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ORION Website and new contact details The new website features a Resource Centre containing documents, links and all you need on a variety of current issues. This Centre will be progressively developed over the next few months with expansion of the topics and information in the Resource Centre. See www.orionco.net. Please let us know if you have any suggestions for items in the Resource Centre. The company has a new email address consult@orionco.net . Please note, we now have a national phone number 1300 767 466 (or 1300 7ORION), which only costs you a local call from anywhere in Australia. Completing the package, you will also note our new logo, shown at the top of this newsletter. BMAP
Developments The QCA Board has approved the final assessments of Council progress for 2001/2 and will present its report to the Minister at the end of February. After that, it is hoped that payments will be made by April or May. However, payments for any Business Activities nominated after the scheme commenced several years ago, will be on a pro-rata basis, because the Reserve Pool is currently heavily overcommitted. However, this will be reviewed after the next round of assessments based on the overall progress in that pool. The QCA will also send out to each Council a list of outstanding issues, which Councils need to implement before full payment can be made. This list will only show each item that needs to be finished, not the details within that item. For example, if a Council has valued its assets on a deprival value basis, but not yet addressed contributed or optimised assets, the list will simply show that the whole asset issue has not yet been fully implemented. For a full explanation of details which are missing, we suggest you compare your preliminary assessment for the QCA (faxed to you in November 2002) with the explanation on our website resource centre. see http://www.orionco.net/pdf/QCAasses.pdf
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Thinly capitalised businesses The QCA shifted the goalposts a bit by requiring Businesses with few or no assets to obtain a 10% profit on their full costs. ORION queried this since it is not in accordance with the Local Government Finance Standards. Therefore, the Local Government Department is preparing a Bulletin to clarify the issue. Ongoing compliance ORION is currently preparing a model Ongoing Compliance Policy for Councils to use. It is being pilot tested in Laidley Shire Council expected to be completed by the end of February and released in March, after the QCA have reviewed it. Water Cross-subsidy guidelines ORION is also writing guidelines on the calculation of water cross-subsidies, which will convert the economic terms used in Departmental guidelines to common accounting terms, so that it should be easier for Councils to prepare. These will be available from LGAQ. We are also working on a spreadsheet model to automatically prepare the statement for the Annual Report, which will be soon available from ORION at a nominal cost. Trade Waste pricing guidelines LGAQ has requested ORION to compile simple guidelines on the new requirements for trade waste pricing. It does not affect the incentive payments to Councils, but this is becoming a hot issue with the National Competition Council. Simplified Loan Borrowing Procedures The Department of Local Government has announced that new loan borrowings will be approved on the Council's capacity to repay the loan, and is no longer related to the purpose of the loan. It is called 'entity-based borrowing' and replaces the previous 'project-based borrowing' process. It is understood that this will also allow Council's to shift debt to different parts of the Council, regardless of the projects it was originally associated with. This means, for example, that debt could be moved from non-commercial programs (eg Roads) to business activities (eg Water), provided the loan repayment terms are not changed.The new procedures also give Council's greater flexibility in the timing of loan drawdowns, since the loans are no longer related to specific projects.Therefore the end-of financial year borrowing rush might become a thing of the past. ORION has considerable experience in debt restructuring (see the recent projects list) and can assist Council's making best use of this new opportunity.
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By David Spearritt Director ORION Local Government Revenue legislation Recent amendments to the legislation change the content of the Revenue Policy, and require the policy to be adopted before the beginning of the financial year. Also, the Budget must now contain a Revenue Statement. Regulatory fees can now include a tax component (subject to the LGFS). A Register of Regulatory fees is now required. ORION is assisting Councils in the development of compliant revenue policies and statements. Simplified Financial Reporting LGAQ is conducting training on simplified financial reporting throughout Queensland in March. This training is based on the report by ORION and BDOKendalls.(PDF 748kb) ORION is already assisting several organisations in simplifying their internal financial reports. CPA Local Government Day On
March 28, CPA Australia is hosting a Local Government Day conference
in Brisbane. David has been asked to speak on the topic "National
Competition Policy: from full cost pricing to better business management
and decision making."
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