2015-09-15 Infrastructure and Services Committee Agenda

INFRASTRUCTURE & SERVICES COMMITTEE MEETING AGENDA                               15 SEPTEMBER 2015


The table below outlines the indicative costs under options A, B and C:

                                              Net Operating Cost to         Total Cost to Council
                                                                            (including depreciation &
                                              Council
                                                                            corporate overheads)
 Option A - CLMB 12 month trial                                  $146,097                        $243,898
 Option B - Council caretaker model                              $138,426                        $236,227
 Option C - Council activation model                             $220,056                        $317,858

Option A is slightly higher than the current budget and Option B, however it is important to note
that it will result in activation of the BFAC rather than a caretaker model. It also remains more
cost effective than Council activation under Option C.

Option A. 12 month trial with CLMB

While this option has risks associated with the CLMB’s first foray into managing a facility, it is the
preferred model, representing a lower cost to Council than if Council were to undertake an
activation role. It also meets the preferred outcomes of the community engagement process
undertaken in 2014/15.

Operating costs such as water, electricity, building maintenance, etc. will remain Council’s
responsibility under this option, however many of these costs would be transferred to CLMB
beyond the 12 month trial. CLMB will need to consider these costs for business planning and
future operations.

A review of corporate overheads with Council’s finance section indicates that a substantial
reduction in corporate overheads is also likely under this model, however this has not been
factored into the projected budget for the 12 month period.


                                                    Projected budget 1 January – 31 December 2016
 Revenue                                                                                       $0
 Expenditure                                                                             $146,097
   Continued Council operating expenses
 during CLMB operation ^                                                                            $22,607
   Other Expenses (fire levies and internal
 charges other than corporate o/heads)                                                             $3,211
   Operating subsidy to CLMB *                                                                   $120,279

 Net Operating Cost to Council                                                                  $146,097

 Depreciation & Amortization                                                                        $19,745
 Corporate Overheads                                                                                $78,056

 Total Cost to Council                                                                          $243,898
 Notes:
 ^ Continued Council operating expenses during CLMB operation projected based on 2015/16 budget
 figures.
 * Based on Indicative Cash Flow Analysis undertaken by Mercer Enterprises




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