Finance and Governance Committee

Notice of Meeting

Monday, 12 February 2018

Tuesday, 06 February 2018

 

 

A meeting of the Finance and Governance Committee will be held  at 6.00pm on Monday 12 February 2018 on Level 1, Georges River Civic Centre, corner Dora and MacMahon Streets, Hurstville.  The agenda and reports for this meeting are available on Council's website at http://www.georgesriver.nsw.gov.au/Council/Council-Meetings.

 

 

 

 

 

 

Gail Connolly

General Manager

 

 

BUSINESS

1.      Apologies

2.      Disclosures of Interest

3.      Minutes of previous meetings

4.      Committee Reports

 


Finance and Governance Committee Meeting

Summary of Items

Monday, 12 February 2018

 

Previous Minutes

MINUTES: Finance and Governance - 11 December 2017

Committee Reports

FIN001-18         Audit, Risk and Improvement Committee Minutes from 17 July 2017.

(Report by Internal Auditor).......................................................................................... 2

FIN002-18         Advice on Court Proceedings - December 2017/January 2018

(Report by General Counsel)....................................................................................... 9

FIN003-18         Investment Report as at 30 November 2017

(Report by Team Leader Financial Reporting)....................................................... 21

FIN004-18         Investment Report as at 31 December 2017

(Report by Financial  Accounting Officer)............................................................... 35

FIN005-18         Property Matter - Proposed Road Closure and Sale of Land - Part Buchanan St, Carlton, Lot 3 in DP734336 and Lot 12 in DP627414

(Report by Strategic Property Officer)....................................................................... 49   

 


Georges River Council – Finance and Governance Standing Committee Meeting -  Monday, 12 February 2018    Page 2

Item:                   FIN001-18          Audit, Risk and Improvement Committee Minutes from 17 July 2017. 

Author:              Internal Auditor

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

Recommendation

(a)     That Council note the Minutes of the Audit, Risk and Improvement Committee for 17 July 2017 provided as an attachment to this report.

Executive Summary

1.   Council’s Audit, Risk and Improvement Committee Charter provides in Cl 5.1 for the periodic reporting of Audit, Risk and Improvement Committee Minutes to the Council. The Charter provides for a time interval in between the ARIC meeting and the reporting of its minutes. The ARIC Committee met on 17 July 2017 and on 30 October 2017 for scheduled meetings.

2.   The Minutes of the July meeting were adopted at the 30 October 2017 meeting and are now presented for Council’s information.

 

Background

1.       Council’s Audit, Risk and Improvement Committee Charter adopted by Council’s Finance and Governance Committee on 13 November 2017, provides in Cl 5.1 for the periodic reporting of Audit, Risk and Improvement Committee Minutes to the Council, as follows:

“The Committee shall report back to Council within a six (6) months period following each meeting. Summary reports may be presented to the Council. The report shall provide Council with the following as appropriate and applicable:

          - Minutes of each meeting

- All significant issues which can be reported without prejudice to the audit function.

This provision is to permit the implementation of Committee recommendations in a reasonable window of confidentiality, to optimise the effectiveness of Committee actions.”

 

3.      The most significant issues considered by the Committee at the 17 July meeting, were related to the preparation of the 2016/2017 Financial reports and the Client Service Plan issued by the NSW Audit Office, as well as Council’s new Enterprise Risk Management Strategy.

 

Financial Implications

4.      No budget impact for this report.

 

File Reference

D17/195764

 

ATTACHMENTS

Attachment 1

PDF Confirmed Minutes - ARIC 17 JULY 2017 - for issue

 


Georges River Council - Finance and Governance Standing Committee Meeting - Monday, 12 February 2018

FIN001-18              Audit, Risk and Improvement Committee Minutes from 17 July 2017.

[Appendix 1]          PDF Confirmed Minutes - ARIC 17 JULY 2017 - for issue

 

 

Page 3

 


 


 


 


 


 


Georges River Council – Finance and Governance Standing Committee Meeting -  Monday, 12 February 2018    Page 9

Item:                   FIN002-18          Advice on Court Proceedings - December 2017/January 2018 

Author:              General Counsel

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

Recommendation

(a)     That the information be received and noted.

Executive Summary

1.      Advice on Council’s Court Proceedings for the period 1 December 2017 to 2 February 2018 is contained within this report.

 

Background

2.      The current Court Proceedings for the reporting period are broken down as follows:

Land and Environment Court Appeals

·   22 x Class 1 (Merit/DA)

·   5 x Class 4 Proceedings (including 2 Contempt of Court proceedings)

Supreme Court

·   1 x Application under s88K for easements (Telado) over Council’s land

Local Court

·   16 x Prosecutions

          NSW Industrial Relations Commission

·   1 x Dispute (United Services Union)

NSW Civil & Administrative Tribunal

·   1 x Application (Briscoe-Hough v Tegg & Ors)

Cost Recovery

·   7 x cost recovery matters

 

Total Costs

·   Total costs to date for the 2017/18 financial year are $249,594.

·   Total legal costs recovered to date for the 2017/18 financial year are $146,938.

 

Historical Costs

·   Total costs for Court proceedings in the 2016/17 financial year were $736,241 [$575,161 (Hurstville) and $161,080 (Kogarah)].

 

New Matters

3.      Six new matters were received during the reporting period: five Class 1 appeals in the Land and Environment Court (Stellar Hurstville Pty Limited, Vortex Property Group, Cash Warwick Pty Limited, Tribeca Property Developers Pty Limited and W & J Lee Property Investments Pty Limited) and one Class 4 matter (The Congregational Christian Church in Samoa, Parish of Sydney Incorporated and Taeipo Malifa)

Finalised Matters

 

4.         One Local Court judgment (Council v Sears) and 1 Land and Environment Court matter (Cash Warwick Pty Limited).

 

Current Table

 

5.      The Court Proceedings current for the reporting period for Council are set out below. The external costs include both external legal and consultants’ fees.

 

 

 

No.

Property Address / Applicant / Proceedings Number

Description of Matter

Status / Critical Dates

External Costs to Date From 2017/18 FY

Land and Environment Court Proceedings – Class 1 Appeals

1

58 and 60 Blackshaw Avenue

MORTDALE

 

Applicant:

Marion McDowell and Associates

 

Proceedings No.

241879 of 2016

 

Class 1 Appeal against Council Order for demolition of existing unauthorised structure.

Judgment handed down on 13 June 2017.  Council’s order was upheld. Compliance period extended to 13 September 2017, pending outcome of building certificate application.  Building certificate application refused.  Appeal lodged.

Awaiting outcome of appeal to commence enforcement.

$7,765.00

2

54 – 56 Johnstone Street, Peakhurst

 

Applicant: AMIA Investments Pty Ltd ATF MIAA Trust

 

Proceedings No:  206973 of 2017

 

Class 1 Appeal against deemed refusal of DA2017/0105 for demolition of existing structure, construction of 9 townhouses and strata title subdivision.

Following S34 Conference on 6 November 2017, applicant submitted amended plans for consideration.  Matter to be resolved through S34 Agreement, subject to conditions.

$20,572.00

3

70 – 78 Regent Street, Kogarah

 

Applicant: Regent Land Pty Limited ATF Regent Land Unit Trust

 

Proceedings No. 215083 of 2017

Class 1 Appeal against deemed refusal of DA 2017/111 for the demolition of existing buildings over eight lots (5 properties), amalgamation of the lots and development of an 11 storey residential flat building with 127 apartments and 145 car parking spaces.

 

Matter not resolved at S34 Conference on 6 December 2017.  Matter has now been listed for hearing on 5 and 6 July 2018.  External urban design, planning and traffic consultants briefed.

$24,244.00

4

11 Stanley Street & 28 – 36 Victoria Street, Kogarah

 

Applicant: No. 1 Victoria Dragons Pty Limited

 

Proceedings No. 217118 of 2017

 

Class 1 Appeal against deemed refusal of DA9/2017/110/1 for demolition of existing buildings and construction of a residential flat building comprising 96 residential dwellings over 3 levels of basement parking.

Matter not resolved at S34 Conference on 4 December 2017.   Matter listed for hearing on 5 and 6 July 2018.  External urban design, planning, heritage and traffic consultants briefed.

$17,893.00

5

2 – 10 Palmerston Street, Kogarah

 

Applicant: Palmerston Dragon No. 1 Pty Limited

 

Proceedings No. 217105 of 2017

 

Class 1 Appeal against deemed refusal of DA9/2017/112/1 for demolition of existing buildings and construction of a residential flat building comprising 67 residential dwellings over 2 levels of basement parking.

Matter not resolved at S34 Conference on 5 December 2017. Matter now listed for hearing on 15 & 16 August 2018.  External urban design, planning, heritage and traffic consultants briefed.

$8,072.00

6

41 – 47 Princes Highway, Kogarah

 

Applicant:

GCK Investments Pty Limited

 

Proceedings No.  235909 of 2017

Class 1 Appeal against refusal of DA183/2016 for the demolition of existing buildings and construction of a 10 storey mixed use development consisting of ground floor commercial tenancy and 51 residential apartments over basement car parking.

Matter was listed for S34 Conference on 19 December 2017.  Negotiations ongoing.  Matter listed for further directions on 6 February 2018. External urban design, planning, heritage and traffic consultants briefed.

$4,851.00

7

832-836 King Georges Road and 51 Connells Point Road, South Hurstville

 

Applicant: Cash Warwick Pty Limited

 

Proceedings No.  245201 of 2017

Class 1 Appeal – application to modify Development Consent no. DA99/2016 granted on 6 April 2017 by the Land and Environment Court proceedings 2016/380571 to delete the lower level basement, internal re-configuration of remaining basement levels, removal of one lift and reconfiguration of the fire stair and bicycle parking.

Matter settled by way of S34 Agreement.

$4,793.00

8

70 – 76 Pitt Street, Mortdale

 

Applicant: D R Design (NSW) Pty Limited

 

Proceedings No. 273727 of 2017

Class 1 Appeal against deemed refusal of DA2017/0242 for demolition of existing structures, site amalgamation and the construction of a 3 storey residential flat building with basement car parking.

Matter was listed for S34 Conference on 18 January 2018. Matter is listed for further directions on 9 February 2018.

$0

10

58 and 60 Blackshaw Avenue

MORTDALE

 

Applicant:

Marion McDowell and Associates

 

Proceedings No.

294745 of 2017

 

Class 1 Appeal against refusal of Building Certificate Application No. 149D2016/0038 lodged on 21 September 2016 and refused on 20 September 2017.

Matter listed for contested hearing on 2 March 2018.

$3,138.00

11

1 – 5 Treacy Street, Hurstville

 

Applicant: G R Capital Group Pty Limited

 

Proceedings No. 304530 of 2017

Class 1 Appeal against refusal of DA2017/0205 for the construction of five additional levels (31 apartments) to an approved mixed development under Development Consent DA2014/0183 (as modified)

Matter is listed for hearing on 29 & 30 May 2018. External town planner and traffic consultant briefed.

$0

12

6 The Crescent, Kingsgrove

 

Applicant: One Funds Management Ltd ATF Kingsgrove Property Trust

 

Proceedings No. 2017/309712

Class 1 Appeal against actual refusal of DA2017/0151 for construction of new off-street entry to premises along Vanessa Street, Kingsgrove.

Matter is listed for S34 Conference on 22 March 2018.

$0

13

16 – 20 Tooronga Terrace, Beverly Hills

 

Applicant: Nicole Saoud

 

Proceedings no. 328848 of 2017

Class 1 appeal against refusal of DA 2016/0230 seeking development consent for retention of existing development fronting Tooronga Terrace, Beverly Hills and construction of a 3 storey building at rear for use as a boarding house with parking at ground level

Matter is listed for S34 Conference on 30 April 2018. External town planner and traffic consultant briefed.

$4,290.00

14

70 Carwar Crescent, Carss Park

 

Applicant: Belinda Sun

 

Proceedings no. 335225 of 2017

Class 1 appeal against refusal of DA263/2016 for demolition of existing structure and construction of a new 2 storey attached dual occupancy with sub floor garage.

Matter is listed for S34 Conference on 1 May 2018.

$0

15

27 Newman Street, Mortdale

 

Applicant: Morgan Ng

 

Proceedings No. 343784/2017

 

Class 1 appeal against deemed refusal of DA2017/0121 for demolition of existing structure and construction of a new boarding house (12 rooms) and carport.

Matter listed for S34 Conference on 8 May 2018.

$0

16

849 King Georges Road, South Hurstville

 

Applicant: Urban Link Pty Limited

 

Proceedings No. 351493 of 2017

 

Class 1 Appeal against refusal of DA for demolition of existing structures and construction of a 4 storey flat building with 13 units and basement parking.

Matter is listed for S34 Conference on 16 May 2018.

$0

17

14 Wright Street, Hurstville

 

Applicant:

Prajna Monastery Australia Incorporated

 

Proceedings No. 2017/353101

Class 1 appeal against Council’s refusal of DA 2017/0384 for demolition of an existing single storey dwelling and construction of a place of worship (Buddhist monastery).

Matter listed for hearing on 21 & 22 May 2018. External traffic consultant briefed.

$0

18

2 – 10 Woniora Road, Hurstville

 

Applicant:

Stellar Hurstville Pty Limited

 

Proceedings No. 2017/370324

Class 1 Appeal against deemed refusal of DA262/2016 for demolition of existing buildings and ancillary structures and construction of a new mixed use commercial residential building comprising three basement levels containing car parking and storage, ground floor commercial and basement parking and 12 residential apartment levels containing 112 apartments.

Matter has been listed for S34 Conference on 15 June 2018.

$0

19

2 – 4 Gladstone Street & 10 Victor Street, Kogarah

 

Applicant: Vortex Property Group

 

Proceedings No. 2017/377046

Class 1 appeal against Council’s deemed refusal of DA 2017/0519 for demolition of existing structures and construction of eleven (11) storey residential flat building containing thirty eight (38) units with basement car parking at 2 – 4 Gladstone Street and 10 Victor Street, Kogarah.

 

Matter has been listed for S34 Conference on 11 July 2018.

$0

20

832 – 836 King Georges Road & 51 Connells Point Road, South Hurstville

 

Applicant:  Cash Warwick Pty Limited

 

Proceedings No. 2017/384934

Class 1 appeal against Council’s deemed refusal of modification application no. MOD2017/0169 seeking to modify development consent structures and construction of a part 5, part 7 storey residential flat building containing sixty seven (67) units to provide for internal reconfigurations and addition of a storey to building B at 832-836 King Georges Road and 51 Connells Point Road, South Hurstville.

 

Matter listed for first directions hearing on 8 February 2018.

$0

21

35 – 37 Empress Street, Hurstville

 

Applicant: Tribeca Property Developers Pty Limited

 

Proceedings No. 2017/385110

Class 1 appeal against Council’s deemed refusal of DA 2017/0496 lodged on 20 October 2017 for the demolition of existing structures and construction of a four (4) storey residential flat building comprising of fifteen (15) units with partially below ground basement car parking at 35 – 37 Empress Street, Hurstville.

 

Matter listed for first directions hearing on 9 February 2018.

$0

22

2D The Crescent, Kingsgrove

 

Applicant:  W & J Lee Property Investments Pty Limited

 

Proceedings No. 2018/9499

Class 1 appeal against Council’s refusal of DA 2016/0107 for the construction and operation of a Resource Recovery Facility at 2D The Crescent, Kingsgrove.

 

Matter listed for first directions on 16 February 2018.

$0

 

Subtotal

 

 

$95,618.00

Land and Environment Court Proceedings – Class 4 Proceedings

1

84D Roberts Avenue

MORTDALE

 

Parties:

 

Romanous Developments Pty Ltd

 

Proceedings No.

40883 of 2013

 

Court orders entered on 24 July 2015 for Class 4 proceedings requiring remediation works under supervision of independent site auditor.

Respondent sought variation to complete works the subject of DAs for Wall and Drainage Works (as defined).  Amended Orders made.  Subject to ongoing monitoring of orders.

$2,017.00

2

5 Maclaurin Street, PENSHURST

 

Parties: Emanuel Mifsud & Crystina Mifsud

 

Proceedings No. 377447 of 2016

 

Class 4 commenced in relation to clearing of articles and matter.

Contempt proceedings heard on 26 July 2017 before her Honour Justice Pain.   Judgment delivered on 1 September 2017.  Mr Mifsud was fined $2,000 (to be paid by 29 September 2017) and fined $500 per week until the orders are complied with. Mr Mifsud was allowed until 24 November 2017 to clean up the property before the $500 per week fine would commence. Council was awarded costs.

Mr Mifsud has complied with orders to clean up the property.  Awaiting payment of costs.

$10,130.00

3

117 Kyle Parade, Kyle Bay

 

Parties: Michael Stanley Lowe

 

Proceedings No. 127157 of 2017

 

Class 4 commenced in relation to removal of crane

Matter heard 16 and 17 October 2017.  Orders made for crane to be removed by 17 April 2018 and costs of $30,000 to be paid by 17 February 2018.

$19,054.00

4

1A Hill Street, Hurstville

 

Parties:  Australian Consulting Builder Pty Limited

Contempt proceedings commenced against respondent for failure to maintain the premises in a matter that would permit no intruders and pose no safety risk.

Court orders were entered for demolition of offending building by 1 December 2017.  Building has now been demolished.  Matter complete.

$17,336.00

5

977 Forest Road, Lugarno

 

Parties: The Congregational Christian Church in Samoa, Parish of Sydney Incorporated and Taeipo Malifa

Proceedings commenced against Respondents for a declaration that the First and Second Respondents have each breached the Protection of the Environment Operations Act 1997 by failing to comply with prevention notices given to each of them under section 96 of that Act by Council on 19 June 2017 in respect of premises known as 977 Forest Road, Lugarno for the purpose of a place of public worship.

 

Matter listed for first directions on 2 March 2018.

$0

 

Subtotal

 

 

$48,537.00

Supreme Court

1

296 Forest Road and Diment Way, Hurstville

 

Applicant: Telado Pty Limited

 

Proceedings No. 299079 of 2017

Applicant seeks s88K order for property rights in perpetuity over Council land known as Central Plaza. Applicant sought order for mediation which was refused by Court.

Applicant has withdrawn its Notice to Produce to Council.  Applicant to file its evidence by 24 November 2017.  Council’s evidence due by 22 December.  Further directions hearing on 2 February 2018.

$48,242.00

 

Subtotal

 

 

$17,475.00

Local Court Proceedings

1

13-17 Peake Parade

PEAKHURST

 

Parties:

Oxford (NSW) Pty Ltd

Appeal against Penalty Notice for breaches of development consent. Defendant pleaded not guilty.

Defendant has been found guilty and judgment to be delivered on 25 May 2018.

$2,277.00

2-6

13-17 Peake Parade

PEAKHURST

 

Parties:

Oxford (NSW) Pty Ltd

 

 

Appeals against five Penalty Notices for breaches of development consent and one water pollution offence under POEO Act.

Defendant has been found guilty and judgment to be delivered on 25 May 2018.

$1,610.00

7-12

25 Koorabel, 25A Koorabel, 25B Koorabel Street

LUGARNO

 

Parties:

Daoud & Daoud Developments Pty Ltd

 

Appeals against six Penalty Notices issued for carrying out development not in accordance with development consent.

Defendant found guilty and the matter is listed for judgment on 16 March 2018.

$12,299.00

13

46 Queens Road, Connells Point

 

Parties:

Kosta Karkoulas

 

 

 

Appeal against Penalty Notice for unauthorised building works not in accordance with development consent.

Matter is listed for a contested hearing on 29 March 2018.

$0

14

33 Robyn Street, Peakhurst Height and Gannons Park, Peakhurst Heights

 

Parties:

Judith Sears

Local Court prosecution for unlawful tree removal.

Court attendance notice filed on 7 November 2017.  The defendant pleaded guilty on 30 January 2018 and was fined $6,000 and prosecutor’s costs of $500.

 

$0

15

33 Robyn Street, Peakhurst Height and Gannons Park, Peakhurst Heights

 

Parties:

Hassan Abbas

Local Court prosecution for unlawful tree removal.

Defendant has pleaded not guilty.  Matter listed for hearing on 2 May 2018.

$0

16

8 Kimberley Road, Hurstville

 

Parties:

Petre Dimovski

Local Court prosecution for unlawful tree removal.

Matter listed for plea or mention on 13 February 2018.

$0

 

 

Subtotal

 

 

$16,186.00

NSW Civil & Administrative Tribunal

1

Briscoe-Hough v Tegg & Ors

Gregory Briscoe-Hough v Warren Tegg, Constantine Hindi, Lupco Konjarski, Gavin Tennant & Greg Copson

 

Applicant has commenced proceedings alleging, “Irregularities in the conduct of the election in breach of Act and Regs”.

Timetable set for amended application, responses and evidence.  Matter set down for hearing on 15 February 2018. Council has a watching brief only.

$0

 

Sub Total

 

 

$0

NSW Industrial Relations Commission

1

United Services Union and Georges River Council

Dispute has arisen around protocol for site visits and use of confidential information. 

Matter heard before Commissioner Newall on 11 December 2017.  Agreed protocol put in place.  Mention listed before Commissioner Newall on 20 March 2018.

$0

Cost Recovery

1

The Baptist Church Union of NSW and The Baptist Churches of NSW Property Trust

 

No. 83357 of 2017

 

Church has taken proceedings to  prevent gazettal of the acquisition notice relating to 4 – 6 Dora Street, Hurstville

Council was successful in resisting the Church’s injunction.  Property acquired by Council on 31 March 2017.  Costs agreed.  Awaiting payment.

$0

2

37 Boronia Street

KYLE BAY

 

Parties:

Mrs Megan McOnie

 

Proceedings No.

40940 of 2015

 

Class 4 commenced in relation to failing to comply with Council Notices/Orders relating to a non-compliant swimming pool fence, overgrown vegetation and unhealthy swimming pool water.

Court Orders in support of Council’s Notices/Orders made. Application for substituted service on Respondent commenced.  Pool secured by Council December 2016.  Costs recovery commenced.  Property being sold by mortgagee.  Council’s costs to be paid out of sale proceeds.

$0

3

5 Booyong Ave, Lugarno

 

Parties: Sasho Naumcevski

Class 5 proceedings in relation to unauthorised excavation works at 5 Booyong Avenue, Lugarno

Costs payable pursuant to Court Orders in enforcement proceedings.  Mr Naumcevski has entered into (and to date, complied with) an instalment arrangement in relation to the $49,881.24 payable. Matter now to be monitored by Finance.

 

$0

4

799 Forest Road PEAKHURST

 

Applicant:

CC Builders (NSW) Pty Ltd

 

Proceedings No.

155689 of 2016

 

Class 1 Appeal against deemed refusal of development application DA2015/0457 for demolition of existing dwelling and construction of a multi dwelling housing development including six dwellings. 

 

Judgment handed down on 16 February 2017.  Consent granted to amended plans.  Costs recovery for s97B costs underway.

$0

6

977 Forest Road, Lugarno

 

Applicant: Congregational Christian Church Samoa Parish of Sydney

 

Proceedings No: 103967 of 2017

Class 1 Appeal against refusal of DA2015/0443 for a child care centre

Applicant has lodged a Notice of Intention to Appeal to the Supreme Court however has not lodged any further documents and time has now expired.  Applicant to pay Council’s costs.

$0

7

1 Arnold Street

PEAKHURST

 

Parties:

Mofeed Louis Tanious

 

Proceedings No.

2017/32320

 

Class 2 Land and Environment Court commencing in relation to failing to comply with Council Notices/Orders concerning keeping of poultry at the premises.  Orders upheld by Court with extension of time to comply to 25 April 2017.

Council was successful in resisting the applicant’s leave application to the Court of Appeal.  Summons dismissed with costs on 16 August 2017.  Applicant has commenced proceedings in the High Court.  Leave application dismissed by High Court on 16 November 2017.  Matter raised with Minister and Local Member.

$1,350.00

 

Subtotal

 

 

$1,350.00

 

6.      The cost savings to date by virtue of S34 delegations are as follows:

 

Month (2017/18)

Savings

July

$0

August

$32,000

September

$32,000

October

$0

November

$0

December

$16,000

January

$16,000

  Total

$96,000

 

Financial Implications

 

7.      Within budget allocation.

 

File Reference

09/1077

 

 

 

  


Georges River Council – Finance and Governance Standing Committee Meeting -  Monday, 12 February 2018    Page 20

Item:                   FIN003-18          Investment Report as at 30 November 2017 

Author:              Team Leader Financial Reporting

Directorate:      Office of the Chief Operating Officer

Matter Type:     Committee Reports

Recommendation

(a)     That the Investment Report as at 30 November 2017 be received and noted

Executive Summary

1.   This report details Council’s performance of its investment portfolio for November 2017 and compares it against key benchmarks.  The report includes the estimated market valuation of Council’s investment portfolio, loan liabilities, and an update on Council’s legal action against various parties.

2.   Council’s annualised rate of return is 3.39%, which is 1.64% above benchmark. Income from interest on investments and proceeds from sale of investments totals at $2,342,027 is $307,715 above 2017/18 year-to-date adopted budget

 

Background

3.      Council’s Responsible Accounting Officer, is required to report monthly on Council’s Investment Portfolio and certify that the Investments are held in accordance with Council’s Investment Policy and Section 625 of the Local Government Act.

Investment Performance Commentary

4.      Council’s performance against the benchmark for returns of its investment portfolio for November 2017, are as follows:

 

 

1 Month

3 Month

12 Month

Portfolio Performance

0.25%

0.78%

3.39%

Performance Index

0.13%

0.42%

1.75%

Excess

0.12%

0.36%

1.64%

                         

Notes                                                       

1       Portfolio performance is the rate of return of the portfolio over the specified period

2       The Performance Index is the rate of return of the market (comparable securities) over the specified period                                     

3       Excess performance is the rate of return of the portfolio in excess of the Performance Index.

 

5.      Council’s investment portfolio as at the end of November was as follows:

Security Type

Market Value $000's

% Total
Value

Cash at Bank

15,703

7.91%

11am Cash

9,346

4.71%

31 Day Notice Account

22

0.01%

Flexi Deposit (Fix/Float)

5,016

2.53%

Floating Rate Deposit

5,005

2.52%

Floating Rate Note

65,167

32.84%

Floating Rate TCD

3,537

1.78%

Term Deposit

88,628

44.67%

Managed Funds Trust

5,998

3.03%

Total Cash and Investments

198,423

100.00%

 

 

6.   At the end of November 2017 Total Cash and Investments were $198.422 million and have increased by $6.9 million from October 2017 as a result of rates revenue due on 30 November 2017.

 

7.      Council continues to utilise the Federal Government’s current guarantee   ($250,000) investing in Term Deposits with a range of Authorised Deposit Taking Institutions (ADI’s) on short to medium term investments (generally 30 days to 180 days maturity) where more competitive rates are available.

 

Legal Issues

 

8.  Council is an admitted creditor in the liquidation of the estate of Lehman Brothers Australia and also a member of a group action against Standard & Poor’s in relation to losses sustained on Collateralised Debt Obligations.  Council received dividend payments in 2016/17 and the matters are still continuing and are currently before the courts.  Due to the limited information available Council is unable to determine the value of any future dividend income.

 

Loan Liability

 

9.      Council’s loan liability as at 30 November was $2.5 million which represents the balance of $5 million ten (10) year loan drawn down on 16 November 2012 for Jubilee Park upgrade in Mortdale. Next repayment of $125,000 is due 28th December 2017.

The outstanding balance on this facility is at a variable interest of 194 basis points over 3 month BBSW. At the current 3 month BBSW rate, the interest rate payable is 3.66% pa.

10.    Council receives a 4.00% pa subsidy under the NSW Government’s Local Infrastructure Renewal Scheme funding agreement for this Jubilee Park upgrade facility. It is intended to continue this financially-advantageous arrangement through to full term in 2022.

 

Policy Limits

 

11.    The following graph shows the limits, as a percentage of total cash investments, of the amount by periods, as allowed under Council’s policy, and comparing them to the amounts actually invested, as a percentage of the total cash investments.

 

12.    It shows that the funds invested are now within the limits set in the Investment Policy.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investment Income

 

13.    Income from interest on investments and proceeds from sales of investments totals $2,342,027 at 30 November and is $307,715 above year to date adopted budget.

Certificate by Chief Financial Officer (Responsible Accounting Officer): Rob Owens

 

14.    Investments have been made in accordance with the Local Government Act, Minister’s Guidelines, Regulations and Council’s Investment Policy.

 

Analysis of Investments

Investment Duration

Investment Term

Market Value

% Total Value

Policy Limits %

0 to < 1 Year

70,526

35.54%

100

1 to < 3 Years

74,807

37.70%

70

3 to < 5 Years

53,089

26.76%

50

> 5 Years

-

 

25

Portfolio Total

198,422

100.00%

 

 

 

 

15.    Council’s portfolio is very liquid, with 35.54% of assets maturing within 12 months. FRNs, funds and fixed bonds also provide additional liquidity in an emergency.

16.    The following graphs show analysis of the total cash investment by:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Type of Investments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Council’s investment portfolio is mainly directed to term deposits, which account for approximately 48% of total investments. Yields have steadily contracted, while tracking bond market volatility in the short term.

 

18.    Bank Floating Rate Notes (FRN) offer liquidity and a higher rate of income accrual, which is highly recommended by our Investment Advisors (CPG Research & Advisory) going forward.

19.    The following are the types of investments held by Council:

 

a)      At Call refers to funds held at a financial institution, and can be recalled by Council either same day or on an overnight basis.

 

b)      A Floating Rate Note (FRN) is a debt security issued by a company with a variable interest rate. This can either be issued as Certificates of Deposit (CD) or as Medium Term Notes (MTN). The interest rate can be either fixed or floating, where the adjustments to the interest rate are usually made quarterly and are tied to a certain money market index such as the Bank Bill Swap Rate.

 

c)      A Fixed Rate Bond is a debt security issued by a company with a fixed interest rate over the term of the bond.

 

d)      A managed fund is a professionally managed investment portfolio that individual investors can buy into, purchasing 'units' rather than shares. Each managed fund has a specific investment objective. This is usually based around the different asset classes (cash, fixed interest, property and shares). The money you invest is used to buy assets in line with this investment objective. When you invest in a managed fund, you are allocated a number of 'units'. The value of your units is calculated on a daily basis and changes as the market value of the assets in the fund rises and falls.

         

* These managed funds have been grandfathered since the NSW State Government changed the list of Approved Investments as a result of the Cole enquiry (which was reflected in the Ministerial Order dated 31/7/2008).

 

Credit Rating

 

20.    Credit ratings are generally a statement as to an institution’s credit quality. Ratings ranging from A1+ to NR (Short Term) & AAA to BBB- (long term) are considered investment grade.

 

21.    A general guide as to the meaning of each credit rating that Council deals with is as follows:

 

Short-term

A1+: the best quality companies, reliable and stable. An obligor has extremely strong capacity to meet its financial commitments.

A1:    Adequate capacity to meet financial commitments, many positive investment attributes but also elements susceptible to adverse effects of changes in economic conditions.

A2:    Adequate capacity to meet financial commitments, but also speculative s or lack of protection against changes of economic conditions.

B1:    Moderate characteristic capacity to meet financial commitments, also in good economic conditions.

Unrated:    This category includes unrated Authorised Deposit-Taking Institutions (ADI’s) such as some Credit Unions and Building Societies to the extent not Commonwealth-guaranteed. No rating has been requested, or there is insufficient information on which to base a rating.     

Long-term

AAA: the best quality companies, reliable and stable. An obligor has extremely strong capacity to meet its financial commitments.

AA:   quality companies, a bit higher risk than AAA. An obligor has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors only to a small degree.

A:      economic situation can affect finance. An obligor has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in higher-rated categories.

BBB: medium class companies, which are satisfactory at the moment. An obligor has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.

Unrated:    This category includes unrated Authorised Deposit-Taking Institutions (ADI’s) such as some Credit Unions and Building Societies to the extent not Commonwealth-guaranteed. No rating has been requested, or there is insufficient information on which to base a rating.

 

22.    The credit quality of Council’s portfolio is relatively high with approximately 66% of assets rated ‘A’ or higher. The ‘AAA’ assets represent the deposit investments covered by the Federal Government’s Financial Claims Scheme (FCS).

 

23.    The remaining 34% rated ‘BBB’ or ‘unrated’ reflects the attractive deposit and Floating Rate Notes (FRN) investments with the regional and unrated ADIs.

 

Council’s Investment Powers

 

24.    Council’s investment powers are regulated by Section 625 of the Local Government Act, which states:

•        A council may invest money that is not, for the time being, required by the council for any other purpose.

•        Money may be invested only in a form of investment notified by order of the Minister published in the Gazette.

•        An order of the Minister notifying a form of investment for the purposes of this section must not be made without the approval of the Treasurer.

•        The acquisition, in accordance with section 358, of a controlling interest in a corporation or an entity within the meaning of that section is not an investment for the purposes of this section.

25.    Council’s investment policy and strategy requires that all investments are to be made in accordance with;

•        Local Government Act 1993 - Section 625

•        Local Government Act 1993 - Order (of the Minister) dated 12 January 2011

•        The Trustee Amendment (Discretionary Investments) Act 1997 – Sections 14A (2), 14C (1) & (2)

•        Local Government (Financial Management) Regulation 1993

•        Investment Guidelines issued by the Department of Local Government

 

 

 

File Reference

D18/7284

 

 

 

ATTACHMENTS

Attachment 1

Investment Portfolio as at 30 November 2017

 


Georges River Council - Finance and Governance Standing Committee Meeting - Monday, 12 February 2018

FIN003-18              Investment Report as at 30 November 2017

[Appendix 1]          Investment Portfolio as at 30 November 2017

 

 

Page 27

 


 


 


 


 


 


 


Georges River Council – Finance and Governance Standing Committee Meeting -  Monday, 12 February 2018    Page 34

Item:                   FIN004-18          Investment Report as at 31 December 2017 

Author:              Team Leader – Financial Reporting

Directorate:      Office of the Chief Operating Officer

Matter Type:     Committee Reports

Recommendation

(a)     That the Investment Report as at 31 December 2017 be received and noted.

Executive Summary

1.        This report details Council’s performance of its investment portfolio for December 2017 and compares it against key benchmarks.  The report includes the estimated market valuation of Council’s investment portfolio, loan liabilities, and an update on Council’s legal action against various parties.

2.        Council’s annualised rate of return is 3.38%, which is 1.61% above benchmark. Income from interest on investments and proceeds from sale of investments totals at $2,634,847 is $183,917 above 2017/18 year-to-date adopted budget.

 

Background

3.      Council’s Responsible Accounting Officer, is required to report monthly on Council’s Investment Portfolio and certify that the Investments are held in accordance with Council’s Investment Policy and Section 625 of the Local Government Act.

 

Investment Performance Commentary

4.      Council’s performance against the benchmark for returns of its investment portfolio for December 2017, are as follows:

 

 

1 Month

3 Month

12 Month

Portfolio Performance

0.24%

0.77%

3.38%

Performance Index

0.14%

0.42%

1.75%

Excess

0.10%

0.35%

1.63%

                         

Notes                                                       

1       Portfolio performance is the rate of return of the portfolio over the specified period

2       The Performance Index is the rate of return of the market (comparable securities) over the specified period                                     

3       Excess performance is the rate of return of the portfolio in excess of the Performance Index.

 

5.      Council’s investment portfolio as at the end of December was as follows:

Security Type

Market Value $000's

% Total
Value

Cash at Bank

10,709

5.48%

11am Cash

9,293

4.76%

31 Day Notice Account

22

0.01%

Flexi Deposit (Fix/Float)

5,016

2.57%

Floating Rate Deposit

5,005

2.56%

Floating Rate Note

65,156

32.36%

Floating Rate TCD

3,537

1.81%

Term Deposit

90,550

46.37%

Managed Funds Trust

5,998

3.07%

Total Cash and Investments

195,286

100.00%

 

 

6.   At the end of November 2017 Total Cash and Investments were $198.422 million and have decreased by $3.1 million as a result of larger than usual creditor payments made in December.

 

7.      Council continues to utilise the Federal Government’s current guarantee   ($250,000) investing in Term Deposits with a range of Authorised Deposit Taking Institutions (ADI’s) on short to medium term investments (generally 30 days to 180 days maturity) where more competitive rates are available.

 

Legal Issues

 

8.  Council is an admitted creditor in the liquidation of the estate of Lehman Brothers Australia and also a member of a group action against Standard & Poor’s in relation to losses sustained on Collateralised Debt Obligations.  Council received dividend payments in 2016/17 and the matters are still continuing and are currently before the courts.  Due to the limited information available Council is unable to determine the value of any future dividend income.

 

Loan Liability

 

9.      Council’s loan liability as at 31 December was $2.375 million which represents the balance of $5 million ten (10) year loan drawn down on 16 November 2012 for Jubilee Park upgrade in Mortdale. Next repayment of $125,000 is due 28th March 2018.

The outstanding balance on this facility is at a variable interest of 194 basis points over 3 month BBSW. At the current 3 month BBSW rate, the interest rate payable is 3.71% pa.

 

10.    Council receives a 4.00% pa subsidy under the NSW Government’s Local Infrastructure Renewal Scheme funding agreement for this Jubilee Park upgrade facility. It is intended to continue this financially-advantageous arrangement through to full term in 2022.

 

Policy Limits

11.    The following graph shows the limits, as a percentage of total cash investments, of the amount by periods, as allowed under Council’s policy, and comparing them to the amounts actually invested, as a percentage of the total cash investments.

 

12.    It shows that the funds invested are now within the limits set in the Investment Policy.

 

 

Investment Income

 

13.    Income from interest on investments and proceeds from sales of investments totals $2,634,847 at 31 December and is $183,917 above year to date adopted budget.

Certificate by Chief Financial Officer (Responsible Accounting Officer): Rob Owens

 

14.    Investments have been made in accordance with the Local Government Act, Minister’s Guidelines, Regulations and Council’s Investment Policy.

 

Analysis of Investments

Investment Duration

Investment Term

Market Value

% Total Value

Policy Limits %

0 to < 1 Year

68,046

34.84%

100

1 to < 3 Years

103,278

52.89%

70

3 to < 5 Years

23,962

12.27%

50

> 5 Years

-

 

25

Portfolio Total

195,286

100.00%

 

 

 

15.    Council’s portfolio is very liquid, with 34.84% of assets maturing within 12 months. FRNs, funds and fixed bonds also provide additional liquidity in an emergency.

16.    The following graphs show analysis of the total cash investment by:

Type of Investments

 

 

Council’s investment portfolio is mainly directed to term deposits, which account for approximately 49% of total investments. Yields have steadily contracted, while tracking bond market volatility in the short term.

 

18.    Bank Floating Rate Notes (FRN) offer liquidity and a higher rate of income accrual, which is highly recommended by our Investment Advisors (CPG Research & Advisory) going forward.

19.    The following are the types of investments held by Council:

 

a)      At Call refers to funds held at a financial institution, and can be recalled by Council either same day or on an overnight basis.

 

b)      A Floating Rate Note (FRN) is a debt security issued by a company with a variable interest rate. This can either be issued as Certificates of Deposit (CD) or as Medium Term Notes (MTN). The interest rate can be either fixed or floating, where the adjustments to the interest rate are usually made quarterly and are tied to a certain money market index such as the Bank Bill Swap Rate.

 

c)      A Fixed Rate Bond is a debt security issued by a company with a fixed interest rate over the term of the bond.

 

d)      A managed fund is a professionally managed investment portfolio that individual investors can buy into, purchasing 'units' rather than shares. Each managed fund has a specific investment objective. This is usually based around the different asset classes (cash, fixed interest, property and shares). The money you invest is used to buy assets in line with this investment objective. When you invest in a managed fund, you are allocated a number of 'units'. The value of your units is calculated on a daily basis and changes as the market value of the assets in the fund rises and falls.

         

* These managed funds have been grandfathered since the NSW State Government changed the list of Approved Investments as a result of the Cole enquiry (which was reflected in the Ministerial Order dated 31/7/2008).

 

Credit Rating

 

20.    Credit ratings are generally a statement as to an institution’s credit quality. Ratings ranging from A1+ to NR (Short Term) & AAA to BBB- (long term) are considered investment grade.

 

21.    A general guide as to the meaning of each credit rating that Council deals with is as follows:

 

Short-term

A1+: the best quality companies, reliable and stable. An obligor has extremely strong capacity to meet its financial commitments.

A1:    Adequate capacity to meet financial commitments, many positive investment attributes but also elements susceptible to adverse effects of changes in economic conditions.

A2:    Adequate capacity to meet financial commitments, but also speculative s or lack of protection against changes of economic conditions.

B1:    Moderate characteristic capacity to meet financial commitments, also in good economic conditions.

Unrated:    This category includes unrated Authorised Deposit-Taking Institutions (ADI’s) such as some Credit Unions and Building Societies to the extent not Commonwealth-guaranteed. No rating has been requested, or there is insufficient information on which to base a rating.     

Long-term

AAA: the best quality companies, reliable and stable. An obligor has extremely strong capacity to meet its financial commitments.

AA:   quality companies, a bit higher risk than AAA. An obligor has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors only to a small degree.

A:      economic situation can affect finance. An obligor has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligors in higher-rated categories.

BBB: medium class companies, which are satisfactory at the moment. An obligor has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.

Unrated:    This category includes unrated Authorised Deposit-Taking Institutions (ADI’s) such as some Credit Unions and Building Societies to the extent not Commonwealth-guaranteed. No rating has been requested, or there is insufficient information on which to base a rating.

 

22.    The credit quality of Council’s portfolio is relatively high with approximately 66% of assets rated ‘A’ or higher. The ‘AAA’ assets represent the deposit investments covered by the Federal Government’s Financial Claims Scheme (FCS).

 

23.    The remaining 34% rated ‘BBB’ or ‘unrated’ reflects the attractive deposit and Floating Rate Notes (FRN) investments with the regional and unrated ADIs.

 

Council’s Investment Powers

 

24.    Council’s investment powers are regulated by Section 625 of the Local Government Act, which states:

•        A council may invest money that is not, for the time being, required by the council for any other purpose.

•        Money may be invested only in a form of investment notified by order of the Minister published in the Gazette.

•        An order of the Minister notifying a form of investment for the purposes of this section must not be made without the approval of the Treasurer.

•        The acquisition, in accordance with section 358, of a controlling interest in a corporation or an entity within the meaning of that section is not an investment for the purposes of this section.

25.    Council’s investment policy and strategy requires that all investments are to be made in accordance with;

•        Local Government Act 1993 - Section 625

•        Local Government Act 1993 - Order (of the Minister) dated 12 January 2011

•        The Trustee Amendment (Discretionary Investments) Act 1997 – Sections 14A (2), 14C (1) & (2)

•        Local Government (Financial Management) Regulation 1993

•        Investment Guidelines issued by the Department of Local GovernmentFinancial

 

 

File Reference

D18/16054

 

 

 

ATTACHMENTS

Attachment 1

Investment Portfolio as at 31 December 2017

 


Georges River Council - Finance and Governance Standing Committee Meeting - Monday, 12 February 2018

FIN004-18              Investment Report as at 31 December 2017

[Appendix 1]          Investment Portfolio as at 31 December 2017

 

 

Page 41

 

 


 


 


Georges River Council – Finance and Governance Standing Committee Meeting -  Monday, 12 February 2018    Page 49

Item:                   FIN005-18          Property Matter - Proposed Road Closure and Sale of Land - Part Buchanan St, Carlton, Lot 3 in DP734336 and Lot 12 in DP627414  

Author:              Strategic Property Officer

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

Recommendation

(a)     THAT the General Manager be authorised to lodge a road closure application with the Department of Industry (Lands & Forestry) for part of Buchanan St, Carlton (Buchanan Street Lot) adjoining Lot 3 in DP734336.

(b)     THAT upon closure of the road and creation of a new lot that the subject lot be classified as Operational Land in accordance with Section 31 of the Local Government Act, 1993.

(c)     THAT the Buchanan St Lot, Lot 3 in DP734336 and Lot 12 in DP627414 be sold to the owner of 280-290 Railway Pde, Carlton as generally detailed in this report and that the above lots be consolidated within this property upon sale.

(d)     THAT that the General Manager be authorised to execute the Contract for Sale, Transfer Document and all other associated documentation to effect the closure of the road, the creation of a new freehold lot, and the sale of Lot 3 in DP734336, Lot 12 in DP627414 and the Buchanan Street Lot.

Executive Summary

1.      To consider the proposed road closure and sale of part of Buchanan St, Carlton together with the proposed sale of Lot 12 in DP627414 and Lot 3 in DP734336 to the adjoining owner for the purpose of consolidation.  A location plan can be found at Attachment 1.

2.      To gain authorisation for the General Manager to execute the Contract for Sale, Transfer Document and all other associated documentation to effect the closure of the road, the creation of a new fee simple allotment and the sale of Lot 3 in DP734336, Lot 12 in DP627414 and the Buchanan Street Lot at market value.

 

Background

3.      In July 2017, Georges River Council received an unsolicited offer to purchase Council Land being lot 12 in DP 627414, Lot 3 in DP 734336 and part of Buchanan St, Carlton from the registered proprietor of Netstrata Pty Ltd, who is the adjoining land owner located at 280-290 Railway Pde, Carlton.

4.      Council records show that Lot 12 in DP627414 and Lot 3 in DP734336 are classified as Operational land and zoned B2, Local Centre under Kogarah LEP 2012.  Following consultation with Council’s Infrastructure and Assets Staff, the subject lands have been identified as surplus to requirements and available for disposal.

5.      The part of Buchanan St, Carlton to be closed was dedicated to Council (for road purposes) to provide rear access to the properties at 280-290 Railway Pde, Carlton (purchaser’s land).  Title searching of Lot 12 in DP 627414 and Lot 3 in DP 734336 identified that there was no specific Statement of Intention to dedicate these parcels for public road purposes.

6.      Should Council dispose of the subject properties to the adjoining owner, rear lane access will no longer be required over the land (as the lots will be consolidated into the purchaser’s land-holdings).  If rear lane access is required in future, it is anticipated that this can be addressed as part of a future Development Application for the site.

7.      Prior to commencing the road closure process, Council obtained independent valuation advice in order to ascertain the current market value of the land proposed to be sold.  Following a review of the market, the valuer recommended that Council adopt a market value as outlined in the confidential valuation report which will be tabled at the meeting.

8.      The land is surrounded by property owned by the proposed purchaser and is not able to be developed in its own right, resulting in the land having no appeal to the wider market. 

9.      As a result, it is recommended that Officers negotiate for a private treaty sale of the land subject to formal Council resolution being obtained.  In principle, terms are outlined in Attachment 2.

10.    A condition of sale will be that once the road is closed and the new lot created, that the subject road parcel together with Lot 12 in DP 627414 and Lot 3 in DP 734336 be consolidated with the purchaser’s land within six (6) months of settlement.

11.    The area of Buchanan Street recommended to be closed and sold is not required for future road construction or widening purposes and, as such, is considered surplus to requirements.

 

Financial Implications

12.    The terms of sale are considered to represent fair market value with the sale resulting in unbudgeted income of which two-thirds are to be allocated to Council’s Commercial Property Reserve fund and one-third to be allocated to the Asset Realignment Reserve.

 

Community Engagement

13.    A statutory community engagement process will be conducted following the commencement of the formal road closure process.

 

File Reference

17/2326

 

 

 

ATTACHMENTS

Attachment 1

Location Plan - Lane rear 280-282 Railway Pde Carlton

Attachment 2

Sales advice - 280-284 Railway Pde Carlton (Confidential)

 


Georges River Council - Finance and Governance Standing Committee Meeting - Monday, 12 February 2018

FIN005-18              Property Matter - Proposed Road Closure and Sale of Land - Part Buchanan St, Carlton, Lot 3 in DP734336 and Lot 12 in DP627414

[Appendix 1]          Location Plan - Lane rear 280-282 Railway Pde Carlton

 

 

Page 51