Airport Services Strategic Business Plan 2019 to 2022 ...€¦ · V0.1 June 2019 Draft Strategic...

Central Highlands Regional Council 1 2019 to 2022 Airport Business Plan

Airport Services

Strategic Business Plan

2019 to 2022

Draft

V1.1

26 September 2019


Table of Contents

1 The Airport’s “Plan on a Page” ................................................................................................. 5

2 Glossary of Terms.................................................................................................................... 8

3 Purpose and Background....................................................................................................... 10

3.1 Purpose of this Plan ........................................................................................................ 10

3.2 Process for Developing the Plan ..................................................................................... 11

3.3 Assessment Framework (the Value Model) ..................................................................... 11

4 Overview of the Airport .......................................................................................................... 13

4.1 CHRC Region ................................................................................................................. 13

4.2 Airport operations background ........................................................................................ 14

4.3 Site and planning ............................................................................................................ 16

4.4 Commercial .................................................................................................................... 16

4.5 Stakeholder engagement ................................................................................................ 17

4.6 Airport Operational Trends .............................................................................................. 17

4.7 SWOT Analysis ............................................................................................................... 19

5 Purpose of the Airport ............................................................................................................ 21

5.1 Overview ......................................................................................................................... 21

5.2 Council’s Strategic Framework ....................................................................................... 22

5.3 Linkages with Council’s Strategic Priorities ..................................................................... 23

5.4 Airport’s Vision and Objectives ....................................................................................... 26

6 The Business Model .............................................................................................................. 28

6.1 Overview ......................................................................................................................... 28

6.2 Product ........................................................................................................................... 30

6.3 Price ............................................................................................................................... 32

6.4 Place and Accessibility ................................................................................................... 33

6.5 Promotion & Channels to Market .................................................................................... 36

7 The Operating Model ............................................................................................................. 37


7.1 Overview ......................................................................................................................... 37

7.2 Airport Risk Assessment ................................................................................................. 38

7.3 Service Planning ............................................................................................................. 38

7.4 Asset Management ......................................................................................................... 40

7.5 Financial Management .................................................................................................... 41

7.6 Year End Reporting ........................................................................................................ 46

7.7 Capability & People Management ................................................................................... 47

7.8 Management Systems and Compliance .......................................................................... 50

7.9 Stakeholder Engagement ............................................................................................... 50

8 Performance Measurement .................................................................................................... 52

9 3-Year Program of Initiatives .................................................................................................. 54

10 Governance and Oversight ................................................................................................. 57

11 Appendix A – Documents Reviewed................................................................................... 58

12 Appendix B - Price List 2019/20 ......................................................................................... 59

13 Appendix C - Legislative Obligations .................................................................................. 60

14 Appendix D – Long Term Financial Plan Outputs ............................................................... 61


Schedule of Changes & Amendments

Version Date Changes/Amendments Author Accepted By

V0.1 June 2019 Draft Strategic Business Plan Inxure Strategy Group

V0.2 July 2019 Initial review by Manager Airport CHRC - Salomon Kloppers

V0.3 July 2019 Review by Commercial Analyst – minor updates to financial information

CHRC – Andrew Gissel

V0.4 July 2019 Review by General Manager Customer and Commercial Services

CHRC – Michelle Webster

V0.5 August 2019

Inclusion of QTC long-term financial modelling

CHRC – Kerry Dobinson /Andrew Gissel

V0.6 September

2019

Review by General Manager Customer and Commercial Services – minor updates to formatting

CHRC – Michelle Webster

V1.0 September

2019 Prepared for endorsement – template, schedule of changes

CHRC – Kelly Gray

V1.1 September

2019 Update to column layout of risk table

CDHR – Andrew Gissel

Endorsement Table

Name Title Endorsed & Signature Date

Michelle Webster General Manager Customer and Commercial Services

Salomon Kloppers Manager Airport


1 The Airport’s “Plan on a Page”

This business plan is for Central Highlands Regional Council’s Airport operations. This Business

Plan has a 3-year duration and has been developed to enable the Business Unit to:

• Deliver upon the relevant elements of Council’s Corporate and Operational Plans;

• Gain agreement on the long-term aspirations and desired outcomes for the Airport;

• Ensure a line of sight from the overall Airport objectives to its day to day operations; and

• Provide a basis for decision making to continuously improve the Airport’s operations and as

such, inform long term capital and operational expenditure plans.

Figure 1 is the Airport’s “Plan on a Page”, which is a diagrammatic representation of the overall

Business Plan. This Figure also shows the key initiatives that are to be pursued over the life of this

plan. An explanation of this vision and the associated objectives and outcomes is provided below:

• The Airport also needs to balance providing competitively priced and valued services, with

ensuring it remains financially sustainable into the long-term;

• Furthermore, the airport must operate profitably. These are the principles upon which the

airport’s operations has been set up. It is intended that the airport operates financially

independently of all levels of government;

• A key aspect of the Airport is both its compliance with the various legislative requirements

involved in running an Airport. This requirement features in the vision and objectives; and

• It is also important that the Airport is financially sustainable into the longer term. To this end,

there is an objective focusing on maintaining investment in the facility to ensure the desired

levels of service are maintained. Safety is paramount in the operation of an airport. As such

it is a highly regulated business. These high levels of regulation, in turn lead to high costs of

operation. For example, asset renewal requirements at the airport are likely to be more

demanding than for similar asset categories in other Council settings.

Table 2 outlines the performance measures for each of the objectives within this plan. This suite of

measures forms a “balanced scorecard” for the business’s performance.

• The vision and objectives reflect the fact that the Airport is more than a profit-making business

activity – it is important contributor to economic development in the Central Highlands region;


Vision Objectives 3 Year Outcomes Key Initiatives

Emerald Airport will, in operating a valued, safe and secure facility, be a leader and partner in the development of the Central Highlands

Provide valued Airport services across the Central Highlands Region

Ensure valued products and services & evolve service offerings that meets customer’s needs

• Review Advisory Committee arrangements to ensure they remain valid

Continue to develop and implement long term Master Plans for the airport’s operations

• Finalise Airport Master Planning

Provide fit for purpose, safe and compliant Airport facilities

Maintain service levels through appropriate levels of investment • Develop a 20-year Renewals Program and Airport

AMP

• Develop a Succession Plan for the Airport BU Maintain appropriate levels of compliance with all requirements

Ensure long term financial sustainability

Run the airport profitably • Restructure financial reports

• Develop EOY Reports for the business unit

• Develop a dynamic long-term financial plan

• Optimise the Depreciation charge

• Review application of Commercial Policies

Ensure the long-term investment requirements for the Airport are identified and supported by sustainable financial plans

Figure 1 - Emerald Airport 2019 - 2022 "Plan on a Page"

Be a contributor to economic development in the Central Highlands region


Vision Objectives Performance

Measures Targets Explanation

Emerald Airport will, in operating a competitive, safe and secure facility, be a leader and partner in the development of the Central Highlands


• Throughput • >200,000 Pax • A measure of the annual throughput at the Emerald Airport

Support economic development in the Central Highlands region

• Direct local economic impact (developed as part of the 5 yearly Master Plan)

• 5% increase over baseline (once determined)

• A measure of the impact of the airport on the local economy. This is measured as part of the 5 yearly master planning process


• Asset Sustainability Ratio

• Critical audit non-compliance

• Lost Time Injuries

• 90%

• Zero

• Zero

• The Asset Sustainability Ratio reflects the service and financial sustainability of the business unit. Specially this measures the actual renewal spend, plus reserves set aside for depreciation, divided by the depreciation allowance

• Being compliant with its many obligations is critical for the business activity and this target is focused on ensuring there are no critical audit non-compliances

• Council has an aspiration for zero harm for all of its activities


• Current assets / current liabilities

• NPAT/Equity

• >1.5

• 5 to 15%

• (Current assets / current liabilities) reflects the liquidity or solvency of the business unit

• NPAT/Equity reflects the profitability of the business unit as a proportion of Equity

Figure 2 - Emerald Airport 2019 - 2022 Performance Measures


2 Glossary of Terms

Terms within this report have the following definitions:

Business Activities Council’s Competition and Water Reform Policy defines business

activities as those which trade in goods and services to clients and could

potentially be delivered by a private sector firm for the purposes of

earning profits in the absence of Council’s involvement. This definition

implies that there is a charge for and thus direct revenue from the goods

and services traded by those Business Units.

Business Units Those groups within Council with the lead carriage for each of the

business activities identified above.

Commercial Service

Provision

The provision of services in a highly transparent and efficient and

effective manner. Such transparency should be achieved through clear

directives from Council and robust financial and non-financial reporting.

A commercial Business Unit can be run either “for profit”, or “not for

profit”. Such outcomes should be defined by Council on a case by case

basis.

Community Service

Obligation

A Community Service Obligation (CSO) arises when Council wants a

Business Unit to carry out activities that they would not do on a

commercial basis. A CSO should be based on a directive by Council and

provide broader social benefit or community value to the region.

Community Value The broader value a Business Unit might provide to the region that is

beyond any direct commercial benefit that Council may receive from the

Business Units.

Business Model How a business creates value for its customers through its service

offerings, marketing strategies and tactics, pricing, and value proposition


Operating Model How a business delivers value as defined by its Business Model by

having the right capability and capacity which consists of people,

processes, systems and structures

Market Scan The gathering of intelligence in relation to a business’s current and

prospective markets, competitors and business collaborators


3 Purpose and Background

3.1 Purpose of this Plan

This plan is for CHRC’s Emerald Airport operations. This Business Plan has been developed to

enable the Business Unit to:

• Deliver upon the relevant elements of Council’s Corporate and Operational Plans;

• Ensure that there is an understanding across Council on the long-term aspirations and desired

outcomes for the Airport;

• Set the service requirements to help inform other key initiatives such as asset management,

financial management, people management and governance;

• Ensure a line of sight from the overall Airport objectives to its day to day operations; and

• Provide a basis for decision making to continuously improve Airport’s operations and as such,

inform long term capital and operational expenditure plans.

Inxure Strategy Group was engaged by Council to develop Strategic Business Plans for three

commercial business units of Council being the Airport, Saleyard and Quarry Operations. The

requirement for the plans was that they:

• Be for a period of 3 years;

• Include Business Development Plans including business growth opportunities and key

customer relationships and business networks;

• Involve an assessment of the Long-Term Financial Sustainability of the business units;

• Include a consideration of strategic risks;

• Recommend commercial and financial policies that would support more effective operation of

the business units;

• Define performance measures; and

• Consider structural options to increase the commercial focus.


3.2 Process for Developing the Plan

Consistent with the brief for this assignment, the plan was developed in the following manner:

• A review of documentation was undertaken. During the review it was evident that a number

of studies have been undertaken over time regarding the performance and future of the airport

operations. A list of documents reviewed is provided in Appendix A;

• An inspection of the airport was conducted on 16 May 2019;

• Four days of interviews with various CHRC staff and external stakeholders were conducted;

• A workshop was conducted on 17 May 2019 with CHRC staff and representatives of the three

business units; and

• The plan was developed from the above actions.

This Business Plan has been developed using a generic 3-step process, which is typical for most

strategic planning exercises. That approach is represented by the following diagram:

Figure 3 - Business Planning Process

3.3 Assessment Framework (the Value Model)

The analysis of the Airport services has been based around what Inxure refers to as the ‘Value

Model’. The model is represented in the following diagram. The purpose of the model is to enable

a structured and coherent consideration of the important facets which must align and culminate to

allow the airport services to provide value to CHRC and the central highlands region. If there is any

misalignment across the elements of the Value Model, it is highly unlikely the optimum level of value

•Assess the current state of the business and its service outcomes

•Base this on input from staff and a range of reports undertaken over the last 5 years

Current State

•Set goals & objectives the Airport

•Base this on Council plans and input from various Council stakeholders

Future Aspirations •Develop a work program to

bridge the gap between current state and future aspirations for the Airport

•Prioritise the program based on risk

Work Program


will be delivered. Ideally to achieve this alignment, the Business Model and then Operating Model

should cascade from one to the other and be developed from the overall vision and strategy for the

business unit. This avoids an outcome of “the tail wagging the dog”, which can lead to perverse

outcomes for the business unit.

Figure 4 - The Value Model

For CHRC, its overarching vision is realised through a combination of plans including the

Community Plan and Corporate Plan. CHRC’s vision is “to be a progressive region creating

opportunities for all”. Hence the value the Airport delivers must align with that vision. Once the

value is determined (which is a combination of markets, products, services and price), the Operating

Model shapes how the value is delivered upon.

It is important that the Value Model be worked through iteratively – testing the alignment of each of

the facets. If for example CHRC sets goals that are not feasible – then the Airport may be set up to

fail. Therefore, it may be necessary to reconsider the vision and strategy for Airport, based on a

robust analysis of the Business Model and the Operating Model.

This report is structured around the facets of this “Value Model”. The CHRC’s vision and strategy

for the Airport is discussed in section 5 of this report. The Business Model is then addressed in

section 6 and the Operating Model in section 7.

Components

• Overall Strategic Direction• Strategy and tactics• Brand• Risk Appetite

• Product offerings • Market strategies and tactics• Pricing plans• Customer value propositions

• Financial management

• Resourcing talent management• Business Systems (Project/Risk/Quality

Management)• Systems• Governance (Board, Committees, Programs)

• Performance (Value) MeasurementCore Operations & Projects

(Delivery)

Vision & Strategy(Purpose)

Business Model(How value is created)

Operating Model(How value is delivered)


4 Overview of the Airport

4.1 CHRC Region

The Central Highlands Regional Council was established in March 2008 based on the amalgamation

of four previous local governments (the Shires of Bauhinia, Duaringa, Emerald, and Peak Downs).

The region encompasses an area of 59,968 square kilometres and is bounded by the Rockhampton

region and Banana Shire to the east, Isaac Shire to the north, the Blackall Tambo region to the west

and the Roma region and Murweh Shire to the south. It is home to around 30,000 people, most of

whom live in the thirteen communities of Arcadia Valley, Bauhinia, Blackwater, Bluff, Capella, Comet,

Dingo, Duaringa, Emerald, Rolleston, Sapphire Gemfields, Springsure and Tieri.

The region is rich in minerals and forms part of the Bowen Basin supporting a globally competitive

coal industry. The region also has the largest sapphire-producing fields in the Southern Hemisphere.

The Central Highlands region has a number of economic advantages which constitute the central

drivers of economic development in the region, including:

▪ Climate and soils highly suited to primary production, particularly beef, grain, cotton, grape

and citrus production;

▪ A major water resource in Fairbairn Dam which permits irrigated crop production and

industrial usage;

▪ Extensive coal reserves in the Bowen Basin;

▪ Significant current levels of development applications (DAs), indicating increased

construction activity in the region in the short to medium term;

▪ A growing tourism market, supported by major natural attractions such as Carnarvon Gorge

and the Sapphire Gemfields; and

▪ A concentration of government facilities, including administration centres, health and

education services; and a sound infrastructure base, including campuses for Central

Queensland University and Central Queensland TAFE, private and government schools,

general and mining related rail networks, a major regional airport and four hospitals.


The Queensland Government’s Regional Plan for Central Queensland identifies the Emerald Airport

as one of central Queensland’s three strategic airports (along with Rockhampton and Gladstone)

and is seen to be ‘of regional significance’1. In addition, the Central Highlands Economic Master Plan

identifies the airport as an ‘infrastructure enabler’ that is critical to economic growth in the region.

4.2 Airport operations background

Emerald Airport is located on the Gregory Highway, approximately 6 kilometres south of Emerald.

This facility is the only public use commercial and general aviation airport in the Central Highlands

Regional local government area (LGA). The primary catchment for the Airport includes the whole of

the Central Highlands region from Rolleston to the south, Clermont to the north, Alpha to the west

and Duaringa to the east.

Central Highland Regional Council (previously Emerald Sire Council) has owned an airport since

1930. The first airport was the old polo ground, with a succession of relocations moving in 1932 to

a site surrounding the High School, moving again in 1948 to a larger site just out of town, to its

current site where it was relocated in 1957. A series of upgrades has seen the lengthening of the

runway in 1998, and the construction of an extended terminal in 2000. A further expansion of the

terminal and associated security baggage handling facilities and apron in was undertaken in 2010,

security screening operations commenced in 2012, and the construction of a new car parking area

was completed in 2013.

The airport supports Regular Public Transport (RPT) services with both QantasLink (DHC-8 400

aircraft) and Virgin (ATR-72 aircraft) providing regular services. Virgin commenced flights in January

2012, which has increased the number and choice of flights for both the business and non-business

sectors. There are also regular air charter services operated by Alliance Airlines to service the

resources sector, General Aviation (GA) privately owned small aircraft, Emergency Response

Services (including Air Ambulance) and the Royal Flying Doctor Service (RFDS).

Currently the airport has two runways; the primary 06/24 runway is sealed and classified as a Code

3C instrument non-precision approach runway. It is 1,900m long and 30m wide and can handle

propeller and small jet-engine aircraft up to Fokker F100 (107 seat capacity). The main 06/24 runway

1https://planning.dsdmip.qld.gov.au/planning/better-planning/state-planning/regional-plans/central-

queensland


is linked to an RPT Apron containing five primary parking positions by one sealed connecting

taxiway.

Aircraft refuelling for GA and RPT aircraft is provided by Shell from compounds located near the

carpark. GA fuel is dispensed using a smartcard system from a 32kl underground tank facility and

RPT aircraft re-fuelling is provided by 10kl mobile tankers from a 116kl underground tank in the Shell

compound. Catering for RPT services is supplied from Brisbane.

Most airfreight is transported using the RPT services with Toll operating a daily service for mail and

small freight. In addition, freight flights in and out of Emerald Airport are operated each weekday by

General Aviation Maintenance (GAM) using a Dornier DO-228-202 aircraft operating from Brisbane

via Biloela/Thangool and back to Brisbane, sometimes via Rockhampton. Freight from Longreach

and Barcaldine is flown to Emerald Airport by a GAM Aero Commander 500-S which is based at

Emerald Airport.

The Boarding lounge has a capacity for 300 passengers and includes:

• 173 seats at the departure gate

• 40 seats for the kiosk

• 47 seats in the arrival hall, and

• 15 seats in the check-in area.

There are six check-in counters, with three leased to Qantas and three leased on behalf of Virgin Australia and

Air Alliance, and commonly used facilities for baggage handling. Facilities include bathrooms, kiosk, seating

areas and commercial (car rental retail). There is provision for long term parking (245 spaces), short term

parking (260 spaces) and rental parking (106 spaces).


4.3 Site and planning

The airport is located on Lot 5 on RP 607371 which is part of the easternmost section of the main

runway (8.928ha) and Lot 1 on SP 232340 which makes up the remainder (109.1ha). Lot 3 RP

856060 (32.59 ha) is situated immediately to the southwest of the Airport was purchased by CHRC

in 2013 for future use.

The site is located within the Community Facilities – Air Services Zoning as per the Central Highlands

Regional Council Planning Scheme 2016 and is intended to provide for community related activities

and facilities under public or private ownership. Development in the zone caters primarily for

specified uses, facilities and works which include:

• Land used, owned or operated by Federal, State or local government, or Government owned

corporations for purposes such as air services, cemeteries, community uses, educational

establishments, emergency services, public hospitals, utility installations, substations and

transport networks;

• Uses, facilities and works which by virtue of their location, intensity, combination of uses,

operations or site characteristics are best managed in a use-specific land use allocation; or

• Private community services and facilities including educational establishments, places of

worship, private hospitals and community uses.

The surrounding land is zoned rural, with the exception of land that is zoned rural residential to the

north-west.

CHRC also manages a series of Aeroplane Landing Areas (ALAs) that are suitable for light aircraft

landings. These are located at Capella, Dingo, Duaringa, Rolleston and Springsure. These areas

are not considered to be part of the commercial airport business unit and it receives a Community

Service Obligation transfer to fund their operations.

4.4 Commercial

The Emerald Airport is wholly owned by Central Highlands Regional Council, with Council delegating

the financial and day-to-day responsibility for operation of the Airport to the Department of Customer

and Commercial Services. The airport operates 7 days a week, 52 weeks per year.

Central Highlands Regional Council and the former Emerald Shire Council has held an Aerodrome

License continually since 1930. In 1958, the Commonwealth Government introduced provisions that

recognized airports that served local needs, allowing Emerald Airport to be admitted to the ALOP

(Airport Local Ownership Plan) as a “Reimbursed Aerodrome”. Emerald Shire Council withdrew


from the ALOP in 1992 and the operation of the Aerodrome since then is funded solely by Council,

which has implemented a user-pays system of cost recovery.

4.5 Stakeholder engagement

Council has established an Airport Advisory Committee that is chaired by a Council representative

and provides advice and recommendations for developing and creating effective networks and

partnerships between Central Highlands Regional Council, airport users, community and business.

The Committee has a focus on ensuring the Emerald Airport effectively meet future aviation

demands, identifies economic development and tourism opportunities that support growth and

sustainability of regional airport assets.

The objectives of the Airport Advisory Committee include:

• Providing a forum for engagement, consultation and communication with airport users

including the local business sector and the community;

• Developing an understanding of the legislative framework airports operate under and

incorporate into all matters considered;

• Contributing to future planning considerations; and

• Contributing recommendations for airport sustainability through economic development,

tourism and other commercial activities including surrounding airport land and airside areas.

The airport also has a Safety Committee, Security Committee and other user committees.

4.6 Airport Operational Trends

Unlike major capital city airports that typically experience some level of linear growth in passenger

movements over successive years, regional airports such as Emerald are subject to a range of

influences that lead to greater fluctuations in usage over time. Passenger numbers at Emerald are

influenced by changes in local population, regional workforce development, tourism development,

local events, resource trends and construction cycles and the availability of government services

such as health and access to professional services. A further factor that will impact on future revenue

passenger numbers includes the ongoing provision of scheduled airlines services with appropriate

levels of service including price and frequency to attract prospective users.


As shown in Figure 5 - Passenger Movement Trend (from BITRE), passenger movements at

Emerald peaked in 2012/2013 at around 300,000 passengers. The key driver of increased demand

was the significant growth in mining and energy resources projects in the Emerald airport catchment

area and increasing use of fly in fly out (FIFO) workers, whereby peak usage coincides with the peak

of the resources boom. The short-term future is marked by mining companies increasingly

scrutinising their investment programs and discretionary spending, while low consumer sentiment

and reduced household spending has adversely impacted on the non-business segment of the air

travel market (Source: Aurecon Draft Masterplan). Without the 2012/13 peak, the airport has seen

steady growth since 2006/07 and some studies suggest that passenger number have more recently

‘normalised’2. This means that future demand may be influenced by opportunistic growth associated

with new mining construction activities in the region.

Figure 5 - Passenger Movement Trend (from BITRE)

2 Airbiz Master Plan Visioning Workshop (2017) p.17

0

50000

100000

150000

200000

250000

300000

350000

2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18

EMD PAX Movement Trend (from BITRE)


The figures above align more closely with previous projections by AEC who predicted that the

maximum number of construction workers for new projects in the mining sector peaking and then

declining with all major construction works then expected to be completed by 2016. Those

projections saw only moderate growth in operational workers with these peaking in 2020, before a

decline in operational workers into the short to mid-term.

Master planning studies for the airport indicates a passenger mix of 75% business passengers (with

45% being FIFO) and the remaining 25% being discretionary passengers (of which 2% is travel

associated with holidays).

Should the annual passenger movement at the airport reach a threshold of 350,000 annual

passenger movements, a resident firefighting service may be required. At this threshold point, Air

Services Australia will also conduct an evaluation into traffic control capacity.

4.7 SWOT Analysis

A high level, strategic level assessment of the strengths, weaknesses, opportunities and threats for

the Airport has been developed as follows. This SWOT analysis has been considered in the

development of the Business and Operating Models for the business plan.


Strengths

• The airport is a key community asset

providing wider economic benefit to Emerald

and the CHRC region

• The airport is located within key agricultural,

mining and tourism assets

• Strong use by FIFOs in the resource sector

• Strategic location with a broad catchment

including developing mines

• The airport currently delivers an operational

surplus

Weaknesses

• Current terminal layout is sub-optimal with

basic upgrades required to address

passenger movement

• Planning for the future is difficult with

fluctuations in overall Pax based on broader

regional factors and the decisions of

commercial airlines

• Pricing structures & underpinning financial

performance, are not always based on

commercial principles

• There is a heavy reliance on contractors

• Work arrangements for Council staff do not

have sufficient flexibility to cover the airport’s

“356 days per year” operations

• Airports are capital intensive assets,

whereby compliance with regulatory

determinations is non-negotiable

Opportunities

• Potential for additional revenues from

product and service growth (a focus of

current Master Planning)

Threats

• Impact of Council budget cuts on essential

airport services

• Decline in FIFO demand

• Stricter CASA regulations triggering major

investments

• Loss of revenue streams to new or existing

airports

• Retail and commercial developments near

the airport (competing with development

opportunities at the airport)

• The potential loss of key staff


5 Purpose of the Airport

5.1 Overview

As outlined in Section 3 of this report, Inxure has used the “Value Model” as the framework for

guiding this overall assessment (see diagram below). As this model depicts, a key starting point for

any business is having a clear purpose via a well-defined vision and strategy.

Figure 6 - Value Model - Focus on Purpose

The Value Model sees the purpose (or vision and strategy) being made up of:

• A clear overall strategic direction or vision for the Airport;

• An understanding of how it links to Council’s overall Strategic Framework and then into

tangible and implementable actions and targets; and

• A clear risk appetite and tolerance (i.e. what strategic risks will the organisation take and not

take in respect of the Airport).

Components







(Delivery)





5.2 Council’s Strategic Framework

Council’s Strategic Planning Framework provides a corporate context for the Airport Business Plan.

This framework is shown below and is taken from the 2017 to 2022 Corporate Plan.

Figure 7 - CHRC Strategic Planning Framework

The Central Highlands 2022 Community Plan is a region-wide plan with outcomes and goals

forming the basis of a long term ‘road map’ setting out the steps for the community to achieve its

vision. The Community Plan involved extensive community consultation and sets out the priorities

for each of the region’s 13 individual communities.


Council’s Corporate Plan sets the strategic direction for Council and provides a number of actions

and strategies to ensure the region is socially, economically and environmentally sustainable. It is

the principal planning tool to guide decision making and balance the delivery of services with

available resources and other variables in Operational Plans. Council has six strategic priorities as

set out in the Corporate Plan. These are:

• Strong vibrant communities

• Building and maintaining quality infrastructure

• Supporting our local economy

• Protecting our people and our environment

• Leadership and governance

• Our organisation

This Business Plan fits within the “Management Plan” and “Annual Operating Plan” levels of

Council’s overall Strategic Planning Framework (as shown in Section 5.2). That is, the Airport

Business Plan is guided by the Community Plan, the Corporate Plan and Council’s Management

Plans. The Business Plan in turn informs the Annual Operational Plan, Budgets and Staff

Performance Plans.

5.3 Linkages with Council’s Strategic Priorities

• Being an enabler for agriculture and mining;

3 Emerald Airport & Business Precinct Strategic Plan 2011

Emerald Airport is a critical piece of transport infrastructure providing access to and from the region

for the public and industry. It generates a significant multiplier effect in the region and is an important

contributor to economic growth in the Central Highlands community. By supporting and

facilitating expansion of marketplace growth, including export trade and tourism, the Airport has

a role as a proactive vehicle for economic development. Direct airport activities also support the

local economy, with direct and indirect economic impact on the local economy estimated in 2011 at

between $116 million and $162 million (this is the most contemporary source of such economic

data).3 The 2013 Emerald Airport Master Plan identifies the important role that the airport plays

in supporting other industries and providing broader community through:


• Contributing to broader community programs such as medical evacuations and firefighting

services;

• Recreational flying;

• Providing public transport service in remote areas;

• The re-structuring the way health services is delivered by the State Government; and

• Providing a support role for the wider aviation industry through the training of commercial

pilots and engineers.

The value provided by the Emerald airport can be aligned to Council’s Strategic Priorities as follows:

Council Strategic

Priorities

Airport’s Alignment with Council’s Strategic Priorities

Strong vibrant

communities

• The airport enables a connected community by providing local

residents with access to a range of services (health, education,

economic) that may not be available locally;

• enhancing social connections and minimizing isolation;

• hosting a recreational aviation community including access to training

and development opportunities.

Building and

maintaining quality

infrastructure

• Emerald airport forms an essential part of Central Highland’s

transport network ensuring efficient options for the movement of

people and products;

• During flood events, Emerald Airport acts as a strategic transport link

when both road and rail access is cut off.

Supporting our

local economy

• The Emerald Airport is the primary entry and departure facility for the

non-resident workforce and a central hub to access business

opportunities in Central and Western Qld;

• Supporting regional economic development where key industry

sectors rely on transport accessibility for customers and movement

of products;

• Maximising the productivity of FIFO workers by travelling to work sites

as efficiently as possible;

• Enabling emerging sectors such as tourism.

Protecting our

people and our

environment

• The airport is a vital link in emergency services through medical

evacuations (including RFDS), enabling firefighting and ensuring law

enforcement;

• Daily operations ensure that there are plans to mitigate, prevent and

prepare for, respond to and recover from hazards;

• Operations are managed in an environmentally responsible way.


Council Strategic

Priorities

Airport’s Alignment with Council’s Strategic Priorities

Leadership and

governance

• Airport management works with the Advisory Committee in order to

balance community and economic outcomes;

• Provide strong management and leadership in the operation and

future development of the Airport;

• The business is professionally and transparently managed for the

benefit of the community.

Our organisation • Provides a workplace of excellence where staff are supported by

systems and processes that develop their potential;

• Working in a positive and future focused culture and demonstrates

the Council’s values;

• Provides consistent high levels of customer service in accordance

with CHRC’s Customer Service Charter.

Table 1 - Airport's Alignment with Council’s Strategic Priorities


5.4 Airport’s Vision and Objectives

The 2015 Business Plan for the Airport identified its vision as “Emerald Airport will, in operating an

efficient, safe and secure facility, be a leader and partner in the development of the Central

Highlands.” This was to be delivered through the following objectives:

sector activity cycles;

• To make sound investment decisions reflecting the anticipated long-term utilisation of the

Airport;

• To ensure that strategies are developed and implemented to continually improve the efficiency

of the Airport; and

• To review the charging structure annually to ensure that the Airport has sufficient financial

capacity to meet customer needs and remain financially sustainable through the long term.

The vision and objectives for the current business plan are set out in Figure 8 - The 2019 - 2022

Airport Vision and Objectives”. These have been based on the analysis of the Airport’s links to

Council’s Corporate Plan, the public value it offers, and consideration of the objectives outlined in

the Airport’s 2015 Business Plan.

• To provide the finest airport experience for members of the Central Highlands community;

• To provide a modern terminal building with a commitment to quality customer service;

• To provide a safe, competitive, low-cost airport for the Central Highlands community;

• To effectively market and promote the region and airport to attract passengers;

• To be a contributor to economic development for the Central Highlands community;

• To maximise landside development opportunities;

• To continually review passenger demand projections, with reference to forecast resources


Vision Objectives 3 Year Outcomes Links to Council’s Strategic

Priorities

Emerald Airport will, in operating a valued, safe and secure facility, be a leader and partner in the development of the Central Highlands


Ensure valued products and services & evolve service offerings that meets customer’s needs

• Strong vibrant communities

• Supporting our local economy Continue to develop and implement long term Master Plans for the airport’s operations


Maintain service levels through appropriate levels of investment

• Building and maintaining quality infrastructure

• Protecting our people and environment

Maintain appropriate levels of compliance with all requirements


Run the airport profitably

• Our organisation

• Leadership and governance Ensure the long-term investment requirements for the Airport are identified and supported by sustainable financial plans

Figure 8 - The 2019 - 2022 Airport Vision and Objectives



6 The Business Model

6.1 Overview

This section of the report focuses on the Business Model for the Airport - or how value is created

(as depicted in the diagram below). Specifically, it examines:

• The value proposition to customers and the region;

• The products and services offered by the Airport;

• Marketing strategy and tactics; and

• The pricing strategies.

Figure 9 - The Value Model focusing on The Business Model

An understanding of the basis of value creation for the airport may inform both the marketing mix

and performance measures attributable to the group.

Components







(Delivery)





The business model is best represented by the “4Ps of the marketing mix”. The following table

summarises the 4Ps model. The following sections analyse each of these elements in further

detail for the Airport.

Category Definition Typical Marketing Decisions

Product Refers to an item that satisfies the

consumer's needs or wants.

Products may be tangible (goods)

or intangible (services, ideas or

experiences).

• Product quality

• Product assortment – product range,

product mix, product lines

• Branding

• Associated services (complementary

service, after-sales service, service

level)

Price Price refers to the amount a

customer pays for a product. Price

may also refer to the sacrifice

consumers are prepared to make to

acquire a product (e.g. time or

effort). Price should also include

considerations of perceived

customer value

• Price strategy & tactics

• Payment terms – credit, payment

methods

Place Refers to providing customer

access and considers providing

convenience for the consumer

• Market coverage

• Transport, and logistics

Promotion Promotion refers to marketing

communications and the

associated channels to market

• Promotional mix - appropriate balance of

advertising, PR, direct marketing and

sales promotion

• Message strategy - what is to be

communicated

• Channel/ media strategy - how to reach

the target audience & frequency

Figure 10 - 4Ps Marketing Mix*

* Adapted from Needham, Dave (1996). “Business for Higher Awards”. Oxford, England: Heinemann


6.2 Product

6.2.1 Overview

As with other airports, Emerald Airport’s assets may be identified within three categories:

• Air side - runways, taxiways, sealed and unsealed aprons, markings, lighting, hangars,

fences, sheds and workshops;

• Terminal side - the terminal building, baggage handling systems, communications and

telephony, furniture and fittings and other equipment; and

• Land side - carparks, roads, power supply, fleet and plant.

Overall, air freight comprises only 0.01% market share of all domestic freight4. As such it is seen

as a small, niche market, but often carrying high value products. Target customers cover a large

spectrum of potential users including:

• Local residents.

• Tourists and visitors.

• FIFO workforces (varies, but around 45% of current passengers).

• Business representatives, contractors, etc.

• Freight companies.

• Recreational aviation enthusiasts.

• Light industry.

Airbiz (2017) assessed the apportionment of users as follows:

4 Airbiz Emerald Airport Master Plan Visioning Workshop (Nov, 2017)


6.2.2 Air Side

Airside products are based on the two runways connected by taxiways, aprons and other

supporting infrastructure. The larger 06/24 runway has capacity to accommodate up to Code 3C

(ATR-72, F1) and Code 3D (DHC-8 400) aircraft. (As of 2017) there are 39 departures per week

comprising 27 Qantas departures and 12 Virgin departures (including one overnighting aircraft for

Tuesday/ Wednesday. Departures are timed for even distribution throughout the day.

The Bureau of Infrastructure, Transport and Regional Economics (BITRE) provides economic

analysis, research and statistics on infrastructure, transport and regional development issues to

inform Australian Government policy development and wider community understanding. Their

statistics show that for the 17/18 financial year, there were some 3,712 inbound and outbound

aircraft movements from Emerald.

6.2.3 Terminal Side

The terminal building was originally constructed in 1981, upgraded in 2000 and again in 2011 to

cater for increased demand. It has a total floor area of approximately 1,500m2 and includes airline

check-in counters, checked-bag screening, baggage make-up areas, baggage reclaim areas, the

Flight Path Kiosk, Qantas lounge, vending machines and car hire service desks.


6.2.4 Land side

There are 260 short term and 245 long term carparks together with 106 parks for rental cars.

Other landside products include a rented office, billboards and advertising rights.

6.2.5 Growth Opportunities

Several opportunities for product growth have been identified across airport operations. These

include:

• Potential changes to scheduling by RPTs;

• New routes;

• Increases to FIFO throughput (linked to expansion of the Galilee Basin); and

• General aviation (GA) opportunities (e.g. aircraft maintenance).

As of 2019, an airport master planning exercise is being advanced to provide a blueprint for future

opportunities in further enhancing and developing airside, terminal and landside assets. This is

the appropriate planning instrument for assessing the viability of and advancing these

opportunities.

6.3 Price

CHRC’s Register of Commercial and cost Recovery Fees, as updated and approved by Council

each year, sets out the fees and charges applicable to airport activities. Fees are categorized as:

• Passenger head tax - paid per passenger for embarking and disembarking on both

passenger and charter flights Landing fees for register operators;

• Security charges including passenger screening;

• Aircraft parking;

• Use of aircraft hangars- both itinerant and long term;

• Annual landing fees;

• Ground space rentals;

• Parking- short and long term, rental cars; and

• Miscellaneous charges (refuse and cleaning, advertising, events, airside escorts).

In 2019, the airport had operating revenue of around $7.7m. Of this around 80% of revenue is

from RPT carriers, with the remaining revenue is attributable to car parking, rents and other aero

and non-aero sources.

Key principles in the setting of pricing include:


• Overall fees and charges must ensure the Airport remains profitable and financially

sustainable into the long-term (covering the costs of maintaining the service potential of

assets);

• In accordance with Council’s Competition and Water Reform Policy (which applies to the

airport), the principles of full cost pricing are to be applied;

• That should be balanced with ensuring value for money outcomes for the local community

and take account of local preferences and priorities.

6.4 Place and Accessibility

6.4.1 Overview

A key strategic competitive advantage is its strategic location as the only publicly accessible high

capacity airport in the Central Highlands region with a significant catchment area with forecast

future developments. Located centrally within the Bowen coal basin, mining activity is a key driver

of airport usage. Further development of resource projects in both the Bowen and Galilee basins

may provide opportunity for the airport to service additional sites. The Queensland Government

has identified a number of ‘coordinated projects’ near Emerald that are projects of economic,

social or environmental significance to Queensland that are approved or under review5. Projects

include:

• Baralaba South project;

• Central Queensland Coal Project (Styx Coal Project);

• Saint Elmo Vanadium project;

• Saraji East Mining Lease project; and

• Walton Coal project.

Growth (or decline) in customers will be significantly impacted by the presence of these resource

sector projects.

The CHRC region has some 1.37 million head of cattle (or 5.5% of the national herd), making it

the third largest cattle producing area in Australia. The region also has the highest density

stocking rate in Australia and agribusinesses are a key value and employment driver in the region.

Forty per cent of registered firms in the region are agribusinesses. Taking account of the strong

5 http://www.statedevelopment.qld.gov.au/assessments-and-approvals/

http://www.statedevelopment.qld.gov.au/assessments-and-approvals/


supply chain links between the agribusiness, farming and grazing sectors on the Central

Highlands and the Downs, agribusinesses have expressed ongoing interest in a regular flight

between Emerald and Toowoomba. Central Highlands Development Corporation (CHDC) is

seeking to advance a potential flight connection between Emerald and Toowoomba.

CHDC also identify the following emerging industries in the region:

• Solar and green energy industry with two solar farms under development and a further

eight proposed across the region;

• A growing tourism market worth more than $230 million, featuring pristine natural

attractions of sandstone wilderness across 749,000ha of world-class natural parks and the

largest Gemfields in the Southern Hemisphere; and

• Major health and education services including both private and public primary and

secondary schooling, hospitals, Emerald Medical Village and a CQ University campus.

6.4.2 Competitors

The nearest airport with commercial services is Moranbah, 224km to the north, which is operated

by BHP Billiton Mitsubishi Alliance (BMA). Moranbah predominantly services the BMA coal mines

in the area. BMA also operated an airport at Blackwater (77km to the east), until it ceased

operations in 2010.

Clermont, Dysart, and Middlemount airports are all within two hours’ drive of Emerald but do not

have commercial flights operating. Larger airports are located in the larger coastal centres of

Rockhampton (270k), Gladstone (370km), and Mackay (392km), however the driving distance

from these centres is seen to limit their use by FIFO workers in the Central Highlands region.


Emerald Rockhampton

(3 hrs drive away)

Roma

(4.5 hrs drive away)

Gladstone

(4hrs drive away)

▪ 5.7 daily

departures

▪ Two airlines

▪ 1900m runway

▪ One destination

(Brisbane)

▪ 2018 Pax: 195k

▪ 12.4 daily

departures

▪ Three airlines

▪ 2,568m runway

▪ Four destinations

(Brisbane,

Mackay,

Townsville and

Gold Coast)

▪ 2018 Pax: 551k

▪ 2.9 daily

departures

▪ One airline

▪ 1,504 m runway

▪ Two destinations

(Brisbane and

Charleville)

▪ 2018 pax: 78k

▪ 8.0 daily

departures

▪ Two airlines

▪ 1,920m runway

▪ One destination

(Brisbane)

▪ 2018 pax: 253

pax

Table 2 - Airport's Key Competitors

Note: Rockhampton also services the defence industry and transport of military goods

Note: Pax figures excludes Charters

It is also noted that, in terms of operating numbers, Mt Isa is closest to Emerald with a pax of 193k

in 2018. More recently, Proserpine airport has been identified as a potential competitor as it has

direct flights to southern capitals and mine workers that would normally fall within the Emerald

airport catchment are being shuttled workers to and from the airport. It is understood that the

attraction of Proserpine is the availability of low-cost flights (including Tiger Air), and the ability to

access major southern capital cities more directly.

The construction of airstrips by any new mines may represent a threat to the growth trend at

Emerald, as the transport costs and the additional time for travel at the beginning and end of a

shift impacts on productivity at the mines.


6.5 Promotion & Channels to Market

The airport has an informative website hosted by Central Highlands Regional Council, providing

links to information on RPT flights, parking options and general aviation. Over time, a number of

bespoke brochures and briefing documents have been developed to support submissions or

proposals around building the airport’s service offering. The Central Highlands Development

Corporation (CHDC) has acted as an effective partner and advocate for airport activities and

maintains communications with key industries as part of on-going promotion of airport services.

Customer management at the Airport is maintained through the following measures:

• Positive people skills, training, attitude and work ethic of Airport staff;

• High quality administrative systems in place that provide efficient and timely service to all

customers;

• Airport facilities are provided and maintained to a standard that delivers optimal and safe

aeronautical services; and

• Effective pricing strategy that focuses on adequate funding for the facility.


7 The Operating Model

7.1 Overview

This section of the report focusses on the Operating Model for the Airport and examines how

value is delivered. This section specifically considers the people capability, processes and

systems necessary to deliver upon the desired vision and objectives for the Airport, and to support

its business model (discussed in the previous section).

Figure 11 - The Value Model focusing on The Operating Model

When considering the operating model, it is important to note that the Airport is grouped with other

commercial business units within the Customer and Commercial Services division of Council

(including the Airport, Saleyard and Quarry operations). This allows Council to achieve synergies

in the operation of these business units. As a result, a number of initiatives identified in this

section of the Plan can be progressed co-operatively with the other business units.

Furthermore, the 3 business units receive a range of corporate services from other divisions of

council including, Council wide financial management, asset management, HR services, IT

services and capital delivery services.

Components







(Delivery)





7.2 Airport Risk Assessment

Council’s “Enterprise Risk Management Framework” has been used in this plan to assess the key

risks for the Airport. This helps inform the prioritisation of key initiatives within the plan. As noted

in the Risk Management Framework, “risk is inherent in all of council’s business activities,

programs, services, projects, processes and decisions. As such, council is committed to

consistent, efficient and effective risk management.” Council’s risk framework is summarised in

Appendix C of this Plan.

The following table summarises the Airport’s key risks, along with their respective mitigations.

This risk assessment has been adapted from the 2015 Business Plan and it remains relevant.

These risks are also considered in the following analysis of the Operating Model.

Risk Description Mitigated

Risk Rating

Risk Mitigation Unmitigated

Risk Rating

Loss of key personnel

High Develop a Succession Plan Extreme

Poor commercial & contract

management

Medium Robust contract management

processes

High

Inadequate stakeholder

engagement

Medium Periodic reviews of stakeholder

engagement arrangements

High

Poor future service planning Medium Master Planning project High

Poor compliance management High Robust compliance management

systems & resourcing

Extreme

Operating at a financial loss

Medium Grow markets / revenue & manage

costs / robust financial management

Extreme

Poor site safety Medium Safety management system

Extreme

Inadequate emergency

management procedures

High Emergency management program

and periodic testing exercises

High

IT systems failure

Medium Corporate Services SLA High

Table 3 - Airport Risks

7.3 Service Planning

7.3.1 Overview

Service planning is about ensuring the Airport can continue to achieve the desired levels of

service expected of it – along with planning for any improvements in such service. For the Airport,

significant Master Planning has been undertaken, which is focussed at maximising the economic

value of the airport and its associated land assets.


7.3.2 Airport Master Planning

Although the terminal has been recently upgraded, the design is not optimal, requiring arriving

passengers to check in and then walk outside the terminal and back in for security screening. A

key issue is the introduction of Australian government requirements that full body scanning

machines be installed into regional airports by December 2020. This will require architectural

modifications, as well as requiring extra staff and additional training. Currently airport

management are focussing on how the terminal infrastructure can be redesigned to implement

this requirement. Other issues raised in relation to the current layout include:

• Congestion in the terminal building at peak times:

• Queuing at check-in counters;

• Congestion at the front of the building when security screening queues form;

• Insufficient seating in the screened security waiting area;

• Insufficient toilets when passengers are disembarking leading to queues outside the toilets;

• The current location of the rental cars in an unsurfaced area which is a considerable

walking distance from the terminal;

• Resistance to the introduction of car parking fees;

• Kerb congestion during drop off and pick up;

• Congestion at the Gregory Highway and Airport Drive Intersection at morning and

afternoon peaks; and

• Insufficient GA, parking spaces, and GA taxiway issues.

The airport infrastructure has some limitations imposed upon it due to runway, taxiway and apron

capacity, as well as terminal size and baggage carousel and conveyer limitations. Also, the

current traffic directions require all refuelling tankers for commercial aircraft to drive immediately

adjacent to the terminal up to 20 times per day which is considered a risk. Even so, there is

currently adequate infrastructure in place to handle and support additional aircraft.


In order to address the matters raised above, Council has initiated a review of the airport

masterplan. This is currently being advanced to provide a blueprint for future opportunities to

enhance and develop airside, terminal and landside assets. Several opportunities for product

growth have also been identified across the airport’s operations and these include:

• Potential changes to scheduling by RPTs;

• New routes; and

• Increases to FIFO throughput (linked to expansion of the Galilee Basin).

7.4 Asset Management

For asset intensive businesses such as the Airport, asset management is an important input to

the service planning. It is critical the assets are capable of achieving the outcomes sought by

Council.

It will be important to both further optimize the Airport AMP and develop an appropriate long-term

renewals plan. Depreciation makes up a large proportion of the Airport’s cost base. Management

needs to be satisfied that this figure is as robust as possible and is thus informing sound

management decisions. One of the concerns is that the assumed asset lives in the AMPs do not

match the regulatory requirements in terms of asset renewal and replacement. It has been

identified by the Manager Airport that more work is required in this regard.

Linked to the optimization of depreciation, is the need to have in place a robust renewals plan for

the facility. The goal of this plan is to maintain the service potential of the facility and it ideally

should have a 20-year outlook. If both the depreciation figure and the renewals plan are robust,

then there should be a broad matching between the two.

To this end, the Queensland Government legislates for Councils to measure the renewals capital

expenditure as a percentage of the depreciation expense (referred to as the Asset Sustainability

Ratio). This is an approximation of the extent to which infrastructure assets are being renewed

to maintain their intended service potential. The Queensland Audit Office (QAO) then reports

annually on this metric for all Councils. They will report a red for fail if the renewals expenditure

is well short of the depreciation figure (the target is 90%). This highlights the importance of both

figures being as robust as possible, otherwise:

• If the renewal expenditure is below what it should be (due to the absence of a renewals

plan), then it indicates that the service potential of the asset is being run down. It may also


be possible that the Council’s long-term financial sustainability is being compromised as it

is not setting aside the funds to renew or replace these assets; and

• If the depreciation figure is incorrect due to a lack of optimisation, then it will incorrectly

show an under or over-expenditure on asset renewals. It will also artificially erode the

financial performance of the business unit.

The Manager Airport advises that this is incompatible with the operations of an airport.

Optimising the AMPs and developing a long-term renewals plan for the facility are important

actions for this business plan. Specific considerations for optimizing the depreciation allowance

are addressed in section 7.5 below.

7.5 Financial Management

7.5.1 General Financial Performance

The following table shows the 18/19 financial year operating budget for the Airport and the revised

forecast for the year, based on the performance to date. Net earnings are expected to be

$445,412 less than originally budgeted. There is a projected reduction in car parking revenue

and costs have increased by around $160,000, including an additional $22,000 for compliance

costs.

Item 18/19 Forecast 18/19 Budget

Total Operating Revenue 7,534,523 7,747,960

Total Operating Expenses 3,951,079 3,719,104

EBITDA 3,583,444 4,028,856

Total Non-Operating Expenses 1,900,053 1,900,053

NET EARNINGS 1,683,391 2,128,803

Table 4 - 18/19 Airport Operating Budget & Projected Result


7.5.2 Optimising the Financial Statements

Quite detailed and informative “Operating and Expense Statements” are produced quarterly for

the Airport. However, it is noted that not all “full cost pricing elements” of Council’s Competition

and Water Reform Policy are applied within these statements. At present there is no inclusion of

a tax equivalent payment. Furthermore, as the airport should be run at a profit, then there should

be a return on equity that should in part flow back to the Council as a dividend. Hence, to allow

a full view of the commercial performance and position of the Airport, it is recommended that the

statements be restructured to incorporate the following:

Earnings before interest, tax and depreciation (EBITDA) Operating revenue, less operating

expense

Earnings before interest and tax (EBIT) EBITDA less depreciation

Earnings before tax (EBT) EBIT less finance costs

Net profit after tax (NPAT) EBT less tax equivalent

Also, to make more informed commercial decisions there should be a balance sheet and cash

flow statement for the Airport. The balance sheet would provide important information in relation

to the capital structure (debt and equity) and enable linkages to be made to the income statement

(i.e. depreciation and finance costs), as well as to retained earnings and reserves. The cash flow

statement provides critical information regarding the inflows and outflows of cash, along with and

understanding of the business unit’s solvency.

7.5.3 Optimising Depreciation

As flagged earlier, there is a risk that the assumed asset lives within the AMP do not match the

regulatory requirements for renewal and replacement of assets. It would be prudent for the

business unit to review the current approach to the accounting depreciation to better understand

how it has been determined and identify if any of these factors could or should be reviewed.

Considerations should include:

• Initial accounting recognition;

• Valuation or re-valuation of the site improvement asset class. It is recommended that

the business unit consider adopting a 5-yearly full revaluation cycle for this asset class.

This would reduce costs to undertake the revaluations as well as providing greater stability

in both asset values and subsequent depreciation expense year by year. The business

unit should also re-consider the decision to undertake an annual desktop valuation


(between full revaluations). The approach should align with the Council policy concerning

‘materiality’, which does not support annual indexation of the valuations;

• Useful life/remaining useful life estimates. Better aligning asset lives with regulatory

requirements imposed on certain airport assets. Also, for the remaining assets (such as

the land side assets), consider undertaking a benchmarking exercise on the useful lives of

assets of a similar nature and revising the policy accordingly. Also check the approach for

remaining useful life assessment, taking into consideration renewal, improvement and

upgrade expenditure; and

• Capitalisation threshold. Review the “site improvements” financial asset class and

identify those assets that may be included that are now below the current threshold.

7.5.4 Long Term Financial Planning

The 2015 Business Plan includes 20-year financial plans. Such plans play an important role in

helping the business unit understand its financial sustainability and put in place strategies for

maintaining that sustainability. This can include growing revenue as well as controlling costs.

Currently however, such plans are static, and it is recommended that Council develop dynamic

long-term financial plans for the business units so they can be readily updated and kept current

in the face of any material changes in business dynamics or assumptions. This enables the

business unit managers and Council to be making real time decisions relating to commercial

performance.

Such plans should:

• Be structured around the recommendations above relating to the financial statements;

• Be based on robust projections of costs and capital programs;

• For the Airport, be for a minimum of 20 years;

• Model a range of scenarios, including a worst-case revenue option, a “break even” option

and a revenue stretch option; and

• The modelling can be used for investment planning on new revenue earning opportunities

for the Airport.

The actual plans are held and maintained by the Commercial Analyst. Outputs from these plans

are provided in Appendix D of this document. It should be noted that the plans are living

documents and the inputs are to be refined over the life of this Business Plan.


7.5.5 Council’s Commercial Policies

Council has three policies relating to the commercial performance of the Airport. These are

summarised in the following table:

Policy Description

Competition and Water

Reform Policy • Identifies the commercial business units within Council to

which this policy applies;

• This includes the Airport; and

• Identifies the full cost pricing elements that must be applied to

these business units, which includes tax equivalents.

Reserves Policy • Relates to the creation and maintenance of reserves to enable

sound and prudent financial management of Council and its

various business activities;

• Reserves can cover untied infrastructure contributions not

used in a given year and the accumulation of depreciation

funding for infrastructure assets.

Asset Accounting Policy • The purpose of this policy is to provide guidance, clarity and

consistency regarding the treatment of capital expenditure,

depreciation, revaluations, disposals and acquisitions which

will provide greater understanding and accuracy of Council’s

capital requirements.

Table 5 - Council's Commercial Policies


From the Airport’s perspective, it is important that these policies enable it to be financially

sustainable by:

• Clearly defining the commercial expectations Council has of the business unit;

• Clearly defining what costs the business unit should be accounting for and ensuring there

is a robust basis those costs (e.g. corporate overheads);

• Ensuring the business is able to properly account for the cost of maintaining the service

potential of its assets (depreciation);

• Ensuring there is financial capacity for the business to maintain the service potential of its

assets (either through retained earnings or the capacity to borrow the necessary funds);

and

• Clearly defining what funds can be taken by Council at year-end without compromising the

business unit’s financial sustainability (e.g. a tax equivalent payment and a sustainable

dividend policy).

When reviewing the current suite of commercial policies against these requirements:

• Council has not clearly defined its commercial expectations for the Airport. This is

addressed in this Business Plan;

• Council does clearly define in its Competition Policy the costs the business units should be

accounting for. However, this is not being fully applied, particularly with respect to tax

equivalent payments and a return on capital;

• Council does not have a robust method for determining corporate overheads;

• Council does clearly define how to account for the cost of maintaining the service potential

of its assets, but this policy is not correctly applied. This is discussed in further detail in

section 7.5.3 above;

• Council’s Reserves Policy does allow for retained earnings to fund depreciation at the

Airport, but this is not applied. It is noted that the current Policy gives the GM of Corporate

Services the discretion whether or not to set aside reserves for depreciation; and

• No existing policy defines what funds can be taken from the business units at the year-end.

It is recommended therefore, that:

• Council reviews the application of its Commercial Policies to enable its various business

units to be financially sustainable, by addressing the issues listed above; and

• The Competition and Water Reform Policy be amended to define what funds can be taken

from the business units at the year-end.


7.6 Year End Reporting

At present, there is informal year-end financial reporting by the Airport (and other business units)

to the Council and externally. Any financial reports are rolled up into Council’s overall year-end

reports, which compromises the transparency of the Airport’s annual financial and non-financial

performance for a given year.

It is recommended that the Airport, along with the other business units within the Customer and

Commercial Services division, provide separate year-end reports to Council on their financial and

non-financial performance for that year. As part of that year-end reporting, the business units

should recommend to Council (in accordance with relevant policies), what funds should be

retained to cover depreciation and what funds can be taken from the business unit without

compromising its financial sustainability.

Should Council elect to adopt a different position to that recommended, their reasoning would

then be clearly and transparently spelt out. This should then help inform a different course of

action for the business unit to help maintain its financial sustainability.


7.7 Capability & People Management

7.7.1 Airport Resourcing

The Manager Airport is responsible for the Airport operations and management of the site. This

position is responsible for Airport operations. The organisation structure for the airport is provided

below.

Figure 12 - Airport Structure

Contractors are engaged to operate and maintain plant and equipment as required. One of the

most significant staffing requirements is that of airport security and screening, which is supplied

on a contract basis.

General Manager Customer Service and Commercial

Manager Airport

Administration Assistant Airport

Supervisor Operations

Airport

Airport CleanerAirport Reporting

OfficerAirport Reporting

OfficerAirport Reporting

Officer

Assets and Maintenance

Officer

Security and Servicing Contract


7.7.2 Provision of Corporate Services

The Airport receives a range of Corporate Services from Council to support its operations,

including corporate finance, corporate Asset Management, IT services, HR and safety services,

and capital delivery services via the newly established PMO with the Infrastructure and Utilities

division of Council. The need to improve the transparency of both the costs and standard of

corporate services has been identified during the development of this Business Plan. This could

be done by putting in place simple Service Level Agreements, or other mechanisms as seen fit.

An option used successfully in other jurisdictions, is the “business partner” model where personnel

from the Corporate Service providers embed themselves within the business units and develop

an intimate understanding of their requirements. It is also recommended that corporate

overheads be reviewed as they are a material input to the Airport’s cost base.

7.7.3 Business Unit Support Services

It is noted that this Business Plan is being developed in conjunction with similar plans for the

Quarry and Saleyard. Council has requested a review into the structure of Council’s commercial

businesses. A separate report and body of work has been undertaken to provide

recommendations to Council to ensure commercial businesses are operated and managed in an

efficient and effective structure. Outcomes from this review have not been considered by Council

at the time of preparation of the business plans and therefore not included in this business

plan. However, it is noted that the review has indicated that a more concerted focus also on

service and asset planning and compliance and management systems would provide benefit to

the business. The table below expands on this holistic approach to the businesses and the

relationship between the roles within Commercial Services and the Corporate Service providers.


Function Corporate Services Responsibilities Support Services Responsibilities

Management

Accounting

• Council wide budgeting, financial management and

long-term financial planning – including consolidation

of outputs from the business units

• Develop commercial policies for the BU’s

• Oversight the commercial performance of the BU’s

• Prepare Business Unit budgets

• Prepare quarterly financial reports

• Prepare and maintain dynamic long-term financial

plans

• Prepare and maintain dynamic price plans

• Identify operational efficiencies across BU’s

• Identify market opportunities for BU’s

Service and

Asset Planning

• Preparation of AMPs on behalf of the BU’s

• Asset valuations & depreciation charges

• Coordination of condition assessments

• Integration of AMP financial outputs to Council’s overall

budgets and long-term financial plans

• PMO to deliver capex programs

• Develop and implement BU Master Plans

• Develop and implement BU Business Plans

• Own the AMPs

• Validate key AMP inputs

• Prepare renewals and maintenance management

plans

• Develop and maintain BU capex programs &

coordinate their delivery with the PMO

• Undertake investment planning and prepare related

business cases

Compliance

and

Management

Systems

• Setting Council wide governance frameworks and

policies (e.g. delegations, reporting, auditing)

• Setting Council wide requirements relating to safety

policies and management systems

• Deliver upon Council’s safety management system

requirements (including assessing and managing BU

risks)

• Maintain and deliver on BU specific compliance and

management systems

• Coordinate compliance and management system

auditing across BU’s

• Report compliance to Council

• Coordinate with regulators on BU specific matters

(including reporting)


7.7.4 Succession Planning

Loss of key personnel is identified as a key risk for the Quarry. It is proposed that a Talent

Management Plan be developed for the Commercial Services business units (including the

Quarry), which could include:

• Identifying key roles for the business units and ensuring there are successors for those

roles;

• Seeking external mentors for key personnel to help build commercial acumen;

• Planning the exit of employees reaching retirement age. This could include using them to

actively coach and mentor younger staff members; and

• Organising secondments across Council and with other organisations to broaden the

experience of key staff members.

7.8 Management Systems and Compliance

The Airport has a wide range of legislative and other obligations it must adhere to in maintaining

a modern and compliant facility. Regulatory requirements apply to the ongoing management and

maintenance of runways and taxiways, as well as airport lighting and navigation aids to ensure

safe navigation. These are listed in Appendix D of this plan. It maintains a variety of compliance

and management systems to ensure it meets these obligations. Ensuring these obligations are

met is also a key performance measure for the Airport business unit.

The Emerald Airport is a Certified Airport under CASA regulations and there is conduct of security

protection scanning by the Office of Transport Security. The CASA requirements, among others,

include:

• The need for an aerodrome manual;

• Establishing a Safety Management System;

• Provision for regular Aerodrome Technical Inspections;

• Having a Trained Reporting Officer in place; and

• A requirement to monitor obstacles.

Standards are defined by a Manual of Standards (MOS) with specifications (standards) prescribed

by CASA, for uniform application, determined to be necessary for the safety of air navigation.

7.9 Stakeholder Engagement

One of the features of the Airport’s operations is that it has a structured engagement mechanism

via the Airport Advisory Committee. The Committee provides advice and recommendations for


developing and creating effective networks and partnerships between Central Highlands Regional

Council, airport users, community and business. The objectives of the Airport Advisory

Committee are to:

• Provide a forum for engagement, consultation and communication with airport users

including the local business sector and the community;

• Develop an understanding of the legislative framework airports operate under and

incorporate into all matters considered;

• Contribute to future planning considerations;

• Contribute recommendations for airport sustainability through economic development,

tourism and other commercial activities including surrounding airport land and airside areas

In addition to the Advisory Committee, the Airport has a range of other stakeholder committees

including:

• A User’s Committee;

• A Security Committee;

• An Emergency Committee and

• A Safety Committee.

It will be important for Council to ensure that these arrangements are serving it well into the future.

To this end, it is recommended that Council biannually review the effectiveness of these

stakeholder engagement arrangements.


8 Performance Measurement

The following table sets out the proposed performance measures for the Airport. These are

mapped back against the objectives for the Airport. They represent a succinct list of measures

that appropriately reflect the financial and non-financial performance of the Airport over the 3-year

life of this plan. It is important not to overwhelm the business unit with measures.

The measures reflect the outcomes the business unit is working to. These measures are to be

cascaded through to individual performance plans and would pick up the important inputs to

achieving these outcomes (for example, carrying out safety training or conducting periodic safety

audits of the facilities). Collectively the measures will provide a basis for a “balanced scorecard”

on performance across the three objectives for the Airport.


Vision Objectives Performance

Measures Targets Explanation

Emerald Airport will, in operating a competitive, safe and secure facility, be a leader and partner in the development of the Central Highlands


• Throughput • >200,000 Pax • A measure of the annual throughput at the Emerald Airport

• Direct local economic impact (developed as part of the 5 yearly Master Plan)

• 5% increase over baseline (once determined)

• A measure of the impact of the airport on the local economy. This is measured as part of the 5 yearly master planning process


• Asset Sustainability Ratio

• Material audit non-compliance

• Lost Time Injuries

• 90%

• Zero

• Zero

• The Asset Sustainability Ratio reflects the service and financial sustainability of the business unit. Specially this measures the actual renewal spend, plus reserves set aside for depreciation, divided by the depreciation allowance

• Being compliant with its many obligations is critical for the business activity and this target is focused on ensuring there are no material audit non-compliances

• Council has an aspiration for zero harm for all of its activities


• Current assets / current liabilities

• NPAT/Equity

• >1.5

• 5 to 15%

• (Current assets / current liabilities) reflects the liquidity or solvency of the business unit

• NPAT/Equity reflects the profitability of the business unit as a proportion of Equity

Figure 13 - Airport 2019 – 2022 Performance Measures



9 3-Year Program of Initiatives

The following table provides a summary of the program of initiatives to progressed as part of this

Business Plan – along with the recommended timeframe within which the initiatives should be

progressed. Progressing these initiatives will help the Airport achieve its 3-year outcomes and

realise the performance targets set within the plan. This Program is to be read in conjunction with

subsequent table, which provides the detail for each key initiative along with the outcome being

sought from that initiative. Each key initiative is uniquely numbered to allow cross-referencing

between the two tables.

Key Initiative Task Timeline

Y 1 Y 2 Y3

Objective: Provide competitively priced high-quality products

A1 Products &

Services Review Advisory Committee arrangements

Objective: Provide a fit for purpose, safe and compliant airport facilities

B1 Service

Planning Finalise Airport Master Planning

B2 Asset

Management Develop a 20-year renewals program

Update the Airport AMP

B3 Governance

Approve Airport Business Plan

Develop a revised Council reporting regime

Review the Business Plan

B4 Support

Services Establish a Corporate Services SLA

B5 People

Management

Develop a Succession Plan for the Airport BU

Resource the support service functions

Objective: Ensure on-going profitability

C1 Financial

Management Restructure the financial reports

Develop EOY reports

Develop a dynamic long-term financial plan

Maintain the LTFP

C2 Commercial

Performance Review application of Commercial Policies

Optimise the Depreciation charge

Figure 14 - Summary of 2019-22 Key Initiatives


Key Initiative

Description Outcome

Objective: Provide competitively priced high-quality products

A2 Products and Services ▪ Biannually review the effectiveness of the stakeholder engagement

arrangements for the Airport.

Provide valued services

Objective: Provide a fit for purpose, safe and compliant airport facilities

B1 Service Planning • Finalise the current Master Planning exercise

• Associated with this master planning, assess airline operations and

identify emerging opportunities around routes and schedules

Ensure robust planning keeps

abreast of regional development

opportunities

B2 Asset Management • Develop a 20-year renewals program for the facility that will help

inform the optimization of the depreciation charge and inform the long-

term financial planning for the facility. This plan is to focus on meeting

the regulatory obligations of the airport and maintaining the service

potential of the facility

• Develop an Airport AMP in 2019/20 based on the optimization of key

inputs such as valuations, depreciation and the renewals plan

Ensure the Airport has proactive

planning in place to maintain the

service potential of the facility and

ensure the business unit’s financial

sustainability


Objective: Provide a fit for purpose, safe and compliant airport facilities (cont.)

B4 Governance • Ensure the Business Plan is approved and progress against the

performance measures and initiatives are reported upon

• Revise the Business Plan in 3 years at the end of its life

Ensure Council is aligned with and

effectively overseeing the delivery

of this Business Plan

B5 Support Services • Establish an SLA with Corporate Services for the provision of these

services to the Airport. This SLA should contemplate the embedding

of key Corporate Services staff within the business unit to deepen their

understanding of the business

• Resource the support services identified in this plan to enable to

efficient operation of the business unit. These services should be

shared among the Commercial Services business units

Ensure the efficient and effective

delivery of corporate and support

services to enable the Airport to

fully deliver upon this business

plan

B6 People Management • Develop a succession plan for the airport BU as set out in section

7.7.3

Ensure there is the on-going

capability to run the airport

business unit in a sustainable

manner

Objective: Ensure on-going profitability

C1 Financial Management • Restructure the financial reports for budgeting purposes and financial

management, as recommended in this plan

• Also develop end of year reporting and engage Council in decisions

relating to retained earnings and returns to Council

• Develop a live and dynamic long-term financial plan for the Airport as

described in this plan and based on the key inputs described above

• Use the LTFP for day to day decision making within the Airport

Effectively manage the financial

performance of the Airport to

ensure its long-term commercial

sustainability

C2 Commercial Performance • Review the commercial polices applicable to the Airport based on the

recommendations within this plan

• Optimise the depreciation charge based on the recommendations

outlined in this plan

Effectively manage the financial

performance of the Airport to

ensure its long-term commercial

sustainability


10 Governance and Oversight

The following table reflects the responsibilities for preparing, approving and overseeing the delivery

of this Business Plan.

Title Requirement

Council Accountable:

• Approve the Business Plan

• Oversee the implementation of the Business Plan

General Manager of

Customer and

Commercial

Services

Manage:

• Endorse this document for Council approval

• Oversee implementation of the Plan and associated key initiatives

• Allocation of resources to deliver upon the Plan

Manager Airport

Responsible:

• Preparing the Business Plan

• Reporting on the Plan’s implementation

Airport Team Deliver:

• Understand and deliver on the Business Plan

To execute this Business Plan, the Manager Airport will prepare annual budgets which shall be

derived from information within this Plan, along with any emerging issues that may arise over the life

of the Plan. Furthermore, the Manager Airport will report on their progress against the key initiatives

in the Business Plan.

This Business Plan has a 3-year outlook and will be reviewed at least every 3 years or when there

is a major change in the assumptions underpinning this Plan.


11 Appendix A – Documents Reviewed

The following documents were reviewed to inform the development of this business plan.

• Emerald Master Plan Visioning Workshop by Airbiz (2017) Powerpoint Presentation;

• Emerald Airport & Business Precinct Strategic Plan by Lawrence Consulting (2011);

• Edge Business Options Report – 27 June 2013;

• Air Freight Feasibility Report;

• Development Concepts Landside Areas;

• Research & Data Analysis: Emerald Airport by CHRC and CHDC (July 2017);

• Asset Management Plan- Airports 2014/14- 2024/25 by CHRC;

• 2015 Business Plan by CHRC; and

• Quarterly Airport Management Reports.


12 Appendix B - Price List 2019/20


13 Appendix C - Legislative Obligations

Council has a wide range of legislative obligations that it must comply with in relation to the Airport.

Relevant legislation applicable to Council and thus the Airport, includes:

• Queensland Local Government Act 2009

• Queensland Local Government Regulation 2012

• Queensland Industrial Relations Act 1999

• Queensland Environmental Protection Act 1994

• Queensland Work Health and Safety Act 2011

Legislation and guidelines applicable directly to Airport, include:

• Aviation Transport Security Act 2004

• Aviation Transport Security Regulations 2005

• Civil Aviation Act 1988

• Civil Aviation Regulations 1988

• Civil Aviation Safety Regulations 1998

• Civil Aviation Orders

• Air Services Act 1995

• Manual of Standards Part 139 – Aerodromes

• Buildings Code of Australia (BCA) and Standards

• Disability Services Act 2006

• Health Act 1937


14 Appendix D – Long Term Financial Plan Outputs

QTC Local Government Forecasting Model—CHRC

Dashboard Summary

8 errors identified—Airport business unit active

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Selected Business Units Normalise for selected grant program

Use median cash balance for ratios

Control Panel

23 All outputs are in thousands ($'000) unless otherwise indicated�

Budget Forecast

Key financial sustainability metrics Target Jun-15A Jun-16A Jun-17A Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F

Operating surplus ratio 0% to 10% na na na na 22.3% 27.4% 9.9% 7.3% 8.8% 9.5% 11.3% 12.0% 13.8% 14.5% 16.3%na na na na 1.0 1.0 2.0 3.0 3.0 2.0 1.0 1.0 1.0 1.0 1.0

Cash expense cover ratio > 3 months na na na na 29.2 59.8 41.4 35.6 30.3 25.3 20.4 15.6 10.9 6.5 2.0na na na na 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 1.0

Asset sustainability ratio > 90% na na na na -% 923.7% 110.9% 7.7% 7.6% 7.4% 7.4% 7.2% 7.2% 6.9% 6.9%na na na na 1.0 3.0 3.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

Average useful life of depreciable assets na na na na 29.8 26.4 16.8 14.4 13.7 12.4 11.8 10.5 9.8 8.6 7.9na na na na na na na na na na na na na na na

Net financial liabilities ratio <= 60% na na na na 65.2% 92.0% 130.1% 128.9% 124.4% 118.6% 112.5% 105.3% 97.8% 89.1% 80.0%na na na na 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

Council controlled revenue ratio > 60% na na na na 99.7% 97.2% 94.9% 96.3% 96.8% 97.2% 97.6% 98.0% 98.4% 98.8% 99.1%na na na na 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0

Total debt service cover ratio > 2 times na na na na 4.5x 2.2x 1.8x 1.8x 1.8x 1.8x 1.9x 1.9x 1.9x 2.0x 2.0xna na na na 3.0 2.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0

Capital expenditure ratio na na na na na 9.5x 1.2x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1xna na na na na na na na na na na na na na na

Actual

-%

5%

10%

15%

20%

25%

30%

Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F

Operating surplus ratio (%)

Operating surplus ratio DILGP—lower bound DILGP—upper bound

Operating Performance Liquidity

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0


Cash expense cover ratio (months)

Cash expense cover ratio QTC—lower bound

Fiscal Flexibility Asset Sustainability

-%

20%

40%

60%

80%

100%

120%

140%


Net financial liability (%)

Net financial liabilities ratio DILGP—upper bound

-%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Council controlled revenue ratio (%)

Council controlled revenue ratio QTC—lower bound

-

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

4.5x

5.0x


Total debt service cover ratio (times)

Total debt service cover ratio QTC—lower bound

-%

100%

200%

300%

400%

500%

600%

700%

800%

900%

1,000%


Asset sustainability ratio (%)

Asset sustainability ratio QTC—lower bound

-

5.0

10.0

15.0

20.0

25.0

30.0

35.0


Average useful life of depreciable assets (years)

Average useful life of depreciable assets

-%

100%

200%

300%

400%

500%

600%

700%

800%

900%

1,000%


Capital expenditure ratio (times)

Capital expenditure ratio

CHRC Business Units 10June

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Operating performance indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29FActual

(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Operating performance metrics

Operating surplus ratio (%) -% 22.3% 27.4% 9.9% 7.3% 8.8% 9.5% 11.3% 12.0% 13.8% 14.5% 16.3% 22.3% 12.6% 13.1%

Operating efficiency ratio (%) -% 128.8% 137.7% 110.9% 107.9% 109.7% 110.6% 112.7% 113.7% 116.0% 116.9% 119.5% 128.8% 115.3% 115.6%

Sales, contracts and recoverable works margin (%) -% -% -% -% -% -% -% -% -% -% -% -% -% -% -%

Creditor days - 68.5 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 68.5 30.0 30.0

Debtor days - 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0

Gross interest expense as a portion of average term debt (%) -% -% 3.9% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.8% 5.8% -% 5.3% 5.5%

Interest revenue as a portion of average cash (%) -% -% 1.6% 2.9% 2.7% 2.7% 2.8% 2.9% 3.0% 3.2% 3.5% 4.8% -% 2.5% 3.0%

Operating result ($'000)

Actual


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Whole of Council

Selected Business Units

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Use alt. min. liquidity for cash chart

-

2,000

4,000

6,000

8,000

10,000

12,000

Jun-18AJun-19AJun-20BJun-21FJun-22F Jun-23FJun-24F Jun-25FJun-26F Jun-27FJun-28FJun-29F

Operating result ($'000)

Operating result Operating revenue Operating expenses

-%

20%

40%

60%

80%

100%

120%

140%

160%


Operating efficiency ratio (%)

Operating efficiency ratio (%)

-%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Sales, contracts and recoverable works margin (%)

Sales, contracts and recoverable works margin (%)

-%

5%

10%

15%

20%

25%

30%




-

10

20

30

40

50

60

70

80

Jun-18A Jun-19AJun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F

Debtor and creditor days

Creditor days Debtor days

-%

1%

2%

3%

4%

5%

6%

7%


Interest to debt and interest to cash balance ratios (%)

Gross interest expense as a portion of average term debt (%)

Interest revenue as a portion of average cash (%)

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Asset Sustainability

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Operating revenue - 7,535 8,642 9,054 9,115 9,271 9,433 9,601 9,772 9,947 10,126 10,310 na 4.6% 3.2%

Operating expenses - 5,851 6,278 8,161 8,448 8,454 8,533 8,516 8,595 8,572 8,662 8,628 na 7.8% 4.0%

Operating result - 1,683 2,364 892 667 816 901 1,085 1,177 1,375 1,464 1,682 na -11.8% -0.0%


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Operating performance indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29FActual

(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Key general rates drivers

Population 30,093 30,093 30,394 30,968 31,005 31,315 31,628 31,944 32,264 32,586 32,912 33,241 -1.2% 1.0% 1.0%

Rateable properties 14,804 14,804 14,878 14,900 14,952 15,100 15,300 15,375 15,450 15,530 15,600 15,670 -1.1% 0.7% 0.6%

Residents per rateable property 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 -0.1% 0.3% 0.4%

Average general rates per rateable property ($) na na na na na na na na na na na na na na na

Average operating cost per rateable property ($) na na na na na na na na na na na na na na na

Council FTEs

Elected officials - 9 9 9 9 9 9 9 9 9 9 9 na -% -%

Staff FTEs (excluding contractors) - 502 503 505 505 508 508 511 511 511 513 513 na 0.3% 0.2%

Contractor FTEs - - - - - - - - - - - - na na na

Total FTEs 481 511 512 514 514 517 517 520 520 520 522 522 3.5% 0.3% 0.2%

Average council wages & salaries ($)

Staff FTEs na 1,878 1,976 2,008 2,048 2,077 2,118 2,148 2,191 2,235 2,271 2,316 na 2.4% 2.1%

Contractor FTEs na na na na na na na na na na na na na na na

All FTEs excluding elected officials na 1,878 1,976 2,008 2,048 2,077 2,118 2,148 2,191 2,235 2,271 2,316 na 2.4% 2.1%

Actual

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4,000

6,000

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16,000

18,000

Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F

Rateable properties vs. general rates per rateable property ($)

Rateable properties (LHS) Average general rates per rateable property ($) (RHS)

-

500

1,000

1,500

2,000

2,500

-

100

200

300

400

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600

Jun-19AJun-20BJun-21FJun-22FJun-23FJun-24FJun-25FJun-26FJun-27FJun-28FJun-29F

Ave

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FT

Es

Council FTEs vs. average wages & salaries per FTE ($)

Elected officials (LHS) Staff FTEs (LHS)

Contractor FTEs (LHS) Average wages & salaries (RHS)

1.98

2.00

2.02

2.04

2.06

2.08

2.10

2.12

2.14

-

5,000

10,000

15,000

20,000

25,000

30,000

35,000LGA population vs. rateable properties

Residents per rateable property (RHS) Population (LHS) Rateable properties (LHS)


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Fiscal flexibility indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29FActual

(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Key metrics

Net financial liabilities ratio (%) -% 65.2% 92.0% 130.1% 128.9% 124.4% 118.6% 112.5% 105.3% 97.8% 89.1% 80.0% 65.2% 118.8% 107.9%

Council controlled revenue ratio (%) -% 99.7% 97.2% 94.9% 96.3% 96.8% 97.2% 97.6% 98.0% 98.4% 98.8% 99.1% 99.7% 96.5% 97.4%

Self generated revenue ratio (%) -% 128.8% 137.7% 110.9% 107.9% 109.7% 110.6% 112.7% 113.7% 116.0% 116.9% 119.5% 128.8% 115.3% 115.6%

Total debt service cover ratio (times) - 4.5x 2.2x 1.8x 1.8x 1.8x 1.8x 1.9x 1.9x 1.9x 2.0x 2.0x 4.5 1.9 1.9

Interest cover ratio (times) - 4.5x 6.3x 3.6x 3.9x 4.2x 4.6x 5.1x 5.8x 6.7x 7.9x 9.7x 4.5 4.5 5.8

Net operating cash flow as a percentage of net capital expenditure (%) -% -% -4.1% 75.1% 1,095.0% 1,374.0% 1,420.4% 1,438.3% 1,489.2% 1,509.2% 1,568.7% 1,593.0% -% 792.1% 1,155.9%

Actual

-%

20%

40%

60%

80%

100%

120%

140%


Net financial liabilities ratio (%)

Net financial liabilities ratio (%)

-%

20%

40%

60%

80%

100%

120%




-%

20%

40%

60%

80%

100%

120%

140%

160%


Self generated revenue ratio (%)

Self generated revenue ratio (%)

-

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

4.5x

5.0x




-

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x


Interest cover ratio (times)

Interest cover ratio (times)

-200%

-%

200%

400%

600%

800%

1,000%

1,200%

1,400%

1,600%

1,800%


Net operating cash flow as a percentage of net capital expenditure (%)

Net operating cash flow as a percentage of net capital expenditure (%)


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(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Operating revenues—by category ($'000)

Net rates, levies and charges - - - - - - - - - - - - na na na

Fees and charges - 7,515 8,404 8,589 8,778 8,971 9,168 9,370 9,576 9,787 10,002 10,222 na 4.1% 3.1%

Operating grants and subsidies - - - - - - - - - - - - na na na

Sales revenue - - - - - - - - - - - - na na na

Interest received - - 226 453 324 287 252 218 182 147 110 73 na na na

Other operating income - 19 12 12 12 13 13 13 13 14 14 14 na -7.7% -2.9%

Total - 7,535 8,642 9,054 9,115 9,271 9,433 9,601 9,772 9,947 10,126 10,310 na 4.6% 3.2%

Operating revenues—annual growth rates (%)

Net rates, levies and charges na na na na na na na na na na na na -% -% -%

Fees and charges na na 11.8% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% -% -% -%

Operating grants and subsidies na na na na na na na na na na na na -% -% -%

Sales revenue na na na na na na na na na na na na -% -% -%

Interest received na na na 100.0% -28.3% -11.6% -12.2% -13.6% -16.4% -19.4% -25.2% -33.1% -% -% -%

Other operating income na na -38.5% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% -% -% -%

Total na na 14.7% 4.8% 0.7% 1.7% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8% -% -% -%

Operating revenues—percentage of total operating revenue (%)

Net rates, levies and charges na -% -% -% -% -% -% -% -% -% -% -% -% -% -%

Fees and charges na 99.7% 97.2% 94.9% 96.3% 96.8% 97.2% 97.6% 98.0% 98.4% 98.8% 99.1% 99.7% 96.5% 97.4%

Operating grants and subsidies na -% -% -% -% -% -% -% -% -% -% -% -% -% -%

Sales revenue na -% -% -% -% -% -% -% -% -% -% -% -% -% -%

Actual

-

2,000

4,000

6,000

8,000

10,000

12,000

Jun-18AJun-19AJun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F

Operating revenues—by category ($'000)

Net rates, levies and charges Fees and charges Operating grants and subsidies

Sales revenue Interest received Other operating income

-%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Operating revenues—percentage of total operating revenue (%)

Net rates, levies and charges Fees and charges Operating grants and subsidies

Sales revenue Interest received Other operating income

-60%

-40%

-20%

-%

20%

40%

60%

80%

100%

120%


Operating revenues—annual growth rates (%)

Total Net rates, levies and charges Fees and charges

Operating grants and subsidies Sales revenue Interest received

Other operating income


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Interest received na -% 2.6% 5.0% 3.6% 3.1% 2.7% 2.3% 1.9% 1.5% 1.1% 0.7% -% 3.4% 2.4%

Other operating income na 0.3% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.1% 0.3% 0.1% 0.1%

Total na 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%


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(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Operating expenses—by category ($'000)

Employee benefits - 942 1,000 1,020 1,040 1,061 1,082 1,104 1,126 1,148 1,171 1,194 na 2.8% 2.4%

Materials and services - 2,946 2,583 2,640 2,698 2,757 2,818 2,880 2,943 3,008 3,074 3,142 na -0.9% 0.6%

Depreciation and amortisation - 1,109 1,835 2,972 3,265 3,283 3,372 3,376 3,478 3,482 3,602 3,606 na 24.9% 12.5%

Finance costs - 791 793 1,462 1,375 1,283 1,188 1,082 972 857 736 605 na 8.5% -2.7%

Other operating expenses - 63 66 68 69 71 72 74 76 77 79 81 na 2.8% 2.5%

Total - 5,851 6,278 8,161 8,448 8,454 8,533 8,516 8,595 8,572 8,662 8,628 na 7.8% 4.0%

Operating expenses—annual growth rates (%)

Employee benefits na na 6.2% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% -% -% -%

Materials and services na na -12.3% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% -% -% -%

Depreciation and amortisation na na 65.5% 61.9% 9.9% 0.5% 2.7% 0.1% 3.0% 0.1% 3.4% 0.1% -% -% -%

Finance costs na na 0.2% 84.3% -6.0% -6.7% -7.4% -9.0% -10.1% -11.9% -14.1% -17.9% -% -% -%

Other operating expenses na na 5.3% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% -% -% -%

Total na na 7.3% 30.0% 3.5% 0.1% 0.9% -0.2% 0.9% -0.3% 1.1% -0.4% -% -% -%

Operating expenses—percentage of total operating revenue (%)

Employee benefits na 16.1% 15.9% 12.5% 12.3% 12.5% 12.7% 13.0% 13.1% 13.4% 13.5% 13.8% 16.1% 13.2% 13.3%

Materials and services na 50.4% 41.1% 32.3% 31.9% 32.6% 33.0% 33.8% 34.2% 35.1% 35.5% 36.4% 50.4% 34.2% 34.6%

Depreciation and amortisation na 18.9% 29.2% 36.4% 38.7% 38.8% 39.5% 39.6% 40.5% 40.6% 41.6% 41.8% 18.9% 36.5% 38.7%

Finance costs na 13.5% 12.6% 17.9% 16.3% 15.2% 13.9% 12.7% 11.3% 10.0% 8.5% 7.0% 13.5% 15.2% 12.5%

Other operating expenses na 1.1% 1.1% 0.8% 0.8% 0.8% 0.8% 0.9% 0.9% 0.9% 0.9% 0.9% 1.1% 0.9% 0.9%

Actual

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000


Operating expenses—by category ($'000)

Employee benefits Materials and services Depreciation and amortisation

Finance costs Other operating expenses

-%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Operating expenses—percentage of total operating revenue (%)

Employee benefits Materials and services Depreciation and amortisation

Finance costs Other operating expenses

-40%

-20%

-%

20%

40%

60%

80%

100%


Operating expenses—annual growth rates (%)

Total Employee benefits Materials and services

Depreciation and amortisation Finance costs Other operating expenses


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Total na 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%


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Asset Sustainability Page 1 of 4


Asset sustainability indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29FActual

(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Key metrics

Asset sustainability ratio (%) -% -% 923.7% 110.9% 7.7% 7.6% 7.4% 7.4% 7.2% 7.2% 6.9% 6.9% -% 211.5% 109.3%

Asset renewal funding ratio (%) -% -% -% -% -% -% -% -% -% -% -% -% -% -% -%

Depreciation as a percentage of closing written down value of property, plant & equipment (%)-% 3.4% 3.8% 5.9% 6.9% 7.3% 8.0% 8.5% 9.5% 10.2% 11.7% 12.7% 3.4% 6.4% 8.4%

Capital expenditure ratio (times) - - 9.5x 1.2x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x - 2.2 1.1

Average useful life by asset class (years)

Land improvements na na 25.2 24.3 23.2 22.3 21.2 20.3 19.2 18.3 17.2 16.3 na 23.2 20.7

Buildings na na 25.4 24.8 23.3 23.5 22.6 22.5 21.6 21.5 20.6 20.5 na 23.9 22.6

Plant & equipment na na 20.0 19.0 18.0 17.0 16.0 15.0 14.0 13.0 12.0 11.0 na 18.0 15.5

Furniture & fittings na na na na na na na na na na na na na na na

Roads, drainage & bridge network na 16.2 27.0 14.9 12.4 11.7 10.3 9.6 8.3 7.6 6.3 5.5 16.2 15.3 11.4

Water na na na na na na na na na na na na na na na

Actual

-%

100%

200%

300%

400%

500%

600%

700%

800%

900%

1,000%




-%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%


Asset renewal funding ratio (%)

Asset renewal funding ratio (%)

-%

2%

4%

6%

8%

10%

12%

14%


Depreciation as a percentage of closing written down value of property, plant & equipment (%)

Depreciation as a percentage of closing written down value of property, plant & equipment (%)

-

1.0x

2.0x

3.0x

4.0x

5.0x

6.0x

7.0x

8.0x

9.0x

10.0x




-

5

10

15

20

25

30

Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F

Average useful life by asset class

Average useful life of depreciable assets Land improvementsBuildings Plant & equipmentFurniture & fittings Roads, drainage & bridge networkWater SewerageMiscellaneous

-

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000


Community equity ($'000)

Community equity Total assets Total liabilities


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Sewerage na na na na na na na na na na na na na na na

Miscellaneous na na na na na na na na na na na na na na na

Average useful life of depreciable assets na 29.8 26.4 16.8 14.4 13.7 12.4 11.8 10.5 9.8 8.6 7.9 29.8 16.8 13.2


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(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Capital expenditure—by asset class ($'000)

Land - - - - - - - - - - - - na na na

Land improvements - - - - - - - - - - - - na na na

Buildings - - 393 165 50 250 250 250 250 250 250 250 na na na

Plant & equipment - - - - - - - - - - - - na na na

Furniture & fittings - - - - - - - - - - - - na na na

Roads, drainage & bridge network - 1,835 16,950 3,295 250 - - - - - - - na -100.0% -100.0%

Water - - - - - - - - - - - - na na na

Sewerage - - - - - - - - - - - - na na na

Miscellaneous - - - - - - - - - - - - na na na

Intangible - - - - - - - - - - - - na na na

Total capital expenditure - 1,835 17,343 3,460 300 250 250 250 250 250 250 250 na -32.9% -18.1%

Capital expenditure—by asset type ($'000)

New - - 393 165 50 - - - - - - - na na na

Renewal - - 16,950 3,295 250 250 250 250 250 250 250 250 na na na

Upgrade - - - - - - - - - - - - na na na

Total capital expenditure - - 17,343 3,460 300 250 250 250 250 250 250 250 na na na

Closing book value of PP&E—by asset class ($'000)

Land - 4,345 4,345 4,345 4,345 4,345 4,345 4,345 4,345 4,345 4,345 4,345 na -% -%

Land improvements - 8,139 7,828 7,567 7,254 6,991 6,676 6,410 6,092 5,825 5,504 5,234 na -3.9% -4.3%

Buildings - 6,865 6,983 6,975 6,736 6,808 6,759 6,825 6,762 6,821 6,743 6,794 na -0.3% -0.1%

Plant & equipment - 21 20 19 18 17 16 15 14 13 12 11 na -5.3% -6.3%

Furniture & fittings - - - - - - - - - - - - na na na

Roads, drainage & bridge network - 17,996 33,698 35,461 33,048 31,244 28,487 26,544 23,698 21,602 18,649 16,378 na 9.6% -0.9%

Water - - - - - - - - - - - - na na na

Sewerage - - - - - - - - - - - - na na na

Actual

-

5,000

10,000

15,000

20,000

Jun-18AJun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F

Capital expenditure—by asset class ($'000)

Land Land improvements BuildingsPlant & equipment Furniture & fittings Roads, drainage & bridge networkWater Sewerage MiscellaneousIntangible

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000


Capital expenditure—by asset type ($'000)

New Renewal Upgrade

-

10,000

20,000

30,000

40,000

50,000

60,000


Closing book value of PP&E—by asset class ($'000)

Land Land improvements BuildingsPlant & equipment Furniture & fittings Roads, drainage & bridge networkWater Sewerage MiscellaneousIntangible


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Miscellaneous - - - - - - - - - - - - na na na

Intangible - - - - - - - - - - - - na na na

Total closing book value - 37,366 52,874 54,367 51,402 49,405 46,283 44,140 40,912 38,605 35,253 32,762 na 4.4% -1.3%


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(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Capital expenditure—by funding source ($'000)

New borrowings - - 13,000 - - - - - - - - - na na na

Grants - - - - - - - - - - - - na na na

Subsidies - - 3,056 - - - - - - - - - na na na

Contributions - - - - - - - - - - - - na na na

Donations - - - - - - - - - - - - na na na

Working capital - - 1,287 3,460 300 250 250 250 250 250 250 250 na na na

Total - - 17,343 3,460 300 250 250 250 250 250 250 250 na na na

Term debt ($'000)

Long-term portion of term debt - 12,776 24,894 23,304 21,623 19,846 17,964 15,972 13,864 11,636 9,277 6,780 na 7.1% -6.1%

Current portion of term debt - 1,500 1,506 1,589 1,682 1,776 1,883 1,992 2,108 2,228 2,360 2,497 na 4.6% 5.2%

Total term debt - 14,276 26,399 24,894 23,304 21,623 19,846 17,964 15,972 13,864 11,636 9,277 na 6.8% -4.2%

Net debt position - 4,664 8,211 12,041 12,020 11,799 11,463 11,081 10,572 10,014 9,306 8,538 na 19.7% 6.2%

Actual

-

2,000.00

4,000.00

6,000.00

8,000.00

10,000.00

12,000.00

14,000.00

16,000.00

18,000.00

20,000.00


Capital expenditure—by funding source ($'000)

New borrowings Grants Subsidies Contributions Donations Working capital

-

5,000.00

10,000.00

15,000.00

20,000.00

25,000.00

30,000.00


Term debt ($'000)

Long-term portion of term debt Current portion of term debt

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000


Net debt position

Net debt position


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(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Forecasted debt repayments ($'000)

Scheduled principal repayments - - 877 1,506 1,589 1,682 1,776 1,883 1,992 2,108 2,228 2,360 na na na

Additional principal repayments na na - - - - - - - - - - na na na

Interest repayments - - 793 1,462 1,375 1,283 1,188 1,082 972 857 736 605 na na na

Total payments - - 1,670 2,968 2,964 2,964 2,964 2,964 2,964 2,964 2,964 2,964 na na na

Key debt measures

Total debt to operating revenue (times) na 1.9x 3.1x 2.7x 2.6x 2.3x 2.1x 1.9x 1.6x 1.4x 1.1x 0.9x 1.9x 2.6x 2.0x

Total debt to community equity (times) na 0.4x 0.8x 0.7x 0.7x 0.6x 0.6x 0.5x 0.4x 0.4x 0.3x 0.2x 0.4x 0.7x 0.5x

Total debt per capita ($) na na 669 828 777 717 656 592 526 458 387 315 na 729 592

Total debt per rateable property ($) na na na na na na na na na na na na na na na

Actual

-

500

1,000

1,500

2,000

2,500

3,000

3,500


Forecasted debt repayments ($'000)

Scheduled principal repayments Additional principal repayments Interest repayments

-

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x


Total debt to operating revenue & community equity (times)

Total debt to operating revenue (times) Total debt to community equity (times)

-

100

200

300

400

500

600

700

800

900


Total debt per capita & rateable property ($)

Total debt per capita ($) Total debt per rateable property ($)


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Liquidity Position Page 1 of 2

Time period for the chart from the start of the forecast 10 years

-

10.0

20.0

30.0

40.0

50.0

60.0

70.0


Cash expense cover (months)

Cash expense cover (months) QTC—lower bound QTC—upper bound

-

2.0x

4.0x

6.0x

8.0x

10.0x

12.0x


Working capital ratio (times)

Working capital ratio (times) QTC—lower bound QTC—upper bound

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000


Closing cash balance and median annual cash balance

(5,000)

-

5,000

10,000

15,000

20,000

25,000

Jul-1

9B

Sep

-19B

Nov

-19B

Jan-

20B

Mar

-20B

May

-20B

Jul-2

0F

Sep

-20F

Nov

-20F

Jan-

21F

Mar

-21F

May

-21F

Jul-2

1F

Sep

-21F

Nov

-21F

Jan-

22F

Mar

-22F

May

-22F

Jul-2

2F

Sep

-22F

Nov

-22F

Jan-

23F

Mar

-23F

May

-23F

Jul-2

3F

Sep

-23F

Nov

-23F

Jan-

24F

Mar

-24F

May

-24F

Jul-2

4F

Sep

-24F

Nov

-24F

Jan-

25F

Mar

-25F

May

-25F

Jul-2

5F

Sep

-25F

Nov

-25F

Jan-

26F

Mar

-26F

May

-26F

Jul-2

6F

Sep

-26F

Nov

-26F

Jan-

27F

Mar

-27F

May

-27F

Jul-2

7F

Sep

-27F

Nov

-27F

Jan-

28F

Mar

-28F

May

-28F

Jul-2

8F

Sep

-28F

Nov

-28F

Jan-

29F

Mar

-29F

May

-29F

Cash cycle by cash segments ($'000)

Cash cover Externally restricted Internally restricted Long-term surplus Short-term surplus

Overdraft Cash cover (unfunded) Cash balance Net cash balance Approved working capital facility limit

-

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

20,000


Closing balance of cash and cash equivalents ($'000)

-

5,000

10,000

15,000

20,000

25,000


Annual unrestricted cash balance range (high, median, low)


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Print All


Fiscal Flexibility


Liquidity



Cash and cash equivalents—closing balance Cash and cash equivalents—median balance


Externally restricted Internally restricted Unrestricted



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Whole of Council





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Print All


Fiscal Flexibility


Liquidity


Liquidity Position Page 2 of 2

Budget Forecast Average annual rates

Liquidity position indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29FActual

(FY15-19)

Forecast

(FY20-24)

Forecast

(FY20-29)

Liquidity metrics

Cash and cash equivalents—closing balance - 9,612 18,188 12,853 11,284 9,823 8,384 6,883 5,400 3,851 2,330 739 na -2.7% -22.6%

Cash and cash equivalents—median balance - - 10,597 18,274 13,001 11,502 10,113 8,762 7,326 5,902 4,415 2,955 na na na

Cash expense cover (months) - 29.2 59.8 41.4 35.6 30.3 25.3 20.4 15.6 10.9 6.5 2.0 29.2 38.5 24.8

Working capital ratio (times) - 4.3x 9.9x 6.8x 5.7x 4.8x 3.9x 3.1x 2.4x 1.7x 1.1x 0.5x 4.3x 6.2x 4.0x

Closing balance of cash and cash equivalents ($'000)

Externally restricted - - - - - - - - - - - - na na na

Internally restricted - 5,000 5,000 5,000 5,000 5,000 5,000 5,000 - - - - na -% -100.0%

Unrestricted - 4,612 13,188 7,853 6,284 4,823 3,384 1,883 5,400 3,851 2,330 739 na -6.0% -16.7%

Total cash - 9,612 18,188 12,853 11,284 9,823 8,384 6,883 5,400 3,851 2,330 739 na -2.7% -22.6%

Actual


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Statement of Comprehensive Income

Line item Annual result

Jun-15A Jun-16A Jun-17A Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F


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General Saleyards

[Inactive BU] 5

[Inactive BU] 6


Whole of Council



Control Panel


Income

Revenue

Operating revenue

General rates - - - - - - - - - - - - - - -

Separate rates - - - - - - - - - - - - - - -

Levies - - - - - - - - - - - - - - -

Water - - - - - - - - - - - - - - -

Water consumption, rental and sundries - - - - - - - - - - - - - - -

Sewerage - - - - - - - - - - - - - - -

Sewerage trade waste - - - - - - - - - - - - - - -

Waste management - - - - - - - - - - - - - - -

Garbage charges - - - - - - - - - - - - - - -

Other rates, levies and charges - - - - - - - - - - - - - - -

Less: discounts - - - - - - - - - - - - - - -

Less: pensioner remissions - - - - - - - - - - - - - - -

Net rates, levies and charges - - - - - - - - - - - - - - -

Building and development fees - - - - - - - - - - - - - - -

Infringements - - - - - - - - - - - - - - -

Licences and registrations - - - - - - - - - - - - - - -

Other fees and charges - - - - 7,515 8,404 8,589 8,778 8,971 9,168 9,370 9,576 9,787 10,002 10,222

Fees and charges - - - - 7,515 8,404 8,589 8,778 8,971 9,168 9,370 9,576 9,787 10,002 10,222

Other rental income - - - - - - - - - - - - - - -

Rental income - - - - - - - - - - - - - - -

Interest from overdue rates, levies and charges - - - - - - - - - - - - - - -

Interest received from investments - - - - - 226 453 324 287 252 218 182 147 110 73

Other interest received - - - - - - - - - - - - - - -

Interest received - - - - - 226 453 324 287 252 218 182 147 110 73

Contract and recoverable works - - - - - - - - - - - - - - -

Gain/(loss) on sale of land held as inventory - - - - - - - - - - - - - - -

Gain/(loss) on sale of inventory held for sale - - - - - - - - - - - - - - -

Gain/(loss) on sale of non-current assets held as inventory - - - - - - - - - - - - - - -

Other sales revenue - - - - - - - - - - - - - - -

Sales revenue - - - - - - - - - - - - - - -

Profit (loss) from joint ventures & associates - - - - - - - - - - - - - - -

Profit (loss) from controlled entities - - - - - - - - - - - - - - -


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[Inactive BU] 5

[Inactive BU] 6


Whole of Council



Control Panel


Profit (loss) from other investments - - - - - - - - - - - - - - -

Profit from investments - - - - - - - - - - - - - - -

External dividends received - - - - - - - - - - - - - - -

Internal charges received - - - - - - - - - - - - - - -

Other income - - - - 19 12 12 12 13 13 13 13 14 14 14

Other income - - - - 19 12 12 12 13 13 13 13 14 14 14

General purpose grants - - - - - - - - - - - - - - -

State subsidies and grants—operating - - - - - - - - - - - - - - -

Commonwealth subsidies and grants—operating - - - - - - - - - - - - - - -

Other non-government subsidies and grants - - - - - - - - - - - - - - -

Donations—operating - - - - - - - - - - - - - - -

Contributions—operating - - - - - - - - - - - - - - -

Grants, subsidies, contributions and donations - - - - - - - - - - - - - - -

Total operating revenue - - - - 7,535 8,642 9,054 9,115 9,271 9,433 9,601 9,772 9,947 10,126 10,310

Capital revenue

Government subsidies and grants—capital - - - - - 3,056 - - - - - - - - -

Donations—capital - - - - - - - - - - - - - - -

Contributions—capital - - - - - - - - - - - - - - -

Other capital contributions - - - - - - - - - - - - - - -

Grants, subsidies, contributions and donations - - - - - 3,056 - - - - - - - - -

Total revenue - - - - 7,535 11,698 9,054 9,115 9,271 9,433 9,601 9,772 9,947 10,126 10,310

Capital income

Profit/(loss) on disposal of property, plant & equipment - - - - - - - - - - - - - - -

Profit/(loss) on sale of joint ventures & associates - - - - - - - - - - - - - - -

Profit/(loss) on sale of controlled entities - - - - - - - - - - - - - - -

Profit/(loss) on sale of other investments - - - - - - - - - - - - - - -

Profit/(loss) on sale of investment property - - - - - - - - - - - - - - -

Revaluation up of property, plant & equipment reversing previous revaluation down - - - - - - - - - - - - - - -

Revaluation of investment property - - - - - - - - - - - - - - -

Revaluation up of joint ventures & associates - - - - - - - - - - - - - - -

Revaluation up of controlled entities - - - - - - - - - - - - - - -

Other capital income - - - - - - - - - - - - - - -

Total capital income - - - - - - - - - - - - - - -

Total income - - - - 7,535 11,698 9,054 9,115 9,271 9,433 9,601 9,772 9,947 10,126 10,310


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Airport

Quarry


General Saleyards

[Inactive BU] 5

[Inactive BU] 6


Whole of Council



Control Panel


Expenses

Operating expenses

Total staff wages and salaries - - - - 942 994 1,014 1,034 1,055 1,076 1,098 1,120 1,142 1,165 1,188

Councillors' remuneration - - - - - - - - - - - - - - -

Employee provision expense - - - - - 6 6 6 6 6 6 6 6 6 6

Other employee related expenses - - - - - - - - - - - - - - -

Less: capitalised employee expenses - - - - - - - - - - - - - - -

Employee benefits - - - - 942 1,000 1,020 1,040 1,061 1,082 1,104 1,126 1,148 1,171 1,194

M&S—sales contract & recoverable works - - - - 244 234 239 244 250 255 261 267 272 278 285

M&S—administration supplies - - - - - - - - - - - - - - -

M&S—audit services - - - - - - - - - - - - - - -

M&S—communication & IT - - - - - - - - - - - - - - -

M&S—consultants - - - - 211 86 88 90 91 94 96 98 100 102 104

M&S—contractors - - - - 2,179 2,004 2,048 2,093 2,139 2,186 2,234 2,283 2,333 2,385 2,437

M&S—electricity - - - - - - - - - - - - - - -

M&S—council maintenance - - - - 312 260 266 271 277 283 290 296 303 309 316

M&S—travel - - - - - - - - - - - - - - -

M&S—other - - - - - - - - - - - - - - -

Materials and services - - - - 2,946 2,583 2,640 2,698 2,757 2,818 2,880 2,943 3,008 3,074 3,142

Finance costs charged by QTC and General - - - - 791 793 1,462 1,375 1,283 1,188 1,082 972 857 736 605

Interest paid on overdraft - - - - - - - - - - - - - - -

Bank charges - - - - - - - - - - - - - - -

Interest on finance leases - - - - - - - - - - - - - - -

Other finance costs - - - - - - - - - - - - - - -

Finance costs - - - - 791 793 1,462 1,375 1,283 1,188 1,082 972 857 736 605

Land improvements - - - - - 311 311 313 313 315 315 318 318 321 321

Buildings - - - - - 275 282 289 290 299 303 313 317 328 332

Plant & equipment - - - - - 1 1 1 1 1 1 1 1 1 1

Furniture & fittings - - - - - - - - - - - - - - -

Roads, drainage & bridge network - - - - 1,109 1,248 2,378 2,662 2,679 2,757 2,757 2,846 2,846 2,953 2,953

Water - - - - - - - - - - - - - - -

Sewerage - - - - - - - - - - - - - - -

Miscellaneous - - - - - - - - - - - - - - -

Amortisation of intangible assets - - - - - - - - - - - - - - -

Depreciation and amortisation - - - - 1,109 1,835 2,972 3,265 3,283 3,372 3,376 3,478 3,482 3,602 3,606


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[Inactive BU] 5

[Inactive BU] 6


Whole of Council



Control Panel


Bad and doubtful debts - - - - - - - - - - - - - - -

Rentals & operating leases - - - - - - - - - - - - - - -

Payments - - - - - - - - - - - - - - -

Restructuring provision expense - - - - - - - - - - - - - - -

Other provision expense - - - - - - - - - - - - - - -

Other expenses - - - - 63 66 68 69 71 72 74 76 77 79 81

Other expenses - - - - 63 66 68 69 71 72 74 76 77 79 81

Total operating expenses - - - - 5,851 6,278 8,161 8,448 8,454 8,533 8,516 8,595 8,572 8,662 8,628

Capital expenses

Loss on impairment - - - - - - - - - - - - - - -

Restoration & rehabilitation provision expense - - - - - - - - - - - - - - -

Revaluation decrement - - - - - - - - - - - - - - -

Other capital expenses - - - - - - - - - - - - - - -

Total capital expenses - - - - - - - - - - - - - - -

Total expenses - - - - 5,851 6,278 8,161 8,448 8,454 8,533 8,516 8,595 8,572 8,662 8,628

Net result - - - - 1,683 5,420 892 667 816 901 1,085 1,177 1,375 1,464 1,682

Tax equivalents

Net result before tax equivalents - - - - 1,683 5,420 892 667 816 901 1,085 1,177 1,375 1,464 1,682

Tax equivalents payable - - - - - 1,626 268 200 245 270 326 353 413 439 505

Net result after tax equivalents - - - - 1,683 3,794 625 467 571 630 760 824 963 1,025 1,178

Other comprehensive income

Items that will not be reclassified to net result

Increase (decrease) in asset revaluation surplus - - - - - - - - - - - - - - -

Miscellaneous comprehensive income - - - - - - - - - - - - - - -

Total other comprehensive income for the year - - - - - - - - - - - - - - -

Total comprehensive income for the year - - - - 1,683 5,420 892 667 816 901 1,085 1,177 1,375 1,464 1,682

Operating result

Operating revenue - - - - 7,535 8,642 9,054 9,115 9,271 9,433 9,601 9,772 9,947 10,126 10,310


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General Saleyards

[Inactive BU] 5

[Inactive BU] 6


Whole of Council



Control Panel


Operating expenses - - - - 5,851 6,278 8,161 8,448 8,454 8,533 8,516 8,595 8,572 8,662 8,628

Operating result - - - - 1,683 2,364 892 667 816 901 1,085 1,177 1,375 1,464 1,682


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Statement of Financial Position




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Airport

Quarry


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[Inactive BU] 5

[Inactive BU] 6


Whole of Council



Control Panel


Assets

Current assets

Internally restricted component - - - - 5,000 5,000 5,000 5,000 5,000 5,000 5,000 - - - -

Externally restricted component - - - - - - - - - - - - - - -

Unrestricted component - - - - 4,612 13,188 7,853 6,284 4,823 3,384 1,883 5,400 3,851 2,330 739

Cash and cash equivalents - - - - 9,612 18,188 12,853 11,284 9,823 8,384 6,883 5,400 3,851 2,330 739

General trade and other receivables - - - - 619 690 707 722 738 753 771 788 806 821 841

Internal loans outstanding - - - - - - - - - - - - - - -

Trade and other receivables - - - - 619 690 707 722 738 753 771 788 806 821 841

Inventories held for sale - - - - - - - - - - - - - - -

Inventories held for distribution - - - - - - - - - - - - - - -

Land held for development or sale - - - - - - - - - - - - - - -

Inventories - - - - - - - - - - - - - - -

Tax equivalent assets - - - - - - - - - - - - - - -

Prepayments - - - - - - - - - - - - - - -

Other current assets - - - - - - - - - - - - - - -

Other current assets - - - - - - - - - - - - - - -

Non-current assets held for sale - - - - - - - - - - - - - - -

Total current assets - - - - 10,231 18,878 13,560 12,007 10,562 9,136 7,654 6,188 4,656 3,151 1,580

Non-current assets

Land held for development for sale - - - - - - - - - - - - - - -

Inventories - - - - - - - - - - - - - - -

General trade and other receivables - - - - - - - - - - - - - - -

Internal loans outstanding - - - - - - - - - - - - - - -

Trade and other receivables - - - - - - - - - - - - - - -

Joint ventures & associates - - - - - - - - - - - - - - -

Controlled entities - - - - - - - - - - - - - - -

Other investments - - - - - - - - - - - - - - -

Investment property - - - - - - - - - - - - - - -

Investments - - - - - - - - - - - - - - -

Land - - - - 4,345 4,345 4,345 4,345 4,345 4,345 4,345 4,345 4,345 4,345 4,345


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[Inactive BU] 5

[Inactive BU] 6


Whole of Council



Control Panel


Land improvements - - - - 8,139 7,828 7,567 7,254 6,991 6,676 6,410 6,092 5,825 5,504 5,234

Buildings - - - - 6,865 6,983 6,975 6,736 6,808 6,759 6,825 6,762 6,821 6,743 6,794

Plant & equipment - - - - 21 20 19 18 17 16 15 14 13 12 11

Furniture & fittings - - - - - - - - - - - - - - -

Roads, drainage & bridge network - - - - 17,996 33,698 35,461 33,048 31,244 28,487 26,544 23,698 21,602 18,649 16,378

Water - - - - - - - - - - - - - - -

Sewerage - - - - - - - - - - - - - - -

Miscellaneous - - - - - - - - - - - - - - -

Work in progress - - - - - - - - - - - - - - -

Property, plant & equipment - - - - 37,366 52,874 54,367 51,402 49,405 46,283 44,140 40,912 38,605 35,253 32,762

Intangible assets - - - - - - - - - - - - - - -

Other non-current assets - - - - - - - - - - - - - - -

Other non-current assets - - - - - - - - - - - - - - -

Total non-current assets - - - - 37,366 52,874 54,367 51,402 49,405 46,283 44,140 40,912 38,605 35,253 32,762

Total assets - - - - 47,597 71,752 67,927 63,408 59,967 55,420 51,794 47,100 43,262 38,404 34,342

Liabilities

Current liabilities

Overdraft - - - - - - - - - - - - - - -

Employee payables - - - - 77 81 83 85 87 88 90 92 94 95 98

Other payables - - - - 664 217 223 227 232 237 243 248 254 258 265

Trade and other payables - - - - 741 299 306 312 319 325 333 340 347 354 363

Loans - - - - 1,500 1,506 1,589 1,682 1,776 1,883 1,992 2,108 2,228 2,360 2,497

Finance leases - - - - - - - - - - - - - - -

Borrowings - - - - 1,500 1,506 1,589 1,682 1,776 1,883 1,992 2,108 2,228 2,360 2,497

Employee - - - - 112 112 112 112 112 112 112 112 112 112 112

Restoration & rehabilitation - - - - - - - - - - - - - - -

Restructuring - - - - - - - - - - - - - - -

Other - - - - - - - - - - - - - - -

Provisions - - - - 112 112 112 112 112 112 112 112 112 112 112

Tax equivalent liabilities - - - - - - - - - - - - - - -

Other - - - - - - - - - - - - - - -


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[Inactive BU] 5

[Inactive BU] 6


Whole of Council



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Other current liabilities - - - - - - - - - - - - - - -

Total current liabilities - - - - 2,353 1,916 2,007 2,106 2,207 2,320 2,437 2,560 2,688 2,825 2,971

Non-current liabilities

Trade and other payables - - - - - - - - - - - - - - -

Loans - - - - 12,776 24,894 23,304 21,623 19,846 17,964 15,972 13,864 11,636 9,277 6,780

Finance leases - - - - - - - - - - - - - - -

Borrowings - - - - 12,776 24,894 23,304 21,623 19,846 17,964 15,972 13,864 11,636 9,277 6,780

Employee - - - - 13 19 25 31 37 43 49 55 61 67 73

Restoration & rehabilitation - - - - - - - - - - - - - - -

Restructuring - - - - - - - - - - - - - - -

Other - - - - - - - - - - - - - - -

Provisions - - - - 13 19 25 31 37 43 49 55 61 67 73

Other non-current liabilities - - - - - - - - - - - - - - -

Total non-current liabilities - - - - 12,789 24,913 23,329 21,654 19,883 18,007 16,021 13,919 11,697 9,344 6,853

Total liabilities - - - - 15,142 26,829 25,337 23,760 22,091 20,327 18,458 16,479 14,385 12,169 9,824

Net community assets - - - - 32,455 44,923 42,590 39,649 37,876 35,093 33,336 30,620 28,877 26,235 24,517

Community equity

Asset revaluation surplus - - - - 3,249 3,249 4,253 4,253 5,290 5,290 6,272 6,272 7,198 7,198 8,063

Retained surplus - - - - 29,206 30,344 29,975 29,998 30,153 30,334 30,558 30,808 31,103 31,425 31,807

Total community equity - - - - 32,455 33,593 34,228 34,251 35,443 35,624 36,831 37,080 38,300 38,623 39,870

Reconciliation

Net community assets to community equity - - - - - 11,329.82 8,361.99 5,397.71 2,433.44 (530.84) (3,495.12) (6,459.40) (9,423.67) (12,387.95) (15,352.23)


30/07/19 10:40 AM Page 3 of 3LGFM v3.0.1

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Statement of Cash Flows




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Airport

Quarry


General Saleyards

[Inactive BU] 5

[Inactive BU] 6


Whole of Council



Control Panel


Cash flows from operating activities

Receipts from customers - - - - 20,000 8,345 8,584 8,775 8,968 9,167 9,365 9,573 9,783 10,001 10,216

Payments to suppliers and employees - - - - (10,388) (4,086) (3,714) (3,795) (3,876) (3,960) (4,044) (4,131) (4,220) (4,311) (4,402)

Payments for land held as inventory - - - - - - - - - - - - - - -

Proceeds from sale of land held as inventory - - - - - - - - - - - - - - -

Dividend received - - - - - - - - - - - - - - -

Interest received - - - - - 226 453 324 287 252 218 182 147 110 73

Rental income - - - - - - - - - - - - - - -

Non-capital grants and contributions - - - - - - - - - - - - - - -

Borrowing costs - - - - - (793) (1,462) (1,375) (1,283) (1,188) (1,082) (972) (857) (736) (605)

Tax equivalents paid to General - - - - - (1,626) (268) (200) (245) (270) (326) (353) (413) (439) (505)

Dividend paid to General - - - - - (2,656) (994) (444) (416) (449) (536) (575) (668) (702) (796)

Payment of provision - - - - - - - - - - - - - - -

Other cash flows from operating activities - - - - - - - - - - - - - - -

Net cash inflow from operating activities - - - - 9,612 (590) 2,598 3,285 3,435 3,551 3,596 3,723 3,773 3,922 3,982

Cash flows from investing activities

Payments for property, plant and equipment - - - - - (17,343) (3,460) (300) (250) (250) (250) (250) (250) (250) (250)

Payments for intangible assets - - - - - - - - - - - - - - -

Net movement in loans and advances - - - - - - - - - - - - - - -

Proceeds from sale of property, plant and equipment - - - - - - - - - - - - - - -

Grants, subsidies, contributions and donations - - - - - 3,056 - - - - - - - - -

Other cash flows from investing activities - - - - - - - - - - - - - - -

Net cash inflow from investing activities - - - - - (14,287) (3,460) (300) (250) (250) (250) (250) (250) (250) (250)

Cash flows from financing activities

Proceeds from borrowings - - - - - 13,000 - - - - - - - - -

Repayment of borrowings - - - - - (877) (1,506) (1,589) (1,682) (1,776) (1,883) (1,992) (2,108) (2,228) (2,360)

Repayments made on finance leases - - - - - - - - - - - - - - -

Net cash inflow from financing activities - - - - - 12,123 (1,506) (1,589) (1,682) (1,776) (1,883) (1,992) (2,108) (2,228) (2,360)

Total cash flows


30/07/19 10:41 AM Page 1 of 2LGFM v3.0.1

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Statement of Cash Flows




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General Saleyards

[Inactive BU] 5

[Inactive BU] 6


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Net increase in cash and cash equivalent held - - - - 9,612 (2,754) (2,367) 1,396 1,503 1,525 1,463 1,481 1,415 1,444 1,373

Opening cash and cash equivalents - - - - - 9,612 6,858 4,491 5,887 7,390 8,915 10,378 11,859 13,274 14,718

Closing cash and cash equivalents - - - - 9,612 6,858 4,491 5,887 7,390 8,915 10,378 11,859 13,274 14,718 16,091

Reconciliation

Closing cash balance to Statement of Financial Position - - - - - 11,330 8,362 5,398 2,433 (531) (3,495) (6,459) (9,424) (12,388) (15,352)


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Asset revaluation surplus

Opening balance 3,249 3,249 4,253 4,253 5,290 5,290 6,272 6,272 7,198 7,198

Net result na na na na na na na na na na

Increase in asset revaluation surplus - 1,004 - 1,036 - 983 - 925 - 865

Internal payments made na na na na na na na na na na

Closing balance 3,249 3,249 4,253 4,253 5,290 5,290 6,272 6,272 7,198 7,198 8,063

Retained surplus

Opening balance 29,206 30,344 29,975 29,998 30,153 30,334 30,558 30,808 31,103 31,425

Net result 5,420 892 667 816 901 1,085 1,177 1,375 1,464 1,682

Increase in asset revaluation surplus na na na na na na na na na na

Internal payments made (4,282) (1,262) (644) (661) (719) (861) (928) (1,080) (1,141) (1,300)

Closing balance 29,206 30,344 29,975 29,998 30,153 30,334 30,558 30,808 31,103 31,425 31,807

Total

Opening balance 32,455 33,593 34,228 34,251 35,443 35,624 36,831 37,080 38,300 38,623

Net result 5,420 892 667 816 901 1,085 1,177 1,375 1,464 1,682

Increase in asset revaluation surplus - 1,004 - 1,036 - 983 - 925 - 865

Internal payments made (4,282) (1,262) (644) (661) (719) (861) (928) (1,080) (1,141) (1,300)

Closing balance 32,455 33,593 34,228 34,251 35,443 35,624 36,831 37,080 38,300 38,623 39,870


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Metrics

User selected ratios Annual metric

ID Name Jun-15A Jun-16A Jun-17A Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F

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1 na na na na na na na na na na na na na na na













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DILGP financial sustainability measures

R1.1 Operating surplus ratio na na na na 22.3% 27.4% 9.9% 7.3% 8.8% 9.5% 11.3% 12.0% 13.8% 14.5% 16.3%

= Operating result / total operating revenue

R1.2 Net financial liabilities ratio na na na na 65.2% 92.0% 130.1% 128.9% 124.4% 118.6% 112.5% 105.3% 97.8% 89.1% 80.0%

R1.3 Asset sustainability ratio na na na na -% 923.7% 110.9% 7.7% 7.6% 7.4% 7.4% 7.2% 7.2% 6.9% 6.9%

QTC credit metrics

R2.1 Council controlled revenue ratio na na na na 99.7% 97.2% 94.9% 96.3% 96.8% 97.2% 97.6% 98.0% 98.4% 98.8% 99.1%

R2.2 Cash expense cover ratio na na na na 29.19 59.80 41.38 35.56 30.31 25.33 20.36 15.63 10.92 6.47 2.01

R2.3 Total debt service cover ratio na na na na 4.5x 2.2x 1.8x 1.8x 1.8x 1.8x 1.9x 1.9x 1.9x 2.0x 2.0x

R2.4 Capital expenditure ratio na na na na na 9.5x 1.2x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x 0.1x

R2.5 Average useful life of depreciable assets na na na na 29.79 26.45 16.83 14.41 13.73 12.44 11.79 10.51 9.84 8.58 7.88

Operating items statistics

R3.1 Growth in rateable properties na -5.0% -% 0.5% -% 0.5% 0.1% 0.3% 1.0% 1.3% 0.5% 0.5% 0.5% 0.5% 0.4%

R3.2 Growth in average general rates per property na na na na na na na na na na na na na na na

R3.3 Growth in FTE numbers na 6.3% 1.7% -% 6.1% 0.3% 0.4% -% 0.6% -% 0.6% -% -% 0.4% -%

R3.4 Growth in EBA agreements -% -% -% -% -% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

R3.5 Change in net rates, levies and charges na na na na na na na na na na na na na na na

R3.6 Change in sales - contract and recoverable works na na na na na na na na na na na na na na na

R3.7 Change in operating subsidies, grants, contributions and donations na na na na na na na na na na na na na na na


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R3.8 Change in other operating revenue na na na na na 14.7% 4.8% 0.7% 1.7% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8%

R3.9 Change in employee benefits na na na na na 6.2% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%

R3.10Change in materials and services not used for sales and recoverable

worksna na na na na -13.1% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2%

R3.11 Change in total materials and services na na na na na -12.3% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2%

R3.12 Change in depreciation & amortisation expenses na na na na na 65.5% 61.9% 9.9% 0.5% 2.7% 0.1% 3.0% 0.1% 3.4% 0.1%

R3.13 Change in other operating expenses na na na na na 0.6% 78.0% -5.6% -6.3% -6.9% -8.3% -9.3% -10.9% -12.7% -15.9%

R3.14 Change in total operating revenue na na na na na 14.7% 4.8% 0.7% 1.7% 1.8% 1.8% 1.8% 1.8% 1.8% 1.8%

R3.15 Change in total operating expenses na na na na na 7.3% 30.0% 3.5% 0.1% 0.9% -0.2% 0.9% -0.3% 1.1% -0.4%

R3.16 Change in operating result na na na na na 40.5% -62.3% -25.2% 22.3% 10.3% 20.5% 8.4% 16.9% 6.4% 14.9%

R3.17 Change in selected cash closing balance na na na na na 89.2% -29.3% -12.2% -12.9% -14.7% -17.9% -21.5% -28.7% -39.5% -68.3%

R3.18 Cash expense cover ratio—excluding externally restricted na na na na 29.19 59.80 41.38 35.56 30.31 25.33 20.36 15.63 10.92 6.47 2.01

R3.19 Cash expense cover ratio—excluding externally & internally restricted na na na na 14.01 43.36 25.28 19.81 14.88 10.22 5.57 15.63 10.92 6.47 2.01

R3.20 Alternative minimum liquidity measure na na na na na 4,173 3,228 1,357 1,316 1,319 1,362 1,367 1,414 1,414 1,464

R3.21 Alternative minimum liquidity—months na na na na na 13.72 10.39 4.28 4.06 3.98 4.03 3.96 4.01 3.92 3.98

R3.22 Gross interest expense as a portion of average term debt na na na na na 3.9% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.7% 5.8% 5.8%

R3.23 Interest revenue as a portion of average cash na na na na na 1.6% 2.9% 2.7% 2.7% 2.8% 2.9% 3.0% 3.2% 3.5% 4.8%

R3.24 Average general rate per property na na na na na na na na na na na na na na na

R3.25 Average operating cost per property na na na na na na na na na na na na na na na

R3.26 Average term debt per property na na na na na na na na na na na na na na na

R3.27 Calculated creditor days na na na na 68.45 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00

R3.28 Calculated debtor days na na na na 29.99 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00

Capital items statistics


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R4.1 Gross capital expenditure - - - - - 17,343 3,460 300 250 250 250 250 250 250 250

R4.2 Net capital expenditure - - - - - 14,287 3,460 300 250 250 250 250 250 250 250

R4.3 New borrowings - - - - - 13,000 - - - - - - - - -

R4.4Depreciation as a percentage of closing written down value of

property, plant & equipmentna na na na 3.4% 3.8% 5.9% 6.9% 7.3% 8.0% 8.5% 9.5% 10.2% 11.7% 12.7%

R4.5 Average useful life—land improvements na na na na na 25.17 24.33 23.17 22.33 21.17 20.33 19.17 18.33 17.17 16.33

R4.6 Average useful life—buildings na na na na na 25.39 24.77 23.32 23.50 22.61 22.52 21.61 21.51 20.57 20.47

R4.7 Average useful life—plant & equipment na na na na na 20.00 19.00 18.00 17.00 16.00 15.00 14.00 13.00 12.00 11.00

R4.8 Average useful life—furniture & fittings na na na na na na na na na na na na na na na

R4.9 Average useful life—roads, drainage & bridge network na na na na 16.23 27.00 14.91 12.41 11.66 10.33 9.63 8.33 7.59 6.32 5.55

R4.10 Average useful life—water na na na na na na na na na na na na na na na

R4.11 Average useful life—sewerage na na na na na na na na na na na na na na na

R4.12 Average useful life—miscellaneous na na na na na na na na na na na na na na na

R4.14Cash capital grants, subsidies, contributions & donations as a

percentage of gross capital expenditurena na na na na 17.6% -% -% -% -% -% -% -% -% -%

R4.15Non-cash capital grants, subsidies, contributions & donations as a

percentage of gross capital expenditurena na na na na -% -% -% -% -% -% -% -% -% -%

R4.16 New borrowings as a percentage of gross capital expenditure na na na na na 75.0% -% -% -% -% -% -% -% -% -%

R4.17Closing revaluation balance as a percentage of opening written down

value of property, plant & equipmentna na na na na 8.7% 8.0% 7.8% 10.3% 10.7% 13.6% 14.2% 17.6% 18.6% 22.9%

R4.18 Asset renewal funding ratio na na na na na na na na na na na na na na na

Operating position indicators

R5.1 Relative operating growth rate na na na na na 7.4% -25.2% -2.8% 1.6% 0.8% 2.0% 0.8% 2.1% 0.7% 2.2%

R5.2 Sales, contracts and recoverable works margin na na na na na na na na na na na na na na na

R5.3 Operating efficiency ratio na na na na 128.8% 137.7% 110.9% 107.9% 109.7% 110.6% 112.7% 113.7% 116.0% 116.9% 119.5%

Fiscal flexibility indicators


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R6.1 Interest cover ratio na na na na 4.5x 6.3x 3.6x 3.9x 4.2x 4.6x 5.1x 5.8x 6.7x 7.9x 9.7x

R6.2 Leverage ratio na na na na 61.9% 95.0% 133.0% 131.9% 127.3% 121.5% 115.4% 108.2% 100.7% 91.9% 82.8%

R6.3 Self generated revenue ratio na na na na 128.8% 137.7% 110.9% 107.9% 109.7% 110.6% 112.7% 113.7% 116.0% 116.9% 119.5%

R6.4Operating grants, subsidies, contributions & donations as a

percentage of total operating revenuena na na na -% -% -% -% -% -% -% -% -% -% -%

R6.5Contract and recoverable works as a percentage of total operating

revenuena na na na -% -% -% -% -% -% -% -% -% -% -%

R6.6 Other operating revenue as a percentage of total operating revenue na na na na 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

R6.7 Total employee benefits as a percentage of total operating expenses na na na na 16.1% 15.9% 12.5% 12.3% 12.5% 12.7% 13.0% 13.1% 13.4% 13.5% 13.8%

R6.8Total materials and services as a percentage of total operating

expensesna na na na 50.4% 41.1% 32.3% 31.9% 32.6% 33.0% 33.8% 34.2% 35.1% 35.5% 36.4%

R6.9Total depreciation & amortisation as a percentage of total operating

expensesna na na na 18.9% 29.2% 36.4% 38.7% 38.8% 39.5% 39.6% 40.5% 40.6% 41.6% 41.8%

R6.10 Other operating expenses as a percentage of total operating expenses na na na na 14.6% 13.7% 18.7% 17.1% 16.0% 14.8% 13.6% 12.2% 10.9% 9.4% 7.9%

R6.11 Net operating cash flow as a percentage of net capital expenditure na na na na na -4.1% 75.1% 1,095.0% 1,374.0% 1,420.4% 1,438.3% 1,489.2% 1,509.2% 1,568.7% 1,593.0%

Liquidity indicators

R7.1 Working capital ratio na na na na 4.3x 9.9x 6.8x 5.7x 4.8x 3.9x 3.1x 2.4x 1.7x 1.1x 0.5x

R7.2 Total restricted cash as a percentage of total cash na na na na 52.0% 27.5% 38.9% 44.3% 50.9% 59.6% 72.6% -% -% -% -%

R7.3 Internally restricted cash as a percentage of total cash na na na na 52.0% 27.5% 38.9% 44.3% 50.9% 59.6% 72.6% -% -% -% -%

R7.4 Externally restricted cash as a percentage of total cash na na na na -% -% -% -% -% -% -% -% -% -% -%

Equity maintenance indicators

R8.1 Net results - - - - 1,683 5,420 892 667 816 901 1,085 1,177 1,375 1,464 1,682

R8.2 Net margin na na na na 22.3% 46.3% 9.9% 7.3% 8.8% 9.5% 11.3% 12.0% 13.8% 14.5% 16.3%

R8.3New capital expenditure as a percentage of opening written down

value of property, plant & equipmentna na na na na 1.1% 0.3% 0.1% -% -% -% -% -% -% -%

R8.4 Change in community equity excluding asset revaluation surplus na na na na na 3.9% -1.2% 0.1% 0.5% 0.6% 0.7% 0.8% 1.0% 1.0% 1.2%


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