2014-01-13 Item 6.3 Appendices 1-5

1.1.2 Incremental annual recurring costs

Incremental annual recurring costs incurred by either the Proponent Council or the
Remaining Council are not considered a cost of de‐amalgamation. QTC has identified
these for the Proponent Council in order to highlight the ongoing extra costs associated
with operating as a separate council.

Successful Proponent Councils will be required to pay their own incremental annual
recurring costs but will not be responsible for paying costs of this nature for the
Remaining Council. Incremental annual recurring costs incurred by the Remaining Council
should be small in comparison to those of the Proponent Council, but may include costs
associated with lower purchasing power and other operating inefficiencies. These costs,
where applicable, have been considered by QTC in the forecasts determined for the
Remaining Council. To the extent that they exist, these costs may impact QTC’s
sustainability rating for the Remaining Council when compared to the Existing Council and
the average rates per rateable property of the Remaining Council when compared to the
Existing Council.
1.1.3 Summary of Proponent Council costs

Table 1 shows the estimated cost of de‐amalgamation, including incremental annual
recurring costs, to the Proponent Council (column 1). It also shows how these costs
translate into a cost per rateable property (columns 2 and 3).

TABLE 1 - SUMMARY OF DE-AMALGAMATION COSTS
                                                                                  QTC             Average         Annualised
                                                                                Estimate           Costs            Costs
                                                                                    $                $                $
 Total one-off costs                                                              3,605,000
 Average one-off costs per Proponent Council rateable property                                     121.34

 Total one-off fixed asset costs                                                  7,415,000
 Average fixed asset costs per Proponent Council rateable property                                 249.57

 Annualised fixed asset costs per Proponent Council rateable property                                                49.91

 Total incremental annual recurring costs                                         2,631,000
 Total incremental annual recurring costs per Proponent Council
                                                                                                                     88.55
rateable property

Note: Annualised fixed asset costs demonstrate the financial effect of spreading the cost of the asset over their useful life (i.e.
depreciation expense)


Table 1 indicates that the one‐off costs of de‐amalgamation per rateable property will be
$121 while the incremental annual recurring costs will be $138.




                                                         Queensland Boundaries Commissioner Report – Proposed Noosa De-amalgamation
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