2021-02-15 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA                                               15 FEBRUARY 2021


12   DEBT POLICY REVIEW

Author           Manager Financial Services, Trent Grauf
                 Corporate Services Department

Index            ECM/ Subject/ 27.48 Council Policies

Attachments      1.    2020-21 Debt Policy



EXECUTIVE SUMMARY
In December 2020, Council resolved to proceed with an application to Queensland Treasury
Corporation (QTC) to refinance its existing debt under the Local Government Debt Refinancing
Program. To support the loan refinancing application, Council’s current 2020/21 Debt Policy has
been updated.

RECOMMENDATION
That Council note the report by the Manager Financial Services to the General Committee Meeting
dated 15 February 2021 and, pursuant to section 192 of the Local Government Regulation 2012,
adopt the updated Debt Policy for the 2020/21 financial year.



REPORT
At the Ordinary Meeting on 17 December 2020, Council resolved to refinance all of Council’s
current debt balances over a 20-year term and capitalise the early repayment adjustment (ERA)
charge. The closing date for debt refinancing applications to QTC is 26 February 2021, and Council
is required to provide a current Debt Policy as part of the supporting documentation.

In line with the Local Government Regulation 2012, Council adopts its Debt Policy on an annual
basis with the budget, and it includes an outline of borrowings proposed during the current year
plus a forecast of borrowings over the ensuing 9 year period.

The following changes are proposed to the current 2020/21 Debt Policy to ensure a compliant
refinancing process and that the policy is reflective of the revised borrowing program:
    Undertaking of debt refinancing activities: The following clause has been included in the
     Debt Policy to facilitate undertaking of debt refinancing activities:
     Council will periodically review its existing debt portfolio to assess the appropriateness of the
     current structure and whether any net benefit can be achieved through refinancing.
     Consideration will be given to borrowing rates, existing cash reserve levels, future cash flows,
     financial sustainability indicators and the principles outlined in Council’s Financial
     Sustainability Policy.
    Proposed Refinanced Borrowings: Appendix B of the Debt Policy outlines the entire
     existing debt pool (approximately $20.3 million) proposed to be refinanced over a 20-year
     term.




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