Thirdslide

Reserve Funds Policy

Reserve Funds Document No:   CPL510.5 
Approval Date:   17 November 2015
Approved Reserve Funds By:   Council 
Review Date:  17 November 2018
Responsible Officer: General Manager Strategy and Performance Version No   02
Authorising Officer:   Chief Executive Officer  


1. Purpose

The Council has established Reserve Funds that account for income that has been received from specific sources for a future application.

This policy outlines the Councils commitment to maintaining Reserve Funds to record future commitments for specific purpose expenditures.


2. Scope

This policy covers both Statutory and Discretionary Reserves.

The Statutory Reserves are:

  • Main Drainage,
  • Carparking, and
  • Public Open Space.

The Discretionary Reserves are:

  • Deferred Works
  • Asset Development
  • Asset Redevelopment and
  • Developer Contribution Plans

This policy excludes the Asset Revaluation Reserve, that arises under the Australian Accounting Standards due to a change in asset values rather than a collection of funds.

Discretionary reserves may be varied from time to time where expenditure commitment may be created or retired.


3. References

  • Local Government Act 1989
  • Australian Accounting Standards
  • Open Space Policy
  • Public Open Space Reserve Fund Procedure
  • Drainage Reserve Fund Procedure
  • Car Parking Reserve Fund Procedure
  • Asset Development Reserve Fund Procedure
  • Asset Redevelopment Reserve Fund Procedure
  • Deferred Works Reserve Fund Procedure
  • Developer Contributions Reserve Fund Procedure
  • Planning and Environment Act 1987
  • Subdivisions Act 1988

4. Definitions

Statutory Reserves are those required by legislation to record Councils future expenditure commitments and include:

  1. Main Drainage,
  2. Carparking, and
  3. Public Open Space.

Discretionary Reserves are those developed by Council to record Councils future expenditure commitments and include:

  1. Asset Development
  2. Deferred Works and
  3. Asset Redevelopment and
  4. Developer Contribution Plans Reserve Funds

5. Council Policy

Council maintains both Statutory and Discretionary Reserves that acknowledge the receipt of funds from particular sources to be applied on programs that are consistent with the purpose of that Reserve fund.

For the purpose of efficient financial management it is acknowledged that in lieu of borrowing’s, Reserve funds may be used to fund budgeted expenditure and therefore not readily available for unbudgeted expenditure. Funding allocations from Reserves will be determined during the budget process.

Reserves represent a record of future obligations and to efficiently manage the application of these funds, requests for expenditure should form part of the Annual Budget program as approved by Council.

As at 30 June each year the recorded cash balances will, as a minimum, be equivalent to the total of the Statutory and Discretionary Reserve balances.


Statutory Reserves

Statutory Reserves are funds collected by Council that represent future obligations and are separately accounted for to ensure sound financial management of the Councils operations. Statutory Reserves include:

  1. Main Drainage,
  2. Carparking, and
  3. Public Open Space.

Council will collect funds from developers according to the legislative requirements of the Planning and Environment Act 1987, and the Subdivisions Act.

Council will create development contribution plans specifying drainage and carparking works to be done and estimated costs of works by area.

Council will collect funds for drainage and carparking according to the development contribution plans so that it can provide and maintain infrastructure at an acceptable standard for the community.

Council will prepare development contribution plans for community infrastructure and set appropriate contribution levels to fund community infrastructure to an acceptable standard.

Council will also receive contributions from developers in accordance with agreements, toward infrastructure costs.


Main Drainage Reserve Fund

The Main Drainage Reserve records the amount of Councils future obligation, under the Planning and Environment Act, to do works to create or improve main drainage and other infrastructure within the municipality.

As part of the budget process, the Manager Engineering Services will identify those capital projects that result in the purchase or improvement to drainage or appropriate infrastructure in the municipality.


Carparking Reserve Fund

The Car Parking Reserve records the amount of Councils future obligation, under the Planning and Environment Act, to do works to create or improve car parking within the municipality.

As part of the budget process, the Manager Local Laws will identify those capital projects that result in the purchase or improvement to car parking within the municipality.


Public Open Space Reserve

Council will develop a strategy for providing public open space and set developer contributions through the planning schemes and the municipal strategic statement at a level that will fund this strategy.

The Public Open Space Reserve records the amount of Councils future obligation, under the Subdivision Act, to do works to create or improve public open spaces within the municipality.

As part of the budget process, the Manager Sport and Recreation, in consultation with the Manager, Parks and Support Services and the Property Advisor will identify the capital projects that result in the purchase or improvement to public open space.

These projects must be part of the approved budget or approved budget revision (reforecast).


Discretionary Reserves

Discretionary Reserves are records of future obligations kept at Councils discretion to ensure sound financial management of the Councils operations and include:

  1. Asset Development
  2. Deferred Works
  3. Asset Redevelopment and
  4. Developer Contribution Plans

Asset Development Reserve

Council will maintain a Reserve for Asset Development that records the receipt of funds from the State Government, which are to be used for development of Council assets.


Deferred Works

Council will maintain a Deferred Works Reserve into which is transferred the amount of funds equal to the net cost of the unfinished capital works program for the year from the accumulated surplus into the reserve.

This surplus is then allocated for the cost of completing the works in the next year.


Asset Redevelopment Reserve

Council will maintain a Reserve for Asset Redevelopment that records the receipt of funds from Insurance Claims which are to be used to repair or rebuild assets.


Developer Contributions Reserve

All income received via developer contribution agreements will be recorded to reserves in the Balance Sheet where there is a future obligation on Council (ie. income in one year represents a funding source for future obligations). Once this obligation has been met, it will be removed from the reserve. A separate discretionary reserve is to be created for each Developer Contribution Plan or Sec 173 Agreement.


6. Quality Records

Quality Records shall be retained for at least the period shown below.

  • Not applicable.


    Page last updated: Thursday, 19 November 2015
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