2014-01-13 Item 6.3 Appendices 1-5

Table 20 provides a summary of the Remaining Council’s key ratios for the FY2013 to FY2017
period.

TABLE 20 – FORECAST FINANCIAL RATIOS

Ratio                             Benchmark         FY2013     FY2014      FY2015   FY2016          FY2017
Own source operating
                                    > 60%           74.6%      77.1%       78.6%        80.2%        81.7%
revenue

Operating surplus ratio           0% - 10%          (1.1%)     (1.9%)      (2.3%)       (2.9%)       (2.1%)

Interest cover                    > 4 times            5.9        5.3         5.2          5.1            5.6

Total debt service cover          > 2 times            n/a        2.5         2.3          2.2            2.2

Cash expense cover                > 3 months           7.1        5.8         4.5          3.3            2.2

Working capital ratio             > 3 times            3.3        2.8         2.2          1.8            1.4

Asset sustainability ratio        > 1.1 times          2.0        2.1         2.2          1.8            1.7

Average useful life of
                                      n/a             44.0       43.2        41.5         39.1           37.1
depreciable assets (years)

Net financial liabilities ratio     < 60%           28.5%      39.5%       49.5%        55.7%        58.1%




Key points to note from Table 20 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.
 With the exception of the working capital ratio from FY2014 onwards and cash expense
  cover from FY2017, Remaining Council either meets or exceeds all benchmarks.
 Modest gearing levels and sound interest and debt service cover ratios.


5.3         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 Existing Council to the average net rates and utilities per rateable property that would
apply for the Existing Council to achieve a balanced operating result (ie, the breakeven rates).

5.3.1 Base Case average annual rates per rateable property

Table 21 shows the average net rates and utilities per rateable property that would apply using
QTC’s Base Case for the Remaining Council.

TABLE 21 – BASE CASE AVERAGE ANNUAL NET RATES AND UTILITIES PER RATEABLE PROPERTY

                                        FY2013        FY2014      FY2015       FY2016        FY2017

Remaining Council ($)                       1,651      1,735       1,851        1,953            2,059




De-amalgamation Analysis of Sunshine Coast Regional Council                                                     Page 31