AGENDA


Finance and Governance Committee

 

Monday, 12 October 2020

6.00pm

 

 

ONLINE MEETING

 

 

 

 

 

 

 

 

 

 


Georges River Council – Finance and Governance Committee -  Monday, 12 October 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

FIN045-20        Confirmation of the Minutes of the Finance and Governance Committee Meeting held on 14 September 2020

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

8.     COMMITTEE REPORTS

FIN046-20        Administrative Matter - Execution of Documents Under Delegated Authority (1 September 2020 to 30 September 2020)

(Report by Manager, Office of the General Manager)......................................................... 8

FIN047-20        Revised Georges River Council Investment Policy

(Report by Coordinator, Financial Management)...................................................................... 10

FIN048-20        Investment Report as at 31 August 2020

(Report by Senior Financial Accountant - Reporting)...................................................... 48

FIN049-20        Membership of Southern Sydney Regional Organisation or Council (SSROC) and Local Government NSW (LGNSW)

(Report by Director)........................................ 63

FIN050-20        Property Matter - Street Name Sign Advertisements ("Identilites") - Proposed New Contract

(Report by Strategic Property Specialist)......... 85  

 

 


Georges River Council – Finance and Governance Committee -  Monday, 12 October 2020                                                                                          Page 3

CONFIRMATION OF MINUTES OF PREVIOUS MEETINGS

Item:                FIN045-20    Confirmation of the Minutes of the Finance and Governance Committee Meeting held on 14 September 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 14 September 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.

 

ATTACHMENTS

Attachment 1

Minutes of the Finance and Governance Committee - 14/09/2020


Georges River Council – Finance and Governance Committee -  Monday, 12 October 2020                                                                                          Page 4

 

 

 

 

 

MINUTES


Finance and Governance Committee

 

Monday, 14 September 2020

6.00pm

 

 

ONLINE MEETING

 

 

 

 

 

 

 

 


PRESENT

Council Members

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

Council Staff

Director Business and Corporate Services - Mr David Tuxford, Manager Governance and Risk - Ms Popy Mourgelas, Chief Financial Officer - Ms Danielle Parker, Senior Strategic Planner – Ms Harkirat Singh,  Strategic Property Specialist - Mr Jim Alison,  Manager Office of the General Manager - Ms Roxanne Thornton (Minutes) and Coordinator Technology – Mr Brendan Scott.

OPENING

Councillor Badalati, opened the meeting at 6.05pm.

ACKNOWLEDGEMENT OF COUNTRY

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

APOLOGIES/LEAVE OF ABSENCE  

There were no apologies or requests for leave of absence.

 

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

Councillor Kastanias disclosed a Pecuniary Interest in Item FIN044-20 Property Matter - Commercial Property Portfolio - 2019/20 Fourth Quarter Report for the reason that she has a commercial lease with Georges River Council. Councillor Kastanias will not be participating in the discussion or voting on this item.

PUBLIC FORUM

There were no registered speakers for this meeting.


 

CONFIRMATION OF MINUTES OF PREVIOUS MEETINGS

Finance and Governance Committee - 10 August 2020

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

(Report by Executive Services Officer)

RECOMMENDATION: Councillor Hindi and Councillor Katris

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

Record of Voting:

For the Motion: Unanimous

COMMITTEE REPORTS

FIN040-20        Investment Report as at 31 July 2020

(Report by Senior Financial Accountant - Reporting)

Recommendation: Councillor Hindi and Councillor Katris

That Council receives and notes the contents of the Investment Report as at 31 July, 2020.

Record of Voting:

For the Motion: Unanimous

Note:        Councillor Kastanias left the meeting at 6.14pm and did not return.

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)

Recommendation: Councillor Hindi and Councillor Agius

That this matter be deferred to the Council Meeting of 28 September 2020 for consideration.

Record of Voting:

For the Motion: Unanimous

 

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

(Report by Integrated Planning and Reporting Officer)

RECOMMENDATION: Councillor Katris and Councillor Hindi

(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.

Record of Voting:

For the Motion: Unanimous

 

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

(Report by Manager Strategic Planning)

RECOMMENDATION: Councillor Hindi and Councillor Katris

(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.

(d)    That paragraph 33(b) in the Report, be amended to read as follows;

“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 with regard to the transfer of data to the new system. 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.”

Record of Voting:

For the Motion: Unanimous

 

 

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

(Report by Strategic Property Specialist)

Note:        Councillor Kastanias lodged a Pecuniary Interest in regard to this item and did not participate in the discussion and voting.

RECOMMENDATION: Councillor Hindi and Councillor Symington

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

Record of Voting:

For the Motion: Unanimous

CONCLUSION

The Meeting was closed at 6.50pm.

 

 

Chairperson

 

 

  


Georges River Council – Finance and Governance Committee -  Monday, 12 October 2020                                                                                          Page 9

COMMITTEE REPORTS

Item:                FIN046-20         Administrative Matter - Execution of Documents Under Delegated Authority (1 September 2020 to 30 September 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 September 2020 to 30 September 2020, there were five (5) 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 September 2020 to 30 September 2020 the following documents have been executed by the General Manager under Delegation.

Community Leases

Date Executed

Document Type

Premises

7 September 2020

 

Head Licence

-    St George Football Association Inc.

Various sporting amenities and storage rooms

25 September 2020

 

Variation to Memorandum of Understanding (Lease)

-    Kingsway Community Care Inc.

Crisis Accommodation (undisclosed location)

25 September 2020

 

Lease

-    Riverwood Community Centre Inc.

31 Thurlow Street, Riverwood

30 September 2020

 

Licence

-    Medlab Pathology

Riverwood Park, 79 Coleridge Street, Riverwood (carpark and storeroom)


 

Premium Facilities

Date Executed

Document Type

Premises

NIL

 

-   

Commercial Leases

Date Executed

Document Type

Premises

21 September 2020

 

Lease

-    Project Youth Incorporated

6 Dora Street, Hurstville

Contracts

Date Executed

Document Type

Premises

NIL

 

 

 

Financial Implications

4.     No budget impact for this report.

Risk Implications

5.     No risks identified.

File Reference

D20/218503

 

 

 

  


Georges River Council – Finance and Governance Committee -  Monday, 12 October 2020                                                                                         Page 11

Item:                FIN047-20    Revised Georges River Council Investment Policy 

Author:            Coordinator, Financial Management

Directorate:     Business and Corporate Services

Matter Type:    Committee Reports

 

 

 

RECOMMENDATION:

(a)    That Council adopt the revised Georges River Council Investment Policy as attached to this report (Attachment 3).

(b)    That Council notes the addition of the ethical and environmentally responsible investments to the revised policy to allow Council to invest in such investments.

 

EXECUTIVE SUMMARY

1.     The purpose of the Investment Policy is to establish the framework within which investment principles are to apply to the investment of Council funds in order to achieve an optimum return, whilst giving due consideration to risk, liquidity and the security of its investments.

2.     The Investment Policy provides guidance around Council’s funds to be invested, investment objectives, compliance with legislation, considerations prior to investment, accounting for investments, safe custody arrangements, reporting on investments, and the review of the policy.

BACKGROUND

3.     Council receives money through various sources. Funds available, in excess of immediate operational requirements, are invested in financial instruments. While exercising the power to invest, consideration is to be given to the preservation of capital, liquidity and the return on investment.

Overview of Policy Changes

4.     The points below outline the proposed investment policy changes:

·        Revised policy into new format

·        Minor editorial amendments

·        Additional ethical and environmentally responsible investments added to criteria

·        BBB and unrated investment reduction in eligibility for investment

Ethical and Environmental Investment Resolutions

5.     As part of the wider initiative of Council to achieve zero net emissions by 2030 (ENV044-19 - 25 November 2019), a media release on 18 December 2019 stated that Council will:

“… Investigate opportunities for a greater proportion of the Council’s investment portfolio to be directed to ethical and environmentally responsible investments which are low risk and have returns equal to or greater than existing investments...”

6.     Ethical & Environmental Investments will be assessed on the same basis as other investment opportunities and Council will select the investment that best meets its overall investment selection criteria.

7.     Westpac have developed a new sustainable investment product known as a Green Tailored Deposit, which has been independently certified to meet the climate bonds standard while not compromising the credit risk of the product.

8.     As per discussions with Westpac in April 2020, the interest rate offered by Westpac for the Green Tailored Deposit is the same as what is offered for a normal Term Deposit. There are, however, some restrictions to consider with Green Tailored deposits: 

a.     Minimum investment amount of $1,000,000

b.     Minimum investment term of 1 year

c.     No “interest rate matching” of offers from other financial institutions.

9.     The unaudited investment portfolio as at 30 June 2020 was valued at $145 Million.  The 2019/20 annual budgeted interest income from investments was $3.4 million. The 2020/21 annual budgeted interest income from investments is forecast to be $2.2 million.

FINANCIAL IMPLICATIONS

10.   No financial/budget impact for this report. It should be noted that the Investment Policy Attachments relating to Green Tailored Deposits are current documents and the information contained within the documentation is up to date.

RISK IMPLICATIONS

11.   Enterprise risks identified and management process applied.

12.   Operational risks identified and management process applied.

COMMUNITY ENGAGEMENT

13.   No community engagement as a result of this report.

FILE REFERENCE

D19/294704

 

 

 

ATTACHMENTS

Attachment 1

Investment Policy Attachment - Westpac Green Tailored Deposits - PIS

Attachment 2

Investment Policy Attachment - Westpac Green Tailored Deposits - Brochure

Attachment 3

Investment Policy

 


Georges River Council - Finance and Governance Committee - Monday, 12 October 2020

FIN047-20                 Revised Georges River Council Investment Policy

[Appendix 1]             Investment Policy Attachment - Westpac Green Tailored Deposits - PIS

 

 

Page 24

 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


 


Georges River Council - Finance and Governance Committee - Monday, 12 October 2020

FIN047-20                 Revised Georges River Council Investment Policy

[Appendix 2]             Investment Policy Attachment - Westpac Green Tailored Deposits - Brochure

 

 

Page 37

 


 


Georges River Council - Finance and Governance Committee - Monday, 12 October 2020

FIN047-20                 Revised Georges River Council Investment Policy

[Appendix 3]             Investment Policy

 

 

Page 44

 


 


 


 


 


 


 


 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 12 October 2020                                                                                         Page 48

Item:                FIN048-20    Investment Report as at 31 August 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 August 2020.

 

Executive Summary

1.     This report details Council’s performance of its investment portfolio as at 31 August 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 1.82% which is 1.16% above benchmark. Income from interest on investments totals $353,181 which is $13,848 higher than the 2020/21 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 August 2020, are as follows:

 

1 Month

3 Month

12 Month

Portfolio Performance

0.13%

0.49%

1.82%

Performance Index

0.01%

0.03%

0.66%

Excess

0.12%

0.46%

1.16%

Notes:                                              

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

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

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


 

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

Security Type

Market Value $000's

% Total Value

At Call Deposit

11,456

8.51%

Consolidated Cash Fund

13,542

10.06%

Covered Floating Bond

1,007

0.75%

Flexi Deposit (Fix/Float)

6,000

4.46%

Floating Rate Deposit

5,000

3.72%

Floating Rate Note

33,188

24.66%

Term Deposit

58,000

   43.10%

Managed Funds Trust

6,379

4.74%

Total Cash and Investments

134,572

100.00%

7.     At the end of July 2020, Total Cash and Investments were $131 million and have increased by $3 million at the end of August 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. As at 31 August 2020, the legal practice working on the matter, Banton Group, is in a position to commence proceedings against Fitch Ratings Inc., which is likely to occur before the end of the year. Council will be further advised as information comes to hand.

Borrowings

10.   Council’s loan liability, as at 31 August 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. interest subsidy under the NSW Government’s Local Infrastructure Renewal Scheme funding agreement for the Jubilee Park upgrade facility. It is intended to continue this financially-advantageous arrangement through to full term in 2022.

Policy Limits

13.   The graph below shows the Investment Rating limits, as a percentage of total cash investments, which are allowed under Council’s Investment policy. It also compares them to the amounts actually invested, as a percentage of the total cash investments. It shows that the funds invested are within the limits set in the Investment Policy.

 

Investment Income

14.   Income from interest on investments to 31 August 2020 is $353k which is $13k higher than the 2020/21 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

85,256

63.35%

100%

1 to < 3 Years

44,361

32.96%

70%

3 to < 5 Years

4,955

3.68%

50%

Portfolio Total

134,572

100.00%

 

 

16.   Council’s portfolio is liquid, with 63.35% of assets maturing within 12 months. FRNs, At-Call Funds and Fixed Bonds also provide additional liquidity in an emergency.

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


 

Type of Investments

18.   The majority of Council’s investment portfolio is made up of fixed term deposits, which account for approximately 43% 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 $353k which is $13k 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

D20/230174

 

 

ATTACHMENTS

Attachment 1

Investment Report as at 31 August 2020

 


Georges River Council - Finance and Governance Committee - Monday, 12 October 2020

FIN048-20                 Investment Report as at 31 August 2020

[Appendix 1]             Investment Report as at 31 August 2020

 

 

Page 58

 


 


 


 



 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 12 October 2020                                                                                         Page 65

Item:                FIN049-20    Membership of Southern Sydney Regional Organisation or Council (SSROC) and Local Government NSW (LGNSW) 

Author:            Director

Directorate:     City Strategy and Innovation

Matter Type:    Committee Reports

 

 

 

RECOMMENDATION:

(a)    That Council reaffirms its membership of Local Government NSW (LGNSW).

(b)    That Council maintains its membership of Southern Sydney Regional Organisation of Councils (SSROC) due to the current benefits for the Environment and Sustainability activities of Council subject to ongoing review to ensure that Council is receiving value for money.

 

EXECUTIVE SUMMARY

1.     At Council’s meeting of 28 October 2019, the following was resolved:

a)     That Council renew its membership for a further 12 months.

b)     That Council informs SSROC that it is reviewing its ongoing membership and will require significant investment in improving Georges River Council specific advocacy and policy development work, and improved governance and management structures to continue with its membership.

c)     That Council Officers provide a further report that outlines the following:

 i)     all existing contracts that Council has entered into with SSROC and LGNSW since amalgamation in May 2016;

ii)      estimated savings that were made through all contracts from both SSROC and LGNSW ;

iii)     net cost from both SSROC and LGNSW per year; and

iv)     advocacy undertaken by both SSROC and LGNSW that affects Georges River Council.

2.     This report responds to part C of the Council resolution.

3.     Following the Council meeting last year both LGNSW and SSROC were contacted to provide a response to the issues raised in the resolution. However during this period both organisations experienced a change to their senior leadership and this delayed a formal response being sent to Council. Formal replies were received in August 2020. These responses are at Attachment 1 and 2.

4.     Membership of SSROC is $77,000 annually and the membership of LGNSW is $72,000 annually.

BACKGROUND

5.     Council will recall that the resolution to which this report responds, was a response to a report from Council officers which considered the advantages to Council of continued membership of SSROC. This report is Attachment 3 which includes the report prepared by SimPPLY which reviewed the procurement services of SSROC and recommended that Council cease membership of SSROC as the procurement services provided were available to Council from other organisations on more favourable terms.

SOUTHERN SYDNEY REGIONAL ORGANISATION OF COUNCILS (SSROC)

6.     Southern Sydney Regional Organisation of Councils’ (SSROC) response can be summarised as:

All the secretariat’s activities are given overall direction by SSROC, and reported to SSROC at each Ordinary Meeting. The services provided are in accordance with the organisation’s constitution, and are broadly categorised as: advocacy, programs and procurement. Of great benefit to Georges River Council is the weight that is given to regional advocacy as a result of endorsement by SSROC and therefore by all the 11 councils of the region, who represent the 1.7 million people who reside in those Local Government Areas.

With regard to information that you have requested in relation to procurement and contracts, where it is possible for the secretariat to identify tangible savings, these are listed. For most contracts, the benefits are assessed by individual councils when deciding whether or not to enter into an agreement with the preferred supplier. Each council is provided with an evaluation report to inform this decision.

7.     Council’s procurement team have reviewed this submission and have provided the following comments regarding the contracts and procurement information submitted by SSROC:

In addition to SSROC membership, Georges River Council has access to Local Government Procurement panel (LGP), Procurement Australia panel (PA), and State Government Contracts and Schemes with no membership cost which offers:

a.  LGP Profit Sharing – LGP direct rebate to Council based on purchases made by council through LGP

b.  No joining or annual fees to utilise LGP/PA/ State Government Contracts and Schemes;

c.  LGP/State Government and Procurement Australia panels and contracts, offers a more comprehensive panel list with competitive rates with no locking contract which minimise the risks compare to SSROC panel contracts.

Case study - The results of comparison between state government contract 101 Office supply as well as prequalified Scheme SCM0007 - Contingent Workforce Scheme to SSROC panel contracts - 05/2015 SSROC - Stationery and Associated Products as well as SSROC T2017-03 temporary staff for 2018/19 financial year indicates council experienced an estimated loss $223,000 P/A ($23,000 – by using office supply and $200,000 on Temporary panels depending on spend level).

Each of these memberships (SSROC / LGP & Procurement Australia) from a Procurement perspective are contract aggregation centres, however, duplication has created cost and efficiency issues (i.e. being ‘prescribed’ (LGP and PA) or ‘not prescribed’ (SSROC)).  In addition, State Government which is an external prequalified panel offers alternate cost efficiencies with respect to procurement products and services.

Key GRC areas of SSROC activity have been Environmental, Sustainability and all aspects of Waste. GRC already established number of contracts through Tender directly with suppliers in these areas. For a very limited number of services council employ SSROC panel/s, a plan of action is recommended to be confirmed, prior to a decision to cease membership if it is a case.

LPG, Procurement Australia are prescribed and NSW Govt. prequalified organisations within NSW, as such the contractual set up can used, with or without the need to carry out additional competitive RFQ activity.

All SSROC panel contract and tendering resolutions need Council approval and, this is not the case with LGP/PA & State Government contract and schemes.

8.     In simple terms, while SSROC provides procurement services that Council can use, other services provide the same or better services at less cost to Council. In the case of LG Procurement there is a rebate arrangement. In addition, use of the other procurement services avoids the need for a formal tender which has cost and time savings.

9.     Council’s Sustainability Team derives significant benefit from the joint tender process of the wastes contracts. The benefits gained through the economies of scale brought about by SSROC procurement far exceed the time taken to prepare the contract. This is further reinforced by the recently awarded clean-up service contract which resulted in a $100 per tonne reduction in processing fees and a 70% diversion rate from land fill as compared to the current contract.

LOCAL GOVERNMENT NSW (LGNSW)

10.   Local Government NSW (LGNSW), which owns LG Procurement, stated that:

During 2019/20FY Georges River Council has had a considerable level of interaction with LGP. In this period Georges River Council spent $7.3m across 23 different LGP contracts which has helped avoid $230k in estimated tendering costs (valued at $15,000 per tender). Georges River Council had 4 delegates attend LGP Network Meetings and 2 people attended the 2019 LGP Annual Conference. Georges River Council received $3.5k in rebate payments and contributed $6.5k to the SSROC LGP Rebate Scheme payment for the 2019 FY for expenditure reported under the bitumen contract.

11.   Like SSROC, LGNSW has an advocacy role, however the unique value proposition of LGNSW is that it is the only organisation that is entitled to represent the employer interests of the industry, including in the negotiation of the Local Government (State) Award, review of the federal Local Government Industry Award and in award-related proceedings, union claims, pay increases, unfair dismissals etc. LGNSW provides legal advice to members on industrial matters at no additional cost.

12.   LGNSW advises that:

Over the last 12 months, LGNSW has assisted Georges River Council with:

•       Representation on 4 occasions

•       Written and/or verbal advice provided by our industrial officers on 12 occasions

•       Advice provided by our Legal Officer on 3 occasions

13.   Based on the information provided by both SSROC and LGNSW, it appears that LGNSW provides Council with better value for money. LGNSW also provides broad representation on a larger scale which better supports advocacy, networking and councillor and staff development. It Council was to determine to proceed with only one membership then I would recommend LGNSW.

14.   The benefits derived by the Environment and Sustainability Team (including waste) through the activities of the SSROC should continue to be monitored to ensure that they continue to provide value for money.

FINANCIAL IMPLICATIONS

15.   Membership of both SSROC and LGNSW are currently within the adopted budget for 2020-21. Not proceeding with either or both memberships does present an opportunity for savings in this and future financial years.

RISK IMPLICATIONS

16.   Ceasing membership of either organisation may have a reputational risk in terms of Council’s being seem as a collaborative organisation that has big picture view of local government.

17.   If Council was not a member of LGNSW then it will not be a member of the employer organisation in any industrial matters and legal costs will increase for matters previously supported by LGNSW.

18.   Ceasing membership of SSROC will require a review of how Council prepares waste service tenders.

COMMUNITY ENGAGEMENT

19.   Community engagement is not required for this matter.

FILE REFERENCE

D20/221434

 

 

 

ATTACHMENTS

Attachment 1

LGNSW response to Georges River Council re LGNSW membership benefits

Attachment 2

SSROC Response to Georges River Council - BENEFITS OF SSROC MEMBERSHIP

Attachment 3

Membership of Southern Sydney Region Organisation of Councils (SSROC) - Finance and Governance Committee 14 October 2019

 


Georges River Council - Finance and Governance Committee - Monday, 12 October 2020

FIN049-20                 Membership of Southern Sydney Regional Organisation or Council (SSROC) and Local Government NSW (LGNSW)

[Appendix 1]             LGNSW response to Georges River Council re LGNSW membership benefits

 

 

Page 70

 


 


 


 



Georges River Council - Finance and Governance Committee - Monday, 12 October 2020

FIN049-20                 Membership of Southern Sydney Regional Organisation or Council (SSROC) and Local Government NSW (LGNSW)

[Appendix 2]             SSROC Response to Georges River Council - BENEFITS OF SSROC MEMBERSHIP

 

 

Page 72

 



 


 


 


 



 


 


Georges River Council - Finance and Governance Committee - Monday, 12 October 2020

FIN049-20                 Membership of Southern Sydney Regional Organisation or Council (SSROC) and Local Government NSW (LGNSW)

[Appendix 3]             Membership of Southern Sydney Region Organisation of Councils (SSROC) - Finance and Governance Committee 14 October 2019

 

 

Page 84

 


 


 


 


Georges River Council – Finance and Governance Committee -  Monday, 12 October 2020                                                                                         Page 85

Item:                FIN050-20    Property Matter - Street Name Sign Advertisements ("Identilites") - Proposed New Contract 

Author:            Strategic Property Specialist

Directorate:     Business and Corporate Services

Matter Type:    Committee Reports

 

 

 

RECOMMENDATION:

(a)    That Council enters into a contract for the creation and display of advertisements (“Identilites”) on street name signs throughout the entire Georges River Local Government Area on the terms outlined in the attached (confidential) Proposed Contract Advice.

(b)    That Council authorises the General Manager to execute the contract and all associated documentation.

 

EXECUTIVE SUMMARY

1.     Council currently has a contract with Claude Outdoor Pty Ltd (“Claude”) that allows Claude to display Identilites at 13 sites previously created under the contract within the former Kogarah City Council local government area. The contract has been held-over on a quarterly basis since 30 June 2020.    

2.     On 26 March 2018, Council resolved the following:

That a formal Expression of Interest process be undertaken in July 2020 for the provision of Illuminated Street and Transport Shelter advertising signage across the Georges River LGA.

3.     This report details the actions taken in regards to that Resolution and recommends Council enters into a Contract for the creation and display of Street advertising signage (Identilites).

BACKGROUND

4.     In 1992, the former Kogarah City Council entered into an agreement to allow Claude Outdoor Pty Ltd (as the company is now called) to erect and display Identilites within the local government area. The agreement commenced on 1 January 1992. An example of a current Identilite is shown in Attachment 1.

5.     The agreement specified a fixed annual fee for each site (comprising 2 Identilites) that was to be paid by Claude to Kogarah City Council. The agreement had an original term of 10 years, with a 5 year option which Claude exercised, taking the agreement up to 31 December 2006.

6.     The two parties then entered a further 5 year agreement on similar terms.

7.     That agreement continued on a hold over basis until August 2015, at which time, Kogarah City Council confirmed that the holdover period could continue until 31 December 2017 at a new fixed annual fee. This was on the proviso that Claude would not increase the number of sites - being 13 - during the holdover period.

8.     In December 2017, a report was presented to Council noting that Claude was seeking to enter into a new agreement that would cover the whole of the newly formed Georges River Council Local Government Area.

9.     During the Committee discussion at the time, concern was raised that the former Hurstville City Council’s agreement with AdShel (now Ooh Media) for advertising signage on transport (bus) shelters may inhibit the EOI process. It was noted that the agreement with Ooh Media prevented Council from permitting anyone other than Ooh Media to deliver, display or make available any advertisements in any format on or from any Street Furniture in the Council Area, if those advertisements are within the prescribed sizes and configurations. It was concluded that this meant that Council could not enter into an agreement for the provision of Identilites within the former Hurstville City Council area.

10.   Ooh Media also had (and still has) a separate agreement for advertising signage on transport shelters within the former Kogarah City Council area (within which Claude operates), that also contains an exclusivity clause.

11.   The former Hurstville City Council’s agreement with Ooh Media has now expired and is in holdover on a quarter by quarter basis. Therefore, the exclusivity clause can be deleted at any time.

12.   Claude was advised of the Council resolution of 26 March 2018 and that the agreement that terminated on 31 December 2017 would be allowed to holdover to 30 June 2020, (to match the contractual expiry date of the bus shelter advertising agreement with Ooh Media) thereby extending Claude’s “tenure” to some 28 ½ years.

13.   Further to the Council resolution, Officers appointed an Advertising Consultant in late 2019 and began detailed investigations in regard to the state of the market, prior to calling for Expressions of Interest. The result of those investigations and subsequent negotiations are set out in the (confidential) Proposed Contract Advice in Attachment 2.

FINANCIAL IMPLICATIONS

14.   If Council enters the proposed contract, it will receive income in accordance with the terms set out in the confidential Proposed Contract Advice in Attachment 2.

RISK IMPLICATIONS

15.   No risks identified.

COMMUNITY ENGAGEMENT

16.   It is considered that no Community engagement is required as a result of this report.

FILE REFERENCE

Q19/301

 

 

 

ATTACHMENTS

Attachment 1

Example of Identilite

Attachment 2

Proposed Contract Advice (Confidential)

 


Georges River Council - Finance and Governance Committee - Monday, 12 October 2020

FIN050-20                 Property Matter - Street Name Sign Advertisements ("Identilites") - Proposed New Contract

[Appendix 1]             Example of Identilite

 

 

Page 87