2021-02-15 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA   15 FEBRUARY 2021


                                     ATTACHMENT 1




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GENERAL COMMITTEE MEETING AGENDA                                             15 FEBRUARY 2021

                                                                                 ATTACHMENT 1

   WM  MENeew,                                                            Council Policy
  me    i    Reeleele                                                   DEBT POLICY
  Corporate Plan Reference:                 Long term planning for Noosa Shire

  Endorsed by Council:                      15 February 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.   Council will not utilise loan funding to finance operating activities or recurrent expenditure.
 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 loan funding 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 which increases the cost of providing capital
      infrastructure.
 4. — Council will endeavour to fund all capital renewal projects from operating cash flows and borrow
      only for new or upgrade capital projects, having regard to sound financial management principles
      and giving consideration to inter-generational equity 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.  |In 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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