AGENDA


Finance and Governance Committee

 

Monday, 13 May 2019

6.00pm

 

Georges River Civic Centre

Hurstville

 

 

 

 

 

 

 

 

 

 

 


Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 3

 

          Finance and Governance Committee

ORDER OF BUSINESS

 

1.      Acknowledgement of Country

2.      Apologies

3.      Disclosures of Interest

4.      Public Addresses to the Meeting

5.      Confirmation of Minutes of Previous Meeting  

MINUTES: Finance and Governance Committee - 08 April 2019

6.      Committee Reports

FIN029-19         Advice on Costs and Status of Council's Court Proceedings - April 2019

(Report by Director Legal Services and General Counsel).................................... 4

FIN030-19         Local Government Remuneration Tribunal Determination - Mayor and Councillors fees for 2019-2020

(Report by Manager, Office of the General Manager)........................................... 15

FIN031-19         Quarterly Budget Review Statement for quarter ending 31 March 2019

(Report by Chief Financial Officer)........................................................................... 37

FIN032-19         Investment Report as at 31 March 2019

(Report by Finance Accountant - Reporting).......................................................... 49

FIN033-19         Draft Budget 2019/20 - resources in the Strategic Planning Team to deal with development contributions

(Report by Manager Strategic Planning)................................................................. 68

FIN034-19         Draft 2019/20 Budget - Consideration of Upgrading Hurstville War Memorial and Provision of a New Basketball Court in Hurstville Ward

(Report by Manager Project Delivery)....................................................................... 80

FIN035-19         Quarterly Report - Outstanding Council Resolutions as at 31 March 2019

(Report by Head of Executive Services).................................................................. 95

FIN036-19         Results of exhibition of Council's Draft Code of Conduct and the Draft Procedures for the Administration of the Code of Conduct

(Report by Manager Governance and Risk)......................................................... 134

FIN037-19         Property Matter - Lease of Commercial Office Space - Suite 4E, 34 MacMahon Street, Hurstvulle.

(Report by Strategic Property Specialist)............................................................... 229

 

FIN038-19         Property Matter - Waratah Private Hospital Car Park

(Report by Head of Strategic Property).................................................................. 231

FIN039-19         St George Business Chamber - Variation of the Terms of the Deed of Agreement

(Report by Economic Development Officer)......................................................... 243  

 

 


Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 6

Committee Reports

Item:                   FIN029-19            Advice on Costs and Status of Council's Court Proceedings - April 2019 

Author:              Director Legal Services and General Counsel

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

 

Recommendation

That the re report “Advice on Costs and Status of Council’s Court Proceedings – April 2019” be received and noted.

 

 

Executive Summary

1.      Advice on Council’s Court proceedings for the period 28 March 2019 to 30 April 2019 is contained within this report.

2.      Total costs to date for the 2018/19 financial year for Court proceedings are $1,353,995.

3.      Total legal costs recovered to date for the 2018/19 financial year are $841,869.

4.      Total nett costs are $512,125.

 

Background

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

Supreme Court

·        3 x Summons

Land and Environment Court

·        22 x Class 1 (Merit/DA)

·        3 x Class 4 proceedings (including 1 x Contempt of Court proceedings)

·        5 x Class 5 (Environmental Prosecutions) Summons’

·        1 x Class 6 (Appeal from Local Court)

Local Court

·        2 x Council Prosecutions

New Matters

6.      There were no new matters during this reporting period.

Finalised matters

7.      Ten matters were finalised – (Stellar Hurstville Pty Limited), (Vortex Property Group Pty Limited), (Abrahim), (Carlton Investments No. 1 Pty Limited), (Masri), (Icon Consulting Group Pty Limited), (Rod Zoabi T/A ZTA Architects), (Riverwood Development Company Pty Limited), (Hville FCP Pty Limited) and (Austyle Projects Pty Limited).

Current Table

8.      The Court proceedings current for the reporting period are set out below. The external costs include both external legal and expert consultants’ (Court witnesses’) fees.

 

 

 

No.

Property Address / Applicant / Proceedings Number

Description of Matter

Status / Critical Dates

Land and Environment Court Proceedings – Class 1 Appeals

1

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 was not resolved at the S34 Conference on 15 June 2018 and has been set down for hearing on 11, 12 and 13 February 2019.  S34 Agreement has been reached and has now been finalised by the Court.  Costs of $40,000 paid.

External heritage, traffic and urban design expert retained.

2

2 – 4 Gladstone Street & 10 Victor Street, Kogarah

 

Applicant: Vortex Property Group

 

Proceedings No. 2017/377046

Kogarah North Precinct

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 was not resolved at the S34 Conference on 11 July 2018 and has been listed for hearing on 4, 5 and 6 March 2019.  Judgment received.  Appeal upheld.

External traffic, heritage and urban design briefed. 

3

1 – 3 John Street, Kogarah Bay

 

Applicant: Al Abrahim

 

Proceedings No. 2018/114721

Class 1 appeal against deemed refusal to grant development consent to the Applicant for the demolition of existing structures and construction of a 7 storey residential flat building compromising 25 residential apartments and basement parking to

1 – 3 John Street, Kogarah Bay.

S34 Agreement entered into.  Awaiting payment of s8.15(3) costs of $12,000.

 

4

10 – 12 Mimosa Street, Oatley

 

Applicant: Ezra 1 Pty Limited

 

Proceedings No: 2018/140860

Class 1 appeal against deemed refusal of Development Application DA2018/0071 for demolition of existing structures and construction of basement car park and 8 attached units to be used as seniors living housing and other ancillary works.

 

Matter was not resolved at the S34 Conference on 17 October 2018 and has been listed for hearing on 3 and 4 June 2019.

External planner, traffic, acoustic and urban design consultants briefed.

5

313 – 323 Princes Highway, Carlton

 

Applicant: Carlton Investments No. 1 Pty Limited

 

Proceedings No: 2018/ 140963

Class 1 appeal against deemed refusal of DA2018/0102 for demolition of existing structures and construction of a part five (5) part six (6) storey mixed use development with three (3) levels of basement car parking.

 

Section 34 Agreement entered into.  Awaiting payment of s8.15(3) costs of $35,000.

External solicitor, planner and traffic expert have been retained.

 

6

71 – 97 Regent Street, Kogarah

 

Applicant: 95 Regent Street Kogarah Pty Limited

 

Proceedings No: 2018/140943

Kogarah North Precinct

SSPP concurrence authority

Class 1 appeal against deemed refusal of DA2017/0438 for demolition of existing structures and construction of a part 12 part 13 storey residential flat building development with 3 levels of basement car parking.

Matter was not resolved at the S34 Conference on 16 November 2018 and is listed for hearing on 24 & 25 June 2019.  Amended proposal to go to S34 Agreement on 2 May 2019.

External planning, urban design and traffic experts have been retained.

7

22 – 26 Montgomery Street, Kogarah

 

Applicant: Icon Consulting Group Pty Limited

 

Proceedings No: 2018/167910

Class 1 appeal against deemed refusal of Development Application DA2018/0138 for partial demolition of existing buildings, restoration of existing heritage listed terraces and construction of a 12 storey plus rooftop, mixed use development consisting of 27 residential units, commercial retail floor area and basement car parking.

 

S34 Agreement entered into following significant amendments and costs of $12,000 paid.

External planner, heritage and urban design experts retained.

8

158 Connells Point Road, Connells Point

 

Applicant: Chung Kei Ng

 

Proceedings No: 2018/223668

 

Class 1 appeal against LPP refusal of DA2017/0286 for alterations and additions to a dwelling, construction of a new building to rear and change of use into a child care centre.

 

Matter was listed for S34 Conference on 24 January 2019 however was not resolved. 

Matter is listed for hearing on 15 and 16 August 2019.

9

7 Wharf Road, Kogarah Bay

 

Applicant: Rod Zoabi T/A ZTA Architects

 

Proceedings No: 2018/234703

 

Class 1 appeal against refusal of DA2017/0024 for demolition of existing structures and construction of three storey attached dual occupancy premises with swimming pools and outbuildings and subdivision of land.

Section 34AA Conciliation Conference heard on 13 and 14 March 2019.  Judgment received, appeal upheld.

 

10

70 Kyle Parade, Kyle Bay

 

Applicant: Marilyn Kidd

 

Proceedings No: 2018/214451

 

Class 1 Appeal against deemed refusal of DA2017/0625 for subdivision into 2 allotments and demolition of carport structure.

Matter was not resolved at the S34 Conference on 13 November 2018 and is now listed for hearing on 17 and 18 June 2019.

External lawyer retained.

11

279 – 281 Belmore Road, Riverwood

 

Applicant: Riverwood Development Company Pty Limited

 

Proceedings No: 2018/244694

 

Class 1 appeal for refusal of DA2016/0219 for demolition of existing structures and construction of a mixed use development.

Matter was listed for S34 Conference on 4 March 2019.  S34 Agreement entered into.  Section 8.15(3) costs of $20,000 to be paid.

External lawyer together with planning, traffic, urban design and acoustic experts retained.

12

32 – 38 Montgomery Street, Kogarah

 

Applicant:  Lateral Estate Pty Limited

 

Proceedings No: 2018/260971

 

SSPP concurrence authority

 

Class 1 Appeal against deemed refusal of DA2018/0139 for the demolition of existing structures and construction of a 12/13 storey mixed use development comprising a residential flat building with 74 apartments over ground floor retail, basement car parking and landscaping.

 

Matter was listed for S34 Conference on 12 December 2018 however was not resolved.  Matter has been set down for hearing on 29, 30, 31 July and 1 August 2019. 

External planning, urban design and heritage briefed.

13

10 Renn Street, Kogarah Bay

 

Applicant: Zeina Masri

 

Proceedings No: 2018/281447

 

Class 1 Appeal against deemed refusal of DA2017/0662 for the construction of a two storey dwelling house with a basement pool, front fence and cabana.

Matter has been set down for S34AA conciliation on 11 and 12 April 2019.  Judgment received, appeal upheld.

External planning consultant retained.

14

513 Princes Highway, Blakehurst

 

Applicant: Borina Pty Limited

 

Proceedings No: 2018/296856

Class 1 Appeal against deemed refusal of DA2018/303 for the demolition of the existing motel and improvements and the erection of a residential flat building development comprising 43 units being 1 x 1 bed and 42 x 2 bed apartments over two levels of basement parking (77 cars).

 

 

Matter listed for a S34 Conference on 29 April 2019.  Resumed S34 Conference now listed for 15 May 2019.

External planning consultant retained.

15

505 – 507 Rocky Point Road, Sans Souci

 

Applicant: Al Abrahim

 

Proceedings No: 2018/317003

 

Class 1 Appeal against deemed refusal of DA 2018/0252 for the demolition of existing dwellings and ancillary structures and the construction of a

mixed-use development over basement parking.

Matter is listed for S34 Conference on 24 May 2019. 

External planning and urban design experts retained.

16

125 Boundary Road, Peakhurst

 

Applicant: Australian Fitness Management Pty Limited

 

Proceedings No: 2018/310085

 

Class 1 Appeal against deemed refusal of DA2018/0129 for the fit

out and use as a fitness studio (recreation facility (indoor)opening 24 hours, 7 days and associated signage.

 

Matter is listed for S34 Conference on 20 May 2019.

External traffic expert briefed.

17

31 & 31A Regent Street, Kogarah

 

Applicant:  Peter Thanos

 

Proceedings No: 2018/363618

Class 1 Appeal against deemed refusal of DA2018/0214 for the demolition of existing building and construction of a 16 room new generation boarding house comprising 1 ground floor commercial tenancy and a car park for 5 vehicles and 4 motorcycle spaces.

 

Matter listed for S34 Conference on 23 July 2019.

18

143 – 145 Rocky Point Road, Beverley Park

 

Applicant:  Adouni & Raad Pty Limited

 

Proceedings No: 2018/369087

Class 1 Appeal against deemed refusal of DA2018/0429  for the demolition of existing building and the construction of a residential flat building, basement car parking, landscaping and associated works

Matter listed for S34 Conference on 31 July 2019.

19

3 Gray Street, Kogarah

 

Applicant: Best Build NSW Pty Limited

 

Proceedings No: 2018/393349

 

Class 1 Appeal against deemed refusal of DA2018/0201 for the demolition of existing building and the construction of a 6 storey boarding house comprising 44 rooms including site manager room over basement car parking

Matter listed for S34 Conference on 28 August 2019.

20

301 Kingsgrove Road, Kingsgrove

 

Applicant: Futuristic Design Pty Limited

 

Proceedings No: 2018/390589

 

Class 1 Appeal against refusal of DA2017/0487 for the demolition of all structures and construction of a two (2) storey child care centre for forty seven (47) children and basement car parking

Matter listed for S34 Conference on 19 August 2019.

External lawyer has been briefed.

21

22 Empress Street, Hurstville

 

Applicant: Erdogan Kasif

 

Proceedings No: 2019/9753

 

Appeal against deemed refusal of DA2018/0441 for partial demolition of existing structures and construction of a residential flat building containing 6 apartments with basement car parking

Matter listed for S34 Conference on 13 September 2019.

22

60 Park Street, Peakhurst

 

Applicant:  Costa Kostantopoulos

 

Proceedings No: 2019/70803

 

 

 

Appeal against deemed refusal of DA2018/0414 to demolish the existing building and erect a centre based child care facility.

Matter listed for S34 Conference on 1 November 2019.

Land and Environment Court Proceedings – Class 4 Proceedings

1

34 Milsop & 47 Jersey Avenue, Mortdale

 

Parties: Robert Stojanovski &

Steven Stojanovski

Proceedings No. 2018/99739

Proceedings commenced for unauthorised erection of structures and slabs, including habitation of structure at the premises.

Respondent has failed to comply with Court Orders dated 21 August 2018 requiring demolition of unauthorised structure.

Contempt proceedings were listed for hearing on 15 April 2019 and the sentencing hearing has been listed for 10 May 2019.

External lawyers briefed.

2

East Quarter – 93 Forest Road,
Hurstville

 

Parties:  Hville FCP Pty Limited

 

Proceedings No: 2018/311231

 

Proceedings commenced for non-payment of contributions under a Voluntary Planning Agreement for Stage 3 of East Quarter site.

Partial payments made in October and December 2018.  Respondent has agreed to Consent Orders to pay Council’s costs and finalise payment of all outstanding monies and obligations by 31 March 2019.  Matter finalised.

3

297 Rocky Point Road, Sans Souci

 

Parties:

Alan Frederick Goddard

 

Proceedings No.:

2018/366019

 

Proceedings commenced for hoarding at property.

Matter is listed for hearing on 2 September 2019. 

Counsel briefed.

Land and Environment Court Proceedings – Class 5 Proceedings

1

111 Gungah Bay Road, Oatley

 

Parties: W K Strong Pty Limited

Proceedings No: 2018/227315, 2018/227316, 2018/227361, and 2018/227363.

 

Parties: Khaled Awada

Proceedings No: 2018/227336

Class 5 appeals in relation to lopping and injuring trees and development not in accordance with development consent at 111 Gungah Bay Road, Oatley.

 

Council’s evidence in chief filed.  W K Strong Pty Limited and Awada entered guilty pleas.

Matter listed for sentencing hearing on 3 July 2019.

Land and Environment Court – Class 6 Proceedings

1

46 Terry Street, Blakehurst

 

Parties: Austyle Projects Pty Limited

 

Proceedings No: 2019/65973

Prosecution for offences of development without consent involving unauthorised road closures, materials being stored on the road/footpath reserve area and non- compliant signage.

 

Matter was listed in the Local Court for contested hearing on 1 February 2019.  Defendant entered a late guilty plea during the course of the hearing and was ultimately fined $30,000 for DA breaches, $800.00 for the Roads Regulation contraventions and Council was awarded $3,000 in costs.  Total amount payable by the Defendant is $33,800.

 

Defendant initially appealed to the Land and Environment Court, subsequently discontinued.

 

Local Court Proceedings

1

50 Queens Road, Connells Point

 

Parties: SAF Developments Pty Limited

Prosecution for development without consent involving unauthorised road closures, materials being stored on the road reserve area, defective/non-compliant sediment and erosion controls , defective non- compliant signage, defective tree protection facilities and allowing materials to enter the storm water system.

 

Defendant has pleaded guilty to 4 offences.  Matter fixed for hearing on sentence 14 June 2019.

 

2

Shop 5 & 6, 309 Forest Road, Hurstville (Spicy Orient)

 

Parties: Jiongyao Lin & L Z Infinity Pty Limited

 

 

Prosecution for multiple breaches of the Food Act.  Defendant has closed business and is unable to be located.  Application for substituted service to be made.

Matter is listed for a sentencing hearing on 4 July 2019. 

 

Supreme Court

1

220 – 226 Princes Highway, Kogarah Bay.

 

Parties:

Nikolaos & Marianna Sykalos

Proceedings No.

2018/215935

 

Supreme Court appeal seeking transfer of ownership of public car park on corner of Princes Highway and Park Road to the plaintiffs as adjoining land owners allegedly pursuant to an historic Deed.

Matter listed for formal mediation on 25 February 2019 before Mr Ian Cullinan.  Matter was unable to be resolved.  Proceedings are now listed for further directions on 17 May 2019, including Council’s strike out application.

2

Sans Souci Bathers Pavilion

 

Parties: Blakehurst Marina Pty Limited

Proceedings No.  2018/297522

 

Proceedings in relation to an Agreement to Lease and allegations of misleading and deceptive conduct by Council relating to the Sans Souci Bathers Pavilion.

Matter is being handled by Council’s insurers.  Matter has been stood over to 24 May 2019 for the parties to finalise a Deed of Settlement.  Plaintiff to discontinue proceedings.

 

3

977 Forest Road, Lugarno

 

Parties: Taeipo Malifa

Proceedings No. 2019/43432

Proceedings seeking leave to appeal Land and Environment Court decision of 12 December 2018 relating to noise breaches at Samoan Church.

Applicant has sought leave to appeal against consent orders agreed in December.  The issue of whether leave should be granted to appeal is listed for 31 May 2019.

 

9.   Costs to date are as follows:

Type

Amount

Class 1 Appeals – Consultants for Court Proceedings

$562,126

Class 1 Appeals – Planning DA External Lawyers

$337,155

Class 2 Appeals

$0

Class 3 Appeals

$0

Class 4 Appeals

$127,964

Class 5 Appeals

$32,339

Local Court Prosecutions/Enforcements

$36,153

Supreme Court Proceedings

$44,687

Industrial Relations Commission (IRC)

$0

Total

$1,140,424

 

 

Financial Implications

 

10.    Within budget allocation.

 

Risk Implications

 

11.    No risks identified.

 

Community Engagement

 

12.    No community engagement is required.

 

 

File Reference

17/1831

 

 

 

  


Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 16

Item:                   FIN030-19            Local Government Remuneration Tribunal Determination - Mayor and Councillors fees for 2019-2020 

Author:              Manager, Office of the General Manager

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

 

Recommendation

That Council determine their remuneration for the 2019/2020 financial year, effective from 1 July 2019.

 

 

Executive Summary

1.      The Local Government Remuneration Tribunal (LGRT) released on 15 April 2019 its Annual Report and Determination under sections 239 and 241 of the Local Government Act 1993.

2.      The Annual Report advises that the LGRT undertook a significant review of the categories of Councils; specifically Georges River Council is classified as a Metropolitan Medium Council.

3.      Additionally, the Annual Report advises the LGRT has recommended a general increase of 2.5% in remuneration.

Background

4.      In accordance with Section 239 of the Local Government Act 1993 the LGRT determines the category of each Council; while in accordance with Section 241 the LGRT determines remuneration to be paid to Councillors and the Mayor. 

5.      The LGRT wrote to all Mayors in December 2018 advising of the commencement of the 2019 Annual Review. In doing so, the LGRT noted that it is only required to review the categories every three (3) years and it will consider the model, the criteria available to each group and the allocation of councils in detail in 2020.

6.      The 2019 Review found the current categorisation to be appropriate, but noted that some of these requests would in the future be likely to meet the criteria for re-categorisation.  

7.      Georges River Council has been categorised as “Metropolitan Medium” Council.

8.      In the review of Mayoral and Councillors Fees under this category, the LGRT determined that an increase of 2.5% to Councillors fees and Mayoral fees was appropriate.  This decision took into consideration a number of factors including the current cap on public sector wages and key economic indicators. 

9.      The table below provides a summary of the minimum and maximum fees determined by the Tribunal.

 

Metropolitan Medium

Minimum fee 2019/2020

Maximum fee 2019/2020

Maximum fee 2018/2019

Councillor Annual Fee

$13,820

$25,790

$25,160

Mayor Additional Fee

$29,360

$68,530

$66,860

 


 

Options

10.    Options available to Council;

a)    No increase to Councillor Annual Fee and Mayor Additional Fee – retain fee at 2018/2019 amounts.

b)    Apply 2.5% increase to Councillor Annual Fee and Mayor Additional Fee.

c)    Reduce the Councillor Annual Fee and Mayor Additional Fee.

 

Financial Implications

11.    If Council were to resolve to increase the Councillor Annual Fee and Mayor Additional Fee by 2.5%, thereby paying the maximum Councillor and Mayoral fees, the total cost to Council will be $455,380 per annum. There is provision for this amount in the Draft 2019-2020 Budget. The new fees are payable as of 1 July 2019.

 

File Reference

17/1831

D19/96284

 

 

 

ATTACHMENTS

Attachment 1

2019 Annual Determination LGRT - Local Government Remuneration Tribunal

 


Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN030-19              Local Government Remuneration Tribunal Determination - Mayor and Councillors fees for 2019-2020

[Appendix 1]          2019 Annual Determination LGRT - Local Government Remuneration Tribunal

 

 

Page 36

 





















Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 38

Item:                   FIN031-19            Quarterly Budget Review Statement for quarter ending 31 March 2019  

Author:              Chief Financial Officer

Directorate:      Business and Corporate Services

Matter Type:     Committee Reports

 

Recommendation

(a)     That Council receive and note the Quarterly Budget Review for quarter ending 31 March 2019.

(b)     That Council approve the variances to the 2018/19 Budget, as detailed in Attachment 1, as a result of the quarter ending 31 March 2019 Budget Review.

 

 

Executive Summary

1.      The purpose of this report is to highlight Council’s third quarter performance against the 2018-19 current budget and present any proposed budget variations in line with the revised projected year end result.

2.      Overall the third quarter results have highlighted mostly favourable budget variations across both income and expenditure. Within income material increases have occurred from the unexpected receipt of voluntary planning contributions and new operating revenue opportunities. The third quarter results have indicated a decline in income within development applications and childcare fees which has been incorporated into the year-end projected result. Within expenditure Council has applied strict management of materials and contract expenditure, which has resulted in further savings projected.

 

Background

3.      Section 203 of the Local Government (General) Regulation 2005 requires that a Quarterly Budget Review be considered by Council that shows current estimates for income and expenditure for the year, indicates whether Council’s financial position is satisfactory and makes recommendations for remedial action, if required.

 

Quarter Budget Review for quarter ending 31 March 2019

Financial Performance

4.      Details of Council’s financial performance and proposed quarter variations are outlined in Attachment 1.

5.      Year to date results for Council are trending to have a material variance to the original adopted budget; these variances are considered to be favourable to our projected 2018/19 year-end financial position.

6.      The overall financial performance of Council is considered to be satisfactory and reflects sound management of income and expenditure. While the Operating Surplus over the 9 month period is ahead of the year-to-date budget by $10.85m, this is mainly due to the unexpected receipt of operating and capital grants/contributions and above budgeted performance in legal recovery, hoarding, property income and the sale of heavy and light vehicle plant. This has been reflected in the year end forecast surplus of $18.4m.

7.      The capital works program at the quarter ending 31 March had year to date (YTD) actuals of $46.98m, against the current budget of $76.56m.

 

Financial Implications

8.      Details of the financial impact are outlined in Attachment 1.

9.      The proposed quarter 3 budget variations result in a favourable increase to Council’s operating surplus of $18.4m. Council’s surplus is heavily supported by Capital Grants & Contributions. Without this income, Council shows a projected operating deficit of $8.7m. Though this is a deficit the project year-end result is a $2m improvement from the 2018-19 original adopted budget.

 

Risk Implications

10.    Enterprise risk identified and management process applied.

 

11.    Council’s enterprise risk identified was ‘poor financial management adversely impacts Council’s long term financial sustainability’. The purpose of this report is to provide an update to Council on the financial performance each quarter. This is to enable financial information for sound decision making, to ensure financial sustainability of Council.

 

Community Engagement

12.    No community consultation is required as a result of this report. Members of the community are able to attend and address Council at the Council meeting in relation to this matter in accordance with Council’s Code of Meeting Practice.

File Reference

D19/78682

 

 

 

ATTACHMENTS

Attachment 1

Quarterly Budget Review Report - 31 March 2019 PDF

 


Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN031-19              Quarterly Budget Review Statement for quarter ending 31 March 2019

[Appendix 1]          Quarterly Budget Review Report - 31 March 2019 PDF

 

 

Page 41

 


 


 



 



 


 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 56

Item:                   FIN032-19            Investment Report as at 31 March 2019 

Author:              Finance Accountant - Reporting and Senior Financial Accountant - Reporting

Directorate:      Business and Corporate Services

Matter Type:     Committee Reports

 

Recommendation:

That Council receive and note the contents of the Investment Report as at 31 March 2019.

 

 

Executive Summary

1.      This report details Council’s performance of its investment portfolio as at 31 March 2019, and compares it against key benchmarks.

2.      This report also includes the estimated market valuation of Council’s investment portfolio, loan liabilities and any required update on Council’s legal action against various parties.

3.      Council’s annualised rate of return is 2.76%, which is 0.74% above benchmark. Income from interest on investments totals $4.0m, which is in line with 2018/19 year-to-date adopted budget.

Background

4.      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 (1993).

Investment Performance Commentary

5.      Council’s performance against the benchmark for returns of its investment portfolio for March 2019, are as follows:

 

1 Month

3 Month

12 Month

Portfolio Performance

0.23%

0.78%

2.76%

Performance Index

0.20%

0.52%

2.02%

Excess

0.03%

0.26%

0.74%

Notes:                                                      

a)      Portfolio performance is the rate of return of the portfolio over the specified period.

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

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

 

 

 

6.      Council’s investment portfolio as at the end of March was as follows:

Security Type

Market Value $000's

% Total Value

Cash at Bank

20,368

11.34%

11am Cash

1,293

0.72%

31 Day Notice Account

23

0.01%

Covered Floating Bond

1,014

0.56%

Flexi Deposit (Fix/Float)

6,000

3.34%

Floating Rate Deposit

5,000

2.78%

Floating Rate Note

49,335

27.47%

Floating Rate TCD

3,512

1.96%

Term Deposit

87,041

48.47%

Managed Funds Trust

5,989

3.34%

Total Cash and Investments

179,575

100.00%

 

7.      At the end of February 2019, Total Cash and Investments were $183.71m and have decreased by $4.14m at end of March 2019 due to capital and operational expenditures in the month of March.

8.      Council continues to utilise the Federal Government’s current guarantee ($250k) 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

9.      Georges River Council is participating in a Group Class Action against Fitch Ratings Inc., in respect of losses suffered on the Corsair (Cayman Islands) No.4 Ltd Series 6 Kakadu Collateralised Debt Obligation (CDO) notes. Council suffered a capital loss of $214,812 on these investments dating back to December 2006, and will seek damages of the Capital Loss including lost interest as part of the action.

Loan Liability

10.    Council’s loan liability, as at 31 March 2019, was $1.75m which represents the balance of a $5m 10 year loan drawn down on 16 November 2012 for the Jubilee Park upgrade in Mortdale. The next repayment of $125k is due on 25 June 2019.

 

11.    The outstanding balance on this facility is at a variable interest rate of 194 basis points above the three month BBSW. At the current three month BBSW rate, the interest rate payable is 3.78% pa.

 

12.    Council receives a 4% p.a. subsidy under the NSW Government’s Local Infrastructure Renewal Scheme funding agreement for the Jubilee Park upgrade facility. It is intended to continue this financially-advantageous arrangement through to full term in 2022.

 

 

 

Policy Limits

 

13.    The following graph below 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. It shows that the funds invested are within the limits set in the Investment Policy.

 

 

Investment Income

14.    Income from interest on investments to 31 March 2019 is estimated at $4.0m, which is in line with 2018/19 year-to-date adopted budget.

 

15.    Investments have been made in accordance with the Local Government Act (1993), Minister’s Guidelines, Regulations and Council’s Investment Policy.

Analysis of Investments

Investment Duration

Investment Term

Market Value ‘000

% Total Value

Policy Limits

0 to < 1 Year

99,975

55.68%

100%

1 to < 3 Years

59,356

33.05%

70%

3 to < 5 Years

 20,244

11.27%

50%

Portfolio Total

179,575

100.00%

 

 

16.    Council’s portfolio is liquid, with 55.68% of assets maturing within 12 months. FRNs, At-Call Funds and Fixed Bonds also provide additional liquidity in an emergency.

 

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

 

 

 

 

Type of Investments

 

18.    Council’s investment portfolio is mainly directed to fixed term deposits, which accounts for approximately 52% of total investments.

 

19.    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).

 

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

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

b)      An 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 Term Deposit is a debt security issued by a company with a fixed interest rate over the term of the deposit.

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  Governmentchanged 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

21.    Credit ratings are generally a statement as to an institution’s credit quality. Ratings ranging from AA to BBB (Short Term) & AA to BBB (long term) are considered investment grade.

 

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

Short-term

AA:            The best quality companies, reliable and stable. An obligor’s capacity to meet its financial commitments on the obligation is very strong.

A:               The obligor’s capacity to meet its financial commitments on the obligation is still strong but is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions.

BBB:          Adequate capacity to meet financial commitments, but adverse economic conditions or changing circumstances are more likely to weaken the obligor’s capacity 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.         

Long-term

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.

23.    The credit quality of Council’s portfolio is relatively high with approximately 73% of assets rated ‘A’ or higher. The ‘AAA’ assets represent the deposit investments covered by the Federal Government’s Financial Claims Scheme (FCS).

 

24.    The remaining 27% rated ‘BBB’ or ‘unrated’ reflects the deposit and FRN investments with the regional and unrated ADIs.

 


 

Council’s Investment Powers

25.    Council’s investment powers are regulated by Section 625 of the NSW Local Government Act (1993), 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.

 

26.    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

 

Reserve Movement Overview

27.    Council’s investment portfolio is composed of a variety of reserves which are used for funding future projects such as capital works or asset acquisitions. The Council has two types of reserves: Externally Restricted Reserves and Internally Restricted Reserves.

 

28.    Externally Restricted Reserves refer to funds that are kept restricted and cannot be used for general purpose, as they are subject to external legislative or contractual obligation.

 

29.    Internally Restricted Reserves refer to funds that are restricted by resolution of Council. These restrictions are developed by Council to cover future commitments/obligations that are expected to arise.

 

30.    The table below highlights balances of restricted cash reserves for Council:

 

Description

Audited Balance 30/06/18

Closing Balance 31/03/19 

 ($'000)

 ($'000)

Externally Restricted Cash Reserves

96,047

99,083

Internally Restricted Cash Reserves

77,119

63,146

Total  Restricted Cash Reserves

173,166

162,229

 

 

Financial Implications

31.    Within budget allocation.

 

 

Risk Implications

32.    Enterprise risk/s identified and management process applied.

 

33.    Council’s enterprise risk identified was ‘poor financial management adversely impacts Council’s long term financial sustainability’. The risk has been managed by Council’s management of investments in accordance with the relevant act and regulations, along with Council adopted Investment Policy. To further minimise the risk, Council will progressively move towards the placement of investments only in investments rated A or above.

 

Community Engagement

34.    No community consultation is required as a result of this report. Members of the community are able to attend and address Council at the Council meeting in relation to this matter in accordance with Council’s Code of Meeting Practice.

 

File Reference

D19/83160

 

 

 

ATTACHMENTS

Attachment 1

Investment Report as at 31 March 2019

 


Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN032-19              Investment Report as at 31 March 2019

[Appendix 1]          Investment Report as at 31 March 2019

 

 

Page 62

 


 


 


 


 


 



 


 


 



Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 79

Item:                   FIN033-19            Draft Budget 2019/20 - resources in the Strategic Planning Team to deal with development contributions 

Author:              Manager Strategic Planning

Directorate:      Environment and Planning

Matter Type:     Committee Reports

 

Recommendation

(a)     That Council approve the extension of the finance resource allocated to development contributions and VPA for a further 13 months - from 16 May 2019 until 30 June 2020 - so as to continue to assist in the financial side of the development contributions and voluntary planning agreements area within the Strategic Planning team.

(b)     That in accordance with Recommendation 2 of the Section 7.11 & 7.12 Income Audit dated 18 March 2019 that Council create a dedicated Development Contributions Officer position to reduce the potential for errors in contribution levies applied and the loss of funding for future developments.

(c)     That Council note impact to the staff costs in the 2019/20 budget for the two positions reference in (a) and (b) and the ongoing staff costs for the dedicated Development Contributions Officer (referenced in (b) above).

 

 

Executive Summary

1.      As a result of an internal review that commenced in February 2018 a planning resource and a finance resource were approved for the Strategic Planning Team under the 2018/19 Budget. The Finance Resource will finish up on 16 May 2019. The Planning Resource (which is currently vacant) will finish on 30 November 2019.

2.      Council officers have undertaken two recent Audit Reports (dated 4/12/2018 & 18/03/2019) relating to development contributions, with a third audit to commence in June 2019 on planning agreements. The two completed Audit Reports contain a series of recommendations – with a number relating to the financial and policy provisions of development contributions.

3.      As a result of the findings of the internal review and the findings and recommendations of the two Audit Reports, this report recommends:

a.   the extension of the finance resource allocated to development contributions and VPA for a further 13 months - from 16 May 2019 until 30 June 2020 - so as to continue to assist in the financial side of the development contributions and voluntary planning agreements area within the Strategic Planning team. 

b.   that in accordance with Recommendation 2 of the Section 7.11 & 7.12 Income Audit dated 18 March 2019 that Council create a dedicated Development Contributions Officer position to reduce the potential for errors in contribution levies applied and the loss of funding for future developments.

4.      Both positions will impact the 2019/20 Budget by increasing the staffing costs within the organisation.

5.      The extension of the finance resource to 30 June 2020 has an impact of an additional cost of $120,000.00 plus super (for 3 days per week).

6.      The Development Contributions Officer position has an impact on the 2019/20 and future budgets of $132,000 per annum (including salary and on-costs).

7.      There are valid and critical reasons for retaining the resources which are outlined in this report.

8.      Funding for the two positions can be considered as an interest free internal loan borrowed from Cost Centre 40.2506.1001.46828 – Section 94A Contributions and reallocated to Section 94 Administration in Cost Centre 2506.  Repayment of the loan will occur from the new Development Contributions Plan.

9.      The Committee is to note that in:-

a.   2017/18 FY a total of $16,633,518 (with $4.67m for VPAs) was received from VPA and S94 income; and

b.   2018/19 FY to date a total of $14,477,221 (with $6.8m for VPAs) was received from VPA and S94 income.

Background

10.    There are currently six Section 7.11 Development Contributions Plans for Georges River Council LGA and one Section 7.12 Plan as follows:

a.   Hurstville S94 Development Contributions Plan 2012

b.   Ramsgate Commercial Centre Development Contributions Plan 2006

c.   S94 Contributions Plan No 1 – Road and Traffic Management

d.   S94 Contributions Plan No 5 Open Space – 2007

e.   S94 Contributions Plan No 8 – Kogarah Town Centre 2006

f.    S94 Contributions Plan No 9 – Kogarah Libraries 2001

g.   Georges River S94A Contributions Plan 2017

11.    Under the former Kogarah Council, the five s94 and one s94A Plans were managed by staff within the Development Assessment Team and Finance section. At the time of the merger Strategic Planning became responsible for the management of the plans and the information on the status of the former Kogarah work program.

12.    Under the former Hurstville Council, the s94 Plan was managed by Strategic Planning and Finance. There were only two VPAs executed by Hurstville Council.

13.    Since the creation of Georges River Council in May 2016 there has been an increased workload in the Development Contributions and voluntary planning agreements area. The increase in workload relates to an increase in the number of VPA offers received by Council, changes in the sections/staff managing the s94 and s94A plans, and identification of issues within the former Kogarah Plans and calculator.

14.    Under the former Kogarah Council, the six (6) s94 and s94A Plans were managed by staff within the Development Assessment Team and Finance section. These plans are now managed by Strategic Planning. There were no VPAs executed by Kogarah Council (12-22 Woniora Road was signed under Georges River Council). Under the former Hurstville Council, the s94 Plan was managed by Strategic Planning and Finance. There were only two (2) VPAs executed by Hurstville Council.

15.    Since the creation of GRC, a total 25 VPAs offers have been considered and reviewed.

16.    Currently only two positions in the Strategic Planning Team undertake work on VPAs and Development Contributions. The positions are not fulltime and equal to only 1.2 FTE persons.

 

Issues identified to date with past contributions management

17.    In 2018 Council’s Strategic Planning Department self-initiated a review of a selected number of development assessments where errors were found in the contributions levied under the Kogarah Contributions Plans. This internal review identified errors amounting to $1.396 million in lost revenue for Council.

18.    The S7.11 and S7.12 Income Audit Recommendations dated 18 March 2019 also found additional issues with the contributions levied under the Kogarah Contributions Plans.

19.    The issues with the contributions are exacerbated as Georges River Council currently utilises two systems for the management of the s7.11 contributions. Computation in relation to development contributions is undertaken using the TechOne system for Hurstville developments and the Kogarah Calculator Excel spreadsheet for Kogarah developments.

20.    The Hurstville Development Contributions Plan is less complex when compared with the Kogarah Contribution Plans. There are 5 Kogarah Contributions Plans and 11 precincts. A mix of plans applies across every precinct (up to 4 on each precinct) and the contributions are based on different set of dwelling types and commercial development. The combination of variables results in 829 different charges for Kogarah Plans which contributes to the complexity for Development Assessment Planners when computing contribution levies. Council is now in the process of preparing a single Development Contributions Plan for Georges River Council.

21.    Whilst the new contributions plan may be in place by year 2020, the existing plans will be repealed and will remain a legacy which will require Council to continue to apply the plans until approximately 2025. 

22.    Work is underway to bring the Kogarah calculator into TechOne – but that is a complex project and requires resourcing.

23.    Other issues have been identified in the two Audits were:

a.   Council has not complied with Division 5 Clause 34 of the Environmental Planning and Assessment Regulations 2000 which requires Council to maintain contributions register for s7.11 and s7.12 contributions levied for developments under the former Kogarah Council. The Kogarah Contributions Register ceased to exist from 2012 – i.e. there is no contributions register for the Kogarah S7.11 and S7.12 Plans from 2012 to 2018.

b.   Although the Contributions Register for the former Hurstville Council is held in TechOne, the reporting capability is currently not automated.

c.   Use of incorrect plan – One error resulted in a DA consent being issued with a condition requiring a contribution of $1,143,905.98. The correct amount should have been $1,814,813.49.

d.   Use of incorrect plan - error in the Kogarah Town Centre from November 2013 was identified in mid 2018 by officers where contributions of $651,087.12 were levied and paid where $1,075.981.60 was the appropriate amount. An exhaustive search due to resourcing has not been undertaken so it is possible that these are not the only cases.

e.   During the handover of the Kogarah Section 94 calculator shortly after amalgamation, the incorrect indices (used the Australian average which is significantly lower and not the Sydney average) were applied for a period of around 12 months. In this time, 26 DAs paid their contributions which resulted in a loss of approximately $300,000.


 

f.    In the Kogarah Calculator, for 4 of the 5 Section 94 plans the index referenced at the base date was incorrect; instead the calculation references the index from the following quarter. These plans are No. 1 – Road and Traffic Management, No. 8 – Kogarah Town Centre, No. 9 – Kogarah Libraries and Ramsgate Town Centre. There is a lack of document version control, so it is unclear how long these errors have been in the calculator. It is possible they could have been in the original calculations from each plan’s base date, which are 1994, 2005, 2000 and 2006 respectively. This has resulted in a calculation that is less than the correct amount in these 4 plans of between 0.2% - 1%, depending on the movement of the relevant index in the quarter that is in error.

g.   Monies are receipted in the TechOne system. However, allocation of expenditure and income from investments and the review of prepaid accounts to resolve anomalies continues to be a manual process.

h.   Evidence of receipt of payment of contribution levies for private certifier Construction Certificates/Complying Development Certificates was not always provided and the Audit dated 18 March 2019 revealed a number of construction certificates/complying development certificates were contributions were required to be paid but were not.

 

Initiatives Implemented to address past and legacy issues

24.    Following the review, the Strategic Planning Department has implemented several initiatives to minimise Council’s exposure in relation to the loss of potential contribution levies.

25.    Initiatives implemented include the following:

a.   Prepared and issued the ‘Procedures Manual for the use of the Kogarah s94 Calculator’ which includes the s7.11 calculations for the Hurstville Plan.

b.   Rolled out training to all DA Planners on the procedures and process for the use of the Kogarah s94 Calculator and Hurstville Contributions Plan and the calculation of contributions levies.

c.   Applied the correct CPI indices in the Kogarah s94 Calculator (September 2018 quarter).

d.   Project underway to create a Kogarah contributions module in the TechOne system.

e.   Development of a Kogarah Development Contributions (s7.11) Register for past development assessments.

f.    Strategic Planning Team working closely with the Development Assessment Team to provide support and guidance on contribution levies for complex developments.

g.   Strategic Planning developing spreadsheets for all Plans and those spreadsheets identify the status of projects, allocation and commitment of funds and expenditure.

h.   Strategic Planning undertaking quarterly audits of all s7.11 rates to ensure that the indexation is correctly applied in TechOne and the Kogarah Calculator.

 


 

New work

26.    As well as the work above, three new projects are underway:

a.   Development Contributions from Court Ordered Consents: The Development Contributions are levied under s7.13(3) of the Environmental Planning and Assessment Act 1979 whereby the courts as the consent authority impose a condition requiring the payment of development contributions.

Financial systems and the management of these contributions has just now been established.

b.   Review of the Georges River Policy on Planning Agreements 2016: HillPDA has been appointed to undertake a review of Council’s Policy on Planning Agreements which is to include a review of the residual land value rates within the Policy for the Hurstville and Kogarah commercial centres, address Council Meeting Notices of Motions and other housekeeping amendments. The review will also require residual land value rates for the following areas of uplift:

•        Kogarah North Precinct;

•        Beverley Hills Centre

•        Riverwood Centre

 

The review of the Policy is to result in a draft Policy on Planning Agreements -Amendment 1 for presentation to the Council. The draft Policy is to provide a clear and transparent framework governing when a Planning Agreement will be considered, the negotiation, assessment and use of planning agreements.

 

A separate report is to be provided that investigates, provides advice and recommendations on how and if the Policy may require development applications which seek additional floor area under clause 4.4 of the LEPs to enter into a planning agreement.

 

c.   New Development Contributions Plan for the Georges River Local Government Area: SGS Economics and Planning has been appointed to prepare a new Section 7.11 Development Contributions Plan for the Georges River Local Government Area (LGA) and to prepare a new Georges River Section 7.12 Contributions Plan to ensure that Council has the most efficient and effective development contributions system for the delivery of community facilities and services.

The project will deliver a development contributions system that levies for a range of public facilities and services and infrastructure across the Georges River Council that will meet the future needs of the community.  

 

Resourcing

27.    As stated previously in this report only two positions in the Strategic Planning Team are dedicated to VPAs and Development Contributions. The positions are not fulltime and equal to only 1.2 persons.

28.    Due to the issues identified in the internal review commencing in early 2018, additional resources were allocated to the Team to address the issues – being a planning resource and a finance resource. The Finance Resource will finish up on 16 May 2019. The Planning Resource position (which is currently vacant) will finish on 30 November 2019.


 

Planning Resource position

29.    One of the issues identified by the S7.11 and S7.12 Income Audit Recommendations dated 18 March 2019 is the key personnel dependency for contributions management and that  Council does not have a dedicated s7.11 Development Contributions Officer in place to undertake close monitoring of the contribution levies imposed, implement process improvement initiatives and controls to ensure errors are identified and corrected prior to the issue of development consents to reduce potential loss of funding for future community developments.

30.    It is also evident from the internal and the Audit findings the complexity of the Kogarah Development Contribution Plans and computations required to ensure the contribution levies are correct at the time of granting the development consents and at the time of collection of the contribution levies requires specialist assistance.

31.    For this reason,  it would be beneficial for Council to create a dedicated s7.11 Contributions Officer position to undertake  close monitoring of the contribution levies imposed, implement process improvement initiatives and controls to ensure errors are identified and corrected prior to the issue of development consents to reduce the potential loss of funding future developments.

Finance Resource position

32.    The Finance resource which commenced in early December 2018 has worked closely with Strategic Planning, Development Assessment & Planning, Finance, Customer Services and IMT to successfully:

a.   Develop and maintain a Project Plan detailing the tasks and activities to be undertaken and implemented for the effective management of Development Contributions for Council. The scope of the plan covers contributions under Section 7.11 & 7.12 (previously Section94 &94A). Actions relating to the administration and management of Section 7.13 - Court Ordered Development Consent Contributions and Voluntary Planning Agreements have been developed and included. The Project Plan extends into March/April 2020.

b.   Commence work on the Contributions Register for former Kogarah City Council KCC, in January 2019, to ensure compliance with Division 5 Clause 34 of the Environmental Planning and Assessment Regulation 2000. This involves the following:

i. Review the information extracted from Data works for each development application;

ii.  Monitor progress to ensure all Development Applications for KCC from 2014 onwards have been correctly and completely entered into the register;

iii. Identify development applications attracting s7.11 and s7.12 contributions;

iv. Enter amounts payable/due by reference to the Excel calculator information;

v.  Update the register with payment information extracted from Authority/TechOne;

vi. Compare the fee levied to the fee paid and determine outstanding amounts due to Council;

vii.          Prepare a list of all outstanding Development Applications to be entered into TechOne.


 

 

c.   Work on Recommendation 3.9 of the Audit dated 18 March 2019 which states: Council should investigate the feasibility of recovering contributions retrospectively that were not paid at the time the Construction Certificate or Complying Development Certificate was issued.  

d.   Discuss and develop clear roles and responsibilities with Strategic Planning, Development Assessment and Assets and Infrastructure for effective financial management of Development Contributions due to, and received by, Council.

 

33.    Work to be also undertaken by this position includes:

a.   Develop financial systems for Court Ordered Development Consent Contributions levied under s7.13(3) of the Environmental Planning and Assessment Act 1979;

b.   Develop financial management systems for Voluntary Planning Agreements;

c.   Develop reports and extract information from the Authority system to update the Contributions register for former KCC to show amounts expensed on capital projects/assets form Development Contributions received on a first in, first out basis. Compare the information to the Financial Statements prepared for KCC/GRC 2014 to current.

d.   Develop the reporting capacity in TechOne.

e.   Review the Schedule of Works for each of the six (6) s94 and s94A Plans for former Kogarah Council. By referring to the information previously prepared by Finance and Strategic Planning, consolidation of the information for former KCC has commenced. The consolidated information identifies works completed/not completed and the accuracy of the information has been verified. Updated information from amalgamation in May 2016 relating to expenditure on each works item, the amount spent, the amount funded from s7.11/s7.12 and the year in which the expenditure was incurred is in progress and still to be completed.

f.    Procedures and training manuals – Capture in Promapp

 

34.    This position will also develop and implement a process to recover development contributions retrospectively. A further report will be submitted to Council on this program when the work on the Kogarah Development Contributions Register is completed.

 

35.    A number of the financial projects will run into the next financial year and beyond.

 

Financial Implications

36.    Funding for the extension of the positions is proposed as an interest free internal loan borrowed from Cost Centre 40.2506.1001.46828 – Section 94A Contributions and reallocated to Section 94 Administration in Cost Centre 2506. The salary costs are to be paid back under the future GRC s7.11 Development Contributions Plan.

37.    As stated in the Executive Summary, both positions will impact the 2019/20 Budget by increasing the staffing costs within the organisation as follows:

a.   The extension of the finance resource to 30 June 2020 has an impact of an additional cost of $120,000.00 plus super (for 3 days per week), and

b.   The Development Contributions Officer position has an impact on the 2019/20 and future budgets of $132,000 per annum (including salary and on-costs).

 

Risk Implications

38.    There are enterprise risks and operational risks with the current situation with this area of Council. The finance resource has been critical in addressing the risks and in assisting in addressing the recommendations of the two audits completed to date relating to development contributions. A third audit – on planning agreements – is scheduled to commence 1 June 2019.

39.    The two audits which have been completed are as follows:

a.   DA Audit dated 4 December 2018: The recommendations are listed below relate to VPAs and development contributions. Work has commenced on all the recommendations below.

Relevant Recommendation

Status

Recommendation: 13.1 Council should move towards a single system and process for the calculation of development contributions.

A calculator for the Kogarah contribution plans have been developed in TechOne test environment.

Testing has been completed and the calculator has to be amended. Further testing will then commence.

Recommendation 13.2 In the interim, Council should review the current process and tools for calculating section 94 contributions applying to individual developments and implement measures to reduce the chance of error. This might include, for example, additional training for staff, allocation of additional resources to allow peer review of calculations, updating of the section 94 calculator etc.

Training has commenced and will be ongoing.

Recommendation 14 Council should finalise the Development Contribution Plan for Georges River Council as soon as possible.

SGS Economics and Planning has been appointed to prepare a new Section 7.11 Development Contributions Plan for the Georges River Local Government Area (LGA) and to prepare a new Georges River Section 7.12 Contributions Plan to ensure that Council has the most efficient and effective development contributions system for the delivery of community facilities and services.

The project will deliver a development contributions system that levies for a range of public facilities and services and infrastructure across the Georges River Council that will meet the future needs of the community. 

Recommendation 15 The proposed combined Contributions Plan for Georges River Council should contain a consistent approach to the deferral, waiver or discounting of contributions.

This will be included in the new Development Contributions plans.

Recommendation 16 Council should develop a policy and/or procedure for assessing and processing of requests for the deferral, waiver or discounting of a contribution prior to the issuing of a consent.

This will be included in the new Development Contributions plans.

Recommendation 18 Council should move towards a single register for the maintenance and reporting of Development Contributions information.

Action has commenced to implement the recommendation.

Recommendation 19 All areas involved in the indexation of contributions should be required to certify as to the correctness of the changes made each quarter to the contribution rates.

Action has commenced to implement the recommendation.

Recommendation 21 Council should make reference in the Voluntary Planning Agreements Policy, to ‘key community infrastructure’ under the Regulation or public infrastructure approved by the Minister for Planning.

HillPDA has been appointed to undertake a review of Council’s Policy on Planning Agreements which is to include a review of the residual land value rates within the Policy for the Hurstville and Kogarah commercial centres, address Council Meeting Notices of Motions and other housekeeping amendments – including the references to ‘key community infrastructure’ under the Regulation or public infrastructure approved by the Minister for Planning.

 

b.   S7.11 and S7.12 Income Audit Recommendations dated 18 March 2019:

 

Relevant Recommendations

 

Target Implementation Date

Action taken

Recommendation No. 1

Training on s7.11 contributions should be provided to Development Assessment Planners and Customer Service staff at the commencement of employment with the Council.

 

Refresher training should be provided periodically to Development Assessment Planners and Customer Service staff to ensure they remain competent in the computation and administration of s7.11 and s7.12 contributions.

 

Refresher  Training – 30 June 2019 then Ongoing

Initial training has been completed but will be on-going

Recommendation No. 2

Council should consider creating a dedicated Development Contributions Officer position to reduce the potential for errors in contribution levies applied and the loss of funding for future developments.

 

31/03/2019

The Council’s Executive Team allocated additional resources to the Team to address the issues – being a planning resource and a finance resource. The Finance Resource will finish up on 16 May 2019. The Planning Resource position (which is currently vacant) will finish on 30 November 2019.

 

This report seeks the extension of the finance resource until June 2020 and the creation of a permanent dedicated Development Contributions Officer position.

 

Recommendation No. 3

 

 

3.1 - The DA Planners should include an Excel extract from TechOne with each Development Assessment Report, for the Development Assessment Team Leader or Coordinator’s review.

 

The reviewer of the Development Assessment Report should assess if the contributions levy was correctly computed for at least a sample of DAs assessed by each DA Planner.

 

30/06/2019

Training has been completed.

 

Manager Development & Building has commenced implementation of the process.

3.2 - Development Assessment Planners must ensure the contribution levies are adjusted by the appropriate index on the Notice of Determination at the time of issue and the Customer Service staff must reassess the contribution rates at the time of collection of the contribution levies.

 

30/06/2019

Manager Development & Building and Manager Customer Service have commenced implementation of the process.

3.3 - Customer Service must confirm that all levies have been paid to Council and receipt numbers provided as evidence of payment.

 

30/06/2019 & ongoing

Manager Customer Service has commenced implementation of the process.

3.4 - Documents received from private certifiers must be completely scanned into TRIM and checked to ensure they are complete.

 

30/06/2019 & ongoing

Chief Information Officer and Manager Customer Service has commenced implementation of the process.

3.5 - Council should provide guidance via a checklist to developers and private certifiers of the order in which documentation should be labelled and submitted to Council.

 

30/06/2019

Manager Development & Building and Manager Strategic Planning have commenced implementation of the process.

3.6 - Evidence of receipt of payment of contribution levies for private certifier Construction Certificates/Complying Development Certificates should be obtained and retained in TRIM.

 

30/06/2019 & ongoing

Manager Customer Service has commenced implementation of the process.

3.7 - Council should produce and review the S7.11 and S7.12 payments made on DAs, CCs and CDCs determined reports on a quarterly basis to ensure development contributions outstanding are followed up and collected.

 

30/09/2019

Manager Strategic Planning & Chief Financial Officer have commenced implementation of the process.

3.8 - Council must monitor information received from private certifiers to ensure private certifiers comply with the payment of the long service levy prior to the issue of the construction certificate.

 

30/09/2019

Manager Development & Building and Chief Financial Officer have commenced implementation of the process.

3.9 - Council should investigate the feasibility of recovering contributions retrospectively that were not paid at the time the Construction Certificate or Complying Development Certificate was issued.

 

30/09/2019

Manager Strategic Planning to implement process but additional resources are required – which are the subject of this report.

 

This is a key area of concern. There are contributions outstanding and CDCs/CCs issued without payment occurring. The first step in the process will be finishing the Kogarah Development Contributions Register and then working out what consents and CDCs have been issued and payments outstanding.

 

Recommendation No. 4

Council should investigate the possibility of linking GIS IntraMaps to TechOne so that data pertaining to the development property is electronically transferred into the TechOne calculator reducing the risk of data entry errors.

 

31/12/2019

Manager Strategic Planning has commenced implementation of the process.

Recommendation No. 5

 

 

5.1 Council must ensure compliance with Division 5 Clause 34 of the Environmental Planning and Assessment Regulation 2000 by ensuring a Contributions Register exists for development consents with section 7.11 or section 7.12 conditions.

 

31/03/2020

Manager Strategic Planning has commenced implementation of the process.

5.2 Automated reporting capability should be investigated for the Contributions Register.

 

31/03/2020

Chief Information Officer has commenced implementation of the process.

 

Recommendation No. 6

 

 

6.1 Council should undertake succession planning, develop an internal procedures manual for the administration of s7.11 contributions, provide internal training to staff and consider job rotation/share to reduce key personnel dependency.

 

31/12/2019

Manager Strategic Planning has commenced process with the finance side in the cross training but additional resources are required.

6.2 Council should automate the financial management and reporting of s7.11 contributions to improve efficiency and reduce key personnel dependency.

 

30/09/2019

Chief Financial Officer has commenced implementation of the process.

6.3 Finance Department should resource and upskill existing staff to enable the functions being undertaken by the former Senior Financial Accountant to be performed within the Finance Department.

 

30/09/2019

Chief Financial Officer has commenced implementation of the process.

Recommendation No. 7

The indexed Development Contributions rates should be published on Council’s website each quarter once the new Development Contributions Plan is implemented.

 

30/09/2020

Manager Strategic Planning will action this when the new Contribution Plans are adopted by Council.

 

 

Community Engagement

40.    Community engagement is not required for this report.

41.    Prior Community engagement may be required in implementing Recommendation 3.9 of the Audit dated 18 March 2019 which states: Council should investigate the feasibility of recovering contributions retrospectively that were not paid at the time the Construction Certificate or Complying Development Certificate was issued.  

42.    The steps involved in implementing this recommendation are:

a.   Finalise the register;

b.   assess what consents and CDCs have been issued with payments outstanding;

c.   Prepare final list of non-payees;

d.   A further report to Council on the findings of the non-payee list and an outline of a suitable process to commence the recovery of the outstanding funds;

e.   Subject to the resolution of Council, communication sent to non-payees; and

f.    Legal action/advice may be required.

 

File Reference

12/2060

 

  


Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 81

Item:                   FIN034-19            Draft 2019/20 Budget - Consideration of Upgrading Hurstville War Memorial and Provision of a New Basketball Court in Hurstville Ward 

Author:              Manager Project Delivery

Directorate:      Assets and Infrastructure

Matter Type:     Committee Reports

 

Recommendation

(a)     That Council considers the upgrading of the Hurstville War Memorial when the 2019/20 draft budget is being formulated.

(b)     That Council considers the provision of a basketball court as part of the Kempt Field Masterplan works.

 

 

Executive Summary

1.      This report is presented to Council following a request from Councillor Wu regarding the allocation of additional funds for works within the Hurstville Ward.

 

Background

2.      Council Wu has made a request that the following items be considered as part of the 2019-2020 Budget Process:

a.   Upgrading the Hurstville War Memorial; and

b.   Identifying a location for the provision of a basketball court in the Hurstville Ward

 

3.      The Hurstville War Memorial (located in Hurstville Memorial Square) was refurbished in 2002 and 2016, with recent additions including Smart Cities devices installed in 2018.  The upgrading of this Memorial would require the allocation of approximately $80,000 for urban designers to review the existing War Memorial (and associated surrounds) plus the allocation of funds in excess of $450,000 for any construction works proposed depending on the design outcome.  At this stage, no funds have been allocated for these works.

 

4.   The provision of a basketball court within the Hurstville Ward has been identified as part of the adopted Kempt Field Masterplan (see attached).  Works include the construction of a multipurpose play zone in the north eastern corner of the park which incorporates ball courts with various line-marking (including Basketball and Badminton), amphitheatre seating for viewing, shelter and social space with picnic tables and seating.  The estimated cost of these works is $400,000, however this does not include any remediation or earthworks required at that location.  The NSW State Government has allocated $6 million as part of the Strategic Open Space Program for Kempt Field to implement the Masterplan.

 

Financial Implications

 

5.      Additional non-budgeted funds of $530,000 for the Hurstville War Memorial Upgrade.

 

Risk Implications

 

6.   No risks identified.

 

Community Engagement

 

7.   Community engagement will be conducted if funds are approved.

 

File Reference

19/253

 

 

 

ATTACHMENTS

Attachment 1

Kempt Field Masterplan

 


Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN034-19              Draft 2019/20 Budget - Consideration of Upgrading Hurstville War Memorial and Provision of a New Basketball Court in Hurstville Ward

[Appendix 1]          Kempt Field Masterplan

 

 

Page 94

 


 


 


 


 


 


 


 


 


 


 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 95

Item:                   FIN035-19          Quarterly Report - Outstanding Council Resolutions as at 31 March 2019 

Author:              Head of Executive Services

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

 

Recommendation;

That the Quarterly Report - Outstanding Council Resolutions as at 31 March 2019, be received and noted.

 

 

 

Executive Summary

1.      Council resolved on 26 February 2018 that a quarterly report be provided, commencing in April 2018, detailing progress made on any outstanding resolutions from previous Council meetings.

2.      This report provides progress on outstanding resolutions as at 31 March 2019.

 

Background

3.      Attachment 1 contains all Council resolutions that remain outstanding or require further action. 

4.      Completed items have been marked accordingly and will be removed from future reports. 

 

Financial Implications

5.      There are no budget implications for this report.

 

Risk Implications

6.      The Enterprise Risk Management Strategy contains relevant actions in regards to the provision of an open, accessible and transparent decision making and meeting process.  The quarterly consideration of this report ensures that Councillors and members of the community are informed in regards to the status of implementation of council resolutions.  

 

Community Engagement

7.      Members of the community are able to attend and address Council meetings in accordance with Council’s Code of Meeting Practice.

 

File Reference

D19/100229

 

 

ATTACHMENTS

Attachment 1

Outstanding Council Resolutions as at 31 March 2019

 


Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN035-19              Quarterly Report - Outstanding Council Resolutions as at 31 March 2019

[Appendix 1]          Outstanding Council Resolutions as at 31 March 2019

 

 

Page 133

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 135

Item:                   FIN036-19            Results of exhibition of Council's Draft Code of Conduct and the Draft Procedures for the Administration of the Code of Conduct 

Author:              Manager Governance and Risk

Directorate:      Business and Corporate Services

Matter Type:     Committee Reports

 

Recommendation

(a)     That Council note the contents of this report incorporating the responses from the Office of Local Government (OLG) and the Independent Commission Against Corporation (ICAC).

(b)     That Council adopted the Draft Code of Conduct and Draft Procedures for the Administration of the Code of Conduct (Procedures), as attached.

 

 

Executive Summary

 

1.      NSW Councils are required to adopt a Code of Conduct and Procedures based on the Model Code of Conduct for Local Councils in NSW and Procedures for the Administration of the Model Code of Conduct for Local Councils in NSW by 14 June 2019.

2.      Council, at its meeting held on 25 March 2019, considered a report regarding the Draft Code of Conduct and Draft Procedures, resolving that these documents be placed on public exhibition for a period of 14 days and during this period, the documents are forwarded to the OLG and the ICAC to seek their feedback.

 

Background

 

3.      Council has six months from the date of prescription to adopt a Code of Conduct and Procedures based on the Prescribed Model Code of Conduct and Procedures, that date being 14 June 2019.

4.      Further to the consideration of Council in March 2019, Council’s Draft Code of Conduct and Procedures were placed on public exhibition for a period of 14 days, closing on 12 April 2019. No submissions were received from the public during the exhibition period.

 

5.      Council did, however, receive feedback from both the OLG and the ICAC. This feedback was largely administrative, and where appropriate, Council has incorporated suggested changes into the attached draft documents. These suggested changes have been highlighted so that they can be easily identified.

 

Financial Implications

 

6.      There are no direct financial implications associated with the adoption of the Code of Conduct and Procedures. Costs associated with training of Councillors and Council officers are accounted for within relevant training budgets.

 

 


 

Risk Implications

7.      The adoption of a revised Code of Conduct supports actions 3.1 and 9.1 of the Enterprise Risk Management Strategy, being defining and implementing a strong Code of Conduct. 

 

Community Engagement

8.     The Draft Code of Conduct and Procedures were placed on public exhibition for a period of 14 days seeking public submissions.  Both documents were also forwarded to the OLG and the ICAC during this period to seek their feedback.

 

File Reference

D19/048126; D19/048056; D19/048119

 

 

 

ATTACHMENTS

Attachment 1

DRAFT - Code of Conduct - April 2019 - Attachment to FIN Report May 2019

Attachment 2

DRAFT - Procedures for the Administration of the Code of Conduct - April 2019 - Attachment to FIN Report May 2019

 


Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN036-19              Results of exhibition of Council's Draft Code of Conduct and the Draft Procedures for the Administration of the Code of Conduct

[Appendix 1]          DRAFT - Code of Conduct - April 2019 - Attachment to FIN Report May 2019

 

 

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Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN036-19              Results of exhibition of Council's Draft Code of Conduct and the Draft Procedures for the Administration of the Code of Conduct

[Appendix 2]          DRAFT - Procedures for the Administration of the Code of Conduct - April 2019 - Attachment to FIN Report May 2019

 

 

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Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 230

Item:                   FIN037-19            Property Matter - Lease of Commercial Office Space - Suite 4E, 34 MacMahon Street, Hurstvulle. 

Author:              Strategic Property Specialist

Directorate:      Business and Corporate Services

Matter Type:     Committee Reports

 

Recommendation

That the report “Property Matter - Lease of Commercial Office Space – Suite 4E, 34 MacMahon Street Hurstville” be received and noted.

 

 

Executive Summary

1.      During the General Manager’s performance review in late 2018, it was requested that future lease and licence agreements be reported to Council.

2.      Council is the owner of a commercial office building located at 34 MacMahon Street, Hurstville known as Hurstville House.  An existing tenant has requested a new lease.

 

3.      A new lease will now be entered into with N Kalaitzis and Co. Pty Ltd for the 87m2 commercial office space, for a three (3) year lease term with a three (3) year option.

 

Background

4.      The former Hurstville City Council is the owner of a commercial office building located at 34 MacMahon Street, Hurstville.

5.      Council’s managing agent has advised that an existing tenant known as N Kalaitzis and Co. Pty Ltd has made an offer for a new lease of Suite 4D for a three (3) year term with a three (3) year option. The lease will commence immediately upon termination of the tenant’s existing lease.

6.      The tenant has agreed to pay the asking market rent as detailed in the confidential Letter of Intent shown as Attachment 1 to this report. The main terms of the lease are summarised below:

Lessor:      

Georges River Council

Lessee:

N Kalaitzis and Co. Pty Ltd

Address:

Hurstville House – Suite 4E/34 MacMahon Street, Hurstville

Area:

87 square metres (approx)

Usage:

Office Space

Rental:

See attached Letter of Intent

Parking:

One (1) car space

Lease Term

Three (3) years

Option

Three (3) years

Guarantee/Bond

Three (3) months’ rent as bond or Bank Guarantee

Lease Commencement

20 July, 2019

Lease End Date

19 July, 2022

Rent Review

See attached Letter of Intent

Option Rent Review

See attached Letter of Intent

Legal Costs

Lessee to pay Council’s reasonable legal costs in relation to preparation of the lease document.

Special Conditions

1.   Insurance - Lessee to keep a current policy covering Public Liability ($20 million) noting Georges River Council as an interested party

2.   All other terms as per current registered lease, including a demolition clause whereby Council may give the tenant one month’s notice of termination in the event that it wishes to demolish or substantially alter the property.

 

Financial Implications

7.      Within budget allocation.

 

Risk Implications

8.   No risks identified.

 

Community Engagement

9.   Community engagement is not required for this matter.

 

 

File Reference

16/1547

 

 

 

ATTACHMENTS

Attachment 1

Letter of Intent - Suite 4E 34 MacMahon Street Hurstville (Confidential)

 


Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 235

Item:                   FIN038-19            Property Matter - Waratah Private Hospital Car Park 

Author:              Head of Strategic Property

Directorate:      Community and Culture

Matter Type:     Committee Reports

 

Recommendation

(a)    That Council receive and note the contents of this report.

 

(b)    That Council continue with 1 hour free parking (as per the proposed Draft 2019/2020 Fees and Charges) to offset the operating loss currently incurred at the Waratah Private Hospital Car Park.

 

(c)    That the General Manager prepares a report investigating the opportunities available to dispose of the 150 Council owned car parking spaces and consider the benefits in reinvesting those funds in existing Council owned car parks or future development sites within Hurstville having regards to the provisions of Council’s Draft Car Parking Strategy.

 

(d)    That Council not provide free community volunteer parking due to the cost and logistics associated with providing this type of parking.

 

 

Executive Summary

1.      Council, at its meeting held on 25 June 2018, resolved the following:

(a)  That Council continue with 1 hour free parking (as per the 2018/19 exhibited Fees and Charges) to offset the operating loss currently incurred at the Waratah Private Hospital Car Park.

(b)  That the General Manager investigate the consolidation of all Council-owned car spaces onto discrete  basement  levels  with a  view  to being  able  to  install  boom  gates  or  other devices  which  would  enable  separate  management  of  the  Council  car  parking  spaces and report back to Council on options.

2.      Following a review by the Waratah Private Hospital Car Parking Manager (WPHCPM), it was determined that the configuration of the hospital basements did not provide a practical nor cost effective solution when considering the separation of the Council owned car parking spaces within the building, which equates to 150 spaces.

 

Background

3.      Council is the registered proprietor of a 150 space stratum public car park legally described as Lot 1 in DP1157338 and located at 31 Dora Street, Hurstville. The public car parking spaces are located predominantly on levels B3 and B4 within the basement car park, with some spaces being located on levels B2 and B5.

4.      In addition to the Council owned parking the Hospital, as part of the approved development consent for this property, is required to make an additional 100 car parking spaces available for public and patients/visitor parking.

5.      Council has been investigating opportunities for improving actual public parking options at this facility while taking into consideration and attempting to reduce the current operational losses incurred by the car park.

6.      As previously reported, either party is unable to impose its will on the other in relation to managing the shared parking facility, with both parties bound to act in good faith in this regard.

7.      Council, in conjunction with the Waratah Hospital Consortium (the Hospital) and the WPHCPM, has investigated the practicalities of separating the parking entitlements of the Hospital and the parking spaces belonging to Council in accordance with the above Council resolution.

8.      Following the review, it was determined that the configuration of the hospital basements did not provide a practical, nor cost effective solution when considering the separation of the Council owned parking spaces within the building. The cost of the additional parking infrastructure is approximately $87,000.

9.      This estimate excludes network switches, routers, credit card clearing and ongoing costs as well as other associated technical and civil works not outlined in the quotation, including appropriate internet connection, power/data/cabling services in addition to ongoing operational and maintenance costs associated with the equipment. The parking manager also indicated that the installation of the additional boom gates would likely create ongoing confusion for motorists.

10.    The current operational loss for this facility is in the order of $230,000.  Separation of the parking entitlements will result in a further reduction of revenue and an increase in operational costs to Council.

11.    Furthermore, the parking manager has advised that normally, gated areas are for specific users who are allocated building/access cards.  This works well where parking is provided to specific and identified individuals. 

12.    As a suitable and cost effective separation option does not exist, this report seeks Council’s endorsement to continue with 1 hour free parking (as per the proposed 2019/2020 Draft Fees and Charges) to offset the operating loss currently incurred at the Waratah Private Hospital Car Park.

13.    As previously reported to Council, the Council owned car parking and the Hospital owned car parking spaces are interspersed over multiple levels.  While the additional boom may, at a cost to Council, be installed within the lower level car parks, the Hospital is not obliged to agree to any proposed reconfiguration of the current parking arrangements within the building. 

14.    Permission for such a reconfiguration would be required from all strata members of the building. Preliminary discussions with the Hospital have indicated that there is no desire to reconfigure the current car park.

 

Proposal to relocate Parking Spaces

15.    In addition to the resolution above, Council also resolved on 25 June 2018 via Notice of Motion the following:

 

(a) That the General Manager investigate, as part of the preparation of the draft Georges River Car Parking Strategy, short and long term options for the potential relocation of the 150 public car parking spaces in Waratah Private Hospital Car Park, to an alternate location within the Hurstville CBD to facilitate the provision of 3 hour-free parking.

 

16.    It is considered that the provision of relocating these spaces should be explored in the development of the concept plans for the Hurstville Civic Centre Precinct and the Treacy Street, Hurstville car park sites.

 

Proposal for a Parking Validation Scheme

17.    In addition to the relocation of the car parking spaces, Council also resolved on 28 May 2018, via resolution (c) of Council report FIN029-18 the following:

 

(c) That Council investigate the possibility of providing registered or bona fide                                                                                        volunteer persons with passes which reduces their cost of entry and stay.

 

18.    The parking manager has advised that in relation to the above resolution, free passes could be issued directly by Council (or Hurstville Library) to be distributed to registered or bona fide volunteer persons who provide community based services to the Georges River LGA.  For example, the Library could periodically be provided with a batch of free exit tickets which it distributes at its discretion – one to each volunteer/visitor on request. 

19.    Costings have been obtained for installation of a two (2) parking validation machines that could be installed in the Hurstville Library and/or an alternative location. The cost of installing two machines is approximately $5,000.

20.    The validation machine would enable bona fide community volunteers to validate their current 1 hour free ticket and receive an additional 1 - 2 hours free.  The parking operator considers this method to be simpler to manage although concedes that validated 2 hour free tickets could attract some level of misuse, once commonly known.

21.    There could be an opportunity to roll out a validated parking system to library users and seniors.  The Hospital has indicated that it is willing to consider the implementation of such a scheme subject to further detailed analysis of the cost implications. 

22.    However, preliminary analysis indicates that to offset the loss of income from an expanded free parking scheme, the Hospital would require Council to consider reducing the current 1 hour free parking to first 15 minutes free only.  Additionally, the number of monthly passes issued for an additional 2 hours free parking may need to be capped so as to maintain, at a minimum, the current levels of parking revenue.

23.    The one hour free component is in keeping with the spirit of the original development at this location.  In this regard, it is considered appropriate that the one hour free component continues to be honoured when taking into consideration any course of action, especially in relation to any proposed validated parking scheme.

 

Current Position

24.    As there does not seem to be a practical or cost effective solution to the separation of the car parking levels, this report will seek that Council continue with the current 1 hour free parking arrangement (as per the proposed 2019/2020 Draft Fees and Charges) to offset the operating loss currently incurred at the Waratah Private Hospital Car Park.

25.    Council, as an alternative, may wish to consider the option of disposing of its interest in the car park to the Hospital.  A further report in this regard could be prepared for Council’s consideration detailing the likely income from sale together with details of how the proceeds from sale could be reinvested in existing Council owned car parks or future development sites within Hurstville.

 

Financial Implications

26.    The cost to install boom gates and other devices, which would enable separate management of the Council car parking spaces is estimated at $87,000. There will be additional costs relating to the installation and ongoing operational and maintenance costs associated with the machines (not yet assessed).

27.    The cost of installation of two (2) validation machines that could be installed in the Hurstville Library and/or an alternative location is estimated at $5,000.  The cost of providing subsidised parking to community volunteers is estimated to be approximately $5,000 per annum (based on 12 volunteers per week).

28.    According to the parking manager, the one hour free parking period at Waratah Private Car Park is unusual for a Hospital and means that virtually half of all car park usage is free.  Of the 30 hospital car parks managed by Metro Parking, the usage distribution at Waratah Private Hospital is the outlier.

29.    Below is the usage table for March 2019, where, from a total of 6,522 users, 3365 or 49% exited the car park within the hour and free of charge.

 

 

30.    Typically, hospital car parks offer only a 15-20 minute free parking period and this usage is usually around 10% of the total volume.  Similarly, the total first hour usage for other hospital car parks is around the 29-30% mark and not 49% as is the case for Waratah Private Hospital; with there being a 20% differential.

31.    Preliminary discussions with the Hospital and parking manager has identified that in order for a limited community based parking validation scheme (to extend the parking by an additional two hours) to not impact on current revenue, the free parking for all other users would need to be simultaneously reduced from 1 hour free to 15 minutes free.

32.    A previously reported in June 2018, if Council decided to increase free parking from 1 hour free to 3 hours free, it is likely that compensation will be payable to the Hospital for the extra 2 hours free parking. There would be a significant income reduction to Council with an annual cost increase of approximately $168,000 per annum, including compensation that would be payable to the Consortium.

 

Community Engagement

33.    Any changes to fees and charges will require a statutory community consultation process to be undertaken in accordance with the Local Government Act, 1993, which includes public exhibiting the draft fees and charges to allow public comment to occur.  Council’s Draft Fees and Charges for 2019/2020 are currently on exhibition for a period of not less than 28 days.

File Reference

13/1543

 

 

 

ATTACHMENTS

Attachment 1

FIN048-18 Draft 2018-2019 Budget - Consideration of Waratah Private Hospital Car Parking Rates

 


Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN038-19              Property Matter - Waratah Private Hospital Car Park

[Appendix 1]          FIN048-18 Draft 2018-2019 Budget - Consideration of Waratah Private Hospital Car Parking Rates

 

 

Page 242

 


 


 


 


 


 


 

 


Georges River Council – Finance and Governance Committee -  Monday, 13 May 2019                                             Page 245

Item:                   FIN039-19  St George Business Chamber - Variation of the Terms of the Deed of Agreement  

Author:              Economic Development Officer

Directorate:      Environment and Planning

Matter Type:     Committee Reports

 

Recommendation

(a)     That Council reaffirms its commitment to having a constructive and positive ongoing relationship with the St George Business Chamber in accordance with the intent of the Deed of Agreement between both parties.

(b)     That Council agree to amend the Deed of Agreement to encourage the St George Business Chamber to meet its obligations of the Deed with regards to providing the remaining six events for local businesses between now and the end of 2019.  

(c)     That Council agree to pay the St George Business Chamber the sum of $22,500 as an adjusted payment with regards to the outstanding 2018/2019 invoice.   

(d)     That a further report be presented to Council on the effectiveness of the Deed to support and promote local business.

 

 

Executive Summary

1.      Over the course of 2018 there were a number of outstanding issues with regards to Council providing the third payment to the St George Business Chamber as part of the Deed of Agreement for the period 2018/2019. As a result the payment ($30,000) for 2018/19 has not been paid.

2.      The purpose of this report is to seek Council approval to implement actions agreed to in the April 8 2019 meeting between the Director of City Strategy and Innovation (CSI) and the Chamber Executive.  Key actions include:

(a)     Seek Council approval to amend the terms of the Deed of Agreement to allow the St George Business Chamber to deliver the remaining six events prior to December 2019 instead of within the current 2018/2019 financial year.

(b)     That Council pay the Chamber the sum of $22,500 representing a pro rata payment in relation to the 2018/19 outstanding invoice in recognition of the two events delivered out of a total of eight events as required by the Deed.

(c)     That Council create a section on its website under the Business tab that provides information about the St George Business Chamber, listing it events and activities  and that the his section will also to include the Deed of Agreement, the Chamber’s Audited Financial Statement, compliance reports and details of relevant insurances.

(d)     That the Chamber submit an invoice for 2019/2020 year along with a list of events planned between January to June 2020 and a compliance report for 2018/19.

(e)     That a bi-monthly meeting be arranged between the Director CSI and the Chamber be arranged to monitor and report on progress. 

 

 

 


 

Background

3.      The responsibility for the management of Council’s partnership with St George Business Chamber was transferred from the Environment and Panning Directorate to the City Strategy and Innovation Directorate as of April 2019. 

4.      At the meeting on the 8 April the Director of CSI and Council’s Economic Development Officer met with the St George Business Chamber Executive which comprised Mr Allan Zreik-President, Mr Carlos Zeidan-Vice President, and Mr Tony Baddour – Secretary.

5.      The purpose of this meeting was to review the respective responsibilities of the Chamber and the Council under the Deed of Agreement. The Deed which was entered into on 24 January 2017 provides financial and in-kind support to the St George Business Chamber for the term of five (5) years upon the terms of the Deed. (Attachment 1.)

6.      The Deed outlines the objectives of the St George Business Chamber; and its obligations under the Deed as well as the obligations of Georges River Council. 

7.      Under Section 3.2(a) and Section 3.2(b) on page 3 of the document The Deed requires that the St George Business Chamber provide a minimum of eight events over the course of the financial year.

8.      The Deed provides that the $30,000 contribution from Council would be paid at the start of the financial year upon the satisfactory completion of the events in the previous financial year.  Since the operation of the Deed, there has been a delay in the payment of the $30,000 beyond the start of the financial year as Council has worked with the Chamber to reconcile the details of the events delivered and costs incurred (in the previous financial year).

9.      To date the Chamber has delivered two events during the current financial year and will not be in a position to deliver the remaining six events as required under the Deed before the 30 June 2019 which would mean that the 2019/2020 contribution from council would not be paid.

10.    At the meeting on the 8 April the Chamber Executive were encouraged to provide feedback to Council on the progress of the partnership and to discuss ways to move forward.

11.    As part of this discussion the Chamber Executive asked for clarification as to the reason why the 2018/2019 invoice had not been paid. 

12.    The Chamber Executive was informed that the payment had not been made as the events required by the Deed of Agreement and as outlined in Council’s communication to the Chamber via email on 7 November 2018 (Attachment 2) had not been organised and subsequently placed on the Chamber’s website. The Chamber Executive was also advised at the meeting that Council was concerned that they had not placed the audited financial statement on their website.

13.    The Chamber Executive informed Council that the six events that are outstanding in relation to the Deed had been removed from the website because the invoice for 2018/19 had not been paid.

14.    In order to move forward the Director CSI reiterated the importance of Council’s relationship with the St George Business Chamber and outlined that the new Directorate will have a strong focus on partnerships and collaboration in order to achieve Council’s 2050 vision.

15.    It was acknowledged and agreed by both parties that Council has a responsibility to ensure that public funds are accounted for in a way that is transparent in order to deliver best value to the community.  

16.    It was also acknowledged that a solution to address the current situation be proposed for consideration by Council via the Finance and Governance Committee.

17.    The details of the proposal discussed at the meeting;

(f)      A report to be prepared for the next available Finance and Governance Committee (13 May 2019) and Council Meeting (27 May 2019).

(g)     That the report will seek approval to amend the terms of the Deed of Agreement to allow the St George Business Chamber to deliver six events prior to December 2019 instead of within the current 2018/2019 financial year.

(h)     That Council pay the Chamber the sum of $22,500 representing a pro rata payment in relation to the 2018/19 outstanding invoice in recognition of the two events delivered out of a total of eight events as required by the Deed.

(i)      That Council create a section on its website under the Business tab that provides information about the St George Business Chamber, listing it events and activities  and that the his section will also to include the Deed of Agreement, the Chamber’s Audited Financial Statement, Compliance Reports and details of relevant insurances.

(j)      That the Chamber submit an invoice for 2019/2020 year along with a list of events planned between January to June 2020 and a compliance report for 2018/19.

(k)     That a bi-monthly meeting be arranged between the Director CSI and the Chamber be arranged to monitor and report on progress. 

 

Financial Implications

18.    Within budget allocation.

 

 

Risk Implications.

19. Enterprise risk/s identified and management process applied.

 

Community Engagement

20. Community engagement will not be required for the purpose of this report.

 

File Reference

SF18/542

 

 

ATTACHMENTS

Attachment 1

Signed - Deed of Agreement between GRC and St George Business Chamber Inc.

Attachment 2

Email dated 7 November 2018 to the St George Business Chamber

 


Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN039-19              St George Business Chamber - Variation of the Terms of the Deed of Agreement

[Appendix 1]          Signed - Deed of Agreement between GRC and St George Business Chamber Inc.

 

 

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Georges River Council -         Finance and Governance Committee - Monday, 13 May 2019

FIN039-19              St George Business Chamber - Variation of the Terms of the Deed of Agreement

[Appendix 2]          Email dated 7 November 2018 to the St George Business Chamber

 

 

Page 254