2015-03-12 Ordinary Meeting Agenda

ORDINARY MEETING AGENDA                                                               12 MARCH 2015


Some reflections
   To a large extent, this result reinforces the general thrust of the de-amalgamation process
    i.e. the Noosa Community received the right to vote on its future with SCRC not having any
    vote on the issue and to offset that approach, the Regulation implementing the de-
    amalgamation (and decisions of the Minister under that Regulation) generally favoured
    SCRC. As an example, section 55 of the Regulation gave the sole power to the CEO of the
    continuing Council to decide which (and how many) staff would transfer to the new Council
    subject to some broad parameters.

        Indeed, the Minister reinforced this approach in his Statement of Reasons which included
         his overarching approach to the resolution of the disputes - “to ensure their equitable,
         timely and cost effective resolution for the residents and ratepayers of both councils, taking
         into account the broad de-amalgamation policy position that the continuing council would
         be no worse off…..”.

Previous Council Consideration
Nil.


Finance & Risk
In formulating, Noosa Council’s financial plans and budgets, a conservative approach was taken
to estimating the final cash split result. With that conservative cash split estimate, Council met all
relevant QTC financial ratios. The table below outlines the various estimates that were applied to
the cash reserve splits as the de-amalgamation process progressed.

    Details                                                                                   Amount

    Amount estimated in De-amalgamation submission to QTC in 2013                              $39.6M

    Amount estimated in Council’s first budget (January 2014)                                   $40M

    Amount agreed via Transfer Committee process excluding the five disputed issues            $40.4M
    (30 June 2014)

    Final amount as per Local Government Ministers Decision                                    $42.5M


At our request, QTC is currently undertaking a credit review of Noosa Shire Council. As
previously advised to Council, they were also requested by the State to undertake credit reviews
of all four de-amalgamating Councils. That review is progressing well and a report and
presentation will be provided to Council in due course.

The only other issue to note at this stage is that one of the key financial challenges facing this
Council is the same as that facing many other Councils i.e. Council have adopted Priority
Infrastructure Plans (PIPs) which they use as the basis of collecting contributions from
development.

Part of the commitment in having PIPs (previously headworks, ICPs etc.) is that there is
ultimately an obligation to build trunk infrastructure that we are collecting contributions for. The
contributions do not (and cannot) fund all of the required future works. Regardless of whether or
not the decision by the Minister in relation to issue number 3 had been made, this Council will
need to ultimately identify how and when it will fund future capital works associated with the PIP.
That will be an outcome of the development of Asset Management Plans and careful long term
financial planning. The decision by the Minister in relation to issue 3 will exacerbate that
challenge for Council.

                                                                                        Page 18 of 24