Financial report - City of Swan

Annual Report 2019/20 69

Financial repor t

Glossary 70

Independent Auditors Repor t 71

Statement by the Chief Execut ive Of f icer 73

Financial overview for the year ended 30 June 2020 74

Statement of Comprehensive Income 74

Statement of Cash Flows 78

Statement of Rat ing Informat ion 78

Financial Per formance Indicators 79

Statement of Comprehensive Income (by nature or t ype) 82

Statement of Comprehensive Income (by program) 83

Statement of Financial Posi t ion 84

Statement of Changes in Equity 85

Statement of Cash Flows 86

Rate Set t ing Statement 87

Notes to and forming par t of the f inancial repor t 88

70 City of Swan

Glossar y The financial statements show how the City performed during the financial year and the overall position at the end of the financial year, 30 June 2020.

The financial statements are prepared by the City in accordance with Australian Accounting Standards as they apply to local government and in accordance with the Local Government Act 1995 and the Local Government (Financial Management) Regulations 1996.

The financial statements must be certified by the Chief Executive Officer and audited by an independent auditor.

The following terms and abbreviations are used throughout the statements.

EMRC – Eastern Metropolitan Regional Council

WALGA – Western Australian Local Government Association

DCP – Developer Contribution Plans

ESL – Emergency Services Levy

AASB – Australian Accounting Standards Board

LSL – Long Service Leave

GST – Goods and Services Tax

FBT – Fringe Benefits Tax

WATC – Western Australian Treasury Corporation

KMP – Key Management Personnel

FOGO – Food Organics Garden Organics

GRV – Gross Rental Value

UV – Unimproved Value

BRB – Builder Registration Board

BCITF – Building and Construction Training Fund

BSL – Building Services Levy

Auditor General

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7th Floor Albert Facey House 469 Wellington Street Perth MAIL TO: Perth BC PO Box 8489 Perth WA 6849 TEL: 08 6557 7500 FAX: 08 6557 7600

INDEPENDENT AUDITOR’S REPORT

To the Councillors of the City of Swan

Report on the Audit of the Financial Report

OpinionI have audited the annual financial report of the City of Swan which comprises the Statement of Financial Position as at 30 June 2020, and the Statement of Comprehensive Income by Nature or Type, Statement of Comprehensive Income by Program, Statement of Changes in Equity, Statement of Cash Flows and Rate Setting Statement for the year then ended, as well as notes comprising a summary of significant accounting policies and other explanatory information, and the Statement by the Chief Executive Officer.

In my opinion the annual financial report of the City of Swan: (i) is based on proper accounts and records; and(ii) fairly represents, in all material respects, the results of the operations of the City for the year

ended 30 June 2020 and its financial position at the end of that period in accordance withthe Local Government Act 1995 (the Act) and, to the extent that they are not inconsistentwith the Act, Australian Accounting Standards.

Basis for OpinionI conducted my audit in accordance with Australian Auditing Standards. My responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of my report. I am independent of the City in accordance with the Auditor General Act 2006 and the relevant ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the annual financial report. I have also fulfilled my other ethical responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

Emphasis of Matter – Basis of AccountingI draw attention to Notes 1 and 11 to the annual financial report, which describe the basis of accounting. The annual financial report has been prepared for the purpose of fulfilling the City’s financial reporting responsibilities under the Act, including the Local Government (Financial Management) Regulations 1996 (Regulations). My opinion is not modified in respect of these matters:

(i) Regulation 17A requires a local government to measure vested improvements at fair valueand the associated vested land at zero cost. This is a departure from AASB 16 Leaseswhich would have required the entity to measure the vested improvements also at zerocost.

(ii) In respect of the comparatives for the previous year ended 30 June 2019, Regulation 16 didnot allow a local government to recognise some categories of land, including land underroads, as assets in the annual financial report.

Responsibilities of the Chief Executive Officer and Council for the Financial ReportThe Chief Executive Officer (CEO) of the City is responsible for the preparation and fair presentation of the annual financial report in accordance with the requirements of the Act, the Regulations and, to the extent that they are not inconsistent with the Act, Australian Accounting Standards. The CEO is also responsible for such internal control as the CEO determines is necessary to enable the preparation of the annual financial report that is free from material misstatement, whether due to fraud or error.

Auditor General

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In my opinion the annual financial report of the City of Swan:(i) is based on proper accounts and records; and(ii) fairly represents, in all material respects, the results of the operations of the City for the year

ended 30 June 2020 and its financial position at the end of that period in accordance with the Local Government Act 1995 (the Act) and, to the extent that they are not inconsistent with the Act, Australian Accounting Standards.



(i) Regulation 17A requires a local government to measure vested improvements at fair value and the associated vested land at zero cost. This is a departure from AASB 16 Leases which would have required the entity to measure the vested improvements also at zero cost.

(ii) In respect of the comparatives for the previous year ended 30 June 2019, Regulation 16 did not allow a local government to recognise some categories of land, including land under roads, as assets in the annual financial report.



Auditor General

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In my opinion the annual financial report of the City of Swan: (i) is based on proper accounts and records; and(ii) fairly represents, in all material respects, the results of the operations of the City for the year

ended 30 June 2020 and its financial position at the end of that period in accordance withthe Local Government Act 1995 (the Act) and, to the extent that they are not inconsistentwith the Act, Australian Accounting Standards.



(i) Regulation 17A requires a local government to measure vested improvements at fair valueand the associated vested land at zero cost. This is a departure from AASB 16 Leaseswhich would have required the entity to measure the vested improvements also at zerocost.

(ii) In respect of the comparatives for the previous year ended 30 June 2019, Regulation 16 didnot allow a local government to recognise some categories of land, including land underroads, as assets in the annual financial report.


Auditor General

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In my opinion the annual financial report of the City of Swan:(i) is based on proper accounts and records; and(ii) fairly represents, in all material respects, the results of the operations of the City for the year

ended 30 June 2020 and its financial position at the end of that period in accordance with the Local Government Act 1995 (the Act) and, to the extent that they are not inconsistent with the Act, Australian Accounting Standards.



(i) Regulation 17A requires a local government to measure vested improvements at fair value and the associated vested land at zero cost. This is a departure from AASB 16 Leases which would have required the entity to measure the vested improvements also at zero cost.

(ii) In respect of the comparatives for the previous year ended 30 June 2019, Regulation 16 did not allow a local government to recognise some categories of land, including land under roads, as assets in the annual financial report.


72 City of SwanPage 2 of 2

In preparing the annual financial report, the CEO is responsible for assessing the City’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the State Government has made decisions affecting the continued existence of the City.

The Council is responsible for overseeing the City’s financial reporting process.

Auditor’s Responsibility for the Audit of the Financial ReportThe objectives of my audit are to obtain reasonable assurance about whether the annual financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the annual financial report.

A further description of my responsibilities for the audit of the annual financial report is located on the Auditing and Assurance Standards Board website at https://www.auasb.gov.au/auditors_responsibilities/ar4.pdf. This includes the identification and assessment of the risk of material misstatement due to fraud arising from management override of controls. This description forms part of my auditor’s report.

Report on Other Legal and Regulatory RequirementsIn accordance with the Local Government (Audit) Regulations 1996 I report that:

(i) In my opinion, the following material matter indicates a significant adverse trend in the financial position of the Shire:

a. The Asset Sustainability Ratio as reported in Note 33 of the annual financial report has been below the Department of Local Government, Sport and Cultural Industries’standard for the past 3 financial years;

(ii) All required information and explanations were obtained by me.(iii) All audit procedures were satisfactorily completed.(iv) In my opinion, the Asset Consumption Ratio and the Asset Renewal Funding Ratio included

in the annual financial report were supported by verifiable information and reasonable assumptions.

Other MatterThe financial ratios for 2018 in Note 33 of the annual financial report were audited by another auditor when performing their audit of the City for the year ending 30 June 2018. The auditor expressed an unmodified opinion on the annual financial report for that year.

Matters Relating to the Electronic Publication of the Audited Financial ReportThis auditor’s report relates to the annual financial report of the City of Swan for the year ended 30 June 2020 included on the City’s website. The City’s management is responsible for the integrity of the City’s website. This audit does not provide assurance on the integrity of the City’s website. The auditor’s report refers only to the annual financial report described above. It does not provide an opinion on any other information which may have been hyperlinked to/from this annual financial report. If users of the annual financial report are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited annual financial report to confirm the information contained in this website version of the annual financial report.

CAROLINE SPENCERAUDITOR GENERALFOR WESTERN AUSTRALIAPerth, Western Australia18 December 2020


CITY OF SWAN FINANCIAL REPORTFOR THE YEAR ENDED 30 JUNE 2020

74 City of Swan

FINANCIAL OVERVIEW FOR THE YEAR ENDED 30 JUNE 2020

The Annual Financial Report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (as they apply to local governments and not-for-profit entities), Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board, the Local Government Act 1995 and accompanying regulations. Material Accounting policies which have been adopted in the preparation of the financial report are stated in the notes and have been consistently applied unless stated otherwise. Except for cash flow and rate setting information, the report has been prepared on the accrual basis and is based on historical costs, modified, where applicable, by the measurement at fair value of the selected non-current assets, financial assets and liabilities. The statements are to be read in conjunction with the updated comparatives.

STATEMENT OF COMPREHENSIVE INCOME

The Statement of Comprehensive Income is prepared on an accrual basis. This process recognises income as it is earned and expenses as they are incurred. In addition it makes adjustments for unearned income, credit sales, pre-payments, accrued expenses and non-cash provisions (i.e. depreciation and leave entitlements). This method provides a more accurate reflection of the transactions which actually occurred during the accounting period, and is a better reflection of the actual business activities undertaken by the City.

REVENUE

The City’s total revenue of $245.9 million (2018/19 $235.6 million) consists of operational revenue of $197.7 million (2018/19 $191.4 million) and non-operational revenue of $48.2 million (2018/19 $44.2 million). Operating revenue increased by $6.3 million principally due to increases in operating grants, rate levies, service charges and other revenue. This is offset by reductions in interest and fees & charges. Revenue classified by Nature or Type identify the inputs by the type of revenue. These classifications are defined by Regulation under the Local Government Act WA.

A

B

C

D E F

OPERATING REVENUE BY NATURE OR TYPE OPERATING REVENUE BY NATURE OR TYPE

FINANCIAL OVERVIEW FOR THE YEAR ENDED 30 JUNE 2020

The Annual Financial Report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards (as they apply to local governments and not-for-profit entities), Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board, the Local Government Act 1995 and accompanying regulations. Material Accounting policies which have been adopted in the preparation of the financial report are stated in the notes and have been consistently applied unless stated otherwise. Except for cash flow and rate setting information, the report has been prepared on the accrual basis and is based on historical costs, modified, where applicable, by the measurement at fair value of the selected non-current assets, financial assets and liabilities. The statements are to be read in conjunction with the updated comparatives.

STATEMENT OF COMPREHENSIVE INCOME

The Statement of Comprehensive Income is prepared on an accrual basis. This process recognises income as it is earned and expenses as they are incurred. In addition it makes adjustments for unearned income, credit sales, pre-payments, accrued expenses and non-cash provisions (i.e. depreciation and leave entitlements). This method provides a more accurate reflection of the transactions which actually occurred during the accounting period, and is a better reflection of the actual business activities undertaken by the City.

REVENUE

The City’s total revenue of $245.9 million (2018/19 $235.6 million) consists of operational revenue of $197.7 million (2018/19 $191.4 million) and non-operational revenue of $48.2 million (2018/19 $44.2 million). Operating revenue increased by $6.3 million principally due to increases in operating grants, rate levies, service charges and other revenue. This is offset by reductions in interest and fees & charges. Revenue classified by Nature or Type identify the inputs by the type of revenue. These classifications are defined by Regulation under the Local Government Act WA.

A

B

C

D E F

OPERATING REVENUE BY NATURE OR TYPE


Non-operational revenue increased by $4.0 million compared to the prior year largely due to increased Developer Contributions and Non-Operating Grants. The City received $27.9 million ($24.1 million 2018/19) of infrastructure assets (i.e. roads, drainage and footpaths) as in-kind contributions by developers. These contributions are shown as non-ordinary activities income in the Statement of Comprehensive Income. The City takes on the responsibility for the maintenance of these assets and these contributions are taken into account in the City’s asset register. As part of the Developer Contribution Plans the City received cash contributions of $7.3 million ($7.9 million 2018/19) from developers. The funds received will be utilised for the construction of infrastructure in the Development Contribution Areas. The City also received $1.3million from the State Library in the form of gifted books.

Grants, Subsidies and Contributions for operating and non-operating expenses continued to be an important source of funds for the City. The City received $27.8 million (2018/19 $19.5 million) for the current financial year. $15.1 million ($10.8 million 2018/19) was received for operating activities and $12.7 million ($8.7 million 2018/19) for non-operating expenses. The following chart shows the breakdown of operational revenue by program (also defined by Regulation under the Local Government Act WA). Rate revenues and general purpose grants are classified in the program General Purpose Funding, whilst refuse collection charges are included in the Community Amenities program.

$m %

A - General Purpose 145.2 73.45%

B – Governance 2.4 1.21%

C - Law, Order and Public Safety 1.4 0.69%

D – Health 0.3 0.17%

E - Education and Welfare 3.5 1.78%

F - Housing 0.1 0.03%

G - Community Amenities 32.2 16.29%

H - Recreation and Culture 6.2 3.11%

I - Transport 2.2 1.13%

J - Economic Services 1.8 0.89%

K - Other Property and Services 2.5 1.25%

A

B C D

E F

G

H I J K

OPERATING REVENUE BY PROGRAM OPERATING REVENUE BY PROGRAM

Non-operational revenue increased by $4.0 million compared to the prior year largely due to increased Developer Contributions and Non-Operating Grants. The City received $27.9 million ($24.1 million 2018/19) of infrastructure assets (i.e. roads, drainage and footpaths) as in-kind contributions by developers. These contributions are shown as non-ordinary activities income in the Statement of Comprehensive Income. The City takes on the responsibility for the maintenance of these assets and these contributions are taken into account in the City’s asset register. As part of the Developer Contribution Plans the City received cash contributions of $7.3 million ($7.9 million 2018/19) from developers. The funds received will be utilised for the construction of infrastructure in the Development Contribution Areas. The City also received $1.3million from the State Library in the form of gifted books.

Grants, Subsidies and Contributions for operating and non-operating expenses continued to be an important source of funds for the City. The City received $27.8 million (2018/19 $19.5 million) for the current financial year. $15.1 million ($10.8 million 2018/19) was received for operating activities and $12.7 million ($8.7 million 2018/19) for non-operating expenses. The following chart shows the breakdown of operational revenue by program (also defined by Regulation under the Local Government Act WA). Rate revenues and general purpose grants are classified in the program General Purpose Funding, whilst refuse collection charges are included in the Community Amenities program.

$m %


B – Governance 2.4 1.21%


D – Health 0.3 0.17%


F - Housing 0.1 0.03%






A

B C D

E F

G

H I J K

OPERATING REVENUE BY PROGRAM

76 City of Swan

EXPENSES

The City’s operating expenditure for the financial year inclusive of borrowing costs was $169.5 million ($166.0 million 2018/19), an increase of $3.5 million over the prior year. Employee costs of $78.5 million ($75.2 million 2018/19) accounted for 46.3% of operating expenditures. The second largest contributor to expenditure was Depreciation on Non-Current Assets, which amounted to $42.8 million ($41.2 million 2018/19) or 25.3% of operating expenditure. This item reflects the consumption of the City's assets consisting of property, plant and equipment, and public infrastructure assets. Materials and Contracts, and Utility Charges represented the third and fourth largest items of expenditure respectively. Materials and Contracts came to $36.0 million ($38.2 million 2018/19) or 21.2% of operating costs with Utilities costing $6.8 million ($6.1 million 2018/19), representing 4.0% of operating expenditures. Expenses classified by Nature or Type identify the outputs by the type of expenditure. These classifications are defined by Regulation under the Local Government Act WA.

$m %

A - Employee Costs 78.5 46.3%

B - Other Expenditure 1.4 0.9%

C - Materials and Contracts 36.0 21.2%

D - Utility Charges 6.8 4.0%

E - Depreciation on Non-Current Assets 42.8 25.3%

F - Interest Expenses 1.5 0.9%

G - Insurance Expenses 2.4 1.4%

A

B C

D

E

F G

EXPENDITURE BY NATURE OR TYPE EXPENDITURE BY NATURE OR TYPE

EXPENSES

The City’s operating expenditure for the financial year inclusive of borrowing costs was $169.5 million ($166.0 million 2018/19), an increase of $3.5 million over the prior year. Employee costs of $78.5 million ($75.2 million 2018/19) accounted for 46.3% of operating expenditures. The second largest contributor to expenditure was Depreciation on Non-Current Assets, which amounted to $42.8 million ($41.2 million 2018/19) or 25.3% of operating expenditure. This item reflects the consumption of the City's assets consisting of property, plant and equipment, and public infrastructure assets. Materials and Contracts, and Utility Charges represented the third and fourth largest items of expenditure respectively. Materials and Contracts came to $36.0 million ($38.2 million 2018/19) or 21.2% of operating costs with Utilities costing $6.8 million ($6.1 million 2018/19), representing 4.0% of operating expenditures. Expenses classified by Nature or Type identify the outputs by the type of expenditure. These classifications are defined by Regulation under the Local Government Act WA.

$m %

A - Employee Costs 78.5 46.3%

B - Other Expenditure 1.4 0.9%

C - Materials and Contracts 36.0 21.2%

D - Utility Charges 6.8 4.0%

E - Depreciation on Non-Current Assets 42.8 25.3%

F - Interest Expenses 1.5 0.9%

G - Insurance Expenses 2.4 1.4%

A

B C

D

E

F G

EXPENDITURE BY NATURE OR TYPE


Operating expenditure by program, the City applies its funds to a wide range of services and programs. The major outlays inclusive of interest charges are for Transport $62.8 million ($40.4 million 2018/19) or 37.0% of spending. Recreation and Culture accounts for $35.9 million ($55.3 million 2018/19) or 21.2% of spending. Community Amenities $28.1 million ($26.2 million 2018/19) or 16.6%, community amenities includes waste management. The following chart shows the breakdown of operational expenditure (also defined by Regulation under the Local Government Act WA) by program inclusive of interest expenditure.

$m %


B - Governance 3.1 1.82%


D - Health 2.1 1.23%


F - Housing 0.1 0.05%






A B C D

E

F

G

H

I

J K

OPERATING EXPENDITURE BY PROGRAM OPERATING EXPENDITURE BY PROGRAM

Operating expenditure by program, the City applies its funds to a wide range of services and programs. The major outlays inclusive of interest charges are for Transport $62.8 million ($40.4 million 2018/19) or 37.0% of spending. Recreation and Culture accounts for $35.9 million ($55.3 million 2018/19) or 21.2% of spending. Community Amenities $28.1 million ($26.2 million 2018/19) or 16.6%, community amenities includes waste management. The following chart shows the breakdown of operational expenditure (also defined by Regulation under the Local Government Act WA) by program inclusive of interest expenditure.

$m %


B - Governance 3.1 1.82%


D - Health 2.1 1.23%


F - Housing 0.1 0.05%






A B C D

E

F

G

H

I

J K

OPERATING EXPENDITURE BY PROGRAM

78 City of Swan

OTHER COMPREHENSIVE INCOME

The statements recognise the fair value of property plant and equipment and all infrastructure assets. Regulation 17A of the Local Government (Financial Management) Regulations 1996, lays down a regulatory framework and mandatory timetable for revaluations. Vehicles and Plant were revalued in the 2019/20 financial year. Increments of $151,332 relate to the increase in the value of Vehicles and Plant. Increments of $472k relate to the City's share in the Eastern Metropolitan Regional Council. The total increase is shown as other comprehensive income in the Statement of Comprehensive Income and is not included in the calculation of the year’s net result.

STATEMENT OF CASH FLOWS

Cash resource management is a vital part of the financial management of the City. The Statement of Cash Flows discloses the cash generated from operations, non-operating payments or receipts, financing activities (debt) and the amount of the cash and cash equivalents available to the City. During the year the City received $216.8 million from operating activities ($193.0 million 2018/19), an increase of $23.8 million compared to the prior year. The most notable items were Rates, Fees and Charges, and Operating Grants, Subsidies and Contributions representing $199.1 million of inflows. Cash outflows for operating activities increased by $3.9 million in comparison to the prior year, totalling $123.4 million for this financial year ($119.5 million 2018/19). Significant items were Employee Costs, Materials and Contracts, and Utilities accounting for $111.4 million of cash outflows. The net cash provided by operating activities was $93.3 million which represents an increase of $19.7 million on the previous year ($73.6 million 2018/19). Cash utilised for the acquisition of plant and equipment and the construction of infrastructure assets was $92.3 million ($54.1 million 2018/19), an increase of $38.2 million.

STATEMENT OF FINANCIAL POSITION (BALANCE SHEET)

The purpose of the Statement of Financial Position is to provide a “snap-shot” of the overall financial position of the City. This statement is constructed according to well defined accounting principles which are embodied in the Australian Accounting Standards. The ratepayer equity (net community assets) in the City can be calculated by deducting total liabilities from total assets. The Statement discloses transactions as current and non-current assets, current and non-current liabilities and equity. At the end of the financial year the City had fixed assets of $2.1 billion ($2.1 billion 2018/19) under management to provide services and facilities to the community. There were borrowings of $39.2 million ($36.4 million in 2018/19) and reserves of $145.6 million ($141.8 million in 2018/19). The value of the City’s investment in the Eastern Metropolitan Regional Council was $73.1 million as at 30 June 2020. Net community assets were $2.2 billion compared to $2.2 billion in 2018/19.

STATEMENT OF RATING INFORMATION (NOTE 26)

The Local Government Act 1995 allows Local Governments to adopt differential rates and the City of Swan has levied differential rates for a number of years. This has been to allow an equitable basis of levying rates on the diverse types of rateable properties within the City. For the 2019/20 financial year the City of Swan increased differential rates by 4.4%. Properties in the urban suburbs of the City have rates based on the Gross Rental Values (GRVs) as determined by the Valuer General once every three years. The last revaluation was undertaken during 2017/18 financial year.


Properties in rural areas have rates based on their Unimproved Values (UVs) as determined each year by the Valuer General. Concessional rates are set for Farmland (previously Urban and Swan Valley Farmland), with the highest differential rate applied to the UV Commercial differential rate type. Total general rates levied in 2019/20 were $125.3 million ($122.9 million 2018/19) which was slightly lower than the budget of $126.1 million. The City also applies a specified area rate for drainage and infrastructure works in four categories; Midland District Drainage, Hazelmere/Guildford District Drainage, GRV - Hazelmere Industrial Area Infrastructure and UV - Hazelmere Industrial Area Infrastructure. These rates raised $2.8 million in 2019/20 ($2.8 million 2018/19).

FINANCIAL PERFORMANCE INDICATORS

Measures the percentage of net rate revenue allocated to the repayment of loans.

1

2

3

4

5

6

7

8

9

10

2015/16 2016/17 2017/18 2018/19 2019/20

Per

cen

tag

e

Financial Year

Debt Costs to Rates Income


Properties in rural areas have rates based on their Unimproved Values (UVs) as determined each year by the Valuer General. Concessional rates are set for Farmland (previously Urban and Swan Valley Farmland), with the highest differential rate applied to the UV Commercial differential rate type. Total general rates levied in 2019/20 were $125.3 million ($122.9 million 2018/19) which was slightly lower than the budget of $126.1 million. The City also applies a specified area rate for drainage and infrastructure works in four categories; Midland District Drainage, Hazelmere/Guildford District Drainage, GRV - Hazelmere Industrial Area Infrastructure and UV - Hazelmere Industrial Area Infrastructure. These rates raised $2.8 million in 2019/20 ($2.8 million 2018/19).

FINANCIAL PERFORMANCE INDICATORS

Measures the percentage of net rate revenue allocated to the repayment of loans.

1

2

3

4

5

6

7

8

9

10

2015/16 2016/17 2017/18 2018/19 2019/20

Per

cen

tag

e

Financial Year


80 City of Swan

The net annual growth of rate revenue compared with loan repayments each year.

Measures the percentage of total operating revenue allocated to the repayment of loans.

1

2

3

4

5

6

7

8

9

10

102030405060708090

100110120130140

2015/16 2016/17 2017/18 2018/19 2019/20

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Rates Income/Loan Repayments

RATE REVENUE LOAN REPAYMENTS

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2015/16 2016/17 2017/18 2018/19 2019/20

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Debt Servicing Ratio Debt Service Costs/Operating Revenue

Compares total principal outstanding on loans at the end of each financial year.

Compares total operating revenue over the current and previous financial years.

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2015/16 2016/17 2017/18 2018/19 2019/20

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Debt Servicing RatioDebt Service Costs/Operating Revenue

The net annual growth of rate revenue compared with loan repayments each year.

Measures the percentage of total operating revenue allocated to the repayment of loans.

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2

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102030405060708090

100110120130140

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$

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RATE REVENUE LOAN REPAYMENTS

0

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2015/16 2016/17 2017/18 2018/19 2019/20

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Debt Servicing Ratio Debt Service Costs/Operating Revenue



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2015/16 2016/17 2017/18 2018/19 2019/20

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Operating Revenue

82 City of Swan

STATEMENT OF COMPREHENSIVE INCOME BY NATURE OR TYPE FOR THE YEAR ENDED 30 JUNE 2020

2020 2020 2019NOTE Actual Budget Actual

$ $ $RevenueRates 26(a) 131,965,253 132,377,810 130,456,543Operating grants, subsidies and contributions 2(a) 15,141,453 7,365,440 10,818,921Fees and charges 2(a) 39,513,752 41,362,150 40,497,851Service charges 26(c) 413,979 407,430 700Interest earnings 2(a) 6,662,860 7,017,980 6,793,883Other revenue 4,005,772 2,585,250 2,861,718

197,703,069 191,116,060 191,429,616

ExpensesEmployee costs (78,542,247) (81,602,822) (75,248,272)Materials and contracts (36,005,898) (37,621,222) (38,203,935)Utility charges (6,751,443) (7,444,536) (6,065,967)Depreciation on non-current assets 11(b) (42,798,213) (43,998,720) (41,197,785)Interest expenses 2(b) (1,499,700) (1,695,860) (1,805,869)Insurance expenses (2,423,215) (2,748,475) (2,194,957)Other expenditure (1,447,895) (1,735,950) (1,302,612)

(169,468,611) (176,847,585) (166,019,397)28,234,458 14,268,475 25,410,219

Non-operating grants, subsidies and contributions 12,658,710 8,972,970 8,692,967Non-operating gifted assets from developers: other 25,271,274 12,750,000 21,455,722Developers contribution plans: cash 7,312,246 10,776,290 7,927,065Developers contribution plans: in kind 2,581,044 5,868,000 2,636,417Non-operating gifted assets from state library 1,262,903 - - Land ceded to the crown (2,045,809) (504,890) (1,979,004)Contribution to state infrastructure - bridge (2,500,000) - - Contribution to state infrastructure - street lighting (1,083,828) - - Profit on asset disposals 11(a) 402,959 238,000 454,707(Loss) on asset disposals 11(a) (64,727) (2,836,520) (1,590,090)Profit/(loss) on investments 21 555,704 - 1,552Share of profit of equity accounted investee 24 (1,782,645) 5,000,000 4,583,216Unrealised gain investment in WALGA house 2,304 - 16,403

42,570,135 40,263,850 42,198,955

Net result for the period 70,804,593 54,532,325 67,609,174

Other comprehensive income

Items that will not be reclassified subsequently to profit or lossChanges in asset revaluation surplus 13 622,985 - 85,301

Total other comprehensive income for the period 622,985 - 85,301

Total comprehensive income for the period 71,427,578 54,532,325 67,694,475

This statement is to be read in conjunction with the accompanying notes.

STATEMENT OF COMPREHENSIVE INCOME BY NATURE OR TYPE FOR THE YEAR ENDED 30 JUNE 2020


STATEMENT OF COMPREHENSIVE INCOME BY PROGRAM FOR THE YEAR ENDED 30 JUNE 2020


$ $ $RevenueGovernance 2,392,200 2,302,260 2,547,867General purpose funding 145,218,515 142,788,851 143,494,044Law, order, public safety 1,358,170 1,302,150 998,321Health 336,879 300,000 347,205Education and welfare 3,518,847 3,906,041 3,783,147Housing 52,300 66,000 59,730Community amenities 32,214,631 27,025,000 26,268,954Recreation and culture 6,151,699 7,490,420 7,760,148Transport 2,233,655 1,844,350 2,034,597Economic services 1,750,242 1,598,000 1,705,831Other property and services 2,475,931 2,492,988 2,429,772

197,703,069 191,116,060 191,429,616

ExpensesGovernance (11,409,979) (11,934,087) (16,135,029)General purpose funding (3,087,603) (2,911,783) (2,008,060)Law, order, public safety (5,430,045) (5,946,896) (5,078,871)Health (2,080,234) (2,157,471) (1,935,377)Education and welfare (8,425,369) (9,964,271) (8,167,816)Housing (85,686) (106,606) (91,435)Community amenities (27,758,891) (28,452,803) (25,761,478)Recreation and culture (35,370,099) (38,633,437) (54,665,318)Transport (62,508,481) (64,467,872) (40,138,917)Economic services (6,656,931) (7,358,014) (6,070,943)Other property and services (5,155,593) (3,218,485) (4,160,284)

(167,968,911) (175,151,725) (164,213,528)

Finance CostsGovernance (26,204) (26,820) (32,339)Community amenities (384,887) (389,940) (438,235)Recreation and culture (531,246) (480,330) (662,707)Transport (262,803) (470,720) (297,100)Other property and services (294,560) (328,050) (375,488)

17(b) (1,499,700) (1,695,860) (1,805,869)28,234,458 14,268,475 25,410,219

Non-operating grants, subsidies and contributions 12,658,710 8,972,970 8,692,967Non-operating gifted assets from developers: other 25,271,274 12,750,000 21,455,722Developers contribution plans: cash 7,312,246 10,776,290 7,927,065Developers contribution plans: in kind 2,581,044 5,868,000 2,636,417Non-operating gifted assets from state library 1,262,903 - - Land ceded to the crown (2,045,809) (504,890) (1,979,004)Contribution to state infrastructure - bridge (2,500,000) - - Contribution to state infrastructure - street lighting (1,083,828) - - Profit on asset disposals 11(a) 402,959 238,000 454,707(Loss) on asset disposals 11(a) (64,727) (2,836,520) (1,590,090)Profit/(loss) on investments 21 555,704 - 1,552Share of profit of equity accounted investee 24 (1,782,645) 5,000,000 4,583,216Unrealised gain investment in WALGA house 2,304 - 16,403

42,570,135 40,263,850 42,198,955

Net result for the period 70,804,593 54,532,325 67,609,174

Other comprehensive income

Items that will not be reclassified subsequently to profit or lossChanges in asset revaluation surplus 13 622,985 - 85,301

Total other comprehensive income for the period 622,985 - 85,301

Total comprehensive income for the period 71,427,578 54,532,325 67,694,475


STATEMENT OF COMPREHENSIVE INCOME BY PROGRAM FOR THE YEAR ENDED 30 JUNE 2020

84 City of Swan

STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020

NOTE 2020 2019$ $

CURRENT ASSETSCash and cash equivalents 3 42,853,275 22,970,288Trade and other receivables 6 17,077,449 16,309,329Other financial assets 5 167,664,220 167,871,205Inventories 7 572,883 522,572Other assets 8 1,590,278 1,228,469Assets classified as held for sale 8 5,810,269 5,810,269TOTAL CURRENT ASSETS 235,568,374 214,712,132

NON-CURRENT ASSETSTrade and other receivables 6 2,743,609 2,298,631Other financial assets 5 12,102,446 464,363Inventories 7 1,262,903 - Investment in associate 24 73,128,146 76,392,781Property, plant and equipment 9 528,244,871 516,881,474Infrastructure 10 1,502,019,668 1,464,907,903Right of use assets 12(a) 143,536 - TOTAL NON-CURRENT ASSETS 2,119,645,179 2,060,945,152

TOTAL ASSETS 2,355,213,553 2,275,657,284

CURRENT LIABILITIESTrade and other payables 14 21,794,852 14,501,296Contract liabilities 15 25,899,466 - Lease liabilities 16 83,295 - Borrowings 17 7,069,546 6,768,036Employee related provisions 18 16,947,500 15,116,273TOTAL CURRENT LIABILITIES 71,794,659 36,385,605

NON-CURRENT LIABILITIESContract liabilities 15 42,110,830 4,169,826Lease liabilities 16 61,396 - Borrowings 17 32,160,282 29,623,828Employee related provisions 18 1,853,697 1,688,083TOTAL NON-CURRENT LIABILITIES 76,186,205 35,481,737

TOTAL LIABILITIES 147,980,864 71,867,342

NET ASSETS 2,207,232,685 2,203,789,942

EQUITYRetained surplus 1,087,957,192 1,088,951,274Reserves - cash backed 4 145,642,139 141,828,299Revaluation surplus 13 973,633,354 973,010,369TOTAL EQUITY 2,207,232,685 2,203,789,942


STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2020


STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020

RESERVESRETAINED CASH REVALUATION TOTAL

NOTE SURPLUS BACKED SURPLUS EQUITY$ $ $ $

Balance as at 1 July 2018 1,041,002,649 122,167,750 972,925,068 2,136,095,467

Comprehensive incomeNet result for the period 67,609,174 - - 67,609,174

Other comprehensive income - - 85,301 85,301Total comprehensive income 67,609,174 - 85,301 67,694,475

Transfers from reserves 4 22,415,027 (22,415,027) - - Transfers to reserves 4 (42,075,576) 42,075,576 - -

Balance as at 30 June 2019 1,088,951,274 141,828,299 973,010,369 2,203,789,942

Change in accounting policy 29 (67,984,835) - - (67,984,835)Restated total equity at 1 July 2019 1,020,966,439 141,828,299 973,010,369 2,135,805,107

Comprehensive incomeNet result for the period 70,804,593 - - 70,804,593

Other comprehensive income - - 622,985 622,985Total comprehensive income 70,804,593 - 622,985 71,427,578

Transfers from reserves 4 40,049,910 (40,049,910) - - Transfers to reserves 4 (43,863,750) 43,863,750 - -

Balance as at 30 June 2020 1,087,957,192 145,642,139 973,633,354 2,207,232,685


STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2020

86 City of Swan

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020


$ $ $CASH FLOWS FROM OPERATING ACTIVITIESReceiptsRates 137,251,750 132,060,720 129,131,954Operating grants, subsidies and contributions 22,339,809 7,365,441 9,586,342Fees and charges 39,513,752 41,262,150 40,497,851Service charges 413,979 307,430 701Interest received 6,662,860 7,017,980 6,793,883Goods and services tax received 6,572,698 5,669,167 4,168,698Other revenue 3,999,220 2,585,249 2,861,718

216,754,068 196,268,137 193,041,147PaymentsEmployee costs (76,114,077) (81,302,822) (74,640,926)Materials and contracts (28,513,768) (36,543,332) (29,403,873)Utility charges (6,751,443) (7,389,537) (6,065,967)Interest expenses (1,499,700) (1,695,860) (1,805,869)Insurance paid (2,423,215) (2,748,475) (2,194,957)Goods and services tax paid (6,654,422) (5,327,201) (4,072,453)Other expenditure (1,447,895) (1,735,950) (1,302,612)

(123,404,520) (136,743,177) (119,486,657)Net cash provided by (used in) operating activities 19 93,349,548 59,524,960 73,554,490

CASH FLOWS FROM INVESTING ACTIVITIESPayments for development of assets held for sale - - (718,515)Payments for purchase of property, plant & equipment 9 (25,475,727) (45,240,641) (23,694,805)Payments for construction of infrastructure 10 (66,815,682) (70,852,600) (30,400,160)Developers contributions: cash 5,885,855 7,927,065Non-operating grants, subsidies and contributions 18,048,201 19,688,151 8,656,261Proceeds from financial assets at amortised cost -term deposits (11,500,000) - (36,899,999)Transfer from trust funds - - 36,706Dividends received 1,953,643Bonds and deposit movements (519,850) - 663,083Proceeds from financial assets at amortised cost -self supporting loans 71,205 71,205 98,665Proceeds from disposal of financial assets 21 555,704 - 1,552Proceeds from sale of property, plant & equipmen 11(a) 1,666,574 11,356,480 4,271,861Net cash provided by (used in)

investment activities (76,130,077) (84,977,405) (70,058,286)

CASH FLOWS FROM FINANCING ACTIVITIESRepayment of borrowings 17(b) (6,768,036) (7,183,019) (7,041,643)

Payments for principal portion of lease liabilities 16 (157,816) - - ESL Movement (16,632) (500,000) 84,362Proceeds from new borrowings 17(b) 9,606,000 9,606,000 - Net cash provided by (used In)

financing activities 2,663,516 1,922,981 (6,957,281)

Net increase (decrease) in cash held 19,882,987 (23,529,464) (3,461,077)Cash at beginning of year 22,970,288 161,838,481 26,431,365Cash and cash equivalentsat the end of the year 19 42,853,275 138,309,017 22,970,288


STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2020


RATE SETTING STATEMENT FOR THE YEAR ENDED 30 JUNE 2020


$ $ $OPERATING ACTIVITIESNet current assets at start of financial year - surplus/(deficit) 44,849,198 19,205,236 37,207,149

44,849,198 19,205,236 37,207,149

Revenue from operating activities (excluding rates)Governance 2,405,491 2,302,260 2,547,867General purpose funding 19,939,068 13,238,127 20,643,645Law, order, public safety 1,358,170 1,302,150 998,321Health 336,879 300,000 347,205Education and welfare 3,518,847 3,906,041 3,783,147Housing 52,300 66,000 59,730Community amenities 32,214,631 27,025,000 26,268,954Recreation and culture 6,151,699 7,490,420 7,760,148Transport 2,233,655 1,844,350 2,034,597Economic services 1,750,242 1,598,000 1,705,831Other property and services 2,859,046 2,730,989 2,644,715

72,820,028 61,803,337 68,794,160Expenditure from operating activitiesGovernance (11,436,183) (11,960,907) (16,457,300)General purpose funding (3,087,603) (2,911,783) (2,008,060)Law, order, public safety (5,430,045) (5,946,896) (5,081,918)Health (2,080,234) (2,157,471) (1,938,527)Education and welfare (8,424,625) (9,964,271) (8,187,996)Housing (85,686) (106,606) (91,435)Community amenities (33,773,415) (29,347,633) (28,178,717)Recreation and culture (35,901,345) (41,825,967) (56,299,396)Transport (62,836,011) (65,062,912) (40,458,292)Economic services (6,656,931) (7,358,014) (6,111,313)Other property and services (5,450,153) (3,546,536) (4,535,773)

(175,162,231) (180,188,996) (169,348,727)

Non-cash amounts excluded from operating activities 27 39,529,144 47,207,218 45,713,241Amount attributable to operating activities (17,963,861) (51,973,205) (17,634,177)

INVESTING ACTIVITIESNon-operating grants, subsidies and contributions 2(a) 47,823,275 38,367,260 40,712,171Proceeds from disposal of assets 11(a) 1,666,574 11,356,480 1,732,430Proceeds from financial assets at amortised cost - self supporting loans 71,204 71,205 98,665Purchase of property, plant and equipment 9 (25,475,727) (45,240,641) (23,694,804)Purchase and construction of infrastructure 10 (66,815,682) (88,965,708) (52,513,294)Amount attributable to investing activities (42,730,356) (84,411,404) (33,664,832)

FINANCING ACTIVITIES

Repayment of borrowings 17 (6,768,036) (7,183,019) (7,041,643)Proceeds from borrowings 17 9,606,000 9,606,000 - Payments for principal portion of lease liabilities 16 (157,816) - - Transfers to reserves (restricted assets) 4 (43,863,750) (46,239,897) (42,075,576)Transfers from reserves (restricted assets) 4 40,049,910 50,713,961 22,415,027Amount attributable to financing activities (1,133,692) 6,897,045 (26,702,192)

Surplus/(deficit) before imposition of general rates (61,827,909) (129,487,564) (78,001,201)Total amount raised from general rates 26 125,279,447 129,550,724 122,850,399Surplus/(deficit) after imposition of general rates 27 63,451,538 63,160 44,849,198


RATE SETTING STATEMENT FOR THE YEAR ENDED 30 JUNE 2020

88 City of Swan

NOTES TO AND FORMING PART OF THE FINANCIAL REPORT FOR THE YEAR ENDED 30 JUNE 2020

1. BASIS OF PREPARATION

The financial report comprises general purpose financial Accounting policies which have been adopted in the statements which have been prepared in accordance with preparation of this financial report have been consistently Australian Accounting Standards (as they apply to local applied unless stated otherwise. Except for cash flow and governments and not-for-profit entities) and Interpretations rate setting information, the report has been prepared on of the Australian Accounting Standards Board, and the Local the accrual basis and is based on historical costs, modified, Government Act 1995 and accompanying regulations. where applicable, by the measurement at fair value of

selected non-current assets, financial assets and liabilities.AMENDMENTS TO LOCAL GOVERNMENT (FINANCIAL MANAGEMENT) REGULATIONS 1996 NEW ACCOUNTING STANDARDS FOR APPLICATION INThe Local Government (Financial Management) Regulations FUTURE YEARS1996 take precedence over Australian Accounting Standards. On 1 July 2020 the following new accounting standards are toPrior to 1 July 2019, Financial Management Regulation 16 be adopted:arbitrarily prohibited a local government from recognising as - AASB 1059 Service Concession Arrangements: Grantorsassets Crown land that is a public thoroughfare, i.e. land - AASB 2018-7 Amendments to Australian Accounting under roads, and land not owned by but under the control or Standards - Materialitymanagement of the local government, unless it is a golf course, showground, racecourse or recreational facility of State or AASB 1059 Service Concession Arrangements: Grantors is regional significance. Consequently, some assets pertaining not expected to impact the financial report.to vested land, including land under roads acquired on or after 1 July 2008, were not recognised in previous financial Specific impacts of AASB 2018-7 Amendments to Australian reports of the City. This was not in accordance with the Accounting Standards - Materiality, have not been identified.requirements of AASB 1051 Land Under Roads paragraph 15 and AASB 116 Property, Plant and Equipment paragraph 7. CRITICAL ACCOUNTING ESTIMATES

The preparation of a financial report in conformity with From 1 July 2019, the City has applied AASB 16 Leases Australian Accounting Standards requires management to which requires leases to be included by lessees in the make judgements, estimates and assumptions that effect the statement of financial position. Also, the Local Government application of policies and reported amounts of assets and (Financial Management) Regulations 1996 have been amended liabilities, income and expenses.to specify that vested land is a right-of-use asset to be measured at cost. All right-of-use assets (other than vested The estimates and associated assumptions are based on improvements) under zero cost concessionary leases are historical experience and various other factors that are measured at zero cost (i.e. not included in the statement of believed to be reasonable under the circumstances; the financial position) rather than at fair value. The exception is results of which form the basis of making the judgements vested improvements on concessionary land leases such as about carrying values of assets and liabilities that are not roads, buildings or other infrastructure which continue to be readily apparent from other sources. Actual results may differ reported at fair value, as opposed to the vested land which is from these estimates.measured at zero cost. The measurement of vested improvements at fair value is a departure from AASB 16 THE LOCAL GOVERNMENT REPORTING ENTITYwhich would have required the City to measure any All funds through which the City controls resources to carry vested improvements at zero cost. on its functions have been included in the financial statements

forming part of this financial report.The City has accounted for the removal of the vested land values associated with vested land previously recognised by In the process of reporting on the local government as a single removing the land value and associated revaluation reserve as unit, all transactions and balances between those funds (for at 1 July 2019. The comparative year amounts have been example, loans and transfers between funds) have been retained as AASB 16 does not require comparatives to be eliminated. restated in the year of transition.

All monies held in the Trust Fund are excluded from Therefore the departure from AASB 1051 and AASB 16 in the financial statements. A separate statement of those respect of the comparatives for the year ended 30 June 2019 monies appears at Note 30 to these financial statements.remains.




2. REVENUE AND EXPENSES

REVENUE RECOGNITION POLICY

Recognition of revenue is dependant on the source of revenue and the associated terms and conditions associated with each source of revenue and recognised as follows:

Revenue Category Nature of goods and services

Timing of revenue recognition until 30 June

2019Timing of revenue

recognition from 1 July 2019Rates • General rates & rates charged for

specific defined purposes.When rates notice is issued. When rates notice is issued.

Operating Grants, Subsidies and Contributions

• Community events, minor facilities, research, design, planning evaluation and services.• General appropriations and contributions with no reciprocal commitment.

On receipt of funds. Income from grants that are enforceable and with sufficiently specific performance obligations is recognised when the City satisfies the performance obligations by achieving the project milestones. Income from grants without any sufficiently specific performance obligations, or that are not enforceable, is recognised when the City has an unconditional right to receive cash which usually coincides with receipt of cash.

Non-Operating Grants, Subsidies and Contributions

• Construction or acquisition of recognisable non-financial assets to be controlled by the local government.

On receipt of funds. Capital grants are recognised as income when the City achieves milestones specified in the grant agreement.

Fees and Charges

• Building, planning, development and animal management, having the same nature as a licence regardless of naming.• Compliance safety check.• Regulatory food, health and safety.• Kerbside collection service.• Waste treatment, recycling and disposal service at disposal sites.• Permission to use facilities and runway.• Gym and pool membership.• Cemetery services, library fees, reinstatements and private works.• Aviation fuel, kiosk and visitor centre stock.• Fines issued for breaches of local l

When fee or charge is raised in relation an event or service occurring, or upon receipt of funds.

At a point in time (or over a relatively short period of time) when the services have been provided and payments are received.

Other Revenue • Sale of scrap materials.• Insurance claims.• Commissions on licencing and ticket sales.

When the significant risks and rewards of ownership transfer to the purchaser and can be measured reliably, or upon receipt of funds.

At a point in time when the goods have been transferred and payments are received, or upon receipt of funds.


90 City of Swan


2. REVENUE AND EXPENSES

(a) Grant revenueGrants, subsidies and contributions are included as both operating and non-operating revenues in the Statement of Comprehensive Income:

2020 2020 2019Actual Budget Actual

$ $ $Operating grants, subsidies and contributionsGovernance - - 130,080General purpose funding 5,631,770 3,060,000 5,870,472Law, order, public safety 359,548 375,000 415,453Education and welfare 3,077,866 3,285,540 3,292,113Community amenities 4,904,300 - - Recreation and culture 34,000 37,000 29,000Transport 875,385 407,900 621,422Economic services - - 50,000Other property and services 258,584 200,000 410,381

15,141,453 7,365,440 10,818,921Non-operating grants, subsidies and contributionsGovernance 167,820 228,880 168,873Law, order, public safety 84,702 - 223,499Community amenities 9,893,290 16,644,290 10,562,070Recreation and culture 417,790 1,100,000 1,267,582Transport 37,259,673 20,394,090 28,490,147

47,823,275 38,367,260 40,712,171

Total grants, subsidies and contributions 62,964,728 45,732,700 51,531,092

Fees and chargesGovernance 327,224 502,800 366,538General purpose funding 433,016 372,500 407,060Law, order, public safety 534,672 474,720 513,825Health 334,379 300,000 347,205Education and welfare 422,180 542,500 490,531Housing 52,300 66,000 59,730Community amenities 26,820,790 26,969,000 26,114,784Recreation and culture 5,875,696 7,428,920 7,662,570Transport 1,329,314 1,435,500 1,280,192Economic services 1,724,076 1,583,000 1,647,280Other property and services 1,660,105 1,687,210 1,608,136

39,513,752 41,362,150 40,497,851

SIGNIFICANT ACCOUNTING POLICIESGrants, subsidies and contributions Fees and ChargesOperating grants, subsidies and contributions are grants, Revenue (other than service charges) from the use of subsidies or contributions that are not non-operating in facilities and charges made for local government nature. services, sewerage rates, rentals, hire charges, fee for Non-operating grants, subsidies and contributions are service, photocopying charges, licences, sale of goodsamounts received for the acquisition or construction of or information, fines, penalties and administration fees. recognisable non-financial assets to be controlled by thelocal government.




2. REVENUE AND EXPENSES (Continued)

2020 2020 2019(a) Revenue (Continued) Actual Budget Actual

$ $ $Contracts with customers and transfersfor recognisable non-financial assetsRevenue from contracts with customers and transfersto enable the acquisition or construction of recognisablenon-financial assets to be controlled by the Citywas recognised during the year for the following natureor types of goods or services:

Non-operating grants, subsidies and contributions 47,823,274 38,367,260 40,712,17147,823,274 38,367,260 40,712,171

Revenue from contracts with customers and transfersto enable the acquisition or construction of recognisable non-financial assets to be controlled by the Cityis comprised of:

Other revenue from performance obligations satisfied during the year 47,823,274 38,367,260 40,712,17147,823,274 38,367,260 40,712,171

Information about receivables, contract assets and contract liabilities from contracts with customers along withfinancial assets and associated liabilities arising from transfersto enable the acquisition or construction of recognisablenon financial assets is:

Trade and other receivables from contracts with customers 2,095,217 - 1,143,548Contract liabilities from contracts with customers 72,729,987 - 4,169,826

Contract assets primarily relate to the City's right to consideration for work completed but not billed at 30 June 2020.Assets associated with contracts with customers were not subject to an impairment charge.Impairment of assets associated with contracts with customers are detailed at Note 2 (b) under 'Other expenditure'.Contract liabilities for contracts with customers primarily relate to grants with performance obligations received inadvance, for which revenue is recognised over time as the performance obligations are met.Information is not provided about remaining performance obligations for contracts with customers that had an original expected duration of one year or less.Consideration from contracts with customers is included in the transaction price. Performance obligations in relation to contract liabilities from transfers for recognisable non financial assets are satisfied as project milestones are met or completion of construction or acquisition of the asset. All associated performance obligations are expected to be met over the next 12 months.


92 City of Swan


2. REVENUE AND EXPENSES (Continued)

2020 2020 2019(a) Revenue (Continued) Actual Budget Actual

$ $ $Revenue from statutory requirementsRevenue from statutory requirements was recognised duringthe year for the following nature or types of goods or services:

General rates 125,279,447 129,550,724 122,850,399Specified area rates 2,848,029 2,827,085 2,790,308Service charges 413,979 407,430 701Fines 537,468 587,500 634,291Developer contributions 6,946,821 14,952,909 6,122,778

136,025,744 148,325,648 132,398,477

Interest earningsInterest on reserve funds 2,947,806 2,998,290 3,061,082Rates instalment and penalty interest (refer Note 26 (e)) 1,263,899 1,250,000 1,228,113Other interest earnings 2,451,156 2,769,690 2,504,688

6,662,860 7,017,980 6,793,883

SIGNIFICANT ACCOUNTING POLICIESInterest earnings Interest earnings (continued)Interest income is calculated by applying the effective Interest income is presented as finance income where interest rate to the gross carrying amount of a financial it is earned from financial assets that are held for cashasset except for financial assets that subsequently become management purposes.credit-impairec. For credit-impaired financial assets the effective interest rate is applied to the net carrying amount of the financial asset (after deduction of the loss allowance).

2. REVENUE AND EXPENSES (Continued)2020 2020 2019

(b) Expenses Note Actual Budget Actual$ $ $

Auditors remuneration- Audit of the Annual Financial Report 58,000 112,100 21,340- Audit of Grant Acquittals 1,600 - 1,600

59,600 112,100 22,940

Interest expenses (finance costs)Borrowings 17 1,473,496 1,669,036 1,773,530Interest - Self Supporting Loan 17 26,204 26,824 32,339

1,499,700 1,695,860 1,805,869Other expenditure

contracts with customers 968,249 600,222 600,222Sundry expenses 479,646 1,135,728 702,390

Impairment loss on trade and other receivables from




3. CASH AND CASH EQUIVALENTS NOTE 2020 2019$ $

Cash at bank and on hand 42,853,275 22,970,288Total cash and cash equivalents 42,853,275 22,970,288

Term deposits 5 179,300,000 167,800,000

Total cash and cash equivalents, and term deposits 222,153,275 190,770,288

RestrictionsThe following classes of assets have restrictionsimposed by regulations or other externally imposedrequirements which limit or direct the purpose for which the resources may be used:

- Term deposits 154,681,605 145,998,125154,681,605 145,998,125

The restricted assets are a result of the following specificpurposes to which the assets may be used:

Reserves - cash backed 4 145,642,139 141,828,299Contract liabilities from contracts with customers 15 9,039,466 4,169,826Total restricted assets 154,681,605 145,998,125

SIGNIFICANT ACCOUNTING POLICIESCash and cash equivalents Restricted assetsCash and cash equivalents include cash on hand, cash at Restricted asset balances are not available for general bank, deposits available on demand with banks and other use by the local government due to externally imposedshort term, highly liquid investments with original restrictions. Externally imposed restrictions are specified maturities of three months or less that are readily in an agreement, contract or legislation. This applies to convertible to known amounts of cash and which are reserves, unspent grants, subsidies and contributions subject to an insignificant risk of changes in value and and unspent loans that have been fully expended in the bank overdrafts. Bank overdrafts are reported as short manner specified by the contributor, legislation or loan term borrowings in current liabilities in the statement of agreement.financial position.


94 City of Swan


4. RESERVES - CASH BACKEDActual Budget Actual

SUMMARY 2019/20 2019/20 2018/19Opening Balance 141,828,299 130,647,482 122,167,750 Adjustment to disclose as liability - (5,802,449) - Interest Earnings 2,947,806 2,998,290 3,061,082 Transfer to Reserve 40,915,944 43,241,608 39,014,494 Transfer from Reserve (40,049,910) (50,713,961) (22,415,027) Closing Balance 145,642,139 120,370,970 141,828,299

Individual Reserve Accounts are as follows:Actual Budget Actual

2019/20 2019/20 2018/19Aged Services Asset Replacement ReservePurpose - to fund the replacement of assets used for the provision of Aged Care Services.

Established in 2001/02

Opening Balance 286,274 141,076 190,835 Interest Earnings 10,611 3,708 7,221 Transfer to Reserve 280,395 155,611 251,181 Transfer from Reserve (26,677) - (162,963) Closing Balance 550,602 300,395 286,274

Midland District Drainage Development Reserve

Funds are collected by Specified Area Rate matched by a 30c per $1 contribution by the City, and Developercontributions of $64,620 per hectare as per Policy POL-C-040.Established in 1982/1983

Opening Balance 3,214,596 2,838,756 2,485,757 Interest Earnings 92,402 69,732 72,126 Transfer to Reserve 1,725,332 1,685,445 1,199,617 Transfer from Reserve (787,475) (929,660) (542,903) Closing Balance 4,244,854 3,664,273 3,214,596

General Insurance ReservePurpose - to fund both general insurance claims against the City that are under the excess and the difference between standard workers compensation premium paid and the estimate maximum. General Insurance contributions to the value of the difference between the standard premium payable and the actual premium paid. Workers Compensation Insurance contributions to the value of the difference between the estimated maximum and the actual premium paid; varying dependant on the number of claims.Established in 1991/1992

Opening Balance 1,698,338 1,240,317 500,000 Interest Earnings 36,862 32,584 17,465 Transfer to Reserve 3,609,121 970,283 1,388,258 Transfer from Reserve (451,623) (400,000) (207,385) Closing Balance 4,892,697 1,843,184 1,698,338

Gravel Pit Rehabilitation ReservePurpose - to fund the remediation of the existing quarry and to acquire land for future quarries.Contributions are made to the value of gravel extracted from the quarry for use on the City's works.

Opening Balance 586,117 669,919 569,946 Interest Earnings 12,863 17,603 13,333 Transfer to Reserve 46,259 85,000 2,838 Transfer from Reserve - - - Closing Balance 645,239 772,522 586,117

Funds are maintained by an annual transfer of unspent HACC Capital and operating grants and a plant replacement component for plant used on Aged Care services.

Purpose - to fund the renewal and upgrade of the stormwater drainage system in Koongamia, Bellevue, Midland, Woodbridge, Middle Swan, Viveash and Midvale.




4. RESERVES - CASH BACKED (Continued)Actual Budget Actual

2019/20 2019/20 2018/19Plant and Equipment ReservePurpose - to fund motor vehicles, plant and equipment associated with the City's works and services.Funds are maintained by an allocation to the value of the plant replacement component on all City's works andservices.

Opening Balance 16,997,662 15,898,331 11,334,817 Interest Earnings 395,465 414,564 313,614 Transfer to Reserve 5,810,346 7,626,258 7,291,736 Transfer from Reserve (11,600,858) (3,205,390) (1,942,505) Closing Balance 11,602,615 20,733,763 16,997,662

Hazelmere/Guildford Drainage ReservePurpose - to fund the renewal and upgrade of the stormwater drainage system in Hazelmere and Guildford.Funds are collected by Specified Area Rate matched by a 30c per $1 contribution by the City, and DeveloperContributions of $64,620 per hectare as per Policy POL-C-040.

Opening Balance 1,030,584 1,032,304 1,221,758 Interest Earnings 29,761 27,128 32,850 Transfer to Reserve 449,677 613,725 474,576 Transfer from Reserve (57,421) (680,000) (698,600) Closing Balance 1,452,601 993,157 1,030,584

Waste Management ReservePurpose - to fund the operations and development of the City's sanitation service, including capital acquisitions.Funds are maintained by an annual allocation to the value of the net 'surplus' in the sanitation operations and a plant replacement component for plant used by Waste Management services.Established in 1992/93Formed by the amalgamation of the Sanitation Reserve and West Midland Rehabilitation.


City Asset Replacement ReservePurpose - to fund the renewal and replacement of the City's infrastructure and capital assets. Funds are maintained by an annual contribution equivalent to 3% of Rate Revenue operations and a plantreplacement component for plant used by Waste Management services.Established in 2006/07.


Ellenbrook Community Facilities ReservePurpose - to provide community facilities and services within the Ellenbrook Estate. Contributions from the Ellenbrook Joint Venture matched 1:1 by City contributions.Established in 1994/95.

Opening Balance - - 61,012 Interest Earnings 19 - 218 Transfer to Reserve 72,377 70,985 72,669 Transfer from Reserve - (70,985) (133,899) Closing Balance 72,396 - -


96 City of Swan



2019/20 2019/20 2018/19Aveley Community ReservePurpose - to provide community facilities and services within Vale and the region. Contributions from the Developers of Vale matched 1:1 by City contributions.Established in 2005/06.

Opening Balance 1,445,463 1,222,992 1,249,760 Interest Earnings 28,868 25,585 30,279 Transfer to Reserve 229,978 315,000 270,273 Transfer from Reserve (338,829) (1,213,057) (104,849) Closing Balance 1,365,480 350,520 1,445,463

Employee Entitlements - LSL ReservePurpose - to fund long service leave requirements. To be used as required.

Opening Balance 11,634,234 10,977,669 10,201,806 Interest Earnings 270,551 288,457 254,002 Transfer to Reserve 1,225,419 529,628 1,178,426 Transfer from Reserve (3,038,084) - - Closing Balance 10,092,120 11,795,754 11,634,234

Urban Growth Corridor Sub-Regional ContributionsPurpose - to fund land acquisition, construction of infrastructure and administration costs in the Swan Urban Growth Corridor, which comprises the Development Contribution Areas of Brabham, Caversham, Dayton and west Swan West.Funded by Developers contributionsEstablished in 2010/11

Brabham - AlbionOpening Balance 21,466,158 15,512,575 19,767,508 Interest Earnings 451,898 425,730 525,157 Transfer to Reserve 1,958,801 2,942,656 1,575,555 Transfer from Reserve (216,298) (3,965,450) (402,062) Closing Balance 23,660,561 14,915,511 21,466,158

CavershamOpening Balance 5,354,099 5,850,409 7,368,259 Interest Earnings 69,744 175,430 190,394 Transfer to Reserve 581,573 1,339,930 1,626,730 Transfer from Reserve (2,379,559) (3,401,323) (3,831,284) Closing Balance 3,625,858 3,964,446 5,354,099

Dayton - West Swan EastOpening Balance 25,249,331 23,452,426 24,459,377 Interest Earnings 492,843 533,830 671,700 Transfer to Reserve 2,582,971 4,301,534 4,455,884 Transfer from Reserve (6,074,778) (13,523,361) (4,337,630) Closing Balance 22,250,369 14,764,429 25,249,331

Bennett Springs - West Swan EastOpening Balance 4,397,146 4,107,198 4,055,138 Interest Earnings 53,725 87,300 79,641 Transfer to Reserve - 1,652,158 268,896 Transfer from Reserve (9,812) (59,138) (6,529) Closing Balance 4,441,059 5,787,518 4,397,146 Total Urban Growth CorridorContributions 53,977,841 39,431,904 56,466,734





2019/20 2019/20 2018/19Developers Contributions - Bullsbrook ResidentialPurpose - to fund land acquisition, construction of infrastructure and administration costs in the Bullsbrook Residential Development Contribution Area.Funded by Developers contributionsEstablished in 2019/20Opening Balance - - - Interest Earnings 453 - - Transfer to Reserve 723,113 540,000 - Transfer from Reserve (54,638) (534,610) - Closing Balance 668,929 5,390 -

Developers Contributions - Ellenbrook BridgePurpose - to fund the construction of a bridge over the Ellenbrook (Ellenbrook Bridge) in the vicinity of Lot 9000 Railway Parade, Upper Swan.Funded by Developers contributionsEstablished in 2013/14Opening Balance 252,245 186,857 1,788,261 Interest Earnings 5,538 4,928 24,468 Transfer to Reserve 39,400 - - Transfer from Reserve - - (1,560,484) Closing Balance 297,183 191,785 252,245

Hazelmere Industrial Area Infrastructure Reserve Purpose - to fund the renewal and upgrade of infrastructure in the Hazelmere Industrial Area.Funds are maintained by a Specified Area Rate charged to properties in the area, matched by a $3 to $1 City'scontribution.Established in 2013/14Opening Balance 10,499,366 11,075,128 6,186,814 Interest Earnings 264,103 220,575 221,598 Transfer to Reserve 5,518,082 5,464,764 5,071,092 Transfer from Reserve (3,000,041) (11,190,667) (980,138) Closing Balance 13,281,510 5,569,800 10,499,366

Strategic Development ReservePurpose - to fund the acquisition of freehold properties for the purpose of the City's strategic development.Funds are maintained by contributions from the City and the proceeds from asset sales at the Council's discretion.Established in 2010/11

Opening Balance 1,838,511 4,004,492 331,147 Interest Earnings 27,623 105,186 4,994 Transfer to Reserve 872,978 5,530,701 2,540,986 Transfer from Reserve (2,501,994) (1,929,000) (1,038,615) Closing Balance 237,119 7,711,379 1,838,511

Restricted Cash ReservePurpose - to hold the City's received restricted cash contributions; to fund works of the same purpose for which the contributions were given.Funds are maintained by transfer of unspent contributions.Established in 1994/95Opening Balance 8,721,632 3,889,244 8,359,011 Transfer to Reserve 332,326 250,000 4,941,376 Transfer from Reserve (4,825,281) - (4,578,755) Closing Balance 4,228,676 4,139,244 8,721,632

Total Cash Backed Reserves 145,642,139 120,370,963 141,828,299


98 City of Swan


5. OTHER FINANCIAL ASSETS 2020 2019$ $

(a) Current assetsFinancial assets at amortised cost 167,664,220 167,871,205

167,664,220 167,871,205

Other financial assets at amortised cost Self supporting loans 64,220 71,205Term deposits not available less than 12 months 167,600,000 167,800,000

167,664,220 167,871,205

(b) Non-current assetsFinancial assets at amortised cost 260,004 324,225Term deposits not available greater than 12 months 11,700,000 - Financial assets at fair value through profit and loss 142,442 140,138

12,102,446 464,363

Financial assets at amortised costSelf supporting loans 260,004 324,224

260,004 324,224

Financial assets at fair value through profit and lossUnits in Local Government House Trust 142,442 140,138

142,442 140,138

Loans receivable from clubs/institutions have the same terms and conditions as the related borrowing disclosed in Note 17 asself supporting loans.

SIGNIFICANT ACCOUNTING POLICIESTerm depositsTerm deposits represent deposits held with financial institutionswith an original maturity of greater than 3 months.

Other financial assets at amortised costThe City classifies financial assets at amortised cost if both of the following criteria are met:- the asset is held within a business model whose objective is

to collect the contractual cashflows, and#NAME?

payments of principal and interest.

Financial assets at fair value through profit and lossThe City classifies the following financial assets at fair value through profit and loss: - debt investments which do not qualify for measurement ateither amortised cost or fair value through other comprehensive income.- equity investments which the City has not elected to recognise fair value gains and losses through other comprehensive income.

Impairment and riskInformation regarding impairment and exposure to risk can be found at Note 28.




6. TRADE AND OTHER RECEIVABLES 2020 2019$ $

CurrentRates receivable 12,168,260 12,171,080Debtors: Trade 2,095,217 1,143,548GST receivable 1,113,656 1,031,932Allowance for impairment of receivables (968,249) (600,222)Debtors: Other 70,061 32,223Accrued Revenue 2,598,504 2,530,768

17,077,449 16,309,329Non-currentPensioner's rates and ESL deferred 2,743,609 2,298,631

2,743,609 2,298,631

SIGNIFICANT ACCOUNTING POLICIES SIGNIFICANT ACCOUNTING POLICIESTrade and other receivables Classification and subsequent measurement Trade and other receivables include amounts due Receivables expected to be collected within 12from ratepayers for unpaid rates and service months of the end of the reporting period are charges and other amounts due from third parties classified as current assets. All other receivables for goods sold and services performed in the are classified as non-current assets.ordinary course of business.

Trade receivables are recognised at original Trade receivables are held with the objective toinvoice amount less any allowances for collect the contractual cashflows and therefore uncollectible amounts (i.e. impairment). The measures them subsequently at amortised cost carrying amount of net trade receivables is using the effective interest rate method.equivalent to fair value as it is due for settlement within 30 days.

Due to the short term nature of current receivables,Impairment and risk exposure their carrying amount is considered to be the same Information about the impairment of trade as their fair value. Non-current receivables are receivables and their exposure to credit risk and indexed to inflation, any difference between the interet rate risk can be found in Note 28. face value and fair value is considered immaterial.


100 City of Swan


7. INVENTORIES 2020 2019$ $

CurrentMaterials at Cost 572,883 522,572

572,883 522,572Non-currentLibrary books 1,262,903 -

1,262,903 -

The following movements in inventories occurred during the year:

Carrying amount at beginning of period 522,572 570,506Additions to inventory 1,313,214 (47,934)Carrying amount at end of period 1,835,786 522,572

SIGNIFICANT ACCOUNTING POLICIESGeneralInventories are measured at the lower of cost andnet realisable value.

Net realisable value is the estimated selling pricein the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.




8. OTHER ASSETS AND ASSETS HELD FOR SALE2020 2019

$ $Other assets - currentPrepayments 1,590,278 1,228,469

1,590,278 1,228,469

Non-current assets held for saleLand and buildings 5,810,269 5,810,269

5,810,269 5,810,269Land and buildings classified as held for saleMidland Oval Precinct- Approximately 11 hectares of land bounded by Morrison Road, Keane Street, The Crescent and Sayer Street, Midland.Other Land- Lot 501 Paradise Quays, Ballajura

SIGNIFICANT ACCOUNTING POLICIESOther current assets Non-current assets held for sale (Continued)Other non-financial assets include prepayments Non-current assets classified as held for sale which represent payments in advance of receipt are valued at the lower of the carrying amount of goods or services or that part of expenditure and fair value less costs to sell.made in one accounting period covering a term extending beyond that period. The fair value of land and buildings was

determined using the sales comparison approachNon-current assets held for sale using comparable properties in the area. This isAssets are classified as held for sale where the a level 2 measurement as per the fair value carrying amount will be recovered through a sale hierarchy set out in Note 31.rather than continuing use and the asset is available for immediate sale with a sale being highly probable.


102 City of Swan

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of t

he c

urre

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anci

al y

ear.

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d -

fr

eeh

old

la

nd

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l lan

d *

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l p

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Bal

ance

at

1 J

uly

20

18

253,

970,

665

253,

970,

665

224,

131,

307

224,

131,

307

478,

101,

972

1,08

4,89

414

,403

,774

1,87

1,91

25,

884,

282

708,

912

8,88

9,54

251

0,94

5,28

8

Add

ition

s2,

241,

062

2,24

1,06

22,

564,

738

2,56

4,73

84,

805,

800

192,

841

4,48

3,01

268

6,79

81,

352,

885

49,3

9412

,124

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23,6

94,8

04

(Dis

posa

ls)

(2,8

14,5

39)

(2,8

14,5

39)

(118

,240

)(1

18,2

40)

(2,9

32,7

79)

(556

,369

)(6

81,7

00)

(178

,234

)(8

25,2

07)

(225

,750

)-

(5,4

00,0

39)

Dep

reci

atio

n (e

xpen

se)

-

-

(6,5

36,4

22)

(6,5

36,4

22)

(6,5

36,4

22)

(205

,541

)(3

,583

,715

)(8

28,9

01)

(1,2

04,0

00)

-

-

(12,

358,

579)

Tran

sfer

s-

-

5,33

2,53

75,

332,

537

5,33

2,53

791

6,81

014

8,99

53,

163,

147

-

2,31

6(9

,563

,805

)-

Car

ryin

g a

mou

nt

at 3

0 J

un

e 2

01

925

3,39

7,18

825

3,39

7,18

822

5,37

3,92

022

5,37

3,92

047

8,77

1,10

81,

432,

635

14,7

70,3

664,

714,

722

5,20

7,96

053

4,87

211

,449

,811

516,

881,

474

Com

pri

ses:

Gro

ss c

arry

ing

amou

nt a

t 30

Jun

e 20

1925

3,39

7,18

825

3,39

7,18

832

8,50

1,39

532

8,50

1,39

558

1,89

8,58

32,

411,

093

23,4

05,4

9718

,920

,230

7,73

1,02

353

4,87

211

,449

,811

646,

351,

109

Acc

umul

ated

dep

reci

atio

n at

30

June

20

19-

-

(103

,127

,475

)(1

03,1

27,4

75)

(103

,127

,475

)(9

78,4

58)

(8,6

35,1

31)

(14,

205,

508)

(2,5

23,0

63)

-

-

(129

,469

,635

)C

arry

ing

am

oun

t at

30

Ju

ne

20

19

253,

397,

188

253,

397,

188

225,

373,

920

225,

373,

920

478,

771,

108

1,43

2,63

514

,770

,366

4,71

4,72

25,

207,

960

534,

872

11,4

49,8

1151

6,88

1,47

4

Add

ition

s-

-

-

-

-

53,0

59

-

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-

-

25,4

22,6

6825

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(Dis

posa

ls)

(382

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)(3

82,0

00)

-

-

(382

,000

)-

(442

,345

)-

(503

,997

)-

-

(1,3

28,3

42)

Rev

alua

tion

incr

emen

ts /

(de

crem

ents

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ansf

erre

d to

rev

alua

tion

surp

lus

-

-

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-

-

-

20,7

36-

130,

596

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-

151,

332

Dep

reci

atio

n (e

xpen

se)

-

-

(6,5

61,8

85)

(6,5

61,8

85)

(6,5

61,8

85)

(343

,264

)(3

,552

,275

)(1

,305

,354

)(1

,172

,542

)-

-

(12,

935,

320)

Tran

sfer

s60

1,19

460

1,19

411

,801

,309

11,8

01,3

0912

,402

,503

79,6

602,

950,

097

491,

292

1,29

2,33

122

,017

(17,

237,

900)

-

Car

ryin

g a

mou

nt

at 3

0 J

un

e 2

02

025

3,61

6,38

225

3,61

6,38

223

0,61

3,34

423

0,61

3,34

448

4,22

9,72

61,

222,

090

13,7

46,5

793,

900,

660

4,95

4,34

855

6,88

919

,634

,579

528,

244,

871

Com

pri

ses:

Gro

ss c

arry

ing

amou

nt a

t 30

Jun

e 20

2025

3,61

6,38

225

3,61

6,38

234

0,30

5,45

534

0,30

5,45

559

3,92

1,83

72,

543,

812

17,4

73,2

9019

,271

,571

5,81

7,43

655

6,88

919

,634

,579

659,

219,

414

Acc

umul

ated

dep

reci

atio

n at

30

June

202

0-

-

(109

,692

,111

)(1

09,6

92,1

11)

(109

,692

,111

)(1

,321

,722

)(3

,726

,711

)(1

5,37

0,91

1)(8

63,0

88)

-

-

(130

,974

,543

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arry

ing

am

oun

t at

30

Ju

ne

20

20

253,

616,

382

253,

616,

382

230,

613,

344

230,

613,

344

484,

229,

726

1,22

2,09

013

,746

,579

3,90

0,66

04,

954,

348

556,

889

19,6

34,5

7952

8,24

4,87

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NO

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70,9

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Add

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99)

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839,

206)

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974

5,58

5,72

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546,

548

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335,

358

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21,8

641,

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907,

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Com

pri

ses:

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amou

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1993

1,29

2,53

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7,05

311

6,28

4,71

523

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2,54

716

3,87

2,57

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1,41

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reci

atio

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30

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201

9(1

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12)

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8,96

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0,98

5,99

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7,21

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arry

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oun

t at

30

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ne

20

19

745,

585,

726

333,

593,

850

87,3

24,5

5716

3,54

6,54

810

7,33

5,35

827

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1,46

4,90

7,90

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s-

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-

(600

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0,42

966

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15,6

82

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posa

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-

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-

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-

Dep

reci

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xpen

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(11,

404,

822)

(5,9

92,0

42)

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80,9

81)

(6,8

40,7

63)

(2,8

85,3

13)

-

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703,

921)

Tran

sfer

s17

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6,55

2,96

11,

806,

194

17,2

60,1

364,

061,

256

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465,

789)

-

Car

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g a

mou

nt

at 3

0 J

un

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02

075

1,96

6,14

633

4,15

4,76

986

,549

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173,

365,

492

109,

111,

730

46,8

71,7

571,

502,

019,

668

Com

pri

ses:

Gro

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arry

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amou

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Jun

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2094

9,07

7,78

151

4,46

0,01

411

8,09

0,90

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0,96

6,50

116

5,17

6,18

750

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2,04

8,22

6,97

7Acc

umul

ated

dep

reci

atio

n at

30

June

202

0(1

97,1

11,6

34)

(180

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1,54

1,13

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7,60

1,00

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8,28

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arry

ing

am

oun

t at

30

Ju

ne

20

20

751,

966,

147

334,

154,

768

86,5

49,7

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3,36

5,49

210

5,52

7,90

650

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1,50

2,01

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441,

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Add

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106 City of Swan


11. FIXED ASSETS

SIGNIFICANT ACCOUNTING POLICIESFixed assets AUSTRALIAN ACCOUNTING STANDARDS - INCONSISTENCYEach class of fixed assets within either plant and Land under control prior to 1 July 2019equipment or infrastructure, is carried at cost or fair value In accordance with the then Local Government (Financialas indicated less, where applicable, any accumulated Management) Regulation 16(a)(ii), the City was previously depreciation and impairment losses. required to include as an asset (by 30 June 2013), vested

Crown Land operated by the local government as a golf course,Initial recognition and measurement between showground, racecourse or other sporting or recreational mandatory revaluation dates facility of State or regional significance.Assets for which the fair value as at the date of acquisition Upon initial recognition, these assets were recorded at cost in is under $5,000 are not recognised as an asset in accordance with AASB 116. They were then classified as Land accordance with Financial Management Regulation 17A (5). and revalued along with other land.These assets are expensed immediately

Land under roads prior to 1 July 2019Where multiple individual low value assets are purchased In Western Australia, most land under roads is Crown Land, the together as part of a larger asset or collectively forming a responsibility for managing which, is vested in the local larger asset exceeding the threshold, the individual assets government.are recognised as one asset and capitalised. Effective as at 1 July 2008, Council elected not to recognise

any value for land under roads acquired on or before 30 June In relation to this initial measurement, cost is determined as 2008. This accords with the treatment available in Australian the fair value of the assets given as consideration plus Accounting Standard AASB 1051 Land Under Roads and the costs incidental to the acquisition. For assets acquired at then Local Government (Financial Management) Regulation zero cost or otherwise significantly less than fair value, 16(a)(i) which arbitrarily prohibited local governments from cost is determined as fair value at the date of acquisition. recognising such land as an asset. This regulation has now The cost of non-current assets constructed by the City been deleted. includes the cost of all materials used in construction, In respect of land under roads acquired on or after 1 July 2008,direct labour on the project and an appropriate proportion as detailed above, the then Local Government (Financialof variable and fixed overheads. Management) Regulation 16(a)(i) prohibited local governments

from recognising such land as an asset.Individual assets that are land, buildings, infrastructure and investment properties acquired between initial recognition Whilst such treatment is inconsistent with the requirements of and the next revaluation of the asset class in accordance AASB 1051, Local Government (Financial Management) with the mandatory measurement framework, are Regulation 4(2) provides, in the event of such an inconsistency, recognised at cost and disclosed as being at fair value as the Local Government (Financial Management) Regulations management believes cost approximates fair value. They prevail. Consequently, any land under roads acquired on orare subject to subsequent revaluation at the next after 1 July 2008 was not included as an asset of the City.anniversary date in accordance with the mandatory measurement framework. Land under roads from 1 July 2019

As a result of amendments to the Local Government (Financial Revaluation Management) Regulations 1996, effective from 1 July 2019, The fair value of land, buildings,infrastructure and vested land, including land under roads, are treated as right-ofinvestment properties is determined at least every five -use assets measured at zero cost. Therefore, the Previousyears in accordance with the regulatory framework. This inconsistency with AASB 1051 in respect of non-recognition ofincludes buildings and infrastructure items which were pre- land under roads acquired on or after 1 July 2008 has been esting improvements (i.e. vested improvements) on vested removed, even though measurement at zero cost means thatland acquired by the City. land under roads is still not included in the statement ofAt the end of each period the valuation is reviewed and financial position.where appropriate the fair value is updated to reflect The City has accounted for the removal of the vested landcurrent market conditions. This process is considered to be values associated with vested land previously recognised by in accordance with Local Government (Financial removing the land value and associated revaluation reserve as Management) Regulation 17A (2) which requires land, at 1 July 2019. The comparatives have not been restated.buildings, infrastructure, investment properties and vested improvements to be shown at fair value. Vested improvements from 1 July 2019

The measurement of vested improvements at fair value inIncreases in the carrying amount arising on revaluation of accordance with Local Government (Financial Management) assets are credited to a revaluation surplus in equity. Regulation 17A(2)(iv) is a departure from AASB 16 which would Decreasaes that offset previous increases of the same have required the City to measure the vested improvements as class of asset are recognised against revaluation surplus part of the related right-of-use assets at zero cost. directly in equity. All other decreases are recognised in profit or loss. Refer to Note 12 that details the significant accounting policies

applying to leases (including right of use assets).




11. FIXED ASSETS

(a) Disposals of Assets

2020 2020 2020 2020 2019 2019Actual Actual 2020 2020 Budget Budget 2020 2020 Actual Actual 2019 2019

Net Book Sale Actual Actual Net Book Sale Budget Budget Net Book Sale Actual ActualValue Proceeds Profit Loss Value Proceeds Profit Loss Value Proceeds Profit Loss

$ $ $ $ $ $ $ $ $ $ $ $382,000 317,273 - (64,727) 12,267,220 9,430,700 - (2,836,520) 2,814,539 2,548,431 238,184 (504,291)

- - - - - - - - 118,240 - - (118,240)- - - - - - - - 556,369 - - (556,369)

442,345 725,965 283,620 - 1,687,780 1,925,780 - 238,000 681,700 746,294 64,594 - - 13,291 13,291 - - - - - 178,234 - - (178,234)

503,997 610,045 106,048 - - - - - 825,207 977,136 151,929 -

Land - freehold land Buildings - non-specialised Furniture Plant Computing Vehicles Artworks - - - - - - - - 225,750 - - (225,750)

1,328,342 1,666,574 402,959 (64,727) 13,955,000 11,356,480 - (2,598,520) 5,407,245 4,271,861 454,707 (1,590,090)

The following assets were disposed of during the year.

2020 2020Actual Actual 2020 2020

Net Book Sale Actual ActualPlant and Equipment Value Proceeds Profit LossOther property and servicesVarious Plant & Equipment 442,345 725,965 283,620 - Various Light Fleet 503,997 610,045 106,048 -

946,342 1,336,010 389,668 - LandRecreation and cultureVarious Properties 382,000 317,273 - (64,727)

382,000 317,273 - (64,727)

Other Asset classProgramGovernance - Computing - 13,291 13,291 -

- 13,291 13,291 -

1,328,342 1,666,574 402,959 (64,727)


108 City of Swan


11. FIXED ASSETS

(b) Depreciation 2020 2020 2019Actual Budget Actual

$ $ $6,561,885 6,411,380 6,536,422

343,264 2,492,020 205,5413,552,275 4,273,280 3,583,7151,305,354 - 828,9011,172,542 - 1,204,000

11,404,822 23,424,300 11,159,6195,992,042 - 5,914,1282,580,981 - 2,537,9716,840,763 6,898,590 6,407,7892,885,313 499,150 2,819,699

Buildings - non-specialisedFurniture Plant Computing Vehicles Infrastructure - roadsOther infrastructure - drainageOther infrastructure - footpathsOther infrastructure - parks & reserves Other infrastructureRight of use assets - plant and equipment 158,971 - -

42,798,213 43,998,720 41,197,785

SIGNIFICANT ACCOUNTING POLICIESDepreciation Depreciation on revaluationThe depreciable amount of all fixed assets including buildings When an item of property, plant and equipment is but excluding freehold land and vested land, are depreciated revalued, any accumulated depreciation at the on a straight-line basis over the individual asset’s useful life date of the revaluation is treated in one of the from the time the asset is held ready for use. Leasehold following ways:improvements are depreciated over the shorter of either the (a) The gross carrying amount is adjusted in aunexpired period of the lease or the estimated useful life of manner that is consistent with the revaluationthe improvements. of the carrying amount of the asset. For

example, the gross carrying amount may beThe assets residual values and useful lives are reviewed, and restated by reference to observable marketadjusted if appropriate, at the end of each reporting period. data or it may be restated proportionately to

the restated proportionately to the change inAn asset's carrying amount is written down immediately to its the carrying amount. The accumulatedrecoverable amount if the asset's carrying amount is greater depreciation at the date of the revaluation isthan its estimated recoverable amount. adjusted to equal the difference between the

gross carrying amount and the carrying amountGains and losses on disposals are determined by of the asset after taking into accountcomparing proceeds with the carrying amount. These accumulated impairment losses; orgains and losses are included in the statement of (b) Eliminated against the gross carrying amountcomprehensive income in the period in which they arise. of the asset and the net amount restated to

the revalued amount of the asset.Depreciation ratesTypical estimated useful lives for the different asset classes Amortisationfor the current and prior years are included in the table below: All intangible assets with a finite useful life, are

amortised on a straight-line basis over the Asset Class Useful life individual asset’s useful life from the time theBuildings 30 to 50 years asset is held for use.Furniture and equipment 4 to 10 yearsPlant and equipment 5 to 15 years The residual value of intangible assets is Sealed roads and streets considered to be zero and the useful life and formation not depreciated amortisation method are reviewed at the end of pavement 50 years each financial year.seal- bituminous seals 20 years Amortisation is included within Depreciation on - asphalt surfaces 25 years non-current assets in the Statement of Gravel roads Comprehensive Income and in the note above.formation not depreciatedpavement 50 yearsFootpaths - slab 20 yearsSewerage piping 100 yearsWater supply piping and drainage systems 75 yearsRight of use (buildings) Based on the remaining leaseRight of use (plant and equipment) Based on the remaining leaseIntangible assets - computer software licen5 years




12. LEASES

(a) Right of Use Assets

Movement in the carrying amounts of each class of right of use asset between the beginning and the end of the current financial year.

Right of use assets - plant

and equipmentRight of use assets

Total$

Carrying amount at 30 June 2019 - -

Recognised on initial application of AASB 16 284,069 284,069Restated total equity at the beginning of the financial year 284,069 284,069Additions 18,438 18,438Depreciation (expense) (158,971) (158,971)Carrying amount at 30 June 2020 143,536 143,536

(b) Cash outflow from leasesInterest expense on lease liabilities (4,709) (4,709)Lease principal expense (157,816) (157,816)Total cash outflow from leases (162,525) (162,525)

SIGNIFICANT ACCOUNTING POLICIESLeases Right-of-use assets - valuationAt inception of a contract, the City assesses if Right-of-use assets are measured at cost. the contract contains or is a lease. A contract This means that all right-of-use assets (otheris, or contains, a lease if the contract conveys than vested improvements) under zero costthe right to control the use of an identified concessionary leases are measured at zero asset for a period of time in exchange for cost (i.e. not included in the statement ofconcideration. financial position). The exception is vested

improvements on concessionary land leases At the commencement date, a right-of-use such as roads, buildings or other infrastructure asset is recognised at cost and lease liability at which are reported at fair value.the present value of the lease payments that are not paid at that date. The lease payments Refer to Note 11 for details on the significant are discounted using the interest rate implicit in accounting policies applying to vested the lease, if that rate can be readily determined. improvements.If that rate cannot be readily determined, the City uses its incremental borrowing rate. Right-of-use assets - depreciation

Right-of-use assets are depreciated over theAll contracts that are classified as short-term lease term or useful life of the underlyingleases (i.e. a lease with a remaining term of asset, whichever is the shortest. Where a 12 months or less) and leases of low value lease transfers ownership of the underlyingassets are recognised as an operating asset, or the cost of the right-of-use asset expense on a straight-line basis over the reflects that the City anticipates to exercise term of the lease. a purchase option, the specific asset is

amortised over the useful life of the underlying Leases for right-of-use assets are secured asset.over the asset being leased.


110 City of Swan

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14. TRADE AND OTHER PAYABLES 2020 2019$ $

CurrentTrade creditors 7,389,546 7,354,049Emergency Services Levy 232,523 249,154Accrued salaries and wages 1,534,879 1,103,550FBT Liability 143,779 143,779Accrued expenses 6,646,541 5,577,702Creditors retentions 102,299 73,062Prepaid rates 5,745,285 -

21,794,852 14,501,296

SIGNIFICANT ACCOUNTING POLICIESTrade and other payables Prepaid rates Trade and other payables represent liabilities for Prepaid rates are, until the taxable event has goods and services provided to the City prior to occurred (start of the next financial year), the end of the financial year that are unpaid and refundable at the request of the ratepayer. Rates arise when the City becomes obliged to make received in advance are initially recognised as a future payments in respect of the purchase of financial liability. When the taxable event occurs, these goods and services. The amounts are the financial liability is extinguished and the Cityunsecured, are recognised as a current liability recognises revenue for the prepaid rates that have and are normally paid within 30 days of not been refunded.recognition.


112 City of Swan


15. CONTRACT LIABILITIES2020 2019

$ $Current

Contract liabilities from contracts with customers - General 71,351 - - Operating Grants 610,535 - - Capital Grants 4,707,604 - - Development Contribution Plans 20,509,976 -

25,899,466 -

Non-currentBonds and deposits held 3,649,976 4,169,826Contract liabilities from contracts with customers - Development Contribution Plans 38,460,854 -

42,110,830 4,169,826

68,010,296 4,169,826

Performance obligations from contracts with customers are expected to be recognised as revenue in accordance with the following time bands:Less than 1 year 25,899,466 - 1 to 2 years 14,181,551 4,169,8262 to 3 years 7,086,462 - 3 to 4 years 14,632,052 - 4 to 5 years 2,074,814 - > 5 years 4,135,951 -

68,010,296 4,169,826

SIGNIFICANT ACCOUNTING POLICIESContract LiabilitiesContract liabilities represent the the City's obligation to transfer goods or services to a customer for which the City has received consideration from the customer.

With respect to transfers for recognisable non-financial assets, contract liabilities represent performance obligations which are not yet satisfied.

Contract liabilities are recognised as revenue when the performance obligations in the contract are satisfied.




16. LEASE LIABILITIES

Lease Liabilities 2020 2019$ $

Current 83,295 - Non-current 61,396 -

144,691 -


114 City of Swan

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17. INFORMATION ON BORROWINGS (Continued)

(c) New Borrowings - 2019/20Total Actual

Loan Term Interest 2020 2020 2020 2020 Interest & BalanceInstitution Type Years Rate Actual Budget Actual Budget Charges Unspent

Particulars/Purpose % $ $ $ $ $ $Ellenbrook Leisure Centre WATC* Qtly Comp 10 1.2065% 556,000 556,000 556,000 556,000 35,052 - The New Junction : POS WATC* Qtly Comp 10 1.2065% 3,550,000 3,550,000 3,550,000 3,550,000 223,804 - The New Junction : The Avenue WATC* Qtly Comp 10 1.2065% 3,000,000 3,000,000 3,000,000 3,000,000 189,130 - Arthur St/Reid Hwy Overpass WATC* Qtly Comp 10 1.2065% 2,500,000 2,500,000 2,500,000 2,500,000 157,608 - * WA Treasury Corporation 9,606,000 9,606,000 9,606,000 9,606,000 605,594 -

2020 2019(d) Undrawn Borrowing Facilities $ $

Credit Standby ArrangementsBank overdraft limit - - Bank overdraft at balance date - - Credit card limit 450,000 450,000Credit card balance at balance date - - Total amount of credit unused 450,000 450,000

Loan facilitiesLoan facilities - current 7,069,546 6,768,036Loan facilities - non-current 32,160,282 29,623,828Lease liabilities - current 83,295 - Lease liabilities - non-current 61,396 - Total facilities in use at balance date 39,374,519 36,391,864

Unused loan facilities at balance date Nil Nil

SIGNIFICANT ACCOUNTING POLICIESFinancial liabilities Borrowing costsFinancial liabilities are recognised at fair value when the City Borrowing costs are recognised as an expense when incurred becomes a party to the contractual provisions to the instrument. except where they are directly attributable to the acquisition,

construction or production of a qualifying asset. Where this is theNon-derivative financial liabilities (excluding financial guarantees) case, they are capitalised as part of the cost of the particular are subsequently measured at amortised cost. Gains or losses asset until such time as the asset is substantially ready for its are recognised in profit or loss. intended use or sale.

Financial liabilities are derecognised where the related obligations Riskare discharged, cancelled or expired. The difference between the Information regarding exposure to risk can be found at Note 28.carrying amount of the financial liability extinguished ortransferred to another party and the fair value of the consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

Amount Borrowed Amount (Used)


116 City of Swan


18. EMPLOYEE RELATED PROVISIONS

(a) Employee Related Provisions Provision for Provision for Provision forAnnual Long Service Other Leave Leave Leave Total

$ $ $ $Opening balance at 1 July 2019Current provisions 5,954,820 7,605,984 1,555,469 15,116,273Non-current provisions - 1,688,083 - 1,688,083

5,954,820 9,294,067 1,555,469 16,804,356

Additional provision 967,493 798,053 231,295 1,996,841Balance at 30 June 2020 6,922,313 10,092,120 1,786,764 18,801,197

ComprisesCurrent 6,922,313 8,238,423 1,786,764 16,947,500Non-current - 1,853,697 - 1,853,697

6,922,313 10,092,120 1,786,764 18,801,197

2020 2019Amounts are expected to be settled on the following basis: $ $Less than 12 months after the reporting date 16,947,500 15,116,273More than 12 months from reporting date 1,853,697 1,688,083

18,801,197 16,804,356

Timing of the payment of current leave liabilities is difficult to determine as it is dependent on future decisions of employeesExpected settlement timings are based on information obtained from employees and historical leave trends and assumes no events will occur to impact on these historical trends.

SIGNIFICANT ACCOUNTING POLICIESEmployee benefitsShort-term employee benefits Other long-term employee benefits (Continued)Provision is made for the City’s obligations for short- discounted at rates determined by reference to market yields at term employee benefits. Short-term employee the end of the reporting period on government bonds that have benefits are benefits (other than termination benefits) maturity dates that approximate the terms of the obligations. that are expected to be settled wholly before 12 Any remeasurements for changes in assumptions of months after the end of the annual reporting period in obligations for other long-term employee benefits are which the employees render the related service, recognised in profit or loss in the periods in which the including wages, salaries and sick leave. Short-term changes occur.employee benefits are measured at the (undiscounted)amounts expected to be paid when The City’s obligations for long-term employee benefits are the obligation is settled. presented as non-current provisions in its statement of

financial position, except where the City does not have an The City’s obligations for short-term employee unconditional right to defer settlement for at least 12 months benefits such as wages, salaries and sick leave are after the end of the reporting period, in which case the recognised as a part of current trade and other obligations are presented as current provisions.payables in the statement of financial position.

ProvisionsOther long-term employee benefits Provisions are recognised when the City has a present The City’s obligations for employees’ annual leave and legal or constructive obligation, as a result of past events, long service leave entitlements are recognised as for which it is probable that an outflow of economic benefits provisions in the statement of financial position. will result and that outflow can be reliably measured.

Long-term employee benefits are measured at the Provisions are measured using the best estimate of the present value of the expected future payments to be amounts required to settle the obligation at the end of the made to employees. Expected future payments reporting period.incorporate anticipated future wage and salary levels, durations of service and employee departures and are




19. NOTES TO THE STATEMENT OF CASH FLOWS

Reconciliation of CashFor the purposes of the Statement of Cash Flows, cash includes cash and cash equivalents,net of outstanding bank overdrafts. Cash at the end of the reporting period is reconciledto the related items in the Statement of Financial Position as follows:


$ $ $

Cash and cash equivalents 42,853,275 14,339,290 22,970,288

Reconciliation of Net Cash Provided ByOperating Activities to Net Result

Net result 70,804,593 54,532,325 67,609,174

Non-cash flows in Net result:(Profit)/loss on Investment (555,704) - (1,552)Share of profit of equity accounted investee 3,736,289 (5,000,000) (4,583,216)Depreciation on non-current assets 42,798,213 43,998,720 41,197,785(Profit)/loss on sale of asset (338,232) 2,598,520 1,135,384Share of profits of associates (2,304) - (16,403)Land Ceded to the Crown 2,045,809 - 1,979,004Contribution to state infrastructure - bridge 2,500,000 - - Contribution to state infrastructure - street lighting 1,083,828 - - Developers contributions - cash ‐ - (7,927,065)Grant contributions for the development of assets (12,843,319) (19,688,151) (8,692,967)Non-cash contributions (26,276,817) (18,113,110) (24,092,139)

Changes in assets and liabilities:(Increase)/decrease in receivables (3,770,088) 263,767 (2,460,923)(Increase)/decrease in other assets (361,809) (110,000) (33,800)(Increase)/decrease in inventories (1,313,214) (12,110) 47,934(Increase)/decrease in contract assets (62,974,377) - - Increase/(decrease) in payables 8,028,383 755,000 8,866,177Increase/(decrease) in provisions 2,228,136 300,000 527,097Increase/(decrease) in contract liabilities 68,560,161 - -

Net cash from operating activities 93,349,548 59,524,961 73,554,490


118 City of Swan


20. TOTAL ASSETS CLASSIFIED BY FUNCTION AND ACTIVITY

2020 2019$ $

Governance 14,967,537 14,469,711General purpose funding 4,271,979 4,129,891Law, order, public safety 4,210,444 4,070,403Health 1,756,408 1,697,989Education and welfare 16,600,883 16,048,731Housing 5,531,255 5,347,283Community amenities 8,308,965 8,032,605Recreation and culture 502,130,719 485,429,645Transport 1,302,382,452 1,259,064,677Economic services 1,123,068 1,085,714Other property and services 138,987,052 134,364,286Unallocated 354,942,791 341,843,800

2,355,213,553 2,275,584,735




21. CONTINGENT LIABILITIESActual Actual

2019/20 2018/19

Workers Compensation Insurance - Burning Risk 2,046,802 3,015,914

Urban Growth Corridor Sub-Regional Reserves 301,000 478,278 2,347,802 3,494,192

Actual Actual2019/20 2018/19

Recovery of prior costs/investments 555,704 1,552

(a) The City has taken out a ‘burning cost’ policy with respect to its workers compensation insurance. This involves setting the premium range with the final amount to be determined by the City's actual claims experience for the relevant period. While it allows the City to potentially pay lower premiums for their workers compensation insurance, it also carries the risk that the City could ultimately pay a higher than conventional rate. (b) The City has received in-kind contributions from developers that are yet to be ceded to the crown.

(c) Legal action by Lehman Brothers in the United States Bankruptcy Court. In May 2007, the City invested $500,000 into Federation Collateralised Debt Obligation (CDO) notes. In October 2008, in common with all Federation CDO investors, the $500,000 investment was fully repaid to the City. Subsequently Lehman Brothers Special Financing Inc. commenced an action in the United States Bankruptcy Court, Southern District of New York, No. 10 - 803547 applying for an order for all investors to repay the amounts paid. The City considers it unlikely that this matter will be successfully brought before the Courts in the United States, as the matters are similar to those already determined in the United Kingdom Supreme Court [2011] UKSC38 decision. The City engaged Johnson Winter and Slattery(JWS) in April 2016 to represent it in this matter, JWS has advised that it perceives the risk of judgement being capable of being enforced in Australia against the City as low and in addition that legal precedent (subject to appeal) has already been set that Lehman Brothers can not have a distribution similar to the City's overturned.

(d) A number of Public Liability Claims are still pending against the City of Swan at balance date. The value of the claims and the probability of success cannot be determined at this stage.

Contingent liabilities and assets at balance date, not otherwise provided for in the financial statements, relate to:

(e) The City of Swan has a number freehold and vested properties that are confirmed to be contaminated or were previously contaminated. There is one property classified as "Contaminated - Remediation Required", four properties classified as "Contaminated - Restricted Use", nine properties classified as "Possibly Contaminated - Investigation Required" and seven properties classified as "Remediated For Restricted Use". There is also twenty properties that have been Decontaminated. The cost to remediate the contamination cannot be determined at this stage.

An action was brought by the City of Swan and others, against Lehman Brothers Australia (in liquidation), the Commonwealth Bank (CBA) and Standard and Poors (S&P) Rating Agency (parent company McGraw-Hill Companies Inc.) for the sale of Collateralised Debt Obligations (CDOs). With regard to the CBA and S&P matters settlement has been achieved. As the City was admitted as a creditor (21 September 2012) to the estate of Lehman Brothers Australia it received further distributions during the year. As shown above the City received $555,704 relating to the above matters. The City is expecting to only receive minimal additional payments within the 2020/21 Financial Year.


120 City of Swan


22. CAPITAL COMMITMENTS 2020 2019$ $

(a) Capital Expenditure Commitments

Contracted for:- capital expenditure projects 6,935,487 6,065,841- plant & equipment purchases 1,797,101 1,937,932

8,732,588 8,003,773

Payable:- not later than one year 8,587,424 7,713,445- longer than one year 145,164 290,328

8,732,588 8,003,773




23. RELATED PARTY TRANSACTIONS

Elected Members Remuneration2020 2020 2019

The following fees, expenses and allowances were Actual Budget Actualpaid to council members and/or the Mayor. $ $ $

Members Allowances/Fees 597,122 597,220 589,381Travelling expenses 40,348 80,000 57,963Conferences/Training/Study Tour 16,926 142,500 39,339Child Care 1,559 10,000 8,910Uniforms 2,447 8,250 1,536Dry Cleaning - - 1,696Telecommunications allowance 52,500 52,500 51,625

710,902 890,470 750,450

Key Management Personnel (KMP) Compensation Disclosure2020 2019

The total of remuneration paid to KMP of the Actual ActualCity during the year are as follows: $ $

Short-term employee benefits 1,364,562 1,244,343Post-employment benefits 189,109 173,442Other long-term benefits 34,887 34,374

1,588,558 1,452,159

Short-term employee benefitsThese amounts include all salary, fringe benefits and cash bonuses awarded to KMP except for details in respect to fees and benefits paid to elected members which may be found above.

Post-employment benefitsThese amounts are the current-year's estimated cost of providing for the City's superannuation contributions made during the year.

Other long-term benefitsThese amounts represent long service benefits accruing during the year.


122 City of Swan


23. RELATED PARTY TRANSACTIONS (Continued)

Transactions with related parties

Transactions between related parties and the City are on normal commercial terms and conditions, no more favourable than those available to other parties, unless otherwise stated.

2020 2019The following transactions occurred with related parties: Actual Actual

$ $Sale of goods and services - Other related party transactions under $50,000 1,022 269

1,022 269Purchase of goods and services - Eastern Metropolitan Regional Council 11,218,783 9,731,587 - Other related party transactions under $50,000 50,335 9,044

11,269,118 9,740,631Joint venture entities: - Eastern Metropolitan Regional Council Dividend 1,953,643 - - Eastern Metropolitan Regional Council Distribution (FOGO) 4,904,300 -

6,857,943 - Amounts payable to related parties:Trade and other payables - Eastern Metropolitan Regional Council 410,129 730,749 - Other related party transactions under $50,000 2,997 450

413,126 731,199Related Parties

The City's main related parties are as follows:

i. Key management personnelAny person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any elected member, are considered key management personnel.

ii. Other Related PartiesThe associate person of KMP was employed by the City under normal employement terms and conditions.

iii. Entities subject to significant influence by the CityAn entity that has the power to participate in the financial and operating policy decisions of anentity, but does not have control over those policies, is an entity which holds significant influence.Significant influence may be gained by share ownership, statute or agreement.

iv. Joint venture entities accounted for under the proportionate consolidation methodThe City has a one-third interest in an environmental health and building service. The interest in the joint venture entity is accounted for in these financial statements using the proportionate consolidated method of accounting. For details of interests held in joint venture entities, refer to

Note 24




24. INVESTMENT IN ASSOCIATE AND JOINT ARRANGEMENTS

2020 2019$ $

(a) Carrying amount of investment in associate

Interest in Joint Venture - EMRC

Current assets 35,503,586 42,087,879Non current assets 43,753,235 38,864,434Total assets 79,256,821 80,952,313

Current liabilities 3,182,166 2,803,826Non current liabilities 2,946,509 1,755,706Total liabilities 6,128,675 4,559,532

Net assets 73,128,146 76,392,781

Net increase/(decrease) in share of associate entity's net assets (3,264,635) 4,668,517

- Share of (loss)/gain of equity accounted investee (1,782,645) 4,583,216- Share of other comprehensive income - equity accounted investee 471,653 85,301- Dividend received (1,953,643) - - Share of associates total comprehensive income arising during the period (3,264,635) 4,668,517

Carrying amount at beginning of period 76,392,781 71,724,264- Share of (loss)/gain of equity accounted investee (1,782,645) 4,583,216- Share of other comprehensive income - equity accounted investee 471,653 85,301- Dividend received (1,953,643) -

Carrying amount at end of period 73,128,146 76,392,781

(b) Share of joint operations

Eastern Metropolitan Regional Council

The City has a 39.64% share in the net assets of the Eastern Metropolitan Regional Council (EMRC) as a member Council.The value of this investment is based on the City's share of Net Assets as disclosed in the Financial Statements of the EMRC for 2019/20. The City's investment in the EMRC has decreased by $3,264,635 to $73,128,146.

In compliance with AASB128 the City's investment is accounted for using the equity method. The City's profit includes its share of the EMRC's profit and the City's other comprehensive income includes its share of the EMRC's other comprehensive income:Current Assets 35,503,586 42,087,879Non-Current Assets 43,753,235 38,864,434Total assets 79,256,821 80,952,313

Current liabilities 3,182,166 2,803,826Total liabilities 6,128,675 4,559,532

Statement of Comprehensive income (1,782,645) 4,583,216Dividend Received (1,953,643) - Net result for the period (3,736,288) 4,583,216

Other comprehensive incomeItems that will not be reclassified subsequently to profit or lossChanges in asset revaluation surplus 471,653 85,301Total other comprehensive income for the period 471,653 85,301

Total comprehensive income for the period (3,264,635) 4,668,517

SIGNIFICANT ACCOUNTING POLICIESInterests in joint arrangements Interests in joint arrangements (Continued)Joint arrangements represent the contractual sharing of Joint operations represent arrangements control between parties in a business venture where whereby joint operators maintain direct interests in unanimous decisions about relevant activities are required. each asset and exposure to each liability of the

arrangement. The City’s interests in the assets, Separate joint arrangements providing joint ventures with an liabilities, revenue and expenses of joint operations interest to net assets are classified as a joint venture and are included in the respective line items of the accounted for using the equity method. The equity method financial statements. of accounting, whereby the investment is initially recognised at cost and adjusted thereafter for the post-acquisition change in the City's share of net assets of the associate. In addition, the City's share of the profit or loss of the associate is included in the City's profit or loss.


124 City of Swan


25. MAJOR LAND TRANSACTIONS

New Junction (formerly Midland Oval Redevelopment)

(a) Details

2020 2020 2019(b) Current year transactions Actual Budget Actual

$ $ $Other revenue

- Sale proceeds - 1,560,570 2,539,431- Written Down Value of land - - (2,790,645)

- 1,560,570 (251,214)

Other expenditure - Property Acquisitions (601,194) - - - Demolition Costs (39,420) - - - Infrastructure (8,319,752) (8,344,000) (797,157) - Development Costs (91,628) (135,000) (277,933)

(9,051,994) (8,479,000) (1,075,090)

(9,051,994) (6,918,430) (1,326,304)

(c) Expected future cash flows2020/21 2021/22 2022/23 2023/24 Total

$ $ $ $ $Cash outflowsDevelopment Costs

- Planning costs (100,000) (150,000) (150,000) (150,000) (550,000) - Demolition Costs - (250,000) - - (250,000) - Property Acquisitions - (3,620,000) - - (3,620,000)

Development Infrastructure - Buildings (300,000) - - - (300,000) - Roadworks - (2,625,000) - (2,643,000) (5,268,000) - Public Open Space (3,400,000) - (2,896,800) - (6,296,800)

(3,800,000) (6,645,000) (3,046,800) (2,793,000) (16,284,800)Cash inflows

- grants/contributions 1,320,430 - - - 1,320,430 - Proceeds from sale of property - - 6,470,250 2,832,800 9,303,050

1,320,430 - 6,470,250 2,832,800 10,623,480

Net cash flows (2,479,570) (6,645,000) 3,423,450 39,800 (5,661,320)

Funding Source - Borrowings 1,470,480 2,800,000 - - 4,270,480 - Reserves/Trust Applied 1,009,090 3,845,000 3,046,800 2,793,000 10,693,890 - Transfers to Reserve - - (6,470,250) (2,832,800) (9,303,050)

2,479,570 6,645,000 (3,423,450) (39,800) 5,661,320

The New Junction precinct comprises approximately 11 hectares of land bounded by Morrison Road, Keane Street, The Crescent and Sayer Street, Midland. The City owns approximately 85% of the precinct.The City has prepared a Midland Oval Redevelopment Masterplan (MORM) which was adopted by Council on 30 January 2017. Council resolved at its Ordinary Meeting of 11 April 2018 to advertise all four scenarios in the draft Business Plan and to conduct a three month public consultation period.The consultation period closed at the end of August 2018. At its Ordinary Meeting of 24 October 2018 Council approved the Midland Oval Redevelopment Precinct (MORP) Business Plan.



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128 City of Swan


26. RATING INFORMATION (Continued)

(e) Interest Charges & Instalments

Instalment Instalment Unpaid RatesDate Plan Plan Interest

Instalment Options Due Admin ChargeInterest Rate Rate $ % %

Option OneSingle full payment 30/08/2019 0.00%Option TwoFirst instalment 30/08/2019 - 0.00% 0.00%Second instalment 01/11/2019 - 5.00% 5.00%Third instalment 17/01/2020 - 5.00% 5.00%Fourth instalment 20/03/2020 - 5.00% 5.00%


$ $ $Interest on unpaid rates 630,412 650,000 573,868Interest on instalment plan 633,486 600,000 654,245

1,263,899 1,250,000 1,228,113




27. RATE SETTING STATEMENT INFORMATION2019/20

2019/20 Budget 2019/20 2018/19(30 June 2020 (30 June 2020 (1 July 2019 (30 June 2019

Carried Carried Brought CarriedNote Forward) Forward) Forward) Forward

$ $ $ $(a) Non-cash amounts excluded from operating activities

The following non-cash revenue or expenditure has been excluded from amounts attributable to operating activities within the Rate SettingStatement in accordance with Financial Management Regulation 32.

Adjustments to operating activitiesLess: Profit on asset disposals 11(a) (402,959) (238,000) (214,942) (214,942)Land ceded to the Crown 2,045,809 - 1,979,004 1,979,004Non-operating gifted assets from state library (1,262,903) - - - Movement in pensioner deferred rates (non-current) (444,978) (207,090) 54,687 54,687Movement in employee provisions and adjustments (2,748,915) 817,068 683,299 683,299Movements in Bonds and Deposits (519,850) - 663,083 663,083Add: Loss on disposal of assets 11(a) 64,727 2,836,520 1,350,325 1,350,325Add: Depreciation on non-current assets 11(b) 42,798,213 43,998,720 41,197,785 41,197,785Non cash amounts excluded from operating activities 39,529,144 47,207,218 45,713,241 45,713,241

(b) Surplus/(deficit) after imposition of general rates

The following current assets and liabilities have been excludedfrom the net current assets used in the Rate Setting Statementin accordance with Financial Management Regulation 32 to agree to the surplus/(deficit) after imposition of general rates.

Adjustments to net current assetsLess: Reserves - cash backed 4 (145,642,139) (120,370,970) (141,828,299) (141,828,299)Less: Financial assets at amortised cost - self supporting loans 5 (64,220) (64,225) (71,205) (71,205)Less: Current assets not expected to be received at end of year

- Land held for resale 8 (5,810,269) - (5,810,269) - - Bonds & Deposits 15 (3,649,976) (3,598,765) (4,169,826) -

Add: Current liabilities not expected to be cleared at end of year- Current portion of borrowings 17 7,069,546 6,956,410 6,768,036 6,696,831- Current portion of contract liability 15 25,899,466 - - - - Current portion of lease liabilities 16 83,295 - - - - Employee benefit provisions held in reserve 4 10,092,120 11,796,193 11,634,234 -

Add: Non-current financial assets that back reserves 5b 11,700,000 - - - Total adjustments to net current assets (100,322,177) (105,281,357) (133,477,329) (135,202,673)

Net current assets used in the Rate Setting StatementTotal current assets 235,568,374 153,634,409 214,712,132 214,712,132Less: Total current liabilities (71,794,659) (48,289,892) (36,385,605) (36,385,605)Less: Total adjustments to net current assets (100,322,177) (105,281,357) (133,477,329) (135,202,673)Net current assets used in the Rate Setting Statement 63,451,538 63,160 44,849,198 43,123,854


130 City of Swan


28. FINANCIAL RISK MANAGEMENT

This note explains the City’s exposure to financial risks and how these risks could affect the City’s future financial performance.

Risk Exposure arising from Measurement Management

Market risk - interest rate Sensitivity analysis

Credit risk Aging analysisCredit analysis

Liquidity risk Rolling cash flow forecasts

(a) Interest rate risk

Cash and cash equivalents

Excess cash and cash equivalents are invested in fixed interest rate term deposits which do not expose the City to cash flow interest rate risk. Cash and cash equivalents required for working capital are held in variable interest rate accounts and non-interest bearing accounts. Carrying amounts of cash and cash equivalents at the 30 June and the weighted average interest rate across all cash and cash equivalents and term deposits held disclosed as financial assets at amortised cost are reflected in the table below.

WeightedAverage Carrying Fixed Variable Non Interest

Interest Rate Amounts Interest Rate Interest Rate Bearing% $ $ $ $

2020Cash 1.29% 42,853,275 - 42,853,275 - Term deposits 1.29% 179,300,000 179,300,000 - -

2019Cash 2.48% 22,970,288 - 22,970,288 - Term Deposits 2.48% 167,800,000 167,800,000 - -

SensitivityProfit or loss is sensitive to higher/lower interest income from cash and cash equivalents as a result of changes in interest rates. 2020 2019

$ $

428,533 229,703

BorrowingsBorrowings are subject to interest rate risk - the risk that movements in interest rates could adversely affect funding costs. The City manages this risk by borrowing long term and fixing the interest rate to the situationconsidered the most advantageous at the time of negotiation. The City does not consider there to be any interest rate risk in relation to borrowings. Details of interest rates applicable to each borrowing may be found at Note 17.

Impact of a 1% movement in interest rates on profit and loss and equity

Borrowings and other liabilities Availability of committed credit lines and borrowing facilities

Long term borrowings at variable rates

Cash and cash equivalents, trade receivables, financial assets and debt investments

Diversification of bank deposits, credit limits. Investment policy

Utilise fixed interest rate borrowings




28. FINANCIAL RISK MANAGEMENT (Continued)

(b) Credit risk

Cash and cash equivalents and other financial assets

The city has cash and cash equivalents and other financial assets in the form of term deposits with Australianfinancial institutions with appropriate credit ratings so as to minimise credit risk.

Trade and other receivables

The level of outstanding receivables is reported to Council monthly and benchmarks are set and monitored for acceptable collection performance.

The City applies the AASB 9 simplified approach to measuring expected credit losses using a lifetime expected loss allowance for all trade receivables. To measure the expected credit losses, rates receivable are separated from other trade receivables due to the difference in payment terms and security for rates receivable.

The expected loss rates are based on the payment profiles of rates and fees and charges over a period of 36 months before 1 July 2019 or 1 July 2020 respectively and the corresponding historical losses experienced within this period. Historical credit loss rates are adjusted to reflect current and forward-looking information on macroeconomic factors.

More than 1 More than 2 More than 3Current year past due years past dueyears past due Total

30 June 2020Rates receivable

Expected credit loss 0.00% 0.00% 0.00% 0.00%Gross carrying amount 9,362,822 1,234,541 - - 10,597,363Loss allowance - - - - -

30 June 2019Rates receivable

Expected credit loss 0.00% 0.00% 0.00% 0.00%Gross carrying amount 8,734,620 1,879,269 - - 10,613,889Loss allowance - - - - -

The loss allowance as at 30 June 2020 and 30 June 2019 was determined as follows for trade receivables.

More than 30 More than 60 More than 90Current days past due days past due days past due Total

30 June 2020Trade and other receivables

Expected credit loss 4.181% 0.00% 6.76% 82.341%Gross carrying amount 897,214 23,501 48,118 1,126,384 2,095,217Loss allowance 37,514 - 3,253 927,482 968,249

30 June 2019Trade and other receivables

Expected credit loss 5.356% 0.00% 0.00% 83.323%Gross carrying amount 394,514 25,283 28,753 694,998 1,143,548Loss allowance 21,132 - - 579,090 600,222


132 City of Swan


28. FINANCIAL RISK MANAGEMENT (Continued)

(c) Liquidity risk

Payables and borrowings

The contractual undiscounted cash flows of the City’s payables and borrowings are set out in the liquidity table below. Balances due within 12 months equal their carrying balances, as the impact of discounting is not significant.

Due Due Due Totalwithin between after contractual Carrying1 year 1 & 5 years 5 years cash flows values

2020 $ $ $ $ $

Payables 21,794,852 - - 21,794,852 21,794,852Borrowings 8,438,903 26,057,042 9,567,853 44,063,798 39,229,828Contract liabilities 30,619,157 37,974,879 4,135,951 72,729,987 68,010,296Lease liabilities 83,295 61,396 - 144,691 144,691

60,936,207 64,093,317 13,703,804 138,733,328 129,179,667

2019

Payables 14,501,296 - - 14,501,296 14,501,296Borrowings 8,321,246 24,526,808 8,973,764 41,821,818 36,391,864

22,822,542 24,526,808 8,973,764 56,323,114 50,893,160




29. INITIAL APPLICATION OF AUSTRALIAN ACCOUNTING STANDARDS

During the current year, the City adopted all of the new and revised Australian Accounting Standards and Interpretations which were compiled, became mandatory and which were applicable to its operations.

(a)

The City adopted AASB 1058 Income for Not-for-Profit Entities (issued December 2016) on 1 July 2019 which will result in changesin accounting policies. In accordance with the transition provisions AASB 1058, the City adopted the new rules retrospectively with the cumulative effect of initially applying AASB 1058 recognised at 1 July 2019. Comparative information for prior reporting periodswas not restated in accordance with AASB 1058 transition requirements.

In applying AASB 1058 retrospectively with the cumulative effect of initially applying the Standard on 1 July 2019 changes occurredto the following financial statement line items by application of AASB 1058 as compared to AASB 118: Revenue and AASB 1004: Contributions before the change:

AASB 118 and AASB 1004 AASB 1058

carrying amount carrying amountNote 30 June 2019 Reclassification 01 July 2019

$ $ $

Contract assets (62,974,377) (62,974,377)

Trade and other payablesRates paid in advance - (5,010,458) (5,010,458) Adjustment to retained surplus from adoption of AASB 1058 29c - (67,984,835) (67,984,835)

Prepaid rates are, until the taxable event for the rates has occurred, refundable at the request of the ratepayer. Therefore the rates received in advance gave rise to a financial liability that is within the scope of AASB 9. On 1 July 2019 the prepaid rates were recognised as a financial asset and a related amount recognised as a financial liability and no income recognised by the City. When the tax event occurred, the financial liability was extinguished and the City recognised income for the prepaid rates that have not been refunded.Assets that were acquired for consideration, that were significantly less than fair value principally to enable the City to further its objectives, may have been measured on initial recognition under other Australian Accounting Standards at a cost that was significantly less than fair value. Such assets are not required to be remeasured at fair value.

AASB 1058: Income For Not-For-Profit Entities


134 City of Swan


29. INITIAL APPLICATION OF AUSTRALIAN ACCOUNTING STANDARDS (Continued)

(b)The City adopted AASB 16 retrospectively from 1 July 2019 which resulted in changes in accounting policies. In accordance with the transition provisions of AASB 16, the City has appplied this Standard to its leases retrospectively, with the cumulative effect of initially applying AASB16 recognised on 1 July 2019. In applying AASB 16, under the specific transition provisions chosen, the City will not restate comparatives for prior reporting periods.

Note 2020$

Operating lease commitments at 30 June 2019 applying AAS 117 284,069 Lease liability - current 157,817 Lease liability - non-current 126,252 Right-of-use assets recognised at 1 July 2019 284,069 Adjustment to retained surplus Nil

In applying AASB 16 for the first time, the City will use the following practical expedient permitted by the standard. - The exclusion of initial direct costs from the measurement of the right-of-use asset at the date of initial application.

(c) Impact of New Accounting Standards on Retained Surplus

The impact on the City's retained surplus due to the adoption of AASB 15, AASB 1058 and AASB 16 as at 1 July 2019 was as follows:

Note Adjustments 2019$

Retained surplus - 30 June 2019 1,088,951,274Adjustment to retained surplus from adoption of AASB 16 29b - Adjustment to retained surplus from adoption of AASB 1058 29a (67,984,835) (67,984,835)Retained surplus - 1 July 2019 1,020,966,439

AASB 16: Leases




30. TRUST FUNDS

Funds held at balance date which are required to be held in trust and which are not included in the financial statements are as follows:

1 July 2019 Amounts Received Amounts Paid 30 June 2020$ $ $ $

Town Planning Act (Section 154)Public Open Space 6,832,961 38,424 - 6,871,385

Building and Construction Industry Training FundBRB, BCITF, BSL & Dev Assess Panel 186,212 226,177 (186,212) 226,177

Other Trust ItemsDeposit for Part of Lot 3, Quin Rd 11,640 - - 11,640Stage 2 New Junction Development Playground 454,545 454,545 - 909,090Koongamia Oval Bore Replacement - 26,470 - 26,470

7,485,358 745,616 (186,212) 8,044,762


136 City of Swan


31. OTHER SIGNIFICANT ACCOUNTING POLICIES

a) Goods and services tax (GST) h) Fair value hierarchyRevenues, expenses and assets are recognised net of the amount AASB 13 requires the disclosure of fair value information by level of the fair of GST, except where the amount of GST incurred is not value hierarchy, which categorises fair value measurement into one of three recoverable from the Australian Taxation Office (ATO). possible levels based on the lowest level that an input that is significant to the

measurement can be categorised into as follows:Receivables and payables are stated inclusive of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included Level 1with receivables or payables in the statement of financial position. Measurements based on quoted prices (unadjusted) in active markets for

identical assets or liabilities that the entity can access at the measurement Cash flows are presented on a gross basis. The GST components of cash date.flows arising from investing or financing activities which are recoverable from, or payable to, the ATO are presented as operating cash flows. Level 2

Measurements based on inputs other than quoted prices included in Level 1 b) Current and non-current classification that are observable for the asset or liability, either directly or indirectly.The asset or liability is classified as current if it is expected to be settled within the next 12 months, being the City’s operational cycle. In the case of Level 3liabilities where the City does not have the unconditional right to defer Measurements based on unobservable inputs for the asset or liability.settlement beyond 12 months, such as vested long service leave, the liability is classified as current even if not expected to be settled within the next 12 The fair values of assets and liabilities that are not traded in an active market months. Inventories held for trading are classified as current or non-current are determined using one or more valuation techniques. These valuation based on the City's intentions to release for sale. techniques maximise, to the extent possible, the use of observable market

data. If all significant inputs required to measure fair value are observable, the c) Rounding off figures asset or liability is included in Level 2. If one or more significant inputs are not All figures shown in this annual financial report, other than a rate in the dollar, based on observable market data, the asset or liability is included in Level 3.are rounded to the nearest dollar. Amounts are presented in Australian Dollars.

Valuation techniquesd) Comparative figures The City selects a valuation technique that is appropriate in the circumstances Where required, comparative figures have been adjusted to conform with and for which sufficient data is available to measure fair value. The availability changes in presentation for the current financial year. of sufficient and relevant data primarily depends on the specific characteristics

of the asset or liability being measured. The valuation techniques selected by When the City applies an accounting policy retrospectively, makes a the City are consistent with one or more of the following valuation approaches:retrospective restatement or reclassifies items in its financial statements that has a material effect on the statement of financial position, an additional Market approach(third) statement of financial position as at the beginning of the preceding Valuation techniques that use prices and other relevant information period in addition to the minimum comparative financial statements is generated by market transactions for identical or similar assets or liabilities.presented.

Income approache) Budget comparative figures Valuation techniques that convert estimated future cash flows or income Unless otherwise stated, the budget comparative figures shown in this annual and expenses into a single discounted present value.financial report relate to the original budget estimate for the relevant item of disclosure. Cost approach

Valuation techniques that reflect the current replacement cost of the servicef) Superannuation capacity of an asset.The City contributes to a number of Superannuation Funds on behalf of employees. All funds to which the City contributes are defined contribution Each valuation technique requires inputs that reflect the assumptions that plans. buyers and sellers would use when pricing the asset or liability, including

assumptions about risks. When selecting a valuation technique, the City g) Fair value of assets and liabilities gives priority to those techniques that maximise the use of observable inputs Fair value is the price that the City would receive to sell the asset or would and minimise the use of unobservable inputs. Inputs that are developed using have to pay to transfer a liability, in an orderly (i.e. unforced) transaction market data (such as publicly available information on actual transactions) and between independent, knowledgeable and willing market participants at the reflect the assumptions that buyers and sellers would generally use when measurement date. pricing the asset or liability are considered observable, whereas inputs for

which market data is not available and therefore are developed using the best As fair value is a market-based measure, the closest equivalent observable information available about such assumptions are considered unobservable.market pricing information is used to determine fair value. Adjustments to market values may be made having regard to the characteristics of the i) Impairment of assetsspecific asset or liability. The fair values of assets that are not traded in an In accordance with Australian Accounting Standards the City's cash generating active market are determined using one or more valuation techniques. These non-specialised assets, other than inventories, are assessed at each reporting valuation techniques maximise, to the extent possible, the use of observable date to determine whether there is any indication they may be impaired.market data.

Where such an indication exists, an impairment test is carried out on the To the extent possible, market information is extracted from either the asset by comparing the recoverable amount of the asset, being the higher of principal market for the asset or liability (i.e. the market with the greatest the asset's fair value less costs to sell and value in use, to the asset's volume and level of activity for the asset or liability) or, in the absence of carrying amount.such a market, the most advantageous market available to the entity at the end of the reporting period (i.e. the market that maximises the receipts from Any excess of the asset's carrying amount over its recoverable amount is the sale of the asset after taking into account transaction costs and recognised immediately in profit or loss, unless the asset is carried at a transport costs). revalued amount in accordance with another Standard (e.g. AASB 116)

whereby any impairment loss of a revalued asset is treated as a revaluation For non-financial assets, the fair value measurement also takes into account decrease in accordance with that other Standard.a market participant’s ability to use the asset in its highest and best use or to sell it to another market participant that would use the asset in its highest For non-cash generating specialised assets that are measured under the and best use. revaluation model ,such as roads, drains, public buildings and the like, no

annual assessment of impairment is required. Rather AASB 116.31 applies and revaluations need only be made with sufficient regulatory to ensure the carrying value does not differ materially from that which would be determined using fair value at the ends of the reporting period.




32. ACTIVITIES/PROGRAMS

City operations as disclosed in these financial statements encompass the following service orientated activities/programs

PROGRAM NAME AND OBJECTIVES ACTIVITIES

GOVERNANCETo collect revenue to allow for the provision of services

Administration and operation of facilities and services to members of council. Other costs that relate to the tasks of assisting elected members and ratepayers on matters which do not concern specific council services.

GENERAL PURPOSE FUNDINGTo collect revenue to allow for the provision of services.

Rates, general purpose government grants and interest revenue.

LAW, ORDER, PUBLIC SAFETYTo provide services to help ensure a safer community.

Supervision of various by-laws, fire prevention, emergency services and animal control.

HEALTHTo provide an operational framework for good community health.

Food and water quality, pest control, immunisation services, child health services and health education.

EDUCATION AND WELFARETo meet the needs of the community in these areas.

Management and support for families, children, youth and the aged within the Community by providing Youth, Aged and Family Centres. Home and Community Aged Care Program, Junior Council and assistance to schools.

HOUSING To help ensure adequate housing. Maintain and administer Elvire Chalets.

COMMUNITY AMENITIESProvide services required by the community. Rubbish collection services and disposal of waste, urban stormwater drainage,

protection of environment, town planning and regional development and other community amenities (bus shelters, public toilets).

RECREATION AND CULTURETo establish and efficiently manage infrastructure and resources which will help the social wellbeing of the community.

Maintenance of public halls, civic centre, recreation and aquatic centres, parks and reserves, libraries, heritage and culture.

TRANSPORTTo provide effective and efficient transport services to the community.

Construction and maintenance of roads, footpaths, bridges, street cleaning and lighting, traffic lights, road verges, street scaping and depot maintenance.

ECONOMIC SERVICESTo help promote the Municipality and improve its economic wellbeing.

The regulation and provision of tourism, area promotion, building control, noxious weeds and vermin control.

OTHER PROPERTY AND SERVICESPublic works overheads, plant and equipment operations and activities not reported in the above programs.


138 City of Swan


33. FINANCIAL RATIOS 2020 2019 2018Actual Actual Actual

Current ratio 2.60 2.78 3.23Asset consumption ratio 0.75 0.72 0.73Asset renewal funding ratio 1.26 0.96 1.06Asset sustainability ratio 0.33 0.71 0.40Debt service cover ratio 7.99 8.12 9.07Operating surplus ratio 0.16 0.16 0.22Own source revenue coverage ratio 1.06 1.08 1.16

The above ratios are calculated as follows:

Current ratio current assets minus restricted assetscurrent liabilities minus liabilities associated

with restricted assets

Asset consumption ratio

Asset renewal funding ratio

Asset sustainability ratiodepreciation

Debt service cover ratio annual operating surplus before interest and depreciationprincipal and interest

Operating surplus ratio operating revenue minus operating expensesown source operating revenue

Own source revenue coverage ratio own source operating revenueoperating expense

depreciated replacement costs of depreciable assetscurrent replacement cost of depreciable assets

NPV of planned capital renewal over 10 yearsNPV of required capital expenditure over 10 years

capital renewal and replacement expenditure




34. EVENTS OCCURRING AFTER THE END OF THE REPORTING PERIOD

No events after the reporting date were identified by management that would affect the operations of the City or the results of the City significantly.

The impact of COVID-19 is difficult to predict and may result in a loss of income through fees waived and potentially lower investment earnings.


Financial report - City of Swan

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