2019-06-28 Special Meeting Agenda

SPECIAL MEETING AGENDA   28 JUNE 2019




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SPECIAL MEETING AGENDA                                                                  28 JUNE 2019

 FINANCIAL SUSTAINABILITY POLICY

 COUNCIL POLICY

 Operating surplus
  Council will ensure that it maintains an operating surplus each year over the life of the ten (10) year
 financial plan. An operating surplus is achieved when operating revenues are greater than operating
 expenses (including depreciation and interest on debt). The operating surplus ratio is one of the
 three (3) key measures of financial sustainability required under legislation. It calculates the
 operating surplus (or deficit) as a percentage of Council operating revenue. The target operating
 surplus ratio set by the state government is between 0% and 10%.
  Council will target to achieve an operating surplus commensurate with mitigating known risks with
  respect to appropriately funding future trunk infrastructure requirements, whilst also ensuring that
 the operating surplus ratio is contained within the required benchmarks.
  Expenditure management
  Council will ensure that expenditure on goods and services to meet established service levels will
  be undertaken efficiently and effectively. This will be achieved via the development of the annual
 operating expenditure budget from a zero base, ensuring staff compliance with Council’s policies
 and procedures as well as partnering with key stakeholders such as Local Buy to ensure efficient
 cost procurement options are implemented.
  Expenditure management outcomes will be measured by how Council performs annually against its
 operating and capital expenditure budget allocations.
 Asset management
  Council will ensure that it maintains its infrastructure and assets on an ongoing basis at defined
  levels to ensure that services are able to be provided effectively to the community.
 The asset sustainability ratio is one of the three (3) key measures of financial sustainability required
  under legislation. This ratio is calculated by measuring the annual expenditure on the renewal and
  rehabilitation of Council’s assets against the annual depreciation charge. It is a measure of whether
  Council is reinvesting appropriately in existing infrastructure assets.
  Council will target over the life of the ten (10) year financial plan to achieve a minimum asset
 sustainability ratio of 90% (including plant, fleet and office equipment renewals) consistent with the
  benchmark unless condition based renewal forecasts demonstrate a percentage lower than 90% in
 any given year.
  Established management plans for Council’s asset and infrastructure classes will incorporate annual
  maintenance financial estimates as well as ten (10) year renewal / replacement forecasts developed
 from regular asset condition assessments. Asset management plan financial forecasts will be
  incorporated into Council’s ten (10) year financial plan and annual budget to ensure financial
 sustainability implications are appropriately considered.
 Annual depreciation forecasts will be developed on an asset by asset basis utilising methodology
 endorsed by the Queensland Audit Office, with assets regularly revalued in accordance with
  legislative requirements
 The QTC project decision framework will be utilised for business case analysis for all new and
  replacement capital projects in accordance with policy. The outcomes from the analysis will be used
 to inform Council of whole of life costing implications associated with each project.

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