2014-01-13 Item 6.3 Appendices 1-5

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