brett grosser: 8/14/2-01: #2052419 · 6/29/2009 · brett grosser: 8/14/2-01: #2052419...

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Agenda - Special (Budget) Meeting 29/6/09 - #2133696

SPECIAL BUDGET MEETING

29 JUNE 200916

2009/10 BUDGET

Brett Grosser: 8/14/2-01: #2052419

RECOMMENDATION:

That Council adopts the 2009/10 Budget as presented, including:

a) Budgeted financial statements for 2009/10 and the following four financial years, pursuant to Sections 518 to 521 of the Local Government Act 1993and the requirements identified within the Local Government Finance Standard 2005, consisting of:

Income StatementAppropriation StatementBalance SheetStatement of Changes in EquityStatement of Cash FlowsCapital Funding StatementStatement of Original Budget by Program

b) 2009/10 Rating and Charges Summary

c) 2009/10 Borrowings Policy

d) 2009/10 Dividend Policy

e) Reserves Policy

f) Code of Competitive Conduct Statement

g) 2009/10 Capital Works Summary

INTRODUCTION:

Section 518 of the Local Government Act 1993 requires Council to, by resolution, adopt a budget for each financial year for its operating fund. The Budget must be developed consistently with the C orporate Plan and Oper ational Plan and be cl early linked with matters specified in the plans.

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COMMENT:

The 2009/10 Budget is produced as a comprehensive document that:

(a) provides readers with information about Council’s budget; and(b) meets legislative requirements.

Broadly, the process used to f ormulate the Operational Plan and associated budget is as follows:

Develop Cairns Regional Council 2009-2014 Corporate Plan and determine which actions must be progressed during the following yearReview the relevant risk registers and r isk treatment plans to deter mine a prioritised action plan to address identified risksReview Audit reports to ensure that all items that have been identified have been addressedConsider other significant opportunities for improvement identified by the Executive Management Team in consultation with Branch Managers. Consider any other key corporate deliverables necessary in the coming year.

The Budget also accommodates a capi tal works program for 2009/10. T he program has been identified and prioritised through a process that considers the capi tal works program for the next five years.

The budget for the organisation is then consolidated and a review is undertaken of the affordability of the budg et using a 10 y ear financial model. T his review can req uire revision of the budget prior to adopti on. In accor dance with S519 of the Local Government Act 1993, the budg et is developed consistent with the Corporate Plan, Operational Plan and Revenue Policy.

A copy of the Budget for 2009/10 is attached. It includes sections detailing the following information:

- Community Financial Report- Budgeted Financial Statements - Rating and Charges Summary for 2009/10- Borrowings Policy 2009/10- Dividend Policy 2009/10- Capital Works Summary for 2009/10 - Code of Competitive Conduct Statement

The Operational Plan sections for the commer cial business units (CBUs) of Cairns Regional Council Water and W aste and C airns Works satisfy Local Government Act 1993 requirements to produce an Annual Performance Plan for CBUs.

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CONSIDERATIONS:

Statutory:

In formulating the budget, Council has complied with the relevant legislative provisions.

Section 518 to 521 outlines the requirements for the adoption of the Budget.

The Local Government Finance Standard 2005 has the f ollowing guidance for the adoption of a budget:

Sections 53 - 57 outline the requirements for the Budget and Revenue StatementSections 76 – 77 outline the requirements for information in the budget on how the Code of Competitive Conduct will apply to the activities of Council.

Financial:

The Operational Plan sets out Council’s objectiv es for 2009/10 and the financial resources required to achieve those obj ectives. T he budget has been pr epared to ensure that the resources required are affordable.

CONSULTATION:

A number of detailed workshops were held with Councillors and staff in the preparation of the Operational Plan and Budget.

CONCLUSION:

The 2009/10 Budget is recommended for adoption.

ATTACHMENTS:

Budget to inform the 2009/10 Operational Planning Processes. (Attachment -#2052528v2).

John RehnActing Manager Financial Services

Brett GrosserGeneral Manager Corporate Services

Peter TabuloActing Chief Executive Officer

CAIRNS REGIONAL COUNCIL

BUDGET 2009/10

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CONTENTS

1. MESSAGE FROM THE MAYOR ....................................................................................................................... 2

2. COMMUNITY FINANCIALS.............................................................................................................................. 5

3. BUDGETED FINANCIAL STATEMENTS .......................................................................................................... 14

4. RATING AND CHARGES SUMMARY FOR 2009/10 ......................................................................................... 28

5. BORROWINGS POLICY 2009/10 .................................................................................................................. 54

6. DIVIDEND POLICY 2009/10 ........................................................................................................................ 56

7. RESERVES POLICY .................................................................................................................................... 58

8. CODE OF COMPETITIVE CONDUCT STATEMENT ........................................................................................... 65

9. CAPITAL WORKS SUMMARY ....................................................................................................................... 69

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1. MESSAGE FROM THE MAYOR

The Cairns Region is feeling the effects of the global economic crisis. The impact on economic growth, jobs and investments are directly affecting this region’s families, communities and businesses. As one of the largest businesses and employers in the region Cairns Regional Council is also feeling those effects. The Cairns region faces many challenges including the need to plan for increased population, to respond to climate change, to protect and enhance our stunning natural assets and to provide for the increasing demands and costs of infrastructure. This budget has been developed in parallel with the community needs and expectations set out in our Corporate Plan. Councillors and council officers have undertaken an exhaustive process for over three months of aligning and balancing Council's vision with the amount of money available. It is important that you know that the process has been rigorous and there have been many hours of robust debate to reach this point. The Cairns Region has been hit especially hard by the economic downturn. Unemployment is at 8.9%, international tourism numbers have fallen significantly and the local construction industry has suffered. Council has faced the same challenges as the corporate sector with a reduction in income and increases in the costs of materials, services and commodities. Bringing down a budget in these circumstances is not easy. Tough decisions have been made. At all times Council has been mindful of the need to balance the community expectations of high service levels with the need to address the economic challenges that face us.

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2009/10 BUDGET AT A GLANCE Our Challenges

• Significant reductions in Council revenue • Cost increases for Council including for electricity, building materials, staff and fuel • Cost shifting by the State Government requiring Council to provide a wider range of services with

little extra funding • A responsibility to maintain services, create jobs and grow the city during the economic downturn

Our Response This year’s budget is framed around five strategic responses to the economic downturn under the theme “Keeping Cairns Confident” The drivers behind our budget are: 1. Building community infrastructure 2. Fostering vibrant communities 3. Creating and protecting jobs 4. Financial Responsibility 5. A sustainable economy Your Rates Rate increases have balanced the pressures on family budgets with the significant cost increase and income decline Council faces this year General rates for households have risen by 3.5-4.6 per cent Water charges have risen to fund the Cleaner Seas project to save the Great Barrier Reef This means an average rate increase of 6-8 per cent across all rating categories Almost 3000 properties will have a decrease in rates The Independent Rate Relief Tribunal will be opened to non-profit organisations for the first time Your Infrastructure $159 million of infrastructure projects to benefit the Cairns Region including: Cleaner Seas - $60 million for the Cleaner Seas Project the save the Great Barrier Reef by upgrading wastewater treatment plants across the region Transport Infrastructure - $26.7 million for transport infrastructure such as roads, footpaths, cycleways Sport and Community Facilities - $13.98 million for sport recreation and community facilities Flood Mitigation - $7.3 million for drainage works to prevent flooding Asset Renewal - $25 million to renew Council assets extending their lifespan and saving ratepayer dollars

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Your Community Funding for community groups, sport, recreation, culture and the arts including: Sport, Recreation and Community Grants - $500,000 in grants for sport, recreation and community groups CBD Safety - Almost $1.4 million to increase CBD safety with security patrols Beach Safety - $1.5 million for lifeguards and stinger nets at our most popular beaches Events - More than $1 million for live performances and concerts on the Esplanade, in the CBD and in cultural venues across the region Festivals - Over $450,000 for festivals across the region Your Future Over $2 million dollars to help the region grow including: Economic development - an economic development fund of $850,000 to attract new businesses to the region and consolidate our existing industries Key economic organisations - support for key economic organisations in the region such as Advance Cairns, Tourism Tropical North Queensland and Tourism Port Douglas Daintree Town Centre Planning - planning projects such as the Mt Peter Masterplan and the Smithfield and Edmonton Town Centres to prepare the region for future growth

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2. COMMUNITY FINANCIALS INTRODUCTION The following budgeted Financial Statements are prepared for the five year period commencing in 2009/10 and concluding in 2013/14. The financial statements are contained in section 3 of this report and include: Income Statement – displays Council’s revenue and expenses. Statement of Appropriations – presents how the profit from the Income Statement is distributed or

constrained for future use. Balance Sheet – displays the Assets (what we own), Liabilities (what we owe) and Community Equity

(our net worth). Statement of Cash Flows – reports how revenue received and expenses paid impacts on Council’s

cash balances. Capital Funding Statement – shows how the expected spending on capital works for the year is to be

funded. Statement of Changes in Equity – presents a summary of transfers to and from Equity accounts

including Accumulated Surplus, Capital and Other Reserves. The budgeted financial statements for 2009/10 form the Original Budget for 2009/10 and will be used for budget performance reporting throughout the year.

ORIGINAL BUDGET 2009/10 AT A GLANCE

Cairns Regional Council’s 2009/10 budget is based on a 12 month financial reporting year. Overall there is an expected Net Result of $69,173,596 and an expected operating deficit of $9,846,970.

Income Assets - Total expected Income $343,351,698 - Total expected Assets $2,961,126,912 - Operating Revenue $264,331,132 - Current Assets $110,431,100 - Capital Revenue $79,020,566 - Non-Current Assets $2,850,695,812 Expenses Liabilities Total expected Expenses $274,178,102 Total expected Liabilities $167,400,504 Borrowings per assessment Capital

Outstanding loan value per rateable assessment is $1,675. Total of $193,528,611 expected to be

incurred over the 2009/10 financial year.

BACKGROUND Budget Assumptions and Principles Under the requirements of the Local Government Act 1993 and Local Government Finance Standard 2005, Council is required to adopt a budget for a five year period up to 2013/14.

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Council’s focus is to integrate our planning, budgeting, and performance management functions. Several indexes have been utilised in calculating the budget, these include the March 2009 Labour Price Index 4.4% and the December 2008 Brisbane CPI 4.3%. Operating and capital requirements were ranked and presented to Council, with an assessment of Council’s capacity to deliver. The results of this budget are linked to the Corporate Plan which provides the strategic direction of Council and the Operational Plan which reports on the performance of each activity. Cairns Regional Council controls and manages infrastructure assets that are largely unique to the public sector. These infrastructure assets include roads, bridges, footpaths, water reticulation and sewerage assets, which generally have very long useful lives and can only be used for providing local government services. The costs associated with the maintenance, depreciation and replacement of these assets form a material part of Council’s annual expenditure. Due to the long lives of these assets, the associated costs identified will be spread across the different generations of ratepayers, hence effective management of these assets will help to ensure there is intergenerational equity among ratepayers with no generation unnecessarily subsidising or being subsidised by another. Cairns Regional Council continues to implement the Asset Management Development Program in order to facilitate sound strategic asset management decisions including the allocation of depreciation funding. Council’s Borrowing Policy aims to finance capital works and new assets to the greatest extent possible from revenue, grants and subsidies or any specific reserves primarily established to fund capital works. Long term borrowings are restricted to capital works for income producing assets. Operating activities or recurrent expenditure cannot be funded by borrowings. The business activities of Cairns Water & Waste and Cairns Works both return a dividend to Council in recognition that they have been established to further good governance. Dividends are then utilised to provide services and infrastructure. CORPORATE FINANCIAL REPORTS INCOME STATEMENT Net Position Council’s net result reflects total revenue less total expenses, this includes capital revenue however does not include any adjustments for asset revaluations. Graph 1 represents Council’s expected total revenue and total expenses for the budget period. GRAPH 1

150

200

250

300

350

400

2009/10 2010/11 2011/12 2012/13 2013/14

Mill

ionsBudget Total

RevenueTotal

Expenses

2009/10 343,351,698 274,178,102

2010/11 338,110,616 284,447,566

2011/12 347,946,682 298,273,765

2012/13 365,883,497 312,759,620

2013/14 383,156,512 325,878,247

FINANCIAL SUMMARY - TOTAL

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Graph 2 shows the net result for each budget year. GRAPH 2

0

15

30

45

60

75

2009/10 2010/11 2011/12 2012/13 2013/14

Mill

ionsBudget Net Position

2009/10 69,173,596

2010/11 53,663,050

2011/12 49,672,917

2012/13 53,123,877

2013/14 57,278,265

FINANCIAL PERFORMANCE - NET RESULT

Operating Position Council’s operating position reflects the organisations ability to meet its day-to-day running costs from operating revenue, this includes its ability to fully fund the depreciation of assets. The operating position is calculated by taking total operating expenses from total operating revenue and does not include revenue or expenditure amounts for capital projects. A comparison of forecast operating revenue and expenses is displayed in graph 3. GRAPH 3

150

175

200

225

250

275

300

325

350

2009/10 2010/11 2011/12 2012/13 2013/14

Mill

ionsBudget Operating

RevenueOperating Expenses

2009/10 264,331,132 274,178,102

2010/11 281,665,638 284,447,566

2011/12 301,668,507 298,273,765

2012/13 315,140,221 312,759,620

2013/14 329,388,038 325,878,247

FINANCIAL SUMMARY - OPERATING

For 2009/10 Council has forecast an operating deficit of $9.8 million. This unfavourable position is reflective of the current global financial crisis which has seen a significant reduction in contribution, interest on investments and various fees and charges revenue streams. A number of ongoing strategies have been formulated to address this deficit including a comprehensive review of depreciation, the implementation of strategic procurement practices across the organisation as well as the ongoing analysis of all areas of operating expenditure. These strategies are forecast to bring Council back to an operating surplus of $3.4 million by 2011/12.

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Graph 4 shows the forecast operating position for the next five years. GRAPH 4

-12.5

-10.0

-7.5

-5.0

-2.5

0.0

2.5

5.0

2009/10 2010/11 2011/12 2012/13 2013/14

Mill


Position

2009/10 -9,846,970

2010/11 -2,781,928

2011/12 3,394,742

2012/13 2,380,601

2013/14 3,509,791

FINANCIAL PERFORMANCE - OPERATING POSITION

Revenue Revenue for the 2009/10 budget is sourced from various items as shown in graph 5. GRAPH 5

InterestRevenue0.93%

Other Income3.70%

Operating Grants,Subsidies andContributions

5.12%

Fees and Charges6.42%

Other CapitalIncome0.01%

ContributedPhysical Capital

Assets7.01%

Net Rates andUtility Charges

60.82%

Cash Capital Grants,Subsidies and Contributions

15.99%

Category Budget

Net Rates and Utility Charges 208,816,168

Fees and Charges 22,045,524

Operating Grants, Subsidies and Contributions 17,567,665

Interest Revenue 3,197,358

Other Income 12,704,417

Cash Capital Grants, Subsidies and Contributions 54,918,355

Contributed Physical Capital Assets 24,082,762

Other Capital Income 19,449

Total 343,351,698

SOURCES OF REVENUE 2009/10

More than half of Council’s revenue is sourced from Net Rates and Utility Charges. Another significant source of revenue is Capital Grants, Subsidies and Contributions which are received solely for the purpose of funding current and future capital works in order for Council to continue to supply important infrastructure to the community. Contribution Income is dependant upon development demand and has suffered as a result of the recent economic downturn, decreasing by approximately $6 million from 2008/09. Fees and Charges and Interest Revenue have also been affected with Fees and Charges forecast to be down approximately $1.7 million from 2008/09 figures and interest rates earned on term deposits and the QTC Cash Fund dropping from between 6% and 7% in September 2008 to a forecast of between 2% and 2.5% for 2009/10.

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Graph 6 shows the total operating revenue for the five year budget period. GRAPH 6

150175

200225

250275

300325

350

2009/10 2010/11 2011/12 2012/13 2013/14

Mill


Revenue

2009/10 264,331,132

2010/11 281,665,638

2011/12 301,668,507

2012/13 315,140,221

2013/14 329,388,038

OPERATING REVENUE

Expenses

Expenses for the 2009/10 budget are categorised as shown in graph 7. GRAPH 7

EmployeeBenefits

Operating34%

Finance Costs3%

Depreciation andAmortisation

28%

Materials andServices

35%

Category Budget

Employee Benefits Operating 93,346,126

Materials and Services 95,707,672

Depreciation and Amortisation 77,441,624

Finance Costs 7,682,680

Total 274,178,102

EXPENSE CATEGORIES 2009/10

Materials and Services and Employee Costs make up 69% of the total expenditure of Council. Council has a strong labour workforce to provide maintenance, water and waste services, planning, community and cultural services and capital infrastructure for the community.

Graph 8 shows the total operating expenses for the five year budget period. GRAPH 8

150

175

200

225

250

275

300

325

350

2009/10 2010/11 2011/12 2012/13 2013/14

Mill

ions

Budget Operating Expenses

2009/10 274,178,102

2010/11 284,447,566

2011/12 298,273,765

2012/13 312,759,620

2013/14 325,878,247

OPERATING EXPENSES

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CAPITAL FUNDING Council manages a very diverse range of infrastructure assets with a value in excess of $2.85 billion and covering categories such as land, buildings, office furniture and equipment, plant and equipment, road and bridge network, drainage, water, sewerage and solid waste disposal. Council is responsible for the construction, upgrade and renewal of the majority of these assets through its capital works program with a smaller portion of these assets being contributed by developers via various developments throughout the region. Council’s capital funding requirements include the capital works program, principal loan repayments for loans acquired to fund capital works and contributed assets. The forecast capital funding applications for the five year budget period are displayed in graph 9: GRAPH 9

159194

139106 105

27

24

24

312998

7

6

10

0

50

100

150

200

250

2009/10 2010/11 2011/12 2012/13 2013/14

Mill

ions

BudgetCapital works

program

Contributed assets

Loan Repayments

2009/10 159,011,979 24,082,762 10,433,870

2010/11 193,731,354 24,323,588 6,400,895

2011/12 138,569,856 26,755,949 7,213,181

2012/13 105,797,521 29,431,543 7,728,883

2013/14 104,712,742 30,903,121 8,667,971

CAPITAL FUNDING APPLICATIONS

The capital budget for 2009/10 is projected to be funded as shown in graph 10: GRAPH 10

Beach ProtectionReserve

0.5%

Cleaner SeasReserve

6.2%

General Revenue-4.9%

Funded DepreciationExpended

37.5%

ContributedAssets12.4%

Funds from LoanBorrowings Expended

in the Period14.5%

Constrained Grants andDeveloper Contributions

33.7%

Daintree Ferry Reserve

0.1%

Category $ %

Funded Depreciation Expended $72.5m 37.5%

Contributed Assets $24.1m 12.4%

Funds from Loan Borrowings Expended in the Period $28.1m 14.5%

Constrained Grants and Developer Contributions $65.2m 33.7%

Beach Protection Reserve $1m 0.5%

Daintree Ferry Reserve $200k 0.1%

Cleaner Seas Reserve $12m 6.2%

General Revenue -9.5m -4.9%

Total $193.5m 100%

SOURCES OF CAPITAL FUNDING 2009/10

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BALANCE SHEET Cairns Regional Council manages close to $2.7 billion of net community assets on behalf of the ratepayers and residents of the region. Projected growth of net community assets is approximately 2% per year for the next five years as shown in graph 11. GRAPH 11

2.50

2.75

3.00

3.25

2009/10 2010/11 2011/12 2012/13 2013/14

Bill

ions

BudgetNet

Community Assets

2009/10 2,793,726,408

2010/11 2,847,389,459

2011/12 2,897,062,375

2012/13 2,950,186,251

2013/14 3,007,464,514

NET COMMUNITY ASSETS AT 30 JUNE

The cash position budgeted for 2009/10 is $84 million. Table 1 is an analysis of cash held for each budget year. TABLE 1

ANALYSIS OF CASH HELD AT 30 JUNE

2009/10 2010/11 2011/12 2012/13 2013/14

Funds held in Capital Reserves 58,596,471 40,887,356 34,726,870 33,181,261 32,804,826

Unspent Loans and Depreciation Fund Reserve 16,365,719 3,130,570 8,891,273 26,670,417 46,242,300

Retained Surplus/(Deficit) - - 3,858,784 1,926,308 6,329,964

Working Capital Cash 8,990,674 9,237,596 9,496,734 9,624,380 9,792,083

Total Cash held at end of year 83,952,864 53,255,522 56,973,662 71,402,366 95,169,173

QUEENSLAND TREASURY DEBT Borrowings are obtained from Queensland Treasury Corporation. Council’s current Borrowing Policy requires: Long term debt will not be used to finance operating activities or recurrent expenditure. Long term borrowings for capital works and new assets will be limited to income producing assets that

generate a net worth. Repayment for new and existing borrowings will be set at ten years or less except in the case of

borrowings for major long-life infrastructure assets and for capital works which have been levied to ratepayers as a special charge, where a repayment period will be determined on a case by case basis.

The ratio of debt service payments to net rates should remain less than 25%. These borrowings are repaid on a monthly basis in accordance with the terms and conditions set by Queensland Treasury Corporation. The repayment terms are reviewed on a regular basis in order to ensure that the expected loan term aligns with market movements.

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Graph 12 displays the ratio of debt service payments to net rates for the next five years. GRAPH 12

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

2009/10 2010/11 2011/12 2012/13 2013/14

Budget Debt Service Payment Rates %

2009/10 16,950,520 208,816,168 8.1%

2010/11 14,833,610 227,264,714 6.5%

2011/12 18,427,778 245,401,689 7.5%

2012/13 20,433,795 256,176,291 8.0%

2013/14 21,891,218 267,453,181 8.2%

DEBT SERVICE PAYMENTS TO NET RATES

The forecast interest expense for the next five years as a result of these borrowings is represented in graph 13. GRAPH 13

0.0

5.0

10.0

15.0

2009/10 2010/11 2011/12 2012/13 2013/14

Mill

ionsBudget Interest

Expense

2009/10 6,516,649

2010/11 8,432,714

2011/12 11,214,597

2012/13 12,704,911

2013/14 13,223,248

INTEREST EXPENSE FOR LOANS FOR CAPITAL WORKS

The forecast closing loan balance at the end of each period is shown in graph 14. GRAPH 14

0

50

100

150

200

250

2009/10 2010/11 2011/12 2012/13 2013/14

Mill

ionsBudget Loan

Balances

2009/10 130,981,555

2010/11 184,971,460

2011/12 220,380,607

2012/13 228,087,023

2013/14 236,647,233

CLOSING LOAN BALANCE

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Graph 15 shows the forecast debt service payments per year (being principal and interest payments). GRAPH 15

10.46.4 7.2 7.7 8.7

11.28.4

6.513.2

12.7

0

5

10

15

20

25

2009/10 2010/11 2011/12 2012/13 2013/14

Mill

ions

Budget Principal Interest

2009/10 10,433,871 6,516,649

2010/11 6,400,896 8,432,714

2011/12 7,213,181 11,214,597

2012/13 7,728,884 12,704,911

2013/14 8,667,970 13,223,248

DEBT SERVICE PAYMENTS

Total debt per rateable assessment is displayed in graph 16. GRAPH 16

0

500

1000

1500

2000

2500

3000

2009/10 2010/11 2011/12 2012/13 2013/14

Budget Rateable Assessments $

2009/10 78,195 1,675

2010/11 78,977 2,342

2011/12 79,767 2,763

2012/13 80,963 2,817

2013/14 82,178 2,880

OUTSTANDING LOAN VALUE PER RATEABLE ASSESSMENT

CONCLUSION During the 2009/10 to 2013/14 five year budget period Council will be faced with a number challenges including the Global Financial Crisis which is anticipated to have a negative impact on revenue from Contributions, Fees and Charges and Interest on Investments. This reduction in revenue coupled with an increased demand for services, increased maintenance and infrastructure requirements due to significant growth and increased capital and operating costs for new wastewater treatment plants will see Council bear operating deficits in 2009/10 and 2010/11. This will also mean that Council will be unable to fully fund depreciation in both these years, with unfunded depreciation being $8.6 million and $1.4 million respectively. An unfunded depreciation position means that revenue is not sufficient to cover Council’s cash and non cash operating expenses and transfers to reserves, including Depreciation. It represents an erosion of the funding reserved for capital works in future years. A number of ongoing strategies have been formulated to address this position and to prevent it from worsening. These strategies include a comprehensive review of depreciation, the implementation of strategic procurement practices across the organisation as well as the ongoing analysis of all areas of operating expenditure. These strategies are forecast to bring Council back to an operating surplus of $3.4 million and a retained surplus of $3.8 million by 2011/12. Detailed Financial Statements are contained in section 3 of this document.

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3. BUDGETED FINANCIAL STATEMENTS

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4. REVENUE STATEMENT 2009/10

CAIRNS REGIONAL COUNCIL NO.1:02:26

General Policy REVENUE STATEMENT 2009/10

Intent The Revenue Statement for a financial year must include the following information for the financial

year—

(a) an outline and explanation of the revenue raising measures adopted, including, an outline and explanation of— (i) the rates and charges to be made and levied in the financial year; and (ii) the rebates and concessions to be granted in the financial year;

(b) whether the local government has made a resolution limiting the increases in rates and charges;

(c) the extent to which physical and social infrastructure costs for new development are to be funded by charges for the development;

(d) whether the operating capability of the local government is to be maintained, increased or decreased and, if it is to be increased or decreased, the extent to which it is to be increased or decreased;

(e) whether depreciation and other non-cash expenses are to be fully funded. Scope The Revenue Statement applies to all revenue raising activities of Council including Council’s

business units. PROVISIONS 1. LEGISLATIVE REQUIREMENTS The Local Government Act 1993 (Chapter 7) requires that a local government adopt a budget for each financial year for its operating fund (section 518(1)). Section 520(A) requires that in addition to specifying the total estimated costs, the costs for each significant activity and the source of funds, the local authority must specify its revenue statement for the particular financial year. In addition to the requirements of the Local Government Act 1993, the Local Government Finance Standards 2005 require that a revenue statement include: (a) An explanation regarding:

(i) How rates and charges are decided by it, including the extent the rates and charges relate to relevant costs;

(ii) Any rebates and Concessions on rates and charges;

(b) Any limitation on increases in rates and charges; (c) The extent physical and social infrastructure costs for new development are to be funded by charges for

the development; (d) Whether it is intended to maintain, decrease or increase the operating capability of the local government

and the extent to which it may be decreased or increased; (e) Whether depreciation, and other non-cash expenses, are to be fully funded.

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2. RATING CATEGORIES The following categories are to be used for rating purposes for all rateable properties: Residential A - Residential properties with a unimproved valuation from $1 to $490,000 Residential B - Residential properties with a unimproved valuation from $490,001 to $735,000 Residential C - Residential properties with a unimproved valuation from $735,001 to $975,000 Residential D - Residential properties with a unimproved valuation from $975,001 to $1,220,000 Residential E - Residential properties with a unimproved valuation from $1,220,001 to $1,465,000 Residential F - Residential properties with a unimproved valuation from $1,465,001 to $1,710,000 Residential G - Residential properties with a unimproved valuation from $1,710,001 to $1,955,000 Residential H - Residential properties with a unimproved valuation from $1,955,001 to $2,200,000 Residential I - Residential properties with a unimproved valuation greater than $2,200,000 Residential J - Residential properties not subject to banding Residential K - Building Units Residential L - Multi Unit Dwellings (Flats) Residential M - Residential land which is subject to section 25 of the Valuation of Land Act 1944 Residential Q - Land situated at the South Arm and the Heads of the Daintree River that have a land use

code of 0600 and are Permits to Occupy. Commercial B - Major Shopping Centres over 34,999 m2 GLAR Commercial D - Inner City Commercial E - Suburban Commercial F - Not for Profit Organisations that are eligible for Rates Based Financial Assistance Commercial G - Major Shopping Centres over 20,000 and under 35,000 m2 GLAR Commercial H - Shopping Centres with a secondary land use of Marina with a total area over 5 ha. Rural Productive - All properties which are used predominately for primary production with land use codes as

defined by the Department of Environment and Resource Management as Rural or Agricultural.

A list of land use codes to be used within each category is set out in Schedule 1. The criteria for identification of properties into the above categories will be:-

- the land use codes as adopted by the Department of Environment and Resource Management for formulating Local Authority unimproved valuations;

- The current Planning Areas in Cairns Plan 2009 and 2006 Douglas Shire Council Planning Scheme Incorporating Amendments 2007 No. 1 and 2007 No. 2 Reprinted as in force on 4th March 2008;

- other such criteria as outlined within this statement and existing as at 1 July 2009.

The definitions of rateable and non-rateable land are outlined in the Local Government Act 1993 and the Local Government Regulation 2005, and are attached as Schedule 2. 3. CALCULATION OF LEVIES PROVISIONS

(i) Differential Rates will apply based on categories. (ii) Minimum general rates will apply. (iii) A system of full cost attribution, which enables Council to relate all Rates and Charges to

relevant costs, is in place. APPLICATION OF GENERAL RATES BY CATEGORY RESIDENTIAL Category A A single rate in the dollar to apply to all properties included in this category with a set

minimum.

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Category B A single rate in the dollar to apply to all properties included in this category with a set minimum.

Category C A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category D A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category E A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category F A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category G A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category H A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category I A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category J A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category K A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category L A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category M A single rate in the dollar to apply to all properties included in this category with no minimum

as required under section 25 of the Valuation of Land Act 1944. Category Q A single rate in the dollar to apply to all properties included in this category with a set

minimum. COMMERCIAL Category B A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category D A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category E A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category F A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category G A single rate in the dollar to apply to all properties included in this category with a set

minimum. Category H A single rate in the dollar to apply to all properties included in this category with a set

minimum.

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RURAL PRODUCTIVE A single rate in the dollar to apply to all properties included in this category with a set minimum. 4. ISSUE OF NOTICES The issuing of rate notices and the payment of rates is closely linked to interest charged on overdue rates. 1. Notices for the 2009/10 financial year will be issued half-yearly, with water usage notices being

issued three times during the year. 2. The due date for payment is defined as being thirty-one (31) days from the date of issue of the rate

notice. 3. Interest will be charged at the rate of 11% per annum calculated at compound interest at daily rests

on all rates and charges which remain after expiration of the due date for payment. 5. REMISSIONS AND CONCESSIONS (1) LODGEMENT OF APPLICATIONS

(a) All applications for remission must be in writing on the prescribed form and contain a declaration as to the accuracy of the information contained therein.

(b) Applications in respect of a new financial year should be submitted before the commencement

of each rating period. New applications for remission received within three (3) months of the commencement of a rating period will be accepted for consideration provided the applicant meets all the criteria as at the commencement of the rating period and such remission will be effective from the beginning of that rating period and not applied retrospectively to previous billing periods. Furthermore if an applicant meets criteria on property/properties for the full rating period, remission will be applicable to one property only. Depending on the lateness of the application and processing times, the applicant may be required to pay the rates in full by the due date to ensure that interest does not apply. In such cases a credit for the amount of the remission will be placed on the individual’s rate file.

(c) Once an application for remission is approved it shall remain in force from year to year without

further renewal whilst the person remains owner/occupier of the property in question. (d) Where an applicant's circumstances alter it is incumbent upon the applicant to notify Council.

Council will conduct periodic audits to verify current entitlements. (2) PENSIONER REMISSION

(a) The rebate will be up to 40% of the General Rate to a maximum of $1,350.00 per annum. (b) The upper limit of total remission will not exceed 5% of Council's total net general rates at

which point the 40% remission is to be reduced on a pro rata basis. (c) Remission will apply for the full rating period (presently six months) for which the remission

has been granted whether the ratepayer remains the registered owner or not.

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(d) The following guidelines to apply in respect of persons applying for pensioner remission:-

(i) The applicant/s must be the sole owners of the property in respect of which remission is sought or be Life tenant/s under a Will with responsibility to pay all rates and charges.

(ii) Such property must be their principal place of residence. (iii) The applicant/s MUST be the holder/holders of one of the following Queensland cards:-

• Centrelink, Pension Concession Card. • Department of Veterans Affairs, Pension Concession Card. • Department of Veteran Affairs, Repatriation Health Card. (Full Conditions only).

(iv) If a pensioner becomes the owner of a new property, he/she must make application for remission in respect of that property.

(v) Such remission of rates will only apply if the applicant/s pay their rates or make an attempt to pay their rates prior to the end of the financial year for which remission is granted. An attempt to pay shall be shown by part payments being made and a payment plan with Council’s Debt Collection Team being entered into. Remission of rates for the first rates issue of a financial year will be granted subject to rates from that issue being paid in full prior to the end of that financial year.

(e) Recognising that many pensioners reside some or all of the time in hospitals, nursing homes,

or with family or friends for ill health reasons, the residence may be regarded as the ‘principal place of residence’ if it is not occupied on a paid tenancy basis during the absence of the approved pensioner owner/s.

(f) Where a pensioner is receiving Council pensioner remission in respect of a property owned by

that person and the person dies, Council remission will cease at the end of the rating period in which records obtained from the Department of Social Security for entitlement purposes do not match Council’s Records. When the property title is transferred under a will to a beneficiary who qualifies for Council pensioner remission, that person will be granted Council remission retrospectively to the beginning of the rating period, provided the pensioner would also have conformed with all the relevant criteria at the commencement of such rating period.

Pensioners may be entitled to a State Government Subsidy (currently up to a maximum of

$180.00 per property per annum). Where the State Government subsidy applies the Council will remit the appropriate amount off the rate notice and claim re-imbursement from the State Government.

To be eligible for the subsidy a pensioner is required to complete an initial application form

including a declaration, or if already registered with Council that person's eligibility status will continue. Once registered, no further application is required each year, unless the ratepayer's pensioner or eligibility status changes.

Provisions of this aspect of the policy may change from time to time depending on the policies

of the Government of the time. Guidelines currently applicable are available on request from the Council's Rates Team.

(3) RETIREMENT VILLAGE REMISSIONS A remission will be extended to retirement villages (as classified under Land Use Code 21), where a

legal entity separate to the residents is the owner and the pensioners are responsible for paying the rates, to the extent that residents of the village are pensioners.

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Thirty days prior to the commencement of any rating period the owner of the land shall lodge an application for remission in the following form:

(a) there shall be a Declaration by the owner that pensioners resident in the complex will be given the benefit of the remission.

(b) a list of all residents in the village and an indication as to which of those residents are pensioners.

(c) where residents are pensioners, their pension number.

(d) a declaration from residents or their legal representatives (where they were residents) that they received the benefit of the remission in the prior year.

A pensioner remission will then apply based on the number of dwellings occupied by pensioners as a percentage of the total number of dwellings in the village.

(4) RATE BASED FINANCIAL ASSISTANCE - Policy 1:02:07 This policy allows Council to consider applications for remission of general rates and sewerage charges from not for profit community based organisations from recreation, sporting and community groups. To qualify for assistance, the constitution of these organisations must clearly state prohibitions on any member of the organisation making a private profit or gain, either from ongoing operations of the organisation or as a result of distribution of assets if the organisation is wound up. Applications for the rating years 2008/2012 were required to be lodged with Council prior to 21 May 2008, with new applications being accepted each financial year if lodged prior to 31 May. Those not for profit organisations that are not already receiving Rate Based Financial Assistance and believe that they may be eligible should contact Council’s Customer Service Centre.

(5) INDEPENDENT RATE RELIEF TRIBUNAL - Policy 1:02:06

This policy has been adopted to provide a safety net for those ratepayers suffering genuine financial hardship. The Tribunal is to be made up of a mixture of independent voluntary appointees made by Council and three Councillors. The main role of the Tribunal is to recommend in certain circumstances, the most appropriate form of assistance to those ratepayers experiencing serious hardship and as a result are unable to pay their rates and charges. The policy is only to apply to the principal place of residence of the ratepayer and no commercial benefit can be derived from the property. Not for profit recreation, sporting and community groups that are already receiving Rate Based Financial Assistance or would be eligible if they did not have rates outstanding, may also apply. Those ratepayers that believe that they may meet the criteria spelt out in the policy should make enquiries with Council’s Customer Service Centre.

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(6) LAND MANAGEMENT REFUND

For the four properties identified below A proportional refund will be provided to landowners who have been under the Council’s Land

Management Agreement project i.e. where a landowner has entered into a Land Management Agreement with Council. The refund will act as a financial incentive for the protection of land which exhibits high conservation values.

Existing Land Management Agreements (LMA’s) will stay in place for the following properties until their expiry date;

Lot 4 RP 706067 expires 11 September 2012 Lot 319 NR66 expires 17 March 2010 Lot 2 RP711837 expires 11 September 2012 Lot 1 RP710767 expires 13 September 2012

Following their expiry no more LMA’s will be issued.

Variation in the refund is determined by the level of conservation values on the property. PROVISIONS

(1) Requirements for eligibility. (2) The refund will operate only in the presence of a Land Management Agreement with Council.

A Land Management Agreement may be entered into where there is an existing Co-operative Management Agreement between the landowner and the Wet Tropics Management Authority or a Voluntary Conservation Agreement between the landowner and the Department of Environment.

(3) The land must meet particular conservation criteria in order to be considered for the

agreement. This criteria includes: • Bio-diversity • Vegetation Type • Habitat Linkages • Wildlife • Scenic Quality • Landowner Leadership

Refund Considerations

(1) The rate refund is proportionately attributable to that area of land included in an agreement. (2) The refund is payable within 2 weeks from receipt by the Council of a written request from the

Owner in respect of the period for which rates are levied. (3) The two levels of refund are:

(a) 50% of the general rate, proportionately attributable to that area of land subject to a

Land Management Agreement or a maximum of $600 per annum (which ever is less). (b) 35% of the general rate, proportionately attributable to that area of land subject to a

regulatory mechanism or a maximum of $300 per annum (whichever is less). There is also provision for this rate to be altered, but not before 5 years have expired from the date of the Land Management Agreement.

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(4) The area of land designated for the Refund will be determined with the use of cadastre, aerial photo interpretation and a site inspection.

(5) In the case where Land Management Agreement conditions have been dishonoured,

repayment of the Refund will be necessary. (6) The requirement for a rate refund will be included in the Land Management Agreement at the

discretion of the Council.

(7) RATES INCENTIVE FOR CONSERVATION POLICY

Purpose The purpose of this Policy is to establish the process for affording rate incentives to landholders that enter into a Conservation Agreement for a Nature Refuge under the Nature Conservation Act 1992. Scope This policy applies to all land within the Cairns Regional Council boundaries. Reference Nature Conservation Act 1992 Where this policy is inconsistent with a previously published policy, procedure or requirement, this policy shall prevail. Definitions Critical Habitat – (as per meaning under the Nature Conservation Act 1992). Policy 1. The owner enters into an agreement preserving/conserving flora and fauna on a rateable property

within the boundaries of the Cairns Regional Council. This agreement must be bound to the property title, in perpetuity, by a Conservation Agreement for a Nature Refuge under the Nature Conservation Act 1992.

2. The rate incentive is proportionately attributed to that area of land included on an agreement. 3. The rate incentive will be credited to the recipient’s rates notice prior to being issued. 4. Refund Rules;

• Properties where 100% of the total area of the property covered by a Nature Refuge

Agreement under the Nature Conservation Act 1992 are entitled to 80% of the general rate or a maximum of $1100p.a (which ever is less).

• Properties where more than 50% of the total area of the property covered by a Nature

Refuge Agreement under the Nature Conservation Act 1992 are entitled to 50% of the general rate or a maximum of $1100p.a (which ever is less).

• Properties where less than 50% of the total area of the property covered by a Nature

Refuge Agreement under the Nature Conservation Act 1992 are entitled to 35% of the general rate or a maximum of $550p.a (which ever is less).

5. Any, and all, benefit provided to a landholder through the Rate Incentive for Conservation

program must be repaid to Council if the declaration of the Nature Refuge to which it relates is revoked in accordance with Section 50 of the Nature Conservation Act 1992.

6. If rates are not paid in full prior to the end of a financial year, future rates incentives will not apply

until all outstanding rates are paid.

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6. SPECIAL CHARGES (1) Holloways Beach Rock Wall Stage 1 A special charge will be levied on all rateable land within the area defined on the map marked Holloways

Beach Rock Wall Stage 1 for the purpose of raising funds to repay interest and principal on a Queensland Treasury Corporation loan of $519,866 borrowed to cover the construction costs of the rock wall.

The Council is of the opinion that all land within the area receives a special benefit from the completed work.

The levy is based on the requirement to service interest and principal charges associated with the loan and agreed to annually by Council.

The levy will continue for each parcel of land within the area on the map marked Holloways Beach Rock Wall Stage 1 for a period of 20 years from 1 July 2003.

(2) Holloways Beach Rock Wall Stage 2A

A special charge will be levied on all rateable land within the area defined on the map marked Holloways Beach Rock Wall Stage 2A for the purpose of raising funds to repay interest and principal on a Queensland Treasury Corporation loan of $382,196.09 borrowed to cover the construction costs of the rock wall.

The Council is of the opinion that all land within the area receives a special benefit from the completed work. The levy is based on the requirement to service interest and principal charges associated with the loan and agreed to annually by Council.

The levy will continue for each parcel of land within the area on the map marked Holloways Beach Rock Wall Stage 2A for a period of 20 years from 1 July 2004.

(3) Holloways Beach Rock Wall Stage 2B

A special charge will be levied on all rateable land within the area defined on the map marked Holloways Beach Rock Wall Stage 2B for the purpose of raising funds to repay interest and principal on a Queensland Treasury Corporation loan of $338,369.35 borrowed to cover the construction costs of the rock wall.

The Council is of the opinion that all land within the area receives a special benefit from the completed work.

The levy is based on the requirement to service interest and principal charges associated with the loan and agreed to annually by Council.

The levy will continue for each parcel of land within the area on the map marked Holloways Beach Rock Wall Stage 2B for a period of 19 years from 1 July 2005.

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(4) Bluewater Canal

A special charge will be levied to cover the annual cost (less Council’s share) of dredging the Canal, Half Moon Creek and Offshore Channel. The cost being $436,466 ($515,504 less Council’s share of $79,038.00) for: (a) Lots that have an immediate water frontage (other than Council lots) and are identified on the map

marked Bluewater Canal, and (b) All berths within the Bluewater and Yorkeys Knob Marinas.

The Council is of the opinion that all land defined on the map and all the marina berths mentioned receive a special benefit from the dredging work.

The levy is based on the requirement to meet the annual cost (other than Council’s share) associated with dredging of the Canal, Half Moon Creek and Offshore Channel under Maintenance Dredging, Bluewater Canals and Offshore Channel document. The levy will form part of the half year rate levy issue twice yearly.

(5) Rural Fire Brigades

A special charge will be levied on all rateable land within the Wonga, Thornton Peak, Daintree and Mowbray Valley Rural Fire Brigades (Areas identified by the Rural Fire Service of Queensland). Council is of the opinion that each parcel of rateable land will specially benefit to the same extent from the purchase and maintenance of equipment by each Rural Fire Brigade in the current or next financial years because each such parcel is within the area for which the brigade is in charge of fire fighting and fire prevention under the Fire and Rescue Services Act 1990. The quantum of the special charge is Wonga Rural Fire Brigade - $35.00, Thornton Peak Rural Fire Brigade - $20.00, Daintree Rural Fire Brigade - $20.00 and Mowbray Valley Rural Fire Brigade - $35.00 per rateable assessment. Revenue raised from this special charge will assist with the purchase and maintenance of equipment in the current or next financial years. The levy will form part of the half year rate levy issued twice yearly.

(6) Refuse Disposal

A special charge of $126.64 will be levied on all rateable properties identified by Council with an improvement that are not currently serviced by Council, for the removal of garbage within the area north of Ellis Beach. The special charge represents the costs associated with funding the provision, operation and maintenance of landfill refuse disposal sites including transfer stations available for general public use. Council is of the opinion that each parcel of rateable land will specially benefit from the use of land fill and transfer stations that are available. The levy will form part of the half year rate levy issued twice yearly.

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7. UTILITY CHARGES WATER – METERED (POTABLE) A. RESIDENTIAL

All properties in this class of consumer receiving water from the following Water Supply Schemes and Catchments: Bramston Beach; Behana Creek; Bessie Point; Copperlode Falls Dam; Goldsborough; Orchid Valley/Mountain View; Mossman/Port Douglas; Daintree; Whyanbeel Dagmar Heights; and other groundwater and run of river sources shall be levied the following charges:

- An access charge for all residential type improvements. - Water usage to be charged at a prescribed rate. - Water usage charges to be raised three times during the year.

In circumstances where improvements are built over the boundary line of two allotments, and the total land area of both allotments is less than 1190M2, and the ratepayer proves to Council that this is the case, Council shall levy utility charges as if it were one property. Financial assistance is available to offset water usage cost for users of Home Dialysis Equipment, written applications must be submitted to Cairns Regional Council for approval. B. COMMERCIAL All properties in this class of consumer regardless of supply scheme shall be levied the following charges: - An access charge per improvement - Water usage to be charged at a prescribed rate

- Water usage charges to be raised three times during the year.

In circumstances where commercial/industrial improvements are built over the boundary line of two allotments, and the ratepayer proves to Council that this is the case, Council shall levy utility charges as if it were one property.

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C. RURAL PRODUCTIVE All properties in this class of consumer receiving water from the following Water Supply Schemes and Catchments: Bramston Beach; Behana Creek; Bessie Point; Copperlode Falls Dam; Goldsborough; Orchid Valley/Mountain View; Mossman/Port Douglas; Daintree; Whyanbeel Dagmar Heights and other groundwater and run of river sources shall be levied the following charges:

- An access charge for all residential type improvements - An access charge for all rural productive improvements with water connected - Water usage to be charged at a prescribed rate - Water usage charges to be raised three times during the year.

For Residential, Commercial, Rural Productive where improvements are of a joint nature, water usage charges will be calculated using the water usage rate applicable to the category on which general rates are levied or would be levied if the property was rateable. Meters shall be read on a rotational basis, three times each year. Where residential type improvement/s share a meter with commercial improvement/s and the Department of Environment and Resource Management’s land use code for that assessment is commercial, water usage charges will be levied at the commercial rate. For Residential and Commercial properties, where improvements are built on one parcel of land any adjoining parcels with the same owners shall be rated separately for utility charges. Not for Profit Sporting and Recreation Organisations that are recipients of Rate Based Financial Assistance will be charged for all water usage at a rate equivalent to the domestic charge per kilolitre. WATER – UNMETERED (POTABLE) A. RESIDENTIAL All properties in this class of consumer receiving water from the following Water Supply Schemes and Catchments: Fishery Falls; Bellenden Ker; Babinda; Miriwinni; Bartle Frere. shall be levied the following:

- an access charge (including a component for unmetered usage) for all residential type improvements.

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In circumstances where improvements are built over the boundary line of two allotments, and the total land area of both allotments is less than 1190M2, and the ratepayer proves to Council that this is the case, Council shall levy utility charges as if it were one property. B. RURAL PRODUCTIVE

All properties in this class of consumer receiving water from the following Water Supply Schemes and Catchments: Fishery Falls; Bellenden Ker; Babinda; Miriwinni; Bartle Frere shall be levied the following charges:

- An access charge (including a component for unmetered usage) for all residential type improvements.

- An access charge (including a component for unmetered usage) for all rural productive improvements with water connected.

For Residential properties, where improvements are built on one parcel of land any adjoining parcels with the same owners shall be rated separately for utility charges. WATER – METERED (RECYCLED) RESIDENTIAL All properties in this class of consumer receiving water from Council’s Recycle Water Reticulation System:

- An access charge for all residential type improvements. - Water usage to be charged at a prescribed rate. - Water usage charges to be raised three times during the year.

Meters shall be read on a rotational basis, three times each year. SEWERAGE A. RESIDENTIAL

- A base charge for all residency type improvements. - A Cleaner Seas Initiative charge for each vacant allotment, residence, flat and each strata-title

unit where Council is prepared to accept sewage. In circumstances where improvements are built over the boundary line of two allotments, and the total land area of both allotments is less than 1190 M2, and the ratepayer proves to Council that this is the case, Council shall levy utility charges as if it were one property. In circumstances where pedestals/urinals are built on common property associated with Strata Title units a standard commercial charge per W.C. will apply. B. COMMERCIAL

- To be charged per W.C.

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- A Cleaner Seas Initiative charge per W.C. C. RURAL PRODUCTIVE

- A base charge for all residency type improvements. - A charge per W.C. for all rural productive improvements connected to the sewer. - A Cleaner Seas Initiative charge for each barrack, each residence, flat and each strata-title

unit where Council is prepared to accept sewage. - A Cleaner Seas Initiative charge per W.C. for all rural productive improvements connected to

the sewer. CLEANSING A. DOMESTIC CLEANSING CHARGE A base charge for all residency type improvements.

B. COMMERCIAL CLEANSING CHARGE All properties north of Ellis Beach are to be charged in accordance with the adopted schedule (refer Rates & Charges).

8. FEES AND CHARGES Pricing is an issue that is of growing interest to both Council and its constituency, with calls for greater reliance on user fees and charges and less reliance on rates levied. The need to balance these considerations with the community service obligations of Council means that the issue of pricing may not be a particularly easy one. In general, the application of the "user pays" principle is the most acceptable methodology for applying a charge for services provided by Council. It permits a choice that can be exercised by constituents and allows increases or encourages reductions in consumption in accordance with the particular preferences and tastes of the individual user. As well, equity benefits are paramount because those who do not use a particular service are not required to pay part of the cost of its supply. Council may decide to provide subsidised services in certain instances to various disadvantaged groups and may relax or reduce user fees in those cases. Decisions to subsidise these community groups will be explicit both in terms of the groups to be subsidised and the level of subsidy to be provided. Council has developed a system of full cost pricing as its vehicle for service delivery and the setting of user fees and charges. All direct and indirect costs involved in providing a service will be reflected in the price charged for the service. Overheads, which are not incurred in the cost centre, providing the service but which are necessary for the service to be provided, are a component of the full cost of providing services and will be allocated to the service area in an appropriate way. Council’s adopted Fees and Charges register includes a mixture of regulatory and user pays fees. The regulatory charges are identified as such in Council’s Fees and Charges Schedule and have been determined with reference to the relevant legislation and where applicable recover the cost of performing the function.

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9. OPERATING CAPABILITY Operating capability refers to the ability of Council at any given time in the future, to carry out its activities at the scale determined by its existing resources. The operating capability of Council is measured by the balance in the Capital Account. Capital is understood to be the operating capability provided by the resources (assets) of Council. Council wishes to maintain its operating capability so that its capital base is not eroded and to ensure that physical assets are able to be replaced by modern equivalents as and when their service potential expires. Council will thus be able to continue to provide a supply of enhanced services to its constituents in future years, including the custodianship of public assets. For the 2009/10 financial year Council’s budgeted operating capability is $2.74 billion. 10. FUNDING OF PHYSICAL & SOCIAL INFRASTRUCTURE It is Council’s intention to have the full costs of physical and social infrastructure assets for new developments funded by charges for the development. Contributions received from developers will be accounted for in accordance with Council’s Trunk Infrastructure Contribution Policy. 11. DEPRECIATION It is Council’s intention to work towards fully funding its charges for depreciation in order to maintain its operating capability. For the 2009/10 financial year Unfunded Depreciation is $8,633,322. Whilst it is Council’s aim to fully fund depreciation, its ability to do so is significantly impacted by the increase in depreciation as a result of the construction of new assets and the revaluation of existing assets in a construction market that has experienced a considerable escalation of costs. 12. POLICY FOR RATING EXEMPTIONS & ASSISTANCE Upon receipt of a written submission Council shall: (1) Decide if the land is rateable land after considering sections 957 (1) (a-f) of the Local Government

Act 1993.

(2) If the land is rateable land, consider if the land is exempt under section 41 of the Local Government Regulations 2005 or entitled to Rate Based Financial Assistance (refer 4).

(3) If the land is still considered rateable after due consideration to the above, Council may upon receipt of a written submission grant financial relief under section 1033 of the Local Government Act 1993 by way of a remission after considering the following :

(i) A local government may exercise a power under section 1031 (Remission, composition and settlement of rates) or 1032 (Deferral of liability to pay rates) only if -

(a) it resolves that the case justifies the exercise of the power; or

(b) the case is of a kind that has been accepted, by resolution of the local government, as justifying the exercise of the power.

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(ii) However, the only circumstances or factors justifying the exercise of the power are -

that an owner of the land concerned is -

(a) a pensioner; or

(b) an entity whose objects do not include the making of profit; or

(c) an entity that provides assistance or encouragement for the arts or cultural development; or

(iii) that payment of the rate would cause the owner of land hardship; or

(iv) the assistance or encouragement of economic development of the whole or part of the area; or

(v) the preservation, restoration or maintenance of structures or places of cultural, environmental, historic, heritage or scientific significance to the local government’s area; or

(vi) circumstances and factors prescribed by regulation.

(4) Not for profit recreation, sporting and community groups may make application for financial relief or remission to be known as Rates Based Financial Assistance in accordance with the Rates Based Financial Assistance Policy. Refer to Remissions and Concessions and/or Council’s Policy Register.

(5) Financial assistance to residential properties and Not for Profit Community and Sporting Organisations may be recommended to Council by the Independent Rate Relief Tribunal in accordance with the Rate Relief Tribunal Policy. Refer to Remissions and Concessions and/or Council’s Policy Register.

13. DEFINITIONS For the purpose of making levying and imposing rates and charges the term Commercial Inner City, Bluewater Canal, Holloways Beach Rock Wall Stages 1, 2A & 2B, Daintree, Wonga, Thornton Peak and Mowbray Valley Rural Fire Brigade Districts will be the areas clearly defined on those maps, the originals of which are held by the Rates Supervisor. (1) For the purpose of calculating sewerage rates and charges for Commercial and Rural Productive

properties:

(a) each 1.8m of urinal or part thereof shall be deemed to be a W.C. (b) each three individual wall hung urinals or part thereof shall be deemed to be a W.C. (c) each pedestal shall be deemed to be a W.C.

(2) For the purposes of charging water usage charges, for water meters read after 1st July 2009 the

charge made, shall be at the rate specified for the 2009/10 financial year. For the purposes of charging water usage charges, for water meters read after 1st July 2010 the

charge made, shall be at the rate specified for the 2010/2011 financial year. (3) For the purposes of calculating utility charges, the term “Strata title unit” is deemed to be “each lot

created pursuant to the provisions of the Body Corporate and Community Management Act 1997”. Cleaner Seas Initiative The Cleaner Seas initiative is being levied to aid in the quantum increase in treatment standards required by the Coastal Management Strategy and subsequent nutrient removal limitations placed upon Cairns Regional Council. It allows a more responsible approach to the environment and is a more sustainable way of doing business. The Cleaner Seas initiative is levied as a utility charge under section 973 of the Local Government Act 1993 as it is allowing nutrient removal sewerage services to be supplied to the Cairns community.

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SCHEDULE 1 LAND USE CATEGORIES Note: The Planning Areas in Cairns Plan 2009 and 2006 Douglas Shire Council Planning Scheme Incorporating Amendments 2007 No. 1 and 2007 No. 2 Reprinted as in force on 4th March 2008 may be a factor in determining the rating categories for Land Use Codes 01, 04, 06, 09, 72. RESIDENTIAL CATEGORY A Properties with a unimproved valuation from $1 to $490,000 to which the following land use codes apply: 01 Vacant urban land (excluding those included in commercial categories D & E); 02 Residential single unit dwelling - urban and rural; 04 Large homesite - vacant urban & rural (excluding those in category J and those in commercial

categories D & E); 05 Large homesite - dwelling - urban & rural; (excluding those in category J); 06 Outbuildings (excluding those in category J and those in commercial categories D & E); 09 Group Titles; 94 Vacant rural land. However not including a lot on a group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes. CATEGORY B Properties with a unimproved valuation from $490,001 to $735,000 to which the following land use codes apply: 01 Vacant urban land (excluding those included in commercial categories D & E); 02 Residential single unit dwelling - urban and rural; 04 Large homesite - vacant urban & rural (excluding those in category J and those in commercial

categories D & E); 05 Large homesite - dwelling - urban & rural; (excluding those in category J); 06 Outbuildings (excluding those in category J and those in commercial categories D & E); 09 Group Titles; 94 Vacant rural land. However not including a lot on a group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes. CATEGORY C Properties with a unimproved valuation from $735,001 to $975,000 to which the following land use codes apply: - 01 Vacant urban land (excluding those included in commercial categories D & E); 02 Residential single unit dwelling - urban and rural; 04 Large homesite - vacant urban & rural (excluding those in category J and those in commercial

categories D & E); 05 Large homesite - dwelling - urban & rural; (excluding those in category J); 06 Outbuildings (excluding those in category J and those in commercial categories D & E); 09 Group Titles; 94 Vacant rural land.

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However not including a lot on a group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes. CATEGORY D Properties with a unimproved valuation from $975,001 to $1,220,000 to which the following land use codes apply: 01 Vacant urban land (excluding those included in commercial categories D & E); 02 Residential single unit dwelling - urban and rural; 04 Large homesite - vacant urban & rural (excluding those in category J and those in commercial

categories D & E); 05 Large homesite - dwelling - urban & rural; (excluding those in category J); 06 Outbuildings (excluding those in category J and those in commercial categories D & E); 09 Group Titles; 94 Vacant rural land. However not including a lot on a group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes. CATEGORY E Properties with a unimproved valuation from $1,220,001 to $1,465,000 to which the following land use codes apply: 01 Vacant urban land (excluding those included in commercial categories D & E); 02 Residential single unit dwelling - urban and rural; 04 Large homesite - vacant urban & rural (excluding those in category J and those in commercial

categories D & E); 05 Large homesite - dwelling - urban & rural; (excluding those in category J); 06 Outbuildings (excluding those in category J and those in commercial categories D & E); 09 Group Titles; 94 Vacant rural land. However not including a lot on a group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes. CATEGORY F Properties with a unimproved valuation from $1,465,001 to $1,710,000 to which the following land use codes apply: 01 Vacant urban land (excluding those included in commercial categories D & E); 02 Residential single unit dwelling - urban and rural; 04 Large homesite - vacant urban & rural (excluding those in category J and those in commercial

categories D & E); 05 Large homesite - dwelling - urban & rural; (excluding those in category J); 06 Outbuildings (excluding those in category J and those in commercial categories D & E); 09 Group Titles; 94 Vacant rural land. However not including a lot on a group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes.

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CATEGORY G Properties with a unimproved valuation from $1,710,001 to $1,955,000 to which the following land use codes apply: 01 Vacant urban land (excluding those included in commercial categories D & E); 02 Residential single unit dwelling - urban and rural; 04 Large homesite - vacant urban & rural (excluding those in category J and those in commercial

categories D & E); 05 Large homesite - dwelling - urban & rural; (excluding those in category J); 06 Outbuildings (excluding those in category J and those in commercial categories D & E); 09 Group Titles; 94 Vacant rural land. However not including a lot on a group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes. CATEGORY H Properties with a unimproved valuation from $1,955,001 to $2,200,000 to which the following land use codes apply: 01 Vacant urban land (excluding those included in commercial categories D & E); 02 Residential single unit dwelling - urban and rural; 04 Large homesite - vacant urban & rural (excluding those in category J and those in commercial

categories D & E); 05 Large homesite - dwelling - urban & rural; (excluding those in category J); 06 Outbuildings (excluding those in category J and those in commercial categories D & E); 09 Group Titles; 94 Vacant rural land. However not including a lot on a group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes. CATEGORY I Properties with a unimproved valuation greater than $2,200,000 to which the following land use codes apply: 01 Vacant urban land (excluding those included in commercial categories D & E); 02 Residential single unit dwelling - urban and rural; 04 Large homesite - vacant urban & rural (excluding those in category J and those in commercial

categories D & E); 05 Large homesite - dwelling - urban & rural; (excluding those in category J); 06 Outbuildings (excluding those in category J and those in commercial categories D & E); 09 Group Titles; 94 Vacant rural land. However not including a lot on a group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes.

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CATEGORY J Properties with the following land use codes apply: Excluding those in categories A to I Properties with the following land use code where that land’s Planning Area is included in Cairns Plan 2009 or Douglas Shire Planning Scheme Incorporating Amendments 2007 No. 1 and 2007 No. 2 Reprinted as in force on 4th March 2008 as Low Density with a total land area over 10 Hectares or Residential 1 with a total land area over 0.5 Hectares or Residential 2 with a total land area over 3.5 Hectares or Residential 3 with a total land area over 0.5 Hectares or Tourist & Residential with a total land area over 0.5 Hectares or Community Facilities with a total land area over 1 Hectare. 04 Large Homesite - Vacant Urban & Rural (excluding those in commercial categories D & E); 06 Outbuildings (excluding those in commercial categories D & E);

Properties with the following land use code where that land’s Planning Area is included in Cairns Plan 2009 or Douglas Shire Planning Scheme Incorporating Amendments 2007 No. 1 and 2007 No. 2 Reprinted as in force on 4th March 2008 as Residential 1 with a total land area over 5 Hectares or Residential 2 with a total land area over 3.5 Hectares or Residential 3 with a total land area over 1.5 Hectares or Tourist & Residential with a total land area over 0.5 Hectares or Community Facilities with a total land area over 1 Hectare. 05 Large Homesite - Dwelling-Urban & Rural;

As well as those properties with the following land use code which are not included in Commercial Category F 21 Residential Institutions (non-medical care); CATEGORY K Properties with the following land use code applies: 08 Building Units However not including a lot on a building units plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for non-residential purposes. CATEGORY L Properties with the following land use code applies: 03 Multi Unit Dwelling (Flats) CATEGORY M Properties with the following land use code applies: 72 Residential land which is subject to section 25 of the Valuation of Land Act 1944. CATEGORY Q Properties that are Permits to Occupy and are situated at the South Arm and the Heads of the Daintree River with the following land use code applies: 06 Outbuildings

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COMMERCIAL CATEGORY B Major Shopping Centres The criteria for this category is, the land shall have the following land use codes and comprise Drive In Shopping Centres and in which the anchor tenants are a variety of department store/s and/or discount department store/s and large grocery supermarket/s with major on-site parking facilities and having a gross lettable area retail (GLAR) over 34,999m² : 12 Shopping Group (more than 6 shops); 13 Shopping Group (2 to 6 shops); 14 Shops Main Retail; 15 Shops Secondary Retail; 16 Drive-In Shopping Centres. CATEGORY D Inner City The criteria for this category is, the properties have the following land use codes and are contained within the shaded area on the map shown as Commercial Inner City: 07 Guest House/Private Hotel; 08 Building Units; 09 Group Titles; 10 Combined Multi Dwelling & Shop; 11 Shop - Single; 12 Shops - Shopping group (more than 6 shops, excluding those in Categories B & G); 13 Shopping group (2 to 6 shops, excluding those in Categories B & G); 14 Shops - Main Retail (excluding those in Categories B & G); 15 Shops - Secondary Retail (excluding those in Categories B & G); 16 Drive In Shopping Centres (excluding those in Categories B & G); 17 Restaurant; 18 Special Tourist Attraction; 19 Walkway; 20 Marina; 22 Car Park; 23 Retail Warehouse; 24 Sales Area Outdoor; 25 Offices; 26 Funeral Parlours; 27 Hospitals; Convalescent Homes (Medical Care) (Private); 28 Warehouses and Bulk Stores; 29 Transport Terminal; 30 Service Station; 31 Oil Depot and Refinery; 32 Wharves; 33 Builders Yard/Contractors Yard; 34 Cold Stores - Iceworks; 35 General Industry; 36 Light Industry; 37 Noxious/Offensive Industry; 38 Advertising - Hoarding; 39 Harbour Industries; 40 Extractive; 41 Child Care; 42 Hotel/Tavern;

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43 Motel; 44 Nurseries; 45 Theatres and Cinemas; 46 Drive-In Theatre; 47 Licensed Clubs; 48 Sports Clubs/Facilities; 49 Caravan Parks; 50 Other Clubs; Non-Business; 51 Religious; 52 Cemeteries (including Crematoria); 55 Library; 56 Showgrounds/Racecourses/Airfields; 57 Parks and Gardens; 58 Educational - including Kindergartens; 91 Transformers; 92 Defence Force establishments; 95 Reservoir, Dam, Bores; 96 Public Hospital; 97 Welfare Homes/Institutions; 99 Community Protection Centre. However not including a lot on a building units plan or group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for a residential purpose. But including the following land where that land is included as City Centre, Sub-Regional Centre, District Centre, Local Centre, Cityport North, Cityport South, Strategic Port Land, Commercial and Industry Planning Areas within Cairns Plan 2009: 01 Vacant urban land; 04 Large vacant urban land; 06 Outbuildings; 09 Group Titles; 72 Refer to Section 25 of Valuation of Land Act 1944. CATEGORY E Suburban The criteria for this category is, the properties shall not be included within Commercial Categories B, D, G and H and are properties to which the following land use codes apply: 07 Guest House/Private Hotel; 08 Building Units; 09 Group Titles; 10 Combined Multi Dwelling & Shop; 11 Shop - Single; 12 Shops - Shopping group (more than 6 shops); 13 Shopping group (2 to 6 shops); 14 Shops - Main Retail; 15 Shops - Secondary Retail; 16 Drive In Shopping Centres; 17 Restaurant; 18 Special Tourist Attraction; 19 Walkway; 20 Marina; 22 Car Park; 23 Retail Warehouse;

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24 Sales Area Outdoor; 25 Offices; 26 Funeral Parlours; 27 Hospitals; Convalescent Homes (Medical Care) (Private); 28 Warehouses and Bulk Stores; 29 Transport Terminal; 30 Service Station; 31 Oil Depots and Refinery; 32 Wharves; 33 Builders Yard/Contractors Yard; 34 Cold Stores - Iceworks; 35 General Industry; 36 Light Industry; 37 Noxious/Offensive Industry; 38 Advertising - Hoarding; 39 Harbour Industries; 40 Extractive; 41 Child Care; 42 Hotel/Tavern; 43 Motel; 44 Nurseries; 45 Theatres and Cinemas; 46 Drive-In Theatres; 47 Licensed Clubs; 48 Sports Clubs/Facilities; 49 Caravan Parks; 50 Other Clubs Non-Business; 51 Religious; 52 Cemeteries (including Crematoria); 55 Library; 56 Showgrounds/Racecourses/Airfields; 57 Parks and Gardens; 58 Educational - including Kindergartens; 91 Transformers; 92 Defence Force establishments; 95 Reservoir, Dam, Bores; 96 Public Hospital; 97 Welfare Homes/Institutions; 99 Community Protection Centre. However not including a lot on a building units plan or group titles plan registered under the Body Corporate and Community Management Act 1997 where that lot is used for a residential purpose But including the following land where that land is included as Sub-Regional Centre, District Centre, Local Centre, Commercial and Industry Planning Areas within Cairns Plan 2009 or Commercial and Industry Planning Areas in Douglas Shire Planning Scheme Incorporating Amendments 2007 No. 1 and 2007 No. 2 Reprinted as in force on 4th March 2008: 01 Vacant urban land; 04 Large vacant urban land; 06 Outbuildings; 09 Group Titles; 72 Refer to Section 25 of Valuation of Land Act 1944.

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CATEGORY F Not for Profit Community, Sporting and Recreation Organisations The criteria for this category is, the land must qualify for rate assistance under Council’s Rate Based Financial Assistance Policy. CATEGORY G Major Shopping Centres The criteria for this category is, the land shall have the following land use codes and comprise Drive In Shopping Centres and in which the anchor tenants are a variety of department store/s and/or discount department store/s and large grocery supermarket/s with major on-site parking facilities and having a gross lettable area retail (GLAR) over 20, 000m² and less than 35,000m² : 12 Shopping Group (more than 6 shops); 13 Shopping Group (2 to 6 shops); 14 Shops Main Retail; 15 Shops Secondary Retail; 16 Drive-In Shopping Centres.

CATEGORY H Shopping Centres (Secondary use Marina) All rateable properties which are predominantly used or intended for use for retailing to the public where such properties are used or intended for use concurrently for the activities of a marina and which: (a) have an area in excess of 5 ha; and (b) contain a building or group of buildings comprising more than six shops. With a land use code 12 Shops - Shopping group (more than 6 shops). RURAL PRODUCTIVE The criteria for this category is, all properties which are used predominately for Primary Production that have the following land use codes: 60 Sheep Grazing - Dry; 61 Sheep Breeding; 64 Cattle Grazing - Breeding; 65 Cattle Breeding and Fattening; 66 Cattle Fattening; 67 Goats; 68 Milk - Quota; 69 Milk - No Quota; 70 Cream; 71 Oil Seeds; 73 Grains; 74 Turf Farms; 75 Sugar Cane; 76 Tobacco; 77 Cotton; 78 Rice; 79 Orchards; 80 Tropical Fruits; 81 Pineapples;

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82 Vineyards; 83 Small Crops and Fodder Irrigated; 84 Small Crops Fodder Non-irrigated; 85 Pigs; 86 Horses; 87 Poultry; 88 Forestry and Logs; 89 Animals Special; 93 Peanuts. SCHEDULE 2 RATEABLE AND NON RATEABLE LAND DEFINITIONS "All land is rateable land other than (a) vacant State land; (b) land occupied by the State or a government entity (other than a non-exempt GOC), except under a

lease from a private person; (c) land in a state forest or timber reserve, other than land occupied under an occupation permit or stock

grazing permit under the Forestry Act 1959 or under a lease under the Land Act 1944; (d) Aboriginal land under the Aboriginal Land Act 1991 or Torres Strait Islander land under the Torres

Strait Islander Land Act 1991, other than land used for commercial or residential purposes; (e) the following land under the Transport Infrastructure Act 1994 -

(i) strategic port land occupied by a port authority, the State, or a government entity; (ii) existing or new rail corridor land; (iii) commercial corridor land that is not subject to a lease;

(ea) airport land, within the meaning given by the Airport Assets (Restructuring and Disposal) Act 2008, that is used for a runway, taxiway, apron, road, vacant land, buffer zone or grass verge;

(f) land exempt from rating under an Act or regulation made under this Act;

(g) land vested in, or placed under the management and control of, a person under an Act for recreation,

sporting or charitable purposes if the land is used for 1 or more of the purposes; (h) land used for charitable purposes if the relevant local government has, by resolution, decided the land

should be exempt; (i) land used for purposes of a public hospital that if - (i) the public hospital is -

(1) part of a private hospital complex; or (2) a private and public hospital complex; and

(ii) if the land used for the purposes is more than 2 Ha and separated from the rest of the complex;

(j) land owned or held by a local government unless the land is leased by the local government to

someone other than another local government; (k) land owned by a religious entity if the land is less than 20 ha and is used for 1 or more of the following

purposes - (i) religious purposes, including for example, public worship;

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(ii) the provision of education, health or community services including facilities for aged persons and

persons with disabilities; (iii) the administration of the religious entity; (iv) housing incidental to a purpose mentioned in subparagraph (i), (ii) or (iii);

(l) land owned by a community entity, including, for example, the Queensland Country Women's Association, if the land is less than 20 ha and is used for providing the following -

(i) accommodation associated with the protection of children; or (ii) accommodation for students; or (iii) educational, training or information services aimed at improving labour market participation or

leisure opportunities;

(m) land used for a cemetery; (n) land used primarily for showgrounds or horse racing other than land specified in paragraph (g) if the

local government concerned has, by resolution, decided the land should be exempt.

This policy is to remain in force until otherwise determined by Council. General Manager Responsible for Review: General Manager Corporate Services ORIGINALLY ADOPTED: 30/06/2004 CURRENT ADOPTION: 29/06/2009 DUE FOR REVISION: 25/06/2010 REVOKED/SUPERSEDED:

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5. BORROWINGS POLICY 2009/10 CAIRNS REGIONAL COUNCIL NO.1:02:05

General Policy

BORROWINGS POLICY FOR YEAR ENDED 25 JUNE 2010 Intent To provide Council with a debt management strategy based on sound financial management

guidelines. Scope This policy applies to all borrowings of Cairns Regional Council including all of the

commercialised business units of Council. PROVISIONS The following sets out the policy on borrowings for the year ended 25 June 2010 as required by section 8 of the Local Government Finance Standard 2005. Principles

1. Council aims to finance capital works and new assets to the greatest extent possible from revenue, grants and subsidies or any specific reserves primarily established to fund capital works.

2. It is Council’s intention to fully fund depreciation which is a significant source of funding. 3. Financing of major infrastructure assets require a strategic approach to evaluate the risk exposure

of Council. 4. Council should continually evaluate its financing options to ensure it assesses the relative risks and

benefits, including the performance of its finances. 5. Long term borrowings for capital works and new assets should be limited to income producing

assets that generate a net worth. 6. Council will not enter into any financing arrangements which involve the repayment of interest only

unless that interest is at least matched by income generated from the asset being financed. 7. Council will set targets designed at reducing the repayment period of outstanding debt by reviewing

that position each year. 8. Council will review the projected ratios of interest and redemption as a percentage of rates revenue

to set a target range every 3 years. 9. There will be no use of long-term debt to finance operating activities or re-current expenditure of

the Council. 10. The repayment for new and existing borrowings will be set at 10 years or less except in the case of

borrowings for major long-life infrastructure assets and for capital works which have been levied to ratepayers as a special charge, where a repayment period will be determined on a case by case basis.

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11. The ratio of Interest and Redemption to Net Rates Revenue (whole of Council) should remain less

than 25%. 12. Detailed capital works and asset acquisition programs for the next 5 years together with the 10

year financial model will provide the basis for determination of funding options. Borrowings for the Five Years Ending June 2014 Borrowings planned for the next five financial years are as follows:

Year and Purpose of Borrowing Amount Term

Year ended 25/6/2010 • Water and Waste Water Infrastructure Assets $27,691,415 20 Years • Refuse Infrastructure Assets $381,000 20 Years Year ended 24/6/2011 • Water and Waste Water Assets • Refuse Infrastructure Assets

$57,715,799 $2,675,000

20 Years 20 Years

Year ended 29/6/2012 • Water and Waste Water Assets • Refuse Infrastructure Assets

$37,901,485 $4,725,000

20 Years 20 Years


$12,516,298 $2,919,000

20 Years 20 Years


$15,973,180 $1,255,000

20 Years 20 Years

The amount projected to be outstanding at 25 June 2010 is $130,981,555. The repayment term of new loans is 20 years with existing loans having repayment terms between 2 and 20 years.

This policy is to remain in force until otherwise determined by Council. General Manager Responsible for Review: General Manager Corporate Services ORIGINALLY ADOPTED:21/06/2002 CURRENT ADOPTION: 29/06/2009 DUE FOR REVISION: 25/6/2010 REVOKED/SUPERSEDED:

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6. DIVIDEND POLICY 2009/10 CAIRNS REGIONAL COUNCIL NO.1:02:27

General Policy

DIVIDEND POLICY FOR YEAR ENDED 25 JUNE 2010 Intent To provide guidelines on the return of dividend to Council from commercialised business units for

the year ended 25 June 2010. Scope This policy applies to all commercialised business units of Council. DEFINITIONS

Business units The activities that have been commercialised in accordance with the Local Government Act 1993 and Local Government Finance Standard 2005.

Consolidated position

Refers to the financial results of Cairns Regional Council, excluding the results of the Cairns Regional Gallery. The 2009/10 year will not consolidate the financial results of the Cairns Regional Gallery.

General Fund The financial position of the organisation excluding the results of the business units.

PROVISIONS Philosophy 1. Business units of Council return a dividend to Council in recognition that these business units have been

established to further the good governance of the Region. 2. Funds earned by the general fund through dividends can be utilised to provide enhanced services and

infrastructure to the people of Cairns. 3. This policy will be reviewed annually to take into account the needs of individual business units (including

projected capital investment requirements) and the general economic and environmental conditions impacting on the performance of the business units.

Methodology 1. If the consolidated position of Cairns Regional Council shows a deficit position at the ‘Operating capabilities

before capital items and after tax’ line of the financial statements, the applicable dividend will be 100% of the distributable surplus of each business unit. Refer point 3 below for calculation of distributable surplus.

2. If the consolidated position of Cairns Regional Council shows a surplus position at the ‘Operating

capabilities before capital items and after tax’ line of the financial statements, the dividend will be between 90% and 100% depending on the extent of the surplus. Council will, by resolution, determine the rate of the dividend within the limits set by this policy. The Council resolution may be by way of a specific resolution or by adoption of the Annual Budget or revised budgets. The exact dividend will be determined after considering the future financial requirements of each business. Unfunded depreciation from prior years and forecast unfunded depreciation is also to be taken into account. Refer point 3 below for calculation of distributable surplus.

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3. Distributable surplus is calculated as follows: Operating Surplus after Income Tax of the business unit XXXXX Less: Constrained revenue from developer contributions (X) Less: Constrained revenue from capital grants and subsidies (X) Less: Other constrained revenue per the Reserves Policy (X) Total Dividend Payable to Cairns Regional Council XX 4. Surpluses retained within the business units will be transferred to a reserve and they will be utilised to build

capacity within the business unit in question. Procedure 1. Dividend will be calculated on actual performance. 2. Calculations for dividend payable to Council will be performed as part of the end of month process. 3. Transfer of surplus funds after dividend within the business unit will be made to reserves on an annual

basis.

This policy is to remain in force until otherwise determined by Council. General Manager Responsible for Review: General Manager Corporate Services ORIGINALLY ADOPTED:19/06/2003 CURRENT ADOPTION: 29/06/2009 DUE FOR REVISION: 25/06/2010 REVOKED/SUPERSEDED:

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7. RESERVES POLICY CAIRNS REGIONAL COUNCIL NO.1:02:31

General Policy

RESERVES Intent To establish an accounting policy for reserves for Cairns Regional Council. Scope This policy applies to the Cairns Regional Council budget and audited financial statements. PROVISIONS The Council will operate capital and operational reserve funds in accordance with the corporate plan. The creation of all reserves must be approved by Council. Reserves will only be created for specific purposes. All reserves must be cash backed and represent funds that are accumulated within the Council to meet specific anticipated future needs. In each case the amount relates to a perceived future requirement which is not currently a liability. The characteristics of each reserve must be identified before approval for creation can be given. The characteristics to be identified must include at least the following:-

• The name of the reserve; • The purpose of the reserve; • An explanation of how it fits into the corporate plan; • How the request for a new reserve eventuated; • The source of funds of the new reserve; • The use of funds in the reserve; • The name of the Council officer responsible for controlling the reserve; • The business unit, program or activity to which the reserve will be allocated; • The budgetary effect of the new reserve. • Reference to other Council Policies which relate to the operation of the reserve.

The purpose of all reserves shall be reviewed annually to confirm continued consistency with the corporate plan. Movements in reserve balances can only occur in line with the approved budget, revised budget or by Council resolution. To create a new reserve, appropriate funds must be debited against accumulated funds and credited against the new reserve. Where the maintenance of a reserve is no longer appropriate the funds held in the reserve must be credited to accumulated funds. Managers will need to resubmit annually for approval to spend reserve funds where the expenditure was planned in a previous budget but was not fully expended in that budget year. This will apply even where the projects are partially complete.

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Reserves that have been created by Council are listed in Appendix A.

This policy is to remain in force until otherwise determined by Council. General Manager Responsible for Review: General Manager Corporate Services ORIGINALLY ADOPTED: 15/09/2003 CURRENT ADOPTION: 29/06/2009 DUE FOR REVISION: 25/06/2010 REVOKED/SUPERSEDED:

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APPENDIX A The following reserves have been created by Council;- Constrained Works Reserve

• This capital reserve is credited with all grants, subsidies and contributions of monetary revenue received during the period and constrained for the purpose of funding specific capital expenditure.

• Monetary contributions received will be identified by precinct and purpose; • Monetary contribution funds will be used for infrastructure works within the precinct and for the purpose

for which the funds are held; • As the expenditure is incurred on specific capital assets the equivalent amounts are transferred to the

capital account. The closing balance reported at the period end represents amounts not yet expended and must be retained until expended in the manner specified by council policy, strategic plans or relevant legislation.

• Cash representing this reserve will be held in Council’s operating bank account or authorised investment.

• Interest earned on this reserve is to be calculated in accordance with the Interest Earned on Constrained Works Reserve Policy 1:02:33 and added to the reserve.

Outdoor Dining Fees Reserve

• This reserve is credited with outdoor dining fees collected annually based on the valuation of footpath impacted by table placement. These funds are used to provide for beautification of public areas in accordance with existing management plans and operational works programs.

• Cash representing this reserve will be held in Council’s operating bank account or authorised investment

Future Asset Acquisition Reserve

• This capital reserve represents cash reserves set aside to provide for the acquisition and replacement of assets and infrastructure in the future by Council. It also includes funds previously held in the Civic Infrastructure Reserve.

• As the expenditure is incurred on specific capital assets the equivalent amounts are transferred to the capital account.

• The assets representing this reserve will be kept as part of the Council’s general pool of assets. • Cash representing this reserve will be held in Council’s operating bank account or authorised

investment.

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Cairns Water Augmentation Reserve

• This capital reserve has been created by the Cairns Water Business Unit. • Over the current planning horizon Cairns Water will face demands, to fund and construct significant

capital works to cater for growth and changing environmental standards. These works will be partly funded from government grants, headworks and developer contributions. However, there will be a shortfall that will need to be funded from Cairns Water’s own resources.

• During each budget cycle Cairns Water will plan for the amount of funds generated from increased operating capability less tax, dividends and other capital items. This is the targeted amount to be transferred to the Asset Augmentation Reserve. At the completion of the financial year, actual figures will be used to determine the amount of the transfer.

• These funds can be used to fund asset augmentation or reduction in loan principal outstanding. o As the expenditure is incurred on specific capital assets the equivalent amounts are transferred to the

capital account. • The reserve will be maintained on the Cairns Water Statement of Financial Position, consolidating into

the Cairns Regional Council asset base. • Cash representing this reserve will be held in Council’s operating bank account or authorised

investment.

Natural Disaster Reserve – Water and Waste

• Each cyclone season Water and Waste is faced with demands to undertake significant repair and rehabilitation of its capital structure in order to maintain operating capacity upon damage.

• During each budget cycle Water and Waste will allow for funds required for repair and rehabilitation works. These funds will be sourced from the annual capital budget. Any balance of funds at the completion of the financial year will be the amount transferred to the reserve.

• These funds may be used to fund asset repair as a consequence of damage in a natural disaster. • As the expenditure is incurred on specific capital assets the equivalent amounts are transferred to the

capital account. • Cash representing this reserve will be held in Council’s operating bank account or authorised

investment. • The upper limit at any one time for this reserve will be $400,000.

Cleaner Seas Initiative Reserve

• This capital reserve has been created by the Cairns Water Business Unit. • The Cleaner Seas Initiative is being levied to aid in the quantum increase in treatment standards

required by the Coastal Management Strategy and subsequent nutrient removal limitations placed upon Cairns Regional Council.

• The Cleaner Seas Initiative is levied as a utility charged under S973 of the Local Government Act 1993 as it is allowing nutrient removal sewerage services to be supplied to the Greater Cairns community.

• During each budget cycle Cairns Water will plan for the amount of funds generated by the Cleaner Seas Initiative utility charge to be transferred to the reserve. At the completion of the financial year, actual figures will be used to determine the amount of the transfer.

• These funds may be used to fund wastewater treatment plant upgrades to support the increase in wastewater treatment standards.


• The reserve will be maintained on the Cairns Water Statement of Financial Position, consolidating into the Cairns Regional Council asset base.


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Future Operational Expenditure Reserve

• This recurrent reserve represents cash reserves accumulated by the Botanic Gardens through the receipt of donations from the community set aside to fund future operational expenditure in relation to the Friends of the Garden Festival.

• This recurrent reserve also represents cash reserves accumulated by the City Library through the sale of books set aside to fund future operational expenditure in relation to the library network.

• This recurrent reserve also represents cash reserves accumulated for unexpended operational grant revenue for each financial year.

• This recurrent reserve also represents lease revenue received from Historical Society, Muddies, Skippers, Botanical Gardens Restaurant and Lake Placid Restaurant which is required to be set aside by Department of Natural Resources & Water to fund future maintenance expenditure.

• As the operational expenditure is incurred the equivalent amounts are transferred to the accumulated surplus account.


Plant Fleet Replacement and Augmentation Reserve

• Council currently operates a fleet that is ageing, unreliable, increasingly unavailable, and generating growing maintenance costs. The only way to overcome these problems is to replace the fleet as soon as possible and develop an economic Fleet Replacement Program. Implementation of this is required to ensure Council has an appropriate fleet at its disposal, or one that can be quickly acquired, to fulfil its responsibilities. It is not possible to meet these requirements while the current situation of being dependent on annual budget allocations continues.

• Any surplus generated from plant operations is to be re-directed into a dedicated Fleet Replacement and Augmentation Reserve.

• These funds may be used to develop a modern fleet and operate a regular Fleet Replacement Program.


• Funds will only be transferred to this reserve when Council is reporting a positive operating position. • Cash representing this reserve will be held in Council’s operating bank account or authorised

investment. Information Technology Replacement Reserve

• The purpose of this reserve is to provide additional funds to ensure that Information Technology and Communication (ITC) assets are replaced and/or enhanced within the correct economic cycle.

• Each year when adopting the budget, Council will determine the amount of funds to be transferred to the Information Technology Replacement Reserve. This amount may be adjusted via the budget review process.

• These funds will be used to fund the acquisition and replacement of ITC equipment and infrastructure and cannot be used to support the ongoing maintenance requirements of the asset base.


• Funds will only be transferred to this reserve when Council is reporting a positive operating position. • Cash representing this reserve will be held in Council’s operating bank account or authorised

investment.

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Beach Protection Reserve

• This reserve has been created to ensure that Council has the ability to deal with the important issue of beach protection.

• Each year when adopting the budget, Council will determine the amount of funds to be transferred to the Beach Protection Reserve. This amount may be adjusted via the budget review process.

• The Beach Protection Reserve has been created to enable the Council the financial capacity to proactively address the issues being experienced along our beaches, particularly with sand degradation and the potential loss of infrastructure due to the natural action of the ocean.

• Reserve funds can be utilised to undertake sand nourishment programs, the construction of groins and the construction of infrastructure designed to protect existing Council infrastructure. Where works are required to protect personal property, Council will determine the proportion of cost that will be allowed to be funded from this reserve on a case by case basis with the decision being based on an assessment of the degree of public benefit to be gained from the works.


Natural Disaster Reserve – Works and Services

• Following periods of significant rainfall or natural disaster, Cairns Regional Council is faced with undertaking significant repair and rehabilitation of its capital structure in order to maintain operating capacity upon damage. Monies are provided to Council under the State Government Flood Damage Subsidy Scheme, however Council is required to fund a flag fall amount prior to a subsidy being claimed.

• The purpose of this reserve is to provide sufficient funds to meet the flag fall amount. • During each budget cycle Cairns Regional Council will allow funds required for repair and rehabilitation

works. These funds will be sourced from any operating surpluses and will not exceed $150,000 in each financial year.

• These funds may be used to fund asset repair as a consequence of damage in a natural disaster. • Funds may only be transferred to this reserve when Council is returning a positive operating position. • Cash representing this reserve will be held in Council’s operating bank account or authorised

investment. • The upper limit at any one time for this reserve will be the maximum flag fall amount that Council will be

required to pay under the State Government Flood Damage Subsidy Scheme. Blue Water Special Charge Reserve

• The Blue Water Special Charge has been levied to recognise that allowance needs to be made and a

process put in place to manage the risk of major storms or other events that may impact on Blue Water Canal, Half Moon Creek and Access Channel.

• Council approved a special charge based on individual lots identified as per the Blue Water Canal Map and Marina Berths associated with Blue Water and Yorkeys Knob Marina.

• Any unspent Blue Water Special Charge revenue is to be transferred to the reserve to fund future dredging costs.


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Public Art Reserve

• The purpose of this reserve is to build up a public art ‘bank’ to support streams of the public art program and all ancillary costs.

• Monetary contributions to the reserve will be determined on the basis of the provisions of the Public Art Policy - No.1:04:44.

• Funds in the reserve are to be used for the purposes identified in the Public Art Policy - No.1:04:44 • Cash representing this reserve will be held in Council’s operating bank account or authorised

investment. Resources, Waste and Environment Reserve

• The purpose of this reserve is to meet expenses of a recurrent nature. • As the operational expenditure is incurred the equivalent amounts are transferred to the accumulated

surplus account. • Cash representing this reserve will be held in Council’s operating bank account or authorised

investment. Cairns Southern Corridor Reserve

• This reserve has been established under the Cairns Southern Corridor Reserve Policy - No. 1:04:50. That policy outlines the provisions for the operation of the reserve.


Daintree Ferry Reserve

• This reserve has been established under the Daintree Ferry Revenue Policy - No.1:03:02 under which the surplus Net Result of the Daintree Ferry function (3790) will be constrained to this reserve each year in order to fund ongoing capital and operational costs associated with the provision of ferry services on the Daintree River.


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8. CODE OF COMPETITIVE CONDUCT STATEMENT STATEMENT OF ACTIVITIES TO WHICH THE CODE OF COMPETITIVE CONDUCT APPLIES For the year ended 25 June 2010 Definition of Activities: For the year ending 25 June 2010, the Minister sets the threshold amounts for identifying a “significant business activity” that should be a Type 1 or 2 business activity. The threshold for the year ending 25 June 2010 has not been released as of the budget adoption date. However, the threshold applicable to 30 June 2010 is based on indexing the 1992/93 base amounts (per section 546) in accordance with the Consumer Price Index, CPI (All Groups: Brisbane), for the March quarter within the year in question. This index is 3.1%. Type 1. Is a business activity where the threshold expenditure for 25 June 2010 adjusted by the consumer

price index is expected to be set as follows:

(a) for water and sewerage combined activities - $ 38.97million (b) for other activities - $23.40 million

Type 2 (a) for water and sewerage combined activities - $11.65 million (b) for other activities - $7.84 million A Type 3 activity also includes 2 categories: Type 3. (a) Roads business activity means:

(i) the construction or maintenance of State controlled roads for which the local government submits an offer to carry out work in response to a tender invitation other than through a sole supplier arrangement; or

(ii) submission of a competitive tender for construction or road maintenance on the local government’s roads which the local government has put out to tender, or called for by another local government.

(b) Business activity means:

(i) trading in goods and services to clients in competition with the private sector; or (ii) the submission of a competitive tender in the local government’s own tendering process

in competition with others for the provision of goods and services to itself. Excluded activities are: • library services • an activity or part thereof prescribed by legislation.

A local government may elect to apply a Code of Competitive Conduct (CCC) to their identified Type 3(b) business activities. This requires the application of full cost pricing, identifying the cost of community service obligations (CSO) and eliminating the advantages and disadvantages of public ownership within that activity. The application of the CCC to the roads business is compulsory. The CSO represents an activities’ cost(s), which would not be incurred if the activities’ primary objective was to make a profit. The Council provides funding from general revenue to the business activity to cover the cost of providing non-commercial community services or costs deemed to be CSO’s by the Council.

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Type 1 Commercialised business units of Council now include: • Cairns Water which manages the water and wastewater activities. • Cairns Works activities including road maintenance, drainage, minor works, parks, street litter and public toilet

cleaning. Type 2 Commercialised business units of Council include:

• Cairns Refuse which manages the solid waste activities. Listed below are the type 3 business activities of which the Code of Competitive Conduct applies for the financial year 2009/10.

Description

Civic Theatre

Water Laboratory Ticket Link Sugar

World Swimming

Pools Revenue for services provided to the Council $36,863 $1,031,607 - - -

Revenue for services provided to external clients $960,604 $870,118 $356,398 $51,717 $408,329

Community Service Obligations, net of charges ($42,659) ($218,765) ($21,153) ($23,272) $531,665

Sub-Total $954,808 $1,682,960 $335,245 $28,445 $939,994

Less: Expenditure $2,414,477 $1,981,832 $323,601 $83,200 $2,357,352

Surplus/(Deficiency) ($1,459,669) ($298,872) $11,644 ($54,755) ($1,417,358)

Description City Place Car Parking Tanks Art Centre

Caravan Parks

Building Regulation

& Certification

Revenue for services provided to the Council - - $8,549 - -

Revenue for services provided to external clients $88,563 $1,283,421 $498,661 $487,061 $570,882

Community Service Obligations, net of charges $143,817 ($489,372) $117,743 ($85,593) ($370,989)

Sub-Total $232,380 $794,049 $624,953 $401,468 $199,893

Less: Expenditure $604,990 $294,752 $2,035,088 $397,241 $963,755

Surplus/(Deficiency) ($372,610) $499,297 ($1,410,135) $4,227 ($763,862)

Description Design Services

Fleet Services

Survey Services

Project Services

Facilities Management

Revenue for services provided to the Council $1,769,165 $29,121,492 $1,035,466 $1,704,395 $5,980,593

Revenue for services provided to external clients $169,794 $372,600 - - -

Community Service Obligations, net of charges ($194,105) ($1,493,638) ($137,383) ($797,332) ($331,585)

Sub-Total $1,744,854 $28,000,454 $898,083 $907,063 $5,649,008

Less: Expenditure $1,726,634 $25,846,400 $899,136 $876,581 $6,526,367

Surplus/(Deficiency) $18,220 $2,154,054 ($1,053) $30,482 ($877,359)

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CAIRNS REGIONAL COUNCIL - unconsolidated STATEMENT OF ACTIVITIES TO WHICH THE CODE OF COMPETITIVE CONDUCT APPLIES For the year ended 25 June 2010 ATTACHMENT B Details of Community Service Obligations are:

Activities CSO Description 2009/10

Type 2 Activities

Water Service Locations - Telstra, etc

31,270 Maintenance of Fire Hydrants 390,082 Free Greening Allowance - Access Charges forgone 1,177,503 Water Charges forgone 2,160,344 Total 3,759,199

Wastewater Service Locations - Telstra, etc

79,914 Water Charges (431,218) Total (351,304)

Solid Waste Management Free dumping general waste

103,576 Free dumping vegetation 121,094 Free transportation costs between transfer stations 123,180 Rates based financial assistance 14,282 Water Charges - Transfer Stations (13,784) Total 348,348 Cairns Works Water Charges (14,711)

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Activities CSO Description 2009/10 Type 3 Activities Water Laboratory Response Advice for Chemical Emergencies(RACE) 4,989 Water Charges (301) Total 4,688 Sugarworld Water Charges - Carparking Water Charges (1,803) Caravan Parks Rental revenue forgone 9,707 Water Charges (10,835) (1,128) Swimming Pools

Revenue forgone

1,091,291

Water Charges (335,307) Total 755,984 City Place Provision of School of Arts lease space 215,661 Rental revenue forgone - Water Charges (6,756) Total 208,905 Civic Theatre Council Funded Shows 160,494 Assistance to community hirers 148,345 Water Charges (217) Total 308,622 Ticket Link Assistance to community hirers 5,800 Water Charges - Total 5,800 Tanks Arts Centre Provision of below market price services to the community

e.g. Market Day, Gallery, Community Exhibitions, Community Events

332,575

Water Charges (2,890) Total 329,685 Facilities Maintenance Equipment revenue forgone to state government agencies 8,000 Notes: 1. The following activities do not provide CSO revenues, but take into account water usage, where

applicable. This water usage is reflected as a negative revenue in the preceding table and above, where applicable.

• Cairns Works • Carparking • Sugarworld • Fleet

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9. CAPITAL WORKS SUMMARY

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brett grosser: 8/14/2-01: #2052419 · 6/29/2009 · brett grosser: 8/14/2-01: #2052419...

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