Issue 54 June 2016

MAV President's Update - occasional report from Cr Bill McArthur, President of the MAV

Issue 54, June 2016

Rural and Regional Planning Conference

Our Rural and Regional Planning Conference in Bendigo last week was a huge success, selling out the Town Hall with more than 220 delegates in attendance. The program provided a wealth of international, national and local expertise offering new insights into opportunities for growth and development in rural and regional Victoria.

Next up is our Environment Conference on 12 and 13 July with an exciting program for councils to hear the latest science and politics about climate change; community, customer and council-led renewable energy projects; the use of drones for ecology and conservation; smart lighting and smart cities; designing thriving built environments, and more.

Dr Richard Denniss, from the Australia Institute will provide detailed analysis of what the result of the federal election will likely mean for national climate change policy and politics - the known, the unknown and where to from here if Australia is to meet its Paris Agreement commitments.

Register now to attend this topical and high value event for members.

Rate capping resources

As councils are busy finalising budgets, today the MAV has made available a suite of rate capping resources to assist member councils explain the State’s rate cap policy to your communities. Our resources have been informed by feedback from members, with a particular focus on explaining that the 2.5% cap applies to the total rates and municipal charges collected by a council, not individual rates notices - which will be determined by recent property revaluations. These impacts are not well understood, with many people believing there will be a uniform 2.5% rise on all rates notices this year.

We also provided comments to the Herald Sun for a story that ran on Monday and a follow up article the paper published today on page 2, and we’ve issued a media release which is receiving considerable media interest. We will continue to work with media outlets over the coming months to achieve wider community understanding of the rate capping impacts and ensure councils aren’t incorrectly accused of breaching the rate cap when rates notices arrive.

We’ve also held discussions with LGV about the need for resources to educate the broader community on the impacts of rate capping. We shared advance copies of our resources with LGV and we understand they will be releasing additional information for the wider community shortly.

Successful second issuance of local government bonds

I’m pleased to report the MAV’s Local Government Funding Vehicle (LGFV) successfully completed its second bond issuance of $100 million into wholesale debt capital markets on behalf of 16 councils earlier this month. Rated Aa2 by Moody’s, our bonds translate to "high quality and subject to very low credit risk".

There was immediate strong demand from local and global institutional investors eager to purchase our secure, long-term assets. This high level of interest helped to drive down the final interest rate achieved for participating councils – 3.97 per cent 10-year fixed rate, interest only loans.

By aggregating council borrowings through the LGFV, we're able to build the scale to a level that gives members access to capital markets, which provides a cheaper source of debt regularly used by governments, corporates and banks.

Local government funding vehicles are popular overseas, having been used by councils in Norway for 90 years, and becoming increasingly common in New Zealand, Canada and the United Kingdom. The MAV LGFV was the first of its kind to launch in Australia in 2014, established in partnership with the Commonwealth Bank and National Australia Bank.

We recently ran an expression of interest process for members keen to participate in our third bond issuance, expected to take place before June 2017.

SES funding progress

The MAV's advocacy calling on the Victorian Government to fund our State Emergency Services (SES) from the State Budget has moved a step closer to resolution, after we first developed a position paper with members in 2011.

We are strong supporters and champions of the vital work that our SES volunteers do, but we don’t believe they should be relying on the goodwill of councils, communities and fundraisers to plug their funding gaps. We have been vocal in seeking a more secure model that properly recognises the valuable role of the SES and funds them in the same way that Victoria’s other vital emergency services are funded.

We have consistently raised this matter in meetings with the Minister for Local Government and the Minister for Emergency Services. Last week, Premier Andrews addressed the matter in Parliament, in response to a question from the Opposition Leader about SES volunteers.

While the Premier does not agree with councils withdrawing funding for SES units due to financial constraints imposed by the Andrews' Government’s rate cap, the Premier did confirm to Parliament that the State is ready to provide consistent support to the SES and, if needed, further support if council funding is reallocated.

This is a welcome move by the Premier and we will be seeking a meeting with both the Premier and the new Minister for Emergency Services to progress discussions further. Local government understands all too well the harsh consequences of cost shifting, and we want to work together with the SES and the Victorian Government to develop a viable long-term solution that provides a secure financial model for the SES to continue its valuable work.

Federal election

As the marathon eight-week federal election campaign draws to a close, I'd like to thank members for your positive feedback on using the MAV's campaign resources to engage with your local federal MPs and candidates. Our federal election newsletter has also been well received, keeping members updated on the latest announcements by political parties, as well as resources, analysis and other election news.

Last week at the Australian Local Government Association (ALGA) National General Assembly, it was a timely opportunity for delegates to hear from the Federal Minister for Local Government, Paul Fletcher and Shadow Minister for Local Government, Julie Collins. Both speakers acknowledged the importance of local-Federal government partnerships to support and strengthen our communities.

The Minister committed a future Coalition Government would establish a $50 million Smart Cities and Suburbs Program for local government initiatives which apply innovative, technology-based approaches in the areas of planning, infrastructure and service provision. This builds on a range of other Coalition community safety, sports infrastructure, local parks, mobile blackspots, local roads and major infrastructure commitments announced on the campaign trail.

The Shadow Minister committed a future Labor Government would recommence indexation of financial assistance grants in 2017 if elected, re-establish the Australian Council of Local Government and create a Regional Innovation Fund. Labor has also committed significant funds towards prevention of violence against women initiatives, a climate change action plan, community renewable energy, active transport initiatives and child care reforms.

The advocacy work of the ALGA, MAV and councils over the past eight weeks will provide an important basis to build a constructive dialogue with the incoming government, as well as opposition parties to secure priority local government funding commitments.

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On a final note, it's that time of year when the MAV's membership renewal pack is being emailed out to all members, together with a summary of our achievements over the past year and how you have benefitted from the outcomes we've secured.

We encourage all councils to table the documents at a council meeting so the range of advocacy wins, money saving initiatives, capacity building projects and business services delivered by the MAV for members over the past year can be formally noted by your council.

Warm regards
BILL