Wagga Wagga City Council
LOANS TO THIRD
PARTIES MANAGEMENT
PROCEDURE
POLICY REFERENCE NUMBER
Original publication date:
Revision number
Issue Date
Council Resolution Council meeting
date
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This document is to be reviewed every four years or in the first 12
months of the new term of Council, whichever occurs first.
RESPONSIBLE DIRECTOR
RESPONSIBLE MANAGER
Next review date:
Director Corporate Services
Manager Finance
Community Loans Management
Ref: POL
PURPOSE
This procedure has been developed to facilitate an equitable basis for the provision of financial
assistance to Community Organisations undertaking projects in order to improve and support
community identity, pride and cohesion within the community.
SCOPE
The procedure extends to cover the administrative processes to facilitate the allocation of monies
under its Loans to Third Parties Management Policy. The procedure is limited to only those project
proposals that are eligible for funding under the Loans to Third Parties Management Policy.
All applications for funding under the Loans to Third Parties Management Policy must use the Loans
to Third Parties Management Application Form.
All applications will be considered on their merits and assessed against funding criteria as set out in
the Loans to Third Parties Evaluation Form.
ACTIONS AND RESPONSIBILITY
1. Responsibility
Parties having responsibilities under this procedure are set out below:
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The Loans to Third Parties Management Policy falls under the authority of the Director of
Corporate Services and the Manager of Finance.
The Manager of Finance shall be responsible for the implementation of the Loans to Third
Parties Management Policy.
The day to day operation of the policy shall be the responsibility of the Manager of Finance.
The Loans to Third Parties Committee shall be responsible for the evaluation and
recommendation to Council of all Loans up to $1,000,000.
A Steering Committee shall be responsible for the evaluation and recommendation to
Council of all Loans over $1,000,000.
2. Eligibility
To be eligible for a Loan the applicant must meet the following criteria:
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Be located within the Wagga Wagga City Council Local Government boundaries;
Makes available its membership to the general community; and
Complete a Community Loans Application Form and provide all required supporting
documentation.
Community Loans Management
Ref: POL
3. Application Fee
To cover the cost of preparing loan documentation, the Applicant will incur an application fee of
$100.00 which will be payable when the loan application is submitted.
4. Rate of Interest
The rate of interest charged on the loan will be based on the Reserve Bank cash rate at the date
the loan is approved, plus 2%. The interest rate will be fixed for the duration of the loan.
5. Terms of Repayment
The duration of the loan is not to exceed a period of five (5) years.
6. Conditions of Funding
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One application per financial year (July to June) is to be submitted by the closing date as
advertised annually by the Wagga Wagga City Council.
The location of the Applicant shall be on land located within the Wagga Wagga City Council
local government boundaries.
Applicants are required to have made an application for funding for the project from other
funding sources to the satisfaction of Council. In relation to this application, the Council may
commit to provide a certain level of funding providing the project proceeds. The rationale
for this is to maximise funding received from the other funding sources.
The duration of the repayment of the loan is not to exceed a repayment period of more than
five (5) years.
Applicants are to demonstrate a financial capacity to service loan repayments and will be
required to provide audited annual income and expenditure statements along with balance
sheets for the past two (2) years.
Applicants to provide detailed budget of projects costs;
Applicants to provide a copy of the minutes of meeting authorising the project to be
undertaken and funding to be sourced.
Documentation is to be provided as evidence that the Applicants is registered for an
Australian Business Number (ABN).
Funding will not be provided for works already commenced, or completed by the
organisation, unless Council’s prior written consent has been received.
At the end of the project period the Applicant must provide an evaluation of the loan and a
detailed reconciliation of project costs and the funding received including Councils loan.
All unspent funds will remain with Council.
All projects must be completed within the timeframe set out in the application proposal. In
the case of a change in timeline a proposal must be submitted to Council in writing for
approval.
Projects linked to the Council’s Strategic Plan or a Community Plan will be a priority.
Projects which support local businesses where purchases are made will be looked upon
favourably.
Community Loans Management
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Ref: POL
In the event of a default, Council shall apply their standard debt collection process which
could result in exercising their right to the Bank Guarantee but may also include legal action
to recover such funds.
For projects that exceed $2,000,000 and require staged progress claims, Council may engage
an Independent Officer, such as a Quantity Surveyor, to assess the works completed and
provide a report on the amount of work completed prior to the loan draw down. The costs
associated with the Independent Officer will be met by the Applicant.
7. Loan Administration
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All approved applications will require the Applicant to enter into a written agreement with
Council.
The Applicant will be required to complete a Direct Debit Authorisation Form for Council to
process Loan Repayments on the date due as per the loan schedule.
It is the responsibility of the Applicant to ensure sufficient funds are available to meet
agreed repayments.
Council will undertake a due diligence and probity check to establish the ability of the
applicant to service loan principal repayments.
Council reserves the right to call in the loan if the terms of the loan are not met and requests
to rectify the loan are not actioned within 30 days.
8. Loan Funding
Funding will be provided for:
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Capital works which add long term value to community facilities;
Structural upgrades to community facilities; and
Current WHS or risk management issues.
Funding will not be provided for:
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Improvements to Council facilities that are not Capital in nature;
General maintenance, minor repairs or moveable items; and
Applicants that already receive funding under an existing service agreement with the Wagga
Wagga City Council in the current financial year.
9. Evaluation
The Loans to Third Parties Committee chaired by the Director Corporate Services shall be responsible
for the allocation of funding under the Loans To Third Parties Management Policy.
Any application for funding exceeding $1,000,000 shall be referred to a Steering Committee for
evaluation.
The Manager Finance shall be responsible for preparing a preliminary assessment of each
application using an Evaluation Checklist.
Community Loans Management
Ref: POL
The Manager Finance will undertake due diligence and probity check to establish the ability of the
applicant to service loan principal repayments.
How will the application be evaluated?
Applications will be assessed for the loans by the Loans to Third Parties Committee, a committee
comprising of the Director Corporate Services, the Manager Finance and two (2) members of the
Audit & Risk Committee. If the loan exceeds $1,000,000 and is referred to a Steering Committee, the
Steering Committee will comprise of the Loans to Third Parties Committee plus two (2) Councillors.
Each application will be assessed on its merits and the following factors will be taken into account to
determine priorities for funding:
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The number of active members in the organisation.
The immediate and future contribution the project will make to support community
development and resilience.
Availability of alternative facilities- is there other viable options/alternatives.
Any other evidence of demand; how much is the project needed?
Long term viability of applicant organisation.
Level of cash or in-kind contribution; what is the organisation contributing to the project?
Availability of other funding source(s).
Prior receipt and utilisation of grants; has the organisation acquitted all previous community
grants to the satisfaction of the Council?
After the assessment, recommendations from the Committee are then presented to Council who
endorse the funding recommendations at a formal Council meeting.
At this meeting successful applicants are announced publically and all applicants who have applied
for a loan will receive notification of the outcomes within one week of the official announcements.
10. Release of Funds
Loan funds will be released following:
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Approval by Council of the Loan.
All permits, insurance and other information or conditions requested or required by Council
are satisfied.
The Loan Agreement as prepared and provided by Council is fully executed.
The Applicant presenting documentary evidence that expenditure in relation to the specified
project has been incurred (as demonstrated by supporting invoices).
11. Monitoring
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The Manager Finance will manage the Loans to Third Parties and report to Council any noncompliant loans.