2014-01-13 Item 6.3 Appendices 1-5

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).




De-amalgamation Analysis of Sunshine Coast Regional Council                              Page 25