2021-01-21 Ordinary Meeting Agenda

ORDINARY MEETING AGENDA                                                           21 JANUARY 2021


    Finance
    a.      Capital costs

    The below table identifies the estimated project capital costs of the Rufous St Stage 3 project
    and details the community house and greenspace tendered elements.

    Table 1. Rufous Street Stage 3 Capital Costs
         Project Element                                                Cost
         Planning                                                              $265,482
         Design                                                                $373,821
         Approvals                                                              $25,150
         Procurement                                                            $59,827
         Construction
              Water Main                                                      $116,373
              Carpark                                                         $394,861
              Community House and Greenspace
              Ri-con Contractors D&C costs to date in Trust               $174,545
              Site costs to date (UXO, fencing, Unity water charges)        $12,766
              Kane Constructions (This contract)                         $3,039,764
              Digital Hub Expansion                                       $459,000
         SUB TOTAL                                                        $4,996,761
         5% Contingency on remaining works                                 $193,474
         TOTAL                                                            $5,190,776
         TOTAL PROJECT BUDGET                                             $5,213,994

    b.      Whole of life cost analysis
    In accordance with Council’s internal policy, a detailed analysis of the expected operating,
    maintenance, and depreciation for the Peregian Beach Community House and greenspace
    infrastructure and services is under development. The methodology and analysis are well-
    developed, with preliminary operating and maintenance cost forecasts developed to reflect
    expected levels of service for the assets, along with consideration of more direct, fixed
    operational costs (such as electricity, insurance, cleaning) that rely on recent experience with
    similar Council infrastructure.
    Specifically, the whole of life costing considers:
           Annual operating costs – the ongoing costs required to keep the asset in operation.
           Annual maintenance costs – the ongoing costs required to keep the asset at a desired
            condition level.
           Depreciation – consumption of assets and infrastructure over an estimated useful life.
    Based on current estimated construction costs, the analysis is outputting annual maintenance
    and operating costs in the vicinity of $250k per annum, with ongoing depreciation expense in
    the vicinity of $150k per annum (with a detailed breakdown by asset type yet to be finalised).
    Assuming a total future ongoing operating budget impact of $400k, this equates to a general
    rate impact of approximately 0.8% that will be partially realised in the 2021/22 budget once the
    project is completed and commissioned.
    The analysis takes a conservative approach regarding operations and maintenance to ensure
    that Council can appropriately and adequately consider financial sustainability impacts on
    Council and the community.
    A new lease is to be established with the Peregian Beach Community House that will consider
    the new operational costs and any potential opportunities to offset.


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