months possibly as a result of the prolonged dry weather resulting in ground movement.

o Contracting out backlogged priority 4 and 5 maintenance works and service requests.

5.6 Loss on Asset Disposal Asset processing for the 2018-19 financial year is not expected to begin until the second quarter due to finalisation of the 2017-18 accounts. 5.7 Capital Revenue ($0.22 million Unfavourable) Developer (cash) contributions are $3.66 million or 5.7% below forecast. Developer contributions are dependent on the level of development activity across the City which fluctuates over the year. In line with the forecast no contributed assets were processed during July with processing expected to resume in the second quarter following finalisation of the 2017-18 accounts.

760th Council Meeting 28 August 2018 14 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) 5.8 Community Returns Income Tax ($0.03 million Favourable) Water and Sewerage Services is a commercialised business unit subject to the Local Government Taxation Equivalents Regime (LGTER). As part of this regime, a PAYG Instalment Activity Statement must be prepared and submitted on a monthly basis, with payment of a PAYG instalment. Current instalment rate as issued by our tax assessors is 6.99%. The instalment rate is applied to total revenue generated to derive the amount of PAYG tax payable each month. At year end, a final taxation return will be prepared, based upon taxable income and utilising the company taxation rate of 30% to calculate total taxation payable for the year. Relevant adjustments will be made to record this annual tax liability to Council.

760th Council Meeting 28 August 2018 15 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) 5.9 Capital Program 5.9.1 Capital Expenditure

The Water and Sewerage Services capital program consists of 65 projects totalling $94.98 million.

Table 3 – Capital Expenditure ($‘000’s)

Year to date capital expenditure of $1.98 million represents a variance of 10.4% above the year to date forecast of $1.79 million. Product Variances Sewerage The sewerage program is $0.07 million (6.5%) below forecast. The following projects are the main contributors to the variance:

· Sewer Gravity Main Asset Renewals Program - $0.16 million below forecast. Expenditure on this project is less than forecast due to contractor delivering 2018-19 scope in June.

· Fall From Heights Prevention Sewerage Pumping Stations - $0.09 million above forecast. This project is ahead of schedule due to the contractor exceeding their estimated fabrication and delivery performance.

Water The water program is $0.26 million (41.1%) above forecast. The following project is the main contributor to the variance:

· Water Main Replacements Program - $0.25 million above forecast. This project is ahead of schedule due to the contractor completing construction works ahead of forecast.

Product

Actual Expenditure ($M) Initial Forecast ($M) Variance

($M)Variance

%Initial

Budget ($M)

Sewerage 1.06 1.14 0.07 6.5% 75.09

Water 0.90 0.64 (0.26) (41.1%) 19.81

Non-Core Water - - - - -

Corporate 1.8% 2.0% 0.2% 9.4% 0.08

Total Capital 1.98 1.79 (0.19) (10.4%) 94.98

Full Year

Water and Sewerage Services Capital Expenditureas at 31 July 2018

Year to Date

760th Council Meeting 28 August 2018 16 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) 5.9.2 Status Update – Major Investments Long Term Recycled Water Release Project scope and budget The City’s existing excess recycled water release system at the Seaway is nearing capacity. The Long Term Recycled Water Release Plan aims to provide a city wide solution to cater for excess recycled water in both average dry weather and peak wet weather flows. Stage 1 consists of infrastructure upgrades at Coombabah STP, Benowa Repump Station and the marine crossings of the Broadwater and Nerang River. Initial budget for 2018-19 is $31.9 million. Achievements for July · The 100 week contract commenced with the main contractor, John Holland Queensland

Pty Ltd. Major issues · The option to increase hydraulic capacity of the Broadwater Crossing through utilisation

of the reinforced concrete tunnel liner pipe only without installation of a second internal carrier pipe proposed by the contractor is being reviewed.

Financial Performance

Forecast ($) 400,000 Budget ($) 79,848,145

Expenditure ($) 712,182 ITD Expenditure ($) 10,260,327

Variance ($) (312,182) Remaining ($) 69,587,818

Variance (%) (78%) Remaining (%) 87%

Year to Date Whole Project

760th Council Meeting 28 August 2018 17 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Pimpama to Coombabah Sewage Treatment Plant Release Main Project scope and budget This project includes the design and construction of the first stage of works required to upgrade the transfer of excess recycled water from Pimpama Sewage Treatment Plant to Coombabah Sewage Treatment Plant. The proposed infrastructure includes the upgrade of a section of pipeline approximately 1.8 kilometres in length, discharging to the Coombabah Sewage Treatment Plant Recycled Water Storage Lagoon. Initial budget for 2018-19 is $6.2 million. Achievements for July · Design is 90% complete.

· Procurement documentation is currently being prepared. Major issues · Resolution of access issues raised by the owners of the Lakelands Golf Club due to a

section of the pipeline being laid through an easement on their property Financial Performance

Forecast ($) 7,000 Budget ($) 18,558,776

Expenditure ($) 0 ITD Expenditure ($) 728,776

Variance ($) 7,000 Remaining ($) 17,830,000

Variance (%) 100% Remaining (%) 96%

Whole ProjectYear to Date

760th Council Meeting 28 August 2018 18 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Potable Water Filling Stations Project scope and budget This project will upgrade eleven existing potable water filling stations to address safety concerns. It will also mitigate existing risks associated with metered standpipe users connecting to hydrant points that are not located in safe areas and reduce the risk of contamination of the potable water supply. Initial budget for 2018-19 is $3.68 million. Achievements for July · Final draft design drawings completed and issued for approval by the Consultant.

· Construction specifications, Environmental Management Plan and the Design Report are in final draft stage.

Major issues · Possible design amendment required due to changes from conventional lighting to solar

lighting.

· Potable Water Filling Station S10 (Rural Fire Brigade site) requires an alternative design element to accommodate fire truck access.


Forecast ($) 1,000 Budget ($) 3,929,533

Expenditure ($) 17,142 ITD Expenditure ($) 266,675




760th Council Meeting 28 August 2018 19 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Coombabah Sewage Treatment Plant Stage 6 Upgrade Project scope and budget This project involves the upgrade of Coombabah Sewage Treatment Plant (STP) to provide additional treatment capacity to cater for growth and meet licence requirements. Coombabah catchment is expected to experience significant growth over the coming years. The transit corridor and Southport Priority Development Area are some of the major developments in this catchment. The preferred Stage 6 option involves a 70,000 EP augmentation, utilising existing biological nutrient removal technology and includes a new Preliminary Treatment Facility, new bioreactor and two secondary clarifiers, disinfection system, waste sludge thickening and dewatering and associated ancillary and support facilities. Initial budget for 2018-19 is $2.5 million. Achievements for July · Studies reviewing the Stage 6 capacity and options for upgrade of Preliminary Treatment

Facility to allow refurbishment of the existing works underway.

· Project Delivery Plan and Principal’s Engineer Package are 80% complete.

· Environmental Consultancy Specification is issued to the market.

· Consultant has commenced on updating of Standard Specifications. Major issues · Based upon revised growth projections, the currently nominated capacity of Stage 6 of

70,000 EP may need to be significantly increased to provide an appropriate timeframe before the next augmentation is required.


Forecast ($) 8,500 Budget ($) 69,891,567






New Water Mains in Coomera Project scope and budget This is Trunk Infrastructure being delivered by a Developer and involves the installation of approximately 2km of water mains to accommodate future growth in the Coomera area as identified through the Local Government Infrastructure Planning (LGIP) process. Initial budget for 2018-19 is $1.9 million. Achievements for July · The Developer is yet to lodge an operational works permit. Major issues · No major issues. Financial Performance

Forecast ($) - Budget ($) 1,905,000

Expenditure ($) - ITD Expenditure ($) -

Variance ($) - Remaining ($) 1,905,000

Variance (%) - Remaining (%) 100%


760th Council Meeting 28 August 2018 21 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Elanora STP Digester A and Sludge Heater Refurbishment Project scope and budget This project includes the refurbishment of digester A and replacement of the non-compliant gas pipework, railings, roof seal and digester heaters at Elanora Sewage Treatment Plant (STP) including opportunistic replacement of internal mechanical, electrical and civil components. Initial budget for 2018-19 is $1.85 million. Achievements for July · Tender period closed with evaluation proceeding.

Major issues · Based upon the tenders received additional funding will need to be requested as part of

the September budget review. Financial Performance

Forecast ($) 5,000 Budget ($) 1,911,295





760th Council Meeting 28 August 2018 22 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Coombabah Sewage Treatment Plant Digesters – Supply and Install Cogeneration Unit Project scope and budget This project includes the supply and installation of a 500kW Cogeneration Unit at Coombabah STP along with a pre gas treatment system. The combined heat power plant will utilise methane gas from biogas generated by anaerobic digestion to provide the required sludge heating and generate renewable electric energy. This energy will be used within the plant thereby reducing purchased energy from predominantly coal power stations. This will also reduce net CO2 emissions from fossil fuels. Initial budget for 2018-19 is $1.81 million. Achievements for July · Consultancy quotations received for the concept/preliminary design and construct tender

specification.

· Consultancy quotation review progressing. Major issues · Additional treatment plant future upgrade planning may be required prior to the delivery of

the Cogeneration project potentially delaying the delivery of the project. Financial Performance

Forecast ($) 5,000 Budget ($) 1,834,969


Variance ($) (387) Remaining ($) 1,807,613



760th Council Meeting 28 August 2018 23 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) New Water Mains in Stapylton and Alberton Project scope and budget This project involves the construction of approximately 2km of DN200 main along Stapylton-Jacobs Well Road reserve from a connection point at intersection of Quinns Hill Road to boundary of the property at No. 400 Stapylton-Jacobs Well Road. Stage 2 is the construction of 1.7km of DN150 main and 100 meters of DN200 main in the Stapylton/Jacobs Well area. Initial budget for 2018-19 is $1.8 million. Achievements for July · No achievements to date as Business Case is yet to be approved. Major issues · Design and construction of the Stage 1 works may not occur in 2018-19 due to delays in

finalisation of project approvals. Financial Performance

Forecast ($) - Budget ($) 1,800,000


Variance ($) - Remaining ($) 1,800,000



760th Council Meeting 28 August 2018 24 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Recycled Water Network Expansion Project scope and budget This project includes infrastructure works for the expansion of the recycled water network to implement improved utilisation of recycled water across the City. The cost of this infrastructure will be recovered in recycled water customer pricing. Initial budget for 2018-19 is $1.5 million. Achievements for July · No achievements as the Business Case is yet to be approved. Major issues · Further detailed planning and negotiations with potential customers are required to be

progressed before this project can proceed to construction phase.


Forecast ($) 3,500 Budget ($) 54,000,000





760th Council Meeting 28 August 2018 25 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Sewage Treatment Process Tank Refurbishment 2018-21 Project scope and budget The aim of this project is to refurbish the Primary Clarifier Tanks C, D and E at Elanora Sewage Treatment Plant and Clarifier 4, 5, 6 and 7 at Merrimac Sewage Treatment Plant. This project is part of a three year program to refurbish process tanks and includes mechanical, electrical and civil components, protective coating and other asset renewal activities. Initial budget for 2018-19 is $1.43 million. Achievements for July · Specification phase is progressing and is 30% complete.

Major issues · No major issues. Financial Performance

Forecast ($) 10,000 Budget ($) 5,880,000

Expenditure ($) 443 ITD Expenditure ($) 443




760th Council Meeting 28 August 2018 26 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) 5.10 Other Financial Activities 5.10.1 Community Service Obligations

In accordance with Sections 23 and 24 of the Local Government Regulation 2012:

…The cost of carrying out community service obligations, less any revenue received from performing the obligations must be treated as revenue for the significant business activity. {Section 23} (and) …A community service obligation is an obligation the local government imposes on a business entity to do something that is not in the commercial interests of the business entity to do.

5.10.1.1 Community Service Obligations – Infrastructure Charges Waivers Detailed information is not currently reported with regard to the permanent discounting of infrastructure charges for “existing buildings”, “expansion” and “family accommodation” development applications. For the 2018-19 year to date, no foregone revenue in the form of waived infrastructure charges under the City’s Non-Profit Community Group Rebate system has been identified. 5.10.1.2 Community Service Obligations – Catchment Management Unit Catchment Management Unit protects human health in recreational waters by monitoring the state of the City’s water environments and providing rapid reporting of the health status of primary contact recreation areas. It supports the maintenance of legislated environmental values in the City’s water environments through catchment and stormwater planning and the implementation of appropriate environmental restoration actions. These activities are funded by way of a Community Service Obligation (CSO). At adoption of Council’s initial budget, the total value of this CSO is $4,631,502. As shown in Table 4 (below), operational activities for the Catchment Management Unit are continuing, with expenditure for those activities at 31 July 2018 being below forecast with expenditure on catchment management operating projects yet to ramp up.


Table 4 – Summary of Catchment Management Unit – Operational Expenses

5.10.2 Water and Sewage Leakage Relief The objective of this policy is to ensure uniform and transparent application of relief from water consumption charges and sewage volumetric charges in cases of proven concealed leakage. Revenue Services administers the Policy on behalf of the City. The table below provides summary level detail of the leakage remissions approved to 31 July 2018. A total of 279 approvals were processed during the month of July, with remissions totalling $0.16 million paid. For the year to date, there are no remissions greater than $10,000. The annual budget for concealed leakage remissions is $2.50 million. Remissions paid to July 2018 are below forecast by $0.04 million or 20.6%.

Table 5 – Summary of Concealed Leakage Remissions

Catchment Management Unit - Operational

Initial Budget ($)

YTD Actuals ($)

Spent (%)

CMU Operations 1,259,500 14,663 1.2%

Catchment Activities 1,536,860 122,945 8.0%

Healthy Waterways Contribution 321,000 0 0.0%

WaterSafe Monitoring & Investigations 249,300 3,222 1.3%

Laboratory Testing Services 536,500 7,434 1.4%

Community Action Support 155,000 97,998 63.2%

Water Cycle Implementation 110,000 16,714 15.2%

SLA for Corporate Services 463,342 38,612 8.3%4,631,502 301,588 6.5%

MonthNumber

of Approvals

Total Leak Volume (kl)

Average Loss per

Account (kl)

Water Remission

Value ($'000)

Sewer Remission

Value ($'000)

Total Remission

Value ($'000)

Jul-17 279 78,352 281 138 18 156 Total 279 78,352 281 138 18 156 Budget provided for year 1,875 625 2,500 Proportion of budget approved to date 7.4% 2.9% 6.2%

760th Council Meeting 28 August 2018 28 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) Table 6 (below), illustrates that 91.4% of applications approved to date relate to residential customers, representing 73% of the value of remissions provided.

Table 6 – Summary of Concealed Leakage Remissions by Customer Type and Product

Graph 3 (below), depicts the value of remissions provided over the past five years, compared to the value provided to date for 2018-19. Resourcing issues significantly impacted the processing of remission applications in 2015-16, which is the main driver for the very low value paid in that year. The value paid in 2016-17 and 2017-18 appears to represent a more appropriate level of remissions. Remissions paid for July 2018 are 53% greater than the average remissions paid for the same period over the last two financial years.

Graph 3 – Concealed Leakage Remissions Paid

5.11 Future Budgetary Trends No significant budgetary trends have been identified at this early stage of the financial year.

Customer Type Total Leak

# % Volume (kl)

Water ($'000)

Sewer ($'000)

Total ($'000) %

Residential Customers Owner Occupied premises 181 64.9% 43,652 89 89 57.3% Rental/Tourist Rental premises 74 26.5% 20,579 24 24 15.7%Total Residential Customers 255 91.4% 64,231 114 114 73.0%Non-Residential Customers 24 8.6% 14,121 24 18 42 27.0%

279 100.0% 78,352 138 18 156 100.0%Proportion of Total Remissions 88.4% 11.6%

Approvals Value of Remissions Provided

760th Council Meeting 28 August 2018 29 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN Not Applicable. 7 FUNDING AND RESOURCING REQUIREMENTS Not Applicable. 8 RISK MANAGEMENT The following risk assessment applies to this report: Risk Number Description

Risk No. CO000435

Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS Not Applicable. 10 COUNCIL POLICIES The following policies have been taken into account when preparing this report: § Gold Coast Water Capital Structure and Community Returns Policy.

§ Revenue Policy.

§ City of Gold Coast Budget Review Policy.

§ Water and Sewage Leakage Relief Policy. 11 DELEGATIONS Not Applicable. 12 COORDINATION AND CONSULTATION

Name and/or Title of the Stakeholder Consulted

Directorate or Organisation

Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Marilyn Hildebrandt Executive Coordinator Directorate Finances

Office of the OCOO Yes

760th Council Meeting 28 August 2018 30 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 3 (Continued) WATER AND WASTE WATER AND SEWERAGE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 FN334/252/19(P2) WSS382/343/08(P1) 13 STAKEHOLDER IMPACTS Not Applicable. 14 TIMING Not Applicable. 15 CONCLUSION Water and Sewerage Services Earnings before Interest and Tax (EBIT) for the period to 31 July 2018 is 9.1% or $1.31 million below forecast. This is predominantly the result of: § Operating revenue being almost $1.00 million (2.2%) lower than forecast; and

§ Capital revenue being $0.23 million (5.9%) lower than forecast.

Performance will continue to be monitored to ensure controllable expenditure is minimised. This is achieved through rigorous internal processes which include detailed review of all projects to ensure only prudent and efficient expenditure is incurred. 16 RECOMMENDATION It is recommended that Council resolves as follows:

That Council notes the Water and Sewerage Services Monthly Financial Report for the period ended 31 July 2018. Author: Authorised by: Karen O’Brien Paul Heaton Manager Business Performance Director Water and Waste 14 August 2018 TRACKS REF: #71440443

COMMITTEE RECOMMENDATION WW18.0823.003 moved Cr Tozer seconded Cr La Castra That Council notes the Water and Sewerage Services Monthly Financial Report for the period ended 31 July 2018.

CARRIED


Attachment 3.1 Financial Management Report – 31 July 2018

Full YearAct Initial

BudgetVar Var Initial

Budget31 July 2018 $000's $000's $000's % $000'sRevenueService Charges 20,828 20,871 (42) (0.2%) 247,975Volumetric Charges 20,064 20,982 (918) (4.4%) 266,951Less: Concealed Leakage (156) (197) 41 20.6% (2,500)Interest on Outstanding Rates 159 104 55 52.9% 1,250Interest on Investments 847 847 - 0.0% 10,164Fees and Charges 273 343 (71) (20.6%) 4,430Total Operating Revenue 42,015 42,950 (935) (2.2%) 528,271Operating ExpenditureFLOW-DEPENDANT EXPENDITUREBulk Water Purchases 14,771 14,595 (176) (1.2%) 185,718Electricity 775 922 147 16.0% 11,090Biosolids Disposal 381 331 (49) (14.8%) 3,978Chemicals 300 301 1 0.3% 3,612Total Flow-Dependant Expenditure

16,227 16,149 (77) (0.5%) 204,397

Operating Revenue net of Flow-Dependant Expenditure

25,788 26,801 (1,013) (3.8%) 323,874

Gross Margin 0.6 0.7 0.6

CONTROLLABLE EXPENDITUREEmployee Expenses 3,544 3,944 400 10.1% 50,569Materials and Services 2,157 1,699 (458) (27.0%) 24,716Council Corporate SLAs 1,660 1,660 0 0.0% 19,924Internal Directorate SLA (278) (278) (0) 0.0% (3,332)Fleet and Plant 708 674 (34) (5.0%) 7,975Sew age Treatment Charge 287 292 5 1.6% 3,500Insurance Premiums 152 152 0 0.0% 1,821Other Expenditure 150 150 - 0.0% 1,800Consultants 29 53 24 45.0% 1,468Regulatory Expenses - 0 - 0.0% 93Total Controllable Expenditure 8,409 8,346 (63) (0.8%) 108,533Total Operating Expenditure 24,636 24,495 (141) (0.6%) 312,930

Loss on Sale of Assets - 0 - 0.0% 5,000

Net Profit before Capital Revenue 17,379 18,455 (1,076) (5.8%) 210,341

Capital RevenueDevelopers Contributions 3,655 3,875 (220) (5.7%) 46,500Contributions and Donations Received 0 10 (10) (96.8%) 125Contributed Assets - 0 - 0.0% 40,000Total Capital Revenue 3,655 3,885 (230) (5.9%) 86,625

EBITDA 21,034 22,341 (1,306) (5.8%) 296,966

Depreciation 7,917 7,917 0 0.0% 95,000

EBIT 13,118 14,424 (1,306) (9.1%) 201,966Interest Expense (QTC Loan) 209 209 0 0.0% 2,509Interest Margin Expense 73 73 0 0.0% 881Shareholder Interest Expense 7,402 7,402 - 0.0% 88,824Income Tax Equivalents 3,127 3,153 26 0.8% 39,099NPAT 2,306 3,586 (1,280) (35.7%) 70,652

Participation Return 83 83 0 0.0% 1,000

Retained earnings impact after participation return

2,223 3,503 (1,280) (36.5%) 69,652

Year to DateWater & Sewerage Services Income Statement

760th Council Meeting 28 August 2018 32 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) Attachment 1: Detailed Income Statement 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT The purpose of this report is to provide the Water and Waste Committee with an update of Waste Services financial performance as at 31 July 2018. Performance is compared to the City’s 2018-19 Adopted Budget. 4 PREVIOUS RESOLUTIONS Not Applicable. 5 DISCUSSION 5.1 High Level Financial Summary

Table 1 - Waste Services - Year to Date Financial Summary

Table 1 above shows Waste Services financial position as at 31 July 2018 is $0.05 million (1.8%) ahead of forecast with operating revenue being $0.58 million below forecast and operating expenses $0.63 million (10.5%) below forecast. Significant variances will be discussed in the following paragraphs with a detailed Income Statement contained in Attachment 1 to the report.

Full Year

Actual Initial Bgt Var Var Initial Budget

31 July 2018 $M $M $M % $MOperating Revenue 8.11 8.69 (0.58) (6.7%) 108.14Operating Expenses 5.32 5.95 0.63 10.5% 73.21Total Operating Profit 2.79 2.74 0.05 1.8% 34.93 Loss on Sale of Assets 0.00 0.00 0.00 0.0% 0.00EBITDA 2.79 2.74 0.05 1.8% 34.93

Waste Services FinancialSummary

Year to Date

760th Council Meeting 28 August 2018 33 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.2 Operating Revenue ($0.58 million unfavourable) Operating revenue is $0.58 million below the initial budget and is influenced by the following: § Waste Utility Rates Revenue - $0.37 million unfavourable: Utility Charges for July

2018 correlate with average monthly revenue from last financial year. Forecast revenue for 2018-19 incorporates an allocation for 4% growth in services across the City, which is yet to be realised. In addition, a small number of accounts are yet to be issued.

§ Fee and charges - $0.13 million unfavourable: This unfavourable variance is due

to additional services revenue and Right for Service revenue being below forecast. Additional Services revenue stream was separated out in 2017-18, with no historical data available to forecast this revenue stream, an estimate of $1 million was included in the budget. Actual revenue received during 2017-18 (less than $0.3 million) will now be utilised to revise this forecast. The budget allocation will be revised at the September budget review. Right for Service revenues are lower than forecast due to the re-use of second-hand bins, which do not attract right for service payments. These second hand bins became available as a result of the promotional campaign to upgrade to 360 litre recycling bins.

§ Refuse Tipping Fees - $0.11 million unfavourable: This variance results from lower than projected waste volumes disposed at Landfill facilities during July.

5.3 Operating Expenditure ($0.68 million Favourable) At a whole business unit level, operating expenses are $0.68 million (10.5%) below the initial budget. The variance is primarily within the Materials and Services line item and is influenced by the following; · Leachate Removal – This variance is due to a combination of the following:

- Leachate volumes were substantially lower in July than in previous months. This is likely due to the drier weather conditions, with no leachate removed from the Reedy Creek site during July.

- 15% of leachate from Stapylton was transferred and treated at Coombabah sewage treatment plant which attracts a significantly lower disposal cost per kilolitre than the existing contractor.

· Wheelie Bin Acquisition and maintenance – the availability and utilisation of

second hand bins, as described above with regard to Right for Service revenue, has led to reduced costs for wheelie bin acquisition and maintenance.

· Concrete Crushing – no expenditure for concrete crushing has been incurred in

July. The new specification for concrete crushing is being finalised and is expected to go to market in September. The annual budget for crushing and screening recycled concrete will remain unchanged.

760th Council Meeting 28 August 2018 34 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.4 Loss on Sale of Assets Asset processing for the 2018-19 financial year is not expected to begin until the second quarter due to finalisation of the 2017-18 accounts. 5.5 Capital Program The 2018-19 Waste Services capital program consists of 18 projects totalling $12.73 million.

Table 3 – Capital Expenditure ($ Million) Year to date expenditure represents a variance of 49.8% below the year to date forecast. The following projects are the main contributors to the variance: · Waste Recycling Centre Minor Renewals 2018-19 - $0.02 million below forecast.

This project is behind schedule due to the finalisation of specification of works.

Actual Expenditure YTD Budget Variance Variance Initial Budget

($M) ($M) ($M) % ($M)

Landfills 0.02 0.04 0.01 37.2% 9.78

Waste and Recycling Centres 0.01 0.02 0.02 70.8% 2.45

Fleet and Plant - - - - 0.50

Total Capital 0.03 0.06 0.03 49.8% 12.73

PROGRAM

Waste Management Capital Expenditureas at 31 July 2018

Year to Date Full Year

760th Council Meeting 28 August 2018 35 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.6 Status Updates - Major Investments The following major investments have been identified for delivery in 2018-19. 5.6.1 Reedy Creek Landfill Cell 3 Liner Program scope and budget The Environmental Authority for the Reedy Creek Landfill requires that all landfill cells have an appropriately designed and constructed landfill liner system to provide adequate protection against possible environmental impacts such as contamination of local ground water by landfill leachate. The construction of Cell 3 at Reedy Creek is programmed for completion by the end of 2018-19. This will maintain availability of landfill void space at Reedy Creek as existing landfill cells come to the end of their useful lives. The project involves the design and construction of Cell 3 inclusive of bulk earthworks, engineered liner and leachate drainage systems. The Initial budget for 2018-19 is $4.88 million. Current Status · Final design documents received. Major Issues · The design process identified that there are potential significant efficiencies and technical

advantages in constructing Cells 3 and 4 together. This option is under review. Financial Performance

Forecast ($) 15,000 Budget ($) 5,093,648





760th Council Meeting 28 August 2018 36 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.6.2 Stapylton Landfill Main Access Upgrade Program scope and budget A Master Plan for Stapylton Landfill was developed in 2017-18 which included recommendations to reconfigure the access road network and replace the existing wheel-wash system. This project is for the design and construction of the main access road and roundabout realignment incorporating a suitable pad for the wheel wash and the relocation and replacement of the aged site accommodation and facilities. The road and enhanced wheel wash infrastructure will enable improved traffic management, compliance with environmental regulations and the prevention of tracking vehicle mud and dirt off site and onto public roads. The Initial budget for 2018-19 is $2.0 million. Current Status · Design contract awarded.

Major Issues · No major issues identified. Financial Performance

Forecast ($) 8,000 Budget ($) 2,028,840





760th Council Meeting 28 August 2018 37 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.6.3 Solid Waste Strategy Implementation Program scope and budget The Solid Waste Strategy 2024 was endorsed by Council in September 2015. The Strategy provides a framework for the City to develop a more sustainable and integrated approach to solid waste management. The Strategy is for nine years and is a legislative requirement under the Waste Reduction and Recycling Act 2011 (s 121). The annual program of work contributes to achieving the four Strategy outcomes:

· The City and community actively practise waste avoidance and other positive waste behaviours.

· Waste re-use, recycling and resource recovery opportunities are maximised prior to landfill disposal.

· Our capacity to manage future waste is secured. · Solid waste management has minimal negative impact on our environment and public

health.

The Initial budget for 2018-19 is $3.18 million. The impact of the Waste Levy in the first quarter of 2019 will increase the importance of this program of work to minimise the financial impact on the City and its Customers. Current Status · Commercial Food Waste - Bins and bin liners were ordered and nine customers

confirmed (equating to 20 bins). · Waste Recycling Centre Signage and Wayfinding - Audits were completed for Merrimac,

Molendinar and Reedy Creek. The findings of the audits inform signage requirements and locations and the procurement/installation can then begin.

· Organics Assessment - Tender submissions reviewed and a recommendation to award drafted.

· Review of Controlled Waste Collection Areas and Waste Disposal Fee Concession Policy - Finalisation of tender documentation.

· Marketing and Communications Program 2018-19 endorsed including promotion of green waste bins, 360 litre recycling bins and recycling at waste and recycling centres.

Major Issues · Ensuring the billing system is ready for Commercial Food Waste program customers to

be charged once the required number of services is reached. Financial Performance

Forecast ($) 38,756 Budget ($) 1,274,920





760th Council Meeting 28 August 2018 38 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.6.4 Bin Bay Upgrades Program scope and budget This project is to upgrade bin bays at Reedy Creek, Helensvale, Merrimac, Jacobs Well and Springbrook Waste and Recycling Centres to address operational and safety concerns. The program of works aims to eliminate manual handling issues associated with the current configuration of bin flaps, minimise risk of damage to bin bay infrastructure and streamline the delivery and removal of bulk bins within the facilities. The Initial budget for 2018-19 is $1.0 million. Current Status · Workshops with stakeholders were carried out to discuss issues and finalise the

Business Case.


Forecast ($) 2,000 Budget ($) 1,000,000


Variance ($) (4,374) Remaining ($) 993,626



760th Council Meeting 28 August 2018 39 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.6.5 Stapylton Landfill Cell 7 Program scope and budget The Environmental Authority for the Stapylton landfill requires that all landfill cells have an appropriately designed and constructed landfill liner system to provide adequate protection against possible environmental impacts such as contamination of local ground water by landfill leachate. The project involves the design and construction of Cell 7 inclusive of bulk earthworks, engineered liner and leachate drainage systems. Construction works are scheduled for completion in 2019-20. This will maintain availability of landfill void space at Stapylton as existing landfill cells come to the end of their useful lives. The Initial budget for 2018-19 is $0.52 million. Current Status · This project remains in planning phase.


Forecast ($) 2,000 Budget ($) 4,870,000





760th Council Meeting 28 August 2018 40 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.6.6 Waste and Recycling Centre Compaction Plant 2018-19 Program scope and budget The Waste and Recycling Centres (WRC) currently have limited compaction mechanisms in place resulting in roll on roll off bins (RORO) being transported from WRCs below their maximum load capacity. This project aims to acquire specialised plant to improve bin compaction rates at WRCs, increasing RORO bin load capacity which will ultimately improve transport efficiencies. The Initial budget for 2018-19 is $0.50 million. Current Status · This project has been incorporated into the Bin Bay Upgrade Business Case which is

currently being finalised. Major Issues · No major issues identified. Financial Performance

Forecast ($) - Budget ($) 500,000


Variance ($) - Remaining ($) 500,000



760th Council Meeting 28 August 2018 41 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.6.7 Reedy Creek Landfill Internal Road Upgrade and Stormwater Entrance Program scope and budget The upgrade of the entrance road will improve the line of sight for security and supervision of vehicles entering the site and the inclusion of a roundabout will allow easy direction flow for traffic and slow traffic entering the site improving safety. The upgrade of internal roads and sealing the perimeter will reduce dust, erosion and stormwater impact both on and off site. The sealed roads will also allow for line marking improving safety for staff and visitors. The upgraded storm water diversion and catchment system will enable improved capture of stormwater both on site and from stormwater flowing into the site and enclosing the sedimentation ponds will improve safety and amenities. This project incorporates the design and construction of an upgraded storm water diversion and catchment system to redirect flow into the existing treatment system and to upgrade the front entrance and internal road network at Reedy Creek Landfill. The Initial budget for 2018-19 is $0.50 million. Current Status · These projects remain in planning phase.


Forecast ($) 4,000 Budget ($) 500,000


Variance ($) 4,000 Remaining ($) 500,000



760th Council Meeting 28 August 2018 42 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.6.8 Stapylton Landfill Internal Road Upgrade and Sediment and Erosion Control Program scope and budget The upgrade of internal roads and sealing the perimeter will reduce dust, erosion and stormwater impact both on and off site. The sealed roads will also allow for line marking improving safety for staff and visitors. The sediment and erosion control project is for the construction of a stormwater sedimentation basin or other detained surface water runoff treatment system at Stapylton Landfill to better manage the capture, control, treatment and release of storm water. Infrastructure at critical control points will be installed to better control stormwater flows to minimise adverse environmental impacts and earthen bank protection works will be undertaken to reduce erosion and sediment generation. The Initial budget for 2018-19 is $0.50 million. Current Status · These projects remain in planning phase.


Forecast ($) 4,000 Budget ($) 500,000


Variance ($) 4,000 Remaining ($) 500,000



760th Council Meeting 28 August 2018 43 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 5.7 Community Returns 5.7.1 Income Tax ($0.09 million favourable) Waste Services is a commercialised business unit subject to the Local Government Taxation Equivalents Regime (LGTER). As part of this regime, a PAYG Instalment Activity Statement must be prepared and submitted on a monthly basis, with payment of a PAYG instalment. Current instalment rate as issued by our tax assessors is 7.32%. The instalment rate is applied to total revenue generated to derive the amount of PAYG tax payable each month. At year end, a final taxation return will be prepared, based upon taxable income and utilising the company taxation rate of 30% to calculate total taxation payable for the year. Relevant adjustments will be made to record this annual tax liability to Council. 5.8 Community Service Obligations

In accordance with Sections 23 and 24 of the Local Government Regulation 2012:

…The cost of carrying out community service obligations, less any revenue received from performing the obligations must be treated as revenue for the significant business activity. {Section 23} (and) …A community service obligation is an obligation the local government imposes on a business entity to do something that is not in the commercial interests of the business entity to do.

Table 9 (below) provides a summary of the Community Service Obligations (CSO) currently provided within Waste Services, together with the annual expenditure budget and actual year-to-date expenses incurred for delivery of those CSOs. Revenue for these CSOs is recognised on a monthly basis throughout the year, with revenue recognised to July of $0.27 million.

Table 9 – Community Service Obligations - 2018-19 financial year

Community Service Obligation2018-19 Initial

Budget($M)

2018-19 YTD Expenditure

($M)

% of Budget Comment

Refuse Charge Donations 0.56 0.24 43%

Free Tipping Donations 0.49 0.05 11%

Kerbside Collection 1.19 0.01 1%

Stradbroke Island Waste Disposal - Expenditure

0.54 0.06 11%

Stradbroke Island Waste Disposal - Revenue

(0.08) (0.01) 10%

Clean-Up Australia Day 0.02 - 0% Clean Up Australia Day will occur in March 2019.

Carcass Collection 0.06 0.01 11%

Street and Park Bin Services 0.37 0.03 8%

E-Waste 0.10

3.25 0.39 12%

This CSO component relates to foregone revenue associated with Contract LG314/411/17/023 0 Collection, Transportation and Recycling / Disposal of Electronic Waste - refer Council Resolution GA17.0803.004

Steet and Park Bin collection services tracking to forecast.

Rates notices issued twice per annum, application of Donations aligns with rating timeframes.

Preparatory work is underway for the 2018-19 Kerbside Collection which will provide services for Divisions 1 to 7.

Commercial waste and recycling services on South Stradbroke Island tracking slightly ahead forecast.

Charitable organisations level of refuse tipping is tracking slightly ahead of forecast and will be monitored throughout the year.

Carcass collection services tracking slightly ahead of forecast.

Provision of waste disposal services to residents and businesses on South Stradbroke Island tracking slightly ahead of forecast.

760th Council Meeting 28 August 2018 44 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN Not Applicable. 7 FUNDING AND RESOURCING REQUIREMENTS Not Applicable. 8 RISK MANAGEMENT The following risk assessment applies to this report: Risk Number Description

Risk No. CO000435

Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS Not Applicable. 10 COUNCIL POLICIES § Debt Policy. § Revenue Policy. § City of Gold Coast Budget Review Policy.

11 DELEGATIONS Not Applicable. 12 COORDINATION AND CONSULTATION

Name and/or Title of the Stakeholder Consulted

Directorate or Organisation

Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Marilyn Hildebrandt Executive Coordinator Directorate Finances

Office of the OCOO Yes

13 STAKEHOLDER IMPACTS Not Applicable.

760th Council Meeting 28 August 2018 45 Water And Waste Committee Meeting 23 August 2018 Adopted Report ITEM 4 (Continued) WATER AND WASTE WASTE SERVICES FINANCIAL PERFORMANCE AS AT 31 JULY 2018 WSS382/343/08(P1) / FN334/176/18(P1) 14 TIMING Not Applicable. 15 CONCLUSION Waste Services Earnings before Interest and Tax (EBIT) for the period to 31 July 2018 is $0.05 million ahead of forecast, with both operating revenue and operating expenditure being below forecast. Water and Waste actively monitors performance to ensure its operations are undertaken in the most effective and efficient manner possible to provide value for money to the ratepayers of the City. This is achieved through rigorous internal processes which include detailed review of all projects to ensure only prudent and efficient expenditure is incurred. 16 RECOMMENDATION It is recommended that Council resolves as follows: That Council notes the Waste Services Monthly Financial Report for the period ended 31 July 2018. Author: Authorised by: Karen O’Brien Paul Heaton Manager Business Performance Director Water and Waste 14 August 2018 TRACKS REF: #71440372 COMMITTEE RECOMMENDATION WW18.0823.004 moved Cr Taylor seconded Cr PJ Young That Council notes the Waste Services Monthly Financial Report for the period ended 31 July 2018.

CARRIED


Attachment 4.1 Detailed Financial Management Report – 31 July 2018

Full Year

Actual Initial Bgt Var Var Initial Budget

31 July 2018 $'000 $000's $'000 % $'000RevenueWaste Utility Rate Revenue 6,797 7,133 (336) (4.7%) 83,990Refuse Tipping Fees 221 334 (113) (33.9%) 8,290Recycling Revenue 109 90 19 21.2% 1,083Fees and Charges 77 209 (131) (62.9%) 2,504Internal Tipping Charges 582 585 (2) (0.4%) 7,824Community Service Obligations 271 271 - 0.0% 3,250Interest on Outstanding Rates 1 13 (11) (90.0%) 150Interest on Investments 53 53 - 0.0% 630Contributions & Donations Revenue - - - 0.0% 378Other Operating Income - 4 (4) (100.0%) 44Total Operating Revenue 8,112 8,691 (579) (6.7%) 108,142

Operating ExpensesEmployee Expenses 639 682 43 6.3% 8,860Materials and Services 847 1,457 610 41.9% 15,847Council Corporate SLAs 229 229 0 0.0% 2,743Internal Directorate SLA 278 278 (0) (0.0%) 3,332Waste Collection Payments 2,168 2,183 16 0.7% 27,561Fleet and Plant 858 850 (8) (0.9%) 10,934Consultants 80 43 (38) (89.2%) 1,200Electricity 8 12 3 29.1% 149Insurance Premiums 7 7 0 0.0% 85Other Expenditure 208 208 (0) (0.0%) 2,500Total Operating Expenses 5,321 5,948 627 10.5% 73,211

Total Operating Profit 2,791 2,743 48 1.8% 34,931

Loss on Sale of Assets - - - 0.0% 0

Net Profit before Capital Revenue 2,791 2,743 48 175.8% 34,931

EBITDA 2,791 2,743 48 1.8% 34,931

Depreciation 717 717 0 0.0% 8,600

EBIT 2,075 2,026 48 2.4% 26,331Interest Expense (QTC Loan) 316 329 13 3.9% 3,945Interest Margin Expense 13 13 0 0.0% 152Income Tax Equivalents 546 638 92 14.5% 7,942NPAT 1,200 1,047 154 14.7% 14,292

Dividend 641 641 0 0.0% 7,691

Retained Earnings 559 406 154 37.9% 6,601

Waste ServicesFinancial Management Report

Year to Date


CLOSED SESSION LOCAL GOVERNMENT ACT 2009 AND SUPPORTING REGULATIONS PROCEDURAL MOTION moved Cr Boulton seconded Cr La Castra That the Committee move into Closed Session pursuant to section 275(1) of the Local Government Regulation 2012, for the consideration of the following item/s for the reason/s shown:-

Item Subject Reason

Not Applicable

PRESENTATION: 2017 Customer Satisfaction Survey

Budget matters

CARRIED

PROCEDURAL MOTION moved Cr PJ Young seconded Cr La Castra That the Committee move into Open Session.

CARRIED


Presentation pages 48 – 54 redacted due to confidential content


ITEM 5 GENERAL BUSINESS CUSTOMER HARDSHIP AND ASSISTANCE PROGRAMS WSS1125/213/01(P1) COMMITTEE RECOMMENDATION WW18.0823.005 moved Cr Taylor seconded Cr PJ Young That the Director of Water and Waste investigate, along with the rest of Council, the potential framework for improving Customer Hardship and Assistance Programs.

CARRIED UNANIMOUSLY


ITEM 6 GENERAL BUSINESS 2017 CUSTOMER SATISFACTION SURVEY WSS1125/324(P1) COMMITTEE RECOMMENDATION WW18.0823.006 moved Cr PJ Young seconded Cr Boulton That the presentation be noted and the Director prepare a report for the public related to the customer satisfaction survey.

CARRIED UNANIMOUSLY


ITEM 7 GENERAL BUSINESS WATER AND SEWERAGE ASSET MANAGEMENT WSS1125/343(P1) COMMITTEE RECOMMENDATION WW18.0823.007 moved Cr Tozer seconded Cr Taylor That a report regarding private Water and Sewerage Asset Management be prepared and returned to Water and Waste Committee for review.

CARRIED There being no further business the meeting closed at 11.40am.


These Pages

Numbered 1 to 58

Constitute The Adopted Report Of The Meeting

Of The Water and Waste Committee

Held Thursday 23 August 2018

Water and Waste Committee - City of Gold Coast · 8/23/2018 · WW18.0823.001. moved Cr Tozer...

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Transcript of Water and Waste Committee - City of Gold Coast · 8/23/2018 · WW18.0823.001. moved Cr Tozer...