2014-01-13 Item 6.3 Appendices 1-5

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