AGENDA


Finance and Governance Committee

 

Monday, 14 October 2019

6.00pm

 

Level 1, Georges River Civic Centre

Hurstville

 

 

 

 

 

 

 

 

 

 

 


Georges River Council – Finance and Governance Committee -  Monday, 14 October 2019                                    

 

          Finance and Governance Committee

ORDER OF BUSINESS

 

1.      Opening

2.      Acknowledgement of Country

3.      Apologies / Leave of Absence

4.      Notice of Webcasting

5.      Disclosures of Interest

6.      Public Forum

7.      Confirmation of Minutes of Previous Meeting  

MINUTES: Finance and Governance Committee - 09 September 2019 (17/1831)

8.      Committee Reports

FIN069-19         Investment Report as at 31 August 19

(Report by Senior Financial Accountant - Reporting)............................................. 1

FIN070-19         Report on Outstanding Council Resolutions for the period 01 April 2019 - 30 September 2019

(Report by Manager, Office of the General Manager)........................................... 19

FIN071-19         Georges River Council - Inaugural Male Leadership Workshop

(Report by People and Culture Projects Specialist)............................................... 56

FIN072-19         Membership of Southern Sydney Region Organisation of Councils (SSROC)

(Report by Director)...................................................................................................... 61

FIN073-19         Legal Services Report - September 2019

(Report by Director Legal Services and General Counsel).................................. 92  

 

 


Georges River Council – Finance and Governance Committee -  Monday, 14 October 2019                                       Page 3

Committee Reports

Item:                   FIN069-19          Investment Report as at 31 August 19 

Author:              Senior Financial Accountant - Reporting

Directorate:      Business and Corporate Services

Matter Type:     Committee Reports

 

 

 

Recommendation:

That Council receives and notes the contents of the Investment Report as at 31 August 2019.

 

 

Executive Summary

1.      This report details Council’s performance of its investment portfolio as at 31 August 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 2.67% which is 0.85% above benchmark. Income from interest on investments totals $631k, which is $90k more than the 2019/20 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 August 2019, are as follows:

 

1 Month

3 Month

12 Month

Portfolio Performance

0.16%

0.61%

2.67%

Performance Index

0.08%

0.34%

1.82%

Excess

0.08%

0.27%

0.85%

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 August was as follows:

Security Type

Market Value $000's

% Total Value

At Call Deposit

8,235

4.69%

31 Day Notice Account

3,032

1.73%

Consolidated Cash Fund

22,146

12.62%

Covered Floating Bond

1,010

0.58%

Flexi Deposit (Fix/Float)

6,000

3.42%

Floating Rate Deposit

5,000

2.85%

Floating Rate Note

51,145

29.16%

Floating Rate TCD

501

0.29%

Term Deposit

72,042

41.07%

Managed Funds Trust

6,301

3.59%

Total Cash and Investments

175,412

100.00%

 

7.      At the end of July 2019, Total Cash and Investments were $164m and have increased by $11m at the end of August 2019.

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).

Legal Matters

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. There is no update on this matter, in terms of an outcome as at 31 August 2019.

Borrowings

10.    Council’s loan liability, as at 31 August 2019 was $1.625m, 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 $125,000 is due on 23 September 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 2.92% 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 graph below shows the Investment Rating limits, as a percentage of total cash investments, which are allowed under Council’s Investment policy. It also compares 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 August 2019 is $631k, which is $90k more than the 2019/20 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

93,577

53.35%

100%

1 to < 3 Years

73,329

41.80%

70%

3 to < 5 Years

8,506

4.85%

50%

Portfolio Total

175,412

100.00%

 

 

16.    Council’s portfolio is liquid, with 53.35% 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.    The majority of Council’s investment portfolio is made up of fixed term deposits, which account for approximately 44% 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 Government changed the list of Approved Investments as a result of the Cole enquiry (which was reflected in the Ministerial Order dated 31/7/2008).

 

 

 

 

Credit Rating

21.    Credit ratings are generally a statement as to an institution’s credit quality. Council’s Investment Advisors (CPG Research & Advisory) use Standard & Poor’s Credit ratings to classify the investments held by Council. 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 72% 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 28% rated ‘BBB’ or ‘unrated’ reflects the deposit and FRN investments with the regional and unrated ADIs.

 

 

 

AMP Bank Downgraded to BBB+

On 27 August 2019, S&P Global Ratings lowered its global ratings for AMP Limited and its subsidiaries from “A-“ to “BBB+” in response to AMP Group revealing plans to sell its life insurance business unit to Britain’s Resolution Life in early August 2019. S&P Global believes the sale of the insurance unit means AMP’s earnings reliance on its wealth and investment management operations as well as its small domestic banking unit will materially weaken the group’s credit profile and lower its future diversification.

 

Council’s Investment with AMP as at 31 August 2019 was as follow:

Investment Type

Market Value ‘000

At Call Accounts

8,453

Term Deposits

500

Floating Rate Notes (FRN)

5,000

Total Cash and Investment with AMP

13,953

          As at 31 August 2019, Council has approximately $14m invested in cash, term deposits and floating rate notes with AMP Bank. Advice provided by our investment advisor (CPG Research & Advisory) states, “with AMP Limited selling the life insurance business, a downgrade in the substantially smaller parent has resulted in a flow-on downgrade in the banking subsidiary. However, the asset sale is not a sign of distress as it gives the group excess capital.” Based on this advice, the rating downgrade on AMP Bank should not have any impact on Council’s financial position, as AMP continues to have a robust balance sheet with its level of capital remaining above the minimum regulatory requirement set by the Australian Prudential Regulation Authority (APRA). 

However, in-line with Council’s current practice of only dealing with institutions who’s investments are global rated A and above, the Term Deposits and At Call Accounts will be reinvested with institutions with the appropriate global rating. It is expected that this will occur during the month of October 2019. The FRN’s will mature between May 2021 and March 2022 and at this stage, due to the current investment interest rates that are being offered and the advice received from CPG Research & Advisory, no change will occur. This, however, will be monitored on a monthly basis.  

Council’s Investment Powers

21.    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.

 

22.    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

Financial Implications

23.    Income from interest on investments totals $631k, which is $90k more than the 2019/20 year-to-date adopted budget.

 

Risk Implications

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

 

25.    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

26.    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

D19/217776

 

 

ATTACHMENTS

Attachment 1

Investment Report as at 31 August 2019

 


Georges River Council -         Finance and Governance Committee - Monday, 14 October 2019

FIN069-19              Investment Report as at 31 August 19

[Appendix 1]          Investment Report as at 31 August 2019

 

 

Page 13

 


 


 


 


 



 


 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 14 October 2019                                       Page 19

Item:                   FIN070-19          Report on Outstanding Council Resolutions for the period 01 April 2019 - 30 September 2019 

Author:              Manager, Office of the General Manager

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

 

 

 

Recommendation;

That the report on Outstanding Council Resolutions for the period 01 April 2019 to 30 September 2019, be received and noted.

 

 

 

Executive Summary

1.      This report provides progress on outstanding resolutions as at 30 September 2019.

Background

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

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

Financial Implications

4.      There are no budget implications for this report.

Risk Implications

5.      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

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

File Reference

D19/193152

 

 

ATTACHMENTS

Attachment 1

Outstanding Council Resolutions as at 30 September 2019 - attachment to Council Report

 


Georges River Council -         Finance and Governance Committee - Monday, 14 October 2019

FIN070-19              Report on Outstanding Council Resolutions for the period 01 April 2019 - 30 September 2019

[Appendix 1]          Outstanding Council Resolutions as at 30 September 2019 - attachment to Council Report

 

 

Page 55

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 14 October 2019                                       Page 60

Item:                   FIN071-19          Georges River Council - Inaugural Male Leadership Workshop 

Author:              People and Culture Projects Specialist

Directorate:      Business and Corporate Services

Matter Type:     Committee Reports

 

 

 

Recommendation

(a)     That Council resolve to proceed with the Inaugural Male Leadership Workshop.

(b)     That interested Councillors contribute funds from their Councillor Discretionary Ward Funding to fund this initiative.

(c)     That the General Manager allocates funding from Council’s operational budget for any shortfall of funding which may occur, for the development, management and delivery of the inaugural Workshop.

(d)     That Council receives a further report from the General Manager with the results and feedback of the success or otherwise of the inaugural event including the costs associated with the event.

 

Executive Summary

1.      At the Council meeting held on Monday 23 September 2019, Council resolved unanimously the following Notice of Motion (NM064-19) put forward by Councillor Hindi:

(a)  That the General Manager investigate and prepare a report to Council on the costs associated with the in-house development and facilitation of a workshop that would be offered to male Year 9 and 10 local high school students.

(b)  The content of the workshop would include male Council officers and Councillors acting as mentors to students, sharing life experiences and lessons and providing practical tools that support developing leadership capacity, confidence, building resilience, celebrating uniqueness and defining individual excellence.

(c)   The report should address potential funding sources such as Councillor Discretionary Ward Funding from interested Councillors, subsidised hire of the Dragon Room (or other suitable venues) and external grant funding opportunities.

2.      As a result of the resolution of Council, a report detailing the costs associated with the in-house development and facilitation of a one-day leadership workshop that would be offered to male Year 9 and 10 local high school students is now presented.

3.      This report also seeks funding from Councillor Discretionary Ward Funding from interested Councillors to fund this inaugural workshop, with any shortfall being funded from Council’s operational budget to cover the financial costs of the workshop.

Background

4.      Council offers a variety of initiatives that showcase and cultivate the positive social contributions that young people make within the community. These include initiatives that build capacity for innovative leadership, creativity, inclusion and diversity.


 

5.      Council’s adopted Community Strategic Plan 2018-2028, Workforce Plan and the Corporate Diversity and Inclusion Action Plan 2019-2021 recognise the importance of mentoring and supporting young men in order to facilitate more men into local government and highlight successful male leaders in the industry.  Conducting a male leadership workshop is therefore consistent with these plans.

6.      It is proposed the in-house development and facilitation of the workshop occur on a voluntary basis sourced through an Expression of Interest process. Staff participation would be a combination of paid and non-paid work demonstrating Council’s commitment to Corporate Social Responsibility.

7.      The purpose of the workshop is not focused around tackling gender issues; it is about engaging young men in a setting which supports them to live positive alternatives to gender stereotypes through the important messages that can be instilled through a focus on defining leadership that embraces one’s self and others that will contribute greatly to wider initiatives that unpack norms at the societal, community and individual level.1.

8.      “Providing young people with the opportunity to develop and exercise leadership can have benefits for the individual young person, their peer group and society more broadly. The emotional and social skills that enable effective leadership have broader significance beyond their potential to prepare young people to take on formal leadership roles; these skills are crucial to young people’s successful transition to adulthood. Additionally, youth leadership can serve as a vehicle for tackling pressing social challenges and catalysing positive social change.”2.

9.      Connecting young men from high schools across the Local Government Area (LGA) with each other and male leaders in public office positions will also contribute positively for the future of these local students through building networks within their community. 

1. [https://jss.org.au/wp-content/uploads/2018/10/The-Man-Box-fact-sheet-Recommendations_WEB.pdf]

 2. [https://youngfoundation.org/wp-content/uploads/2012/10/Taking-the-Lead-October-2009.pdf]

Proposed Program

10.    The workshop is proposed to run in early 2020. The workshop will be offered to up to 150 students from within the LGA and will be a one-day event.

11.    The workshop will run over 5 hours consisting of a keynote address, four focus sessions and a networking lunch. The proposed program is outlined below.
09:30am – Welcome
09:45am – Keynote Address
10:15am – Morning Tea
10:30am – Focus Session 1
11:15am – Focus Session 2
12:00pm – Networking Lunch
12:45pm – Focus Session 3
01:30pm – Focus Session 4
02:15pm – Wrap-up
02:30pm – Event Close

12.    Students will be allocated to a group which will rotate between the four focus sessions. This will allow students from different schools to also network with each other throughout the day. 

 


 

Workshop Theme

13.    The workshop will be based on the theme WISE, with the campaign title “Boys will be Wise Men”. The theme is an allusion on the notion that boys will be boys, when in fact boys will not be boys, but have the ability to become wise men.

14.    The four key topic areas that will be the basis of each focus session centres on leadership characteristics wisdom, identity, strength and excellence. Below is an outline of each session.
(a)     What is it to be WISE? – in this session students will explore qualities of wise     leaders, vulnerability and confidence, communication tools and decision making    guided by values and morals.
(b)     Whose IDENTITY is it anyway? – in this session students will be encouraged to          embrace their own identities, being authentic, rather than conforming to constrained         masculine scripts and appreciating diversity of others.
(c)     The sum of STRENGTH – in this session students will define what it means to be       strong and learn about strength through keeping perspective and recovering from         setback, staying focused and positive and managing change.
(d)     EXCELLENCE is defined by you – in this session students will be encouraged to       aspire to set goals, implement strategies to stay on track to balance time and     celebrate personal success as well as success of others.

15.    The criteria for engaging a keynote will be defined by their suitability in meeting the theme. Ideally the keynote will be able to share their experience as a leader, preferably within public service, and inspire students to be future leaders.

Focus Session Development

16.    The focus sessions will be an interactive 45 minutes dedicated to each of the key topic areas. The content of the focus sessions will be developed by Council’s Organisational Development and Capability (ODC) team.

17.    The ODC team will work in collaboration with male Council officers and Councillors acting as facilitators for the focus sessions and mentors to the students by sharing their life experiences and lessons and providing practical tools that support leadership capacity, develop confidence, build resilience, celebrate uniqueness and define individual excellence.

18.    Officers and Councillors may require facilitation skills training which can also be provided by the ODC team. Likely, the development of the focus sessions will need to take place outside of core working hours and will be time dedicated by staff and Councillors on a voluntary basis.

Event Management

19.    The coordination of the workshop will be managed within Council’s current resources as many of Council’s male leadership team have volunteered to contribute their time at no cost on an after-hours basis.  Activities will include event planning, promotion, delivery and post-event activity, managing the logistics including administration, resource management, venue hire, catering and event volunteers.

20.    Event promotion will require marketing via community channels, outreach to schools and communication to parents/guardians about the workshop and regarding permissions. Event delivery will require the resource to be onsite to ensure the workshop is kept to a run schedule, with set-up and pack-down required and support for the focus sessions.

21.    Post-event activity will include the collation of feedback and a report to Council regarding the outcome of the workshop.


Community Ties and Sponsorship

22.    Liaison with relevant organisations to leverage off existing programs would benefit the workshop to connect students with further avenues for building their leadership capacity. For example, there is potential to engage 3 Bridges Community Youth Services and the programs they already have in place as well as broader national organisations such as the Top Blokes Foundation which runs social education and mentoring programs to boys and young men aged 10-24 years old.

23.    Interest from the community in contributing to the workshop through a sponsorship capacity would be beneficial in offsetting the costs of running the workshop.

Registration Considerations

24.    There are currently 7 public high schools with a male demographic in the LGA :

Public High Schools

(a)     Woniora Road School
(b)     Carinya School
(c)     Blakehurst High School
(d)     Kingsgrove High School
(e)     Kogarah High School
(f)      Georges River College Peakhurst Campus
(g)     Georges River College Hurstville Boys Campus
(Of the 7 schools, 2 are schools for specific purposes)

25.    There will be a first round of registrations where a percentage of places will be offered to each school dependent on total number of enrolments in Year 9 and 10 to ensure equity in the registration process. A second round of registrations will open vacant places to schools who wish to send further students above their allocated places.

Financial Implications

26.    With the voluntary commitment of Council officers the total estimated cost for the workshop is $12,700.   This estimated cost is made up of the following components:

·    Venue Hire $4,700 - Council venues are suitable to host the workshop and will be required  for a full day (8 hours) to allow for setup and pack down. (Council could consider donating or waiving the cost of venue hire for the workshop).

·    Catering $6,000 - Catering will include morning tea break and a networking lunch to allow students to speak to Council Officers and Councillors. The budget allows for individually packed meals or a light buffet to accommodate the scheduling.

·    Resource Development $1,000 - Resources will include the production of participant workbooks, focus session materials, handouts, stationery, printing, registration collateral.

·    Promotional Materials $1,000 - Promotional materials will include a branded show bag for participants, advertising and event banners. 

27.    Without Councillor discretionary funds, external financial sponsorship or a donation from Council approximately $12,700 will be required from Council’s operational budget (learning and development budget) to fund this resolution.

Risk Implications

28.    Operational risk/s identified and management process applied.

 

Community Engagement

29.    Community engagement will be conducted including:
(a)     Outreach with schools through existing networks such as the St George Welfare           Teachers Network via Council’s Youth Development Officer.
(b)     Contact with Principals and Deputy Principals to speak at school assemblies and       promote the workshop.
(c)     Communications with parents/guardians to share workshop information and seek           permission regarding attendance. 

File Reference

D19/232866

 

 

 

  


Georges River Council – Finance and Governance Committee -  Monday, 14 October 2019                                       Page 64

Item:                   FIN072-19          Membership of Southern Sydney Region Organisation of Councils (SSROC) 

Author:              Director

Directorate:      City Strategy and Innovation

Matter Type:     Committee Reports

 

 

 

Recommendation

a)   That Council advise the President and General Manager of the Southern Sydney Regional Organisation of Councils that Council will not be renewing its membership for the 2020-2021 financial year.

b)   That the Southern Sydney Regional Organisation of Councils be notified that this advice constitutes Council’s requirement to provide 6 months’ notice prior to cessation of membership of the organisation.

 

 

Executive Summary

1.      Council currently holds membership with the Southern Sydney Regional Organisation of Councils (SSROC), the cost of which is $79,079 for the 2019/2020 financial year.

2.      In addition to this membership, Council is also a member of Local Government New South Wales (LGNSW) which has a procurement function through Local Government Procurement (LGP) and provides a duplication of benefits to those provided by SSROC. Membership to LGNSW has cost $68,393 for the financial year.

3.      SSROC was formed in 1986 and currently consists of eleven member Councils being Bayside, Burwood, Canterbury Bankstown, City of Canada Bay, City of Sydney, Georges River, Inner West, Randwick City, Sutherland Shire, Waverley and Woollahra.

4.      At its meeting held 17 December 2018 Council considered a report on the future of membership with SSROC. The Council resolved:

a.   That Council investigate the costs and benefits of not renewing membership of the Southern Sydney Regional Organisation of Councils and the Local Government NSW and that a further report be provided to Council at the earliest opportunity regarding the outcome of these investigations.

b.   That Council continues with its SSROC membership until the further report is received.

5.      This report advises of the outcome of that additional investigation, considers options for Council’s future relationship with SSROC and recommends that Council not renew its membership of SSROC for 2020-2021 financial year.

Background

6.      Following the December 2018 resolution, an external procurement adviser SimPPLY was engaged to investigate the procurement and advocacy benefits of membership with SSROC compared to other services and membership (Attachment 1). 

7.      The outcomes of the investigations were presented at a Councillor workshop on 19 August 2019.  The following table summarises the conclusion of the work of SimPPLY:

      

8.   SimPPLY advised that if GRC ceased membership of SSROC, the benefits would include:

·    A financial benefit of $77,000 p.a. (the annual 2019 SSROC membership fee).

·    The removal of the duplication of procurement services.

·    An increase in the overall engagement and service offering of the remaining Groups and Councils.

·    Remaining engaged with other Councils through the community that utilise the products and services of LGP and or Procurement Australia and or NSW Government Procurement.

9.   Based on its review SimPPLY recommended that:

·    Council advises SSROC of the decision to cease membership.  

·    Council issue a ‘notice to cease membership’ of SSROC including the 6-month notice period required.

·    Council develop and implement a Communication and Change Plan, covering all internal and external stakeholders.

·    Council to determine and implement a plan for GRC Environmental, Sustainability and Waste activities.

·    During this notice period that Council increase its engagement with other local area Councils, LPG and Procurement Australia and establish internal processes to make this an effective continuing activity for advocacy and procurement.

 

10.    It is acknowledged that the SSROC membership affords the following advantages and benefits:

(a)     SSROC provides a forum through which members can interact, exchange ideas and work collaboratively to solve regional issues and contribute to the future sustainability of the region.

(b)     The organisation advocates on behalf of the region to ensure that the major issues are addressed by all levels of government, including responsive planning mechanisms, waste and resource recovery, and procurement. A comprehensive overview of advocacy issues and other SSROC programs are contained in their Member Value Statement available at: http://ssroc.nsw.gov.au/ssroc-member-value-statement/

(c)     Participation by Council staff in specialist interest groups established by SSROC.  The benefits include combined purchasing power, information on the latest innovation and technology trends and regional initiatives.

11.    The challenges associated with continuing membership of SSROC include:

(a)     Cost and value of ongoing membership, advocacy being undertaken by SSROC which may not be relevant to our community or identity.

(b)     Procurement services offered by SSROC are available through other procurement bodies that Council is already accessing including which can be accessed without additional cost.

12.    Council is also a member of LGNSW. This organisation provides a range of services similar to SSROC such as procurement services, strong advocacy on local and regional issues across all levels of government, strong media presence, industry research, training (staff and councillors), special interest groups for staff and major projects which benefit local government as a whole.

13.    In regards to LGNSW, the 2019/2020 membership fee is $68,393.  In addition to this, management fees for the utilisation of LGP are charged at a minimum of 1% calculated on the total expenditure involved in utilising its vendor panel.  A rebate is then paid annually calculated on total contract value awarded.   As evidenced above, Council is essentially paying membership of two organisations to attract the same benefit in terms of advocacy and procurement services.

14.    Council is currently able to access the procurement services of LGNSW - LGP and utilise State Government Contracts and Procurement Australia endorsed suppliers.  Increased use of this service could allow Council to achieve the same purchasing outcomes without the additional outlay of $79,000 per year.

15.    If Council ceases membership of SSROC it should investigate the economic viability of establishing a cooperative arrangement with other neighbouring Councils via the pooling of resources in regard to larger group procurement on identified contracts and district issues.

16.    The current operation of SSROC presents some challenges for member councils.  While advocacy should be a strong reason for continuing membership there is no evidence of a structured and planned approach to advocacy by SSROC that has any particular benefit to Georges River Council or any other council area. 

17.    Further it may very well be argued that Georges River Council would be better served by issue-based strategic alliances with adjoining councils and other non-council entities. 

18.    An example of this might be a strategic alliance with Sutherland and Canterbury Bankstown Councils. Council has begun working with Canterbury Bankstown in a collaborative approach to support advocacy for the Central River City.  This has particular relevance for Georges River due to the future rail connections between Kogarah and Parramatta.  Council has also previously resolved to establish an advocacy program.

19.    While this report recommends that Council not renew its membership of SSROC, other options that the Council could consider include:

a.   Put SSROC on notice that Council is reviewing its ongoing membership and will require significant investment in improved Georges River specific advocacy and policy development work, and improved governance and management structures to continue with its membership.  Any changes to SSROC should include an “opt in/out provision” for the procurement services with a corresponding reduction in fees.

b.   Take no action and continue with membership.

Financial Implications

20.    Should Council resolve to discontinue its membership, there will be a reduction in expenditure of $79,000 from the Operating Budget 2020/2021 and onwards.

Risk Implications

21. Operational risk/s identified and management process applied.

Community Engagement

22. Community engagement will not be required, however a clear communication plan will be necessary to ensure that internal and external stakeholders are aware of the reasons for the  decision if Council resolves to leave SSROC and the actions to be undertaken to maximise opportunities for advocacy and achieving benefits of aggregated procurement.

 

File Reference

D19/236155

 

 

 

ATTACHMENTS

Attachment 1

SimPPLY Recommendation Report

 


Georges River Council -         Finance and Governance Committee - Monday, 14 October 2019

FIN072-19              Membership of Southern Sydney Region Organisation of Councils (SSROC)

[Appendix 1]          SimPPLY Recommendation Report

 

 

Page 91

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 14 October 2019                                       Page 93

Item:                   FIN073-19          Legal Services Report - September 2019 

Author:              Director Legal Services and General Counsel

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

 

 

 

Recommendation

That the report “Legal Services Report – September 2019” be received and noted.

 

 

To avoid breaches of legislation, the Code of Conduct, perceived conflicts of interest and Council’s policies, this report provides a high level summary of the current litigation matters where Council is a party. The detailed report is contained on Council’s website. 

Current Matters

 

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

Land and Environment Court

·        18 x Class 1 (Merit/DA)

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

 

Local Court

·        5 x Council Prosecutions (including 1 x Police matter)

 

Supreme Court

·        1 x Summons

 

Costs

 

2.      The nett costs for this financial year 2019/2020 are $172,422.

Current Status of Court Actions and Legal Matters

3.      Detailed information regarding these matters is provided in the Councillors’ Information Bulletin and the quarterly Legal Services briefings to Council.

 

Financial Implications

 

4.      Within budget allocation.

 

Risk Implications

5.      No risks identified.

 

 

Community Engagement

 

6.      No Community engagement is required.

 

File Reference

17/1831