Council to consider Queensland Treasury Corporation’s financial report on de-amalgamation
10 April 2019
Southern Downs Regional Council (SDRC) formally received the
Queensland Treasury Corporation’s (QTC) Financial Analysis of proposed de-amalgamation
at a Special Council Meeting today.
engaged by the Department of Local Government Racing and Multicultural Affairs
(DLGRMA) and SDRC to complete a financial analysis of proposed de-amalgamation;
splitting the existing Southern Downs Regional Council into two councils.
important all residents take the time to read QTC’s report and work out for
themselves the consequences of de-amalgamation on their individual household,
their community and for the region as a whole.
Based on QTC’s Financial Analysis, the proposed
de-amalgamation of the new Granite Belt Regional Council (GBRC) from SDRC is
not financially viable unless significant increases in rates and utility
charges are absorbed by the Granite Belt community.
taken into account the existing financial circumstances of the existing SDRC
and how this would change if de-amalgamation was to occur. While
financial impacts on the remaining SDRC will be minimal, there are likely to be
lost opportunities for the region due to the cost de-amalgamation would have on
the community as a whole. The annual increase in rates for the remaining SDRC area
is forecasted to remain at 3%, but could be less, as is the case this financial
year at 2%.
For the new GBRC, de-amalgamation will come at a significant
cost to ratepayers in the previous Stanthorpe Shire Council area. Currently, the average rates
amount in the Granite Belt is $2,526 and is forecast to be $2,602 in 2019-20 without
de-amalgamation was to occur, average rates in the first year are
expected to rise by 82% to $4726, reducing to $3,948 in the second year
following de-amalgamation (including the expected 3% annual increase). Rates
will increase to $4052 and then $4,158 in subsequent years.
report indicates that the major contributors to the increased costs that are
absorbed in the increased rates are due to the once-off costs associated with
de-amalgamation and higher ongoing costs for staffing and information
communication technology costs.
very few of these costs that can be avoided as part of de-amalgamation, and in
the process of establishing a new local government authority. De-amalgamation
will have a greater impact on Stanthorpe and its surrounding areas due to its
existing low rate base.
financial analysis undertaken by QTC is comprehensive. It makes comparisons
with other Queensland councils in relation to the number of staff, the size of
the areas managed and the number of elected representatives.
sensitivity analysis confirmed that significant decreases in the transition and
other costs and assumed staffing levels would not change the result of the
analysis; that the proposed de-amalgamation is not financially viable.
Councillors will now consider QTC’s report before making a
decision on whether they support the Granite Belt Community Association’s
proposal for de-amalgamation at Council’s 30 April General Meeting.
Councillors will also consider the Granite Belt Community
Association’s ‘Response to Southern Downs Regional Council’s Management
Review’, as well as the report from Grassroots Connections Australia undertaken
by independent consultant Greg Hoffman.
To review a
copy of the QTC Financial Analysis and all information regarding proposed
de-amalgamation, please visit sdrc.qld.gov.au/de-amalgamation or pick up a hard copy from any of SDRC’s Community Contact Centres. For
more information or questions regarding QTC’s Financial Analysis, please
contact Southern Downs Regional Council on 1300 MY SDRC (1300 697 372).