Agenda of Council Briefing

Council Briefing Agenda 27 March 2018

5.6 North Perth Town Centre Parking - Six Month Review of Parking Restrictions

TRIM Ref: D18/4347

Author: Stephen Schreck, Strategic Planning Officer

Authoriser: John Corbellini, Director Development Services

Attachments: 1. Attachment 1 - Map of Existing Parking Restrictions in the North Perth Town Centre ⇩

2. Attachment 2 - North Perth Town Centre Parking Occupancy Survey Results ⇩

3. Attachment 3 - Summary of Community Feedback ⇩

4. Attachment 4 - Existing and Proposed Pansy Street Car Park & Pansy Street Parking Restrictions ⇩

5. Attachment 5 - Existing and Proposed Vine Street Parking Restrictions ⇩

Recommendation:

That Council:

1. ADVERTISES for the purpose of community consultation for a period of 21 days the following proposed parking restrictions:

1.1. 2P 8:00am – 6:00pm Monday – Friday in the Pansy Street Car Park and on Pansy Street, North Perth, as shown in Attachment 4; and

1.2. 2P 8:00am – 6:00pm Monday – Friday on Vine Street, North Perth, as shown in Attachment 5; and

2. NOTES:

2.1. The results of the parking occupancy survey as shown in Attachment 2; and

2.2. The community feedback received since the implementation of the North Perth Town Centre Parking Restrictions and Administration’s comments on this feedback, as shown in Attachment 3.

Purpose of Report:

To consider the six month review of the parking restrictions in the North Perth Town Centre and to consider adopting modifications to existing parking restrictions within the original survey area as a result of the review and introduce new parking restrictions to streets outside the original survey area for the purpose of advertising for public comment.

Background:

Council adopted a set of new parking restrictions for the North Perth Town Centre at its meeting on 7 March 2017 (Item 9.1.5). A map of the adopted parking restrictions that are currently in effect is included as Attachment 1. The parking restriction signage and line marking was installed during May and June 2017. The City observed a transition period for the parking restrictions in June 2017 and commenced enforcement of the parking restrictions on 1 July 2017.

As part of the approval of the parking restrictions, Council requested that the City undertake a review of the parking occupancy rates in the area within six months of the introduction of the changes and present a report back on the results of this review along with any recommended changes to the parking restrictions. The purpose of this review was to ensure that the parking restrictions are functioning correctly and to assist the City with any future decisions on parking restrictions within North Perth.

The City undertook parking occupancy surveys between 6 December and 9 December 2017 at 9:00am‑11:00am, 12:00pm-2:00pm, 3:00pm-5:00pm and 6:00pm-8:00pm, on Wednesday, Friday and Saturday. These survey times were chosen to replicate the initial parking occupancy survey conducted in February and March 2016 and ensure the City is using a consistent data set for comparison. An additional time period of 6:00pm-8:00pm was added to this round of surveys in the original town centre survey area in response to local business concerns that the night time economy was not represented in the 2016 surveys.

The City also received feedback from residents and businesses outside the original town centre survey area identifying issues with parking on Alma Road, Forrest Street, Norfolk Street, Pansy Street, Pansy Street Car Park and Wasley Street. The City conducted further surveys on these streets between 17 February and 23 February 2018 at 9:00am-11:00am, 12:00pm-2:00pm and 3:00pm-5:00pm on Wednesday, Friday and Saturday.

Details:

There were six key findings from the six month review, including from the results of the parking surveys and the feedback from residents, which are summarised below. A full copy of the survey results is included as Attachment 2 and a summary of the feedback from residents and Administration’s response is included as Attachment 3.

1. Overall Result

The 2017 survey results show that since the implementation of the parking restrictions peak parking occupancy across the majority of streets in North Perth has decreased. This indicates that the new parking restrictions have been successful in managing parking throughout the North Perth town centre.

The surveys demonstrated that the number of streets recording a peak occupancy of greater than 85 percent reduced from eight to two. The peak occupancy in the View Street car park fell from 100 percent to 73 percent and the peak occupancy in the Wasley Street car park fell from 98 percent to 76 percent.

It is noted that Albert Street and Peach Street demonstrated a peak occupancy of 100 percent due to a once off local event at the North Perth Primary School on the Friday of the 2017 survey. All other streets and car parks in the 2017 survey area demonstrated peak occupancy within the acceptable rate between of 45 percent and 85 percent.

2. Evening Parking

The 6:00pm-8:00pm survey period (only done in 2017) demonstrated that the average occupancy for all streets and car parks was 34 percent. Nine streets demonstrated peak occupancy at this time, however this peak occupancy was below 50 percent in all instances which is not high enough to warrant changes to the parking restrictions. The survey demonstrates that there is adequate available parking in the town centre after 6:00pm.

3. Pansy Street

The City received feedback regarding the Pansy Street Car Park and Pansy Street on street parking, which is currently unrestricted. The feedback indicated that since North Perth parking restrictions were implemented parking on Pansy Street and in the Pansy Street Car Park has become fully occupied all day, limiting the use of the bays for surrounding residents and businesses. The feedback also expressed that there were a number of vehicles that use laneways to access Charles Street, which further increased the amount of traffic in Pansy Street.

The City’s parking surveys of the Pansy Street Car Park and Pansy Street on street parking showed that Pansy Street Car Park had an average occupancy of 54 percent and a peak occupancy of 100 percent. Pansy Street on street parking demonstrated an average occupancy of 60 percent and a peak occupancy of 100 percent. Both the Pansy Street Car Park and Pansy Street demonstrated peak occupancies on Friday 23 February 2018 at 9:00-11:00am and 12:00-2:00pm. Pansy Street also demonstrated a peak occupancy of 100 percent on Friday 23 February 2018 at 3:00-5:00pm.

The City’s Parking Category Matrix recommends that, where peak parking occupancy is greater than 85 percent and within a town centre environment, a mix of paid parking, 15 minute, 30 minute and one hour parking should be implemented. Pansy Street and Pansy Street Car Park are both located outside of the main core of the Town Centre and given the nearby restrictions the above options are considered too stringent in this context. It is proposed that Pansy Street and Pansy Street Car Park be advertised with a two hour parking restriction, between 8:00am and 6:00pm Monday to Friday, as shown in Attachment 4.

4. Vine Street

Vine Street between Albert Street and Angove Street was implemented as ‘No Parking’ on the western side and five hour parking on the eastern side. Since implementation of the parking restrictions, a number of comments have been received from residents on the street requesting the adopted parking restrictions be swapped so that ‘No Parking’ is on the eastern side and five hour parking is on the western side. The residents explained that several properties on the western side of the street do not have access to off street parking and rely on the on street parking outside their homes for their private vehicles. As a result the residents preferred the have parking permitted on this western side and for the ‘No Parking’ restrictions to be located on the eastern side of Vine Street. One resident was also concerned that parking on the north-western portion of the street was unsafe as cars access Angove Street or turn into Vine Street from Angove Street.

The City understands the issues raised in the feedback received as it may be appropriate to maintain available car parking for residents on the western side adjacent to their properties and may reduce the risk of conflicts with cars turning into Vine Street. It is proposed that Vine Street, between Albert Street and Angove Street, be advertised with a five hour parking restriction for the western side of the street and ‘No Parking’ for the eastern side of the street, between 8:00am and 6:00pm Monday to Friday, as shown in Attachment 5.

5. Alma Road, Forrest Street, Norfolk Street and Wasley Street

A submission was received from a resident of Alma Road between Norfolk Street and William Street explaining that the parking restrictions that had recently been implemented omitted the section between Norfolk Street and William Street. The submitter explained that, as this section is unrestricted, a number of vehicles have begun parking on Alma Road. The submitter has requested that parking restrictions be implemented on Alma Road between Norfolk Street and William Street. This section of Alma Road was located outside of the original 2016 survey area and, as a result, parking occupancy data was not recorded during this survey. Surveys undertaken by the City demonstrated that this section of Alma Road recorded an average occupancy of 13 percent and a peak occupancy of 20 percent.

The City received two comments regarding parking on Norfolk Street explaining that, since the implementation of the parking restrictions west of Norfolk Street, the number of vehicles parking on Norfolk Street had increased and were beginning to create issues relating to entering and exiting side streets. Both the comments requested that parking restrictions be introduced on Norfolk Street. Norfolk Street is located outside of the original 2016 survey area and, as a result, parking occupancy data was not recorded during this survey. Surveys undertaken by the City demonstrated that this section of Norfolk Street recorded an average occupancy of 13 percent and a peak occupancy of 20 percent.

The City also received feedback from a community member regarding parking on Wasley Street, east of Norfolk Street. The feedback explained that cars had been parking on both sides of the road which makes it difficult for traffic to travel through. A request was received to implement ‘No Parking’ on one side of the street to allow vehicles to pass each other safely. Surveys undertaken by the City demonstrated that this section of Wasley Street recorded an average occupancy of 16 percent and a peak occupancy of 25 percent. Further analysis also identified that Wasley Street demonstrated a width of 8 metres with minimal crossovers in the northern section.

The City did not receive any feedback from the community regarding Forrest Street, however given its location in between Both Alma Road and Wasley Street it was seen as appropriate to survey Forrest Street to ensure there was not an anomaly occurring. The surveys demonstrated that all three streets were consistent, with Forrest Street demonstrating an average occupancy of 15 percent and a peak occupancy of 25 percent.

All four of the streets listed above demonstrated average occupancies of 15 percent or less and peak occupancies of 25 percent or less. The City’s Category Matrix demonstrates where peak parking occupancy is less than 60 percent no parking restrictions should be implemented. All of those street are considered to have currently low enough parking rates to support parking on both sides of the road. Given the above it is not recommended that parking restrictions be introduced on Alma Road, Forrest Street, Norfolk Street or Wasley Street at this stage.

6. Local Employee Parking

The City received feedback from a local business owner explaining that the recently implemented parking restrictions were not providing parking suited to the needs of local businesses and their employees. The business owner recommended that free commercial parking permits should be provided to allow local businesses and employees to continue to work and operate within the North Perth Town Centre.

Council resolved to adopt five hour parking restrictions on streets located further from the town centre to allow for some limited employee parking while discouraging long stay employee and commuter parking for those seeking to access local bus routes to the CBD. The City also has commercial parking permits available for purchase in accordance with the City’s Policy No. 3.9.3 – Parking Permits to allow employee parking to occur in appropriate locations. In conducting the six month review, the City considered the cost and availability of commercial parking permits to be appropriate to meet the needs of local businesses given the availability of alternative transport modes for local employees to access the North Perth Town Centre. On this basis it is not recommended that free commercial parking permits be provided to businesses.

Consultation/Advertising:

No formal consultation was undertaken during the six months since implementation, however the City received eight comments from the local community. A summary of these comments and the City’s response is included as Attachment 3.

Legal/Policy:

· Local Government Act 1995;

· City of Vincent Parking and Parking Facilities Local Law 2007; and

· Town of Vincent – Car Parking Strategy 2010.

Risk Management Implications:

Nil.

Strategic Implications:

The City of Vincent Corporate Business Plan 2016/2017 – 2019/2020 states:

“8. Creating Liveable Neighbourhoods

8.4 Prepare a Transport Strategy and Implement the North Perth Parking Study.”

The City’s Strategic Plan 2013 – 2023 states:

“1.1.5 Take action to improve transport and parking in the City and mitigate the effects of traffic.”

The City’s Car Parking Strategy 2010 states:

“Objective 7

· Ensure sufficient parking supply to support prosperous and vibrant commercial and high activity centres; and

· Ensure parking space availability is managed according to the varying needs of businesses, customers and commuters.”

SUSTAINABILITY IMPLICATIONS:

The City’s Sustainable Environment Strategy 2011 – 2016 states:

“1.13 Employ a demand management approach to car parking within the City to encourage the use of alternative transport modes.”

Financial/Budget Implications:

The costs associated with advertising the proposed parking restrictions will be met by the City’s existing operational budget.

Comments:

The town centre parking occupancy surveys showed that the majority of streets demonstrated a reduction in the peak occupancy following the implementation of the parking restrictions. As a result, it is considered that the parking restrictions are successfully managing parking supply and demand in the town centre.

The City received comments from local businesses and residents regarding a number of streets within and outside of the study area. It is recommended that Council advertises proposed parking restrictions on Pansy Street and the Pansy Street Car Park and modified parking restrictions on a portion of Vine Street, as shown in Attachment 4 and Attachment 5 respectively, for the purpose of advertising for public comment. Following advertising of the proposed parking restrictions the results of the public consultation will be presented back to Council for consideration.

It is acknowledged that parking use and demand continuously evolves over time, so the City must monitor parking occupancy to ensure that restrictions are working effectively. Administration will include a project for Council to consider as part of the 2018/19 – 2022/23 Corporate Business Plan and 2018/19 Budget to periodically survey car parking in North Perth and across the City.

Council Briefing Agenda 27 March 2018

7 Corporate Services

7.1 Review of Corporate Services Policies

TRIM Ref: D18/854

Author: Tim Evans, Manager Governance and Risk

Authoriser: Kerryn Batten, Director Corporate Services

Attachments: 1. Policies for re-adoption without amendments ⇩

2. Policies for re-adoption with minor amendments ⇩

Recommendation:

That Council:

1. READOPTS the following existing policies without amendment as shown in Attachment 1:

ITEM	POLICY NUMBER	POLICY
1.1	4.1.4	Freedom Of Information Requests
1.2	4.1.27	Disaster Appeals – Donations and Assistance
1.3	4.1.33	Third Party Mediation - Citizens Advice Bureau
1.4	4.2.1	Legal Representation for Council Members and Employees
1.5	4.2.10	Business Dealings with the City - Council Members and Employees

2. READOPTS the following existing policies with minor amendments as shown in Attachment 2:

ITEM	POLICY NUMBER	POLICY
2.1	4.1.10	Execution of Documents
2.2	4.2.7	Council Members – Allowances, Fees and Reimbursement of Expenses

3. RESCINDS the following policies:

ITEM	POLICY NUMBER	POLICY
3.1	4.1.8	Nuclear Free Zone
3.2	4.1.12	Newsletters
3.3	4.1.14	Primary and Annual Returns
3.4	4.1.13	Official Photograph - Council, Mayor, Councillors and Senior Officers
3.5	1.2.6	Plant and Vehicles – Sale of
3.6	1.2.7	Loan of City Items
3.7	1.2.8	Corporate Credit Cards
3.8	1.2.11	Parent and Citizens’ Associations – Financial Assistance
3.9	4.1.19	Community Facility - Use other than Primary Designated Purpose
3.10	4.1.34	Relationship Declaration Register
3.11	4.2.11	Honorary Freeman of the City of Vincent

; and

4. AMENDS BY ABSOLUTE MAJORITY the Schedule of Fees and Charges 2017/2018, in accordance with Section 6.16(3)(b) of the Local Government Act 1995, to delete the following fees:

4.1 Application fee to make a Relationship Declaration;

4.2 Replacement of Declaration Certificate; and

4.3 Certified Copy of entry – Relationship Declaration Register.

Purpose of Report:

To review and adopt existing Council policies, which are due for periodic review.

Background:

Council adopts various policies which provide guidance to Administration on a range of issues and assist Council in its decision making. Policies are reviewed and/or amended from time to time as the need arises. It is good practice to review policies at regular intervals and the City generally undertakes this every five years.

Details:

Administration has reviewed the "Corporate Services" suite of policies and has identified a number of policies that are due for review. These are listed below along with one of three proposed actions – either to readopt without amendment (READOPT), to rescind the policy (RESCIND) or to readopt with minor amendments (AMEND) along with a brief commentary on each policy:

Policy No	Policy Name	Action	Commentary
4.1.4	Freedom of Information (FOI) Requests	READOPT	This policy provides clear direction to Administration as to when an FOI application fee may be waived.
4.1.8	Nuclear Free Zone	RESCIND	Administration is not aware that this Policy has never been used in its 23 year existence and is therefore considered unnecessary. Importantly, rescinding this policy does not change the fact that Council's position with respect to the City being nuclear free will survive in the form of the Council resolution of 24 July 1995 unless otherwise determined by Council. The City’s website will be updated to include reference to the City’ position on this issue to ensure that it remains current and discoverable.
4.1.10	Execution of Documents	AMEND	Clarification has been added to note that where the City is in control of Crown Land, any Development Applications relating to that Crown Land must be signed by the CEO.
4.1.12	Newsletters	RESCIND	The issuing of Newsletters is considered to be an operational matter that can be dealt by the CEO in liaison with the Mayor. It is not considered that a policy is necessary.
4.1.13	Official Photograph - Council, Mayor, Councillors and Senior Officers	RESCIND	Administration considers that this policy is unnecessary as the City moves away from a more formal shoot approach, and is working with Council to have photography done that matches their style/lifestyle/brand. Administration will continue, as part of general work practises, to have a formal portrait hung of the Mayor.
4.1.14	Primary and Annual Returns	RESCIND	This policy re-states the legislative requirement to complete Primary and Annual Returns and is not considered to be necessary.
4.1.19	Council Community Facility - Use other than Primary Designated Purpose	RESCIND	Administration does not consider it necessary for all applications for use other than primary designated purpose to come to Council and considers that this can be satisfactorily dealt with through the City's bookings and events team processes. Administration will still require community consultation to be carried out if a use may impact on residents and the Director Community Engagement and CEO will use their discretion to report any significant or controversial uses to Council.

4.1.27	Disaster Appeals - Donations and Assistance	READOPT	This policy sets out appropriate financial limits to financial and non-financial support for disaster appeals. While the policy is unchanged, the amounts stated have been updated to reflect CPI to July 2017. CPI changes to values in policies do not require Council approval, pursuant to clause 5 of Policy 4.1.1.
4.1.33	Third Party Mediation - Citizens Advice Bureau	READOPT	This policy sets out circumstances when residents should be referred to the Citizens Advise Bureau (CAB) by the City and also affirms a principle that the City will subsidise CAB services.
4.1.34	Relationship Declaration Register	RESCIND	This policy was adopted in December 2012 in order to provide a means for couples to have their relationships recognised, regardless of sexual orientation. On 7 December 2017, the Federal Parliament legislated for marriage equality. As a consequence, the Relationship Declaration Register is no longer considered to be a necessary mechanism for the declaration of relationships. This is discussed further in the “Comments” section of this report.
4.2.1	Legal Representation for Council Members and Employees	READOPT	This policy sets out the circumstances under which the City will contribute to legal fees for employees and staff. While the policy is unchanged, the amounts stated have been updated to reflect CPI to July 2017.
4.2.7	Council Members – Allowances, Fees and Reimbursement of Expenses	AMEND	This policy requires minor amendment to delete section 1.4 – Acting Roles. Administration is also proposing that attendance at Regional Councils meetings be explicitly added to the list of functions for which expenses can be reimbursed. These minor amendments are discussed in the COMMENTS section of the report.
4.2.10	Business Dealings with the City - Council Members and Employees	READOPT	This policy sets out an appropriate methodology for treatment of business dealings with the City by Council Members and employees.
4.2.11	Honorary Freeman of the City of Vincent	RESCIND	Under the former Local Government Act (1960), a local government was able to confer upon any person the title of "Honorary Freeman of the Municipality", although title did not grant any right or privilege other than that of being so designated. Since the Local Government Act 1995 was introduced, there has been no legislative basis for the title. The City only adopted its policy in February 2010 but the policy has not been used and the title has not been awarded in that time. This historic practice is now considered unnecessary.
1.2.6	Plant and Vehicles – Sale of	RESCIND	This policy is no longer required as s.3.58 of the Local Government Act 1995 is clear on the process that is to occur in regards to the disposal of Plant and Vehicles.
1.2.7	Loan of City Items	RESCIND	This policy is no longer considered appropriate. It is recommended that any applications for in-kind support such as the loan of city items are made through the City's community funding program (see Policy 3.10.11), where all funding and in-kind support can be properly tracked and accounted for.
1.2.11	Parent and Citizens’ Associations – Financial Assistance	RESCIND	Policy no longer required, Where appropriate Capital requests should be made through the Community Budget Submission process and minor contributions through the Community Grants process.

Consultation/Advertising:

Public consultation relating to policies is only required for new policies or where significant amendments are being proposed. This is not the case for the purposes of this report.

Legal/Policy:

Policies are not legally enforceable, however they provide guidance to the City's Administration and Council Members when considering various matters. The City's code of conduct requires that employees adhere to all City policies.

Risk Management Implications:

Low: Failure to review Council policies will not result in any breach of legislation. However, the routine review and re-adoption of policies will improve the relevancy of information available to Council, Administration and the community.

Strategic Implications:

This matter is in keeping with the Strategic Plan 2013-2017– Key Result Area “4: Leadership, Governance and Management: 4.1.2 – Manage the Organisation in a responsible, efficient and accountable manner”.

SUSTAINABILITY IMPLICATIONS:

Maintaining a current and up-to-date suite of policies serves to ensure that the City's practices are operating effectively and may enhance sustainability.

Financial/Budget Implications:

Nil.

Comments:

The report seeks to deal only with readopting / rescinding Corporate Services policies that are due for review and/or where Administration considers that the proposed action is relatively straightforward in nature. Policies that require more detailed consideration will be dealt with in more detail and will involve more detailed liaison and consultation with Council Members.

Administration considers that the policies listed for readoption without amendment are working effectively and is seeking Council's endorsement of its recommendation to readopt these policies without amendment.

Administration is proposing that a number of policies be rescinded. The reason behind each of these policies is explained in the table in the DETAILS section of this report. Typically, this has been recommended where either the policy is no longer considered to be necessary or appropriate (e.g. Loan of City Items Policy), or where Administration considers that the matter is primarily operational in nature and therefore best dealt with by an Administration Procedure (e.g. Newsletters Policy).

4.1.34 - Relationship Declaration Register

It is worth noting that on 18 December 2012, the City of Vincent established Western Australia’s first Relationship Declaration Register (the Register) enabling couples, regardless of sexual orientation, an opportunity to formally recognise their relationship. The Register was introduced largely as a symbol of the City’s support of marriage equality. It is considered that the Register, and the supporting policy, have played an important role both in recognising relationships of all types and also in expressing Council’s position on marriage equality.

The Australian Marriage Law Postal Survey was held between 12 September and 7 November 2017 following an increase in popular support for same-sex marriage in Australia. The City of Vincent demonstrated its continued support of same-sex marriage on 18 November 2014 and again on 22 August 2017 when Council resolved as follows:

“That Council:

1. NOTES its public support for marriage equality was first demonstrated in December 2012 with the establishment of Western Australia’s first Relationship Declaration Register, providing all couples, regardless of sex and gender identity, with a formal recognition of their committed relationship;

2 NOTES its commitment to marriage equality was reaffirmed with the adoption of a Marriage Equality Proclamation at the Ordinary Meeting of Council on 18 November 2014;

3. REAFFIRMS its strong support for marriage equality on the basis that a committed relationship between two loving adults, regardless of sex and gender identity, deserves to be respected and recognised in the Australian Marriage Act 1961; and

4. APPROVES the flying of rainbow flags in place of the City of Vincent's corporate flag at the City's Administration and Civic Centre and at Axford Park for the duration of the Australian Marriage Law Postal Survey, from the close of enrolments to one week following the date of the survey results being published.”

On 7 December 2017, Parliament passed the Marriage Amendment (Definition and Religious Freedoms) Bill 2017 which amended the Marriage Act 1961 to allow couples to marry, regardless of gender. As a consequence, Administration considers that the primary purpose of the Register has been served and is now superseded. As a consequence, Administration is therefore recommending that this policy be rescinded, but that the existing register and the relationship declarations contained within it be kept in perpetuity. No new applications for inclusion on the Register would be accepted, nor would the City continue to offer replacement Declaration Certificates. However, parties to a relationship that are already on the Register would still be able to request that the City amends the Register to show that a relationship has been terminated.

If this policy is rescinded then it is also appropriate to delete the fees relating to making a Relationship Declaration from the City’s schedule of fees and charges.

Two policies are being recommended for readoption with minor amendments. The proposed amendments to each of these policies is explained below:

Policy 4.1.10 - Execution of Documents

The policy specifies that "Documents required in the management of land as a landowner" are able to be executed by either the CEO or the Director Corporate Services. However, Administration notes that the Minister for Lands Instrument of Authorisation dated 2 June 2016 specifies that a Development Application on any crown land managed by a local government can be signed only by the CEO of that local government. A note of clarification has been added to the policy to this effect.

Policy 4.2.7 - Council Members Allowances, Fees and Reimbursement of Expenses

Administration is proposing to delete clause 1.4 of this policy which relates to additional payments when undertaking an "Acting Role". The Salaries and Allowance Tribunal sets maximum limits on the allowances that may be paid to Mayors, Deputy Mayors and Councillors. The Local Government Act 1995 does not provide the scope for any Council Member to receive any additional allowance or payment than that maximum regardless of whether they take on any of the functions of the Mayor or Deputy Mayor in their absence. Similarly, there are no provisions under the Act requiring any Council Member on leave of absence forgo any part of their annual allowance. As a consequence, Administration is of the view that section 1.4 of the policy is inconsistent with the Act and should therefore be deleted. Advice received from the Department of Local Government on this matter supports Administration's view.

Administration is also proposing to add attendance at Regional Council meetings to the list of functions for which expenses may be reimbursed. The policies of both the Mindarie Regional Council and Tamala Park Regional Council state that member Councils will be responsible for expenses claims. Notwithstanding any debate as to which body should be responsible for member expenses, Administration has to-date considered that these expenses meet the definition of clause 3(f) – "Any other occasion in the performance of an act under the express authority of Council.". Nevertheless, it would be provide greater clarity to Administration if Regional Council meeting were expressly added to the list of approved functions.

Administration is aware of a number of other policies that require review. This report is intended to be the first in a series that will endeavour to ensure that the City's policies are reviewed in a timely fashion. Once Council makes a decision on the status of these policies, the City's policy manual will be updated accordingly.

Council Briefing Agenda 27 March 2018

7.2 Lease of Leederville Oval by East Perth Football Club Inc & Subiaco Football Club Inc - request for waiver and write-off of fees and variation of leases

TRIM Ref: D18/23627

Author: Meluka Bancroft, Property Leasing Officer

Authoriser: Kerryn Batten, Director Corporate Services

Attachments: 1. Summary of write off of 2014-15 and 2015-16 turf maintenance costs & outstanding balance ⇩

2. Summary of waiver of 2016-17 turf & VO costs & balance outstanding ⇩

Recommendation:

That Council:

1. APPROVES a write-off of a portion of turf maintenance recoupments for both East Perth Football Club Inc and Subiaco Football Club Inc, as listed in Attachment 1, and being:

(a) $2,178.18 (incl GST) for the period January to June 2015; and

(b) $5,687.48 (incl GST) for the 2015/16 financial year;

for the reasons outlined in this report, SUBJECT TO immediate payment of the outstanding turf maintenance balance for the above periods by each club, being:

(i) $19,398.20 for East Perth Football Club Inc: and

(ii) $16,202.20 for Subiaco Football Club Inc.

2. APPROVES a waiver of variable outgoings, turf maintenance and utility recoupments for both East Perth Football Club Inc and Subiaco Football Club Inc for the 2016/17 financial year totalling $29,839.87 (incl GST), as listed in Attachment 2, for the reasons outlined in this report, SUBJECT TO immediate payment of the outstanding balance for that period by each club, being $38,145.74 each.

3. NOTES that East Perth Football Club Inc and Subiaco Football Club Inc have paid all variable outgoings, turf maintenance and utility costs as invoiced by the City for the 2017/18 financial year.

4. APPROVES a variation of the lease with East Perth Football Club Inc (the Club) in respect to Leederville Oval, located at 244 Vincent Street, Leederville, to reflect the proposed future apportionment of turf maintenance costs as follows:

4.1. Clauses 6.19(c)(ii) and (iii) to be deleted; and

4.2. A new clause 6.19(c)(ii) to be inserted as follows:

“The annual cost of the maintenance of the oval as referred to in clause 6.19(c)(i) will be shared equally between the City (formerly the Town), Subiaco Football Club Inc and the Club. The costs will be paid by Subiaco Football Club and the Club in the same manner as the variable outgoings, as set out in clause 3.3.”

5. APPROVES a variation of the lease with Subiaco Football Club Inc (the Club) in respect to Leederville Oval, located at 244 Vincent Street, Leederville, to reflect the proposed future apportionment of turf maintenance costs as follows:

5.1. Clauses 6.19(c)(ii) and (iii) to be deleted; and

5.2. A new clause 6.19(c)(ii) is inserted as follows:

“The annual cost of the maintenance of the oval as referred to in clause 6.19(c)(i) will be shared equally between the City (formerly the Town), East Perth Football Club Inc and the Club. The costs will be paid by East Perth Football Club and the Club in the same manner as the variable outgoings, as set out in clause 3.3.”

6. Subject to final satisfactory negotiations being carried out by the Chief Executive Officer, AUTHORISES the Mayor and Director Corporate Services to affix the common seal and execute the variation of leases as set out in 4. and 5. above.

Purpose of Report:

To detail activities, including the waiving and writing-off of a portion of turf maintenance and utility costs payable by East Perth Football Club Inc and Subiaco Football Club Inc, which will facilitate the transition towards full compliance with the lease terms, including as varied in respect to the turf maintenance apportionment, from 2017/18 onwards, and the payment of all remaining outstanding costs.

Background:

At the Ordinary Meeting of Council held on 26 October 2004 (Item 10.4.9) Council approved the long term use of Leederville Oval by East Perth Football Club Inc (EPFC) and Subiaco Football Club Inc (SFC) (collectively, the Clubs). Each Club’s lease is dated 18 February 2005 and is for a term of 21 years, commencing on 1 November 2004, and has a further 9 year option term commencing on 31 October 2025 (Leases). The Clubs also have the right to use a number of the car parking bays adjacent to Leederville Oval pursuant to the licence at Annexure B of each Lease. A Memorandum of Understanding (MoU) between the City and the Clubs is also annexed to the Lease as Annexure C and addresses issues associated with the shared use, management and maintenance of the stadium and turf at Leederville Oval.

The Lease provides the Clubs with exclusive use of their respective clubrooms and change rooms. The Lease also provides the Clubs with non-exclusive, but preferential use of the common areas (which are all parts of the land and building not leased by the Clubs, but does not include the first floor function / bar area). The Leases provide that the Clubs can use the function / bar area if approved by the City, and the Clubs will be granted priority use on training and match game days. The City may hire out the function / bar area and the income received will be offset against the costs incurred in respect to the building.

In 2014/15 Administration became aware that the City had not administered the Leases strictly in accordance with the Lease provisions, since the Leases commenced in 2004. Subsequent to this discovery, Administration and the Clubs have been discussing and negotiating the future use of Leederville Oval and the payment of costs as set out in the Leases, with the intention of bringing the management of Leederville Oval back in line with the terms of the Leases, or if that is not possible, varying the Leases to reflect a new arrangement that satisfies both the Clubs and the City. Administration and the Clubs have now reached consensus in respect to the future payment of costs. In recognition of the increased cost implications this arrangement will have for the Clubs, Administration is proposing an arrangement to enable the Clubs to transition to full lease compliance. The proposed waiver and write-off described in this paper are key components of this transitional arrangement, and are subject to the Clubs immediately paying in full all outstanding balances and continuing to pay all 2017/18 costs.

Lease Obligations

The Lease obligations which are relevant to the proposed write-off and waiver are set out in 1. and 2. below:

1. Variable Outgoings and Utilities:

The Leases provide that all costs and charges incurred by the City in relation to the land and the buildings located on the land (but not in relation to the premises), and excluding any cost, charges and expenses which are of a capital nature, are recoverable from the Clubs via the payment of variable outgoings (VOs).

Each Club’s proportion of the VOs is calculated as the total of:

(a) One half of the Building Section Proportion of the VOs;

(b) One half of the Oval Section Proportion of the VOs; and

In addition, the VOs include the following costs and charges associated with the areas of the land and buildings which are not leased by the Clubs:

· Insurance premiums (building insurance, contents insurance in respect to City’s fixtures and fittings);

· Cleaning costs;

· Pest inspection and treatment;

· Utilities including electricity and gas for services;

· Running and maintaining all services, including air conditioners;

· Maintaining and monitoring all fire equipment;

· Maintenance of gardens, oval, landscaped areas, bore and reticulation; and

· General maintenance and upkeep of the buildings.

In calculating the Club’s proportion of the VOs the City first applies the annual revenue, less related expenses, earned by the City from Leederville Oval, to the respective calculations. The City currently receives nominal payments from the TAFE for use of Leederville Oval and this is credited towards the Oval Section Proportion of the VOs. Any income the City receives through hiring out the function/ bar area would be credited towards the Building Section Proportion of the VOs.

Clause 3.6 of the Leases provides that the Clubs must also pay all charges for water consumption, gas, electricity, fuel, telephone and other services, utilities or facilities directly relating to the Premises or the use or occupation of the Premises. In calculating the proportion of these charges the Clubs must pay, the City will take into account any use of the land or buildings by groups other than the Clubs, and the City will pay for these costs. As the City has not used or hired out the function/ bar area all utility costs for the building should be apportioned equally between the Clubs.

Therefore the apportionment of the key costs (after deducting associated income derived) would be as follows:

	SFC	EPFC	City
Building Insurance	50%	50%	0%
Emergency Services Levy	50%	50%	0%
Water	50%	50%	0%
Electricity	50%	50%	0%
Variable outgoings	50%	50%	0%

2. Turf maintenance

The Leases provide that the City is responsible for organising the maintenance of the Oval and is required by clause 6.19(c) to call for tenders for the maintenance of the Oval to playing standard. Clause 6.19(c)(ii) of the Leases provides that the City must annually pay the first $15,000 (subject to annual CPI increase) of the cost of the maintenance of the Oval. The remaining cost for the maintenance of the Oval is to be paid equally by the Clubs.

Lease Administration

Administration notes that the City has not administered the Leases strictly in accordance with the Lease provisions since 2004.

In respect to turf maintenance, the cost has been equally shared between the City and the two Clubs, which is contrary to the terms of the Leases.

Prior to 2015/16, the City has historically recouped the following proportion of costs from the Clubs:

Costs to be recouped	SFC	EPFC	City
Building Insurance	35%	35%	30%
Emergency Services Levy	0%	0%	100%
Water	30%	30%	40%
Electricity	20% (approx.)	20% (approx.)	60% (approx.)
Turf Maintenance	33.3%	33.3%	33.3%
Variable Outgoings (general maintenance, upkeep of oval)	0%	0%	100%

Notably, prior to 2017/18, the City has not recouped any costs associated with a number of charges including:

· General upkeep and maintenance of Leederville Oval;

· Cleaning of eastern public toilets; and

· Maintenance of oval surrounds.

Administration has communicated the above information to the Clubs with the intention of bringing the relationship back in line with the Leases and MoU and to negotiate any formal amendments to the Leases required to meet the Club’s future needs.

Details:

The Clubs and Administration have agreed that the lease obligations, as explained above, do not completely reflect the current use of Leederville Oval. Given that the Clubs are the sole users of the building it has been agreed that VOs and utility costs should be apportioned in accordance with the Lease, which is equally between the Clubs once any hire income is offset. In respect to the use of the oval, Administration is seeking broader community utilisation and therefore has agreed that turf maintenance should be apportioned one-third each, on the basis that Leederville Oval is available for use by the public when not required for games or training. This change will result in a cost increase for the Clubs, as shown by the table below, which compares the actual costs paid or agreed to be paid by each Club in 2015-16 and 2016-17, and the agreed costs to be paid this financial year (which are currently being paid by monthly instalments).

*LEEDERVILLE OVAL COSTS FOR EACH CLUB (incl GST)*
Item	2015/16	2016/17	Estimate for 2017/18
Turf maintenance	$31,300.52	$36,499.87	$36,785.00
Variable Outgoings	0	$1,883.50	$6,602.00
Building Insurance	$5,328.00	$5,685.20	$6,129.00
Emergency Services Levy	$3,315.50	$3,535.36	$3,719.00
Water	$6,903.08	$6,063.86	$13,799.00
Power	$17,160.81	$19,606.00	$42,878.00

TOTALS	$64,007.91	$73,273.79	$109,912.00

Given the cost increase between 2015/16 and 2017/18, it is proposed that a transitional arrangement is applied in 2016/17 to allow the Clubs to adjust to the cost increase. It is noted that the Clubs are paying the estimated cost for 2017/18 by monthly instalments, as provided for in the Leases, and are up to date with all payments.

1. Proposed write-off

Administration adjusted turf maintenance costs in January 2015 to reflect the Lease terms (City paid $15,000 indexed for the financial year, and balance apportioned equally between the Clubs). As the Clubs and Administration have now agreed that turf maintenance is to be apportioned one-third each (as occurred since the Lease commenced in 2004, albeit the Lease provisions) it is necessary for Administration to write-off the difference between the amounts invoiced using the Lease apportionment and the amounts to be recouped in accordance with the one-third each apportionment, as set out in Attachment 1.

A summary of the write-off related to turf maintenance is below:

*Jan 2015- June 2015*	EPFC	SFC
Amount invoiced (Lease apportionment) (incl GST)	$16,398.42	$16,398.42
Amount payable (one-third apportionment) (incl GST)	$14,220.26	$14,220.26
Difference (amount to be written off) (incl GST)	$2,178.18	$2,178.18

*July 2015 - June 2016*	EPFC	SFC
Amount invoiced (Lease apportionment) (incl GST)	$36,987.96	$36,987.96
Amount payable (one-third apportionment) (incl GST)	$31,300.52	$31,300.52
Difference (amount to be written off) (incl GST)	$5,687.48	$5,687.48

2. Proposed waiver – utilities and variable outgoings

In recognition of the increased cost of utilities and variable outgoings expenses that will result for the Clubs, Administration confirmed in a letter dated 16 March 2017 that a 50 per cent discount would be applied to any ‘new’ costs or apportionment of costs arising during the 2016-17 financial year, as part of a transition to lease compliance.

The ‘new’ costs are:

· Variable Outgoings – have not been previously paid by Clubs;

· Water – apportionment of charge has significantly changed; and

· Power – apportionment of charge has significantly changed.

As these costs are yet to be invoiced, Administration is requesting Council approval of a waiver of 50 per cent of these ‘new’ costs as explained below and set out in Attachment 2.

A summary of the waiver is set out below:

Item	Total cost	Amount to be recouped from each Club pursuant to Lease	Amount to be recouped from each Club ( - 50% discount for 'new' costs)*
Turf maintenance	$109,499.63	$38,786.39	$36,499.87
Variable outgoings (maintenance and statutory compliance costs)	$7,533.98	$3,766.99	$1,883.50*
Building Insurance	$11,370.40	$5,685.20	$5,685.20
Emergency Services Levy	$7,685.57	$3,535.36	$3,535.36
Water	$24,255.44	$12,127.72	$6,063.86*
Power	$78,424.01	$39,212.00	$19,606.00*

*TOTALS*	$238,769.03	$103,113.66	$73,273.79
*Difference (requested waiver for each Club) (incl GST) =*		$29,839.87

3. Variation of Leases – turf maintenance

In order to formalise the one-third each apportionment of turf maintenance costs it is necessary for clauses 6.19(c)(ii) and (iii) of the Leases to be replaced, as shown below:

“(i) The Town will call for tenders for the annual maintenance of the part of the Land which comprises the oval including keeping the playing surface in prime condition to a standard required for the Club’s and other similar professional sports bodies’ requirements.

(ii) The Town will pay an amount of $15,000 per annum towards the maintenance costs referred to in paragraph 6.19(c)(i). The Town’s contribution will be increased each year on the anniversary of the Commencement Date by a factor equal to the percentage increase in the Consumer Price Index between the Consumer Price Index published for the quarter ending immediately prior to the previous anniversary of the Commencement Date (or the Commencement Date in the case of the first anniversary of the Commencement Date) and the quarter ending immediately prior to the current anniversary of the Commencement Date.

(iii) The Club will pay one half of the balance of the annual costs of the maintenance referred to in clause 6.19(c)(i) to the Town upon demand, and the Town will seek payment of the remaining half from EPFC.

(ii) “The annual cost of the maintenance of the oval as referred to in clause 6.19(c)(i) will be shared equally between the City, Subiaco Football Club Inc and East Perth Football Club Inc. The costs will be paid by the Clubs in the same manner as the variable outgoings, as set out in clause 3.3.”

Consultation/Advertising:

Administration has met with the Clubs on a number of occasions to discuss the outstanding costs and lease provisions. The Clubs are in agreement with Administration’s proposal to bring the arrangement in line with the Leases, and have paid all VO instalments for the 2017/18 financial year to date.

Legal/Policy:

Varying the apportionment of turf maintenance costs is a variation of the Leases and requires the preparation of a Deed of Variation of Lease, which must be signed and sealed by all parties. A Deed of Variation of Lease is categorised as a Category 1(a) document pursuant to the City’s Policy 4.1.10 – Execution of Documents. As a consequence, the approval of the Deed of Variation of Lease is a decision reserved for Council.

The City’s Delegated Authority Register 2017-18, which was adopted at the Ordinary Meeting of Council held on 27 June 2017, provides that the Chief Executive Officer can waive fees or write off money subject to the amount not exceeding $1,000. As the amounts proposed to be waived and written off exceed $1,000 it is necessary for Council to make this decision.

Risk Management Implications:

Low / Med Administration and the Clubs have reached agreement on the use and management of Leederville Oval moving forward, and the Clubs have to date paid all 2017/18 VO and turf maintenance costs as agreed. Waiving and writing off the fees as requested by the Clubs will assist in the transition towards lease compliance and on that basis it is deemed to have a medium risk for the City.

The proposed variation of the Leases will formalise the proposed one-third apportionment of turf maintenance costs and therefore it has a low risk for the City.

Strategic Implications:

The outcomes associated with this Report align with the following Objectives in the City’s Strategic Community Plan 2013-2023:

“2.1 Progress economic development with adequate financial resources.

2.1.2 Develop and promote partnerships and alliances with key stakeholders.

2.1.3 Develop business strategies that reduce reliance on rates revenue.

3.1 Enhance and promote community development and wellbeing

3.1.6 Build capacity within the community to meet its needs.

4.1 Provide good strategic decision-making, governance, leadership and professional management

4.1.2 Manage the organisation in a responsible, efficient and accountable manner.

4.1.5 Focus on stakeholder needs, values, engagement and involvement.”

SUSTAINABILITY IMPLICATIONS:

Not applicable.

Financial/Budget Implications:

Administration is requesting the following write-off and waiver of fees:

*Write-off / Waiver*	EPFC	SFC	*TOTAL*
Write-off Jan-June 2015 turf maintenance costs (incl GST)	$2,178.18	$2,178.18	$4,356.36
Write-off 2015/16 turf maintenance costs (incl GST)	$5,687.48	$5,687.48	$11,374.96
Waiver of 2016-17 utility and turf maintenance costs (incl GST)	$29,839.87	$29,839.87	$59,679.74
TOTAL	$37,705.53	$37,705.53	*$75,411.06*

The Clubs have agreed to immediately pay the outstanding turf maintenance and utility costs if the above write-off and waiver is approved by Council, as set out below:

*Outstanding costs*	*SFC*	*EPFC*
Jan-Jun 2015 & 2015-16 turf maintenance	$16,202.20	$19,398.14
2016-17 turf and utility costs	$38,145.74	$38,145.74
TOTAL	$54,347.94	$57,543.88

This will result in no further costs being outstanding for the 2015/16 and 2016/17 financial years. Administration also notes that the Clubs have paid all VO and turf maintenance instalments for 2017/18 as agreed with the City.

Comments:

Administration and the Clubs have been discussing and negotiating the future use of Leederville Oval and the payment of costs as set out in the Leases since 2014/15, with the intention of bringing the management of Leederville Oval back in line with the original terms of the Leases, or if that is not possible, varying the Leases to reflect a new arrangement that satisfies both the Clubs and the City.

The Clubs have agreed with the proposed resolution in this report and Administration considers that this is a reasonable outcome for the City and for the Clubs, and will allow facilitation to full lease compliance, as varied in respect to the turf maintenance apportionment, as soon as practical.

It is noted that in the spirit of working towards full compliance, the Clubs are up to date with the payment of all lease costs for the 2017/18 financial year.

The Clubs have also confirmed that the outstanding turf maintenance balance ($19,398.20 for EPFC and $16,202.26 for SFC) and the outstanding balance of all other costs for 2016/17, which is $38,145.74 for each Club, will be paid in full immediately if the write-off and waiver is approved by Council.

Administration recommends that Council approves the proposed write-off and waiver as recommended in order to establish a strong and collaborative approach with the Clubs, bring the payment of all outstanding costs up to date, and enable both the City and Clubs to move forward in relation to the use of Leederville Oval.

Finally, Administration notes that the City is embarking on the Leederville Oval Master Plan in the 2018/19 financial year. This may result in further changes to the Clubs’ use of Leederville Oval, and potentially could require further variations to the Leases or a new lease / use arrangement. Administration will keep Council informed in respect to any changes.

Council Briefing Agenda 27 March 2018

7.3 Investment Report as at 28 February 2018

TRIM Ref: D18/34570

Author: Sheryl Teoh, Accounting Officer

Authoriser: Kerryn Batten, Director Corporate Services

Attachments: 1. Investment Report ⇩

Recommendation:

That Council NOTES the Investment Report for the month ended 28 February 2018 as detailed in Attachment 1.

Purpose of Report:

To advise Council of the level of investment funds and operating funds available, the distribution of surplus funds in investments and the interest earned to date.

Background:

Surplus funds are invested in Bank Term Deposits for various terms, to maximise investment returns in compliance with good governance, legislative requirements and Council’s Investment Policy No 1.2.4. Details are attached in Attachment 1.

The City’s investment portfolio is diversified across several financial Institutions in accordance with the Investment Policy.

Details:

Total funds held for the period ended 28 February 2018 including on call in the City’s operating account were $39,217,278; compared to $34,028,716 for the period ending 28 February 2017.

Total Investments for the period ended 28 February 2018 were $36,665,928 as compared to $36,147,499 for the prior month end; and $32,316,251 for the period ending 28 February 2017.

Investment comparison table:

Month	2016/17		2017/18
Ended	Total Funds Held	Total Investments	Total Funds Held	Total Investments
July	$19,683,412	$18,420,252	$23,433,728	$21,212,649
August	$26,167,645	$22,573,297	$30,161,860	$27,714,651
September	$36,754,571	$34,302,896	$40,305,364	$37,944,911
October	$37,581,885	$34,521,542	$41,087,462	$38,947,823
November	$37,034,885	$35,775,011	$41,716,473	$39,482,047
December	$33,692,431	$31,165,443	$38,768,084	$37,065,389
January	$34,645,041	$33,201,749	$39,498,741	$36,147,499
February	$34,028,716	$32,316,251	$39,217,278	$36,665,928
March	$32,070,200	$31,424,409
April	$30,661,122	$26,206,328
May	$27,412,051	$25,718,292
June	$24,670,461	$23,533,279

Total accrued interest earned on Investments as at 28 February 2018:

	Adopted Budget	YTD Budget	YTD Actual	% of YTD Budget
Municipal	$414,960	$306,590	$349,505	114.00%
Reserve	$258,420	$161,740	$159,310	98.50%
Sub-total	$673,380	$468,330	$508,815	108.64%
Leederville Gardens Inc Surplus Trust*	$0	$0	$93,656	0.00%
Total	$673,380	$468,330	$602,471	128.64%

*Interest estimates for Leederville Gardens Inc Surplus Trust were not included in the 2017/18 Budget as actual interest earned is held in Trust and restricted.

Consultation/Advertising:

Not applicable.

Legal/Policy:

The power to invest is governed by the Local Government Act 1995.

6.14. Power to invest

(1) Money held in the municipal fund or the trust fund of a local government that is not, for the time being, required by the local government for any other purpose may be invested as trust funds may be invested under the Trustees Act 1962 Part III.

(2A) A local government is to comply with the regulations when investing money referred to in subsection (1).

(2) Regulations in relation to investments by local governments may —

(a) make provision in respect of the investment of money referred to in subsection (1); and

[(b) deleted]

(c) prescribe circumstances in which a local government is required to invest money held by it; and

(d) provide for the application of investment earnings; and

(e) generally provide for the management of those investments.

Further controls are established through the following provisions in the Local Government (Financial Management) Regulations 1996:

19. Investments, control procedures for

(1) A local government is to establish and document internal control procedures to be followed by employees to ensure control over investments.

(2) The control procedures are to enable the identification of —

(a) the nature and location of all investments; and

(b) the transactions related to each investment.

19C. Investment of money, restrictions on (Act s. 6.14(2)(a))

(1) In this regulation —

authorised institution means —

(a) an authorised deposit‑taking institution as defined in the Banking Act 1959 (Commonwealth) section 5; or

(b) the Western Australian Treasury Corporation established by the Western Australian Treasury Corporation Act 1986;

foreign currency means a currency except the currency of Australia.

(2) When investing money under section 6.14(1), a local government may not do any of the following —

(a) deposit with an institution except an authorised institution;

(b) deposit for a fixed term of more than 3 years;

(c) invest in bonds that are not guaranteed by the Commonwealth Government, or a State or Territory government;

(d) invest in bonds with a term to maturity of more than 3 years;

(e) invest in a foreign currency.

To further guide the prudent and responsible investment of the City’s funds, Council has adopted the City’s Investment Policy No. 1.2.4, which delegates the authority to invest surplus funds to the Chief Executive Officer or his delegate.

Administration has established guidelines for the management of the City’s investments, including the following ratings table:

Short Term Rating (Standard & Poor’s) or Equivalent	Direct Investments Maximum % with any one institution		Managed Funds Maximum % with any one institution		Maximum % of Total Portfolio
Short Term Rating (Standard & Poor’s) or Equivalent	Policy	Actual	Policy	Actual	Policy	Actual
A1+	30%	19.6%	30%	Nil	90%	44.7%
A1	25%	0.0%	30%	Nil	80%	0.0%
A2	20%	16.2%	n/a	Nil	60%	55.3%

*As per subtotals on Attachment 1

Risk Management Implications:

Moderate: Funds are invested with various financial institutions with high Long Term and Short Term Rating (Standard & Poor’s or equivalent), obtaining more than three quotations for each investment. These investment funds are spread across various institutions and invested as Term Deposits from one to twelve months to reduce risk.

Strategic Implications:

In keeping with the City’s Strategic Plan 2013-2023:

“4.1 Provide good strategic decision-making, governance, leadership and professional management:

4.1.2 Manage the organisation in a responsible, efficient and accountable manner;

(a) Continue to adopt best practice to ensure the financial resources and assets of the City are responsibly managed and the quality of services, performance procedures and processes is improved and enhanced.”

SUSTAINABILITY IMPLICATIONS:

Not applicable.

Financial/Budget Implications:

The financial implications of this report are as noted in the details and comments section of the report. Overall the conclusion can be drawn that appropriate and responsible measures are in place to protect the City’s financial assets and to ensure the accountability of management.

Comments:

The funds for investment have increased from the previous period due to excess funds available from receipt of rates revenue after creditors and other payments.

The City has obtained a weighted average interest rate of 2.55% for current investments including the operating account; and 2.63% excluding the operating account. The Reserve Bank 90 days Accepted Bill rate for February 2018 is 1.77%.

As at 28 February 2018, the City’s total investment earnings excluding the Leederville Gardens Inc. Surplus Trust income exceed the year to date budget estimate by $40,485 (8.64%).

In response to the amendment to the City’s Investment Policy that provided preference “is to be given to investments with institutions that have been assessed to have no current record of funding fossil fuels, providing that doing so will secure a rate of return that is at least equal to alternatives offered by other institutions”, Administration has actively sought investment offerings from relevant institutions.

It is of note that in September 2017, the City added Bank Australia Ltd to the list of non-fossil fuel lending institutions utilised and further funds were invested with them during this reporting period. As a result, 55.31% of the City’s investments were held in non-fossil fuel lending institutions as at 28 February 2018.

The investment report (Attachment 1) consists of:

· Investment Performance & Policy Compliance Charts;

· Investment Portfolio;

· Investment Interest Earnings; and

· Current Investment Holding.

Council Briefing Agenda 27 March 2018

7.4 Authorisation of Expenditure for the Period 2 February 2018 to
28 February 2018

TRIM Ref: D18/35199

Author: Nikki Hirrill, Accounts Payable Officer

Authoriser: Kerryn Batten, Director Corporate Services

Attachments: 1. Payments by EFT February 2018 ⇩

2. Payments by Cheque February 2018 ⇩

3. Payments by Credit Card February 2018 ⇩

Recommendation:

That Council RECEIVES the list of accounts paid under delegated authority for the period 2 February 2018 to 28 February 2018 as detailed in attachment 1, 2 and 3 as summarised below:

Cheque Numbers 82087 - 82164		$95,200.72
Cancelled cheques		$0.00
EFT Documents 2202 - 2212		$3,078,597.96
Payroll		$1,220,449.04

Direct Debits
· Lease Fees	$385.00
· Loan Repayments	$0.00
· Bank Fees and Charges	$11,728.30
· Credit Cards	$4,963.23
Total Direct Debit		$17,076.53
Total Accounts Paid		$4,411,324.25

Purpose of Report:

To present to Council the expenditure and list of accounts paid for the period 2 February 2018 to 28 February 2018.

Background:

Council has delegated to the Chief Executive Officer (Delegation No. 1.14) the exercise of its power to make payments from the City’s Municipal and Trust funds. In accordance with Regulation 13(1) of the Local Government (Financial Management) Regulations 1996 a list of accounts paid by the Chief Executive Officer is to be provided to Council, where such delegation is made.

The list of accounts paid must be recorded in the minutes of the Council Meeting.

Details:

The Schedule of Accounts paid for the period 2 February 2018 to 28 February 2018, covers the following:

FUND	CHEQUE NUMBERS/ PAY PERIOD	AMOUNT
Municipal Account (Attachment 1, 2 and 3)
Cheques	82087 - 82164	$95,200.72
Cancelled Cheques		$0.00
EFT Payments	2202 - 2212	$3,078,597.96
Sub Total		$3,173,798.68

Transfer of Payroll by EFT	06/02/18	$585,697.68
	20/02/18	$629,405.25
	22/02/18 Ad hoc	$3,540.25
	27/02/18 Ad hoc	$1,805.86
	February 2018	$1,220,449.04

Bank Charges and Other Direct Debits
Lease Fees		$385.00
Loan Repayments		$0.00
Bank Charges – CBA		$11,728.30
Credit Cards		$4,963.23

Total Bank Charges and Other Direct Debits (Sub Total)		$17,076.53

Total Payments		$4,411,324.25

consulting/advertising:

Not applicable.

Legal/Policy:

Regulation 12(1) and (2) of the Local Government (Financial Management) Regulations 1996 refers, i.e.-

12. Payments from municipal fund or trust fund, restrictions on making

(1) A payment may only be made from the municipal fund or the trust fund —

· if the local government has delegated to the CEO the exercise of its power to make payments from those funds — by the CEO; or

· otherwise, if the payment is authorised in advance by a resolution of Council.

(2) Council must not authorise a payment from those funds until a list prepared under regulation 13(2) containing details of the accounts to be paid has been presented to Council.

Regulation 13(1) and (3) of the Local Government (Financial Management) Regulations 1996 refers, i.e.-

13. Lists of Accounts

(1) If the local government has delegated to the CEO the exercise of its power to make payments from the municipal fund or the trust fund, a list of accounts paid by the CEO is to be prepared each month showing for each account paid since the last such list was prepared -

· the payee’s name;

· the amount of the payment;

· the date of the payment; and

· sufficient information to identify the transaction.

(3) A list prepared under sub regulation (1) is to be —

· presented to Council at the next ordinary meeting of Council after the list is prepared; and

· recorded in the minutes of that meeting.

Risk Management Implications:

Low: Management systems are in place to establish satisfactory controls, supported by internal and external audit function.

Strategic Implications:

Strategic Plan 2013-2023:

“4.1 Provide good strategic decision-making, governance, leadership and professional management:

4.1.2 Manage the organisation in a responsible, efficient and accountable manner;

SUSTAINABILITY IMPLICATIONS:

Not applicable.

Financial/Budget Implications:

All Municipal Fund expenditure included in the list of payments is in accordance with Council’s Annual Budget.

Comments:

If Councillors require further information on any of the payments, please contact the Manager Financial Services.

Council Briefing Agenda 27 March 2018

7.5 Financial Statements as at 28 February 2018

TRIM Ref: D18/37472

Author: Nilesh Makwana, Accounting Officer

Authoriser: Kerryn Batten, Director Corporate Services

Attachments: 1. Financial Statements as at 28 February 2018 ⇩

Recommendation:

That Council RECEIVES the Financial Statements for the month ended 28 February 2018 as shown in Attachment 1.

Purpose of Report:

To present the Financial Statements for the period ended 28 February 2018.

Background:

Regulation 34 (1) of the Local Government (Financial Management) Regulations 1996 requires a local government to prepare each month a statement of financial activity reporting on the sources and applications of funds, as set out in the budget.

A statement of financial activity report is to be in a form that sets out:

· the annual budget estimates;

· budget estimates for the end of the month to which the statement relates;

· actual amounts of expenditure, revenue and income for the end of the month to which the statement relates;

· material variances between the year-to-date income and expenditure; and

· other supporting notes and other information that the local government considers will assist in the interpretation of the report.

In addition to the above, under Regulation 34 (5) of the Local Government (Financial Management) Regulations 1996, each financial year a local government is to adopt a percentage of value, calculated in accordance with AAS 5, to be used in statements of financial activity for reporting material variances.

Details:

The following documents, included as Attachment 1 represent the Statement of Financial Activity for the period ending 28 February 2018:

Note	Description	Page

1.	Statement of Financial Activity by Program Report and Graph	1-3
2.	Statement of Comprehensive Income by Nature and Type Report	4
3.	Net Current Funding Position	5
4.	Summary of Income and Expenditure by Service Areas	6-63
5.	Capital Expenditure and Funding and Capital Works Schedule	64-78
6.	Cash Backed Reserves	79
7.	Rating Information and Graph	80-81
8.	Debtor Report	82
9.	Beatty Park Leisure Centre Financial Position	83

The following table provides a summary view of the year to date actual, compared to the Revised and Year to date Budget.

Summary of Financial Activity by Program as at 28 February 2018

		Revised Budget	Revised YTD Budget	YTD Actual	Variance	Variance
		2017/18	2017/18	2017/18	2017/18	2017/18
		$	$	$	$	%
REVENUE		22,397,993	15,493,718	14,922,814	(570,904)	-4%

EXPENDITURE		(57,017,898)	(38,102,950)	(36,515,825)	1,587,125	-4%

NET OPERATING EXCLUDING RATES		(34,619,905)	(22,609,232)	(21,593,011)	1,016,221	-4%

OPERATING ACTIVITIES EXCLUDED FROM BUDGET
NON-CASH EXPENDITURE AND REVENUE
	Add Deferred Rates Adjustment	0	0	9,237	9,237	0%
	Add Back Depreciation	9,663,980	6,442,552	6,812,118	369,566	6%
	(Profit)/Loss on Asset Disposals	(411,373)	(411,373)	(127,888)	283,485	-69%
	"Percent for Art" and "Cash in Lieu" Funds Adjustment	0	0	0	0	0%

AMOUNT ATTRIBUTABLE TO OPERATING ACTIVITIES		9,252,607	6,031,179	6,693,467	662,288	11%

INVESTING ACTIVITIES
	Non-Operating Grants, Subsidies and Contributions	2,712,344	1,128,644	1,026,186	(102,458)	-9%
	Capital Expenditure	(13,379,565)	(10,427,350)	(3,296,494)	7,130,856	-68%
	Proceeds from Joint Venture Operations	333,333	333,333	166,667	(166,666)	-50%
	Proceeds from Disposal of assets	204,500	204,500	305,020	100,520	49%
		(10,129,388)	(8,760,873)	(1,798,621)	6,962,252	-79%

FINANCING ACTIVITIES
	Repayments Loan Capital	(881,398)	(579,452)	(579,451)	1	0%
	Transfers from Reserves	1,342,875	1,219,165	241,468	(977,697)	-80%
	Transfers to Reserves	(1,850,534)	(1,345,729)	(404,893)	940,836	-70%
		(1,389,057)	(706,016)	(742,876)	(36,860)	5%

	Plus: Surplus/(Deficiency) Brought Fwd 1 July 2017	3,946,211	3,946,211	4,475,026	528,816	13%
	Surplus/(Deficiency) Before General Rates	(32,939,532)	(22,098,731)	(12,966,015)	9,132,717	-41%
	Total amount raised from General Rates	32,939,532	32,858,277	33,004,208	145,931	0%

NET CURRENT ASSETS at JUNE 30 C/FWD - SURPLUS/(DEFICIT)		0	10,759,546	20,038,193	9,278,648	86%

Comments on Summary of Financial Activity by Program:

Operating Revenue

There is a difference in classification of revenue reported by Program and by Nature and Type. Operating revenue by Program reporting includes ‘Profit on Sale of Assets’, but this is excluded in the Nature and Type report, however ‘Rates’ revenue is added.

Revenue by Program is showing a negative variance of 4% ($570k). This is due to lower revenue in Other Property and Services $270k (asset disposals), Recreation and Culture of $207k ($95k Beatty Park fees and charges, $49k Public Hall revenue) and Transport of $137k (predominantly parking infringement revenue which is expected to improve).

Operating Revenue as presented on the ‘Nature and Type’ report (Page 4 of Attachment 1) is showing nil variance in terms of percentage.

Operating Expenditure

Expenditure by Program is showing an underspend variance of 4% ($1.58m). This is due to lower expenditure in:

· Community Amenities - $558k, primarily comprising $333k Policy and Place, $30k Environmental Services, $97k Processable Waste Collection and $47k on Recycling expenditure;

· Recreation and Culture - $795k, primarily comprising $89k Community Partnerships, $66k Library Services, $373 nib Stadium – depreciation and $203k Parks and Reserves;

· Transport - $259k, largely comprising $110k Engineering Design, $38k Environment Services, $55k Parks Services, $223k Rangers Services and over spend of $120k in Works and Operations Services; and

· Education and Welfare - $71k, primarily comprising $36k Senior, Disability and Youth Services and $26k Child Care Centres and Play Groups.

Similarly, the operating expenditure listed under the Nature and Type report reflects a corresponding favourable variance of 4%, with the largest variances in:

· Employee Costs, comprising $150k Salaries, $68k Superannuation, $190k Labour and $16k Wages;

· Materials and Contracts, where the underspend is predominately in $87k Events and $399k Contractors; and

· Depreciation on Non-current Assets, due to revaluation of Building assets, adjusted in mid-year budget review.

Transfer from Reserves

Transfer from Reserves is aligned with the timing of Capital Works projects that are reserve funded. Most of these projects have not yet started, with a large number likely to do so before the end of the financial year.

Capital Expenditure

The variance is attributed to timing on commencement of projects. For further detail, refer to Note 5 on Attachment 1.

Transfer to Reserves

Monthly transfer to reserves commenced in July 2017 except for the Tamala Park Land Sale Reserve which is transferred when actual funds are received.

Opening Funding Surplus / (Deficit)

The surplus opening balance brought forward from 2016/17 was $4,035,268, compared to the revised budget opening surplus balance of $3,946,211, after end of year carry forward adjustments. The actual surplus for 2016/17 was $4,475,026, which reflects an improvement of $529k over the anticipated end of year result for 2016/17.

Closing Surplus / (Deficit)

There is currently a surplus of $20,038,193 compared to the year to date budget surplus of $10,759,546. This is substantially attributed to underspending in operating and capital expenditure and the increase in the opening balance.

Comments on financial performance as set out in the Statement of Financial Activity (Attachment 1) and an explanation of each report is detailed below:

1. Statement of Financial Activity by Program Report (Note 1 Page 1)

This statement of financial activity shows operating revenue and expenditure classified by Program.

2. Statement of Comprehensive Income by Nature and Type Report (Note 2 Page 4)

This statement of financial activity shows operating revenue and expenditure classified by nature and type.

3. Net Current Funding Position (Note 3 Page 5)

Net current assets is the difference between the current assets and current liabilities, less committed assets and restricted assets. This amount indicates how much capital is available for day to day activities. The net current funding position as at 28 February 2018 is $20,038,193.

4. Summary of Income and Expenditure by Service Areas (Note 4 Page 6 – 63)

This statement shows a summary of operating revenue and expenditure by Service Unit.

5. Capital Expenditure and Funding Summary (Note 5 Page 64 - 78)

The following table is a summary of the ‘2017/2018 Capital Expenditure Budget by Program’, which compares year to date budget with actual expenditure to date. The full Capital Works Program is listed in detail in Note 5 of Attachment 1.

	Revised Budget	Revised YTD Budget	YTD Actual	Remaining Budget
	$	$	$	%
Land and Buildings	2,351,801	2,011,801	542,160	77%
Infrastructure Assets	8,329,870	5,883,655	2,022,090	76%
Plant and Equipment	1,583,747	1,583,747	541,045	66%
Furniture and Equipment	1,114,147	948,147	191,200	83%
Total	13,379,565	10,427,350	3,296,494	75%

FUNDING	Revised Budget	Revised YTD Budget	YTD Actual	Remaining Budget
	$	$	$	%
Own Source Funding - Municipal	9,119,846	7,875,041	1,723,820	81%
Cash Backed Reserves	1,342,875	1,219,165	241,468	82%
Capital Grant and Contribution	2,712,344	1,128,644	1,026,186	62%
Other (Disposals/Trade In)	204,500	204,500	305,020	-49%
Total	13,379,565	10,427,350	3,296,494	75%

Note: Detailed analysis is included on page 64 - 78 of Attachment 1.

6. Cash Backed Reserves (Note 6 Page 79)

The Cash Backed Reserves schedule details movements in the reserves, including transfers and funds used, comparing actual results with the annual budget. The balance as at 28 February 2018 is $9,071,544.

7. Rating Information (Note 7 Page 80 – 81)

The notices for rates and charges levied for 2017/18 were issued on 07 August 2017.

The Local Government Act 1995 provides for ratepayers to pay rates by four instalments. The due dates for each instalment are:

First Instalment	12 September 2017
Second Instalment	06 November 2017
Third Instalment	08 January 2018
Fourth Instalment	06 March 2018

To cover the costs involved in providing the instalment program the following charge and interest rates apply:

Instalment Administration Charge

(to apply to second, third, and fourth instalment)

$13.00 per instalment

Instalment Interest Rate

5.5% per annum

Late Payment Penalty Interest

11% per annum

Pensioners registered with the City for rate concessions do not incur the above interest or charge.

The Rates debtors balance to be collected as at 28 February 2018 is $3,693,167 (this includes deferred rates of $100,508). This represents 10.08% of collectable income compared to 10.47% at the same time last year.

8. Receivables (Note 8 Page 82)

Receivables of $3,810,824 are outstanding as at 28 February 2018, of which $2,943,020 has been outstanding over 90 days. This is comprised of:

· $2,430,779 (82.6%) relates to unpaid infringements (plus costs) over 90 days. Infringements that remain unpaid for more than two months are sent to Fines Enforcement Registry (FER), who then collect the outstanding balance and return the funds to the City for a fee. Administration is currently reviewing systems issues that have implications for timely collection of infringement debtors;

· $350,104 (11.9%) relates to Cash in Lieu Parking. Some Cash in Lieu Parking debtors have special payment arrangements over more than one year; and

· $162,137 (5.5%) relates to Other Receivables, (refer page 82)

Administration has been following up outstanding items which relate to Other Receivables by issuing reminders when they are overdue and initiating formal debt collection when payments remain outstanding over longer periods of time.

9. Beatty Park Leisure Centre – Financial Position Report (Note 9 Page 83)

As at 28 February 2018 the operating deficit for the centre was $650,807 in comparison to the year to date budgeted deficit of $418,482. This unfavourable outcome is primarily due to a higher depreciation expense being incurred as a result of the latest Fair Value Revaluation.

Once the depreciation component has been deducted, the cash position showed a current cash surplus of $123,298 in comparison to the year to date budget estimate of a cash deficit of $53,850.

10. Explanation of Material Variances

All material variances as at 28 February 2018 have been detailed in the variance comments report in Attachment 1.

The materiality thresholds used for reporting variances are 10% and $10,000. This means that variances will be analysed and separately reported when they are more than 10% (+/-) of the year to date budget, where that variance exceeds $10,000 (+/-). This threshold was adopted by Council as part of the budget adoption for 2017/18 and is used in the preparation of the statements of financial activity when highlighting material variance in accordance with Financial Management Regulation 34(1) (d).

Consultation/Advertising:

Not applicable.

Legal/Policy:

Section 6.4 of the Local Government Act 1995 requires a local government to prepare an annual financial report for the preceding year and such other financial reports as are prescribed.

Regulation 34 (1) of the Local Government (Financial Management) Regulations 1996 requires the local government to prepare each month, a statement of financial activity reporting on the source and application of funds as set out in the adopted Annual Budget.

A statement of financial activity and any accompanying documents are to be presented at an Ordinary Meeting of the Council within two months after the end of the month to which the statement relates.

Section 6.8 of the Local Government Act 1995, specifies that a local government is not to incur expenditure from its Municipal Fund for an additional purpose except where the expenditure is authorised in advance by an absolute majority decision of Council.

Risk Management Implications:

Low: Provision of monthly financial reports fulfils a statutory requirement.

Strategic Implications:

Strategic Plan 2013-2023:

“4.1 Provide good strategic decision-making, governance, leadership and professional management:

4.1.2 Manage the organisation in a responsible, efficient and accountable manner;

SUSTAINABILITY IMPLICATIONS:

Not applicable.

Financial/Budget Implications:

Not applicable.

Comments:

The capital works schedules includes an item for unbudgeted purchase of an Engineering tools trailer. This was the replacement of an existing trailer due to age and poor condition. This has now been addressed in the mid-year budget review.

Council Briefing Agenda 27 March 2018

8 Community Engagement

8.1 Reallocation of Loftus Recreation Centre reserve funds

TRIM Ref: D18/31783

Author: Dale Morrissy, Manager Beatty Park Leisure Centre

Authoriser: Michael Quirk, Director Community Engagement

Attachments: Nil

Recommendation:

That Council:

1. In accordance with Section 6.8(1) of the Local Government Act 1995 APPROVES BY ABSOLUTE MAJORITY the unbudgeted expenditure of $41,192.50 from the Loftus Recreation Centre Reserve to replace the Centre’s outdoor synthetic soccer pitch surface; and

2. NOTES the following budget adjustment to facilitate 1. above:

	From	To
Loftus Recreation Centre Reserve Fund	$41,192.50
New Capital Budget Item: Loftus Recreation Centre		$41,192.50

Purpose of Report:

To approve the transfer of $41,192.50 from the Loftus Recreation Centre Reserve Fund into the City’s Municipal Fund for the purposes of replacing the outdoor synthetic soccer pitch surface.

Background:

Loftus Recreation Centre is located on Loftus Street, Leederville and provides a range of sport, recreation and fitness services for the community. Belgravia Health and Leisure Pty Ltd (Belgravia Leisure) operates the Centre on the City’s behalf through a Lease and Management Contract expiring on 31 December 2021.

The Centre hosts one of the largest team sports programs in Western Australia with more than 450 teams competing each week in basketball, netball, soccer and volleyball. These team sports competitions enable participation for people of all skill and fitness levels across junior, male, female and mixed divisions. The outdoor synthetic soccer pitch located at the rear of the Centre overlooking Leederville Oval accommodates approximately 18,000 users and generates nearly $190,000 per annum.

Unfortunately, due to poor storm water drainage design the outdoor synthetic soccer pitch at the Centre has been subjected to ongoing drainage issues for an extended period of time and as a result the surface has deteriorated significantly. The pitch was installed in 2012 and while the expected asset life would normally be around 10 years an inadequate storm water pipe system and broken pipework under the court has led to the need for surface replacement earlier than anticipated. The ongoing build-up of water and other materials on the surface has also accelerated wear and tear. Despite ongoing maintenance and repairs many sections of the surface are now threadbare with sub-surface concrete exposed.

Over the last 12 months Belgravia Leisure has received an increasing number of complaints regarding the quality and safety of the playing surface, and they have now formally raised concerns with the City regarding the increased likelihood of injury and loss of revenue should the surface not be improved. Under the terms of the Lease and Contract the City may, at its sole discretion, undertake capital improvements and redevelopment. Belgravia Leisure is responsible for monitoring the premises and ensuring that all fittings, fixtures, plant and equipment are serviced, maintained and repaired as required. The Contract requires the City to maintain fittings and equipment and replace specific items. Any capital improvements are normally considered through Council’s annual budget process however this will not enable these important works to be undertaken in a timely manner.

Details:

Upon investigating the need for ongoing repairs and maintenance to the Centre’s outdoor synthetic soccer pitch Administration has identified that an inadequate storm water pipe work system and broken pipe work under the court itself are the direct cause. The pipe work connecting the two floor wastes from the spectator area are broken in their entirety which requires part of the court to be removed and excavated. The drainage system has backfall which does not effectively allow volumes of water to flow away and also results in the rubber particles on the pitch to creating blockages. The drainage works to resolve this situation are scheduled for completion in April 2018. This requires the synthetic soccer pitch surface to be removed and given the extent of existing damage to the pitch surface it will need to be totally replaced when the drainage works are complete.

Based upon quotations received the replacement of the outdoor synthetic soccer pitch surface will cost $41,192.50 (excluding GST). The Lease between the City and Belgravia Leisure required the establishment of a Loftus Recreation Centre Reserve Account, and at the Ordinary Council Meeting on 6 March 2018 it was resolved to amend the purpose of that Reserve to ensure consistency with the Lease Agreement. This Reserve has been established “for the purpose of capital improvements, including replacing major items of plant and equipment or renewal and modifications to the Centre.” An amount of $58,394 is currently available within this Reserve that can be made available for this project subject to Council approval. There are no alternative plans to utilise these Reserve funds for other projects in the short to medium term.

While replacement of the outdoor synthetic soccer pitch surface is vitally important to ensure safe, quality playing conditions for Centre patrons it is also incumbent upon the City under the objectives of the Lease and Contract to ensure that the Premises are “attractive to the community and maintained in good working order.” Belgravia Leisure notified the City in early 2017 that the outdoor synthetic soccer pitch surface was in poor condition and required intervention through either significant asset maintenance or capital replacement otherwise they could not deliver a good quality service to customers. Administration acknowledges that the Centre’s soccer competition forms an important part of Belgravia Leisure’s services, and on that basis the replacement of the outdoor synthetic soccer pitch surface is regarded as a high priority. With drainage repair works scheduled in April 2018 prior to the commencement of winter it is not considered appropriate to await the availability of funds through Council’s 2018/19 capital budget.

Consultation/Advertising:

Nil.

Legal/Policy:

In accordance with Section 6.8(1) of the Local Government Act 1995 a local government is not incur expenditure from its municipal fund for an additional purpose except where the expenditure is incurred in a financial year before the adoption of the annual budget, authorised in advance by resolution (absolute majority required) or authorised in advance by the Mayor in an emergency.

Belgravia Leisure leases the Loftus Recreation Centre from the City pursuant to a Lease Agreement dated 9 July 2010, and the operation of the Centre is governed by a Management Contract also dated 9 July 2010 (Contract). At the Ordinary Council Meeting on 23 August 2017 it was resolved that the Lease and Contract be extended for a term of five years commencing on 1 January 2017.

Clause 3.1 of the Lease requires Belgravia Leisure to contribute to a reserve fund which can only be spent by the City on capital improvements which are defined as “improvements of a fixed, permanent and substantial character with respect to the Land and Buildings or parts of it which comprise items of a capital nature and do not comprise repairs and maintenance.” Clause 19 of the Contract also states that any capital improvements are at the City’s sole discretion, and more specifically, that “while the Town must consult with the Contractor about the nature of any Capital Improvements to be funded from the Reserve Fund, the Town shall retain an unfettered discretion as to what Capital Improvements it will make and when it will make them.” The replacement of the outdoor synthetic soccer pitch surface is a capital improvement and therefore Council may, at its sole discretion, resolve to undertake the works.

Any capital improvements are at the sole discretion of the City, and therefore the Lease and Contract do not impose any obligation on the City to undertake the replacement, and the City will not be in breach of its obligations pursuant to the Lease or Contract if it delays or does not choose to undertake the replacement of the outdoor synthetic soccer pitch surface. Similarly, the City will not be required to compensate Belgravia Leisure for any loss of income associated with the outdoor synthetic soccer pitch.

Risk Management Implications:

High: The Lease states that Belgravia Leisure occupies the Premises at its risk and agrees to indemnify the City in respect to any loss or damage arising as a result of their operations, and the Contract specifically sets out the obligations of Belgravia Leisure which includes risk and safety management. On that basis, Belgravia Leisure is responsible for ensuring the outdoor synthetic soccer pitch is in a suitable condition for use, and if it determines that it is not, they are responsible for restricting use accordingly.

The City provides Belgravia Leisure with quiet enjoyment of the Premises for the term of the Lease, and therefore the City has no obligation to identify and respond to risks. However, upon the City being advised of any risk by Belgravia Leisure the City may play a role in mitigating that risk particularly where capital improvements are required. Should Council resolves not to undertake the surface replacement then Belgravia Leisure will be responsible for taking appropriate action to mitigate any risks or liability which may include closing the pitch until such time that it is repaired or replaced.

Strategic Implications:

The following objectives of Council’s Strategic Community Plan 2013 – 2023 are relevant to this matter:

“1.1 Improve and maintain the natural and built environment and infrastructure

1.1.4 Enhance and maintain the City’s infrastructure, assets and community facilities to provide a safe, sustainable and functional environment.

4.1 Provide good strategic decision-making, governance, leadership and professional management

4.1.2 Manage the organisation in a responsible, efficient and accountable manner

(a) Continue to adopt best practise to ensure the financial resources and assets of the City are responsibly managed and the quality of services, performance procedures and processes is improved and enhanced..”

SUSTAINABILITY IMPLICATIONS:

Nil.

Financial/Budget Implications:

Replacement of the outdoor synthetic soccer pitch surface at the Centre will cost $41,192.50 with sufficient funds available within the Loftus Recreation Centre Reserve so that municipal funds are not required. The transfer of funds from the Reserve for this purpose will leave a balance of $17,201.50 for future use. Drainage works are being completed in April 2018 at a cost of approximately $10,000.

As per clause 5.2 of the Contract, Belgravia Leisure is required to pay the City a profit share amount of 25 percent for every dollar exceeding an annual Centre profit of $250,000. The profit share amount for the last three financial years is provided below:

Financial Year	Profit Share
2014/15	$ 9,617.74
2015/16	$ 25,092.10
2016/17	$ 31,132.20

It should be noted that the Centre’s outdoor synthetic soccer pitch generates approximately $190,000 revenue per annum, and therefore the inability to utilise this pitch as part of the soccer competition will negatively impact revenue and as a result may also negatively impact any profit share payment to the City.

Any capital improvements are at the sole discretion of the City, and therefore the Lease and Contract do not impose any obligation on the City to undertake the replacement, and the City will not be in breach of its obligations if it delays or does not choose to undertake the replacement of the outdoor synthetic soccer pitch surface. The City will not be required to compensate Belgravia Leisure for any loss of income associated with the outdoor synthetic soccer pitch.

Comments:

The Loftus Recreation Centre is a highly utilised community facility and hosts one of the largest team sports programs in Western Australia which requires all playing areas to be safe and functional. With drainage works soon to be undertaken to resolve the issues that have led to sooner than anticipated deterioration of the outdoor synthetic soccer pitch surface it is considered necessary to allocate funds to fully replace that surface as soon as practicable. The availability of funds within the Loftus Recreation Centre Reserve for this purpose ensures there is no direct, negative impact on Council’s 2017/18 budget.