AGENDA AND BUSINESS PAPER

 

 

Airport Advisory Committee

 

 

 

To be held on
Wednesday

6 February 2019

AT 6.00pm

 

 

 

Cnr Baylis and Morrow Streets,
Wagga Wagga NSW 2650
PO Box 20, Wagga Wagga

 

Phone: 1300 292 442
Fax: 02 6926 9199
Website: www.wagga.nsw.gov.au

 


Reports submitted to the Airport Advisory Committee to be held on Wednesday 6 February 2019.

Airport Advisory Committee AGENDA AND BUSINESS PAPER

Wednesday 6 February 2019

ORDER OF BUSINESS:

CLAUSE           PRECIS                                                                                                PAGE

ACKNOWLEDGEMENT OF COUNTRY                                                                              2

APOLOGIES                                                                                                                      2

Confirmation of Minutes                                                                                          2

DECLARATIONS OF INTEREST                                                                                        2

Reports from Staff

RP-1                 Submissions received for the 2019/20 Draft Budget                 3

RP-2                 Financial Information Requested                                                21

RP-3                 Airport Review - Scope of Works                                                 53

QUESTIONS WITH NOTICE 


ACKNOWLEDGEMENT OF COUNTRY

 

 

APOLOGIES

 

 

Confirmation of Minutes

CM-1              Meeting Minutes - 19 December 2018       

 

Recommendation

That the Minutes of the proceedings of the Airport Advisory Committee Meeting held on 19 December 2018 be confirmed as a true and accurate record.

 

 

Attachments  

1.

Meeting Minutes - 19 December 2018

59

 

 

DECLARATIONS OF INTEREST


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                 RP-1

 

Reports from Staff

RP-1               Submissions received for the 2019/20 Draft Budget

Author:          Carolyn Rodney 

Director:       Natalie Te Pohe

         

 

Summary:

Committee members were requested to provide feedback to Council by 29 January 2019 on the draft 2019/20 Airport Budget.

 

Council officers have received two submissions and received a further one feedback with an extension of time requested.

 

Council officers have reviewed the submissions and the feedback provided. Council officers are still recommending a 1.9% fee increase to Airport Fees and Charges due to the reasons outlined in this report.

 

 

Recommendation

That the Committee:

a       Note that two formal submissions were received on the 2019/20 draft budget and a further one request for an extension to the submission due date

b       Note the anticipated under budgeted income for Passenger Charges for the 2018/19 financial year

c        Note the expected financial position of the Airport Reserve at 30 June 2019

 

Report

At the 19 December 2018 Airport Advisory Committee meeting, the committee resolved the following in regards to the 2019/20 Draft Airport Budget:

 

Following this, on 29 January 2019 Council extended the deadline until 12 noon 30 January 2019.

 

Council has received three formal submissions and one request for an extension. At the time of finalising this report, the further submission had not been received.

 

Submission 1: REX, received 23 January 2019 – Attachments 1 and 2.

 

Submission 2 and 3: Mr Geoff Breust, received 29 January 2019 and subsequently revised on 3 February 2019 – Attachment 3 and 4.

 

Submission 4: Request for an extension: Qantas, received 30 January 2019 – Attachment 5.

 

Airport Reserve

 

As noted in RP-2 report presented to the 19 December 2018 Airport Advisory Committee meeting:

 

 

Reference is made to the opening sentence in the above extract “if all operating income and expenditure budgets are met…” 

 

Passenger Charges income for 2018/19 is currently tracking at 46.22% as at 31 December 2018. The December 2018 cost statement provided to committee members on 18 January 2019 includes an accrual for the December month – the 46.22% is six months of passenger charges income.

 

Passenger Charges summary:

Budgeted income

$2,792,785

YTD Actuals as at 31 December 2018

$1,290,849

Percentage Target Versus Actuals

50% v 46.22%

Anticipated under budget if first half of year trend continues

($211,087)

 

 

If the passenger charges income continues to underperform to budget, there will be a reduction in the amount of income that is expected to be transferred to the Airport Reserve at the end of the financial year ($259,722 as opposed to the budgeted $470,809).  This assumes all other income and expenditure budgets are met.

 

Proposed 1.9% Fee Increase

 

At present, the income the Airport is generating is not adequate to cover the operating expenditure and future capital requirements of the Airport.  The Airport’s asset base is in excess of $36.3M, and to have an expected Cash reserve of only $259,722 at the end of this financial year is not adequate. 

 

It is for the above reason that Council officers are still recommending a 1.9% fee increase, to improve the financial position of the Airport Reserve to meet the future needs of the Airport and expectations of the community. 

 

The review that will be undertaken this year is anticipated to provide advice and clarification to Committee members.  It is hoped that there will be some efficiencies gained, however it is not anticipated that any efficiency gains will have a material impact on the next few years budgets. 

 

As previously advised to the Committee, the transfers to the Airport Reserve excludes depreciation. If during the review the depreciation figures change, this will not have any impact on the Airport Reserve position. Depreciation expense is a non-cash item, and does not impact the Airport Reserve.

 

Financial Implications

Councillors will consider public exhibition of the annual budget in April, consider any public submissions and adopt the annual budget of Council and therefore the Airport at the 24 June 2019 Council meeting.

Policy and Legislation

POL 021 – Financial Reserves for Future Expenditures

POL 013 – Return on Investment Council Businesses Policy

POL 052 – Budget Policy

 

Link to Strategic Plan

Community Leadership and Collaboration

Objective: We have strong leadership

Outcome: We are accountable and transparent

 

Risk Management Issues for Council

Without adequate revenue to cover the costs of operating the Airport, there is the risk that the Airport will not be financially sustainable and not meet the community’s expectations into the future.


 

Internal / External Consultation

Council is consulting with the Airport Advisory Committee to review the proposed draft budget for the 2019/20 Long Term Financial Plan.

 

Attachments  

 

1.

Submission on 2019/20 Budget from Rex

 

2.

Annex A to Submission on 2019/20 Budget from Rex

 

3.

Submission 2019-20 Budget - G Breust revised 29 January 2019

 

4.

Revised Submission on 2019/20 Budget from Mr Geoff Breust

 

5.

Request for extension - Submission 2019-20 - Draft Airport - Qantas - 30 January 2019

 

 

 

 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                       RP-1

 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         RP-1

 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                       RP-1

 


 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                       RP-1

 


 


 


 


 


 


 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                       RP-1

 


 

 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                 RP-2

 

RP-2               Financial Information Requested

Author:          Carolyn Rodney 

Director:       Natalie Te Pohe

         

 

Summary:

The Airport Advisory Committee has requested information on AVDATA, electricity accounts and oncharging, along with plant and vehicle information. 

 

Also included in this report is clarification regarding the Accounting Standards utilised by Council.

 

 

Recommendation

That the Committee receive and note the following:

a       AvData information requested

b       Electricity information requested

c        Plant and Vehicle information requested

d       That AASB 120 - Accounting for Government Grants and Disclosure of Government Assistance is not available for use by Council, as Council is a not-for–profit entity and AASB 120 is only available for use by for-profit entities

 

Report

The Airport Advisory Committee has requested information on AVDATA, electricity accounts and oncharging, and plant and vehicle information. 

 

Also included in this report is clarification on the Accounting Standards utilised by Council. 

 

 


 

AVDATA Australia

 

Included in Mr Geoff Breast’s submission on the 2019/20 draft budget, was the following excerpt:

 

 

Attachment 6 incorporates a response to the above queries, along with clarification on questions raised in prior correspondence.

 

Electricity

 

Please see attached for the December electricity account and also for the calculation spreadsheet used for the oncharging to the various users.

 

Plant and Vehicle Rates

 

Council utilise the Institute of Public Works Engineering Australasia (IPWEA) guide to determine the whole of life costing for plant, which also recommends the optimum replacement time to deliver the best resale value for the piece of plant. The preventative maintenance schedules are as per the manufacturer’s recommendation. 

 

The monthly plant charge is calculated taking into account the following over the expected life of the plant item:

 

·   Purchase price

·   Maintenance costs

·   Fuel consumption

·   Insurance

·   Registration costs if applicable

 

 

Accounting Standards

 

At the informal Airport Advisory Committee meeting held at REX on 29 November 2018, REX advised the Committee that Council were not utilising the correct accounting standards in regards to the treatment of income. Out of session on 20 December 2018, REX emailed Council AASB 120 Accounting for Government Grants and Disclosure of Government Assistance.  AASB 120 is attached to this report.  The Committee should note the application section on page 8, shown below:

 

 

As is shown above, AASB 120 applies to “for-profit” entities. Council is a not-for-profit entity, and utilises the following accounting standards:

 

·     AASB 118 – Revenue

·     AASB 1004 – Contribution

·     AASB 13 – Fair Value measurement

·     AASB 116 – Property, Plant and Equipment

 

Further to this, the Office of Local Government’s Code of Accounting Practice outlines the relevant accounting standard for each of the sections in the annual financial statements. For example, Income (Note 3 – 2018/19) is shown below for the Committees’ information:

 

 

Council is audited by the NSW Audit Office each financial year where the financials of Council are reviewed to ensure they are prepared in accordance with the Australian Accounting Standards and the Local Government Code of Accounting Practice and Financial Reporting.

 

Financial Implications

N/A

Policy and Legislation

POL 021 – Financial Reserves for Future Expenditures

POL 013 – Return on Investment Council Businesses Policy

POL 052 – Budget Policy

 

Link to Strategic Plan

Community Leadership and Collaboration

Objective: We have strong leadership

Outcome: We are accountable and transparent

 

Risk Management Issues for Council

Without adequate revenue to cover the costs of operating the Airport, there is the risk that the Airport will not be financially sustainable into the future and the airport cannot be maintained to the required standards nor meet the expectations of the community.

Internal / External Consultation

Council’s Finance, Airport, and Procurement divisions have provided input into this report.


 

 

Attachments  

 

1.

December Electricity Account

 

2.

December Electricity Account - Various Users invoiced

 

3.

AASB 120 - Accounting for Government Grants and Disclosure of Government Assistance - provided by REX

 

4.

August 2018 - Defence Landings

 

5.

Clarification Email from D Woods to G Breust sent 2 February 2019

 

6.

Australian Airports Association - BIL00011768

 

 

 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                       RP-2

 


 


 


 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         RP-2

 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                       RP-2

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         RP-2

 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                       RP-2

 


 


 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                       RP-2

 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                 RP-3

 

RP-3               Airport Review - Scope of Works

Author:          Darryl Woods 

Director:       Caroline Angel

         

 

Summary:

Airport Review of budgeted items - Council staff have incorporated feedback from the informal Airport Advisory Committee meeting held on the 29 November 2018 and Airport Advisory Committee meeting held on the 19 December 2018.

 

 

Recommendation

That the Committee:

a       note the contents of the report

b       endorse the scope of works for the Wagga Wagga airport review

 

Report

Further to the Airport Review report presented to the Airport Advisory Committee meeting of 3 October 2018, a draft scope of works is attached for the Committee’s review.

Financial Implications

Council has budgeted $20,000 for this work

Policy and Legislation

N/A

Link to Strategic Plan

Community Leadership and Collaboration

Objective: We have strong leadership

Outcome: We are accountable and transparent

Risk Management Issues for Council

N/A

Internal / External Consultation

Report the outcome Council for approval to undertake consultancy.

 

Attachments  

 

1.

Wagga Wagga City Council - Airport Reveiw - Draft Scope - February 2019

 

 

 

 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                                       RP-3

 


 


 


Report submitted to the Airport Advisory Committee on Wednesday 6 February 2019.                                                         

 

QUESTIONS WITH NOTICE 

 


Reports submitted to the Airport Advisory Committee to be held on Wednesday 6 February 2019.