The Commonwealth Government has confirmed that they will accept Western Australia's proposal to allow local governments to include overhead costs when using their own resources to undertake recovery works following a proclaimed disaster event.
This is excellent news for local governments as it enables them to be fully reimbursed when using their own labour for recovery works.
The previous Day Labour Exemption (9 May 2017) did not allow local governments to be fully reimbursed when using their own labour, as only salaries could be reimbursed. Now overheads, such as vehicle expenses, insurance and sick and holiday pay are covered.
It is important to note:
This temporary exemption can only be utilised for events occurring since January 2017. Repairs to damage caused by prior events should already be well underway, given the damage is to an essential public asset. Main Roads and OEM will, however, review specific local government requests for prior events on a case by case basis.An important requirement for this exemption is that all local governments demonstrate the cost-effectiveness of using their own labour, plant and equipment, compared to contractors.Local governments must claim overheads in accordance with the local government legislation and the Australian Accounting Standards.
Since the release of the Temporary Exemption framework and supporting templates, the OEM has worked with users to review the documents and further streamline the process. The Supporting Guidelines and Templates on the OEM website have been updated. Guidance on the specific overheads can be found in the WANDRRA Guidelines. If you have downloaded previous versions, please update your documents.
In the early development of the framework it was initially proposed that local governments would receive a 40% up-front payment once the estimate to repair damaged assets was agreed. Once 40% of work was complete an additional 40% would be provided, with a final 20% payment made upon completion of the works. This was referred to as the 40:40:20 payment.
This part of the framework cannot be implemented at this stage as the magnitude of the claims for up-front payments presents a significant issue and requires a comprehensive review. In addition, it was only intended for local governments' day labour and not work undertaken by contractors and as a result it creates an uneven playing field between contractors and local governments.
However, recognising the challenges for local governments in managing their cash flows, it has been agreed that, if required, local governments can make more frequent claims for the work done. This may be a monthly claim if it assists in the management of their cash flow. Main Roads WA and WANDRRA have also committed to processing payments to local governments as quickly as possible.
The new Natural Disaster Relief and Recovery Arrangements (NDRRA) are proposed to start in July 2018. Until then, the temporary exemption for labour, plant and equipment applies. This will provide an opportunity for Western Australia to test elements of the new system and provide feedback to the Commonwealth on any issues that are identified. Main Roads WA, WALGA and OEM will also meet regularly to monitor and review this system.
The OEM has sent the Commonwealth a proposal for the inclusion of overheads under the temporary Day labour, plant and equipment exemption.
The OEM is well aware of the urgency of this issue and endeavours to provide an update as soon as advice is received from the Commonwealth.
Following the Flooding in Western Australia event, the OEM had requested an exemption to the standing day labour provisions to allow local governments to seek assistance to fund their own workforce when undertaking disaster reconstructions works on local government-owned assets. With this exemption, comes the assurance that the use of local governments will be better value than engaging external contractors.
The Commonwealth Government extended the exemption to also included reimbursement for plant and equipment.
The OEM-led working group comprising of Main Roads WA and WA Local Government Association have developed a Temporary Framework for Local Governments Reinstating Assets Framework and supporting guidelines and templates.
Visit the Labour, Plant and Equipment exemption page to learn more and access guidelines and templates.
9 May 2017 - Day labour exemption approved for flood-affected areas - Hon. Francis Logan MLA9 May 2017 - Commonwealth boosts disaster recovery support for Western Australia - Hon. Michael Keenan MP
The OEM's State Recovery Coordinator, Steve Joske CSC visited the City of Swan on Thursday 27 April 2017. We decided to ask him a few questions about his visit.
As State Recovery Coordinator, what was the purpose of your visit?
We know through the Department of Agriculture and Food WA's assessments that the Swan Valley region was badly affected by the flooding event in January and February 2017. The area renowned for its vineyards suffered major loss. I was keen to speak to the people involved in the recovery effort and see first-hand the damage to the valley and the long-term effects of the flood.
What were your observations?
I probably made three key observations.
The first was, I was astonished to see the flood levels indicators of how high the water level rose. It really makes you think about this huge body of water travelling through that area and the damage it causes.
Secondly, I was impressed with the fantastic job done by the City of Swan in restoring the damaged infrastructure. All bike paths and playgrounds have been repaired and if you were visiting the area for the first time, you probably would not realise that they had suffered such a big flood event.
And lastly, I also reflected on the difference between a large local government like City of Swan compared to a smaller one like Lake Grace that I visited a few weeks ago, particularly in their capacity to respond to disasters. Although regional WA knows how to deal with rural challenges in a resilient manner, it really does highlight that smaller local governments cannot restore their areas as fast as the larger ones and most will require additional help when affected by a disaster. The City of Swan are highly capable to respond to disaster and to recover quickly, and I congratulate all those involved.
Who did you meet?
I was pleased to meet with City of Swan Mayor Mick Wainwright, CEO Mike Foley and Executive Manager Community Wellbeing Mr Mark Bishop. It was a great opportunity to see how proud they were of the way their community recovered from the flooding and the City's ability to get back to normal. As a local government they have received a lot of positive feedback from the recovery of this event. We spoke about disaster recovery planning in general and their top priority hazards.
I also visited the affected areas including Bells Rapid in Brigadoon with City of Swan officers: Mr Heath Stenton and Mr Ian Robertson.
What was the City of Swan's impression of the OEM?
The Mayor and CEO were very complimentary about our work and the service before, during and after, particularly the service provided by the OEM's District Advisor Ms Merveen Cross. The OEM has District Advisors servicing all emergency management districts in WA. Their role in recovery is to be my 'eyes and ears' on the ground. They provide valuable intelligence as well as advice and assistance in all aspects of recovery. Merveen is obviously highly respected and valued by the team at City of Swan.
The swollen Swan River during floods.
The visit will enable Steve
to discuss ongoing matters relating to the flooding event, as well as
an inspection of affected areas.
visits are vital to my role. This visit to the City of Swan follows my
recent visits to the shires of Lake Grace and Ravensthorpe, where I
benefited from not only seeing the flood damage but also from hearing
the local stories behind the damage. Hearing the stories gives context
to all we do in recovery. I'm sure the stories from the Swan Valley will
be poignant, as the damage has been significant."
the devastating impact of Tropical Cyclone Debbie the Australian
Government has agreed to reimburse eligible councils for use of their
own plant and equipment when rebuilding damaged essential public assets.
Previously there have been restrictions around the use of Council’s
own resources for recovery works.
The additional financial
support will be available to all states and territories, subject to
them accepting the Government's offer, for all eligible disasters that
have occurred between 2013-14 and 2017-18 financial years.
State is required to implement assurance arrangements to ensure that the
use of local government-owned plant and equipment for reconstruction
works delivers greater value for money than the use of contracted plant
and equipment, and that using council labour will be better value than
utilising external contractors.
WA has sent through a draft
framework for review and discussion with the Commonwealth and is working
to address the assurance requirements. The urgency to get this issue
resolved for Local Governments affected by the recent flooding events is
understood and all efforts are being made to expedite this process so
that arrangements can be put in place as soon as possible.
The OEM’s State Recovery Coordinator, Steve Joske will meet with the Shire of Ravensthorpe on Friday 7 April. After the meeting in Ravensthorpe, he will travel to Esperance to meet with the Local Government about recovery matters and later visit the jetty, which was a sensitive issue from the Esperance bushfire.
The Minister for Local Government, the Hon David Templeman MLA will be travelling with Steve Joske on his itinerary.
The new Minister for Emergency Services, the Hon. Fran Logan MLA has signed Western Australia's proposal to use local government day labour to repair or re-construct roads damaged by the flooding. The proposal is now with the Federal Minister for Justice, Michael Keenan MP for consideration of proposed options to progress the day labour issue.
With the current events taking place in Queensland and New South Wales, Michael Keenan's office is working through its top priorities.
Our multi-agency working group is continuing to draft the framework and endeavour to be ready to consult with the Commonwealth when they have confirmed their preferred position.
Shire of Jerramungup staff inspecting damage to local road network. Image courtesy of Shire of Jerramungup
A draft submission for Category C measures has been sent to the Commonwealth Government. They have provided additional advice on how Western Australia can strengthen its claim. The submission will be finalised incorporating the Commonwealth's advice.