Annual Report 2014/15

2014/2015

Annual Report

© Sunshine Coast Regional Council 2009-current.

Sunshine Coast Council™ is a registered trademark of Sunshine Coast Regional Council. www.sunshinecoast.qld.gov.au mail@sunshinecoast.qld.gov.au T 07 5475 7272 F 07 5475 7277 Locked Bag 72 Sunshine Coast Mail Centre Qld 4560 Acknowledgements Council wishes to thank all contributors and stakeholders involved in the development of this document.

Disclaimer Information contained in this document is based on available information at the time of writing. All figures and diagrams are indicative only and should be referred to as such. While the Sunshine Coast Regional Council has exercised reasonable care in preparing this document it does not warrant or represent that it is accurate or complete. Council or its officers accept no responsibility for any loss occasioned to any person acting or refraining from acting in reliance upon any material contained in this document.

2

Sunshine Coast Council Annual Report 2014/15

Contents Welcome

4

Section 1: Introduction

5

Message from the Mayor

6

Message from the Chief Executive Officer

8

About our region - Key statistics

10

Sunshine Coast local government area divisions

10

Councillors

12

Leadership team

13

Our organisation

14

Major achievements

15

Corporate Plan Performance

16

Section 2: Implementation of corporate and operational plans

18

A new economy

20

A strong community

22

An enviable lifestyle and environment

24

Service excellence

26

A public sector leader

28

Section 3: Annual disclosures

30

Corporate governance

31

Councillor remuneration

32

Councillor expenses and facilities

33

Councillor meeting attendance

34

Conduct and performance of Councillors

35

Remuneration packages to senior contract employees

36

Public sector ethics

36

Registers

36

Beneficial enterprises

37

National competition policy

37

Administrative action complaints

37

Summary of concessions for rates and charges

38

Service, facility, activity supplied by another Local Government

40

Service, facility, activity for which special rates/charges levied

40

Changes to tenders

41

Overseas travel

42

Grants to community organisations

43

Glossary

53

Section 4: Financial Information

54

Sunshine Coast Council Annual Report 2014/15

3

Welcome Welcome to the Sunshine Coast Council’s Annual Report 2014/2015.

This report describes council’s achievements in delivering services to the Sunshine Coast region and shows council’s progress in delivering the actions from the Corporate Plan 2014-2019 and Operational Plan 2014-2015.

The annual report is one of the ways council connects with the community and is the culmination of regular reporting. It shows: • council’s commitment to achieve its vision for the region • the results of actioning the Corporate and Operational plans • details of council’s achievements • details of the services that have been provided to the region • transparency and accountability of council

4

Sunshine Coast Council Annual Report 2014/15

Section 1

Introduction

Sunshine Coast Council Annual Report 2014/15

5

Message from the Mayor The 2014/15 year was an important period in the Sunshine Coast’s history. Council has moved forward in our quest to become Australia’s most sustainable region – vibrant, green, diverse - and in doing so, our community, our environment and our economy have taken centre stage in shaping our future.

At the heart of the region’s success are the people that make up our communities. Throughout the year, council has placed a major emphasis on strengthening the opportunities for people and places to connect, encouraging resilient and engaged communities and pursued opportunities that showcase and embrace our culture, heritage and diversity. Highlights included adopting the Sunshine Coast Social Strategy 2015 and releasing the Sunshine Coast Draft Heritage Plan 20152020 which will guide Council in its efforts to conserve and manage the region’s heritage.

Throughout the year, council also worked with or supported more than 1,800 not for profit community organisations to deliver important information, facilities and services within our community. The work of these organisations and the support provided by council enables people to connect with one another, lead active and healthy lifestyles, improve their knowledge and participate in a range of activities and events.

The importance of liveability and preserving our natural environment are major priorities. We have much to be proud of this year with additional Voluntary Conservation Agreements put in place to protect

6

Sunshine Coast Council Annual Report 2014/15

significant areas of privately owned bushland and our Land for Wildlife program continuing to expand, making this the largest program of its type for any local government in Australia.

Communicating this message to other levels of government has also been a significant task this year, with Council taking a strong position on advocating to the State Government on the retention and preservation of the Sunshine Coast-Moreton Bay Regional Interurban break. Council will continue to push this matter vigorously with the new State Government to ensure appropriate measures are put in place for the Regional Inter-urban break in the next iteration of the South East Queensland Regional Plan.

Our purposeful agenda to build a strong and resilient economy continued, with some significant milestones achieved as we moved into the second year of implementing the Regional Economic Development Strategy 2013-2033. As a result, Sunshine Coast has been ranked in the annual State of the Regions Report as the second highest performing regional economy in Queensland.

During the year, the development scheme for the Maroochydore Priority Development Area was gazetted and council established a separate company – SunCentral Maroochydore Pty Ltd – with a high calibre board of directors to take this project forward.

The opportunity to plan and develop Australia’s only greenfield CBD at this time will enable council to

ensure an array of civic and entertainment facilities, high quality streets and public spaces, commercial and retail business opportunities, apartments, parks and waterways are delivered on this site. When the project is completed, council will own $300 million of community assets – including roads and parks – with the development providing a catalyst for up to 10,000 new jobs in the region.

Our other game-changing projects progressed throughout the financial year, including lodgement of the Sunshine Coast Airport Expansion Environmental Impact Statement with the Coordinator General.

Planned to be completed by 2020, the expansion will ensure the ongoing viability of the airport. It will open the Sunshine Coast up to new tourism markets and enable freight transportation by air particularly to the highly lucrative markets in the Asia Pacific and beyond.

The Sunshine Coast Solar Farm development application was approved by council and the project was progressed to tender stage. Once completed, this facility will provide all of council’s electricity needs and council will become the first local government in Australia to own a utility scale solar farm with the capacity to generate enough renewable electricity to meet its consumption.

investors in Hong Kong, Frankfurt and London on my investment mission in May, this provided an outstanding opportunity to highlight the region’s economic credentials, high value industries and excellent investment opportunities to a global investor audience.

The feedback has been strongly positive and bodes well for the future in securing much needed investment into the region – investment that will deliver jobs for our residents, new career opportunities and lift average household income levels.

Our council will continue with its efforts to shape a future which puts the community’s interests at the heart of everything we do and I would like to recognise and commend our staff for their enthusiasm, commitment and tireless efforts to respond to the needs of our community every day.

Mark Jamieson Mayor

Council also launched the region’s first Investment Prospectus, to help showcase the region’s capital and industry investment opportunities. Having had the opportunity to present this prospectus to significant

Sunshine Coast Council Annual Report 2014/15

7

Message from the Chief Executive Officer Strong leadership, strategic partnerships and effective advocacy for the region and individual communities in order to reach our full potential, have been the hallmarks of Sunshine Coast Council’s focus and achievements during 2014/15.

Importantly, our council has once again achieved an impressive end of year result and the community can have confidence that its local government is in good shape. Council has been independently assessed by the Queensland Treasury Corporation as having a strong financial rating – the second highest available and no other council in Queensland has a higher rating. This enables council to provide the services and facilities that our community expects on a daily basis, but also to advance major projects that will shape a prosperous future for our residents and our region. And for the seventh consecutive year, council received an unqualified audit report by the Queensland Audit Office.

Building and development activity positioned the Sunshine Coast region for a positive future, with the Regional Strategy and Planning Department managing 5,400 building approvals, with a value of more than $1.1 billion.

A new $80 million, seven year waste collection contract was awarded to Remondis Australia – the largest contract ever awarded by Sunshine Coast Council. The service will provide more than eight million household

8

Sunshine Coast Council Annual Report 2014/15

collection services each year.

Council purchases of $169 million were awarded to local businesses in the 2014/15 financial year, contributing to a sustainable and growing economy.

The Sunshine Coast region hosted 28 major events, attracting 63,000 visitors and participants and generating approximately $48.5 million in economic activity for the region throughout the year. The councilmanaged Caloundra Music Festival attracted about 25,000 people over four days and has become a nationally-recognised event on the festival calendar.

The strength of our community has been a major focus for council in 2014/2015. Due to our prudent fiscal management, we are in a strong financial position to support our community through a wide range of facilities, programs and services. This year, council provided more than $3.7 million in grants to community organisations to help deliver improved services, programs and facilities for our residents. Sunshine Coast Council distributes more community grant funding than any other regional council in Queensland because we understand and value the services these organisations provide to improve the lifestyle and wellbeing of our residents.

Council continued to make significant investments in local facilities and infrastructure like roads, bridges and parks. Maintaining and improving almost 3,000

kilometres of roads, 448 bridges and more than 1,100 kilometres of pathways – the distance from here to Townsville - is a big part of council’s capital program.

These assets are an integral part of the social and economic fabric of our region.

Our sporting and performance venues and libraries received increases in patronage and the Sunshine Coast Libraries Plan 2014-2024, which sets the direction for libraries over the next 10 years, was adopted.

On the front line, council’s customer contact staff continued to play a vital role in helping our community, responding to more than 260,000 enquiries either over the counter, through email, on the phone or via the internet.

Council continues to be recognised for our outstanding achievements in workplace health and safety and innovation and excellence. Council scored an impressive 91.1% in a workplace health and safety audit – the highest score achieved by any council in Queensland in the history of the Local Government Workcare Scheme. Council also won the Excellence in Innovation award at the Local Government Managers Australia Queensland awards for an online tool which makes it easier and more convenient to access general town planning information for specific sites; and collected three awards at the Institute of Public Works Engineering State Excellence Awards.

A highlight was the launch of the “Disaster Hub”, which provides helpful information to the community and media outlets. This one-stop-online shop provides information on weather warnings, local, state and federal road closures, media announcements and evacuation centres and has received accolades from all levels of government and emergency services, the media, residents and community organisations during disaster events. The result is a safer community and the ability to repair damage across the region more quickly.

Council will continue to focus on continuing its prudent financial management, providing exceptional customer service and ensuring the Sunshine Coast maintains its reputation for economic, community and environmental excellence.

Ray Turner Acting Chief Executive Officer

Sunshine Coast Council Annual Report 2014/15

9

About our region - Key statistics The Sunshine Coast Council area is located in southeast Queensland, about 100 kilometres north of Brisbane. It is bound by the Noosa region in the north, Gympie in the west, the Coral Sea in the east, the Moreton Bay region in the south, and the Somerset region in the south-west. The Sunshine Coast is a diverse region with picturesque hinterland towns, coastal urban centres, waterways, national parks, state forests, bushland, rural areas and scenic mountains.

Sunshine Coast local government area divisions

10

5

Current population estimate

290,000 persons* Source: Sunshine Coast Council. For more facts and figures refer to council’s website. * Projected resident population as at 30 June 2015 based on Queensland Government Population Projections, 2013.

10

Sunshine Coast Council Annual Report 2014/15

The Sunshine Coast has: An area of

130 kilometres of coastline

2,291km2

Over 3,700 kilometres of waterways 1,324 hectares of recreation parks and reserves 5,733 hectares of environmental reserves 2,743 kilometres of roads 1,092 kilometres of pathways

9

127,046 rateable properties 8.3 million garbage collections per year (domestic and commercial)

The

workforce

8 7

136,360 residents employed# 16.1% work in health care and social assistance# 14.1% work in retail#

6

4 3 2

The

economy

$12.94 billion Gross Regional Product# 5,468 building approvals issued by council and private certifiers+, with an estimated value of construction of more than $1.1 billion 1,737 development approvals+ Source: # National Institute of Economic and Industry Research 2014. + Sunshine Coast Council Development Indicators reports.

1 1

Sunshine Coast Council Annual Report 2014/15

11

Councillors The role of councillors is to represent the community. They make decisions that benefit their divisions as well as the whole Sunshine Coast region, now and into the future.

Mayor Cr Mark Jamieson Economic Development Portfolio

Deputy Mayor Division 4

Division 1

Division 2

Division 3

Division 5

Cr Rick Baberowski

Cr Tim Dwyer

Cr Peter Cox

Cr Jenny McKay

Transport Strategy Portfolio Regional Projects Portfolio

Economic Development Portfolio - Health and Medical Precinct and Education

Community Programs Portfolio and Environment Portfolio

Division 6

Division 7

Division 8

Division 9

Division 10

Cr Christian Dickson

Cr Ted Hungerford

Cr Jason O’Pray

Cr Steve Robinson

Cr Greg Rogerson

Regional Planning Portfolio

Service Delivery Portfolio

Economic Development Portfolio - Tourism, Sport, Major Events

Economic Development Portfolio - New and Emerging Industries

Place Management and Delivery Portfolio

Cr Chris Thompson Finance and Water Portfolio and Corporate Planning Portfolio

12

Sunshine Coast Council Annual Report 2014/15

Leadership team The Chief Executive Officer and five Directors make up council’s Executive Leadership Team. This team has the shared responsibility for providing the organisation with leadership and direction to achieve the outcomes determined by council.

Chief Executive Officer until 23

Acting Chief Executive Officer from

April 2015

24 April 2015

John Knaggs

Ray Turner

Director Community Services

Acting Director Corporate Services

Coralie Nichols

Michael Costello

Director Corporate Strategy and Delivery

Director Infrastructure Services

Director Regional Strategy and Planning

Greg Laverty

Andrew Ryan

Warren Bunker

Sunshine Coast Council Annual Report 2014/15

13

Our organisation Council’s structure consists of five departments each headed by a Director. These Directors, along with the Chief Executive Officer, make up the Executive Leadership Team.

Elected council

(Mayor and Councillors)

Chief Executive Officer

Corporate Strategy and Delivery Department

Corporate Services Department

Office of the Mayor and CEO

Community Services Department

Strategy and Coordination

Procurement and Contracts

Community Facilities and Planning

Economic Development

Corporate Governance

Community Relations

Sunshine Coast Airport

Finance

Communication Commercial Projects

Information Communication Technology Services Property Management Human Resources

Community Response

Infrastructure Services Department

Project Delivery Civil Works Services Environmental Operations Parks and Gardens Transport Infrastructure Management Waste and Resources Management Fleet and Quarry Services

14

Sunshine Coast Council Annual Report 2014/15

Regional Strategy and Planning Department

Major Urban Developments Strategic Planing Transportation and Infrastructure Policy Environment and Sustainability Policy Development Services

Major achievements Council supports the long term economic success of the region by delivering programs and projects to encourage investment, create jobs and maintain our lifestyle.

A new economy Awarded $169 million in contracts to local business Commenced work on a new city centre at Maroochydore Approved 1,737 development applications Preferred route options identified for Light Rail project for the coast Completed the environmental impact statement for the Sunshine Coast Airport Expansion

A strong community Adopted the Sunshine Coast Social Strategy 2015 Delivered 1,800 library programs and workshops to more than 38,000 participants Awarded $3.7 million in grants to more than 700 community applicants Hosted 28 major events attracting 63,000 people Received more than 178,000 customer phone calls

An enviable lifestyle and environment Progressed the new solar farm facility to tender stage Environmental land purchased through the Environment Levy now totals 2,761 hectares Managed the largest Land for Wildlife program held by a local government in Australia, with 874 registrations Worked closely with developers to achieve new communities in Palmview and Caloundra South

Service excellence and a Public sector leader Delivered a balanced budget for 2015/16 - $588 million Recognised for strong financial management by Queensland Audit Office Sunshine Coast Council Annual Report 2014/15

15

Corporate Plan performance In June 2015, council adopted a suite of 28 performance measures to monitor progress towards achieving Corporate Plan outcomes. The measures below are those for which a target was set and performance monitored for the whole 2014/15 year. Data collection for new performance measures commenced on 1 July 2015 and will be first reported in the Annual Report 2015/16.

A new economy – 2015-2016 Goal Performance Statement Target 2014/15

Actuals 2014/15

Council actions in the Regional Economic Development Strategy implemented in accordance with agreed timelines

54%

64%

Local business graduates’ satisfaction with council’s Export Capability Program

75%

75%

Estimated economic impact from council-supported major and regional events

$50m

$48.5m

Development applications decided within target decision time frames

90%

95%

Target 2014/15

Est. Actual 2014/15

90%

90.5%

Measures

A strong community – 2015-2016 Goal Performance Statement Measures Ratio of desexed animals registered with council compared to total animal registrations

An enviable lifestyle and environment – 2015-2016 Goal Performance Statement Target 2014/15

Est. Actual 2014/15

23

28.3

Increase in landholders and community groups partnering with council in environmental and conservation programs

7.5%

7.5%

Audited parks meeting maintenance standards

90%

95%

Measures Council’s greenhouse gas emissions reduced (tonnes per employee)

16

Sunshine Coast Council Annual Report 2014/15

Service excellence – 2015-2016 Goal Performance Statement Target 2014/15

Est. Actual 2014/15

Percentage of successful prosecutions relating to vicious dog attacks

95%

100%

Percentage of calls to customer contact centres answered within 60 seconds

80%

85.23%

Total waste diversion rate

31%

33%

Operating surplus ratio

3.5%

3.5%

Asset sustainability ratio

67%

67%

Asset consumption ratio

80.6%

80%

90%

90%

Target 2014/15

Est. Actual 2014/15

28.2%

24.5%

Debt servicing ratio

3.4

4.1

Unqualified audit

Yes

Yes

Measures

Capital works achieving physical completion

A public sector leader – 2015-2016 Goal Performance Statement Measures Net financial liabilities

Sunshine Coast Council Annual Report 2014/15

17

Section 2

Implementation of corporate and operational plans

18

Sunshine Coast Council Annual Report 2014/15

Council remains firmly committed to its vision for the Sunshine Coast first articulated in 2009:

To be Australia’s most sustainable region – vibrant, green, diverse

In contributing to achieving the vision for the region, council’s purpose is:

To serve the community well and position the region for the future

The Corporate Plan is structured around five corporate goals (shown below), each supported by a suite of outcomes that council is committed to achieve.

Highlights under each of the corporate goals are detailed in the following pages.

Corporate goals 2014-2019

A new economy

A strong community

An enviable lifestyle and environment

Service excellence

A public sector leader

Sunshine Coast Council Annual Report 2014/15

19

A new economy Providing the regional policy, regulatory settings and identity that shape a globally competitive economy Outcomes • Strong economic leadership, collaboration and identity • New capital investment in the region • Investment and growth in high-value industries • Strong local to global connections • A natural, major and regional event destination

28 major events attracting

63,000 visitors Generating

$48.5m 20

Sunshine Coast Council Annual Report 2014/15

in economic activity

Highlights for 2014/15 New city centre Planning and development of the Maroochydore Priority Development Area started. Development management company SunCentral Maroochydore Pty Ltd was established to oversee the project. This was an important milestone in the journey of creating our new city centre for the Sunshine Coast – a development that is Australia’s only greenfield CBD at this time.

SunCentral Maroochydore is located on 53 hectares of land previously occupied by the Horton Park Golf Club, which has since been relocated to Bli Bli.

Attracting potential investors Council targeted numerous potential investors in the Sunshine Coast’s game-changer and high-value industry projects through domestic and international investment missions.

Supporting local business Council purchases, totalling $169 million, were awarded to local businesses in the last financial year, contributing to a sustainable and growing economy.

Sunshine Coast Airport expansion

Major events

The Environmental Impact Statement for the Sunshine Coast Airport expansion and the financing strategy to upgrade the airport runway were both completed.

Council continued to work with major airlines to attract additional flights and visitors to the region. The ‘Fly Local’ campaign, targeting business travellers, highlighted the advantages and savings of using direct services from the Sunshine Coast Airport.

The Sunshine Coast region hosted 28 major events, attracting 63,000 visitors/participants which generated approximately $48.5 million in economic activity for the region.

Planning for the future In alignment with the Sunshine Coast Regional Economic Development Strategy, council completed seven industry and investment plans to build the economy of the Sunshine Coast covering: • health and wellbeing

Economic results Council worked collaboratively with the Sunshine Coast Economic Futures Board to help develop the region.

This has resulted in the Sunshine Coast being ranked as the second highest performing regional economy in Queensland, in the national 2015-2016 State of the Regions Report.

Capital works

• education and research

The following capital works programs were implemented:

• knowledge industries and professional services

• Sunshine Coast Airport and aerodromes

• tourism, sport and leisure

• Strategic land and commercial properties

• agribusiness • clean technologies • aviation and aerospace

Light rail progress The preferred route option for the light rail project between Caloundra and Maroochydore has been identified, following public consultation.

This project has the potential to support the lifestyle of residents now and into the future. Results of the feasibility studies will be used as the basis for more detailed investigation.

Sunshine Coast Council Annual Report 2014/15

21

A strong community Supporting an engaged, resilient and inclusive community that embraces diversity.

Outcomes • Safe and healthy communities • Resilient and engaged communities • Culture, heritage and diversity are valued and embraced • People and places are connected

1,800

library programs

and workshops delivered

22

Sunshine Coast Council Annual Report 2014/15

$3.7m

in community grants awarded

Highlights for 2014/15 Sunshine Coast Social Strategy 2015

Community venues

Council developed and adopted the Sunshine Coast Social Strategy 2015, which commits to strengthening the region’s community of communities. This document provides the overarching direction to advance the Corporate Plan goal of developing ‘a strong community’.

The Sunshine Coast Performance and Community Venues Service Plan 2014-2029 was adopted. The plan aims to ensure venues are well equipped to cater for a diverse range of activities and events for the next 15 years.

Protecting our heritage

In addition, more than 7,900 events were held at community venues, attracting over 500,000 patrons.

Delivered heritage initiatives including:

Art exhibitions

• The Sunshine Coast Draft Heritage Plan 20152020 was released for community comment. This document will guide the identification, protection, conservation and management of the region’s heritage

A number of significant art exhibitions were hosted:

• Appointments to the Cultural Heritage Reference Group were endorsed • The Mary Grigor Centre, in Bankfoot House Heritage Precinct, Glass House Mountains was officially opened. This project received a Gold award at the National Trust Queensland Heritage Awards 2015.

Community grants In total, more than $3.7million was awarded to more than 700 grant applicants for one-off projects, events and activities that benefit our region.

Sporting facilities A number of long term plans to provide regional community sport and recreation facilities were implemented The $2.4 million expansion at Coolum sports complex commenced.

Library services Approximately 1,800 library programs and workshops were delivered to more than 38,000 participants to assist in lifelong learning opportunities. In addition, the Sunshine Coast Libraries Plan 2014-2024 which will set the direction for libraries over the next 10 years was adopted.

• Cream: Four Decades of Australian Art – a touring exhibit of some of Australia’s most recognised artists • Digital Disruption exhibition, which showcased the winning and finalist artworks from the 2014 Sunshine Coast Art Prize New Media Award • #whatliftsyou, a large interactive mural of a set of ornate wings by New York City artist Kelsey Montague.

Caloundra Music Festival Held in October each year, the Caloundra Music Festival attracts around 25,000 people over four days and is recognised nationally on the festival calendar.

Popular acts at the 2014 event included John Butler, Pete Murray, Tina Arena and Wolfmother.

Animal Management The Domestic Animal Management (Cats and Dogs) Strategy 2014-2020 was adopted. The strategy aims to promote responsible pet ownership and inform the community about council’s role and future priorities in animal management.

Capital works program The transportation capital works program was implemented.

Sunshine Coast Council Annual Report 2014/15

23

An enviable lifestyle and environment Maintaining and enhancing the region’s natural assets, liveability and environmental credentials.

Outcomes • Healthy natural ecosystems and protected remnant vegetation • Well-managed and maintained open space, waterways and foreshore assets • A reputation for innovative environmental practices • A region shaped by clever planning and design

2,761

hectares purchased

by the Environment Levy since the 1990s

66 24

Voluntary Conservation Agreements covering

1,000 hectares

Sunshine Coast Council Annual Report 2014/15

Highlights for 2014/15 Planning and designing places The following key areas are being revitalised to improve lifestyle and the environment:

Beaches, foreshores, coastal infrastructure and canals The following works were undertaken:

• Caloundra City Centre - Master Plan under development for the CBD

• Dredging operations and sand nourishment at Maroochydore Beach and Mooloolaba Spit

• Maleny Community Precinct – Parkway Drive Maleny Trail under development

• Planned for the protection of Bribie Island and dredging sand for Golden Beach

• Nambour Heritage Precinct – Activation Plan under development

• Constructed a tide gauge at Lamerough Canal to monitor storm tides and longer term sea levels.

• Mooloolaba placemaking – community consultation completed to determine future direction

Protecting the environment

• Beerwah Town Centre – completed transformation of town centre • Coolum Beach Holiday Park – upgrade to cater for growing visitor numbers • Maroochydore Beach – beach recovery to protect from future storm impacts • Buderim Village Park – staged works underway • Kunda Park – concept plan prepared for a local park and community facility • Currimundi - developed a landscape plan for Graham Stewart Park.

Palmview - infrastructure for new community The agreement for infrastructure funding for a new community located south of Sippy Downs was finalised. This 926 hectare development will provide homes for 16,000 residents. The agreement covers all necessary infrastructure including roads, water, sewerage, sports fields, parks and ecological area, without impacting on existing ratepayers. It is anticipated construction work will begin in mid-2016.

Solar farm

• Eight new properties were signed up to protect significant areas of privately owned bushland bringing the total of Voluntary Conservation Agreements with council to 66, covering 1,000 hectares • With 874 registrations, the Sunshine Coast Land for Wildlife program is the largest held by any Local Government in Australia • The Environment Levy has purchased 2,761 hectares of land since it began in the early 1990s.

More than 400 hectares have been purchased since 2012.

Capital works program The following capital works programs were implemented: • Coast and canals • Environmental assets • Parks and gardens • Holiday parks • Waste • Stormwater

Council approved the development application for a solar farm at Valdora. Council will become Australia’s first local government to build a utility scale solar farm. This innovative environmental project will offset council’s entire electricity consumption at its facilities and operations.

Sunshine Coast Council Annual Report 2014/15

25

Service excellence Providing value-for-money services responsive to the needs of the community.

Outcomes • Customer focussed services • Services and assets are efficient, appropriately maintained and managed to meet the needs of a growing community • Sustainable waste and resource management services

1,737

178,600

people phoned council’s call centre

26

Sunshine Coast Council Annual Report 2014/15

building approvals

Highlights for 2014/15 Customer service Council continued to provide a variety of ways in which customers can interact with the organisation including in person, by phone and by webchats. During the year more than:

A number of initiatives to encourage growth, development and create employment opportunities included: • Pre-lodgement meetings remained popular with 341 free meetings being held during 2014/15

• 43,000 people visited council’s customer contact counters

• The ‘Build and Benefit’ scheme continued, offering up to a 50% reduction in infrastructure charges

• 178,600 people phoned council’s call centre

• The ‘Fast Track’ assessment program continued to provide a consistent approach to progressing low-risk applications and the opportunity for fast business

• 33,600 email and online enquiries were received • 5,400 web-chats took place.

A variety of built and natural assets across the region were maintained including: • 2,207 kilometres of sealed roads and 536 kilometres of unsealed roads • 1,092 kilometres of pathways • 1,021 parks and reserves • 986 hectares of parks mown/slashed • 355 bridges • 257 beach accesses • 153 constructed water bodies (including canals and artificial lakes)

Building and development activity Council has worked closely with both the development and building industries to position the Sunshine Coast region for a positive future.

Building development continued to thrive across the Sunshine Coast during 2014/15, with more than 5,400 building approvals, totalling more than $1.1 billion.

There were 1,737 development approvals in 2014/15, almost a 5% increase from the previous year. More than 90% of these were assessed within statutory timeframes.

• Opportunities for electronic business were provided, with more than 87% of relevant applications now being received electronically

New look waste collection A new seven year $80 million waste collection contract was awarded to Remondis Australia to service the entire council region. The service will provide more than eight million collection services from local households each year. Contracts were also awarded for management of landfill operations and resource recovery facilities.

Public health and safety Approximately 1,800 premises across the region were licenced, all of which undergo annual inspections to ensure community health and wellbeing.

Disaster management The ‘Disaster Hub’ which provides helpful information to the community on how to prepare and keep up to date during a disaster event was launched. The hub provides access to weather warnings, road closures and other important information on one easy-to-use website.

Major Applications included: • Solar Farm - Valdora • Youi Office Building - Sippy Downs

Sunshine Coast Council Annual Report 2014/15

27

A public sector leader Delivering a high performance organisation, supported by good governance and robust decisionmaking.

Outcomes • Robust and transparent decision-making • A financially sustainable organisation • An employer of choice • Productive, professional partnerships

$53 million

given to transportation and stormwater projects to enhance the road network

Council scored

91.1%

28

in a workplace health and safety audit

Sunshine Coast Council Annual Report 2014/15

Highlights for 2014/15 Council budget

Innovation and excellence awards

Initiatives which encourage investment and create jobs, supporting the long-term economic success of the region were delivered, including:

• Council won the Excellence in Innovation award from Local Government Managers Australia (LGMA) Queensland for an online development tool that makes it easier and more convenient to access general town planning information for a specific site

• $53 million on transportation and stormwater projects to enhance the road network • $23 million for environmental programs to protect our beaches, bushland and way of life • $15 million for libraries and galleries providing places to learn, meet and inspire • $9 million to maintain council’s parks and gardens enhancing our natural environment • $6 million for events and grants supporting our community • $6 million on community and sporting facilities encouraging healthy lifestyles • $4.7 million for tourism and major events building the economy.

Strong financial management For the seventh consecutive year, council received an unqualified audit report and continued to meet five out of six Queensland Treasury financial ratios.

Election A review of electoral division boundaries was undertaken and council subsequently made recommendations to the Queensland Government for consideration at the local government elections in 2016.

Leader in workplace health and safety Council scored an impressive 91.1% in a workplace health and safety audit, the highest score achieved by a council in Queensland in the history of the Local Government Workcare Scheme.

• Council also collected three awards at the Institute of Public Works Engineering State Excellence Awards for: Maroochy Sand Renourishment Project, Landscape Infrastructure Manual, Place + Beerwah Public Domain Improvement Project

Building council’s reputation nationally and globally Council’s partnerships were enhanced and new avenues for regional promotion were built through a number of international investment missions including Hong Kong, Germany and United Kingdom.

Risk management A major review of council’s risk management approach was undertaken to ensure that risk management practices are built into daily operations. This project received the 2015 Local Government Mutual (LGM) Queensland Award for Risk Management Excellence.

Responsible pet ownership Council worked with the community in an effort to promote and enforce responsible pet ownership in shared public places. Council continued to promote messaging that encourages residents to make informed choices when taking on the responsibility of a pet.

Capital works Capital works programs for Fleet, Quarries, Information Communication Technology and Building and Facilities were implemented.

Sunshine Coast Council Annual Report 2014/15

29

Section 3

Annual disclosures

30

Sunshine Coast Council Annual Report 2014/15

Corporate governance Corporate governance encompasses the relationships between Sunshine Coast Council’s councillors, Executive Leadership Team, staff, community and other stakeholders. It provides the structure through which council’s vision and objectives are set, monitored, reviewed and achieved. It involves the development of appropriate systems, policies, processes and structure, all of which guide the business practices and culture of the organisation. Council has a governance framework that enhances organisational performance, whilst monitoring and maintaining compliance with legislative and other controls.

The framework focuses on: • organisational accountability, needs and aspirations • clear and objective strategic thinking • ethical decision-making • the importance of the community as a key stakeholder • the effective discharge of responsibilities • fiscal responsibility • council’s commitment to good governance and continuous improvement.

• greater understanding of roles and responsibilities for risk, contributing to the development of a positive organisational culture • risks incorporated in decision making by Executive Leadership Team and Councillors Risk will continue to be monitored at appropriate levels in the organisation. These include: Strategic risks • Council receive a quarterly report at the confidential session of the ordinary meeting • Audit Committee receive a report each meeting Operational risks • Audit Committee receive statistics on ‘net risk ratings’ and ‘high’ rated risks each meeting • Directors monitor their department risks each quarter Project risks • Governance committees overseeing large projects, monitor project risks • The ‘Gateway’ project sets a framework for project risk management and reporting.

Risk management Risk management is the identification, assessment and prioritisation of risks. It also includes the steps taken to minimise such risks.

Council recently reviewed and updated its Risk Management Policy, Risk Management Guideline and Risk Management Framework to assist in identifying risks and opportunities in all aspects of council operations. The policy and framework are based on AS/ NZS/ISO 31000:2009 which is an international standard for risk management. In line with the new policy, guideline and framework, council has undertaken a major review of existing risk information through a series of workshops across the organisation.

This will have ongoing benefits including: • improved planning, particularly in regard to continuity of service delivery

Audit Committee The overall objective of the Audit Committee is to assist council and the Chief Executive to discharge their duties in accordance with the Audit Committee Charter: • Corporate Governance and responsibilities in relation to the organisation’s financial reporting, internal control structure, risk management systems and the external and internal audit functions; • maintain an independent and objective forum promoting transparency, accountability and an ethical culture throughout council; • maintain by scheduling regular meetings, open lines of communications with council, Executive Management, External Audit and Internal Audit, to exchange information and views.

• improved financial planning and resource allocation through a reduction in the likelihood of ‘surprises’ and proactive management of challenges and undesirable events

Sunshine Coast Council Annual Report 2014/15

31

The Audit Committee comprises Councillors and independent external representatives as follows: • Mr Peter Dowling AM (Independent Chair) • Mr Len Scanlan (Independent Member) • Cr Chris Thompson • Cr Christian Dickson.

Key activities undertaken by the Audit Committee during the year include: • Monitor Financial Statement annual preparation process and review the draft Financial Statements prior to certification; • Oversee governance reporting including risk management and work health and safety;

External Auditors, Directors and Internal Auditors also attend meetings and contribute toward a culture of continuous improvement. The Audit Committee is an Advisory Committee reporting to council.

Audit and Assurance The Audit and Assurance team conduct activities in accordance with best practice principles including guidance issued by the Institute of Internal Auditors.

Activities for the period July 2014 to June 2015 covered revenue and expenditure control processes across operational areas of council and the provision of advice and assistance to council.

• Review both external and internal audit plans, reports and recommendations.

Councillor remuneration Sunshine Coast Council Mayor and Councillors were remunerated in accordance with the maximum remuneration rates published by the Local Government Remuneration and Discipline Tribunal.

The table below sets out the remuneration paid to Sunshine Coast councillors for the period 1 July 2014 to 30 June 2015:

Salary ($)

Employer Superannuation ($)

Mayor Jamieson

205,462

24,655

Cr Baberowski

124,744

14,969

Cr Dwyer

124,744

14,969

Cr Cox

124,744

14,969

Cr Thompson (Deputy Mayor)

142,355

17,083

Cr McKay

124,744

14,969

Cr Dickson

124,744

14,969

Cr Hungerford

124,744

14,969

Cr O’Pray

124,744

14,969

Cr Robinson

124,744

14,969

Cr Rogerson

124,744

14,969

Councillor

32

Sunshine Coast Council Annual Report 2014/15

Councillor expenses and facilities Councillors’ Expenses Reimbursement and Provision of Facilities policy provides for the payment of reasonable expenses incurred, or to be incurred, by Councillors in carrying out their duties. The policy also outlines the facilities to be provided to Councillors for the same purpose.

Council business is described as activities conducted on behalf of council where a councillor is required to undertake certain tasks to satisfy a legislative requirement, perform ceremonial activities or achieve the business objectives of council. Council business should result in a benefit being achieved either for the local government and/or the local community. This includes, but is not limited to: • Preparing, attending and participating in council meetings, committee meetings, workshops, strategic briefings, deputations and inspections;

provided with a council vehicle for council business, with access to private use of that vehicle subject to reimbursement to council for expenses associated with private use. Councillors may enter into an alternative arrangement in lieu of the provision of a council vehicle at the discretion of the CEO. Such arrangement equates to no more than the value of the general vehicle entitlement.

It is recognised that community expectations and demands on the Mayor are such that mobile phone and vehicle costs are deemed to be council business.

Councillor expenses Councillor

Expenses ($)

Mayor Jamieson

3,921

• Undertaking professional development opportunities;

Cr Baberowski

1,044

• Attending civic functions or civic events;

Cr Dwyer

3,229

• Attending public/community meetings, presentation dinners, annual general meetings where invited as a Councillor;

Cr Cox Cr Thompson (Deputy Mayor)

6,017

• Attending a community event (e.g., school fete, community group awards and presentations, fundraisers) where a formal invitation has been received.

Cr McKay

4,561

Cr Dickson

5,417

Cr Hungerford

5,347

Councillors were provided with the following facilities to enable them to perform their duties and undertake council business:

Cr O’Pray

6,305

Cr Robinson

1,347

• Administrative support of one full time equivalent officer per councillor;

Cr Rogerson

2,905

834

• Office accommodation at one of four council owned or leased premises as well as access to meeting rooms; • Business and communication tools; • Mobile devices*; and • Vehicle#. * With the exception of the Mayor, councillors are invoiced 5% of the total call and data charges in recognition of costs attributable to personal use of such devices.

The Mayor is provided with a council owned vehicle for council business. Councillors are entitled to be

#

Sunshine Coast Council Annual Report 2014/15

33

Councillor meeting attendance Council meetings comprised ordinary meetings, special meetings and strategic discussion forums. The Ordinary Meeting has a membership comprising all councillors and the mayor.

Ordinary Meetings

Strategic Discussion Forums

Meetings held: 12

Meetings held: 12

Councillor

Member attendance*

Councillor

Member attendance*

Mayor Jamieson

10

Mayor Jamieson

9

Cr Baberowski

11

Cr Baberowski

11

Cr Dwyer

11

Cr Dwyer

8

Cr Cox

12

Cr Cox

10

Cr Thompson (Deputy Mayor)

12

Cr Thompson (Deputy Mayor)

12

Cr McKay

12

Cr McKay

10

Cr Dickson

12

Cr Dickson

11

Cr Hungerford

11

Cr Hungerford

11

Cr O’Pray

11

Cr O’Pray

10

Cr Robinson

12

Cr Robinson

12

Cr Rogerson

12

Cr Rogerson

12

* All councillors are required to attend Ordinary Meetings.

* No statutory obligation to attend Strategic Discussion Forums.

Councillors notify any absences and reasons for such. These may include competing diary commitments, medical leave, annual leave, professional development and personal commitments.

Special Meetings Meetings held: 12 Councillor

Member attendance*

Mayor Jamieson

11

Cr Baberowski

10

Cr Dwyer

9

Cr Cox

9

Cr Thompson (Deputy Mayor)

10

Cr McKay

11

Cr Dickson

12

Cr Hungerford

12

Cr O’Pray

12

Cr Robinson

11

Cr Rogerson

11

* All councillors are required to attend Special Meetings.

34

Sunshine Coast Council Annual Report 2014/15

Conduct and performance of Councillors To ensure appropriate standards of conduct and performance are maintained by Councillors, a code of conduct has been adopted and a process is in place to deal with complaints. The Code of Conduct for Councillors sets out the standards of behaviours expected of councillors of Sunshine Coast Council.

The requirements of the code are in addition to the roles, responsibilities and obligations of Councillors set out in the Local Government Act 2009.

During the year the following matters relating to conduct of councillors were raised: Orders and recommendations made under section 180(2) or (4) of the Act

Nil

Orders made under section 181 of the Act

Nil

Complaints about the conduct or performance of councillors for which no further action was taken under section 176C(2) of the Act

Nil

Complaints referred to the department’s chief executive under section 176C(3)(a)(i) of the Act

Nil

Complaints referred to the mayor under section 176C(3)(a)(ii) or (b)(i) of the Act

Nil

Complaints referred to the department’s chief executive under section 176C(4)(a) of the Act

Nil

Complaints assessed by the chief executive officer as being about corrupt conduct under the Crime and Corruption Act

Nil

Complaints heard by a regional conduct review panel

Nil

Complaints heard by the tribunal, referred/ carried over from previous financial year and referred in 2013/2014 heard in 2014/2015 year Complaints to which section 176C(6) of the Act applied.

1

Nil

Sunshine Coast Council Annual Report 2014/15

35

Remuneration packages to senior contract employees Council has five Directors who are senior contract employees reporting to the Chief Executive Officer.

Registers Council keeps and makes available a number of registers as required by legislation, these include: • Gifts and disclosure • Local law database • Roads • Delegations • Register of interests

CEO and senior contracted employees

Total remuneration package per employee

1

$390,000 - $450,000

5

$250,000 - $280,000

• Regulated dogs • Registered animals • Environmentally relevant activities • Waste transporters • Register of enterprises • Community engagement • Lobbyists

Public sector ethics

• Assets

Code of Conduct

• Business activities to which the national competition policy applies

Council has an employee Code of Conduct based on the ethical principles outlined in the Public Sector Ethics Act 1994. The Code aligns with council’s corporate values and is a public statement of our commitment to leading the way in all that we do. All employees have been provided with a copy of the Code of Conduct and new employees receive a copy during their induction program.

Education and training Council has provided training to staff in relation to public sector ethics, principles and obligations, particularly during corporate orientation, which is a regular occurrence.

During the past year information sessions have been provided organisation wide on legislative awareness and compliance.

Procedures and practices of public sector entities Council’s administrative procedures and management practices have proper regard to the Public Sector Ethics Act 1994, as well as the Code of Conduct.

Officers’ delegations of authority are monitored and regularly reviewed.

36

Sunshine Coast Council Annual Report 2014/15

• Fees and charges

• Pre-qualified suppliers

Beneficial enterprises Council participated in beneficial enterprises with the following entities during the 2014/2015 financial year: • Forestry Products Queensland Pty Ltd • SunCentral Maroochydore Pty Ltd • Sunshine Coast Events Centre Pty Ltd

National competition policy Council conducted the following business activities during the 2014/2015 financial year: • Waste and Resource Management • Sunshine Coast Airport • Sunshine Coast Holiday Parks • Quarries Waste and Resources Management was a significant business activity and applied the competitive neutrality principle. There were no new significant business activities.

No investigation notices were issued in 2014/2015 by the Queensland Competition Authority for competitive neutrality complaints.

Administrative action complaints Council is committed to dealing with complaints fairly, confidentially, promptly and in a respectful manner.

It is also committed to providing a superior level of service to its customers, and to open and transparent government. Council aspires to provide a level of service and conduct its business in a way that does not attract complaints. However, where a customer is not satisfied, council is equally committed to the prompt and efficient resolution of complaints. This process supports council’s priority to ensure clear accountabilities, ethical standards of behaviour and a commitment to act in accordance with the “local government principles” within the Act. Council’s Administrative Action Complaints Management Process is made available to the public via council’s external website as well as being available to staff via the intranet.

During 2014/2015 council received and resolved 73 administrative action complaints.

The effectiveness of the new process has been demonstrated by a proportional decline in the number of investigations carried out by the Queensland Ombudsman. The satisfactory resolution of complaints may be due to a heightened level of response including articulating sound reasons for a decision to the customer.

With an emphasis on complaints being appropriately managed by operational areas, coupled with a robust internal review process there is a demonstrable commitment to managing customer concerns promptly and respectfully.

Sunshine Coast Council Annual Report 2014/15

37

Summary of concessions for rates and charges General Rate Concession

Deferment for pensioners

In addition to those classes of land granted a general rate exemption under Section 93(3) of the Local Government Act 2009 and Section 73 of the Local Government Regulation 2012, council grants a general rates concession to land identified in Section 120(1) (b) of the Local Government Regulation 2012 to the extent council is satisfied the land is owned by an entity whose objects do not include making a profit or an entity that provides assistance or encouragement for arts or cultural development and is one of the following:

To assist eligible pensioners who have experienced large increases in the value of their property as determined by the Department of Natural Resources and Mines or have experienced financial hardship, council will allow deferment of up to 50% of the general rate. The deferred rates will accumulate as a debt against the property until it is sold or until the death of the ratepayer. The deferment of general rates applies only to ratepayers categorised in Differential General Rates Categories 1, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 28 and 30.

• Boy Scout and Girl Guide associations

To be eligible to defer up to 50% of the general rate the applicant must:

• Surf Lifesaving and Coastguard organisation • Community sporting organisation – not for profit organisations without a commercial liquor licence or a community club liquor licence

• own and occupy the property; and

• Community cultural or arts organisation – not for profit organisations without a commercial liquor licence or a community club liquor licence

• be the holder of a Pension Concession Card issued

by Centrelink or the Department of Veteran Affairs; OR

• Charitable organisations

• a Repatriation Health (Gold) Card issued by the Department of Veteran Affairs; OR

a) Not for profit organisation; and b) Registered as a charity institution or a public benevolent institution; and c) Providing benefits directly to the community; and

• have no overdue rates and charges on the said property; and

• a Commonwealth Seniors Health Card; OR • a Queensland Seniors Card issued by the Queensland State Government.

The concession shall be 100% of the general rate.

Note that automatic eligibility applies to those ratepayers currently receiving a Pension Concession on their rate notice. Eligibility for those ratepayers with a Seniors Card will be assessed accordingly.

Deferral of general rate

Deferment for businesses or enterprises

Chapter 4 Part 10 of the Local Government Regulation 2012 allows council to enter into an agreement with certain ratepayers to defer payment of their general rates. Council’s pensioner rate deferment concession for eligible pensioners shall be allowed under Chapter 4, Part 10 of the Local Government Regulation 2012, Section 120(1)(a) and council’s business and enterprise rate deferment concession to eligible businesses or enterprises shall be allowed under Chapter 4, Part 10 of the Local Government Regulation 2012, Section 120(1)(d).

To assist businesses and enterprises in accordance with the Business Investment Policy, council will allow deferment of the general rate to approved applicants under the Sunshine Coast Investment Incentive Scheme. The deferred rates will accumulate as a debt against the property until it is sold or until the payment is required in accordance with the provisions of the Sunshine Coast Investment Incentive Scheme.

d) Endorsed by the Australian Tax Office – Charity Tax Concession.

38

Sunshine Coast Council Annual Report 2014/15

Interest Charges Interest Charges, or the payment of an additional charge, shall be applied to all deferred general rates under Section 122(5) of the Local Government Regulation 2012. The interest shall be compound interest, calculated in daily rests. The interest rate shall be set at the 90 day bank bill rate as at the adoption of the 2014/2015 Budget.

Pensioner Concessions Council’s pensioner rate concession to eligible pensioners shall be allowed under Chapter 4, Part 10 of the Local Government Regulation 2012.

2.4.1 Eligibility Criteria The pensioner: 1. Must comply with eligibility criteria contained in the Queensland Government’s Rate Subsidy Scheme and must possess a current, valid qualifying concession card, namely: • Pensioner Concession Card issued by Centrelink or the Department of Veteran Affairs; OR • Repatriation Health (Gold) Card – (for all conditions) issued by the Department of Veteran Affairs; and 2. Must be the owner (either solely or jointly), or be an eligible life tenant, in accordance with the guidelines for the State Government Rate Subsidy Scheme, of property within the region which is their principal place of residence, AND must have (either solely or jointly) with a co-owner, the legal responsibility for payment of rates and charges which are levied in respect of the said property by the council. In the case of joint ownership, the concession will apply only to the approved pensioner’s proportionate share of the applicable rates and charges, except where the co-owners are an approved pensioner and his/her spouse. In this situation the concession will apply to the full amount of applicable rates and charges; and

to a concession will commence from either the card start date shown on the Pensioner Concession Card or the date of occupation of their principal place of residence or the start of the current rating period, whichever is the latter date. Such entitlement shall continue until the sale of that property or until the entitlement to a pension ceases to exist; and 4. Must, if an ‘existing’ applicant, lodge another application if required by council OR on the acquisition of a replacement property within the region. Entitlements to a concession will continue without interruption if such application is received within a month of the request for a new application or of the property settlement; and 5. Must have owned, or otherwise paid rates on, property within the region for the preceding three years. Pensioner concession may be allowed where the applicant has paid rates on property within the region for five of the last 10 years, so long as the “gap” between ownerships in this period does not exceed 12 months. Discretion may be applied in relation to contribution to the region regarding continuous residency, consistent with pensioner concession arrangements as listed above. For holders of the Repatriation Health (Gold) Card issued by the Department of Veteran Affairs who have been classified as totally and permanently incapacitated the three year ownership provision is waived.

2.4.2 Method of Calculation

Pension rate

Sole title to the property

Joint title to the property

Maximum level of pension

$230 p.a. maximum

$180 p.a. maximum

Not maximum level of pension

$115 p.a. maximum

$65 p.a. maximum

3. Must, if a ‘first time’ applicant, lodge and complete the prescribed application to be entitled to a rate concession. The information on this application form will be used by council to verify the eligibility of all pensioners (Centrelink and Veteran Affairs pension recipients). Upon proof of eligibility, the entitlement

Sunshine Coast Council Annual Report 2014/15

39

2.4.2.1 Single Owner on the Maximum Rate of Pension Where the pensioner is in receipt of the maximum level of pension and has sole title to the property that is their principal place of residence the concession shall be 25% of the general rate up to a maximum amount of $230 per annum.

2.4.2.2 Joint Owner on the Maximum Rate of Pension Where the pensioner is in receipt of the maximum level of pension and owns the property jointly with one or more people the concession shall be 25% of the general rate up to a maximum amount of $180 per annum.

2.4.2.3 Single Owner not on the Maximum Rate of Pension Where the pensioner is not in receipt of the maximum level of pension and has sole title to the property that is their principal place of residence the concession shall be 25% of the general rate up to a maximum amount of $115 per annum.

Service, facility, activity supplied by another Local Government Nil

Service, facility, activity for which special rates/charges levied • Environment Levy

2.4.2.4 Joint Owner not on the Maximum Rate of Pension

• Public Transport Levy

Where the pensioner is not in receipt of the maximum level of pension and owns the property jointly with one or more people the concession shall be 25% of the general rate up to a maximum amount of $65 per annum.

• Montville Beautification Levy

• Heritage Levy • Tourism Levy • Rural Fire Charge • Brightwater Estate Landscaping Charge • Twin Waters Maintenance Charge • Sunshine Cove Maintenance Charge • Mooloolah Island Maintenance Charge • Emergency Management Levy For additional information refer to the revenue analysis of the Financial Statement 2014/2015.

40

Sunshine Coast Council Annual Report 2014/15

Changes to tenders Contract No.

Contract Title

Details of changes

1314036

Boardwalk construction – David Low Way, Bli Bli

Notice was issued where revised pricing was requested due to a preapproved traffic control “concept” drawing being developed for the duration of the boardwalk works.

C140101

Supply of retail electricity services

Notice was issued requesting a revised pricing schedule due to changes in the proposed contract term, stages and definitions.

1314067

Civil Works at Caloundra Aerodrome Northern Allotment

Notice was issued advising of a reduction in the scope of works required for road works, and the inclusion of the water and sewerage connection works.

A revised pricing breakdown was requested.

1314012

Road surface crack sealing

Notice was issued with a revised technical specification and additional document outlining crack sealing locations. A lump sum amount was requested for the works in the additional documents.

ITT1424

Nambour Heroes Walk – Landscape Construction Project

Notice was issued requesting best and final offers for a reduced scope of works.

ITT1418

Maroochydore City Centre – Engineering Design Package 1

Notice was issued with a revised technical specification to include the installation and operation of a pneumatic waste collection system within the Maroochydore Priority Development Area.

ITT1427

Nambour Administration Precinct air-conditioning upgrade – Stage 3 Mechanical Services

Notice was issued with a reduction in scope of works.

ITT1431

Aquatic weed harvesting and chemical control

Notice was issued advising that the categories had been restructured to include sub-categories.

Respondents were requested to provide revised pricing and methodology

ITT1453

Landscape construction works – Maroochy River Foreshore, Bradman Avenue, Maroochydore

Notice was issued requesting best and final offers with an amendment to all landscape drawings. All of the previous engineering works drawings were revised and reissued.

ITT1450

Construction of new sports field at Coolum Sports Complex

Notice was issued requiring revised pricing schedule containing amended quantities and additional items.

ITT1445

Caloundra Landfill – HES Basin Dosing System – Cell 3

Notice was issued advising of additional scope of works being the supply and installation of electrical conduit.

ITT1443

Design and Construct – Maroochy Wetlands Boardwalk Renewal – Stage 6

Notice was issued advising of a revised scope of works.

A140101

Sunshine Coast Airport – Southern GA and RPT Aprons Upgrade

Notice was issued confirming that the use of a material transfer vehicle was required for this contract. Respondents were given the opportunity to provide revised pricing if the item had not already been accounted for in their tender.

ITT1422

Pre-printed corporate stationery

Notice was issued to respondents requesting best and final offers and advising of a revised scope of works.

Sunshine Coast Council Annual Report 2014/15

41

Overseas travel The following table provides details of travel made in an official capacity during the financial year.

Cost ($)

Attendee

Destination

Purpose

Mayor Mark Jamieson

Hong Kong, Frankfurt, Germany, London, UK

Major Capital Markets investment mission. The major capital markets identified, reflect key destinations visited by the Queensland Treasurer and Queensland Treasury Corporation every year as the major sources of investment in Government bonds.

15,226

Mayor Mark Jamieson

Portland and San Francisco, USA

To participate in a joint mission with the University of the Sunshine Coast to examine urban planning, commercial and industry development opportunities. Also, to profile the region as a destination for business investment in knowledge industries, health and wellbeing and education and research.

12,428

Mayor Mark Jamieson

China

SCC representative at the opening of RADAQUA’s facility in Fujian Province China (a Sunshine Coast business)

Nil cost to council

Manager Strategy and Coordination, Craig Matheson

Hong Kong, Frankfurt, Germany, London, UK

Major Capital Markets investment mission. The major capital markets identified, reflect key destinations visited by the Queensland Treasurer and Queensland Treasury Corporation every year as the major sources of investment in Government bonds.

8,900

CEO, John Knaggs

Portland and San Francisco, USA

To participate in a joint mission with the University of the Sunshine Coast to examine urban planning, commercial and industry development opportunities. Also, to profile the region as a destination for business investment in knowledge industries, health and wellbeing and education and research.

6,125

Councillor Jason O’Pray

New Zealand

Trade mission with Sunshine Coast Destination Limited to showcase the region’s tourism products and experiences, open up new business opportunities for local businesses and professionals in the tourism sector.

2,215

General Manager Sunshine Coast Airport, Peter Pallot

China

Trade Mission - Routes Asia Conference 2015. Promote Sunshine Coast Airport as an international destination of choice at an event represented by over 100 airlines and 200 airports world-wide.

6,756

Manager Civil Asset Management, Tony McDougall

Rotorua, New Zealand

IPWEA International Conference

3,540

Coordinator Engineering and Environment Assessment, Michael Henderson

Rotorua, New Zealand

IPWEA International Conference

3,488

42

Sunshine Coast Council Annual Report 2014/15

Grants to community organisations Successful recipients of Mayoral and Councillor Discretionary Funding for 2014/2015:

Mayor Jamieson: Total 2014/15 Allocation - $50,000 (+ $620 carry over 2013/14) Amount Funded ($)

Amount Remaining ($)

Applicant

Project

Sunshine Coast Bromeliad Society

Sunny Broms Conference

2,000

48,620

Madeleine Naddei

Thicker Than Water movie production

4,000

44,620

Sunshine Coast Homeschoolers

Lego Robotics Challenge

500

44,120

Suncoast Clayworkers

Eudlo Story Wall

3,500

40,620

Maroochydore Revitalisation

2015 Ocean Street World Festival

5,852

34,768

Sunshine Coast Sailability

Guinness World Record attempt for the “Longest Continual Moving Line of Wheelchairs”.

700

34,068

Very Good Co. Ltd

Being Woman Gathering 2015

1,500

32,568

Eumundi Rotary Club

Katie Rose Cottage Long Lunch

500

32,068

Montville Village Association

Sound System for Hearing Impaired in Montville Village Hall

1,000

31,068

Cotton On Foundation

Run Sunshine Coast

10,240

20,828

Buderim War Memorial Community Association

Centenary of ANZAC Commemorative Booklet

718

20,110

Maleny History Preservation and Restoration Society

Shifting of historical house Glenferna to Maleny Pioneer Village

5,000

15,110

Australian Pensioners and Superannuants League Caloundra

16th Amateur Fun Walk for seniors and their families

1,000

14,110

Maleny Golf Club

Rehabilitation of Armstrong Dam and temporary club house

2,500

11,610

Buderim War Memorial Community Association

Buderim’s Giant Expo

2,500

9,110

Sunshine Coast Council Annual Report 2014/15

43

Division 1 Cr Baberowski: Total 2014/15 Allocation - $50,000 Amount Funded ($)

Amount Remaining ($)

Applicant

Project

Transfer of funds

Allocation to Minor Operational Works Budget

2,500

47,500

Transfer of funds

Allocation to Minor Operational Works Budget

2,000

45,500

Landsborough School of Arts Memorial Hall

Structural repairs to hall

12,000

33,500

Transfer of funds

Allocation to Minor Operational Works Budget

11,250

22,250

Rotary Club of Caloundra

2015 Driver Awareness Program

500

21,750

Sunshine Coast Destinations

Interpretive panels for Glasshouse Visitor Information Centre

550

21,200

Glasshouse Musos

Festival of Small Halls – Beerwah

2,500

18,700

Transfer of funds

Allocation to Minor Operational Works Budget

2,310

16,390

Bellvista Community Association

Bells Community Garden

3,000

13,390

Landsborough and District Historical Society

“Far From This Land” exhibit banner

544

12,846

Amount Funded ($)

Amount Remaining ($)

Division 2 Cr Dwyer: Total 2014/15 Allocation - $20,000

Applicant

Project

Murray Power

Caloundra Fringe Film Festival

15,000

5,000

Caloundra Lapidary Club

Refrigerator and computer

2,000

3,000

SC Sports Hall of Fame

2014 Induction Ceremony

1,000

2,000

Rotary Club of Caloundra

2015 Driver Awareness Program

500

1,500

Madeleine Naddei

Thicker Than Water movie production

1,000

500

Sunshine Coast Homeschoolers

Lego Robotics Challenge

200

300

Queensland Wheelchair Rugby League

State Training Camp

300

0

44

Sunshine Coast Council Annual Report 2014/15

Division 3 Cr Cox: Total 2014/15 Allocation - $12,500 (+ $600 carry over 2013/14) Amount Funded ($)

Amount Remaining ($)

Applicant

Project

Rotary Club of Caloundra

2015 Driver Awareness Program

500

12,600

Scripture Union Qld

Caloundra Chaplaincy Charity Golf Classic

500

12,100

Kawana Family Centre

Community Family Christmas Celebrations

200

11,900

Kawana Junior Australian Football Club

Main oval irrigation

500

11,400

Sunshine Coast Falcons

Stadium hire costs

4,750

6,650

Sunshine Coast Indoor Rowing Club

Hosting the 2015 Qld Indoor Rowing Championships

350

6,300

Sunnykids

Keeping Kids Safe

1,440

4,860

Maleny Golf Club

Temporary club house

750

4,110

Amount Funded ($)

Amount Remaining ($)

1,100

3,900

Division 4 Cr Thompson: Total 2014/15 Allocation - $5,000

Applicant

Project

Kawana Waters Surf Life Saving Club

Up The Tower

Sunshine Coast Sailability

Guinness World Record attempt for the "Longest Continual Moving Line of Wheelchairs".

900

3,000

Buddina State School P&C

Art Show

500

2,500

Sunshine Coast Yacht Club

SC Offshore Regatta and Qld IRC Championships

2,000

500

Alexandra Headland Community Association

Alex Community Garden

500

0

Sunshine Coast Council Annual Report 2014/15

45

Division 5 Cr McKay: Total 2014/15 Allocation - $50,000 + $339 returned funds Amount Funded ($)

Amount Remaining ($)

4,000

46,339

300

46,039

1,000

45,039

Applicant

Project

Eudlo Public Hall and Rec Grounds

Repair and upgrade of sewerage trenches

Nambour and District Historical Museum Assoc. Inc.

Jim Hocking Commemoration Day – catering

Mooloolah River Waterwatch

Mooloolah River Market – Happy Earth Festival

Maleny Music and Performing Arts

2014 Maleny Music Weekend

500

44,539

Eudlo Public Hall and Rec Grounds

Olsen Mill Site Timer

623

43,916

Eudlo Rural Fire Brigade

Redevelopment certification fees

173

43,743

Palmwoods Memorial Hall

Palmwoods Community Spring Carnival

500

43,243

Transfer of funds

Allocation to Minor Operational Works Budget

1,000

42,243

Obi Obi Rural Fire Brigade

Shed construction

3,415

38,828

Suncoast Clayworkers

Attendance at Penland USA School of Craft

4,000

34,828

Woombye Community Library

Book buying

750

34,078

Montville Village Association

Opening of restored Montville Village Hall

500

33,578

SC Agricultural Show Society

Banners for exhibitions

1,237

32,341

Chenrezig Institute

40th Anniversary Celebration

500

31,841

Transfer of funds

Allocation to Minor Operational Works Budget

3,000

28,841

SC Community Co-Op

SC Multicultural Excellence Awards

200

28,641

Barung Landcare

Hinterland Bush Links Project

200

28,441

Mapleton Bowls Club

Solar panels

1,000

27,441

Hinterland Business Centre

Peace in the Trees Sculpture Workshop

1,600

25,841

Mooloolah Valley Community Association

Lighting Up Mooloolah Valley for Christmas 2014

1,000

24,841

Sunshine Coast Gymnastics

Giant fan

1,000

23,841

Sunshine Coast Homeschoolers

Lego Robotics Challenge

500

23,341

Sunshine Valley Men’s Shed

Superceded Planning Scheme fee

897

22,444

Maleny Community Centre

Infrastructure charges

5,958

16,486

46

Sunshine Coast Council Annual Report 2014/15

Amount Funded ($)

Amount Remaining ($)

Applicant

Project

Maleny Swimming Club

Maleny Swim Meet

250

16,236

Barung Landcare Association

Children’s Woodworking Workshops

700

15,536

Friends of Pattemore House

Kitchen upgrade

1,008

14,528

Maleny Music and Performing Arts

2015 Maleny Music Weekend

1,440

13,088

Montville Village Association

Sound system for hearing impaired in Montville Village Hall

1,000

12,088

Ethos Foundation

Young Ethos Scholars

500

11,588

Nambour & District Historical Museum

Frame historical council Chairman photo

366

11,222

Project Vietnam

PVI 25th Anniversary publication

500

10,722

Mooloolah Valley Lions Club

Information afternoon

300

10,422

Montville Chamber of Commerce

UN youth delegate

200

10,222

Maleny History Preservation and Restoration Society

Shifting of historical house Glenferna to Maleny Pioneer Village

3,450

6,772

Maleny Community Centre

Infrastructure charges

5,092

1,680

Maleny Golf Club

Rehabilitation of Armstrong Dam and temporary club house

1,650

30

Sunshine Coast Council Annual Report 2014/15

47

Division 6 Cr Dickson: Total 2014/15 Allocation - $50,000 Amount Funded ($)

Amount Remaining ($)

Applicant

Project

One Step Alliance

Step Up!

1,500

48,500

Lions Club of Buderim

Buderim Street Party

5,000

43,500

Buderim Historical Society

Stories of Old Buderim

1,790

41,710

Maroochydore Cricket Club

Sewerage installation for Kerry Emery Oval

7,426

34,284

S.C. Dog Obedience Club

Rehoming Day

1,516

32,768

S.C. Dog Obedience Club

Covered outdoor training area

15,000

17,768

Fusion Australia Sunshine Coast

Alcooringa Community Kitchen upgrade

5,000

12,768

Buderim Men’s Shed

Queensland Sheds Expo

1,000

11,768

Rotary Club of Caloundra

2015 Driver Awareness Program

1,000

10,768

Buderim Male Choir

Membership promotional drive

500

10,268

SAILS Buderim

Native Forest Preservation Project

5,000

5,268

Disabled Access Awareness Group

Set up costs

250

5,018

Sunshine Coast Homeschoolers

Lego Robotics Challenge

300

4,718

Sunshine Coast Concert Band

New shirts for student members

500

4,218

Glenfields Waterbury Park Community Association

Community website project

500

3,718

Buderim Craft Cottage

Laying of turf

718

3,000

Sunshine Coast Hockey Assoc.

Memorial plaques

750

2,250

Sippy Downs and District Community Association

Ongoing community consultation and engagement

1,368

882

Buderim War Memorial Community Association

Centenary of ANZAC Commemorative Booklet

782

100

Maleny Golf Club

Rehabilitation of Armstrong Dam

100

0

48

Sunshine Coast Council Annual Report 2014/15

Division 7 Cr Hungerford: Total 2014/15 Allocation - $20,000

Applicant

Project

Transfer of funds

Allocation to Minor Operational Works Budget

Amount Funded ($)

Amount Remaining ($)

20,000

0

Division 8 Cr O’Pray: Total 2014/15 Allocation - $50,000 (+ $18,562 carry over 2013/14) Amount Funded ($)

Amount Remaining ($)

932

67,630

Applicant

Project

SC Literary Association

Poetry Workshop

Sunshine Coast Paddlesports Club

Dragon Boat purchase

1,500

66,130

Julie Shelton

Temporary event permit for Sunshine Coast Real Food Festival

1,000

65,130

Disabled Access Awareness Group

Set up costs

250

64,880

Maroochy Neighbourhood Centre

External information storage server

2,000

62,880

Cotton Tree Swimming Club

Club tent

2,204

60,676

Sunshine Coast Special Olympics Basketball Group

Trophies for athletes

750

59,926

Marcoola Surf Life Saving Club

Purchase of rescue board

1,509

58,417

Sunshine Coast Homeschoolers

Lego Robotics Challenge

500

57,917

Sustainable Partnerships Australia Ltd

Hold Fast Entertainment – purchase of computer

2,171

55,746

Maroochy Sailing Club

Outboard Motor for Children’s Support Boat

1,500

54,246

Sunnykids Inc

Great Trolley Race

1,765

52,481

Sunshine Coast Table Tennis Club

Table tennis tables for Australian Veterans Championships

4,605

47,876

Suncare Community Services

Garden benches

750

47,126

Mudjimba Beach Boardriders

Soft boards purchase

1,500

45,626 Continued next page

Sunshine Coast Council Annual Report 2014/15

49

Division 8 Cr O’Pray: Total 2014/15 Allocation - $50,000 (+ $18,562 carry over 2013/14) cont.

Amount Funded ($)

Amount Remaining ($)

Applicant

Project

Maroochydore Revitalisation Association

Marquees for 2015 Ocean Street World Festival

8,070

37,556

Maroochydore State Emergency Service

Sandbag pallet jack

1,000

36,556

Transfer of funds

Allocation to Minor Operational Works Budget

14,610

21,946

Sunnykids

4xFun Adventure Rally

4,000

17,946

SC Pride Fair Committee

2016 Sunshine Coast Pride Fair Festival

2,000

15,946

Maroochydore Rotary Club

Rotary Youth Driver Awareness

750

15,196

Maroochydore RSL Sub-Branch

ANZAC Centenary

1,045

14,151

Leukaemia Foundation of Qld

Light the Night 2015

1,000

13,151

ICKFA Sunshine Coast Branch

Karate Club view area and live streaming

1,500

11,651

Maroochy Canal Action Group

Laptop computer and printer

1,609

10,042

Marcoola Progress Association

Marcoola dune fencing and group promotions

2,000

8,042

Seaside Shores Community Association

Christmas lights for the pavillion in Glen Retreat Park

3,200

4,842

Amount Funded ($)

Amount Remaining ($)

Division 9 Cr Robinson: Total 2014/15 Allocation - $50,000

Applicant

Project

Maroochy Rowing Club

Boat storage shed

25,000

25,000

Bli Bli Tennis Club

Clubhouse renewal

10,000

15,000

Coolum Tennis Club

Provision of a modular room

10,000

5,000

50

Sunshine Coast Council Annual Report 2014/15

Division 10 Cr Rogerson: Total 2014/15 Allocation - $50,000 (+ $15 carry over 2013/14) Amount Funded ($)

Amount Remaining ($)

300

49,715

Applicant

Project

Nambour and District Historical Museum Assoc. Inc.

Jim Hocking Commemoration Day – chairs

Transfer of funds

Allocation to Minor Operational Works Budget

1,000

48,715

Nambour Alliance

Retro Rocks Nambour

2,500

46,215

Obi Obi Rural Fire Brigade

Shed construction

3,415

42,800

Nambour Alliance

Nambour Annual Clean Up

600

42,200

Mapleton and District Community Association

Dam review

2,500

39,700

Transfer of funds

Allocation to Minor Operational Works Budget

1,000

38,700

Yandina and District Community Association

Dam recreation use peer review

2,500

36,200

Sunshine Coast Agricultural Show Society

Banners for exhibitions

3,208

32,992

Yandina Tennis Club

Resurfacing of tennis courts

10,000

22,992

Madeleine Naddei

Thicker Than Water movie production

1,000

21,992

Genealogy Sunshine Coast

Material Change of Use application fee

2,000

19,992

Mapleton Community Choir

Replacement of piano

1,500

18,492

Mapleton Bowls Club

Solar panels

2,000

16,492

Mapleton and District Community Association

Light the Lights

1,000

15,492

Nambour Alliance

Christmas tree lights

2,000

13,492

Sunshine Coast Homeschoolers

Lego Robotics Challenge

500

12,992

Mapleton Men’s Shed

Light the Lillypond lights

467

12,525

Barung Landcare

Children’s woodworking workshops

500

12,025

Mapleton and District Community Association

100 Years of the Shay

500

11,525

Montville Village Association

Sound system for hearing impaired in Montville Village Hall

1,000

10,525 Continued next page

Sunshine Coast Council Annual Report 2014/15

51

Division 10 Cr Rogerson: Total 2014/15 Allocation - $50,000 (+ $15 carry over 2013/14) cont.

Amount Funded ($)

Amount Remaining ($)

Applicant

Project

Nambour and District Historical Museum

Frame historical council Chairman photo

366

10,159

North Arm State School P&C

Application fee for commemorative memorial

160

9,999

Mary Valley Community News Association

EOI for toilet project at Isaac Moore Park

500

9,499

Kenilworth & District Historical Association

Welcome to Country at ANZAC Ceremony

220

9,279

Mapleton Bowls Club

New cool room

3,000

6,279

Yandina Baptist Church

Conference room

507

5,772

Compass Institute

Show bags

500

5,272

Yandina Rugby League

Front entrance sign

660

4,612

Nambour Blue Demons Hockey Club

Field line marking

1,967

2,645

Mapleton Men’s Shed

Geotec survey

330

2,315

Mapleton and District Community Association

PA system

2,315

0

52

Sunshine Coast Council Annual Report 2014/15

Glossary Strategic implementation

Infrastructure

Used to describe the activities within an organisation to manage the execution of a strategic plan.

Robust decision-making

The basic facilities, services and installations needed for the functioning of a community or society, such as transport networks, drainage, water and sewerage and the like.

Decision framework that identifies potential strategies and evaluates the outcomes.

Operational Plan

A council plan, which prioritises the construction of the necessary infrastructure (e.g. roads, bridges, buildings) to support the development of the region.

Details the activities and projects that council will undertake during a 12 month period to achieve the broader strategic direction and outcomes identified in the Corporate Plan which are funded through the budget.

Corporate Plan

Place making

Strategic document that identifies the priorities for council for the next five years and beyond.

Capitalises on a local community’s assets, inspiration, and potential, ultimately creating good public spaces that promote people’s health, happiness, and wellbeing.

Capital works program

Liveability Numerous factors that equate to a community’s quality of life.

Governance Framework Outlines the relationship between the governing and accountability processes of council. It covers management structure, management standards and control and review processes.

Sustainable Meeting the needs of the present without compromising the ability of future generations to meet their own needs.

Sunshine Coast Council Annual Report 2014/15

53

Section 4

Financial Information

54

Sunshine Coast Council Annual Report 2014/15

Community Financial Report 2014/15 The objective of this report is to provide an easy to understand representation of Sunshine Coast Council’s recent financial performance.

Financial Statements The financial statements consist of four reports, and notes that accompany the reports.

When read in conjunction with each other, it assists the reader to have an overall understanding of Council’s financial position.

Statement of Comprehensive Income The statement of comprehensive income provides information about revenues and expenses and shows if a profit or a loss has been made in delivering Council services.

Statement of Financial Position The statement of financial position provides information about assets and liabilities. Together they provide the net worth of Council, which has been built up over many years. This is also called the Community Equity.

Statement of Changes in Equity The statement of changes in equity summarise the increase (or decrease) in Council’s net worth for the year.

Statement of Cash Flows The statement of cash flows show changes to cash balances and how they resulted. It differs from the statement of comprehensive income in that it excludes non-cash expenses such as depreciation, accruals and revaluation of assets such as land and buildings.

Notes to the Financial Statements The notes to the financial statements disclose Council’s accounting policies and provide additional information and greater detail on the values contained in the statements.

Measures of Financial Sustainability (Ratios) Financial ratios measure Council’s financial sustainability by looking at the relationships between different financial categories. These ratios are also used for comparison purposes when looking at benchmarking with other Councils.

55 Community Financial Report 2014/15

Statement of Comprehensive Income

Revenue

Expenses

Where did the money come from?

Council received $380 million in recurrent operating revenue during 2014/15 year with the major source of this revenue generated from the rates and utility charges. Total operating revenue increased by $18.6 million (5.1%) on the previous year.

Where was the money spent?

Council returns the majority of revenues to the community in the form of services and community projects.

Total recurrent expenses during the 2014/15 year were $347 million which was a slight decrease (1%) on the previous year.

Rates & Utilities (62.7%) Fees & Charges (14.9%) Interest Received (8.7%) Grants & Other (6.8%) Unitywater (6.9%)

$'000 238,518 56,590 33,220 25,853 26,074 380,255

$'000 Employee benefits (33.9%) 117,678 Materials and Services (45%) 156,007 Finance Costs (2.8%) 9,835 Depreciation (18%) 62,359 Contribution to 1,187 controlled entities (0.3%) 347,066

The Net Operating Result The operating profit (or loss) The net operating result for Council for the 2014/15 year was $33 million. The money is reinvested back into our region via the capital works program thereby providing necessary funds for investment in regional growth.

Statement of Financial Position

Assets + Liabilities = Community Equity Assets

Liabilities

What do we own?

What do we owe?

The value of all assets we controlled as at 30 June 2015 totalled $4.844 billion.

This figure is further broken down into current assets $328 million (6.8%) and non-current assets $4.516 billion (93.2%). Current assets are those that are readily available to meet expenses . and mainly include cash and amounts owed by customers. Non-current assets include property plant and equipment and investments in associates (Unitywater). $'000 Cash and Cash Equivalents (5.9%) 287,386 Trade and Other Receivables (9.3%) 448,712 Other Financial Assets (.6%) 26,901 Property, Plant and Equipment (73.1%) 3,542,972 Investments in Associates (11.1%) 538,212 4,844,183 56 Community Financial Report 2014/15

The value of all liabilities as at 30 June 2015 was $373 million. This figure is further broken down into current liabilities $85 million (22.8%) and noncurrent liabilities of $288 million (77.2%).

The largest single debt owed by Council is to the Queensland Treasury Corporation (QTC) which is the state government-owned lending agency. This money is borrowed for infrastructure and large-scale region making projects.

Trade and Other Payables (11.5%) Borrowings (71.6%) Provisions (13.5%) Other Liabilities (3.4%)

$'000 42,925 267,169 50,492 12,425 373,011

Statement of Changes in Equity

Community Equity What is our net worth?

Assets (what we own) less liabilities (what we owe) equal Council’s net worth (Community Equity). As at 30 June 2015, the Community Equity for Council was $4.471 billion, an increase of $365 million (8.9%).

The majority of this increase is due to the revaluation of Council’s assets for 2014/15 which totalled $201 million. Assets revalued in the current year included land, buildings, parks, roads and stormwater.

Liabilities 4%

Assets 50%

Equity 46%

Council’s total Community Equity ($4.471billion) is made up of:  Accumulated Surplus the profit or loss results of all financial years ($836.7 million)  Asset Revaluation which is the accumulated value of the assets in excess of what we have paid for the assets $896.8 million.  Regional Capital Initial and ongoing investment of the Community $4.411 billion.

Statement of Cash Flows

Cash Flow Cash in, cash out There are three types of activities that have an impact on cash balances:  Operating activities including receipts from customers and payments to suppliers, interest and dividends, grants, and the cost of borrowings. 

Investing activities include investments made in property, plant and equipment, movement in loans and advances, proceeds from sale of assets and contributions.



Financing activities include the cash movement from borrowings proceeds received, less repayment commitments.

Overall cash balances for Council increased by $63.5 million for the financial year. The majority of this increase (84.5%) relates to borrowings for large-scale region making projects including the Maroochydore City Centre, the Solar Farm, the Sunshine Coast Airport Runway Project and other business areas around the Sunshine Coast.

The remaining 15% increase in cash is closely related to a reduction in Council’s Trade and Other Receivables balance (money owed to Council). Debts owed to Council were reduced during the 2014/15 year by over $9 million. This is made up of $5 million from rates and general debtors and a $4 million payment from Unitywater for their working capital loan which has now been finalised.

57 Community Financial Report 2014/15

Capital Expenditure Building Assets Buildings and Facilities Parks and Gardens Stormwater Strategic Land and Commercial Properties Sunshine Coast Airport & Aerodrome Transportation (Roads) Waste Coast and Canals Other

$'000 7,872 11,504 5,273 23,964 3,955 40,832 13,405 1,564 6,882 115,251

Capital Expenditure sits outside the normal operating costs of Council and is included in the Property Plant and Equipment balance on the Statement of Financial Position. Capital expenditure includes infrastructure costs such as the development of the new Maroochydore City Centre. It also includes work on Council owned assets such as buildings, roads, landfill and waste facilities, stormwater etc. Capital costs appear in the operating statement as a depreciation expense over the life of the asset.

Trade Receivables (Money owed to Council) $.000

$100,000 $50,000 $‐ 2010/11

2011/12

2012/13

2013/14

2014/15

Year

Measures of Financial Sustainability (Ratios)

Ratios %

Ratio

Description

Operating Surplus Ratio

Measures the extent to which operating revenues raised cover operational expenses.

8.7%

Net Financial Liabilities Ratio

Measures the extent to which the net financial liabilities of Council can be repaid from operating revenue.

11.8%

Asset Sustainability

Measures the extent to which the infrastructure assets managed by Council are being replaced as they reach the end of their useful lives.

70.4%

Council’s financial ratios for 2014/15 are showing a positive result which is an indication that there is surplus revenue to fund future capital expenditure and meet all its debt servicing obligations.

58 Community Financial Report 2014/15

2014/15 Financial Statements Contents 1. INDEPENDENT AUDITORS REPORT .................................................................. 60 2. FINANCIAL SUSTAINABILITY STATEMENT ...................................................... 61 3. FINANCIAL STATEMENTS .................................................................................. 66 Statement of Comprehensive Income .................................................................... 66 Financial Position ................................................................................................... 67 Statements of Changes in Equity ........................................................................... 68 Statement of Cash Flows ....................................................................................... 70 4.

NOTES TO THE FINANCIAL STATEMENTS ...................................................... 71 1.

Significant accounting policies ...................................................................... 71 2.

Analysis of results by function ....................................................................... 84 3.

Revenue analysis .......................................................................................... 86 4.

Employee benefits......................................................................................... 87 5.

Materials and Services .................................................................................. 87 6.

Finance costs ................................................................................................ 88 7.

Depreciation and amortisation ...................................................................... 88 8.

Contribution to controlled entities .................................................................. 88 9.

Capital expenses........................................................................................... 89 10a. Cash and cash equivalents ........................................................................... 89 10b. Investment Securities .................................................................................... 89 11. Trade and other receivables ......................................................................... 89 12. Inventories..................................................................................................... 90 13. Investment in associate................................................................................. 90 14. Other financial assets.................................................................................... 91 15. Property, plant and equipment ...................................................................... 92 16. Property, plant and equipment – Fair Value.................................................. 94 17. Intangible assets ......................................................................................... 104 18. Trade and other payable ............................................................................. 104 19. Borrowings .................................................................................................. 104 20. Loans .......................................................................................................... 104 21. Provisions.................................................................................................... 105 22. Other liabilities............................................................................................. 106 23. Asset revaluation surplus ............................................................................ 106 24. Commitments for expenditure ..................................................................... 107 25. Contingent liabilities .................................................................................... 107 26. Superannuation ........................................................................................... 109 27. Operating lease income .............................................................................. 110 28. Controlled entities ....................................................................................... 110 29. Trust funds .................................................................................................. 110 30. Reconciliation of net operating surplus for the year to net cash inflow (outflow) from operating activities ............................................................... 111 31. Financial instruments .................................................................................. 111 32. National Competition Policy ........................................................................ 116 33. Events after the reporting period ................................................................. 117 34. Prior Period Adjustment .............................................................................. 117

5. MANAGEMENT CERTIFICATE .......................................................................... 119

Summary of Significant Accounting Policies continued

1. INDEPENDENT AUDITOR’S REPORT INDEPENDENT AUDITOR’S REPORT To the Mayor of Sunshine Coast Regional Council Report on the Financial Report I have audited the accompanying financial report of the Sunshine Coast Regional Council, which comprises the statements of financial position as at 30 June 2015, the statements of comprehensive income, statements of changes in equity and statements of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and certificates given by the Mayor and Chief Executive Officer of the Council and the consolidated entity comprising the Council and the entities it controlled at the year’s end and from time to time during the financial year.

The Council’s Responsibility for the Financial Report The Council is responsible for the preparation of the financial report that gives a true and fair view in accordance with prescribed accounting requirements identified in the Local Government Act 2009 and the Local Government Regulation 2012, including compliance with Australian Accounting Standards. The Council’s responsibility also includes such internal control as the Council determines is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility My responsibility is to express an opinion on the financial report based on the audit. The audit was conducted in accordance with the Auditor-General of Queensland Auditing Standards, which incorporate the Australian Auditing Standards. Those standards require compliance with relevant ethical requirements relating to audit engagements and that the audit is planned and performed to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control, other than in expressing an opinion on compliance with prescribed requirements. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Council, as well as evaluating the overall presentation of the financial report.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.

60

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

Independence The Auditor-General Act 2009 promotes the independence of the Auditor-General and all authorised auditors. The Auditor-General is the auditor of all Queensland public sector entities and can be removed only by Parliament.

The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any person about the way in which audit powers are to be exercised.

The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can report to Parliament matters which in the Auditor-General’s opinion are significant.

Opinion In accordance with s.40 of the Auditor-General Act 2009 (a)

I have received all the information and explanations which I have required; and

(b)

in my opinion (i)

the prescribed requirements. in relation to the establishment and keeping of accounts have been complied with in all material respects; and

(ii)

the financial report presents a true and fair view, in accordance with the prescribed accounting standards, .of the financial performance and cash flows of the Sunshine Coast Regional Council and the consolidated entity for the financial year 1 July 2014 to 30 June 2015 and of the financial position as at the end of that year.

Other Matters - Electronic Presentation of the Audited Financial Report Those viewing an electronic presentation of these financial statements should note that audit does not provide assurance on the integrity of the information presented electronically and does not provide an opinion on any information which may be hyperlinked to or from the financial statements. If users of the financial statements are concerned with the inherent risks arising from electronic presentation of information, they are advised to refer to the printed copy of the audited financial statements to confirm the accuracy of this electronically presented information.

Sunshine Coast Council 2014/15 Financial Statements

61

Summary of Significant Accounting Policies continued

2. FINANCIAL SUSTAINABILITY STATEMENT Current-year Financial Sustainability Statement Sunshine Coast Regional Council For the year ended 30 June 2015

The Independent Auditor's Report relating to the above Current-year Financial Sustainability Statement can be found on pages 64 and 65.

62

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

Long-Term Financial Sustainability Statement Sunshine Coast Regional Council For the year ended 30 June 2015

The above forward estimates in the Long-Term Financial Sustainability Statement are unaudited.

Sunshine Coast Council 2014/15 Financial Statements

63

Summary of Significant Accounting Policies continued

INDEPENDENT AUDITOR’S REPORT

To the Mayor of Sunshine Coast Regional Council Report on the Current-Year Financial Sustainability Statement I have audited the accompanying current-year financial sustainability statement, which is a special purpose financial report of Sunshine Coast Regional Council for the year ended 30 June 2015, comprising the statement and explanatory notes, and certificates given by the Mayor and Chief Executive Officer.

The Council's Responsibility for the Current-Year Financial Sustainability Statement The Council is responsible for the preparation and fair presentation of the current-year financial sustainability statement in accordance with the Local Government Regulation 2012.

The Council's responsibility also includes such internal control as the Council determines is necessary to enable the preparation and fair presentation of the statement that is accurately calculated and is free from material misstatement, whether due to fraud or error.

Auditor's Responsibility My responsibility is to express an opinion on the current-year financial sustainability statement based on the audit. The audit was conducted in accordance with the Auditor-General of Queensland Auditing Standards, which incorporate the Australian Auditing Standards. Those standards require compliance with relevant ethical requirements relating to audit engagements and that the audit is planned and performed to obtain reasonable assurance about whether the statement is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the statement, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Council's preparation and fair presentation of the statement in order to¡design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Council's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Council, as well as evaluating the overall presentation of the statement.

My responsibility is to form an opinion as to whether the statement has been accurately calculated based on the Council's general purpose financial report. My responsibility does not extend to forming an opinion on the appropriateness or relevance of the reported ratios, nor on the Council's future sustainability.

I believe that the audit evidence obtained is sufficient and appropriate to provide a basis for my audit opinion.

64

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

Continued Independent Auditor’s Report

Independence The Auditor-General Act 2009 promotes the independence of the Auditor-General and all authorised auditors. The Auditor-General is the auditor of all Queensland public sector entities and can be removed only by Parliament.

The Auditor-General may conduct an audit in any way considered appropriate and is not subject to direction by any person about the way in which audit powers are to be exercised.

The Auditor-General has for the purposes of conducting an audit, access to all documents and property and can report to Parliament matters which in the Auditor-General's opinion are significant.

Opinion In accordance with s.212 of the Local Government Regulation 2012, in my opinion, in all material respects, the current-year financial sustainability statement of Sunshine Coast Regional Council for the year ended 30 June 2015, has been accurately calculated.

Emphasis of Matter- Basis of Accounting Without modifying my opinion, attention is drawn to Note 1 which describes the basis of accounting. The current-year financial sustainability statement has been prepared in accordance with the Financial Management (Sustainability) Guideline 2013 for the purpose of fulfilling the Council's reporting responsibilities under the Local Government Regulation 2012.

As a result, the statement may not be suitable for another purpose.

Other Matters - Electronic Presentation of the Audited Statement Those viewing an electronic presentation of this special purpose financial report should note that audit does not provide assurance on the integrity of the information presented electronically and does not provide an opinion on any information which may be hyperlinked to or from the financial statements. If users of the financial statements are concerned with the inherent risks arising from electronic presentation of information, they are advised to refer to the printed copy of the audited financial statements to confirm the accuracy of this electronically presented information.

The above Independent Auditor's Report relates to the Current Year Financial Statement found on page 62.

Sunshine Coast Council 2014/15 Financial Statements

65

Summary of Significant Accounting Policies continued

3. FINANCIAL STATEMENTS Statements of Comprehensive Income For the Year Ended 30 June 2015

Consolidated

Note

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Income Revenue Recurrent revenue Net rates and utility charges Fees and charges Sales - contract and recoverable works Grants, subsidies, contributions and donations Share of tax equivalents of associate Dividend Income Interest received Share of profit of associate

3 (a) 3 (b) 3 (c) 3 (d) 3 (e) 3 (f) 3 (g) 3 (h)

Total recurrent revenue

238,518 58,353 12,624 13,189 9,147 33,266 45,125

221,919 54,594 16,936 7,847 8,736 33,929 32,263

238,518 56,590 12,664 13,189 9,147 16,927 33,220 -

221,919 52,990 16,936 7,847 8,736 19,255 33,896 -

410,221

376,224

380,254

361,579

140,541

56,083

140,541

56,083

550,763

432,306

520,796

417,662

(119,194) (155,989) (11,623) (62,360) -

(120,128) (155,511) (12,452) (61,859) -

(117,678) (154,235) (11,607) (62,359) (1,187)

(118,903) (154,073) (12,439) (61,859) (1,067)

(349,166)

(349,949)

(347,066)

(348,340)

(5,093) (8,240)

(3,841) (462)

(5,093) (8,240)

(3,841) (462)

Capital revenue Grants, subsidies, contributions and donations

3 (i)

Total income

Expenses Recurrent expenses Employee benefits Materials and services Finance costs Depreciation and amortisation Contributions to controlled entities

4 5 6 7 8

Total recurrent expenses Capital expenses Loss on disposal property, plant and equipment Change in estimate for future landfill restoration Net revaluation decrease property, plant & equipment

9 21 15

-

(228,015)

-

(228,015)

Total expenses from continuing operations

(362,499)

(582,267)

(360,399)

(580,658)

Net result (deficiency) from Continuing operations

188,263

(149,961)

160,396

(162,996)

Discontinued Operations Profit / (Loss) for the year from discontinued operations Noosa Shire Council

(1,562)

(1,033,349)

(1,562)

(1,033,274)

Net result (deficiency) from discontinued operations

(1,562)

(1,033,349)

(1,562)

(1,033,274)

Net result (deficiency) Other comprehensive income Increase / (decrease) in asset revaluation surplus

186,702

158,835

(1,196,270)

201,234

91,105

201,234

91,105

Total other comprehensive income

201,234

91,105

201,234

91,105

*Total comprehensive income for the year

387,936

66

23

(1,183,310)

Sunshine Coast Council 2014/15 Financial Statements

(1,092,205)

360,069

(1,105,165)

Summary of Significant Accounting Policies continued

FINANCIAL STATEMENTS Statements of Financial Position For the Year Ended 30 June 2015

Consolidated

Note

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Assets Current Assets Cash and cash equivalents

10a

258,371

139,410

257,386

138,871

Investments

10b

30,000

85,000

30,000

85,000

Trade and other receivables

11

13,881

23,727

13,819

23,713

Inventories

12

1,338

1,494

1,254

1,411

Other financial assets

14

25,682

26,602

25,646

26,567

329,272

276,233

328,106

275,562

Total Current Assets Non-Current Assets Receivables

11

434,393

434,393

434,893

434,393

Property, plant and equipment

15

3,521,770

3,164,426

3,522,198

3,164,426

Investments in associates

13

604,565

576,367

538,212

538,212

Intangible assets

17

20,774

20,250

20,774

20,250

4,581,502

4,195,436

4,516,078

4,157,281

4,910,775

4,471,668

4,844,183

4,432,843

Total Non-Current Assets

TOTAL ASSETS Liabilities Current Liabilities Trade and other payables

18

41,770

49,855

41,630

49,639

Borrowings

19

13,838

12,909

13,838

12,909

Provisions

21

17,560

15,480

17,560

15,480

Other liabilities

22

12,425

9,939

12,425

9,905

85,593

88,184

85,453

87,933

Total Current Liabilities Non-Current Liabilities Trade and other payables

18

1,370

2,209

1,296

2,209

Borrowings

19

253,331

211,314

253,331

211,314

Provisions

21

32,932

25,375

32,932

25,312

287,633

238,898

287,559

238,835

373,226

327,082

373,011

326,769

4,537,549

4,144,585

4,471,172

4,106,075

Total Non-Current Liabilities

TOTAL LIABILITIES NET COMMUNITY ASSETS Community Equity Asset revaluation surplus Retained surplus (deficiency) Regional capital

TOTAL COMMUNITY EQUITY

23

896,832

695,598

896,832

(770,793)

(962,523)

(836,749)

695,598 (1,000,612)

4,411,510

4,411,510

4,411,089

4,411,089

4,537,549

4,144,585

4,471,172

4,106,075

Sunshine Coast Council 2014/15 Financial Statements

67

Summary of Significant Accounting Policies continued

FINANCIAL STATEMENTS Statements of Changes in Equity For the Year Ended 30 June 2015 Consolidated

Regional Capital

Asset revaluation surplus

Retained surplus

Capital and other reserves

Total

$'000

$'000

$'000

$'000

$'000

Notes For the year ended 2015 Balance as at 1 July 2014 Correction of prior period error

Increase (decrease) in asset revaluation surplus

4,411,510

695,598

(962,523) 5,028

-

4,144,585 5,028

201,234 -

186,702

-

201,234 186,702

4,411,510

896,832

(770,793)

-

4,537,549

4,411,510 -

604,493 -

214,528 6,259

-

5,230,531 6,259

-

91,105

34

23

Net result Balance at 30 June 2015

-

For the year ended 2014 Balance as at 1 July 2013 Correction of prior period error Increase (decrease) in asset revaluation surplus

23

Net result Balance at 30 June 2014

68

Sunshine Coast Council 2014/15 Financial Statements

-

91,105

-

-

4,411,510

695,598

(1,183,310)

-

(1,183,310)

(962,523)

-

4,144,585

Summary of Significant Accounting Policies continued

FINANCIAL STATEMENTS Statements of Changes in Equity For the Year Ended 30 June 2015 Council

Regional Capital

Asset revaluation surplus

Retained surplus

Capital and other reserves

Total

$'000

$'000

$'000

$'000

$'000

Notes For the year ended 2015 Balance as at 1 July 2014 Correction of prior period error Increase (decrease) in asset revaluation surplus

34 23

Net result Balance at 30 June 2015

4,411,089 -

695,598 -

(1,000,613) 5,028

-

4,106,074 5,028

201,234 -

158,835

-

201,234 158,835

4,411,089

896,832

(836,749)

-

4,471,172

4,411,089

604,493

189,397 6,259 -

-

5,204,979 6,259 91,105

(1,196,269)

-

(1,196,269)

(1,000,613)

-

4,106,074

For the year ended 2014 Balance as at 1 July 2013 Correction of prior period error Increase (decrease) in asset revaluation surplus Net result Balance at 30 June 2014

23

-

91,105

-

-

4,411,089

695,598

Sunshine Coast Council 2014/15 Financial Statements

69

Summary of Significant Accounting Policies continued

FINANCIAL STATEMENTS Statement of Cash Flows For the Year Ended 30 June 2015 Consolidated

Note

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Cash flows from operating activities Receipts from customers

317,188

347,012

313,814

344,335

(282,918)

(320,364)

(279,447)

(317,767)

Interest and dividends received

59,340

61,919

59,294

61,888

Recurrent grants and contributions

13,189

7,847

13,189

7,847

(11,607)

(13,702)

(11,607)

(13,702)

95,192

82,712

95,244

82,600

(111,459)

(123,228)

(111,457)

(123,228)

(3,793)

(3,386)

(3,793)

(3,386)

4,283

4,472

4,283

4,472

55,000

(35,000)

55,000

(35,000)

Payments to suppliers and employees

Borrowing costs

.

Net cash inflow (outflow) from operating activities

30

Cash flows from investing activities Payments for property, plant and equipment Payments for intangible assets Net movement in loans and advances Net movement in investment securities Proceeds from sale of property, plant and equipment Grants, subsidies, contributions and donations Cash transferred to Noosa Shire Council

Net cash inflow (outflow) from investing activities

2,913

3,282

2,913

3,282

33,379

29,267

33,379

29,267

-

(32,114)

-

(32,012)

(19,677)

(156,706)

(19,675)

(156,604)

Cash flows from financing activities Proceeds from borrowings

53,700

15,000

53,700

15,000

Repayment of borrowings

(10,754)

(13,461)

(10,754)

(13,461)

-

-

-

43,446

1,539

42,946

1,539

Net increase (decrease) in cash and cash equivalents held

118,961

(72,455)

118,515

(72,465)

Cash and cash equivalents at beginning of financial year

139,410

211,865

138,871

211,336

Cash and cash equivalents at end of the financial year 10a

258,371

139,410

257,386

138,871

30,000

85,000

30,000

85,000

288,371

224,410

287,386

223,871

Proceeds from issue of share capital

500

Net cash inflow (outflow) from financing activities

Additional Information Plus: Investments on hand - end of year

10b

Total cash, cash equivalents & investments

70

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

4. NOTES TO THE FINANCIAL STATEMENTS For the Year Ended 30 June 2015

1. Summary of Significant Accounting Policies 1.01

Basis of Preparation These general purpose financial statements are for the period 1 July 2014 to 30 June 2015 and have been prepared in accordance with the Local Government Act 2009 and the Local Government Regulation 2012. Consequently, these financial statements have been prepared in accordance with all Australian Accounting Standards, Australian Accounting Interpretations and other authoritative pronouncements issued by the Australian Accounting Standards Board.

These financial statements have been prepared under the historical cost convention except for the revaluation of certain non-current assets.

Recurrent/Capital Classification Revenue and expenditure are presented as "recurrent" or "capital' in the Statement of Comprehensive Income on the following basis: Capital Revenue includes grants and subsidies received which are tied to specific projects for the replacement or upgrade of existing non-current assets and/or investment in new assets. It also includes non-cash contributions which are usually infrastructure assets received from developers.

The following transactions are classified as either "Capital Income" or Capital Expenses" depending on whether they result in accounting gains or losses: - disposal of non-current assets - revaluations of investment property and property, plant and equipment.

All other revenue and expenses have been classified as "recurrent".

1.02

Statement of Compliance These general purpose financial statements comply with all accounting standards and interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to Council's operations and effective for the current reporting period. Because the Council is a not-for-profit entity and the Australian Accounting Standards include requirements for not-for-profit entities which are inconsistent with International Financial Reporting Standards (IFRS), to the extent these inconsistencies are applied, these financial statements do not comply with IFRS. The main impacts are the offsetting of revaluation and impairment gains and losses within a class of assets, and the timing of the recognition of non-reciprocal grant revenue.

1.03

Fair Value Sunshine Coast Regional Council is compliant with AASB 13 Fair Value Measurement in effect since 01 January 2013. The recognised fair values of financial and nonfinancial assets and liabilities are classified according to the following fair value hierarchy that reflects the significance of the inputs used in making these measurements:  Level 1 - Fair values that reflect the unadjusted quoted prices in active markets for identical assets/liabilities.  Level 2 - Fair values that are based on inputs that are directly or indirectly observable for the asset/liability (other than unadjusted quoted prices)."  Level 3 - Fair values that are derived from data not observable in a market.

Fair value measurement requires taking a market based perspective, and to that end consideration is given to asset characteristics that market participants would take into account such as the market itself, its nature, existence, and the participants in that market.

Sunshine Coast Council 2014/15 Financial Statements

71

Summary of Significant Accounting Policies continued

The valuation premise includes identifying the alternative highest and best use of the asset from a market perspective. The determination of the highest and best use involves considering what is physically possible, legally permissible and financially feasible, such that the determination maximises value to the market participant. If the determination can be made within the scope of these factors then the alternative highest and best is to be considered in a valuation.

The technique aims to maximise the use of observable inputs and minimises the use of unobservable inputs.

Where external valuers are used the proficiency of the valuers is assessed, the underlying key assumptions made are disclosed, and the valuations are carried out at an appropriate level of frequency so as to ensure that asset carrying values do not materially differ from their fair value.

1.04

Basis of Consolidation (i)

Subsidiaries The consolidated financial statements incorporate the assets and liabilities of all entities controlled by the Sunshine Coast Regional Council as at 30 June 2015.

The Council and its controlled entities together form the economic entity which is referred to in these financial statements as the consolidated entity. In the process of reporting the Council as a single economic entity, all transactions and balances with entities controlled by the Council have been eliminated.

Council had an interest in two (2) subsidiaries during the year being Sunshine Coast Events Centre Pty Ltd and SunCentral Maroochydore Pty Ltd.

(ii) Associates Associates are entities that Sunshine Coast Regional Council has significant influence over. Significant influence is the power to participate in the financial, operating and policy decisions but the critical link for the determination of control as defined in AASB 10 Consolidated Financial Statements requires more than this.

Investments in associates are accounted for in the financial statements using the equity method and are carried at the lower of cost and recoverable amount. Under this method, the consolidated entity's share of post-acquisition profits and losses of associates is recognised in the Statement of Comprehensive Income and the interest in the equity of the associates is recognised in the Statement of Financial Position. The cumulative post acquisition movements are adjusted against the cost of the investment. " Council had an interest in one (1) associate during the year being Unitywater.

Council has no other joint ventures, joint arrangements or interests in other entities.

1.05

Adoption of New and Revised Accounting Standards In current year, Council adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that are relevant to its operations and effective for the current reporting period. The adoption of the new And revised standards and interpretations has not resulted in any material changes to Council's accounting policies. These Standards composed AASB 10 Consolidated Financial Statement , AASB 11 Joint Arrangements, AASB 12 Disclosures of Interests In Other Entities , AASB 127 (revised 2011) Investments in Associates and Joint Ventures.

From 1 July 2016, AASB 124 Related Party Disclosures will apply to Council, This means Council will disclose more information About related parties and transactions with those related parties. Council is currently preparing for this change by identifying related parties. Related parties are expected to include the Mayor, councillors and senior management. In addition the close family members of those people and any

72

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

organisations that they control or are associated with will be classified as related parties.

Other than the above standard, the amended Australian Accounting Standards and Interpretations which were issued at the date of authorisation of the financial report but have future commencement dates are judged by management not likely to have a material impact on the financial statements.

1.06 Currency The Council uses the Australian Dollar as its functional currency and its presentation currency.

1.07 Constitution The Council is constituted under the Queensland Local Government Act 2009 and is domiciled in Australia.

1.08 Date of Authorisation The financial report was authorised for issue on the date it was submitted to the Auditor-General for certification. This is the date the management certificate is signed.

1.09

Critical accounting judgements and key sources of estimation uncertainty In the application of Council's accounting policies, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and ongoing assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in future periods as relevant.

Judgements, estimates and assumptions that have the potential to cause a material adjustment to the carrying amounts of assets and liabilities within the next financial year are referred to in the appropriate notes to the financial statements including:    

Valuation and depreciation of property, plant and equipment - Note 1.19 and Note 16 Impairment of property, plant and equipment - Note 1.21 Employee benefits and provisions - Note 1.24, 1.26 and Note 21 Contingent liabilities - Note 25

1.10

Changes to Accounting Policies There has been no changes to Accounting Policies throughout the period.

1.11

Changes in Accounting Estimates During 2014/15 Council reviewed the pattern of consumption, componentisation and useful lives of its building, other infrastructure, road network and stormwater network assets. As a result of this review further componentisation has occurred in order that significant costs in relation to the total cost of the asset are judged to have different estimated useful lives and are depreciated separately. Overall there was a 3% increase to depreciation expense in 2014/15 as a result of this review.

Buildings and other infrastructure has a decrease to depreciation expense in the current period as a result of the useful life review and further componentisation. The change will have an immaterial effect in future periods.

Road network assets has a significant increase to depreciation expense in 2014/15 as a result of the useful life review and previously non depreciating sub-base components now depreciating as from 01 July 2014.

Sunshine Coast Council 2014/15 Financial Statements

73

Summary of Significant Accounting Policies continued

Stormwater network has a significant decrease to depreciation expense in 2014/15 as a result of the useful life and review of concrete pipes.

Following is a summary of the effect of the change in accounting for asset components and useful lives on depreciation expense.

1.12

Comparative figures Where required by Accounting Standards comparative figures have been adjusted to conform to changes in presentation for the current financial period.

1.13

Revenue Rates, levies, grants and other revenue are recognised as revenue on receipt of funds or earlier upon unconditional entitlement to the funds. (i)

Rates and Levies Rate revenue is recognised at the time rates are levied which is the commencement of the rating period or when rate monies are received, whichever is earlier.

(ii) Grants and Subsidies Grants, subsidies and contributions revenues are recognised as a receivable when it is probable that it will be received and the amount is known, otherwise the amount is recognised upon receipt. Grants, subsidies and contributions that are non-reciprocal in nature are recognised as revenue in the year in which Council obtains control over them.

Where Council has an obligation to use a grant, subsidy or contribution in a particular manner, and is considered to be reciprocal, the amount is recognised as a liability until such time as Council has extinguished any obligation set by the grantor. As the various obligations are fulfilled the grant or subsidy is recognised as revenue. (iii) Fees and Charges Fees and charges are recognised upon unconditional entitlement to the funds.

Generally this is upon lodgement of the relevant applications or documents, issuing of the infringement notice or when the service is provided. (iv) Non-cash Contributions Non-cash contributions including physical assets, in excess of $5,000 in value are recognised as revenue and as non-current assets. Non-cash contributions below $5,000 are recorded as revenue and expenses.

Physical assets contributed to Council by developers in the form of road works, stormwater, water and wastewater infrastructure and park equipment are recognised as revenue when the development becomes "on maintenance" (i.e. the Council obtains control of the assets and becomes liable for any ongoing maintenance) and there is sufficient data in the form of drawings and plans to determine the approximate specifications and values of such assets. All non-cash contributions are recognised at the fair value of the contribution received on the date of acquisition.

74

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

(v) Cash Contributions Council receives cash contributions from property developers to construct assets such as roads and footpaths. Where agreements between Council and the developers relating to these contributions are determined to fall within the scope of AASB Interpretation 18 Transfers of Assets from Customers these contributions are recognised as revenue when the related service obligations are fulfilled. (vi) Interest and dividends Interest received from term deposits is accrued over the term of the investment.

Dividends are recognised once they are formally declared by the directors of Unitywater, which is an associate of Sunshine Coast Regional Council. (vii) Other Revenue including Contributions Other revenue is recognised as a receivable when it is probable that it will be received and the amount is known, otherwise the amount is recognised upon receipt.

1.14

Financial assets and financial liabilities Council recognises a financial asset or a financial liability in its Statement of Financial Position when, and only when, Council becomes a party to the contractual provisions of the instrument.

Sunshine Coast Regional Council has categorised and measured the financial assets and financial liabilities held at balance date as follows: Financial assets  Cash and cash equivalents (Note 1.15)  Receivables - measured at amortised cost (Note 1.16) Financial liabilities  Payables - measured at amortised cost (Note 1.23)  Borrowings - measured at amortised cost (Note 1.26) Financial assets and financial liabilities are presented separately from each other and offsetting has not been applied.

The fair value of financial instruments is determined as follows:  The fair value of cash and cash equivalents and non-interest bearing monetary financial assets and financial liabilities approximate their carrying amounts and are not disclosed separately.  The fair value of borrowings, as disclosed in Note 19 to the accounts, is determined by reference to published price quotations in an active market and/or by reference to pricing models and valuation techniques. It reflects the value of the debt if the Council repaid it in full at balance date. As it is the intention of the Council to hold its borrowings for their full term, no adjustment provision is made in these accounts.  The fair value of trade receivables approximates the amortised cost less any impairment. The fair value of payables approximates the amortised cost.

All other disclosures relating to the measurement and financial risk management of financial instruments are included in Note 31.

1.15

Cash and Cash Equivalents For the purposes of the Statement of Financial Position and the Statement of Cash Flows, cash assets include cash on hand as well as deposits at call with financial institutions. It also includes bank overdrafts and other short term highly liquid investments with short periods to maturity that are readily convertible to cash at the Council’s option and that are subject to a low risk of changes in value. The Council considers all its term deposits, being for periods of less than three months to be cash equivalents. Term deposits in excess of three months are reported as investments.

Sunshine Coast Council 2014/15 Financial Statements

75

Summary of Significant Accounting Policies continued

1.16

Receivables Trade receivables are recognised initially at the amounts due at the time of sale or service delivery (i.e. the agreed purchase price or contract price). Settlement of these amounts is required within 30 days from invoice date.

The collectability of receivables is assessed periodically and, if there is objective evidence that Council will not be able to collect all amounts due, the carrying amount is reduced with allowance being made for impairment. The impairment loss is recognised in financial costs. The amount of the allowance is the difference between the asset’s carrying amount and the present value of the estimated cash flows, discounted at the effective interest rate. Increases in the allowance for impairment are based on loss events. All known bad debts were written-off against the allowance for impairment at 30 June. Subsequent recoveries of amounts previously written off are credited against finance costs in the Statements of Comprehensive Income.

Because Council is empowered under the provisions of the Local Government Act 2009 to sell an owner's property to recover outstanding rate debts, Council does not impair any rate receivables.

Loans and advances are recognised in the same way as other receivables. Terms are usually a maximum of five years with interest charged at commercial rates. Security is not normally obtained.

1.17

Investments Term deposits in excess of three months are reported as investments, with deposits of less than three months being reported as cash equivalents. The value of investments is disclosed in Note 10b.

1.18

Inventories Stores and raw materials are valued at the lower of cost and net realisable value and include, where applicable, expenditure incurred in acquiring inventories and an appropriate portion of variable and fixed overheads. Costs are assigned on the basis of weighted average cost.

Inventories held for distribution are:  

goods to be supplied at no, or nominal, charge, and goods to be used for the provision of services at no, or nominal, charge.

These goods are held at cost adjusted for any loss of service potential.

1.19

Property, Plant and Equipment Each class of property, plant and equipment is carried at fair value or cost less, where applicable, any accumulated depreciation and accumulated impairment losses. Items of property, plant and equipment with a total value of less than $5,000, except for land and network assets (which have a recognition threshold of $1), are treated as an expense in the year of acquisition. All other items of property, plant and equipment are capitalised.

The classes of property, plant and equipment recognised by the Council are:  Land and Improvements  Buildings  Plant and Equipment o Fleet o Other plant and equipment  Infrastructure o Road and bridge network o Stormwater and drainage network o Other infrastructure assets  Work in progress

76

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

(i)

Acquisition of assets Acquisitions of assets are initially recorded at cost. Cost is determined as the fair value of the assets given as consideration plus costs directly related to the acquisition and incurred in preparing the asset for use.

The cost of property, plant and equipment being constructed by Council includes the cost of materials and direct labour, and any other costs directly attributable to bringing the assets to a working condition for their intended use.

Property, plant and equipment received in the form of contributions, are recognised as assets and revenues at fair value by Council valuation where that value exceeds the recognition thresholds for the respective asset class. Fair value is the price that would be received to sell the asset in an orderly transaction between market participants at the measurement date.

(ii)

Capital and operating expenditure Direct labour and materials and an appropriate proportion of overheads incurred in the acquisition or construction of assets, are treated as capital expenditure. Assets under construction are not depreciated until they are completed and commissioned, at which time they are reclassified from work in progress to the appropriate property, plant and equipment class.

Routine operating maintenance, repair costs and minor renewals to maintain the operational capacity and useful life of the non-current asset is expensed as incurred, while expenditure that relates to replacement of a major component of an asset to maintain its service potential and extend its useful life is capitalised.

Expenditure incurred in accordance with Natural Disaster Relief and Recovery Arrangements on road assets is analysed to determine whether the expenditure is capital in nature. The analysis of the expenditure requires Council engineers to review the nature and extent of expenditure on a given asset. For example, expenditure that patches a road is generally maintenance in nature, whereas a kerb to kerb rebuild is treated as capital. Material expenditure that extends the useful life or renews the service potential of the asset is capitalised.

(iii)

Valuation Land, buildings, infrastructure and heritage assets are measured on the revaluation basis, at fair value, in accordance with AASB116 Property, Plant and Equipment and AASB 13 Fair Value Measurement. The fair values mean the estimated amount for which an asset could be exchanged in an active market on the date of valuation between a willing buyer and a willing seller in an arm's length transaction. All other non-current assets, principally plant and equipment and intangibles, are measured at cost.

Non-current physical assets measured at fair value are revalued where required so that the carrying amount of each class of asset does not materially differ from its fair value at the reporting date. This is achieved by engaging independent, professionally qualified valuers to determine the fair value for each class of property, plant and equipment assets at least once every 3 years. This process involves the valuer physically sighting a representative sample of Council assets across all asset classes and making their own assessments of the condition or value of the assets at the date of inspection.

Council uses internal engineers to assess the condition and cost assumptions associated with all infrastructure assets, the results of which are considered in combination with the relevant indices independently published for the Sunshine Coast Region. Together these are used to form the basis of a management valuation for infrastructure asset classes in each of the intervening years. With respect to the valuation of the land and improvements, and buildings classes in the intervening years, management engage independent, professionally qualified Sunshine Coast Council 2014/15 Financial Statements

77

Summary of Significant Accounting Policies continued

valuers to perform a 'desktop' valuation. A desktop valuation involves management providing updated information to the valuer regarding additions, deletions and changes in assumptions such as useful life, residual value and condition rating.

The valuer then determines suitable indices which are applied to each of these asset classes.

The annual review performed by management has indicated that, on average, the variance between an indexed asset value and the valuation by an independent valuer when performed is not significant and the indices used by Council are sound. Further details in relation to valuers, the methods of valuation and the key assumptions used are disclosed in Note 16.

Any revaluation increments arising on the revaluation of an asset are recognised in other comprehensive income and presented in the asset revaluation surplus in equity. A decrease in the carrying amount on revaluation is charged as an expense to the extent that it exceeds the balance of previously recognised revaluation increments for that asset class. On revaluation depreciation is restated proportionately with the change in carrying amount of the asset and any change in the estimated useful life.

Separately identified components of assets are measured on the same basis as the assets to which they relate. (iv)

Land held under deed of grant in trust (DOGIT) The Department of Natural Resources and Mines administers nine parcels of land, which have been granted to and are controlled by Council in terms of Deeds of Grant in Trust under Section 34 of the Land Act 1994, the value of which has been included in land assets (Note 15). These parcels are used by Council for sport, recreation, showground and park purposes.

The land is currently valued at fair value. Council is able to derive future economic benefits from the use of the land, although not the legal owner, however, these land parcels have restrictions on use and are held for specific purposes.

(v)

Land Under Roads Land under roads acquired after 30 June 2008 is recognised as a non-current asset where Council holds title or a financial lease over the asset. The Sunshine Coast Regional Council currently does not have any such land. Land under the road network within Sunshine Coast region that has been dedicated and opened for public use under the Land Act 1994 or the Land Title Act 1994 is not controlled

by Council but is controlled by the State pursuant to the relevant legislation.

Therefore this land is not recognised in these financial statements.

(vi)

Depreciation Land and Road Formation/Earthworks are not depreciated as they are judged to have unlimited useful life. Depreciation on property, plant and equipment is calculated on a straight-line basis at asset component level so as to write-off the net cost or revalued amount of each depreciable asset, less its estimated residual value if appropriate, progressively over its estimated useful life. Management believe that the straight line basis appropriately reflects the pattern of consumption of all council assets.

Assets are depreciated from the date of acquisition or, in respect of internally constructed assets, from the time an asset is completed and commissioned ready for use.

Where assets have separately identifiable components that are subject to regular replacement, these components are assigned useful lives distinct from the asset to which they relate. Any expenditure that increases the originally assessed capacity or service potential of an asset is capitalised and the new depreciable amount is depreciated over the new estimated useful life. Major spares purchased

78

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

specifically for particular assets that are above the asset recognition threshold are capitalised and depreciated on the same basis as the asset to which they relate."

The depreciable amount of improvements to or on leasehold land is allocated progressively over the estimated useful lives of the improvements to the Council or the unexpired period of the lease, whichever is the shorter.

Depreciation methods, estimated useful lives and residual values of property, plant and equipment assets are reviewed at the end of each reporting period and adjusted where necessary to reflect any changes in the pattern of consumption, physical wear and tear, technical or commercial obsolescence, or management intentions. The condition assessments performed as part of the annual valuation process for assets measured at depreciated current replacement cost are used to estimate the useful lives of these assets at each reporting date. Details of the range of estimated useful lives for each class of asset are shown in Note 15. (vii)

1.20

Capital Works in Progress The cost of property, plant and equipment being constructed by the Council includes the cost of purchased services, materials, direct labour and an appropriate proportion of labour overheads.

Intangible Assets Only intangible assets which have a cost exceeding $5,000 are recognised as noncurrent assets in the financial statements, items with a lesser value being expensed.

Expenditure on internally generated intangible assets is recognised from the date of the approval by the Council of a capital expenditure authorisation for the acquisition or development of the asset.

Expenditure on internally generated assets, up to the decision to generate the asset in a particular form, is research expenditure and is not capitalised.

It has been determined that there is not an active market for any of the Council's intangible assets. As such, the assets are recognised and carried at cost less accumulated amortisation and accumulated impairment losses. Amortisation methods, estimated useful lives are reviewed at the end of each reporting period and adjusted where appropriate. Useful lives are in the range of 2 to 10 years.

1.21

Impairment of non-current assets All non-current physical and intangible assets are assessed for indicators of impairment on an annual basis. If an indicator of impairment exists, the Council determines the asset’s recoverable amount. Any amount by which the asset’s carrying amount exceeds the recoverable amount is recorded as an impairment loss.

The asset’s recoverable amount is determined as the higher of the asset’s fair value less costs to sell and value in use, or if the asset would be replaced if deprived of its use, depreciated replacement cost.

An impairment loss is expensed immediately in the Statement of Comprehensive Income, unless the asset is carried at a revalued amount. When the asset is measured at a revalued amount, the impairment loss is offset against the asset revaluation surplus of the relevant class to the extent available.

Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, only to the extent that the assets carrying value does not exceed the carrying value that would have been determined, net of depreciation, if no impairment had been recognised for the asset in prior years. A reversal of an impairment loss is recognised as income, unless the asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase and recognised in the asset revaluation surplus.

Sunshine Coast Council 2014/15 Financial Statements

79

Summary of Significant Accounting Policies continued

1.22

Leases Leases of plant and equipment under which the Council as lessee assumes substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership, are classified as finance leases. Other leases where substantially all the risks and benefits are not transferred by the lessor are classified as operating leases.

Payments made under operating leases are expensed in equal instalments over the accounting periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased property.

1.23

Payables Trade creditors are recognised upon receipt of the goods or services ordered and are measured at the agreed purchase/contract price gross of applicable trade and other discounts. Amounts owing are unsecured and are generally settled on 30 day terms.

1.24

Liabilities - employee benefits Liabilities are recognised for employee benefits such as wages and salaries, annual leave and long service leave in respect of services provided by the employees up to the reporting date. Liabilities for employee entitlements are assessed at each reporting date. Where it is expected that the leave will be taken in the next twelve months the liability is treated as a current liability. Otherwise the liability is treated as non-current. (i) Salaries and wages A liability for salaries and wages is recognised and measured as the amount unpaid at the reporting date at current pay rates in respect of employees' services up to that date. This liability represents an accrued expense and is reported in note 18 as a payable. (ii) Annual leave A liability for annual leave is recognised. Amounts expected to be settled within 12 months are calculated on current wage and salary levels and includes related employee on-costs. Amounts not expected to be settled within 12 months are calculated on projected future wage and salary levels and related employee oncosts, and are discounted to present values. This liability represents an accrued expense and is reported in Note 18 as a payable. (iii) Superannuation The superannuation expense for the reporting period is the amount of the contribution Council makes to the superannuation plan which provides benefits to its employees. Details of arrangements are set out in Note 26. (iv) Long service leave A liability for long service leave is measured as the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date. The value of the liability is calculated using current pay rates and projected future increases in those rates and includes related employee oncosts. The estimates are adjusted for the probability of the employee remaining in the Council's employment or other associated employment which would result in the Council being required to meet the liability. Adjustments are then made to allow for the proportion of the benefit earned to date, and the result is discounted to present value. The interest rates attaching to Commonwealth Government guaranteed securities at the reporting date are used to discount the estimated future cash outflows to their present value. This liability is reported in Note 21 as a provision.

80

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

Where employees have met the prerequisite length of service, and council does not have an unconditional right to defer this liability beyond 12 months, long service leave is calculated as a current liability. Otherwise it is classified as noncurrent. (v) Sick leave Council's on going obligation to meet seek leave entitlements are met as and when the obligation occurs. No provision is made for this liability.

1.25

Provision for Rehabilitation A provision is made for the cost of rehabilitation of assets and other future restoration costs where it is probable the Council will be liable, or required, to incur such a cost on the cessation of use of the facility. This liability is provided in respect of Quarries and Landfill sites.

The provision is measured at the expected cost of the work required discounted to current day values using an appropriate rate. The current capital market yield bond rate is considered an appropriate rate with a maturity date corresponding to the anticipated date of the restoration. (i) Landfill rehabilitation The provision represents the present value of the anticipated future costs associated with the closure of the landfill sites, decontamination and monitoring of historical residues and leaching on these sites. The calculation of this provision requires assumptions such as application of environmental legislation, site closure dates, available technologies and engineering cost estimates. These uncertainties may result in future actual expenditure differing from amounts currently provided.

Because of the long-term nature of the liability, the most significant uncertainty in estimating the provision is the costs that will be incurred. The provision recognised is reviewed at least annually and updated based on the facts and circumstances available at the time. (ii) Quarry rehabilitation The provision represents the present value of the anticipated future costs associated with the closure of the quarries, refilling the basin, and reclamation and rehabilitation of these sites. The calculation of this provision requires assumptions such as application of environmental legislation, site closure dates, available technologies and engineering cost estimates. These uncertainties may result in future actual expenditure differing from amounts currently provided. Because of the long-term nature of the liability, the most significant uncertainty in estimating the provision is the costs that will be incurred. The provision recognised for quarry rehabilitation is reviewed at least annually and updated based on the facts and circumstances available at the time. Management estimates that the restoration will occur no sooner than 2070.

1.26

Borrowings and borrowing costs Loans payable are measured at amortised cost using the effective interest rate method.

The effective interest rate is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument. Borrowing costs, which includes interest calculated using the effective interest method and administration fees, are expensed in the period in which they arise. Costs that are not settled in the period in which they arise are added to the carrying amount of the borrowing.

Borrowing costs are treated as an expense unless attributed to a specific capital project where the costs are capitalised as part of the qualifying asset during construction.

Gains and losses on the early redemption of borrowings are recorded in other revenue/ expense.

Sunshine Coast Council 2014/15 Financial Statements

81

Summary of Significant Accounting Policies continued

Borrowings are classified as current liabilities unless Council has an unconditional right to defer settlement of the liability for at least 12 months after the balance date.

In accordance with the Local Government Regulation 2012 council adopts an annual debt policy that sets out council's planned borrowings for the next nine years. Council's current policy is to only borrow for capital projects and for a term no longer than the expected life of the asset. Council also aims to comply with the Queensland Treasury Corporation's borrowing guidelines and ensure that sustainability indicators remain within acceptable levels at all times.

1.27

Components of Equity (i)

Asset revaluation surplus The asset revaluation surplus comprises adjustments relating to changes in value of property, plant and equipment that do not result from the use of those assets.

Net incremental changes in the carrying value of classes of non-current assets since their initial recognition are accumulated in the asset revaluation surplus.

Increases and decreases on revaluation are offset within a class of assets.

Where a class of assets is decreased on revaluation, that decrease is offset first against the amount remaining in the asset revaluation surplus in respect of that class. Any excess is treated as an expense, in the Statement of Comprehensive Income.

When an asset is disposed of the amount reported in the surplus in respect of that asset is retained in the asset revaluation surplus and not transferred to retained surplus.

1.28

Controlled Entities The Council wholly owns the issued shares of the Sunshine Coast Events Centre Pty Ltd and SunCentral Maroochydore Pty Ltd. SunCentral Maroochydore Pty Ltd was incorporated on 12 January 2015 with the sole purpose of aiding in the construction and delivery of a new City Centre in the heart of Maroochydore. Council acquired a parcel of land (previously the Horton Park Golf Course) in 2012 with the objective to deliver a mix of residential, commercial, retail, civic and community use land to create a thriving and vibrant business district and city centre. It will complement and enhance Maroochydore’s existing business offering. The project has an expected 30 year horizon. The new city centre proposes a future regional entertainment, exhibition and convention centre with public transport playing a key part in the future vision for the centre.

82

1.29

National Competition Policy The Council has reviewed its activities and has identified four (4) activities that are business activities. Details of these activities can be found in Note 32.

1.30

Rounding Amounts included in the financial statements have been rounded to the nearest $1,000 or, where that amount is $500 or less, to zero.

1.31

Trust Funds Held for Outside Parties Funds held in the Trust Account on behalf of outside parties include those funds from the sale of land for arrears in rates, deposits for the contracted sale of land, security deposits lodged to guarantee performance and unclaimed monies (e.g. wages) paid into the Trust Account by the Council. The Council performs only a custodian role in respect of these monies and because the monies cannot be used for Council purposes, they are not considered revenue nor brought to account in the financial statements.

The monies are disclosed in Note 29 to the Financial Statements for information purposes only.

Sunshine Coast Council 2014/15 Financial Statements

Summary of Significant Accounting Policies continued

1.32

Taxation Income of local authorities and public authorities is exempt from Commonwealth taxation except for Fringe Benefits Tax and Goods and Services Tax (‘GST’). The net amount of GST recoverable from the Australian Taxation Office (ATO) or payable to the ATO is shown as an asset or liability respectively. The Council pays payroll tax to the Queensland Government on certain activities.

Unitywater pays Council an income tax equivalent in accordance with the requirements of the Local Government Act 2009. Where the activity of such an entity is subject to the tax equivalents regime, the income tax expense is calculated on the operating surplus adjusted for permanent differences between taxable and accounting income. These transactions are eliminated upon consolidation.

Sunshine Coast Council 2014/15 Financial Statements

83

Notes to the Financial Statements For the Year Ended 30 June 2015

2. (a) Analysis of results by function Components of council functions The activities relating to the Council's components reported on in Note 2(a) are as follows:  Infrastructure Services Infrastructure Services is responsible for the delivery, operations and maintenance of council’s infrastructure, both the built and the natural environment. It encompasses all ‘hard’ infrastructure including, roads, drainage systems, canals, parks, buildings and facilities, as well as the pristine ‘natural’ assets such as waterways, bushlands, lakes and beaches. Operations include transport management, quarries, civil works, fleet, parks and gardens, environment conservation, waste management and major project delivery.

 Corporate Strategy and Delivery The Corporate Strategy and Delivery Department focuses on strategic planning and management for both the region and the organisation. The department is responsible for the Coast’s economic development and corporate strategy. This includes council’s commercial entities and strategic marketing. This department has responsibility for major commercial projects, communications, economic development, and operating the Sunshine Coast Airport.

 Community Services Community Services Department plays a pivotal role in building a strong and successful organisation, capable of delivering on the community’s and council’s vision by providing contemporary leadership in the functional areas of community capacity building and partnerships and service delivery. Major areas of focus include community planning, sport and recreation, environmental health, vector control, regulated parking, cemeteries, libraries and art galleries.

 Regional Strategy and Planning Contributing to sustainable growth by planning for growth and facilitating change, delivering essential plumbing and building services, providing reliable information and advice, protecting and enhancing our environment and lifestyle, building prosperous communities, planning for infrastructure and advocating for the community. Operations include development and building assessment, environment and sustainability policy, strategic planning, major urban developments and transport and infrastructure policy.

 Corporate Services The Corporate Services Department plays a pivotal role in building a strong successful organisation capable of delivering on the community's vision and council's strategy themes; identifying and putting into action best new way opportunities and driving service delivery excellence for our customers and the community. This department has primary responsibility for corporate governance, finance, human resources, information and communication technology, property management and procurement.

 Office of the Mayor and CEO The Office of the Mayor and CEO provides strategic support and advice to the Mayor, Councillors, CEO, Executive Leadership Team and the wider organisation.

The department delivers organisational leadership for key corporate initiatives, legal advice, audit compliance, statutory and corporate meeting management and facilitates government, business and community relationships.

84

Sunshine Coast Council 2014/15 Financial Statements

23,864

Regional Strategy and Planning

556,314

Total Consolidated

50,367

Regional Strategy and Planning

(42,458)

536,111

Less discontinuing operation

Total Consolidated

595

14,645

Controlled Entities Net of Eliminations

Office of the Mayor and CEO

307,917

50,234

Community Services

Corporate Services

36,096

Corporate Strategy and Delivery

118,716

$'000

2 (b) Analysis of results by function

Infrastructure Services

2014

56,083

(2,003)

-

-

482

556

150

8

56,890

$'000

2014

(159,888)

-

-

(4,373)

(76,018)

(17,154)

(21,325)

(4,638)

(36,380)

$'000

2014

transactions

inter-function

For the year ended 30 June 2014

Elimination of

Capital

Gross program income

(146,093)

-

(3,879)

(67,234)

(15,672)

(23,028)

(6,278)

(30,002)

$'000

2015

transactions

Recurring

140,541

-

52

808

176,060

Notes to Financial Statements

2 95,013

-

44,718

$'000

2015

Controlled Entities Net of Eliminations

Office of the Mayor and CEO

262,488

12,463

Community Services

Corporate Services

59,546

21,841

Infrastructure Services

$'000

2 (b) Analysis of results by function

Corporate Strategy and Delivery

2015

inter-function

For the year ended 30 June 2015

Notes to Financial Statements

Elimination of

Capital

Gross program income

Recurring

Total

432,306

(44,460)

14,645

(3,778)

232,381

33,768

29,058

31,466

139,226

$'000

2014

income

Total

550,763

176,060

(3,827)

196,063

103,205

(10,562)

15,563

74,262

$'000

2015

income

(13,333)

-

-

(74)

(510,300)

40,144

(1,610)

(4,425)

(123,593)

(57,954)

(87,215)

(34,907)

(240,739)

$'000

2014

Recurring

-

(289)

-

(12,971)

$'000

2015

Capital

(231,856)

-

-

-

(228,119)

-

(112)

(143)

(3,481)

$'000

2014

Capital

Gross program expense

(495,258)

(147,118)

246

(31,773)

(39,485)

(59,479)

(25,037)

(192,612)

$'000

2015

Recurring

Gross program expense

159,888

-

-

569

30,944

26,451

34,376

13,052

54,497

$'000

2014

transactions

inter-function

Elimination of

146,093

-

272

23,461

29,679

35,217

10,088

47,376

$'000

2015

transactions

inter-function

Elimination of

Total

(582,267)

40,144

(1,610)

(3,856)

(320,768)

(31,503)

(52,951)

(21,998)

(189,724)

$'000

2014

expenses

Total

(362,499)

(147,118)

518

(8,386)

(9,807)

(24,551)

(14,949)

(158,206)

$'000

2015

expenses

Net result

25,813

(2,314)

13,035

(7,634)

139,250

1,710

(23,931)

9,603

(103,906)

$'000

2014

operations

from recurring

Net result

61,056

28,942

(3,309)

186,942

(1,615)

(34,826)

614

(115,692)

$'000

2015

operations

from recurring

Net

(149,961)

(4,317)

13,035

(7,634)

(88,388)

2,265

(23,893)

9,468

(50,497)

$'000

2014

result

Net

188,263

28,942

(3,309)

187,677

93,398

(35,113)

614

(83,944)

$'000

2015

result

4,471,668

-

38,824

-

1,539,507

11,148

155,747

156,777

2,569,665

$'000

2014

Assets

4,910,775

66,590

-

1,582,819

12,359

150,749

198,298

2,899,960

$'000

2015

Assets

Notes to the Financial Statements

For the Year Ended 30 June 2015 2 (b) Analysis of results by function

Sunshine Coast Council 2014/15 Financial Statements

85

Notes to the Financial Statements For the Year Ended 30 June 2015 Consolidated

Note

3.

Consolidated

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Revenue analysis

Operating revenue (a) Rates and utility charges General rates

186,292

173,233

186,292

173,233

47,056

42,437

47,056

42,437

Tourism and special levies

8,185

8,775

8,185

8,775

Environment levy

7,637

7,418

7,637

7,418

Rural fire levy

386

403

386

403

Valuation fees

69

34

69

34

249,625

232,299

249,625

232,299

Waste management

Total rates and utility charge revenue Less: discounts

(7,345)

(6,772)

(7,345)

(6,772)

Less: pensioner remissions

(3,056)

(2,963)

(3,056)

(2,963)

(707)

(645)

(707)

(645)

(11,107)

(10,380)

(11,107)

(10,380)

238,518

221,919

238,518

221,919

Airline service charges

6,891

6,613

6,891

6,613

Application fees (development)

4,471

3,303

4,471

3,303

13,550

12,905

13,550

12,905

Less: rebates

Net rates and utility charges (b) Fees and charges

Caravan parks Cemetery fees

958

875

958

875

2,012

1,852

2,012

1,852

Refuse tip fees

5,401

5,663

5,401

5,663

Registration fees

1,112

1,095

1,112

1,095

Search fees

1,146

1,325

1,146

1,325

Waste service charges

396

435

396

435

Change of ownership fees

837

757

837

757

Fines & Penalties

2,298

2,226

2,298

2,226

Venue Hire

1,152

1,206

1,152

1,206

Security Service Fees

1,952

1,715

1,952

1,715

Development Services

8,675

6,781

8,675

6,781

Permits & Licences

1,266

1,314

1,266

1,314

Other fees and charges

6,238

6,529

4,474

4,925

58,353

54,594

56,590

52,990

5,398

Parking fees

(c) Sales - contract and recoverable works Lease Revenue

5,435

5,398

5,435

Recoverable works

239

1,233

239

1,233

Sale of recyclables

2,477

2,549

2,477

2,549

Other revenue

4,472

7,756

4,513

7,756

12,624

16,936

12,664

16,936

10,356

4,325

10,356

4,325

1,955

2,557

1,955

2,557

-

74

878

891

878

891

13,189

7,847

13,189

7,847

(d) Grants, subsidies, contributions and donations Government grants and subsidies commonwealth Government grants and subsidies state Grants and subsidies other Contributions

86

Sunshine Coast Council 2014/15 Financial Statements

-

74

Notes to the Financial Statements For the Year Ended 30 June 2015 Consolidated

Note

3.

Consolidated

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Revenue analysis (continued)

(e) Share of tax equivalents of associate

9,147 -

(f ) Dividend income

8,736

9,147

8,736

-

16,927

19,255

(g) Interest received Interest received from associate

23,967

23,857

23,967

23,857

Interest received from cash and term deposits

8,361

8,409

8,315

8,376

Interest from overdue rates and utility charges

938

1,664

938

1,664

33,266

33,929

33,220

33,896

45,125

32,263

-

-

410,221

376,224

380,254

361,579

Government grants and subsidies commonwealth

3,242

2,205

3,242

2,205

Government grants and subsidies state

5,197

7,700

5,197

7,700

24,951

18,019

24,951

18,019

107,151

28,159

107,151

28,159

140,541

56,083

140,541

56,083

550,763

432,306

520,796

417,662

95,248

96,456

93,748

95,230

1,677

1,607

1,677

1,607

15,722

15,890

15,722

15,890

(h) Share of profit of associate Total recurrent revenue Grants, subsidies, contributions and donations Recurrent

Developer contributions Infrastructure from developers at fair value

Total income

4.

Employee benefits Total wages and salaries Councillors' remuneration * Annual, sick and long service leave entitlements Superannuation

Other employee related expenses

Less :Capitalised employee expenses

26

15,769

15,569

15,752

15,569

128,416

129,521

126,900

128,296

3,255

3,302

3,255

3,302

131,671

132,823

130,155

131,598

(12,477)

(12,695)

(12,477)

(12,695)

119,194

120,128

117,678

118,903

* Councillor remuneration represents salary, superannuation contributions and other allowances paid in respect of carrying out their duties.

Total Council employees at the reporting date: Elected Members

5.

11

11

11

Staff

1473

11

1403

1447

1380

Total full time equivalent employees

1484

1414

1458

1391

Materials and services Advertising Audit of annual financial statements by the Auditor General of Queensland

1,518 263

313

263

313

Consultancy fees

4,204

4,240

4,204

4,240

Commissions paid

1,022

1,518

1,022

2,425

2,007

2,425

2,007

Contract services parks & gardens

11,360

10,150

11,360

10,150

Contract services waste collection

28,333

27,482

28,333

27,482

Sunshine Coast Council 2014/15 Financial Statements

87

Notes to the Financial Statements For the Year Ended 30 June 2015 Consolidated

Note Contract services other

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

36,535

36,651

36,535

36,651

Donations

2,592

2,469

2,592

2,469

Electricity

8,729

9,035

8,729

9,035

444

323

444

323

1,132

1,326

1,132

1,326

Fuel

2,786

3,608

2,786

3,608

Grants to community organisations

7,278

7,463

7,278

7,463

Insurance

2,448

2,884

2,448

2,884

Legal fees

3,184

5,325

3,184

5,325

Library resources

1,306

1,199

1,306

1,199

Materials road base

3,348

3,504

3,348

3,504

Operating leases - rentals

7,760

8,355

7,758

8,355

Plant and equipment hire

6,001

3,215

6,001

3,215

Security services

1,188

1,044

1,188

1,044

Software and maintenance

4,153

3,694

4,153

3,694

Telecommunications

3,205

3,092

3,205

3,092

3,680 18,132

2,863 19,962

3,680 16,381

2,863 18,524

162,003

161,227

160,250

159,789

Entertainment and hospitality Equipment < $5,000.00

Water and sewerage charges All other materials and services

Less: Capitalised expenses

6.

Consolidated

(6,014)

(5,716)

(6,014)

(5,716)

155,989

155,511

154,235

154,073

9,021

12,364

9,021

12,364

793

766

777

Finance costs Finance costs charged by the Queensland Treasury Corporation * Bank charges and credit card fees Finance costs due to discounting

21

1,772

(1,263)

1,772

766 (1,263)

Impairment of debts

(10)

455

(10)

Other finance costs

47

129

47

455 116

11,623

12,452

11,607

12,439

* Interest includes $9.021M operating cost and $3.37M capitalised against the Maroochydore City Centre Development project ($62.991 M at a weighted average of 5.35%)

7.

Depreciation and amortisation (a) Depreciation of non-current assets Buildings

5,322

5,640

5,322

5,640

Road and bridge network

28,158

25,332

28,158

25,332

Stormwater and drainage network

12,026

10,281

12,026

10,281

Plant and equipment

4,671

5,531

4,671

5,494

Other infrastructure

11,066

10,566

11,065

10,603

15

59,498

55 59,150

59,498

55 59,150

17

2,862

2,708

2,862

2,708

62,360

61,859

62,359

61,859

-

-

1,187

1,067

-

-

1,187

1,067

347,066

348,340

Land improvements (b) Amortisation of intangible assets Software Total depreciation and amortisation

8.

Contributions to controlled entities Contributions to controlled entities

Total recurrent expenses

88

Sunshine Coast Council 2014/15 Financial Statements

349,166

349,949

Notes to the Financial Statements For the Year Ended 30 June 2015 Consolidated

Note

9.

Consolidated

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Capital Expenses Gain/loss on disposal of current and non-current assets Proceeds from the sale of plant, equipment and intangibles Less carrying amount sold Less carrying amount disposed

612

990

612

990

(420)

(620)

(420)

(620)

(45)

(11)

(45)

(11)

147

360

147

360

Proceeds from the sale of property, land & improvements

2,301

2,290

2,301

2,290

Less carrying amount sold

(2,601)

(2,734)

(2,601)

(2,734)

(300)

(444)

(300)

(444)

Replaced and renewed

(3,866)

(3,594)

(3,866)

(3,594)

Disposed and written-off

(1,074)

(162)

(1,074)

(162)

(4,940)

(3,756)

(4,940)

(3,756)

(5,093)

(3,841)

(5,093)

(3,841)

Replacement of roads, stormwater and other infrastructure Less carrying amount:

Loss on disposal of property, plant and equipment, and intangibles

10a.

Cash and cash equivalents Total cash and equivalents

10b.

Investment Securities

258,371

139,410

257,386

138,871

30,000

85,000

30,000

85,000

Restricted cash Council's cash and cash equivalents are subject to a number of internal and external restrictions that limit amounts available for discretionary or future use. These include: Externally imposed expenditure restrictions at the reporting date

105,522

98,110

105,522

98,110

Internally imposed expenditure restrictions at the reporting date Total unspent restricted cash

28,436 133,958

31,561 129,671

28,436 133,958

31,561 129,671

*Externally imposed expenditure restrictions at the reporting date relate to the following cash assets: Constrained works

62,867

62,071

62,867

62,071

General

32,077

31,363

32,077

31,363

Levy Funded

6,235

333

6,235

333

Special purpose

4,344

4,344

4,344

4,344

105,522

98,110

105,522

98,110

Total unspent restricted cash *Internally imposed expenditure restrictions at the reporting date: Constrained works

1,596

1,374

1,596

1,374

19,124

18,883

19,124

18,883

Levy Funded

4,652

8,047

4,652

8,047

Special purpose

3,064

3,258

3,064

3,258

28,436

31,561

28,436

31,561

Rates and utility charges

5,511

9,522

5,511

9,522

Infringements

2,984

3,016

2,984

3,016

Infrastructure charges

1,485

698

1,485

698

Trade Debtors

3,114

5,854

3,114

5,854

General

Total unspent restricted cash

11.

Trade and other receivables Current

Other Debtors Less allowance for impairment Loan to associate - (working capital)

2,419

2,086

2,357

2,071

(1,631)

(2,232)

(1,631)

(2,232)

-

4,783

-

4,783

13,881

23,727

13,819

23,713

Sunshine Coast Council 2014/15 Financial Statements

89

Notes to the Financial Statements For the Year Ended 30 June 2015 Consolidated

Note

Consolidated

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Trade and other receivables continued Movement in accumulated impairment losses (other debtors) is as follows: Opening balance at 1 July

2,232

Impairment Debts written off during the year

(521)

2,225 (1,115)

2,232 (521)

Additional impairments recognised

556

555

556

Impairments Reversed

(636)

(33)

(636)

Adjustment resulting from prior year Noosa estimates

-

Closing Balance at 30 June

601

1,631

2,232

2,225 (1,115) 555 (33)

1,631

601 2,232

Non-Current Loans at amortised cost Shares in Controlled Entities

-

Loan to associate - Subordinated Debt

-

500

-

434,393

434,393

434,393

434,393

434,393

434,393

434,893

434,393

1,254

1,411

Interest is charged on outstanding rates at 11% per annum. No interest is charged on other debtors.

There is no concentration of credit risk for rates and utility charges, fees and other debtors receivable.

The subordinated interest only loan terminates on 30 June 2033 with the interest rate to be set by QTC annually. Applicable interest rate for 2015 was 5.47% (2014 5.38%)

12.

Inventories Plant and equipment, stores and quarries

13.

1,338

1,494

Investment in associate Sunshine Coast Regional Council has an investment in one associate as at 30 June 2015.

Name of Associate

Northern SEQ Distributor-Retailer Authority (trading as Unitywater)

Principal Activity

Provision of Water and Wastewater Services

Place of Operation

Moreton Bay and Sunshine Coast Regions

Proportion of Ownership Interest

37.51%

(1) Background The South-East Queensland Water (Distribution and Retail Restructuring) Act 2009 (the Act) established the Northern SEQ Distributor-Retailer Authority (the Authority) trading as Unitywater on the 25th June 2010.

The Authority was set up to deliver water and wastewater services to customers within the local government areas of the now (3) participating Councils - Sunshine Coast Regional , Moreton Bay Regional and Noosa Shire Councils.

Under the Act, governance arrangements for the Authority are established in a Participation Agreement. The agreement provides for participation rights to be held by the participating Councils, With Sunshine Coast Regional Council holding 37.51% of these rights.

The Authority's Board is comprised of independent directors, with no individual Council having the ability to dominate the Authority's decision making to obtain greater benefits from its activities than any other of the participants.

(2) Contractual Agreements Council provides some contracted services to the Authority, mainly around the collection of Infrastructure Charges relating to the construction of water and wastewater assets, which are remitted to the Authority.

(3) Returns to Council Council provided two loans to the Authority from 1 July 2010 under "Participating Local Government Fixed rate Loan Agreements (Senior and Subordinated Debt" with monthly interest-only payments for three years to 30 June 2013.

Council agreed to extend the loans with a Participating Local Government (PLG) Loan Agreement between Sunshine Coast Regional Council and the Authority duly executed on 21 June 2013. This new loan was subject to an annual reset rate (to be determined by Queensland Treasury Corporation in accordance with the credit rating assigned for the Authority) with quarterly interest-only payments for twenty years to 30 June 2033. The rate to 30 June 2015 is 5.47% (2014: 5.38%).

90

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 Consolidated

Note

Consolidated

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Investment in associate continued Any repayment of principal, or refinancing of the loan shall be subject to the prior written approval and on terms agreed by the Treasurer or Under Treasurer of Queensland.

Interest received and receivable from the Authority

23,967

25,211

23,967

25,211

The Authority operates under a tax equivalent regime, with all tax paid being distributed pro-rata to the participating Councils based on their participation rights. Tax is payable monthly based on a percentage of the Authority's gross revenue.

Tax received and receivable from the Authority

9,147

8,736

9,147

8,736

As a party to the Participation Agreement, Council receives a proportional share of net profits as a participation return. Returns are paid from post-tax operating profits.

Participation returns received and receivable from the Authority

-

-

16,927

19,255

538,212

538,193

(4) Participation Rights Participation rights in the Authority are recognised at initial value plus share of undistributed profits.

Movement in carrying amount Investment (at cost)

576,367

563,339

Adjustment for Noosa estimates prior year

-

60,998

-

60,998

Actual Noosa transfer

-

(60,978)

-

(60,978) -

Share of profits after tax and before dividends

45,125

32,263

-

Dividends received /receivable

(16,927)

(19,255)

-

Carrying amount at the end of the financial year

604,565

576,367

538,212

538,212

The Authority is not a publicly listed entity and consequently does not have published price quotations.

Summary financial information for the Authority, not adjusted for the percentage ownership held by Council, as reflected in their 30 June 2015 financial statements is shown below.

Extract from the Authority's Statement of Comprehensive Income Ordinary revenues

624,673

550,493

Ordinary expenses

(460,435)

(431,766)

Profit before income tax equivalent

164,238

118,727

Income tax equivalent expense

(43,936)

(32,715)

Prior year adjustment

-

Share of profit (after tax)

120,302

(1,546) 84,466

Extract from the Authority's Statement of Financial Position Retained earnings: Balance at beginning of financial year

84,912

47,174

120,302

84,466

Less distribution paid

(43,936)

(48,274)

Balance at the end of financial year

161,278

84,912

Net result for the period

Share of assets and liabilities: Current assets

146,459

139,288

Non-current assets

3,196,447

3,128,842

Total assets

3,342,906

3,268,130

Current liabilities

109,694

126,453

1,645,827

1,621,983

Total liabilities

1,755,521

1,755,921

Net assets

1,587,385

1,512,209

Non-current liabilities Prior year adjustment

14.

7,485

Other financial assets Current Prepayments Accrued revenue

4,571 21,110

2,929 23,673

4,536 21,110

2,929 23,638

25,682

26,602

25,646

26,567

Sunshine Coast Council 2014/15 Financial Statements

91

92 9 23

34

Sunshine Coast Council 2014/15 Financial Statements

* Additions comprise: Renewals and replacements Upgrades New additions Total additions

Range of estimated useful life in years

Total book value at period end

Opening accumulated depreciation balance as at 01 July 2014 Opening accumulated impairment balance as at 01 July 2014 Adjustment to opening balance 34 Revaluation adjustment to other comprehensive income (ARS) 23 Depreciation provided in period 7 Depreciation on disposals 9 Transfers between classes Closing accumulated depreciation Closing accumulated impairment Closing accumulated depreciation and impairment as at 30 June 2015

Accumulated Depreciation and Impairment

Opening gross value as at 01 July 2014 Adjustment to opening balance Additions at cost Transfer from capital works in progress * Contributed assets at valuation Disposals Revaluation adjustment to other comprehensive income (ARS) Transfers between classes Closing gross value as at 30 June 2015

Asset Values

Basis of measurement

Note

8 24,510 24,518

-

611,423

-

489,719 29,572 71,111 (2,490) 23,511 611,423

Land & Improvements Valuation 2015 $'000

3,527 931 2,263 6,721

2-100

226,083

49,365 19,325 5,322 (392) 73,619 73,619

289,234 5,216 570 (504) 5,186 299,702

Buildings Valuation 2015 $'000

49 1,437 1,486

2-60

30,159

27,165 4,671 (1,118) 261 30,979 30,979

58,907 3,113 (1,540) 658 61,138

Plant & Equipment Cost 2015 $'000

24,601 1,129 15,215 40,945

5-150

1,407,953

379,838 1,702 (19,054) 28,158 (4,822) 385,822 385,822

1,732,702 4,243 46,571 17,507 (8,315) 1,066 1,793,775

3,831 850 593 5,274

5-135

869,178

197,001 22,055 10,281 (21) 229,315 229,315

904,192 4,467 16,188 (42) 173,688 1,098,493

Road & Bridge Stormwater & Network Drainage Network Valuation Valuation 2015 2015 $'000 $'000

6,658 4,947 21,274 32,879

2-100

292,418

109,159 626 (7,257) 11,065 (3,548) (261) 109,784 109,784

362,224 3,113 27,872 1,774 (4,976) 12,853 (658) 402,202

Other Infrastructure Valuation 2015 $'000

-

-

84,985

-

89,975 111,821 (116,812) 84,985

Capital Works in Progress Cost 2015 $'000

38,625 7,906 65,290 111,821

-

3,522,198

762,527 2,328 15,069 59,497 (9,902) 829,519 829,519

3,926,953 7,356 111,821 107,151 (17,867) 216,302 4,351,717

2015 $'000

Total

Notes to the Financial Statements

For the Year Ended 30 June 2015

15. Property, Plant and Equipment (a) Council â&#x20AC;&#x201C; 30 June 2015

9 23

* Additions comprise: Renewals and replacements Upgrades New additions Total additions

Range of estimated useful life in years

Total book value at period end

Opening accumulated depreciation balance as at 01 July 2013 Opening accumulated impairment balance as at 01 July 2013 Revaluation adjustment to other comprehensive income (ARS) 23 Depreciation provided in period 7 Depreciation on disposals 9 Transfer to Noosa Shire Council Transfers between classes Closing accumulated depreciation Closing accumulated impairment Closing accumulated depreciation and impairment as at 30 June 2014

Accumulated Depreciation and Impairment

Opening gross value as at 01 July 2013 Additions at cost Transfer from capital works in progress * Contributed assets at valuation Disposals Revaluation adjustment to other comprehensive income (ARS) Revaluation adjustment to income (capital income) Transfer to Noosa Shire Council Transfer from current assets held for sale Transfers between classes Closing gross value as at 30 June 2014

Asset Values

Basis of measurement

Note

3,620 189 35,803 39,611

-

489,719

889 (944) 55 -

859,784 26,175 20 (466) (9,011) (228,015) (159,860) 1,092 489,719

Land & Improvements Valuation 2014 $'000

6,635 858 5,403 12,896

3-100

239,869

78,416 45 (17,041) 5,640 (3,084) (14,538) (73) 49,365 49,365

356,354 7,141 850 (3,693) 4,071 (75,019) (470) 289,234

Buildings Valuation 2014 $'000

786 786

2-60

31,742

30,182 5,494 (3,496) (4,482) (533) 27,165 27,165

74,523 2,956 (4,126) (11,879) (2,567) 58,907

Plant & Equipment Cost 2014 $'000

18,705 6,097 14,828 39,629

5-100

1,352,864

469,599 (9,513) 25,332 (13,703) (91,877) 379,838 379,838

2,289,679 44,266 18,951 (17,111) 39,046 (642,129) 1,732,702

3,314 242 1,688 5,244

10-100

707,191

222,707 4,587 12,026 (309) (42,010) 197,001 197,001

1,016,506 4,870 8,541 (495) 20,845 (146,075) 904,192

Road & Bridge Stormwater & Network Drainage Network Valuation Valuation 2014 2014 $'000 $'000

8,363 5,790 10,989 25,141

3-100

253,065

132,860 (11,412) 10,603 (1,671) (21,828) 606 109,159 109,159

419,373 15,862 496 (1,834) 1,830 (76,540) 3,037 362,224

Other Infrastructure Valuation 2014 $'000

-

-

89,975

-

71,475 123,269 (101,270) (3,499) 89,975

Capital Works in Progress Cost 2014 $'000

41,422 13,175 68,711 123,309

-

3,164,426

934,653 45 (34,323) 59,150 (22,263) (174,735) 762,527 762,527

5,087,694 123,269 28,858 (27,725) 56,781 (228,015) (1,115,001) 1,092 3,926,953

Total 2014 $'000

Notes to the Financial Statements

For the Year Ended 30 June 2015 Property, Plant and Equipment continued

(b) Council â&#x20AC;&#x201C; 30 June 2014

Sunshine Coast Council 2014/15 Financial Statements

93

Notes to the Financial Statements For the Year Ended 30 June 2015 16. Property, Plant & Equipment - Fair Values Property, plant and equipment are measured at fair value in accordance with AASB 13 Fair Value Measurement, AASB 116 Property, Plant and Equipment, and the Local Government Regulation 2012. The fair values are reported in accordance with the fair value hierarchy provided by AASB 13 Fair Value Measurement which is discussed in detail in Note 1.

The impact of AASB13 Fair Value Measurement relates to additional disclosure requirements, however there have also been changes in valuation techniques and the assumptions that underlie the way fair value is measured.

Valuation techniques used to determine fair values The fair values of financial and non financial assets that are not traded in an active market are determined using valuation techniques. These valuation techniques maximise the use of observable data where it is available and rely as little as possible on entity specific estimates.

If the significant inputs required to value an asset at fair value are based on observable market data, the asset is included in level 2 valuations. If one or more of the significant inputs is not based on observable market data, the asset is included in level 3 valuations. This is the case for most Council building and infrastructure assets which are of a specialised nature where there is no active market for the assets.

Where the fair value has been determined as level 3 an estimate of sensitivity to change is assessed as an indication of the level of confidence in the unobservable inputs used in measuring fair value.

Valuation techniques As at 30 June 2015 Financial Class

Valuation

Technique 2015

Technique 2014

Level

Land

Independently Valued

Interim Indexation

Market Basis

2 - 3

Buildings

Independently Valued

Valuation Update

Market Basis

2-3

Other Infrastructure

Independent & Internal

Valuation Update

Market Basis & Indexation

3

Parks

Independent & Internal

Depreciated Replacement Cost

Depreciated Replacement Cost

3

Roads and Bridges

Independent & Internal

Depreciated Replacement Cost

Interim Indexation

3

Stormwater Drainage

Independent & Internal

Depreciated Replacement Cost

Interim Indexation

3

Plant and Equipment is held at Historic Cost and therefore is not measured under one of the above valuation techniques.

The following tables represent Council's assets measured and recognised at fair value at 30 June 2015. All fair value measurements are recurrent and categorised as either level 2 or level 3 fair value measurements. There have been no transfers between levels during the current financial period. Council has no assets and liabilities measured at fair value on a non-recurring basis.

94

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 Property, Plant & Equipment - Fair Values continued

Recognised fair value measurements and changes in valuation levels As at 30 June 2015

Significant factors:

Level 2 other observed inputs

Level 3 unobserved inputs

Total

$'000

$'000

$'000

268,405

343,019

611,424

4,721

221,362

226,083

-

124,301

124,301

Non-financial assets Land Buildings Other - Facility Infrastructure - Park Infrastructure Roads and Bridges Stormwater and Drainage

-

168,116

168,116

-

1,407,953

1,407,953

273,126

869,178 3,133,929

869,178 3,407,055

Land and Improvements (Level 2 and 3) Land and improvements are reported at fair value for the year ended 30 June 2015.

Land fair values were determined by an independent valuer and the valuation was conducted in accordance with the Australian Accounting Standards.

Land fair values were last comprehensively determined by Asset Valuation Services for year ended 30 June 2014. Values were based on analysis of sales evidence and comparisons, with consideration also given to the existence of restrictions and active markets. Where there were no restrictions and an active market was present, level 2 observable inputs were used to determine fair value measurement. Where there were restrictions and an active market could not be identified, level 3 unobservable inputs were used to determine fair value measurement.

The Sunshine Coast Local Planning Scheme 2014 was adopted by Council in May 2014. The independent valuers included the revised planning scheme in determining land values by giving consideration to the restrictions on land use as defined by the Planning Scheme, and the impact these restrictions would have on the valuation of the land by market participants.

Consideration was also given to other restrictions such as the existence of a deed of trust and the intended use of land where this had a significant impact on market value.

Asset Valuation Services developed a set of market based regional indices on behalf of Council for application in determining land fair value as at 30 June 2015. Valuers used a valuation technique that included indexing and maximised the relevant observable market inputs for the Sunshine Coast region. Indexation was based on land sales transactions and assessment of median/average price movement in the past twelve months for specific areas as follows:

Land Category Hinterland

Average Increase 1%

Suburban Areas

5%

Coastal Areas

7%

Environmental Open Space Reserves Average regional Land value movement

0% 4.61%

Sunshine Coast Council 2014/15 Financial Statements

95

Notes to the Financial Statements For the Year Ended 30 June 2015 Property, Plant & Equipment - Fair Values continued

Additions during the financial period are reported at cost of acquisition, which represents fair value.

Buildings (Level 2 and 3) Building assets are reported at fair value for the year ended 30 June 2015.

Building fair values were last comprehensively determined by independent valuer, Australian Pacific Valuers (APV) for year ended 30 June 2014. Where there was a market for Council building assets, fair value has been derived on a market basis from the observed sales prices of comparable properties after adjusting for differences in key attributes such as property size.

The most significant inputs into this valuation approach were price per square metre for individual buildings.

Council buildings are typically of a specialised nature such that there is no active market for these assets. Fair value for these assets was measured on a cost approach by determining depreciated replacement cost. The gross current values were derived from reference to relevant recent construction data. As there is no depth of market for specialised buildings, the net current value is determined as the current depreciated replacement cost to replace the service capacity of the asset.

In determining the level of accumulated depreciation the asset has been disaggregated into significant components which exhibit different patterns of consumption and/or useful lives.

Allowance has been made for the typical asset life cycle and renewal treatments of each component, the pattern of consumption of the asset's future economic benefit and the condition of the asset. Condition was assessed taking into account both physical characteristics as well as holistic factors such as functionality, capability, utilisation and obsolescence.

Building fair values were updated by independent valuer, Australian Pacific Valuers (APV) for year ended 30 June 2015. Desktop valuations typically adjust prior comprehensive fair values to recognise current year movement in market value or replacement cost and remaining service potential.

Where there is an active market for Council building assets, fair value has been derived on a market basis from the observed sales prices of comparable properties after adjusting for differences in key attributes such as property size. The most significant inputs into this valuation approach were price per square metre for individual buildings (level 2).

Where there was no depth of market, fair value has been derived using a cost approach; current replacement cost less accumulated depreciation adjusted to reflect the consumed or expired service potential of the building asset (level 3). Current replacement cost is derived from reference to recent cost of construction data for each particular building type and movement applied as an index. Depreciation is calculated at the individual component level on a straight line basis.

Additions during the financial period are reported at cost of acquisition or cost of construction, which represents fair value.

96

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 Property, Plant & Equipment - Fair Values continued

Infrastructure Assets (Level 3) Infrastructure assets are reported at fair value for the year ended 30 June 2015.

All Council infrastructure assets are held at fair value using a cost approach valuation technique. The depreciated replacement cost used was the asset's current replacement cost less accumulated depreciation calculated on a basis of such cost to reflect the already consumed or expired future economic benefits of the asset. Council first determined the gross cost of replacing the full service potential of the asset and then adjusted this amount to take account of the expired service potential of the asset.

Current replacement cost was measured by reference to the lowest cost at which the gross future economic benefits of the asset could currently be obtained in the normal course of business. Where existing assets were over designed, had excess capacity, or were redundant an adjustment was made so that the resulting valuation reflected the cost of replacing the existing economic benefits based on an efficient set of modern equivalent assets to achieve the required level of service output within the Council's planning horizon.

A comprehensive revaluation of infrastructure assets was undertaken during the year, effective 30 June 2015. In accordance with the comprehensive revaluation process unit rates were developed to calculate the replacement cost of infrastructure assets in consultation with external independent engineers, Cardno. The rates developed are designed to reflect Council's current costs of construction, and also include the development of on cost rates and other factors associated with valuing the replacement of these assets.

The revaluation includes physical verification and spatial alignment process. Unit rates are applied to spatially aligned specifications and dimensions and fair values are reported to reflect condition or age of the asset as consistent with principles of the cost approach embodied in AASB 13 Fair Value Measurement.

Road and Bridge Infrastructure (Level 3) Transport infrastructure assets are held to provide essential services to the community.

Accordingly, the fair value of such assets is measured using a depreciated replacement cost valuation technique, rather than at a 'market value', where there is no market for the assets.

Comprehensive valuations of Council's road and bridge assets are carried out every three years. In the interim the valuation of road and bridge assets are indexed by reference to appropriate indices Whilst straight line useful life is assumed to be true at the outset, an annual cyclical review of fair value is carried out in order to determine where there is a departure from assumptions and the expected pattern of consumption of future economic benefits embodied in the assets has occurred.

In the comprehensive revaluation of roads, bridges and associated infrastructure in 2014/15, assets have initially undergone a verification process in order to assert existence, ownership and control. Unit rates have been developed in consultation with external independent engineers were then applied to spatially aligned assets in order to measure the replacement cost of those assets.

The fair value of these assets was restated at 30 June 2015 to reflect condition, where available, otherwise to reflect age or service potential consumed in accordance with the principles of the cost approach embodied in AASB 13 Fair Value Measurement.

Sunshine Coast Council 2014/15 Financial Statements

97

Notes to the Financial Statements For the Year Ended 30 June 2015 Property, Plant & Equipment - Fair Values continued

Fair value is determined as the written down current replacement costs of each of the asset categories. Written down gross replacement cost is the asset's current replacement cost less accumulated depreciation.

In determining the level of accumulated depreciation, roads and drainage assets were disaggregated into significant components which exhibited different patterns of consumption or useful lives.

Average costs for each of the key components: Asset category

Key cost components

Measurement unit

Sealed roads

Pavement: gravel Surface: Spray seal Surface: Asphalt Gravel

cubic metre square metre cubic metre square metre cubic metre

208.14 9.39 558.32 34.06 208.14

Concrete Timber Pedestrian Intersection

square metre square metre each each

5,668.19 3,741.00 108,900.00 242,000.00

Concrete Concrete Material

square metre linear metre square metre

101.34 53.05 444.13

Formation Unsealed roads Bridges Traffic signals Pathway Kerb and channel Retaining walls

Cost/unit $

Average increase to cost of construction for each major component: Component

Unit

2015 Sealed Roads

Unsealed Roads

Sealed Roads $16.59

2014 Unsealed Roads

Seal

$/m2

$16.75

n/a

Pavement

$/m2

$52.04

$65.04

$51.30

$64.12

Formation

$/m2

$34.06

$42.58

$30.37

$37.96

n/a

Sealed Roads For sealed roads, a consumption assessment is undertaken cyclically and is based on four health indices, each expressed as a numerical value to provide an estimate of current health, the proportion of health remaining and the remaining useful lives of the assets. The four health indices used were:

98

1)

The Pavement Health Roughness Index (PHNI), which is a function of both the surface roughness and of lane average annual daily traffic (AADT). Perfect health (as indicated by roughness) is retained for all traffic levels up to a roughness of 40 NAASRA (National Association of Australian State Road Authorities) per roughness counts per kilometre.

2)

The Pavement Health Rutting Index (PHRI), which is a function of mean rut depth, annual rainfall and lane AADT. Perfect health (as indicated by rutting) is retained for all levels of traffic and rainfall until mean rut depth is 2mm.

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 Property, Plant & Equipment - Fair Values continued

3)

The Surface Health Cracking Index (SHCI), which is a function of the percentage area of cracking, the annual rainfall and the lane-AADT. A larger percentage cracking and annual rainfall combined with high traffic levels causes a migration of base and sub base material resulting in damage to the underlying pavement from the ingress of water.

4)

The Surface Health Texture Index (SHTI), which is a function of the percentage of road affected by texture distresses, rainfall and lane AADT. The index covers surface distresses caused by ravelling and stripping, leading to the loss of stone, which affects the waterproofing provided by the road surface.

An aggregate of these indices is used to determine condition based on the asset accounting condition scale.

Condition Assessment

Index Value

Consumption (Range)

Excellent

80 - 100

0 - 20%

10%

Very good

60 - 80

20 - 40%

30%

Good

40 - 60

40 - 60%

50%

50%

Fair

20 - 40

60 - 80%

70%

30%

Poor

< 20

80 - 100%

90%

10%

Non existent

100%

Non existent

Nil

Nil

Consumption (Average)

Remaining Useful Life 90% 70%

Bridges For bridges, a consumption assessment is undertaken cyclically and includes a visual inspection to determine condition. Where a review is deemed appropriate the condition scale outlined above is used as a basis for assessment of fair value, remaining service potential and remaining useful life.

Additions during the financial period are reported at cost of construction, which represents fair value.

Stormwater and Drainage Infrastructure (Level 3) Stormwater assets are held to provide essential services to the community. Accordingly, the fair value of such assets is measured using a depreciated replacement cost valuation technique, rather than at a 'market value', where there is no market for the assets.

A comprehensive valuation of Council's stormwater and drainage assets is carried out every three years. In the interim the valuation of stormwater and drainage assets is indexed by reference to an appropriate measure of the increase to cost of constructing these assets. As a large proportion of stormwater and drainage infrastructure is located under or nearby roadways, and often constructed at the same time, the increase to cost of replacement is similar to other infrastructure assets.

In the comprehensive revaluation of stormwater infrastructure in 2014/15 pipes, as the significant representation of the network, have initially undergone a verification process in order to assert existence, ownership and control. Unit rates developed in consultation with external independent engineers were then applied to spatially aligned assets in order to measure the replacement cost of those assets. For the remainder of stormwater network assets revaluation techniques have been applied in accordance with the principles of the cost approach embodied in AASB 13 Fair Value Measurement.

Sunshine Coast Council 2014/15 Financial Statements

99

Notes to the Financial Statements For the Year Ended 30 June 2015 Property, Plant & Equipment - Fair Values continued

Whilst a straight line useful life is assumed to be true at the outset, an annual cyclical review of fair value is carried out in order to determine where there is a departure from assumptions and expected pattern of consumption of future economic benefits embodied in the assets has occurred.

Average costs for each of the key components: Asset category

Key cost components

Measurement unit

Stormwater

Pits - concrete Pipes - material Open drains - concrete Water quality devices

based on type and dimensions type and linear metre linear metre each

Cost/unit $ 3,707.95 1,185.66 119.98 30,890.47

Average increase to cost of construction for each major component Diameter (mm) < 600 mm

$/m

% Network 50%

600-1300 mm

$/m

38%

$1,202.02

$933.54

> 1300 mm

$/m

12%

$4,636.69

$4,137.87

Unit

2015 Pipes $327.30

2014* Pipes $319.49

* A revision in assumptions and change in methodology means that depth factors which previously sat outside the unit rates are now included as specific unit rateable costs for the replacement of assets at a component level. This has resulted in an increase in component unit rates for pipes.

Additions during the financial period are reported at cost of construction, which represents fair value.

Other - Facility Infrastructure (Level 3) Facility infrastructure assets are reported at fair value for the year ended 30 June 2015.

Facility asset fair values were last comprehensively determined by independent valuer, Australian Pacific Valuers (APV) for year ended 30 June 2014.

Fair values were updated by APV using a desktop valuation technique in 2014/15. Desktop valuations typically adjust prior comprehensive fair values to recognise current year movement in market value or replacement cost and remaining service potential.

Council facilities, such as aquatic centres, holiday parks, and waste recycle depots, are typically of a specialised nature such that there is no depth of market for the assets. Fair value for these assets is measured on a cost basis by determining depreciated replacement cost.

The gross current values have been updated by reference to movement in relevant recent market data on replacement cost. As there is no depth of market, the net current value of an asset is the current replacement cost less accumulated depreciation adjusted to reflect the consumed or expired service potential of the asset.

100

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 Property, Plant & Equipment - Fair Values continued

In determining the level of accumulated depreciation, the asset has been disaggregated into significant components which exhibit different patterns of consumption and/or useful lives.

Allowance has been made for the typical asset life cycle, renewal treatments of each component, the pattern of consumption of future economic benefit and the condition of the asset. Condition was assessed in 2014/15 taking into account both physical characteristics as well as holistic factors such as functionality, capability, utilisation and obsolescence.

Depreciation expense is calculated at individual component level on a straight line basis.

Additions during the financial period are reported at cost of acquisition or cost of construction, which represents fair value.

Other - Park Infrastructure (Level 3) Park assets are reported at fair value for the year ended 30 June 2015.

Park, sport and open space infrastructure assets were comprehensively revalued during the year ended 30 June 2015 by GHD - Consulting Engineers.

Park assets do not have an active market as they are specialised assets held to provide services to the community. Accordingly, the fair value of such assets is measured using a depreciated replacement cost (DRC) valuation technique.

The gross current values have been determined by reference to Council's internal costs, such as materials and labour, and relevant recent market data on construction costs to establish current replacement cost unit rates. The net current value of an asset is the current replacement cost less accumulated depreciation adjusted to reflect the consumed or expired service potential of the asset. Annual depreciation is calculated at component level on a straight line basis.

Additions during the financial period are reported at cost of acquisition or cost of construction, which represents fair value.

Other - Park Infrastructure (Level 3) Park assets are reported at fair value for the year ended 30 June 2015.

Park, sport and open space infrastructure assets were comprehensively revalued during the year ended 30 June 2015 by GHD - Consulting Engineers.

Park assets do not have an active market as they are specialised assets held to provide services to the community. Accordingly, the fair value of such assets is measured using a depreciated replacement cost (DRC) valuation technique.

The gross current values have been determined by reference to Council's internal costs, such as materials and labour, and relevant recent market data on construction costs to establish current replacement cost unit rates. The net current value of an asset is the current replacement cost less accumulated depreciation adjusted to reflect the consumed or expired service potential of the asset. Annual depreciation is calculated at component level on a straight line basis.

Additions during the financial period are reported at cost of acquisition or cost of construction, which represents fair value.

Plant & Equipment Plant and Equipment assets are reported at Historical Cost for the year ended 30 June 2015.

Plant and equipment are reported at original cost less accumulated depreciation. A condition and useful life review is conducted on a cyclical basis in order to make the necessary assertions relating to existence, ownership and condition in order to determine remaining service potential and useful lives.

Sunshine Coast Council 2014/15 Financial Statements

101

Notes to the Financial Statements For the Year Ended 30 June 2015 Property, Plant & Equipment - Fair Values continued

Sunshine Coast Airport Sunshine Coast Airport assets are reported across asset financial classes as per Note 15.

Assets are reported at fair value for the year ended 30 June 2015.

Building and other facility assets fair values were determined by independent valuer, Australian Pacific Valuers (APV) effective 30 June 2015.

Sunshine Coast Airport assets are typically of a specialised nature such that there is no active market for the assets.

Fair value for these assets was measured on a cost basis by determining depreciated replacement cost. The gross current values were derived from reference to relevant recent construction data. As there is no depth of market for specialised assets, the net current value is determined as the current depreciated replacement cost.

In determining the level of accumulated depreciation the asset has been disaggregated into significant components which exhibit different patterns of consumption and/or useful lives.

Allowance has been made for the typical asset life cycle and renewal treatments of each component, the pattern of consumption of the asset's future economic benefit and the condition of the asset. Condition was assessed taking into account both physical characteristics as well as holistic factors such as functionality, capability, utilisation and obsolescence during the 2013/14 comprehensive valuations.

Asset fair values were updated by independent valuer, Australian Pacific Valuers (APV) for year ended 30 June 2015. Desktop valuations typically adjust prior comprehensive fair values to recognise current year movement in market value or replacement cost and remaining service potential.

Land fair values were last comprehensively determined by Asset Valuation Services for year ended 30 June 2014. Values were based on analysis of sales evidence and comparisons, with consideration also given to the existence of restrictions and active markets. Where there were no restrictions and an active market was present, level 2 observable inputs were used to determine fair value measurement. Where there were restrictions and an active market could not be identified, level 3 unobservable inputs were used to determine fair value measurement.

The Sunshine Coast Local Planning Scheme 2014 was adopted by Council in May 2014. The independent valuers included the revised planning scheme in determining land values by giving consideration to the restrictions on land use as defined by the Planning Scheme, and the impact these restrictions would have on the valuation of the land by market participants.

Consideration was also given to other restrictions such as the existence of a deed of trust and the intended use of land where this has a significant impact on market value.

Asset Valuation Services determined land fair values for year ended 30 June 2015 by using an index valuation technique that maximise the relevant observable market inputs for the Sunshine Coast region. Indexing was based on land sales transactions and assessment of median/average price movement in the past twelve months. An average 7% increase to land values was determined for the Mudjimba area.

102

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 Property, Plant & Equipment - Fair Values continued

Net Fair value of Sunshine Coast Airport assets 2015 $,000 49,748 21,327 33,687 3,220 214 108,196

Land Buildings Other Infrastructure Plant and Equipment (held at Historic Cost) Intangibles

2014 $,000 34,002 22,389 33,552 3,676 255 93,876

Additions during the financial period are reported at cost of acquisition or cost of construction, which represents fair value.

Waste Landfill Cells Waste landfill cells fair values were determined by Council engineers as at 30 June 2014.

Current Replacement Cost was calculated by reference to landfill cell area and volume specifications, estimated labour and material inputs, services costs, and overhead allocations.

Material and services costs were determined by reference to Council's existing supplier contracts and labour costs. Costs for each of the key components were dependant on the scope and timing of works undertaken and existed within the following ranges: Asset category

Key cost components

Measurement unit

Cost/unit

Waste landfill cells

Preliminary & preparation

per cubic metre

2.00 - 8.00

Excavation

per cubic metre

2.50 - 5.00

Base liner & leachate drain construction

per cubic metre

28.00 - 35.00

Stormwater management system

per cubic metre

18.00 - 25.00

Depreciated Replacement Cost was determined through assessment of the remaining air space for each landfill cell, which was also used to determine percentage cell capacity used in the year. Waste landfill valuations are included in level 3 valuations.

Sunshine Coast Council 2014/15 Financial Statements

103

Notes to the Financial Statements For the Year Ended 30 June 2015 Consolidated

Note

17.

Consolidated

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Intangible assets Software Opening gross carrying value Additions at cost Disposals

9

Transfer to Noosa Shire Council

20,541

18,291

20,541

3,793

4,948

3,793

(429) -

Closing gross carrying value

(2,619) (79)

(429) -

18,291 4,948 (2,619) (79)

23,905

20,541

23,905

20,541

Opening balance

4,266

4,177

4,266

4,177

Amortisation in the period

2,862

2,708

2,862

Accumulated amortisation

Disposals

9

Closing accumulated amortisation

(387)

(2,619)

(387)

2,708 (2,619)

6,741

4,266

6,741

4,266

Opening gross carrying value

3,974

5,577

3,974

5,577

Additions at cost

3,430

3,346

3,430

3,346

(3,793)

(4,948)

(3,793)

(4,948)

3,611

3,974

3,611

3,974

20,774

20,250

20,774

20,250

31,377

39,811

31,537

39,731

9,742

9,502

9,551

9,365

651

543

542

543

41,770

49,855

41,630

49,639

1,370

2,209

1,296

2,209

1,370

2,209

1,296

2,209

13,838

12,909

13,838

12,909

253,331

211,314

253,331

211,314

267,169

224,223

267,169

224,223

Capital Works in Progress

Capital works completed Closing gross carrying value Consolidated net carrying value as at 30 June 2015

18.

Trade and other payables Current Creditors and accruals Annual leave Other employee entitlements Non-Current Annual Leave

19.

Borrowings Current Queensland Treasury Corporation Non-Current Queensland Treasury Corporation

20.

Loans (i) Queensland Treasury Corporation

104

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 Loans continued Consolidated

Note

Consolidated

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Classified as: 13,838 253,331 267,169

12,909 211,314 224,223

13,838 253,331 267,169

12,909 211,314 224,223

Loans raised Repayments Interest - Includes capitalised interest Transfer to Noosa Balance at the end of the year (Book Value)

224,223 53,700 (23,149) 12,394 267,169

262,732 15,000 (27,169) 13,708 (40,048) 224,223

224,223 53,700 (23,149) 12,394

262,732 15,000 (27,169) 13,708 (40,048) 224,223

Balance at the end of the year (Market Value)

297,022

249,224

297,022

249,224

Current Debt Pool Non-current Debt Pool (i) Queensland Treasury Corporation Opening balance (Book Value)

267,169 .

The market value represents the value of the debt if the Council repaid the debt as at 30 June 2015.

As it is the intention of the Council to hold the debt for its term, no provision is required to be made in these accounts. The weighted average borrowing rate for the year was 5.33% (5.76% in 2014) Borrowings are all in Australian dollars and carried at amortised cost, interest being expensed as it accrues.

No assets have been pledged as security by the Council for any liabilities, however all loans are guaranteed by the Queensland State Government.

21.

Provisions Current Long service leave

17,097

14,125

17,097

14,125

Landfill rehabilitation

318

601

318

601

Quarry rehabilitation

144

-

144

Carbon Permits Non-Current Long service leave Landfill rehabilitation * Quarry rehabilitation

-

17,560

755 15,480

17,560

755 15,480

4,788 25,867 2,277 32,932

7,021 16,176 2,178 25,375

4,788 25,867 2,277 32,932

6,958 16,176 2,178 25,312

* Increase in the landfill rehabilitation provision is due to changes in contract conditions with Councils' waste providers.

Previously the cost for landfill capping was the responsibility of the contract provider as part of the contract agreement.

As from the 1st July 2015, these costs will be met by council.

Details of movements in Landfill and Quarry provisions: Long service leave Balance at beginning of financial year Adjustment for Noosa estimates prior year Long service leave entitlement arising Payment of actual liability to Noosa Long Service entitlement paid Long Service entitlement extinguished Balance at end of financial year Landfill Rehabilitation Balance at beginning of financial year Adjustment for Noosa estimates prior year Increase (decrease) in provision due to unwinding of discount and effect of interest rate movement Payment of actual liability to Noosa Increase (decrease) in provision due to change in estimate Increase (decrease) in provision as a result of actual expenditure incurred during the year Balance at end of financial year

21,083 3,011 (1,957) (252) 21,885

23,502 3,831 2,947 (5,688) (2,870) (576) 21,146

21,083 3,011 (1,957) (252) 21,885

23,502 3,831 2,947 (5,751) (2,870) (576) 21,083

16,776 -

19,530 3,185

16,776 -

19,530 3,185

1,529 8,240

(990) (4,598) 462

1,529 8,240

(990) (4,598) 462

(360) 26,185

(812) 16,776

(360) 26,185

(812) 16,776

Sunshine Coast Council 2014/15 Financial Statements

105

Notes to the Financial Statements For the Year Ended 30 June 2015 Provisions continued

Consolidated

Consolidated

Council

Council

2015 $'000

2014 $'000

2015 $'000

2014 $'000

Note Quarry Rehabilitation Balance at beginning of financial year Adjustment for Noosa estimates prior year Increase (decrease) in provision due to unwinding of discount Increase (decrease) in provision as a result of actual Balance at end of financial year

2,178 243 (144) 2,277

2,118 345 (273) (12) 2,178

2,178 243 (144) 2,277

2,118 345 (273) (12) 2,178

Council holds an Environmental Protection Agency licence to operate a number of landfills. Council estimates and discounts expected future costs to restore landfill cells to present value at a discount factor based on Commonwealth bond yield rates.

Landfill Site Coolum Buderim Pierce Avenue Nambour Landfill Noosa Landfill Old Buderim Landfill

Post Closure Expected Closure Monitoring Cost Year 2009 2039 2005 2035 2028 2058 2022 2052 2032 2062 1989 2019

At 30 June 2015 the net present value of the projected costs over the next 30 years has been assessed as $ 29.904million Capital Market Yields - Government 10 year bond rate for 2015 was 3.01% (2014 3.54%)

22.

Other liabilities Current Non policy developer contributions Unearned revenue Non-Current Unearned revenue

23.

5,919 6,506 12,425

4,581 5,358 9,939

5,919 6,506 12,425

4,581 5,324 9,905

-

-

-

-

Asset revaluation surplus Movements in the asset revaluation surplus were as follows: Balance at beginning of period Land and improvements Buildings Road and bridge network Stormwater and Drainage network Other Infrastructure

59,757 487,472 101,807 46,561 695,598

8,068 38,905 438,912 85,550 33,058 604,493

59,757 487,472 101,807 46,561 695,598

8,068 38,905 438,912 85,550 33,058 604,493

Net adjustment to non-current assets to reflect a change in current fair value Land and improvements Buildings Road and bridge network Stormwater and Drainage network Other Infrastructure

23,511 (14,139) 20,120 151,633 20,109 201,234

(8,068) 21,113 48,560 16,257 13,242 91,105

23,511 (14,139) 20,120 151,633 20,109 201,234

(8,068) 21,113 48,560 16,257 13,242 91,105

Closing balance of the asset revaluation surplus is comprised of the following asset categories: Land and improvements Buildings Road and bridge network Stormwater and Drainage network Other Infrastructure

106

Sunshine Coast Council 2014/15 Financial Statements

23,511 45,618 507,592 253,440 66,670 896,832

59,757 487,472 101,807 46,561 695,598

23,511 45,618 507,592 253,440 66,670 896,832

59,757 487,472 101,807 46,561 695,598

Notes to the Financial Statements For the Year Ended 30 June 2015 Consolidated

Note

24.

Consolidated

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Commitments for expenditure

Operating leases Minimum lease payments in relation to non-cancellable operating leases are as follows: Within one year One to five years Greater than five years

5,067 5,915 2,568 13,550

5,835 6,133 2,935 14,903

5,067 5,915 2,568 13,550

5,835 6,133 2,935 14,903

40,159 108,147 44,311 192,617

52,576 86,364 55,856 194,796

40,159 108,147 44,311 192,617

52,576 86,364 55,856 194,796

101 1,011 287 1,097 336 759 132 972 1,851 179 989 5,554 2,417 9,618 2,849

2,858 531 975 195 961 1,116 2,304 254 101 8,733 924 9,469 4,719

101 1,011 287 1,097 336 759 132 972 1,851 179 989 5,554 2,417 9,618 2,849

2,858 531 975 195 961 1,116 2,304 254 101 8,733 924 9,469 4,719

28,153

33,138

28,153

33,138

6,945

1,466

6,945

1,466

Contractual commitments Contractual commitments at balance date but not recognised in the financial statements are as follows: Within one year One to five years Greater than five years Capital commitments Commitment for the construction of the following assets contracted for at the reporting date but not recognised as liabilities: Aerodromes Buildings and Facilities Coast and Canals Divisional Allocations Environmental Operations Fleet Holiday Parks Information Technology Parks, Gardens and Reserves Quarries Stormwater Strategic Land and Planning Sunshine Coast Airport Transportation Waste These expenditures are payable within one year

25.

Contingent liabilities Details and estimates of maximum amounts of contingent liabilities are as follows : (i) Various planning scheme claims are pending at 30 June 2015, with the amounts subject to these legal claims not expected to exceed:

Sunshine Coast Council 2014/15 Financial Statements

107

Notes to the Financial Statements For the Year Ended 30 June 2015 Contingent Liabilities continued

Caloundra South Master Plan Caloundra South is a proposed new Sunshine Coast master planned community with the potential to enhance regional amenity, prosperity and liveability. The new community will be established on a 2,310ha former forestry site and become the southern gateway of Queenslandâ&#x20AC;&#x2122;s Sunshine Coast.

Economic Development Queensland (EDQ), formerly the Urban Land Development Authority (ULDA), is the State Government agency with planning responsibility for the site. The ULDA Development Scheme for Caloundra South was adopted by the State Government in October 2011.

Following adoption of the Caloundra South Development Scheme, Stockland (the Developer) lodged a Master Plan application with the State Government for assessment in December 2011. The Master Plan was approved by the Queensland Government in June 2012.

Council is currently reviewing any possible infrastructure obligations it may have following the approval by the State Government.

Council's risk assessment associated with Caloundra South has been significantly reduced following clarification surrounding the commitments proposed by both the State Government and Developer to the plan. Council has agreed in principle to signing of agreements where 95% of the outstanding risk items have been mitigated.

Currently no agreement has yet been signed with on-going discussions and negotiations taking place with EDQ and the developer. Although no liability or contingent liability is able to be quantified in these financial statements, Council's estimated exposure is not forecast to exceed $15 million, based on the costs to build infrastructure to accommodate the increase in residents to the Sunshine Coast, resulting from the Caloundra South Development.

Local Government Workcare Council is a member of the Queensland local government workers compensation selfinsurance scheme, Local Government Workcare. Under this scheme the Council has provided an indemnity towards a bank guarantee to cover bad debts which may remain should the selfinsurance licence be cancelled and there was insufficient funds available to cover outstanding liabilities. Only the Queensland Government's workers compensation authority may call on any part of the guarantee should the above circumstances arise. Council's maximum exposure to the bank guarantee is $3,362,638.76.

Local Government Mutual The Council is a member of the local government mutual liability self-insurance pool, LGM Queensland. In the event of the pool being wound up or it is unable to meet its debts as they fall due, the trust deed and rules provide that any accumulated deficit will be met by the individual pool members in the same proportion as their contribution is to the total pool contributions in respect to any year that a deficit arises.

As at 30 June 2014 the financial statements reported an accumulated surplus and it is not anticipated any liability will arise.

108

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 26. Superannuation The Sunshine Coast Regional Council contributes to the Local Government Superannuation Scheme (Qld) (the scheme). The scheme is a Multi-employer Plan as defined in the Australian Accounting Standard AASB119 Employee Benefits.

The Queensland Local Government Superannuation Board, the trustee of the scheme, advised that the local government superannuation scheme was a complying superannuation scheme for the purpose of the Commonwealth Superannuation Industry (Supervision) legislation.

The scheme has three elements referred to as:  The City Defined Benefits Fund (CDBF) which covers former members of the City Super Defined Benefits Fund  The Regional Defined Benefits Fund (Regional DBF) which covers defined benefit fund members working for regional local governments; and  The Accumulation Benefits Fund (ABF) The ABF is a defined contribution scheme as defined in AASB 119. Council has no liability to or interest in the ABF other than the payment of the statutory contributions as required by the Local Government Act 2009.

The Regional DBF is a defined benefit plan as defined in AASB119. Council is not able to account for the Regional DBF as a defined benefit plan in accordance with AASB119 because the scheme is unable to account to the Council for its proportionate share of the defined benefit obligation, plan assets and costs. The funding policy adopted in respect of the Regional DBF is directed at ensuring that the benefits accruing to members and beneficiaries are fully funded as they fall due.

To ensure the ongoing solvency of the Regional DBF, the scheme's trustee can vary the rate of contributions from relevant employers subject to advice from the scheme's actuary. As at the reporting date, no changes had been made to prescribed employer contributions which remain at 12% of employee assets and there are no known requirements to change the rate of contributions.

Any amount by which the fund is over or under funded would only affect future benefits and contributions to the Regional DBF, and is not an asset or liability of the Council. Accordingly there is no recognition in the financial statements of any over or under funding of the scheme.

As at the reporting date, the assets of the scheme are sufficient to meet the vested benefits.

The most recent actuarial assessment of the scheme was undertaken as at 1 July 2012. The actuary indicated that “the Regional DBF" is currently in a satisfactory but modest financial position and remains vulnerable to adverse short and medium term experience.

Following the previous actuarial assessment in 2009, councils were advised by the trustee of the scheme, following advice from the scheme’s actuary, that additional contributions may be imposed in the future at a level necessary to protect the entitlements of Regional DBF members. In the 2012 actuarial report the actuary has recommended no change to the employer contribution levels at this time.

Under the Local Government Act 2009 the trustee of the scheme has the power to levy additional contributions on councils which have employees in the Regional DBF when the actuary advises such additional contributions are payable - normally when the assets of the Regional DBF are insufficient to meet member's benefits.

Sunshine Coast Council 2014/15 Financial Statements

109

Notes to the Financial Statements For the Year Ended 30 June 2015 Superannuation continued Consolidated

Consolidated

Council

Council

2015

2014

2015

2014

$'000

$'000

$'000

$'000

Note The next actuarial investigation will be conducted as at 1 July 2015.

The amount of superannuation contributions paid

by Sunshine Coast Regional Council to the superannuation scheme in this period for the benefit of employees was:

27.

4

15,769

15,569

15,752

15,569

4,246 10,357 11,845 26,448

5,547 16,053 14,872 36,472

4,246 10,357 11,845 26,448

5,547 16,053 14,872 36,472

Operating lease income The minimum lease payments are payable as follows: Within one year One to five years Greater than five years

28.

Controlled entities The council has a 100% controlling interest in Sunshine Coast Events Centre Pty Ltd and SunCentral Maroochydore Pty Ltd. The following table shows revenue and expenses before consolidating eliminations.

SunCentral Maroochydore PL 2015 $'000 Revenue Expenses Surplus/(deficiency)

29.

Sunshine Coast Events Centre PL

2014 $'000

429 (383) 46

2015 $'000

-

2,994 (2,943) 51

2014 $'000

2,703 (2,676) 27

Trust funds Monies collected or held on behalf of other entities yet to be paid out to or on behalf of those entities.

4,474 The Sunshine Coast Regional Council performs only a custodial role in respect of these monies. As these funds cannot be used by the Council, they are not brought to account in these financial statements.

110

Sunshine Coast Council 2014/15 Financial Statements

4,437

Notes to the Financial Statements For the Year Ended 30 June 2015

Note

30.

Consolidated

Consolidated

Council

2015

2014

2015

Council 2014

$'000

$'000

$'000

$'000

Reconciliation of net result for the year to net cash inflow (outflow) from operating activities 186,702

Net result

(1,183,310)

158,835

(1,196,270)

Non-cash items Depreciation and amortisation

62,359

61,859

62,359

Share of net profit of associate

(28,198)

(13,008)

-

34,161

48,851

62,359

61,859 61,859

Investing activities Net loss on disposal of property, plant and equipment Capital grants and contributions Net revaluation decrease property, plant & equipment (Profit) / Loss on transfer of net assets on discontinued operations

5,093 (140,541) 1,562 (133,886)

3,841 (58,086)

5,093 (140,541)

3,841 (58,086)

228,015

-

228,015

1,037,666

1,562

1,037,591

1,211,436

(133,886)

1,211,361

Changes in operating assets and liabilities (increase)/decrease in receivables (increase)/decrease in inventory increase/(decrease) in payables

158 (10,241)

10,015 (83) (4,400)

6,030 157 (10,471)

10,027 (67) (4,486)

increase/(decrease) other liabilities

2,520

1,508

2,520

1,496

increase/(decrease) in other provisions

9,700

(1,305)

9,700

(1,320)

8,215

5,735

7,936

5,650

95,192

82,712

95,244

82,600

Net cash inflow from operating activities

31.

6,078

Financial Instruments Financial Risk Management Councils principal financial investments comprise cash and cash equivalents, investments, loans at amortised cost and borrowings. The main purpose of these financial instruments is to provide the financial capability to support councils operations and acquisition of noncurrent assets.

Councils activities expose it to a variety of financial risks, including interest rate risk, credit risk and liquidity risk. Exposure to financial risks is managed in accordance with Council approved policies on financial risk management. These policies focus on managing the volatility of financial markets and seek to minimise potential adverse effects on the financial performance of the Council.

Council is responsible for the establishment and oversight of the risk management framework, together with developing and monitoring risk management policies specifically for managing credit, liquidity and market risk.

Sunshine Coast Council 2014/15 Financial Statements

111

Notes to the Financial Statements For the Year Ended 30 June 2015 Financial Instruments continued

Council's risk management policies are established to identify and analyse the risks faced, to set appropriate limits and controls and to monitor these risks and adherence against limits.

The Council aims to manage volatility to minimise potential adverse effects on the financial performance of the Council.

Council does not enter into derivatives.

Sunshine Coast Regional Council measures risk exposure using a variety of methods as follows: Risk exposure

Measurement method

Credit risk

Ageing analysis

Liquidity risk

Maturity analysis

Interest rate risk

Sensitivity analysis

Credit risk exposure Credit risk exposure refers to the situation where the Council may incur financial loss as a result of another party to a financial instrument failing to discharge their obligations. These obligations arise principally from the council's investments and receivables from customers.

In the case of rate receivables, the Council has the power to sell the property to recover any defaulted amounts. In effect this power protects the Council against credit risk in the case of these defaults.

In other cases, the Council assesses the credit risk before providing goods or services and applies normal business credit protection procedures to minimise the risk.

The Council is exposed to credit risk through its investments with the Queensland Treasury Corporation (QTC), loans to Unitywater and deposits held with banks or other financial institutions. The QTC Cash Fund is an asset management portfolio that invests with a wide variety of high credit rating counterparties. Deposits are capital guaranteed. Other investments are held with highly rated/regulated banks/financial institutions and whilst not capital guaranteed, the likelihood of a credit failure is remote.

The subordinate loan to Unitywater, which represents $434,394,000 has been renegotiated to terminate on 30 June 2033 and is not secured.

By the nature of the Councils operations, there is a geographical concentration of risk in the Council's area.

The maximum exposure to credit risk at balance date in relation to each class of recognised financial asset is the gross carrying amount of those assets inclusive of impairment.

No collateral is held as security relating to the financial assets held by the Council.

When the Council borrows, it borrows from the Queensland Treasury Corporation unless another financial institution can offer a more beneficial rate, taking into account any risk.

Borrowing by the Council is constrained by the provisions of the Statutory Bodies Financial Arrangements Act 1982.

112

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 Financial Instruments continued

Council's maximum exposure to credit risk is as follows: Note

Financial assets

2015

2014

2015

Consolidated $'000

2014 Council

$'000

$'000

$'000

Cash and cash equivalents

10a

258,371

139,410

257,386

138,871

Investment Securities

10b

30,000

85,000

30,000

85,000

Receivables - rates

11

5,511

9,522

5,511

9,523

Receivables - other

11

8,370

9,422

8,308

9,407

25 11

3,363

4,343

3,363

4,343

434,393

439,176

434,393

439,176

740,009

686,873

500 739,461

686,321

Other credit exposures Guarantees Loan to Unitywater - Subordinate Debt and working Capital Shares Held in Contolled Entities

11

No financial assets have had their terms renegotiated so as to prevent them from being past due or impaired, and are stated at the carrying amounts as indicated.

The following represents an analysis of the age of the Council's financial assets that are either fully performing, past due or impaired: Consolidated 2015 Fully performing ($000's) Not past due Receivables Loans and advances to Unitywater

Total (000's)

Past due ($000's) 30-60 days

61-90 days

Over 90 days

Impaired

10,890 -

641 -

297 -

3,683 434,893

(1,631) -

13,881 434,893

10,890

641

297

438,577

(1,631)

448,774

Consolidated 2014

Not past due Receivables

15,488

Loans and advances to Unitywater

Total (000's)

Past due ($000's)

Fully performing ($000's)

4,352 19,840

30-60 days 1,311 1,311

61-90 days 456

Over 90 days 4,352

Impaired (2,232)

19,375

-

434,393

-

438,745

456

438,745

(2,232)

458,120

Council 2015

Not past due Receivables Loans and advances to Unitywater

Total (000's)

Past due ($000's)

Fully performing ($000's)

10,828 10,828

30-60 days 641

61-90 days 297

Over 90 days 3,683

Impaired (1,631)

13,819

-

-

434,893

-

434,893

641

297

438,577

(1,631)

448,712

Sunshine Coast Council 2014/15 Financial Statements

113

Notes to the Financial Statements For the Year Ended 30 June 2015 Financial Instruments continued

Council 2014 Fully performing ($000's)

Past due ($000's) Not past due

Total (000's)

30-60 days

Receivables

15,474

Loans and advances to Unitywater

4,352

-

19,826

1,311

61-90 days

1,311

Over 90 days

456 456

Impaired

4,352

(2,232)

19,361

434,393 438,745

(2,232)

438,745 458,106

Liquidity risk Liquidity risk refers to the situation where the Council may encounter difficulty in meeting obligations associated with financial liabilities that are settled by delivering cash or another financial asset. The Council is exposed to liquidity risk through its trading in the normal course of business and borrowings from the Queensland Treasury Corporation for capital works.

Council manages its exposure to liquidity risk by maintaining sufficient undrawn facilities, both short and long term, to cater for unexpected volatility in cash flows. These facilities are disclosed in Note 19.

Council is also exposed to liquidity risk through the Participating Local Government Fixed Rate Loan Agreement (Subordinated Debt) between Council and Northern SEQ DistributorRetailer Authority (Trading as Unitywater). Under the Agreement the Borrower may request the Lender to capitalise all or part of the interest payable, thereby representing a risk to securing cash flow anticipated by Council.

The following table sets out the liquidity risk of financial liabilities held by the Council in a format as it might be provided to management. The amounts disclosed in the maturity analysis represent the contractual undiscounted cash flows at balance date: Consolidated 2015 Trade and other payables Loans - QTC 2014 Trade and other payables Loans - QTC

Council 2015 Trade and other payables Loans - QTC 2014 Trade and other payables Loans - QTC

114

0 to 1 year $'000 31,377 27,575 58,952 39,811 25,270 65,081 0 to 1 year $'000 31,538 27,575 59,114 39,731 25,270 65,001

Sunshine Coast Council 2014/15 Financial Statements

1 to 5 years $'000 109,872 109,872 100,928 100,928 1 to 5 years $'000 109,872 109,872 100,928 100,928

Over 5 years $'000 237,175 237,175 185,520 185,520 Over 5 years $'000 237,175 237,175 185,520 185,520

Total $'000 31,377 374,622 405,999 39,811 311,718 351,529 Total $'000 31,538 374,622 406,161 39,731 311,718 351,449

Notes to the Financial Statements For the Year Ended 30 June 2015 Financial Instruments continued

The outflows in the above table are not expected to occur significantly earlier and are not expected to be for significantly different amounts than indicated in the table.

Interest rate risk The Council is exposed to interest rate risk through its borrowings from the Queensland Treasury Corporation, investments held with financial institutions and shareholder loans with the Northern SEQ Distributor Retailer Authority (Unitywater).

The following interest rate sensitivity analysis is based on a report similar to that which would be provided to management, depicting the outcome to profit and loss should there be a 1% increase in market interest rates. The calculations assume that the rate would be held constant over the next financial year, with the change occurring at the beginning of that year.

It is assumed that interest rates on overdue rates would not change. If the rates decreased by 1% the impact would be equal in amount in the reverse direction.

Consolidated Net carrying amount

Profit

Equity

2015

2014

2015

2014

2015

2014

$'000

$'000

$'000 4,349

$'000 4,392

$'000 4,349

$'000 4,392

Financial assets

-

-

Financial liabilities

(2,970)

(2,492)

(2,970)

(2,492)

(2,970)

(2,492)

Net total

(2,970)

(2,492)

1,379

1,900

1,379

1,900

Council Net carrying amount

Financial assets

Profit

Equity

2015

2014

2015

2014

2015

2014

$'000

$'000

$'000 4,349

$'000 4,392

$'000 4,349

$'000 4,392

-

-

Financial liabilities

(2,970)

(2,492)

(2,970)

(2,492)

(2,970)

(2,492)

Net total

(2,970)

(2,492)

1,379

1,900

1,379

1,900

The risk in borrowing is effectively managed by borrowing only from the Queensland Treasury Corporation and having access to a mix of floating and fixed funding sources such that the desired interest rate risk exposure can be minimised. Interest rate risk in other areas is minimal.

In its management of interest rate risk associated with Unitywater shareholder loans, Council has a number of options available to mitigate risk from market interest rate movements including: * Principal reduction for corresponding external loan liabilities * Conversion of current external loan liabilities from principal and interest repayments to payment of interest only with terms negotiated to match the review periods with Unitywater shareholder loans; or * Undertake interest rate hedging through QTC to protect against market fluctuations in interest rates payable by Unitywater.

Sunshine Coast Council 2014/15 Financial Statements

115

Notes to the Financial Statements For the Year Ended 30 June 2015 Financial Instruments continued

Carrying Amount

Fair Value

$'000

$'000

2015 Queensland Treasury Borrowings

267,169

297,022

2014 Queensland Treasury Borrowings

224,223

249,224

Fair value The fair value of trade and other receivables and payables is assumed to approximate the value of the original transaction, less any allowance for impairment.

The fair value of borrowings with QTC is based on the market value of debt outstanding. The market value of a debt obligation is the discounted value of future cash flows based on prevailing market rates and represents the amount required to be repaid if this was to occur at balance date. The market value of debt is provided by QTC. QTC applies a book rate approach in the management of debt and interest rate risk, to limit the impact of market value movements to clients' cost of funding. The book value represents the carrying value based on amortised cost using the effective interest rate method.

32.

National Competition Policy Before the end of each financial year, the Minister must decide for the financial year, the expenditure amounts (the 'threshold amounts") for identifying a "significant business activityâ&#x20AC;?.

The thresholds for the 2014/15 financial year are as follows: (1) for water and sewerage combined activities - $13,300 million (2) for other activities - $8,900 million Waste and Resources Management was a significant business activity and applied the competitive neutrality principle. There were no new significant business activities. (b)

116

Activities to which the code of competitive conduct is applied A business activity of a local government is divided into two categories: (a) Roads business activity means (i) the construction or maintenance of State controlled roads for which the local government submits an offer to carry out work in response to a tender invitation other than through a sole supplier arrangement or; (ii) submission of a competitive tender for construction or road maintenance on the local government's roads which the local government has put out to tender, or called for by another local government. (b) Other business activity, referred to as type three activities, means the following: (i) trading in goods and services to clients in competition with the private sector, or (ii) the submission of a competitive tender in the local government's own tendering process in competition with others for the provision of goods and services to itself. Excluded activities are (a) library services, (b) an activity or part thereof prescribed by legislation.

Sunshine Coast Council 2014/15 Financial Statements

Notes to the Financial Statements For the Year Ended 30 June 2015 National Competition Policy continued

Local government may elect to apply a Code of Competitive Conduct (CCC) to their identified business activities. This requires the application of full cost pricing, identifying the cost of community service obligations (CSO) and eliminating the advantages and disadvantages of public ownership within that activity.

The CSO value is determined by Council, and represents any activities cost(s) which would not be incurred if the activities primary objective of the activities was to make a profit. The Council provides funding from general revenue to the business activity to cover the cost of providing non-commercial community services or costs deemed to be CSO's by the Council.

The Council has resolved to apply the CCC to the following activities:  Sunshine Coast Airport  Waste Management  Quarry Operations  Caravan Parks The following activity statements are for activities subject to the competitive code of conduct: Airport 2015 $'000 Revenue for services provided to Council Revenue for services provided to external clients Community Service Obligations Less : Expenditure Surplus / (deficiency)

1 15,556 124 15,682 13,957 1,724

Quarry Operations 2015 $'000 6,695 982 7,678 10,022 (2,344)

Caravan Parks 2015 $'000 13,651 13,651 7,656 5,995

Waste 2015 $'000 916 56,683 718 58,318 43,814 14,504

Description of CSO's provided to business activities: Activities

CSO Description

Net cost 2015 $'000

Sunshine Coast Airport Waste Management

Reduce lease rentals and landing fees to community bodies Waste collection and disposal charges for charitable organisatio

124 718

33.

Events after the reporting period There are no material adjusting events after the balance date.

34.

Prior Period Adjustment Initial Recognition of Non-Current Assets not previously recognised The initial recognition of non-current assets relates to items of property, plant and equipment that should have been brought to account in previous financial years but have been identified and placed in the financial asset register during the current reporting period.

Sunshine Coast Council 2014/15 Financial Statements

117

Notes to the Financial Statements For the Year Ended 30 June 2015 Prior Period Adjustment continued

All identified assets have been initially recognised within the accounts at their fair value as at the reporting date and have been disclosed in note 15 for the respective classes of Property, Plant & Equipment.

Retrospective adjustments have not been applied as per the provisions of AASB 108 given the impractical nature of determining the period specific effect or cumulative effect of the error.

Initial recognition of PP&E by asset class: Council

30 June 2015

30 June 2015

$'000

$'000

Gross value of road network added

4,243

4,243

Accumulated depreciation and impairment

1,702

1,702

Net value of road network added

2,541

2,541

Gross value of other infrastructure added

3,113

3,113

626

626

Net value of other infrastructure added

2,487

2,487

Total net value

5,028

5,028

Accumulated depreciation and impairment

118

Consolidated

Sunshine Coast Council 2014/15 Financial Statements

5.

MANAGEMENT CERTIFICATE

Sunshine Coast Council 2014/15 Financial Statements

119

51080 10/15. Printed on environmentally responsible paper.

www.sunshinecoast.qld.gov.au mail@sunshinecoast.qld.gov.au T 07 5475 7272â&#x20AC;&#x201A; F 07 5475 7277 Locked Bag 72 Sunshine Coast Mail Centre Qld 4560