2021-02-15 General Committee Meeting Agenda

GENERAL COMMITTEE MEETING AGENDA   15 FEBRUARY 2021




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GENERAL COMMITTEE MEETING AGENDA                                            15 FEBRUARY 2021

 Repayment Ability
 8.   Council will maintain close scrutiny of debt levels to ensure that relevant 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 will be given to the provision of loans
      to business activities and other specifically identified projects and activities from surplus cash
      reserves held by Council by way on an internal loan.
 Proposed New 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
 Refinancing of Existing Borrowings
 11   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. The debt policy will include any proposed refinancing initiatives for the current year and
      the next 9 years.
      11.1 Proposed refinancing of existing borrowings are outlined in Appendix B
 Leases
 12   Funding alternatives for asset acquisition also includes leasing. Leases are defined under
      accounting standard AASB 16 as a contract for the right of use over an asset for a temporary
      period of time.
      12.1 Any low value (under $10,000) or short term (under 12 months) leases are considered an
           operating expense.
      12.2 However, all other lease arrangements under AASB 16 are reported as a right-of-use
           asset with a corresponding liability in the balance sheet recognised with all other debt and
           loan borrowing instruments.
      12.3 Any lease arrangement greater than $2 million (other than any lease for office premises)
           are considered borrowings under the Statutory Bodies Financial Arrangement Act 1982
           and will require prior approval by the Queensland Government before they are committed.
      12.4 Council will also undertake a lease vs. buy analysis before entering into any lease
           contract.
 Internal Loans
 13.  The provision and approval of an internal loan will depend on the availability of surplus cash at
      the time of consideration and the capacity of either the business activity or operational activity
      to repay the loan.
      13.1 All decisions regarding internal loans will be made by Council as part of the annual budget
           process. The approval to establish an internal loan will only occur following confirmation
           that Council's relevant sustainability indicators in the 10 year financial forecast will not be
           compromised.

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