2016-02-02 P&O Committee - Item 7 - Attachment 1 - Waste Management PBA Draft Report

Executive Summary
Public Benefit Assessment Background
Noosa Council is required to undertake a PBA of its financially significant waste management
business activity to determine the most appropriate business structure under National Competition
Policy (NCP) reforms. The reform options under consideration include:

1. The business remains a Council service, and continues with Full Cost Pricing (FCP) reform
   (minimum level of reform); and
2. The business becomes a Commercialised Business Unit (CBU).

Reform Option           Implications
Full Cost Pricing        Business is essentially operated as just another branch within
                           Council’s organisational structure.
                         Prices are set in accordance with commercial cost recovery.

Council                    A commercialised business unit (not a separate legal entity) is
Commercialised              created by Council to manage the business, with a dedicated
Business Unit               business unit manager employed.
                           The business unit enjoys increased managerial autonomy for day-
                            to-day operations and strategic decisions.
                           The business may have a greater ability to source inputs from
                            outside of Council, subject to the framework adopted.
                           The business operates under its own business plan.
                           The business has more of a commercial orientation than under the
                            full cost pricing reform option, and is subject to separate more
                            detailed performance reporting (financial and non-financial).
                           Prices are set in accordance with commercial cost recovery.


The objective of the PBA will be to assess whether the benefit to the Noosa community (in terms of
service quality and cost) of applying the competitive neutrality principle in relation to a significant
business activity outweighs the costs of applying the competitive neutrality principle.

There are four key stages in the assessment process:

Stage 1 – Definition of the existing structure and operation of the business, including management
and reporting structures, annual income and expenditure, and other financial arrangements;
Stage 2 – Identification of, and consultation with, stakeholders in the community who might be
affected by the outcome of the PBA;
Stage 3 – Assessment of the potential impact of the business models under consideration on the
business activity and identified stakeholders; and
Stage 4 – Based on stages 1-3, the provision of recommendations to Council regarding which of
the business models is most appropriate for the business, including detail on the costs and benefits
of each model as well as a timetable for implementation of the recommended business model.

Business Profile Summary
Area                    Outcome
Business Functions      The major services provided by the business include:
                         Waste collection and transport including commercial and domestic

Waste Management Public Benefit Assessment                                                      Page 2