City of Brisbane Amendment Regulation (No. 1) 1998 (Qld)

Queensland Subordinate Legislation 1998 No. 132 City of Brisbane Act 1924 CITY OF BRISBANE AMENDMENT REGULATION (No. 1) 1998 TABLE OF PROVISIONS Section Page 1 Short title . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2 Regulation amended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 Amendment of s 2 (Definitions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 4 Replacement of s 15 (Depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 15 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 5 Insertion of new pt 3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 PART 3A—COMMERCIALISATION Division 1—Preliminary 20A Object of pt 3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 20B Application of pt 3A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Division 2—Commercialisation Subdivision 1—Matters affecting commercialisation 20C Matters affecting commercialisation . . . . . . . . . . . . . . . . . . . . . . . . . 4 Subdivision 2—Full cost pricing 20D Application of full cost pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 20E Different charges for commercial reasons . . . . . . . . . . . . . . . . . . . . . 5 20F Total costs of carrying on activity . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 20G Administrative and overhead costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 20H Cost of resources used in carrying on activity . . . . . . . . . . . . . . . . . . 6 20I Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

2 City of Brisbane Amendment (No. 1) No. 132, 1998 20J Return on capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Subdivision 3—Treatment of community service obligations 20K Extra cost for community service obligations to be treated as revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Subdivision 4—Reporting 20L Statement in budget . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 20M Statement in annual report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Subdivision 5—Annual performance plan 20N Annual performance plan for each commercial business unit . . . . . 10 6 Replacement of s 29 (Depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 29 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 7 Replacement of s 50 (Depreciation) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 50 Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

s1 3 s5 City of Brisbane Amendment (No. 1) No. 132, 1998 ˙ Short title 1. This regulation may be cited as the City of Brisbane Amendment Regulation (No. 1) 1998 . ˙ Regulation amended 2. This regulation amends the City of Brisbane Regulation 1993 . ˙ Amendment of s 2 (Definitions) 3. Section 2— insert— ‘ “commercialisation” , for part 3A, see section 458CH 1 of the Local Government Act.’. ˙ Replacement of s 15 (Depreciation) 4. Section 15— omit, insert— ˙ ‘ Depreciation ‘ 15.(1) Depreciation of an asset used in carrying on an activity must be based on the deprival value of the asset allocated over its useful life. ‘ (2) However, the council may decide not to base depreciation of an asset on its deprival value allocated over its useful life, but to use instead an amount decided by the council to be appropriate in the circumstances.’. ˙ Insertion of new pt 3A 5. After part 3— insert— 1 Section 458CH (Meaning of “commercialisation”)

s5 4 s5 City of Brisbane Amendment (No. 1) No. 132, 1998 ‘ PART 3A—COMMERCIALISATION ‘Division 1—Preliminary ˙ ‘ Object of pt 3A ‘ 20A. The object of this part is to make standards about requirements for commercialisation for chapter 7A, part 5 of the Local Government Act. ˙ ‘ Application of pt 3A ‘ 20B. This part applies to the council’s implementation of commercialisation for its significant business activities under chapter 7A, part 5 of the Local Government Act. ‘ Division 2—Commercialisation ‘ Subdivision 1—Matters affecting commercialisation ˙ ‘ Matters affecting commercialisation ‘ 20C. The matters affecting commercialisation are— (a) full cost pricing; and (b) treatment of community service obligations; and (c) elimination, or taking account, of advantages and disadvantages of public ownership; and (d) financial reporting; and (e) matters mentioned in the council’s annual performance plan.

s5 5 s5 City of Brisbane Amendment (No. 1) No. 132, 1998 ‘ Subdivision 2—Full cost pricing ˙ ‘ Application of full cost pricing ‘ 20D. In deciding charges to clients for goods and services provided in carrying on an activity, the council must ensure the projected total revenue from carrying on the activity is enough to cover the projected total costs of carrying on the activity for the council’s financial year. ˙ ‘ Different charges for commercial reasons ‘ 20E.(1) A charge may be decided for the provision of specific goods or services in carrying on an activity that is, for commercial reasons, an appropriate charge for the goods or services provided. ‘ (2) For subsection (1), a charge is, for commercial reasons, an appropriate charge if it is a charge that could reasonably be charged if the goods or services had been provided by an entity carrying on the activity with the primary object of making a profit from carrying on the activity. ˙ ‘ Total costs of carrying on activity ‘ 20F. For this subdivision, the total costs of carrying on an activity include the following— (a) operational costs incurred in carrying on the activity; (b) administrative and overhead costs; (c) cost of resources used in carrying on the activity; (d) depreciation; (e) equivalents for Commonwealth or State taxes the council is not liable to pay because it is a local government; 2 (f) equivalents for the cost of funds advantage the council obtains 2 See section 458CO of the Local Government Act (Commonwealth and State tax equivalents).

s5 6 s5 City of Brisbane Amendment (No. 1) No. 132, 1998 over commercial interest rates because of State guarantees on borrowings; 3 (g) return on capital. ˙ ‘ Administrative and overhead costs ‘ 20G. The council must make a reasonable allocation of its administrative and overhead costs to each activity to which commercialisation is applied. ˙ ‘ Cost of resources used in carrying on activity ‘ 20H.(1) If resources are provided by or to the council for carrying on an activity, the cost of resources used in carrying on the activity includes an equivalent cost. ‘ (2) If the resources have an identifiable cost, the cost of the resources may be taken to be the equivalent cost. ‘ (3) If subsection (2) does not apply and the resources are readily available on the open market, the price at which they can be obtained in the market may be taken to be the equivalent cost. ‘ (4) If subsection (3) is applied, the council must ensure the terms on which the cost is based are similar to the terms on which they are made available in carrying on the activity. ˙ ‘ Depreciation ‘ 20I.(1) Depreciation of an asset used in carrying on an activity must be based on the deprival value of the asset allocated over its useful life. ‘ (2) However, the council may decide not to base depreciation of an asset on its deprival value allocated over its useful life, but to use instead an amount decided by the council to be appropriate in the circumstances. 3 See section 458CP of the Local Government Act (Guarantees by State).

s5 7 s5 City of Brisbane Amendment (No. 1) No. 132, 1998 ˙ ‘ Return on capital ‘ 20J.(1) The amount for the return on the capital used in carrying on an activity must be decided using the rate at which, in the opinion of the council, a comparable private sector entity carrying on the activity would be able to obtain the capital in the market, having regard to the split the council considers appropriate, for the type of business, between equity and loan capital and the return appropriate to each. ‘ (2) Despite subsection (1), the amount for the return on the capital used in carrying on an activity for the first year in which commercialisation applies to the activity may be the amount the council decides. ‘ (3) In this section— “capital used in carrying on an activity” means the total value (using an accepted accountancy method) of the assets used for the activity less the liabilities attributable to the activity. ‘ Subdivision 3—Treatment of community service obligations ˙ ‘ Extra cost for community service obligations to be treated as revenue ‘ 20K. If community service obligations are carried out as part of an activity, for deciding charges for goods and services provided through the activity, there must be treated as revenue for the activity an amount equivalent to— (a) the cost of carrying out the obligations; less (b) any revenue arising from carrying out the obligations. ‘ Subdivision 4—Reporting ˙ ‘ Statement in budget ‘ 20L.(1) Each budget of the council must include a statement about its activities to which commercialisation applies. ‘ (2) The statement must, for each activity— (a) show the estimated revenues; and

s5 8 s5 City of Brisbane Amendment (No. 1) No. 132, 1998 (b) show the estimated expenses including any items required to be taken into account for commercialisation other than return on capital; and (c) include the estimated surplus or deficit for the financial year; and (d) include a description of the nature of community service obligations to be provided. ‘ (3) The statement must disclose, for each activity, as estimated revenues, the following items separately— (a) estimated revenue for services to be provided by the activity to clients other than the council; (b) estimated revenue for services to be provided by the activity to the council; (c) the estimated cost of, less any estimated revenue arising from, carrying out community service obligations provided under the activity. ‘ (4) The statement must disclose, for each activity, as estimated expenses, the following items separately— (a) operational costs including— (i) administrative and overhead costs; and (ii) cost of resources to be used in carrying on the activity; (b) depreciation; (c) competitive neutrality adjustments including— (i) equivalents for taxes other than income tax; and (ii) equivalents for the cost of funds advantage the council obtains over commercial interest rates because of State guarantees on borrowings; and (iii) adjustments for advantages and disadvantages of public ownership of the activity. ˙ ‘ Statement in annual report ‘ 20M.(1) The council must include in the financial statements in its

s5 9 s5 City of Brisbane Amendment (No. 1) No. 132, 1998 annual report a statement about its activities to which commercialisation applies. ‘ (2) The statement must, for each activity— (a) show the revenues; and (b) show the expenses including any items required to be taken into account for commercialisation other than return on capital; and (c) include the surplus or deficit for the financial year; and (d) include a description of the nature of community service obligations provided. ‘ (3) The statement must disclose, for each activity, as revenues, the following items separately— (a) revenue for goods and services provided to clients other than the council in carrying on the activity; (b) revenue for goods and services provided to the council in carrying on the activity; (c) the cost of, less any revenue arising from, carrying out community service obligations provided under the activity. ‘ (4) The statement must disclose, for each activity, as expenses, the following items separately— (a) operational costs including— (i) administrative and overhead costs; and (ii) cost of resources used in carrying on the activity; (b) depreciation; (c) competitive neutrality adjustments including— (i) equivalents for taxes other than income tax; and (ii) equivalents for the cost of funds advantage the council obtains over commercial interest rates because of State guarantees on borrowings; and (iii) adjustments for advantages and disadvantages of public ownership of the activity.

s 5 10 s 5 City of Brisbane Amendment (No. 1) No. 132, 1998 ‘Subdivision 5—Annual performance plan ˙ ‘ Annual performance plan for each commercial business unit ‘ 20N.(1) The annual performance plan for a commercial business unit (a “CBU” ) must include the following matters— (a) the CBU’s financial and non-financial performance targets for its activities; (b) the nature and extent of the CBU’s community service obligations; (c) the costings of, and funding for, the CBU’s community service obligations. ‘ (2) A CBU’s annual performance plan must also include the following matters— (a) the CBU’s objectives and functions; (b) the nature and scope of the CBU’s main activities and undertakings; (c) the CBU’s notional capital structure and treatment of surpluses; (d) the CBU’s proposed major investments; (e) the CBU’s outstanding and proposed borrowings; (f) the CBU’s policy on the level and quality of service consumers can expect from the CBU; (g) the delegations necessary to allow the CBU to exercise management autonomy and authority in its commercial activities; (h) the type of information to be given in reports. ‘ (3) However, a CBU is not required to include in its annual performance plan a matter, or an aspect of a matter, mentioned in subsection (2) if the council is satisfied that the matter or aspect is not materially relevant to the CBU or its activities. ‘ (4) Subsections (1) and (2) do not limit the matters that may be included in an annual performance plan. ‘ (5) A matter in the annual performance plan of a CBU may be omitted

s 6 11 s 7 City of Brisbane Amendment (No. 1) No. 132, 1998 from the copies of the plan to be made public if— (a) the matter is of a commercially sensitive nature to the CBU; and (b) a full statement of the matter is given— (i) if the annual performance plan is adopted by resolution of the council—to each of the council’s councillors; or (ii) if the council delegates the adoption of the annual performance plan—to the delegate. 4 ’. ˙ Replacement of s 29 (Depreciation) 6. Section 29— omit, insert— ˙ ‘ Depreciation ‘ 29.(1) Depreciation of an asset used in carrying on an activity must be based on the deprival value of the asset allocated over its useful life. ‘ (2) However, the council may decide not to base depreciation of an asset on its deprival value allocated over its useful life, but to use instead an amount decided by the council to be appropriate in the circumstances.’. ˙ Replacement of s 50 (Depreciation) 7. Section 50— omit, insert— ˙ ‘ Depreciation ‘ 50.(1) Depreciation of an asset used in carrying on an activity must be based on the deprival value of the asset allocated over its useful life. ‘ (2) However, the council may decide not to base depreciation of an asset on its deprival value allocated over its useful life, but to use instead an amount decided by the council to be appropriate in the circumstances.’. 4 Under s 198(2) of the Local Government Act 1993 , a person who is or has been a local government councillor must not release information that the person knows, or should reasonably know, is confidential to the local government and the local government wishes to keep confidential.

12 City of Brisbane Amendment (No. 1) No. 132, 1998 ENDNOTES 1. Made by the Governor in Council on 14 May 1998. 2. Notified in the gazette on 15 May 1998. 3. Laid before the Legislative Assembly on . . . 4. The administering agency is the Department of Local Government and Planning. © State of Queensland 1998