Agenda - Byron Shire Council - NSW Government

BYRON SHIRE COUNCIL
ORDINARY MEETING 9 MAY 2013 (52)
Financial Implications
5
10
15
20
25
30
35
Council has previously established an Infrastructure Reserve that was funded from a levy on
Council owned and managed Holiday Parks. It is estimated that this Reserve will at 30 June 2013
hold funds of $83,500. With the loss of the Crown Holiday Parks managed by Council no funds are
now generated and it is recommended that the funds held as at 30 June 2013, be transferred from
the Infrastructure Reserve to the Infrastructure Renewal Reserve and that the Infrastructure
Reserve be retired.
To give Council the flexibility to embark on works/projects relevant to the terms of reference for the
Infrastructure Renewal Reserve more immediately before sources of funds are realised, Council is
able to internally loan to the Infrastructure Renewal Reserve from its other internal reserves held.
Based on projected future commitments, if Council wished to establish a total of $1,000,000 in
initial funding for the Infrastructure Renewal Reserve including the $83,500 from the retired
Infrastructure Reserve, it could do so from the following sources:
Quarry Reserve $600,000
Plant Reserve $156,500
Information Technology Reserve $160,000.
As the funding sources for the internal loan are from other internal reserves, Council is not obliged
to charge itself interest as in effect it is simply reallocating existing funding within the basket of
internal reserves so the internal loan can be on an interest free basis. Council should, as a priority,
repay the internal loans when funding sources feeding the Infrastructure Renewal Reserve are
realised, e.g. sale proceeds from the Roundhouse subdivision, to restore the Quarry, Plant and
Information Technology Reserves for the amounts borrowed to meet potential future demands in
those reserves.
Undertaking an internal loan as indicated above may restrict the capacity of the Quarry, Plant and
Information Technology reserves to meet unexpected future demands not currently foreseen but if
Council proceeds with the internal loan this is a risk that can be managed should it eventuate.
Once established, the Infrastructure Renewal Reserve will be funded from the sources identified
above for the operation of the Reserve and will be used to fund eligible infrastructure renewal
projects as indicated in the recommended criteria identified earlier in this report.
In accordance with Resolution 13-137 the following information is provided to Council in all reports
prepared for the 9 May, 13 and 27 June 2013 Ordinary Meetings:
40
The estimated staff hours for the preparation of this report was approximately 1 hour.
Statutory and Policy Compliance Implications
45
50
Internally Restricted Funds or Reserves must be established by Resolution of Council. The Council
should also determine the criteria for the operation of the Reserve to provide a governance
framework for transfers to and from the Reserve.
Council is only able to borrow by way of internal loan against funds that are externally restricted ie
water, sewerage, domestic waste and developer contributions through application to an approval
by the Minister for Local Government in accordance with Section 410 of the Local Government Act
1993.
Ordinary Meeting Agenda 09/05/13