Cost Allocation Overview

The cost allocation methodology adopted has been developed to support the implementation of a development contributions policy and complies with the requirements of the LGA 2002. The outputs of the analysis are presented in a manner that will meet the requirements of Section 106 in respect of the level and detail of information that should be made available for review.

The cost allocation methodology allocates the project costs into the expenditure components of Renewal, Backlog and Growth.

The portion of a planned (or completed) capital project providing capacity in excess of existing community demand at the current agreed levels of service.

The portion of a planned (or completed) capital project that is required to rectify a shortfall in service capacity to meet existing community demand at the current agreed levels of service.

The gross cost of replacing an existing asset with a modern equivalent asset to the same function and capacity at the end of its life.

Renewal is about the "money put aside" in anticipation of the cost for replacing the asset at some future time. This should not be confused with the asset replacement activity. The asset replacement activity (or rehabilitation work) draws on the knowledge that an asset is reaching the end of its life and is the work planned to ensure that the integrity of the service is maintained. The rehabilitation work may also include elements of backlog and growth to ensure the integrity of the service for some time into the future.