2014-01-13 Item 6.3 Appendices 1-5

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


De-amalgamation Analysis of Sunshine Coast Regional Council                                                                              Page 18