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ordinary meeting of council to be held on tuesday, 26 april 2005 at ... ordinary meeting of council to be held on tuesday, 26 april 2005 at ...

kmc.nsw.gov.au
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Ku-ring-gai Council Draft Management Plan 2005-2009 STATEMENT OF PROPOSED BORROWINGS Council may only borrow funds in accordance with legislative restrictions on borrowing limits, and terms and conditions as determined by the Department ong>ofong> Local Government. Council makes a submission and seeks approval for borrowing limits on an annual basis. Council considers that the maintenance ong>ofong> existing infrastructure assets should ong>beong> funded from operating revenue and that loan funds are only ong>toong> ong>beong> utilised for the following purposes: Infrastructure refurbishment programs. To purchase or build a major new asset, where full funding costs can ong>beong> recovered over the life ong>ofong> the asset. To buy an asset or establish a service which will decrease costs ong>ofong> service delivery or generate income and is justifiable in economic terms. In an emergency. Once approval ong>ofong> Council’s general borrowing limit is advised by the Department ong>ofong> Local Government, submissions will ong>beong> invited from financial institutions ong>toong> provide the required borrowings. Council complies with the provisions ong>ofong> Section 623 ong>ofong> the Local Government Act (1993) and clause 23 ong>ofong> the Financial Management Regulations, in that any funds borrowed by Council will ong>beong> secured by a charge over Council’s General Fund income. Council will need a moderate borrowing program ong>toong> continue ong>toong> commit funding ong>toong> asset refurbishment. Accordingly, the proposed new borrowings, principal repayments and net repayments proposed over the term ong>ofong> the plan are: Financial Year Proposed Borrowings Principal Repayments Net Repayments 2005/2006 $1,400,000 $1,538,500 $138,500 2006/2007 $1,000,000 $1,706,500 $706,500 2007/2008 $1,000,000 $1,856,700 $856,700 2008/2009 $1,000,000 $1,877,300 $877,300 TOTAL $4,400,000 $6,979,000 $2,579,000 Over the term ong>ofong> this Management Plan, Council will reduce “net debt” by $2,579,000. Page 81

Ku-ring-gai Council Draft Management Plan 2005-2009 NATIONAL COMPETITION POLICY The intent ong>ofong> the National Competition Policy is ong>toong> apply competitive neutrality principles ong>toong> business activities conducted by Councils. The principle ong>ofong> competitive neutrality is based on the concept ong>ofong> the ‘level playing field’ and essentially means that Council should operate without net competitive advantage over other businesses as a result ong>ofong> its public ownership. The ‘level playing field’ enhances competition and promotes greater efficiency and lower costs ong>toong> government and the community. Council is required ong>toong> incorporate the costs ong>ofong> administrative overheads including depreciation charges, imputed taxation costs, and a notional return on capital for its Category 1 and Category 2 businesses. Category 1 businesses are defined as those which have gross operating income exceeding $2 million, while Category 2 businesses have gross operating incomes ong>ofong> less than $2 million. In accordance with this policy Council has identified the following business activities. Category 1 At this stage Council has no Category 1 businesses. Category 2 (a) Ku-ring-gai Art Centre (b) Tennis Courts (c) Nursery (d) Swimming Pool (f) Thomas Carlyle Children’s Centre (g) Gordon Golf Course (h) Turramurra Golf Course (i) Commercial Leasing (e) Trade Waste The above businesses are identified in Council’s Annual Financial Statements and a separate Special Purpose Financial Report is prepared ong>toong> disclose their results. This report is presented ong>toong> Council in Ocong>toong>ong>beong>r each year. Page 82

Ku-ring-gai Council<br />

Draft Management Plan <strong>2005</strong>-2009<br />

NATIONAL COMPETITION POLICY<br />

The intent <str<strong>on</strong>g>of</str<strong>on</strong>g> the N<strong>at</strong>i<strong>on</strong>al Competiti<strong>on</strong> Policy is <str<strong>on</strong>g>to</str<strong>on</strong>g> apply competitive neutrality<br />

principles <str<strong>on</strong>g>to</str<strong>on</strong>g> business activities c<strong>on</strong>ducted by Councils. The principle <str<strong>on</strong>g>of</str<strong>on</strong>g> competitive<br />

neutrality is based <strong>on</strong> the c<strong>on</strong>cept <str<strong>on</strong>g>of</str<strong>on</strong>g> the ‘level playing field’ and essentially means th<strong>at</strong><br />

Council should oper<strong>at</strong>e without net competitive advantage over other businesses as a<br />

result <str<strong>on</strong>g>of</str<strong>on</strong>g> its public ownership. The ‘level playing field’ enhances competiti<strong>on</strong> and<br />

promotes gre<strong>at</strong>er efficiency and lower costs <str<strong>on</strong>g>to</str<strong>on</strong>g> government and the community.<br />

Council is required <str<strong>on</strong>g>to</str<strong>on</strong>g> incorpor<strong>at</strong>e the costs <str<strong>on</strong>g>of</str<strong>on</strong>g> administr<strong>at</strong>ive overheads including<br />

depreci<strong>at</strong>i<strong>on</strong> charges, imputed tax<strong>at</strong>i<strong>on</strong> costs, and a noti<strong>on</strong>al return <strong>on</strong> capital for its<br />

C<strong>at</strong>egory 1 and C<strong>at</strong>egory 2 businesses.<br />

C<strong>at</strong>egory 1 businesses are defined as those which have gross oper<strong>at</strong>ing income<br />

exceeding $2 milli<strong>on</strong>, while C<strong>at</strong>egory 2 businesses have gross oper<strong>at</strong>ing incomes <str<strong>on</strong>g>of</str<strong>on</strong>g> less<br />

than $2 milli<strong>on</strong>.<br />

In accordance with this policy Council has identified the following business activities.<br />

C<strong>at</strong>egory 1<br />

At this stage Council has no C<strong>at</strong>egory 1 businesses.<br />

C<strong>at</strong>egory 2<br />

(a) Ku-ring-gai Art Centre<br />

(b) Tennis Courts<br />

(c) Nursery<br />

(d) Swimming Pool<br />

(f) Thomas Carlyle Children’s Centre<br />

(g) Gord<strong>on</strong> Golf Course<br />

(h) Turramurra Golf Course<br />

(i) Commercial Leasing<br />

(e) Trade Waste<br />

The above businesses are identified in Council’s Annual Financial St<strong>at</strong>ements and a<br />

separ<strong>at</strong>e Special Purpose Financial Report is prepared <str<strong>on</strong>g>to</str<strong>on</strong>g> disclose their results. This<br />

report is presented <str<strong>on</strong>g>to</str<strong>on</strong>g> Council in Oc<str<strong>on</strong>g>to</str<strong>on</strong>g><str<strong>on</strong>g>be</str<strong>on</strong>g>r each year.<br />

Page 82

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