1. Click to edit Master title style Click to edit Master text styles 0 Department of Local Government, Community Recovery and Resilience Role and Relationships with Councils Samantha Cieslar, Principal Project Officer, Finance and Funding Jim Evans, Manager, Northern Region Friday, 10 October 2014

2. Click to edit Master title style Click to edit Master text styles Structure of presentation Minister & Acting Director-General Vision & objectives Role of the Department Legislative framework Departmental functions Revenue generation & management Questions Contact details

3. Click to edit Master title style Click to edit Master text styles Honourable David Crisafulli Minister for Local Government, Community Recovery and Resilience Area of responsibilityLegislationResponsible agency Local Government Aboriginal and Torres Strait Islander Communities (Justice, Land and Other Matters) Act 1984 (Part 9, Div 2 and Part 10) City of Brisbane Act 2010 Local Government Act 2009 Local Government Electoral Act 2011 Department of Local Government, Community Recovery and Resilience Reconstruction of Queensland following statewide flooding and Cyclone Yasi Queensland Reconstruction Authority Act 2011Queensland Reconstruction Authority

4. Click to edit Master title style Click to edit Master text styles Steve Johnston Acting Director-General 3 Steve’s role is to realise the Government’s objectives for the community by: taking a leading role in overseeing the implementation of resilience projects to minimise the impact of future natural disasters providing a legislative framework that enables councils to deliver sound decisions and policies, improve front-line services and to use sound financial management practices for the benefit of their communities

5. Click to edit Master title style Click to edit Master text styles Our Vision and Objectives Empowered councils with capacity to build resilient local communities Councils have the authority and capacity to manage their interests, to be financially sustainable and accountable Councils have access to high-quality capacity building programs and resources Recovery projects are delivered and resilience activities implemented to mitigate the effect of natural disaster events The department is informed, efficient and effective 4

6. Click to edit Master title style Click to edit Master text styles The role of the Department work closely with local governments to help them build on their capability and capacity provide timely, accurate advice and quality service to local governments across Queensland.

7. Click to edit Master title style Click to edit Master text styles Legislative Framework of Local Governments The Local Government Act 2009 provides the legal framework in which local governments operate. The purpose of the Act is to provide for: (a) the way in which a local government is constituted and the nature and extent of its responsibilities and powers; (b) a system of local government in Queensland that is accountable, effective, efficient and sustainable.

8. Click to edit Master title style Click to edit Master text styles 7 Departmental Functions Queensland Local Government Grants Commission Local Government Remuneration and Discipline Tribunal Borrowings program Local Laws Database Monitoring & Capacity Building Funding of Infrastructure

9. Click to edit Master title style Click to edit Master text styles 8 Revenue generation & management Differential rating categories Auditor-General report to Parliament Local government comparative information

10. Click to edit Master title style Click to edit Master text styles 9 Differential Rating Categories Mackay investors angry about being billed more on their rates The Daily Mercury, 31 August 2013 Investors win rates case against Mackay Regional Council The Daily Mercury, 30 April 2014

11. Click to edit Master title style Click to edit Master text styles 10 Paton & Ors v Mackay Regional Council [2014] QSC 75 The applicants contended that Council took into account the following: Ability to pay The capacity of the property to generate revenue Council wanted to spread the burden and people or companies that own rental properties have the capacity to claim a tax deduction for rates and other expenses

12. Click to edit Master title style Click to edit Master text styles 11 Justice McMeekin’s conclusion: …whether the statute permits the Council to categorise land for differential rating purposes by reference to the occupation of it by the owner. In my opinion it does not.

13. Click to edit Master title style Click to edit Master text styles Dramatic state government changes save BCC $1b rates headache The Brisbane Times, 4 June 2014 Section 94(1A) Local Government Act 2009, Section 96(1A), City of Brisbane Act 2010: a local government may categorise rateable land, and decide differential rates for rateable land, according to whether or not the land is the principal place of residence of the owner

14. Click to edit Master title style Click to edit Master text styles Councils with a ‘not principal place of residence’ differential category Council% above principal place of residence Brisbane City Council27% City of Gold Coast20% Ipswich City Council32% Logan City Council33% Moreton Bay Regional Council25% Townsville City Council14% Whitsunday Regional Council15%

15. Click to edit Master title style Click to edit Master text styles 14 Definition A local government is financially sustainable if the local government is able to maintain its financial capital and infrastructure capital over the long term. Definition of sustainability Section 104(2), Local Government Act 2009, Section 103(2), City of Brisbane Act 2010:

16. Click to edit Master title style Click to edit Master text styles 15 I would like my council’s financial management compared to other local governments

17. Click to edit Master title style Click to edit Master text styles Auditor-General’s report to Parliament Results of audit: Local government entities 2012–13 Report 14 : 2013–14

18. Click to edit Master title style Click to edit Master text styles 17 Auditor-General assesses councils’ financial sustainability from an analysis of these financial sustainability measures: operating surplus ratio—capacity to meet operating expenditure from operating revenue (target: between 0% and 10%) net financial liabilities ratio—capacity of the council to repay long term liabilities, especially borrowings (target: less than 60%) asset sustainability ratio—extent to which assets are being replaced as they reach the end of their useful lives (target: greater than 90%)

19. Click to edit Master title style Click to edit Master text styles 18 For 2012–13, four very large councils had net financial liabilities that exceeded the 60 per cent target: Brisbane City Council Ipswich City Council Rockhampton Regional Council Townsville City Council

20. Click to edit Master title style Click to edit Master text styles “…borrowings, when undertaken prudently, are an appropriate means for local government to finance long lived assets…servicing of debt through rates or user charges enables the cost of the asset to be matched with the benefits from consumption of the services over the life of the asset, thereby promoting inter-generational equity.” Productivity Commission, 2008 19

21. Click to edit Master title style Click to edit Master text styles 20 Conclusions Indigenous councils were rated overall as being at higher risk of becoming financially unsustainable. Very large councils were assessed as having a moderate overall financial sustainability risk. Councils in high population growth areas need careful financial planning and strategies to maintain manageable debt levels in the long term.

22. Click to edit Master title style Click to edit Master text styles 21 Local Government Comparative Information Compare and contrast with similar local governments – why are they flourishing? Allows you to benchmark with your neighbours

23. Click to edit Master title style Click to edit Master text styles Separate & Special Rates/Charges 22 CouncilRate or ChargeAmount rated per property BananaEnvironmental levy$98 BundabergGin Gin sewerage extension$100 CairnsBluewater canal dredging Marina 1 $189,786 CookEnvironmental levy$69 WhitsundayInfrastructure levy$140

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25. Click to edit Master title style Click to edit Master text styles Contact Details Jim Evans Manager Email: jim.evans@dlgcrr.qld.gov.aujim.evans@dlgcrr.qld.gov.au Phone4758 3425 Mobile0429 499 479 Location: Level 5, Central Plaza, 370 Flinders Street, Townsville QLD, 4810 Postal Address: PO Box 5666, Townsville, QLD, 4810 24

26. Click to edit Master title style Click to edit Master text styles 25 Contact Details Samantha Cieslar Principal Project Officer Email: samantha.cieslar@dlgcrr.qld.gov.ausamantha.cieslar@dlgcrr.qld.gov.au Phone: 3452 6721 Location: Level 17, 41 George Street Brisbane QLD 4000 Postal Address: PO Box 15009, City East, Queensland 4002 25