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2014-01-13 Item 6.3 Appendices 1-5
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APPENDIX 1
Queensland Boundaries
Commissioner Report
Proposed Noosa De-amalgamation
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Full text of sections 2 to 146 (of 171)
Section 2
Published by the Queensland Boundaries Commission November 2012 The Queensland Boundaries Commission, Department of Local Government (the Commission), supports and encourages the dissemination and exchange of information. However, copyright protects this publication. Except for purposes permitted by the Copyright Act 1968, no part may be reproduced by any means without the prior written permission of the Queensland Boundaries Commission. Disclaimer: While every care has been taken in preparing this publication, the Commission accepts no responsibility for decisions or actions taken as a result of any data, information, statement or advice, expressed or implied, contained within. To the best of our knowledge, the content was correct at the time of publishing. Any references to legislation are not an interpretation of the law. They are to be used as a guide only. The information in this publication is general and does not take into account individual circumstances or situations. Where appropriate, independent legal advice should be sought.
Section 3
Contents
Queensland Boundaries Commissioner ~ background and overview of report ...... 1
Key points and recommendations ............................................................................... 2
Key points ................................................................................................................... 2
Recommendation ....................................................................................................... 2
Noosa ~ Sunshine Coast Regional Council de-amalgamation background............. 4
Summary of information provided ............................................................................... 5
Noosa Independence Alliance proposal................................................................... 5
Sunshine Coast Regional Council ............................................................................ 5
Consultation with stakeholders ................................................................................ 6
Financial viability and sustainability............................................................................ 7
QTC financial analysis ............................................................................................... 7
Queensland Treasury Corporation summary .............................................................. 8
1.1 Financial impact of de-amalgamation................................................................. 8
1.1.1 De-amalgamation costs ........................................................................................................... 8
1.1.2 Incremental annual recurring costs.......................................................................................... 9
1.1.3 Summary of Proponent Council costs ..................................................................................... 9
1.2 Assessment of financial viability – using QTC’s Base Case .......................... 10
1.2.1 Sustainability ratings – Base Case forecasts......................................................................... 11
1.3 Financial effect per rateable property............................................................... 12
1.3.1 Base Case average annual rates per rateable property........................................................ 12
Regional planning........................................................................................................ 13
Shared services........................................................................................................ 13
Waste disposal ......................................................................................................... 13
Sewerage................................................................................................................... 13
Sunshine Coast Airport ........................................................................................... 13
Disaster management .............................................................................................. 14
Maroochydore Principal Regional Activity Centre ................................................ 14
Caloundra South ...................................................................................................... 14
Journey to work profile ~ Sunshine Coast Region ................................................... 16
Sankey chart ~ Journey to work data ..................................................................... 17
Economic development............................................................................................... 18
Growth....................................................................................................................... 18
Tourism ..................................................................................................................... 19
Electoral arrangements ............................................................................................... 20
New council .............................................................................................................. 20
Remaining council ................................................................................................... 20
Map ~ current Sunshine Coast Regional Council area............................................. 21
Map ~ former Noosa Shire Council area .................................................................... 22
Map ~ remaining Sunshine Coast Regional Council area ........................................ 23
Section 4
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JG
This page is intentionally left blankSection 5
Queensland Boundaries Commissioner
~ background and overview of report
The Queensland Boundaries Commissioner Col Meng (the Commissioner) was appointed
to his role on 29 June 2012 by The Honourable David Crisafulli MP, Minister for Local
Government.
The Commissioner was appointed to investigate the viability of former shires wishing to
de‐amalgamate from larger regional councils. The Minister received 19 proposals, five of
which were referred to the Commissioner.
The Commissioner reviewed local government de‐amalgamation proposals referred to
him in an open and logical way and undertook targeted public consultation.
This report gives the Minister information including:
a summary of the proposal from the proponent group and information provided by
the council
a summary of the detailed financial analysis provided by Queensland Treasury
Corporation (QTC) (contracted as an independent third party specialist to holistically
analyse the viability and sustainability elements of the submission)
a summary of the consultation process
an outline of the possible impacts of de‐amalgamation on economic development
an outline of the possible impacts of de‐amalgamation on regional planning issues
information demonstrating communities of interest in the region
maps showing the boundaries of the current council and the former shire.
The Commissioner has reviewed, evaluated and analysed all information and has made
recommendations accordingly.
The Commissioner has no past or current associations with the Sunshine Coast Regional
Council (SCRC) or proposed Noosa Shire Council (NSC) that might create a conflict of
interest.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 1 of 23
Section 6
Key points and recommendations
The Commissioner would like to extend his thanks to The Noosa Independence Alliance
(NIA) and all stakeholders for their participation in this process. The level of engagement
has been high.
The Commissioner would also like to extend his thanks to the SCRC for their efforts. The
Commissioner would like to acknowledge that participating in this process has required
significant resources and the high level of cooperation given to both the Queensland
Boundaries Commission (QBC) and QTC is appreciated.
Key points
According to projections by QTC, ratepayers of the proposed NSC will have to
contribute a minimum increase of $260 in the first year, and a minimum of $142 over
the following four years, adjusted for inflation.
According to projections by QTC, the proposed NSC will be rated as Moderate
(neutral) and the remaining SCRC will be Sound (neutral).
De‐amalgamation is likely to affect a number of proposed projects (including capital
projects and events) in the remaining regional council area.
De‐amalgamation will result in a number of diseconomies of scale.
There are considerations other than financial sustainability at play such as social and
cultural issues (including but not limited to perceived loss of identity). This was evident
in the high level of engagement by both the council and proponent group.
The airport is a significant asset to the region and should de‐amalgamation occur,
careful consideration will need to be given to its place in the region.
Recommendation
Although there are many reasons for the current SCRC to remain as it is, the
Commissioner’s view is that a new NSC would be financially viable and there are enough
reasons to allow the people of Noosa to decide the future direction of their local
representation.
In the case that the Minister accepts this recommendation the poll should be in March
2013 to allow enough time to disseminate information in this report. The poll should be
attendance rather than postal and will be compulsory for the enrolled voters in the new
NSC.
In the event that the required percentage of people vote in favour of de‐amalgamation, it
is recommended that:
consideration should be given to appointing administrators
the de‐amalgamation will be complete and the new council will be operational no later
than March 2014
the Commissioner will produce transition procedures after the poll.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 2 of 23
Section 7
During the 2008 structural changes, council employees’ rights and entitlements were
preserved by means of a three year jobs moratorium. This provision hampered many
councils and reduced the ability to develop a flexible and responsive organisational
structure. The Commissioner does not see the need to implement a similar requirement
should a de‐amalgamation occur.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 3 of 23
Section 8
Noosa ~ Sunshine Coast Regional
Council de-amalgamation background
In July 2007, the Local Government Reform Commission concluded its report on
the examination of local government area boundaries, classes, names and
electoral arrangements. In March 2008, the structural changes to Queensland local
goverments took place.
The SCRC was established from the amalgamation of Caloundra City Council,
Maroochy Shire Council, and NSC.
The former NSC and local community groups expressed strong opposition to the
amalgamation.
Prior to amalgamation, the Financial Sustainability Review by Queensland Treasury
Corporation (QTC) rated NSC as Strong (developing), and the other two pre‐
amalgamated shires of Caloundra and Maroochy as Moderate (developing) and
Strong (neutral) respectively.
On 29 August 2012, the Minister referred a de‐amalgamation proposal from the
Noosa Independence Alliance (NIA) to the Queensland Boundaries Commissioner
for review.
The proposal from the former NSC was coordinated by the NIA, an alliance of four
community organisations from the Noosa area with a total membership of
approximately 5,000.
The NIA organisations include:
o Noosa Parks Association Inc.
o Friends of Noosa Inc.
o EDV (Eumundi, Doonan and Verrierdale) Residents Group Inc.
o Noosa Biosphere Association Inc.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 4 of 23
Section 9
Summary of information provided
Noosa Independence Alliance proposal
The proposal outlines reasons for de‐amalgamation including:
a large proportion of the community would prefer a separate council
the costs forecast by the proponent group may be borne by ratepayers without the
need for above CPI rate adjustment
services may be improved by re‐forming a NSC
maintaining local identity by avoiding extraneous signage, parking meters and traffic
lights
a NSC may be better placed to market Noosa as a tourist destination
a NSC would be better placed to protect the environment that distinguishes the area
from other parts of the region
regional economy and economic development of the entire region will not be
adversely affected by de‐amalgamation.
The NIA proposal includes a standard service delivery model. However, the proposal and
further consultation have clarified that the NIA would prefer a model including a certain
amount of outsourcing. The proposal identifies opportunities in areas such as lifeguards,
libraries and some back‐office services.
The proposal can be viewed at www.friendsofnoosa.org.
Sunshine Coast Regional Council
SCRC initially adopted a neutral stance regarding possible de‐amalgamation. Subsequently
SCRC acknowledged the state government’s boundary review process and on 18 October
2012 passed a Resolution advising the council’s preference is to retain the current unified
local government model for the Sunshine Coast region.
SCRC provided QTC with current five‐year financial forecasts and potential de‐
amalgamation cost estimates.
In addition to the financial forecasting, SCRC identified a number of regional efficiencies
that could be at risk including:
fuel and electricity contracts
common regulatory services
standard development application policies and procedures
disaster management coordination
Information and Communication Technology (ICT) platforms and applications
consolidated local laws
animal management
insect management
single Sunshine Coast Planning Scheme.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 5 of 23
Section 10
Consultation with stakeholders
The Queensland Boundaries Commissioner consulted with:
NIA
SCRC
Sunshine Coast Destination Ltd
Unitywater
Tourism Queensland
Master Builders Queensland
Hastings Street Association
Tourism Noosa
Noosa Chamber of Commerce and Industry
Property Council of Australia
Sunshine Coast Business Council.
All organisations expressed views on possible de‐amalgamation and the potential impact
on specific areas of interest.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 6 of 23
Section 11
Financial viability and sustainability
QTC financial analysis
QTC has had a long‐standing relationship with local governments in Queensland. Of
particular note was QTC’s major review of the financial sustainability of 109 of
Queensland’s local governments in July 2007. QTC has also undertaken and continues to
undertake regular credit reviews of local governments.
QTC was engaged to assist in conducting a comprehensive, objective analysis of both the
proposed NSC and remaining SCRC. The full report De‐amalgamation Analysis of Sunshine
Coast Regional Council is attached (Appendix 1).
During this process, QTC participated in the consultation process with representatives of
NIA to clarify details of the financial model provided. QTC also engaged with SCRC to
understand the allocation of revenue, costs, assets and liabilities between NSC and the
remaining local government. QBC gave broad guidance on what may constitute de‐
amalgamation costs, however each proposal was considered on a case‐by‐case basis.
It was assumed from the outset there would be disparity in the figures provided by the
de‐amalgamation proponents and the SCRC. QTC made adjustments to the assumptions
proposed where they were not considered to be complete and/or reasonable.
For the purpose of this review, a five‐year timeframe was used to create financial
forecasts, and also included consideration of the impact of de‐amalgamation from service,
community, financial and economic perspectives.
A sustainability rating was provided by QTC on the Base Case scenario. The Base Case
scenario indicates how a council is expected to perform against key performance
indicators in the coming years taking into account revenue, service delivery levels and the
operational environment.
The sustainability rating also takes into account de‐amalgamation costs (both one‐off and
fixed asset costs) and incremental annual recurring costs. Incremental annual recurring
costs are not strictly de‐amalgamation costs, but are expected to be incurred to operate a
new NSC.
A new NSC is expected to have minor operating deficits for the five‐year forecast period
(Appendix 1, table 14 – page 24). Long‐term operating deficits are unsustainable. How a
new NSC would manage this matter over the long term could take different forms. Rates
could be increased and/or service levels reduced. While a break‐even budget scenario is
provided to ensure completeness of information (Appendix 1, table 3 – page 6), it is
acknowledged that, should the proposed NSC be reconstituted, the council will make its
own decisions on revenue and expenditure.
Rating figures provided by QTC do not take into account the differential rating systems
used by Queensland councils. This was deliberate and ensures the effective comparison
between the proposed NSC and the proposed remaining SCRC.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 7 of 23
Section 12
Queensland Treasury Corporation
summary
Sunshine Coast Regional Council (SCRC or the Existing Council) was formed in March 2008
following the amalgamation of Caloundra City, Maroochy Shire and Noosa Shire Councils.
It covers an area of approximately 3,126 km2 and has a current population of
approximately 151 000.
A proposal has been lodged by the Noosa Independence Alliance (the Proponent) for the
de‐amalgamation of the former Noosa Shire Council (Proponent Council). If successful, a
new Noosa Shire Council would be formed along its former boundaries, which includes an
area of approximately 869 km2 and a population of 30,000.
QTC has been engaged by the Department of Local Government to provide advice and
assistance to the Queensland Boundaries Commission (the Commission) about the
financial aspects of this de‐amalgamation proposal. QTC’s review includes a financial
analysis of both the proposed de‐amalgamating council and what would become the
remaining Sunshine Coast Regional Council (the Remaining Council) to:
determine the costs of de‐amalgamation for both the Proponent Council and the
Remaining Council, and
assess the financial viability of the Proponent Council and the Remaining Council on
the basis that de‐amalgamation was successful, and compare this to the financial
viability of the Existing Council.
1.1 Financial impact of de-amalgamation
1.1.1 De-amalgamation costs
De‐amalgamation costs include all costs incurred from the date of a successful poll for de‐
amalgamation of the Proponent from an Existing Council to the date of de‐amalgamation
(i.e., election of Proponent councillors, which is likely to be approximately 12 months after
the poll). QTC has identified the costs of de‐amalgamation to include:
One‐off costs. These relate to implementation and due diligence, community and staff
engagement, and information and communication and technology (ICT). They will
have the greatest direct impact on the cost to ratepayers because they will be
expensed in full during the first year of de‐amalgamation, and
Fixed asset costs. These relate to the cost of purchasing new ICT equipment and any
other new plant and equipment required for the Proponent Council to maintain
service delivery standards. These assets will be expensed over the term of their useful
life, therefore impacting ratepayers more subtly over time than one‐off costs.
Successful Proponent Councils will be required to pay their own de‐amalgamation costs as
well as the de‐amalgamation costs of the Remaining Council.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 8 of 23
Section 13
1.1.2 Incremental annual recurring costs
Incremental annual recurring costs incurred by either the Proponent Council or the
Remaining Council are not considered a cost of de‐amalgamation. QTC has identified
these for the Proponent Council in order to highlight the ongoing extra costs associated
with operating as a separate council.
Successful Proponent Councils will be required to pay their own incremental annual
recurring costs but will not be responsible for paying costs of this nature for the
Remaining Council. Incremental annual recurring costs incurred by the Remaining Council
should be small in comparison to those of the Proponent Council, but may include costs
associated with lower purchasing power and other operating inefficiencies. These costs,
where applicable, have been considered by QTC in the forecasts determined for the
Remaining Council. To the extent that they exist, these costs may impact QTC’s
sustainability rating for the Remaining Council when compared to the Existing Council and
the average rates per rateable property of the Remaining Council when compared to the
Existing Council.
1.1.3 Summary of Proponent Council costs
Table 1 shows the estimated cost of de‐amalgamation, including incremental annual
recurring costs, to the Proponent Council (column 1). It also shows how these costs
translate into a cost per rateable property (columns 2 and 3).
TABLE 1 - SUMMARY OF DE-AMALGAMATION COSTS
QTC Average Annualised
Estimate Costs Costs
$ $ $
Total one-off costs 3,605,000
Average one-off costs per Proponent Council rateable property 121.34
Total one-off fixed asset costs 7,415,000
Average fixed asset costs per Proponent Council rateable property 249.57
Annualised fixed asset costs per Proponent Council rateable property 49.91
Total incremental annual recurring costs 2,631,000
Total incremental annual recurring costs per Proponent Council
88.55
rateable property
Note: Annualised fixed asset costs demonstrate the financial effect of spreading the cost of the asset over their useful life (i.e.
depreciation expense)
Table 1 indicates that the one‐off costs of de‐amalgamation per rateable property will be
$121 while the incremental annual recurring costs will be $138.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 9 of 23
Section 14
The following graph shows the financial impact of de‐amalgamation, including
incremental recurring costs, per rateable property over five years.
Total de-amalgamation costs per Proponent Council rateable property ($)
300
250
200
150
100
50
-
Year 1 Year 2 Year 3 Year 4 Year 5
One-off costs Fixed assets Incremental annual recurring costs
In the first year, each rateable property in the Proponent Council area will on average 1
need to contribute an extra $260 in rates to cover the costs of de‐amalgamation. In the
second year, the extra contribution will drop to $142 and is then expected to increase each
year based on inflation.
1.2 Assessment of financial viability – using QTC’s
Base Case
The financial viability of the Existing Council, Proponent Council and Remaining Council
was assessed by QTC with reference to financial information provided by the Proponent,
and the Existing Council’s current five year forecasts as well as five year forecasts for their
respective Proponent Council and Remaining Council.
In order to derive its own Base Case set of 5 year financial forecasts for the Proponent and
Remaining Councils, QTC made adjustments to the assumptions of the Proponent Council
and Existing Council where they were not considered to be complete and/or reasonable.
QTC’s Base Case financial forecasts for the Proponent Council and Remaining Council
included a cost allocation that might occur because of decreased purchasing power with
suppliers including insurance, waste management, fleet leasing and other expenses, as
well as other inefficiencies.
QTC’s financial forecasts for the Proponent Council also included the items identified in its
assessment of de‐amalgamation costs. That is:
the one‐off costs of de‐amalgamation for itself and the Existing Council
the additional fixed asset costs, and
1
Rates per rateable property may bear no direct comparison to actual rates paid by some ratepayers because it is an average figure
calculated using total rateable properties. It does not take into consideration that some residential, commercial and industrial ratable
properties attract a higher portion of the base rate than others.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 10 of 23
Section 15
the incremental annual recurring costs of de‐amalgamation where they were not
already considered to be included.
QTC’s financial forecasts were based on a standard delivery model. However, where
existing assets were shared across a region (i.e., landfills), QTC assumed that a
commercial arrangement would be negotiated between the councils to continue to share
the asset. This was thought to be a more practical assumption than including the cost of
replacing the asset.
1.2.1 Sustainability ratings – Base Case forecasts
QTC’s assessment of financial viability involved determining a sustainability rating for the
Existing Council, Proponent Council and Remaining Council. This rating considers each
council’s five year forecasts against sustainability ratios and benchmarks referred to by
both QTC and the Department of Local Government (DLG).
A summary of the sustainability rating assigned by QTC to the Existing, Proponent and
Remaining Council is shown below. It should be noted that these sustainability ratings
have been determined based on information and assumptions contained in the Base Case
forecasts estimated by QTC.
Sustainability Rating Existing Council Proponent Remaining
Council Council
QTC rating (and outlook) – Base Strong (neutral) Moderate (neutral) Sound (neutral)
Case
Based on the Base Case forecasts made available QTC has rated the Existing Council as
Strong, the Proponent Council as Moderate, and the Remaining Council as Sound.
The Existing Council’s Strong rating is supported by:
historical and forecast operating surpluses in all years
very low gearing levels throughout the forecast period and high interest and debt
service cover ratios
strong liquidity, and
forecast capital expenditure of $718 million with only 14.3 per cent funded by new
borrowings.
The Remaining Council’s Sound rating is supported by:
minor operating deficits over the forecast period, and
a reasonable level of borrowings which are able to be adequately serviced.
The Proponent Council’s Moderate rating is supported by:
minor operating deficits over the forecast period, and
adequate capacity to meet its financial commitments in the short to medium term and
acceptable capacity in the long term.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 11 of 23
Section 16
1.3 Financial effect per rateable property
QTC undertook an assessment of the impact to ratepayers of de‐amalgamation by
comparing the average net rates and utilities per rateable property that would apply
under the Base Case for the Proponent and Remaining Councils.
1.3.1 Base Case average annual rates per rateable property
Table 2 shows the average net rates and utilities per rateable property that would apply
using QTC’s Base Case for the Proponent and Remaining Councils.
TABLE 2 – BASE CASE AVERAGE ANNUAL NET RATES AND UTILITIES PER RATEABLE PROPERTY
FY2013 FY2014 FY2015 FY2016 FY2017
Proponent Council ($) 1,894 2,000 2,114 2,234 2,362
Remaining Council ($) 1,651 1,735 1,851 1,953 2,059
See Appendix 1 for the full report.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 12 of 23
Section 17
Regional planning
Shared services
The Commissioner requested proponent proposals include a standard delivery model
showing services, systems and governance that could be conducted by the new council.
There is a risk that outsourcing would come at a cost to ratepayers. Previous de‐
amalgamations of councils in other states have resulted in stronger councils adding a
surcharge to services purchased. The surcharge could cover administrative costs, risks and
overheads. Due to the nature of de‐amalgamation, cooperation and collaboration
between the two councils could be adversely affected.
Waste disposal
The SCRC has been running waste management on a regional basis and currently uses the
Tewantin, Nambour and Caloundra sites. The Nambour and Caloundra sites are estimated
to have eight years of life left. The SCRC anticipates that in the event of de‐amalgamation,
it will no longer have access to the Eumundi Road site and proposes to negotiate a bulk
haul contract with Ipswich while acquiring and developing a new site.
The NIA proposal suggests that waste assets will be allocated according to geographical
location and QTC has agreed with this approach.
QTC has assumed that the NSC will agree to an arrangement with SCRC to utilise the
Eumundi Road site for the purpose of QTC’s analysis. Whether this arrangement can be
made or other options need to be explored, waste disposal will have a major cost to the
SCRC ratepayers in the immediate and foreseeable future.
Sewerage
Unitywater has advised that water supply and sewerage infrastructure in the Noosa area
needs significant upgrades to meet environmental compliance, growth and safety
concerns. The existing shareholding in Unitywater would need to be divided.
Sunshine Coast Airport
The Sunshine Coast Airport (SCA) is located at Marcoola – midway between Caloundra
and Noosa – and approximately 110 kilometres north of Brisbane. It is owned, managed
and operated by SCRC.
The SCA operates 24 hours a day, handles approximately 87,000 aircraft movements and
around one million passengers per year. SCRC is proposing to construct a new runway
along an east‐west alignment by 2022 with the associated apron, taxiways, terminal and
commercial infrastructure to support the future population and growth in tourism. The
total cost is estimated to be $435 million. The Noosa tourism industry is sure to derive an
economic benefit from any future upgrades.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 13 of 23
Section 18
QTC has assumed that the SCRC will retain full ownership and control of the airport for
the purpose of this analysis.
For the remaining SCRC to bear the cost of upgrades that will allow for growth to Noosa’s
tourism is inequitable. Proponents have acknowledged the benefit of the airport to their
area. In the view of the Commissioner, the airport would have to be considered differently
to the proposed QTC treatment.
There is the risk that de‐amalgamation would delay this project, and costs will rise due to
inflation to a point where the project might not eventuate. This would have a detrimental
effect on future national and international tourism to the region as the air traffic would be
limited. A new NSC would have to consider assisting SCRC with funding.
Disaster management
Disaster management is a core responsibility of local government. Local government is
well placed to provide first‐hand knowledge and understanding when it comes to co‐
ordinating responses to a disaster.
The NIA is proposing to use the existing Disaster Management policies and procedures.
The SCRC advises that it expects Noosa to establish a separate Local Disaster
Management group, a separate Emergency Operations Team, a separate Field
Coordination Centre and an Emergency Coordination Centre, which would be necessary to
comply with the Disaster Management Act 2003.
As recent natural disasters across the state have demonstrated, effective disaster
management is vitally important to the community. De‐amalgamation may not only cause
duplication of services but may also affect the ability to respond to and mitigate disasters.
Maroochydore Principal Regional Activity Centre
Maroochydore was identified as the Principal Regional Activity Centre for the Sunshine
Coast by both SCRC and the state government (South East Queensland Regional Plan 2009).
The centre will include a retail precinct, a golf course and other unspecified facilities. The
SCRC recently purchased a large land parcel and needs to secure more land to fulfil this
plan.
There is a risk that de‐amalgamation would delay this project and costs will rise due to
inflation to a point where the project might not eventuate.
Caloundra South
Caloundra South is a proposed new Sunshine Coast master‐planned community. If
approved, the new community will be established on a 2,310 hectare former forestry site.
Currently, the Urban Land Development Authority (ULDA) is the state government agency
with planning responsibility for the site. The ULDA Development Scheme for Caloundra
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 14 of 23
Section 19
South was adopted by the state government in October 2011. At this stage there is no
infrastructure agreement with the developer for the land. The ULDA is currently being
transformed into Economic Development Queensland under the Economic Development
Bill 2012. This may have an impact on the proposed development.
Unless there is a gap in funding between the infrastructure charges and the amount to be
funded by the developer, de‐amalgamation is unlikely to affect the progress of this
development.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 15 of 23
Section 20
Journey to work profile ~ Sunshine
Coast Region
This map shows the areas of interest for the following journey to work analysis according
to the Australian Bureau of Statistics (ABS) 2011 Census data using Statistical Local Areas
(SLAs). Journey to work data is an indicator of communities of interest. The boundaries
used by the 2011 Census did not align exactly with the pre‐amalgamation local government
boundaries. In order to address this issue, a model incorporating additional data from the
Australia Post Postal Address File was applied.
The area including Noosa‐Noosaville, Sunshine‐Peregian and Tewantin area shows high
self‐containment with 73 per cent of journey to work trips staying within this region in
2011. The Noosa Balance area has lower self‐containment (36 per cent), however the
majority of trips leaving the Noosa Balance area are travelling to the Noosa‐Noosaville,
Sunshine‐Peregian and Tewantin area.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 16 of 23
Section 21
Sankey chart ~ Journey to work data
This chart shows journey to work volumes between different origins (left) and
destinations (right). The thicker the line, the greater the volume of journeys between
origin and destination.
Origin Destination
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 17 of 23
Section 22
Economic development
Economic development is a concept that generally refers to the actions of government
and communities to promote a higher standard of living. Such actions may involve the
development of infrastructure and regional competitiveness.
Economic activity in the region is based around tourism, primary production, building,
commerce, retail and light industry.
Growth
Population growth is an important factor and contributes to economic growth. An
increasing population in a local government area usually means an increase in the rateable
property base. This is the primary source of local government revenue. Without economic
growth communities can quickly stagnate. Local government areas with very low, zero or
negative growth generally require significant levels of subsidisation from state and federal
governments.
Projected population growth rates in both the new NSC and remaining SCRC are expected
to be around 1 per cent. The population of a new NSC is estimated at 61,719 with 29,711
rateable properties. The estimated increase of 0.4 per cent means approximately 120 new
rateable properties per year over the five‐year forecast period. It is likely the relatively
large population size and number of rateable properties of the proposed NSC has capacity
to absorb the rise in cost of rates and utility charges needed to provide a reasonable level
of service and capital expenditure.
Costs for a new NSC to do business are likely to increase if growth is limited. This is
reflected in the sustainability ratings assigned by QTC for a new NSC of Moderate
(neutral) and a new SCRC of Sound (neutral). De‐amalgamation would result in SCRC
being downgraded from its rating of Strong (neutral). A local government with a larger
population and more rateable properties has a greater capacity to provide services, better
absorb unforeseen shocks and be better placed to contribute to the economic
development of its area.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 18 of 23
Section 23
Tourism
Since local government amalgamation in 2008, events such as the global financial crisis
and the increasing value of the Australian dollar have had a decisive impact on tourism in
Queensland.
The Sunshine Coast is the third most popular destination in Queensland. While the
Sunshine Coast has had an increase in visitors from New Zealand in the past year, other
international markets have declined. Domestic tourists, specifically Queenslanders,
represent the majority of visitors to the region. The Sunshine Coast draws a small
international market (only 7.8 per cent of total overnight visits), with most visitors coming
from New Zealand and Europe. The trial Auckland to Sunshine Coast flight service has
recently been extended to October 2013, creating further tourist movement.
Sunshine Coast Destination Ltd (SCDL) was created in 2010 to represent the region and
reduce duplication. SCDL is currently the Regional Tourism Organisation (RTO)
representing the area from the Glass House Mountains in the south, to Rainbow Beach in
the north and the hinterland in the west.
Tourism Noosa is the official tourism organisation for the northern region of the Sunshine
Coast. Noosa historically has a strong tourism brand that exploits a range of available
experiences (National Parks, waterways, beaches and hinterland).
Tourism Noosa has produced a document NOOSA – Sustainable Destination Action Plan
2013‐2016 which can be viewed on www.visitnoosa.com.au setting a strategic vision for
the leadership and management of the tourism industry in the Noosa community.
This strategy identifies three key priorities for growth:
marketing and events
industry and product development
sustainability.
In order to deliver on these priorities, recommendations include working with local
government on a number of initiatives.
A possible de‐amalgamation would have a detrimental effect on levels of service to
tourism and levels of service in general which would affect the attraction of the region to
tourists.
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 19 of 23
Section 24
Electoral arrangements
New council
Name Noosa Shire Council
Boundaries The former Noosa Shire Council would be
re‐formed to its pre‐2008 boundary
Elections Quadrennial
Remuneration category Category 4
Classification Shire
Composition of mayor and councillors 1+6
Quota N/A
Divided/Undivided Undivided
Population 2006 48,556
Projected population 2026 58,432
Remaining council
Name Sunshine Coast Regional Council
Boundaries Current regional council boundaries with
Noosa removed
Elections Quadrennial
Remuneration category Category 8
Classification Region
Composition of mayor and councillors 1 + 10
Quota For the remaining divisions to stay
unchanged and to be normalised as part of
the normal process leading into the 2016
local government quadrennial elections
Divided/Undivided Divided
Population 2006 241,470
Projected population 2026 415,295
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 20 of 23
Section 25
Map ~ current Sunshine Coast
Regional Council area
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 21 of 23
Section 26
Map ~ former Noosa Shire Council
area
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 22 of 23
Section 27
Map ~ remaining Sunshine Coast
Regional Council area
Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
Page 23 of 23
Section 28
Section 29
|
APPENDIX 2 |
a oe
W, oe, \
1S
‘ * IR
Queensland
Local Government Act 2009
Local Government
(De-amalgamation
Implementation) Regulation
2013
Current as at 6 December 2013
Warning—Some provisions of this legislation are not in
operation. These provisions are italicised. For details, see the
List of legislation.Section 30
Information about this reprint
This reprint shows the legislation current as at the date on the cover and is authorised by
the Parliamentary Counsel.
A new reprint of the legislation will be prepared by the Office of the Queensland
Parliamentary Counsel when any change to the legislation takes effect. This change may
be because a provision of the original legislation, or an amendment to it, commences or
because a particular provision of the legislation expires or is repealed.
When a new reprint is prepared, this reprint will become a historical reprint. Also, if it is
necessary to replace this reprint before a new reprint is prepared, for example, to include
amendments with a retrospective commencement, an appropriate note would be included
on the cover of the replacement reprint and on the copy of this reprint at
www.legislation.gid.gov.au.
The endnotes to this reprint contain detailed information about the legislation and reprint.
For example-—
* The table of reprints endnote lists any previous reprints and, for this reprint, gives
details of any discretionary editorial powers under the Reprints Act 1992 used by the
Office of the Queensland Parliamentary Counsel in preparing it.
. The list of legislation endnote gives historical information about the original
legislation and the legislation which amended it. It also gives details of
uncommenced amendments to this legislation. For information about possible
amendments to the legislation by Bills introduced in Parliament, see the Queensland
Legislation Current Annotations at www legislation.gld.gov.au/Leg
Info/Ainformation.htm.
* The list of annotations endnote gives historical information at section level.
All Queensland reprints are dated and authorised by the Parliamentary Counsel. The
previous numbering system and distinctions between printed and electronic reprints are
not continued.Section 31
& A es
“ot
MEAG
Nextel
Queensland
Local Government (De-amalgamation
Implementation) Regulation 2013
Contents
Page
Part 1 Preliminary
Division 1 Introduction
1 Short title 2... cece cence eee eens 5
2 Commencement........ 0.000 c cece rece eee eee e ences 5
Division 2 Purpose
3 Purpose of regulation—Act, s 260F......... 0.2.0.0 cea 5
4 Achievement of purpose... 2.2... 0c. eee eee eee eae 6
Division 3 Interpretation
5 Key definitions 2... 0... eee eect eens 7
6 Definitions... 0.0... cece ee eee eee neers 8
Part 2 Elections for new local governments
7 Application of pt2. 0... occ ee cece ee eens 8
8 Conduct of elections. ..... 0.0... 8
9 Notice for elections... 2.2... eee ees 9
10 Term of Office 2. cee eee eee eee ee 9
11 Remuneration of councillors... 1... . cee ee ees 10
Part 3 Transfer mechanism
Division 1 Transfer manager
12 Appointment... 0.0... cee teen een eae 10
13 TQM ce ee ee eee teen eet en teeees 11
14 Remuneration... cee cee eee eee ener teenies 11
15 Functions 2... ce eee tere ee eee rete enna VW
16 POWEIS 2. cee ee eee beeen nen nnes 11
17 Protection... 0.0... eect teen eens i1
18 Acting chief executive officer of new local government ........ 12Section 32
Local Government (De-amalgamation Implementation) Regulation 2013 Contents Division 2 Transfer methodology 19 Definition for div 2... 2... ccc cece nee eee eee 12 20 Purpose of transfer methodology ............ 0 cece ee ee eee 12 21 When transfer methodology takes effect .................4. 13 22 Notification of transfer methodology..................0000- 14 23 Complying with transfer methodology ..................2-- 14 24 Role of transfer committee... 0... eee eee 14 Division 3 Transfer committee 25 Definition for div 3.0... 0... ccc eee nee eee 14 26 Establishment... .....0.0 0.000. c cece nen eee 14 a7 Functions 20... 0... 0.2 ee ce cee eee eee eee 15 28 Conduct of meetings .... 0.0.0.0... 0c cece eee eens 15 29 Term of committee 2... 6. ce eee eee eee 16 30 Adjudication by Minister... 0.2... 0.000... cece eee 16 Division 4 Local advisory committee 31 Establishment. ...... 2000... c cece ee eee eens 16 32 FUNCHON 00. ce ene tenet n eens 16 33 Meetings with transfer manager.........0.......000 cee eee 17 34 Protection... 0... ee cee een eee 17 Division 5 De-amalgamation costs 35 What are de-amalgamation costs.....................000- 17 36 Recovery of de-amalgamation costs ...............0..0005 18 37 Transfer of QTC working capital facility .................... 18 Part 4 Financial matters 38 Assets transfer... 0... cece eee ete eaee 19 39 Liabilities transfer... 6... cece eee eens 19 40 Levying rates and chargeS............0 0... eee ee ee eee 19 41 Recovery of unpaid rates and charges..................05. 20 42 FECS oo eee treet nett een e ee 20 43 Recovery of unpaid fees........... 0.0.20... 0 ce eee eee 20 44 Register for dealings in assets... 0... eee eee 21 Part 5 Local laws and other instruments 45 Local laws for new local government ...............00-008- 21 46 Planning instruments for new local government.............. 22 47 Existing instruments continue in force ..................08, 23 48 Pending legal proceedingS..... 0.0.2.0... cece cece eee eee 24 Page 2
Section 33
Loca! Government (De-amalgamation Implementation} Regulation 2013
Contents
49 Administrative processeS .... 0.0... eee cece eee eens 24
50 References in documents... 0... ccc eee eee eens 24
51 Effect of local laws and other instruments of continuing local
QOVErNMENE ©... eee eee 25
Part 5A Disaster management matters
5iA Action by transfer manager ......... 0.0.0. c eee eee eee 25
51B Appointment of local disaster coordinator ................-. 26
51C Effect of action under this part... 2.2... 0... cece ce eee 27
Part 6 Continuing local governments
Division 1 Councillors
52 Ending of term of councillors ............ 0.00.00... eee 27
53 Continuation of term of councillors... 2.0.0... cee 27
Division 2 Employees
54 New organisational structure 0... 0.0... eee eee 28
55 Allocation of positions... 0.0... . cece eee eens 28
56 Entitlements of transferred employees.................005- 29
Division 3 Duties and responsibilities
57 Major contracts... 0.2... 2. eee ee ee ees 30
58 Duty to facilitate de-amalgamation.................0.0.00. 30
59 Responsibility for local government area... 60.2... eee 31
Part 7 Amendment of Local Government Regulation 2012
60 Regulation amended in pt7............ 000: e eee ee ee eee 31
61 Amendment of sch 1 (Prescribed information about local
governments) beet eee tenet teens 31
Schedule Dictionary ... 2.2... 0.0.2 eee 33
Endnotes
1 Index to endnotes... 2.0... ee eee 34
2 Date to which amendments incorporated...................-.. 34
3 KEY eee eee eee eee 35
4 Table of reprints 6.0... 00... cee eee eee eee 35
5 List of legislation. 0... ee eee ee ee ee eee eens 36
6 List of annotations ........... 0.0... eee eee 36
Page 8Section 34
Section 35
|
i
Local Government (De-amalgamation Implementation) Regulation 2013 |
Part 1 Preliminary
[s 1]
Local Government (De-amalgamation
implementation) Regulation 2013
{as amended by all amendments that commenced on or before 6 December 2013]
Part 1 Preliminary
Division 1 Introduction
1 Short title
This regulation may be cited as the Local Government
(De-amalgamation Implementation) Regulation 2013.
2 Commencement
Part 7 commences on the changeover day.
Division 2 Purpose
3 Purpose of regulation—Act, s 260F
The purpose of this regulation is to implement the
de-amalgamation of the following local government areas—
(a) Cairns;
(b) Rockhampton;
(c) Sunshine Coast;
(d) Tablelands.
Current as at 6 December 2013 Page 5Section 36
i
Local Government (De-amalgamation Implementation) Regulation 2013
Part 1 Preliminary
[s 4]
4 Achievement of purpose
The purpose is achieved by—
(a) continuing the following local government areas with
different boundaries—
(i) Cairns;
(ii) Rockhampton;
(iii) Sunshine Coast;
(iv) Tablelands; and
(b) establishing the following new local government
areas—
(i) Douglas;
Qi) Livingstone;
(iil) Noosa;
(iv) Mareeba; and
(c) providing for elections for the new local governments;
and
(d) providing for a transfer mechanism, including a transfer
manager, transfer methodology and transfer committee,
to transfer employees, assets, liabilities and documents
from the continuing local governments to the related
new local governments; and
(e) providing for financial matters relating to the
de-amalgamation of the continuing local governments;
and
(f) providing for matters relating to local laws and other
instruments of the continuing local governments and
new local governments; and
(g) providing for matters relating to the continuing local
governments.
Page 6 Current as at 6 December 2013Section 37
Local Government (De-amalgamation Implementation) Regulation 2013
Part 1 Preliminary |
[s 5] |
Division 3 Interpretation
5 Key definitions
(1) In this regulation—
changeover day means | January 2014.
continuing local government means—
(a) Cairns Regional Council; or
(b) Rockhampton Regional Council; or
(c) Sunshine Coast Regional Council; or
(d) Tablelands Regional Council.
new local government means each of the following local
governments that comes into existence on the changeover
day—
(a) Douglas Shire Council;
(b) Livingstone Shire Council;
(c) Noosa Shire Council;
(d) Mareeba Shire Council.
new local government area, for a new local government,
means the local government area for the new local
government that comes into existence on the changeover day.
(2) A continuing local government is related to a new local
government, and vice versa, if the new local government area
for the new local government is, before changeover day, part
of the local government area of the continuing local
government.
Notes—
1 Cairns Regional Council is related to Douglas Shire Council.
2 Rockhampton Regional Council is related to Livingstone Shire
Council.
3 Sunshine Coast Regional Council is related to Noosa Shire Council.
4 Tablelands Regional Council is related to Mareeba Shire Council.
Current as at 6 December 2013 Page 7Section 38
Local Government (De-amalgamation Implementation) Regulation 2013
Part 2 Elections for new local governments
[s 6]
6 Definitions
The dictionary in the schedule defines particular words used
in this regulation.
Part 2 Elections for new local
govern ments
7 Application of pt 2
This part applies to the conduct of elections (new local
government elections) for—
(a) the election of the mayor of each new local government;
and
(b) the election of the councillors of each new local
government.
8 Conduct of elections
(1) Except to the extent this section or section 9 provides
otherwise, the new local government elections must be
conducted under the Local Government Electoral Act as if
they were quadrennial elections for a local government.
(2) The elections must be conducted as if the new local
governments and the new local government areas come into
existence on the commencement of this section.
(3) For the purposes of conducting the elections—
(a) the Minister may, by gazette notice, fix a day for the
elections for a new local government; and
(b) the cut-off day for compiling a voters roll for the
elections for a new local government is—
(i) at least 5 days, but not more than 7 days, after the
publication in a newspaper, under section 9, of
notice of the day of the elections; or
Page 8 Current as at 6 December 2013Section 39
Local Government {De-amalgamation impiementation) Regulation 2013
Part 2 Elections for new local governments
I
[s 9] |
(ii) a later day fixed by the Minister by gazette notice. |
(4) Without limiting subsection (1)— |
(a) a function or power conferred, or obligation imposed, on
a person under the Local Government Electoral Act in
relation to a quadrennial election for a local government
is conferred or imposed on the person in relation to the
new local government elections; and
(b) the Court of Disputed Returns may, under the Local
Government Electoral Act, hear and decide an
application to dispute the election of a person at a new
local government election; and
(c) the Court of Appeal may, under the Local Government
Electoral Act, hear and decide an appeal against a
decision of the court mentioned in paragraph (b).
9 Notice for elections
As soon as practicable after the Minister fixes the day for the
elections for a new local government, the returning officer
must publish, in a newspaper circulating generally in the new
local government area for the new local government and in the
other ways that the returning officer may consider
appropriate, notice of—
(a) the day fixed; and
(b) the cut-off day for the voters roll for the elections.
10 Term of office
The term of office of a person elected as the mayor or other
councillor of a new local government—
(a) starts on the changeover day; and
(b) ends at the conclusion of the next quadrennial election
for the new local government.
Current as at 6 December 2013 Page 9Section 40
Local Government (De-amalgamation Implementation) Regulation 2013
Part 3 Transfer mechanism
{s 11]
11 Remuneration of councillors .
(1) The tribunal must—
(a) for each new local government, decide the category of
local government to which the new local government
belongs; and
(b) for each category decided under paragraph (a), decide
the remuneration payable to a councillor, mayor or
deputy mayor of a new local government in the
category.
(2) The tribunal must decide the category, and the remuneration,
before 1 September 2013.
(3) To remove any doubt, it is declared that—
(a) the tribunal must include the new local governments in
its review of the categories of local governments under
the Local Government Regulation 2012, section 243(3)
to (5); and
(b) for the Local Government Regulation 2012, section
243(4), definition local government term, an election for
a new local government is taken to be a quadrennial
election.
Part 3 Transfer mechanism
Division 1 Transfer manager
12 Appointment
(1) The Minister must appoint, for each new local government, a
qualified person to be the manager (the transfer manager) for
the new local government.
(2) A person is qualified to be a transfer manager for a new local
government if the person has the ability, experience,
Page 10 Current as at 6 December 2013Section 41
|
Local Government (De-amalgamation Implementation) Regulation 2013
Part 3 Transfer mechanism
[s 13] |
knowledge and skills that the Minister considers appropriate,
having regard to the functions of a transfer manager.
13 Term
A transfer manager must be appointed for a term that ends
immediately before the changeover day.
14 Remuneration
A transfer manager is entitled to be paid the fees and
allowances decided by the Minister.
15 Functions
A transfer manager for a new local government has all the
functions necessary or convenient to facilitate the
establishment of the new local government.
16 Powers
(1) A transfer manager for a new local government has power to
do all things necessary or convenient to be done for or in
connection with the performance of the transfer manager’s
functions under section 15.
(2) To remove any doubt, it is declared that the transfer manager
has power to enter into contracts that will bind the new local
government.
(3) However, before entering a contract mentioned in subsection
(2), the transfer manager must obtain the approval of the
department’s chief executive.
17 Protection
(1) A transfer manager is not civilly liable for an act done, or
omission made, honestly and without negligence under this
regulation.
Current as at 6 December 2013 Page 11Section 42
t
|
Local Government (De-amalgamation Implementation) Regulation 2013 |
Part 3 Transfer mechanism
[s 18]
(2) Ifsubsection (1) prevents a civil liability attaching to a person, |
the liability attaches instead to the State.
18 Acting chief executive officer of new local government
(1) On the changeover day, the transfer manager for a new local
government—
(a) becomes the acting chief executive officer of the new
local government; and
(b) in addition to the person’s functions as the acting chief
executive officer of the new local government, retains all
the functions and powers the person had as the transfer
manager for the new local government; and
(c) becomes an employee of the new local government on
the same terms and conditions, so far as practicable, as
the person was employed as the transfer manager.
(2) Unless the person’s employment as acting chief executive
officer is otherwise ended, the person holds the appointment
as acting chief executive officer until the new local
government appoints a chief executive officer.
Division 2 Transfer methodology
19 Definition for div 2
In this division—
responsible entity means an entity having responsibilities
under a transfer methodology.
20 Purpose of transfer methodology
(1) The department’s chief executive must make a methodology
(a transfer methodology) directed at ensuring the proper
transfer of employees, assets, liabilities and documents from a
continuing local government to the related new local
government.
Page 12 Current as at 6 December 2013Section 43
Local Government (De-amalgamation Implementation) Regulation 2013
Part 3 Transfer mechanism
[s 21] |
(2) Without limiting subsection (1), the transfer methodology
may—
(a) provide for the development of an action plan for the
proper transfer of employees, assets, liabilities and
documents from the continuing local government to the
new local government; and
(b) provide for the achievement of particular milestones in
the proper transfer of employees, assets, liabilities and
documents from the continuing local government to the
new local government; and
(c) require the continuing local government to make
available its employees, by secondment or otherwise,
for the purpose of providing assistance to the transfer
manager for the new local government; and
(d) identify the costs associated with the de-amalgamation
of the continuing local government that are to be
payable by the new local government; and
(e) provide for responsible entities to report to the Minister
about their compliance with the methodology.
(3) To remove any doubt, it is declared that the department’s chief
executive may amend or repeal a transfer methodology,
whether before or after the changeover day.
21 When transfer methodology takes effect
(1) The department’s chief executive must notify the making of a
transfer methodology by publishing the methodology on the
department’s website.
(2) The transfer methodology takes effect—
(a) on the day the methodology is published on the
department’s website; or
(b) if a later day is stated in the transfer methodology—on
the later day.
Current as at 6 December 2013 Page 13Section 44
Local Government (De-amalgamation Implementation) Regulation 2013
Part 3 Transfer mechanism
[s 22] |
22 Notification of transfer methodology |
The department’s chief executive must, as soon as practicable
after a transfer methodology or an amendment of a transfer
methodology takes effect, advise all responsible entities of the
taking effect of the transfer methodology or the amendment of
the methodology.
23 Complying with transfer methodology
Each responsible entity must take all reasonable steps to
comply with the transfer methodology.
24 Role of transfer committee
The transfer committee must make decisions as provided for
under the transfer methodology.
Division 3 Transfer committee
25 Definition for div 3
In this division—
transfer manager, for a new local government, means—
(a) for the period before the changeover day—the transfer
manager for the new local government; or
(b) for the period from the changeover day—the acting
chief executive officer, or the chief executive officer, of
the new local government.
26 Establishment
(1) To facilitate the de-amalgamation of a continuing local
government, a committee (a transfer committee) for the
related new local government is established.
(2) The transfer committee consists of—
Page 14 Current as at 6 December 2013Section 45
Local Government (De-amalgamation Implementation) Regulation 2013
Part 3 Transfer mechanism
[s 27]
(a) the chief executive officer of the continuing local
government; and
(b) the transfer manager for the new local government.
27 Functions
The transfer committee’s functions are—
(a) to decide the assets and liabilities that are to be |
transferred to the new local government; and
(b) to settle joint agreements between the continuing local
government and the new local government for matters to
be decided because of the transfer, including, for
example, the following—
(i) capital works costs;
(ii) maintenance of boundary roads;
(iii) use of library and community facilities;
(iv) catchment management;
(v) services, including, for example, road and park
maintenance, waste and water services and
sewerage; and
(c) subject to section 35(1)(a), (b), (c), (d), () and (g), to
decide the costs associated with the de-amalgamation
that are to be payable by the new local government; and
(d) to make decisions about other matters the transfer
committee considers appropriate.
28 Conduct of meetings
(1) The transfer committee may conduct its meetings in the way it
considers appropriate.
(2) Committee meetings are to be held at the times and places the
committee decides.
Current as at 6 December 2013 Page 15Section 46
Local Government (De-amaigamation Implementation) Regulation 2013
Part 3 Transfer mechanism
[s 29]
29 Term of committee
The transfer committee ceases to exist on—
(a) the day that is 6 months after the changeover day; or
(b) if another day is notified in writing by the Minister to
each member of the transfer committee—the other day.
30 Adjudication by Minister
(1) This section applies if the transfer committee is unable to
make a decision about a matter mentioned in section 27.
(2) Either member of the committee may refer the matter to the
Minister.
(3) The Minister must, after considering the submissions of each
member of the committee, make a decision about the matter.
Division 4 Local advisory committee
31 Establishment
(1) To provide advice to the transfer manager for a new local
government, a committee (a local advisory committee) for the
new local government is established.
(2) The committee consists of the persons appointed to the
committee by the Minister.
(3) The Minister may appoint any person the Minister considers
appropriate.
32 Function
(1) The function of a local advisory committee for a new local
government is to give advice to the transfer manager for the
new local government about any matter in relation to which
the transfer manager requests the committee’s advice.
(2) The local advisory committee may give the advice orally or in
writing.
Page 16 Current as at 6 December 2013Section 47
Local Government (De-amaigamation Implementation) Regulation 2013
Part 3 Transfer mechanism
[s 33]
33 Meetings with transfer manager
The local advisory committee for the new local government
must meet with the transfer manager for the new local
government at least once in each calendar month from the
date of commencement of this section until the changeover
day.
34 Protection
(1) A member of a local advisory committee is not civilly liable
for an act done, or omission made, honestly and without
negligence under this regulation.
(2) Ifsubsection (1) prevents a civil liability attaching to a person,
the liability attaches instead to the State.
Division 5 De-amalgamation costs
35 What are de-amalgamation costs
(1) The de-amalgamation costs of a new local government are—
(a) the fees and allowances of the transfer manager under
section 14; and
(b) any civil liability that attaches to the State under section
17(2); and
(c) the remuneration and other costs associated with the
employees made available by the continuing local
government to the transfer manager for the new local
government under section 20(2)(c); and
(d) the costs identified in the transfer methodology under
section 20(2)(d) to be payable by the new local
government; and
(e) the costs decided by the transfer committee under
section 27(c) to be payable by the new local
government; and
Current as at 6 December 2013 Page 17Section 48
Local Government (De-amalgamation Implementation) Regulation 2013 |
Part 3 Transfer mechanism
[s 36] |
(f) the costs, if any, decided by the Minister under section
30 to be payable by the new local government; and
(g) any civil liability that attaches to the State under section
34(2).
(2) To remove any doubt, it is declared that de-amalgamation
costs may be incurred on any date, whether before or after the
changeover day.
36 Recovery of de-amalgamation costs
(1) The de-amalgamation costs of a new local government are a
debt payable by the new local government.
(2) The debt may be satisfied by the related continuing local
government deducting the amount of the debt from the cash
assets to be transferred from the related continuing local
government to the new local government on the changeover
day.
(3) The de-amalgamation costs may be recovered from the new
local government by action in a court of competent
jurisdiction.
37 Transfer of QTC working capital facility
(1) This section applies if a QTC working capital facility has been
established for the sole purpose of facilitating the
de-amalgamation of a continuing local government.
(2) The facility must be transferred from the continuing local
government to the related new local government on
changeover day.
(3) The new local government must discharge the facility by 31
December 2014.
(4) In this section—
OTC working capital facility means a working capital facility
held with Queensland Treasury Corporation.
Page 18 Current as at 6 December 2013Section 49
i
Local Government (De-amalgamation Implementation) Regulation 2013
Part 4 Financial matters
[s 38]
Part 4 Financial matters
38 Assets transfer |
(1) The transfer committee for a new local government must
decide the assets that are to transfer from the related
continuing local government to the new local government.
(2) On the changeover day, each asset to be transferred to the new
local government is transferred to, and becomes the asset of,
the new local government.
39 Liabilities transfer
(1) The transfer committee for a new local government must
decide the liabilities that are to transfer from the related
continuing local government to the new local government.
(2) On the changeover day, each liability to be transferred to the
new local government is transferred to, and becomes the
liability of, the new local government.
40 Levying rates and charges
(1) This section applies if, immediately before the changeover
day, a continuing local government—
(a) had made or imposed a rate or charge in relation to land
in the new local government area of the related new
local government; and
(b) had not given a notice levying the rate or charge on a
person.
(2) The new local government—
(a) must give the person a notice levying the rate or charge;
and
(b) is taken to have made and levied the rate or charge.
Current as at 6 December 2013 Page 19Section 50
i
|
|
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Local Government (De-amalgamation Implementation) Regulation 2013
Part 4 Financial matters
[s 41]
41 Recovery of unpaid rates and charges
(1) This section applies if—
(a) before the changeover day, a continuing local
government had given a person a notice levying a rate or
charge in relation to land in the new local government
area of the related new local government; and
(b) immediately before the changeover day, the rate or
charge had not been paid.
(2) The new local government is taken to have made and levied
the rate or charge.
(3) If the time for payment of the rate or charge has not ended
before the changeover day, the time continues to run until the
due date for payment of the rate or charge.
(4) If the person fails to pay the rate or charge by the due date for
payment of the rate or charge, the new local government may
take action against the person to recover the rate or charge.
42 Fees
From the changeover day, a fee fixed or levied by a continuing
local government in relation to the new local government area
of the related new local government—
(a) is taken to have been fixed or levied by the new local
government; and
(b) applies until the new local government varies the fee.
43 Recovery of unpaid fees
(1) This section applies if—
(a) before the changeover day, a continuing local
government had levied a fee in relation to the new local
government area of the related new local government;
and
(b) immediately before the changeover day, the fee had not
been paid.
Page 20 Current as at 6 December 2013Section 51
Local Government (De-amalgamation Implementation) Regulation 2013
Part 5 Local laws and other instruments
|
(2) The new local government is taken to have levied the fee.
(3) If the time for payment of the fee has not ended before the
changeover day, the time continues to run until the due date
for payment of the fee.
(4) If the person fails to pay the fee by the due date for payment
of the fee, the new local government may take action against
the person to recover the fee.
44 Register for dealings in assets
The registrar of titles or other person responsible for keeping a
register for dealings in assets must, if asked by a local
government, record the transfer or the vesting of any asset
under this part in the local government.
Part 5 Local laws and other
instruments
45 Local laws for new local government
(1) A current local law of a continuing local government, from
the changeover day, is taken to be a local law of the related
new local government.
(2) The local law is taken to have been made by the new local
government on the changeover day.
(3) <A current local law taken to be a local law of a new local
government under subsection (1) must be read with the
changes necessary to make it consistent with, and adapt its
operation to, this regulation.
(4) In this section—
current local law, of a continuing local government, means a
local law of the continuing local government in force
immediately before the changeover day.
Current as at 6 December 2013 Page 21Section 52
Local Government (De-amalgamation Implementation) Regulation 2013
Part 5 Local laws and other instruments
{[s 46]
46 Planning instruments for new local government
(1) A current planning instrument applying to a continuing local
government, from the changeover day, is taken to be a
planning instrument applying to the related new local
government.
(2) A current planning instrument taken to be a planning
instrument applying to a new local government under
subsection (1) must be read with the changes necessary to
make it consistent with, and adapt its operation to, this
regulation.
(3) A planning scheme taken to be a planning instrument
applying to a new local government under subsection (1) is
taken to have been originally made by the new local
government on the day that it was originally made by the
continuing local government.
Note—
See the Planning Act, section 91 (Local government must review
planning scheme every 10 years).
(4) If a continuing local government started to prepare a new
planning scheme for its local government area, but did not
finish preparing the planning scheme, before the changeover
day—
(a) the related new local government may, from the
changeover day, continue preparing the new planning
scheme; and
(b) the new planning scheme, when approved under the
Planning Act, will apply only to the new local
government area of the new local government.
(5) In this section—
current planning instrument, applying to a continuing local
government, means a planning instrument applying to the
continuing local government immediately before the
changeover day.
a
Page 22 Current as at 6 December 2013Section 53
Local Government (De-amalgamation Implementation) Regulation 2013
Part 5 Local laws and other instruments
[s 47]
47 Existing instruments continue in force
(1) This section applies to an instrument made under a local law
or an Act—
(a) made by a continuing local government before the
changeover day about—
(i) aresident in the new local government area of the
related new local government; or
(ii) an owner of land in the new local government area
of the related new local government; or
(iii) land in the new local government area of the
related new local government; or
(iv) aperson’s entitlement to carry out an activity in the
new local government area of the related new local
government; and
(b) in force immediately before the changeover day.
(2) For the new local government dealing, from the changeover
day, with an instrument made under a local law—
(a) the local law under which the instrument was made is
taken to be a local law of the new local government; and
(b) the local law is taken to be in force for the new local
government area of the new local government; and
(c) the instrument is taken to have been made by the new
local government under the local law; and
(d) the new local government is responsible for
administering the local law to deal with the instrument;
and
(e) the instrument continues in force until it is amended or
repealed by the new local government.
(3) For the new local government dealing, from the changeover
day, with an instrument made under an Act, the instrument is
taken to have been properly made under the Act by the new
local government and continues in force until it would, if the
Current as at 6 December 2013 Page 23Section 54
Local Government (De-amalgamation Implementation) Regulation 2013 |
Part 5 Local laws and other instruments
[s 48] |
de-amalgamation under this regulation had not occurred, have
ceased to have effect under the Act.
(4) In this section—
instrument does not include a planning instrument.
48 Pending legal proceedings
(1) Despite anything else in this regulation, a pending legal
proceeding by or against a continuing local government for a
matter relating to the new local government area of the related
new local government must, from the changeover day, be
started or continued by or against the new local government.
(2) In this section—
pending legal proceeding, by or against a continuing local
government, means a legal proceeding that—
(a) could have been started or continued by or against the
continuing local government before the changeover day;
and
(b) is not finished before the changeover day.
49 Administrative processes
An administrative process that could have been started or
continued by or against a continuing local government before
the changeover day for a matter relating to the new local
government area of the related new local government may,
from the changeover day, be started or continued by or against
the new local government.
50 References in documents
(1) Ina document relating to the new local government area of a
new local government, including, for example, a contract to
which a continuing local government is a party, a reference to
the continuing local government may, if the context permits,
be taken to be—
Page 24 Current as at 6 December 2013Section 55
Local Government (De-amalgamation Implementation) Regulation 2013
Part 5A Disaster management matters
[s 51]
(a) areference to the related new local government; or
(b) areference to both the continuing local government and
the related new local government.
(2) If, under subsection (1)(b), a reference in a contract to a
continuing local government is taken to be a reference to both
the continuing local government and the related new local
government, the contract continues in force according to its
terms and both the continuing local government and the
related new local government are taken to be a party to the
contract.
51 Effect of local laws and other instruments of continuing
locai government
To remove any doubt, it is declared that, from the changeover
day, a local law, planning instrument or other instrument of a
continuing local government has effect only in the local
government area of the continuing local government that
comes into existence on the changeover day.
Part 5A Disaster management matters
51A Action by transfer manager
(1) Before the changeover day, the transfer manager for a new
local government must take action to ensure that, on the
changeover day, the new local government may operate
effectively and immediately under the Disaster Management
Act 2003.
(2) In taking action under subsection (1), the transfer manager
acts in place of the new local government.
(3) Without limiting subsection (1), a transfer manager must take
the following actions under the Disaster Management Act
2003—
Current as at 6 December 2013 Page 25Section 56
|
Local Government (De-amalgamation Implementation) Regulation 2013
Part 5A Disaster management matters
[s 51B]
(a) appoint, under section 24 of that Act, a person to be a
member of a district group;
(b) establish, under section 29 of that Act, a Local Disaster
Management Group;
(c) appoint, under section 33 of that Act, persons to be
members of a Local Disaster Management Group;
(d) appoint, under section 34 of that Act, persons to be the
chairperson and deputy chairperson of a Local Disaster
Management Group;
(e) prepare, under section 57 of that Act, and approve,
under section 80 of that Act, a plan for disaster
management in a new local government’s area;
(f) nominate, under section 85(2) of that Act, a member of
an SES unit to be the local controller of the unit.
(4) For subsection (3)(c) and (d), a person elected to be a
councillor of a new local government is taken to be a
councillor of the new local government.
51B Appointment of local disaster coordinator
(1) Before the changeover day, the person appointed under
section 51A(3)(d) as the chairperson of a Local Disaster
Management Group must appoint, under the Disaster
Management Act 2003, section 35 (the appointment section),
a person as a local disaster coordinator of the group.
(2) For subsection (1)—
(a) a reference in the appointment section to the chief
executive officer of a local government is taken to be a
reference to a transfer manager; and
(b) areference in the appointment section to an employee of
a local government is taken to be a reference to a person
who will be an employee of a new local government.
Page 26 Current as at 6 December 2013Section 57
|
Local Government (De-amalgamation Implementation) Regulation 2013 |
Part 6 Continuing local governments
[s 51C]
51C ‘Effect of action under this part
(1) An action taken under this part has effect from the changeover
day until the new local government for which the action is
taken otherwise provides.
(2) However, a person appointed under section 51A(3)(d) as the
chairperson of a Local Disaster Management Group must act
under section 51B before the changeover day even though the
person’s appointment as chairperson does not take effect until
the changeover day.
Part 6 Continuing local governments
Division 1 Councillors
52 Ending of term of councillors
(1) This section applies to a councillor for the following divisions
of the following local government areas—
(a) Cairns, division 10;
(b) Rockhampton, divisions 1, 2 and 3;
(c) Sunshine Coast, divisions 11 and 12;
(d) Tablelands, divisions 1, 7 and 8.
(2) The councillor’s term ends on the changeover day.
53 Continuation of term of councillors
(1) This section applies to the following persons—
(a) the mayor of the following local governments—
(i) Cairns Regional Council;
(ii) Rockhampton Regional Council;
Current as at 6 December 2013 Page 27Section 58
i
I
Local Government (De-amalgamation Implementation) Regulation 2013
Part 6 Continuing local governments
[s 54]
(iii) Sunshine Coast Regional Council;
(iv) Tablelands Regional Council;
(b) a councillor for the following divisions of the following
local government areas—
(i) Cairns, divisions 1, 2, 3,4, 5, 6, 7, 8 and 9;
(ii) Rockhampton, divisions 4, 5, 6, 7, 8,9 and 10;
(111) Sunshine Coast, divisions 1, 2, 3, 4, 5, 6, 7, 8, 9
and 10;
(iv) Tablelands, divisions 2, 3, 4,5 and 6.
(2) To remove any doubt, it is declared that the person’s term as
mayor or councillor ends at the conclusion of the next
quadrennial election of the local government of which the
person is mayor or councillor.
Division 2 Employees
54 New organisational structure
(1) Acontinuing local government must, under section 196 of the
Act, adopt an organisational structure that is appropriate to the
performance of the local government’s responsibilities after
changeover day.
(2) The new organisational structure must be implemented on the
changeover day.
55 Allocation of positions
(1) The chief executive officer of the continuing local government
must decide the positions that are to be transferred from the
continuing local government to the related new local
government on the changeover day.
(2) The number of positions transferred must be within the
approved range, unless otherwise approved by the Minister.
(3) In this section—
Page 28 Current as at 6 December 2013Section 59
Local Goverment (De-amalgamation Implementation) Regulation 2013
Part 6 Continuing local governments
[s 56]
approved range means—
(a) for Cairns Regional Council—no less than 135 and no
more than 165; or
(b) for Rockhampton Regional Council—no less than 325
and no more than 400; or
(c) for Sunshine Coast Regional Council—no less than 365
and no more than 450; or
(d) for Tablelands Regional Council—no less than 245 and
no more than 300.
56 Entitlements of transferred employees
(1) This section applies to an employee of a continuing local
government who is transferred to the related new local
government because of a decision under section 55.
(2) The employee becomes an employee of the new local
government on the changeover day.
(3) The employee is entitled to all existing and accruing rights of
employment applying to the employee immediately before the
changeover day.
(4) Subject to any industrial instrument applying to the employee,
the new local government is not obliged to employ the
employee on the same conditions on which the employee was
employed by the continuing local government.
(5) Ifthe employee is retrenched or made redundant because of a
decision made by the new local government from the
changeover day—
(a) the employee is entitled to be paid an amount for the
retrenchment or redundancy in accordance with the
retrenchment or redundancy arrangements applying to
the employee immediately before the changeover day;
and
(b) the new local government must pay the amount.
(6) This section applies despite the Local Government Regulation
2012, section 287(1) and (2).
Current as at 6 December 2013 Page 29Section 60
Local Government (De-amalgamation Implementation) Regulation 2013
Part 6 Continuing local governments
[s 57]
a
Division 3 Duties and responsibilities
57 Major contracts
(1) This section applies if a continuing local government
proposes to enter into a major contract that would bind the
related new local government after the changeover day.
(2) The continuing local government must not enter into the
contract unless the transfer manager for the new local
government agrees in writing to the continuing local
government entering into the contract.
(3) If the continuing local government and the transfer manager
for the new local government are unable to agree on whether
the continuing local government should enter into the
contract, the Minister must make the decision.
(4) In this section—
major contract means a contract the total value of which is
more than the greater of the following—
(a) $200000;
(b) 1% of the continuing local government’s net rate and
utility charges as stated in the continuing local
government’s audited financial statements included in
the continuing local government’s most recently
adopted annual report.
58 Duty to facilitate de-amalgamation
(1) A continuing local government must do all acts and things
necessary or desirable to facilitate a de-amalgamation under
this regulation.
(2) Without limiting subsection (1), a continuing local
government must give the related new local government the
documents that are necessary to enable compliance with this
regulation.
rr
Page 30 Current as at 6 December 2013Section 61
Local Government (De-amalgamation Implementation) Regulation 2013
Part 7 Amendment of Local Government Regulation 2012
[s 59]
59 Responsibility for local government area
Nothing in this regulation affects a continuing local
government’s responsibility for the good rule and local
government of its local government area, whether before or
after changeover day.
Part 7 Amendment of Local
Government Regulation 2012
60 Regulation amended in pt 7
This part amends the Local Government Regulation 2012.
61 Amendment of sch 1 (Prescribed information about local
governments)
Schedule 1, entry for Cairns, Rockhampton, Sunshine Coast
and Tablelands—
omit, insert-—
Cairns region LGB 14 division 1—] 10
edition 3 division 2—]
division 3—I
division 4—]
division 5—]
division 6—]
division 7—~]
division 8]
division 9—~]
Current as at 6 December 2013 Page 31Section 62
Local Government (De-amalgamation implementation) Regulation 2013
Part 7 Amendment of Local Government Regulation 2012
[s 61]
|
Rockhampton | region LGB 58 division 4—] &
ee diviston S—]
edition 2 division 6—]
division 7—1
division 8—]
division 9—]
division 1O—I
Sunshine Coast | region LGB 63 division ]—I il
edition 3 division 2—]
division 3—I
division 4—]
division 5—]
division 6—]
division 7—~]
division 8—]
division 9—]
division 10—]
Tablelands region LGB 64 division 2—] 6
edition 1 division 3—1
division 4—]
division 5—]
division 6—1
a re
Page 32 Current as at 6 December 2013Section 63
|
Local Government (De-amalgamation implementation) Regulation 2013
Schedule
Schedule Dictionary
section 6
changeover day see section 5(1).
continuing local government see section 5(1).
de-amalgamation costs, of a new local government, see
section 35.
document includes record.
local advisory committee see section 31(1).
new local government see section 5(1).
new local government area see section 5(1).
planning instrument see the Planning Act, schedule 3.
planning scheme see the Planning Act, schedule 3.
related, continuing local government and new local
government, see section 5(2).
responsible entity, for part 3, division 2, see section 19.
transfer committee see section 26(1).
transfer manager—
(a) generally see section 12(1); or
(b) for part 3, division 3, see section 25.
transfer methodology see section 20(1).
Current as at6December2018.=2=«*202°« ° | #pageaaSection 64
Local Government (De-amalgamation Implementation) Regulation 2013
Endnotes
i
Endnotes
1 Index to endnotes
Page
2 Date to which amendments incorporated...........00.0 0.0. cce cece eee ee G4
3 Key ccc cette cece eee eee eeeeneeeene ees BS
4 Table of reprints... cece eee eee ee ene 35
5 List of legislation ©... 1c eee cece teen e eee ee ee BG
6 List of annotations ©... 0... ccc cece eee cece ener eee ee BT
2 Date to which amendments incorporated
This is the reprint date mentioned in the Reprints Act 1992, section 5(c). Accordingly, this
reprint includes all amendments that commenced operation on or before 6 December
2013. Future amendments of the Local Government (De-amalgamation Implementation)
Regulation 2013 may be made in accordance with this reprint under the Reprints Act 1992,
section 49.
ee
Page 34 Current as at 6 December 2013Section 65
|
|
Local Government (De-amalgamation Implementation) Regulation 2013
Endnotes
i rane
3 Key
Key to abbreviations in list of legislation and annotations
Key Explanation Key Explanation
AIA = Acts Interpretation Act 1954 (prev) = previously
amd = amended proc = proclamation
amdt = amendment prov = provision
ch = chapter pt = part
def = definition pubd = published
div = division R[X] = Reprint No. [X]
exp = expires/expired RA = Reprints Act 1992
gaz = gazette reloc = relocated
hdg = heading renum = renumbered
ins = inserted rep = repealed
lap = lapsed (retro) = retrospectively
notfd = notified rv = revised version
num = numbered s = section
oince = order in council sch = schedule
om = omitted sdiv = subdivision
orig = original SIA = Statutory Instruments Act 1992
P = page SIR = Statutory Instruments Regulation 2012
para = paragraph SL = subordinate legislation
prec = preceding sub = substituted
pres = present unnum = unnumbered
prey = previous
4 Table of reprints
A new reprint of the legislation is prepared by the Office of the Queensland Parliamentary
Counsel each time a change to the legislation takes effect.
The notes column for this reprint gives details of any discretionary editorial powers under
the Reprints Act 1992 used by the Office of the Queensland Parliamentary Counsel in
preparing it. Section 5(c) and (d) of the Act are not mentioned as they contain mandatory
requirements that all amendments be included and all necessary consequential
amendments be incorporated, whether of punctuation, numbering or another kind. Further
details of the use of any discretionary editorial power noted in the table can be obtained by
contacting the Office of the Queensland Parliamentary Counsel by telephone on 3237
0466 or email legislation [email protected] 29 January 2013, all Queensland reprints are dated and authorised by the
Parliamentary Counsel. The previous numbering system and distinctions between printed
and electronic reprints is not continued with the relevant details for historical reprints
included in this table.
Current as at Amendments included Notes
12 April 2013 none
13 September 2013 2013 SL No. 177
6 December 2013 2013 SL No. 273
Current as at 6 December 2013 Page 35Section 66
Local Government (De-amaigamation Implementation) Regulation 2013
Endnotes
5 List of legislation
Regulatory impact statements
For subordinate legislation that has a regulatory impact statement, specific reference to the statement
is included in this list.
Explanatory notes
All subordinate legislation made on or after | January 2011 has an explanatory note. For subordinate
legislation made before | January 2011 that has an explanatory note, specific reference to the note is
included in this list.
Local Government (De-amalgamation Implementation) Regulation 2013 SL No. 48
made by the Governor in Council on 11 April 2013
notfd gaz 12 April 2013 pp 514-15
ss 1-2 commenced on date of notification
pt.7 commences | January 2014 (see s 2)
remaining provisions commenced on date of notification
exp | September 2023 (see SIA s 54)
Note-——The expiry date may have changed since this reprint was published. See the
latest reprint of the SIR for any change.
amending legislation—
Local Government (De-amalgamation Implementation) Amendment Regulation (No.
1) 2013 SL No. 177
notfd gaz 13 September 2013 pp 74-5
commenced on date of notification
Local Government Legislation Amendment Regulation (No. 4) 2013 SL No. 273 s 1,
pt4
notfd <www.legislation.qld.gov.au> 6 December 2013
commenced on date of notification
6 List of annotations
Achievement of purpose
s4 amd 2013 SL No. 177s 3
PART 2—ELECTIONS FOR NEW LOCAL GOVERNMENTS
pt hdg amd 2013 SL.No. 177s 4
Application of pt 2
s7 amd 2013 SLNo. 177s 5
Conduct of elections
s8 sub 2013 SL No. 177s 6
Notice for elections
s9 sub 2013 SL No. 177s 6
Page 36 Current as at 6 December 2013Section 67
I
i
Lacal Government (De-amalgamation Implementation) Regulation 2013
Endnotes
Remuneration of councillors
s11 amd 2013 SL No. 177s7
PART 5A—DISASTER MANAGEMENT MATTERS
pt 5A (ss 51A—51C) ins 2013 SL No. 273 s 32
Entitlements of transferred employees
s 56 amd 2013 SL No. 273 s 33
© State of Queensland 2013
Authorised by the Parliamentary Counsel]
Current as at 6 December 2013 Page 37Section 68
APPENDIX 3
De-amalgamation Transfer
Methodology
Version 1.0
APPENDIX 3
Department of Local Government, Community Recovery and Resilience
De-amalgamation Transfer
Methodology
Version 1.0
apy Nie
Great state. Great opportunity. ene
GovernmentSection 69
The Department of Local Government, Community Recovery and Resilience leads a coordinated Queensland Government approach to delivering short and long-term solutions for strong local government. © State of Queensland. Published by the Department of Local Government, Community Recovery and Resilience, May 2013, 63 George Street, Brisbane Qld 4000. The Queensland Government supports and encourages the dissemination and exchange of information. However, copyright protects this publication. The State of Queensland has no objection to this material being reproduced, made available online or electronically but only if it is recognised as the owner of the copyright and this material remains unaltered. Copyright enquiries about this publication should be directed to the department’s Legal Services Unit in writing to PO Box 15009, City East QLD 4002. The Queensland Government is committed to providing accessible services to Queenslanders of all cultural and linguistic backgrounds. If you have difficulty understanding this publication and need a translator, please call the Translating and Interpreting Service (TIS National) on 131 450 and ask them to telephone the Queensland Department of Local Government on 13 QGOV. Disclaimer: While every care has been taken in preparing this publication, the State of Queensland accepts no responsibility for decisions or actions taken as a result of any data, information, statement or advice, expressed or implied, contained within. To the best of our knowledge, the content was correct at the time of publishing. ODG_0318.001_Pu
Section 70
Contents
Abbreviations and glossary.............................................................................3
1. Introduction.............................................................................................4
2. Key dates ...............................................................................................5
3. Fresh elections .......................................................................................6
4. Transfer mechanism...............................................................................7
4.1. Transfer manager.................................................................................... 7
4.2. Continuing council chief executive officer................................................ 8
4.3. Transfer methodology ............................................................................. 9
4.4. Transfer committee ................................................................................. 9
4.5. Local advisory committee ...................................................................... 10
4.6. Transfer action plan............................................................................... 10
5. De-amalgamation costs........................................................................12
5.1. Identification of de-amalgamation costs ................................................ 12
5.2. Initial payment of de-amalgamation costs ............................................. 12
5.3. Recovery of de-amalgamation costs ..................................................... 12
5.4. De-amalgamation costs statement ........................................................ 12
6. Financial matters ..................................................................................14
6.1. Balance sheet........................................................................................ 14
6.2. Summary of opening financial position.................................................. 14
7. Staff and interim organisational structure .............................................15
7.1. Organisational structure ........................................................................ 15
7.2. Transfer of staff—continuing council ..................................................... 15
7.3. Transfer of staff—new council ............................................................... 15
7.4. Communications with staff .................................................................... 15
7.5. Employment instruments and records ................................................... 16
8. Interim service delivery arrangements..................................................17
9. Contracts ..............................................................................................18
9.1. Application of existing contracts ............................................................ 18
9.2. Entering into new contracts—continuing council ................................... 18
9.3. New contracts for the new council......................................................... 19
10. General governance issues..................................................................20
10.1. Local laws and other instruments .......................................................... 20
10.2. Transfer of legal proceedings ................................................................ 20
10.3. Business registration and tax requirements .......................................... 20
10.4. Delegations and authorisations ............................................................. 20
10.5. Insurance policy .................................................................................... 21
10.6. Information technology separation ........................................................ 21
10.7. Records separation ............................................................................... 22
1
Section 71
Appendix 1—Balance sheet allocation methodology ....................................23
2
Section 72
Abbreviations and glossary
CEO Chief Executive Officer
CCEO The chief executive officer of the current and continuing Sunshine
Coast, Rockhampton, Tablelands and Cairns Regional Councils.
Changeover day 1 January 2014
Continuing The Sunshine Coast, Rockhampton, Tablelands and Cairns
council Regional Councils
DCS De-amalgamation costs statement
DLGCRR Department of Local Government, Community Recovery and
Resilience
IT Information technology
LGA The Local Government Act 2009
LGR The Local Government Regulation 2012
LGDIR The Local Government (De-amalgamation Implementation)
Regulation 2013.
LAC Local Advisory Committee
Minister The Minister for Local Government, Community Recovery and
Resilience
New council The new Noosa, Livingstone, Mareeba and Douglas Shire
councils
QTC Queensland Treasury Corporation
TAP Transfer Action Plan
Transfer manager The transfer manager for each of the new council areas
appointed by the Minister:
Noosa – Mr Peter Franks
Livingstone – Mr Graeme Kanofski
Mareeba – Mr Rod Ferguson
Douglas – Mr Jeff Tate
3
Section 73
1. Introduction
The de-amalgamation polls held on 9 March 2013, resulted in four communities
voting to de-amalgamate from the existing regional councils.
This will result in the re-establishment of the former Noosa Shire Council,
Livingstone Shire Council, Mareeba Shire Council and Douglas Shire Council (the
new councils). These areas will de-amalgamate from the Sunshine Coast Regional
Council, Rockhampton Regional Council, Tablelands Regional Council and Cairns
Regional Council (the continuing councils) based on the boundaries as they existed
immediately prior to the 2008 amalgamations.
In order to facilitate the de-amalgamations, the Local Government (De-
amalgamation Implementation) Regulation 2013 (LGDIR) was enacted on 11 April
2013.
Transfer managers have been appointed to manage the establishment of each new
council. The transfer manager and chief executive officer of the continuing council
will form the transfer committee in each de-amalgamation area. The transfer
committee will be responsible for making decisions on matters such as the transfer
of assets and liabilities to the new councils, establishment of joint agreements to
ensure continuity of business and deciding on de-amalgamation costs.
A local advisory committee will also be established in each area to provide advice to
the transfer managers on local issues.
This transfer methodology should be read in conjunction with the LGDIR and is
designed to provide further advice and direction to the transfer manager and transfer
committee on the de-amalgamation process.
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2. Key dates
11 April 2013 Local Government (De-amalgamation
Implementation) Regulation 2013
enacted
12 April 2013 Transfer managers appointed
1 September 2013 Local Government Remuneration and
Discipline Tribunal to decide
remuneration/category for new
councillors (s11(2) LGDIR) and councils
October to December 2013 Elections for new councils to be held at a
date to be determined by the Minister.
31 December 2013 Terms of the following councillors end:
Cairns–Division 10
Rockhampton–Divisions 1,2,3
Sunshine Coast–Divisions 11,12
Tablelands–Divisions 1,7,8
1 January 2014 Changeover day
1 January 2014 Transfer managers become acting chief
executive officers—continue until a chief
executive officer is appointed
1 January 2014 The term of mayor and councillors for
each new council commences
1 July 2014—six months after Transfer committee ceases to exist
‘changeover day’ (unless another date approved by the
Minister)
By 31 December 2014 The new council must discharge any
Queensland Treasury Corporation
working capital facility established for the
sole purpose of facilitating the
de-amalgamation
Next quadrennial election date (2016) Terms of all councillors/mayors end
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3. Fresh elections
The Minister will determine and confirm, by gazette notice, the day for the elections,
which are likely to be in the last quarter of 2013, as outlined in section 9 of the
LGDIR.
The elections will be conducted by the Electoral Commission Queensland subject to
the provisions of the Local Government Electoral Act 2011.
Each new council will be responsible for the cost of the fresh elections. These costs
will be de-amalgamation costs pursuant to section 35(1)(d) of the LGDIR.
Neither the continuing council chief executive officer (CCEO) or transfer manager
will have any role in the conduct of the elections.
6
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4. Transfer mechanism
4.1. Transfer manager
The transfer manager is accountable to the Minister and will report operationally to
the Director-General of the department, or his nominee.
The department will pay the remuneration costs of the transfer manager, as
determined under section 14 of the LGDIR. All costs associated with the transfer
manager positions funded by the department will be de-amalgamation costs
pursuant to section 35(1)(a) of the LGDIR.
The transfer manager will, in accordance with the LGDIR and the Local Government
Act 2009 (LGA), take all steps necessary to achieve separation of the new council
from the continuing council and prepare for the new council to be business ready
and commence operations from changeover day. This includes, but is not limited to:
preparation and maintenance of a transfer action plan (TAP), refer
section 4.6
the transfer of contractual arrangements, assets, liabilities and
documents from the continuing council to the new council as approved
by the transfer committee
establishment of a service delivery plan for the new council to ensure
continuity of business and service to the community from changeover
day
develop an interim organisational structure for the new council and
match employees transferring to the new council to that structure and,
where necessary, engage new employees to fill required positions
following identification of the plant and equipment to be transferred to the
new council, arrange where necessary, procurement of any new plant
and equipment required to enable continuity of business and service to
the community from the changeover day
establishment of business systems for the new council, including
information and communications technology, data and knowledge
management systems, corporate software applications, financial and
assets management systems, property and rating systems, regulatory
systems, human resource management and payroll systems.
develop an interim budget for consideration by the new council after
changeover day.
Where required, the transfer manager may engage consultants and contractors to
provide them with specialist advice on and assistance with de-amalgamation tasks.
7
Section 77
For example this may include, but is not limited to, specialist independent advice in
the areas of legal, industrial relations, information technology, accounting and
finance. Engagement must first be approved by the Director-General. These
consultants and contractors will be engaged through the continuing council with all
associated costs being de-amalgamation costs pursuant to section 35(1)(d) of the
LGDIR.
The transfer manager, will establish a project team to support the de-amalgamation
process. This project team will report directly to the transfer manager. The project
team costs will be de-amalgamation costs pursuant to section 35 (1)(c) of the
LGDIR.
It is acknowledged that in order to achieve the major objectives of the transfer
manager position namely that the ‘transfer manager will take all steps necessary to
achieve separation of the new council from the continuing council and prepare for
the new council to be business ready and commence operations from the
commencement date’, the transfer manager will need to commit the new council to a
range of contracts, agreements and service delivery arrangements.
In doing so, the transfer manager will ensure that these contracts, agreements and
service delivery arrangements are entered into on an interim basis so as to allow the
new council to make a new decision in due course, unless absolutely necessary or if
it is detrimental to the continuing council.
All costs incurred by the transfer manager will be de-amalgamation costs under
section 35(1)(d) of LGDIR.
On changeover day, the transfer manager will become the acting chief executive
officer of the new council and remain in that position until such time as the new
council formally appoints a chief executive officer.
4.2. Continuing council chief executive officer
The continuing council chief executive officer (CCEO) is a member of the transfer
committee and must work closely with the transfer manager to assist with the de-
amalgamation implementation.
The CCEO is required to ensure that the transfer manager is provided reasonable
access to continuing council facilities, information and records so as to enable the
transfer manager to carry out the requirements of the position.
The CCEO must provide staff and facilities as required to the transfer manager for
the project team. Staffing may consist of experienced staff from the continuing
council, contract staff or consultants as necessary.
The CCEO must decide a process which defines how other continuing council staff,
by secondment or otherwise, can be accessed to provide assistance to the transfer
manager for the new council.
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Casual or contract staff may be engaged by the continuing council where adequate
or suitable staffing resources are not available from within the continuing council.
These costs will be de-amalgamation costs pursuant to section 35(1)(c) of the
LGDIR.
The CCEO may delegate responsibility under the LGDIR and this transfer
methodology pursuant to section 259 of the LGA. The CCEO must advise the
transfer manager of any delegations.
4.3. Transfer methodology
This transfer methodology is made pursuant to the provisions of part 3, division 2 of
the LGDIR.
The Director-General may amend or repeal this transfer methodology at any time,
before or after the changeover day. This methodology or any amendment takes
effect on the day that it is published on the department’s website.
The Director-General will advise the transfer manager and CCEO immediately upon
publishing any amendment to the transfer methodology.
4.4. Transfer committee
Section 28 of the LGDIR provides that the transfer committee may conduct its
meetings in the way it considers appropriate and at times and places the committee
decides is appropriate.
The transfer committee must ensure that formal minutes are kept of each transfer
committee meeting and that these minutes are signed as a true and correct record
by transfer committee members. These minutes represent the formal record of all
decisions made by the transfer committee. Copies of signed transfer committee
minutes must be provided to the Director-General within seven days of being
signed.
Transfer committee meetings are not open to the public. The transfer committee is
able to invite all persons necessary to ensure the orderly conduct of its business.
Section 30 of the LGDIR provides for adjudication by the Minister if the transfer
committee is unable to make a decision in relation to one of its functions specified in
section 27 of the LGDIR.
Either member of the transfer committee may refer the matter to the Minister.
The referral must be in writing and provide full details of the matter requiring
decision. Both members must also provide the Minister with an individual
submission outlining their position on relation to the matter and detailing the risk to
their respective council of their position not being accepted.
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Section 79
All costs incurred by the transfer committee for the conduct of its meetings will be
de-amalgamation costs under the provisions of LGDIR section 35(1)(d).
4.5. Local advisory committee
The LGDIR provides for establishment of a local advisory committee (LAC) for each
new council area. The LAC is established to provide advice to the transfer manager
on local matters to assist them in carrying out the role. The LAC may not direct the
transfer manager.
The membership and number of members of each LAC is at the discretion of the
Minister and may be altered at any time by the Minister. The Minister will provide
notice of the appointment of, or changes to, the LAC membership in writing to the
transfer manager and details will be published on the department’s website.
The LGDIR requires that the LAC meet with the transfer manager at least once in
each calendar month, however the transfer manager may arrange for meetings of
the LAC at any time in order to seek advice.
No remuneration is payable to LAC members. The transfer manager may authorise
reimbursement of reasonable expenses incurred by LAC members in attending
meetings. Any costs incurred in conduct of LAC meetings will be de-amalgamation
costs pursuant to section 35(1)(d) of the LGDIR.
4.6. Transfer action plan
The transfer manager must develop and maintain an up-to-date transfer action plan
(TAP). The TAP should be considered a work in progress and must progressively
document key steps with associated milestones, progress and completion deadlines
required to ensure the new council is established and in a position to act effectively
from changeover day.
Each transfer manager may decide the format for the TAP, however, as a minimum,
it must include an overview and statistical snapshot of the new council and a section
detailing actions under each of the key deliverable areas of the LGDIR. This
includes:
financial matters, including transfer of assets and liabilities
staffing and interim organisational structure
interim service delivery arrangements
establishment and continuity of business systems
information communications technology strategy
details of contracts transferring and new contracts
10
Section 80
transfer of legal proceedings
planning
community engagement and communications plan.
The TAP should also include a section highlighting identified key risk areas and
detail mitigation strategies.
Transfer managers must provide a monthly progress report, in the format specified
by the Director-General, along with a copy of the latest TAP, no later than seven
days after the end of each calendar month.
11
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5. De-amalgamation costs
5.1. Identification of de-amalgamation costs
De-amalgamation costs are those defined in part 3, division 5, section 35 of the
LGDIR. These include additional costs:
identified in this de-amalgamation transfer methodology pursuant to section
35(1)(d)
decided by the transfer committee pursuant to section 35(1)(e)
decided by the Minister pursuant to section 35(1)(f).
5.2. Initial payment of de-amalgamation costs
In the period leading up to the changeover day, the continuing council will be
responsible for payment of all de-amalgamation costs on behalf of the new council.
The CCEO must ensure detailed records are kept in relation to all de-amalgamation
costs paid.
5.3. Recovery of de-amalgamation costs
The de-amalgamation costs of the new council are a debt payable by the new
council to the relevant continuing council.
This debt may be satisfied by the continuing council deducting the amount of the
debt for de-amalgamation costs from the cash assets to be transferred to the new
council on changeover day.
Alternatively, the continuing council may apply to the department for approval to
establish a Queensland Treasury Corporation (QTC) working capital facility, for the
sole purpose of paying de-amalgamation costs and capitalised interest relating to
the working capital facility.
This working capital facility will be transferred to the new council on changeover day
with the new council being required to discharge the facility by 31 December 2014.
5.4. De-amalgamation costs statement
A monthly de-amalgamation costs statement (DCS) must be prepared for each new
council. For the period to changeover day, the CCEO must prepare the statement.
After changeover day through to the completion of the transfer committee’s term the
CEO of the new council must prepare the statement.
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The DCS must include details of all approved de-amalgamation costs paid. The
DCS must be certified by both the CCEO and transfer manager and provided to the
Director-General no later than seven days after the end of each calendar month.
13
Section 83
6. Financial matters
6.1. Balance sheet
The transfer committee must decide the split of assets and liabilities between the
continuing and new council to determine the opening balance sheet position of the
new council.
The Queensland Boundaries Commissioner’s de-amalgamation report included a
financial analysis prepared by QTC. As part of this analysis, QTC established an
opening balance sheet position as at 1 July 2012 as a base case for testing.
Considerable effort was undertaken by QTC in constructing these opening balance
sheets, which are based on the actual financial position of each council at
amalgamation in 2008 along with a break up by new and continuing council area
from 16 March 2008 to 30 June 2012.
Due to the significant effort and cost involved in reaching this position, it is
recommended, particularly to determine a starting position for the break up of cash
and debt, that the transfer committee give consideration to using the figures
established by QTC.
Appendix 1 provides the proposed balance sheet allocation methodology, prepared
by QTC, that may be used to determine the separation of balance sheet items
between the continuing and new councils.
Each transfer committee will be provided with QTC financial information relevant to
their council.
6.2. Summary of opening financial position
The transfer manager must also prepare a detailed report outlining the new council’s
opening financial position and short-term financial outlook. This report must be
provided to the new council at its first meeting.
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Section 84
7. Staff and interim organisational structure
7.1. Organisational structure
Section 54 of the LGDIR requires each continuing council to adopt a new
organisational structure which will apply on changeover day.
The transfer manager must also prepare an interim organisational structure for the
new council. This structure will apply to the new council from changeover day until
such time as the new council adopts a new structure in accordance with the
provisions of section 196 of the LGA.
7.2. Transfer of staff—continuing council
The CCEO, having regard for the ongoing operational requirements of the
continuing council, will determine which staff will be transferred to the new council.
Section 55(2) of the LGDIR restricts the number of positions that may be transferred
to a pre-determined range for each new council. The numbers of positions quoted
for each range should be taken to be the number of full-time equivalent positions to
be transferred.
Once the CCEO has determined those staff that will transfer to the new council, the
CCEO must provide full details to the transfer manager in writing.
7.3. Transfer of staff—new council
Once the transfer manager has been formally advised by the CCEO of the details of
the staff that will be allocated to the new council, the transfer manager must
determine the roles of the transferring staff in the interim organisational structure
where possible.
The transfer manager is to prepare a list of transferring staff that are unable to be
meaningfully placed in the interim organisational structure for consideration of the
new council.
It is recognised that in order to be operationally ready at changeover day, it may be
necessary for staff identified as transferring to the new council to commence duties
under the direction of the transfer manager prior to changeover day. Where this
occurs, the costs of these employees will be de-amalgamation costs pursuant to
section 35(1)(c) of the LGDIR.
7.4. Communications with staff
The transfer committee must ensure regular communication occurs with all
continuing council staff including those staff that will transition to the new council.
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7.5. Employment instruments and records
Pursuant to the provisions of Part 5 of the LGDIR and subject to section 56 (4) of the
LGDIR, all employment and industrial relations instruments including employment
records, policies, contracts and enterprise bargaining agreements remain in force
and apply to the new council to the extent they apply to staff transitioning to the new
council.
16
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8. Interim service delivery arrangements
The transfer manager must ensure that the new council is business ready and in a
position to provide continuity of service to residents from changeover day. In order
to achieve this, the transfer manager has the power to do all things necessary or
convenient to be done to ensure the new council can meet its local government
responsibilities.
In discharging this responsibility, the transfer manager must, wherever possible,
ensure that the decisions are made:
on an interim basis only so that the new council is able to make the final
decisions on the issue after changeover day
within the budget allocated for the new council past changeover day
In determining the service delivery arrangements, the transfer manager should:
identify each service and service location
determine, where necessary on an interim basis, the level of service to be
applied to each function
identify budgeted capital works program applicable to the new council area
give consideration to the benefits of maintaining shared service
arrangements with the continuing council for service delivery
where necessary enter into contracts or shared service arrangements for the
provision of functions.
The transfer manager must develop a community information campaign aimed at
informing the community in relation to on-going services from changeover day.
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9. Contracts
9.1. Application of existing contracts
Where there is a current contract to which the continuing council is a party, if the
context permits, it is taken to be a contract with the new council or both the
continuing council and new council pursuant to section 50 of the LGDIR.
For example, a contract for the:
employment of staff
construction of a new building or other infrastructure which is entirely within
the new council area, would be deemed to be a contract related to the new
council or
provision of maintenance services (e.g. waste collection, mowing, public
facilities maintenance and cleaning services) which applies across both the
continuing and new council areas would be deemed to be a contract with
both the continuing and new council.
The transfer committee must agree and maintain a schedule of all contracts which,
after changeover day, will apply to the:
new council only
continuing council only
new and continuing council.
In relation to those contracts that will continue to apply to both the continuing and
new councils, the transfer committee must decide, within the terms of the contract,
the extent of the liability of each council and the process for managing the contract
beyond changeover day.
All costs associated with determining the status of each contract are deemed to be a
de-amalgamation cost pursuant to section 35(1)(d) of the LGDIR.
9.2. Entering into new contracts—continuing
council
It is acknowledged that circumstances may arise whereby it is absolutely necessary
in order to ensure continuity of business and delivery of essential services, that the
continuing council may need to enter into new contracts that will bind the new
council, prior to changeover day.
Section 57 of the LGDIR provides a specific approval process for major contracts.
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Section 88
In cases where the continuing council and transfer manager are unable to agree on
whether the continuing council should enter into the contract and the Minister is
required to make a decision pursuant to section 57(3) of the LGDIR, the CCEO
should write to the Minister setting out:
the purpose of the contract
the monetary value of the contract
why it is desirable to enter into the contract prior to the changeover day
the impact of the contract on both the new and continuing council after the
changeover day.
The transfer manager should also write to the Minister setting out the reasons for
not agreeing to the contract.
9.3. New contracts for the new council
It is acknowledged that in order to ensure continuity of service delivery from
changeover day, the transfer manager may need to enter into contracts that will bind
the new council. This power is provided for in section 16 of the LGDIR.
Section 16(3) of the LGDIR provides that the transfer manager must obtain the
approval of the Director-General prior to entering into the contract. In seeking this
approval, the transfer manager should write to the Director-General setting out:
the purpose of the contract
the monetary value of the contract
why it is desirable to enter into the contract prior to the changeover day
provide an explanation as to the likely impact on the new council if the
contract is not finalised prior to changeover day.
The transfer manager will ensure that these contracts are, unless absolutely
necessary or the action would be detrimental to the continuing council, entered into
on an interim basis so as to allow the new council to make a new decision in due
course.
Consideration should also be given by the transfer committee as to whether short-
term or long-term shared services arrangement between the new and continuing
council may be of benefit. This is particularly important in the corporate services
space where continuity of corporate knowledge and systems is essential.
All costs incurred by the transfer manager in establishing these contracts will be de-
amalgamation costs pursuant to section 35(1)(d) of the LGDIR.
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10. General governance issues
10.1. Local laws and other instruments
All instruments such as local laws, planning instruments, policies and procedures
will, on changeover day, transfer to the new council pursuant to the regulation.
References in those documents to the continuing council are to be read as
references to the new council where appropriate. Following changeover day, the
new council is at liberty to amend or update these instruments as deemed
appropriate.
The transfer manager must establish an inventory and official record of all
instruments.
10.2. Transfer of legal proceedings
In terms of the transfer of current legal proceedings, the transfer committee should
promptly identify all current proceedings and decide whether a proceeding is to
transfer to the new council government on changeover day.
Key factors which should be included in that decision-making process include:
workcover claims involving staff will follow the staff member
workplace health and safety claims pertaining to a particular workplace will
remain with the council who will be responsible for that workplace. For
example, if a library is located in a new council area, it may be suitable to
transfer a related claim to the new council
planning and environment matters will be transferred to the appropriate
council based on the property’s location.
10.3. Business registration and tax
requirements
The transfer manager must ensure all necessary operational requirements such
as registered trading name, ABN, registration for GST, FBT and other tax
requirements are arranged.
10.4. Delegations and authorisations
All existing delegations and authorisations of the continuing council apply to the
new council until varied or revoked by the new council.
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Section 90
There will be a need to rationalise some delegations and authorisations associated
with the executive and senior management positions affected by the new interim
executive organisational structure and there may also be a need for some additional
delegations and authorisations in this regard.
The required outcome should be an interim delegations and authorisations schedule
relating to the interim organisational structure.
10.5. Insurance policy
The transfer manager must ensure that the new council has adequate insurance
cover is provided for the new council from changeover day.
10.6. Information technology separation
The transfer manager must ensure that the new council has an operational
information technology (IT) capability from changeover day.
As part of the Queensland Boundaries Commissioner assessment and QTC
financial analysis, KPMG were engaged to undertake a high-level cost estimate for
the de-amalgamation and re-establishment of an operational IT capability.
This review took into account the broad range of IT capability including:
establishment of data centre
client peripherals
data and voice systems, PABX, core switches and routers, wide area
networking including internet, firewall and remote access device, voice
telecommunications, mobile phone service and supervisory control and data
acquisition systems
establishment of helpdesk
core applications software including financials, property and rating, asset
management, human resources and payroll, spatial and mapping, library
management, minutes/agenda and reports, design (Autocad), Microsoft
Enterprise agreement
costs for transition of data to new council and cleanup of continuing council
data.
The department will provide the transfer committee a copy of the KPMG document
to assist in planning the establishment and transfer of data and systems to the new
council.
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When undertaking an assessment of the needs and developing the IT strategy, it is
recommended that full consideration be given to the possible continuation of
delivery of IT services via a shared service arrangement with the continuing council.
All costs associated with the separation of the information technology and
communications systems and establishment of systems for the new council are de-
amalgamation costs pursuant to section 35(1)(d) of the LGDIR.
10.7. Records separation
The transfer committee, having regard to the requirements of Part 5 of the LGDIR
and provisions of the Public Records Act 2002 will need to ensure the proper
separation and sharing of all council records between the continuing and new
council.
This will require early agreement and establishment of a process to identify:
Which records are to be transferred
Ownership and custody of records
Formats for transferring electronic/digital records
Transfer timeframes
Contractual arrangements (eg arrangements with external service providers
for records storage offsite)
On-going access arrangements.
Further information to assist with the management and transfer of records can be
found on the Queensland State Archives website www.archive.qld.gov.au.
All costs associated with the separation of records are de-amalgamation costs
pursuant to section 35 (1) (d) of the LGDIR.
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Section 92
Appendix 1—Balance sheet allocation methodology
The following table sets out the proposed balance sheet allocation methodology, prepared by QTC, that may be used to determine the separation of balance sheet items between
the continuing and new councils based on the 1 July 2012 opening balance position prepared by QTC and published with the Queensland Boundaries Commissioner’s Report.
The sum of the balance sheets for the new council and continuing council must equal the balance sheet used for statutory reporting purposes by the existing council as at
30 June 2013 and 31 December 2013.
Item As at 30 June 2013 As at 31 December 2013
Council to use the opening balance sheet identified as at 1 July 2012 and Council to use the opening balance sheet identified as at 30 June 2013 and
reconstruct the cash flows that would have occurred for the new council and reconstruct the cash flows that would have occurred for the new council and the
Cash and cash the continuing council over the period from 1 July 2012 to 30 June 2013. continuing council over the period from 31 December 2013.
equivalents The cash flow reconstruction should take into account movements in all cash The cash flow reconstruction should take into account movements in all cash flow
flow items including but not limited to accounts receivable/payable, grants, items including accounts receivable/payable, grants, debt draw downs, repayments
debt draw downs, repayments and interest payments. and interest payments.
Based on the opening balance of debt for the new council and the continuing Based on the opening balance of debt for the new council and continuing council as
council as at 30 June 2012, at 30 June 2013,
- plus new borrowings in proportion to the value of capital expenditure - plus new borrowings made by the existing council on behalf of the new council
made by the existing council in the new council and continuing council and continuing council
Debt geographical area (unless more accurate detail known)
- less redemptions made by the existing council on behalf of the new council and
- less redemptions made by the existing council in proportion to the value continuing council
of borrowings held by the new council and continuing council (unless over the period from 30 June 2013 to 31 December 2013.
more accurate detail known)
over the period from amalgamation on 1 July 2012 to 30 June 2013.
Based on the actual contribution to receivables by the new council and Based on the balance of receivables as at 31 December 2013 for the new council
Receivables continuing council as at 30 June 2013 (ie, allocated in accordance with the and continuing council.
underlying transaction).
Based on where the land is located as at 30 June 2013. The new council Based on the location of the land or other assets assumed as at 30 June 2013,
Land held for and continuing council should receive land held for development in their adjusted for any agreed movements in land or other assets to 31 December 2013.
development geographical areas.
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Inventory which relates to specific plant and machinery, infrastructure or Based on the allocation of inventory as at 30 June 2013, adjusted for movements
work in progress should go to the new council or continuing council where related to the new council and continuing council operations to 31 December 2013.
the specific plant and machinery, infrastructure or work in progress is
Inventory which relates to specific plant and machinery, infrastructure or work in
allocated.
Inventory progress should go to the new council or continuing council where the specific plant
Residual inventory should be based on the percentage of inventory and machinery, infrastructure or work in progress is allocated.
contributed by the new council and continuing council at amalgamation.
Residual inventory should be based on the percentage of inventory contributed by
the new council and continuing council at amalgamation.
Based on balance of prepayments as at 30 June 2013 attributable to the Based on the balance of prepayments as at 31 December 2013 for the new council
new council and continuing council (ie, allocated in accordance with the and continuing council.
Prepayments underlying transaction).
Based on the physical location of the PP&E as at 30 June 2013. The new Based on the physical location of PP&E assumed as at 30 June 2013, adjusted for
council and continuing council should receive PP&E in their geographical any agreed movements in PP&E to 31 December 2013.
PP&E areas.
The new council and continuing council should receive all PP&E required in their
Where there is uncertainty / disagreement, the allocation should be based on geographical area.
the balance of PP&E held as at 30 June 2012.
Based on the physical location of the assets to which the intangible asset Based on the balance of intangible assets as at 30 June 2013, adjusted for any
Intangible assets relates as at 30 June 2013. movements in intangible assets to 31 December 2013.
Based on the physical location of the capital works in progress as at 30 June Based on the balance of capital works in progress as at 30 June 2013, adjusted for
2013. The new council and continuing council should receive all capital any movements in capital works in progress to 31 December 2013.
Capital works in
works in progress in their geographical area.
progress The new council and continuing council should receive all capital works in progress in
their geographical area.
Based on the actual contribution to trade and other payables by the new Based on the balance of trade and other payables as at 31 December 2013 for the
council and continuing council as at 30 June 2013 (ie, allocated in new council and continuing council.
Trade and other
accordance with the underlying transaction).
payables
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Based on the provisions attaching to the staff that are expected to reside Based on the provisions attaching to the staff that will reside with the new council and
with the new council and continuing council on 1 January 2013. continuing council on 1 January 2013.
If this is not known with certainty, then based on the percentage of staff These provisions will not be cash backed.
Employee provisions
numbers expected to transfer to the new council and continuing council on
de-amalgamation.
These provisions will not be cash backed.
Based on balance of other provisions as at 30 June 2013 attributable to the Based on balance of other provisions as at 31 December 2013 attributable to the
new council and continuing council (ie, allocated in accordance with the new council and continuing council (ie, allocated in accordance with the underlying
Other provisions underlying transaction). transaction).
These provisions will not be cash backed. These provisions will not be cash backed.
Based on balance of other assets and liabilities as at 30 June 2013 Based on balance of other assets and liabilities as at 31 December 2013 attributable
attributable to the new council and continuing council (ie, allocated in to the new council and continuing council (ie, allocated in accordance with the
Other assets and
accordance with the underlying transaction). underlying transaction).
liabilities
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Department of Local Government, Community Recovery and Resilience PO Box 15009 tel 13 QGOV (13 74 68) [email protected] www.dlgcrr.qld.gov.au
Section 96
APPENDIX 4 De-amalgamation Analysis of Sunshine Coast Regional Council PREPARED BY QUEENSLAND TREASURY CORPORATION NOVEMBER 2012
Section 97
1 Executive summary
Sunshine Coast Regional Council (SCRC or the Existing Council) was formed in March 2008
following the amalgamation of Caloundra City, Maroochy Shire and Noosa Shire Councils. It
covers an area of approximately 3,126 km2 and has a current population of approximately
151,000.
A proposal has been lodged by the Noosa Independence Alliance (the Proponent) for the de-
amalgamation of the former Noosa Shire Council (Proponent Council). If successful, a new
Noosa Shire Council would be formed along its former boundaries, which includes an area of
approximately 869 km2 and a population of 30,000.
QTC has been engaged by the Department of Local Government to provide advice and
assistance to the Queensland Boundaries Commission (the Commission) about the financial
aspects of this de-amalgamation proposal. QTC’s review includes a financial analysis of both
the proposed de-amalgamating council and what would become the remaining Sunshine Coast
Regional Council (the Remaining Council) to:
determine the costs of de-amalgamation for both the Proponent Council and the
Remaining Council, and
assess the financial viability of the Proponent Council and the Remaining Council on the
basis that de-amalgamation was successful, and compare this to the financial viability of
the Existing Council.
1.1 Financial impact of de-amalgamation
1.1.1 De-amalgamation costs
De-amalgamation costs include all costs incurred from the date of a successful poll for de-
amalgamation of the Proponent from an Existing Council to the date of de-amalgamation (ie,
election of Proponent councillors, which is likely to be approximately 12 months after the
poll). QTC has identified the costs of de-amalgamation to include:
one-off costs. These relate to implementation and due diligence, community and staff
engagement, and information and communication and technology (ICT). They will have
the greatest direct impact on the cost to ratepayers because they will be expensed in full
during the first year of de-amalgamation, and
fixed asset costs. These relate to the cost of purchasing new ICT equipment and any
other new plant and equipment required for the Proponent Council to maintain service
delivery standards. These assets will be expensed over the term of their useful life,
therefore impacting ratepayers more subtly over time than one-off costs.
Successful Proponent Councils will be required to pay their own de-amalgamation costs as well
as the de-amalgamation costs of the Remaining Council.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 2
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1.1.2 Incremental annual recurring costs
Incremental annual recurring costs incurred by either the Proponent Council or the Remaining
Council are not considered a cost of de-amalgamation. QTC has identified these for the
Proponent Council in order to highlight the ongoing extra costs associated with operating as a
separate council.
Successful Proponent Councils will be required to pay their own incremental annual recurring
costs but will not be responsible for paying costs of this nature for the Remaining Council.
Incremental annual recurring costs incurred by the Remaining Council should be small in
comparison to those of the Proponent Council, but may include costs associated with lower
purchasing power and other operating inefficiencies. These costs, where applicable, have been
considered by QTC in the forecasts determined for the Remaining Council. To the extent that
they exist, these costs may impact QTC’s sustainability rating for the Remaining Council when
compared to the Existing Council and the average rates per rateable property of the Remaining
Council when compared to the Existing Council.
1.1.3 Summary of Proponent Council costs
Table 1 shows the estimated cost of de-amalgamation, including incremental annual recurring
costs, to the Proponent Council (column 1). It also shows how these costs translate into a cost
per rateable property (columns 2 and 3).
TABLE 1 - SUMMARY OF DE-AMALGAMATION COSTS
QTC Average Annualised
Estimate Costs Costs
$ $ $
Total one-off costs 3,605,000
Average one-off costs per Proponent Council rateable property 121.34
Total one-off fixed asset costs 7,415,000
Average fixed asset costs per Proponent Council rateable property 249.57
Annualised fixed asset costs per Proponent Council rateable property 49.91
Total incremental annual recurring costs 2,631,000
Total incremental annual recurring costs per Proponent Council
88.55
rateable property
Note: Annualised fixed asset costs demonstrate the financial effect of spreading the cost of the asset over their useful life (ie depreciation expense)
Table 1 indicates that the one-off costs of de-amalgamation per rateable property will be $121
while the incremental annual recurring costs will be $138.
The following graph shows the financial impact of de-amalgamation, including incremental
recurring costs, per rateable property over five years.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 3
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Total de-amalgamation costs per Proponent Council rateable property ($)
300
250
200
150
100
50
-
Year 1 Year 2 Year 3 Year 4 Year 5
One-off costs Fixed assets Incremental annual recurring costs
In the first year, each rateable property in the Proponent Council area will on average 1 need to
contribute an extra $260 in rates to cover the costs of de-amalgamation. In the second year, the
extra contribution will drop to $142 and is then expected to increase each year based on
inflation.
1.2 Assessment of financial viability – using QTC’s Base Case
The financial viability of the Existing Council, Proponent Council and Remaining Council was
assessed by QTC with reference to financial information provided by the Proponent, and the
Existing Council’s current five year forecasts as well as five year forecasts for their respective
Proponent Council and Remaining Council.
In order to derive its own Base Case set of 5 year financial forecasts for the Proponent and
Remaining Councils, QTC made adjustments to the assumptions of the Proponent Council
and Existing Council where they were not considered to be complete and/or reasonable.
QTC’s Base Case financial forecasts for the Proponent Council and Remaining Council
included a cost allocation that might occur because of decreased purchasing power with
suppliers including insurance, waste management, fleet leasing and other expenses, as well as
other inefficiencies.
QTC’s financial forecasts for the Proponent Council also included the items identified in its
assessment of de-amalgamation costs. That is:
the one-off costs of de-amalgamation for itself and the Existing Council
the additional fixed asset costs, and
1 Rates per rateable property may bear no direct comparison to actual rates paid by some ratepayers because it is
an average figure calculated using total rateable properties. It does not take into consideration that some
residential, commercial and industrial rateable properties attract a higher portion of the base rate than others.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 4
Section 100
the incremental annual recurring costs of de-amalgamation where they were not already
considered to be included.
QTC’s financial forecasts were based on a standard delivery model. However, where existing
assets were shared across a region (ie, landfills), QTC assumed that a commercial arrangement
would be negotiated between the councils to continue to share the asset. This was thought to
be a more practical assumption than including the cost of replacing the asset.
1.2.1 Sustainability ratings – Base Case forecasts
QTC’s assessment of financial viability involved determining a sustainability rating for the
Existing Council, Proponent Council and Remaining Council. This rating considers each
council’s five year forecasts against sustainability ratios and benchmarks referred to by both
QTC and the Department of Local Government (DLG).
A summary of the sustainability rating assigned by QTC to the Existing, Proponent and
Remaining Council is shown below. It should be noted that these sustainability ratings have
been determined based on information and assumptions contained in the Base Case forecasts
estimated by QTC.
Sustainability Rating Existing Council Proponent Remaining
Council Council
QTC rating (and outlook) – Base Strong (neutral) Moderate (neutral) Sound (neutral)
Case
Based on the Base Case forecasts made available QTC has rated the Existing Council as
Strong, the Proponent Council as Moderate, and the Remaining Council as Sound.
The Existing Council’s strong rating is supported by:
historical and forecast operating surpluses in all years
very low gearing levels throughout the forecast period and high interest and debt service
cover ratios
strong liquidity, and
forecast capital expenditure of $718 million with only 14.3 per cent funded by new
borrowings.
The Remaining Council’s sound rating is supported by:
minor operating deficits over the forecast period, and
a reasonable level of borrowings which are able to be adequately serviced.
The Proponent Council’s moderate rating is supported by:
minor operating deficits over the forecast period, and
adequate capacity to meet its financial commitments in the short to medium term and
acceptable capacity in the long term.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 5
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1.3 Financial effect per rateable property – Base Case versus
Breakeven Case
QTC undertook an assessment of the impact to ratepayers of de-amalgamation by comparing
the average net rates and utilities per rateable property that would apply under the Base Case
for the Proponent and Remaining Councils, to the average net rates and utilities per rateable
property that would apply for the Proponent and Remaining Councils to achieve a balanced
operating result (ie, the Breakeven Case).
1.3.1 Base Case average annual rates per rateable property
Table 2 shows the average net rates and utilities per rateable property that would apply using
QTC’s Base Case for the Proponent and Remaining Councils.
TABLE 2 – BASE CASE AVERAGE ANNUAL NET RATES AND UTILITIES PER RATEABLE PROPERTY
FY2013 FY2014 FY2015 FY2016 FY2017
Proponent Council ($) 1,894 2,000 2,114 2,234 2,362
Remaining Council ($) 1,651 1,735 1,851 1,953 2,059
1.3.2 Breakeven average annual rates per rateable property
QTC considers that a balanced operating result is essential to a council’s long term financial
sustainability. Table 3 shows the estimated incremental increase / (decrease) in net rates and
utilities per rateable property that would apply if de-amalgamation was successful and the
Proponent and Remaining Councils were to achieve a balanced operating result (ie, the
breakeven rates).
TABLE 3 - CHANGE IN AVERAGE ANNUAL NET RATES AND UTILITIES PER RATEABLE PROPERTY
– BREAKEVEN CASE INCREMENTAL TO BASE CASE
FY2013 FY2014 FY2015 FY2016 FY2017
Breakeven case
Proponent Council ($) 101 14 23 46 4
Change from Base Case (%) 5% 1% 1% 2% 0%
Remaining Council ($) 29 52 61 76 52
Change from Base Case (%) 2% 3% 3% 4% 3%
The required increases per rateable property in the Breakeven Case when compared to the
Base Case forecasts reflect:
the elimination of operating deficits in the current five year forecasts where they existed
the cost increases attributable to the impact of de-amalgamation, with the upfront costs
being incurred in FY2013 and other costs expensed in future years, and
the impact of increased operating expenses associated with a reduction in economies of
scale and efficiency.
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1.4 Key issues for consideration
Proponent Council and Remaining Council are forecasting minor operating deficits over the
forecast period. A balanced or surplus operating result is essential to long term financial
sustainability. Current forecasts for the Proponent Council and the Remaining Council
do not achieve an operating surplus in any of the forecast years.
Major regional initiatives may be disrupted
– Capacity upgrades to the Sunshine Coast Airport is a regional initiative that needs to
be considered although this will require significant State or Federal Government
assistance with or without de-amalgamation.
– Existing Council has committed to the Maroochydore Principal Activity Centre
(PAC). This project may either be delayed or if it continues as planned the cost of
the project would be borne entirely by the ratepayers of Remaining Council.
Sequencing around regional waste disposal options may be disrupted: SCRC has
consciously delayed opening further landfill capacity in the region, instead directing
resources to exploring alternative waste treatment technologies. If the Remaining
Council is denied access to the Eumundi Road landfill it will result in significantly
increased cost to Remaining Council to transport waste outside of the region.
Existing waste collection contracts may need to be temporarily extended: Existing Council
will call for tenders for regional waste collection in November 2012, awarding in May
2013, for commencement in July 2014 for a period of seven years. If the tender cannot
be put on hold or awarded as individual contracts the existing arrangement will need to
be temporarily extended resulting in additional costs to both Remaining Council and the
Proponent Council.
Uncertainty re Caloundra South: The Urban Land Development Authority (ULDA) has
not entered into an infrastructure agreement with Stockland for the land at Caloundra
South. If there is a funding gap between the infrastructure charges and the amount to be
funded by Stockland, the liability will accrue to the ULDA. At present there is
uncertainty around the role of the ULDA and concern that this funding gap will need to
be borne by SCRC. This issue will need to be resolved regardless of de-amalgamation.
Unitywater: A share in Unitywater can be transferred to the Proponent Council however
there are legal issues to overcome and added complexities that arise from having an
additional stakeholder.
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Table of contents
1 Executive summary 2
1.1 Financial impact of de-amalgamation 2
1.2 Assessment of financial viability – using QTC’s Base Case 4
1.3 Financial effect per rateable property – Base Case versus Breakeven Case 6
1.4 Key issues for consideration 7
2 Existing Council profile 9
2.1 Regionally significant assets and services 9
2.2 Financial viability assessment of Existing Council 11
2.3 Financial analysis 12
3 Proposed de-amalgamation arrangement 15
3.1 Proposed de-amalgamation profile 15
3.2 Proposed de-amalgamation and incremental annual recurring costs 15
3.3 Proposed balance sheet separation 19
4 Financial viability assessment of Proponent Council 21
4.1 Proposed approach for regionally significant assets and services 21
4.2 Financial analysis 22
4.3 Financial effect per rateable property – Base Case versus Breakeven Case 25
5 Financial viability assessment of Remaining Council 27
5.1 Proposed approach for regionally significant assets and services 27
5.2 Financial analysis 29
5.3 Financial effect per rateable property – Base Case versus Breakeven Case 31
Disclaimer 33
Appendix 1: Forecast assumptions 34
Appendix 2: Existing Council income statement 35
Appendix 3: Proponent Council income statement 36
Appendix 4: Remaining Council income statement 37
Appendix 5: QTC’s sustainability rating definitions 38
Appendix 6: Key financial ratios definitions and benchmarks 40
De-amalgamation Analysis of Sunshine Coast Regional Council Page 8
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2 Existing Council profile
Table 4 sets out selected demographics of the amalgamating local governments in 2008 and the
current profile for SCRC.
TABLE 4 - OVERVIEW
14 March 2008 2012
Maroochy Caloundra Noosa Existing
Shire Shire Shire Total Council
2
Area covered by region (km ) 1,163 1,094 869 3,126 3,126
Population in region # 149,051 92,419 48,556 290,026 316,858
No. of rateable properties in region 68,408 44,020 28,654 141,082 152,532
No. of voters in region 96,020 60,110 31,585 187,715 211,195
Councillors 13 11 10 34 13
Number of staff 1,182 741 500 2,423 1,939
# Census 2006 data used for 14 March 2008 figures and Census 2011 data used for 2012 figures
Key observations since amalgamation:
Staff numbers have reduced notably since amalgamation in March 2008, with 380
employees transferring to Unitywater, the water and sewerage business owned by SCRC and
Moreton Bay Regional Council (MBRC). A further 20 staff were transferred upon SCRC’s
divestment of Maroochy Childcare.
Rateable properties have grown by a modest 7.6 per cent over the last four years. The
region has experienced a downturn in population growth in recent years.
Upon amalgamation, the number of councillors reduced from 34 to 13.
2.1 Regionally significant assets and services
2.1.1 Water and sewerage/wastewater
SCRC currently holds a 41.76 per cent interest in Unitywater, the statutory authority
established to own and operate the water and sewerage distribution infrastructure of SCRC and
MBRC. MBRC owns the remaining 58.24 per cent of Unitywater. In addition to this equity
holding, the owners have also lent money to Unitywater through participating shareholder
loans with SCRC loans valued at $497.1 million.
SCRC and MBRC derive returns from their investment in Unitywater by way of interest
payments on shareholder loans and the payment of dividends and tax equivalents associated
with their equity interest.
Unitywater returns are forecast to decrease from 1 July 2013 based on reduced interest income
from shareholder loans after rate resetting, and reduced dividends due to the revised treatment
of contributed assets within the context of full cost pricing.
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2.1.2 Waste Landfill SCRC utilises the available capacity of the Eumundi Road Landfill (located in the Proponent Council’s area) for the region. This landfill has capacity for approximately 20 years and enough land for future expansion. SCRC has consciously delayed opening further landfill capacity in the region, instead directing resources to exploring alternative waste treatment technologies. Collection SCRC has 3 contracts (Caloundra - Thiess, Maroochy - JJ Richards and Noosa - TPC) expiring July 2014. Existing Council will be calling for tenders for regional waste collection in November 2012, awarding in May 2013, with commencement in July 2014 for a period of seven years with the focus of achieving regional contracting efficiencies. Materials recycling SCRC has one regional recycling facility within the Maroochy and Noosa areas, which caters for two-thirds of the region’s recycling volume. The Caloundra area transports materials for recycling out of the region to Petrie. A call for tender is underway based on a single regional re-cycling facility for all recyclables from the region. The contract allows for transport out of the region via a new bulk haul recycling transfer facility. 2.1.3 Airport The Sunshine Coast Airport, located in Marcoola, is presently owned and operated by SCRC. With a modest operating surplus of $1.1 million in FY2012, SCRC is covering the costs associated with the airport but making only marginal returns on equity. The airport is reaching capacity constraints, particularly with respect to the runway’s ability to handle larger aircraft. QTC understands the Civil Aviation Safety Authority (CASA) has provided dispensation until 2021 to land Boeing 737s on the current runway. From 2022 CASA requires the runway to be widened. This upgrade is expected to cost approximately $250 million dollars and is unlikely to proceed without significant assistance from either the State or Federal Governments. SCRC has not included this capital expenditure in the forecasts reviewed by QTC. 2.1.4 Maroochydore Principal Activity Centre SCRC has committed $42.0 million to acquire 53 hectares of land in Maroochydore with a plan to develop a principal activity centre (PAC) for the region. A further $150 million is required to complete the required PAC infrastructure. SCRC has not included this capital expenditure in the forecasts reviewed by QTC. 2.1.5 Caloundra South Urban Development Area In December 2011, an application by Stockland Development Pty Ltd (Stockland) for the development of land at Caloundra South was approved by the Urban Land Development De-amalgamation Analysis of Sunshine Coast Regional Council Page 10
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Authority (ULDA) in accordance with the Caloundra South Master Plan. At present, the
ULDA has not entered into an infrastructure agreement with Stockland. If there is a funding
gap between the cost of required infrastructure and the amount to be funded by Stockland, the
liability will accrue to the ULDA. At present there is uncertainty around the role of the ULDA
and concern that this funding gap will need to be borne by SCRC.
2.2 Financial viability assessment of Existing Council
QTC ratings Nov 2012 Sunshine Coast Regional Council Strong (Neutral outlook)
Nov 2010 Sunshine Coast Regional Council Strong (Neutral outlook)
Feb 2010 Sunshine Coast Regional Council Strong (Developing outlook)
In November 2010, Sunshine Coast Regional Council’s financial viability was rated as Strong
with a Neutral outlook.
On the basis of the financial information provided for the de-amalgamation analyses (past
three years actual performance and the five years forecast), QTC is of the opinion that SCRC
would maintain the Strong rating ascribed in November 2010.
A Strong rating reflects:
historical and forecast operating surpluses in all years
very low gearing levels throughout the forecast period and high interest and debt service
cover ratios
strong liquidity, and
forecast capital expenditure of $718 million with only 14.3 per cent funded by new
borrowings.
A neutral outlook has been applied as there are no known foreseeable significant events within
the next 24 months that are expected to have a direct impact on SCRC’s capacity to meet its
financial commitments.
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2.3 Financial analysis
2.3.1 Key assumptions
Table 5 outlines key assumptions applied to the financial forecasts used by QTC to assess the
financial viability of the Existing Council.
TABLE 5 – KEY ASSUMPTIONS
Actual Actual Actual
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Number of rateable
149,510 151,338 152,532 154,667 156,833 159,028 161,255 163,512
properties
Growth in rateable
n/a 1.2% 0.8% 1.4% 1.4% 1.4% 1.4% 1.4%
properties
Growth in net rates and
9.6% (31.1%) 0.9% 5.4% 7.0% 7.8% 6.2% 6.6%
utilities revenue
Net rates & utility charges
2,402 1,636 1,637 1,702 1,797 1,910 2,001 2,103
per rateable property ($)
Staff numbers (FTE) 2,529 2,256 1,939 1,949 1,958 1,968 1,978 1,988
Note: The reduction in net rates and utility charges per rateable property reflects the transfer of water and sewerage services
responsibilities to Unitywater.
Key points to note from Table 5 include:
Growth in net rates and utilities revenue, not attributable to the growth in rateable
properties, is above current CPI in each year of the forecast.
Staff numbers are assumed to increase in-line with the forecast growth in rateable
properties as indicated by a consistent ratio of employees per rateable property.
2.3.2 Forecast financial results
Table 6 provides a summary income statement, balance sheet and cashflow for the Existing
Council. It should be noted that since SCRC submitted its forecast to QTC, further
information became available resulting in a reduction to forecast revenue. QTC has
subsequently adjusted the forecasts provided by the Existing Council for the purposes of this
report.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 12
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TABLE 6 – SUMMARY OF KEY FINANCIAL INFORMATION
Actual Actual Actual
FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Income Statement items ($000)
Net rates and utilities 359,113 247,595 249,732 263,237 281,760 303,798 322,635 343,855
Grants and subsidies 21,514 20,652 22,061 13,857 13,586 13,587 13,591 13,595
Total recurrent revenue 478,850 435,235 434,734 415,958 435,303 461,684 483,730 508,634
Employee expenses 164,393 150,144 155,033 148,844 151,081 157,816 164,386 171,229
Materials and services costs 185,103 169,932 168,463 171,233 184,138 195,939 205,983 216,556
Depreciation 102,698 63,492 69,233 72,495 75,813 81,236 88,243 95,191
Interest expense 7,422 11,866 12,564 13,863 15,651 16,734 17,383 16,720
Total recurrent expenses 470,646 405,833 417,295 407,852 428,352 453,987 479,249 504,223
Operating surplus/(deficit) 8,204 29,402 17,439 8,106 6,951 7,697 4,481 4,411
Balance Sheet items ($000)
Cash / (Overdrafts) 334,562 268,956 238,978 226,671 213,706 185,787 155,046 124,502
Property, plant and equipment 3,491,748 3,699,974 4,017,225 4,214,750 4,415,452 4,625,723 4,818,626 5,006,335
Total QTC borrowings 188,502 201,501 231,201 261,930 281,452 294,296 285,856 259,260
Cashflow items ($000)
Gross capital expenditure 212,210 188,492 170,989 145,769 145,149 154,419 138,204 134,472
New borrowings 37,998 23,143 40,888 44,150 41,939 44,420 33,333 23,980
Note: Historical figures include share of profits in Unitywater in total recurrent revenue for FY2011 and FY2012. Forecasts include
Unitywater dividend, interest and tax equivalents amounts
Key points to note from Table 6 include:
Water and sewerage assets transferred to Unitywater on 1 July 2010. From FY2011 revenue
from net rates and utilities and corresponding operating expenses were reduced and
replaced with a share of profits in Unitywater, in addition to interest income and tax
equivalents payments.
Within total recurrent revenue is interest received by SCRC on shareholder loans to
Unitywater. This revenue is expected to reduce from FY2014, as the terms of these loans
are renegotiated and reflect current lower market interest rates. In addition, SCRC can
expect to receive reduced dividends as a result of the revised treatment of contributed assets
within the context of full cost pricing.
Operating grants and subsidies are forecast to decrease significantly in FY2013 due to the
reduction in Financial Assistance Grants (FAGs) and the wind down of works associated
with recent natural disasters.
Employee costs decrease in FY2013 due largely to targeted savings expected to crystallise
from benefits of amalgamation. With staff numbers expected to increase by around 10 FTE
each year, this supports the very modest salary increases forecast.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 13
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Table 7 provides a summary of Existing Council’s key historical and forecast ratios for the
FY2010 to FY2017 period.
TABLE 7 – HISTORICAL AND FORECAST FINANCIAL RATIOS
Actual Actual Actual
Benchmark FY2010 FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 FY2017
Own source operating
> 60% 86.8% 70.1% 71.0% 76.1% 78.3% 79.5% 80.8% 82.2%
revenue
Operating surplus ratio 0% - 10% 1.7% 6.8% 4.0% 1.9% 1.6% 1.7% 0.9% 0.9%
Interest cover > 4 times 15.9 8.8 7.9 6.8 6.3 6.3 6.3 7.0
Total debt service cover > 2 times n/a 4.5 4.0 3.3 2.6 2.2 1.9 1.7
Cash expense cover > 3 months 11.1 9.8 8.5 8.5 7.6 6.3 5.0 3.8
Working capital ratio > 3 times 4.0 3.2 3.1 3.1 2.6 2.1 1.7 1.4
Asset sustainability ratio > 1.1 times 2.9 3.9 3.3 2.0 2.1 2.1 1.8 1.7
Average useful life of
n/a n/a n/a 45.9 45.7 44.8 43.0 40.4 38.2
depreciable assets (years)
Net financial liabilities ratio < 60% (17.7%) (2.6%) 11.1% 20.6% 27.5% 33.7% 36.6% 36.6%
Key points to note from Table 7 include:
With the exception of debt service cover, all financial metrics either meet or comfortably
exceed the recommended benchmarks.
SCRC derives the majority of its revenue from sources over which it has control, such as
general rates and utility charges, with an own source revenue ratio greater than 75 per cent
over the forecast period. This provides significant financial flexibility and some protection
against adverse financial shocks.
Given the strong asset sustainability ratio with falling average useful life of the asset base,
SCRC’s forecast depreciation expense appears overestimated.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 14
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3 Proposed de-amalgamation arrangement
The proposed de-amalgamation arrangement involves separating the former Noosa Shire
Council from the existing Sunshine Coast Regional Council. QTC has received information
from the Proponent Council and Existing Council in relation to the cost of de-amalgamation,
and the initial financial position of each entity, which is analysed below.
3.1 Proposed de-amalgamation profile
Table 8 shows selected demographics of the Existing Council, together with the proposed
composition of the Remaining Council and the Proponent Council.
TABLE 8 – PROPOSED DE-AMALGAMATION PROFILE
Proposed split
Existing
Council Remaining Proponent
Total
Council Council
2
Area covered by region (km ) 3,126 2,257 869 3,126
Population in region # 316,858 255,139 61,719 316,858
No. of rateable properties in region 152,532 122,821 29,711 152,532
No. of voters in region 211,195 176,619 34,576 211,195
Councillors 13 11 7 20
Number of staff (transferring) 1,939 1,532 407 1,939
# Census 2011 data
The proposed de-amalgamation profile is based on the boundaries of the former Noosa Shire
Council, which largely correlates with Divisions 11 and 12 of the current SCRC.
3.2 Proposed de-amalgamation and incremental annual recurring
costs
Outlined below is QTC’s estimate of the cost of de-amalgamation to the Proponent Council
and some discussion on where this estimate differs from that of the Proponent Council and
Existing Council.
3.2.1 One-off costs of de-amalgamation proposal
Table 9 shows the one-off and incremental property, plant and equipment recurring costs
associated with the de-amalgamation proposal.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 15
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TABLE 9 – ONE-OFF DE-AMALGAMATION COSTS
Existing Proponent
QTC
Council Council
Estimate $
Estimate $ Estimate $
Governance, planning and implementation costs 1,411,000 379,520 1,325,000
Industrial relations costs 79,000 240,000 -
Community & staff engagement costs 637,000 433,140 300,000
Legal due diligence costs 222,000 180,000 50,000
Accounting and finance due diligence costs 60,000 42,000 -
New ICT costs 1,176,000 800,000 -
Other costs: -
Reimbursement to Remaining Council for new property, plant
20,000 100,000 -
and equipment
Other - - 75,000
Total one-off costs 3,605,000 2,174,660 1,750,000
Average cost per Proponent Council rateable property $121.34
Generally, QTC’s estimates of one-off costs of de-amalgamation exceed both that of the
Proponent Council and Existing Council. Significant differences between QTC’s one-off cost
assumptions and those of SCRC and the Proponent Council are discussed below
Governance, planning and implementation costs: QTC assumed slightly higher costs
than the Proponent Council to take into account a possible extra 10 per cent loading on
Councillor remuneration for six months during the transition period. The major variance
between QTC’s estimate and Existing Council’s estimate related to resourcing the De-
amalgamation Project Team. It should be noted that QTC considers its cost estimate as
being conservative. It does not reflect the costs of preparing new planning schemes, disaster
management schemes and other required policies and plans for either the Remaining
Council or the Proponent Council. QTC’s experience at the time of amalgamation was that
these costs were incurred after the establishment of the new council.
Industrial relations costs: QTC and Existing Council have factored in the cost of staff
recruitment. Existing Council has also factored in additional costs associated with resolving
industrial relations issues. QTC has considered these costs within its legal due diligence
estimate. The Proponent Council did not explicitly provide for either of these costs.
Community and staff engagement costs: QTC has assumed a dedicated resource,
electronic communication and uniforms. The Proponent Council has not allowed for new
uniforms for the Proponent Council or Remaining Council.
Legal due diligence costs: QTC’s has used the same estimate of time for legal due
diligence as the Existing Council but a higher daily rate. The Proponent Council has only
allowed for legal due diligence in relation to the transfer of participation rights in
Unitywater.
Accounting and finance due diligence costs: QTC has estimated a minimum accounting
due diligence cost which is slightly higher than the Existing Council estimate. The
Proponent Council has not allowed for accounting due diligence costs.
New ICT costs: QTC engaged KPMG to estimate the information and communication
technology costs of de-amalgamation. These costs relate to the one-off costs associated
De-amalgamation Analysis of Sunshine Coast Regional Council Page 16
Section 112
with the establishment of data and voice systems and the IT transition Project Team. The
IT Transition Project Team is additional to the Joint Transfer Board and the De-
Amalgamation Project Team included by QTC in governance, planning and implementation
costs. The Existing Council estimate of these costs was derived from an independently
commissioned report in March 2012 – De-amalgamation cost to create a new Noosa
Council (the Deloitte Report), and was slightly under the KPMG estimate. The Proponent
Council did not forecast these one-off costs.
Other costs: The Existing Council claimed for the cost of redeveloping of its website.
QTC estimates a lesser cost than the Existing Council to make edits to the current Existing
Council website. The Proponent Council has not explicitly allowed for this cost but has
allowed for a small cost contingency.
3.2.2 Property, plant and equipment costs
Table 10 outlines the estimate of property, plant and equipment purchases required by the
Proponent Council as a result of de-amalgamation.
TABLE 10 – PROPERTY, PLANT AND EQUIPMENT DE-AMALGAMATION COSTS
Existing Proponent
QTC
Council Council
Estimate $
Estimate $ Estimate $
New ICT assets 4,040,000 11,864,038 250,000
Additional property, plant and equipment 3,375,000 9,908,723 -
Total one-off fixed asset costs 7,415,000 21,772,761 250,000
Depreciation 1,483,000 4,354,552.20 50,000
Cost per Proponent Council rateable property $249.57
Annualised cost per Proponent Council rateable property $49.91
Significant differences between the estimates of QTC, SCRC and the Proponent Council are:
New ICT assets: KPMG has estimated the required ICT capital expenditure for the
Proponent Council, which QTC has adopted. QTC has reflected this capital expenditure in
the Proponent Council forecast as depreciation expense over 5 years. Existing Council has
adopted the lower estimate of the range outlined in the Deloitte Touche Tohmatsu Report 2
while the Proponent Council has only allowed for an amount to redevelop its website.
Additional property, plant and equipment: QTC’s estimate of costs assumes that the
Proponent Council will need to purchase property, plant and equipment, including yellow
goods, to enable it to maintain current service levels in the region. The Existing Council has
also estimated a similar amount for these costs, plus an additional $7.0 million to fund a
new waste transfer station in the event it is denied access to the Eumundi Road landfill
within the Proponent Council area. QTC has not provided for this cost, assuming that a
commercial contract will be negotiated for waste disposal between the Remaining Council
and the Proponent Council.
The estimate of Annualised Costs per Proponent Council ratepayer in Table 10 reflects the
total fixed asset costs depreciated over the average useful lives of the assets concerned.
2 Deloitte Touche Tohmatsu, De-amalgamation cost to create a new Noosa Council, 2012,
www.sunshinecoast.qld.gov.au/addfiles/agendaAttachments/om%20140312/Attach7.pdf
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3.2.3 Incremental annual recurring costs
Table 11 shows the incremental annual cost associated with administering the proposed de-
amalgamated council.
These costs reflect the incremental annual expenditure associated with administering an
additional council. Ratepayers of the Proponent Council would bear these incremental costs
post de-amalgamation.
TABLE 11 - INCREMENTAL ANNUAL RECURRING COSTS
Existing Proponent
QTC
Council Council
Estimate $
Estimate $ Estimate $
Councillor remuneration 525,000 665,172 -
Salaries and wages costs 1,174,000 3,327,500 -
ICT costs ** 1,571,500 -
Insurance ** 515,425 -
Service delivery costs - 11,250,000 -
Diseconomies of scale for Proponent Council 932,000 - -
Total incremental annual recurring costs 2,631,000 17,329,597 -
Cost per Proponent Council rateable property $88.55
** while there will be annually recurring costs of de-amalgamation for ICT, insurance and other costs, QTC has assumed that these costs are included
in the Proponent Council’s forecasts and QTC has included only incremental costs in Diseconomies of scale for the Proponent Council in Table 11.
Key points to note from Table 11 include:
Councillor remuneration: QTC has estimated councillor remuneration based on
information in the most recent Local Government Remuneration Tribunal publication3.
QTC has assumed that the Remaining Council will remain a category 8 local government
and the Proponent Council a category 4 local government.
Salaries and wages costs: QTC has allowed for the salaries of a Chief Executive and four
additional senior executives that would be required by the Proponent Council. The Existing
Council has provided for these executives, as well as an additional 17.5 managers.
ICT costs: Existing Council has specifically identified incremental annually recurring ICT
costs however QTC and the Proponent Council has assumed no costs over and above
those that would be a usual cost of doing business and already included in the forecasts.
Insurance: Existing Council has specifically identified incremental annually recurring
insurance costs while QTC has included this assumption within its estimate of
diseconomies of scale below.
Service delivery costs: Existing Council has included additional costs for de-amalgamation
associated with the 5 to 10 per cent premium that could be incurred by the Proponent
Council and the Remaining Council for the temporary extension of existing waste collection
contracts. Existing Council has also included amounts for transportation costs in the event
that a commercial agreement cannot be reached relating to the Eumundi Road landfill.
3 Local Government Remuneration Tribunal publication - http://www.dsdip.qld.gov.au/resources/report/local-
government/full-report-2011.pdf
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Diseconomies of scale for Proponent Council: It is assumed that the two smaller entities
would be subject to reduced economies of scale compared to the Existing Council. QTC
has included a recurring cost relating to diseconomies of scale equal to 2.5 per cent of the
annual materials and services expense for the Remaining Council and 3.0 per cent for the
Proponent Council. This also incorporates increased costs related to Insurance.
3.3 Proposed balance sheet separation
Table 12 shows the opening balance sheet for the Existing Council, and estimates of what
would become the opening balance sheet for the Proponent Council and Remaining Council if
de-amalgamation were to proceed.
TABLE 12 – SUMMARY BALANCE SHEET ALLOCATION
Existing Remaining Proponent
Council Council Council
Assets ($000)
Cash & cash equivalents 238,978 188,216 50,762
Property, plant & equipment 4,017,225 3,118,526 898,699
Other assets 1,270,573 1,144,007 126,566
Total assets 5,526,776 4,450,749 1,076,027
Liabilities ($000)
Debt 231,201 188,990 42,211
Other liabilities 124,090 106,693 17,397
Total liabilities 355,291 295,683 59,608
Total community equity 5,171,485 4,155,066 1,016,419
QTC has estimated an opening balance sheet as at 1 July 2012 for the Remaining Council and
Proponent Council based on the FY2012 unaudited Balance Sheet for the Existing Council
(see Appendix 2). QTC has referenced information provided by both the Proponent Council
and Existing Council to determine the estimated opening Balance Sheet.
Discussion on key Balance Sheet items follows.
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3.3.1 Cash and cash equivalents
Unrestricted cash: QTC has allocated to the Proponent Council the unrestricted cash as
at 30 June 2012 based on its pre-amalgamation proportion and then added back the
proportion of cash backed reserves as at 30 June 2012 that were attributable to the
Proponent Council.
Cross check: QTC cross checked this methodology for reasonableness by estimating the
opening cash balances of the Remaining Council and the Proponent Council based on a
reconstruction of the cash flows during the period since amalgamation. This involved
assumptions around:
– receipts from customers
– payments to suppliers and employees
– payments for property, plant and equipment including subsidies, donations and
contributions for new capital expenditure, and
– proceeds from and repayments of borrowings.
3.3.2 Property, plant and equipment
QTC has relied on information from the Existing Council for the allocation of the
property, plant and equipment, which has been allocated on geographic location. QTC has
allocated to the Proponent Council, the closing written down value of the assets based on
the assets located in Divisions 11 and 12 as advised by SCRC.
3.3.3 Debt
QTC has allocated borrowings since amalgamation to the Remaining Council and the
Proponent Council in the same proportion as the capital expenditure in their respective
areas. Redemptions over the same period are assumed to have occurred in the same
proportion as the opening debt balances at the time of amalgamation. The opening balance
for the Proponent Council is based on the proportion of debt at date of amalgamation,
taking into account the debt split for the transfer of bulk water assets.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 20
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4 Financial viability assessment of Proponent
Council
QTC ratings Nov 2012 Proponent Council Moderate (Neutral outlook)
Feb 2007 Noosa Shire Council Strong (Developing outlook)
Based on information made available QTC has rated the Proponent Council as Moderate with
a Neutral outlook.
Although the Proponent Council’s forecast shows small and continuous operating deficits over
the forecast period it has adequate capacity to meet its financial commitments in the short to
medium term and acceptable capacity in the long term. The Proponent Council is likely to
have the ability to address its operating deficits, manage unforeseen financial shocks and any
adverse changes in its business, with minor or moderate revenue and/or expense adjustments.
A neutral outlook reflects QTC’s assumption that there are no known foreseeable significant
events within the next 24 months that are expected to have a direct impact on Council’s
capacity to meet its financial commitments.
4.1 Proposed approach for regionally significant assets and services
4.1.1 Water and sewerage/wastewater
The Proponent Council does not propose to take over any of the functions currently
performed by Unitywater. Rather, the Proponent Council expects to become a shareholder in
Unitywater alongside the Existing Council and MBRC. QTC understands the existing
Participation Agreement between Unitywater, SCRC and MBRC will permit this arrangement.
The Proponent Council has calculated its share of the Existing Council’s interest in Unitywater
using a net present value of future cashflows methodology. The Proponent Council estimates
this to be 11.2 per cent of the Existing Council’s 41.76 per cent share in Unitywater, which
would give it a 4.25 per cent share in Unitywater.
QTC has used a regulated asset base methodology to determine the Proponent Council’s share
in Unitywater. This methodology was adopted by SCRC and MBRC in establishing their
original investment. Using this methodology, the Proponent Council will receive 10.18 per cent
of the Existing Council’s share in Unitywater, giving it a 4.25 per cent share in the entity.
4.1.2 Waste
Landfill
The Proponent Council will own the Eumundi Road landfill under a de-amalgamation scenario
but may lack the necessary scale to maximise efficiency because of its high fixed costs relative
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to reduced throughput. The landfill will readily accommodate waste from both the Proponent Council and Remaining Council for a further 20 years with enough land for future expansion. QTC has assumed that this arrangement will be agreed between the Proponent Council and Remaining Council and negotiated on commercial terms (including a margin for risk). QTC has not reflected this arrangement in the forecast of the Proponent Council as this would involve detailed analysis of the Waste business. Collection Existing Council will call for tenders for regional waste collection in November 2012. This contract will be awarded in April 2013 and commence in July 2014 for seven years. The tender is likely to proceed on the basis that the contract can be separated upon de-amalgamation. SCRC has advised that the existing arrangements will need to be extended for up to two years while finalising the terms of this contract and will involve an increase in annual costs of approximately 5 to 10 per cent. QTC has included the cost of extending the contract within the materials and services costs of the Proponent Council in FY2015 and FY2016. Materials recycling A tender is underway based on a single regional re-cycling facility. The contract allows for transport out of the region to a new bulk haul recycling transfer facility. The Proponent Council could participate in the arrangement or transport out of the region (to Gympie, Wide Bay or Petrie). QTC has not allowed for any additional costs. 4.1.3 Airport The Proponent Council will have no involvement in the ownership or management of the airport following de-amalgamation. 4.1.4 Maroochydore Principal Activity Centre The Proponent Council will have no involvement in the ownership or management of the PAC for the region following de-amalgamation. 4.1.5 Caloundra South Urban Development Area The Proponent Council will have no involvement in the ownership or management of the Caloundra South Urban Development Area following de-amalgamation. 4.2 Financial analysis QTC derived a set of financial forecasts for the Proponent Council after considering the financial information provided by the Existing Council and the Proponent Council. De-amalgamation Analysis of Sunshine Coast Regional Council Page 22
Section 118
In order to derive its own Base Case set of 5 year financial forecasts for the Proponent
Council, QTC made adjustments to the assumptions where they were not considered complete
and/or reasonable.
4.2.1 Key assumptions
Table 13 outlines key assumptions applied to the financial forecasts used by QTC to determine
the financial viability of the Proponent Council.
TABLE 13 – KEY ASSUMPTIONS
FY2013 FY2014 FY2015 FY2016 FY2017
Number of rateable
29,830 29,949 30,069 30,189 30,310
properties
Growth in rateable
n/a 0.4% 0.4% 0.4% 0.4%
properties
Growth in net rates and
n/a 6.0% 6.1% 6.1% 6.1%
utilities revenue
Net rates & utility charges
1,894 2,000 2,114 2,234 2,362
per rateable property ($)
Staff numbers (FTEs) 412 414 416 418 420
Key points to note from Table 13 include:
Growth in net rates and utility revenue reflects the growth rates forecast by the Existing
Council.
Staff numbers are forecast to grow in-line with the increase in rateable properties.
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Section 119
4.2.2 Proponent Council financial information
Table 14 provides a summary of the Proponent Council’s key income statement, balance sheet
and cashflow items used by QTC to assess the financial viability of the Proponent Council.
TABLE 14 – SUMMARY OF KEY FINANCIAL INFORMATION
FY2013 FY2014 FY2015 FY2016 FY2017
Income Statement items ($000)
Net rates and utilities 56,486 59,894 63,559 67,451 71,585
Grants and subsidies 5,169 5,227 5,285 5,346 5,408
Total recurrent revenue 81,389 84,634 88,831 93,116 97,682
Employee expenses 31,099 32,413 33,784 35,212 36,701
Materials and services costs 31,988 33,235 35,047 36,977 37,349
Depreciation 15,278 16,684 17,753 19,137 20,502
Interest expense 2,501 2,831 3,104 3,374 3,485
Total recurrent expenses 84,470 85,163 89,688 94,700 98,037
Operating surplus/(deficit) (3,081) (529) (857) (1,584) (355)
Balance Sheet items ($000)
Cash / (Overdrafts) 40,836 40,218 38,812 36,706 36,118
Property, plant and equipment 941,922 979,148 1,018,305 1,054,990 1,089,595
Total QTC borrowings 48,556 53,909 59,195 61,649 61,679
Cashflow items ($000)
Gross capital expenditure 31,413 25,935 28,300 26,657 25,426
New borrowings 8,830 8,388 8,884 6,667 4,796
Key points to note from Table 14 include:
Net rates and utilities revenue is forecast to increase in-line with the Existing Council’s
assumptions, which are above current CPI in all years.
Shareholder returns from Unitywater are included within total recurrent revenue. This
revenue is forecast to fall from current levels commencing in FY2014 as a result of a
reduction in the rate of interest being earned on renegotiation of the shareholder loans. In
addition, dividends from Unitywater are expected to reduce because of the revised
treatment of contributed assets within the context of full cost pricing.
QTC has estimated the number of FTEs expected to transfer to the Proponent Council on
de-amalgamation in addition to five identified new positions, (Chief Executive and four
Executives), with current average salaries. Employee expenses are forecast to increase by
an average of 4.2 per cent per annum in-line with the Proponent Council’s assumptions,
including growth in FTEs of two FTEs per annum.
QTC has included an additional cost within the materials and services costs of the
Proponent Council to account for diseconomies of scale.
Forecasts show operating deficits in all years.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 24
Section 120
Table 15 provides a summary of QTC’s view of the Proponent Council’s key ratios for the
FY2013 to FY2017 period.
TABLE 15 – FORECAST FINANCIAL RATIOS
Benchmark FY2013 FY2014 FY2015 FY2016 FY2017
Own source operating
> 60% 81.7% 83.0% 83.7% 84.5% 85.2%
revenue
Operating surplus ratio 0% - 10% (3.8%) (0.6%) (1.0%) (1.7%) (0.4%)
Interest cover > 4 times 5.9 6.7 6.4 6.2 6.8
Total debt service cover > 2 times n/a 3.1 3.0 2.8 2.8
Cash expense cover > 3 months 7.3 7.4 6.8 6.1 5.9
Working capital ratio > 3 times 3.5 3.5 3.2 2.9 2.8
Asset sustainability ratio > 1.1 times 2.3 1.8 1.8 1.6 1.5
Average useful life of
depreciable assets n/a 50.2 46.7 44.8 42.2 39.9
(years)
Net financial liabilities
< 60% 15.2% 20.9% 27.4% 30.9% 29.8%
ratio
Key points to note from Table 15 include:
The Operating surplus ratio shows minor recurring operating deficits in all forecast years.
On average, a balanced or surplus operating result is essential to long term financial
sustainability.
The working capital ratio falls marginally below benchmark in FY2016 and FY2017.
All other benchmarks are met or exceeded during the forecast period.
4.3 Financial effect per rateable property – Base Case versus
Breakeven Case
QTC undertook an assessment of the impact to ratepayers of de-amalgamation by comparing
the average net rates and utilities per rateable property that would apply under the Base Case
for the Proponent Council to the average net rates and utilities per rateable property that
would apply for the Proponent Council to achieve a balanced operating result (ie, the
Breakeven Case).
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4.3.1 Base Case average annual rates per rateable property
Table 16 shows the average net rates and utilities per rateable property that would apply using
QTC’s Base Case for the Proponent Council.
TABLE 16 – BASE CASE AVERAGE ANNUAL NET RATES AND UTILITIES PER RATEABLE PROPERTY
FY2013 FY2014 FY2015 FY2016 FY2017
Proponent Council ($) 1,894 2,000 2,114 2,234 2,362
4.3.2 Breakeven average annual rates per rateable property
QTC considers that a balanced operating result is essential to a council’s long term financial
sustainability. Table 17 shows the estimated incremental increase / (decrease) in net rates and
utilities per rateable property that would apply if de-amalgamation was successful and the
Proponent Council was to achieve a balanced operating result (ie, the breakeven rates).
TABLE 17 - CHANGE IN AVERAGE ANNUAL NET RATES AND UTILITIES PER RATEABLE PROPERTY
– BREAKEVEN CASE INCREMENTAL TO BASE CASE
FY2013 FY2014 FY2015 FY2016 FY2017
Breakeven case
Proponent Council ($) 101 14 23 46 4
Change from Base Case (%) 5% 1% 1% 2% 0%
The required increases per rateable property in the Breakeven Case when compared to the
Base Case five year forecasts reflect:
the elimination of operating deficits in the Base Case
the cost increases attributable to the impact of de-amalgamation, with the upfront costs
being incurred in FY2013 and other costs expensed in future years, and
the impact of increased operating expenses associated with a reduction in economies of
scale and efficiency.
Additional revenue would not rectify the debt servicing issues experienced by the Proponent
Council. Borrowings would still be required to fund the significant forecast capital expenditure
program.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 26
Section 122
5 Financial viability assessment of Remaining
Council
QTC ratings Nov 2012 Remaining Council Sound (Neutral outlook)
Based on the financial information available, QTC has assessed the Remaining Council’s
financial viability as Sound with a Neutral outlook.
Although the Remaining Council’s forecast shows minor operating deficits over the forecast
period it retains an adequate capacity to meet its financial commitments. This includes a
reasonable level of borrowings, which are able to be adequately serviced. The Remaining
Council is likely to have the ability to address its operating deficits, manage unforeseen
financial shocks and any adverse changes in its business, with minor or moderate revenue
and/or expense adjustments.
A neutral outlook reflects QTC’s assumption that there are no known foreseeable significant
events within the next 24 months that are expected to have a direct impact on Council’s
capacity to meet its financial commitments.
5.1 Proposed approach for regionally significant assets and services
5.1.1 Water and sewerage/wastewater
Existing Council would transfer 10.18 per cent of its current 41.76 per cent share in
Unitywater to the Proponent Council. This would leave the Remaining Council with a 37.51
per cent share of Unitywater. QTC has used the same regulated asset base methodology
adopted by Unitywater upon its establishment in July 2010
The Remaining Council would not need to purchase any additional assets under this approach.
5.1.2 Waste
Landfill
QTC has assumed that an arrangement will be agreed between the Proponent Council and
Remaining Council, negotiated on commercial terms, to access the Proponent Council’s
Eumundi Road landfill.
If there are difficulties with Remaining Council accessing the Eumundi Road landfill post de-
amalgamation and there are delays in bringing new treatment technologies or landfill capacity
online in the Remaining Council area, additional transportation costs to transfer this waste to
alternative landfill locations outside of the Remaining Council area are likely to be incurred.
Existing Council has estimated an additional $7 million in capital expenditure for a waste
transfer station and a further $5.3 million per annum in recurring transportation costs. QTC
De-amalgamation Analysis of Sunshine Coast Regional Council Page 27
Section 123
has excluded this in its assessment of de-amalgamation costs and the forecast of Remaining Council. Collection Existing Council will call for tenders for regional waste collection in November 2012. This contract will be awarded in April 2013 and commence in July 2014 for seven years. The tender is likely to proceed on the basis that the contract can be separated upon de-amalgamation. SCRC has advised that the existing arrangements will need to be extended for up to two years while the contract is being re-negotiated which would involve an increase in costs of approximately 5 to 10 per cent. QTC has included the cost of extending the contract within the materials and services costs of the Remaining Council in FY2015 and FY2016. Materials recycling A call for tender is underway based on a single regional re-cycling facility. The contract allows for transport out of the region to a new bulk haul recycling transfer facility. Any reduction in volume due to de-amalgamation will increase costs by $200,000 to $500,000 per annum for Remaining Council. QTC has not directly allowed for any additional costs however has considered these in its diseconomies of scale estimate within de-amalgamation costs. 5.1.3 Airport QTC has assumed that the Existing Council will retain full ownership and control of the airport. The airport currently makes very modest returns ($1.1 million in FY2012) and is required to make a $250 million investment in its runway by 2022 or risk not being able to land Boeing 737s into the airport. Funding for this upgrade is uncertain at present and no provisions have been made to the forecasts to accommodate either the capital expenditure requirement or its funding. 5.1.4 Maroochydore Principal Activity Centre QTC has assumed that the Remaining Council will retain full ownership and control of the PAC. Existing Council has already committed $42.0 million to acquire the land but has not yet secured additional funding for its development. The forecasts used by QTC do not consider any further investment in the PAC. De-amalgamation Analysis of Sunshine Coast Regional Council Page 28
Section 124
5.1.5 Caloundra South Urban Development Area
The Caloundra South Urban Development area exists within the Remaining Council’s regional
and as such the Remaining Council may be potentially liable for any debt the ULDA attributes
to this development. QTC has not included this potential liability in its forecasts, assuming
instead that the State will mediate a satisfactory outcome between the ULDA and the
Remaining Council.
5.2 Financial analysis
QTC derived a set of financial forecasts for the Remaining Council after considering the
financial information provided by the Existing Council and the Proponent Council.
In order to derive its own Base Case set of 5 year financial forecasts for the Remaining
Council, QTC made adjustments to the assumptions where they were not considered complete
and/or reasonable.
5.2.1 Key Assumptions
Table 18 outlines key assumptions applied to the financial forecasts used by QTC to determine
the financial viability of the Remaining Council.
TABLE 18 – KEY ASSUMPTIONS
Ratio FY2013 FY2014 FY2015 FY2016 FY2017
Number of rateable
123,814 125,548 127,306 129,088 130,895
properties
Growth in rateable
n/a 1.4% 1.4% 1.4% 1.4%
properties
Growth in net rates and
n/a 6.6% 8.2% 7.0% 6.9%
utilities revenue
Net rates & utility charges
1,651 1,735 1,851 1,953 2,059
per rateable property ($)
Staff numbers (FTEs) 1,532 1,540 1,547 1,555 1,563
Key points to note from Table 18 include:
Growth in net rates and utility revenue reflects the same growth as the forecast of the
Existing Council.
Staff numbers are forecast to grow in-line with the increase in rateable properties and do
include some efficiency gains.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 29
Section 125
5.2.2 Remaining Council financial information
Table 19 provides a summary of the Remaining Council’s key income statement, balance sheet
and cashflow used by QTC to assess the financial viability of the Remaining Council.
TABLE 19 – SUMMARY OF KEY FINANCIAL INFORMATION
FY2013 FY2014 FY2015 FY2016 FY2017
Income Statement items ($000)
Net rates and utilities 204,460 217,858 235,676 252,104 269,464
Grants and subsidies 10,988 10,988 10,988 10,988 10,988
Total recurrent revenue 331,732 344,697 365,439 383,555 403,362
Employee expenses 121,939 123,801 129,306 134,678 140,274
Materials and services costs 144,234 154,551 166,245 175,041 181,195
Depreciation 57,968 60,617 64,937 70,481 75,928
Interest expense 11,199 12,443 13,426 14,354 14,611
Total recurrent expenses 335,340 351,412 373,914 394,554 412,008
Operating surplus/(deficit) (3,608) (6,715) (8,475) (10,999) (8,646)
Balance Sheet items ($000)
Cash 156,616 135,123 109,841 84,043 59,284
Property, plant and equipment 3,278,510 3,437,298 3,601,616 3,748,256 3,889,278
Total QTC borrowings 213,190 232,767 251,419 258,006 254,274
Cashflow items ($000)
Gross capital expenditure 121,770 119,213 126,119 111,548 109,046
New borrowings 35,320 33,551 35,536 26,666 19,184
Key points to note from Table 19 include:
Shareholder returns from Unitywater are included within total recurrent revenue. This
revenue is forecast to fall from current levels commencing in FY2014 as a result of a
reduction in the rate of interest being earned on shareholder loans upon their impending
renegotiation. In addition, dividends from Unitywater are expected to reduce because of the
revised treatment of contributed assets within the context of full cost pricing.
QTC has included an amount for diseconomies of scale within materials and services. It is
calculated at 2.5 per cent of the base materials and services costs for each forecast year.
QTC has included additional costs for FY2015 and FY2016 in the materials and services
line item for costs associated with the 5 to 10 per cent premium that could be incurred by
the Remaining Council for the temporary extension of existing waste collection contracts.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 30
Section 126
Table 20 provides a summary of the Remaining Council’s key ratios for the FY2013 to FY2017
period.
TABLE 20 – FORECAST FINANCIAL RATIOS
Ratio Benchmark FY2013 FY2014 FY2015 FY2016 FY2017
Own source operating
> 60% 74.6% 77.1% 78.6% 80.2% 81.7%
revenue
Operating surplus ratio 0% - 10% (1.1%) (1.9%) (2.3%) (2.9%) (2.1%)
Interest cover > 4 times 5.9 5.3 5.2 5.1 5.6
Total debt service cover > 2 times n/a 2.5 2.3 2.2 2.2
Cash expense cover > 3 months 7.1 5.8 4.5 3.3 2.2
Working capital ratio > 3 times 3.3 2.8 2.2 1.8 1.4
Asset sustainability ratio > 1.1 times 2.0 2.1 2.2 1.8 1.7
Average useful life of
n/a 44.0 43.2 41.5 39.1 37.1
depreciable assets (years)
Net financial liabilities ratio < 60% 28.5% 39.5% 49.5% 55.7% 58.1%
Key points to note from Table 20 include:
The operating surplus ratio shows minor recurring operating deficits in all forecast years.
On average, a balanced or surplus operating result is essential to long term financial
sustainability.
With the exception of the working capital ratio from FY2014 onwards and cash expense
cover from FY2017, Remaining Council either meets or exceeds all benchmarks.
Modest gearing levels and sound interest and debt service cover ratios.
5.3 Financial effect per rateable property – Base Case versus
Breakeven Case
QTC undertook an assessment of the impact to ratepayers of de-amalgamation by comparing
the average net rates and utilities per rateable property that would apply under the Base Case
for the Existing Council to the average net rates and utilities per rateable property that would
apply for the Existing Council to achieve a balanced operating result (ie, the breakeven rates).
5.3.1 Base Case average annual rates per rateable property
Table 21 shows the average net rates and utilities per rateable property that would apply using
QTC’s Base Case for the Remaining Council.
TABLE 21 – BASE CASE AVERAGE ANNUAL NET RATES AND UTILITIES PER RATEABLE PROPERTY
FY2013 FY2014 FY2015 FY2016 FY2017
Remaining Council ($) 1,651 1,735 1,851 1,953 2,059
De-amalgamation Analysis of Sunshine Coast Regional Council Page 31
Section 127
5.3.2 Breakeven average annual rates per rateable property
QTC considers that a balanced operating result is essential to a council’s long term financial
sustainability. Table 22 shows the estimated incremental increase / (decrease) in net rates and
utilities per rateable property that would apply if de-amalgamation was successful and the
Remaining Council was to achieve a balanced operating result (ie, the breakeven rates).
TABLE 22 - CHANGE IN AVERAGE ANNUAL NET RATES AND UTILITIES PER RATEABLE PROPERTY
– BREAKEVEN CASE INCREMENTAL TO BASE CASE
FY2013 FY2014 FY2015 FY2016 FY2017
Breakeven case
Remaining Council ($) 29 52 61 76 52
Change from Base Case (%) 2% 3% 3% 4% 3%
The required increases per rateable property in the Breakeven Case when compared to the
Base Case five year forecasts reflect:
the elimination of operating deficits in the Base Case
the cost increases attributable to the impact of de-amalgamation, with the upfront costs
being incurred in FY2013 and other costs expensed in future years, and
the impact of increased operating expenses associated with a reduction in economies of
scale and efficiency.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 32
Section 128
Disclaimer Department of Local Government and Queensland Boundaries Commission: Local Government De-amalgamation QTC has prepared this Report for use solely by the Department of Local Government (Department) and the Boundaries Commission (Commission). The Department and the Commission shall not use the Report for any purpose other than the purpose for which the Report was expressly provided under the terms of the Letter of Engagement between QTC and the Department dated 6 September 2012 (the Engagement Letter). The Report is provided in accordance with the scope of work, scope exclusions, special conditions and other terms and conditions as set out in the Engagement Letter. This Report contains confidential information. None of its contents may be provided or disclosed to any other party without QTC’s express written consent. QTC is aware that this Report may be provided to third parties or made public by the Department or the Commission. The Report is only to be provided to third parties or made public on the basis that the recipients will be made aware of and will be subject to any assumptions, qualifications, exclusions or limitations of liability contained in the Engagement Letter. The information in this Report is provided by QTC in good faith in relation to the information available at the time of its preparation and on the basis of information supplied to QTC by the Department, the Commission or third parties. QTC has not independently verified the information supplied to it and accordingly does not represent that the information contained in this Report is accurate or complete and it should not be relied upon as such. QTC is under no obligation or duty to notify anyone if there is any change in any information or any new information or if it forms a different opinion at any time after the date of this Report. Neither QTC nor any of its employees or agents accepts any liability for any loss or damage suffered by any person as a result of that person or any other person placing any reliance on, or acting on the basis of, the contents of this Report. To the extent permitted by law, QTC expressly excludes any representation or warranty in relation the accuracy, currency and completeness of this Report. To the extent permitted by law, QTC limits its liability in accordance with the terms of the Engagement Letter. The Department and the Commission acknowledge that QTC is not a legal, tax or accounting advisor and that independent expert advice from practitioners in the relevant disciplines should be obtained on those matters before acting upon the information contained in this Report. © Queensland Treasury Corporation 2012 De-amalgamation Analysis of Sunshine Coast Regional Council Page 33
Section 129
Appendix 1: Forecast assumptions
QTC assumptions
Proponent Council Existing Council Proponent Council
Forecast assumptions assumptions (avg) assumptions (avg) (avg)
Population growth - Proponent 1.0% 1.8% 1.0%
Population growth - Remaining Council N/a 1.8% 1.0%
Rateable property growth 0.4% 1.4% 0.4%
LGAQ CCI growth 3.5% 3.6% 3.6%
Growth in net rates and utilities charges 4.1% 6.1% 4.1%
Growth in wages and salaries - employees 4.2% 3.6% 4.2%
Growth in wages and salaries - Councillors 3.5% 0.0% 3.5%
Growth in materials and services 3.9% 5.9% 3.9%
Interest rate - debt (existing) 6.0% 6.2% 6.1%
Interest rate - debt (new) 5.5% 6.4% 5.5%
Interest rate - cash 5.5% 4.8% 3.7%
Creditor days 30 days 60 days 60 days
Debtor days 30 days 30 days 30 days
De-amalgamation Analysis of Sunshine Coast Regional Council Page 34
Section 130
Appendix 2: Existing Council income statement
Year ended FY2013 FY2014 FY2015 FY2016 FY2017
$000 $000 $000 $000 $000
Revenue
Recurrent revenue:
Net rates and utility charges 263,237 281,760 303,798 322,635 343,855
Fees and charges 53,109 59,107 63,351 68,350 74,188
Grants, subsidies, contributions and donations 13,857 13,586 13,587 13,591 13,595
Interest received 47,886 38,832 38,042 37,141 35,760
Other recurrent income 37,869 42,018 42,906 42,013 41,236
Total recurrent revenue 415,958 435,303 461,684 483,730 508,634
Capital revenue:
Total capital revenue 51,182 53,642 55,915 56,038 59,001
Total income 467,140 488,945 517,599 539,768 567,635
Expenses
Recurrent expenses:
Employee benefits 148,844 151,081 157,816 164,386 171,229
Materials and services 171,233 184,138 195,939 205,983 216,556
Depreciation and amortisation 72,495 75,813 81,236 88,243 95,191
Other expenses 21 22 23 24 25
Finance costs 15,259 17,298 18,973 20,613 21,222
Payments - - - - -
Total recurrent expenses 407,852 428,352 453,987 479,249 504,223
Total expenses 407,852 428,352 453,987 479,249 504,223
Result from ordinary activities 59,288 60,593 63,612 60,519 63,412
Net result attributable to Council 59,288 60,593 63,612 60,519 63,412
OPERATING RESULT
Operating revenue 415,958 435,303 461,684 483,730 508,634
Operating expense 407,852 428,352 453,987 479,249 504,223
Operating result 8,106 6,951 7,697 4,481 4,411
De-amalgamation Analysis of Sunshine Coast Regional Council Page 35
Section 131
Appendix 3: Proponent Council income statement
Year ended FY2013 FY2014 FY2015 FY2016 FY2017
$000 $000 $000 $000 $000
Revenue
Recurrent revenue:
Net rates and utility charges 56,486 59,894 63,559 67,451 71,585
Fees and charges 9,980 10,369 10,774 11,194 11,630
Grants, subsidies, contributions and donations 5,169 5,227 5,285 5,346 5,408
Interest received 2,153 1,998 1,983 1,991 2,010
Other recurrent income 7,601 7,146 7,230 7,134 7,049
Total recurrent revenue 81,389 84,634 88,831 93,116 97,682
Capital revenue:
Total capital revenue 10,236 10,728 11,183 11,208 11,800
Total income 91,625 95,362 100,014 104,324 109,482
Expenses
Recurrent expenses:
Employee benefits 31,099 32,413 33,784 35,212 36,701
Materials and services 31,988 33,235 35,047 36,977 37,349
Depreciation and amortisation 15,278 16,684 17,753 19,137 20,502
Other expenses - - - - -
Finance costs 2,501 2,831 3,104 3,374 3,485
Payments 3,604 - - - -
Total recurrent expenses 84,470 85,163 89,688 94,700 98,037
Total expenses 84,470 85,163 89,688 94,700 98,037
Result from ordinary activities 7,155 10,199 10,326 9,624 11,445
Net result attributable to Council 7,155 10,199 10,326 9,624 11,445
OPERATING RESULT
Operating revenue 81,389 84,634 88,831 93,116 97,682
Operating expense 84,470 85,163 89,688 94,700 98,037
Operating result (3,081) (529) (857) (1,584) (355)
De-amalgamation Analysis of Sunshine Coast Regional Council Page 36
Section 132
Appendix 4: Remaining Council income statement
Year ended FY2013 FY2014 FY2015 FY2016 FY2017
$000 $000 $000 $000 $000
Revenue
Recurrent revenue:
Net rates and utility charges 204,460 217,858 235,676 252,104 269,464
Fees and charges 43,129 47,998 51,445 55,504 60,244
Grants, subsidies, contributions and donations 10,988 10,988 10,988 10,988 10,988
Interest received 8,005 7,110 6,227 5,114 3,989
Other recurrent income 65,150 60,743 61,103 59,845 58,677
Total recurrent revenue 331,732 344,697 365,439 383,555 403,362
Capital revenue:
Total capital revenue 40,946 42,914 44,732 44,830 47,201
Total income 372,678 387,611 410,171 428,385 450,563
Expenses
Recurrent expenses:
Employee benefits 121,939 123,801 129,306 134,678 140,274
Materials and services 144,234 154,551 166,245 175,041 181,195
Depreciation and amortisation 57,968 60,617 64,937 70,481 75,928
Other expenses - - - - -
Finance costs 11,199 12,443 13,426 14,354 14,611
Payments - - - - -
Total recurrent expenses 335,340 351,412 373,914 394,554 412,008
Total expenses 335,340 351,412 373,914 394,554 412,008
Result from ordinary activities 37,338 36,199 36,257 33,831 38,555
Net result attributable to Council 37,338 36,199 36,257 33,831 38,555
OPERATING RESULT
Operating revenue 331,732 344,697 365,439 383,555 403,362
Operating expense 335,340 351,412 373,914 394,554 412,008
Operating result (3,608) (6,715) (8,475) (10,999) (8,646)
De-amalgamation Analysis of Sunshine Coast Regional Council Page 37
Section 133
Appendix 5: QTC’s sustainability rating definitions
Ratings
Very Strong A local government with a very strong capacity to meet its financial
commitments in the short, medium and long-term. It has a record of reporting
operating surpluses and is highly likely to be able to manage major unforeseen
financial shocks and any adverse changes in its business without revenue
and/or expense adjustments. Its capacity to manage core business risks is
very strong.
Strong A local government with a strong capacity to meet its financial commitments in
the short, medium and long-term. It generally has a record of operating
surpluses and may occasionally report minor operating deficits. It is able to
address its operating deficits, manage major unforeseen financial shocks and
any adverse changes in its business, with minor revenue and/or expense
adjustments. The expense adjustments are likely to result in only minor
changes to the range of and/or quality of services offered. Its capacity to
manage core business risks is strong.
Sound A local government with an adequate capacity to meet its financial
commitments in the short, medium and long-term. While it is likely that it may
have a record of minor to moderate operating deficits, the local government is
expected to regularly report operating surpluses. It is likely able to address its
operating deficits, manage major unforeseen financial shocks and any adverse
changes in its business, with minor or moderate revenue and/or expense
adjustments. The expense adjustments are likely to result in some changes to
the range of and/or quality of services offered. Its capacity to manage core
business risks is sound.
Moderate A local government with an adequate capacity to meet its financial
commitments in the short to medium-term and an acceptable capacity in the
long-term. While it has some record of reporting minor to moderate operating
deficits, the local government may also have recently reported a significant
operating deficit. It is likely able to address its operating deficits, manage
unforeseen financial shocks and any adverse changes in its business, with
moderate revenue and/or expense adjustments. The expense adjustments are
likely to result in a number of changes to the range of and/or quality of services
offered. Its capacity to manage core business risks is moderate.
Weak A local government with an acceptable capacity to meet its financial
commitments in the short to medium-term and a limited capacity in the long-
term. It has a record of reporting moderate to significant operating deficits with
a recent operating deficit being significant. It is unlikely to be able to address
its operating deficits, manage unforeseen financial shocks, and any adverse
changes in its business, without the need for significant revenue and/or
expense adjustments. The expense adjustments would result in significant
De-amalgamation Analysis of Sunshine Coast Regional Council Page 38
Section 134
Ratings
changes to the range of and/or quality of services offered. It may experience
difficulty in managing core business risks.
Very Weak A local government with a limited capacity to meet its financial commitments in
the short and medium-term, and a very limited capacity long-term. It has a
record of reporting significant operating deficits. It is highly unlikely to be able
to address its operating deficits, manage unforeseen financial shocks and any
adverse changes in its business without the need for structural reform and
major revenue and/or expense adjustments. The expense adjustments are
likely to result in significant changes to the range and/or quality of services
offered and it may need the assistance from higher levels of government. It will
have difficulty in managing its core business risks.
Distressed A local government with a very limited capacity to meet its short-term financial
commitments and no capacity to meet its medium to long-term financial
commitments. It has a record of reporting significant operating deficits. To be
able to address its operating deficits, meet its medium and long-term
obligations, manage unforeseen financial shocks and any adverse changes in
its business, major revenue and expense adjustments and structural reform
will be required. The local government is unlikely to have the capacity to
manage core business risks and may need assistance from higher levels of
government.
Outlooks
A ratings outlook generally focuses on the potential movement in an entity’s rating in the short-term
(ie, less than 24 months). Outlooks may be positive, neutral or negative.
Positive/Negative As a result of a foreseeable event or circumstance occurring, there is the
potential for enhancement/deterioration in the local government’s capacity to
meet its financial commitments (short and/or long-term) and resultant change
in its rating. However, it does not necessarily indicate that a rating change
may be forthcoming.
Neutral There are no known foreseeable events that would have a direct impact on
the local government’s capacity to meet its financial commitments. It may be
possible for a rating upgrade or downgrade to occur from a neutral outlook, if
such an event or circumstance warranted as such.
De-amalgamation Analysis of Sunshine Coast Regional Council Page 39
Section 135
Appendix 6: Key financial ratios definitions and
benchmarks
Target
Indicator Calculation and definition
benchmark
Net rates and utilities and fees and charges / total operating revenue
Own Source This indicates the level of Council's fiscal flexibility. It is the degree of reliance on external funding sources Greater than
Operating Revenue such as operating subsidies, donations and contributions. Council’s financial flexibility improves the higher the 60%
level of its own source revenue.
Operating result (excluding capital items) as a percentage of operating revenue
Operating Surplus This is an indicator of the extent to which revenues raised cover operational expenses only or are available for Between 0% and
Ratio capital funding purposes. A positive ratio indicates the percentage of total rates available to help fund proposed 10%
capital expenditure.
Operating result before gross interest expense and depreciation / gross interest expense
Greater than 4
Interest Cover Ratio This ratio indicates the extent to which Council can service its interest bearing debt and take on additional
times
borrowings. It measures the burden of the current interest expense upon Council’s operating cash.
Net operating cash flow + gross interest expense / gross interest expense + prior year current interest
bearing liabilities
Total Debt Service Greater than 2
This ratio indicates Council’s ability to repay loan funds. If cover drops below benchmark, this may indicate
Cover times
periods of higher risk for Council with constrained flexibility and limited capacity to take on higher levels of debt
to manage unforeseen financial shocks.
Current year’s cash and cash equivalents balance / (total operating expenses – depreciation and
Cash Expense amortisations – finance costs charged by QTC – interest paid on overdraft) *12 Greater than 3
Cover This liquidity ratio indicates the number of months Council can continue paying for its immediate expenses months
without additional cash inflow.
Capital expenditure divided by depreciation expense (expressed as a percentage)
Asset Sustainability Greater than 1.1
This is an approximation of the extent to which the infrastructure assets managed by a local government are
Ratio times
being replaced as these reach the end of their useful lives.
Total liabilities less current assets divided by total operating revenues (expressed as a per cent)
Net Financial Not greater than
This is an indicator of the extent to which the net financial liabilities of a local government can be serviced by its
Liability 60%
operating revenues. A ratio greater than zero implies that total liabilities exceed current assets.
Current assets divided by current liabilities
Working Capital Greater than 3
This is an indicator of the management of working capital and measures the extent to which a local government
Ratio times
has liquid assets available to meet short term financial obligations.
Average Useful Life Total assets (or asset class) divided by total depreciation (or depreciation on asset class)
Greater than 35
Property, Plant & This is an indicator of asset management planning and asset renewal and or maintenance of the asset base of
years
Equipment Council.
QTC may use additional sustainability ratios where required
De-amalgamation Analysis of Sunshine Coast Regional Council Page 40
Section 136
APPENDIX 5
AGENDA
Ordinary Meeting
Thursday, 2 January 2014
commencing at 1pm
Council Chambers, 9 Pelican Street, Tewantin
Section 137
ORDINARY MEETING AGENDA 2 JANUARY 2014
TABLE OF CONTENTS
ITEM SUBJECT PAGE
1 APOLOGIES & ABSENCE ON COUNCIL BUSINESS 3
2 CONFIRMATION OF MINUTES 3
3 MAYORAL MINUTES 3
4 NOTIFIED MOTIONS 3
5 CONSIDERATION OF COMMITTEE RECOMMENDATIONS 3
6 ORDINARY MEETING REPORTS 4
6.1 APPOINTMENT OF DEPUTY MAYOR 4
6.2 COUNCIL MEETINGS 5
6.3 COUNCIL COMMITTEES 7
6.4 INTERIM ORGANISATIONAL STRUCTURE 10
6.5 KERBSIDE COLLECTION 13
6.6 TEEWAH AIRSTRIP 14
6.7 INFRASTRUCTURE CHARGES RESOLUTIONS AND POLICIES 18
6.8 COUNCILLORS’ EXPENSES REIMBURSEMENT POLICY 22
6.9 RECRUITMENT OF CHIEF EXECUTIVE OFFICER 30
6.10 2013/2014 OPERATIONAL PLAN AND BUDGET 32
7 PETITIONS 36
8 CLOSED SESSION 36
9 NEXT MEETING 36
10 MEETING CLOSURE 36
Page 2 of 36
Section 138
ORDINARY MEETING AGENDA 2 JANUARY 2014
1 APOLOGIES & ABSENCE ON COUNCIL BUSINESS
Nil.
2 CONFIRMATION OF MINUTES
Nil.
3 MAYORAL MINUTES
Nil.
4 NOTIFIED MOTIONS
Nil.
5 CONSIDERATION OF COMMITTEE RECOMMENDATIONS
Nil.
Page 3 of 36
Section 139
ORDINARY MEETING AGENDA 2 JANUARY 2014
6 ORDINARY MEETING REPORTS
6.1 APPOINTMENT OF DEPUTY MAYOR
DOCUMENT INFORMATION
File No
Author Acting Chief Executive Officer
SUMMARY/PURPOSE
The purpose of this report is to propose to Council a process to appoint a Deputy Mayor.
BACKGROUND INFORMATION
Section 175 of the Local Government Act 2009 (the Act) requires that Council resolve to appoint
a Deputy Mayor from its councillors at the post election meeting.
Other than the requirement for such an appointment, the Act and Local Government Regulation
2012 are silent with regards to the process.
PREVIOUS COUNCIL CONSIDERATION
Nil.
REPORT
It is proposed that the process for the appointment of the Deputy Mayor commence with the
Mayor calling for nominations. Should there be only a single nomination the Mayor would call for
a motion proposing the election of the nominated individual and the motion then be put.
In the event of more than one nomination it is proposed that the preferred nominee be elected by
means of an exhaustive secret ballot, with the Acting Chief Executive Officer and Chief of Staff
acting as Returning Officers. Once the preferred nominee has been identified the Acting Chief
Executive Officer shall inform the Council of the successful nominee’s name and the ballot
papers destroyed. The Mayor would then call for a motion proposing the appointment of the
nominated individual and the motion be put.
BUDGET & FINANCIAL ASPECTS
Nil.
RECOMMENDATION
That Council note the report by the Acting Chief Executive Officer to the Ordinary Meeting dated
2 January 2014 and appoint a Councillor as Deputy Mayor in accordance with Section 175 of the
Local Government Act 2009.
ATTACHMENTS
Nil.
Page 4 of 36
Section 140
ORDINARY MEETING AGENDA 2 JANUARY 2014
6.2 COUNCIL MEETINGS
DOCUMENT INFORMATION
File No
Author Chief of Staff, Executive Office
SUMMARY/PURPOSE
The purpose of this report is for council to adopt Council meeting dates and times for holding
future Council meetings during 2014.
BACKGROUND INFORMATION
In accordance with the Local Government Act 2009 and the Local Government Regulation 2012,
Council at its post election meeting is required to consider the day and times of future meetings.
PREVIOUS COUNCIL CONSIDERATION
Nil.
REPORT
In considering the day and times of future Council meetings, Council is further advised of S257 of
the Local Government Regulation 2012 which requires that a local government meet at least
once in each month.
It is proposed that Council meetings during 2014 be held as follows:
• Thursday 2 January 2014 commencing at 1 pm
• Monday 13 January 2014 commencing at 10 am
• Monday 20 January 2014 commencing at 10 am
• Thursday 6 February 2014 commencing at 6 pm
• From 6 February onwards, on a four weekly cycle commencing at 6pm, except for a single
5 weekly cycle following the meeting on 26 June.
It is proposed that the Chief of Staff develop the corporate meetings calendar and publish the
details of future Council meetings on the internet and corporate website. Details should include
the information that all meetings must be held at Council offices in Tewantin unless determined
otherwise by Council at a previous meeting.
BUDGET & FINANCIAL ASPECTS
Nil.
Page 5 of 36
Section 141
ORDINARY MEETING AGENDA 2 JANUARY 2014
RECOMMENDATION
That Council note the report by the Chief of Staff to the Ordinary Meeting dated 2 January 2014
and:
1. Conduct the first Ordinary Meeting of Council at 1pm on Thursday 2 January 2014 at the
Tewantin office; and
2. Hold subsequent Ordinary Meetings of Council as follows:
a) Monday 13 January 2014 commencing at 10 am
b) Monday 20 January 2014 commencing at 10 am
c) Thursday 6 February 2014 commencing at 6 pm
d) From 6 February onwards on a four weekly cycle at 6pm, except for a single 5 weekly
cycle following the meeting on 26 June.
ATTACHMENTS
Nil.
Page 6 of 36
Section 142
ORDINARY MEETING AGENDA 2 JANUARY 2014
6.3 COUNCIL COMMITTEES
DOCUMENT INFORMATION
File No
Author Chief of Staff, Executive Office
SUMMARY/PURPOSE
The purpose of this report is for Council to consider the establishment of three standing
committees as part of its decision making process.
BACKGROUND INFORMATION
The Local Government Regulation 2012 provides that a council may appoint from its councillors,
standing committees or special committees to assist it to deal with matters.
PREVIOUS COUNCIL CONSIDERATION
Nil.
REPORT
It is proposed that the Council’s decision making process be based around a structure of two
standing committees each comprising the Mayor and three councillors (Committees), a standing
committee comprising all councillors (General Committee), and the Ordinary Meeting.
Pursuant to Section 264 of the Local Government Regulation 2012, it is proposed that the
following standing committees be established:
• The Infrastructure and Services Committee comprising the Mayor, Cr Bob Abbot,
Cr Sandy Bolton and Cr Frank Pardon; and
• The Planning and Organisation Committee comprising the Mayor, Cr Tony Wellington,
Cr Frank Wilkie and Cr Joe Jurisevic;
• The General Committee comprising the Mayor and all Councillors;
The roles of the Infrastructure and Services Committee, the Planning and Organisation
Committee, and the General Committee are:
1. To make recommendations to Council on:
• The formulation of program policies, objectives, priorities and levels of service and
the course of action for specific issues and matters presented to the relevant
committee for determination;
• Issues arising from the monitoring and review of the operation and performance of
the Council’s programs.
2. To provide oversight and guidance to staff on policies and issues relating to the programs
under their Department’s jurisdiction.
Areas of responsibility of the Infrastructure and Services Committee include those programs and
responsibilities assigned by the interim organisation structure to the Community Infrastructure
Department, and the Community and Development Department, with the exception of Planning
and Development programs.
Page 7 of 36
Section 143
ORDINARY MEETING AGENDA 2 JANUARY 2014
Areas of responsibility of the Planning and Organisation Committee include those programs and
responsibilities assigned by the interim organisation structure to the Organisational Services
Department, the Executive Office, and the Planning and Development programs of the
Community and Development Department.
The General Committee has the responsibility to deal with matters not dealt with at the
Infrastructure and Services Committee and the Planning and Organisation Committee.
The rules for the conduct of Standing Committees are dictated by the Local Government Act
2009, the Local Government Regulation 2012, and Council’s Standing Orders.
Standing Committees can only deal with the subject matters for which they are formally
established, they have no statutory powers and can only recommend a course of action to the
Council unless formal delegation of power by the Local Authority has been given. Like the
Ordinary Meeting, Standing Committees are open to the public unless a closed meeting is
declared. Items for Council consideration are placed on the agenda of the appropriate
committee.
In relation to the conduct of standing committees, section 267 of the Local Government
Regulation 2012, states that “a local government may appoint a chairperson of each committee”,
accordingly it is proposed that the Council delegate to each committee the appointment of a
committee chairperson.
It is also proposed that the meetings of the committees occur in the Tewantin office generally on
a four weekly cycle during 2014, as follows:
• General Committee, on the Monday prior to the Ordinary Meeting, commencing at 10 am
on 3 February 2014;
• Infrastructure and Services Committee, on the Tuesday morning prior to the week of the
General Committee Meeting and the Ordinary Meeting, commencing at 9am on
28 January 2014; and
• Planning and Organisation Committee, on the Tuesday afternoon prior to the week of the
General Committee Meeting and the Ordinary Meeting, commencing at 1.30pm on
28 January 2014.
In relation to the Infrastructure and Services Committee, and the Planning and Organisation
Committee, it is proposed that these Committees not meet in April 2014 because of the Easter
holiday period and that while the meeting cycle would generally be four weeks, there be a single
five weekly cycle following the meetings of the Committees in June 2014.
It is also proposed that the Chief Executive Officer include the dates and times of meetings of the
Committees in the Corporate Meetings Calendar published on the internet and corporate
website.
BUDGET & FINANCIAL ASPECTS
Nil.
Page 8 of 36
Section 144
ORDINARY MEETING AGENDA 2 JANUARY 2014
RECOMMENDATION
That Council note the report by the Chief of Staff to the Ordinary Meeting of 2 January 2014
regarding the creation of three Standing Committees and:
1. Approve the creation of the Infrastructure and Services Committee, the Planning and
Organisation Committee, and the General Committee, with the roles and responsibilities
identified in the Officer’s report;
2. Delegate to each of the Committees the authority to appoint a chairperson; and
3. Approve the times and dates of future meetings of the Committees in accordance with
those detailed in the Officer’s report.
ATTACHMENTS
Nil.
Page 9 of 36
Section 145
ORDINARY MEETING AGENDA 2 JANUARY 2014
6.4 INTERIM ORGANISATIONAL STRUCTURE
DOCUMENT INFORMATION
File No
Author Acting Chief Executive Officer
SUMMARY/PURPOSE
The purpose of this report is to obtain Council endorsement of the Interim Organisational
Structure and to have delegation of authority granted to the Chief Executive Officer to manage all
related staff matters.
BACKGROUND INFORMATION
The De-amalgamation Transfer Methodology required the Transfer Manager to develop an
Interim Organisational Structure for the new Council. Once the continuing Council Chief
Executive Officer had provided the list of staff transferring, the Transfer Manager was required to
place staff into positions in the structure and identify those who were unable to be placed.
The number of positions, and hence staff transferring, was at the discretion of the continuing
Council Chief Executive Officer within the range set in the Regulation. The range was between
365 and 450 equivalent full time (EFT) positions.
The list provided the Chief Executive Officer of the Sunshine Coast Council (SCRC) on
29 October 2013 contained 424 EFT positions, which translates to 512 staff.
PREVIOUS COUNCIL CONSIDERATION
Nil
REPORT
The development of the Interim Structure was preceded by the review of services, considering
those currently being delivered by the SCRC to the Noosa Council area, and those delivered by
the pre-amalgamation Noosa Council.
To assist with this project the previous Noosa Council Chief Executive Officer was engaged as a
consultant. On the basis of the service information, a review of the old Noosa Council
organisational structure, the current Sunshine Coast Council structure (particularly those portions
servicing the Noosa area), and discussions with the relevant SCRC Co-ordinators, SCRC
Managers, and the Transfer Team, a draft interim structure was developed.
This draft structure was then further reviewed with regard to funding available to support this
structure and the impacts and effect this would have on the long term financial sustainability of
the Council. It was decided that a structure be built on the premise that staff resources would be
provided to ensure that the services could be provided but there would be very little, if any,
capacity to deal with any calls for additional service.
Page 10 of 36
Section 146
ORDINARY MEETING AGENDA 2 JANUARY 2014
The attached proposed interim structure places 426 staff into 360 EFT positions. These
comprise staff who are in a range of employment categories i.e. contract, permanent full and part
time, temporary full and part time, casuals and trainees whose hours may vary depending on
service needs.
Transferring employees were matched to positions in the interim structure by direct translation,
i.e. they were currently fulfilling a similar role in a similar department in SCRC. Where there were
more staff available for a role than positions available, a closed merit competitive process was
undertaken. In this process staff were invited to submit supporting documentation to assist the
Transfer Manager in the selection process which included a review of the documentation
supplied, their skills and experience, their service record, and in certain cases, reference checks.
During the process of identifying staff who currently fulfilled similar roles, it became evident that
there were certain roles in the Interim Structure for which there were no staff who could be
placed through direct translation, or the competitive process. These positions were then
“advertised” amongst those participating in the competitive process as well as those who had
been identified as not being able to be placed.
Once this process had been completed and where possible, positions filled, all staff who could
not be placed were invited to meet with the Transfer Manager, who then informed them of this
and of the process going forward.
The Interim Structure put forward to Council is one which will ensure that services will continue to
be provided to the community while a permanent structure can be developed. The development
of a permanent structure will require the Council to decide on service levels in particular areas
and to undertake an evaluation of positions before staff are formally placed.
BUDGET & FINANCIAL ASPECTS
All costs have been provided for in the Budget being proposed to Council at this meeting.
RECOMMENDATION
That Council note the report by the Acting Chief Executive Officer to the Ordinary Meeting dated
2 January 2014 and:
1. Adopt the Interim Organisational Structure as attached to the report; and
2. Delegate authority to the Acting Chief Executive Officer to manage all related staff matters.
ATTACHMENTS
1. Interim Organisational Structure – Attachment 1
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The text continues on section 147.