020 CHRC Quarry Business Plan Draft V1.1 26 September 2019

Quarry Business
Strategic Business Plan
2019 to 2022
Draft
V1.1
26 September 2019
Central Highlands Regional Council 1 Quarry Business Plan

Table of Contents
1 The Quarry’s “Plan on a Page” ............................................................................................ 5

2 Glossary of Terms.............................................................................................................. 10
3 Purpose and Background................................................................................................... 12
3.1 Purpose of this Plan .................................................................................................. 12
3.2 Process for Developing the Plan................................................................................ 13
3.3 Plan Structure (the Value Model) ............................................................................... 13
4 Overview of the Quarry ...................................................................................................... 15
4.1 CHRC Region ............................................................................................................ 15
4.2 Quarry Background ................................................................................................... 15
4.3 Site and planning ....................................................................................................... 17
4.4 Quarry sales .............................................................................................................. 17
4.5 Previous Quarry Review ............................................................................................ 20
4.6 SWOT Analysis ......................................................................................................... 21
5 Purpose of the Quarry........................................................................................................ 22
5.1 Overview ................................................................................................................... 22
5.2 Council’s Strategic Framework .................................................................................. 23
5.3 Regional Public Value of the Quarry Business ........................................................... 24
5.4 Quarry’s Vision and Objectives .................................................................................. 26
6 The Business Model .......................................................................................................... 29
6.1 Overview ................................................................................................................... 29
6.2 Product ...................................................................................................................... 31
6.3 Price .......................................................................................................................... 33
6.4 Place and Accessibility .............................................................................................. 33
6.5 The Market ................................................................................................................ 34
6.6 Promotion & Channels to Market ............................................................................... 35
6.7 Business Model Summary ......................................................................................... 36
7 The Operating Model ......................................................................................................... 37
7.1 Overview ................................................................................................................... 37
7.2 Quarry Risk Assessment ........................................................................................... 38
7.3 Service Planning........................................................................................................ 39
7.4 Asset Management.................................................................................................... 39
7.5 Financial Management .............................................................................................. 41
7.6 Capability & People Management .............................................................................. 47
7.7 Management Systems and Compliance .................................................................... 51

8 Possible Sale of the Shepton Quarry ................................................................................. 53
8.1 Overview ................................................................................................................... 53
8.2 Assessing Any Expressions of Interest for Shepton ................................................... 54
9 Performance Measurement ................................................................................................ 56
10 3-Year Program of Initiatives .............................................................................................. 58
11 Governance and Oversight ................................................................................................ 63
12 Appendix A – Documents Reviewed .................................................................................. 64
13 Appendix B – Council’s Risk Framework ............................................................................ 66
14 Appendix C – Legislative and Other Obligations ................................................................ 67
15 Appendix D – Long Term Financial Plan Outputs ............................................................... 68

Schedule of Changes & Amendments
Version Date Changes/Amendments Author Accepted By
Inxure Strategy
V0.1 June 2019 Draft Strategic Business Plan
Group
Initial review by Coordinator CHRC – Joe

V0.2 July 2019
Operations – Shepton Quarry Newman
Review by Commercial Analyst – CHRC –

V0.3 July 2019
minor updates to financial information Andrew Gissel
CHRC –
Review by General Manager Customer
V0.4 July 2019 Michelle
and Commercial Services
Webster
August CHRC – Kerry

Inclusion of QTC long-term financial
V0.5 Dobinson /
2019 modelling
Andrew Gissel
September Review by General Manager Customer CHRC –

V0.6 and Commercial Services – minor Michelle
2019 updates to formatting Webster
September Prepared for endorsement – template, CHRC – Kelly

V1.0 Gray
2019 schedule of changes
September CHRC –
V1.1 Update to column layout of risk table Andrew Gissel
2019
Endorsement Table
Name Title Endorsed & Signature Date
General Manager Customer and

Michelle Webster
Commercial Services
Coordinator Operations –
Joe Newman
Shepton Quarry

1 The Quarry’s “Plan on a Page”
This business plan is for Central Highlands Regional Council’s Quarry business activity including:
• The Shepton Quarry, which provides a mix of products external to Council and to Council
itself;
• The Mungabunda Quarry which provides products directly to Council; and
• The various borrow pits that are quarried to also provide services directly to Council.
This Business Plan has a 3-year duration and has been developed to enable the Business Unit
to:
• Deliver upon the relevant elements of Council’s Corporate and Operational Plans;
• Gain agreement on the long-term aspirations and desired outcomes for the business;
• Ensure a line of sight from the overall objectives to the day to day operations; and
• Provide a basis for decision making to continuously improve the business unit’s operations
and as such, inform long term capital and operational expenditure plans.
Figure 1 is the Quarry Business’s “Plan on a Page”, which is a diagrammatic representation of

the overall Business Plan. This Figure also shows the key initiatives that are to be pursued over
the life of this plan. Features of this Business Plan include:
• The vision and objectives reflect the fact that the Quarry provides public value, beyond that
of a private sector run business activity. However, the Quarry must run with the discipline
of a private sector organisation;
• The importance to the Central Highlands Region of Council owning their own quarry is two-
fold.
o Firstly, it ensures there is a constant provider of high quality and compliant quarry
products to the region. This benefit is demonstrated by the fact that a number of
customers who have corporate goals of ensuring ethical and compliant purchasing
practices, that are customers of the quarry;
o The second benefit is that it is able to ensure the market for quarrying products remains
competitive and stable in all circumstances. Other regions have seen excessive pricing
during periods of high demand, such as when needing to respond to flood events or a
spike in the local economy;
• To ensure its competitiveness, the quarry must compete in the open market. However, it
must do so profitably. Otherwise Council’s ratepayers are subsidizing the provision of
quarrying products to the broader market. As such there is a performance target set for
the operation of the Shepton Quarry, that over 60% of its sales must be external to Council;

• A key aspect of the quarry is both its compliance with the various legislative requirements
involved in running a quarry, and high quality of the products it provides. Both
considerations feature in the vision and objectives; and
• It is also important that the quarry is financially sustainable into the longer term. To this
end, there is an objective focusing on maintaining investment in the facility to ensure the
desired levels of service are maintained.
It should be noted that this plan is based on a robust foundation, with the quarry business activity
recording robust financial outcome for the 18/19 financial year. If movements in inventory are
netted off the results, then the business activity recorded net earnings of $300,000. Furthermore,
Shepton recorded a positive turnaround of $680,000 compared with budget (net of movements in
inventory). This was based on a doubling of sales compared with budget. This has been achieved
in a flat market, which has not been influenced by an increase in mining activity or other factors
such as flood repair works.
This business plan assumes the Shepton Quarry remains part of the overall Quarrying business
activity. It is noted that Council is currently working through an Expression of Interest process for
the possible sale of the Quarry. This EoI process will have the following implications for the quarry
business activity and Council, that need to be noted as part of this plan:
• In the 18/19 financial year, Shepton made up 61% of total Sales for the Quarry business
unit. Furthermore, the remaining sales from Mungabunda and Council’s borrow pits, are
exclusively to Council. If Shepton was sold, the Quarry Business would no longer
constitute a business activity as defined by Council’s Water Reform and Competition
Policy. The unit would become an internal service provider - principally to the Infrastructure
and Utilities division of Council;
• It is noted that during the Expression of Interest process, Council has put a freeze on any
capital expenditure and appointment of permanent staff within the Quarry business. While
this is most likely an appropriate course of action, it must be noted that it is both inefficient
and is holding the Quarry business back from achieving its longer-term goals. The
business unit is having to appoint contractors at a high cost and a lack of capital investment
means that the asset service potential is being run down and opportunities for growth are
being delayed or missed. It would be important that council expedite the sale process to
provide certainty for the business unit, one way or another;
• If Council were to sell the Shepton quarry business, it would lose a revenue stream that
currently covers a range of costs that that must continue to be covered after a sale process
(these costs are spelt out in further detail in section 8.2 of this plan). There is an estimated
$4million worth of costs that are covered by the current revenue stream from Shepton.

These include, corporate overheads, interest on the current loan for the quarry, discounts
on product provided to Council, and a profit steam that partly covers the principal for the
quarry loan;
• There are also a range of intangible benefits that would be lost such as quarrying expertise
and an economy of scale that helps lower production costs at the remaining quarrying
activities; and
• Any sale will have balance sheet implications for Council, which should not be overlooked.
An overall asset write-down will be required. Should the value of this write down exceed
the sale price, then Council would record a one-off loss in the year of the sale. While it
would be a “paper” loss, it would potentially have broader reputational impacts for Council,
particularly if it puts the entire Council position into a loss for the year.
Figure 2 provides the performance measures that will be used to assess the Quarry’s
performance over the life of this plan. These performance measures map back to the plan’s
objectives and 3-year outcomes. These performance measures will enable the Quarry to maintain
and report on a “balanced scorecard” of financial and non-financial performance measures.
This result should position the Quarry well to realise its objectives of being a profitable business
unit and applying competitive pressure on quarry product prices across the region. Furthermore,
it provides a sound platform for considering a number of the growth opportunities outlined in 7.3
of this plan.

Vision Objectives 3 Year Outcomes Key Initiatives
Evolve service offerings that meet

customer’s needs
Provide competitively
priced, high-quality • Review options for new services
quarry products Ensure competitive pricing for the Quarry
across the Central Business’s products and services • Grow existing markets
Highlands Region
Provide high-quality products
• Assess & re-value rehabilitation liabilities across the

Maintain service levels through
quarrying operations
appropriate levels of investment
To safely and
• Review investment decision-making processes
profitably provide
competitively priced, Provide fit for • Review resourcing requirements for the business
high-quality quarry purpose, safe and
products for the compliant quarry • Develop a 5 to 10-year Renewals Program
facilities Maintain appropriate levels of compliance
benefit of the Central
with all requirements • Develop a revised performance reporting regime
Highland’s region
• Resource the support services functions
• Develop a Talent Management Plan
• Restructure financial reports

• Develop EOY Reports for the business unit
Ensure on-going
Run the business activity profitably • Develop a dynamic long-term financial plan
profitability
• Optimise the Depreciation charge
• Review application of Commercial Policies
Figure 1 - The Quarry's "Plan on a Page"

Performance
Vision Objectives Targets Explanation
Measures
• Product
• The product growth measure is aimed at ensuring the business unit
growth
Provide continues to innovate and adapt to meet its customer’s needs
competitively • External • 1 / year
• Maintaining external sales from Shepton above 60%, ensures the
priced, high- Sales / Total
• >60% Quarry’s rates are market competitive and thus sets the benchmark for
quality quarry Sales
what it charges Council for its products
products across • 100%
• Achieve
the Central compliance • Product quality is an important differentiator for the Quarry and is thus an
MRD’s
Highlands Region important performance measure. The key benchmark is the Main Road’s
quality
Specifications
specifications
To safely and
profitably provide
• The Asset Sustainability Ratio reflects the service and financial
competitively • Asset
priced, high- sustainability of the business unit. Specially this measures the actual
Sustainability
quality quarry renewal spend, plus reserves set aside for depreciation, divided by the
Ratio
products for the Provide fit for • 90% depreciation allowance
benefit of the purpose, safe and • Material audit
• Zero • Being compliant with its many obligations is critical for the business
Central Highland’s compliant quarry non-
activity and this target is focused on ensuring there are no material audit
region facilities compliance • Zero non-compliances
• Lost Time
• Safety is an important outcome for Council and the target always needs to
Injuries
be one of zero harm
• Current • >1.5
• (Current assets / current liabilities) reflects the liquidity or solvency of the
assets /
Ensure on-going current • 5 to 15% business unit
profitability liabilities • This KPI reflects the profitability of the business unit as a percentage of
the business’s equity
• NPAT/Equity
Figure 2 - The Quarry's Performance Measures

2 Glossary of Terms
Terms within this plan have the following definitions:
Business Activities Council’s Competition and Water Reform Policy defines business
activities as those which trade in goods and services to clients and
could potentially be delivered by a private sector firm for the purposes
of earning profits in the absence of Council’s involvement. This
definition implies that there is a charge for and thus direct revenue from
the goods and services traded by those Business Units.
Business Units Those groups within Council with the lead carriage for each of the
business activities identified above.
Commercial Service The provision of services in a highly transparent and efficient and
Provision effective manner. Such transparency should be achieved through clear
directives from Council and robust financial and non-financial reporting.
A commercial Business Unit can be run either “for profit”, or “not for
profit”. Such outcomes should be defined by Council on a case by case
basis.
Community Service A Community Service Obligation (CSO) arises when Council wants a
Obligation Business Unit to carry out activities that they would not do on a
commercial basis. A CSO should be based on a directive by Council
and provide broader social benefit or community value to the region.
Community Value The broader value a Business Unit might provide to the region that is
beyond any direct commercial benefit that Council may receive from
the Business Units.
Business Model How a business creates value for its customers through its service
offerings, marketing strategies and tactics, pricing, and value
proposition

Operating Model How a business delivers value as defined by its Business Model by
having the right capability and capacity which consists of people,
processes, systems and structures
Market Scan The gathering of intelligence in relation to a business’s current and

prospective markets, competitors and business collaborators
Competitive Competitive neutrality is about ensuring government owned monopoly

business activities do not have a competitive advantage over the
Neutrality
private sector due to their government ownership or monopoly powers

3 Purpose and Background
3.1 Purpose of this Plan
This plan is for CHRC’s regional Quarrying operations, including:
• The Shepton Quarry, which provides a mix of products external to Council and to Council
itself;
• The Mungabunda Quarry which provides products for Council’s own use; and
• The various borrow pits that are quarried to also provide products directly to Council.
This Business Plan has been developed to enable the Business Unit to:
• Deliver upon the relevant elements of Council’s Corporate and Operational Plans;
• Ensure that there is an understanding across Council on the long-term aspirations and
desired outcomes for the Quarry Business;
• Set the service requirements to help inform other key strategies such as asset
management, financial management, people management and governance;
• Ensure a line of sight from the overall Quarry Business’s objectives to its day to day
operations; and
• Provide a basis for decision making to continuously improve Quarry’s operations and as
such, inform long term capital and operational expenditure plans.
Inxure Strategy Group was engaged by Council to develop Strategic Business Plans for three
business units of Council (the Quarry Business, Emerald Airport and Saleyard). It was requested
that the plans:
• Be for a period of 3 years;

• Include Business Development Plans including business growth opportunities and key
customer relationships and business networks;
• Involve an assessment of the Long-Term Financial Sustainability of the business units;
• Include a consideration of strategic risks;
• Recommend commercial and financial policies that would support more effective operation
of the business units;
• Define performance measures; and
• Consider structural options to increase the commercial focus.

3.2 Process for Developing the Plan
The following steps were used to develop this plan:
• A review of documentation was undertaken;

• An inspection of the Shepton Quarry was conducted on 15 May 2019;
• Four days of interviews with various CHRC staff and external stakeholders were
conducted;
• A workshop was conducted on 17 May 2019 with CHRC staff and representatives of the
three business units; and
• Findings were developed from the above actions.
This Business Plan has been developed using a generic 3-step process, as represented by the
following diagram. This is typical for most strategic planning exercises.
Future
•Assess the current state of the
business and its service
Aspirations •Develop a work program to
bridge the gap between current
outcomes •Set goals & objectives the state and future aspirations for
•Base this on input from staff and Quarry Business the Quarry Business
a range of reports undertaken •Base this on Council plans and •Prioritise the program based on
over the last 5 years input from various Council risk
stakeholders
Current State Work Program
Figure 3 - The Business Planning Process
3.3 Plan Structure (the Value Model)

The analysis of the Quarry Business has been based around what Inxure refers to as the ‘Value
Model’. The model is represented in the following diagram. The purpose of the model is to enable
a structured and coherent consideration of the important facets which must align and culminate
to allow the quarry services to provide value to CHRC and its key stakeholders. If there is any
misalignment across the elements of the Value Model, it is highly unlikely the optimum level of
value will be delivered. Ideally to achieve this alignment, the Business Model and then Operating
Model should cascade from one to the other and be developed from the overall vision and strategy

for the business unit. This avoids an outcome of “the tail wagging the dog”, which can lead to
perverse outcomes for the overall CHRC businesses.
Components
• Overall Strategic Direction

• Strategy and tactics
• Brand
• Risk Appetite
Vision &
Strategy
(Purpose)
• Product offerings
• Market strategies and tactics
Business Model • Pricing plans
(How value is created) • Customer value propositions
• Financial management
• Resourcing talent management
Operating Model • Business Systems (Project/Risk/Quality
(How value is delivered) Management)
• Systems
• Governance (Board, Committees, Programs)
• Performance (Value) Measurement
Core Operations & Projects
(Delivery)
Figure 4 - The Value Model
For CHRC, its overarching vision is realised through a combination of plans including the
Community Plan and Corporate Plan. CHRC’s vision is “to be a progressive region creating
opportunities for all”. Hence the value the Quarry Business delivers must align with that vision.
Once the value is determined (which is a combination of markets, products, services and price),
the Operating Model shapes how the value is delivered upon.
It is important that the Value Model be worked through iteratively – testing the alignment of each
of the facets. If for example CHRC sets goals that are not feasible – then the Quarry Business
may be set up to fail. Therefore, it may be necessary to reconsider the vision and strategy for
Quarry Business, based on a robust analysis of the Business Model and the Operating Model.
This report is structured around the facets of this “Value Model”. The CHRC’s vision and strategy
for the Quarry is discussed in section 5 of this report. The Business Model is then addressed in
section 6 and the Operating Model in section 7.

4 Overview of the Quarry
4.1 CHRC Region
The Central Highlands Regional Council was established in March 2008 based on the
amalgamation of four previous local government areas (the Shires of Bauhinia, Duaringa,
Emerald, and Peak Downs). The region encompasses an area of 59,968 square kilometres and
is bounded by the Rockhampton region and Banana Shire to the east, Isaac Shire to the north,
the Blackall Tambo region to the west and the Roma region and Murweh Shire to the south. It is
home to around 30,000 people most of whom live in the thirteen communities of Arcadia Valley,
Bauhinia, Blackwater, Bluff, Capella, Comet, Dingo, Duaringa, Emerald, Rolleston, Sapphire
Gemfields, Springsure and Tieri.
The region is rich in minerals and forms part of the Bowen Basin supporting a globally competitive
coal industry. The region also has the largest sapphire-producing fields in the Southern
Hemisphere.
4.2 Quarry Background

The following section of the plan describes the quarry business. It is made up of a range of quarry
sites (with a key part of the business being the Shepton and Mungabunda Quarries) and borrow
pits.
Shepton Quarry was established by the former Peak Downs Shire Council in 1991. The Quarry
is located 25km east of Capella and 40km north of Emerald. The site incorporates a large open
cut pit, a fixed crushing plant, office facilities and weighbridge. The Quarry resource is rock that
is olivine basalt, a basic igneous rock described as strong, hard and durable. Quarry resource
mapping in 2014 confirmed resources at 39 million tonnes. This would allow for an 80-year life of
the Quarry based on an estimated 500,000 tonnes per year. Shepton Quarry, in the heart of the
Bowen Basin, supports product delivery to Capella, Emerald, Clermont and surrounding areas.
The quarry supplies NATA certified, hard rock product from a high-grade geological source for
civil and road building and maintenance projects.
The fixed crusher plant is a feature of the Shepton Quarry and represents a significant investment
in materials and equipment that was seen to be viable when the quarry was achieving high
production levels. Much of the value from the fixed plant is derived from its current use, and the
underlying infrastructure (concrete support pads etc) would have little salvage value. A key
learning from the installation of the fixed crusher plant investment is that future decision making
associated with major investments should be supported by a well-developed business case
providing analysis on projected returns on investment for various future demand scenarios.

In late 2014, due to the market decline for products from the Quarry site in Capella, Shepton
Quarry diversified its internal supply operations within Council. A Quarrying license was
developed with a local property owner to undertake extraction activities at a project site known as
‘Deep Creek’ and produced 130,000 tonnes of road base material for the Arcadia Valley Road
project. This project was effectively a demonstration model of how quarry operations can be
diversified internally for the benefit of Shepton Quarry revenues and the provision of quality
product and controlled supply costs to other Council departments.
Further diversification has involved establishing operations at Mungabunda to ensure supply to

the southern part of the Central Highlands Region. A development permit was issued in July 2017
for operations at Mungabunda. The quarry was formerly used as a borrow pit for secondary roads,
however the site was found to have the potential to become a reliable source of quality road
maintenance and construction materials. This included works undertaken in the far south-east of
the Central Highlands region under the Natural Disaster Relief and Recovery Arrangement
(NDRRA) scheme. The geology of Mungabunda Quarry is basic volcanic igneous rock known as
olivine basalt, which is made up of hexagonal cooling column prisms referred to as columnar
basalt deposits. General quarrying practices have been established within the Mungabunda lease
area together with provisions for drill blast, mobile crushing and screening equipment to be
operated on a campaign basis. The quarry is certified to supply material for the Queensland
Government’s Department of Transport and Main Roads works and has recently become a
preferred supplier to Banana Shire Council.
Further gravel borrow pits (about 300 sites) are located throughout the Central Highlands region.
These sites are under the control of Council and are largely used for maintenance of Council’s
unsealed road network.
Whilst the quarry operations were initially established to provide aggregate and road base in-
house to council’s infrastructure and waste service areas, increasingly activities have expanded
to supply commercially to mining operations, Qld Department of Transport and Main Roads and
the public. Key customer groups include:
• Mining
• Local government
• State government
• Road construction
• Building construction
• Concrete manufacture
• Extractive industry

4.3 Site and planning
The Shepton quarry occupies a 64.74ha site area on land described as Lot 2 of SP 164551 and
incorporates the following major developments:
• Pit 1: a smaller work area in the south-western portion of the site;

• Pit 2: a deep, open cut pit extending down the southern portion of the site; and
• Northern Pit: a large, open cut pit at the north of the site (current operations).
The Quarry is leased under a 30-year lease agreement which expires on 30 September 2040.
The lessors are Kenneth John Ross and Jo-Anne Phoebe Ross. The lease agreement allows for
5 extensions of 10 years each which covers the total expected life of the Quarry. The lease is
transferable subject to the lessor’s consent.
The Mungabunda Quarry is located on ‘Cowandilla’ approximately 25 kilometres from Bauhinia.

The site is located at 1203 Mungabunda Road, Rhydding on land described at Lot 6 on BH108
and is leased under a 5-year agreement.
Council has in the order of 300 borrow pits across its region. Compliance audit of the borrow pits
is planned to be undertaken. Quarry may in future undertake a role in compliance management.
4.4 Quarry sales

4.4.1 Current Sales
Demand for quarry products is linked to the economic activity within the mining and construction
sectors and the follow-on effect of increased urban development. Following what is referred to
as a resources ‘boom’ that peaked in 2012, the region has experienced a significant retraction
within these sectors until recently. In addition, significant investment in public infrastructure in
the region was initiated due to flood damage to roads between 2008 and 2015 within the Central
Highlands Region, amounting to $165M in road construction works. With this work nearing
completion, a decline in Government spending on road infrastructure at both State and Local
levels will continue to impact on demand for quarry products.
These drivers for demand had a strong impact on sales between 2009 and 2012. From 2013/14,
demand for products dropped off, but since then sales have been increasing by around 9% per
annum. The 18/19 financial year has seen a significant jump in production to:
• 195,000 tonnes for Shepton; and

• 11,000 tonnes for Mungabunda.

The following table shows the breakdown of sales (by percentage) from the three components of
the Quarry Business. This breakdown is by internal and external sales. The table also shows
the percentage that each component makes up of total sales. These figures are based on the
18/19 financial year performance.
Item Shepton Mungabunda Council Total

Borrow Pits
External Sales (%) 60% 0 0 36.6%
Internal Sales (%) 40% 100% 100% 63.4%
% of Total Sales 61% 4% 35% 100%

Table 1 - % Sales for the Quarry Business - 18/19 Financial Year
One of the objectives of this Business Plan is to ensure the Quarry business’s products are
competitively priced. This is a key feature for ensuring the Quarry business delivers value back
to Council. As there is a competitive market for quarry products in the Central Highlands region,
the most effective means of ensuring the Quarry business’s prices are competitive, is for it to
compete in this market.
As the table above shows, 60% of the product from Shepton is sold externally. This translates to
over 35% of total sales for the business unit. The Quarry business in turn provides Council with
a $1.50 per tonne discount on the products sold internally for its infrastructure requirements. To
maintain this competitive pressure, a target of 60% has been set for external sales from Shepton.
4.4.2 Future Demand
Future demand of Quarry products within the region is identified through the following potential
opportunities:
• Galilee Basin mining – rail development;

• Upgrade of Gregory Highway between Emerald and Clermont;
• Upgrade of Blackwater Rolleston Road;
• Upgrade of Tambo Springsure Road;
• Gas development projects throughout the Region; and
• Council internal projects.

Regional economic trends may play some part in future demand for quarry products. According
to REMPLAN economy1, a number of regional economic indicators for Gross Regional Product
(GRP, Building Approval (residential and non-residential) and population peaked between around
2010-2013. As shown in the figure below, the subsequent downturn is showing signs of
abatement with trends indicating small percentage increases in population, building approvals
and GRP for the region.
Trends for Central Highlands region

300.00%
250.00%
200.00%
150.00%
100.00%
50.00%
0.00%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
-50.00%
-100.00%
-150.00%
GRP % Change Residential Buiding Approvals

Non-Residential Building Approvals Population % Change
2 per. Mov. Avg. (GRP % Change) 2 per. Mov. Avg. (Residential Buiding Approvals)
Figure 5 - Central Highlands Economic Trends
In summary, the operating environment for the quarry has experienced significant flux in recent
years, as the regional economy adjusts to a post resources boom period, together with on-going
planned investments in public infrastructure. That said, a further adverse event associated with
flooding is likely to result in immediate demand for quarry products as part of any reconstruction
efforts.
1 https://www.economyprofile.com.au/centralhighlands/trends/gross-regional-product

4.5 Previous Quarry Review
In 2013, Edge Advantage undertook a review of Council’s three commercial businesses, including
the quarry, to review the markets, operations and financial performance of these assets and to
assess a range of options for each asset against specific criteria. A number of turnaround
strategies were proposed to improve business performance (see Appendix A). As a result, a
number of changes have been implemented included the assignment of delegated authority to
the Operations Coordinator - Shepton Quarry and the General Manager of Customer and
Commercial Services. These improvements appear to be effective, with a corresponding turn
around in financial performance for the Quarry business in the 18/19 financial year (as discussed
in further detail in the following sections).
Furthermore, in early 2019, an Expression of Interest process was commenced seeking

submissions from the private sector to operate the Shepton Quarry operations.

4.6 SWOT Analysis
A high level, strategic level assessment of the strengths, weaknesses, opportunities and threats
for the Quarry Business has been developed as follows.
Strengths Weaknesses
• Quality of Shepton product - basalt and • Location of the two quarry sites-
other products limitations to the area that can be
• The capabilities of the existing crushing serviced
plant allow the ability to provide a range • Limited agreement that quarry
of products operations contribute to core Council
• Ability to provide mobile crushing operations
services at multiple locations • The quarry is subject to OHS
• Securing of some 300 pit sites across the requirements of the Mining Act that is
region more stringent than Council’s statutory
• Capability and experience of staff (ex framework
Holcim) • Lean staffing levels- loss of key staff is
• Council’s delegation to adjust pricing to an issue
meet market conditions • IT, communications and services
• Customer focus and lowering of limitations to remote locations
production costs
Opportunities Threats
• Pre-coat aggregate production • Environmental licensing requirements

• Ability to meet specification for HPV • Fluctuating markets
pavements • Impediments to further mining activity
• Expanding customer base- mines, other
councils
• Piloting of mobile crusher for potential
investment
• Collaborations with other businesses to
provide products that meet market
demands

5 Purpose of the Quarry
5.1 Overview
As outlined in Section 3 of this report, Inxure has used the “Value Model” as the framework for
guiding this overall assessment (see diagram below). As this model depicts, a key starting point
for any business is having a clear purpose via a well-defined vision and strategy.
Components

• Brand
• Risk Appetite
Vision &
Strategy
(Purpose)
• Systems
(Delivery)
Figure 6 - Value Model - Focus on Purpose
The Value Model sees the purpose (or vision and strategy) being made up of:
• A clear overall strategic direction or vision for the Quarry Business;

• An understanding of how it links to Council’s overall Strategic Framework and then into
tangible and implementable actions and targets; and
• A clear risk appetite and tolerance (i.e. what strategic risks will the organisation take and
not take in respect of the Quarry Business).

5.2 Council’s Strategic Framework
Council’s Strategic Planning Framework provides a corporate context for the Quarry Business
Plan. This framework is shown below and is taken from the 2017 to 2022 Corporate Plan.
Figure 7 - Council's Strategic Framework
The Central Highlands 2022 Community Plan is a region-wide plan with outcomes and goals
forming the basis of a long term ‘road map’ setting out the steps for the community to achieve its
vision. The Community Plan involved extensive community consultation and sets out the priorities
for each of the region’s 13 individual communities.

Council’s Corporate Plan sets the strategic direction for Council and provides a number of
actions and strategies to ensure the region is socially, economically and environmentally
sustainable. It is the principal planning tool to guide decision making and balance the delivery of
services with available resources and other variables in Operational Plans. Council has six
strategic priorities as set out in the Corporate Plan. These are:
• Strong vibrant communities;

• Building and maintaining quality infrastructure;
• Supporting our local economy;
• Protecting our people and our environment;
• Leadership and governance; and
• Our organisation.
The Quarry Business Plan fits between the “Management Plan” and “Annual Operating Plan”
levels of Council’s overall Strategic Planning Framework. That is, the Quarry Business Plan is
guided by the Community Plan, Corporate Plan and Council’s Management Plans. The Business
Plan in turn informs the Annual Operational Plan, Budgets and Staff Performance Plans.
5.3 Regional Public Value of the Quarry Business

Business planning within the public sector needs to account for the broader public value that an
organisation delivers to the communities it serves. Bennington (2009)2 defines public value as a
concept that ‘extends beyond market economic considerations, and also encompasses
ecological, political, social, and cultural dimensions of value - all that adds value to the public
sphere’.
A clear indicator of the broader value that the quarry provides to the local and regional economy
is evidenced by its financial performance whereby external customers comprise 35% of the
quarry’s overall revenue. A range of factors underpin the attraction to broader industry customers,
however the quality of the product combined with the systems and processes that have been put
place to meet regulatory standards - means that contractors undertaking works for government
or mining operations include decision criteria that take account of quality of product and systems.
2
Benington, J., 2009. Creating the public in order to create public value? Intl Journal of Public
Administration 32, 232–249

It may also be noted that quarry operations have been retained by a number of councils across
Australia. Some examples include Whitsunday Regional Council (Foxdale Quarry), Brisbane City
Council (Bracalba Quarry), Campaspe Shire Council (Mt Scobie and Nanneella Quarries) and
Snowy Monaro Regional Council (Middlingbank Quarry), to name a few. In these cases, it would
follow that a clear public value motive drives a view to retain these facilities as part of council
operations.
For the Central Highlands, council’s quarry operations may be seen to deliver public value to the
local community in terms of Council’s Strategic Priorities as follows.
Council Strategic Quarry’s Public Value

Priorities
Strong vibrant
• The quarry business supports the local economy through
communities
collaborative partnerships with the business community
Building and
• The quarry operations ensure that good quality, cost effective
maintaining quality
materials are available to council and the wider industry
infrastructure
• Quarry materials contribute to durable pavement assets with lower
maintenance costs
Supporting our local

• The quarry business ensures cost effective quarry materials are
economy
critical in the construction of economic infrastructure
• Quarry products are critical to supporting a resilient regional economy
when faced with adverse climate events by ensuring stable pricing
during such events
Protecting our people

• Safety is critical in quarry operations
and our environment
• Through a focus on rehabilitation programs, Council seeks to leave
sites in better condition than before
• The water resources within the quarry provide a contingency water
supply in drought
Leadership and
• Council’s quarry products are produced based on robust Quality
governance
Assurance systems and processes
Our organisation
• The quarry business provides consistent high levels of customer
service in accordance with CHRC’s Customer Service Charter
• CHRC’s systems and processes provide industry with confidence
when using quarry services

5.4 Quarry’s Vision and Objectives
Previous plans3 have identified the Quarry’s vision as being “To provide a safe operating Quarry
that maximises opportunities for efficient and cost-effective production practices, that meets the
needs of both our internal and external customers”. This is to be delivered through the following
objectives:
• Ensure the Quarry Business and its operations meet all legislative requirements;
• Ensure planning of Quarry operations meets production targets in the most efficient and
cost-effective manner;
• Develop and maintain strong customer relationships to optimise opportunity for ongoing
sales;
• Produce quality quarry products within determined specification and customer needs;
• Develop operator training plans to ensure competent and skilled quarry operators;
• Develop and maintain preventative maintenance plans to ensure optimal production from
Quarry plant and equipment;
• Regularly review cost of production information to ensure competitive pricing and
achievable profit targets;
• Ensure operation in accordance with the Quarry’s Quality and Safety Management
Systems.
The vision and objectives for the current business plan are set out in Figure 8 below. These have
been based on the analysis of the Quarry Business’s links to Council’s Corporate Plan, the public
value it offers, and consideration of the objectives outlined in the Quarry’s 2014 Business Plan.
An explanation of this vision and the associated objectives and outcomes is provided below:
• The vision and objectives reflect the fact that the Quarry provides public value, beyond that
of a private sector run business activity. However, the Quarry must run with the discipline
of a private sector organisation;
• The importance to the Central Highlands Region of Council running their own quarry
operations is two-fold.
o Firstly, it ensures there is a constant provider of high quality and compliant quarry
products to the region. This benefit is demonstrated by the fact that a number of
3 Quarry Business Plan 2015

customers who have corporate goals of ensuring ethical and compliant purchasing
practices, that are customers of the quarry;
o The second benefit is that it is able to ensure the market for quarrying products remains
competitive and stable in all circumstances. Other regions have seen excessive pricing
during periods of high demand, such as when needing to respond to flood events or a
spike in the local economy;
• To ensure its competitiveness, the quarry must compete in the open market. However, it
must do so profitably. Otherwise Council’s ratepayers are subsidizing the provision of
quarrying products to the broader market. As such there is a performance target set for
the operation of the Shepton Quarry, that over 60% of its sales must be external to Council;
• A key aspect of the quarry is both its compliance with the various legislative requirements
involved in running a quarry, and high quality of the products it provides. Both
considerations feature in the vision and objectives; and
• It is also important that the quarry is financially sustainable into the longer term. To this
end, there is an objective focusing on maintaining investment in the facility to ensure the
desired levels of service are maintained.

Links to Council’s Strategic
Vision Objectives 3 Year Outcomes
Priorities
Evolve service offerings that meets customer’s

needs
Provide competitively priced, high- • Strong vibrant communities
quality quarry products across the Provide high-quality products
Central Highlands Region • Supporting our local economy
Ensure competitive pricing for the Quarry

To safely and profitably Business’s products and services
provide competitively
priced, quality quarry
products for the benefit of Maintain service levels through appropriate
• Building and maintaining
the Central Highland’s levels of investment
Provide fit for purpose, safe and quality infrastructure
region
compliant quarry facilities • Protecting our people and
Maintain appropriate levels of compliance with
environment
all requirements
• Leadership and governance

Ensure on-going profitability Run the business activity profitably
• Our organisation
Figure 8 - Quarry's Vision and Objectives

6 The Business Model
6.1 Overview
This section of the report focuses on the Business Model for the Quarry Business - or how value
is created (as depicted in the diagram below). Specifically, it examines:
• The value proposition to customers and the region;

• The products and services offered by the Quarry Business;
• Marketing strategy and tactics; and
• The pricing strategies.
Components

• Brand
• Risk Appetite
Vision &
Strategy
(Purpose)
• Systems
(Delivery)
Figure 9 - The Value Model focusing on The Business Model
An understanding of the basis of the value proposition for the Quarry Business Unit will inform the
group’s business model. As outlined in the previous section, the general principles underpinning
the Quarry’s business model include:
• The Quarry Business provides wider community value, and this should be built upon; and
• The Quarry is a commercial business unit seeking to be commercially self-sufficient of
Council and to run profitably.

The business model is best represented by the “4Ps of the marketing mix”. The following table
summarises the 4Ps model. The following sections analyse each of these elements in further
detail for the Quarry Business.
Category Definition Typical Marketing Decisions

Product Refers to an item that satisfies the Product quality
consumer's needs or wants. Products Product assortment – product range,
may be tangible (goods) or intangible product mix, product lines
(services, ideas or experiences). Branding
Associated services (complementary
service, after-sales service, service
level)
Price Price refers to the amount a customer Price strategy & tactics
pays for a product. Price may also refer Payment terms – credit, payment
to the sacrifice consumers are prepared methods
to make to acquire a product (e.g. time
or effort). Price should also include
considerations of perceived customer
value
Place Refers to providing customer access Market coverage
and considers providing convenience Transport, and logistics
for the consumer
Promotion Promotion refers to marketing Promotional mix - appropriate balance
communications and the associated of advertising, PR, direct marketing and
channels to market sales promotion
Message strategy - what is to be
communicated
Channel/ media strategy - how to reach
the target audience & frequency
Figure 10 - 4Ps Marketing Mix*
* Adapted from Needham, Dave (1996). “Business for Higher Awards”. Oxford, England: Heinemann

6.2 Product
6.2.1 Overview
The Quarry produces quality basalt rock products that are angular in shape and very strong, ideal
for road base as the pieces lock together which enhances road durability. Basalt is a dark-
coloured, very strong, fine-grained igneous rock, and is also used for concrete aggregate, asphalt
pavement aggregate, railroad ballast, filter stone in drains, and many other purposes. The Quarry
has approval from the Department of Transport and Main Roads for the production of aggregate
for the production of hot mix (asphalt) by others.
The quarry business is capable of producing quality ‘in specification’ road base products and
delivering material supply at controlled costs internally to Council. Products meet the following
technical specifications:
• Queensland Department of Transport and Main Roads specifications - MRTS70 Concrete

• Queensland Construction specifications - C242 Flexible Pavement
• Queensland Department of Transport and Main Roads specifications - MRTS22 Supply of
Cover Aggregate
• Queensland Department of Transport and Main Roads specifications - MRTS05 Unbound
Pavements.
A key feature of the Shepton Quarry operations is the fixed crushing plant comprising four
crushers and associated conveyors and operating plant. As such it is capable of (but not limited
to) producing the major products outlined in Table 1 below.

Material Description
Dust Crusher dust<5mm
Minus 11<10mm
Concrete Aggregate Concrete Aggregate 12mm & 22.5mm
Gravel Base Gravel (Type 2.1)

Base Gravel (Type 2.2)
Top 600
Minus 40mm Base Gravel
Unspec gravel
Screenings Un-precoated:7mm, 10mm,14mm, 16mm, 20mm
Screening mixes 7/10mm mix

12/24 mm
Rock Dumped shot rock
Gabion rock
Minus 100mm
Minus 75mm
Ballast Ballast 25-50 mm
Ballast mix 16/25-50mm
Table 2 - Quarry's Major Products
6.2.2 Opportunities for product growth
The Quarry Business has identified the following growth opportunities:
• Producing Manufactured Coarse Sand;

• Rail Ballast that may be loaded at a local rail siding;
• Provision of material for Concrete Manufacturing plants; and
• Internal supply to Council Departments.
The quarry business has previously supplied precoated aggregate for road pavements. This
market is seen to be highly profitable, and plans are currently in place to re-establish facilities for
pre-coated aggregate production.
The further development of the mobile quarry production model has been identified as a key
opportunity that can provide significant value to Council internal operations and road construction
operations throughout the region. The use of mobile crushers has now been effectively piloted by
the quarry business unit adding to a more diversified product mix with potentially lower cost due
to lower transport costs.

6.3 Price
Although the Quarry Business’s products are of good quality, this generally will not necessarily
motivate the customer to pay a premium price for better quality product. The quarry industry has
become highly competitive and price has become a key differentiating factor, followed by quality
of product and customer service. The need to understand cost of production expenditures is
critical to the development of the commercial price, as well as informing profit margins when
negotiating variable and competitive pricing.
In May 2014 a flexible pricing model was implemented by Council to facilitate the Quarry
Business’s competitiveness within the quarry product market. Council’s pricing policy ensures
that certain delegated authorities are available to officers in order to respond to market soundings
for products in a timely and competitive manner.
The Quarry Business has a production cost model for different modes of production. Pricing is
based on this model, plus an appropriate margin, depending on the market. Delegations are then
set for both the Operations Coordinator – Shepton Quarry and the General Manager Customer
and Commercial Services in respect of approving the final price for products. It is also noted that
over 60% of Shepton’s products are sold into an external competitive market, which also places
downward pressure on prices.
6.4 Place and Accessibility

Extractive resources are essential to the State and regional economies, and the community, as
the primary raw materials for the construction industry. The extractive industry does not have
flexible location options, because the extractive resources are fixed, finite and are limited in
occurrence.
Quarries provide a range of extractive materials, such as sand, gravel, crushed rock and clay,
which are processed and used as raw inputs for buildings and construction, agriculture and
industrial purposes. It is estimated that 90% of the output from quarries in Australia is used within
the building and construction industries. These extractive resources (or aggregates) include
processed rock, gravel and sand products that are used to build houses, schools, roads, bridges,
commercial and industrial buildings, airports, railways and other basic infrastructure.
Unlike mining for metals or coal, extractive materials (including road base, aggregate, sand and
clay) are high volume, low-cost materials that need to be extracted and ideally processed as close
as possible to the communities that use them. This is due to the high relative cost of transporting
low-cost heavy materials. Utilising extractive materials from outside the region brings with it
significant social, environmental and economic costs. However, the cost of transport also needs

to be balanced with the cost of ensuring the compliant use of borrow pits, which can be expensive
at a small scale.
Strategic quarry locations should be sourced, assessed for feasibility, and licenced. Quarry
location is of the utmost significance, as aggregates are low-value relative to weight, so increasing
the distance over which they are transported from quarry to road construction site adds
significantly to costs. Having strategic placed quarries throughout the Council area would enable
Council to pass on cost effectiveness for road reconstruction works, whilst maintaining a profitable
return with an overall cost benefit to the community.
The Shepton Quarry is well located in the heart of the Bowen Basin, and supports product delivery
to Capella, Emerald, Clermont and surrounding areas. The establishment of the Mungabunda
Quarry and the broader use of regional pits has allowed the quarry to extend its geographic reach
and supply to the southern part of the Central Highlands region. Having strategically placed
quarry operations, particularly in the south of the region allow the quarry to meet the requirements
of council and support other remote civil construction activities.
The Quarry Business uses both Council trucks and private contractors for delivery of products.
The use of private contractors for cartage purposes provides the Quarry with an additional
revenue opportunity, whereby a profit margin is included in the overall cost to the customer. Cost
of cartage however can be prohibitive in the catchment market, which is identified as
approximately a 70-kilometre radius from the Quarry. Costs of cartage beyond this area can
restrict the Quarry in its ability to compete with quarries located closer to customer sites
6.5 The Market

More recently, several additional quarries have emerged in close proximity to Shepton Quarry
with aggressive pricing strategies, initially having a significant impact on demand from Shepton
Quarry. The current Quarry management have responded by driving down production costs. A
brief description of various other quarries in the wider region is provided in the table below. These
quarries can be both customers and competitors to Council’s quarry business. Council’s robust
financial analysis and management associated with the quarry business unit, mitigates against
the risk of perceived market collusion.
Quarry Description
Quarries of Quarries of Queensland operates the Eureka Quarry located 23 kilometres east
Queensland of Capella in the Lilyvale Mining Area. This is the closest quarry to Council’s
Shepton Quarry

Glendon Quarry Located approximately 33kms west of Emerald, Glendon offers a range of blue
metal products having supplied road base, ballast and shot rock for residential,
infrastructure, commercial and civil projects in the region.
Emerald Quarries Emerald Quarries is located 58 kilometres due west of Emerald, between
Sapphire and Rubyvale on the Gemfields. The quarry site is over 600ha in size
and even though the quarry has been operating for over 25 years they are only
utilising 60 acres. The primary function of Emerald Quarries is to supply concrete
plants around Australia with decorative pebble. The stone / pebble in question is
round quartz stone with high strength. Emerald Quarries provides 3 different
coloured products, Honey, Gold and White which are sized in
1,2,3,4,5,6,7,10,12,14-16 and 20mm. With a sand drier newly commissioned on
site, they are now able to offer dried premix concrete mix in one and two tonne
bags.
Wallaby Hills Quarry Wallaby Hill Quarry is located adjacent to the 24 kilometres west of Springsure
and six kilometres south of the Dawson Developmental Road. The crushable
rock reserves at this site are approximately 2.0 million tonne of basalt rock. The
development approval application is for a maximum capacity of 50,000 tonnes
per annum. The life expectancy of this site in excess of is 25 years. The Quarry
is operated by Millibourne Pty Ltd t/a Lanes Land Developments.
Clermont Quarry
Blackwater Quarry Offers an extensive range of construction products either custom made for
individual requirements or as general industry standard products. This includes
aggregates; ready mixed concrete, high performance ready mixed concrete and
can undertake a range of precast concrete products.
Table 3 - Quarry's Competitors
6.6 Promotion & Channels to Market

The market for products of the quarry business lies largely within the government, mining and
construction sectors. An understanding of the pending pipeline of infrastructure works is critical
to being able to ensure that services can be promoted at the appropriate time to potential
customers. The nature of the construction industry means that business promotion is largely
built upon relationships to ensure on-going and effective communications with existing and
potential customers. At the same time, promotional material is necessary to ensure on-going
recognition by current clients, as well as raising awareness with potential new clients.
The following initiatives have been formalised as part of the Quarry Business’s marketing
activities:
• The development of a client database (comprising past, existing and prospective clients)

• Development of a marketing brochure (that requires updating as it features the previous
mine manager);
• Establishment of a dedicated web page on Council’s website; and
• Various marketing collateral and promotional products.
6.7 Business Model Summary

CHRC’s quarry operations provide broader value to the council and the Central Highlands
community and the business model for quarry services should reflect this value. Quarry services
contribute to wider public value and addresses Council’s corporate priorities by:
• supporting the local economy through collaborative partnerships with the business
community;
• ensuring that good quality, cost effective materials are available to council and the wider
industry;
• facilitating commercial opportunities in the region where cost effective quarry materials are
critical in the construction of economic infrastructure;
• supporting a resilient regional economy when faced with adverse climate events;
• effectively managing safety;
• through a focus on rehabilitation, leaving sites in better condition than before;
• providing consistently high levels of customer service in accordance with CHRC’s
Customer Service Charter; and
• having systems and processes that provide industry with confidence in using quarry
services.
As a commercial business unit, the consideration of providing value to the community must be
balanced with commercial considerations. For quarry services, maintaining a profitable business
is equally important. In order to maintain profitability, the focus needs to continue on building both
external and internal customer relationships and identifying new opportunities to support various
construction activities throughout the region.

7 The Operating Model
7.1 Overview
This section of the report focusses on the Operating Model for the Quarry Business and examines
how value is delivered. This section specifically considers the people capability, processes and
systems necessary to deliver upon the desired vision and objectives for the Quarry, and to support
its business model (discussed in the previous section).
Components

• Brand
• Risk Appetite
Vision &
Strategy
(Purpose)
• Systems
(Delivery)
Figure 11 - The Value Model focusing on The Operating Model
When considering the operating model, it is important to note that the Quarry is grouped with
other commercial business units within the Customer and Commercial Services division of
Council (including the Airport, Saleyard and Housing Services). This allows Council to achieve
synergies in the operation of these business units. As a result, a number of initiatives identified
in this section of the Plan can be progressed co-operatively with the other business units.
Furthermore, the 3 business units receive a range of corporate services from other divisions of
council including, Council wide financial management, asset management, HR services, IT
services and capital delivery services.

7.2 Quarry Risk Assessment
Council’s “Enterprise Risk Management Framework” has been used in this plan to assess the key
risks for the Quarry business. This helps inform the prioritisation of key initiatives within the plan.
As noted in the Risk Management Framework, “risk is inherent in all of council’s business
activities, programs, services, projects, processes and decisions. As such, council is committed
to consistent, efficient and effective risk management.” Council’s risk framework is summarised
in Appendix B of this Plan.
The following table summarises the Quarry business’s key risks, along with their respective
mitigations. This risk assessment has been adapted from the 2015 Business Plan and it remains
relevant. These risks are also considered in the following analysis of the Operating Model.
Risk Description Mitigated Risk Mitigation Unmitigated

Risk Rating Risk Rating
Loss of key personnel Extreme Talent management plan Extreme
Ineffective or inadequate Medium Compliance and management High

processes systems
Poor site induction Medium Induction program (including Extreme
adherence to that program)
Out of specification product Medium Appropriately certified staff & Extreme
specification testing
Operating at a financial loss Medium Grow markets / revenue & manage Extreme
costs / robust financial management
Poor site safety Medium Safety management system Extreme
Inadequate facilities High Robust preventative maintenance High

maintenance regimes
Inaccurate weigh bridge Medium Regular calibration and certification High
checks
IT systems failure Medium Corporate Services SLA High
Table 4 - Quarry Risks
It is noted that the “Loss of Key Personnel” remains as a high risk while there is uncertainty about
the quarry’s on-going operations in light of the Expression of Interest process. While this process
is running, Council is reluctant to invest in more permanent resourcing for the quarry business,
which places pressure on the existing personnel.

7.3 Service Planning
Service planning is about ensuring the Quarry business can continue to deliver the products and
services expected of it – along with planning for any improvements in such service. For the
Quarry business, significant work has been undertaken in recent years to upgrade the facilities to
improve levels of service. There has however, been a poor investment decision made in the
recent past at Shepton. The current crushing unit was built in the middle of a construction boom
and following a subsequent downturn, it had to be financially impaired by $7.8m (which represents
68% of the crusher’s production capacity). This led to financial impacts upon not just the business
unit, but also Council.
The Quarry has identified the following growth opportunities, which could in turn lead to the need
for future service planning:
• Producing Manufactured Coarse Sand;

• Rail Ballast that may be loaded at a local rail siding;
• Provision of material for Concrete Manufacturing plants;
• Internal supply to Council Departments;
• The supply of precoated aggregate for road pavements; and
• Developing a mobile quarry production business.
These growth opportunities are likely to require some level of capital investment to bring them to
fruition. Council’s past experience should not result in it avoiding such opportunities, but rather
improving the investment decision making process. There are a number of state-based
processes available from Departments such as Treasury or Building Queensland. Council should
adopt and where necessary adapt these processes for application within its commercial business
units such as the Quarry. A key part of such decision-making is undertaking long term financial
modelling to determine the possible impacts of such investments under a range of scenarios.
7.4 Asset Management

For asset intensive businesses such as the Quarry business, Asset Management is an important
input to service planning. It is critical that the assets are capable of achieving the outcomes
sought by the Operations Coordinator - Shepton Quarry. Council has a corporate Asset
Management service provider and this group:
• Sets overall corporate policies relating to asset management;

• Through a central pool of expertise - leads the development of the AMPs on behalf of the
various asset custodians. The AMPs provide a high-level statement regarding levels of

service, a detailed overview of the assets and contemporary asset valuations and
depreciation figures; and
• Where practical and efficient, the corporate service provider will coordinate condition
assessments for various asset types.
Through this model, AMPs have been established for all asset types including the Quarry. It is
then up to each asset custodian to:
• Be the owners of the AMPs;

• Optimise the plans and the associated information within them;
• Develop appropriate maintenance management plans; and
• Develop appropriate renewals plans.
The Quarry has a relatively high percentage of mechanical and electrical equipment. Furthermore, the is
equipment is essential to the production of product for sale. If this equipment fails, then the quarry’s
operations and revenues cease to flow. As a consequence, the Quarry has a robust preventative
maintenance plan for its “active assets”.
It will be important to both further optimize the AMP and develop an appropriate renewals plan.
Depreciation makes up a large proportion of the Quarry’s cost base and it compromises its ability
to operate with a positive operating position. Management needs to be satisfied that this figure
is as robust as possible and is thus informing sound management decisions.
Linked to the optimization of depreciation, is the need to have in place a robust renewals plan for
the facility. The goal of this plan is to maintain the service potential of the facility and it ideally
should have a 5 to 10-year outlook. If both the depreciation figure and the renewals plan are
robust, then there should be a broad matching between the two.
To this end, the Queensland Government legislates for Councils to measure the renewals capital
expenditure as a percentage of the depreciation expense (referred to as the Asset Sustainability
Ratio). This is an approximation of the extent to which infrastructure assets are being renewed
to maintain their intended service potential. The Queensland Audit Office (QAO) then reports
annually on this metric for all Councils. They will report a red for fail if the renewals expenditure
is well short of the depreciation figure (the target is 90%). This highlights the importance of both
figures being as robust as possible, otherwise:
• If the renewal expenditure is below what it should be (due to the absence of a renewals
plan), then it indicates that the service potential of the asset is being run down. It may also
be possible that the Council’s long-term financial sustainability is being compromised as it
is not setting aside the funds to renew or replace these assets; and

• If the depreciation figure is artificially high due to a lack of optimisation, then it will
incorrectly show an under expenditure on asset renewals. It will also artificially erode the
financial performance of the business unit.
Optimising the AMPs and developing a long-term renewals plan for the facility are important
actions for this business plan. Specific considerations for optimizing the depreciation allowance
are addressed in section 7.5 below.
7.5 Financial Management

7.5.1 General Financial Performance
The following table shows the 18/19 financial performance for the quarrying operations. The
financial performance is broken down by the key component of the overall quarrying business
being:
1. The Shepton Quarry, which sells in the order of 60% of its product externally and the
remainder is provided directly to Council for its infrastructure activities;
2. Mungabunda Quarry, which provides product exclusively to Council for its infrastructure
activities; and
3. The numerous borrow pits that are operated across the Central Highlands region, which
provide product exclusively to Council for its infrastructure activities.
Item Shepton Mungabunda Council Total

Borrow Pits
Total Operating $4,445,662 $222,643 $2,252,048 $6,920,353

Revenue
Total Operating ($4,141,726) $323,850 ($2,030,594) ($6,496,170)
Expenses
EBITDA $303,936 ($101,206) $221,453 $424,183
Total Non-Operating ($554,712) 0 0 ($554,712)

Expenses
NET EARNINGS (250,776) ($101,206) $221,453 (130,529)

Table 5 - 18/19 Actual Financial Performance

The net earnings for the Quarry business for 18/19 financial year is influenced negatively by
$420,000 worth of movement in inventory at Shepton and Mungabunda. If this movement was
netted off the results, then the net earnings would have been a positive $300,000. Furthermore,
the net earnings (less movement of inventory) for Shepton is $130,000, which compares very
favourably to the budgeted net earnings for Shepton of a negative $550,000. Put differently, this
is a $680,000 turn around for Shepton’s bottom line. This is based on a near doubling of sales
from Shepton compared with budget, and prudent cost control.
Hence, the 18/19 financial year result positions the Quarry well to realise its objectives of being a
profitable business unit into the future and applying competitive pressure on quarry product prices
across the region. Furthermore, it provides a sound platform for considering a number of the
growth opportunities outlined in 7.3 of this business plan.
7.5.2 Optimising the Financial Statements
Quite detailed and informative “Operating and Expense Statements” are produced quarterly for
the Quarry. However, it is noted that not all “full cost pricing elements” of Council’s Competition
and Water Reform Policy are applied within these statements. At present there is no inclusion of
a tax equivalent payment. Furthermore, as the quarry should be run at a profit, then there should
also be a return on capital that should in part flow back to the Council as a dividend. Hence, to
allow a full view of the commercial performance and position of the Quarry, it is recommended
that the statements be restructured to incorporate the following:
Earnings before interest, tax and depreciation (EBITDA) Operating revenue, less operating
expense
Earnings before interest and tax (EBIT) EBITDA less depreciation
Earnings before tax (EBT) EBIT less finance costs
Net profit after tax (NPAT) EBT less tax equivalent
Also, to make more informed commercial decisions there should be a balance sheet and cash
flow statement for the Quarry. The balance sheet would provide important information in relation
to the capital structure (debt and equity) and enable linkages to be made to the income statement
(i.e. depreciation and finance costs), as well as to retained earnings and reserves. The cash flow
statement provides critical information regarding the inflows and outflows of cash, along with and
understanding of the business unit’s solvency.

7.5.3 Accuracy of the Balance Sheet
A further consideration for the Quarry business is maintaining an accurate balance sheet. At
present there are a number of issues the business should be examining in relation to its Balance
Sheet, including:
• The rehabilitation costs for the various quarry sites needs to be reviewed and made
contemporary. The value of this liability for Shepton is based on some unsubstantiated
costs from approximately 5 years ago. The business needs to update the valuation of this
liability for Shepton;
• The current allowance in the Balance Sheet for rehabilitation at Mungabunda or the other
borrow pits appears understated. It is noted that Council has just initiated a piece or work
to help define its obligations in respect of these other sites;
• In respect of these rehabilitation costs, they should be measured at the present value of
the expected cash flows that will be required to perform the rehabilitation. The cost of the
‘provision’ should then be recognised as part of the cost of the asset when it is put in place
and depreciated over the asset’s useful life. A further consideration for the Quarry
business is whether the entire liability is recognised when quarrying activity begins or
whether it is recognised in increments as the activity is undertaken. This will need to be
resolved by the business in conjunction with Council;
• This leads to a further consideration for the Quarry business, which is that it presently does
not recognise the lease for Shepton Quarry in its Balance Sheet (or the other sites for that
matter). The incoming accounting standard AASB16, which will apply from 30 June 2019,
will require Council to include any operating leases in their Balance Sheet. Council will
need to assess whether the current lease agreement is captured by the requirements of
AASB16. Given Council is regonising the rehabilitation liability associated with Shepton, it
is likely this will need to be associated with an asset, being the lease for the site; and
• It is noted that Council is setting aside a provision within its reserves for the rehabilitation
of the Shepton site (currently in the order of $200,000). Council should consider whether
this needs to be recognised as an asset within the Quarry business’s Balance Sheet.
This work may re-value the annual provision being made for the cost of rehabilitating Shepton
and the other sites. Any such changes will also need to be reflected in the P&L.

7.5.4 Optimising Depreciation
Annual depreciation expenses are based on the Quarry’s 2018 Asset Management Plan (AMP).
These expenses are a material element of the Quarry’s cost base and is impacting the business
unit’s ability to maintain a positive operating result. There are opportunities to further optimize
the depreciation expense. It is likely that any changes made to the current approach will result in
a more reflective ‘depreciation expense’ for the business unit as well as lessening some of the
pressure on Council’s overall financial performance. It is expected that this in turn will result in a
more positive outcome for Council when it reports against the overall Asset Sustainability Ratio.
It would be prudent for the business unit to review the current approach to the accounting
depreciation to better understand how it has been determined and identify if any of these factors
could or should be reviewed. Considerations should include:
• Initial accounting recognition;

• Valuation or re-valuation of the site improvement asset class. It is recommended that
the business unit consider adopting a 5-yearly full revaluation cycle for this asset class.
This would reduce costs to undertake the revaluations as well as providing greater stability
in both asset values and subsequent depreciation expense year by year. The business
unit should also re-consider the decision to undertake an annual desktop valuation
(between full revaluations). The approach should align with the Council policy concerning
‘materiality’, which does not support annual indexation of the valuations;
• Useful life/remaining useful life estimates. Consider undertaking a benchmarking
exercise on the useful lives of assets of a similar nature and revising the policy accordingly.
Also check the approach for remaining useful life assessment, taking into consideration
renewal, improvement and upgrade expenditure; and
• Capitalisation threshold. Review the “site improvements” financial asset class and
identify those assets that may be included that are now below the current threshold.
7.5.5 Long Term Financial Planning

The 2015 Business Plan includes 10-year financial plans. Such plans play an important role in
helping the business unit understand its financial sustainability and put in place strategies for
maintaining that sustainability. This can include growing revenue as well as controlling costs.
Currently however, such plans are static, and it is recommended that Council develop dynamic
long-term financial plans for the business units so they can be readily updated and kept current
in the face of any material changes in business dynamics or assumptions. This enables the
business unit managers and Council to be making real time decisions relating to commercial
performance.

Such plans should:
• Be based on QTC’s long term financial models, thus allowing them to be rolled up into
Council’s overarching long term financial plans;
• Be structured around the recommendations above relating to the financial statements;
• Be based on robust projections of costs and capital programs;
• For the Quarry, be for a minimum of 5 years;
• Model a range of scenarios, including a worst-case revenue option, a “break even” option
and a revenue stretch option;
• The modelling can be used for investment planning on new revenue earning opportunities
for the Quarry.
The actual plans are held and maintained by the Commercial Analyst. Outputs from these plans
are provided in Appendix F of this document. It should be noted that the plans are living
documents and the inputs are to be refined over the life of this Business Plan.
7.5.6 Council’s Commercial Policies

Council has three policies relating to the commercial performance of the Quarry. These are
summarised in the following table:
Policy Description
Competition and Water
• Identifies the commercial business units within Council to
Reform Policy
which this policy applies;
• This includes the Quarry; and
• Identifies the full cost pricing elements that must be applied
to these business units.
Reserves Policy
• Relates to the creation and maintenance of reserves to
enable sound and prudent financial management of
Council and its various business activities;
• Reserves can cover untied infrastructure contributions not
used in a given year and the accumulation of depreciation
funding for infrastructure assets.
Asset Accounting Policy
• The purpose of this policy is to provide guidance, clarity
and consistency regarding the treatment of capital
expenditure, depreciation, revaluations, disposals and
acquisitions which will provide greater understanding and
accuracy of Council’s capital requirements
Table 6 - Council's Commercial Policies

From the Quarry’s perspective, it is important that these policies enable it to be financially
sustainable by:
• Clearly defining the commercial expectations Council has of the business unit;
• Clearly defining what costs the business unit should be accounting for and ensuring there
is a robust basis those costs (e.g. corporate overheads);
• Ensuring the business is able to properly account for the cost of maintaining the service
potential of its assets (depreciation);
• Ensuring there is financial capacity for the business to maintain the service potential of its
assets (either through retained earnings or borrowing the necessary funds); and
• Clearly defining what funds can be taken by Council at year-end without compromising the
business unit’s financial sustainability (e.g. a tax equivalent payment).
When reviewing the current suite of commercial policies against these requirements:
• Council has not clearly defined its commercial expectations for the Quarry. This is
addressed in this Business Plan;
• Council does clearly define in its Competition Policy the costs the business units should be
accounting for. However, this is not being fully applied;
• Council does not have a robust method for determining corporate overheads;
• Council does clearly define how to account for the cost of maintaining the service potential
of its assets, but this policy is not correctly applied;
• Council’s Reserves Policy does allow for retained earnings to fund depreciation at the
Quarry, but this is not applied. It is noted that the current Policy gives the GM of Corporate
Services the discretion whether or not to set aside reserves for depreciation; and
• No existing policy defines what funds can be taken from the business units at the year-end.
It is recommended therefore, that Council reviews the application of its Commercial Policies to
enable its various business units to be financially sustainable. It is also recommended that the
Competition and Water Reform Policy be amended to define what funds can be taken from the
business units at the year-end.

7.5.7 Year End Reporting
At present, there is informal year-end financial reporting by the Quarry (and other business units)
to the Council and externally. Any financial reports are rolled up into Council’s overall year-end
reports, which compromises the transparency of the Quarry’s annual performance.
It is recommended that the Quarry, along with the other business units within the Customer and
Commercial Services division, provide separate year-end reports to Council on their financial and
non-financial performance for that year. As part of that year-end reporting, the business units
should recommend to Council, what funds should be retained to cover depreciation and what
funds can be taken from the business unit without compromising its financial sustainability.
Should Council elect to adopt a different position to that recommended, their reasoning would
then be clearly and transparently spelt out. This should also help inform a different course of
action for the business unit to help maintain its financial sustainability.
7.6 Capability & People Management

7.6.1 The Quarry’s Operations
The organisation structure for the Quarry is provided below:
General Manager
Customer and
Commercial
Services
Coordinator
Operations -
Shepton Quarry
Weighbridge
Quarry Operator Quarry Operator Administration Plant Fitter Quarry
Officer Officer
Figure 12 - Quarry Organisational Structure

The quarry operations have seen a significant reduction in staffing levels in recent years, whereby
the quarry had twelve fulltime staff in 2015. This has contributed to lower operating costs and the
ability to more flexibly respond to market demands. Any scaling up of staffing levels to meet
customer demand is provided by contractors who are engaged to operate and maintain plant and
equipment as required.
It is noted that a proposal has been put forward for the Plant Fitter role to become an SSE for the
borrow pit operations. This would assist council comply with its regulatory obligations and
potentially assist further with business opportunities in this area of the business.
The Quarry is open for business during the hours of 6.30 am to 3.30 pm on Monday to Thursday
and 6.30 am to 3.00 pm on Fridays. However, if sales permit or crushing is taking place the site
is open longer and sometimes Saturdays.
Plant and equipment include:
• 400 TPH Terex/Jaques fixed crushing and screening plant

• CAT 769C dump truck
• Komatsu WA480 wheel loader
• Cat 972H wheel loader
• 40-metre weighbridge
Suppliers to the Quarry include:
• Crushing plant maintenance and repair

• Mechanical and Equipment Maintenance and Repair
• Engineering
• Mobile crusher hire
• Plant and Labour Hire
• Electrical contractors
• Fuel
• Bituminous products
• Sandy loam
• Quality Management System auditing
• Office supplies
• Weighbridge software
• Calibration services
• First aid training
• Drug and alcohol testing

• Internal corporate services.
The operations at Shepton Quarry have been subject of on-going optimisation. Recent upgrades
to the Shepton site include the fixed crushing plant to run solely on generator power this will
eliminate the need for mains power to run the crushing plant.
Future plans include provision to install a facility to enable Shepton to supply pre-coated
aggregates to the market, extending its product portfolio and another source of revenue for the
quarry business.
7.6.2 Provision of Corporate Services
The Quarry receives a range of Corporate Services from Council to support its operations,
including corporate finance, corporate Asset Management, IT services, HR and safety services,
and capital delivery services via the newly established PMO with the Infrastructure and Utilities
division of Council. The need to improve the transparency of both the costs and standard of
corporate services has been identified during the development of this Business Plan. This could
be done by putting in place simple Service Level Agreements, or other mechanisms as seen fit.
An option used successfully in other jurisdictions, is the “business partner” model where personnel
from the Corporate Service providers embed themselves within the business units and develop
an intimate understanding of their requirements. It is also recommended that corporate
overheads be reviewed as they are a material input to the Quarry’s cost base.
7.6.3 Business Unit Support Services

It is noted that this Business Plan is being developed in conjunction with similar plans for the
Saleyard and Airport. Council has requested a review into the structure of Council’s commercial
businesses. A separate report and body of work has been undertaken to provide
recommendations to Council to ensure commercial businesses are operated and managed in an
efficient and effective structure. Outcomes from this review have not been considered by Council
at the time of preparation of the business plans and therefore not included in this business
plan. However, it is noted that the review has indicated that a more concerted focus also on
service and asset planning and compliance and management systems would provide benefit to
the business. The table below expands on this holistic approach to the businesses and the
relationship between the roles within Commercial Services and the Corporate Service providers.

Function Corporate Services Responsibilities Support Services Responsibilities
Management • Council wide budgeting, financial management and • Prepare Business Unit budgets
Accounting long-term financial planning – including consolidation • Prepare quarterly financial reports
of outputs from the business units • Prepare and maintain dynamic long-term financial
• Develop commercial policies for the BU’s plans
• Oversight the commercial performance of the BU’s • Prepare and maintain dynamic price plans
• Identify operational efficiencies across BU’s
• Identify market opportunities for BU’s
Service and • Preparation of AMPs on behalf of the BU’s • Develop and implement BU Master Plans
Asset Planning • Asset valuations & depreciation charges • Develop and implement BU Business Plans
• Coordination of condition assessments • Own the AMPs
• Integration of AMP financial outputs to Council’s overall • Validate key AMP inputs
budgets and long-term financial plans • Prepare renewals and maintenance management
• PMO to deliver capex programs plans
• Develop and maintain BU capex programs &
coordinate their delivery with the PMO
• Undertake investment planning and prepare related
business cases
Compliance • Setting Council wide governance frameworks and • Deliver upon Council’s safety management system
and policies (e.g. delegations, reporting, auditing) requirements (including assessing and managing BU
Management • Setting Council wide requirements relating to safety risks)
Systems policies and management systems • Maintain and deliver on BU specific compliance and
management systems
• Coordinate compliance and management system
auditing across BU’s
• Report compliance to Council
• Coordinate with regulators on BU specific matters
(including reporting)

7.6.4 Talent Management
Loss of key personnel is identified as a key risk for the Quarry. It is proposed that a Talent
Management Plan be developed for the Commercial Services business units (including the
Quarry), which could include:
• Identifying key roles for the business units and ensuring there are successors for those
roles;
• Seeking external mentors for key personnel to help build commercial acumen;
• Planning the exit of employees reaching retirement age. This could include using them to
actively coach and mentor younger staff members;
• Organising secondments across Council and with other organisations to broaden the
experience of key staff members; and
• Working in partnership with the local University and/or schools to promote Council as an
attractive place to work.
7.7 Management Systems and Compliance

The Quarry has a wide range of legislative and other obligations it must adhere to in maintaining
a modern and compliant facility. These are listed in Appendix C of this plan. It maintains a variety
of compliance and management systems to achieve ensure it meets these obligations. Ensuring
these obligations are met is a key performance measure for the Quarry.
Safety is a key issue for quarry operations and is principally regulated under the Queensland
Government Department of Natural Resources and Mines that regularly audit and inspect the
quarry operations. The safety management system is documented and is regularly audited.
Resource extraction management and site rehabilitation plans are developed and utilised to
ensure that cost effective disturbance is balanced with considerations of impact and that
rehabilitation of the landform is undertaken ensuring sites are suitable for an appropriate use into
the future.
The environmentally relevant activities at the Quarry must be carried out by such reasonable and
practicable means necessary to prevent the emission or likelihood of emission of noise that
constitutes an unreasonable intrusive noise. The reasonable and practicable measures adopted
for the Quarry are incorporated into the relevant procedure(s) implemented under the Site Based
Management Plan. Dust management controls are in place for the purposes of achieving
compliance with the operational conditions of the Shepton Quarry licence, and to minimize

impacts on the neighbours and the adjoining environment. The need to manage stormwater runoff
onto neighbouring land and into adjoining watercourses is also part of site management plans.
Specifically, Quarry products are subject to extensive quality control testing and technical support.
Quarry operations require a range of compliance testing for aggregates, rocks, pavement
materials, soils and provides quality control testing for all of quarry products. The Quarry is
certified for the supply of quarry product under AS/NZS/ISO9001:2008. Certified by Sci Qual
International Pty Ltd on 1 July 2015.
The quarry is also capable of producing quality ‘in specification’ road base products and delivering
material supply at controlled costs internally to Council. Products meet the following technical
specifications:
• Queensland Department of Transport and Main Roads specifications - MRTS70 Concrete

• Queensland Construction specifications - C242 Flexible Pavement
• Queensland Department of Transport and Main Roads specifications - MRTS22 Supply of
Cover Aggregate
• Queensland Department of Transport and Main Roads specifications - MRTS05 Unbound
Pavements.

8 Possible Sale of the Shepton Quarry
8.1 Overview
Council is currently running an Expression of Interest process for the sale of the Shepton Quarry
business (noting that Council leases the Shepton site from a private land owner). A separate
business case analysing the merits or otherwise of any Expression of Interest will be prepared to
inform Council’s decision-making process in this regard. This section of the Plan addresses some
of the implications that the sale of Shepton may have on the long-term plans for the Quarrying
Business. This should in turn, feed into Council’s deliberations on any Expressions of Interest for
Shepton. Some considerations include:
• In the 18/19 financial year, Shepton made up 61% of total Sales for the Quarry business
unit. Furthermore, the remaining sales from Mungabunda and Council’s borrow pits, are
exclusively to Council. If Shepton was sold, the Quarry Business would no longer
constitute a business activity as defined by Council’s Water Reform and Competition
Policy. The unit would become an internal service provider - principally to the Infrastructure
and Utilities division of Council;
• Should that occur, Council should revisit this plan and determine if it is still required and if
so, what modifications are required to be made to it;
• It is noted that during the Expression of Interest process, Council has put a freeze on any
capital expenditure and appointment of permanent staff within the Quarry business. While
this is most likely an appropriate course of action, it must be noted that it is both inefficient
and is holding the Quarry business back from achieving its longer-term goals. The
business unit is having to appoint contractors at a high cost and a lack of capital investment
means that the asset service potential is being run down and opportunities for growth are
being delayed or missed. It would be important that council expedite the sale process to
provide certainty for the business unit, one way or another;
• If Council were to sell the Shepton quarry business, it would lose a revenue stream that
currently covers a range of costs that exist after a sale process. These costs are estimated
to be in the order of $5million and are spelt out in further detail in section 8.2 below; and
• Any sale will have balance sheet implications for Council, which should not be overlooked.
An overall asset write-down will be required. Should the value of this write down exceed
the sale price, then Council would record a one-off loss in the year of the sale. While it
would be a “paper” loss, it would potentially have broader reputational impacts for Council,
particularly if it puts the entire Council position into a loss for the year.

8.2 Assessing Any Expressions of Interest for Shepton
When considering any expression of interest for Shepton, it is worth noting that if Council were to
sell the business, it would lose a revenue stream, which currently covers a range of costs that are
set out in the following table. A number of these costs can be quantified, and a number are
intangible. The costs that have been quantified are the Net Present Values of future cash streams
over a period of 8 years, based on a discount rate of 2% (it is worth noting that a higher discount
rate does not materially change these figures). 8 years has been chosen as this matches the
remaining term of the current loan for the quarry. The figures are rounded up to the nearest
$100,000. The total Net Present Value of the costs that are covered by the revenue stream that
would be lost from the sale of the quarry would be in the order of $4million. In other words,
Council would need to receive an offer in excess of this amount to make it worthwhile selling the
Shepton quarry business.
It is also noted that should any sale proceed; Council would need to record an asset write-down
in the year of the sale. The 18/19 Balance Sheet shows that such a write-down would be in the
order of $3,500,000. This represents the net of the current assets and liabilities: less the loan for
the quarry, which Council would retain even if the quarry were sold. It should also be noted that
as of 30 June 2019, Council will most likely need to record the lease for the Shepton Quarry as
an asset, so the above figure could increase.
Finally, it is worth noting some of the factors that could influence the value of any offers for the
Shepton quarry business:
• The value of the offer will be determined by whether or not the prospective purchaser sees
Shepton as a going concern. If they do, then they should value the business based on
prospective future cash flows, less costs. If not, then any price would be based on the
scrap value of the assets;
• Unless Council guarantees to purchase a certain amount of product from Shepton, Council
has no forward contracts that underpin future revenue streams for Shepton. This stands
to reason given the uncertainty associated with the EoI process;
• The prospective purchasers are likely to discount any offers, by their estimate of the cost
to rehabilitate the site; and
• If any inventory is sold with the business, this should be factored into the sale price by the
prospective purchaser. Alternatively, Council could sell this inventory themselves ahead
of the sale if they felt this was more financially beneficial.

Item NPV Comment
Corporate Overheads Cost $1,800,000 These costs are fixed and would need to be borne by
Council following any sale (the 18/19 overheads applied
to Shepton were $230,000).
Interest Cost $1,300,000 This is the NPV of the interest cost on the remaining
$8.5million loan for the quarry.
Loss of Profit & Tax $1,000,000 This is based on the net profit (including tax equivalents)
Equivalents of $130,000 for Shepton for the 18/19 financial year (net
of movement in inventory). This was a normal trading
year, with no abnormal economic conditions such as a
mining boom or large volumes of flood works. This
revenue stream would in part cover the principal
component of the quarry loan.
Loss of Buffer to Economic With Shepton and the other quarry sites, Council is able
Cycles to meet all of its own needs. If Shepton is sold, it is likely
Council would have to purchase a percentage of quarry
product from the private sector. Hence it would be
exposed to price fluctuations (good and bad) due to
external economic cycles.
Loss of Economies of It is possible that the cost of production at Mungabunda

Scale and the borrow pits would go up due to a loss of scale,
with Shepton currently accounting for 60% of the total
quarry business output.
Loss of Expertise Shepton makes up 60% of Council’s total quarry business

output. If Shepton were sold, then it is possible Council
would need to downsize its staffing requirements in this
area, loosing valuable quarrying expertise. This could in
turn lead to a compromising of product quality.
Site Rehabilitation Current revenue streams from Shepton cover the costs of
the site’s rehabilitation. This liability would presumably be
transferred with any sale and be factored into the sale
price.
Total $4,100,000
Table 7 – Council Related Costs covered by the Current Revenue Stream from Shepton

9 Performance Measurement
The following table sets out the proposed performance measures for the Quarry. These are mapped back
against the objectives for the Quarry. They represent a succinct list of measures that appropriately reflect
the financial and non-financial performance of the Quarry over the 3-year life of this plan. It is important
not to overwhelm the business unit with measures.
The measures reflect the outcomes the business unit is working to. These measures are to be cascaded
through to individual performance plans and would pick up the important inputs to achieving these outcomes
(for example, carrying out safety training or conducting periodic safety audits of the facilities). Collectively
the measures will provide a basis for a “balanced scorecard” on performance across the three objectives
for the Quarry.

Performance
Vision Objectives Targets Explanation
Measures
• Product
• The product growth measure is aimed at ensuring the business unit
growth
Provide continues to innovate and adapt to meet its customer’s needs
competitively • External • 1 / year
• Maintaining external sales from Shepton above 60%, ensures the
priced, high- Sales / Total
• >60% Quarry’s rates are market competitive and thus sets the benchmark for
quality quarry Sales
what it charges Council for its products
products across • 100%
• Achieve
the Central compliance • Product quality is an important differentiator for the Quarry and is thus an
MRD’s
Highlands Region important performance measure. The key benchmark is the Main Road’s
quality
Specifications
specifications
To safely and
profitably provide
• The Asset Sustainability Ratio reflects the service and financial
competitively • Asset
priced, high- sustainability of the business unit. Specially this measures the actual
Sustainability
quality quarry renewal spend, plus reserves set aside for depreciation, divided by the
Ratio
products for the Provide fit for • 90% depreciation allowance
benefit of the purpose, safe and • Material audit
• Zero • Being compliant with its many obligations is critical for the business
Central Highland’s compliant quarry non-
activity and this target is focused on ensuring there are no material audit
region facilities compliance • Zero non-compliances
• Lost Time
• Safety is an important outcome for Council and the target always needs to
Injuries
be one of zero harm
• Current • >1.5
• (Current assets / current liabilities) reflects the liquidity or solvency of the
assets /
Ensure on-going current • 5 to 15% business unit
profitability liabilities • This KPI reflects the profitability of the business unit as a percentage of
the business’s equity
• NPAT/Equity
Figure 13 - Quarry 2019 - 2022 Performance Measures

10 3-Year Program of Initiatives
The following table provides a summary of the program of initiatives to progressed as part of this Business
Plan – along with the recommended timeframe within which the initiatives should be progressed.
Progressing these initiatives will help the Quarry achieve its 3-year outcomes and realise the performance
targets set within the plan. This Program is to be read in conjunction with subsequent table, which provides
the detail for each key initiative along with the outcome being sought from that initiative. Each key initiative
is uniquely numbered to allow cross-referencing between the two tables.
Key Initiative Task Timeline

Y1 Y2 Y3
Objective: Provide competitively priced high-quality products
A1 Products &
Services Review options for new services
Grow existing markets
Objective: Provide a fit for purpose, safe and compliant quarry facilities
B1 Service
Planning Assess & re-value rehabilitation liabilities across all
quarrying operations
Develop an Investment Decision Making process
B2 Asset
Management Develop a 5 to 10 renewals program
Update the Quarry AMP
B3 People
Management Review Resourcing Arrangements
Develop a Talent Management Plan
Modify employee performance plans
B4 Governance
Approve Quarry Business Plan
Develop a revised Council reporting regime
Review the Business Plan
B5 Support
Services Establish a Corporate Services SLA
Resource the support services functions

Objective: Ensure on-going profitability
C1 Financial
Management Restructure the financial reports
Develop EOY reports
Develop a dynamic long-term financial plan
Maintain the LTFP
C2 Commercial
Performance Review application of Commercial Policies
Optimise the Depreciation charge
Figure 14 - Summary of 2019-22 Key Initiatives

Key Initiative Description Outcome
Objective: Provide competitively priced high-quality products

A2 Products and Services • Continue to review and consider new growth opportunities for the Continue to grow the market,
business as outlined in this plan revenue and financial performance
• Assess these opportunities using the decision-making tool referenced of the Quarry business unit, for the
in key initiative B1 below benefit of the region
• Mine the relevant customer data with a view to growing existing
markets
Objective: Provide a fit for purpose, safe and compliant quarry facilities
B1 Service Planning • Review the level of compliance of the various borrow pits operated by Ensure all of Council’s Quarry
Council and determine the tasks and costs necessary to make them operations are compliant with
compliant necessary regulatory requirements
• Also assess and value (or re-value as necessary) the rehabilitation Ensure there is a robust process
liabilities assocaited with the quarrying operations and reflect these for investment planning to mitigate
revised valuations in the Balance Sheet the risk of poor and costly future
• Rationalise the number of Council borrow pits if necessary following investments
this review
• Develop an investment decision making tool for the business unit
• Base this tool on relevant State Government guidelines available from
Treasury and Building Queensland
B2 Asset Management • Develop a 10-year renewals program for the facility that will help Ensure the Quarry has proactive
inform the optimization of the depreciation charge and inform the long- planning in place to maintain the
term financial planning for the facility. This plan is to focus on service potential of the facility and
maintaining the service potential of the facility ensure the business unit’s financial
• Update the AMP in 2022 based on the optimization of key inputs such sustainability
as valuations, depreciation and the renewals plan

Objective: Provide a fit for purpose, safe and compliant quarry facilities (cont.)
B3 People Management • Review the mix of self-performed and contracted out activities for the Ensure the Council mitigates
Quarry. Also review the adequacy of the equipment for the operations against the risk of losing personnel
Develop a Talent Management Plan based on the aspects identified who are vital to the effective
in this business plan management of the Quarry
• Cascade the performance measures and key initiatives in this Ensure the effective
business plan through to individual’s performance plans so they are implementation of this Business
aligned with objectives and outcomes of this plan Plan
B4 Governance • Ensure the Business Plan is approved and progress against the Ensure Council is aligned with and
performance measures and initiatives are reported upon effectively overseeing the delivery
• Revise the Business Plan in 3 years at the end of its life of this Business Plan
B5 Support Services • Establish an SLA with Corporate Services for the provision of these Ensure the efficient and effective
services to the Quarry. This SLA should contemplate the embedding delivery of corporate and support
of key Corporate Services staff within the business unit to deepen their services to enable the Quarry to
understanding of the business fully deliver upon this business
• Resource the support services identified in this plan to enable to plan
efficient operation of the business unit. These services should be
shared among the Commercial Services business units

Objective: Ensure on-going profitability
C1 Financial Management • Restructure the financial reports for budgeting purposes and financial Effectively manage the financial
management, as recommended in this plan performance of the Quarry to
• Ensure any leases for quarrying operations are properly reflected in ensure its long-term commercial
the Balance sheet to comply with the incoming accounting standard sustainability
AASB16
• Update rehabilitation liability valuations and reflect these in the
Balance Sheet
• Incorporate any reserves that have been set aside for Quarrying
Operations in the Balance Sheet
• Also develop end of year reporting and engage Council in decisions
relating to retained earnings and returns to Council
• Develop a live and dynamic long-term financial plan for the Quarry as
described in this plan and based on the key inputs described above
• Use the LTFP for day to day decision making within the Quarry
C2 Commercial Performance • Review the commercial polices applicable to the Quarry based on the Effectively manage the financial
recommendations within this plan performance of the Quarry to
• Optimise the depreciation charge based on the recommendations ensure its long-term commercial
outlined in this plan sustainability

11 Governance and Oversight
The following table reflects the responsibilities for preparing, approving and overseeing the delivery
of this Business Plan.
Title Requirement
Council Accountable:
• Approve the Business Plan

• Oversee the implementation of the Business Plan
General Manager Manage:

Customer and
• Endorse this document for Council approval
Commercial
• Oversee implementation of the Plan and associated key initiatives
Services
• Allocation of resources to deliver upon the Plan
Operations Responsible:
Coordinator -
• Preparing the Business Plan
Shepton Quarry
• Reporting on the Plan’s implementation
Quarry Team Deliver:
• Understand and deliver on the Business Plan
To execute this Business Plan, the Operations Coordinator - Shepton Quarry will prepare annual
budgets which shall be derived from information within this Plan, along with any emerging issues
that may arise over the life of the Plan. Furthermore, the Operations Coordinator - Shepton Quarry
will report on their progress against the key initiatives in the Business Plan.
This Business Plan has a 3-year outlook and will be reviewed at least every 3 years or when there
is a major change in the assumptions underpinning this Plan.

12 Appendix A – Documents Reviewed
The following documents were reviewed to inform the development of this business plan.
Report Report Conclusion or Purpose

Edge Advantage In 2013, a report by Edge Advantage recommended the following
turnaround strategies to improve business performance:
• Increasing delegations for the Operations Coordinator - Shepton

Quarry to enable flexibility in pricing of product to meet market
demands and to be able to rapidly respond to customer
enquiries, in order to win business;
• Improving financial systems and analysis to understand the true
fixed and variable costs of running the business by product to
enable accurate pricing and effective management of operational
business costs;
• Reviewing the haulage agreements for product to ensure that the
most efficient services are provided by the haulage provider;
• Ensuring availability of highly experienced maintenance staff to
maintain the plant and implementing a rigorous maintenance
regime to preserve the value of the plant and maximise the
utilisation of the plant;
• Appointing an experienced Operations Coordinator - Shepton
Quarry at a competitive remuneration level that attracts the best
candidate;
• Continuing to reduce the reliance on external mobile plant
contractors, where it is financially viable to do so, to enable most
appropriate utilisation of fixed plant to reduce the cost of goods;
• Reviewing staff numbers, capacity and capability at the plant, to
ensure that the plant is run on a commercial basis, with the most
experienced and qualified;
• Ensuring that all staff are well trained in, and adhere to, the
Safety and Environment Management System for the quarry, and
that there are regular toolbox talks, and ongoing safety training
for all staff to target a zero-harm environment. This should be

associated with appropriate monitoring and reporting of all
incidents;
• The improvement of the business development, sales and
marketing expertise in the business, either through the
Operations Coordinator - Shepton Quarry, or by appointment of
an experienced Business Development Manager; and
• The Edge Advantage report stated that there is no real public
benefit for council to retain the quarry business and
recommended that council consider sub-leasing the operations
to a commercial operator.
CHRC Quarry A Gantt chart outlining tasks and timeframes in developing a marketing
Sales Strategy strategy for the quarry
Implementation
Plan
Shepton Quarry The Business Plan sets out goals and objectives for the business,
Business Plan including financial forecasts and based on various sales scenarios over
November 2015 ten years
Asset Provides an assessment of asset condition and replacement value
Management Plan ensuring a consistent approach to asset management and planning and
Shepton Quarry on-going financial viability.
2015/16

13 Appendix B – Council’s Risk Framework
Council’s risk assessment matrix is as follows:
Consequence 1- Insignificant 2 - Minor 3 - Moderate 4 - Major 5 - Significant
Likelihood
5 - Almost Certain 5 - Moderate 10 - High 15 - Extreme 20 - Extreme 25 - Extreme
4 - Likely 4 - Moderate 8 - Moderate 12 - High 16 - Extreme 20 - Extreme
3 - Possible 3 - Low 6 - Moderate 9 - High 12 - High 15 - Extreme
2 - Unlikely 2 - Low 4 - Moderate 6 - Moderate 8 - Moderate 10 - High
1 - Rare 1 - Low 2 - Low 3 - Low 4 - Moderate 5 - Moderate
Figure 15 - Council Risk Matrix
Council’s Enterprise Risk Management Framework then recommends the following general risk
strategies and actions for the various risk severities:
Severity Treatment Strategy Treatment Action
Extreme Requires immediate action as the Risk needs to cease immediately.

potential risk exposure could be Needs immediate mitigation strategies
devastating to the organisation. to be implemented. Risk must be
treated unless it is not cost effective to
do so.
High Requires action very soon (within 3 Treatment strategies should be

months), as it has the potential to be developed and implemented as soon as
damaging to the organisation. possible. Risk must be treated unless it
is not cost effective to do so.
Moderate Continue to monitor and re-evaluate the Treatment strategies should be

risk and treat with routine or specific developed and implemented as soon as
procedures. practical. Risk must be treated unless it
is not cost effective to do so.
Low Continue to monitor and re-evaluate the This risk can be accepted if there are no
risk, treat with routine procedures. readily available treatments. Must be
regularly monitored and acted upon
appropriately.
Figure 16 - Risk Treatment Table

14 Appendix C – Legislative and Other Obligations
Council has a wide range of legislative obligations that it must comply with in relation to the Quarry.
Relevant legislation applicable to Council and thus the Quarry, includes:
• Queensland Local Government Act 2009

• Queensland Local Government Regulation 2012
• Queensland Industrial Relations Act 1999
• Queensland Environmental Protection Act 1994
• Queensland Work Health and Safety Act 2011
Legislation and guidelines applicable directly to Quarry, include:
• Quarry Safety and Health Act 1999

• Mining and Quarry Safety and Health Regulations 2001
• Sustainable Planning Act 2009
• Cultural Heritage and Native Title Legislation
• Biosecurity Act 2014

15 Appendix D – Long Term Financial Plan Outputs

QTC Local Government Forecasting Model—CHRC
Dashboard Summary
3  2 All outputs are in thousands ($'000) unless otherwise indicated
6 errors identified—Quarry business unit active
Control Panel
Select Scenario Whole of Council or Business Units? Select Business Units Normalise Results Print
1. 2. 3. 4. 5.
Whole of Council General Saleyards Use median cash balance for ratios
Print Summary
Selected Business Units Airport [Inactive BU] 5 Normalise for selected grant program
Quarry [Inactive BU] 6
Operating Performance Liquidity

Operating surplus ratio (%) Cash expense cover ratio (months)
12% 10.0
9.0
10%
8.0
8% 7.0
6.0
6% 5.0
4.0
4%
3.0
2% 2.0
1.0
-% -
Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Operating surplus ratio DILGP—lower bound DILGP—upper bound Cash expense cover ratio QTC—lower bound
Fiscal Flexibility Asset Sustainability
Net financial liability (%) Asset sustainability ratio (%)

300% 250%
250%
200%
200%
150%
150%
100%
100%
50%
50%
-% -%
Net financial liabilities ratio DILGP—upper bound Asset sustainability ratio QTC—lower bound
Council controlled revenue ratio (%) Average useful life of depreciable assets (years)
100% 25.0
90%
80% 20.0
70%
60% 15.0
50%
40% 10.0
30%
20% 5.0
10%
-% -
Council controlled revenue ratio QTC—lower bound Average useful life of depreciable assets
Total debt service cover ratio (times) Capital expenditure ratio (times)
4.0x 800%
3.5x 700%
3.0x 600%
2.5x 500%
2.0x 400%
1.5x 300%
1.0x 200%
0.5x 100%
- -%
Total debt service cover ratio QTC—lower bound Capital expenditure ratio
Actual Budget Forecast

Key financial sustainability metrics Target Jun-15A Jun-16A Jun-17A Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Operating surplus ratio 0% to 10% na na na na 5.7% 4.7% 5.0% 0.2% 0.4% 0.7% 1.0% 1.2% 1.5% 1.8% 5.9%
na na na na 3.0 3.0 3.0 2.0 2.0 2.0 2.0 3.0 3.0 3.0 3.0
Cash expense cover ratio > 3 months na na na na 1.4 0.5 (2.8) (1.3) 0.2 1.7 3.2 4.8 6.4 8.0 9.5
na na na na 1.0 1.0 1.0 1.0 1.0 1.0 2.0 3.0 3.0 3.0 3.0
Asset sustainability ratio > 90% na na na na -% -% 200.8% 22.8% 22.1% 21.4% 20.8% 20.2% 19.6% 19.1% 30.9%
na na na na 1.0 1.0 3.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Average useful life of depreciable assets na na na na 18.1 17.8 23.5 11.3 10.1 9.0 8.0 6.9 5.9 5.0 7.3
na na na na na na na na na na na na na na na
Net financial liabilities ratio <= 60% na na na na 181.8% 255.7% 274.4% 262.1% 248.7% 234.7% 220.9% 207.0% 193.2% 179.5% 167.0%
na na na na 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Council controlled revenue ratio > 60% na na na na 20.7% 33.8% 33.8% 33.9% 33.8% 33.8% 33.7% 33.6% 33.5% 33.4% 33.3%
na na na na 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
Total debt service cover ratio > 2 times na na na na 2.5x 0.6x 2.8x 0.7x 1.2x 2.9x 3.1x 3.2x 3.3x 3.4x 3.5x
na na na na 3.0 1.0 3.0 1.0 1.0 3.0 3.0 3.0 3.0 3.0 3.0
Capital expenditure ratio na na na na na na 6.7x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.3x
na na na na na na na na na na na na na na na
CHRC Business Units 10June LGFM v3.0.1

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Dashboard 3  2 All outputs are in thousands ($'000) unless otherwise indicated
Control Panel
1. 2. 3. 4. 5.
Whole of Council General Saleyards Use median cash balance for ratios Print All
Use alt. min. liquidity for cash chart Operating Performance

Selected Business Units Airport [Inactive BU] 5
Fiscal Flexibility
Normalise for selected grant program
Quarry [Inactive BU] 6 Asset Sustainability
Liquidity
Operating Performance Page 1 of 2
Operating result ($'000) Operating efficiency ratio (%) Sales, contracts and recoverable works margin (%)
7,000 120% 100%
6,000 90%
100%
80%
5,000
80% 70%
4,000 60%
3,000 60% 50%
40%
2,000 40%
30%
1,000 20%
20%
- 10%
Jun-18AJun-19AJun-20BJun-21FJun-22F Jun-23FJun-24F Jun-25FJun-26F Jun-27FJun-28FJun-29F -% -%
Operating result Operating revenue Operating expenses Operating efficiency ratio (%) Sales, contracts and recoverable works margin (%)
Operating surplus ratio (%) Debtor and creditor days Interest to debt and interest to cash balance ratios (%)
7% 120 6%
5%
6% 100 4%
5% 3%
80 2%
4% 1%
60
3% -%
-1%
40
2% -2%
20 -3%
1%
-4%
-% - -5%
Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Gross interest expense as a portion of average term debt (%)
Operating surplus ratio (%) Creditor days Debtor days Interest revenue as a portion of average cash (%)
Actual Budget Forecast Annual average

Actual Forecast Forecast
Operating performance indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
(FY15-19) (FY20-24) (FY20-29)
Operating performance metrics

Operating surplus ratio (%) -% 5.7% 4.7% 5.0% 0.2% 0.4% 0.7% 1.0% 1.2% 1.5% 1.8% 5.9% 5.7% 2.2% 2.2%
Operating efficiency ratio (%) -% 106.0% 105.0% 105.3% 100.2% 100.4% 100.7% 101.0% 101.2% 101.5% 101.8% 106.3% 106.0% 102.3% 102.3%
Sales, contracts and recoverable works margin (%) -% -% -% -% -% -% -% -% -% -% -% -% -% -% -%
Creditor days - 96.6 30.0 30.0 30.1 30.0 30.0 30.0 30.0 30.0 30.0 30.0 96.6 30.0 30.0
Debtor days - 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0 30.0
Gross interest expense as a portion of average term debt (%) -% -% 4.9% 4.7% 4.7% 4.8% 4.9% 4.9% 4.9% 4.9% 4.9% 4.9% -% 4.8% 4.9%
Interest revenue as a portion of average cash (%) -% -% 3.5% -3.9% -% -1.1% 5.0% 3.4% 3.1% 2.9% 2.8% 2.8% -% 0.7% 1.8%
Operating result ($'000)

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Liquidity
Operating revenue - 6,539 4,503 4,603 4,689 4,794 4,913 5,034 5,158 5,285 5,416 5,550 na -5.6% -1.6%
Operating expenses - 6,169 4,290 4,372 4,681 4,774 4,881 4,986 5,094 5,205 5,320 5,220 na -4.6% -1.7%
Operating result - 370 214 231 8 20 33 48 64 80 96 330 na -38.5% -1.1%

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Operating Performance Page 2 of 2
Rateable properties vs. general rates per rateable property ($) Council FTEs vs. average wages & salaries per FTE ($) LGA population vs. rateable properties
18,000 1 600 1,400 35,000 2.14
16,000 1 1,200 2.12
500 30,000
14,000 1
Average salary ($)

1,000 2.10
400 25,000
1
12,000 800 2.08
FTEs
1 300 20,000
10,000 600 2.06
1 15,000
8,000 200 2.04
0 400
10,000
6,000 100 2.02
0 200
4,000 5,000 2.00
0 - -
2,000 0 Jun-19AJun-20BJun-21FJun-22FJun-23FJun-24FJun-25FJun-26FJun-27FJun-28FJun-29F - 1.98
- -
Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Elected officials (LHS) Staff FTEs (LHS)
Rateable properties (LHS) Average general rates per rateable property ($) (RHS) Contractor FTEs (LHS) Average wages & salaries (RHS) Residents per rateable property (RHS) Population (LHS) Rateable properties (LHS)

Operating performance indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
(FY15-19) (FY20-24) (FY20-29)
Key general rates drivers

Population 30,093 30,093 30,394 30,968 31,005 31,315 31,628 31,944 32,264 32,586 32,912 33,241 -1.2% 1.0% 1.0%
Rateable properties 14,804 14,804 14,878 14,900 14,952 15,100 15,300 15,375 15,450 15,530 15,600 15,670 -1.1% 0.7% 0.6%
Residents per rateable property 2.0 2.0 2.0 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 -0.1% 0.3% 0.4%
Average general rates per rateable property ($) na na na na na na na na na na na na na na na
Average operating cost per rateable property ($) na na na na na na na na na na na na na na na
Council FTEs
Elected officials - 9 9 9 9 9 9 9 9 9 9 9 na -% -%
Staff FTEs (excluding contractors) - 502 503 505 505 508 508 511 511 511 513 513 na 0.3% 0.2%
Contractor FTEs - - - - - - - - - - - - na na na
Total FTEs 481 511 512 514 514 517 517 520 520 520 522 522 3.5% 0.3% 0.2%
Average council wages & salaries ($)

Staff FTEs na 919 1,127 1,145 1,168 1,185 1,208 1,225 1,250 1,275 1,295 1,321 na 5.6% 3.7%
Contractor FTEs na na na na na na na na na na na na na na na
All FTEs excluding elected officials na 919 1,127 1,145 1,168 1,185 1,208 1,225 1,250 1,275 1,295 1,321 na 5.6% 3.7%

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Fiscal Flexibility Page 1 of 3
Net financial liabilities ratio (%) Council controlled revenue ratio (%) Self generated revenue ratio (%)
300% 40% 120%
35%
250% 100%
30%
200% 80%
25%
150% 20% 60%
100% 15%
40%
10%
50% 20%
5%
-% -% -%
Net financial liabilities ratio (%) Council controlled revenue ratio (%) Self generated revenue ratio (%)
Total debt service cover ratio (times) Interest cover ratio (times) Net operating cash flow as a percentage of net capital expenditure (%)
4.0x 3.0x 700%
3.5x 600%
2.5x
3.0x
500%
2.0x
2.5x
400%
2.0x 1.5x
300%
1.5x
1.0x
200%
1.0x
0.5x 100%
0.5x
- - -%
Total debt service cover ratio (times) Interest cover ratio (times) Net operating cash flow as a percentage of net capital expenditure (%)

Fiscal flexibility indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
(FY15-19) (FY20-24) (FY20-29)
Key metrics
Net financial liabilities ratio (%) -% 181.8% 255.7% 274.4% 262.1% 248.7% 234.7% 220.9% 207.0% 193.2% 179.5% 167.0% 181.8% 255.1% 224.3%
Council controlled revenue ratio (%) -% 20.7% 33.8% 33.8% 33.9% 33.8% 33.8% 33.7% 33.6% 33.5% 33.4% 33.3% 20.7% 33.8% 33.6%
Self generated revenue ratio (%) -% 106.0% 105.0% 105.3% 100.2% 100.4% 100.7% 101.0% 101.2% 101.5% 101.8% 106.3% 106.0% 102.3% 102.3%
Total debt service cover ratio (times) - 2.5x 0.6x 2.8x 0.7x 1.2x 2.9x 3.1x 3.2x 3.3x 3.4x 3.5x 2.5 1.7 2.5
Interest cover ratio (times) - 2.5x 2.1x 2.1x 2.0x 2.1x 2.1x 2.2x 2.3x 2.3x 2.3x 2.4x 2.5 2.1 2.2
Net operating cash flow as a percentage of net capital expenditure (%) -% -% -% 25.7% 439.4% 466.6% 490.3% 515.0% 540.2% 566.0% 591.7% 555.0% -% 355.5% 465.5%

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Operating revenues—by category ($'000) Operating revenues—percentage of total operating revenue (%) Operating revenues—annual growth rates (%)
7,000 100% 700%
90% 600%
6,000
80% 500%
5,000 70% 400%
60%
4,000 300%
50%
200%
3,000 40%
100%
2,000 30%
-%
20%
1,000 -100%
10%
-% -200%
-
Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Total Net rates, levies and charges Fees and charges
Net rates, levies and charges Fees and charges Operating grants and subsidies Net rates, levies and charges Fees and charges Operating grants and subsidies Operating grants and subsidies Sales revenue Interest received
Sales revenue Interest received Other operating income Sales revenue Interest received Other operating income Other operating income

(FY15-19) (FY20-24) (FY20-29)
Operating revenues—by category ($'000)

Net rates, levies and charges - - - - - - - - - - - - na na na
Fees and charges - 1,351 1,520 1,553 1,588 1,623 1,658 1,695 1,732 1,770 1,809 1,849 na 4.2% 3.2%
Operating grants and subsidies - - - - - - - - - - - - na na na
Sales revenue - - - - - - - - - - - - na na na
Interest received - - 14 14 - 2 15 29 42 57 73 89 na na na
Other operating income - 5,188 2,970 3,035 3,102 3,170 3,240 3,311 3,384 3,458 3,534 3,612 na -9.0% -3.6%
Total - 6,539 4,503 4,603 4,689 4,794 4,913 5,034 5,158 5,285 5,416 5,550 na -5.6% -1.6%
Operating revenues—annual growth rates (%)

Net rates, levies and charges na na na na na na na na na na na na -% -% -%
Fees and charges na na 12.5% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% -% -% -%
Operating grants and subsidies na na na na na na na na na na na na -% -% -%
Sales revenue na na na na na na na na na na na na -% -% -%
Interest received na na na 3.2% -100.0% na 631.1% 85.2% 48.7% 34.6% 27.1% 22.5% -% -% -%
Other operating income na na -42.8% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% -% -% -%
Total na na -31.1% 2.2% 1.9% 2.2% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5% -% -% -%
Operating revenues—percentage of total operating revenue (%)

Net rates, levies and charges na -% -% -% -% -% -% -% -% -% -% -% -% -% -%
Fees and charges na 20.7% 33.8% 33.8% 33.9% 33.8% 33.8% 33.7% 33.6% 33.5% 33.4% 33.3% 20.7% 33.8% 33.6%
Operating grants and subsidies na -% -% -% -% -% -% -% -% -% -% -% -% -% -%
Sales revenue na -% -% -% -% -% -% -% -% -% -% -% -% -% -%

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Interest received na -% 0.3% 0.3% -% 0.0% 0.3% 0.6% 0.8% 1.1% 1.3% 1.6% -% 0.2% 0.6%
Other operating income na 79.3% 65.9% 65.9% 66.1% 66.1% 65.9% 65.8% 65.6% 65.4% 65.3% 65.1% 79.3% 66.0% 65.7%
Total na 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

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Operating expenses—by category ($'000) Operating expenses—percentage of total operating revenue (%) Operating expenses—annual growth rates (%)
7,000 100% 120%
90% 100%
6,000
80% 80%
5,000 70%
60%
60%
4,000 40%
50%
3,000 20%
40%
-%
2,000 30%
20% -20%
1,000
10% -40%
- -% -60%
Employee benefits Materials and services Depreciation and amortisation Employee benefits Materials and services Depreciation and amortisation Total Employee benefits Materials and services
Finance costs Other operating expenses Finance costs Other operating expenses Depreciation and amortisation Finance costs Other operating expenses

(FY15-19) (FY20-24) (FY20-29)
Operating expenses—by category ($'000)

Employee benefits - 461 569 580 592 604 616 628 641 653 666 680 na 6.0% 4.0%
Materials and services - 3,539 2,202 2,251 2,300 2,351 2,403 2,455 2,509 2,565 2,621 2,679 na -7.5% -2.7%
Depreciation and amortisation - 233 224 224 438 453 467 481 495 510 524 324 na 14.9% 3.4%
Finance costs - 396 415 418 432 428 436 441 447 453 462 468 na 2.0% 1.7%
Other operating expenses - 1,541 879 899 918 939 959 980 1,002 1,024 1,047 1,070 na -9.0% -3.6%
Total - 6,169 4,290 4,372 4,681 4,774 4,881 4,986 5,094 5,205 5,320 5,220 na -4.6% -1.7%
Operating expenses—annual growth rates (%)

Employee benefits na na 23.5% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% -% -% -%
Materials and services na na -37.8% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% -% -% -%
Depreciation and amortisation na na -3.7% -% 95.6% 3.3% 3.2% 3.1% 3.0% 2.9% 2.8% -38.2% -% -% -%
Finance costs na na 4.8% 0.8% 3.4% -0.9% 1.8% 1.1% 1.4% 1.5% 1.8% 1.3% -% -% -%
Other operating expenses na na -42.9% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% -% -% -%
Total na na -30.5% 1.9% 7.1% 2.0% 2.2% 2.2% 2.2% 2.2% 2.2% -1.9% -% -% -%
Operating expenses—percentage of total operating revenue (%)

Employee benefits na 7.5% 13.3% 13.3% 12.6% 12.6% 12.6% 12.6% 12.6% 12.6% 12.5% 13.0% 7.5% 12.9% 12.8%
Materials and services na 57.4% 51.3% 51.5% 49.1% 49.2% 49.2% 49.2% 49.3% 49.3% 49.3% 51.3% 57.4% 50.1% 49.9%
Depreciation and amortisation na 3.8% 5.2% 5.1% 9.4% 9.5% 9.6% 9.7% 9.7% 9.8% 9.9% 6.2% 3.8% 7.8% 8.4%
Finance costs na 6.4% 9.7% 9.6% 9.2% 9.0% 8.9% 8.8% 8.8% 8.7% 8.7% 9.0% 6.4% 9.3% 9.0%
Other operating expenses na 25.0% 20.5% 20.6% 19.6% 19.7% 19.7% 19.7% 19.7% 19.7% 19.7% 20.5% 25.0% 20.0% 19.9%

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Fiscal Flexibility
Liquidity
Total na 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%

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Fiscal Flexibility
Liquidity
Asset Sustainability Page 1 of 4
Asset sustainability ratio (%) Asset renewal funding ratio (%) Depreciation as a percentage of closing written down value of property,
250% 100% plant & equipment (%)
90% 25%
200% 80%
70% 20%
150% 60%
50% 15%
100% 40%
10%
30%
50% 20% 5%
10%
-% -% -%
Asset sustainability ratio (%) Asset renewal funding ratio (%) Depreciation as a percentage of closing written down value of property, plant & equipment (%)
Capital expenditure ratio (times) Average useful life by asset class Community equity ($'000)
8.0x 25 15,000
7.0x 20
10,000
6.0x 15
5.0x 5,000
10
4.0x
5 -
3.0x
-
2.0x (5,000)
Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
1.0x Average useful life of depreciable assets Land improvements
Buildings Plant & equipment (10,000)
-
Furniture & fittings Roads, drainage & bridge network Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Water Sewerage
Capital expenditure ratio (times) Miscellaneous Community equity Total assets Total liabilities

Asset sustainability indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
(FY15-19) (FY20-24) (FY20-29)
Key metrics
Asset sustainability ratio (%) -% -% -% 200.8% 22.8% 22.1% 21.4% 20.8% 20.2% 19.6% 19.1% 30.9% -% 53.4% 37.8%
Asset renewal funding ratio (%) -% -% -% -% -% -% -% -% -% -% -% -% -% -% -%
Depreciation as a percentage of closing written down value of property, plant & equipment
-% (%) 5.5% 5.6% 4.2% 8.9% 9.9% 11.1% 12.5% 14.4% 16.8% 20.1% 13.6% 5.5% 7.9% 11.7%
Capital expenditure ratio (times) - - - 6.7x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.3x - 1.8 0.9
Average useful life by asset class (years)

Land improvements na na na na na na na na na na na na na na na
Buildings na na na na na na na na na na na na na na na
Plant & equipment na na 17.8 23.5 11.3 10.1 9.0 8.0 6.9 5.9 5.0 7.3 na 14.4 10.5
Furniture & fittings na na na na na na na na na na na na na na na
Roads, drainage & bridge network na - na na na na na na na na na na - na na
Water na na na na na na na na na na na na na na na

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Fiscal Flexibility
Liquidity
Sewerage na na na na na na na na na na na na na na na
Miscellaneous na na na na na na na na na na na na na na na
Average useful life of depreciable assets na 18.1 17.8 23.5 11.3 10.1 9.0 8.0 6.9 5.9 5.0 7.3 18.1 14.4 10.5

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Fiscal Flexibility
Liquidity
Capital expenditure—by asset class ($'000) Capital expenditure—by asset type ($'000) Closing book value of PP&E—by asset class ($'000)
1,600 1,600 6,000
1,400 1,400 5,000

1,200 1,200
4,000
1,000 1,000
800 800 3,000
600 600 2,000
400 400
200 1,000
200
- - -
Land Land improvements Buildings Land Land improvements Buildings
Plant & equipment Furniture & fittings Roads, drainage & bridge network Plant & equipment Furniture & fittings Roads, drainage & bridge network
New Renewal Upgrade Water Sewerage Miscellaneous
Water Sewerage Miscellaneous
Intangible Intangible

(FY15-19) (FY20-24) (FY20-29)
Capital expenditure—by asset class ($'000)

Land - - - - - - - - - - - - na na na
Land improvements - 474 - - - - - - - - - - na -100.0% -100.0%
Buildings - - - - - - - - - - - - na na na
Plant & equipment - - - 1,500 100 100 100 100 100 100 100 100 na na na
Furniture & fittings - - - - - - - - - - - - na na na
Roads, drainage & bridge network - - - - - - - - - - - - na na na
Water - - - - - - - - - - - - na na na
Sewerage - - - - - - - - - - - - na na na
Miscellaneous - - - - - - - - - - - - na na na
Intangible - - - - - - - - - - - - na na na
Total capital expenditure - 474 - 1,500 100 100 100 100 100 100 100 100 na -26.7% -14.4%
Capital expenditure—by asset type ($'000)

New - - - - - - - - - - - - na na na
Renewal - - - 450 100 100 100 100 100 100 100 100 na na na
Upgrade - - - 1,050.0 - - - - - - - - na na na
Total capital expenditure - - - 1,500 100 100 100 100 100 100 100 100 na na na
Closing book value of PP&E—by asset class ($'000)

Land - - - - - - - - - - - - na na na
Land improvements - - - - - - - - - - - - na na na
Buildings - - - - - - - - - - - - na na na
Plant & equipment - 4,222 3,998 5,274 4,936 4,583 4,216 3,835 3,439 3,029 2,605 2,381 na -0.0% -5.6%
Furniture & fittings - - - - - - - - - - - - na na na
Roads, drainage & bridge network - - - - - - - - - - - - na na na
Water - - - - - - - - - - - - na na na
Sewerage - - - - - - - - - - - - na na na

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Fiscal Flexibility
Liquidity
Miscellaneous - - - - - - - - - - - - na na na
Intangible - - - - - - - - - - - - na na na
Total closing book value - 4,222 3,998 5,274 4,936 4,583 4,216 3,835 3,439 3,029 2,605 2,381 na -0.0% -5.6%

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Fiscal Flexibility
Liquidity
Capital expenditure—by funding source ($'000) Term debt ($'000)

12,000.00
1,600.00 Net debt position
10,000
1,400.00 10,000.00 9,000
8,000
1,200.00 8,000.00
7,000
1,000.00 6,000
6,000.00
800.00 5,000
4,000.00 4,000
600.00
3,000
400.00 2,000.00 2,000
200.00 1,000
-
-
- Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Net debt position
New borrowings Grants Subsidies Contributions Donations Working capital Long-term portion of term debt Current portion of term debt

(FY15-19) (FY20-24) (FY20-29)
Capital expenditure—by funding source ($'000)

New borrowings - - - - - - - - - - - - na na na
Grants - - - - - - - - - - - - na na na
Subsidies - - - - - - - - - - - - na na na
Contributions - - - - - - - - - - - - na na na
Donations - - - - - - - - - - - - na na na
Working capital - - - 1,500 100 100 100 100 100 100 100 100 na na na
Total - - - 1,500 100 100 100 100 100 100 100 100 na na na
Term debt ($'000)

Long-term portion of term debt - 7,379 8,558 8,665 8,777 8,895 9,019 9,149 9,285 9,429 9,580 9,738 na 4.1% 2.8%
Current portion of term debt - 980 (101) (107) (112) (119) (124) (130) (136) (144) (150) (158) na na na
Total term debt - 8,359 8,457 8,558 8,665 8,777 8,895 9,019 9,149 9,285 9,429 9,580 na 1.3% 1.4%
Net debt position - 7,695 8,317 9,432 9,092 8,726 8,336 7,921 7,480 7,014 6,523 6,068 na 1.6% -2.3%

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Fiscal Flexibility
Liquidity
Forecasted debt repayments ($'000) Total debt to operating revenue & community equity (times) Total debt per capita & rateable property ($)
2.5x 350
500
2.0x
400 300
1.5x
300 250
1.0x
200 0.5x 200
-
100 150
-0.5x
- 100
-1.0x
(100) -1.5x 50
(200) -2.0x -
Scheduled principal repayments Additional principal repayments Interest repayments Total debt to operating revenue (times) Total debt to community equity (times) Total debt per capita ($) Total debt per rateable property ($)

(FY15-19) (FY20-24) (FY20-29)
Forecasted debt repayments ($'000)

Scheduled principal repayments - - (98) (101) (107) (112) (119) (124) (130) (136) (144) (150) na na na
Additional principal repayments na na - - - - - - - - - - na na na
Interest repayments - - 415 419 424 429 436 441 447 453 462 468 na na na
Total payments - - 317 317 317 317 317 317 317 317 317 317 na na na
Key debt measures

Total debt to operating revenue (times) na 1.3x 1.9x 1.9x 1.8x 1.8x 1.8x 1.8x 1.8x 1.8x 1.7x 1.7x 1.3x 1.8x 1.8x
Total debt to community equity (times) na -1.1x -1.1x -1.2x -1.2x -1.2x -1.2x -1.2x -1.3x -1.3x -1.3x -1.4x -1.1x -1.2x -1.2x
Total debt per capita ($) na na 277 289 299 285 279 280 282 283 284 286 na 286 284
Total debt per rateable property ($) na na na na na na na na na na na na na na na

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Fiscal Flexibility
Liquidity
Liquidity Position Page 1 of 2
Time period for the chart from the start of the forecast 10 years
12.0
Cash expense cover (months)
10.0
Cash cycle by cash segments ($'000)
5,000 8.0
6.0
4,000 4.0
2.0
-
3,000
(2.0)
(4.0)
2,000 Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Cash expense cover (months) QTC—lower bound QTC—upper bound
1,000
Working capital ratio (times)

14.0x
-
12.0x
10.0x
(1,000)
8.0x
6.0x
(2,000)
4.0x
(3,000) 2.0x
Jul-19B
Jan-20B
May-20B
Jul-20F
Sep-20F
Nov-20F
Jan-21F
Mar-21F
May-21F
Jul-21F
Sep-21F
Nov-21F
Jan-22F
Mar-22F
May-22F
Jul-22F
Sep-22F
Nov-22F
Jan-23F
Mar-23F
May-23F
Jul-23F
Sep-23F
Nov-23F
Jan-24F
Mar-24F
May-24F
Jul-24F
Sep-24F
Nov-24F
Jan-25F
Mar-25F
May-25F
Jul-25F
Sep-25F
Nov-25F
Jan-26F
Mar-26F
May-26F
Jul-26F
Sep-26F
Nov-26F
Jan-27F
Mar-27F
May-27F
Jul-27F
Sep-27F
Nov-27F
Jan-28F
Mar-28F
May-28F
Jul-28F
Sep-28F
Nov-28F
Jan-29F
Mar-29F
May-29F
Sep-19B
Nov-19B
Mar-20B
-
Cash cover Externally restricted Internally restricted Long-term surplus Short-term surplus
Working capital ratio (times) QTC—lower bound QTC—upper bound
Overdraft Cash cover (unfunded) Cash balance Net cash balance Approved working capital facility limit
Closing balance of cash and cash equivalents ($'000) Annual unrestricted cash balance range (high, median, low) Closing cash balance and median annual cash balance
4,000 5,000 4,000
3,500
4,000 3,500
3,000 3,000
2,500 3,000 2,500
2,000 2,000
1,500 2,000
1,500
1,000 1,000
1,000
500 500
- - -
(500) (500)
(1,000)
(1,000) (1,000)
(1,500) (2,000) (1,500)
Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F

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Fiscal Flexibility
Liquidity
Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Externally restricted Internally restricted Unrestricted Cash and cash equivalents—closing balance Cash and cash equivalents—median balance

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Fiscal Flexibility
Liquidity
Liquidity Position Page 2 of 2
Actual Budget Forecast Average annual rates

Liquidity position indicators Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
(FY15-19) (FY20-24) (FY20-29)
Liquidity metrics
Cash and cash equivalents—closing balance - 664 140 (874) (428) 51 560 1,098 1,668 2,271 2,907 3,512 na -3.4% 18.1%
Cash and cash equivalents—median balance - - 697 653 (346) 115 609 1,133 1,687 2,273 2,901 3,545 na na na
Cash expense cover (months) - 1.4 0.5 (2.8) (1.3) 0.2 1.7 3.2 4.8 6.4 8.0 9.5 1.4 (0.4) 3.0
Working capital ratio (times) - 0.5x 1.6x 0.3x 0.5x 1.4x 3.0x 4.7x 6.5x 8.4x 10.4x 12.2x 0.5x 1.4x 4.9x
Closing balance of cash and cash equivalents ($'000)

Externally restricted - - - - - - - - - - - - na na na
Internally restricted - - - - - - - - - - - - na na na
Unrestricted - 664 140 (874) (428) 51 560 1,098 1,668 2,271 2,907 3,512 na -3.4% 18.1%
Total cash - 664 140 (874) (428) 51 560 1,098 1,668 2,271 2,907 3,512 na -3.4% 18.1%

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Statement of Comprehensive Income 3  2 All outputs are in thousands ($'000) unless otherwise indicated
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Line item Annual result

Jun-15A Jun-16A Jun-17A Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Income
Revenue
Operating revenue
General rates - - - - - - - - - - - - - - -
Separate rates - - - - - - - - - - - - - - -
Levies - - - - - - - - - - - - - - -
Water - - - - - - - - - - - - - - -
Water consumption, rental and sundries - - - - - - - - - - - - - - -
Sewerage - - - - - - - - - - - - - - -
Sewerage trade waste - - - - - - - - - - - - - - -
Waste management - - - - - - - - - - - - - - -
Garbage charges - - - - - - - - - - - - - - -
Other rates, levies and charges - - - - - - - - - - - - - - -
Less: discounts - - - - - - - - - - - - - - -
Less: pensioner remissions - - - - - - - - - - - - - - -
Net rates, levies and charges - - - - - - - - - - - - - - -
Building and development fees - - - - - - - - - - - - - - -

Infringements - - - - - - - - - - - - - - -
Licences and registrations - - - - - - - - - - - - - - -
Other fees and charges - - - - 1,351 1,520 1,553 1,588 1,623 1,658 1,695 1,732 1,770 1,809 1,849
Fees and charges - - - - 1,351 1,520 1,553 1,588 1,623 1,658 1,695 1,732 1,770 1,809 1,849
Other rental income - - - - - - - - - - - - - - -

Rental income - - - - - - - - - - - - - - -
Interest from overdue rates, levies and charges - - - - - - - - - - - - - - -

Interest received from investments - - - - - 14 14 - 2 15 29 42 57 73 89
Other interest received - - - - - - - - - - - - - - -
Interest received - - - - - 14 14 - 2 15 29 42 57 73 89
Contract and recoverable works - - - - - - - - - - - - - - -

Gain/(loss) on sale of land held as inventory - - - - - - - - - - - - - - -
Gain/(loss) on sale of inventory held for sale - - - - - - - - - - - - - - -
Gain/(loss) on sale of non-current assets held as inventory - - - - - - - - - - - - - - -
Other sales revenue - - - - - - - - - - - - - - -
Sales revenue - - - - - - - - - - - - - - -
Profit (loss) from joint ventures & associates - - - - - - - - - - - - - - -

Profit (loss) from controlled entities - - - - - - - - - - - - - - -

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Profit (loss) from other investments - - - - - - - - - - - - - - -

Profit from investments - - - - - - - - - - - - - - -
External dividends received - - - - - - - - - - - - - - -

Internal charges received - - - - - - - - - - - - - - -
Other income - - - - 5,188 2,970 3,035 3,102 3,170 3,240 3,311 3,384 3,458 3,534 3,612
Other income - - - - 5,188 2,970 3,035 3,102 3,170 3,240 3,311 3,384 3,458 3,534 3,612
General purpose grants - - - - - - - - - - - - - - -

State subsidies and grants—operating - - - - - - - - - - - - - - -
Commonwealth subsidies and grants—operating - - - - - - - - - - - - - - -
Other non-government subsidies and grants - - - - - - - - - - - - - - -
Donations—operating - - - - - - - - - - - - - - -
Contributions—operating - - - - - - - - - - - - - - -
Grants, subsidies, contributions and donations - - - - - - - - - - - - - - -
Total operating revenue - - - - 6,539 4,503 4,603 4,689 4,794 4,913 5,034 5,158 5,285 5,416 5,550
Capital revenue
Government subsidies and grants—capital - - - - - - - - - - - - - - -
Donations—capital - - - - - - - - - - - - - - -
Contributions—capital - - - - - - - - - - - - - - -
Other capital contributions - - - - - - - - - - - - - - -
Total revenue - - - - 6,539 4,503 4,603 4,689 4,794 4,913 5,034 5,158 5,285 5,416 5,550
Capital income
Profit/(loss) on disposal of property, plant & equipment - - - - - - - - - - - - - - -
Profit/(loss) on sale of joint ventures & associates - - - - - - - - - - - - - - -
Profit/(loss) on sale of controlled entities - - - - - - - - - - - - - - -
Profit/(loss) on sale of other investments - - - - - - - - - - - - - - -
Profit/(loss) on sale of investment property - - - - - - - - - - - - - - -
Revaluation up of property, plant & equipment reversing previous revaluation down - - - - - - - - - - - - - - -
Revaluation of investment property - - - - - - - - - - - - - - -
Revaluation up of joint ventures & associates - - - - - - - - - - - - - - -
Revaluation up of controlled entities - - - - - - - - - - - - - - -
Other capital income - - - - - - - - - - - - - - -
Total capital income - - - - - - - - - - - - - - -
Total income - - - - 6,539 4,503 4,603 4,689 4,794 4,913 5,034 5,158 5,285 5,416 5,550

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Expenses
Operating expenses
Total staff wages and salaries - - - - 461 567 578 590 602 614 626 639 651 664 678
Councillors' remuneration - - - - - - - - - - - - - - -
Employee provision expense - - - - - 2 2 2 2 2 2 2 2 2 2
Other employee related expenses - - - - - - - - - - - - - - -
Less: capitalised employee expenses - - - - - - - - - - - - - - -
Employee benefits - - - - 461 569 580 592 604 616 628 641 653 666 680
M&S—sales contract & recoverable works - - - - 714 563 576 589 601 615 628 642 656 671 685
M&S—administration supplies - - - - - - - - - - - - - - -
M&S—audit services - - - - - - - - - - - - - - -
M&S—communication & IT - - - - - - - - - - - - - - -
M&S—consultants - - - - 520 205 209 214 218 223 228 233 238 243 249
M&S—contractors - - - - 2,184 1,352 1,381 1,412 1,443 1,474 1,507 1,540 1,574 1,609 1,644
M&S—electricity - - - - - - - - - - - - - - -
M&S—council maintenance - - - - 121 83 85 86 88 90 92 94 96 99 101
M&S—travel - - - - - - - - - - - - - - -
M&S—other - - - - - - - - - - - - - - -
Materials and services - - - - 3,539 2,202 2,251 2,300 2,351 2,403 2,455 2,509 2,565 2,621 2,679
Finance costs charged by QTC and General - - - - 396 415 419 424 429 436 441 447 453 462 468
Interest paid on overdraft - - - - - - - 15 - - - - - - -
Bank charges - - - - - - - - - - - - - - -
Interest on finance leases - - - - - - - - - - - - - - -
Other finance costs - - - - - - (1) (7) (1) - - - - - -
Finance costs - - - - 396 415 418 432 428 436 441 447 453 462 468
Land improvements - - - - - - - - - - - - - - -
Buildings - - - - - - - - - - - - - - -
Plant & equipment - - - - - 224 224 438 453 467 481 495 510 524 324
Furniture & fittings - - - - - - - - - - - - - - -
Roads, drainage & bridge network - - - - 233 - - - - - - - - - -
Water - - - - - - - - - - - - - - -
Sewerage - - - - - - - - - - - - - - -
Miscellaneous - - - - - - - - - - - - - - -
Amortisation of intangible assets - - - - - - - - - - - - - - -
Depreciation and amortisation - - - - 233 224 224 438 453 467 481 495 510 524 324

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Bad and doubtful debts - - - - - - - - - - - - - - -

Rentals & operating leases - - - - - - - - - - - - - - -
Payments - - - - - - - - - - - - - - -
Restructuring provision expense - - - - - - - - - - - - - - -
Other provision expense - - - - - - - - - - - - - - -
Other expenses - - - - 1,541 879 899 918 939 959 980 1,002 1,024 1,047 1,070
Other expenses - - - - 1,541 879 899 918 939 959 980 1,002 1,024 1,047 1,070
Total operating expenses - - - - 6,169 4,290 4,372 4,681 4,774 4,881 4,986 5,094 5,205 5,320 5,220
Capital expenses
Loss on impairment - - - - - - - - - - - - - - -
Restoration & rehabilitation provision expense - - - - - - - - - - - - - - -
Revaluation decrement - - - - - - - - - - - - - - -
Other capital expenses - - - - - - - - - - - - - - -
Total capital expenses - - - - - - - - - - - - - - -
Total expenses - - - - 6,169 4,290 4,372 4,681 4,774 4,881 4,986 5,094 5,205 5,320 5,220
Net result - - - - 370 214 231 8 20 33 48 64 80 96 330
Tax equivalents
Net result before tax equivalents - - - - 370 214 231 8 20 33 48 64 80 96 330

Tax equivalents payable - - - - - 64 69 0 6 10 14 19 24 29 99
Net result after tax equivalents - - - - 370 150 162 8 15 23 34 45 56 67 231
Other comprehensive income
Items that will not be reclassified to net result

Increase (decrease) in asset revaluation surplus - - - - - - - - - - - - - - -
Miscellaneous comprehensive income - - - - - - - - - - - - - - -
Total other comprehensive income for the year - - - - - - - - - - - - - - -
Total comprehensive income for the year - - - - 370 214 231 8 20 33 48 64 80 96 330
Operating result
Operating revenue - - - - 6,539 4,503 4,603 4,689 4,794 4,913 5,034 5,158 5,285 5,416 5,550

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Operating expenses - - - - 6,169 4,290 4,372 4,681 4,774 4,881 4,986 5,094 5,205 5,320 5,220
Operating result - - - - 370 214 231 8 20 33 48 64 80 96 330

Statement of Financial Position 3  2 All outputs are in thousands ($'000) unless otherwise indicated
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Assets
Current assets
Internally restricted component - - - - - - - - - - - - - - -
Externally restricted component - - - - - - - - - - - - - - -
Unrestricted component - - - - 664 140 - - 51 560 1,098 1,668 2,271 2,907 3,512
Cash and cash equivalents - - - - 664 140 - - 51 560 1,098 1,668 2,271 2,907 3,512
General trade and other receivables - - - - 537 368 377 385 394 401 411 420 430 438 449
Internal loans outstanding - - - - - - - - - - - - - - -
Trade and other receivables - - - - 537 368 377 385 394 401 411 420 430 438 449
Inventories held for sale - - - - - - - - - - - - - - -

Inventories held for distribution - - - - - - - - - - - - - - -
Land held for development or sale - - - - - - - - - - - - - - -
Inventories - - - - - - - - - - - - - - -
Tax equivalent assets - - - - - - - - - - - - - - -

Prepayments - - - - - - - - - - - - - - -
Other current assets - - - - - - - - - - - - - - -
Other current assets - - - - - - - - - - - - - - -
Non-current assets held for sale - - - - - - - - - - - - - - -
Total current assets - - - - 1,201 508 377 385 445 961 1,510 2,089 2,700 3,345 3,961
Non-current assets
Land held for development for sale - - - - - - - - - - - - - - -
Inventories - - - - - - - - - - - - - - -
General trade and other receivables - - - - - - - - - - - - - - -

Internal loans outstanding - - - - - - - - - - - - - - -
Trade and other receivables - - - - - - - - - - - - - - -
Joint ventures & associates - - - - - - - - - - - - - - -

Controlled entities - - - - - - - - - - - - - - -
Other investments - - - - - - - - - - - - - - -
Investment property - - - - - - - - - - - - - - -
Investments - - - - - - - - - - - - - - -
Land - - - - - - - - - - - - - - -

30/07/19 10:45 AM 'FinPos' Page 1 of 3
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Land improvements - - - - - - - - - - - - - - -
Buildings - - - - - - - - - - - - - - -
Plant & equipment - - - - 4,222 3,998 5,274 4,936 4,583 4,216 3,835 3,439 3,029 2,605 2,381
Furniture & fittings - - - - - - - - - - - - - - -
Roads, drainage & bridge network - - - - - - - - - - - - - - -
Water - - - - - - - - - - - - - - -
Sewerage - - - - - - - - - - - - - - -
Miscellaneous - - - - - - - - - - - - - - -
Work in progress - - - - - - - - - - - - - - -
Property, plant & equipment - - - - 4,222 3,998 5,274 4,936 4,583 4,216 3,835 3,439 3,029 2,605 2,381
Intangible assets - - - - - - - - - - - - - - -
Other non-current assets - - - - - - - - - - - - - - -
Other non-current assets - - - - - - - - - - - - - - -
Total non-current assets - - - - 4,222 3,998 5,274 4,936 4,583 4,216 3,835 3,439 3,029 2,605 2,381
Total assets - - - - 5,423 4,505 5,651 5,321 5,028 5,177 5,345 5,528 5,730 5,950 6,342
Liabilities
Current liabilities
Overdraft - - - - - - 874 428 - - - - - - -
Employee payables - - - - 37 46 48 48 49 50 51 52 54 54 56
Other payables - - - - 1,429 253 259 265 270 276 282 289 295 301 308
Trade and other payables - - - - 1,466 299 306 313 320 326 334 341 349 355 364
Loans - - - - 980 (101) (107) (112) (119) (124) (130) (136) (144) (150) (158)
Finance leases - - - - - - - - - - - - - - -
Borrowings - - - - 980 (101) (107) (112) (119) (124) (130) (136) (144) (150) (158)
Employee - - - - 67 67 67 67 67 67 67 67 67 67 67
Restoration & rehabilitation - - - - 51 51 51 51 51 51 51 51 51 51 51
Restructuring - - - - - - - - - - - - - - -
Other - - - - - - - - - - - - - - -
Provisions - - - - 118 118 118 118 118 118 118 118 118 118 118
Tax equivalent liabilities - - - - - - - - - - - - - - -

Other - - - - - - - - - - - - - - -

30/07/19 10:45 AM 'FinPos' Page 2 of 3
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Other current liabilities - - - - - - - - - - - - - - -
Total current liabilities - - - - 2,564 316 1,191 747 319 320 322 323 322 323 324
Non-current liabilities
Trade and other payables - - - - - - - - - - - - - - -
Loans - - - - 7,379 8,558 8,665 8,777 8,895 9,019 9,149 9,285 9,429 9,580 9,738
Finance leases - - - - - - - - - - - - - - -
Borrowings - - - - 7,379 8,558 8,665 8,777 8,895 9,019 9,149 9,285 9,429 9,580 9,738
Employee - - - - 7 9 11 13 15 17 19 21 23 25 27
Restoration & rehabilitation - - - - 3,138 3,138 3,138 3,138 3,138 3,138 3,138 3,138 3,138 3,138 3,138
Restructuring - - - - - - - - - - - - - - -
Other - - - - - - - - - - - - - - -
Provisions - - - - 3,145 3,147 3,149 3,151 3,153 3,155 3,157 3,159 3,161 3,163 3,165
Other non-current liabilities - - - - - - - - - - - - - - -
Total non-current liabilities - - - - 10,524 11,705 11,814 11,928 12,048 12,174 12,306 12,444 12,590 12,743 12,903
Total liabilities - - - - 13,088 12,021 13,005 12,674 12,368 12,494 12,628 12,767 12,913 13,066 13,227
Net community assets - - - - (7,665) (7,515) (7,354) (7,354) (7,340) (7,317) (7,283) (7,239) (7,183) (7,115) (6,884)
Community equity
Asset revaluation surplus - - - - - - - - - - - - - - -

Retained surplus - - - - (7,665) (7,515) (7,354) (7,354) (7,340) (7,317) (7,283) (7,239) (7,183) (7,115) (6,884)
Total community equity - - - - (7,665) (7,515) (7,354) (7,354) (7,340) (7,317) (7,283) (7,239) (7,183) (7,115) (6,884)
Reconciliation
Net community assets to community equity - - - - - - - - - - - - - - -

30/07/19 10:45 AM 'FinPos' Page 3 of 3
Statement of Cash Flows 3  2 All outputs are in thousands ($'000) unless otherwise indicated
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Cash flows from operating activities
Receipts from customers - - - - - 4,659 4,579 4,681 4,784 4,890 4,996 5,107 5,219 5,335 5,450
Payments to suppliers and employees - - - - - (4,816) (3,721) (3,802) (3,885) (3,970) (4,054) (4,143) (4,233) (4,325) (4,417)
Payments for land held as inventory - - - - - - - - - - - - - - -
Proceeds from sale of land held as inventory - - - - - - - - - - - - - - -
Dividend received - - - - - - - - - - - - - - -
Interest received - - - - - 14 14 (15) 2 15 29 42 57 73 89
Rental income - - - - - - - - - - - - - - -
Non-capital grants and contributions - - - - - - - - - - - - - - -
Borrowing costs - - - - - (415) (419) (424) (429) (436) (441) (447) (453) (462) (468)
Tax equivalents paid to General - - - - - (64) (69) (0) (6) (10) (14) (19) (24) (29) (99)
Dividend paid to General - - - - - - - - - - - - - - -
Payment of provision - - - - - - - - - - - - - - -
Other cash flows from operating activities - - - - - - - - - - - - - - -
Net cash inflow from operating activities - - - - - (622) 385 439 467 490 515 540 566 592 555
Cash flows from investing activities
Payments for property, plant and equipment - - - - - - (1,500) (100) (100) (100) (100) (100) (100) (100) (100)
Payments for intangible assets - - - - - - - - - - - - - - -
Net movement in loans and advances - - - - - - - - - - - - - - -
Proceeds from sale of property, plant and equipment - - - - - - - - - - - - - - -
Other cash flows from investing activities - - - - - - - - - - - - - - -
Net cash inflow from investing activities - - - - - - (1,500) (100) (100) (100) (100) (100) (100) (100) (100)
Cash flows from financing activities
Proceeds from borrowings - - - - - - - - - - - - - - -

Repayment of borrowings - - - - - 98 101 107 112 119 124 130 136 144 150
Repayments made on finance leases - - - - - - - - - - - - - - -
Net cash inflow from financing activities - - - - - 98 101 107 112 119 124 130 136 144 150
Total cash flows

30/07/19 10:45 AM 'CashFlow' Page 1 of 2
Statement of Cash Flows 3  2 All outputs are in thousands ($'000) unless otherwise indicated
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Net increase in cash and cash equivalent held - - - - - (524) (1,013) 446 479 509 539 570 602 636 605
Opening cash and cash equivalents - - - - - 664 140 (874) (428) 51 560 1,098 1,668 2,271 2,907
Closing cash and cash equivalents - - - - 664 140 (874) (428) 51 560 1,098 1,668 2,271 2,907 3,512
Reconciliation
Closing cash balance to Statement of Financial Position - - - - - - - - - - - - - - -

30/07/19 10:45 AM 'CashFlow' Page 2 of 2
Statement of Changes in Equity 3  2 All outputs are in thousands ($'000) unless otherwise indicated
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Asset revaluation surplus
Opening balance - - - - - - - - - -
Net result na na na na na na na na na na
Increase in asset revaluation surplus - - - - - - - - - -
Internal payments made na na na na na na na na na na
Closing balance - - - - - - - - - - -
Retained surplus
Opening balance (7,665) (7,515) (7,354) (7,354) (7,340) (7,317) (7,283) (7,239) (7,183) (7,115)
Net result 214 231 8 20 33 48 64 80 96 330
Increase in asset revaluation surplus na na na na na na na na na na
Internal payments made (64) (70) (7) (7) (10) (14) (19) (24) (29) (99)
Closing balance (7,665) (7,515) (7,354) (7,354) (7,340) (7,317) (7,283) (7,239) (7,183) (7,115) (6,884)
Total
Opening balance (7,665) (7,515) (7,354) (7,354) (7,340) (7,317) (7,283) (7,239) (7,183) (7,115)
Net result 214 231 8 20 33 48 64 80 96 330
Increase in asset revaluation surplus - - - - - - - - - -
Internal payments made (64) (70) (7) (7) (10) (14) (19) (24) (29) (99)
Closing balance (7,665) (7,515) (7,354) (7,354) (7,340) (7,317) (7,283) (7,239) (7,183) (7,115) (6,884)

30/07/19 10:45 AM 'ChgEquity' Page 1 of 1
Metrics 3  2 All outputs are in thousands ($'000) unless otherwise indicated
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User selected ratios Annual metric

ID Name Jun-15A Jun-16A Jun-17A Jun-18A Jun-19A Jun-20B Jun-21F Jun-22F Jun-23F Jun-24F Jun-25F Jun-26F Jun-27F Jun-28F Jun-29F
Selected Metrics
Selected metric charts
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[—] DILGP / QTC—upper bound DILGP / QTC—lower bound DILGP / QTC—upper bound DILGP / QTC—lower bound [—] DILGP / QTC—upper bound DILGP / QTC—lower bound

30/07/19 10:46 AM 'Metrics' Page 1 of 8
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1 na na na na na na na na na na na na na na na

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DILGP financial sustainability measures
R1.1 Operating surplus ratio na na na na 5.7% 4.7% 5.0% 0.2% 0.4% 0.7% 1.0% 1.2% 1.5% 1.8% 5.9%
= Operating result / total operating revenue
R1.2 Net financial liabilities ratio na na na na 181.8% 255.7% 274.4% 262.1% 248.7% 234.7% 220.9% 207.0% 193.2% 179.5% 167.0%
R1.3 Asset sustainability ratio na na na na -% -% 200.8% 22.8% 22.1% 21.4% 20.8% 20.2% 19.6% 19.1% 30.9%
QTC credit metrics
R2.1 Council controlled revenue ratio na na na na 20.7% 33.8% 33.8% 33.9% 33.8% 33.8% 33.7% 33.6% 33.5% 33.4% 33.3%
R2.2 Cash expense cover ratio na na na na 1.44 0.46 -2.81 -1.35 0.16 1.69 3.24 4.82 6.42 8.05 9.52
R2.3 Total debt service cover ratio na na na na 2.5x 0.6x 2.8x 0.7x 1.2x 2.9x 3.1x 3.2x 3.3x 3.4x 3.5x
R2.4 Capital expenditure ratio na na na na na na 6.7x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.2x 0.3x
R2.5 Average useful life of depreciable assets na na na na 18.14 17.84 23.54 11.26 10.12 9.03 7.97 6.94 5.94 4.97 7.35
Operating items statistics
R3.1 Growth in rateable properties na -5.0% -% 0.5% -% 0.5% 0.1% 0.3% 1.0% 1.3% 0.5% 0.5% 0.5% 0.5% 0.4%
R3.2 Growth in average general rates per property na na na na na na na na na na na na na na na
R3.3 Growth in FTE numbers na 6.3% 1.7% -% 6.1% 0.3% 0.4% -% 0.6% -% 0.6% -% -% 0.4% -%
R3.4 Growth in EBA agreements -% -% -% -% -% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
R3.5 Change in net rates, levies and charges na na na na na na na na na na na na na na na
R3.6 Change in sales - contract and recoverable works na na na na na na na na na na na na na na na
R3.7 Change in operating subsidies, grants, contributions and donations na na na na na na na na na na na na na na na

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R3.8 Change in other operating revenue na na na na na -31.1% 2.2% 1.9% 2.2% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
R3.9 Change in employee benefits na na na na na 23.5% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0%
Change in materials and services not used for sales and recoverable
R3.10 na na na na na -42.0% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2%
works
R3.11 Change in total materials and services na na na na na -37.8% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2% 2.2%
R3.12 Change in depreciation & amortisation expenses na na na na na -3.7% -% 95.6% 3.3% 3.2% 3.1% 3.0% 2.9% 2.8% -38.2%
R3.13 Change in other operating expenses na na na na na -33.2% 1.7% 2.6% 1.2% 2.1% 1.9% 2.0% 2.0% 2.1% 1.9%
R3.14 Change in total operating revenue na na na na na -31.1% 2.2% 1.9% 2.2% 2.5% 2.5% 2.5% 2.5% 2.5% 2.5%
R3.15 Change in total operating expenses na na na na na -30.5% 1.9% 7.1% 2.0% 2.2% 2.2% 2.2% 2.2% 2.2% -1.9%
R3.16 Change in operating result na na na na na -42.2% 7.9% -96.6% 156.5% 60.1% 47.8% 31.9% 25.7% 20.1% 243.3%
R3.17 Change in selected cash closing balance na na na na na -79.0% -726.1% -51.1% -111.9% 1,000.4% 96.2% 51.9% 36.1% 28.0% 20.8%
R3.18 Cash expense cover ratio—excluding externally restricted na na na na 1.44 0.46 - - 0.16 1.69 3.24 4.82 6.42 8.05 9.52
R3.19 Cash expense cover ratio—excluding externally & internally restricted na na na na 1.44 0.46 - - 0.16 1.69 3.24 4.82 6.42 8.05 9.52
R3.20 Alternative minimum liquidity measure na na na na na 473 980 427 441 454 468 482 497 512 527
R3.21 Alternative minimum liquidity—months na na na na na 1.55 3.15 1.35 1.36 1.37 1.38 1.39 1.41 1.42 1.43
R3.22 Gross interest expense as a portion of average term debt na na na na na 4.9% 4.7% 4.7% 4.8% 4.9% 4.9% 4.9% 4.9% 4.9% 4.9%
R3.23 Interest revenue as a portion of average cash na na na na na 3.5% -3.9% -% -1.1% 5.0% 3.4% 3.1% 2.9% 2.8% 2.8%
R3.24 Average general rate per property na na na na na na na na na na na na na na na
R3.25 Average operating cost per property na na na na na na na na na na na na na na na
R3.26 Average term debt per property na na na na na na na na na na na na na na na
R3.27 Calculated creditor days na na na na 96.57 30.00 30.00 30.05 30.01 30.00 30.00 30.00 30.00 30.00 30.00
R3.28 Calculated debtor days na na na na 29.97 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00 30.00
Capital items statistics

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R4.1 Gross capital expenditure - - - - - - 1,500 100 100 100 100 100 100 100 100
R4.2 Net capital expenditure - - - - - - 1,500 100 100 100 100 100 100 100 100
R4.3 New borrowings - - - - - - - - - - - - - - -

Depreciation as a percentage of closing written down value of
R4.4 na na na na 5.5% 5.6% 4.2% 8.9% 9.9% 11.1% 12.5% 14.4% 16.8% 20.1% 13.6%
property, plant & equipment
R4.5 Average useful life—land improvements na na na na na na na na na na na na na na na
R4.6 Average useful life—buildings na na na na na na na na na na na na na na na
R4.7 Average useful life—plant & equipment na na na na na 17.84 23.54 11.26 10.12 9.03 7.97 6.94 5.94 4.97 7.35
R4.8 Average useful life—furniture & fittings na na na na na na na na na na na na na na na
R4.9 Average useful life—roads, drainage & bridge network na na na na - na na na na na na na na na na
R4.10 Average useful life—water na na na na na na na na na na na na na na na
R4.11 Average useful life—sewerage na na na na na na na na na na na na na na na
R4.12 Average useful life—miscellaneous na na na na na na na na na na na na na na na

Cash capital grants, subsidies, contributions & donations as a
R4.14 na na na na na na -% -% -% -% -% -% -% -% -%
percentage of gross capital expenditure
Non-cash capital grants, subsidies, contributions & donations as a
R4.15 na na na na na na -% -% -% -% -% -% -% -% -%
percentage of gross capital expenditure
R4.16 New borrowings as a percentage of gross capital expenditure na na na na na na -% -% -% -% -% -% -% -% -%
Closing revaluation balance as a percentage of opening written down
R4.17 na na na na na -% -% -% -% -% -% -% -% -% -%
value of property, plant & equipment
R4.18 Asset renewal funding ratio na na na na na na na na na na na na na na na
Operating position indicators
R5.1 Relative operating growth rate na na na na na -0.7% 0.3% -5.2% 0.3% 0.2% 0.3% 0.3% 0.3% 0.3% 4.4%
R5.2 Sales, contracts and recoverable works margin na na na na na na na na na na na na na na na
R5.3 Operating efficiency ratio na na na na 106.0% 105.0% 105.3% 100.2% 100.4% 100.7% 101.0% 101.2% 101.5% 101.8% 106.3%
Fiscal flexibility indicators

Control Panel
1. 2. 3. 4. 5.
Selected Metrics

All Metrics

R6.1 Interest cover ratio na na na na 2.5x 2.1x 2.1x 2.0x 2.1x 2.1x 2.2x 2.3x 2.3x 2.3x 2.4x
R6.2 Leverage ratio na na na na 117.7% 184.7% 185.9% 184.8% 182.0% 169.7% 157.3% 145.0% 132.7% 120.4% 109.3%
R6.3 Self generated revenue ratio na na na na 106.0% 105.0% 105.3% 100.2% 100.4% 100.7% 101.0% 101.2% 101.5% 101.8% 106.3%
Operating grants, subsidies, contributions & donations as a
R6.4 na na na na -% -% -% -% -% -% -% -% -% -% -%
percentage of total operating revenue
Contract and recoverable works as a percentage of total operating
R6.5 na na na na -% -% -% -% -% -% -% -% -% -% -%
revenue
R6.6 Other operating revenue as a percentage of total operating revenue na na na na 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0% 100.0%
R6.7 Total employee benefits as a percentage of total operating expenses na na na na 7.5% 13.3% 13.3% 12.6% 12.6% 12.6% 12.6% 12.6% 12.6% 12.5% 13.0%
Total materials and services as a percentage of total operating
R6.8 na na na na 57.4% 51.3% 51.5% 49.1% 49.2% 49.2% 49.2% 49.3% 49.3% 49.3% 51.3%
expenses
Total depreciation & amortisation as a percentage of total operating
R6.9 na na na na 3.8% 5.2% 5.1% 9.4% 9.5% 9.6% 9.7% 9.7% 9.8% 9.9% 6.2%
expenses
R6.10 Other operating expenses as a percentage of total operating expenses na na na na 31.4% 30.2% 30.1% 28.9% 28.6% 28.6% 28.5% 28.4% 28.4% 28.3% 29.4%
R6.11 Net operating cash flow as a percentage of net capital expenditure na na na na na na 25.7% 439.4% 466.6% 490.3% 515.0% 540.2% 566.0% 591.7% 555.0%
Liquidity indicators
R7.1 Working capital ratio na na na na 0.5x 1.6x 0.3x 0.5x 1.4x 3.0x 4.7x 6.5x 8.4x 10.4x 12.2x
R7.2 Total restricted cash as a percentage of total cash na na na na -% -% na na -% -% -% -% -% -% -%
R7.3 Internally restricted cash as a percentage of total cash na na na na -% -% na na -% -% -% -% -% -% -%
R7.4 Externally restricted cash as a percentage of total cash na na na na -% -% na na -% -% -% -% -% -% -%
Equity maintenance indicators
R8.1 Net results - - - - 370 214 231 8 20 33 48 64 80 96 330
R8.2 Net margin na na na na 5.7% 4.7% 5.0% 0.2% 0.4% 0.7% 1.0% 1.2% 1.5% 1.8% 5.9%
New capital expenditure as a percentage of opening written down
R8.3 na na na na na -% -% -% -% -% -% -% -% -% -%
value of property, plant & equipment
R8.4 Change in community equity excluding asset revaluation surplus na na na na na -2.0% -2.1% -0.0% -0.2% -0.3% -0.5% -0.6% -0.8% -0.9% -3.2%

Control Panel
1. 2. 3. 4. 5.
Selected Metrics

All Metrics



020 CHRC Quarry Business Plan Draft V1.1 26 September 2019

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020 CHRC Quarry Business Plan Draft V1.1 26 September 2019

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Quarry Business

Strategic Business Plan

Central Highlands Regional Council 1 Quarry Business Plan

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

Central Highlands Regional Council 2 Quarry Business Plan

Central Highlands Regional Council 3 Quarry Business Plan

Version Date Changes/Amendments Author Accepted By

Initial review by Coordinator CHRC – Joe

Review by Commercial Analyst – CHRC –

August CHRC – Kerry

September Review by General Manager Customer CHRC –

September Prepared for endorsement – template, CHRC – Kelly

Name Title Endorsed & Signature Date

General Manager Customer and

Central Highlands Regional Council 4 Quarry Business Plan

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

Central Highlands Regional Council 5 Quarry Business Plan

Central Highlands Regional Council 6 Quarry Business Plan

Central Highlands Regional Council 7 Quarry Business Plan

Evolve service offerings that meet

• Assess & re-value rehabilitation liabilities across the

• Restructure financial reports

Figure 1 - The Quarry's "Plan on a Page"

Central Highlands Regional Council 8 Quarry Business Plan

Figure 2 - The Quarry's Performance Measures

Central Highlands Regional Council 9 Quarry Business Plan

Central Highlands Regional Council 10 Quarry Business Plan

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

Competitive Competitive neutrality is about ensuring government owned monopoly

Central Highlands Regional Council 11 Quarry Business Plan

• Be for a period of 3 years;

Central Highlands Regional Council 12 Quarry Business Plan

• A review of documentation was undertaken;

Current State Work Program

Figure 3 - The Business Planning Process

3.3 Plan Structure (the Value Model)

Central Highlands Regional Council 13 Quarry Business Plan

• Overall Strategic Direction

Figure 4 - The Value Model

Central Highlands Regional Council 14 Quarry Business Plan

4.2 Quarry Background

Central Highlands Regional Council 15 Quarry Business Plan

Further diversification has involved establishing operations at Mungabunda to ensure supply to

Central Highlands Regional Council 16 Quarry Business Plan

• Pit 1: a smaller work area in the south-western portion of the site;

The Mungabunda Quarry is located on ‘Cowandilla’ approximately 25 kilometres from Bauhinia.

4.4 Quarry sales

• 195,000 tonnes for Shepton; and

Central Highlands Regional Council 17 Quarry Business Plan

Item Shepton Mungabunda Council Total

External Sales (%) 60% 0 0 36.6%

Internal Sales (%) 40% 100% 100% 63.4%

% of Total Sales 61% 4% 35% 100%

4.4.2 Future Demand

• Galilee Basin mining – rail development;

Central Highlands Regional Council 18 Quarry Business Plan

Trends for Central Highlands region

GRP % Change Residential Buiding Approvals

Figure 5 - Central Highlands Economic Trends

Central Highlands Regional Council 19 Quarry Business Plan

Furthermore, in early 2019, an Expression of Interest process was commenced seeking

Central Highlands Regional Council 20 Quarry Business Plan

• Pre-coat aggregate production • Environmental licensing requirements