2021-06-30 Special Meeting Agenda

SPECIAL MEETING AGENDA    30 JUNE 2021


                         ATTACHMENT 3




                           Page 21 of 67

SPECIAL MEETING AGENDA                                                                   30 JUNE 2021

                                                                                      ATTACHMENT 3

   | » |      NOOSA                                                         Council Policy
        i     Keeleele                                                    DEBT POLICY

  Corporate Plan Reference:                  Long term planning for Noosa Shire

   Endorsed by Council:                      30 June 2021

   Policy Author:                             Director Corporate Services

 POLICY BACKGROUND
 The purpose of this policy is to ensure the sound management of Council's existing and future debt.
 The policy will provide clear guidance for staff in the management of Council’s debt portfolio and
 maintenance of appropriate debt and debt service levels.
 This policy applies to all Councillors and Council staff and extends to all borrowing activities of Council
 and any controlled entities.
 COUNCIL POLICY
 Council will utilise a debt management strategy based on sound financial management principles and
 ensure net debt (net financial liabilities) remains within financial sustainability targets.
 Borrowing Purposes
 1.    Legislation prevents Council from accessing loan financing to fund operating deficits.
 2.    Council undertakes full analysis of all funding options as outlined in the Long Term Financial
       Model, including a forward program of capital works, to determine any borrowing requirements.
 3.    Council recognises that infrastructure demands placed upon Council can often only be met
       through borrowings, but will always be mindful of the additional cost incurred by the community
       when assets are acquired through borrowings.
 4.    Council will consider loan funding for capital renewal projects on a case by case basis, but
       predominately borrow only for new, expansion or upgrade capital projects, giving consideration
       to inter-generational equity particularly for the funding of long term infrastructure projects.
 5. | Where capital expenditure is deferred from one year to the next, the drawdown of approved
       loan funds will be reviewed to minimise interest expenses.
6.     Borrowings for infrastructure that provides a positive rate of return on investment will take priority
       over borrowing for other assets.
 Debt Term
 7.    Where capital projects are financed through borrowings, Council will repay the loan over a term
       which takes into consideration the expected life of those assets, and over a term that optimises cash
       flow efficiency.
       7.1.  If surplus funds become available, and where it is advantageous to Council, one-off loan
             repayments will be made to reduce the term of existing loans.
       7.2.  \n an environment of fluctuating interest rates, and where there is a distinct economic
             advantage to Council, consideration will be given to renegotiating any outstanding loans
             to obtain the best long-term benefit to Council.

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