2014-01-02 Budget Attachments

2013/2014 DEBT POLICY


Repayment Ability
8      Council will maintain close scrutiny of debt levels to ensure that relative sustainability
       indicators will not exceed target parameters recommended by Queensland Treasury
       Corporation and the Local Government Regulation 2012.Borrowing Sources
9      Council will raise all external borrowings at the most competitive rates available and from
       sources available as defined by legislation. Consideration may be given to the provision of
       loans to business activities from surplus cash reserves held by Council by way on an internal
       loan.
Proposed Borrowings
10     Pursuant to section 192 Local Government Regulation 2012, Council must prepare a debt
       policy each year that states the new borrowings planned for the current financial year and the
       next 9 financial years.
       10.1 Proposed Borrowings are outlined in Appendix A
Leases
11     Financing alternatives for asset acquisition includes the option of leases. Such facilities are
       defined as being either operating leases or finance leases.
       11.1 Operating leases are undertaken for office equipment, computer equipment and
            vehicles under master lease facilities subject to periodic review.
       11.2 Finance leases are essentially loans and require prior approval by Treasury under the
            Statutory bodies Financial Arrangements Act 1982.

GUIDING PRINCIPLES
The purpose of establishing a Borrowing Policy is to:

      Provide a comprehensive view of Council’s long term debt position and the capacity to fund
       infrastructure growth for the shire;
      Increase awareness of issues concerning debt management;
      Enhance the understanding between Councillors, community groups and Council staff by
       documenting policies and guidelines;
      Demonstrate to government and lending institutions that Council has a disciplined approach
       to borrowing.

ROLES AND RESPONSIBILITIES
Pursuant to section 192 of the Local Government Regulation 2012 detail of the proposed
borrowing for the current year and the future 9 years will be prepared annually as part of the
budget process.

Applications outlining proposed borrowings will be forwarded to the Minister for Local Government
for approval.

Credit Reviews will be undertaken periodically by the QTC on behalf of the Minister for Local
Government.

Loan proceeds will be drawn down subject to cash flow requirements annually so as to minimise
interest expenses.

All lease proposals will be referred to Financial Services for evaluation against the QTC Asset
Financing Model to assess alternatives for asset acquisition and to ensure statutory compliance.




Noosa Shire Council                                                                        Page 2 of 4