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Annual Budget – Key dates, preparation, content and adoption requirements under Local Government Act 2009 and Local Government Regulation 2012

Purpose

This bulletin is to provide councils with an overview of the Division 3 requirements under the Local Government Regulation 2012 for the completion of the budgets starting from the 2013/14 financial year onwards.

Key dates

Key dates for the completion of the budgets starting from the 2013/14 financial year

Under the Local Government Act 2009 and the Local Government Regulation 2012, all councils are required to prepare and adopt annual budgets:

  • (a) After 31 May in the year before the financial year
  • (b) but before 1 August, or
  • (c) a later date decided by the Minister for Local Government, Community Recovery and Resilience.

The mayor must give each councillor a copy at least two weeks prior to the budget adoption meeting.

Preparation

Annual budgets must be prepared on an accrual basis and must include the following content:

Current year plus next two consecutive years

Financial position

Cash flow

Income and expenditure

The statement of income and expenditure must state each of the following:

  • rates and utility charges excluding discounts and rebates
  • contributions from developers
  • fees and charges
  • interest
  • grants and subsidies
  • depreciation
  • finance costs
  • net result
  • the estimated costs of the:
    • (1) local government's significant business activities carried on using a full cost pricing basis
    • (2) activities of the local government's commercial business units
    • (3) local government's significant business activities.

Changes in equity

Long-term financial forecast – covering at least 10 years

  • Must include:
    • income of the local government
    • expenditure of the local government
    • the value of assets, liabilities and equity of the local government.
  • Must consider its long-term financial forecast before planning new borrowings; and review its long-term financial forecast annually.
  • Councils are encouraged to use the Queensland Treasury Corporation (QTC) Local Government Forecasting Model, available directly from QTC.

Revenue statement

  • Must state:
    • if the local government levies differential general rates:
      • the rating categories for rateable land in the local government area
      • a description of each rating category; and
    • if the local government levies special rates or charges for a joint government activity - a summary of the terms of the joint government activity; and
    • if the local government fixes a cost-recovery fee - the criteria used to decide the amount of the cost-recovery fee; and
    • if the local government conducts a business activity on a commercial basis - the criteria used to decide the amount of the charges for the activity's goods and services.
    • Also, the revenue statement for a financial year must include the following information for the financial year:
      • an outline and explanation of the measures that the local government has adopted for raising revenue, including an outline and explanation of:
        • the rates and charges to be levied in the financial year
        • the concessions for rates and charges to be granted in the financial year
      • whether the local government has made a resolution limiting an increase of rates and charges.

Revenue policy

Measures of financial sustainability plus nine years

The relevant measures of financial sustainability are the following measures as described in the financial management (sustainability) guideline - available on the department's website:

  • asset sustainability ratio
  • net financial liabilities ratio
  • operating surplus ratio.

Total value of the change

  • The budget must include the total value of the change, expressed as a percentage, in the rates and utility charges levied for the financial year compared with the rates and utility charges levied in the previous budget.
  • For calculating the rates and utility charges levied for a financial year, any discounts and rebates must be excluded.

Budget must be consistent with the following documents

  • its five-year corporate plan;
  • its annual operational plan.

Budget must comply with Section 169 of the Local Government Regulation 2012

Amending the budget

Council can amend anytime before end of financial year, but must still comply with Section 169 and the decision about rates and charges made at the budget meeting for the financial year - or not valid.

Adoption

Under the Local Government Act 2009, Section 107A, a council must consider the budget presented by the Mayor and, by resolution, adopt the budget with or without amendments.

The mayor must give each councillor a copy at least two weeks prior to the meeting.

Publication

The budget must be published on council's website, preferably not part of the council minutes but in a separate area on the website.

Legislation

The annual budget requirements are contained in:

  • Local Government Act 2009
  • Local Government Regulation 2012.

Further information

For any further enquiries on this matter please contact the department on 13 QGOV (13 74 68).