Please note:  These minutes are yet to be confirmed as a true record of proceedings

CITY OF BUSSELTON

MINUTES FOR THE Council  MEETING HELD ON 27 April 2016

TABLE OF CONTENTS

ITEM NO.                                        SUBJECT                                                                                                                              PAGE NO.

1....... Declaration of Opening and Announcement of Visitors. 3

2....... Attendance. 3

3....... Prayer. 3

4....... Public Question Time. 4

5....... Announcements Without Discussion.. 4

6....... Application for Leave of Absence. 4

7....... Petitions and Presentations. 4

8....... Disclosure Of Interests. 5

9....... Confirmation and Receipt Of Minutes. 5

Previous Council Meetings. 5

9.1          Minutes of the Council Meeting held 13 April 2016. 5

Committee Meetings. 5

9.2          Minutes of the Finance Committee Meeting held 14 April 2016. 5

10..... Reports of Committee. 8

10.1        Finance Committee - 14/04/2016 - LIST OF PAYMENTS MADE - FEBRUARY 2016. 8

10.2        Finance Committee - 14/04/2016 - FINANCIAL ACTIVITY STATEMENTS - PERIOD ENDING 29 FEBRUARY 2016. 10

10.3        Finance Committee - 14/04/2016 - ANNUAL BUDGET REVIEW - PERIOD ENDING 29 FEBRUARY 2016. 17

10.4        Finance Committee - 14/04/2016 - DRAFT SCHEDULE OF FEES AND CHARGES FOR THE 2016/17 FINANCIAL YEAR. 90

10.5        Finance Committee - 14/04/2016 - WHALE VIEWING PLATFORM POINT PICQUET - 2015/16 BUDGET AMENDMENT. 74

10.6        Finance Committee - 14/04/2016 - PERMIT FEES FOR COMERCIAL USE OF BERTHING PLATFORMS AT THE BUSSELTON JETTY. 79

10.7        Finance Committee - 14/04/2016 - GEOGRAPHE LEISURE CENTRE - BUDGET AMENDMENT REQUEST DRYSIDE CHANGEROOM RENEWAL. 164

11..... Planning and Development Services Report. 37

11.1        WONNERUP COASTAL RESERVES MANAGEMENT PLAN.. 169

11.2        PROPOSED AMENDMENT NO. 15 TO LOCAL PLANNING SCHEME NO. 21 - LOT 4001 METRICUP-YELVERTON ROAD, YELVERTON - CONSIDERATION OF ADOPTION FOR FINAL APPROVAL. 37

12..... Engineering and Works Services Report. 42

13..... Community and Commercial Services Report. 42

13.1        Busselton - Margaret River Regional Airport Noise Management Plan Review.. 42

14..... Finance and Corporate Services Report. 61

14.1        LONG TERM FINANCIAL PLAN 2016/17 TO 2025/26. 61

15..... Chief Executive Officer's Report. 71

15.1        COUNCILLORS' INFORMATION BULLETIN.. 71

16..... Motions of which Previous Notice has been Given.. 178

17..... Confidential Reports. 178

18..... Public Question Time. 178

19..... Next Meeting Date. 178

20..... Closure. 178

 


Council                                                                                      3                                                                        27 April 2016

MINUTES

 

MINUTES OF A Meeting of the Busselton City Council HELD IN Meeting Room One, Community Resource Centre, 21 Cammilleri Street, Busselton, ON 27 April 2016 AT 5.30pm.

 

1.               Declaration of Opening and Announcement of Visitors

The Presiding Member opened the meeting at 5.30pm.

2.               Attendance

Presiding Member:

Members:

 

Cr Grant Henley     Mayor

Cr Ross Paine

Cr Terry Best

Cr John McCallum

Cr Rob Bennett

Cr Paul Carter

Cr Robert Reekie

Cr Gordon Bleechmore

 

Officers:

 

Mr Mike Archer, Chief Executive Officer

Mr Oliver Darby, Director, Engineering and Works Services

Mr Paul Needham, Director, Planning and Development Services

Mrs Naomi Searle, Director, Community and Commercial Services

Mr Matthew Smith, Director, Finance and Corporate Services

Miss Lynley Rich, Manager, Governance Services

 

Apologies

 

Cr Coralie Tarbotton

 

Approved Leave of Absence

 

Nil

 

Media:

 

“Busselton-Dunsborough Times”

“Busselton-Dunsborough Mail”

 

Public:

 

12

3.               Prayer

The prayer was delivered by Pastor Nathan Seinemeier from Cornerstone Church.

4.               Public Question Time

Response to Previous Questions Taken on Notice 

 

Nil

Public Question Time

 

Ms Anne Ryan asked, in relation to Item 13.1 on the agenda “Busselton-Margaret River Regional Airport Noise Management Plan Review”, how the City would address the matter of items that were included in her written submission but did not appear in the report. Ms Ryan stated that her submission included a number of matters that were not included in the report.

 

The Director, Community and Commercial Services advised that as the submission was lengthy the key points in relation to the Noise Management Plan were included in the table of submissions, with comments and responses provided.  However, all submissions in full will be provided to the Environmental Protection Authority as part of the environmental approvals process.  It is considered that the crux of the submission was included in the table of submissions.

 

Ms Ryan asked how the matters raised in her submission but not included in the report would be addressed as she believed there were a number of important matters omitted.

 

The Mayor advised that the full submission would be provided to the Environmental Protection Authority.

5.               Announcements Without Discussion

Announcements by the Presiding Member 

 

The Mayor acknowledged all of the community members involved in the ceremonies held in recognition of ANZAC Day on 25 April, 2016.

 

The Mayor acknowledged the contribution of Busselton-Dunsborough Times journalist Lisa Thomas and welcomed her successor Taelor Pelusey.

Announcements by other Members at the invitation of the Presiding Member

 

Nil

6.               Application for Leave of Absence

Nil

7.               Petitions and Presentations

Nil 


 

8.               Disclosure Of Interests

DISCLOSURE OF INTEREST

Name/Position

Councillor Gordon Bleechmore

Item No./Subject

11.1 – Wonnerup Coastal Reserves Management Plan

Type of Interest

Proximity Interest.

Nature of Interest

The area covered by the Management Plan is across a thoroughfare from land owned.

9.               Confirmation and Receipt Of Minutes 

Previous Council Meetings

9.1             Minutes of the Council Meeting held 13 April 2016

Council Decision

C1604/090              Moved Councillor P Carter, seconded Councillor J McCallum

That the Minutes of the Council  Meeting held 13 April 2016 be confirmed as a true and correct record.

CARRIED 8/0

 

Committee Meetings

9.2             Minutes of the Finance Committee Meeting held 14 April 2016

Council Decision

C1604/091              Moved Councillor G Bleechmore, seconded Councillor T Best

 

1)    That the minutes of the Finance Committee Meeting held 14 April 2016 be received.

 

2)    That the Council notes the outcomes of the Finance Committee Meeting held 14 April 2016 being:

 

a)       The Finance Committee Information Bulletin – February 2016 was noted.

 

b)      The List of Payments Made – February 2016 is presented for Council consideration at Item 10.1 of this agenda.

 

c)       The Financial Activity Statements – Period Ending 29 February 2016 is presented for Council consideration at Item 10.2 of this agenda.

 

d)      The Annual Budget Review – Period Ending 29 February 2016 is presented for Council consideration at Item 10.3 of this agenda.

 

e)      The Draft Schedule of Fees and Charges for the 2016/17 Financial Year Item is presented for Council consideration at Item 10.4 of this agenda.

 

f)        The Whale Viewing Platform Point Picquet – 2015/16 Budget Amendment Item is presented for Council consideration at Item 10.5 of this agenda.

 

g)       The Permit Fees for Commercial use of Berthing Platforms at the Busselton Jetty Item is presented for Council consideration at Item 10.6 of this agenda.

h)      The Geographe Leisure Centre – Budget Amendment Item is presented for Council consideration at Item 10.7 of this agenda.

 

i)        The Director, Finance and Corporate Services presented information relating to restricted assets and reserve accounts.

 

j)        The Director, Finance and Corporate Services presented information relating to rating strategies.

 

k)    The Chief Executive Officer presented information relating to elected member allowances 2016/17.

CARRIED 8/0

 

 


 

Items Brought Forward and Adoption by Exception Resolution

At this juncture the Mayor advised the meeting that with the exception of the items identified to be withdrawn for discussion, that the remaining reports, including the Committee and Officer Recommendations, will be adopted en bloc.

 

Council Decision / Committee Recommendation and Officer Recommendation

C1604/092              Moved Councillor G Bleechmore, seconded Councillor P Carter

 

That the Committee and Officer Recommendations in relation to the following agenda items be carried en bloc noting additional submissions received for item 13.1 and that the SAT information in item 15.1 is to be updated and presented at the 11 May Council meeting:

               

10.1        Finance Committee - 14/04/2016 - LIST OF PAYMENTS MADE - FEBRUARY 2016

10.2        Finance Committee - 14/04/2016 - FINANCIAL ACTIVITY STATEMENTS - PERIOD ENDING 29 FEBRUARY 2016

10.3        Finance Committee - 14/04/2016 - ANNUAL BUDGET REVIEW - PERIOD ENDING 29 FEBRUARY 2016

11.2        PROPOSED AMENDMENT NO. 15 TO LOCAL PLANNING SCHEME NO. 21 - LOT 4001 METRICUP-YELVERTON ROAD, YELVERTON - CONSIDERATION OF ADOPTION FOR FINAL APPROVAL

13.1        Busselton - Margaret River Regional Airport Noise Management Plan Review

14.1        LONG TERM FINANCIAL PLAN 2016/17 TO 2025/26

15.1        COUNCILLORS' INFORMATION BULLETIN

CARRIED 7/1

En Bloc

Voting:

For the motion:             Councillor T Best, Councillor G Bleechmore, Mayor G Henley, Councillor J McCallum, Councillor P Carter, Councillor R Reekie and Councillor R Paine.

Against the motion:     Councillor R Bennett.

 


Council                                                                                      9                                                                        27 April 2016

10.             Reports of Committee

10.1           Finance Committee - 14/04/2016 - LIST OF PAYMENTS MADE - FEBRUARY 2016

SUBJECT INDEX:

Financial Operations

STRATEGIC OBJECTIVE:

An organisation that is managed effectively and achieves positive outcomes for the community.

BUSINESS UNIT:

Finance and Information Technology

ACTIVITY UNIT:

Finance

REPORTING OFFICER:

Financial Accountant - Ehab Gowegati

AUTHORISING OFFICER:

Director, Finance and Corporate Services - Matthew Smith

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Attachment a   List of Payments Made - February 2016  

 

This item was considered by the Finance Committee at its meeting on 14 April 2016, the recommendations from which have been included in this report. 

 

PRÉCIS

 

This report provides details of payments made from the City’s bank accounts for the month of February 2016, for noting by the Council and recording in the Council Minutes.

 

BACKGROUND

 

The Local Government (Financial Management) Regulations require that when the Council has delegated authority to the Chief Executive Officer to make payments from the City’s bank accounts, that a list of payments made is prepared each month for presentation to, and noting by, Council.

 

STATUTORY ENVIRONMENT

 

Section 6.10 of the Local Government Act and more specifically, Regulation 13 of the Local Government (Financial Management) Regulations; refer to the requirement for a listing of payments made each month to be presented to the Council.

 

RELEVANT PLANS AND POLICIES

 

NA.

 

FINANCIAL IMPLICATIONS

 

NA.

 

STRATEGIC COMMUNITY OBJECTIVES

 

This matter principally aligns with Key Goal Area 6 – ‘Open and Collaborative Leadership’ and more specifically Community Objective 6.3 – ‘An organisation that is managed effectively and achieves positive outcomes for the community’.

 

RISK ASSESSMENT

 

NA.

 


 

CONSULTATION

 

NA.

 

OFFICER COMMENT

 

NA.

CONCLUSION

 

NA.

 

OPTIONS

 

NA.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

NA.

 

Council Decision / Committee Recommendation and Officer Recommendation

C1604/093              Moved Councillor G Bleechmore, seconded Councillor P Carter

 

That the Council notes payment of voucher numbers M111623 – M112729, EF044726 – EF045129, T007223 – T007225, and DD002680 – DD002696; together totaling  $4,769,452.00.

CARRIED 7/1

En Bloc

Voting:

For the motion:             Councillor T Best, Councillor G Bleechmore, Mayor G Henley, Councillor J McCallum, Councillor P Carter, Councillor R Reekie and Councillor R Paine.

Against the motion:     Councillor R Bennett.

 


Council                                                                                      15                                                                      27 April 2016

10.2           Finance Committee - 14/04/2016 - FINANCIAL ACTIVITY STATEMENTS - PERIOD ENDING 29 FEBRUARY 2016

SUBJECT INDEX:

Budget Planning and Reporting

STRATEGIC OBJECTIVE:

An organisation that is managed effectively and achieves positive outcomes for the community.

BUSINESS UNIT:

Finance and Information Technology

ACTIVITY UNIT:

Financial Services

REPORTING OFFICER:

Financial Accountant - Ehab Gowegati

AUTHORISING OFFICER:

Director, Finance and Corporate Services - Matthew Smith

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Attachment a   Financial Activity Statements - February  

 

This item was considered by the Finance Committee at its meeting on 14 April 2016, the recommendations from which have been included in this report. 

 

PRÉCIS

 

Pursuant to Section 6.4 of the Local Government Act (‘the Act’) and Regulation 34(4) of the Local Government (Financial Management) Regulations (‘the Regulations’), a local government is to prepare, on a monthly basis, a statement of financial activity that reports on the City’s financial performance in relation to its adopted/ amended budget.

 

This report has been compiled to fulfil the statutory reporting requirements of the Act and associated Regulations, whilst also providing the Council with an overview of the City’s financial performance on a year to date basis for the period ending 29 February 2016.

 

BACKGROUND

 

The Regulations detail the form and manner in which financial activity statements are to be presented to the Council on a monthly basis; and are to include the following:

 

§   Annual budget estimates;

§   Budget estimates to the end of the month in which the statement relates;

§   Actual amounts of revenue and expenditure to the end of the month in which the statement relates;

§   Material variances between budget estimates and actual revenue/ expenditure/ (including an explanation of any material variances);

§   The net current assets at the end of the month to which the statement relates (including an explanation of the composition of the net current position).

 

Additionally, and pursuant to Regulation 34(5) of the Regulations, a local government is required to adopt a material variance reporting threshold in each financial year. At its meeting of 23 July 2015, the Council adopted (C1507/208) the following material variance reporting threshold for the 2015/16 financial year:

 

That pursuant to Regulation 34(5) of the Local Government (Financial Management) Regulations, the Council adopts a material variance reporting threshold with respect to financial activity statement reporting for the 2015/16 financial year to comprise variances equal to or greater than 10% of the year to date budget amount as detailed in the Income Statement by Nature and Type/ Statement of Financial Activity report, however variances due to timing differences and/ or seasonal adjustments are to be reported on a quarterly basis.

 

STATUTORY ENVIRONMENT

 

Section 6.4 of the Local Government Act and Regulation 34 of the Local Government (Financial Management) Regulations detail the form and manner in which a local government is to prepare financial activity statements.

 

RELEVANT PLANS AND POLICIES

 

NA

 

FINANCIAL IMPLICATIONS

 

Any financial implications are detailed within the context of this report.

 

STRATEGIC COMMUNITY OBJECTIVES

 

This matter principally aligns with Key Goal Area 6 – ‘Open and Collaborative Leadership’ and more specifically Community Objective 6.3 - ‘An organisation that is managed effectively and achieves positive outcomes for the community’. The achievement of the above is underpinned by the Council strategy to ‘ensure the long term financial sustainability of Council through effective financial management’.

 

RISK ASSESSMENT

 

Risk assessments have been previously completed in relation to a number of ‘higher level’ financial matters, including timely and accurate financial reporting to enable the Council to make fully informed financial decisions. The completion of the monthly Financial Activity Statement report is a treatment/ control that assists in addressing this risk.  

 

CONSULTATION

 

NA

 

OFFICER COMMENT

 

In order to fulfil statutory reporting requirements, and to provide the Council with a synopsis of the City’s overall financial performance on a year to date basis, the following financial reports are attached hereto:

 

§   Statement of Financial Activity

This report provides details of the City’s operating revenues and expenditures on a year to date basis, by nature and type (i.e. description). The report has been further extrapolated to include details of non-cash adjustments and capital revenues and expenditures, to identify the City’s net current position; which reconciles with that reflected in the associated Net Current Position report.

 

§   Net Current Position

This report provides details of the composition of the net current asset position on a year to date basis, and reconciles with the net current position as per the Statement of Financial Activity.

 

§   Capital Acquisition Report

This report provides year to date budget performance (by line item) in respect of the following capital expenditure activities: 

·   Land and Buildings

·   Plant and Equipment

·   Furniture and Equipment

·   Infrastructure

 

§   Reserve Movements Report

This report provides summary details of transfers to and from reserve funds, and also associated interest earnings on reserve funds, on a year to date basis. 

Additional reports and/ or charts are also provided as required to further supplement the information comprised within the statutory financial reports.

 

COMMENTS ON FINANCIAL ACTIVITY TO 29 FEBRUARY 2016

 

Comments on the financial activity and a brief explanation of the variances is provided below.  For further information, please refer to the report to the Council on the same agenda with regard to the Annual Budget Review, which provides a full analysis of the major variances and projected subsequent impact on the end of year position.

 

Operating Activity

 

§   Operating Revenue

As at 29 February 2016, there is a variance of +5% in total operating revenue, with the following categories exceeding the 10% material variance threshold:  

 

Description

Variance

%

Variance

$000’s

Operating Grants, Subsidies and Contributions

+13%

+$310

Other Revenue

+585%

+$1,923

Interest Earnings

+22%

+$318

Profit on Asset Disposals

+15%

+$2

 

Operating Grants, Subsidies and Contributions (+$310K)

The current variance in this category is primarily attributable to timing differences in the receipt of operating grants, subsidies and contributions +$92K, coupled with the receipt of additional and/or unbudgeted reimbursements +$218K.  

 

Other Revenue (+$1,923K)

This category includes a range of revenue types including fines and penalties, the sale of miscellaneous items and other sundry revenue. The major variance is attributable to the unbudgeted drawdown of the Port Geographe bank guarantees that was the subject of a report to Council at the 23 March 2016 meeting.

 

Interest Earnings (+318K)

There is a current favourable variance of approximately +$281K in collective municipal, reserve and restricted interest earnings, with individual variances of approximately -$46K, +$146K and +$181K respectively. Also, there is a current favourable variance of approximately +$37K in relation to rates related interest charges. Late payment interest charges are tracking above year to date budget estimates by +$27K and instalment plan interest charges are currently tracking approximately +$10K above year to date budget projections.

 

Profit on Asset Disposals (+$2K)

The current minor variance remains attributable to book profits on the sale of assets. It should be noted that this is an accounting book entry, and has no direct impact on the surplus/ deficit position.

      


 

§   Operating Expenditure

As at 29 February 2016, there is a variance of -7% in total operating expenditure, with the following categories exceeding the 10% material variance threshold:  

 

Description

Variance

%

Variance

$000’s

Materials and Contracts

-23%

-$2,347

Other Expenses

-10%

-$196

Allocations

+16%

+$212

Loss on Asset Disposal

+37%

+$23

 

Materials and Contracts (-$2,347K)

The Materials and Contracts operating expenditure category comprises a wide range of expenditure types. The current variance is attributable to both favourable and adverse variances (of varying magnitudes) across a range of diverse activities. Material reporting variances are as follows:

 

§ Maintenance of Buildings

There is a favourable variance of approximately -$181k in this activity on a year to date basis, with the major contributors being building maintenance services -$47K and contract cleaning costs -$134K. A portion of the variance is attributed to timing and is expected to be expended by 30 June 2016.   

 

§ Contractors

There is a favourable year to date variance of approximately -$966k in collective contractors’ expenditure. This expenditure type is comprised of a significant range of projects, and a number of individual variances (favourable and adverse) are evident throughout. The following contractor expenditure variances have been highlighted for comment: 

 

1.    Busselton Jetty contractor costs are under budget year to date by approximately -$334K. Jetty works are funded from the jetty reserve and hence this variance will have no impact on the City’s year end net financial position; 

2.    Provence Estate maintenance presents a favourable contractor variance of -$155K as the public open space areas have not yet been handed over to the City.  It should be noted that the portion of the budget to be funded from the specified area rates cannot be drawn down if expenditure has not occurred within the area. 

3.    Vasse Newtown presents a favourable contractor variance of -$110K; however this saving will be offset against expenditure in other areas of the City. 

4.    Refuse sites presents a favourable contractor variance of -$151K.  Variances in waste services will be offset against the Waste Reserve and therefore have no impact on the City’s net financial position.

 

§ Fleet Expenses – Fuel

The fleet fuel expenditure reflects a favourable variance of -$241K, largely due to lower fuel prices.

 

§ Engineering Administration and Projects

Engineering Administration and Projects reflects a favourable variance of -$300k. This variance represents the annual payment to the Department of Transport in relation to the Port Geographe management deed which was outstanding as at 29 February 2016. It is noted the payment has been processed during March 2016.

 

Other Expenditure (-$196K)

Other Expenditure reflects a favourable variance of approximately -$196K attributable to Members of Council expenses (timing difference) and Community Services administration, events marketing and promotions. Marketing funds have not been fully expended with the halt to the MRBTA recharge campaign as a result of the amalgamation of GBTA/AMRTA and changes to regional branding.

 

It is noted that Council has resolved (resolution C1510/293) to transfer $150K from the differential rate marketing funds into new Airport Reserve specifically for marketing/support of Airport development project.

 

Allocations (+$212K)

The variance in Allocations is largely attributable to plant and overhead related allocations, which due to the nature of this activity is routinely subject to timing variances.   It is anticipated that in line with historical trends, that the variance will gradually decrease as the year progresses.

 

Loss on Asset Disposal (+$23K)

The Loss on Asset Disposal represents adverse book losses on the sale of sundry plant items and vehicles. It should be noted that this is a book entry only, and has no direct impact on the surplus/ deficit position.   

   

Capital Activity

 

§   Capital Revenue

As at 29 February 2016, there is a variance of -67% in total capital revenue, with the following categories exceeding the 10% material variance threshold:  

 

Description

Variance

%

Variance

$000’s

Proceeds from Sale of Assets

-34%

-$162

Transfer from Restricted Assets

-71%

-$1,060

Transfer from Reserves

-80%

-$4,595

 

Proceeds from Sales (-$162K)

The Proceeds from Sale of Assets category recognises the estimated sale or trade-in value of ‘heavy and light’ plant items budgeted to be replaced during the financial year. The current adverse variance is largely reflective of the timing difference in the lower Plant and Equipment capital expenditure on a year to date basis.

 

Transfer from Restricted Assets (-$1,060K)

The variance in Transfers from Restricted Assets results largely from the budgeted $1.5M transfer associated with the Busselton Regional Airport development. As at 29 February 2016, no transfer has been processed, as project expenditure (year to date actual $600k) has not yet reached this value (net -$1.5m).

 

This variance is partly offset by refunds in bonds and deposits of +$440K as at the end of February where all obligations have been fulfilled to authorise the return of funds.  The City does not budget for these transactions, and as such, any material variance will be reported accordingly.

 

Transfer from Reserves (-$4,595K)

The variance in Transfers from Reserves is attributed to the budget transfer of $4.5M associated with the new Civic and Administration Centre building. A significant timing variance is reflected as at 29 February 2016, as transfers are not processed until after funds have been expended or invoiced.  It is anticipated that the end of year position will be in line with the budget.

 

§   Capital Expenditure

As at 29 February 2016, there is a variance of -40% in total capital expenditure, with the following categories exceeding the 10% material variance threshold: 

 

Description

Variance

%

Variance

$000’s

Land and Buildings

-84%

-$10,409

Plant & Equipment

-41%

-$821

Furniture and Equipment

-24%

-$93

Infrastructure

-30%

-$4,924

Transfers to Restricted Assets

+55%

+$659

The attachments to this report include detailed listings of the following capital expenditure (project) items, to assist in reviewing specific variances:

§   Land and Buildings

§   Plant and Equipment

§   Furniture and Equipment

§   Infrastructure

 

CONCLUSION

 

As at 29 February 2015, the overall operating revenue is +$3M above year to date budget. This is mainly attributable to the unbudgeted additional revenue of +$1.8M received due to the drawdown of the Port Geographe bank guarantee, and timing differences associated with the receipt of other revenue (i.e. contributions, reimbursements, interest etc.). Expenditure categories are currently tracking below budget by -$3M, at this time however the majority of variances have been identified as timing issues only. More significant variances are evident in the capital revenue and expenditure categories.  Capital revenue performance is highly dependent upon the level of capital expenditure (i.e. acquisitions and construction). Capital expenditure performance to the end of February is below year to date budget projections across a number of classes; which significantly contributes to the reduced capital revenue levels.

 

Please also refer to the report to the Council on the same agenda with regard to the Annual Budget Review which is based on the City’s financial performance to 29 February 2016. The report includes a projection of the City’s financial performance to 30 June 2016 and endeavours to identify significant budget variances and if required recommends remedial action to be instigated as necessary prior to financial year end.  The Annual Budget Review for 2015/2016 has not identified any specific remedial action and foreshadows an overall net favourable variance to budget.

 

OPTIONS

 

The Council may determine not to receive the statutory financial activity statement reports.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

NA

 

Council Decision / Committee Recommendation and Officer Recommendation

C1604/094              Moved Councillor G Bleechmore, seconded Councillor P Carter

 

That the Council receives the statutory financial activity statement reports for the period ending 29 February 2016, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations.

CARRIED 7/1

En Bloc

Voting:

For the motion:             Councillor T Best, Councillor G Bleechmore, Mayor G Henley, Councillor J McCallum, Councillor P Carter, Councillor R Reekie and Councillor R Paine.

Against the motion:     Councillor R Bennett.

 


Council                                                                                      17                                                                      27 April 2016

10.3           Finance Committee - 14/04/2016 - ANNUAL BUDGET REVIEW - PERIOD ENDING 29 FEBRUARY 2016

SUBJECT INDEX:

BUDGET PLANNING AND REPORTING

STRATEGIC OBJECTIVE:

An organisation that is managed effectively and achieves positive outcomes for the community.

BUSINESS UNIT:

Finance and Information Technology

ACTIVITY UNIT:

FINANCIAL SERVICES

REPORTING OFFICER:

Financial Accountant - Ehab Gowegati

AUTHORISING OFFICER:

Director, Finance and Corporate Services - Matthew Smith

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Nil

 

This item was considered by the Finance Committee at its meeting on 14 April 2016, the recommendations from which have been included in this report. 

 

PRÉCIS

 

Between January and March in each financial year, a local government is to carry out a review of its annual budget for that year. The Council is required to consider the review submitted to it and determine (by absolute majority) whether or not to adopt the review, any parts of the review or any recommendations made in the review.

 

This report, based on the City’s financial performance for the period ending 29 February 2016, has been compiled to fulfil the statutory reporting requirements of the Local Government Act and associated Regulations in respect of the annual budget review process. 

 

In order to meet regulatory requirements the annual budget review is to be submitted to the Council by 30 April 2016

 

BACKGROUND

 

The requirement for a local government to carry out an annual budget review is prescribed via Regulation 33A of the Local Government (Financial Management) Regulations (the ‘Regulations’). A copy of the review, including the Council's determination in respect of the review, is to be provided to the Department of Local Government and Communities within 30 days of the date of the applicable Council Resolution. The Regulations require that the budget review must:

 

(a)       consider the local government's financial performance in the period beginning on 01 July and ending no earlier than 31 December in that financial year; and

 

(b)       consider the local government's financial position as at the date of the review; and

 

(c)       review the outcomes for the end of the financial year that are forecast in the budget.

 

Essentially, the purpose of an annual budget review is to ensure that a local government conducts a review of its financial performance at an appropriate time in the financial year such that any significant budget variances can be identified and remedial action instigated as necessary; prior to financial year end.

 

STATUTORY ENVIRONMENT

 

Regulation 33A of the Local Government (Financial Management) Regulations details the requirement for a formal budget review to be completed annually.

RELEVANT PLANS AND POLICIES

 

Not applicable.

 

FINANCIAL IMPLICATIONS

 

Any short term financial implications attributable to this review are addressed within the context of this report.

 

Long-term Financial Plan Implications

 

The primary purpose of this report is to review the City’s current and projected financial performance for the financial year ending 30 June 2016. Whilst there is limited direct consideration of long term financial plan implications within the report, the City’s current year financial performance will nonetheless assist in informing the development of next year’s long term financial plan. 

 

Long-term Financial Plan Implications

 

STRATEGIC COMMUNITY OBJECTIVES

 

This matter principally aligns with Key Goal Area 6 – ‘Open and Collaborative Leadership’ and more specifically Community Objective 6.3 - ‘An organisation that is managed effectively and achieves positive outcomes for the community’. The achievement of the above is underpinned by the Council strategy to ‘ensure the long term financial sustainability of Council through effective financial management’.

 

RISK ASSESSMENT

 

Risk assessments have been previously completed in relation to a number of ‘higher level’ financial matters, including timely and accurate financial reporting to enable the Council to make fully informed financial decisions. The completion of an annual budget review is a treatment/ control that will assist in addressing this risk.  

 

CONSULTATION

 

Not applicable.

 

OFFICER COMMENT

 

The Annual Budget Review has been compiled, as in previous years, based on the ‘Nature and Type’ reporting structure to maintain consistency with monthly Financial Activity Statement reporting. The review has concluded that the City’s financial performance to 29 February 2016 is satisfactory. Furthermore, as no net overall material adverse variance has been projected as part of the review, specific remedial actions are not required to be implemented.

 

Notwithstanding this, the report has identified a number of year to date favourable and adverse variances and projects variances will be remain evident as at 30 June 2016.  In many instances, the variances relate to items that are fully offset and, as such, will not expected to directly impact on the overall budget performance at financial year end. These matters are discussed within the body of this report, with the following Executive Summary providing a synopsis of those areas projected to potentially impact on the City’s overall net budget performance at financial year end.

 

 

Executive Summary

 

Operating Revenue

§ Rates revenue is projected to exceed the annual budget estimates by up to +$50k;

§ Operating grants, subsidies and contributions is projected to be largely in line with the annual budget estimates;

§ Fees and charges is projected to exceed the annual budget estimates by up to +$120k;

§ Other revenue is projected to be less than the annual budget estimates by up to -$50k;

§ Interest earnings revenue is projected to be less than the annual budget estimates by up to -$100k;

§ Non-operating grants, subsidies and contributions is projected to be cost neutral due to fact that should grants be not received, then the subsequent expenditure will not be incurred.

 

In summary, net operating revenue is projected to be materially in line with the annual budget estimates. 

 

Operating Expenditure

§ Employee Costs is projected to have a slight favourable variance to the annual budget estimates;

§ Materials and Contracts will be underspent on the whole however this will not affect the end of year position as material variances within this category will be transferred to equity in accordance with operational practice, with the exception of fuel which is projected to be less than the annual budget estimates by up to -$200k;

§ Utilities (gas, electricity, water etc.) is projected to be less than the annual budget estimates by up to -$90k;

§ Insurance Expenses is projected to be less than the annual budget estimates by up to -$60k;

§ Other Expenditure is projected to have a nominal variance and come in materially in line with the annual budget estimates;

§ Interest Expenses is projected to be less than the annual budget estimates by up to -$10k.

 

In summary, net operating expenditure is projected to be slightly lower than the annual budget estimates with a projected favourable variance of approximately $360k. 

 

Capital Revenue

§ There is material capital revenue variances estimated as at 30 June 2016, however these are either due to timing issues or are attributable to fully funded projects and therefore will not impact on end of year position.

 

Capital Expenditure

§ There is material capital expenditure variances estimated as at 30 June 2016, however these are either due to timing issues or are attributable to fully funded projects and therefore will not impact on end of year position.

 

The aforementioned estimation is predicated on numerous assumptions and is also exclusive of any potential/identified carry over items. Carry over items will ultimately form part of the end of year position, but will be allocated as part of the 2016/17 budget. The projected closing surplus position may also be impacted by any extraordinary items that may arise during the remainder of the financial year.   

 

The Executive Summary only highlights variances that are projected to have a material net impact on the City’s financial performance as at financial year end. There are numerous other variances estimated as at 30 June 2016, however in most instances, there will be offsetting variances to negate any net budget impact. This includes expenditures (both operating and capital) funded from reserves, grants, contributions, or borrowings. It is nonetheless considered appropriate that the Council is provided with an overview of the projected annual budget performance in all relevant income and expenditure activities. Accordingly, the following sections of this report provides a more detailed summary of financial performance against each of the operating revenue and expenditure categories (by nature and type), and also the capital revenue and expenditure categories (by classification/ description).

 

OPERATING REVENUE

 

As at 29 February 2016, there is a variance of approximately +$3m (or +5%) in respect of total operating revenue activities.  This variance is detailed as follows:

 

Description

Actual

YTD

$

Amended Budget YTD

$

Amended Budget

$

Variance

YTD

$

Variance YTD

%

Rates

38,992,419

38,783,970

38,998,079

+208,449

+0.54%

Operating Grants, Subsidies and Contributions

 

2,655,100

2,344,825

3,580,496

+310,275

+13.23%

Fees and Charges

 

12,154,325

12,053,390

15,099,480

+100,935

+0.84%

Other Revenue

 

2,251,985

328,596

534,090

+1,923,389

+585.34%

Interest Earnings

 

1,733,673

1,415,421

2,039,550

+318,252

+22.48%

Non-operating Grants, Subsidies and Contributions

 

4,854,414

4,720,347

37,451,666

+134,067

+2.84%

Profit on Asset Disposals

 

12,876

11,207

16,007

+1,669

+14.89%

TOTAL

62,654,792

59,657,756

97,719,368

+2,997,036

+5.02%

 

An overview of the financial performance in each activity is provided as follows:

 

Rates (YTD variance: +$208K)

The current favourable variance is primarily attributable to interim rating, predominantly in the improved residential and commercial rating zone. As at the end of February, the year to date actual is only below the annual budget allocation by $5k. 

 

Historically, net rates revenue tends to level off towards the end of the financial year, as overpayments and other refunds are processed. However, it is estimated that further valuation schedules will be received prior to financial year end, resulting in a net increase in the current financial year’s interim rates revenue. Whilst the financial impact of the new valuations is unable to be accurately determined at this stage, it is anticipated that this could be in the vicinity of $50k.

 

For the purpose of this review, it is therefore estimated that Rates revenue will exceed annual budget estimates by up to +$50k as at financial year end.  

 

Operating Grants, Subsidies and Contributions (YTD variance: +$310K)

The current variance is primarily attributable to timing differences in the receipt of operating grants, subsidies and contributions +$92k, coupled with the receipt of additional and/or unbudgeted reimbursements +$218k.  

 

With respect to operating grants, performance is generally in line with budgeted expenditure therefore it is not expected that there will be any material variances which will impact on the closing surplus/deficit position as at financial year end.      

With regards to reimbursements, current favourable variances include the reimbursement of Fire Prevention costs, workers compensation and insurance related matters. Whilst primarily reimbursing expenditures already incurred, the fire prevention reimbursement does include an unbudgeted amount of approximately $66k that relates to last year’s final reconciliation, which will contribute to the closing surplus/deficit position. Current adverse variances in reimbursements include legal expenses associated with rates administration, and the reimbursement of workers compensation costs relating to previous claims years -$40k.       

 

For the purposes of this budget review, the fire prevention reimbursement of $66k represents revenue that will assist in the determination of the closing surplus/deficit position as at 30 June 2016.  However it is unknown at this stage if the insurance recovery will occur, therefore this may negate any expected surplus. Consequently, performance in this activity is unlikely to have a material net impact of the closing surplus/deficit position.

 

Fees and Charges (YTD variance: +$101K)

The current variance in the Fees and Charges is attributable to a range of variances, both favourable and adverse.  The major contributors, by dollar value, are as follows:

 

 

Description

YTD Variance

$

YTD Variance

%

Building Fees

(39,018)

-7.64%

 

Health Fees

(43,777)

-17.73%

 

Planning Fees Statutory

155,288

44.92%

 

Planning Fees Strategic

(38,431)

-57.64%

 

Rangers Fees

63,349

56.01%

 

Refuse Service Fees

166,903

2.43%

 

Council Facility Service Fees

(25,782)

-1.86%

 

Caravan Park Fees

(213)

-0.02%

 

Aged Housing

4,713

1.61%

 

Airport Fees

(160,880)

-20.86%

 

Cemetery Fees

(10,856)

-9.29%

 

Other Fees & Charges

29,639

6.26%

 

 

100,935

+0.84%

 

 

Responsible Directorates have provided commentaries in relation to the aforementioned variances:  

 

§ Building Fees

The unfavourable year to date variance of -$39k is attributable to a range of variances including building permits -$86k, swimming pool inspection fees +$24k, and R-Codes approval fees +$23k. Forecast year end variances are building permits -$40k, swimming pool fees +$3k, and R-Codes approval fees +$29k.

 

Based on the above information it is anticipated that the building fees at year end will report a net nominal variance.  Consequently, performance in this activity will not have any net material impact on the closing surplus/deficit position.

 

§ Health Fees

The adverse year to date variance of -$44k is attributable to a range of variances including license fees for street traders +$7k, other health license fees (including S39 Cert.) +$5k, water sampling fees -$20k, concert license fee/ service charges -$12k,  inspection fees for food premises +$32k, and holiday home renewal fee -$55k.  Overall revenue is reported to be consistent with budget, with variances due to timing differences at this time. Consequently, performance in this activity will not have any net material impact of the closing surplus/deficit position.

 

§ Statutory Planning Fees

The favourable year to date variance of +$155k is attributable to development application fees. It is forecast that at year end development application fees will remain favourable by approximately +$100k. This is due to once off large commercial applications received in the current year (Coles Vasse, Busselton Central and West Street).  Consequently, performance in this activity will have an impact of the closing surplus/deficit position.

 

§ Strategic Planning Fees

The unfavourable year to date variance of -$38k is attributable to rezoning charges -$23k and process guide plans -$15k. This includes timing differences and it is uncertain at this stage as to the impact to the yearend position. Consequently, performance in this activity is not anticipated to have a net material impact of the closing surplus/deficit position.

 

§ Rangers Fees

The favourable year to date variance of +$63k is mainly attributable to dog registration fees +$61k. Overall revenue is reported to be consistent with budget, with variances due to timing differences at this time. Consequently, performance in this activity will not have any net impact of the closing surplus/deficit position.

 

§ Refuse Service Fees

The favourable year to date variance of +$167k is attributable to a range of variances including refuse removal fees (domestic) +$51k, tipping fees +$82k, and recycling fees (domestic) +$26k. The favourable refuse removal and recycling fees (domestic) is due to higher interim rates through property growth compared to relatively conservative growth estimates used for budget purposes.  With regard to tipping fees there has been an increase in the amount of commercial waste collected, with some of this attributable to a higher level of building activity and housing construction within the City.  All the above variances will have no net impact on the City’s year end position as any surplus in excess of budget will form part of the net position of waste, which will be transferred to the Waste Reserve.    

 

§ Council Facility Service Fees

Of the -$26k adverse variance, -$21k relates to the Naturaliste Community Centre (NCC), where certain revenue streams have proven to be unachievable, e.g. a new vacation care program due to licensing delays and kiosk/café services which have not proved viable. The revenue deficit however, will be fully offset by an under-spend in expenses to ensure there is no impact to the net operating position.

 

The remaining variance is due to a range of variances across Council facilities. Performance in this activity is not anticipated to have any net material impact of the closing surplus/deficit position.

 

§ Aged Housing Fees

The favourable year to date variance of +$5k is attributable to aged housing rental.  As a nominal variance is anticipated by financial year end, aged housing fees is not anticipated to have a net impact on the closing surplus/deficit position.

 

§ Airport Fees

The adverse year to date variance of -$161k is attributable to a range of variances including airport hangar leases -$8k, airport landing and take-off fees -$65k,  airport FIFO car parking income -$27k, head taxes/passenger fee -$31k, airport fuel agency fees -$20k, and airport fuel facility leasing fees -$9. With regard to airport landing fees and head taxes/passenger fee, these are expected to be on target at the end of the financial year. Car parking fees, airport fuel agency fees, airport fuel facility leasing fees and hangar leases are expected to be down by similar variance amounts at the end of the financial year due to decreases in car parking patronage and the jet fuel and new hangar projects not commencing. Subsequently the revenue targets will not be met.  Expenditure however is also below budget. 

 

The net operating surplus will be less than anticipated however as the Airport surplus is transferred to the Airport Infrastructure Reserve it has a net neutral impact on the net closing position.

 

§ Cemetery Fees

Cemetery fees have a year to date variance of -$11k. Cemetery fee revenue is difficult to predict and based on the comparatively immaterial values involved, it is assumed that budget estimates will be achieved. Consequently, performance in this activity will not have any net material impact of the closing surplus/deficit position.

 

§ Other Fees and Charges

The favourable year to date variance of +$30k is attributable to a range of fees and charges including the provision of property information -$30k, license fees revenue -$10k, lease payments on commercial properties +$5k, art sales commission +$14k, and supervision fees +$50k. With regard to the collection of supervision fees this is highly variable based on the clearance of new subdivision areas linked to housing construction activity and the demand for vacant land.  Although difficult to predict, based on current information available, it is anticipated this will represent a surplus to the City in the order of +$20k over the annual budget. This amount may be higher if a large subdivision is given clearance.    

 

Overall, based on the above analysis of Fees and Charges, a favourable variance is projected of +$120k, therefore performance in this activity will have an impact on the end of year closing position.

 

Other Revenue (YTD variance: +$1.923M)

This category includes a range of revenue types including fines and penalties, the sale of miscellaneous items and other sundry revenue. The current variance in respect of these activities is summarised as follows:

 

§ Fines and Penalties Revenue

As at 29 February 2016, there is an adverse variance of approximately -$59k in this area, with the main contributors being Bushfire related fines -$44k and parking fines -$11k. Revenue for bushfire related fines is projected to be lower than the budget estimate of $60k, with inspections undertaken to date indicating a higher level of compliance and less than projected number of infringements issued for non-compliance. The projected budget revenue estimate has therefore been revised down to $21k, being an expected adverse variance of -$39k on the end of year financial position.  With regard to parking fines, the decrease in revenue may be due to community awareness of parking time restrictions resulting in shopper behavioural changes. Revised projected budget revenue is estimated at $78k with the resultant adverse variance -$12k affecting the end of year financial position. 

 

§ Sale of Miscellaneous Items

As at 29 February 2016, there is an adverse variance of approximately -$51k, primarily due to the sale of scrap metal.  Current scrap metal prices are lower than anticipated and at current price, is not expected to meet costs associated with the disposal and therefore metal will be stock piled at this time.  Accordingly, scrap metal sales are estimated to finish the year approximately $90k under budget. This will have no net impact on the City’s year end position as any surplus/(deficit) will form part of the net position of waste which is transferred to/from the Waste Reserve.


 

§ Other Sundry Revenue

As at 29 February 2016, there is a favourable variance of approximately $2.034m in this area. This variance is mainly attributable to the unbudgeted drawdown of the Port Geographe bank guarantees. In accordance with Council Resolution (C1603/065), the funds received will be transferred to reserve accounts and as a consequence will not impact on the closing surplus/deficit position.

 

Based on the analysis of Other Revenue, there will be an overall adverse net impact on the closing position of approximately -$50k.

 

Interest Earnings (YTD variance: +$318K)

The Interest Earnings activity includes interest earnings on municipal, reserve and restricted funds, as well as rates related interest revenue. The year to date and projected end of financial year, performance in each of these areas is summarised as follows:

 

§ Municipal, Reserves and Restricted Interest

There is a current overall favourable variance of approximately +$281k in collective municipal, reserve and restricted interest earnings.  However, individual variances reflect an adverse variance for municipal funds of approximately -$46k, with favourable variances in reserves and restricted funds of +$146k and +$181k respectively. This is due to higher than anticipated balances.

 

Based on current projections, it is expected that by financial year end, municipal interest earnings will fall short of annual budget estimates by up to -$100k. This shortfall is partially attributable to self-funding the City’s overdraft in the early part of the financial year and the lower than anticipated cash flow projections. This adverse variance will affect the end of year financial position.

 

Reserve interest earnings are estimated to exceed annual budget estimates by up to +$200k. This is mainly attributable to a higher than anticipated  balance which included the $18m loan funds for the Administration building redevelopment, which at the end of February is yet to be utilised to offset any expenditure.

 

Interest on Restricted Funds will exceed budget by +$900k. Although this additional income relates to airport funds which have not been budgeted for, it should be noted that the Airport grant agreement requires these funds be applied towards the Airport project.

 

Reserve and restricted cash interest earnings do not directly impact on the City’s closing surplus/ deficit position, as this revenue is reallocated to the ‘Transfers to Reserves/ Restricted Assets’ capital equity account. Notwithstanding this, the additional interest earnings do represent a further injection of funds to the City’s Reserve and Restricted cash accounts. Conversely, municipal interest earnings form part of the City’s general revenue and consequently, the estimated shortfall of up to -$100k will directly impact on the closing position.

 

§ Rates Related Interest (Instalment Plan and Late Payment)

There is a current favourable variance of approximately +$37k in relation to rates related interest charges. Late payment interest charges are tracking above year to date budget estimates by +$27k and instalment plan interest charges are currently tracking approximately +$10k above year to date budget projections. This interest is predominantly raised early in the financial year (subsequent to the initial instalment payment date), and as such, the current annual budget variance is not expected to materially increase. For the purpose of this review, it is projected that rates related interest earnings will not exceed annual budget estimates by financial year end.                  

 

In summary, it is anticipated that the overall Interest Earnings activity will be in excess of annual budget estimates by up to +$1m as at 30 June 2016. However, for the purposes of estimating a closing surplus/deficit position, a net adverse variance of some -$100k is projected which is attributable to the shortfall of interest earned on municipal funds.

 

Non-operating Grants, Subsidies and Contributions (YTD variance: +$134K)

This category reflects a net favourable variance of +$134k, with significant individual variances summarised below:

 

·    Busselton Foreshore provision of services and auxiliary works is -$986k.  This is due to the $4.5m Royalties for Regions grant being pending, with likely notification in June or July.

·    Foreshore east youth precinct (skate park and adventure playground) is +$615k.  This is due to timing differences;

·    Busselton shark net non-operating grant is +$100k. This is due to a timing difference as the Government Grant was received earlier than initially anticipated;

·    Tuart Drive Bridge (0239A) is +$285k.  This is due to timing differences;

·    Metricup Road Bridge (0239A) is -$203k. The City has been informed by Main Roads WA that this project will not go ahead this financial year.  The proposed detour around this bridge was deemed excessive (approx. 11kms) and so the bridge works will be carried out next financial year with a temporary detour planned to be constructed on private land;

·    Roads to recovery road construction works (23 road works) is net +$605k. This is a timing difference only with the City claiming the Federal Government Grant in advance of the second payment quarter (Oct-Dec) based on the works predicted  to be carried out;

·    Main roads road construction projects is net -$75k, of which the Strelly Street design project is -$60k. It was anticipated that the City would claim more of the contracted road design works earlier in the year.  These designs are linked to deliberations associated with the Busselton traffic study, and thus there have been some delays in finalising designs;

·    Busselton bypass – Fairway to Kangaroo Gully is -$240k. This dual use path project was impacted by delays in obtaining approvals from Main Roads to work within their road reserve. This project has now commenced and represents a timing difference only at this time;

·    Bus Bay and Shelters is -$180k.  This project was delayed owing to complex negotiations with the Department of Environment and Conservation regarding the clearing of land.  These works have now commenced.

 

Overall grant funding variances are primarily due to timing differences.  However it must be noted that where projects are not proposed to commence in 2015/16, the associated grant funding will not be raised until the expenditure has been incurred.

 

The above variances will not have any direct impact on the closing surplus/deficit position as long as grants for works completed are raised on or before 30 June 2016. Conversely, where grants are received in advance of works being completed (by 30 June 2016), any unspent component of the associated grant funding will be required to be transferred to restricted assets.        

 

With regards to the favourable variances in contributions of +$217k, this will not have any direct impact on the closing surplus/deficit position as these funds will be transferred to restricted accounts to be used in the future for the purpose they were taken for.    

                   

Profit on Asset Disposals (YTD variance: +$2K)

The current minor variance is attributable to book profits on the sale of assets. It should be noted that this is an accounting book entry, and has no direct impact on the surplus/deficit position.       

 

 

OPERATING EXPENDITURE

 

As at 29 February 2016, there is a variance of approximately -$2.9m (or -7.2%) in respect of total operating expenditure activities.  This variance is detailed as follows:

 

Description

Actual

YTD

$

Amended Budget YTD

$

Amended Budget

$

Variance

YTD

$

Variance YTD

%

Employee Costs

 

16,679,104

17,331,302

26,413,101

-652,198

-3.76%

Materials and Contracts

 

7,832,067

10,178,818

15,120,925

-2,346,751

-23.06%

Utilities (Gas, Electricity, Water etc.)

 

1,454,351

1,547,396

2,321,370

-93,045

-6.01%

Depreciation on Non-current Assets

 

9,949,433

9,761,600

14,636,430

+187,833

+1.92%

Insurance Expenses

 

663,483

736,624

737,370

-73,141

-9.93%

Other Expenditure

 

1,706,456

1,902,406

3,028,622

-195,950

-10.30%

Allocations

 

-1,089,757

-1,302,140

-1,899,950

+212,383

+16.31%

Interest Expenses

 

680,845

691,046

1,340,955

-10,201

-1.48%

Loss on Asset Disposals

 

85,066

62,016

68,867

+23,050

+37.17%

TOTAL

37,961,048

40,909,068

61,767,690

-2,948,020

-7.21%

 

An overview of the financial performance in each activity is provided as follows:

 

Employee Costs (YTD variance: -$652K)

Whilst reflecting an overall favourable variance as at 29 February 2016, this category presently includes numerous individual variances (both favourable and adverse). On the whole however, this category can be broken into three main sections, all of which have favourable variances; salaries -$436k, wages -$88k, and other employee costs -$128k.

 

In order to project an end of financial year variance, the current expenditure in each account has been extrapolated and then amended for any known adjustments.  Impacting factors taken into account include current vacant positions, historical expenditure patterns, known additional costs with regard to workers compensation insurance +$67k, and the final adjustment attributable to the recognition of accrued employee cost to financial years end.  Overall, it is projected there will be a slight favourable variance as at 30 June 2016. There are a range of matters however that can directly impact on the final Employee Costs, and as such it must be reiterated that this projection is based on available information at the time of compiling this report.  

 

Materials and Contracts (YTD variance: -$2.347M)

The Materials and Contracts category comprises a wide range of expenditure types, and presently incorporates in the order of 142 separate accounts. The current variance is attributable to both favourable and adverse variances (of varying magnitudes) across a range of diverse activities. Consequently, this report will highlight those material variances which are either of interest due to materiality or are expected to have a direct impact on the City’s closing surplus/deficit position as at 30 June 2016.

§ Maintenance of Buildings

There is a favourable variance of approximately -$181k in this activity on a year to date basis, with the major contributors being building maintenance services -$47k and contract cleaning costs -$134k.

It is expected that the building maintenance services expenditure may fall short of annual budget estimates by up to -$100K as at 30 June 2016. Expenditure against buildings year to date has been less than budgeted due in part to Facility staff spending a considerable amount of their time on relocating staff for the new administration building project.  It is anticipated however that the level of expenditure will increase in the second half of the year.  To this end it is projected that building maintenance services and overall cleaning costs at years end will come within budget expectations.

 

§ Contractors

There is a favourable year to date variance of approximately -$966k in collective contractors’ expenditure, comprised of a significant range of projects and individual variances (favourable and adverse). However, for the purposes of this review, the following contractor expenditure variances have been highlighted for comment. 

 

Busselton Jetty contractor costs are under year to date budget estimates by approximately -$334k. Jetty works are funded from the jetty reserve and hence this variance will have no impact on the city’s year end net financial position.  That said, there are significant works to be undertaken on the jetty in the next four months and so much of this budget will be expended. 

 

Contractor costs associated with Provence Estate maintenance are under budget by -$155k as public open space areas within the estate is yet to be handed over to the City; therefore the maintenance of the area is not yet the responsibility of the City.  A portion of the allocated budget is funded from the specified area rates and this draw down can only occur if expenditure is within the specified area.  Any portion of the variance that represents a saving to the City will be offset and used to facilitate works in other activity areas within parks and gardens. 

 

There is a favourable contractor cost variance totalling -$110k attributable to Vasse Newtown.  The saving however will offset expenditure in other areas of the City and, similar to Provence Estate the Vasse Newtown budget is linked in part to the specified area rate with a draw down only being possible if relevant expenditure is incurred.

 

Finally, there is a favourable contractor cost variance totalling -$151k attributable to refuse sites. It is anticipated there will be significant savings as at 30 June 2016, however this will not impact on the City’s net financial position, as any saving will be transferred to the Waste Reserve.

 

§ Consultancies

As at 29 February 2016, the collective consultancies budget reflects a favourable year to date variance of approximately -$201k, with the variance attributable to a range of individual consultancy allocations. Based on projections to 30 June 2016, it is estimated that the annual operating budget allocation of approximately $677k will be underspent by up to approximately -$70k.  This will not however affect the end of year position as, as outlined below, material variances identified in this category will be transferred to reserves in accordance with operational practice.

 

The major contributors to the projected variance include:

 

·    Airport operations consultancy budget is on budget compared to the year to date allocation and there may be nominal savings at the end of the year  of -$5-10k;

·    Property and business development consultancy budget is down due to delays in progressing the foreshore commercial sites (cafes, hotel and microbrewery sites) and the need to seek either legal/commercial advice. It is expected that some funds will be expended prior to the end of financial year however there is likely to be unspent funds of approximately -$10k. This underspend will form part of the end of year airport reconciliation and will therefore will not affect the City’s net current position;

·    A $100k consultancy budget was provided to facilitate works towards the development of a future tip site.  It is anticipated that $60k of this budget will not be required.  This will have no impact on the City’s net financial position as this is being funded from the Waste Reserve. 

 

§ Fleet expenses – Fuel

As at 29 February 2016, the fleet expenditure associated with fuel reflects a favourable year to date variance of -$241k. This is mainly attributable to decreasing fuel prices with the overall expenditure on fuel being significantly less than what was budgeted for this financial year.  That said, overall fuel usage is historically higher in the second half of the year as construction activity is greater.  Nonetheless, a fuel saving in the order of -$200k is anticipated based on current fuel prices.

 

§ Engineering Administration and Projects

There is a favourable variance within this area of -$300k. This represents the annual payment that is yet to be made to the Department of Transport in relation to the Port Geographe management deed. It is noted the payment has been processed during March 2016. As this item is fully reserve funded, it will have no impact on the end of year position.

 

Utilities - Gas, Electricity, Water etc. (YTD variance: -$93K)

The current variance is attributable to favourable variances in electricity charges -$37k, telephone charges -$14k and water charges -$42k. Whilst due in part to timing differences in the receipt and payment of utility invoices, end of financial year savings are nonetheless projected in several of the utility categories.

 

§ Electricity Charges

The electricity charges overall favourable variance -$37k is due to a range of individual variances (both favourable and adverse), with the more significant savings reflected in the major electricity users, including the Geographe Leisure Centre -$11k, the Kookaburra Caravan Park -$6k, and the Administration Building -$26k.  An analysis undertaken to forecast end of year expenditure, estimates that a favourable variance of up to -$40k will be evident in electricity charges as at financial year end.

 

§ Telephone Charges

The telephone charges overall favourable variance -$14k is primarily due to the costs associated with mobile phones being -$4k down and call centre costs -$1k down as compared to the year to date budget. An analysis at this time indicates that a nominal saving may be evident as at 30 June 2016.

 

§ Water Charges

The current favourable variance in water charges is primarily attributable to higher budgeted rate increases. At time of budget compilation, the City was advised of likely percentage increases.  Actual increases have been below what was quoted, i.e. Busselton water charges were 0.5% below what was initially advised and the Water Corporation increase was 1.8% below that budgeted.  An analysis undertaken to forecast end of year expenditure estimates that a favourable variance of up to -$50k will be evident in water charges as at financial year end.

 

In summary of the above, it is projected that the Utilities activity will reflect a favourable variance of up to -$90k as at 30 June 2016.

 

 

 

 

Depreciation on Non-current Assets (YTD variance: +$188K)

This variance, which will further increase by 30 June 2016, is primarily attributable to the 2015 infrastructure fair value valuation coupled with the significant value of donated assets also brought to account as at 30 June 2015.

 

The depreciation budget is required to be calculated reasonably early in the annual budget development process, and has historically been predicated on financial year end projections, along with other known material asset movements. Whilst generally accurate, this approach has this year been impacted by the aforementioned activities.

 

Whilst depreciation is an expense that the City needs to be fully mindful of, due to its nature, this operating expense is reversed as a non cash adjustment in the Statement of Financial Activity, and as such has no net effect on the surplus/deficit position.                       

 

Insurance Expenses (YTD variance: -$73K)

The current variance in this activity is attributable to a range of variances, primarily property insurance -$9k, plant insurance premiums -$46k, public liability insurance -$14k and other general insurance costs -$4k. As with depreciation expenses, the insurance budget is required to be developed early in the budget process, to enable other necessary budget activities to progress. Whilst the City’s insurer provides preliminary premium ratios, these are subject to subsequent amendment.      

 

Whilst additional insurances expenses are expected to be incurred prior to 30 June 2016, due to insurance schedule additions and amendments, along with excess payments, these are not expected to be material in value. Consequently, a favourable variance of approximately -$60k is projected in this activity by financial year end. 

 

Other Expenditure (YTD variance: -$196K)

The favourable variance as at 29 February 2016 includes -$100k associated with events marketing and promotions relating to MERG which have not been expended due to the amalgamation of GBTA/AMRTA and regional branding discussions. Council has resolved to transfer $150k from the differential rate marketing funds into a new Airport Reserve specifically for marketing/support of Airport development project, and this $100k, along with savings made in the remainder of the financial year, will be used for this purpose.

 

The bulk of the remaining difference is attributable to the members of Council activity area which has a favourable variance of -$88k. This represents a timing variance only and therefore will not have any net impact of the closing surplus/deficit position.

 

Not including the above activities, a range of other individual year to date variances (both favourable and adverse) is evident throughout this category. Expectations are that these will largely cancel each other out by financial year end.

 

Allocations (YTD variance: +$212K)

This activity incorporates numerous internal accounting allocations. Whilst the majority of individual allocations are administration based and cleared each month, the activity also includes plant and overhead related allocations. Due to the nature of these line items, the activity reflects as a net offset against operating expenditure, in recognition of those expenses that are of a capital nature and need to be recognised accordingly. Due to its ‘accounting transaction’ nature, performance in this activity has no net impact on the surplus/deficit position.                 

 


 

Interest Expenses (YTD variance: -$10K)

The current variance is attributable to a timing delay in the drawdown of budgeted loan facilities for Lot 40 Vasse Highway totalling $850k. The delay in drawdown of this loan will result in a favourable variance of -$10k in this category as at 30 June 2016.

 

Loss on Asset Disposals (YTD variance: +$23K)

This variance is due to book losses on the sale of sundry plant items and a range of vehicles. It should be noted that this is a book entry only, and has no direct impact on the surplus/deficit position.       

 

CAPITAL REVENUE

 

As at 29 February 2016, there is an adverse variance of approximately -$5.8m (or -67.29%) in respect of total capital revenue activities.  This variance is detailed as follows:

 

Description

Actual

YTD

$

Amended Budget YTD

$

Amended Budget

$

Variance

YTD

$

Variance YTD

%

Proceeds from Sale of Assets

 

319,780

482,400

592,200

-$162,620

-33.71%

Proceeds from New Loans

 

850,000

850,000

850,000

0

0%

Self-Supporting Loans –Repayment of Principal

 

36,690

36,690

74,508

0

0%

Transfers from Restricted Assets

 

440,442

1,500,000

53,267,805

-1,059,558

-70.64%

Transfers from Reserves

 

1,180,797

5,775,692

24,472,157

-4,594,895

-79.56%

TOTAL

2,827,709

8,644,782

79,256,670

-5,817,073

-67.29%

 

An overview of the financial performance in each activity is provided as follows:

 

Proceeds from Sale of Assets (YTD variance: -$163K)

The Proceeds from Sale of Assets category is directly aligned with the heavy and light plant component of the Plant and Equipment capital expenditure budget, insofar as it recognises the estimated sale/trade-in value of plant items budgeted to be replaced during the financial year. Consequently, the current adverse variance in this category is largely reflective of the lower than projected level of capital expenditure in the Plant and Equipment capital expenditure budget on a year to date basis. Furthermore, and due to the aforementioned alignment, any shortfall in this revenue budget will predominantly be offset by under expenditure in the associated capital expenditure budget line items.

 

As discussed in the Plant and Equipment capital expenditure category, the Plant and Equipment budget is expected to be fully expended (other than the replacement of the City’s road maintenance patching truck) by 30 June, and as such, the current variance in this category should largely reduce by financial year end.

 

Proceeds from New Loans (YTD variance: $0)

The budgeted new loan for the 2015/16 financial year has been drawn down, and no further transactions will be incurred in this category.

 

 

Self-Supporting Loans –Repayment of Principal (YTD variance: $0)

Self-supporting repayments are anticipated to be as per budget estimates.  Therefore no variance is expected in this category.   

 

Transfers from Restricted Assets (YTD variance: -$1,060K)

The Transfers from Restricted Assets category represents the equity transfer of previously quarantined monies (e.g. grants, contributions and unspent loans) to assist in funding specified works within the current financial year, along with the refund of bond and deposit payments.  Due to the nature of this category, the annual budget allocation is generally spread evenly across the financial year, with the exception of June, where a higher allocation is made to reflect specific end of financial year transactions. Consequently, budget variances will be evident throughout the year.

A transfer from Restricted Assets was budgeted to occur by the 29 February 2016 of $1.5m, associated with expenditure to be incurred for the Busselton Regional Airport development. To date no transfer has been made as expenditure for the project has not yet reached this value (net -$1.5m).  The remaining +$440k is attributable to bonds and deposits refunded to the end of February as all obligations have been fulfilled to authorise the return of funds. As the City does not budget for these transactions, any material variance will be reported accordingly.

 

 Transfers from Reserves (YTD variance: -$4,595K)

Similar to Transfers from Restricted Assets, this category represents equity transfers utilised to fund identified capital and operating expenditures. The annual budget reflects the total value of transfers from reserves occurring in June, to minimise budget variances arising as a result of timing differences.

 

As with the Transfers from Restricted Assets category, performance in this category will have no direct impact on the closing surplus/deficit position. Where a transfer is not made, it will be due to the associated works not having incurred any expenditure within the financial year. It should be noted however that the timing of transfers does have an impact on associated interest earnings. That is, where transfers can be deferred, this provides the capacity for additional earnings on the respective reserve accounts (albeit this does not impact on the closing surplus/deficit position).

 

As at 29 February, the 2015/16 budget includes a transfer from reserves of $4.590m associated with the building of the new Civic and Administration Centre. As this expenditure has not been realised/ invoiced, no transfer has been made and hence the significant variance. At this time however it is anticipated that the Civic and Administration building actual expenditure and subsequent income will be incurred in line with the budget.

 

CAPITAL EXPENDITURE

 

As at 29 February 2016, there is a variance of approximately -$15.4m (or -39.51%) in respect of total capital expenditure activities.  This variance is detailed as follows:

 

Description

Actual

YTD

$

Amended Budget YTD

$

Amended Budget

$

Variance

YTD

$

Variance YTD

%

Land & Buildings

 

1,929,317

12,337,880

29,548,202

-10,408,563

-84.36%

Plant & Equipment

 

1,177,576

1,998,664

2,514,500

-821,088

-41.08%

Furniture & Office Equipment

 

299,622

392,822

2,229,834

-93,200

-23.73%

Infrastructure

 

11,548,717

16,472,594

69,867,195

-4,923,877

-29.89%

Total Loan Repayments- Principal

 

886,326

886,326

1,823,986

0

0%

Transfers to Restricted Assets

 

1,864,328

1,205,656

1,808,490

+658,672

+54.63%

Transfers to Reserves

 

5,945,504

5,804,461

9,483,842

+141,043

+2.43%

TOTAL

23,651,390

39,098,403

117,276,049

-15,447,013

-39.51%

 

An overview of the financial performance in each activity is provided as follows:

 

Land & Buildings (YTD variance: -$10.4M)

The Land and Buildings capital expenditure budget of approximately $10.4m comprises a number of major projects areas, including:

§ Land purchases for Airport Development -$0.9m;

§ Foreshore east youth precinct Community Youth Building (incorporating BSLSC) - $1.9m;

§ Railway House -$1.2m;

§ Multi-purpose community sporting clubhouse -$0.5m;

§ Civic and administration centre (inclusive of relocation costs) -$5.4m;

§ Remainder of Buildings Program - $0.5m.

 

§ Busselton Airport Development - $0.9M

Land acquisition negotiations are currently being finalised.  It is anticipated that deposits for three portions of land will be paid this financial year with the balance in 2016/17. As this project is fully grant funded, it will have no effect on the year end net current position.

 

§ Foreshore east youth precinct Community Youth Building (incorporating BSLSC) - $1.9M

Due to changes in policy and timing with the Lottery West funding system, the outcome of the grant application submitted to Lottery West has only just been announced.  The City has been successful in its application, with Lottery West granting the full estimated costs to construct the building of $2.881m. This project is due to Commence construction in October 2016.

 

§ Railway House -$1.2M

A design and construction tender has been awarded.  Construction commenced in February 2016 with the projected completion date during the 2016/17 financial year.

 

§ Multi-purpose community sporting clubhouse -$0.5M

City staff are currently working with relevant stakeholders and user groups of the Barnard Park Ovals to develop a suitable concept which meets their requirements. Construction should commence in May 2016 with the project being carried forward and completed in the 2016/17 financial year.

 

§ Civic and administration centre (inclusive of relocation costs) -$5.4M

This variance is due to a timing difference in that construction commenced later than reflected in the 2015/16 budget.  However given the tight schedule for construction and the anticipated practical completion date of February 2017, it is still anticipated that all of the funds budgeted will be spent.

 

Based on the above, it is projected that the Land and Buildings capital expenditure category will fall short of annual budget estimates. However, as the projects are fully funded from grants, contributions and/or reserve transfers, the under expenditure will not have any net impact on the closing surplus/deficit position.

 

Plant & Equipment (YTD variance: -$821K)

The Plant and Equipment capital expenditure budget of approximately $2.5m comprises $2.4m in heavy and light plant replacements and acquisitions, with the balance of the budget for sundry plant and equipment procurements.

 

At 29 February 2016, the majority of the current variance is primarily attributable to timing in the delivery of the heavy plant replacement program -$0.6m; including the following:

§ A new small rear load waste truck $200k;

§ Parks and Gardens heavy plant $60k;

§ Construction heavy plant $380k.

 

It is anticipated that all budgeted items of Plant and Equipment will be replaced by 30 June 2016 other than the replacement of the City’s road maintenance patching truck. This specialised vehicle has a long lead-time between ordering & delivery and to this end, will represent a carry over.  As this vehicle is funded from the plant replacement reserve, this transaction will have no impact on the net financial year end position.

 

Furniture & Office Equipment (YTD variance: -$93K)

The current variance in this category is primarily due to information technology expenditure -$65k, cultural planning -$24k, and other minor variances which net to -$4k.

 

With regards to the information technology expenditure, the variance is currently attributable to timing differences in relation to specific projects.  It is anticipated that the full capital program in this area will be achieved by the end of the financial year.

 

With regards to the cultural planning expenditure (settlement art project), the variance is currently attributable to timing differences with a purchase order for $25k currently outstanding for this line item. It is expected that the full budget allocation will be utilised by the end of the financial year.

 

For the purpose of this review, performance in the Furniture and Office Equipment category is not projected to have any net impact on the closing surplus/deficit position.  

 

Infrastructure (YTD variance: -$4.924M)

For the purposes of this review, the Infrastructure capital expenditure category is broken down into three specific areas. The year to date performance in each area is summarised as follows:

 

Description

Actual

YTD

$

Amended Budget YTD

$

Amended Budget

$

Variance

YTD

$

Variance YTD

%

Busselton Foreshore

 

4,437,524

5,001,363

7,040,318

-563,839

-11.27%

Busselton Regional Airport

 

451,202

1,200,085

41,645,094

-748,883

-62.40%

Infrastructure - Other

6,659,991

10,271,146

21,181,783

-3,611,155

-35.16%

TOTAL

11,548,717

16,472,594

69,867,195

-4,923,877

-29.89%

 

Comments relating to the performance in each of the above areas are provided as follows:

 

§ Busselton Foreshore

Following the continued success of the Busselton Youth Precinct, the construction projects being undertaken for the Busselton Foreshore are in the main, progressing according to budget and schedule. An exception is noted for the Busselton Foreshore provision of services and auxiliary works which is pending due to Royalties for Regions grant notification.

 

§ Busselton Regional Airport 

It is noted the progress of the Airport Development Project is on schedule.  However, there is a material variance with the timing of the project costs, with funding scheduled to be spent over the three years commencing from the 2015/16 financial year.  Key progress and payments to be made in 2015/16 include administration (operations of Project Management Office), preliminary assessments and designs, and land acquisition.  It is estimated that approximately $54.6m will be carried over into the 2016/17 financial year.  The project is self-funded and will not adversely affect the net position.

 

§ Infrastructure - Other

This component of the Infrastructure capital expenditure budget is largely managed by the Engineering and Works Services Directorate and covers a range of different activities. With an annual budget of approximately $21m and a year to date budget of approximately $10m, there is a current year to date variance of -$3.6m. There were a further $3m in committed costs raised against projects as at the end of February representing orders made to suppliers and anticipated to be receipted and paid in the short to medium term.

 

The year to date variance is explained by the following major variances;

 

§ -$1.4m, representing 40% of the unexpended year to date budget variance, is attributable to Sanitation (waste) Infrastructure:

 

·    Phase one of the New Cell Development, currently under construction, was -$811k under budget, noting that this project is due for completion by the end of May 2016.

·    The Busselton Transfer Station Development was under budget by -$600k due to the delays in project commencement. The tendered price for this development is far in excess of budget and hence a budget amendment report is required to be submitted to the Council. This project will likely represent a carry over.

 

It is noted that any variances in these projects will not impact on the net end of year position as variances with be transferred to/from the Waste Reserve.

 

§ -$1.080m, representing 30% of the year to date variance is attributable to the Vasse Community & Recreation Precinct - AFL Oval Stage 1 project. This is a timing difference with works now underway and due to be completed by June 2016.

 

§ Capital Bridge projects make up a further -$487k or 14% of the variance.  This is almost exclusively attributed to the Metricup Road bridge works that have been postponed and will represent a carry over to the 2016/17 financial year. Note there is no financial impact to the end of financial year net position as this project is funded from State and Federal grants.  

 

§ As at 29 February 2016 road capital projects are -$357k under expended and make up a further 10% of the year to date budget variance. The Puzey Road reconstruction project, representing -$223k of the variance was delayed due to vegetation clearing matters and environmental approvals. The project is however scheduled for completion by June 30 2016.

 

In summary, it is estimated that only a small number of projects may be required to be carried over to the 2016/17 financial year. Whilst this may impact on the final closing surplus/deficit position for 2016/17, this will be offset by the need to re-list these projects in the ensuing draft budget. Additionally, other projects that may be deferred (and particularly in respect of sanitation related expenditure) are reserve funded and as such, will have no net impact on the closing surplus/deficit position.

Total Loan Repayments- Principal (YTD variance: $0K)

The principal loan repayments are anticipated to be as per budget estimates.  Therefore no variance is expected in this category

 

Transfers to Restricted Assets (YTD variance: +$658K)

The Transfers to Restricted Assets budget comprises an estimation of funds that could potentially be received during the financial year, primarily from developer contributions. Included are cash in lieu of parking, community and recreation facilities contributions and contributions to works. Due to the nature of the category, the annual budget allocation is spread evenly throughout the financial year. The performance in this activity does not have any direct impact on the surplus/deficit position, as whilst recognised as operating revenue upon receipt (via Non-operating Grants, Subsidies and Contributions), these funds are subsequently quarantined to Restricted Assets, essentially offsetting the initial transaction.

 

In addition to the above, the Transfers to Restricted Assets category also includes the payment of bonds and deposits, albeit no specific budget allocation is made for these funds.  

 

The favourable financial year to date variance of approximately +$658k is primarily attributable to the receipt of developer contribution payments totalling +$260k, and bond and deposit payments totalling approximately +$400k.

 

Whilst performance in this category does not directly impact on the closing surplus/deficit position, interest earnings on a range of restricted asset funds do contribute to the City’s municipal interest earnings.     

 

Transfers to Reserves (YTD variance: +$141K)

The Transfers to Reserves budget includes both a base transfer and a projected interest component, which collectively equate to the respective annual budget allocations. Whilst the base transfers are made in terms of the adopted budget, the overall financial performance in any year is impacted by the associated interest earnings performance. 

 

The current favourable variance is attributable to interest earnings on Reserve funds. The reserves balance currently includes the full $18m loan funds for the Administration building redevelopment which is yet to be utilised to offset any expenditure. Due to the higher than anticipated balance at this point in time, interest earned has exceeded current budget projections. It should be noted of the +$141k in additional interest, +$112k is attributable to the Civic and Administration Centre Construction Reserve.

 

Current projections are that reserve interest earnings will exceed annual budget estimates by approximately +$200k as at 30 June 2016, which will be reflected in the end of financial year Transfers to Reserves performance. Whilst this will not directly impact on the closing surplus/deficit position, the additional revenue will supplement the projected balance of the City’s reserve funds at financial year end.   

 

CONCLUSION

 

As detailed within this report, it is considered that the City’s overall financial performance to 29 February 2016 is satisfactory.  Current projections indicate a potential surplus closing position as at 30 June 2016, in the order of approximately +$360k (exclusive of carry forwards).  The Annual Budget Review has not identified any specific adverse financial trends, for which remedial action is required to be instigated prior to financial year end. The projected surplus closing position is primarily due to operating expenditure savings.  

 

As this report also identifies, it is projected that overall capital expenditure will fall well short of annual budget estimates, with this primarily attributable to the Airport Development project. However, as individual projects are essentially fully funded in one form or another, a corresponding short fall in capital revenue will also be evident as at 30 June 2016.      

 

Whilst components of the unspent capital and operating expenditure budgets may need to be considered for re-listing in the Council’s 2016/17 draft budget, the current projected surplus closing position of $360k represents net underspends directly associated with the current financial year’s financial performance.

 

It is noted that the  potential surplus closing position at financial year end, including consideration of utilisation, or quarantining of these funds, be will be fully considered as part of the Council’s 2016/17 draft budget deliberations.   

 

OPTIONS

 

The Finance Committee/ Council may determine that additional recommendations are required to be made, or alternatively that the Annual Budget Review not be adopted by the Council at this time, pending clarification of any further matters.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

Consequent to endorsement by the Council, with or without amendment, a copy of this report (and the associated Council Resolution) will be forwarded to the Department of Local Government and Communities within 30 days of the date of the Council Resolution. 

 

OFFICER RECOMMENDATION

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

That, pursuant to Regulation 33A of the Local Government (Financial Management) Regulations, the Council adopts the 2015/16 Annual Budget Review.

Council Decision and Committee Recommendation

C1604/095              Moved Councillor G Bleechmore, seconded Councillor P Carter

 

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

1.            That, pursuant to Regulation 33A of the Local Government (Financial Management)         Regulations, the Council adopts the 2015/16 Annual Budget Review.

 

2.            That the Council reaffirms its resolution C1303/074 that any surplus at the end of the      2015/16 Financial year be transferred to the Infrastructure Development Reserve.

CARRIED 7/1

En Bloc

(by absolute majority)

Voting:

For the motion:             Councillor T Best, Councillor G Bleechmore, Mayor G Henley, Councillor J McCallum, Councillor P Carter, Councillor R Reekie and Councillor R Paine.

Against the motion:     Councillor R Bennett.

 

Note:       While included in the En Bloc motion it is noted that the Absolute Majority requirement has      been achieved.

11.             Planning and Development Services Report

11.2           PROPOSED AMENDMENT NO. 15 TO LOCAL PLANNING SCHEME NO. 21 - LOT 4001 METRICUP-YELVERTON ROAD, YELVERTON - CONSIDERATION OF ADOPTION FOR FINAL APPROVAL

SUBJECT INDEX:

Town Planning Schemes and Amendments

STRATEGIC OBJECTIVE:

Growth is managed sustainably and our environment is protected and enhanced as we develop.

BUSINESS UNIT:

Strategic Planning and Development

ACTIVITY UNIT:

Strategic Planning and Development

REPORTING OFFICER:

Strategic Planner - William Hosken

AUTHORISING OFFICER:

Director, Planning and Development Services - Paul Needham

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Attachment a   Location Plan

Attachment b    Aerial Photograph

Attachment c    Proposed Scheme Amendment Plan

Attachment d   Proposed Structure Plan

Attachment e    Schedule of Submissions  

  

PRÉCIS

 

The Council is requested to consider adopting for final approval proposed Amendment No. 15 to Local Planning Scheme No. 21 (LPS21) and an accompanying Structure Plan (SP).

 

The proposal seeks to rezone a portion of Lot 4001 Metricup-Yelverton Road, Yelverton from ‘Agriculture’ to ‘Bushland Protection’ and facilitate subdivision of two additional lots under the City’s Biodiversity Incentive Strategy (BIS).

 

Following initiation by the Council on 9 December 2015, the proposed Amendment was referred to the Environmental Protection Authority (EPA) for assessment and, subsequently, publicly advertised and referred to relevant State Government agencies. It is now proposed that the Council note submissions received and resolve to support the final approval of Amendment 15 unmodified, which will then be forwarded to the WA Planning Commission for consideration and endorsement.

 

BACKGROUND

 

The proposed Amendment and accompanying SP relates to Lot 4001 Metricup-Yelverton Road, Yelverton, a lot of 77.7 hectares located approximately 24 kilometres south-west of the Busselton City Centre (Attachment A). The lot has been substantially cleared and used for timber plantations but retains several areas of remnant vegetation totaling approximately 14.9 hectares (Attachment B).

 

The subject site is eligible for a voluntary subdivision incentive in accordance with the ‘alternate’ track criteria outlined in the BIS. Consistent with the BIS, a proposed Local Planning Scheme Amendment (Attachment C) and accompanying Structure Plan (Attachment D) have been submitted which propose subdivision of Lot 4001 into three lots.

 

Remnant vegetation on the site is proposed to be preserved within proposed Lots 1 and 3 (8.35ha and 32.9ha), which are proposed to be rezoned to ‘Bushland Protection’ and subject to a restrictive (conservation) covenant. Proposed Lot 2 (36.4ha) contains the majority of timber plantation on the site (now substantially harvested) and no other significant vegetation, and is therefore proposed to retain its current ‘Agriculture’ zoning.

 

STATUTORY ENVIRONMENT

 

Relevant considerations of the Planning and Development Act 2005 and the Planning and Development (Local Planning Schemes) Regulations 2015 have been taken into account in preparing and processing this Amendment and Structure Plan. The proposed Amendment and Structure Plan are being progressed concurrently in this instance.

 

In accordance with the Regulations, the Council’s resolution initiating this Amendment specified this as a ‘standard’ amendment. Correspondence was received from the Department of Planning confirming this assessment, and the proposed Amendment has been progressed on this basis.

 

As detailed in the report to Council of 9 December 2015 the proposed Amendment and Structure Plan have been assessed against, and are considered to be consistent with, Local Planning Scheme No. 21.

 

RELEVANT PLANS AND POLICIES

 

As detailed in the report to Council of 9 December 2015, the proposed Amendment and Structure Plan have been assessed against, and are considered to be consistent with, the City’s Biodiversity Incentive Strategy, Local Rural Planning Strategy and relevant local planning policies.

 

FINANCIAL IMPLICATIONS

 

There are no direct financial implications arising from the recommendations of this report.

 

Long-term Financial Plan Implications

 

Nil.

 

STRATEGIC COMMUNITY OBJECTIVES

 

The proposed amendment is considered to be consistent with the following objective of the City’s Strategic Community Plan 2013 – ‘5.2 Growth is managed sustainably and our environment is protected and enhanced as we develop’.

 

RISK ASSESSMENT

 

An assessment of the potential implications of implementing the Officer Recommendation has been undertaken using the City’s risk assessment framework. The assessment identified ‘downside’ risks only, rather than upside risks as well. Officer assessment identified no significant risks associated with this proposal.

 

CONSULTATION

 

Following Council’s initiation on 9 December 2015, the proposed Amendment was referred to the EPA for consideration of the need for formal assessment under Part IV of the Environmental Protection Act 1986. The EPA subsequently provided advice that formal assessment was not required.

The proposed Amendment was then publicly advertised and referred to adjoining landowners and relevant State Government agencies for a period of 42 days in accordance with the Planning and Development (Local Planning Schemes) Regulations 2015. During the advertising period, which ended on 23 March 2016, three submissions were received from State Government agencies and no submissions were received from adjoining landowners or other members of the public (refer Attachment E).

 

OFFICER COMMENT

 

Submissions

 

A submission was received from the Department of Fire and Emergency Services (DFES) indicating that the fundamental strategies and risk mitigation works proposed were appropriate, however some (relatively) minor amendments to the Bushfire Management Plan accompanying the proposal are necessary in order to meet with the requirements of State Planning Policy 3.7 and associated documents (noting that these have recently been updated). This advice has been forwarded to the proponent, while this outcome is secured by a relevant (existing) condition on the Structure Plan.

 

Two submissions were received from servicing agencies (Water Corporation and Telstra) providing no objection to the proposal and general development advice, which has also been forwarded to the proponent.

 

General

 

Other than requiring updates to the Bushfire Management Plan (as outlined above), the proposal meets with the relevant provisions of the planning framework and represents a relatively typical proposal for subdivision under the City’s Biodiversity Inventive Strategy.

 

Matters requiring further consideration as part of this process, including the securing of a conservation covenant through a recognised agency, are addressed via conditions on the proposed Structure Plan and will be implemented at subdivision stage.

 

CONCLUSION

 

The proposal provides for the subdivision of Lot 4001 in accordance with the City’s Biodiversity Incentive Strategy, and will thereby secure the preservation of remnant vegetation on the site consistent with the intent of this Strategy. Officers therefore recommend that the Council resolve to support the final approval of the proposed Amendment and accompanying Structure Plan, which will then be forwarded to the WA Planning Commission for consideration and endorsement.

 

OPTIONS

 

Should the Council not support the Officer Recommendation the Council could instead resolve –

 

1.            To seek further information before making a decision.

 

2.            To adopt the proposed Amendment and/or Structure Plan subject to further modification(s) as required, noting that this would be provided as a recommendation to the WA Planning Commission.

 

3.            Not to support the proposed Amendment and/or Structure Plan, noting that the final decision would be made by the WA Planning Commission upon receipt of this recommendation by the City.

 

Officer assessment has not revealed any substantive issue or reasonable grounds that would support any of these options.

 


 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

The implementation of the Officer Recommendation would involve provision of advice of the Council resolution to the applicant and referral of the proposed Amendment and Structure Plan within 21 days of the Council’s resolution.

 

Council Decision and Officer Recommendation

C1604/096              Moved Councillor G Bleechmore, seconded Councillor P Carter

 

That the Council:

 

1.    Pursuant to s. 75 of Part V of the Planning and Development Act  2005, resolves to adopt draft Amendment No. 15 to the City of Busselton Local Planning Scheme No. 21 for final approval, for the purpose of rezoning a portion of Lot 4001 Metricup-Yelverton Road, Yelverton from ‘Agriculture’ to ‘Bushland Conservation’ and amending the Scheme map accordingly.

 

2.    Pursuant to r.53 and r.55 of the Planning and Development (Local Planning Schemes) Regulations 2015, resolves to provide proposed Amendment No. 15 to the Western Australian Planning Commission with a request for the approval of the Hon. Minister for Planning.

 

3.    In accordance with r.35(2) of the Planning and Development (Local Planning Schemes) Regulations 2015, it is the opinion of the Council that draft Amendment No. 15 is a ‘standard amendment’, for the following reason(s):

a)      the draft Amendment is consistent with the objectives identified in the Scheme for that zone;

b)     the draft Amendment is consistent with the City’s adopted Biodiversity Incentive Strategy;

c)      the draft Amendment will have no significant environmental, social, economic or governance impacts on land in the Scheme area not subject to the draft Amendment proposal.

 

4.    Pursuant to deemed provision r.20(2)(e) of the Planning and Development (Local Planning Schemes) Regulations 2015 recommends that the Western Australian Planning Commission adopts the proposed Structure Plan over Lot 4001 Metricup-Yelverton Road, Yelverton (dated 10 November 2015).

 

5.    Pursuant to r.53 of the Planning and Development (Local Planning Schemes) Regulations 2015, resolves to endorse the ‘Schedule of Submissions’ at Attachment E prepared in response to submissions received on proposed Amendment No. 15 and the associated Structure Plan following public consultation.

 

6.    Pursuant to r.56 of the Planning and Development (Local Planning Schemes) Regulations 2015, should directions be given that modifications to proposed Amendment No. 15 and the associated Structure Plan are required, these modifications are to be undertaken accordingly, on behalf of the Council, unless they are considered by Officers to be likely to significantly affect the purpose and intent of proposed Amendment No. 15 and the associated Structure Plan, in which case the matter shall be formally referred back to the Council for assessment and determination.

CARRIED 7/1

En Bloc

 

Voting:

For the motion:             Councillor T Best, Councillor G Bleechmore, Mayor G Henley, Councillor J McCallum, Councillor P Carter, Councillor R Reekie and Councillor R Paine.

Against the motion:     Councillor R Bennett.

  

 


 

12.             Engineering and Works Services Report

Nil

13.             Community and Commercial Services Report

13.1           Busselton - Margaret River Regional Airport Noise Management Plan Review

SUBJECT INDEX:

Busselton Margaret River Regional Airport

STRATEGIC OBJECTIVE:

Infrastructure assets are well maintained and responsibly managed to provide for future generations.

BUSINESS UNIT:

Commercial Services

ACTIVITY UNIT:

Commercial Services

REPORTING OFFICER:

Manager, Commercial Services - Jennifer May

AUTHORISING OFFICER:

Director, Community and Commercial Services - Naomi Searle

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Attachment a   Noise Management Plan (2016) - DRAFT

Attachment b    Submissions Received: Noise Management Plan (2016) - DRAFT

Attachment c    Group Submission Received: Noise Management Plan (2016) - DRAFT

Attachment d   Supplementary Report Received (Chapman submission) - Noise Management Plan (2016) - DRAFT  

  

PRÉCIS

 

Following Council endorsement 9C1603/044) of the draft Busselton-Margaret River Regional Airport Noise Management Plan (2016) for the purposes of public comment, the following report presents the submissions received and Officer responses to individual comments. This report requests the Council acknowledges the submissions and further endorses the Draft BMRRA Nosie Management Plan (2016) to be included in the Assessment of Proponent Information-Category A (API-A) to be referred to the Office of the Environmental Protection Authority as part of the environmental approvals process for the Airport Development Project.

 

BACKGROUND

 

The concept of a Noise Management Plan (NMP) for the Busselton Regional Airport (BRA) was first initiated in 2009 when environmental consulting firm Strategen was engaged to prepare a NMP. This was in response to the first Fly in Fly out (FIFO) services commencing at the BRA and the need to address the restrictive hours of operations and conditions specified in Ministerial Statement 399 approved by the Minister for the Environment (October 1995). The key elements of Statement 399, that the then Shire of Busselton was looking to revise and seek approval from the Office of the Environmental Protection Authority (OEPA) and Minister for the Environment were;

 

“4.2 To achieve the objectives of condition 4.1, at all times during the operation of the aerodrome, the proponent shall ensure that noise emissions from the aerodrome activities, including emissions from aircraft using the aerodrome, do not cause noise levels at any residential premises in occupation to exceed an average of 55 dB(A)Ldn or a maximum of 65 dB L a slow, unless a specific variation to the maximum noise level is agreed to by the Minister for the Environment on advice of the Department of Environment and Conservation and following consultation with relevant agencies.

 

4.3 Where a variation has been granted by the Minister for the environment, as referred to in condition 4.2, the variation may only apply for operation between 0700 hours and 2200 hours, and the proponent shall ensure that the maximum noise level does not exceed 80 dB La slow and that the number of flights is limited ”

A variation, described in condition 4.3 had been granted by the Minister for the Environment to allow two (2) flights per day between the hours of 0700 and 2200 with aircraft noise to be limited to 80 dB(A) to enable the first Skywest Airlines Fokker100 FIFO operations to commence.

 

Environmental consulting firm Strategen was engaged to prepare a draft NMP that was presented to the then Airport Advisory Group (AAG). The AAG was a working group made up of community members, three Shire Councillors, and representatives from the Busselton and Dunsborough Chambers of Commerce, Geographe Bay Tourism Association and the Busselton Aero Club.

 

The draft NMP was further developed by the AAG and in July 2010 a draft plan was presented to the Council for review and consideration. Furthermore, at this time the AAG was transitioned to an official committee of the Council, the Airport Advisory Committee (AAC), with four nominated Councillors. In October 2010, the newly formed AAC requested City staff review and update the draft NMP (developed by the AAG) and present a final draft to the Council for endorsement prior to being submitted to the OEPA for consideration. Subsequently, a final draft version of the NMP was presented to the Council for endorsement on 15 December 2010 followed by submission to the OEPA on the 1 February 2011.

 

A lengthy consultation period occurred with the OEPA, including a public consultation period of four weeks, prior to a final NMP being submitted to the OEPA Board for consideration and referral to the Minister of the Environment; Water for approval. The City of Busselton’s Noise Management Plan (June 2012) was approved as part of Ministerial Statement 901 on the 22 June 2012.

 

As part of the annual compliance reporting detailed in the Ministerial Statement for the Busselton-Margaret River Regional Airport (BMRRA), the City of Busselton has the opportunity to review and submit proposed amendments or updates to the NMP on an annual basis. In a report presented to the Council at its meeting on 28 August 2013, City Officers presented a number of proposed changes, some were considered minor or not technical in nature and hence did not change the intent of the existing NMP. However, some of the proposed changes to the Hours of Operations were considered material under Condition 4-2 of the then Statement 901 and were advertised for public comment.  Following Council endorsement, City Officers submitted a proposed, amended NMP to the OEPA for review and approval in September 2013.

 

The OEPA assessment resulted in the proposed material amendments being resubmitted by the City of Busselton as a Section 46 application under the Environmental Protection Act (1986), which occurred in March 2014. Following further discussions with the OEPA and gaining agreement on the proposed amendments, the City of Busselton submitted a final revised version of the NMP in December 2014, which came into effect in July 2015.

 

In June 2015, the State Government committed to funding the upgrade of the BRA. After reviewing a rigorous Business Case submitted by the South West Development Commission in 2013, and considering the views of the Steering Committee appointed by the then Minister for Transport to oversee the development of the Business Case, the Government publically committed to allocating funding for the redevelopment of the BRA.

 

The Airport Development Project Team was established soon after the funding announcement and one of the priority processes identified for the project was the environmental approvals required from the Minister of the Environment; Heritage. The environmental approvals specifically involve the City of Busselton applying to the Office of Environmental Protection Authority (OEPA) to amend the proposal description that underlies the current Ministerial Statement 1009 and submit a revised NMP that will allow for the proposed interstate air services resulting from the Airport Development Project. Following consultation with the OEPA, an Assessment of Proponent Information-Category A (API-A) is considered the most appropriate assessment application to gain the required environmental approvals for the Airport Development Project to amend the existing Ministerial Statement and implement a revised NMP.

 

At the ordinary meeting on 9 March 2016, the Council was presented a revised draft NMP (2016) recommended by the AAC for endorsement for the purpose of public comment. The recommended amendments to the NMP (2015) as presented to the Council can be summarised into the following key areas listed below;

 

Description

Chapter(s) of the NMP

Comments relating to proposed NMP (2016)

Grammatical updates

All

Includes amendments such as airport name change (BRA-BMRRA), typographical errors, index page update, addition of terms to ‘Definitions page’ etc

These changes do not change the intent of the NMP (2015).

 

Inclusion of Airport Development Project information

Background (p3)

Objectives for Development (p5)

Information relating to the upgrade of the Airport has been added as context in describing the future operations, expansion of infrastructure and objectives including management of aircraft noise.

 

Standard Operating hours

3.1.3 Standard Hours of Operations (p13-15)

1.    Number of operating categories has been reduced from five to three (See Table 3) – Light and General Aviation categories have been combined into one; Open& closed Charter Flights and RPT services have been combined into one category.

2.    In combining the Light Aviation and General Aviation categories the requirement for light aviation / Single Engine Aircraft under 2000kg MTOW not to exceed 65dB(A) has been removed.

3.    All operating categories have unrestricted operating hours subject to aircraft noise not exceeding 85dB(A) and aircraft >5,700kgs MTOW requiring approval to operate.

Flight Training

3.1.5 Flight Training Guidelines (p19-22)

1.    Aircraft type has been amended to include “Single engine aircraft’ under 1500kgs MTOW

2.    Single engine aircraft noise emissions has been changed from ‘to be less than 65dB(A)’ to ‘to be less than 85 dB(A)’.

3.    Times for flight training operations amended to Mon-Fri 8am – last light; Saturdays, Sundays and Public Holidays 9am -5pm.

Non-Conforming Activities

3.3.2 Approval for Non-Conforming Activity (p25-26)

 Based on the assumption that the proposed amendments to the Standard Hours of operations are accepted this section will be deleted.

Methods for determining Noise Impacts and reduction measures

6.2 Noise reduction, Amelioration and Measures (p32-33)

1.    Added information relating to the City’s decision to adopt the AS2021;2015 Acoustics – Aircraft noise intrusion – Building siting and construction.

2.    Added information on the preparation and use of ANECs and N-contours for the developed Airport.

Noise Acceptability  Criterion

6.2.1 Noise Reduction  Parameters (p33)

Inserted the acceptability definitions and noise levels detailed in AS2021;2015 Section 2.3 and Table E1.

Noise Amelioration

6.2.2 noise Amelioration as a Noise Reduction Technique (p34)

Inserted the building site acceptability criteria detailed in AS2021;2015 Table 2.1 and Table E1.

Implementation of NMP

9.3 Implementation Priorities (p45)

Deleted this section as originally included to detail the implementation actions of the NMP approved in 2012.

 

Table 1: Summary of proposed amendments to the NMP.

 

The proposed amendments to Chapters 3.1.3 Standard Hours of Operation, 3.1.5 Flight Training Guidelines, 6.2 Noise reduction, Amelioration and measures listed above are considered material and under condition 4.2 of Statement 1009 need to be considered by the OEPA for approval. These proposed amendments will be assessed by the OEPA through the API-A referral process. The proposed amendments are discussed in further detail below;

 

Standard hours of Operation

 

As identified in the preparation of the Business Case and as a key risk outlined in the BMRRA Project Definition Plan, one of the key constraints and risks to the future viability of the Development Project are the current standard hours of operations. Without review and amendments the likelihood of Interstate services being secured is severely restricted.

 

As part of this review, Officers recommend consolidating the number of different aircraft operating categories in this section. This is primarily to remove some of the confusion around the definitions of light and general aviation. The current NMP distinguishes between light and general aviation with light aviation aircraft being defined as single engine aircraft under 2000kg MTOW not exceeding 65dB(A) and general aviation including all other aircraft not included in the light aviation definition. There are instances where light aviation aircraft under 2000kgs MTOW exceed the 65dB(A) noise level and hence cause confusion for pilots leading to non-compliances. The current definition also places responsibility on Airport staff for deciding if the noise level of light aircraft exceeds 65dB(A) based on published information which can be difficult to source and extremely difficult for Airport staff to determine as light aircraft fly at variable heights, speeds and in variable weather conditions. Hence, Officers are recommending that the light and general aviation categories are combined with the conditions that aircraft can have unrestricted operations, but do not exceed 85dB(A) and general aviation aircraft over 5,700kgs require prior approval to operate from in/out of the BMRRA.

   

Officers also recommend that the categories of open and closed charters and Regular Passenger Transport (RPT) services are combined into one category. The conditions proposed applicable to this category are for unrestricted operations with City approval and aircraft noise not to exceed 85dB(A).The justification for approved, unrestricted operations are to facilitate future interstate operations that may need to operate at ‘back of clock’ hours. In the City’s initial discussions with airlines interested in potentially servicing future interstate services from the BMRRA, they have indicated that until the BMRRA route demand has been established they may need to fly unutilised /idle aircraft between the hours of 1100pm – 0200am depending on the destination (Melbourne or Sydney). To ensure that noise is managed effectively, the City of Busselton will have an approval process for all aircraft in this category operating in/out of the BMRRA. The proposed amendments to the standard hours of operation are listed below;

 

Operator / Aircraft Type

Current Standard Hours of Operation

Proposed Standard Hours of Operation

Proposed Conditions

Emergency Services

UNRESTRICTED

UNRESTRICTED

Emergency situations and normal flight patterns

(training flights require approval under the Flight Training Guidelines)

Light Aviation/ General Aviation

 

Light Aviation

Single Engine Aircraft under 2000kg MTOW not exceeding 65dB(A)*

General Aviation

(Any aircraft that does not comply with the Light Aviation definition)

 

0700 to 1900 May   –November

0600 to 2100 December - April

UNRESTRICTED

 

Subject to noise not exceeding 85dB(A)*

Flight Training approval required (only available for aircraft below 1500kg MTOW and flight training conditions apply)

Aircraft above 5,700kgs MTOW – City approval required

Open, Closed Charters, RPT/Commercial Operators

Open and Closed Charter Flights

0600 to 2200

Regular Passenger Transport Flights

0600 to 2300

UNRESTRICTED

 

Subject to noise not exceeding 85dB(A)*

City approval required

 

Flight Training Guidelines  

 

Officers recommend a number of amendments to this chapter. The first is to further define the type of aircraft that can perform flight training from the BMRRA by including ‘single engine aircraft’ under 1500kgs MTOW in the definition. This will ensure that flight training is restricted to the smaller light aircraft and hence minimise the noise impact from training. Further, the daily hours allowable for flight training have been amended to reflect an even spread of hours throughout the week and on public holidays.  It is to be noted that the maximum allowable hours of flight training per week of 25 remains unchanged.

Non-Conforming Activities

 

The current NMP allows for the CEO to approve up to twelve non-conforming activities per reporting year. Non-conforming activities are flight activities that operate outside of the standard hours of operations and approved for operations in support of delayed scheduled FIFO services and events such as the Charity Events or Leeuwin Concerts that occur annually. Based on the acceptance of the proposed amendments to chapter 3.1.3 Standard Hours of Operations, chapter 3.3.2 Non-Conforming Activities can deleted from the NMP. 

 

Noise Reduction, Amelioration and Measures

 

The current NMP (2015) approach to noise reduction, amelioration and noise criterion is based on the inclusion of building siting criteria and noise acceptability criteria from a number of different sources including the superseded Australian Standard 2021;2000. Officers recommended that the revised NMP be based on the AS2021;2015 standard and use a combination of criteria from the standard that relates to aerodromes with Australian Noise Exposure Forecast (ANEFs) and for aerodromes that do not have ANEFs.

 

The recommendations from government, regulatory bodies and the aviation industry for measuring and predicting noise impacts at Australian airports is broadly based on the use of the ANEF system. The ANEF system was developed in 1980 following results from surveys from the existing system in use in Australia at that time (the NEF system) which was then modified to suit Australian conditions and became termed the ANEF system. The ANEF system was developed as a land use planning tool aimed at controlling encroachment on airports by noise sensitive buildings. The system underpins Australian Standard AS2021 ‘Acoustics—Aircraft noise intrusion—Building siting and construction’. The Standard contains advice on the acceptability of building sites based on ANEF zones and for aerodromes do not have ANEFs (ANEFs are not considered a suitable tool for light aviation aerodromes that do not have jet aircraft operations), building site acceptability using decibel (dB(A)) levels.

 

The proposed amendments to this section of the NMP include updating the criteria for noise level acceptability from the existing four categories (acceptable, generally acceptable, conditionally acceptable and unacceptable) to match the Australian Standard AS2021;2015 of three categories (acceptable, conditionally acceptable and unacceptable) and to utilise a combined approach of using the ANEF zones and aircraft decibel levels for the acceptable, conditionally acceptable and unacceptable categories for buildings (including homes, units, flats) potentially impacted by aircraft noise as defined in AS2021;2015. The acceptability criteria vary depending on the type of land use. The Table below details the recommended criterion taken from AS2021; 2015 to be included in the NMP;

 

Outdoor Noise Criterion

Noise Amelioration action is required where LAmax regularly exceeds2

(1)  85dB(A); or

(2)  80-85dB(A) for >15 events1 per day; or

(3)  75-80dB(A) for >30 events1 per day; or

 

Notes:

(1)  Each aircraft noise event occurring between 7pm and 7am is to be counted as 4 events. 

(2)  Regularly exceeds consists of events arranged in or constituting a constant and definite pattern, especially with the same space between individual circumstances. Noise generated by Emergency Services Aircraft operating in emergency situations are not to be taken to count towards the monitored noise events for amelioration purposes. 

 

OR

 

Table 2.1 Building Site Acceptability based on ANEF Zones in AS2021:2015; where a house, home, unit, flat, caravan park falls in the 20-25 ANEF zone

 

Officers have used a combination of criterion from AS2021;2015 applicable to both aerodromes with and without ANEFs. This approach is to ensure that the community is provided with a suitable level of protection from aircraft noise.  

 

The Draft NMP (2016) was endorsed by Council (C1603/44) at the 9 March 2016 meeting to be advertised for public comment for a period of 21 days with public submissions to be referred to Council for consideration. The NMP was advertised between the dates of 14 March – 1 April 2016 on the City and Airport websites for public comment and in the Council for the Community pages of the Busselton-Dunsborough Mail on the 16 March 2016. Emails were also sent out to all community members who had expressed an interest to be kept informed on the Airport Development Project.

 

A total of 21 submissions were received, two submissions were received after the closing date of 1 April 2016 and have been included in the submissions table and responses provided. Out of the 21 submissions received, 17 represented residents in the immediate vicinity of the airport, with one of these submissions co-signed by a further 19 residents (3 signatories also submitted individual submissions). The four remaining submissions were received from the wider community (including two submissions from Willow Grove residents).

 

In summary, the majority of submissions raised concerns with the proposed updates to the draft NMP and in particular with regard to the following areas;

 

·    Standard hours of operations  - unrestricted operations;

·    Flight training;

·    Flight paths;

·    Noise abatement zones;

·    Fly neighborly agreements;

·    Insufficient Information  -  noise contours;

·    Noise criteria levels, mitigation and amelioration; and

·    Vasse-Wonnerup Wetlands.

 

It should also be noted however that some of the comments received were based on inaccurate interpretations of the draft NMP which could be qualified.

 

One submission was supportive of the draft NMP and the proposed future operations resulting from the Airport Development Project and another submission was in support of the flight training guidelines and suggested further changes.

 

STATUTORY ENVIRONMENT

 

The Noise Management Plan (22 June 2012) was approved by the then Minister for the Environment; Water after review and consideration by the Environmental Protection Authority. Compliance reporting and review of the NMP is defined under Ministerial Statement 1009; Busselton Regional Aerodrome.

 

As part of the Airport Development Project, the City of Busselton is required to seek environmental approvals for the project in accordance with the Environmental Protection Act (1986) from the Minister for the Environment; Heritage through the assessment processes of the OEPA. Following recent consultation with the OEPA, an Assessment on Proponent Information Category A (API-A) is considered the most appropriate process for the City to submit an application which will include the revised NMP. The City will submit the API-A referral application in accordance with the Environmental Protection Authority’s Environmental Assessment Guideline 14 (EAG14) and the Environmental Protection Act (1986).

 

The BMRRA operates in accordance with the following: Aviation Transport Security Act 2004, Aviation Transport Security Regulations 2005, CASA MOS 139, Council’s Transport Security Plan and City policies and procedures.

 

RELEVANT PLANS AND POLICIES

 

This report is in-line with the City of Busselton’s current Noise Management Plan and processes for monitoring and reporting of aircraft movements and proposed changes to update the NMP.

 

FINANCIAL IMPLICATIONS

 

The Commercial Services Business unit has an approved operational budget allocated to the maintenance and upkeep of the facility and aviation related services. None of the recommended changes to the NMP are expected to have an additional cost implication to the operational budget. 

 

The Airport Development Project, funded by the State Government and overseen by the Project Governance Committee (PGC) has a budget allocated for the project approval processes, including the environmental approvals being sought.   

 

One of the possible future actions resulting from the approval of the recommended changes to the NMP could be to perform noise monitoring at residential properties in the vicinity of the Airport. As such a budget allocation for noise amelioration has been included in the Airport Development Project and will be considered at the appropriate time.

 

Long-term Financial Plan Implications

 

An operational financial model was developed as part of the State Government Business Case proposal which incorporated a 10-year financial plan.  The model considered revenues and costs associated with the upgraded facility, including up-front and recurrent capital and ongoing operational expenditure.  The model demonstrates that the upgraded facility will be self-sustainable, generating a modest profit into the future, to be transferred into the City’s Airport Infrastructure Renewal and Replacement Reserve at the end of each financial year. It should be noted however that the revenue projections were based on Regular Pasenger Transport (RPT) aircraft being able operated beyond the current Standard Hours of Operations as governed through the NMP.

 

The Long Term Financial Plan (LTFP) is currently based on the current operations, and will require updating to reflect the Development Project, including ongoing operational and capital revenue and expenditure based on the funded project.  This work has commenced.

 

STRATEGIC COMMUNITY OBJECTIVES

 

This report is consistent with the City of Busselton’s Strategic Community Plan (2013) community goals and objectives;

 

Well Planned, Vibrant and Active Places:

1.    Infrastructure assets that are will maintained and responsibly managed to provide for future generations.

Connected City:

Transport options that provide greater links within our district and increase capacity for community participation.

 

RISK ASSESSMENT

 

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk assessment framework. The assessment identifies ‘downside’ risks only, rather than ‘upside’ risks as well. The table below describes identified risks where the residual risk, once controls have been identified, is identified as ‘medium’ or greater;

 

Risk

Controls

Consequence

Likelihood

Risk Level

Extending the Hours of Operation cause noise nuisance and complaints requiring noise monitoring and mitigation.

Monitor and assess any increase in aircraft traffic during the extended hours for the potential for noise complaints from the community.

Minor

Unlikely

Medium

NMP Public consultation results in OEPA API- A appeals process that could delay the commencement of the Development Project construction phases. 

Community information sessions and private meetings held with members of the community on aircraft noise management.  NMP public consultation period performed to assess community feedback.

Moderate

Unlikely

Medium

 

It should be noted however that through discussions with airlines interested in potentially servicing the BMRRA to interstate destinations, that there is a high possibility that initial services will be ‘back of clock’ in order for idle aircraft to be utilized on an untested new route. There is therefore a significant risk associated with not amending the standard hours of operations to facilitate this which has been identified as ‘extreme’ and/or ‘high’ risks to the Development Project and as such has been documented in the Project Definition Plan as requiring mitigation, which is wholly supported by the Project Governance Committee consisting of representatives from; City of Busselton, South West Development Commission, Tourism WA, Department of Transport, Department of Treasury and Department of Regional Development. The following ‘extreme’ and ‘high’ rated risks have been identified in the BMRRA Project Definition Plan:

 

Key Identified Risk

Mitigation Strategy & comments

Risk Rating

(K1) Inability to attract and/or sustain domestic services

Early engagement with airlines to assess expectations and demands.  Tourism WA (TWA) to develop and lead an airline engagement strategy. Prepare and deliver route development proposals for airlines.   Assess and develop airline incentive package. City of Busselton (CoB) and TWA to work with relevant agencies and stakeholders in ensuring expectations are met. CoB and TWA to work with relevant agencies and stakeholders in ensuring expectations are met. Continue to engage with airlines to prove demand and explore alternate incentive programs. Continue discussions with Mining Industry partners for increased FIFO operations.  Explore opportunities to further lengthen runway to enable international freight operations and continue to explore freight services with providers and regional producers.

 

Extreme

(C1) EPA API-A application rejected or highly conditioned resulting in restrictive noise management conditions, noise curfews that restricts operations for eastern states RPT services limited appeal to airlines and other operators, etc.

 

Specific stakeholder engagement and communications plan to be developed for the API-A approval process.  Plans to be submitted to the EPA and regularly reviewed at PMT meetings (weekly). Ensure major construction activities have not commenced prior to receiving approval and/or subsequent conditions, review conditions upon receiving approval and report to PGC for approval to proceed (on the basis approval is highly conditioned).  Negotiate with airlines to operate during approved standard hours of operations.  If approval not received do not proceed with project.

 

High

(C2) Necessary project specific approvals such as EPBC, MNES - Matters of national and environmental significance, State and Federal approvals may not be obtained or may be obtained subject to unacceptable conditions causing significant project delays.

 

Ensure stakeholders are engaged and project requirements are communicated with relevant Departments. Engage experienced consultants to progress applications. Keep relevant Government Departmental heads and Ministers up to date on approval processes. Ensure major construction activities have not commenced prior to receiving approval and/or subsequent conditions, review conditions upon receiving approval and report to PGC for approval to proceed (on the basis approval is highly conditioned).  Negotiate with airlines to operate during approved standard hours of operations.  If approval not received do not proceed with project.

 

High

(C3) Environmental approvals process not progressing/stalling (API-A) causing changes in construction programme resulting in time and cost implications and operational consequences.

 

To be adequately captured in PDP, update approvals register, update programme inclusive of State/Federal approval timelines. Meet with Federal and State Environmental stakeholders on a regular basis. Incorporate a timeframe buffer within the project programme between project approvals and commencement of construction.

 

High

CONSULTATION

 

Officers will continue to consult with the OEPA, CASA, AirServices Australia, City of Busselton residents and wider community, airport users and stakeholders throughout the environmental approval process and Airport Development Project.

 

The City will utilise the API-A referral process to submit the revised NMP for approval. This process requires the City to complete a public and stakeholder consultation process prior to submitting the API-A application. As such the City of Busselton is undertaking the following public and stakeholder consultation;

 

Who

Meeting Forum

Description

Information Provided

Residents in vicinity of the Airport and/or near flight paths

Private meetings either at residents home or at the City offices.

·    Brief outline of the Development Project, objectives and infrastructure;

·    Predicted flight movements;

·    Predicted noise impacts including ANECs, N-Contours and flight paths

·    Noise Management Plan review

 

·    City’s Noise brochure;

·    City project Fact sheet;

·    Information on External websites and agencies for further information;

·    Link to BMRRA Master Plan (2016-2036) including draft noise modelling report and contours.

·    Advice on public submission process on draft NMP (2016).

Community information sessions

5 Information sessions for up to 12 people held at the City offices.

·    Brief outline of the Development Project, objectives and infrastructure;

·    Predicted flight movements;

·    Predicted noise impacts including ANECs, N-Contours and flight paths

·    Noise Management Plan review

·    City’s Noise brochure;

·    City project Fact sheet;

·    Information on External websites and agencies for further information.

·    Link to BMRRA Master Plan (2016-2036) including draft noise modelling report and contours.

·    Advice on public submission process on draft NMP (2016).

Decision Making Agencies (DMAs) engagement

Individual meetings with DMAs –

Libby Mettam MLA

Dept Of Water

Dept Parks and Wildlife

Dept of Transport

Dept of Planning

 

·    Brief outline of the Development Project, objectives and infrastructure;

·    Predicted flight movements;

·    Predicted noise impacts including ANECs, N-Contours and flight paths

·    Noise Management Plan review

·    City’s Noise brochure;

·    City project Fact sheet;

·    Information on External websites and agencies for further information.

NMP Public Comment

Revised NMP advertised on the City’s Airport website for public comment.

·    Revised NMP showing track changes advertised for 21 days for public comment.

·    Revised NMP

·    Summary of changes and justification for changes

·    Information on API-a process

 

87 letters were sent out to residential property owners in the vicinity of the airport inviting them to a private meeting regarding the Development Project and aircraft noise management associated with the BMRRA.  A total of eight meetings were booked with one resident cancelling prior to the meeting. The majority of feedback received from residents related to questions on flight paths and the possibility of flights late at night as well as asking to be kept informed of updates throughout the project.

 

Additionally, 1180 letters were sent out to property owners in residential areas within approximately 5km of the airport informing community members of the community information sessions and how to register. The community information sessions were also advertised in the local media. A total of five community sessions were scheduled with only 4 being held with between 10 and 14 people attending each session. A further 3 one to one meetings were held following the community information sessions. As with the private meetings the main feedback received from the sessions related to questions on the flight paths and the possibility of flights late at night as well as requesting to be kept informed of updates throughout the project.

 

Following the Council’s endorsement to advertise the draft NMP (2016), Officers advertise the NMP for a period of 21 days from 14 March – 1 April 2016 on the City and Airport websites and in the Busselton –Dunsborough Mail, Council for Community pages for public comment.

 

OFFICER COMMENT

 

The draft NMP (2016) was advertised for 21 days between the dates of 14 March – 1 April 2016 on the City and Airport websites for public comment and in the Council for the Community pages of the Busselton-Dunsborough Mail on the 16 March 2016.

 

A total of 21 submissions were received, of which 17 represented residents in the immediate vicinity of the airport, with one of these submissions signed by a further 19 residents (3 signatories also submitted separate submissions). The four remaining submissions were received from the wider community (including two submissions from Willow Grove residents).

 

In summary, the 19 of the 21 submissions raised concerns with proposed updates to the draft NMP and in particular with the following areas;

 

·    Standard hours of operations  - unrestricted operations;

·    Flight training;

·    Flight paths;

·    Noise abatement zones;

·    Fly neighborly agreements;

·    Insufficient Information  -  noise contours;

·    Noise criteria levels, mitigation and amelioration; and

·    Vasse-Wonnerup Wetlands.

 

It should also be noted however that some of the comments received were based on inaccurate interpretations of the draft NMP which could be qualified.

 

One submission was supportive of the draft NMP and the proposed future operations resulting from the Airport Development Project and another submission was in support of the flight training guidelines and recommended further changes. 

 

Standard Hours of Operations

 

In general, the majority of submissions raised concerns with changing the standard hours of operations to unrestricted for light aviation, general aviation, charter and RPT services with the main objection relating to the potential for unrestricted aircraft night operations. Some of the submissions stated that residents were already impacted by existing operations and did not support the extension of operational hours from 2300 – 0600hrs which could result in further impacts from aircraft noise. 

 

The draft NMP proposes changing the standard hours of operations for all categories of aircraft however requires all operators with aircraft over 5,700kgs to gain approval to operate at the BMRRA. This enables the City to monitor and assess potential noise impacts and where necessary reject requests for operations and specifically night operations. Conversely, the changes also enable further flexibility in allowing charter services to operate after 2200hrs and if required for the initial interstate services to operate at night until the Busselton route has been proven. It should be noted that the City’s preference is for interstate day time services which is also supported by feedback from airlines that have indicated that the Busselton route may be appropriate for a ‘premium’ customer and hence daytime services preferred

 

The submissions received have also included objections to the maximum level for aircraft emission for light aviation of 65dB(A) being been raised to 85dB(A) and a number of submissions objecting to the maximum acceptable noise level being raised.

 

The existing 65dB(A) noise level applicable to light aviation was a result of the noise level set for the airport as part of the original approval in 1996.  A variation to Ministerial Statement 399 in 1996 enabled the first FIFO, BAE146 aircraft (followed by Fokker100 aircraft) to operate from the BMRRA and included the maximum acceptable noise level of 80dB(A). The NMP approved in 2012 included the maximum acceptable level of 85dB(A), which remains in place and is not proposed to be increased or changed. The justification for removing the 65dB(A) applicable to light aircraft only, is that this is a control that is impractical to measure and enforce as light aviation aircraft (generally having low noise emissions) fly at variable heights, speeds and in different weather conditions resulting in it being near impossible for City Officers to determine when a light aircraft may be non-compliant. The overall, maximum acceptable noise level of 85dB(A) is not proposed to be changed or increased.

 

Flight Training

 

A number of submissions raised concerns and objections to the opening up of flight training and in particular of operating hours for flight training. Officers believe this to be misinterpretation of the Standard Hours of Operations table included in the draft NMP. The draft NMP (2016) does not propose to change the underlying principle that the BMRRA is a restricted, flight training airport.

The draft NMP (2016) proposes that flight training hours will remain restricted and for approved operators only in accordance with the existing NMP (2015) Chapter 3.1.5 Flight Training Guidelines. The draft NMP (2016) however, proposes to amend the flight training days and hours to the following:

 

·    Monday – Friday  8am- last light;

·    Saturday, Sunday and Public Holidays 9am-5pm;

·    there is to be no flight training on Christmas Day, Boxing Day or Good Friday.

 

The proposed changes include lifting the start time for flight training on business days from 7am to 8am and to allow for more regular hours during the week. This provides a more even spread of hours throughout the week. The approval process for operators remains unchanged however the definition of flight training aircraft has been updated to be more descriptive in that aircraft must be single engine aircraft only. Additionally the total number of flight training hours allowable by each operator is set at 25 hours per week. This is the number in the current NMP (2015) and remains unchanged. Emergency services and military aircraft are exempt due to the associated community service/benefit provided.

 

Flight Paths

 

A number of submissions, particularly from residents situated in the Tuart Forest area raised concerns about the flight paths and more specifically requested that flight paths be reviewed with the intention of avoiding the residential areas situated in this area.

 

The orientation and deign of flight paths is not controlled by the City but by Civil Aviation Safety Authority (CASA) and AirServices Australia (ASA) and based primarily on aircraft safety principles; ASA will be required to review the flight paths and as such Officers have committed to including community concerns and requests for changes to the flight paths when engaging with AirServices Australia, CASA and flight path designers as part of the Airport Development Project.

 

Noise abatement zones

 

Most submissions raised concerns about the effectiveness of the noise abatement zones (NAZs) defined in the NMP. Residents situated to the north of the airport commented that aircraft were able to fly over the NAZs, and particularly when aircraft were approaching the runway to land and departing to northern ports.

 

The BMRRA is categorized as ‘G” airspace which means it is uncontrolled airspace. It is therefore important to understand that the purpose of NAZs are to minimise aircraft noise where and whenever possible and not necessarily to exclude aircraft operations from these areas completely. The NAZs are included in fly neighborly agreements with operators to highlight areas to avoid when overflying cross country and for operators that fly on a regular basis such as emergency services, scenic/adventure flight operators and aero club operators.

 

The draft NMP (2016) does not propose any changes to the noise abatement zone section other than updates to include the new Airport name.

 

Fly Neighborly Agreements

 

There were a range of comments in regards to the Fly Neighborly Agreement (FNA) section. A number of submissions objected to changes in this section whilst other submissions commented on the relevance/appropriateness of FNAs and asked if any FNAs were in use.

 

FNA are agreements entered into between the City and aircraft/airline operators which incorporates the draft NMP and includes principles that are advocated by CASA and ASA. The City has signed FNAs with all emergency service operators and aviation (business) operators that are either based at the BMRRA or regularly use the BMRRA. 

 

The purpose of the FNA is to define a condensed set of procedures that outline the noise abatement procedures and measures to minimise aircraft noise disturbance resulting from operations at the BMRRA. The FNAs depend on aircraft operators agreeing to abide by a voluntary code of practice when safe to do so, however by entering into a FNA the majority of aircraft operators are then more aware of community concerns and more likely to comply. The City will continue to implement FNAs with both existing and new aircraft/airline operators using the BMRRA.

 

Noise Criteria Levels, Mitigation and Amelioration

 

Chapter 6.2 Noise Reduction and Amelioration Measures of the draft NMP (2016) has been updated to include relevant information included in the Australian Standard AS2021 ‘Acoustics—Aircraft noise intrusion—Building siting and construction’. A small number of submissions commented and objected to the proposed changes, particularly Table 6 Noise Criterion for Amelioration contained in the draft NMP.

 

This section of the NMP has been updated to reflect AS2021:2015, as the standard has recently (2015) undergone a full stakeholder and industry review and is considered by Government and industry as the standard for aircraft noise intrusion applicable to building siting and construction. Officers are therefore of the opinionthat this is the most appropriate measure to use. 

 

Insufficient Information  -  Noise Contours

 

A number of submissions received stated concerns that insufficient information had been provided either as part of the draft NMP or as supporting information. The submissions commented that noise contours (N65, N70, N75 and N85) and noise footprints for future operations were not available and that residents could not provide a fully informed comment without the noise contour information.

 

The noise contours and ANECs were available to all members of the community in the one –to –one private meetings and the community information sessions. The Contours and ANECs were not distributed as public documents at the time  of the community information sessions as the completed noise modelling was undergoing a peer review. However, in the one-to-one meetings and community information sessions the contours were displayed and made available for community members to review to assess any potential noise impacts.

 

The updated BMRRA Master Plan (2016-2036) was also made available to the community through the Council agenda and included the draft Noise Modelling report and associated contours.

 

Once the peer review of the noise modelling has been completed, the noise contours will be provided to the community on the BMRRA website. The peer reviewed noise contours are not expected to be noticeably different to the noise contours included as part of the BMRRA Master Plan.

 

Vasse-Wonnerup Wetlands

 

A small number of submissions raised concerns in regards to possible impacts resulting from increased aircraft operations to the birds of the Vasse-Wonnerup Wetlands, the wetlands are recognised as wetlands of international importance under the Ramsar Convention 1971.

 

The environmental approvals required for the Airport Development Project include the City assessing any future impacts to the wetlands. As such the City has sought advice from an environmental specialist, with experience of the Vasse-Wonnerup Wetlands, to determine any potential future aircraft related impacts on the wetalnds. The City has also submitted a referral under the Environmental Protection and Biodiversity Conservation Act to the Federal Government to assess any potential impacts.

 

CONCLUSION

 

The NMP has been in effect for over three years now and has been subject to one review. With the funding secured from the State Government to upgrade the BMRRA and the required environmental approval process underway for the project, there is a need to update the current NMP. As such Officers have reviewed the NMP and are proposing amendments to a number of sections, in particular the standard hours of operations, flight training guidelines, noise reduction, amelioration, and noise criterion measures. This report presents the draft NMP including proposed amendments to the draft NMP and the submissions received following a public comment period of 21 days.

 

The proposed amendments have been drafted to allow and support the development of the BMRRA, particularly with the funding announcement to upgrade the airport to operate interstate services and continue to provide protection to the community from aircraft noise.  Areas included in NMP such as the noise complaints process and request for noise amelioration assessment have been reviewed and remain in place without any amendments. Where amendments are being proposed, Officers have considered appropriate control measures such as requiring approval for operations to occur.  

 

A total of 21 submissions were received, with 17 representing residents in the immediate vicinity of the airport, with 1 of the 17 submissions signed by a further 19 residents (3 signatories also submitted individual submissions). The four remaining submissions were received from the wider community (including two submissions from Willow Grove residents).

 

In summary, the majority of submissions of raised concerns with proposed updates to the draft NMP and in particular with the following areas;

 

·    Standard hours of operations  - unrestricted operations;

·    Flight training;

·    Flight paths;

·    Noise abatement zones;

·    Fly neighborly agreements;

·    Insufficient Information  -  noise contours;

·    Noise criteria levels, mitigation and amelioration; and

·    Vasse-Wonnerup Wetlands.

 

One submission was supportive of the draft NMP and the proposed future operations resulting from the Airport Development Project and another submission was in support of the flight training guidelines and further changes. 

 

While the above areas were identified in the submissions as areas for concern it should be noted that a number of areas were based on misunderstandings or misinterpretations of the draft NMP. This includes areas such as flight training, noise abatement zones and fly neighborly agreements. It is also a matter of opinion that that the City has not provided sufficient information for community members to review such as noise contours, when the City has had detailed, defined public consultation processes including making the draft noise contours available in private, one to one meetings and community information sessions, in addition to being made publicly available with the recently endorsed BMRRA Master Plan (2016-2036).

 

One of the areas that has been misinterpreted is the flight training chapter, submissions have indicated that community members do not support increased flight training and flight training operational hours being unrestricted. The draft NMP does not propose allowing flight training to be unrestricted, either based on aircraft type or the hours of operations. The principles of flight training detailed in the current NMP (2015) remain in place with relatively minor changes to days and hours of operations.  The maximum number of approved flight training hours (25) remains unchanged.

 

Other areas that Officers believe may have been misinterpreted are the definition and purpose of Noise Abatement Zones and the Fly Neighborly Agreement chapter. A number of submissions indicate that the NAZs are currently ineffective, however the purpose of NAZs are not to exclude aircraft traffic but for operators to avoid overflying when and where possible. The NAZs are included in the existing signed FNAs with emergency services and aviation operators based at the airport or who use the airport on a frequent basis and as such are one of the tools identified in the NMP to minimize aircraft noise disturbance. Additionally it should be noted that the NAZ and FNA chapters remain unchanged other than to reflect the change in the airport name to the Busselton Margaret River Regional Airport.

 

As such, the submissions generally raise concerns or objections to the proposed changes in the Standard Hours of Operations and noise criteria levels, mitigation and amelioration chapters. Officers believe that controls have been put in place to enable effective management of the operations to ensure that the amenity of the community is protected in regards to the hours of operations and the implementation of the Australian Standard (AS2021;2015) noise criteria recognized by government and industry for considering aircraft noise intrusion in land use planning procedures and building/construction measures for buildings.

 

Officers are recommending that Council endorses the draft NMP (2016)as proposed and that the draft NMP (2016) be included in the API-A referral to the Office of the Environmental Protection Authority along with the public submissions received. 

 

OPTIONS

 

The Council may choose not to support the Officers recommendation and/or;

 

1.    Not amend the proposed Standard Hours of Operations in the draft NMP (2016) and maintain the existing Standard Hours of Operations detailed in the current NMP (2015);

 

2.    Amend the Standard hours of operations to include the following;

 

Operator / Aircraft Type

Current Standard Hours of Operation

Proposed Standard Hours of Operation

Proposed Conditions

Emergency Services

UNRESTRICTED

UNRESTRICTED

Emergency situations and normal flight patterns

(training flights require approval under the Flight Training Guidelines)

Light Aviation/ General Aviation

 

Light Aviation

Single Engine Aircraft under 2000kg MTOW not exceeding 65dB(A)*

General Aviation

(Any aircraft that does not comply with the Light Aviation definition)

 

0700 to 1900 May   –November

0600 to 2100 December - April

0600 – 2200hrs

 

Subject to noise not exceeding 85dB(A)*

Flight Training approval required (only available for aircraft below 1500kg MTOW and flight training conditions apply)

Aircraft above 5,700kgs MTOW – City approval required

Open, Closed Charters,

Open and Closed Charter Flights

0600 to 2200

 

0600-2200hrs

 

Subject to noise not exceeding 85dB(A)*

City approval required

RPT/Commercial Operators

Regular Passenger Transport Flights

0600 to 2300     

UNRESTRICTED

Subject to noise not exceeding 85dB(A)*

City approval required

 

The above option allows for further flexibility for light and general aviation, open and closed charters however considers the community concerns with unrestricted operations. All aircraft over 5,700kgs would still require approval to operate and not exceed the 85dB(A), so the airport operations can be managed in regards to potential aircraft noise disturbance. The allowing of light, general aviation and charters to operate until 2300hrs is not expected to increase night operations significantly and does not include any flight training, which remains unchanged. Should this option be endorsed by the Council it should be noted however that this option restricts aircraft that do not reach maximum noise levels. Officers recommend the reinstatement of the CEO approval of non-conforming activities for charters and private operators who may have legitimate reasons for operating outside their applicable standard hours of operations such as operational flight delays and events.

 

2. Amend the Standard Hours of Operations for specific categories of aircraft types only including light aviation, general aviation, charter operations and RPT services;

 

3. Not amend the proposed noise criteria levels, mitigation and amelioration in the draft NMP (2016) and maintain the existing noise criteria levels, mitigation and amelioration detailed in the current NMP (2015). This option however is not in line with the Government and Industry endorsed AS2021:2015;

 

4. Endorse any combination of the above options. 

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

Following endorsement of the draft NMP (2016), Officers will publish draft plan on the City of Busselton and Busselton-Margaret River Regional Airport websites. The draft NMP will then be included in the API-A referral application to be submitted to the Office of the Environmental Protection Authority including all public submissions received during the public consultation period. The API-A referral is expected to be submitted in May 2016.


 

Council Decision and Officer Recommendation

C1604/097              Moved Councillor G Bleechmore, seconded Councillor P Carter

 

That the Council:

 

Endorses the draft BMRRA Noise Management Plan (2016) for inclusion in the the Assessment of Proponent Information-Category A (API-A) to be referred to the Office of the Environmental Protection Authority as part of the environmental approvals process for the Airport Development Project, in addition to the submissions received as part of the public consultation process.

CARRIED 7/1

En Bloc

Voting:

For the motion:             Councillor T Best, Councillor G Bleechmore, Mayor G Henley, Councillor J McCallum, Councillor P Carter, Councillor R Reekie and Councillor R Paine.

Against the motion:     Councillor R Bennett.

  


 

14.             Finance and Corporate Services Report

14.1           LONG TERM FINANCIAL PLAN 2016/17 TO 2025/26

SUBJECT INDEX:

Financial Plans and Strategies

STRATEGIC OBJECTIVE:

An organisation that is managed effectively and achieves positive outcomes for the community.

BUSINESS UNIT:

Financial Services

ACTIVITY UNIT:

Financial Services

REPORTING OFFICER:

Strategic Financial Planning Accountant - Stuart Wells

AUTHORISING OFFICER:

Director, Finance and Corporate Services - Matthew Smith

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Attachment a   Statement of Comprehensive Income by Nature and Type

Attachment b    Statement of Cash Flows

Attachment c    Rate Setting Statement

Attachment d   Statement of Financial Position

Attachment e    Detailed Capital Expenditure

Attachment f    Reserves Summary

Attachment g   Contributions Summary

Attachment h   Loans Summary

Attachment i     Potential Future Capital Projects List

Attachment j     Key Performance Indicators

Attachment k    LTFP Assumptions

Attachment l    Statement of Changes in Equity  

  

PRÉCIS

 

The draft Long Term Financial Plan (‘LTFP’) has been subject to four extensive workshops with Councillors between March and April 2016.  As a result of the most recent workshop held on 06 April 2016, Councillors advised they were comfortable to consider formally approving the LTFP, with the matter being advanced as part of the 27 April 2016 Council meeting.

 

Subsequent to inclusion of all amendments agreed to as part of the four workshops held with Councillors, this report now presents the LTFP for formal consideration and endorsement by the Council.

 

BACKGROUND

 

In accordance with Section 5.56 of the Local Government Act (the ‘Act’), and regulations 19C and 19DA of the Local Government (Administration) Regulations (the ‘Regulations’) a local government is to plan for the future of its district.  This incorporates the development and adoption of two key documents, namely a Strategic Community Plan and a Corporate Business Plan.

 

Whilst a Strategic Community Plan sets out the community’s aspirations, visions and objectives over a ten year period, a more detailed Corporate Business Plan identifies and prioritises the principal strategies and activities required to achieve the higher level Strategic Community Plan outcomes, albeit for the first four years of the higher order plan.

 

A Corporate Business Plan is also required to be underpinned by several resourcing plans, including a Workforce Plan, Asset Management Plan and also a LTFP.  The LTFP component is not only required to demonstrate a local government’s financial capacity to resource its identified Corporate Business Plan actions, but also its ability to resource its asset management plan obligations and projected

workforce growth requirements, as detailed in the relevant plans.

A Corporate Business Plan is to be reviewed annually.  The Council’s current Corporate Business Plan

was adopted in June 2015. Whilst acknowledging that the Council is being requested to endorse its equivalent LTFP in advance of the associated Corporate Business Plan review, it is felt that the LTFP satisfactorily encapsulates (from a financial perspective) the strategies and activities comprised within the current Corporate Business Plan.

 

Prior to presentation to Councillors for workshopping, the LTFP was subject to internal scrutiny and input of Senior Management. This was not only to confirm the LTFP’s continued alignment with the Strategic Community and Corporate Business Plans, but also to certify that the LTFP continues to reflect sound financial principles.

 

STATUTORY ENVIRONMENT

 

Section 5.56 of the Act requires local governments to plan for the future of their districts. Regulations

19C and 19DA of the Regulations provide specific guidance to local governments in relation to planning for the future; which include the requirements to develop a Strategic Community Plan and Corporate Business Plan. The Corporate Business Plan looks to integrate matters relating to resources, including asset management, workforce planning and also long-term financial planning.

 

RELEVANT PLANS AND POLICIES

 

From an Integrated Planning and Reporting perspective, the LTFP has a direct relationship with the Council’s Strategic Community Plan, and more particularly with the Corporate Business Plan. The LTFP also reflects the financial implications associated with other key resourcing documents; namely the Workforce Plan and Asset Management Plans.

 

In addition to the above, the LTFP incorporates the funding requirements associated with a range of other Council endorsed Plans and Policies.

 

FINANCIAL IMPLICATIONS

 

Whilst there are no direct financial implications associated with the recommendations as comprised within this report, the LTFP does reflect the Council’s strategic financial direction over the next ten year period, in line with its Strategic Community Plan and Corporate Business Plan.

 

STRATEGIC COMMUNITY OBJECTIVES

 

This matter principally aligns with Key Goal Area 6 – ‘Open and Collaborative Leadership’ and more specifically Community Objective 6.3 - ‘An organisation that is managed effectively and achieves positive outcomes for the community’.

 

RISK ASSESSMENT

 

The risks associated with the Council endorsing the LTFP are limited. In addition to its being a guiding document only, the LTFP is also a living document which will continue to be formally reviewed and updated on an annual basis. Consequently, the Council has the ability to amend the content of the Plan as and when circumstances necessitate; albeit bearing in mind that material amendments (relating to Corporate Business Plan activities) may be required to be reported as part of the Annual

Report.

 

Notwithstanding the above, a level of risk is always inherent in projecting in to the future. Whilst the extrapolation assumptions, interest rate projections (borrowings) and other variable assumptions are based on historical averages, these are subject to fluctuation and external shocks beyond the control of Council.

The LTFP demonstrates the financial capacity for the Council to deliver on the services as detailed in the higher level strategic plans, consistent with the underpinning assumptions. However in order to minimise or mitigate financial risk, any decisions to enter into financial arrangements in future years must not be undertaken based solely on the prevailing LTFP projections.

 

CONSULTATION

 

The LTFP continues to reflect the community’s aspirations, vision and objectives as included in the Strategic Community Plan 2015, and is consistent with the principal strategies and activities within the Council’s prevailing Corporate Business Plan. Consequently, no specific (external) consultation has been undertaken in relation to the content of the LTFP.

 

OFFICER COMMENT

 

The following commentary provides an overview of the LTFP development, the outcomes of the subsequent Councillor workshops and provides an overview of the LTFP as presented for  formal consideration.

 

LTFP Development

The LTFP 2016/17 – 2025/26 has been developed in a manner similar to previous years with some notable differences in relation to estimation of extrapolation assumptions.  A high level summary of this process is provided as follows:

 

·    As with prior years, the currently adopted budget (2015/16 budget) formed the basis for the operating revenue and expenditure.  With non-recurrent and periodic items adjusted/deleted, and stand-alone funding models excluded (eg. Busselton Regional Airport), the remaining operating revenues and expenditures were then projected out via the extrapolation assumptions.

 

·    In prior years, a conservative approach was taken when estimating the extrapolation assumptions.  In preparing this year’s LTFP extrapolation assumptions, significant historical analysis was undertaken to estimate the extrapolation assumptions.  This included historical analysis of the following:

 

Growth in number of rate payers from 2006 to 2015.

Analysis of historical CPI, Interest Rates and Cash Deposit Rates.

Analysis of historical electricity price increases

Analysis of historical wages and salaries increases.

 

Following this analysis, historical averages were taken and used in the model on a go forward basis.  It is expected through utilisation of historical trends in predicting future outcomes, the model is more likely to better reflect expected outcomes. 

 

Whilst over the long term the use of historical averages is more likely to be correct, it is also important to acknowledge that through adoption of this approach, in the short term there may be years in which these historical averages are not met.  This risk can be mitigated by regularly reviewing the model to reset the baseline as maybe required.  For that reason it is recommended   the model continue to be reviewed on an annual basis. It is also proposed that a high level review be undertaken 3 monthly with the Finance Committee.

 

·    Following update of the extrapolation assumptions, the capital revenue and expenditure components were moved forward one year, with new Year 10 figures added (either via the provision of specific allocations or ongoing percentage increases as relevant). This process also involved the review of major projects expenditure, and whether any specific adjustments are required to be reflected in the revised LTFP.

 

·    Subject to review and rationalisation where required, the above process delivers the ‘base-line’ LTFP.

 

Prior to presentation to Councillors, work had been undertaken in relation to review of the ‘base line’ LTFP.  Part of this process involved the Senior Management Group reviewing the LTFP across a number of areas, including but not limited to:

 

·    Ensuring the LTFP continued to reflect the strategies and activities in the Councils currently adopted Strategic Community Plan and Corporate Business Plan;

·    Reprioritisation and update of capital project spend throughout the LTFP based on availability of funding;

·    Review of the extrapolation assumptions for reasonableness and ensure the LTFP reflects realistic and supportable projections;

·    Revision of the rate increases included in the LTFP including comparison to prior years LTFP rate increases and ensure those increases do not exceed 5% in any one year;

·    Ensure the LTFP identifies any potential funding deficits, with a particular focus on the initial years of the plan and identify potential actions to address those deficits.

 

Subsequent to those matters being addressed, the LTFP was considered acceptable for presentation to Councillors for further review and deliberation.

 

LTFP Workshops

Four LTFP workshops have been convened with the Councillors during March and April 2016.

 

At the initial workshop (09 March 2016), Councillors were presented with the LTFP as well as an outline of the methodology by which it had been developed which included an overview of the assumptions.  The first workshop also involved commencement of a detailed review of the capital projects included in the LTFP.

 

At the second workshop (16 March 2016) Councillors completed their detailed review of the capital projects listing as well as reviewing the reserves summary for each council reserve.

 

The third workshop (23 March 2016) included a rewording of the contributions summary, loan and borrowings summary (Council and self-supporting loans), operational projects included in the LTFP, potential operational projects, and potential capital projects.

 

The fourth workshop (06 April 2016) focussed on reviewing the potential future capital projects list as well as discussion on a proposal for a general loan funding allocation in later years of the plan, 2020/21 onwards.  Councillor bids were also discussed.

 

Councillors indicated support for the methodology and to build the model for the LTFP which included the following factors and assumptions;

·    CPI forecast

·    LGCI calculated average

·    Escalation factors for;

Materials and Contracts

Utilities

Wages and Salaries

·    Inclusion of maintenance costs for new assets @ 1.75% of asset cost

·    Expected rate payer growth and inclusion of additional planned commercial properties.

 

Councillors requested consideration be given to renaming a number of reserves and the creation of some new reserves.  This will be the subject of a separate report.

 

Councillors indicated support for the capital projects and other items included in the LTFP and identified several additional projects or items for consideration for inclusion.  Councillors agreed to make the following proposed amendments to the LTFP, subject to more detailed consideration, where required, during the annual budget process:

·    Include a change to the minimum rates by $50 from 2016/17 onwards.

·    Include proposed discretionary operating funding (unallocated) based on 1% of rates p.a commencing in 2017/18.  This is explained later in the report.

·    Include potential self-supporting loans for community groups at 150k p.a.

·    Include the Cemetery expansion project as part of the LTFP.

·    Include the provision of a new sporting oval into the new Dunsborough Lakes Community and Recreation Facility into the base plan.

·    Further consider the annual funding support for the Workforce Plan and in particular the capacity to provide funding for 2016/17.  This issue to be further considered as part of the budget process.

 

Councillors also considered a number of future capital projects for potential inclusion in the LTFP and in response the following adjustments have been made (mainly in the latter years of the LTFP):

·    NCC Expansion for Community Hub Facility/Senior Citizens Centre – the Senior Citizens Centre component has been deferred until after the 10 year life of the Plan and the capital project amount reduced to $1 million.

·    New/Extended Art Gallery - this project deferred to later than ten years (not in the LTFP).

·    Vasse River Foreshore Improvement Projects – have been left in the LTFP but will be assessed further for overall feasibility.

·    Balance of Busselton Foreshore Infrastructure – the three lookout towers proposed as part of this project deferred beyond the term of the LTFP.

 

Overview of the LTFP 2016/17 to 2025/26

 

The aforementioned commentary provides a synopsis as to how the LTFP has been developed, whilst also summarising issues considered at LTFP workshops. The following provides an overview of the composition of the relevant components of the LTFP.

 

Extrapolation Assumptions

 

For the purpose of long term financial planning, the rolling 10 year average Consumer Price Index (CPI) and Local Government Cost Index (LGCI) figures have been used to inform the majority of ongoing operating extrapolations as in prior years.  The rolling averages sit at 3% for CPI and 3.5% for LGCI at 30 June 2015. 

 

Those operating factors not informed by these averages in this year’s LTFP are:

 

Materials and Contracts – CPI of 2% in FY16/17 and 2.5% in FY17/18 were used instead of 10 year rolling averages.  Materials and contracts in general have a rise and fall clause included at CPI.  Forecast CPI for FY16/17 and 17/18 is expected to be below the 10 year average, based on current trends.

 

Utilities – Analysis was undertaken for the period FY11/12 to FY14/15 and it was shown on average utilities increasing by 7.95% p.a.  Due to the governments continued expected focus on negating the effects of global warming, this historical factor has been applied to utilities in the LTFP going forward.

 

Employee Costs - Historical analysis was undertaken for the period FY10/11 to FY14/15 which showed on average wages increasing 1% above inflation on a full time equivalent (FTE) basis.  This 1% real wage adjustment has been applied.

 

A summary of the LTFP extrapolation assumptions and their application can be seen in the table below:

 

Description

Extrapolation

Operating Revenue

 

Rates (General Rate Increase)

LGCI + Service Level Improvement %

Operating Grants, Subsidies and Contributions

CPI

Fees and Charges

LGCI

Interest Earnings

CPI + 1% on cash balances

Other Revenue

CPI

Non-Operating Grants, Subsidies and Contributions

Actual

Profit on Asset Disposal

Nil

 

 

Operating Expenditure

 

Employee Costs

CPI + 1% real wage adjustment

Materials and Contracts

16/17 (2%), 17/18 (2.5%), 18/19 onwards CPI

Utilities

Historical Average = 7.95%

Depreciation

Actual

Interest Payable

CPI + 2% on loan balances

Insurance

CPI

Other Expenditure

CPI

Loss on Asset Disposal

Nil

 

Closing Surplus/(Deficit) Position

 

The LTFP shows closing deficits in the initial two years and closing surpluses in the remaining eight years of the plan.  The deficits as identified in the LTFP are expected to be addressed as part of the 2016/17 budget process which will result in a balanced budget.  Any adjustments identified during the budget process will be included in subsequent revisions of the LTFP at the next review.

 

Included in the surplus/(deficit) position of the LTFP are the following general unallocated amounts:

 

·    One off 1% of rates allocated for operational and services discretionary expenses.  Included for ongoing operational services that maybe required and support demand on service level improvements of the community but are not yet identified.

·    1% of rates allocated from FY20/21 onwards for additional new loan funding.  This equates to approximately $5 million in additional new loan funding each financial year to be utilised in implementation of potential capital projects that are as yet not prioritised.  These potential capital projects are expected to be prioritised as part of ongoing community consultation efforts. The philosophy behind this approach is to utilise a revolving line of debt servicing as a means of providing future inter-generational infrastructure.

 

Whilst the annual surpluses in later years could have been transferred to Reserves (as savings), it was considered appropriate to identify these in the plan as (potentially) available funds for capital projects.  It should be noted that various factors could influence surplus/deficit outcomes in later years of the Plan and these are estimates only.

 

The following table details the annual surplus/ deficit movements as reflected within the LTFP:

 

Description

16/17

17/18

18/19

19/20

20/21

21/22

22/23

23/24

24/25

25/26

Annual Cash Surplus/(Deficit)

(95,146)

(85,971)                  

87,687

435,894

1,111,967

267,765

470,841

933,820

1,230,383

1,722,795

Carry Forward Surplus/(Deficit)

0

(95,146)

(181,117)

(93,430)

342,464

1,454,431

1,722,196

2,193,037

3,126,857

4,357,240

Cumulative Surplus/(Deficit)

(95,146)

(181,117)

(93,430)

342,464

1,454,431

1,722,196

2,193,037

3,126,857

4,357,240

6,080,035

 

General Rate Increases

 

It can be seen that the rate increases included in the LTFP exceed the LGCI 10 year average from year to year.  The reason for the difference can be seen in the table below:

 

Description

16/17

17/18

18/19

19/20

20/21

21/22

22/23

23/24

24/25

25/26

LGCI 10 Yr Avg

3.50%

3.50%

3.50%

3.50%

3.50%

3.50%

3.50%

3.50%

3.50%

3.50%

Asset Mgt - Roads

1.00%

1.00%

1.00%

-

-

-

-

-

-

-

Foreshore Loans

0.90%

0.90%

0.40%

0.40%

0.40%

-

-

-

-

-

Performing Arts / Convention Centre Loan

-

-

-

0.95%

0.60%

-

-

-

-

-

Coastal Adaptation

-

-

-

-

-

0.25%

0.25%

0.25%

0.25%

-

 

 

 

 

 

 

 

 

 

 

 

Expected Rate Increase

5.40%

5.40%

4.90%

4.85%

4.50%

3.75%

3.75%

3.75%

3.75%

3.50%

Rate Adjustment

-0.45%

-0.65%

-0.15%

-0.10%

0.00%

0.50%

0.50%

0.50%

0.50%

0.50%

 

 

 

 

 

 

 

 

 

 

 

Proposed Rate Increase

4.95%

4.75%

4.75%

4.75%

4.50%

4.25%

4.25%

4.25%

4.25%

4.25%

 

The rate increases and other adjustments over and above the LGCI are a result of the following:

 

Asset Management Roads

It was previously agreed by Council that a 1% increase in rates per annum was required until the 2018/19 financial year to ensure sufficient funding for the Road Asset Management Plan.  The LTFP reflects this.

 

Busselton Foreshore Loans

As part of last year’s LTFP Councillors agreed to fund the Busselton foreshore loans through additional rate increases over the next 5 years.  For this year’s LTFP, this will result in additional rate increases as noted in the table above, covering off both the completion of the remaining Foreshore works and the Barnard Park Combined Clubhouse and Tennis Facilities.

 

Performing Arts / Convention Centre (PAC)

As with last year, the LTFP includes the construction of the PAC commencing in year 4 of the plan, at a cost of approximately $15 million.  The two additional rate increases of 0.95% and 0.60% in years 4 and 5 are required to fund the loan repayments associated with $9 million in borrowings.  The loan is a 20 year loan.

 

Coastal Adaptation

Agreed as part of last year’s LTFP, was the inclusion of 0.25% in general rates in years 6 to 9 of the plan, to provide funding for future coastal adaptation requirements.  The LTFP has this revenue being transferred to the beach protection reserve.

 

Rate Adjustment

In the initial years (years 1 to 5) of the LTFP, the negative adjustment represents a desire by Council to keep rate increases below 5%.  For later years (years 6 to 10), the 0.5% additional rate adjustment reflects additional capacity of the council to fund new major projects and or improve services over current levels.  Those same years are also expected to be in surplus, so council may choose at that time to reduce rates rather than maintain rates at those levels.

Major Projects included in the LTFP

 

Whilst the attachments to this report provide summary details of proposed capital works to be undertaken over the terms of the LTFP, major projects comprised within the plan include the following on a go forward basis:

 

·    Busselton Foreshore Project - $24M

·    Civic and Administration Centre - $13M

·    Performing Arts Centre - $15M

·    Regional Airport Development - $50M

 

The above is in addition to significant recurrent capital expenditure activities, including the following

 

·    Road Construction - $63M

·    Sanitation Infrastructure - $22M

·    Parks, Gardens and Reserves (inclusive of Townscape Works) – $28M

·    Footpaths and Cycleways - $7M

·    Beach Restoration - $7M

 

Borrowings

 

The LTFP includes $54M in proposed new borrowings.  A breakdown of the proposed loan funding can be seen in the table below:

 


Description

Total Borrowings

Busselton Foreshore – Central Core

$6,000,000

Tennis Clubhouse and Courts Relocation

$6,000,000

Performing Arts / Convention Centre

$9,000,000

Car parking – Dunsborough Town Centre

$500,000

Cemetery Expansion

$2,038,920

Self-supporting loans

$1,500,000

Unallocated Loan Funding (note 1)

$29,349,507

 

 

Total Proposed Loan Funding

$54,388,427

 

(note 1) Unallocated loan funding represents amounts allocated to new projects which may not yet be known or have not yet been prioritised in the LTFP.  As time progresses and community consultation is undertaken these amounts will be allocated against specific projects and/or vary in value from year to year.

 

Alignment with other resourcing plans – Asset Management and Workforce Plan

 

As discussed in the Background section of this report, the LTFP is one of three resourcing documents required to support the annual Corporate Business Plan. In addition to demonstrating the financial capacity to resource the identified Corporate Business Plan strategies and actions, the LTFP must also be able to financially support the other resourcing plans, namely asset management plan obligations and projected workforce plan growth requirements.

 

The LTFP as presented is able to fully fund these obligations over the term of the plan. In addition to over $21M in workforce plan funding allocations, the LTFP also includes over $80M in Asset Management Plan funding requirements across a range of core activities (e.g. roads, buildings, parks, coastal protection, drainage, Busselton jetty)

 

Key Performance Measures – Financial Ratios

 

As part of the Integrated Planning and Reporting process, a number of key performance indicators (in the form of financial ratios) have been identified to assist in assessing a local governments’ long term financial sustainability. The ratios cover both core operational matters (e.g. liquidity, debt servicing), and also asset management related matters (e.g. asset consumption and sustainability). In assessing financial sustainability, each of the ratios has been assigned a minimum standard of achievement.

 

A brief summary of the City’s performance against each of these ratios over the term of the plan is outlined below:

 

Ratio

Description of Ratio

City of Busselton Performance

Operating Surplus Ratio

Measures extent to which revenue not only covers operational expenses, but also provides for capital funding

Meets minimum standard by year 4 of plan and continues to improve on a yearly basis thereafter

Own Source Revenue Rate Coverage

Measures Local Governments ability to cover operating expenses from its own source revenue

Meets or exceeds advanced standard in all ten years of plan

Current Ratio

Measure of a Local Governments liquidity and its ability to meet its short term financial obligations from unrestricted cash

Meets standard by year 6 of plan.

Debt Service Coverage Ratio

Indicator of Local Governments ability to generate sufficient cash to cover its debt repayments

Close to meeting or exceeds advanced standard in all ten years of plan

Asset Sustainability Ratio

Indicator of the extent to which assets are being renewed or replaced as they reach the end of their useful life

Meets or exceeds target in years 1 to 5 of plan.  Years 6 to 10 do not meet target, although in later years surpluses are available to further improve this ratio

Asset Consumption Ratio

Measures the extent to which depreciable assets have been consumed, comparing their written down value to their replacement value.

Not available – Not enough data on replacement value exists to reliably measure this ratio for the LTFP.

Asset Renewal Funding Ratio

Measure of the ability of a Local Government to fund its projected asset renewal/replacements in the future.

Not available – Not all asset management plans are yet developed to reliably measure this ratio for the LTFP.

 

For further details on these ratios please refer to LTFP (Attachment K)

 

CONCLUSION

 

The LTFP 2016/17 – 2025/26 has been reviewed and updated cognisant of the Council’s current Strategic Community Plan, its currently adopted Corporate Business Plan, and also the associated informing plans. In addition to amendments and additions ratified by the Council since the endorsement of the current plan in March 2015, the plan has been further updated to reflect the outcomes of recent Councillor Workshops held during March and April 2016.

 

Subject to endorsement, the LTFP will be utilised to guide the Council’s 2016/17 budget development. With the plan being reviewed and updated annually, it will also be pivotal in informing future annual budget development processes. The Plan will also be invaluable to assisting the Council in deliberating future financial obligations, particularly as they relate to the higher order Strategic Community Plan (and associated Corporate Business Plan) and providing direction to the City’s administration on priority of future projects.

 

The LTFP 2016/17 – 2025/26 is considered realistic in its assumptions. It is also considered to be achievable, with the City comfortable in its ability to deliver on the Plan’s content. With this in mind, it is recommended that the Council endorses the Long Term Financial Plan 2016/17 – 2025/26 as presented.

 

OPTIONS

 

The Council may determine to further amend the content of the LTFP.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

Subject to endorsement, the LTFP will inform the 2016/17 budget process and outcomes, which in turn will form the basis of the following years LTFP.  Additionally, it is intended a LTFP report be prepared to be placed on the City’s website and a professionally printed hard copy will also be provided.

 

Council Decision and Officer Recommendation

C1604/098              Moved Councillor G Bleechmore, seconded Councillor P Carter

 

That the Council endorses its Long Term Financial Plan 2016/17 to 2025/26, comprising the following financial statements and supporting schedules, as attached to this report:

 

·    Attachment A - Statement of Comprehensive Income by Nature and Type

·    Attachment B - Statement of Cash flows

·    Attachment C - Rate Setting Statement

·    Attachment D - Statement of Financial Position

·    Attachment E - Detailed Capital Expenditure

·    Attachment F - Reserves Summary

·    Attachment G - Contributions Summary

·    Attachment H - Loans Summary

·    Attachment I - Potential Future Capital Projects List

·    Attachment J – Key Performance Indicators

·    Attachment K – LTFP Assumptions

·    Attachment L – Statement of Changes in Equity

CARRIED 7/1

En Bloc

Voting:

For the motion:             Councillor T Best, Councillor G Bleechmore, Mayor G Henley, Councillor J McCallum, Councillor P Carter, Councillor R Reekie and Councillor R Paine.

Against the motion:     Councillor R Bennett.

15.             Chief Executive Officer's Report

 15.1          COUNCILLORS' INFORMATION BULLETIN           

SUBJECT INDEX:

Councillors' Information

STRATEGIC OBJECTIVE:

Governance systems that deliver responsible, ethical and accountable decision-making.

BUSINESS UNIT:

Executive Services

ACTIVITY UNIT:

Executive Services

REPORTING OFFICER:

Reporting Officers - Various   

AUTHORISING OFFICER:

Chief Executive Officer - Mike Archer

VOTING REQUIREMENT:

Simple Majority

ATTACHMENTS:

Attachment a   Disclosure Requirements in Relation to Gifts and Contributions to Travel

Attachment b    PDS1 ApplicationsDeemedComplete20160406

Attachment c    PDS2 ApplicationsDetermined20160406

Attachment d   PDS3 SAT Appeals 20160406  

  

PRÉCIS

 

This report provides an overview of a range of information that is considered appropriate to be formally presented to the Council for its receipt and noting. The information is provided in order to ensure that each Councillor, and the Council, is being kept fully informed, while also acknowledging that these are matters that will also be of interest to the community.

 

Any matter that is raised in this report as a result of incoming correspondence is to be dealt with as normal business correspondence, but is presented in this bulletin for the information of the Council and the community.

 

INFORMATION BULLETIN

15.1.1    Planning and Development Statistics

 

Planning Applications

 

Attachment PDS1 is a report detailing all Planning Applications received by the City between 1 March, 2016 and 31 March, 2016.  107 formal applications were received during this period.

 

Attachment PDS2 is a report detailing all Planning Applications determined by the City between 1 March, 2016 and 31 March, 2016.  A total of 92 applications (including subdivision referrals) were determined by the City during this period with 88 approved / supported and 4 refused.

 

Local Planning Scheme Notices

 

LOCAL PLANNING SCHEME NO. 21

 

Scheme Amendment No. 16

 

The above scheme was published in the Western Australian Government Gazette on 24th March 2016.

The purpose of this amendment is to rezone a portion of Lot 519 Bell Drive, Broadwater from ‘Residential R20’ to ‘Residential R40’ and amend the Scheme Map accordingly.

 


 

LOCAL PLANNING SCHEME NO. 21

 

Scheme Amendment No. 5

 

The above scheme was published in the Western Australian Government Gazette on 24th March 2016.

 

The purpose of this amendment is for the following:

 

(a)        Inserting the following particulars into Schedule 3 – Special Provision Areas of the Scheme:

 

No.

Particulars of Land

Zone

Special Provisions

SP58

700 Caves Road, Marybrook

Tourist

Notwithstanding any other provision of the Scheme: an unrestricted length of stay is permissible for Lots 6 – 15 as shown on the current Strata Plan 46392 (approved on 8 September 2005), with up to two accommodation units, both of  which may be unrestricted length of stay being able to be developed on each lot.

 

(b) Amending the Scheme Map accordingly

 

State Administrative Tribunal (SAT) Appeals

 

Attachment PDS3 is a list showing the current status of State Administrative Tribunal Appeals involving the City of Busselton as at 1 April, 2016.

15.1.2    Current Active Tenders

 

2015 TENDERS

RFT 19/15            CONSTRUCTION OF THE NEW TRANSFER STATION AT BUSSELTON WASTE FACILITY

The City of Busselton invited tenders for the construction of the new transfer station at the Busselton Waste Facility at Rendezvous Road, Vasse. The project includes construction of a new multifunctional facility, comprising of a community recycling drop-off area, light and heavy vehicle multi-tiered drop-off area for putrescible waste, as well as associated stormwater drainage and road access infrastructure. The tender was advertised on 26 December 2015 with an initial closing date for submissions of 29 January 2016. Due to a number of technical queries from prospective tenderers it was extended to 26 February 2016. Ten tenders have been received. The value of the submissions are significantly more than the anticipated budget. A report proposing restructuring of the funding for this project will be presented to the Finance Committee along with a report to Council for award of the tender. It is anticipated that the report will be presented to Council on 27 April 2016.

 

2016 TENDERS

RFT 01/16            PROVISION OF CITY OF BUSSELTON CORPORATE UNIFORMS

The City of Busselton invited tenders for the provision of the City's corporate uniforms. The successful supplier will supply the City's corporate wardrobe as required for a period of four years (two years plus 2 options of 12 months each). The tender was advertised on 16 January 2016 with a closing date for submissions of 11 February 2016. Three compliant tender submissions were received by the City. The tender evaluation process was completed in March 2016 and has been awarded by the CEO under delegated authority (as the value of the contract does not exceed $350,000) to MJ & S Phillips Family Trust trading as Hip Pocket Workwear and Safety, a locally owned and operated business. This is a variable price contract, based on the submitted tendered rates.

 

EOI 01/16             EXPRESSION OF INTEREST – DESIGN AND CONSTRUCTION OF AIRSIDE INFRASTRUCTURE AT BUSSELTON-MARGARET RIVER REGIONAL AIRPORT

Council resolved at its 23 March 2014 meeting to invite Expressions of Interest (EOI) for the design and construction of Airside Infrastructure at Busselton-Margaret River Regional Airport and to delegate to the CEO the power to decide which, if any, of those expressions of interest that are received, are from persons who he thinks to be capable of satisfactorily supplying the goods and services required for this purpose. The EOI was advertised in the West Australian on 26 March 2016 and 3 April 2016 and on the City’s Website. The EOI’s submission deadline is 26 April 2016. It is expected that the evaluation process will be concluded and acceptable tenderers shortlisted by early May 2016, which will allow the City to invite tenders by mid to late May 2016.

15.1.3    Disclosure Requirements in Relation to Gifts and Contributions to Travel

 

Correspondence has been received from the Department of Local Government and Communities regarding disclosure requirements in relation to gifts and contributions to travel (attachment A).

 

Council Decision and Officer Recommendation

C1604/099              Moved Councillor G Bleechmore, seconded Councillor P Carter

 

That the items from the Councillors’ Information Bulletin be noted:

·    15.1.1              Planning and Development Statistics

·    15.1.2              Current Active Tenders

·    15.1.3              Disclosure Requirements in Relation to Gifts and Contributions to Travel

CARRIED 7/1

En Bloc

Voting:

For the motion:             Councillor T Best, Councillor G Bleechmore, Mayor G Henley, Councillor J McCallum, Councillor P Carter, Councillor R Reekie and Councillor R Paine.

Against the motion:     Councillor R Bennett.

  


Council                                                                                      77                                                                      27 April 2016

10.5           Finance Committee - 14/04/2016 - WHALE VIEWING PLATFORM POINT PICQUET - 2015/16 BUDGET AMENDMENT

SUBJECT INDEX:

Committee Meetings

STRATEGIC OBJECTIVE:

Our natural environment is cared for and enhanced for the enjoyment of the community and visitors.

BUSINESS UNIT:

Environmental Services

ACTIVITY UNIT:

Environmental Services

REPORTING OFFICER:

Manager, Environmental Services  - Greg Simpson

AUTHORISING OFFICER:

Director, Planning and Development Services - Paul Needham

VOTING REQUIREMENT:

Absolute Majority

ATTACHMENTS:

Nil

 

This item was considered by the Finance Committee at its meeting on 14 April 2016, the recommendations from which have been included in this report. 

 

PRÉCIS

 

This report recommends that Council amend the 2015/16 Budget by way of a transfer of funding currently allocated for projects within Meelup Regional Park. It is recommended that Council transfer surplus expenditure from the Meelup Beach car parking upgrade project account 541- COO27 which is now completed, to the Whale viewing platform project account 425-C3127-3280, to enable construction of the platform at Point Picquet in Meelup Regional Park.

 

BACKGROUND

 

Since 2004, community volunteers from Dunsborough Coast and Land Care Inc (D-CALC), in partnership with Western Whale Research, have been using Point Picquet during the whale migration season as the vantage point for monitoring the whales’ southwards passage through Geographe Bay. This land-based monitoring forms part of a wider research program undertaken by SouWEST as part of a south west whale ecology study. SouWEST was formed in 2010, and is a collaborative science program which integrates the research expertise of Western Whale Research, the Centre for Marine Science and Technology at Curtin University and the community through D-CALC, to monitor whale sightings as part of a program for the long-term conservation of whales and their critical habitats along the coast.

 

In April 2013, D-CALC approached the Meelup Regional Park Management Committee (the Committee) with a proposal to construct a whale viewing platform at Point Picquet to assist their whale monitoring program and for the benefit of the wider public, as this location provides a unique ocean vantage point of Geographe Bay. The D-CALC proposal was presented at the May 2013 Committee meeting and the Committee resolution (MP1305/010) from that meeting is as follows:

 

That the Committee provides in‐principle support for the whale watching deck and walkway, according to the following guidelines:

1.         That DCALC consults with the Meelup Regional Park Committee on the project’s development and implementation;

2.         That the materials used for the decking and walkway are consistent with those recommended in the Meelup Beach Master Plan; and

3.       That the design of the decking fits into the existing granite rocks to create an organic shape that fits into the landscape, rather than a rectangularshaped decking.

 

In April 2015, Council amended the 2014/15 Budget to receive a $25,000 National Landcare grant as revenue towards the establishment of a Whale viewing platform at Point Picquet. This decision resulted in corresponding expenditure of $25,000 towards construction of the Whale viewing platform being included in the 2015/16 Budget.

 

In August 2015, Council resolved (resolution C1508/215), to endorse concept design and construction drawings for the establishment of a whale viewing platform at Point Picquet for the purpose of public consultation and this design was advertised for a  period of four weeks. In response to public advertising three submissions were received, none of which objected to or raised concerns with the proposal. 

 

In December 2015, Council endorsed a proposal to construct a whale viewing platform at Point Picquet within Meelup Regional Park, in accordance with the advertised concept design and construction drawings.

 

STATUTORY ENVIRONMENT

 

Section 6.8 of the Local Government Act 1995 refers to expenditure from the municipal fund not included in the annual budget.

 

Meelup Regional Park is Reserve 21629, and is Crown Land over which the City has a management order. The reserve purpose is ‘Conservation and Recreation’.

 

RELEVANT PLANS AND POLICIES

 

The Meelup Regional Park Management Plan (2010) provides direction for the overall management of the Park. However, this Plan does not specifically address coastal management prompting the development of the Meelup Regional Park Coastal Nodes Master Plan in 2013, to guide the sensitive development of the Meelup Regional Park coastal nodes and to manage the impacts that result from increasing visitation to the Park’s coastal areas including Point Picquet.

 

In December 2013, Council resolved (resolution C1312/324) to endorse the Meelup Regional Park Coastal Nodes Master Plan, as an informing strategy for the purpose of planning and managing the Meelup Regional Park.

 

The Coastal Nodes Master Plan supported a whale viewing platform to be constructed at Point Picquet. The Coastal Nodes Master Plan concept for the upgrade of Point Picquet carpark and surrounds includes an indicative location for the platform at Point Picquet and a notation that the feasibility of a whale viewing platform be investigated further in consultation with D-CALC.

 

FINANCIAL IMPLICATIONS

 

Quotations for the construction of the Whale Platform have now been received with the preferred contractor’s price being $63,337 (GST excl).

 

Council’s 2015/16 Budget includes $279,652 expenditure for the Meelup beach parking upgrade account 541- COO27. The works associated with the Meelup beach carpark upgrade have been completed for less than the 2015/16 budget, which has resulted in a surplus of $39,145 in account 541- COO27  

 

Council’s 2015/16 Budget also includes $25,000 in account 425-C3127-3280, towards the development of the Whale viewing platform which is the value of the $25,000 National Landcare grant Council received in April 2015. This report recommends that the construction of the Whale viewing platform continue and that Council amends the 2015/16 Budget and transfer the $39,145 from the Meelup beach parking upgrade account 541- COO27 to the Whale Viewing Platform – Point Picquet account 425-C3127-3280 as follows:

Description

Account String

2015/2016 Adopted Budget

2015/2016 Amended Budget (Proposed)

Variation to 2015/16 Budget

Expenditure

 

Meelup Beach Parking Upgrade

541- COO27

279,652

240,507

39,145

Whale Viewing Platform Point Picquet

425-C3127-3280

25,000

64,145

(39,145)

Net Exp/Rev

 

304,652

304,652

0

 

D-CALC has indicated their intent to contribute funds towards the whale viewing platform, for the installation of interpretive signage.  The installation of interpretive signage will occur post construction and following consultation and support from the Meelup Regional Park Committee.

 

Long-term Financial Plan Implications

 

Nil

 

STRATEGIC COMMUNITY OBJECTIVES

 

This matter is considered relevant to Key Goal Area 5 ‐ Cared for and Enhanced Environment and Community Objective 5.1 ‐ Our natural environment is cared for and enhanced for the enjoyment of the community and visitors.

 

RISK ASSESSMENT

 

An assessment of the potential implication of implementing the officer recommendation has been undertaken using the City’s risk assessment framework. The assessment sought to identify ‘downside’ risks only rather than ‘upside’ risks and where the risk, following implementation of controls has been identified, is medium or greater. No such risks were identified.

 

CONSULTATION

 

The advertised (September 2012) Meelup Regional Park Coastal Nodes Master Plan concept design for the upgrade of Point Picquet carpark and surrounds included an indicative location at Point Picquet for the establishment of a whale viewing platform.  A notation on the plan alerted readers that the feasibility of a whale viewing platform will be further investigated in consultation with D-CALC. No submissions were received in response to the advertising of the Master Plan, objecting to establishing a whale viewing platform at Point Picquet.

 

The notation in the Meelup Regional Park Coastal Nodes Master Plan that the feasibility of a whale viewing platform be investigated further in consultation with D-CALC, resulted in the formation of a working group to progress the design for the whale viewing platform at Point Picquet. The Whale viewing platform working group comprised:

·    One City Environmental Officer and Meelup Environment Officer

·    One Dunsborough Coast and Landcare  Group representative

·    Two Meelup Regional Park Management Committee representatives

In May 2015, the proposed site for the establishment of a whale viewing platform at Point Picquet was inspected by representatives of the Nyungar community as part of an Aboriginal heritage assessment. No Aboriginal heritage sites or places were found to be located within the proposed Point Picquet whale viewing platform area. The assessment concluded that the proposed Whale viewing platform would have a low key impact on the environment and recommended that the City of Busselton proceed with the proposal to construct a whale viewing platform at Point Picquet without risk of breaching Section 17 of the Aboriginal Heritage Act 1972 in relation to Aboriginal heritage sites/places as defined by Section 5 of the Act.

 

The concept design and construction drawings for a proposed whale viewing platform to be located at Point Picquet were advertised for public comment for a period of 28 days during September 2015. The City received three submissions, none of which objected to or raised concerns with the proposal.

 

In November 2015, the Committee recommended that the Council endorse the proposal to develop and construct a whale viewing platform at Point Picquet within Meelup Regional Park in accordance with the proposed concept design and construction drawings.

 

OFFICER COMMENT

 

Since 2004, community volunteers from Dunsborough Coast and Land Care Inc (D-CALC), in partnership with Western Whale Research, have been using Point Picquet during the whale migration season as the vantage point for monitoring the whales’ southwards passage.

 

Point Picquet is considered to be the best site for whale monitoring as it is the northern projection of the “greater Castle Bay” area with deeper water close to the coast and provides an almost 180-degree view for monitoring passing whales. This site also provides a ready reference point for whale monitoring, in the form of the buoy of the Swan wreck dive, north-east of the site.

 

The concept design for the whale viewing platform due to its low key design and setting into an existing depression in the coastal granite will have low visual impact due to the higher elevation of the surrounding landform.

 

The materials proposed for construction of the platform include exposed aggregate concrete and locally sourced granite. The use of exposed aggregate concrete is consistent with the material palette in the Meelup Beach Master Plan, and will also allow an ‘organically-shaped’ structure that fits into the landscape, rather than a rectangular-shaped deck. Locally sourced granite will help blend the structure into the landscape and will continue the granite theme used elsewhere in the Park and seating will be incorporated as part of the granite stone surround to the concrete platform.  The proposed platform will provide universal access for disabled and a compass will be embedded into the concrete platform, to assist orientation for the public whilst providing a useful function for whale watching monitors.

 

There are limited formalised lookouts elsewhere in the Park, these include a timber deck at the termination of the universal trail alongside Meelup Brook, and a lookout car park on Meelup Beach Road. The proposed lookout at Point Picquet is unique in that it will be the only such infrastructure on the coastline in Meelup Regional Park, which will also provide universal access and has an almost 180-degree view of Geographe Bay.

 

CONCLUSION

 

Point Picquet has been used for the purpose of monitoring Whale migration since 2004 due to its proximity to deeper water close to the coast and almost 180-degree view for monitoring passing whales. Given that Point Picquet is currently the preferred location for whale monitoring activities and that the development of whale viewing platform will have low visual impact, it is recommended that Council endorse the officer recommendation and proposed 2015/16 Budget amendment.

 

OPTIONS

 

Council may require a review of the project design with a view to reducing expenditure on the project and refer the design back to the Whale viewing platform working group and Meelup Regional Park Management Committee, however this process is expected to extend beyond the funding agreement date for completion of this project 30 June 2016, requiring a new completion date to be agreed with the funding body.

 

Council may resolve not to endorse the officer recommendation to amend the 2015-16 Budget to enable the construction of a Whale Viewing Platform at Point Picquet, in which case Council would forfeit the $25,000 National Land-care grant to assist the project.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

Should the Officer Recommendation be endorsed, an amendment to the 2015/2016 adopted budget will be processed by the 30 May 2016.

 

Council Decision and Committee Recommendation

C1604/100              Moved Councillor T Best, seconded Councillor J McCallum

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

That the Council Endorses an amendment to the 2015/2016 adopted budget on the following basis to enable construction to proceed on the Point Picquet Whale Viewing Platform:

Description

Account String

2015/2016 Adopted Budget

2015/2016 Amended Budget (Proposed)

Variation to 2015/16 Budget

Expenditure

Meelup Beach Parking Upgrade

541- COO27

279,652

240,507

39,145

Whale Viewing Platform Point Picquet

425-C3127-3280

25,000

64,145

(39,145)

Net Exp/Rev

 

304,652

304,652

0

 

 

CARRIED 8/0

by absolute majority

 


Council                                                                                      79                                                                      27 April 2016

10.6           Finance Committee - 14/04/2016 - PERMIT FEES FOR COMERCIAL USE OF BERTHING PLATFORMS AT THE BUSSELTON JETTY

SUBJECT INDEX:

Tourism Development

STRATEGIC OBJECTIVE:

An organisation that is managed effectively and achieves positive outcomes for the community.

BUSINESS UNIT:

Commercial Services

ACTIVITY UNIT:

Commercial Services

REPORTING OFFICER:

Economic and Business Development Coordinator - Jon Berry

AUTHORISING OFFICER:

Director, Community and Commercial Services - Naomi Searle

VOTING REQUIREMENT:

Absolute Majority

ATTACHMENTS:

Nil

 

This item was considered by the Finance Committee at its meeting on 14 April 2016, the recommendations from which have been included in this report. 

 

PRÉCIS

 

To facilitate growth in marine-based tourism, the City of Busselton has completed the construction of two new marine berthing platforms at the Busselton Jetty.  The berths (one on the east side and one on the west side) have been constructed with financial assistance of a Federal Tourism Development grant and are intended for use by cruise ship tenders and commercial whale watching and charter/tour vessels.

 

Council has previously resolved (C1512/369) to defer applying fees and charges for cruise ship tender use of the platforms until the 2017/18 financial year and to set a permit fee for other commercial vessels as part of the 2016/17 budget process (the subject of this report).

 

This report presents the topic of raising necessary capital to maintain the Jetty through a fee-for-use charge to be paid by commercial operators.  It also contemplates options for the introduction of fees from 1 July 2017, for use of the berths by cruise ship companies.

 

BACKGROUND

 

In early-2015, the City was successful in its application to the Federal Government’s Tourism Demand Driver Infrastructure (TDDI) program and received funding of $600k, matched by a City contribution of $600k (a total of $1.2m) for new marine berthing facilities at the Busselton Jetty.  The funds enabled the City to construct a 35m berthing platform on the east side of the Jetty (the principal berthing facility with universal pedestrian access) and a 15m platform on the west side of the Jetty (stair access only).  The two platforms will enable the transfer of cruise ship passengers in a range of weather conditions and provide a new pick up and drop off point for commercial whale-watching and charter/tour vessels at Busselton’s premier tourist precinct.  They are exclusively for tourism based commercial use.

 

There is also an existing platform toward the end of the Jetty known as ‘Alley’s Landing’ , which was  purpose built for visits of tall ships such as the sail training ship “STS Leeuwin II”, operated by the not for profit Leeuwin Ocean Adventure Foundation.  There is no fee or charge set for use of this landing, with no new fee proposed at this time.

 

The installation of the two new marine berths will primarily support berthing of vessels operated by two user groups, being cruise ship tenders and whale-watching/tour vessels, with the potential for further commercial use.

 

 

1. Whale watching/tour vessels

There are six vessels regularly operating whale watching tours in the Geographe Bay region, which is a popular activity for tourists visiting the Region.  Some of these vessels are based at Dunsborough (Quindalup professional fisherman’s boat ramp), with the majority being moored at pens at Port Geographe, with seasonal visits from Perth or North West home ports.  The whale-watching season in Geographe Bay primarily runs from September to mid-December, with some of the vessels then operating out of Augusta through to May to experience whale migration and for fishing charters.

 

It is estimated that these operators service around 5,000 passengers per annum from Geographe Bay.  Based on an average cost per passenger of $75.00, this equates to direct expenditure of $375,000 per annum for this activity.  The multiplier effect increases economic impact significantly, including for example, food and accommodations expenditure.

 

An existing jet boat operator has been issued a Jetty landing permit and is using the eastern-side platform from January 2016 to the end of April 2016, with passengers paying the Jetty entrance fee to BJECA in the absence of Council setting a designated Jetty landing permit fee.

 

Preliminary interest has also been received from a yacht charter company interested in using the facility as an embarkation point for corporate/motivational sailing experiences on an ‘occasional use’ basis.

 

2. Cruise ship vessels

During the 2014/15 financial year a total of six cruise ships visited Busselton and disembarked passengers via tender vessels at the U-shaped swim Jetty, now enclosed by a beach enclosure and stinger nets.

 

Independent research commissioned by Cruising Down Under reported passengers spent an estimated $1.8m in the Region, generating $0.5m in wages (equivalent of 10 FTEs) and $0.9m in value add.  A total of 8,773 passengers and crew disembarked the vessels with 2,530 undertaking pre-booked tours of the Region.

 

The Western Australian Cruise Shipping Strategic Plan 2012-2020 produced by Tourism Western Australia aims to maximise the economic benefits of cruise shipping to the state and identifies 10 key cruise ship destinations in the state, one of which is Busselton.  Accordingly, all other factors being equal, it is likely cruise ship visits to Busselton will continue to grow into the foreseeable future.

 

There are seven cruise ship visits scheduled to visit Busselton in 2015/16, a further eight booked for 2016/17 and five pre-booked for 2017/18.  Council has previously resolved (C1512/369) to waive berthing fees until 2017/18.

 

Currently all members of the public using the Jetty during daylight hours are charged an entrance fee.  On 25 November 2015, Council resolved (C1511/330) to waive jetty entrance fees for cruise ship passengers.  On 9 December 2015 Council also resolved (C1512/369) to waive berthing fees for cruise ship tender vessels until the 2017/18 financial year and to consider a regime of fees for other commercial vessels to be adopted as part of the 2016/17 budget deliberations.

 

This report recommends a proposed fee schedule for whale watching/tour vessels to be introduced from 1 July 2016 and for context, contemplates a proposed future fee schedule for cruise ship tender berthing from 1 July 2017 (which will be the subject of a separate report following further industry consultation over the next six months).

 

STATUTORY ENVIRONMENT

 

Jetties Act 1926

 

This Act provides for the construction, maintenance, and preservation of jetties and other works, and to make better provision for securing and regulating the use and management of jetties.  Pursuant to section 7 of the Jetties Act, the CEO of the Department of Transport may grant a license for the erection or construction of a jetty or for the maintenance and use of any Jetty.  The Busselton Jetty is licensed in accordance with this legislation.

 

Busselton Jetty License (2009)

 

The City of Busselton (former Shire) was granted a Jetty License in 2009 by the Department of Transport, with the permitted use being for ‘Recreation, Tourism and Heritage’. Section 6.3 requires the City to establish and maintain a Jetty Maintenance Reserve and contribute to the account from income received from existing ground leases on the Busselton foreshore plus a minimum of $650k (indexed to CPI) sourced from Busselton Jetty Environment and Conservation Association (BJECA), which is licensed to operate tourism enterprises on the Jetty to raise this capital.

 

City of Busselton and Busselton Jetty Environment and Conservation Association License (2009)

 

The City of Busselton licenses BJECA to use and manage the Jetty as a commercial enterprise on specified terms and conditions.  Licensed activities include operation of commercial enterprises by BJECA including the Interpretative Centre, Underwater Observatory and the Miniature Railway Train.  BJECA is also licensed to collect the Jetty Entrance fee that is set by Council. 

 

City of Busselton Jetties Local Law 2014

 

The Busselton Jetty Local Law (2014) allows the City to control access to berthing at the Jetty.  Relevant clauses include:

 

·    Section 2.2 Mooring of Vessels:

(1)  A person shall not moor to or berth a vessel at the jetties or moor or berth a vessel on the Land—

(a) unless the mooring or berthing of the vessel is authorized or permitted by the local  government either by way of a sign affixed by the local government to the jetties or by written consent of the local government; (b) other than in accordance with any conditions imposed by the local government under clause 3.2(1)(a).

(2)  Subclause (1) does not apply to—

(a)  a person who needs to moor to or berth a vessel at the jetties or on the Land in an emergency;

(b)  a vessel in distress such as that repairs are required and then only to effect the minimum repairs necessary to enable the vessel to be moved elsewhere;

(c)   a person who uses the jetties under and in accordance with a written agreement with the local government; and

(d)  a person who has been exempted from subclause (1) by the local government.

(3) A person shall not—

(a)  moor a vessel to the jetties or any part of the jetties except to such moorings or mooring piles as are provided; or

(b)          permit a vessel to remain alongside the jetties unless the vessel is so moored or fastened.

·    Section 5.6 Fees and charges:

(1)  Fees and charges may be imposed by the local government for the purposes of this local law in accordance with the requirements of Part 6, Division 5, Subdivision 2 of the Act.

(2)  A person shall not charge admission or seek payment for entering or using the jetties without having first obtained the written consent of the local government.

(3)  A person shall not enter upon or use the jetties without first having paid—

(a) the fees and charges which may apply to such entry or use, as determined by the local government from time to time; or

(b) admission charged by a person who obtained written consent pursuant to subclause (2).

 

RELEVANT PLANS AND POLICIES

 

Busselton Jetty 50-Year Maintenance Plan

The Busselton Jetty 50-Year Maintenance Plan identifies the maintenance, capital replacement and upgrade tasks required to maintain the Busselton Jetty, including the exterior and structural maintenance of the Interpretive Centre and the Underwater Observatory, for the 50-year period from 2013 to 2062. Reconstruction of the existing lower landing fishing platform (known as 2A) was originally scheduled for the year 2020 (with no access ramp) at a forecast cost of ~$500k, so this work has effectively been bought forward by the new platform replacing existing 2A on the east side of the Jetty.

 

FINANCIAL IMPLICATIONS

 

Asset replacement and maintenance of the two new berths will be provided for in the Jetty Maintenance Reserve.  Engineering and Works (EWS) estimate the cost at approximately $25k pa, which is to be reflected in a review of the Busselton Jetty 50-Year Maintenance Plan.

 

This report proposes the above costs be funded from the introduction of a permit fee for whale watching / tour vessels from 1 July 2016 (estimated income of $12k-$20k pa) and supplemented by a future permit fee (from 1 July 2017) from cruise ships (income to be estimated in a report to the Finance Committee within six months).  Any surplus funds directed to the Jetty Reserve over $25k pa, will effectively reduce reliance on municipal funds to support Jetty Reserve income obligations.

 

No provision is currently made for a swing mooring (estimated at $10k) that may be required in the future should there be competing demand for use of the berths, resulting in vessels needing to moor temporarily while other vessels are embarking/disembarking passengers.  Should this arrangement be deemed necessary, this item would be funded in a future budget or a budget review (dependent on timing).

 

Additionally, cruise ship visits currently cost the City on average of $1.8k per visit (~$13k pa), with these funds used for an onshore visitor welcome program and budgeted in the Economic and Business Development Activity section of the municipal budget.  This is a partnering contribution along with separate resources provided by the Margaret River Busselton Tourism Association (MRBTA), Chambers of Commerce and Busselton Jetty Conservation and Environment Association (BJECA) who provide staff resources and volunteer effort.  Tourism WA and the South West Development Commission have also provided some additional seed funding for marquees and maps.

 

These costs to the City would be offset by revenue from the permits that would be directed into the Jetty Reserve, effectively reducing funding required from the municipal fund required to meet the City’s Jetty Licence obligations.

 

Long-term Financial Plan Implications

 

City of Busselton Engineering and Works staff estimate that the maintenance and provision for the replacement of the two new tender platforms will cost around $25,000pa over a 50 year period.  These costs are to be integrated into the Long Term Financial Plan, however it revenue generated through future berthing fees and charges will offset this.

 

Support to a cruise ship visitation program is identified in the City’s Long Term Financial Plan in the Economic and Business Development Activity Unit under marketing and promotion.

 

Long-term Financial Plan Implications

 

STRATEGIC COMMUNITY OBJECTIVES

 

Key Goal Area2

Well planned, vibrant and active places:  An attractive City offering great places and facilities promoting an enjoyable and enriched lifestyle

2.3     Infrastructure assets are well maintained and responsibly managed to provide for future generations.

 

Key Goal Area 3:

Robust local economy: A strong local economy that sustains and attracts existing and new business, industry and employment opportunities.

3.1    A strong, innovative and diversified economy that attracts people to live, work, invest and visit;

3.2    A City recognised for its high quality events and year round tourist offerings; and,

3.3    A community where local business is supported.

 

RISK ASSESSMENT

 

The following risks have been rated as either high or moderate.

 

Risk

Controls

Consequence

Likelihood

Risk Level

REPUTATIONAL

The City’s fees and charges for the new marine berthing platforms are set too high and deter use of the platforms by commercial operators

 

Consult with commercial tour operators when determining fees.

 

Conduct a comparative assessment of charges by other ports and permit/licensing authorities

 

Moderate

Possible

M13

FINANCIAL

The City’s fees and charges for the new marine berthing platforms are set too low and funds  for maintenance and provision for replacement are needed to be sourced from municipal revenues

Set fees on estimated requirement to maintain and replace berthing platforms and other costs associated with supporting cruise ship visits

Moderate

Possible

M13

 

CONSULTATION

 

In preparing this report, Officers conducted desktop research and consulted with several operators conducting commercial tours from Port Geographe.  The results of the consultation are reflected in the Officer comment and recommendations.  The three whale watching vessel operators and one tour boat operator all expressed interest in using the platforms as a pick-up and drop-off point and would likely utilize the facility for at least three pickups and three drop offs in any one day, primarily during the period September to November during whale watching season.  The operators consulted also see future potential in conducting sunset tours in the summer months, particularly once the foreshore redevelopment is complete and tourism numbers potentially grow as a result of the introduction of interstate flights operating out of the developed airport.

 

Preliminary consultation has also occurred with Carnival Australia (P&O and Princess Cruises) regarding the City’s intention to commence applying a berthing Permit fee from 2017/18 financial year.  This consultation will continue along with further discussions with Tourism Western Australia regarding setting a reasonable fee that is acceptable to the growing cruise ship industry.  The results of these consultations will be included in a separate report and recommendation to the Finance Committee leading into the 2017/18 financial year.

 

In addition, Officers have consulted with the Busselton Jetty Environment and Conservation Association Inc (BJECA), which prefers to retain the authority to collection the Jetty Entrance fee  (currently $3.00 per adult), for each passenger wanting to walk northward on the Jetty after alighting or departing from a vessel using the new berthing platforms.  On 25 November 2015, Council resolved (C1511/330) to waive the Jetty Entrance fee for cruise ship passengers, in part to support a more welcoming environment in an effort to grow cruise ship visits as a new economic activity supporting tourism development across the district.

 

OFFICER COMMENT

 

The installation of the two new marine berths at the Busselton Jetty will primarily support berthing of two user groups, being cruise ship tenders and commercial whale-watching/tour vessels, with the potential for further commercial use such as short term yacht charter pickups.  Although this report makes recommendations on fees and charges for whale watching/tour vessels, it also contemplates options for the introduction of fees from 1 July 2017, for use of the berths by cruise ships (the subject of a future report to the Finance Committee within six months).

 

1.    Proposed Permit Fees for whale watching / tourist vessels (from 1 July 2016)

 

There are several considerations for the setting of fees and charges;

 

·   Firstly, it is desirable for the regime to be administratively simple for the City (as owner of the Jetty) and for the operators and/or their booking agents.

·   Secondly, fees need to be set with the primary objective of supporting whole of life asset maintenance and replacement of the platforms (est. ~$25k pa)

·   Thirdly, fees should ideally not be set at such a level so as to deter commercial tourism use of the platforms, the very reason they were funded with support from a Federal Government tourism development grant.

 

When setting the fees, it is important to differentiate between casual or one-off use of the platforms as opposed to commercial businesses who commit to operating at the Jetty for extended periods, effectively value adding to the experience of visitors to the Busselton foreshore, which is destined to be the district’s premier tourist precinct.

 

In order to reduce administrative complexity, but provide some flexibility with commercial use of the new platforms, a fee regime which relates to the characteristics of the vessel (e.g. registered length – which in most cases is also directly proportional to passenger capacity) is recommended, along with charges associated with duration of use, with an annual permit duration being relatively less expensive than monthly use.  This type of arrangement reflects the approach taken by the Department of Transport when it sets fees for its facilities, albeit there are limited examples of non-metropolitan jetties that are not enclosed in a marina or other protected space.  It also takes account existing charges for pens at Port Geographe, which range from an annual base fee of approximately $6,000 (15m vessel) to ~$11,000 pa (25m vessel), representing an established fixed cost reflected in ticket process for whale watching tours.

 

The known fleet of six vessels range in size from 16m to 24m and currently operate in the Geographe Bay region.  The recommended fees below are based on a primary objective of supporting whole of life asset maintenance and replacement of the two new platforms (est. ~$25k pa) while at the same time not being too high so as to prohibit commercial interest.  Given the platforms are intended for pick up and drop off of paying passengers, one or two swing moorings may also be required for use by vessels prior to pick up of passengers and following disembarkation, prior to the next tour commencing.  This will keep the berthing platforms free for use (i.e. not tying up and monopolizing the berths).  The cost and ownership of providing a shared mooring requires further discussions with Department of Transport and potential operators, however should one or more be required, the cost is likely to be in the order of $10k per mooring (source; MP Rogers Marine Berthing Study 2014) which if amortized over 10 years amounts to $1k per annum.  This type of logistical arrangement for low draught vessels may also be viable at Scout Road jetty. Consultation with two operators indicates tours would likely commence between 9.00am -10.00am and return between 12noon and 1.00pm (3hr tours).

 

The following categories are proposed for the issuing of permits to whale watching/tourist vessels, based on duration:

 

·    Monthly Permit:  (per calendar month – i.e. from a specified time/date in one month to the same time/date in the next month, or part thereof)

·    Annual Permit:  A period of 12 consecutive months

 

 

Maximum duration of use permitted

 

Registered Length of vessel

Monthly

Annual

Refundable Bond*

 

0 ‹ 10 m

$500

$3,500

$5,000

 

10 ‹ 15

$550

$4,000

$7,000

 

15 ‹ 25

$600

$4,500

$9,000

 

Over 25m

$700

$5,000

$12,000

 

Permit Application Fee:  $70.00 (ex GST)

*Bond charge per vessel payable in advance (in addition to insurance requirements)

Permit fee payable in advance at issue of notice of approval

 

The above fees would likely generate between $12k and $20k per annum, dependent on the number of whale watching vessels committing to using the platforms (early indications suggest four vessels) and the number (if any) extending use beyond the traditional whale watching period (four months of the year) to include sunset and other marine tours (up to eight months of the year).

 

2.    Proposed Future Permit fees for Cruise ship Visits (from 1 July 2017)

 

Fees and charges for cruise ships vary at destinations and are generally determined by the size of the vessel, number of passengers and duration of use.  In making decisions on the choice of destination to berth, shipping companies consider profit maximization (which is based to some extent on port fees and charges along with other factors such as safety and passenger experiences at the destination). Hitherto, the City of Busselton and regional tourism industry has been able to provide an exceptional visitor experience and has established Busselton as a growing cruise ship stop-over destination.  This is demonstrated by independent research conducted by Tourism Western Australia, which concluded that three out of five (61 per cent) transit passengers rated their overall experience at the destination as “excellent” while a further 34 per cent rated their experience as “very good.”  The remainder rated their experience as good, meaning 100 per cent of transit passengers had a positive experience in the Region. Two in five (42 per cent) said they would definitely recommend the Region as a holiday destination to family and friends, while a further 54 per cent were “very likely” or “quite likely” to recommend it.

 

Other cruise ship ports/anchorage points in WA that charge berthing fees for cruise ships and/or their tenders include:

 

­  Albany (port facilities)

­  Augusta (anchorage – no visits at this time)

­  Broome (port facilities)

­  Bunbury (port facilities)

­  Busselton (anchorage)

­  Esperance (anchorage / port facilities)

­  Exmouth (anchorage)

­  Fremantle (port facilities)

­  Geraldton (anchorage)

­  Port Hedland (port facilities)

 

Port berthing fees vary and generally include navigation fees, berth hire and services fees (water and waste).  For example Albany Port charges $0.2957 per tonne of vessel for navigation fees (min $9,926) and $1,266 per 8 hour berth period.  If the ship does not come alongside berth it is charged $1,266 per day for a navigation fee.  Similarly, costs at the Port of Bunbury for a large vessel such as the Diamond Princess would include berth hire ($2,800); pilotage ($6,800), navigational services (~$6,500 per hour) and stevedoring charges (~$2,600 per visit).

 

The two anchorage ports most similar to Busselton are Exmouth and Geraldton, which are both under the control of the Department of Transport, which calculates its fees inclusive of GST at $9.93 per metre of the tender vessel plus $4.24 per passenger.

 

In the case of Geraldton, DoT contributes to the wage of a cruise co-ordinator, a position shared with the local visitor centre and has invested in some infrastructure on the foreshore.  Esperance Port charges $7,000 per visit for mobilizing a pontoon when anchorage visits are required.

 

Officer communications with Tourism WA indicate cruise ship companies are generally willing to pay a ‘reasonable fee’ to cover costs of a host port.  Preliminary discussions with cruise ship lines have stated they incur additional costs at anchorage ports, including mobilization of tender vessels, fuel, security and staff to manage passengers onshore, which offsets berthing fees typically payable at ports.  They also take a view that there are significant economic benefits to the host community that should be taken into consideration when planning berthing fees.  They have stated any berthing costs would need to be included in the passengers’ fare, in what is increasingly become a fiercely competitive industry.

 

Busselton is currently an anomaly in the cruise ship visitation circuit because it does not charge fees for berthing tender vessels, whereas other ports and anchorage locations have established a commercial charge for use of their facilities, primarily using Department of Transport charging policies.

Given the previous Council resolution to defer fees and charges for cruise ship visits until 2017/18, a separate report recommending an appropriate fee will be prepared in late-2016, following further consultation with affected shipping lines (currently Princess Cruises, P&O and Cunard).  Two alternative approaches to be considered are:

­  use of Department of Transport charging principles for cruise ship tender use of their facilities (charge per passenger of $4.24 and per metre of tender vessel $9.93 (typically 14m length with six tenders); or,

­  a simple up-front payment of a fixed permit fee per visit, based on the registered passenger and crew capacity of the ship (Officer recommendation).

 

Feedback from the cruise ship industry will be sought on the above alternative approaches to fees and charges, along with other options.  A separate Officer recommendation will be made in a future Finance Committee report.

 

CONCLUSION

 

It is timely and prudent for Council to introduce a charge for the use of its Jetty infrastructure to recover the cost of maintenance and administration of commercial activities which benefit from using the facility.  This needs to be transparent, equitable and comparable to other destinations.

 

Officers recommend Council considers as part of the 2016/17 budget preparation (fees and charges schedule) a fee arrangement for whale watching/tour vessels from 1 July 2016.

 

This report recommends waiving of the Jetty entrance fee in favour of charging a single Permit fee (payable in advance) authorising use of the platforms by commercial tour operators from 2016/17 and cruise ship tenders from 2017/18.  This approach will be readily implemented with all revenue achieved by the City from the permit fees being transferred to the Jetty Maintenance Reserve, which is generally, in the mutual interest of BJECA, the City and the ratepayers of the Busselton district.

 

The recommended fee schedule will likely raise between $15-20k per annum from whale watching / tour vessels from 2016/17 financial year (based on six vessels using the platforms four months of the year).  This may increase to approx. $30k pa in a best case scenario, if all the operators used the platforms for eight months of the year.

 

The Officer recommendation also proposes the CEO commence negotiations with cruise ship companies on a mutually acceptable permit fee for use of the marine berthing platforms, with a separate report to be prepared for the Finance Committee within six months.

 


 

OPTIONS

 

Council may wish to incur an alternative fee and charge regime for use of the new marine berthing platforms that differs from the Officer recommendation.

 

Similarly, Council may elect to forgo (or reduce) fees and charges and fund the required asset however this will result in the City sourcing additional maintenance funds (est $25k pa) from the municipal budget.  This option would require amendments to the LTFP and annual budgeting cycle.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

Should Council adopt the Officer recommendation, the 2016/17 Fees and Charges schedule will include the amount specified and be incurred from 1 July 2016 for whale watching / tour vessels.

 

Officers will then engage further with the cruise ship companies based on feedback from Council on an appropriate methodology for striking fees and charges for disembarking passengers at the new marine berthing platforms from 1 July 2017.

 

OFFICER RECOMMENDATION

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

That the Council:                                                                              

 

1.    Waives the Busselton Jetty Entrance fees for passengers pre-booked on commercial tours operated by vessels issued with a permit to berth at the Busselton Jetty lower platforms;

 

2.    Adopts in the 2016/17 Fees and Charges Schedule, the following charges for commercial use of the new marine berthing platforms on the Busselton Jetty under the category ‘whale-watching/tour vessels’.

 

 

Maximum duration of use permitted

 

Registered Length of vessel

Monthly

(ex GST)

Annual

(ex GST)

Refundable Bond*

 

0 ‹ 10 m

$500

$3,500

$5,000

 

10 ‹ 15

$550

$4,000

$7,000

 

15 ‹ 25

$600

$4,500

$9,000

 

Over 25m

$700

$5,000

$12,000

 

Permit Application Fee:  $70.00 (ex GST)

*Bond charge per vessel payable in advance (in addition to insurance requirements)

Permit fee payable in advance at issue of notice of approval

 

3.    Supports the CEO engaging with cruise ship companies on a mutually acceptable flat permit fee per visit for use of the marine berthing platforms and presenting a further report and recommendations to the Finance Committee within six months.

 

Council Decision and Committee Recommendation

C1604/101              Moved Councillor P Carter, seconded Councillor J McCallum

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

That the Council:

 

1.    Waives the Busselton Jetty Entrance fees for passengers pre-booked on commercial tours operated by vessels issued with a permit to berth at the Busselton Jetty lower platforms;

2.    Adopts in the 2016/17 Fees and Charges Schedule, the following charges for commercial use of the new marine berthing platforms on the Busselton Jetty under the category ‘whale-watching/tour vessels’.

 

Maximum duration of use permitted

 

Registered Length of vessel

Monthly

(ex GST)

Annual

(ex GST)

Refundable Bond*

 

0 ‹ 10 m

$500

$3,500

$2,500

 

10 ‹ 15

$550

$4,000

$3,500

 

15 ‹ 25

$600

$4,500

$4,500

 

Over 25m

$700

$5,000

$6,000

 

Permit Application Fee:  $70.00 (ex GST)

*Bond charge per vessel payable in advance (in addition to insurance requirements)

Permit fee payable in advance at issue of notice of approval

 

3.    Supports the CEO engaging with cruise ship companies on a mutually acceptable flat permit fee per visit for use of the marine berthing platforms and presenting a further report and recommendations to the Finance Committee within six months.

CARRIED 8/0

by absolute majority

 


Council                                                                                      107                                                                   27 April 2016

10.4           Finance Committee - 14/04/2016 - DRAFT SCHEDULE OF FEES AND CHARGES FOR THE 2016/17 FINANCIAL YEAR

SUBJECT INDEX:

Finance and IT Services

STRATEGIC OBJECTIVE:

An organisation that is managed effectively and achieves positive outcomes for the community.

BUSINESS UNIT:

Finance and IT Services

ACTIVITY UNIT:

Financial Operations

REPORTING OFFICER:

Financial Compliance Officer - Jeffrey Corker

AUTHORISING OFFICER:

Director, Finance and Corporate Services - Matthew Smith

VOTING REQUIREMENT:

Absolute Majority

ATTACHMENTS:

Nil

 

This item was considered by the Finance Committee at its meeting on 14 April 2016, the recommendations from which have been included in this report. 

 

PRÉCIS

 

In accordance with Regulation 5(2) of the Local Government (Financial Management) Regulations, a local government is to undertake a review of its fees and charges regularly; and not less than once in every financial year. This report provides the Finance Committee with a recommended Schedule of Fees and Charges to apply for the financial year commencing on 01 July 2016, for its consideration and consequent recommendation to the Council.

 

 

BACKGROUND

 

Section 6.16 of the Local Government Act (the “Act”) states that a local government may impose and recover a fee or charge for any goods or services it provides or proposes to provide, other than a service for which a service charge is imposed.

 

Section 6.17 of the Act further states that in determining the amount of a fee or charge for goods and services, a local government is to take in to consideration the following factors:

a)            The cost to the local government of providing the service or goods;

b)            The importance of the service or goods to the community; and

c)            The price at which the service or goods could be provided by an alternative provider.

 

Section 6.18 of the Act clarifies that if the amount of any fee or charge is determined under another written law, then a local government may not charge a fee that is inconsistent with that law.

 

The above matters have been considered as part of the annual fees and charges review and the fees and charges recommended are in accordance with recent planning and discussions relating to the City’s Long Term Financial Plan.

 

Finally, whilst Section 6.16(3) of the Act states that a schedule of fees and charges is to be adopted by the Council when adopting the annual budget, fees and charges may also be imposed during a financial year. In order for the 2016/17 schedule of fees and charges to be effective from the commencement of the new financial year, the Council is required to adopt its schedule in advance of 30 June 2016, such that any statutory public notice periods (including gazettal’s where required) can be complied with.

 

STATUTORY ENVIRONMENT

 

Sections 6.16 – 6.19 of the Act refer to the imposition, setting the level of, and associated administrative matters pertaining to fees and charges. The requirement to review fees and charges on an annual basis is detailed within Regulation 5 of the Local Government (Financial Management) Regulations.

 

RELEVANT PLANS AND POLICIES

 

The Council’s endorsed Long Term Financial Plan reflects an annual increase in Fees and Charges revenue of 3.5% (the 10 year average Local Government Cost Index). This matter has been considered as part of the review process.

 

FINANCIAL IMPLICATIONS

 

Whilst fees and charges revenue includes items that the Council has no authority to amend, it is important that, where possible, controllable fees and charges are appropriately indexed on an annual basis, to assist in offsetting the increasing costs of providing associated services.    This may include increases beyond normal indexation in particular cases in line with Section 6.17 of the Act.

 

Long-term Financial Plan Implications

 

In terms of the Council’s currently adopted budget, revenue from fees and charges (excluding waste collection charges) equates to approximately 23% of budgeted rates revenue and 15% of total operating revenue (excluding non-operating grants). As such, fees and charges form an integral and important component of the City’s overall revenue base in relation to the Long Term Financial Plan.

 

STRATEGIC COMMUNITY OBJECTIVES

 

The schedule of fees and charges adopted by the Council encompasses 'whole of organisation' activities. As such, all Key Goal Areas within the Council’s Strategic Community Plan 2013 are in some way impacted. More specifically however, this matter aligns with Key Goal Area 6 – ‘Open and Collaborative Leadership’ and particularly Community Objective 6.3 - ‘An organisation that is managed effectively and achieves positive outcomes for the community’.

 

RISK ASSESSMENT

 

There are several risks that the Council needs to be mindful of when reviewing its schedule of fees and charges. Firstly, in an effort to assist in recovering costs associated with the provision of services, it is important that, where applicable, fees and charges are increased on an annual basis in line with relevant economic indicators. Should this not occur the provision of services is required to be increasingly subsidised by other funding sources. Conversely however, a balance is also required to ensure that fees and charges are maintained at levels so as not to adversely impact on the financial ability for ratepayers to utilise those services, which may otherwise result in a net reduction in revenue.              

 

CONSULTATION

 

Business Unit Managers are responsible for reviewing fees and charges associated with activities under their control. As part of the review process, consultation may occur with other local government authorities, in addition to a review of prices offered by alternate service providers (pursuant to Section 6.17 of the Act).       

 

OFFICER COMMENT

 

The 2016/17 draft Schedule of Fees and Charges has been guided by a general escalation of 3.5% over currently adopted fees and charges, which represents the average of the Local Government Cost Index (LGCI) over the past 10 years. This methodology is consistent with the Fees and Charges revenue extrapolation as comprised within the Council’s currently endorsed Long Term Financial Plan. Notwithstanding this however, in numerous instances this principle is not appropriate, with other factors also requiring consideration. The following provides an overview, by Directorate, of noteworthy instances where an LGCI extrapolation has not been utilised, whilst also discussing, where relevant, newly proposed fees and charges.              

 

Executive Services

 

No new fees or significant changes

 

Planning and Development Services

 

Environmental Health

·    Temporary Food Business Assessment Fee (per occasion)

The description of this fee has been changed  from ‘application for temporary food stall’  to ‘Temporary Food Business Assessment Fee (per occasion)’ to  better reflect the purpose of this fee, being the recovery of administration costs associated with the assessment of temporary food businesses that are registered with another local government and apply to operate within the City of Busselton.

 

·    Temporary Food Business Assessment Fee (Annual)

A new ‘Temporary Food Business Assessment Fee (Annual)’ is proposed to enable the recovery of costs associated with the assessment of temporary food business that are registered with another local government and apply to operate within the City of Busselton for an extended period of up to one (1) year.

 

·    Stallholders (Food Stall)

Subject to Council endorsing the proposed changes to Temporary Food Business Assessment fee and a proposed new annual fee, it is recommended that the ‘Stallholders (Food Stall)’ fee be deleted as these fees will become superfluous.

 

Meelup Regional Park

·    Event Bonds

In June 2015, Council resolved (resolution C1506/172) that any permits issued for the event (Gourmet Escape) held within Meelup Regional Park include the imposition of a bond in accordance with the City’s Schedule of Fees and Charges. The proposed event bond hierarchy is recommended for inclusion in the Schedule of Fees and Charges for the implementation of Council’s decision.

 

Engineering and Works Services

 

No new fees or significant changes

 

Finance and Corporate Services

 

·    Busselton Community Resource Centre

In order to encourage community use of the CRC meeting rooms no increase has been applied to the community based rates.  Feedback from community groups, and in particular the tenants of the CRC, has indicated that the community rates are currently at the upper end of what such groups can afford.  Hence it is felt that increasing them any further, particularly given the current economic environment, will discourage use.  Commercial rates have however been increased by 3.5%.

 


 

Community and Commercial Services

 

Events & Casual Ground Hire

·    Street Banners – Install and remove (per pole)

This fee has been introduced to replace an existing fee previously based on the hire of 16 street poles. There are now a number of different options for hire including the Queen Street (12 poles), side streets (5 pole) and Busselton Foreshore (7 poles). The fee is to be waived for not for profit community groups (C1002/061).

 

·    Ground Hire Bonds (to be applied to Community Events);

This fee has been introduced to replace an existing fee ‘Ground hire Bonds (to be applied to Events and Commercial Usage)’ which was based on number of days usage. The new fee for a bond is based on the grounds that the event will be held on such as sporting grounds, foreshore and other reserves. This fee has also been amended to apply to Community events only (compared to previously commercial events) as there are existing commercial event bonds already in place.  

 

Busselton Jetty

·    Busselton Jetty Entry Passes

Jetty Entry passes fees have been added to the schedule as The City of Busselton is responsible for the setting of the Busselton Jetty entrance fee in accordance with the Busselton Jetties Local Law (2014).  The Collection of Entrance fees is a licensed activity of the Busselton Jetty Environment and Conservation Association Inc. (BJECA) in accordance with the Busselton Jetty License between the City of Busselton and BJECA.              

 

·    Commercial Use of Marine Berthing Platforms - Whale Watching / Tour Vessels

New Monthly and Annual fees and Bonds have been proposed for Whale watching / tour vessels utilising the marine berthing platforms. A separate Council agenda item further discusses these fees.  The fees have been included in the draft schedule so as to facilitate the advertising requirements enabling a 1 July effective date, however they are reliant upon the separate report.

 

Naturaliste Community Centre (NCC)

·    Various Wording changes as requested so that description better matches fee

 

·    Basketball, netball & volleyball courts charged per court

Deleted as not relevant to NCC Facility

 

·    Volleyball Courts 5 & 6 (i.e. smaller courts)

Deleted as not relevant to NCC Facility

 

·    Casual Basketball (Individual fee*) school student rate per hour conditions apply

New fee introduced as there is a demonstrated need in community for a student rate for after school hours and on school holidays.

 

·    6 months membership

6 month membership has increased by 11.5% as this membership is reciprocal at GLC and to avoid any disadvantage between Centre’s and to align fees. Note: very low volume of sales at both Centre’s.

 

·    3 months membership

3 month membership has increased by 39% as this membership is reciprocal at GLC and to avoid any disadvantage between Centre’s and to align fees. Note: very low volume of sales at both Centre’s.

·    6 and 3 months membership (concession)

New categories have been added to align with GLC pricing and to avoid any disadvantage between Centre’s.

 

·    Seniors Programs

Fee not increased in order to align with seniors program entry at GLC. Hence 10 pass fee also not increased.

 

·    Pay as you go fortnightly direct debit (including concession option)

New fees to align NCC with the GLC.

 

·    Pay as you go cancellation fee

New fee added as this covers administration costs if cancelling after a short period from joining.

 

·    Double Membership per person

New fee added to align with GLC pricing and to avoid any disadvantage between centres.

 

·    City of Busselton staff Group Fitness membership. A 10% discount applies on renewal.

New fee added to align with GLC pricing and to avoid any disadvantage between centres

 

·    Vacation care program, per child per day

New fee added as a new program has been implemented. Fee aligns with GLC.

 

·    Stage Hire (Including Bond)

New fee added as Stage hire requires administration and staff resources to administer and contribution to asset replacement cost.

 

·    Grounds Hire

The NCC has a maintained paved and grassed outdoor area with access to all services, intended for community use in the initial design of the facility. Implementing this fee will recover some fixed maintenance costs and also variable costs associated with hirer’s use of services.

 

Geographe Leisure Centre (GLC)

·    Local Swimming clubs and local user groups

This was a negotiated fee mid-year with swim clubs and expectation is that it is negotiated each year and has been increased from $1 to $2 this year.

 

·    Lifestyle seniors program

This program is a concession fitness class for seniors.

 

·    Small group Personal Training

New fee added as the GLC is now making the PT space in the gym available and this fee is to cover participants cost of group training.

 

·    Casual Basketball

New fee added as there is a community demonstrated need for accessible service for school age participants at a cheaper price.

 

·    Whole of Stadium Hire and Bond

New fee added so as to be able to charge a whole of stadium fee for events.

 

·    Gym - Pay as you go cancellation fee

New fee covers administration costs if cancelling after a short period from joining.

 

Kookaburra Caravan Park

·    Park Home 6 (site 3) - up to a maximum of 6 people;

A new fee has been entered for the installation of the new cabin completed in FY 2015/16. This includes fees for overnight rates for off-season and peak season, and weekly rates for peak season (up to 27 Days).

 

·    A CPI increase of 3.5% has not been applied to the following KCP fees, with the primary reason being that these fees are essentially within market range compared to other caravan parks. While the KCP offers good quality, affordable accommodation, it does not provide many of the facilities that some other Parks provide such as swimming pools, playgrounds and theatre rooms and as such ensuring that affordable accommodation is a critical factor that can then differentiate the KCP which then continues to remain attractive to visitors.  

Extra Adults per night for powered sites and cabins during peak, off-peak and weekly rates. 

Extra Child per night for powered sites and cabins during peak, off-peak and weekly rates. 

Booking Cancellation Fee

Washing Machines/ Dryers

Refill of 9kg gas bottle

Shower charge

Linen hire per site

 

ArtGeo Cultural Complex

·    Storage Fee

A new weekly storage fee will allow temporary use of available spaces to store equipment and works for example when lease arrangements are transitioning.

 

Busselton Regional Airport

·    The following fees have not been increased by CPI;

Passenger charge (head tax) for RPT flights (arriving & departing passengers)

Passenger Facilitation Fee for Open & Closed Charter Flights (using Ground & BHS services) - Departing Passengers only

These two fees have not been increased due to the economic climate within the mining /resource industry at the current time.

 

·    Per motor vehicle / motor bike per day

The City has increased car parking charges at the Airport for the last two financial years. One of the observed impacts of these fee increases was for FIFO passengers to car pool and also for increased drop offs/pick-ups. Officers feel that a further fee increase in 2016/17 would result in additional loss of car parking revenue due to passengers finding alternative means of transport to the Airport and home. 

 

·    CEO Non-conforming Activity per hour fee

This per hour fee has been introduced to recover the costs associated with any approved CEO non-conforming activities. These activities are non-scheduled flights that occur outside of normal Airport operating hours and hence require the City to provide staff (ARO’s) at overtime rates. The fee has been based on an average per hour overtime rate (outdoor staff level 5/6) and incurs a minimum charge of 1.5 hours allowing for an arrival and departure.

 

Library Charges

·    Public Internet – Guest Pass

A new fee has been proposed in the amount of a $2.00 charge for all non-library members to use the public internet computers which is hoped will encourage travelers and tourists to use their own devices instead of the public PCs which are in high demand for study and other essential services by local residents.

 

CONCLUSION

 

As part of the annual fees and charges review, the currently adopted fees and charges have been reviewed in line with the requirements of the Local Government Act and other relevant legislation as applicable. Where considered relevant, fees and charges have been increased by, or above, LGCI estimates in recognition of increased costs associated with the provision of services. In other instances, the prevailing fees and charges are considered adequate (and as such, no changes are recommended). Furthermore, a number of new fees and charges have been proposed, or amendments to existing fees structures recommended. Consequently, it is recommended that the Finance Committee endorses the draft Schedule of Fees and Charges for 2016/17 as recommended, for subsequent consideration by the Council.

 

OPTIONS

 

The Finance Committee may determine to recommend amendments to the draft Schedule of Fees and Charges as it deems appropriate. 

  

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

Consequent to adoption by the Council, the Schedule of Fees and Charges for 2016/17 will become effective from and including 01 July 2016. 

 

Committee Recommendation and Officer Recommendation

ABSOLUTE MAJORITY DECISION OF COUNCIL REQUIRED

 

That the Council:

 

1.    Endorses the Fees and Charges as detailed in the “Draft Fee 2016/17 (exc. GST)” column of the Schedule of Fees and Charges, effective from and including 01 July 2016.

 

DESCRIPTION

ADOPTED FEE 2015/16                    (Exc GST)

DRAFT FEE 2016/17                    (Exc GST)

DRAFT FEE 2016/17                    (Inc GST)

 

 

 

 

A concession of 50% of the adopted fee or charge may apply (upon application) in relation to those fees and charges shaded and marked with an asterisk (*). The concession is only available to incorporated not for profit organisations and groups where profits raised from the associated activity are to be donated to a local cause or charity.       

 

 

 

 

EXECUTIVE SERVICES

 

 

 

 

 

 

 

SALE OF DOCUMENTS

 

 

 

Council Minutes

 

 

 

Subscription on a per annum basis

470.00

470.00

470.00

Single Copy - Agenda

30.00

30.00

30.00

Single Copy - Minutes

20.00

20.00

20.00

 

 

 

 

Electoral Rolls

 

 

 

Per copy

62.50

65.00

65.00

 

 

 

 

Publications

 

 

 

Cape of Contrasts Book

20.00

20.00

22.00

 

 

 

 

CITY OF BUSSELTON LICENCE PLATES

 

 

 

(Not applicable to plates sold at Auction )

 

 

 

City of Busselton plates (aluminium)

509.09

509.09

560.00

Dunsborough plates (polycarbonate)

509.09

509.09

560.00

Yallingup plates (polycarbonate)

509.09

509.09

560.00

 

 

 

 

Major Projects

 

 

 

Consultancy charge out rates subject to Contract negotiation where applicable

 

 

 

Project Manager Advisor

150.00

154.55

170.00

Chief Executive Officer

220.00

227.27

250.00

Cultural Planner

75.00

77.27

85.00

Strategic Planner

75.00

77.27

85.00

Finance Officer

65.00

67.27

74.00

Administration Officer

65.00

67.27

74.00

 

 

 

 

Charge-out rates: City staff undertaking consultancy/ contract work for other local government authorities    

 

 

 

- Manager Level

154.55

159.09

175.00

- Co-ordinator Level

118.18

122.73

135.00

- Technical Officer Level

104.55

109.09

120.00

 

 

 

 

 

 

 

 

 

 

 

 

PLANNING & DEVELOPMENT SERVICES

 

 

 

 

 

 

 

BUILDING RELATED FEES

 

 

 

 

 

 

 

Fees for building services listed in Schedule 2, Building Regulations 2012

As per the maximum fee listed in Schedule 2, Building Regulations 2012

As per the maximum fee listed in Schedule 2, Building Regulations 2012

As per the maximum fee listed in Schedule 2, Building Regulations 2012

 

 

 

 

R-Codes Assessment

 

 

 

Rcodes variation applications

Planning application fee as per Schedule 2

Planning application fee as per Schedule 2

Planning application fee as per Schedule 2

Planning application consultation (R Code variations)

114.00

118.00

118.00

 

 

 

 

Demolition Licence

 

 

 

Performance Bond - site clean-up and verge bond

392.00

420.00

420.00

 

 

 

 

Building Plan Searches and Research Fee

 

 

 

Building under construction

72.00

75.00

75.00

Old Archive (Stored at Depot) - under 15 years

108.00

112.00

112.00

Old Archive (Stored at Depot) - over 15 years

142.00

147.00

147.00

Provide copy of Housing Indemnity Insurance Policy

72.00

75.00

75.00

Site Plans

56.00

58.00

58.00

The above fees include the cost of copying up to ten A4 or A3 sheets or equivalent. Any further copies which be charged in accord with the adopted photocopy charges as detailed in this Schedule.

 

 

 

 

 

 

 

Provision of Hard Copy of Approved Plans

 

 

 

A4 Photocopy

13.00

14.00

14.00

A3 Photocopy

16.00

17.00

17.00

Computer Plotting (full colour) per sheet

 

 

 

A4 Sheet

27.00

30.00

30.00

A3 Sheet

32.00

35.00

35.00

A2 Sheet

42.00

45.00

45.00

A1 Sheet

65.00

68.00

68.00

 

 

 

 

Building Inspection and Reports

 

 

 

Building inspection and report preparation (relocated dwelling or similar)

457.27

472.73

520.00

Strata inspection fee - First inspection free.  Fee applies to subsequent inspections.

142.73

147.27

162.00

Property Inspection and Report Preparation

427.27

441.82

486.00

Building Call Out Fee.  Fee applies where work for which an inspection is requested, was not ready for inspection.

142.73

147.27

162.00

Weekend Call Out Fee - per hour (calculated as a minimum of one hour)

118.18

122.73

135.00

Pool inspection fee on sale of property (if more than 1 year from scheduled inspection)

142.73

147.27

162.00

Building and Pool re-inspection fee for noncompliance.

142.73

147.27

162.00

 

 

 

 

Subscription for Building Lists

 

 

 

Annual (supplied monthly) - per annum fee

262.00

272.00

272.00

One Monthly Subscription only - per month fee

44.00

46.00

46.00

 

 

 

 

Building certificates and written advice (Building Act 2011)

 

 

 

Certificate of design compliance for class 2-9 buildings construction value up to $2M

0.09% of the GST inclusive estimated value of works, with a minimum of $262; plus GST.

0.09% of the GST inclusive estimated value of works, with a minimum of $262; plus GST.

0.09% of the GST inclusive estimated value of works, with a minimum of $262; plus GST.

Certificate of design compliance for class 2-9 buildings construction value more than $2M

 $1,800, plus 0.07% of the GST inclusive estimated value of works for every $ over $2M; plus GST.

 $1,800, plus 0.07% of the GST inclusive estimated value of works for every $ over $2M; plus GST.

 $1,800, plus 0.07% of the GST inclusive estimated value of works for every $ over $2M; plus GST.

Certificate of Construction/ Building Compliance

Hourly fee of $125, minimum of $262 plus GST

Hourly fee of $125, minimum of $262 plus GST

Hourly fee of $125, minimum of $262 plus GST

Provision of written advice confirming compliance with town planning and/or environmental health matters, and/or advising of town planning and environmental health requirements, prior to submissions of an application for issue of a building permit

66.36