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Submission of Local Government Financial Forecasts

Department of Local Government, Racing and Multicultural Affairs

Purpose

This Bulletin is to advise local governments of the requirement to submit long term financial forecasts to the Queensland Treasury Corporation (QTC) and the Department of Local Government, Racing and Multicultural Affairs.

Background

As part of its annual Local Government Borrowing Program, and in line with QTC’s Terms and Conditions for Local Government clients, the Department requires that every Local Government with existing borrowings, or intending to borrow in that financial year, submit its long-term financial forecasts to the Department and QTC in the recommended format (refer to Section 1 below).

Local Governments without borrowings and not intending to borrow in 2019–20 are also requested to submit their long-term financial forecasts to the Department and QTC in the format described further below (refer to Section 2).

Use of Financial Forecast Information

In previous years, the Department has collected Forecasts only from those Local Governments with debt or seeking borrowings in a particular financial year. For 2019–20, the Department is requesting Forecasts from all Local Governments.

The Department uses the financial and non-financial forecast information submitted by Local Governments for various purposes, including (but not limited to):

  • identifying areas for further Local Government sector capacity building initiatives
  • assessing applications for grant and loan funding
  • risk monitoring and management
  • informing the design and delivery of Department programs and initiatives
  • assessing the need for statutory intervention as provided for under Chapter 5, Part 1 of the Local Government Act 2009 and City of Brisbane Act 2010

1. For Local Governments with existing borrowings, or intending to borrow in 2019–20:

Annual Borrowing Assessment

The Department has engaged QTC to undertake a comprehensive Annual Borrowing Assessment (ABA) process of Local Governments. This process will evaluate current borrowings and Working Capital Facilities (WCF), and requests for new borrowings and WCFs (including temporary WCFs with an expiry date or ongoing WCFs used to manage short term operating requirements).

The process will provide the Department with information about:

  • the ability of a Local Government to service existing debt as well as any new debt requested, and
  • a Local Government’s need to borrow in the particular year having consideration of its prevailing and forecast liquidity, and its forecast capital expenditure requirements.

Local Government Forecasting Model (LGFM)

The long term financial forecasts must be submitted in the QTC’s LGFM (Version 3.0.2) and must be complete and consistent with the long term financial forecast requirements under section 171 of the Local Government Regulation 2012 and section 163 of the City of Brisbane Regulation 2012.

The QTC LGFM should include five years of historical values including the last full financial year, and ten years of forecast values beginning from the current budget year. The Department encourages Local Governments to work closely with QTC in using or updating the QTC LGFM.

QTC will undertake a completeness and reasonableness review of a Local Government’s long term financial forecasts as part of the ABA process. To promote the quality and reliability of the projections contained in the long term financial forecast, Councils should ensure that:

  • historical figures correspond with data contained in the relevant audited financial statements
  • growth rates and forecast assumptions are appropriate and reasonable
  • any substantial fluctuations in forecasts are explained or substantiated.

This may require the inclusion of additional notes or supporting documentation.

Key Dates

To enable QTC to complete the ABA of local governments, every Local Government with existing QTC borrowings as at 30 June 2019, and also those seeking new borrowings in 2019–20, are required to submit their latest long-term financial forecasts electronically by Friday 30 August 2019 to QTC at This email address is being protected from spambots. You need JavaScript enabled to view it., with a copy to be supplied to the Department at This email address is being protected from spambots. You need JavaScript enabled to view it..

2. For Local Governments without existing borrowings:

The ABA process does not apply to Local Governments without existing borrowings.

The long-term financial forecasts are requested in a Microsoft Excel (or equivalent) format, or QTC’s LGFM (Version 3.0.2 or later), and must be complete and consistent with the long-term financial forecast requirements under section 171 of the Local Government Regulation 2012 and section 163 of the City of Brisbane Regulation 2012.

The forecasts should include ten years of forecast values beginning from the current budget year as adopted with the Local Government’s 2019–20 budget.

Key Dates

Local Governments without existing QTC borrowings as at 30 June 2019 are requested to submit their latest long-term financial forecasts electronically by Friday 30 August 2019 to QTC at This email address is being protected from spambots. You need JavaScript enabled to view it., with a copy to be supplied to the Department at This email address is being protected from spambots. You need JavaScript enabled to view it..

Local Government Borrowing Program

A further bulletin will be released shortly outlining the process and requirements for submitting applications for long term borrowings and WCF requests as part of the 2019–20 Local Government Borrowing Program.

Further information

Financial Performance and Advice, Finance & Funding
Department of Local Government, Racing and Multicultural Affairs
(07) 3452 6719
This email address is being protected from spambots. You need JavaScript enabled to view it..