2016-03-07 General Committee - Item 2 - Waste Management PBA Final Report - ATTACHMENT 1

Table 4.2: Impact Assessment of Commercial Business Unit Model

Impact Area          Impact Criteria   Impact     Benefits / Cost Description                                                        Qualitative Assessment
                                       Type
                                                                                                                        Likelihood       Consequence          Impact
Business      Unit   Pricing           Benefits      The business must continue to apply full cost price-setting    n.a.               n.a.             Nil Benefit
Financial                                             practices and user pays principles in the pricing of goods
Position             NET COST (very                   and services to ensure ongoing financial sustainability.
                     low)              Costs         Some potential for political interference in price-setting     Very Low           Low              Very Low Cost
                                                      practices, although this also exists under the FCP model.
                     Non Commercial    Benefits      Non-commercial activities undertaken are still required to     n.a.               n.a.             Nil Benefit
                     Activities        Costs          be identified and funded via CSO payments funded by the        n.a.               n.a.             Nil Cost
                                                      general rate to the business, which should ensure
                     NIL IMPACT                       appropriate cost recovery for all activities undertaken,
                                                      enhanced transparency in service provision and the
                                                      removal of any potential hidden cross subsidies between
                                                      customer classes.

                     Administration    Benefits      Nil identified                                                 n.a.               n.a.             Nil Benefit
                                       Costs         The business would be required to undertake additional         Very High          Low              Medium Cost
                     NET COST                         statutory reporting functions associated with a CBU
                     (medium)                         structure, including annual performance plans, separate
                                                      reporting of performance in Council’s annual report, annual
                                                      reporting and submission of tax equivalent returns.

                                       Costs         Requires the ongoing use of a pricing model for the            Very High          Low              Medium Cost
                                                      business, to ensure legislative requirements regarding full
                                                      cost recovery are met.

                     Operational       Benefits      The identification of true direct and indirect operating and   Moderate           Low              Low Benefit
                     Efficiency                       capital costs incurred by the business may improve
                                                      decision making.
                     NET               Benefits      Potential for a greater degree of management autonomy          Moderate           Low              Low Benefit
                     BENEFIT                          and business independence (via delegated authority from
                     (low)                            Council’s Chief Executive Officer) which may allow for
                                                      more efficient decision making and more timely responses
                                                      to business and customer issues.
                                       Benefits      Greater potential scope for the business to implement          Low                Low              Low Benefit
                                                      formal service level agreements for internal services
                                                      provided by Council to ensure value for money and more
                                                      accurate cost inputs for pricing determination.
                                       Costs         Nil identified                                                 n.a.               n.a.             Nil Benefit

                     Business          Benefits      An enhancement in the clarity of business objectives /         Moderate           Low              Low Benefit


Waste Management Public Benefit Assessment                                                                                                                             Page 20