Natural disaster relief
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Natural disasters can cause substantial damage to local government owned assets. It is local government’s responsibility to carry out on-the-spot emergency works and to restore their assets.
However, when a severe natural disaster occurs causing damage to these assets in excess of $240,000 (including roads, bridges and Crown lands), the NSW Government may issue a Natural Disaster Declaration. Under these circumstances the Commonwealth and NSW Governments provide financial assistance to local government through Natural Disaster Relief and Recovery Arrangements for emergency work and restoration of damaged council assets.
Public Works Advisory (PWA) administers financial assistance on behalf of NSW Treasury for restoration works undertaken by councils, other than those involving roads and road bridges, which are administered by the Roads and Maritime Services, and restoration of assets on crown lands and reserves, which is administered by the NSW Department of Industry – Crown Lands division.
Overview and roles
The Natural Disaster Relief and Recovery Arrangements
On behalf of the Office of Emergency Management, Public Works Advisory administers financial assistance to councils, county councils and certain community trusts under the joint Commonwealth/State Natural Disaster Relief and Recovery Arrangements.
Other government agencies administer other aspects of the assistance, for example, Roads and Maritime Services for roadworks, the Department of Primary Industries for primary producers and the Department of Family and Community Services for personal hardship.
The Commonwealth and the relevant State government agency share the recovery costs based on a formula that escalates the Commonwealth’s contribution once certain indexed limits are reached.
Purpose of the arrangements
The Commonwealth/State Natural Disaster Relief and Recovery Arrangements make financial assistance available to help the community with the burden of recovering from declared natural disasters.
The financial assistance is only available to cover costs relating to an event where a Natural Disaster Declaration has been issued.
Who issues Natural Disaster Declarations
For NSW, Natural Disaster Declarations are issued by the Premier or Minister for Emergency Services, or their delegate. The Office of Emergency Management is the co-ordinator of the State’s natural disaster relief arrangements. The declarations are made on a whole of Local Government Area basis.
When is a Natural Disaster Declaration issued?
The damage to an affected community must exceed $240,000 before the NSW Government will consider issuing a Natural Disaster Declaration. This limit relates not only to council infrastructure damage but also takes into account community and other eligible costs.
If council considers that its local government area has sustained damage that exceeds the $240,000 threshold and a Natural Disaster Declaration has not been issued, it should prepare preliminary estimates and contact Public Works Advisory, who will review them and forward to the Office of Emergency Management for determination.
What is considered a natural disaster under the arrangements?
A natural disaster is considered to be a serious disruption to a community or region caused by the impact of a naturally occurring rapid onset event that threatens or causes death, injury or damage to property or the environment and which requires significant and coordinated multi-agency and community response. Serious disruption can be caused by any one, or a combination, of the following natural hazards: bushfire, earthquake, flood, storm, cyclone, storm surge, landslide, tsunami, meteorite strike or tornado.
The following are not considered natural disasters for the purpose of Commonwealth/State Natural Disaster Relief and Recovery Arrangements: drought,frost, heatwave, epidemics or events where human activity is a significant contributing cause.
The nature of the financial assistance
The financial assistance is in the form of whole or partial reimbursement of actual expenditure.
Public Works Advisory’s role
Following a natural disaster declaration, Public Works Advisory, on behalf of the Office of Emergency Management, administers financial assistance to councils, county councils and certain community trusts managing infrastructure assets, such as bore water trusts.
This includes making initial contact with councils, providing advice about the financial assistance process and eligibility of items, assessing councils’ claims and value of completed works and processing financial assistance payments.
NSW Public Advisory also provides assessment services to agencies such as the Department of Family and Community Services and the NSW Department of Indusry – Crown Lands division.
In most areas it is the responsibility of local government to undertake on-the-spot emergency works and to physically restore their assets damaged by the declared disasters.
Councils should set up new accounting charge headings for the declared natural disaster to facilitate cost collection and substantiation. The charge headings should reflect the nature of the works.
The breakdown of costs should be sufficient to enable Public Works Advisory’s assessors to determine if the claimed amounts are fair and reasonable.
Should an audit of council’s expenditure be necessary, council will be responsible for the costs incurred.
Evidence of damage
Photographic evidence of damage will aid in establishing council’s claim for financial assistance. It is recommended that council photograph areas of extensive damage before emergency and restoration repairs and submit the photographs of damage with its claim. Councils should also keep records that demonstrate that the debris removed was from council property.
Inspection of works
Council must make available suitable officers to assist any Public Works Advisory inspection of proposed or completed works and provide any additional information that Public Works Advisory requests to facilitate assessment of the claim.
Essential public assets
Assistance is provided to councils when they perform emergency debris clean-up and/or restoration works to eligible, essential public assets. The following are examples of assets that would generally be considered to be essential public assets:
- road infrastructure, for example road signs, guard rails and traffic lights
- local government offices
- stormwater infrastructure
Emergency debris clean-up
Clean-up work from essential public assets (e.g. debris removal, tree pruning, drain clearing etc.), must be completed within 21 days of the disaster declaration. Financial assistance is only available to cover additional external resources that council had to use to perform the work (e.g. overtime hours, agency staff, contract services, external plant hire, etc.). Council cannot claim for work performed by its usual salary and wages staff within normal operating hours nor any internal plant hire charges.
Councils should submit documentation to Public Works Advisory that shows that the costs they are claiming are additional to normal operating costs, as defined above.
For asset repair and replacement work to essential public assets, financial assistance is only available to cover additional resources council had to use to perform the work (e.g. overtime hours, extra shifts, backfilling positions, agency staff, contract services etc.). Council cannot claim for work performed by its usual council’s salary and wages staff within normal operating hours nor any internal plant hire charges.
Councils should submit documentation to Public Works Advisory that demonstrates the costs they are claiming are additional to normal operating costs, as defined above. Councils have the balance of the financial year in which the disaster occurred plus two full financial years to complete the works.
Pre Disaster Condition
Financial assistance may be available to councils to help return essential public assets to their pre-disaster condition. Before seeking a grant for essential public assets restoration or replacement, councils are expected to have implemented the Integrated Planning and Reporting Guidelines for local government in NSW and the Local Government Code of Accounting Practice and Financial Reporting.
Under these guidelines, councils are required to establish a Community Strategic Plan and a Resourcing Strategy, which includes an Asset Management Plan. They are also required to report on the overall condition of each class of assets in their annual financial statements, in line with the Local Government Code of Accounting Practice and Financial Reporting.
When applying for a grant for the restoration or replacement of damaged essential public assets, councils are expected to provide:
- A copy of their Asset Management Policy, with evidence of its endorsement by council
- The relevant Asset Management Plan for the asset
- A copy of the Annual Financial Statement for the previous financial year (including asset condition reports)
- The most recent documentation available that shows the pre-disaster condition of the asset. This documentation should be either the same documents used to inform asset condition reporting in the Annual Financial Statement, or more recent documentation (including photographic evidence) about the condition of the asset, where it exists.
- Very Poor Condition
If the most recent asset condition documentation indicates that prior to the Natural Disaster, the asset was in ‘Very Poor’ condition (as defined in the Integrated Planning and Reporting Manual for local government in NSW — March 2013), a grant to restore or replace the asset will not be given.
- Average or Poor Condition
If the most recent asset condition documentation indicates that prior to the Natural Disaster, the asset was in ‘Average’ or `Poor’ condition (as defined in the Integrated Planning and Reporting Manual for local government in NSW— March 2013), the council must provide evidence to show that it had allocated funding within the last 12 months to return the asset to ‘Good’ or ‘Excellent’ condition. If this funding has been allocated but not yet spent, any grant that might be given to restore or replace the asset will be reduced by the amount of the unspent funding.
- Very Poor Condition
Where the most recent asset condition documentation indicates that the asset was in ‘Average’ or Poor’ condition and the council has not allocated funding to return the asset to ‘Good’ or `Excellent’ condition, the administering agency will first make a determination as to whether there were reasonable grounds for not allocating such funding. Reasonable grounds would include consideration of consultation with and acceptance by the community of a lower asset condition and consequent level of service. If the grounds for not allocating funding were unreasonable, a grant to restore or replace the asset will not be given. If the grounds for not allocating funding were reasonable, any grant that is eventually given to restore or replace the asset will be reduced by the amount that would have been required to bring the asset to `Good’ condition. This amount will be determined by agreement between the administering agency and the council. If agreement cannot be reached, then an independent and appropriately qualified third party will be selected by the administering agency and engaged at council’s expense to provide an estimate.
For the period up to 30 June 2016, if a Council is unable to provide the documents listed above, it will be given an opportunity to provide other evidence about the pre-disaster condition of the asset (e.g. via photos, video footage or witness testimony). If such evidence is presented, the General Manager of the council must attest to the veracity of the evidence. If such evidence cannot be provided, then a grant to restore or replace the asset will not be given.
In situations where the cost of damage to the asset has been exacerbated by pre-existing damage or poor condition, any grant that may eventually be given to restore or replace the asset will also be reduced by the additional cost of damage that is attributable to the pre-existing damage or poor condition.
Insurance and self-help
Assistance is not to supplant or operate as a disincentive for self-help by way of either commercial insurance or appropriate strategies of disaster mitigation and asset maintenance and planning. Councils are expected to take out prudent insurance cover and assistance given under the Natural Disaster Relief and Recovery Arrangements is net of any insurance recoveries, including insurance excess. Future increases in insurance premiums brought about by council claiming against their existing policy or policies for a particular disaster are not covered by the Natural Disaster Relief Arrangement program guidelines.
Damage to any asset must be directly attributed to the declared disaster event and should not include normal maintenance operations, particularly for those assets which were in a poorly maintained state at the time of the disaster. Council may be required to supply records of maintenance on items and assets in question.
Insurance and insurance excess is not covered. Council must claim on insurance where available for any damaged item. The financial assistance will cover the gap or difference between the insurance payout (including the insurance excess) and the total cost to restore the item.
NDRRA Cover = Cost to restore item – (Insurance claim + Insurance excess)
Restoration of damage to uninsured council assets will be considered. However claims relating to items that could reasonably be expected to be insured, such as major council buildings, may be disallowed as financial assistance is not to take the place of normal insurances.
Assistance is provided to councils to restore a public asset to the equivalent of its pre-disaster standard, subject to current planning and developmental controls and building standards.
Council trading undertakings that recover less than 50% of their costs may be eligible for financial assistance. Councils are to provide Public Works Advisory with statements regarding: a trading undertaking’s production and recovery costs, the extent council has recourse to reimbursement via any lease/rental agreement, and relevant insurance policies.
Eligible public trading undertakings include local government bodies or other bodies which provide community, social or economic service free of charge outside the normal market mechanism.
However, it excludes a public financial undertaking which is primarily engaged in financial transactions in the market involving the incurring of liabilities and the acquisition of financial assets. It also excludes a public trading undertaking which is permanently engaged in the production of goods and services for sale in the market with the intention of recovering all or a significant proportion of its operating costs.
Claims relating to crown reserves that are entrusted to councils should be referred to Crown Lands who has responsibility for managing financial assistance relating to these areas.
Clean-up of debris undertaken within the first 21 days of a declared disaster and additional council resources and contracted services are the only items eligible. Emergency clean-up of trees, branches, leaves and other debris from essential public assets (including mud from man-made surfaces) is eligible for assistance. Clean-up of debris from private property (including rubbish piled on public property from residences and businesses) is not eligible for assistance. If damage is incurred to private property by falling council trees it is not eligible as it will be covered by council’s insurance or the owner’s insurance.
Should trees need to be replaced to maintain the treescape of an area, $5 per tree will be allowed for in the financial assessment of the restoration works.
Restoration of stormwater assets is eligible. However, it is the asset, and the damaged area immediately surrounding the asset, that is eligible.
This includes the restoration of scour around the asset only if the asset is in danger of failure. It does not include the natural channel downstream of the damaged asset. This section is considered as natural erosion or a natural erosion process to a watercourse, and is, therefore, not eligible under the program.
Clearance of blockages and debris removal is eligible. However, silt removal deposited by an estuarine environment interfacing with the stormwater system is not eligible for funding.
Other drainage works
Restoration of headwalls and man-made structures along a river are eligible, provided they are not protecting or part of a trading undertaking.
Levee repairs and flood mitigation works
Damage to flood levees and clean up and repair of flood drains are eligible.
Restoration of floodgates or floodflaps is eligible only if council is solely responsible for the maintenance of the asset.
Council-owned waste processing centres
Additional costs associated with operating council owned waste processing centres that can be directly attributable to the declared disaster are eligible (e.g. operating the centres for extended hours etc. but not foreshortened site life costs or foregone income or opportunity type costs).
Reserves and sporting fields
Council owned reserves, parks and sporting fields are not eligible for assistance.
Recreational facilities and play equipmentRecreational facilities and equipment at council-owned parks and reserves and sporting fields are not eligible for assistance. Barbeque equipment, playground equipment, boat ramps and recreational jetties are not eligible for assistance.
Council normal operations costs
Normal maintenance and administration costs are not eligible for assistance. For example, salaries, day labour costs, council’s plant costs, other on-going administrative type expenditure, which would have been incurred even if no damage had been sustained.
Loss of income
There is no provision for councils to claim compensation for loss of income or lost opportunity costs.
Long term and partially pre-existing damage
Damage caused to assets by prolonged exposure to climate elements and not as direct result of a natural disaster event(s) is considered to be a normal maintenance liability and is not eligible for assistance.
Council tip fees charged for the disposal of debris and mulching fees for processing debris are not eligible.
Any request for betterment works is subject to different conditions of financial assistance and requires a separate submission seeking State and Commonwealth Government approval.
Works in progress
Repairs of damage to council works in progress are not eligible as they are not considered an existing asset and are assumed to be covered by insurance.
Inadequate design and/or maintenance
The restoration of damage that can be wholly or partly attributed to inadequate design, inadequate maintenance or faulty construction, is not eligible. Councils are expected to have in place, and be implementing, asset management plans where appropriate that cover the items claimed.
Motor vehicles and equipment
Damage in whole or part to motor vehicles and equipment owned or hired by council, including insurance, fuels, tolls and all other running costs is not eligible.
Expenditure to purchase, maintain and run all capital works items is not eligible. This includes, for example, chainsaws, hazard warning lights, personal safety equipment, first aid kits, eye shields, small tools, maintenance equipment, vehicle control barriers etc.
Non-statutory council oncosts are not eligible.
Beach, lake and streambank restoration
Damage to beaches and dunes is not covered as storm damage to the dune area is considered a natural process.
Debris clean-up of river and lake foreshores and adjacent areas is not eligible. Debris clean-up and reinstatement of natural riverbanks and foreshores is not eligible as this damage is considered an ongoing natural realignment process.
Clearing streams of silt build-ups, snags and natural blockages, clearing of debris around bridge pylons, reshaping of natural river or natural storm water channels and repairs to a natural channel or watercourse leading from a stormwater asset are not eligible.
Bushfire access trails and walking tracks
Clearing and restoration of fire trails, walking tracks and built pathways is not eligible.
Landslip is not eligible for assistance as it is considered a natural occurrence in a similar manner to the natural coastal erosion of beaches and sand dunes.
Water supply and sewerage services
These are considered trading undertakings recovering their costs from rates and charges and, therefore, not eligible for financial assistance.
Work such as laying down fences, flood protection sandbagging, clearing firebreaks, patrolling and closing flood-prone roads and bridges etc. before and during a declared emergency is not eligible.
Categories of financial assistance
Two categories of works attract financial assistance:
Emergency works – eligible for 100% subsidy
Works classed as essential to the immediate clean-up of an essential public asset in the council area as designated in the disaster declaration.
Works include removing vegetation, rubbish and debris from essential public assets only. It does not include removing materials from private properties.
Only additional council resources such as overtime, extra shifts and additional contracted services are eligible for reimbursement.
A 21-day time restriction applies to this category and is calculated from the end date of the event as specified in the disaster declaration.
Restoration works – eligible for 75% subsidy
Infrastructure works required to return the community to its pre-disaster condition.
This category attracts a funding subsidy of 75% of the cost of restoration works up to a maximum of $116,000, and 100% thereafter. This limits the maximum contribution by council to $29,000.
Works included in this category are the repairs to council’s stormwater and drainage infrastructure, levees or other essential public assets as listed on this website.
Only additional council resources such as overtime and extra shifts and additional contracted services are eligible for reimbursement.
Commonwealth and State Natural Disaster Relief and Recovery Arrangements give councils the balance of the financial year in which the disaster occurred plus two full financial years to complete the works and claim financial assistance for emergency and restoration works.
After this period, expenditure to repair disaster damage must be met solely by council.
Extensions of time
Under the terms of the Commonwealth and State Natural Disaster Relief and Recovery Arrangements, the Commonwealth Government must approve any request for an extension of time to complete the works and claim financial assistance for emergency and restoration works beyond the balance of the financial year in which the disaster occurred plus two full financial years.
The Commonwealth Government has determined that extensions of time will only be granted in exceptional circumstances.
The Commonwealth Government has indicated that:
- Administrative delays associated with the application or offering of financial assistance would not satisfy the definition of an exceptional circumstance
- Requests for extensions of time will only be considered before any offer of financial assistance expires.
Each year Public Works Advisory will process two rounds of requests for extensions of time. In order for councils to have any request for an extension of time considered, they will be required to submit their request to Public Works Advisory by the end of the first week of March or September.
Multiple Natural Disaster Declarations in one year
A limit is applied to the maximum contributions councils are expected to make should they experience multiple natural disaster events in any one financial year.
Funding arrangements are as follows:
The maximum payable by council for any natural disaster event is $29,000 or any part thereof, withheld in the first instance by the Roads and Maritime Services (RMS) should councils experience road and bridge damage during this event. The balance or difference, if any, between the $29,000 and RMS’s damage costs is then offset against any claim processed by Public Works Advisory.
The maximum payable by a council in any financial year is limited to $68,000 and is withheld in the first instance on claims processed by the RMS. Accordingly, council contributions for multiple natural disaster events in any one financial year would be:
- Maximum contribution of $29,000 for first declared event
- Maximum contribution of $29,000 for second declared event
- Maximum contribution of $10,000 for third declared event and
- Zero contribution for subsequent declared events.
The $240,000 threshold and $68,000 maximum contribution are subject to revision as advised by NSW Treasury.
Funding Application and Payment Claim Process
Council should apply for financial assistance to the nearest Public Works Advisory office. This will, generally, be the office that notified council of the declaration and has been liaising with council about its application.
You will find a list of Public Works Advisory regional offices on this website.
Your application should consist of:
- A covering letter on council/trust letterhead seeking financial assistance under natural Disaster Relief and Recovery Arrangements and stating the relevant Declared Natural Disaster event. The letter should include the certifications that: (i) all expenditure claimed is free of GST, (ii) all insurance and insurance excess has been deducted from the claim, (iii) financial assistance has not been claimed from other agencies or departments, (iv) current asset and maintenance management plans are in place where appropriate for all items claimed, (v) all debris collected is from council owned / maintained property (vi) oncosts are not included , nor are tipping and mulching fees, motor vehicle running costs or materials.
- Actual expenditure or cost estimate details of items are claimed using the Public Works Advisory NDRA Program Financial Assistance Application form (MS Excel). Claimed items should be specified as Emergency debris clean-up works (undertaken within 21 days) or Restoration works and categorised under (a) Public buildings, (b) Stormwater drainage, (c) Retaining walls, (d) Rock protection and flood mitigation works, (e) Other works specified.
- Any photographic or other evidence to assist Public Works Advisory to assess the claim.
- A copy of council’s Asset Management Policy and copies of the relevant Asset Management Plan for those assets the council is seeking to restore; a copy of the previous financial year’s financial statements, including asset condition reports; and any other documentation detailing the immediate pre-disaster condition of the assets council is seeking to restore.
- It is preferable for just one claim per Declared Natural Disaster be submitted once all costs or estimates are known. For larger claims it is permissible for a council to submit one claim covering all the emergency costs and another with restoration works estimates.
In applying for financial assistance, applicants accept the conditions stated on this website.
When claiming recoupment for completed works, councils must submit a Public Works Advisory NDRA Program Certificate of Expenditure form (MS Word).
If undertaking major works, councils may make progressive payment claims, with Public Works Advisory concurrence.
Financial assistance under the Natural Disaster Relief and Recovery Arrangements is free of GST. Monetary amounts set out in the offer of financial assistance are stated exclusive of GST. No GST will form part of the subsidy payment to council or will be included in councils request for financial assistance.
When they advise Public Works Advisory of the actual costs and estimates, councils are to ensure that these amounts exclude GST.
Claim and payment process
- The NSW Government issues a Natural Disaster Declaration
- Councils submit to Public Works Advisory a documented financial assistance request that can include both completed and proposed works
- Public Works Advisory assesses the request for eligibility based on council estimates and the program eligibility criteria and makes a recommendation to the Minister
- The Minister gives approval and issues grant letter
- Council completes the eligible works and seeks reimbursement by submitting a completed Certificate of Expenditure
- Public Works Advisory assesses the value of completed works and makes a recommendation to the Minister for Finance, Services & Property
- The Minister approves payment and issues cheque.