AGENDA


Finance and Governance Committee

 

Monday, 14 September 2020

6.00pm

 

ONLINE MEETING

 

 

 

 

 

 

 

 

 

 

 


Georges River Council – Finance and Governance Committee -  Monday, 14 September 2020                                 Page 2

 

          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 MEETINGS

FIN039-20         Confirmation of the Minutes of the Finance and Governance Committee Meeting Held on 10 August 2020

(Report by Executive Services Officer)....................................................................... 3  

8.      COMMITTEE REPORTS

FIN040-20         Investment Report as at 31 July 2020

(Report by Senior Financial Accountant - Reporting)............................................. 9

FIN041-20         Administrative Matter - Execution of Documents Under Delegated Authority (1 August 2020 to 31 August 2020)

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

FIN042-20         End of Year Progress Report July 2019 - June 2020

(Report by Integrated Planning and Reporting Officer)........................................ 21

FIN043-20         Update on Development Contributions Ministerial Directions, Reforms and Resourcing

(Report by Manager Strategic Planning)............................................................... 147

FIN044-20         Property Matter - Commercial Property Portfolio - 2019/20 Fourth Quarter Report

(Report by Strategic Property Specialist)............................................................... 248  

 

 


Georges River Council – Finance and Governance Committee -  Monday, 14 September 2020                                 Page 3

CONFIRMATION OF MINUTES OF PREVIOUS MEETINGS

Item:                   FIN039-20  Confirmation of the Minutes of the Finance and Governance Committee Meeting Held on 10 August 2020 

Author:              Executive Services Officer

Directorate:      Office of the General Manager

Matter Type:     Previous Minutes

 

 

RECOMMENDATION:

That the Minutes of the Finance and Governance Committee Meeting held on 10 August 2020 be adopted.

 

EXECUTIVE SUMMARY

The Minutes of the Finance and Governance Committee Meeting as attached be adopted by Council as a true and correct record of that meeting.

FILE REFERENCE

SF19/3600

 

ATTACHMENTS

Attachment 1

Minutes of the Finance and Governance Committee - 10/08/2020


DRAFTGeorges River Council – Finance and Governance Committee -  Monday, 14 September 2020                                 Page 8

 

 

 

 

 

MINUTES


Finance and Governance Committee

 

Monday 10 August 2020

6.00pm

 

 

 

ONLINE MEETING

 

 

 

 

 

 


PRESENT

Council Members

Councillor Vince Badalati (Chair), Councillor Sam Elmir, Deputy Mayor, Councillor Con Hindi, Councillor Nick Katris and Councillor Nancy Liu.

Council Staff

Director Business and Corporate Services - Mr David Tuxford, Manager Governance and Risk - Ms Popy Mourgelas, Chief Financial Officer - Ms Danielle Parker, Strategic Property Specialist - Mr Jim Alison,  Manager Office of the General Manager - Ms Roxanne Thornton, Executive Services Officer - Mrs Marina Cavar and Technology Services Officer - Mr Alex Wong.

OPENING

Councillor Badalati, opened the meeting at 6.05pm.

ACKNOWLEDGEMENT OF COUNTRY

Councillor Badalati acknowledged the traditional custodians of the land, the Biddegal people of the Eora Nation.

APOLOGIES/LEAVE OF ABSENCE  

RECOMMENDATION: Councillor Katris and Councillor Elmir

That apologies for Councillors Agius, Kastanias and Symington be accepted and a Leave of Absence granted.

Record of Voting:

For the Motion: Unanimous

NOTICE OF WEBCASTING

The Chairperson, Councillor Badalati advised staff and the public that the meeting is being recorded for minute-taking purposes and is also webcast live on Council’s website, in accordance with Section 4 of Council’s Code of Meeting Practice.  This recording will be made available on  Council’s website.

DISCLOSURES OF INTEREST

There were no disclosures of interest made.

PUBLIC FORUM

There were no registered speakers for this meeting.


 

CONFIRMATION OF MINUTES OF PREVIOUS MEETINGS

Finance and Governance Committee - 13 July 2020

RECOMMENDATION: Councillor Katris and Councillor Hindi

That the Minutes of the Finance and Governance Committee held on 13 July 2020 be confirmed.

Record of Voting:

For the Motion: Unanimous

COMMITTEE REPORTS

FIN032-20         Report on Outstanding Council Resolutions (Period up to and including 30 June 2020)

(Report by Manager, Office of the General Manager)

RECOMMENDATION: Councillor Katris and Councillor Elmir

That the report on Outstanding Council Resolutions (period up to and including 30 June 2020), be received and noted.

Record of Voting:

For the Motion: Unanimous

 

 

FIN033-20         Local Government NSW (LGNSW) 2020 Annual Conference - Voting Delegates and Submission of Motions

(Report by Manager, Office of the General Manager)

RECOMMENDATION: Councillor Hindi and Councillor Elmir

That this item be deferred to a full Council meeting for discussion and voting.

Record of Voting:

For the Motion: Unanimous

 

 

FIN034-20         Administrative Matter - Execution of Documents Under Delegated Authority (1 July 2020 to 31 July 2020)

(Report by Manager, Office of the General Manager)

Recommendation: Councillor Hindi and Councillor Katris

That Council note, for the period 1 July 2020 to 31 July 2020, there were two (2) documents executed by the General Manager under delegation.

Record of Voting:

For the Motion: Unanimous

 

 

FIN035-20         Audit, Risk and Improvement Committee Minutes from meetings held on 23 March and 13 July 2020

(Report by Chief Audit Executive)

RECOMMENDATION: Councillor Hindi and Councillor Katris

(a)   That the confirmed Minutes of the Audit, Risk and Improvement Committee Meeting held on the 23 March 2020 be received and noted.

(b)   That the unconfirmed Minutes of the Audit, Risk and Improvement Committee Meeting held on the 13 July 2020 be received and noted.

Record of Voting:

For the Motion: Unanimous

 

 

FIN036-20         Investment Report as at 30 June 2020

(Report by Senior Financial Accountant - Reporting)

Recommendation: Councillor Hindi and Councillor Elmir

That Council receives and notes the contents of the Investment Report as at 30 June, 2020.

Record of Voting:

For the Motion: Unanimous

 

 

FIN037-20         NSW Government Grants to Georges River Council

(Report by Director Business and Corporate Services)

RECOMMENDATION: Councillor Elmir and Councillor Hindi

That Council receives and notes the information contained within this report.

Record of Voting:

For the Motion:  Unanimous

 

 

FIN038-20         Property Matter - Beverley Park Golf Course - Easement to Drain Water from Adjoining Residential Property

(Report by Strategic Property Specialist)

RECOMMENDATION: Councillor Hindi and Councillor Katris

(a)     That Council grants an Easement to Drain Water over Lot 1 in DP1115160, being part of the Beverley Park Golf Course as generally detailed in this report.

(b)     That the General Manager be authorised to execute the Section 88B Instrument or Transfer Granting Easement and all associated documentation to create the easement under Common Seal of the Council, if required.

(c)     That Council note that all costs associated with the granting of the easement are met by the applicant.

Record of Voting:

For the Motion: Unanimous

 

CONCLUSION

The Meeting was closed at 6.25pm

 

 

 

 

Chairperson

 

 

  


Georges River Council – Finance and Governance Committee -  Monday, 14 September 2020                                 Page 15

COMMITTEE REPORTS

Item:                   FIN040-20  Investment Report as at 31 July 2020 

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 July, 2020.

 

Executive Summary

1.      This report details Council’s performance of its investment portfolio as at 31 July 2020, 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 1.84% which is 1.11% above benchmark. Income from interest on investments totals $182,000 which is $13,000 higher than the 2020/2021 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, Section 625 of the Local Government Act (NSW) 1993 and Local Government (General) Regulation 2005.

Investment Performance Commentary

5.      Council’s performance against the benchmark for returns of its investment portfolio for July 2020, are as follows:

 

1 Month

3 Month

12 Month

Portfolio Performance

0.20%

0.57%

1.84%

Performance Index

0.01%

0.03%

0.73%

Excess

0.19%

0.54%

1.11%

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 July was as follows:

Security Type

Market Value $000's

% Total Value

At Call Deposit

8,449

6.44%

Consolidated Cash Fund

2,081

1.59%

Covered Floating Bond

1,007

0.77%

Flexi Deposit (Fix/Float)

6,000

4.58%

Floating Rate Deposit

5,000

3.81%

Floating Rate Note

33,188

25.31%

Term Deposit

69,000

   52.63%

Managed Funds Trust

6,379

4.87%

Total Cash and Investments

131,104

100.00%

7.      At the end of June 2020, Total Cash and Investments were $145 million and have decreased by $14 million at the end of July 2020.

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

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 July 2020.

Borrowings

10.    Council’s loan liability, as at 31 July 2020 was $1.125 million, which represents the balance of a $5 million/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 24 September 2020.

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 2.04% 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 July 2020 is $182,000, which is $13,000 higher than the 2020/2021 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

67,778

51.70%

100%

1 to < 3 Years

56,861

43.37%

70%

3 to < 5 Years

6,465

4.93%

50%

Portfolio Total

131,104

100.00%

 

 

16.    Council’s portfolio is liquid, with 51.70% 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 53% 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 88% 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 12% 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.

Financial Implications

27.    Income from interest on investments totals $182,000, which is $13,000 higher than the 2020/21 year-to-date adopted budget.

Risk Implications

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

29.    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

30.    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

D20/192501

 

 

ATTACHMENTS

Attachment 1

Investment Report as at 31 July 2020

 


Georges River Council -         Finance and Governance Committee - Monday, 14 September 2020

FIN040-20              Investment Report as at 31 July 2020

[Appendix 1]          Investment Report as at 31 July 2020

 

 

Page 19

 


 


 


 



 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 14 September 2020                                 Page 25

Item:                   FIN041-20  Administrative Matter - Execution of Documents Under Delegated Authority (1 August 2020 to 31 August 2020) 

Author:              Manager, Office of the General Manager

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

 

 

 

Recommendation:

That Council note, for the period 1 August 2020 to 31 August 2020, there were two relevant documents executed by the General Manager under delegation.

 

Executive Summary

1.      At its meeting on 24 February 2020, Council resolved that the General Manager report to Council any lease, contract or hire agreement (excluding staff contracts) executed under delegation.

REPORT

2.      Council at its meeting on 24 September 2018, delegated to the General Manager the General Manager’s Delegations (Instrument of Delegation).

3.      During the period 1 August 2020 to 31 August 2020 the following documents have been executed by the General Manager under Delegation.

Community Leases

Date Executed

Document Type

Premises

26 August 2020

Licence

 

276 Princes Highway, Kogarah Bay

Premium Facilities

Date Executed

Document Type

Premises

NIL

 

 

 

Commercial Leases

Date Executed

Document Type

Premises

NIL

 

 

Contracts

Date Executed

Document Type

Premises

14 August 2020

Service Agreement (Sydney Dogs and Cats Home)

N/A

 

Financial Implications

4.      No budget impact for this report.

Risk Implications

5.      No risks identified.

File Reference

D20/213652

 

 

 

  


Georges River Council – Finance and Governance Committee -  Monday, 14 September 2020                                 Page 33

Item:                   FIN042-20  End of Year Progress Report July 2019 - June 2020 

Author:              Integrated Planning and Reporting Officer and Chief Financial Officer

Directorate:      Office of the General Manager

Matter Type:     Committee Reports

 

 

 

RECOMMENDATION:

(a)     That Council receive and note the End of Year Progress Report July 2019 – June 2020 (Attachment 1) of performance made against Georges River Council’s Delivery Program 2018/2019 to 2020/2021 and Operational Plan 2019/2020.

(b)     That Council endorse the Delivery Program and Operational Plan items recommended for cancellation and carry over, as detailed in Table 1: Proposed Cancellations and  Table 2: Proposed Carry Overs.

(c)     That a copy of the End of Year Progress Report July 2019 – June 2020 be published on Council’s website.

 

EXECUTIVE SUMMARY

1.      The July 2019 – June 2020 End of Year Progress Report of performance made against Georges River Council’s Delivery Program 2018/2019 to 2020/2021 and Operational Plan 2019/2020 is submitted for the information of Council and the community. Council’s Financial Statements for 2019/20 will be presented to Council in a separate report. Any associated budget carry overs will be submitted to Council for approval in the 2020/2021 Quarter 1 Budget Review Report.

BACKGROUND

2.      Section 405(5) of the Local Government Act 1993 requires the General Manager to ensure that regular progress reports are provided to the Council on its progress with respect to the principal activities detailed in its Delivery Program, at least every six months. This is the second progress report on the 2018/19 to 2020/21 Delivery Program and 2019/20 Operational Plan.

3.      Office of Local Government Circular 20-15 dated 1 May 2020 advises Council’s existing Delivery Program 2018/19 to 2020/21 will apply for a further 12 months, maintaining the key themes and any activities not yet completed.

4.      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.

5.      Council’s Three Year Delivery Program 2018/2019 to 2020/2021 and One Year 2019/20120 Operational Plan sets the strategic and financial objectives of the year. These documents also detail the goals and strategies for Council’s six (6) pillars which underpin Council’s planning, their relevant performance measures and the projects Council plans to deliver initially in 2018/2019 and within the next three (3) years.

 

Progress against Operational Plan

6.      Attachment 1 includes details for each of the six (6) pillars and the 25 goals, detailing the targets adopted by Council and the performance to date in achieving these targets by 30 June 2020.

7.      71% of the Operational Plan items for 2019/2020 were either completed or are ongoing.

8.      Whilst only 2% of projects were cancelled (2 projects); one reported in the half yearly progress report as a duplicated action and the other to comply with the Public Health Order due to the COVID-19 pandemic, 26% have had to be carried over (46 projects).

9.      Reasons for the cancellations and carry overs can be seen in Table 1: Proposed Cancellations and Table 2: Proposed Carry Overs. Whilst the number of items being carried over to 2020/2021 seems high, it should be noted that seven (7) of the items listed below have been carried over to comply with the Public Health Order due to the COVID-19 pandemic.

Progress against Delivery Program

10.    Progress against Council’s Three Year Delivery Program 2018/2019 to 2020/2021 is tracking well, with 95% of items either complete, ongoing or on track. Only 3% of projects are behind schedule or on hold and approximately 2.5% of items are not progressing.

11.    All projects that are proposed to be cancelled or carried over are listed in this report for Council’s consideration. 

 

Table 1: Proposed Cancellations

Cancellations

Item Code and Description

Delivery Program (DP) or Operational Plan (OP) item

Reason

1.4.2ai
Take part in the 2020 Australian Heritage Festival.

OP

The Australian Heritage Festival 2020 was cancelled by the National Trust of Australian to comply with the Public Health Order due to the COVID-19 pandemic.

6.6.1a

Develop strategic partnerships to influence key government policy and bring investment to the LGA.

OP

Cancelled – as stated in half-yearly progress report.

 

 

 

 

 

 

 

 

 

 

Table 2: Proposed Carry Overs

 

Carry Overs

Item Code and Description

Delivery Program (DP) or Operational Plan (OP) item

Reason

1.1.1ai
Develop a Resilience Strategy

OP

This program was delayed due to a key staff vacancy during the year. A consultant has been engaged to prepare an Environmental Resilience Strategy which is currently being drafted for Council endorsement and public exhibition by Q2 of 2020/21.

1.1.1ci Implement the Canopy Enhancement Program as part of the Urban Forest Strategy.

OP

The project was delivered in accordance with the funding requirements of the grant with a completion date of August 2020.

1.1.1ei Develop a Waste Minimisation Strategy.

OP

The completion of the Waste Strategy was delayed following the briefing to Councillors on 2 March 2020 due to the COVID-19 outbreak and a subsequent focus on delivering core services to the community. The draft Waste Strategy was finalised in Q4 and will be placed on public exhibition in Q1 of 2020/21.

1.3.1ai Implement the 2019/20 Parks and Open Space Improvement Program.

OP

Drainage works at Beverly Hills and Olds Park Sports fields needed to be carried over to September / October 2020 (after football season) due to heavy rains experienced earlier in the year preventing the work being done.

1.1.1ci Implement the 2019/20 painting program for Council assets in parks and open space, including identification of four murals.

OP

The preventative maintenance painting program continues. However, due to the volume of responsive work assigned to the painters, the resourcing did not allow for the development and completion of the final murals.

2.1.2bi Prepare a new Georges River DCP 2020.

OP

The DCP could not be finalised until the Georges River LEP 2020 had been referred to the Georges River Local Planning Panel for determination.

2.1.4aii Conduct community information sessions on legislation changes affecting building and development.

OP

Council's new Development Advisory Service has commenced Development Information Sessions, however compliance with the Public Health Order due to the COVID-19 pandemic meant face to face meetings were not possible and were placed on hold. The team is currently investigating options to run the sessions over an online communications platform.

2.1.5ai Review the functions and membership of the Design Review Panel.

OP

Pending the outcome of a Development and Building Team Service Review which may identify various options to the way urban design is obtained.

2.2.1bi Conduct community information sessions on development and building matters.

OP

Council's new Development Advisory Service has commenced Development Information Sessions, however  compliance with the Public Health Order due to the COVID-19 pandemic meant face to face meetings were not possible and were placed on hold. The team is currently investigating options to run the sessions over an online communications platform.

2.3.1bi Implement R22 refrigerant phase out across all legacy HVAC systems.

OP

Allocated budget was not sufficient to complete phase out across all HVAC systems.

3.2.2ai Develop and deliver the 2019/20 Capital Works Program for new construction and renewals.

 

Resurfacing and irrigation works are complete at Beverly Hills and Olds Park 2 sports fields. Drainage works at these sites were delayed due to heavy rain experienced in late January / February 2020 and will now be undertaken in late September / early October 2020.

3.4.1aii Complete Hurstville Central Plaza as community open space

OP

All civil works are completed. Only Ausgrid works remain which were delayed due to the live work ban that was in place for an extended period.

4.2.1ai Finalise the Commercial Centres Strategy for all centres within the LGA.

OP

No funding was available in 2019/20 FY to commence Part 2.

4.3.1ai Complete a new draft Section 94 Contributions Plan(s) for the Georges River LGA.

OP

SGS Economics and Planning were appointed in 2019 to prepare a new Contributions plan for GRC.

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team; and other work commitments outlined in this table.

4.3.1aii Identify critical infrastructure needs arising from the new car parking strategy

OP

Project was delayed as Councillors requested additional briefings and the timing of the briefings.

4.3.3ai Finalise an action plan to market the LGA's investment opportunities.

OP

In 2019/20 Council endorsed the Kogarah Investment Attraction Strategy, the Reputation Strategy and was working towards a City Launch Event  which due to compliance with the Public Health Order due to the COVID-19 pandemic, the event was postponed.

5.2.1ai Complete the Inclusive Housing Strategy

OP

Delays were due to resourcing – the completion of the LEP and its referral to the LPP took precedence.

5.2.1aii Prepare an affordable rental housing policy

OP

Delays were due to resourcing – the completion of the LEP and its referral to the LPP took precedence.

5.2.2aii Use the new Housing Strategy to inform NSW Government advocacy that includes key worker housing in affordable housing initiatives

OP

Delays were due to resourcing – the completion of the LEP and its referral to the LPP took precedence.

5.2.3aii Based on the findings of the Affordable Housing Strategy, approach the NSW Department of Planning and Environment to include mandatory affordable housing in State Environmental Planning Policy No. 70 - Affordable Housing (Revised Schemes).

OP

Delays were due to resourcing – the completion of the LEP and its referral to the LPP took precedence.

5.2.4ai Complete the Inclusive Housing Strategy and the Housing Strategy

OP

Delays were due to resourcing – the completion of the LEP and its referral to the LPP took precedence.

5.3.1a Develop the Social Plan

OP

The Social Plan has been reframed as a Social Justice Charter. Shaped by the draft Social Plan, actions plans and extensive community consultation, the Social Justice Charter will provide a practical approach to addressing disadvantage and advocating for social change across the LGA. To be delivered to Council in late 2020.

5.3.3aii Consult on and develop a Community Safety Plan

OP

The draft Community Safety Plan has been realigned as an action within the Social Justice Charter, to be delivered in late 2020.

5.3.4ai Establish a 40 place long day care centre in Oatley West.

OP

Fitout complete with minor defects to be rectified. Awaiting Occupation Certificate.

5.4.1aiv Develop a Collection Management Plan.

OP

The Collection Management Plan will be aligned with the principles outlined in the Georges River Library Strategy which was only adopted by Council on 25 May 2020.

5.4.1bii Develop a Debt Recovery Plan for Library Services.

OP

Pre-Spydus charges and unrecoverable debt have been finalised and will be presented to Council in September seeking clearance of these debts. The Debt Recovery Plan will then be developed.

5.5.1ai Implement the 2019/20 regulatory programs to ensure compliance with the relevant legislation and to address community safety concerns.

OP

Delays due to compliance with the Public Health Order due to the COVID-19 pandemic.

5.5.2ai Continue the enforcement strategy requiring the removal of illegal rubbish by the dumper.

OP

Delays due to compliance with the Public Health Order due to the COVID-19 pandemic.

6.1.3ai Create interactive PDF and videos where appropriate to share Council’s progress against the Community Strategic Plan, Delivery Program and Operational Plan.

OP

Pre Council Meeting video has been prepared and presented prior to all Council meetings, however, interactive PDF and videos will need to be actioned in the 2020/21 year due to in-house resourcing.

6.2.1ai Produce a feasibility report on the ‘Meet Your Ward Councillor’ sessions.

OP

Due to compliance with the Public Health Order due to the COVID-19 pandemic the majority of the Meet Your Ward Councillor sessions were cancelled with the exception of 22 February 2020 held in Blakehurst.

6.2.6ai Implement a Professional Development Program for Councillors to ensure a minimum of 12 hours of skills development training is offered to each Councillor.

OP

Councillors are continually encouraged to apply for appropriate training opportunities throughout the year. Due to compliance with the Public Health Order due to the COVID-19 pandemic is was difficult for all Councillors to complete 12 hours of professional development.

6.3.1di Develop promotional videos highlighting how customers can communicate with Council.

OP

Promotional video is currently in development, delays due to in-house resourcing.

6.3.2ci Implement the Innovation Strategy.

OP

The Draft Innovation Strategy was on public exhibition during June. The implementation of the Strategy has commenced with a 12 month program focused on building a culture of innovation and developing an Innovation Network.

6.3.3aiii Create and promote an investment prospectus which targets both large industry and small business.

OP

The majority of the work has been completed focussing on Kogarah with the completion of a Kogarah Investment Strategy. The next phase of the work is a City Marking Strategy  and Investment prospectus for Kogarah.

6.3.3bii Cultivate the night time economy of Kogarah to support health sector workers, students and local business.

OP

Compliance with the Public Health Order due to the COVID-19 pandemic resulted in this strategy being postponed.

6.4.2bii Submit a proposed new Georges River Council rate structure to the Independent Pricing and Regulatory Tribunal.

OP

Council decided to defer on 10 February 2020.

6.4.2biii Submit a Georges River Council Special Rate Variation request to the Independent Pricing and Regulatory Tribunal.

OP

Council decided to defer on 10 February 2020.

6.4.2cii Expand payment options for all revenue activities to minimise risks and costs associated with cash and cheque management.

OP

BPay set up for Debtors. New payment process for online lodgement is in development.

6.4.3ai Redevelop Sans Souci Bathers' Pavilion to provide commercial leasing opportunity

OP

No funding available in 2019/20 Budget.

6.4.3bi Develop Masterplan for Sans Souci Park.

OP

No funding available in 2019/20 Budget.

6.4.3bii Develop Plan of Management for Sans Souci Park.

OP

No funding available in 2019/20 Budget.

6.4.3civ Implement outdoor dining and footway trading application management system.

OP

Amendments required in data management system due the COVID-19 pandemic and the Council's resolution to provide assistance pursuant to Economic and Social Recovery Plan.

6.4.3iii Progress Planning Proposals for planned Council developments. Implement leasing management system.

OP

The resolution of Council from 11 May 2020 required further studies to be undertaken.

 

6.5.1aii Streamline recruitment processes for easier candidate selection and onboarding

OP

HROnboard Implementation Phase 3 Testing Complete. HRO is Live – Phase 4: integration with ichris to commence August.
People & Culture EVP & Employer Branding Strategy has commenced- Careers Video launch to go live this month July 2020.

FINANCIAL IMPLICATIONS

12.    Council’s Financials Statements for 2019/2020 will be presented to Council in a separate report. Any associated budget carry overs will be submitted to Council for approval in the 2020/21 Quarter 1 Budget Review Report.

RISK IMPLICATIONS

13.    Enterprise risk identified and management process applied.

COMMUNITY ENGAGEMENT

14.    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

D19/200506

 

 

 

ATTACHMENTS

Attachment 1

Delivery Program  Operational Plan - End of Year Report - Final Draft for Finance and Governance Meeting pdf

 


Georges River Council -         Finance and Governance Committee - Monday, 14 September 2020

FIN042-20              End of Year Progress Report July 2019 - June 2020

[Appendix 1]          Delivery Program  Operational Plan - End of Year Report - Final Draft for Finance and Governance Meeting pdf

 

 

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Georges River Council – Finance and Governance Committee -  Monday, 14 September 2020                                 Page 170

Item:                   FIN043-20     Update on Development Contributions Ministerial Directions, Reforms and Resourcing 

Author:              Manager Strategic Planning

Directorate:      Environment and Planning

Matter Type:     Committee Reports

 

 

 

RECOMMENDATION:

(a)     That Council endorse the extension of the staffing of a finance resource position in the development contributions and VPA area until 30 March 2021.

(b)     That Council approve a 12 month full time secondment (from within Council) to be allocated to the development contributions and VPA area for a period of 12 months from appointment.

(c)     That the Council’s FY19/20 and 20/21 Budgets be updated to reflect the additional positions and salaries.

 

EXECUTIVE SUMMARY

1.      This report seeks the Council approval to:

a.      extend the finance resource allocated to the development contributions and VPA area from 1 July 2020 to 30 March 2021 (6 months from 25 September 2020), and

b.      a 12 month full time secondment (from within Council) to be allocated to the development contributions and VPA area for a period of 12 months from appointment.

2.      To support this request the report:

a.      Provides a Workplan covering a timeline to 30 December 2021. The Workplan assumes the retention of the existing 1.6 FTE as well as a fulltime planning resource for 12 months and a 6 month 3 days per week finance resource. The finance resource will work with the Council’s Finance Section on legacy issues related to development contributions and the implementation of the new development contributions plans.

b.      Outlines the impact of the Environmental Planning and Assessment Act and Regulation Reforms and COVID-19 Ministerial Directions on resourcing and Council’s Capital Works Program.

c.       Provides an update on the three Audits that have been undertaken in this area of Council and indicates that 12 actions are outstanding as at August 2020.

3.      In summary additional resourcing is required to address the following:

a.      The Kogarah Calculator has been migrated into TechOne. As a result over 100 DA applications from the former Kogarah LGA will need to have their data moved from Authority to TechOne manually.

b.      The data in the new Development Contributions Dashboard (which currently only has the Hurstville S94 Plan and the GRC S94A plan contributions levied and paid) has an issue with integrity. This needs to be fixed before the dashboard can be used with any confidence and will involve checking each DA and CDC, whether or not a CC or OC or Notice of Commencement had been issued and what account the development contribution was paid into.

c.       Following up on non-payment of S7.11 and S7.12 Contributions.

d.      Finalisation and implementation of the Georges River S7.11 and S7.12 Development Contribution Plans. This will involve changes to TechOne relating to the receipting, DA and finance modules as well as the associated testing and training involving directorates across Council. This will require resourcing.

e.      The completion of the review of the process around the lodgement of Private CDCs and Private CCs and the payment of developer contributions and outstanding fees and the implementation of the process improvements.

f.       Completion of the review of the Council’s planning agreement policy.

g.      In order to address the Infrastructure Contributions Reforms 2020 more detail will need to be added to the Council’s development contributions register on the contributions received and expended, including DA reference, consent authority, date of consent, the purpose of the contribution, amount received, details of land or works in kind (including land value and location), project identification and description of where the contribution is spent, amount expended, use of or development of the land or works in kind, internal borrowings, percentage of project funded. This will require new processes and support software changes in TechOne.

h.      In order to address the Infrastructure Contributions Reforms 2020 Council’s VPA Register will also require the similar detail including monetary contributions received and expended, works in kind delivered, value and location including assets held by receiving agencies, land dedications received, value and location

i.        A new process to be implemented and monitored to ensure that any outstanding Section 7.11 or Section 7.12 contributions are paid prior to issuing an occupation certificate.

j.        The key issues raised in the NSW Audit Office Report – refer to Paragraphs 36 to 40 of this report.

 

4.      If Council does not support the extension of the finance resource and provide an additional 12- month planning resource then further consideration on resourcing the completion of legacy issues, the outstanding audit actions and completing the implementation of new financial systems for Development Contributions of Council would be required.

BACKGROUND

5.      Council at its meeting held 27 May 2019 resolved as follows:

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).

6.      The Development Contributions Officer position was advertised and an appointment made in October 2019. The existing financial resource allocated to development contributions and VPA was extended and the position was in place until 30 June 2020.

7.      A resource from the DA Team has been assisting on matters relating to development contributions, focusing on areas relating to development assessment up to 10 hours per fortnight for the last 7 months. This was agreed between the Director Environment & Planning, Manager Strategic Planning and Manager Development and Building due to the changes required in TechOne relating to the DA process to capture correct development contributions and the associated tested and training. This arrangement was in place until June 2020 or a stage in the development contributions program identified by the Manager Strategic Planning and agreed to by the Manager Development and Building.

8.      The report to the Council Meeting 27 May 2019 advised that the Finance Resource Position would address a number of outstanding legacy matters that had been highlighted by the two audits into development contributions. The report to Council also indicated that a number of the financial projects would run into the next financial year and beyond.

9.      Both the finance resource and the resource from the DA Team have been extended until the end of September 2020 in order for Council to consider this report.

Current Resourcing

10.    The following positions are involved in planning agreements and development contributions:

Table 1 – Current Resourcing in development contributions and planning agreements

Position

Work

Executive Planner (0.6FTE)

Deals with planning agreements.

The tasks involve:

·      Review DAs and Planning Proposals and consider if VPA offer is negotiated

·      Co-ordinate and manage the VPA process for each VPA offer

·      Ongoing management and implementation of VPAs

·      Financial Management of VPA contributions and assets

·      Completion of VPA and obligations

 

Senior Development Contributions Planner

(1 FTE)

Dealing with the development contribution work relating to the six Section 7.11 Development Contributions Plans for Georges River Council LGA and one (1) Section 7.12 Plan. This involves training, provision of information to internal and external auditors, advice on funding requests, calculation of development contributions, accounts etc.

The preparation of the new Georges River Development Contributions Plan.

 

Finance Consultant (finance resource position)

(0.6 FTE – finishes 30/09/2020)

All financial work related to planning agreement and development contribution work; including financial reporting, construction of the former Kogarah Council development contribution registers, construction of the former Kogarah council Development Contributions expenditure register – 2011 to 2018, etc.

 

 

11.    The DA Planner resource –5 hours per week – is an informal resource and works on the dashboard and the migration of the Kogarah calculator into TechOne. This resource also provides assistance to the DA planners on the calculation of development contributions.

Workplan

12.    The report considered and adopted by Council on 27 May 2019 provided a work program on planning agreements and development contributions. Whilst a lot of work has been completed in this area to address legacy and current issues, there is still work to be undertaken to address the issues.

13.    Attachment 1 contains a copy of the Development Contributions and Planning Agreement Workplan that has been prepared covering a timeline to 30 December 2021. The Workplan assumes the retention of the existing 1.6 FTE as well as a fulltime DA planning resource for 12 months and a 6 month 3 days per week finance resource. The finance resource will work with the Council’s Finance Section on both legacy and the implementation of the new development contributions plans.

14.    The Workplan covers:

a.      Former Kogarah Section 7.11 (previously S94) Calculator into Tech1

b.      Kogarah Development Applications with unpaid S7.11 charges lodged into TechOne

c.       Kogarah Development Applications with unpaid S7.12 charges (to 1 July 2017) lodged into TechOne

d.      Former Hurstville Section 7.11 (previously S94) Calculation and Receipts Script for Credits in Tech1

e.      Implement automated reporting capability for the Contributions register (Georges River Council)

f.       Investigate the feasibility of recovering contributions retrospectively

g.      Voluntary Planning Agreements

h.      Section 7.13 - Court Ordered Development Consent Contributions

i.        Compile a s7.11 and s7.12 Contributions Register to comply with Div5 Clause 34 of EPA Regulation 2000

j.        Extended Audit - Development Application calculations and related payments received by Council

k.       S7.11 Contributions errors detected by Strategic Planning

l.        Process improvements to reduce key personnel dependency for s7.11 management

m.     Staff training on Development Contributions

n.      Prepare and complete a Schedule of Works for former Kogarah Council Development Contribution Plans - the timing of the new development contributions plans has been significantly delayed due to COVID-19 related workforce issues. Given the split of the organisation into two teams the delay will be further exacerbated.

o.      New Development Contributions Plan for the Georges River Local Government Area – it should be noted that the timing of the new development contributions plans has been significantly delayed due to COVID-19 related workforce issues. Given the split of the organisation into two teams the delay will be further exacerbated.

p.      Other items

i.     Investigate alternative payment methods and collaborate with Finance for implementation

ii.    Review of Development Assessments/Issue of Construction Certificates and Complying Development Certificates - Contribution Levies

iii.   Ensure the accurate and timely reporting of payments of the long service levy for Building and compliance to review prior to issuing construction certificates by entering an event in P&R

iv.   Investigate the feasibility of appointing a dedicated assessment officer to evaluate estimated building costs, review and maximise development contributions to Council

15.    As stated in the Executive Summary, if the Council decides not to extend the finance resource for 6 months and provide an additional 12- month planning resource then a decision on how to resource the completion of legacy issues from the former Councils, address the outstanding audit actions and completing the implementation of new financial systems for Development Contributions of Council would need to be addressed. The attached Workplan would require updating as well as a report to the Council’s Audit, Risk and Improvement Committee.

Implications of Reforms and COVID-19 Ministerial Directions on Resourcing

COVID-19 Ministerial Directions on Resourcing

16.    A report to the Environment and Planning Committee in August 2020 provided detailed information on the Ministerial Directions on the contribution framework. An overview is provided below.

17.    The NSW Government recently made changes to the Environmental Planning and Assessment Regulation (EP&A Regulation) and the Minister for Planning and Public Spaces issued three new Ministerial Directions in relation to infrastructure contributions. The Council were advised of these changes at the August 2020 Environment and Planning Committee.

18.    The amendment to the Environmental Planning and Assessment Regulation 2000 (EP&A Regulation) requires certifiers to obtain written documentation from councils that certifies that there are no outstanding contributions or levies prior to issuing an occupation certificate.

19.    The three Directions were:

a.      Local Infrastructure Contributions - Pooling of Contributions Direction 2020: The Direction was given to all councils and states that “if a council holds contributions that have been paid for different purposes, including purposes identified in more than one contributions plan that applies in the LGA concerned, the council is to endeavour to pool those contributions, apply them progressively, in order to facilitate the provision of the public amenities and public services to which any of those contributions plans relate”.

b.      Local Infrastructure Contributions – Information Direction 2020: This Direction applies to 16 councils, including Georges River, and required councils to submit information to the DPIE by 3 July 2020 on projects within their existing contributions plans that are scheduled for delivery in the next 12 to 18 months. The Direction states:

“A local council to whom this direction is given is to provide the Minister with information relating to the delivery of public amenities and public services specified in any contributions plan applying to land in the LGA concerned, including the staging of works to provide those amenities or services, as indicated in the table below….

The information required by this Direction is to be provided to the Minister within 6 weeks of this Direction taking effect”.

Council staff reviewed the existing Contributions Plans and identified up to 41 projects that could be delivered in the next 12-24 months. These projects include the embellishment of parks and sporting fields, compulsory acquisition of land for the provision of open space, public domain works, upgrades to local libraries and child care centres throughout the LGA.

c.       Local Infrastructure Contributions – Timing of Payments Direction 2020: This Direction allows councils to temporarily defer the payment of s7.11 and s7.12 contributions and levies until at least the issuing of the first occupation certificate for developments (with active consents) with an estimated cost of $10 million or more.

Council is to note that there are 58 DAs that qualify for the deferral under the Ministers Direction. Of these, 27 have already paid contributions. The remaining 31 DAs have contributions totalling $29,293,778.92.

20.    These changes have been made as part of a whole-of-government response to the economic downturn caused by the COVID-19 pandemic and seek to ensure the planning system continues to support productivity, investment and community wellbeing across the State.

Reforms for Infrastructure Contributions

21.    The NSW Government has proposed Planning Reforms for Infrastructure Contributions which cover:

a.      Draft Planning Agreements (VPA) Policy Framework - Practice Note and Direction

b.      Improving the review of higher rate s7.11 contributions plans - Discussion Paper

c.       Criteria to request a higher s7.12 percentage - Discussion Paper

d.      Draft Special Infrastructure Contributions (SIC) guidelines

e.      Proposed amendments to the Environmental Planning and Assessment Regulation 2000 - policy paper and draft instrument.

Implications on Resourcing

22.    The implications of the Ministerial Directions and the Reforms are:

a.      Financial Reporting on Contributions - more detail will need to be submitted by councils and published online on the contributions received and expended. The contributions registers and annual financial reports will now require details on:

i.     Contributions received - DA reference, consent authority, date of consent, the purpose of the contribution, amount received, details of land or works in kind (including land value and location).

ii.    Contributions expended – project identification and description, amount expended, use of or development of the land or works in kind, internal borrowings, percentage of project funded.

b.      VPA Register and Financial Report – more detail will need to be submitted on:

i.     Financial reports to include monetary contributions received and expended, works in kind delivered, value and location including assets held by receiving agencies, land dedications received.

ii.    VPA Register to identify the type of development proposed and annual reports.

c.       A new process to be implemented and monitored to ensure that any outstanding Section 7.11 or Section 7.12 contributions are paid prior to issuing an occupation certificate. If the certifier is an accredited certifier (rather than council), an application for an occupation certificate must include a document from council certifying that a contribution or levy under s7.11, s7.12 or s7.24:

i.     is not required at any time before the issue of an occupation certificate, or

ii.    is required before the issue of an occupation certificate and the requirement has been met.

23.    In summary additional resourcing will be required to address the new reporting requirements in that:

a.   More detail will need to be added to the Council’s development contributions register on the contributions received and expended, including DA reference, consent authority, date of consent, the purpose of the contribution, amount received, details of land or works in kind (including land value and location), project identification and description of where the contribution is spent, amount expended, use of or development of the land or works in kind, internal borrowings, percentage of project funded. This will require new processes and support software changes in TechOne.

b.   Council’s VPA Register will also require the similar detail including monetary contributions received and expended, works in kind delivered, value and location including assets held by receiving agencies, land dedications received, value and location

c.   A new process to be implemented and monitored to ensure that any outstanding Section 7.11 or Section 7.12 contributions are paid prior to issuing an occupation certificate.

 

FINANCIAL IMPLICATIONS

Trends

24.    Figure 1 below shows the trends for development contributions income for the period 2006 to 2020. Please note that it is not final for the current financial year but provides a good idea of how the income tracked over the last few years. The brown line is the 14 year average of $7,385,120.03.

Figure 1 - Development contributions income trends for the period 2006 to 2020

Impact of COVID-19 on Developer Contributions Income

25.    The Budget currently forecasts $15 million in developer contributions and $3 million in VPAs to be received in 2020/21. However:

a.      Over a five year period Council receives an average of $7.3 million per year, though can experience highs and lows depending on the size/scale of developments being undertaken in the Local Government Area (LGA).

b.      Initial projections for the 2020/21 financial year indicate a reduction in income from $15 million to less than $10 million as a result of these Ministerial Directions. Similar reductions in income can be assumed for the following 2 financial years.

c.       Council also receives interest income on developer contributions. Assuming a drop of at least $5 million in income per year and a rate of return of 0.85% to 1.90%, the drop in interest income could be up to $95,000 per year for the next 3 years.

d.      These impacts to Council’s budget will need to be taken into consideration during the preparation of the Capital Works Program for at least the next 3 years.

Financial Impact on Additional Resourcing Requested

26.    Additional non-budgeted funds of $179,219.00 from the Council’s Operating Budget over FY 2020/21 & 2021/22 which is broken up as follows:

a.      FY20/21: $142,479.33

b.      FY21/22: $36,739.67

27.    Based on current terms and conditions:

a.      The extension of the position of Financial Consultant would have a financial impact of $69,000 based on 6 months inclusive of on costs.

b.      The position of Development Contributions Project Planner would have a financial impact of $110,219 per annum inclusive of on costs. This position is intended to be pitched at like for like with a Development Assessment Planner level, the proposed salary grade for the extended position is Grade 13/Level 4 being $95,842.80 gross per annum plus on costs - $110,219 per annum inclusive of on costs.

The current position of the person who accepts the secondment would need to be back filled.

28.    Funding for 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.

RISK IMPLICATIONS

29.    There are enterprise risks and operational risks with the current situation with this area of Council.

30.    Both the temporary DA Resource and the finance resource in the Strategic Planning Team have been critical in addressing the risks and the actions of the three audits that have been undertaken in this area of Council as follows:

a.      Voluntary Planning Agreements Audit-October 2019,

b.      Section 7.11& 7.12 Income Audit dated 18 March 2019; and

c.       Development Assessment Audit dated 4 December 2018.

31.    Significant improvements have been made in this area of Council as follows:

a.      The peer review of the reports and consents to ensure correct calculations for development contributions are within the DA report and in the conditions of development consent.

b.      The migration of the Kogarah Excel calculator into TechOne – this was a 2 year project.

c.       The Kogarah Contributions Register – which did not exist prior to amalgamation even though it is a requirement of the EP&A Act and its Regulation – has been built for both S7.11 and S7.12 Development Contributions.

d.      Unpaid development contributions identified in the S7.11 Development Contributions Register that has been built for the Kogarah Development Contributions Plans are now being followed up – with 3 (totally approx. $600,000) subject to legal action.

e.      Training has been rolled to all DA Planners on the procedures and process for the use of the Kogarah and Hurstville Contributions Plans and the calculation of contributions levies. Training is also now on-going. Strategic Planning Team work closely with the Development Assessment Team to provide support and guidance on contribution levies for complex developments.

f.       The development of spreadsheets for all Development Contributions Plans and those spreadsheets identify the status of projects, allocation and commitment of funds and expenditure.

g.      Quarterly audits are undertaken of all s7.11 rates to ensure that the indexation is correctly applied in TechOne.

h.      Financial systems for Court Ordered Development Consent Contributions levied under s7.13(3) of the Environmental Planning and Assessment Act 1979 have been developed.

i.        Financial systems for Voluntary Planning Agreements have been developed.

j.        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.

k.       Completion of a review of 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 just been completed. 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.

OUTSTANDING AUDIT REPORT TO BE COMPLETED

32.    Whilst the implementation of the actions from the Audits has improved processes relating to development contributions; there is still work to complete. Resourcing is required to complete the work outlined in Table 2 which lists the Audit actions that are still outstanding:

 

 

 

Table 2 – List of Audit recommendations outstanding

 

Audit

 

 

Action

 

Reasons for Delay

Developer Contributions Income (Section 7.11/7.12) - March 2019

Developer Contributions Income (Section 7.11/7.12) - March 2019

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.

 

Completion Dates

Original - 31/12/2019

Revised 31/12/2020

An electronic dashboard has been built by Council’s IMT Team that has all DAs and CDCs, contributions levied and contributions paid. The dashboard is functional; however there is a data quality issue that requires investigation of 200 DAs/CDCs from the former Kogarah Council. The number from former Hurstville Council is not available at the time of writing this report but may be a similar number.

 

Delays in checking the data have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team; and other work commitments outlined in this table.

Developer Contributions Income (Section 7.11/7.12) - March 2019

Developer Contributions Income (Section 7.11/7.12) - March 2019

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.

 

Completion dates

Original - 30/09/2019

Revised - 30/06/2021

In the report to the Finance and Governance Committee held 13/05/2019 the Council was advised of 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.

 

Council was advised that the steps involved in implementing this recommendation are:

·      Finalise the register;

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

·      Prepare final list of non-payees;

·      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;

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

·      Legal action/advice may be required.

·      The Council adopted the minutes of the Committee on 27/05/2019.

 

This work has commenced with seven outstanding contributions identified from the completion of the Kogarah S7.11 Development Contributions register. Three of the outstanding contributions have been referred for legal action – these contributions total nearly $600,000.00. Two others – totalling $31,000 have been paid.

 

The S7.12 Kogarah Development Contributions Register was completed in July 2020 and 200 applications require investigation before a list of non payment of contributions can be determined.

 

A review of the process around the lodgement of Private CDCs and Private CCs and the payment of developer contributions and outstanding fees has been commenced but resourcing to implement the improvements is required.

Developer Contributions Income (Section 7.11/7.12) - March 2019

Developer Contributions Income (Section 7.11/7.12) - March 2019

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

 

Completion Dates

Original - 30/09/2019

Revised - 30/06/2021

Hurstville S94 Plan is currently placed on the Council’s website. The former Kogarah Development Contributions Plans are too complex.

 

The indexed Development Contributions rates will be published on Council’s website each quarter once the new Development Contributions Plan is implemented by June 2021.

Development Assessments using ICAC DA Audit Tool - November 2018

Development Assessments using ICAC DA Audit Tool - November 2018

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

 

Completion dates

Original – 31/12/2019

Revised – 30/06/2020

Actual – 22/06/2020

The single system in Council’s TechOne to manage Developer Contributions has been explored and worked on over the last 2 years. It finally went live on Monday 22 June 2020; along with new processes and procedures including a peer review process to reduce errors.

Development Assessments using ICAC DA Audit Tool - November 2018

Development Assessments using ICAC DA Audit Tool - November 2018

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

 

Completion dates

Original – 30/06/2020

Revised – 30/06/2021

SGS Economics and Planning were appointed in 2019 to prepare a new Contributions plan for GRC.

 

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team; and other work commitments outlined in this table.

Development Assessments using ICAC DA Audit Tool - November 2018

Development Assessments using ICAC DA Audit Tool - November 2018

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

 

Completion dates:

Original – 30/06/2020

Revised – 30/06/2021

SGS Economics and Planning were appointed in 2019 to prepare a new Contributions plan for GRC.

 

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team; and other work commitments outlined in this table.

Development Assessments using ICAC DA Audit Tool - November 2018

Development Assessments using ICAC DA Audit Tool - November 2018

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.

 

Completion dates

Original – 30/06/2020

Revised – 30/06/2021

SGS Economics and Planning were appointed in 2019 to prepare a new Contributions plan for GRC.

 

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team; and other work commitments outlined in this table.

Development Assessments using ICAC DA Audit Tool - November 2018

Development Assessments using ICAC DA Audit Tool - November 2018

17. Same as Recommendations 13.1 & 13.2

 

Completion dates

Original – 30/06/2020

Revised – 30/06/2021

SGS Economics and Planning were appointed in 2019 to prepare a new Contributions plan for GRC.

 

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team; and other work commitments outlined in this table.

Development Assessments using ICAC DA Audit Tool - November 2018

Development Assessments using ICAC DA Audit Tool - November 2018

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

 

Completion dates

Original – 30/06/2020

Revised – 30/06/2021

SGS Economics and Planning were appointed in 2019 to prepare a new Contributions plan for GRC.

 

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team; and other work commitments outlined in this table.

Voluntary Planning Agreements Audit-October 2019

Voluntary Planning Agreements Audit-October 2019

1. The criteria for determining whether or not a monetary contribution under a VPA should be indexed or not should be included in the Policy on Planning Agreements.

 

Completion dates

Original – 30/06/2020

Revised – 31/12/2020

Draft amendment to the Planning Agreement Policy will be referred to E&P Committee on 14 September 2020 for adoption by Council on 28 September 2020.

 

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team, other work commitments outlined in this table; and the Ministerial Directions which had a due date of 3/7/2020.

Voluntary Planning Agreements Audit-October 2019

Voluntary Planning Agreements Audit-October 2019

2.1 The criteria for determining whether or not securities should be applied for VPA's should be included in the Policy on Planning Agreements.

 

Completion dates

Original – 30/06/2020

Revised – 31/12/2020

Draft amendment to the Planning Agreement Policy will be referred to E&P Committee on 14 September 2020 for adoption by Council on 28 September 2020.

 

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team, other work commitments outlined in this table; and the Ministerial Directions which had a due date of 3/7/2020.

Voluntary Planning Agreements Audit-October 2019

Voluntary Planning Agreements Audit-October 2019

2.2 The Policy on Planning Agreements should specify the various forms of security that may be required under a Voluntary Planning Agreement arrangement.

 

Completion dates

Original – 30/06/2020

Revised – 31/12/2020

Draft amendment to the Planning Agreement Policy will be referred to E&P Committee on 14 September 2020 for adoption by Council on 28 September 2020.

 

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team, other work commitments outlined in this table; and the Ministerial Directions which had a due date of 3/7/2020.

Voluntary Planning Agreements Audit-October 2019

Voluntary Planning Agreements Audit-October 2019

3. The Policy on Planning Agreements should specify the treatment of interest earned on cash payments as security held in reserve by Council. The basis for the interest computation should also be included in the Policy.

 

Completion dates

Original – 30/06/2020

Revised – 31/12/2020

Draft amendment to the Planning Agreement Policy will be referred to E&P Committee on 14 September 2020 for adoption by Council on 28 September 2020.

 

The project was due for completion by June 2020; however delays have occurred due COVID work arrangements; leave arrangements of the 1.6 FTE officers in the Strategic Team, other work commitments outlined in this table; and the Ministerial Directions which had a due date of 3/7/2020.

 

33.    In summary the matters outstanding that require resourcing to address are:

a.      The Kogarah Calculator has been migrated into TechOne. As a result over 100 DA applications from the former Kogarah LGA will need to have their data moved from Authority to TechOne manually.

b.      The data in the new Development Contributions Dashboard (which currently only has the Hurstville S94 Plan and the GRC S94A plan contributions levied and paid) has an issue with integrity. This needs to be fixed before the dashboard can be used with any confidence and will involve checking each DA and CDC, whether or not a CC or OC or Notice of Commencement had been issued and what account the development contribution was paid into.

c.       Following up on non-payment of S7.11 and S7.12 Contributions.

d.      Finalisation and implementation of the Georges River S7.11 and S7.12 Development Contribution Plans. This will involve changes to TechOne relating to the receipting, DA and finance modules as well as the associated testing and training involving directorates across Council. This will require resourcing.

e.      The completion of the review of the process around the lodgement of Private CDCs and Private CCs and the payment of developer contributions and outstanding fees and the implementation of the process improvements.

f.       Completion of the review of the Council’s planning agreement policy.

g.      The Infrastructure Contributions Reforms 2020 also will have an impact on resourcing as there are a number of proposed changes to the EP&A Regulation that will impact the financial reporting of contributions.

These changes are proposed in response to the Kaldas Report and Legislative Assembly Committee Land Release Report that recommended an audit of contribution funding and update of VPA reporting. The key amendments to the Regulation are outlined below.

i.     In respect of Financial Reporting on Contributions - more detail will need to be submitted by councils and published online on the contributions received and expended. The contributions registers and annual financial reports will now require details on:

1.      For contributions received - DA reference, consent authority, date of consent, the purpose of the contribution, amount received, details of land or works in kind (including land value and location)

2.      Contributions expended – project identification and description, amount expended, use of or development of the land or works in kind, internal borrowings, percentage of project funded.

3.      The proposed changes will result in more accountability, transparency and efficiency in the financial reporting of contributions. Council’s Finance Section have reviewed the proposed changes and noted that the changes can be implemented.

ii.    For VPA Registers and Financial Reports – more detail will need to be submitted on:

iii.   Financial reports to include monetary contributions received and expended, works in kind delivered, value and location including assets held by receiving agencies, land dedications received, value and location

iv.   VPA Register to identify the type of development proposed and annual reports.

h.      A new process to be implemented and monitored to ensure that any outstanding Section 7.11 or Section 7.12 contributions are paid prior to issuing an occupation certificate.

34.    The current permanent resources of 1.6FTE persons cannot address all the outstanding issues. Additional resources are required. This report seeks to extend the finance resource currently working in the development contributions area as well as requesting Council to support and fund a full time planning resource (for 12 months) to assist in completing of legacy issues from the former Councils, address the outstanding audit actions

35.    If the Council decides not to extend the finance resource for 6 months and provide an additional 12- month planning resource then a decision on how to resource the completion of legacy issues from the former Councils, address the outstanding audit actions and completing the implementation of new financial systems for Development Contributions of Council would need to be addressed.

 

NSW Audit Office - Performance Audit Report - Governance and internal controls over local infrastructure contributions (17 August 2020)

36.    The NSW Audit Office Performance Audit Report assessed the effectiveness of the governance and internal controls over Local Infrastructure Contributions (LICs) at the four councils with the largest cash balances at 30 June 2018 (Blacktown City Council, Liverpool City Council, Central Coast Council and City of Sydney Council). A copy of the report is available in Attachment 2.

37.    The report outlines key findings and recommendations for each of the Council’s governance and internal controls for LICs.

38.    The DPIE response to the report states that there scope to improve certain aspects of the system, in-line with the recommendations of the Kaldas Report and that the report will inform the current review of the system.

39.    The report includes legal advice from the Crown Solicitor in relation to infrastructure contributions.

40.    In summary Table 3 below provides a list of the key issues raised by the NSW Audit Office. A preliminary assessment has been undertaken against the key issues raised by the NSW Audit Office. Proposed actions have been identified and these have been included in Table 3 below. It is clear that resourcing will be needed to address some of the key issues raised.

 

Key Issues Raised in NSW Office Audit Report

 

Actions required to Council’s governance and internal controls over Local Infrastructure Contributions

Internal Controls

 

 

1.   A committee to provide oversight of Contributions

a)     Committees to have senior level officers from across Council to act as an effective decision-making body.

 

b)    Committees to have a clear charter and role (managing contributions, LICs, making decisions to spend LICs or enter into VPAs with developers, monitoring work funded by LICs, reviewing contributions plans , coordinating different parts of the council organisation to ensure that infrastructure is delivered when needed)

 

c)     Committees to meet regularly

 

(refer to Blacktown Council committee model)

 

·      Systems, processes and procedures to be updated for the new GRC Contributions Plan.

·      Review of membership of the current Development Contributions Working Party  to include Senior Development Contributions Planner and financial management positions

2.   Contributions are to be spent as intended & in accordance with the plans

-     Funds can only be spent on projects identified in the plans.

(eg Central Coast Council used LICs collected to pay for administration expenses under contributions plans. The plans had no allowance for administration. Central Coast Council repaid the LIC fund in late 2019. The other three audited councils spent LICs in accordance with their relevant contributions plans).

 

·      New Development Contributions Plans to include a recovery of costs associated with the administration of the Plan

3.   Address risks that can arise in the administration of LICs. This can include

a)   financial controls over receipt and expenditure of LIC funds

b)   management of conflicts-of-interest when dealing with developers.

c)   guidance relating to probity during negotiations with developers

d)   independent valuations of works-in-kind and dedicated land

e)   ensuring delivery and quality of works-in-kind,

f)    obtaining security from developers in the event of non-delivery or poor quality work

g)   management of variations to VPAs and works-in-kind agreements.

h)   ensure contributions are collected when accredited private certifiers issue construction certificates.

 

·      Introduce a process through CM9 actions to check contribution payment on receiving construction certificates;

·      Formalise the process to chase the missed contribution payment after construction certificates being issued;

·      Take further actions to accredited private certifiers who regularly miss contribution payment.

4.   Systems and spreadsheets security

Ensure security over important data and personal information is maintained in spreadsheets and systems (i.e.  contributions calculations and credit and offset arrangements with developers cannot be manipulated)

 

a)   Access to spreadsheets/systems is restricted and monitored

b)   Spreadsheets/systems are stored safely and backed up regularly

c)   Management check the accuracy and completeness of the data.

d)   Changes to spreadsheets/systems are logged

e)   Data must balance with financial systems

f)    Personal information is managed in accordance with the Privacy and Personal Information Protection Act 1998 (PPIP Act) - council should keep this personal information on file for no longer than the purpose for which it is required, dispose of it securely, and protect against loss, unauthorised access, use, modification, and disclosure.

 

Investigation underway of what additional actions are required.

5.   Bank Guarantees/Bonds for Security

-     ensure security bonds paid by developers are sufficient to cover the cost of undelivered or poor quality works-in-kind

 

(eg City of Sydney Council recognises that security over works-in-kind may be insufficient due to the rising cost of work and incorporates into the Deed of Agreement the right to claim the difference from the developer. Blacktown City Council requires security over works-in-kind of 125 per cent of the value of the work to ensure that sufficient funds are available if the value of the work has increased).

 

·      For bonds and security over works - Review City of Sydney model for Deed of Agreement and determine if this should be implemented.

 

6.   Process and Procedures

a)   Ensure they are current and up to date

 

b)   VPA Policies - guidance requiring staff to consider separation of duties and conflicts of interest.

 

c)   VPA Policies – to address increased or indexed bank guarantees to accommodate cost increases.

 

d)   Works-in-kind policies - guidance about how to declare and manage risks.

 

·      New GRC Contributions Plan. Systems - processes and procedures to be updated.

·      Continue to update Pro-Map

·      Compare cost of works-in-kind stipulated in agreement to independent valuation on completion of works and report to ET on significant variances.

7.   Staffing

a)   Ensure staff have the appropriate knowledge and skills to perform their duties

 

b)   Ensure not heavily reliant on the knowledge of specific staff members due to outdated procedural documentation).

 

·      This report to the Finance and Governance Committee staffing resources.

·      Update procedural documentation in Pro-Mapp.

8.   Works in Kind

When developers offer to deliver works-in-kind or dedicate land in full or partial payment of their LIC, councils must agree a value for that work or land with the developer. If work or land is over-valued, the reduction in contributions is greater than necessary.

 

a) Council obtain 3 quotes for Works in Kinds

 

b) Works are properly and independently valued

·      New GRC Plan works-in-kind clauses to be consistent with current Practice Notes and best practice.

 

Transparency

 

 

9.   Financial transparency on contributions collected and spent

a)     Ensure transparency on contributions collected and spent (s7.11/s7.12/VPAs) - published in Financial Reporting, Capital Works Programs, and Annual Reports.

 

e.g. When presenting information to the public about capital works expenditure, councils should consider including information about the source of funding (

Refer to Liverpool City Council).

e.g. annual report includes information about infrastructure that has been delivered for every contributions plan, providing transparency over how LICs have been spent.

 

b)    Implementation plans for spending contributions

 

c)     Ensure contributions collected under VPAs is transparent

-     VPA register on Council’s webpage

-     Intended use of contributions collected under VPAs

-     Work completed with VPA contributions

-     Land dedicated or works in kinds from VPAs

 

·      VPA Register - Update the Council’s VPA register to show when the VPA works are completed/funds spent/land dedicated.

10.  Credit for works to be documented

-     formally document credit arrangements and have a robust process to validate and keep track of credit balances and report on them.

 

Investigation underway of what additional actions are required.

Governance

 

 

11.  Strong governance framework

A strong governance framework is important at each council to ensure that the funds are managed well, available when needed and spent as intended. This covers ‘decision making’ and ‘monitoring delivery of plans’ (reviewing status of plans and assumptions).

 

Refer to No. 1 above for additional actions required.

12.  Councillors to be involved in key decision making

-     Councillors to be involved in amount to be levied, infrastructure provided, expenditure and management of funds.

 

Investigation underway of what additional actions are required.

 

Monitoring

 

 

13.  Financial monitoring and reporting on future contribution cash flow needs to be regular

a)   Require regular reports to senior management, General Manager and Councillors about the projected financial status of plans. This includes:

Where we are heading

Where we are now

Where we are expected to be

Long term financial plan

 

b)   Need to be able to project and know if the plans contributions are on track.

 

c)   Councils publish annual financial statements for their contributions plans (eg this was insufficient in all councils, none of the four councils regularly report to senior management or their councillors about the projected financial status of their contributions plans.

 

d)   Financial controls –

evidence that reconciliations were independently reviewed

reconciliations between the general ledger and sub ledgers

expenditure approved by staff with appropriate delegation

reviews of staff access to Council’s financial systems are systematically conducted.

 

 

·      Tracking the contributions income and expenditure against the population growth indicated in the plan to ensure that plans are proceeding as expected.

 

 

14.  Monitoring Plans - Review of Contributions plans within suggested timeframes

a)   Plans to be reviewed within five years (as suggested in DPIE Practice Note 2005).

 

b)   Consolidate old and small plans.

 

c)   Review and revise factors underpinning the plans to reset assumptions and basis for calculating contributions such as:

population estimates and council boundaries

construction standards and costs

land values and the cost of labour

appropriateness of indexes used in plan

affordability of discounts and exemptions.

 

Investigation underway of what additional actions are required.

 

COMMUNITY ENGAGEMENT

41.    Community engagement is not required.

 

FILE REFERENCE

D20/188520

 

 

 

ATTACHMENTS

Attachment 1

Development Contributions and Planning Agreements Workplan

Attachment 2

NSW Audit Office Report on Local Infrastructure Contributions

 


Georges River Council -         Finance and Governance Committee - Monday, 14 September 2020

FIN043-20              Update on Development Contributions Ministerial Directions, Reforms and Resourcing

[Appendix 1]          Development Contributions and Planning Agreements Workplan

 

 

Page 177

 


 


 


 


Georges River Council -         Finance and Governance Committee - Monday, 14 September 2020

FIN043-20              Update on Development Contributions Ministerial Directions, Reforms and Resourcing

[Appendix 2]          NSW Audit Office Report on Local Infrastructure Contributions

 

 

Page 252

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 14 September 2020                                 Page 254

Item:                   FIN044-20  Property Matter - Commercial Property Portfolio - 2019/20 Fourth Quarter Report 

Author:              Strategic Property Specialist

Directorate:      Business and Corporate Services

Matter Type:     Committee Reports

 

 

 

RECOMMENDATION:

That Council receives and notes the Commercial Property Portfolio – 2019/2020 Fourth Quarter report.

 

EXECUTIVE SUMMARY

1.      At the Council meeting held on 1 May 2017, Council resolved to receive a regular report on the Commercial Property Portfolio and other associated leases and licences.

BACKGROUND

2.      The report presented to Council includes information on the commercial properties within the Commercial Property Portfolio including commercial car parking.

3.      The report is an evolving document and responds to the ongoing audit of Council’s commercial leases and licences and the execution of new leases and licences.

4.      The table below shows the performance of the portfolio for Q4 of the 2019/20 financial year. 

Property Type

Number of Properties

No. of Current Vacant Premises

Q4 Net Income to 30/06/20 Actual

Q4 Net Income to 30/06/20 Budget

Variance

 

Comments

Commercial

75

5

$2,332,413

$2,358,755

$26,342

(deficit)

Result under budget (1.1%) due to rentals being waived for COVID-19 tenant assistance.

Retail

6

1

$154,756

$136,756

$18,000

surplus

 

Commercial Car Parks

4

0

$18,670

$294,706

$276,036

(deficit)

Effects of COVID-19 impacting income.

Footway Trading

NA

NA

$48,959

$50,000

$1,041

(deficit)

 

Outdoor Furniture Advertising

4

0

$188,541

$210,000

$21,459

(deficit)

Variation due to reduced advertising income.

Telecommunications

4

0

$129,444

$43,844

$85,600

surplus

Additional income received from Redin Place, Connells Point and The Green, Kyle Bay.

Total Income

93

6

$2,872,783

$3,094,061

($221,278)

Deficit

 

5.      There are currently six vacancies across the portfolio. 

FINANCIAL IMPLICATIONS

6.      Budget implications have been highlighted in the table above. Budget shortfalls are predominantly the result of reduced car parking revenues due to decreased patronage associated with the COVID-19 pandemic and higher than expected maintenance costs associated with the commercial properties maintenance program.

7.      Some of the deficits recorded are as a result from rent relief granted to commercial tenants as a consequence of the COVID-19 pandemic and pursuant to the Federal Government’s mandated Code of Conduct in relation to small-medium sized business. The subject rent relief provided by Council affected 15 tenancies, totalling in the order of $135,000 over the reporting period.  It should be noted, however, that approximately 50% of this amount is intended to be collected over future reporting periods.

RISK IMPLICATIONS

8.      Council’s losses arising due to the COVID-19 pandemic have been reported monthly. However, the risk of tenants being unable to continue trading in the current environment and bleak economic outlook remains high.

COMMUNITY ENGAGEMENT

9.     No community engagement is required for this matter.

FILE REFERENCE

D20/210923