2014-01-13 Item 6.3 Appendices 1-5

   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


De-amalgamation Analysis of Sunshine Coast Regional Council                                          Page 17