MEETING NOTICE AND AGENDA – 22 June 2022

 

 

TO:                  THE MAYOR AND COUNCILLORS

 

 

NOTICE is given that a meeting of the Council will be held in the Council Chambers, Administration Building, Southern Drive, Busselton on Wednesday, 22 June 2022, commencing at 5.30pm.

 

Your attendance is respectfully requested.

 

 

DISCLAIMER

Statements or decisions made at Council meetings or briefings should not be relied on (or acted upon) by an applicant or any other person or entity until subsequent written notification has been given by or received from the City of Busselton. Without derogating from the generality of the above, approval of planning applications and building permits and acceptance of tenders and quotations will only become effective once written notice to that effect has been given to relevant parties. The City of Busselton expressly disclaims any liability for any loss arising from any person or body relying on any statement or decision made during a Council meeting or briefing.

tony nottle    ACTING CHIEF EXECUTIVE OFFICER

10 June 2022

Agenda FOR THE Council MEETING TO BE HELD ON 22 June 2022

TABLE OF CONTENTS

 

1....... Declaration of Opening, ACKNOWLEDGEMENT OF COUNTRY and Announcement of Visitors. 5

2....... Attendance. 5

3....... Prayer. 5

4....... Application for Leave of Absence. 5

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

6....... Announcements Without Discussion.. 5

7....... Question Time For Public. 5

8....... Confirmation and Receipt Of Minutes. 5

Previous Council Meetings. 5

8.1          Minutes of the Council Meeting held 8 June 2022. 5

Committee Meetings. 6

8.2          Minutes of the Finance Committee Meeting held 8 June 2022. 6

9....... RECEIVING OF Petitions, Presentations AND DEPUTATIONS. 7

9.1          PETITION - GEOGRAPHE BAY ROAD DUNSBOROUGH.. 7

10..... QUESTIONS BY MEMBERS OF WHICH DUE NOTICE HAS BEEN GIVEN (WITHOUT DISCUSSION). 11

11..... Items brought forward for the convenience of those in the public gallery. 11

12..... Reports of Committee. 12

12.1        Finance Committee - 8/6/2022 - LIST OF PAYMENTS MADE - APRIL 2022. 12

12.2        Finance Committee - 8/6/2022 - FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 APRIL 2022. 22

12.3        FINANCE COMMITTEE - 8/6/2022 - BUDGET AMENDMENT REQUEST - LOWER VASSE RIVER SEDIMENT REMOVAL PROJECT. 55

12.4        FINANCE COMMITTEE - 8/6/2022 - BUDGET AMENDMENT - EWS VARIOUS PROJECTS. 58

13..... Planning and Development Services Report. 69

14..... Engineering and Work Services Report. 70

14.1        RFT 02-22 EXTERNAL CLEANING SERVICES. 70

14.2        REGIONAL ROAD SPEED REDUCTIONS PROJECT PARTNERSHIP - RAC. 74

14.3        BUDGET AMENDMENT - BUSSELTON FORESHORE EAST REDEVELOPMENT. 77

15..... Community and Commercial Services Report. 80

15.1        BUSSELTON SENIOR CITIZENS CENTRE - FUNDING REQUEST. 80

16..... Finance and Corporate Services Report. 88

16.1        VASSE COMMUNITY GARDENS AND VASSE AND DISTRICTS COMMUNITY CENTRE APPLICATIONT TO LEASE. 88

16.2        EXPRESSION OF INTEREST TO LEASE CAMPSITE 7 LOCKE ESTATE. 96

16.3        DEFERRAL OF NEW COUNCIL MEETING SCHEDULE TO COMMENCE AUGUST 2022. 105

17..... Chief Executive Officers Report. 108

17.1        COUNCILLORS' INFORMATION BULLETIN.. 108

18..... Motions of which Previous Notice has been Given.. 118

19..... urgent business. 118

20..... Confidential Matters. 119

20.1        PROSPECTIVE ACQUISITION BY CITY OF BUSSELTON OF LOT 100 SUES ROAD, YALYALUP FOR COMMUNITY PURPOSES. 119

21..... Closure. 119

 

 

1.               Declaration of Opening, ACKNOWLEDGEMENT OF COUNTRY and Announcement of Visitors

 

2.               Attendance 

Apologies

 

Approved Leave of Absence

 

Cr Kate Cox is an approved leave of absence.

 

Cr Phill Cronin is an approved leave of absence.

 

3.               Prayer

 

4.               Application for Leave of Absence

 

5.               Disclosure Of Interests

 

6.               Announcements Without Discussion

Announcements by the Presiding Member

 

7.               Question Time For Public

Response to Previous Questions Taken on Notice

Public Question Time For Public

 

8.               Confirmation and Receipt Of Minutes 

Previous Council Meetings

8.1             Minutes of the Council Meeting held 8 June 2022

Recommendation That the Minutes of the Council Meeting held 8 June 2022 be confirmed as a true and correct record.

 

Committee Meetings

8.2             Minutes of the Finance Committee Meeting held 8 June 2022

Recommendation That the Unconfirmed Minutes of the Finance Committee Meeting held 8 June 2022 be noted as received.

 

9.               RECEIVING OF Petitions, Presentations AND DEPUTATIONS

9.1             PETITION - GEOGRAPHE BAY ROAD DUNSBOROUGH

STRATEGIC THEME	LIFESTYLE - A place that is relaxed, safe and friendly with services and facilities that support healthy lifestyles and wellbeing
STRATEGIC PRIORITY	2.10 Provide local road networks that allow for the safe movement of people through the District.
SUBJECT INDEX	Petitions
BUSINESS UNIT	Corporate Services
REPORTING OFFICER	Manager Governance and Corporate Services - Sarah Pierson
AUTHORISING OFFICER	Director Finance and Corporate Services - Tony Nottle
NATURE OF DECISION	Noting: The item is simply for information purposes and noting
VOTING REQUIREMENT	Simple Majority
ATTACHMENTS	Attachment a   Petition Letter⇩ Attachment b    Published Under Separate Cover Petition Signatures

 

OFFICER RECOMMENDATION That the Council receive the petition from Mr Alan Wilkins in relation to traffic treatments along Geographe Bay Road, Dunsborough.

 

A petition (the Petition) was received by the City on 30 May 2022 from Mr Alan Wilkins (the Petitioner), regarding concerns of the number of vehicles and the speeds in which they are travelling along Geographe Bay Road in Dunsborough.

 

The Petition was lodged by the Petitioner by mail, and was addressed to the Busselton City Council. The request contained within the Petition relates to the installation of traffic treatments; namely low, wide, speed reducing humps along Geographe Bay Road, Dunsborough.

 

The Petition has been signed by 70 people, all of whom are identified by name and address. There are two names within the Petition that do not have local addresses, the other 68 having local addresses within the area to which the Petition pertains.

 

The Petition meets the majority of the clauses of section 6.9 of the City of Busselton Standing Orders Local Law 2018 (the Standing Orders); specifically it meets (b), and (d) through to (g):

(a)       be addressed to the Mayor;

(b)       be made by electors of the district;

(c)       state the request on each page of the petition;

(d)       contain the name, address and signature of each elector making the request;

(e)       contain a summary of the reasons for the request;

(f)        state the name of the person to whom, and an address at which, notice to the petitioners can be given; and

(g)       be respectful and temperate in its language.

 

The Petition does not meet requirements (a) and (c) as it was not addressed to the Mayor and did not state the request on each page of the Petition.

 

The presiding member has the discretion to accept the petition for consideration if it meets a majority of the above requirements.

 

Pursuant to section 6.9(3) of the Standing Orders, the Council has the following options: receive the petition; reject the petition; receive the petition and refer it to the CEO to prepare a report to Council or receive the petition and refer it to the CEO for action.

 

With respect to the subject of the petition, the City periodically undertakes traffic counts to determine the volume of traffic on roads within the district. A traffic count on Geographe Bay Road has been requested to be undertaken when a unit is next available. 

 

Where, through traffic counting, the operating speed is identified to be over the posted limit or if a pattern of non-compliance can be determined, the matter is referred to the WA Police to seek an increased presence for targeted enforcement. Once new data for Geographe Bay Road is collected, it will be reviewed to determine the extent of non-compliance and any other enforceable trends and where appropriate referred to WA Police for assistance.

 

It is considered by officers that the Petition meets a majority of the requirements set out by the Standing Orders and, given the above response and proposed actions to be taken, it is recommended that the petition is received by Council.

 

Council		10		22 June 2022
9.1	Attachment a		Petition Letter

 

 

Presentations

Deputations

 

10.             QUESTIONS BY MEMBERS OF WHICH DUE NOTICE HAS BEEN GIVEN (WITHOUT DISCUSSION)

 

11.             Items brought forward for the convenience of those in the public gallery

12.             Reports of Committee

12.1           Finance Committee - 8/6/2022 - LIST OF PAYMENTS MADE - APRIL 2022

STRATEGIC THEME	LEADERSHIP - A Council that connects with the community and is accountable in its decision making.
STRATEGIC PRIORITY	4.2 Deliver governance systems that facilitate open, ethical and transparent decision making.
SUBJECT INDEX	Financial Operations
BUSINESS UNIT	Financial Services
REPORTING OFFICER	Manager Financial Services - Paul Sheridan
AUTHORISING OFFICER	Director Finance and Corporate Services - Tony Nottle
NATURE OF DECISION	Noting: The item is simply for information purposes and noting
VOTING REQUIREMENT	Simple Majority
ATTACHMENTS	Attachment a   List of Payments - April 2022⇩

 

This item was considered by the Finance Committee at its meeting on 8/6/2022, the recommendations from which have been included in this report.

 

COMMITTEE RECOMMENDATION That the Council notes payment of voucher numbers for the month of April 2022 as follows: CHEQUE PAYMENTS  CHEQUE # 119220 - 119247                   37,911.19 ELECTRONIC FUNDS TRANSFER PAYMENTS  EFT # 86435 - 86783 and 86787 - 87066              6,673,369.55 TRUST ACCOUNT PAYMENTS  EFT # 86784 - 86786                   53,792.34 PAYROLL PAYMENTS  01.04.22 - 30.04.22             1,657,295.04 INTERNAL PAYMENT VOUCHERS  DD # 4833 - 4864, 5194 and 5214                159,748.56 TOTAL PAYMENTS               8,582,116.68

 

OFFICER RECOMMENDATION

That the Council notes payment of voucher numbers for the month of April 2022 as follows:

CHEQUE PAYMENTS	CHEQUE # 119220 - 119247	37,911.19
ELECTRONIC FUNDS TRANSFER PAYMENTS	EFT # 86435 - 86783 and 86787 - 87066	6,673,369.55
TRUST ACCOUNT PAYMENTS	EFT # 86784 - 86786	53,792.34
PAYROLL PAYMENTS	01.04.22 - 30.04.22	1,657,295.04
INTERNAL PAYMENT VOUCHERS	DD # 4833 - 4864, 5194 and 5214	159,748.56
TOTAL PAYMENTS		8,582,116.68

 

EXECUTIVE SUMMARY

This report provides details of payments made from the City’s bank accounts for the month of April 2022, for noting by the Council and recording in the Council Minutes.

BACKGROUND

The Local Government (Financial Management) Regulations 1996 (the Regulations) requires that, when the Council has delegated authority to the Chief Executive Officer to make payments from the City’s bank accounts, a list of payments made is prepared each month for presentation to, and noting by, the Council.

OFFICER COMMENT

In accordance with regular custom, the list of payments made for the month of April 2022 is presented for information. 

 

Statutory Environment

Section 6.10 of the Local Government Act 1995 and more specifically Regulation 13 of the Regulations refer to the requirement for a listing of payments made each month to be presented to the Council.

 

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter.

 

Financial Implications

There are no financial implications associated with the officer recommendation.

 

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

 

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

 

Options

Not applicable.

CONCLUSION

The list of payments made for the month of April 2022 is presented for information.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.

 

Council		21		22 June 2022
12.1	Attachment a		List of Payments - April 2022

 

12.2           Finance Committee - 8/6/2022 - FINANCIAL ACTIVITY STATEMENTS - YEAR TO DATE AS AT 30 APRIL 2022

STRATEGIC THEME	LEADERSHIP - A Council that connects with the community and is accountable in its decision making.
STRATEGIC PRIORITY	4.2 Deliver governance systems that facilitate open, ethical and transparent decision making.
SUBJECT INDEX	Financial Services
BUSINESS UNIT	Financial Services
REPORTING OFFICER	Manager Financial Services - Paul Sheridan
AUTHORISING OFFICER	Director Finance and Corporate Services - Tony Nottle
NATURE OF DECISION	Executive: Substantial direction setting, including adopting budgets, strategies, plans and policies (excluding local planning policies); funding, donations and sponsorships; reviewing committee recommendations
VOTING REQUIREMENT	Simple Majority
ATTACHMENTS	Attachment a   Loan Schedule - April 2022⇩ Attachment b    Financial Activity Statement - April 2022⇩ Attachment c    Investment Report - April 2022⇩

 

This item was considered by the Finance Committee at its meeting on 8/6/2022, the recommendations from which have been included in this report.

 

COMMITTEE RECOMMENDATION That the Council receives the statutory financial activity statement reports for the period ending 30 April 2022, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations 1996.

 

OFFICER RECOMMENDATION

That the Council receives the statutory financial activity statement reports for the period ending 30 April 2022, pursuant to Regulation 34(4) of the Local Government (Financial Management) Regulations 1996.

 

EXECUTIVE SUMMARY

Pursuant to Section 6.4 of the Local Government Act 1995 (the Act) and Regulation 34(4) of the Local Government (Financial Management) Regulations 1996 (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 30 April 2022.

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 on 26 July 2021, the Council adopted (C2107/140) the following material variance reporting threshold for the 2021/22 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 2020/21 financial year as follows:

·        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 only if not to do so would present an incomplete picture of the financial performance for a particular period; and

·        Reporting of variances only applies for amounts greater than $25,000.

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 full year basis, and reconciles with the net current position as per the Statement of Financial Activity.

 

Capital Acquisition Report

This report provides full year 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 associated interest earnings on reserve funds, on a full year basis.

 

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

Comments on Financial Activity to 30 April 2022

The Statement of Financial Activity (FAS) for the year to date (YTD) shows an overall Net Current Position of $5.2M as opposed to the budget of ($13.8M). This represents a positive variance of $19M YTD.

 

The following table summarises the major YTD variances that appear on the face of the FAS, which, in accordance with Council’s adopted material variance reporting threshold, collectively make up the above difference.  Each numbered item in this lead table is explained further in the report.

 

Revenue from Ordinary Activities

In total, revenue from Ordinary Activities is close to budget, being 4.72% ahead YTD.  There are however material variance items contained within this category, on the face of the Financial Activity Statement, that require comment.

 

1.      Operating Grants, Subsidies & Contributions

Ahead of YTD budget by $2.5M, or 77.4%, mainly due to the items listed in the table below:

 

2.      Other Revenue

Ahead of YTD budget by $295K, or 113.6%, mainly due to the items listed in the table below:

 

3.      Interest Earnings

Ahead of YTD budget by $62K, or 11%, due to an increase in interest rates being offered on investments over the last few months.

 

Expenses from Ordinary Activities

Expenditure from ordinary activities is $7.7M, or 10.5%, less than expected when compared to the budget YTD. The expense line items on the face of the financial statement that have a YTD variance that meet the material reporting threshold are outlined below.

 

4.      Other Expenditure  

$5.3M, or 67.4%, under the budget YTD. The main contributing items are listed below:

 

5.      Capital Expenditure  

YTD there is an underspend variance of 59.4%, or $30.7M, in total capital expenditure, with YTD actual at $21M against the YTD budget of $51.7M. A large portion of this positive underspend variance is offset by the negative variance in Non-Operating Grants, Contributions & Subsidies discussed above, with the remainder offset by the negative variances in Transfers From Reserves and Restricted Assets related to funds held aside for these projects. The attachments to this report include detailed listings of all capital expenditure (project) items, however the main areas of YTD variance are summarised as follows:

 

 

 

6.      Proceeds From Sale of Assets  

YTD there have been minimal proceeds from sale of assets recorded against the YTD budget of $776K. This is due to the continuing delays in delivery of acquisitions, and the associated transfer to auction of the vehicles being replaced.  Some vehicles that were planned to be traded/auctioned have also been retained and redeployed instead. 

 

7.     Proceeds from New Loans

By YTD April it was forecast that the self-supporting loan to BJINC of $4M for the AUDC project would have been drawn.  This will no longer be proceeding.  A further $125K of self-supporting loans to community groups was also forecasted to have been drawn and on-lent by this stage of the financial year.  The combination of these things accounts for the $4.125M negative variance YTD.

 

        This is offset by a corresponding positive timing variance of $4.125M in Advances to Community Groups.

 

8.     Self Supporting Loans – Repayments of Principal

         This line is $91K under budget due to the AUDC loan not proceeding.

 

9.     Total Loan Repayments - Principal

         Repayments of the principal on loans is $330K under budget YTD, due to the loan for the BPACC not proceeding in the timeframe as budgeted, as well as the deferment of the AUDC project and hence the non-draw down of the associated self-supporting loan to BJINC (offset per #8 above).

 

10.   Advances to Community Groups

         Although it is not possible to predict when these loans will be applied for, the negative variance is 100% offset by the positive variance in Proceeds from New Loans outlined above.  YTD the variance is $4.125M mainly due to the AUDC being put on hold.

 

11.   Transfer to Restricted Assets  

There is a YTD variance in transfers to Restricted Assets of $22.2M because there is usually no budget for this item during the year.  The transfers are usually not possible to predict, and are fully reconciled only at year end.

 

At the time of budgeting it is not possible to predict what grants will be received, and in what timeframe, nor when they will be spent and hence potentially transferred to Restricted Assets (or unspent portions thereof). 

 

YTD, loans of $20M were received for BPACC that were transferred to restricted assets ($10M of which was budgeted for per a budget amendment for an additional $10M borrowing), until utilized, as well as $8.6M in various government grants, plus $1.7M in Roadwork Bonds, and $1.9M in developer contributions, deposits and bonds.

 

12.   Transfer from Restricted Assets

YTD, there has been $8.1M transferred from Restricted Assets into the Municipal Account. The transfers are usually not possible to predict, and are fully reconciled only at year end.

 

This was attributable to $3.4M of grant money for works completed and reconciled, $713K of Roadwork Bonds, $463K of caravan park deposit refunds, utilization of $1.7M of restricted loan money (BPACC), and $1.8M of various other bonds and deposits.

13.   Transfer to Reserves

YTD, there has been $1.8M more transferred to reserves than budgeted due to receiving the Financial Assistance Grants for the 2022/23 year in advance.  This was put aside in the Prepaid Grants Reserve to be utilised next financial year.

 

Investment Report

As at 30^th April 2022 the value of the City’s invested funds increased to $107M from $97M as at 31^st March 2022.

 

As at 30^th April 2022 the 11AM account balance is $23M, up from $13M as at 31^st March 2022.

 

The increase of $10M in the investment pool is due to:

·        Addition of $10M loan received for the BPACC project deposited into the 11am account (an intermediary account which offers immediate access to the funds compared to the term deposits, and a higher rate of return compared to the cheque account)

 

During the month of April six term deposits totalling the amount of $18M matured. These were renewed for a further 69 days at 0.91% on average.

 

The official cash rate remains steady for the month of April at 0.10%.

 

Borrowings Update

During the month a further two lots of $5M were drawn from the WATC for the BPACC project, per the budget amendment in March that brought these planned borrowings in earlier than originally forecast in the LTFP, due to increasing interest rates.  Also, $435K of principal and $85K of interest was repaid on existing loans.  The attached Loan Schedule outlines the status of all existing loans as at April YTD.

 

Chief Executive Officer – Corporate Credit Card

There were no transactions made on the Chief Executive Officer’s corporate credit card during April 2022.

 

Donations & Contributions Received

During the month no donations or contributions were received.

 

Statutory Environment

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

 

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter.

 

Financial Implications

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

 

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

 

Options

The Statements of Financial Activity are presented in accordance with Section 6.4 of the Act and Regulation 34 of the Regulations and are to be received by Council. Council may wish to make additional resolutions as a result of having received these reports.

CONCLUSION

As at 30^th April 2022, the City’s net current position stands at $5.2M. The City’s financial performance is considered satisfactory, and cash reserves remain strong.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

Not applicable.

 

Council		40		22 June 2022
12.2	Attachment a		Loan Schedule - April 2022

 

Council		52		22 June 2022
12.2	Attachment b		Financial Activity Statement - April 2022

 

Council		54		22 June 2022
12.2	Attachment c		Investment Report - April 2022

 

12.3           Finance Committee - 8/6/2022 - BUDGET AMENDMENT REQUEST - LOWER VASSE RIVER SEDIMENT REMOVAL PROJECT 

STRATEGIC THEME	ENVIRONMENT - An environment that is valued, conserved and able to be enjoyed by current and future generations.
STRATEGIC PRIORITY	1.3 Work with key partners to improve the health of the Vasse River and other waterways in the Geographe catchment.
SUBJECT INDEX	Water Quality
BUSINESS UNIT	Environmental Services
REPORTING OFFICER	Senior Sustainability/Environment Officer - Mathilde Breton
AUTHORISING OFFICER	Director, Planning and Development Services - Paul Needham
NATURE OF DECISION	Executive: Substantial direction setting, including adopting budgets, strategies, plans and policies (excluding local planning policies); funding, donations and sponsorships; reviewing committee recommendations
VOTING REQUIREMENT	Simple Majority
ATTACHMENTS	Nil

 

This item was considered by the Finance Committee at its meeting on 8/6/2022, the recommendations from which have been included in this report.

 

COMMITTEE RECOMMENDATION That the Council endorse the following budget amendment, transferring the budget for Lower Vasse River Sediment Removal from the capital to operating budgets, to better align the budget with relevant accounting standards - Cost code description Account string Current budgeted expenditure Amended budgeted expenditure Impact on budgeted net position Vasse River – ongoing restoration of river habitat C3243 $640,000 Nil $640,000 Sustainability - Contractors 400-10801-3280-0000 Nil $640,000 ($640,000) Overall NA $640,000 $640,000 Nil

 

That the Council endorse the following budget amendment, transferring the budget for Lower Vasse River Sediment Removal from the capital to operating budgets, to better align the budget with relevant accounting standards -

Cost code description	Account string	Current budgeted expenditure	Amended budgeted expenditure	Impact on budgeted net position
Vasse River – ongoing restoration of river habitat	C3243	$640,000	Nil	$640,000
Sustainability - Contractors	400-10801-3280-0000	Nil	$640,000	($640,000)
Overall	NA	$640,000	$640,000	Nil

 

EXECUTIVE SUMMARY

The Council is asked to support a budget amendment to align with relevant accounting standards, but which has no impact on the budget bottom line.

BACKGROUND

Consistent with the City’s Long Term Financial Plan, funds were allocated in the City’s 2021/22 capital budget towards Lower Vasse River Restoration. A total of $640,000 was allocated, with $290,000 being funded through a transfer from the newly created Waterways Restoration Reserve and the balance of $350,000 funded from a State Government Grant through the Healthy Estuaries Initiative programme.

 

Consistent with feedback received from the Lower Vasse River Management Advisory Group (LVRMAG) and following the obtaining of all environmental approvals, as well as various procurement processes, those funds are being used for the Stage 1 sediment removal project that commenced in April. It is expected that the full budget should be spent by end June, although there may be a need to relist some spend and associated reserve/restricted asset transfers, should portions of the current project not be complete prior to that time.

 

Since adoption of the 2021/22 budget, however, it has been identified that the expenditure should have been budgeted as operating and not capital expenditure. The nature of the works actually being undertaken this financial year, being sediment removal, does not represent capital spend. The ‘land’ that the River occupies is also Unallocated Crown Land (UCL), neither not owned by the City or subject of a management order granted to the City under the Land Administration Act 1997. As such, the expenditure should be identified as operating and not capital, to align with relevant accounting standards – and an amendment to the budget to reflect that is therefore recommended.

 

It should be noted that the purpose of the Waterways Restoration Reserve allows for both operating and capital spend. The Reserve purpose as identified in the 2021/22 budget is; “To provide for any works required to rejuvenate, revive or rectify natural waterways within the Busselton district”. The proposed budget amendment will not affect the City’s overall budget balance, and nor will it have a significant impact on the City’s financial ratios.

 

OFFICER COMMENT

It is necessary for the City to ensure that its finances are managed in a manner consistent with relevant accounting standards, including the correct identification of spend as either capital or operating. Whilst, in many senses, including the nature of the work and scale of investment, the sediment removal project is being run and managed in a manner consistent with a capital project, as the Lower Vasse River is not a City asset in an accounting sense, the sediment removal work cannot be identified as capital expenditure.

 

Statutory Environment

The officer recommendation supports the general function of a local government under the Local Government Act 1995 to provide for the good government of persons in its district. As the recommendation provides for an amendment to the budget, an absolute majority resolution of the Council is required.

 

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter.

 

Financial Implications

There are no financial implications associated with the officer recommendation.

 

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

 

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

 

Options

As an alternative to the proposed recommendation the Council could not amend the budget, and instead reconcile the City’s books with relevant accounting standards as part of 2021/22 year end processes. It is seen as preferable to amend the budget prior to year end.

CONCLUSION

It is recommended that the Council support the recommended budget amendment.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

The recommendation would be implemented immediately following a Council resolution.  

12.4           Finance Committee - 8/6/2022 - BUDGET AMENDMENT - EWS VARIOUS PROJECTS

STRATEGIC THEME	LEADERSHIP - A Council that connects with the community and is accountable in its decision making.
STRATEGIC PRIORITY	4.5 Responsibly manage ratepayer funds to provide for community needs now and in the future.
SUBJECT INDEX	Budget Amendment - EWS Various Projects
BUSINESS UNIT	Engineering and Works Services
REPORTING OFFICER	Director, Engineering and Works Services - Oliver Darby
AUTHORISING OFFICER	Chief Executive Officer - Mike Archer
NATURE OF DECISION	Legislative: adoption of “legislative documents” such as local laws, local planning schemes and local planning policies
VOTING REQUIREMENT	Simple Majority
ATTACHMENTS	Nil

 

This item was considered by the Finance Committee at its meeting on 8/6/2022, the recommendations from which have been included in this report.

 

COMMITTEE RECOMMENDATION That the Council agree to endorse the following budget amendments; 1.    Offset $181,000 in coastal damage repair works from the major storm event that occurred in July and August by transferring $126,000 in budget from various postponed projects and drawing down an additional $55,000 from Emergency Disaster Recovery Reserve. 2.    Transfer the $100,000 Capital Sand Re-nourishment budget to Operations and recognise $50,000 in sand re-nourishment grant revenue and corresponding expenditure secured from the Department of Transport. 3.    Transfer $100,000 in budget from C3241 being the Outdoor Spaces (Gen capital allocation for courts, flood lights etc) project representing funding from Reserve 302 - Community Facilities - City District monies and transfer an additional $20,000 in budget from Reserve 225 Parks, Gardens and Reserve to B9612 being the Churchill Park Sports Lighting Renewal Project. 4.    Transfer the remaining budget totalling $156,636 from the Ludlow Hithergreen Road project (S0077) to the Peel Terrace Roundabout project (S0070) where $104,424 of this is Regional Road Group grant funds while the remaining $52,212 is funded from the Road Asset Renewal Reserve; 5.    Recognise and receive $94,909 in additional funding form the Regional Road Group to cover additional costs associated with the Peel Terrace Roundabout (S0070); and 6.    Transfer $128,455 from the Major Traffic Improvements Reserve to the Peel Terrace Roundabout project (S0070) to cover additional costs associated with the project. Account string Existing budget Adjustment Adjusted budget Reserve 1.    Yallingup Costal Damage 541.C7003.3280.0000 Foreshore Protection-Yallingup $0 $126,000 debit $126,000 From 225 - Parks, Gardens and Reserves Reserve 541.C7003.3280.0000 Foreshore Protection-Yallingup $0 $55,000 debit $181,000 From Emergency Disaster Recovery Reserve 545.C1006.3280.0000 $15,000 -$15,000 credit $0 Remove From 225 - Parks, Gardens and Reserves Reserve 545.C1012.3280.0000 $10,000 -$10,000 credit $0 Remove From 225 - Parks, Gardens and Reserves Reserve 545.C3007.3280.0000 $25,000 -$25,000 credit $0 Remove From 225 - Parks, Gardens and Reserves Reserve 545.C3239.3280.0000 $20,000 -$20,000 credit $0 Remove From 225 - Parks, Gardens and Reserves Reserve 545.C3240.3280.0000 $10,000 -$10,000 credit $0 Remove From 225 - Parks, Gardens and Reserves Reserve 545.C1752.3280.0000 $40,000 -$40,000 credit $0 Remove From 225 - Parks, Gardens and Reserves Reserve 545.C3236.3280.0000 $20,750 -$6,000 credit $14,750 Remove From 225 - Parks, Gardens and Reserves Reserve Emergency Disaster Recovery Reserve $135,370 -55,000 credit $80,370 CB Emergency Disaster Recovery Reserve 2.    Sand Renourishment 541.C2512.3280.0000 Sand Renouishment Capital $100,000 -$100,000 credit $0 102 - Coastal and Climate Adaptation Reserve 541.C7002.3280.2153 Foreshore Protection-Dunsborough $4,150 $100,000 debit $104,150 $100k from the Coastal and Climate Adaptation Reserve 541.C7002.3280.0000 Foreshore Protection-Dunsborough $104,150 $50,000 debit $154,150 $50k grant corresponding expenditure budget 541.C7002.1239.2153 Operating grant $0 -$50,000 credit $50,000 DOT Grant 3.    Churchill Park Sports lighting 545.B9612.3280.0000 Churchill Park Renew Sports Lights $212,850 $100,000 $312,850 From C3241 Outdoor Spaces (General capital allocation for courts, flood lights etc.) funded from the 302 - Community Facilities - City District 545.C3241.3280.0000 Outdoor Spaces (General capital allocation for courts, flood lights etc.) $200,000 -$100,000 $100,000 Reduce the budget C3241. The other $100,000 is budgeted grant revenue the City will not receive.  545.B9612.3280.0000 Churchill Park Renew Sports Lights $312,850 $20,000 $332,850 From: 225 - Parks, Gardens and Reserves Reserve 4.    Peel Terrace Roundabout Add Expenditure Budget Peel T         541.S0070.3280.0000 Peel & Queen Street Roundabout EXPENSE $610,500 +$156,636 $767,136 Increase budget contractors 1 from Ludlow HG to Peel T 541.s0077.3280.0000 Peel & Queen Street Roundabout EXPENSE $767,136 +$94,909 $862,045 Increase budget contractors 2 –  Extra RRG Gran - Peel T 541.s0077.3280.0000 Peel & Queen Street Roundabout EXPENSE $862,045 +$128,455 $990,500 Increase budget contractors 3  – From Major Traffic Reserve to  Peel T Add Revenue Budget Peel T         541.S0070.1210.0000 Peel & Queen Street Roundabout REVENUE $400,000 +$199,333 $599,333 Increase RRG grant revenue Peel T ($104,424+$94,909) Adjustments Ludlow Hithergreen         541.S0077.3280.000 Ludlow-Hithergreen Stage 2 EXPENSE $360,000 $-156,636 $203,364 Reduce budget contractors Ludlow job. 541.S0077.1210.0000 Ludlow-Hithergreen Stage 2 REVENUE $220,000 $104,424 $135,576 Reduce RRG grant revenue – Ludlow job Adjustments Major Traffic Reserve         137 -  Major Traffic Improvements Reserve $997,470 -$128,455 $869,015 Deduct from Major Traffic Improvements Reserve   Reasons:             The Committee Recommendation reflects funding received from external sources           between the publication of the Finance Committee Agenda and the Finance          Committee Meeting.

 

OFFICER RECOMMENDATION That the Council agree to endorse the following budget amendments; 1.    Offset $181,000 in coastal damage repair works from the major storm event that occurred in July and August by transferring $126,000 in budget from various postponed projects and drawing down an additional $55,000 from Emergency Disaster Recovery Reserve. 2.    Transfer the $100,000 Capital Sand Re-nourishment budget to Operations and recognise $50,000 in sand re-nourishment grant revenue and corresponding expenditure secured from the Department of Transport. 3.    Transfer $100,000 in budget from C3241 being the Outdoor Spaces (Gen capital allocation for courts, flood lights etc) project representing funding from Reserve 302 - Community Facilities - City District monies and transfer an additional $20,000 in budget from Reserve 225 Parks, Gardens and Reserve to B9612 being the Churchill Park Sports Lighting Renewal Project. 4.    Transfer the remaining budget totalling $156,636 from the Ludlow Hithergreen Road project (S0077) to the Peel Terrace Roundabout project (S0070) where $104,424 of this is Regional Road Group grant funds while the remaining $52,212 is funded from the Road Asset Renewal Reserve; and 5.    Transfer $220,000 from the Major Traffic Improvements Reserve to the Peel Terrace Roundabout project (S0070) to cover additional costs associated with the project.

Account string	Existing budget	Adjustment	Adjusted budget	Reserve
1.     Yallingup Costal Damage
541.C7003.3280.0000 Foreshore Protection-Yallingup	$0	$126,000 debit	$126,000	From 225 - Parks, Gardens and Reserves Reserve
541.C7003.3280.0000 Foreshore Protection-Yallingup	$0	$55,000 debit	$181,000	From Emergency Disaster Recovery Reserve
545.C1006.3280.0000	$15,000	-$15,000 credit	$0	Remove From 225 - Parks, Gardens and Reserves Reserve
545.C1012.3280.0000	$10,000	-$10,000 credit	$0	Remove From 225 - Parks, Gardens and Reserves Reserve
545.C3007.3280.0000	$25,000	-$25,000 credit	$0	Remove From 225 - Parks, Gardens and Reserves Reserve
545.C3239.3280.0000	$20,000	-$20,000 credit	$0	Remove From 225 - Parks, Gardens and Reserves Reserve
545.C3240.3280.0000	$10,000	-$10,000 credit	$0	Remove From 225 - Parks, Gardens and Reserves Reserve
545.C1752.3280.0000	$40,000	-$40,000 credit	$0	Remove From 225 - Parks, Gardens and Reserves Reserve
545.C3236.3280.0000	$20,750	-$6,000 credit	$14,750	Remove From 225 - Parks, Gardens and Reserves Reserve
Emergency Disaster Recovery Reserve	$135,370	-55,000 credit	$80,370 CB	Emergency Disaster Recovery Reserve
2.     Sand Renourishment
541.C2512.3280.0000 Sand Renouishment Capital	$100,000	-$100,000 credit	$0	102 - Coastal and Climate Adaptation Reserve
541.C7002.3280.2153 Foreshore Protection-Dunsborough	$4,150	$100,000 debit	$104,150	$100k from the Coastal and Climate Adaptation Reserve
541.C7002.3280.0000 Foreshore Protection-Dunsborough	$104,150	$50,000 debit	$154,150	$50k grant corresponding expenditure budget
541.C7002.1239.2153 Operating grant	$0	-$50,000 credit	$50,000	DOT Grant
3.     Churchill Park Sports lighting
545.B9612.3280.0000 Churchill Park Renew Sports Lights	$212,850	$100,000	$312,850	From C3241 Outdoor Spaces (General capital allocation for courts, flood lights etc.) funded from the 302 - Community Facilities - City District
545.C3241.3280.0000 Outdoor Spaces (General capital allocation for courts, flood lights etc.)	$200,000	-$100,000	$100,000	Reduce the budget C3241. The other $100,000 is budgeted grant revenue the City will not receive.
545.B9612.3280.0000 Churchill Park Renew Sports Lights	$312,850	$20,000	$332,850	From: 225 - Parks, Gardens and Reserves Reserve
4.     Peel Terrace Roundabout
541.S0077.3280.000 Ludlow-Hithergreen Stage 2	$360,000	$-156,424	$205,376	Reduce budget contractors Ludlow job.
541.S0070.3280.0000 Peel & Queen Street Roundabout	$610,500	$156,424	$766,924	Increase budget contractors – Peel job
541.S0077.1210.0000 Ludlow-Hithergreen Stage 2	$220,000	$104,424	$135,576	Reduce RRG grant revenue – Ludlow job

541.S0070.1210.0000 Peel & Queen Street Roundabout	$400,000	$104,424	$504,424	Increase RRG grant revenue – Peel Job
541.S0077.3280.000 Ludlow-Hithergreen Stage 2	$766,924	$220,000	$986,924	Increase budget contractors. Funds from 137 -  Major Traffic Improvements Reserve

 

EXECUTIVE SUMMARY

This report seeks Council approval regarding the four budget amendments as listed below;

1.         Yallingup Coastal Damage

2.         Sand Re-nourishment

3.         Churchill Park Sports lighting

4.         Peel Terrace Roundabout

 

BACKGROUND

In accordance with section 6.8(1) of the Local Government Act 1995, a local government is not to incur expenditure from its Municipal fund for an additional purpose except where the expenditure:

·        is incurred in a financial year before the adoption of the annual budget by the local government; and

·        is authorised in advance by Council resolution - absolute majority required; or

·        is authorised in advance by the Mayor in an emergency.

 

Approval is therefore sought for the budget adjustments for the following items.

1.         Yallingup Coastal Damage

2.         Sand Re-nourishment

3.         Churchill Park Sports lighting

4.         Peel Terrace Roundabout

 

OFFICER COMMENT

 

Yallingup Coastal Damage

A series of storm fronts impacted the City in July and August 2021. Significant damage was sustained to both the beach access way in Yallingup and the beach itself. Due to the extent of the damage the platform lookout, beach showers and parts of the path/stairs needed to be repaired and replaced. “Improvement” works in the form of coastal protection with sand bags and dune stabilisation were also completed to protect the infrastructure from future events. These works incurred unbudgeted contractor costs totalling $181,317.  These costs are recorded against Cost Code C7003 - Foreshore Protection-Yallingup & Smiths Beach.  

 

Since the event various City Officers pursued all avenues regarding a possible insurance claim, however this has been unsuccessful. 

 

A number of capital projects were temporarily postponed pending the outcome regarding the insurance line of enquiry. This amendment will now seek to transfer both; $126,000 in budget allocations associated with other projects put on hold and $55,000 in additional funding from the Emergency Disaster Recovery Reserve to cover the $181,000 in unforeseeable costs incurred. The source of funds is outlined in the Financial Implications section of this report.

 

 

 

Sand Re-nourishment

The same storm events as mentioned in item 1 above also did extensive damage to the Dunsborough and Busselton coastline. Significant sand re-nourishment costs to the value of $150,000 have been incurred year to date. The City has an annual $100,000 sand re-nourishment budget classified as capital and the City also secured a $50,000 Sand Re-nourishment Costal Protection Grant from the Department of Transport earlier in the financial year. This amendment will seek to both reassign the $100,000 budget from capital to operating and also bring the $50,000 grant to account.  

 

Based on a combination of Australian Accounting Standards a change in the way the City accounts for sand renourishment needs to be resolved. Through the appropriate accounting standards it has been determined that these costs represent a form of temporary coastal protection in the form of beach maintenance and thus should be recorded as an operational and maintenance costs as opposed to a capital cost.

 

The nature of sand re-nourishment, in the most part, represents the depositing, spreading and shaping of sand on City beaches prone to regular erosion or to form defensive structures to minimise erosion/infrastructure damage. In comparison, building sand-bag groynes represent more permanent and measurable coastal defences that are categorised as assets and thus can be depreciated over their estimated useful lives.

 

In summary, it has been determined that sand re-nourishment represent a form of maintenance to natural assets in the form of beaches that are not recorded on the City’s balance sheet. Based on this, a budget amendment is required to adjust and transfer the City’s capital sand re-nourishment budget to operations where costs have been incurred.

 

Further to the above, the City secured a $50,000 Sand Renourishment Costal Protection Grant from the Department of Transport for this financial year. Given the change in cost categorisation a budget amendment is now required for record keeping purposes. This will subsequently increase the operational sand renourishment budget up to a value of $150,000 representing the amount that has been spent year to date.

 

The Council should be aware that all of the City’s Coastal Protection and sand renourishment budgets have now been fully expended; if there is any costal damage from adverse weather events between now and June 30 there is no budget to accommodate additional costs, unless further funds are utilised from the Emergency Disaster Recovery Reserve.

   

Churchill Park Sports Lighting Project

As part of the City’s asset management plan and Sport and Recreation Strategy, the upgrade of the Churchill Parks sports lighting was identified along with the upgrade and replacement of the trotting track lights to LED lights.

 

The existing budget was set based on price estimates received from suitably qualified suppliers in the 12 months leading up to project implementation. The budget valued at $212,850 (including a Community Sporting and Recreation Facilities Fund (CSRFF) grant of $72,850) was assigned to the project at that point. Due to supplier issues the material costs subsequently increased significantly by up to 40% while electrical contractor costs also increased with only one contractor submitting a Request for Quotation (RFQ) due to high demand for their services. The combined impact of higher costs has resulted in a price escalation on the project in the order of $130,000. The project was split into materials to be purchased directly by the City and the procurement of electrical contract labour for installation

 

The Financial Implications section of this report offers recommendations on where an additional $130,000 can be sourced to accommodate these higher costs.

Peel Terrace Roundabout

The original costing for this project was $610,000 and included some minor design works, service relocations and the construction works (outside of contractor’s works).

 

The road construction component of this project was advertised for tender on 21 August 2021, and tenders closed on 8 September 2021. The Council accepted the tender from BCP Contractors Pty Ltd for RFT 04/21 Road Network Upgrade Peel Terrace / Causeway Road Intersection Upgrade Stage 1 as being the most advantageous tender at its Council meeting held on 12 October 2022.

 

Further to detailed contract negotiations and a further council report on 24 November 2021 BCP Contractors Pty Ltd was awarded the project formally by means of letter of award on 6 January 2022. Note that the contract award price was in excess of the existing budget at this point.

 

The contractor took possession of site on 15 February 22, and the project was completed on 14 April 2022. The original construction period was 7 weeks, the project was completed in approximately 8 weeks.

 

This project came with a host of challenges, in the most part working in one of the oldest sections of road in the City with data on services not being available as part of the Dial Before You Dig nor from the service pickup completed prior to the works commencing. The contractor encountered a myriad of old asbestos cement pipes, which were all removed as part of the project.

 

A further major constraint was the works traversed two of ATCO Gas’s main lines, being a primary and secondary feed for the area. The logistics of working around these lines was problematic as ATCO Gas could not provide us as-built data on these lines. As a result a full time gas spotter was required on site whilst the contractor carried out work. The ATCO mains (along with other services) created a further issue with the pavement design whereby in order to avoid services (the depth at which could not be identified at the design stage) the pavement depth had to be reduced which required the need to install Tensar Geo Grid mesh. The mesh strengthens the pavement at a reduced thickness and although there are savings from the use of less imported material the grid is at an additional cost.  

 

During construction when the drainage system was exposed, officers had to make the determination to replace additional drainage infrastructure whilst the road was open. The original scope did not require a portion of mainline to be replaced, however on inspection the old infrastructure using butt jointed pipes was considered unsuitable and beyond its useable life. The pipe was re configured to into the new drainage layout and upgraded. The redesign and renewal reduced the overall additional total stormwater pipes in system and negated the need for upgrading these pipes at a later stage at a higher cost.

 

No landscaping was included in the original scope of works/budget, only new concrete to the centre of the roundabout. This was seen as unsatisfactory for the entrance into Busselton. A detailed Landscape Design was completed similar to the designs completed on Causeway road for the roundabout. In addition only a small portion of the old median island located north of the works, was included in the project, this was also upgraded from an old “pink” concrete median to a landscaped median. Sections of old kerb were also replaced to ensure the entire extent of the works was completely upgraded.

 

A further increase to the scope was the upgrade of the footpaths from grey concrete to exposed aggregate. This was to ensure when the next Stage of the Road Network Upgrade, i.e. Albert Street and Queen Street intersection is completed, that there is continuation of the theme that links the entire Queen Street and the entry on Causeway Road/Peel Terrace.

 

The last item was for additional costs associated with the relocation and upgrade of a Busselton water Main than ran through the roundabout.

 

Further to the above, with Officers understanding the requirement for additional funding on this project, an opportunity was presented regarding a significant saving on another Regional Road Group RRG project (Ludlow Hithergreen Road project - S0077). To this end, $156,626 has been secured that can be offset against the additional Peel Terrace works.

 

In addition officers requested further funding of $94,909 from the Regional Road Group (RRG) underspends to assist with this shortfall. The RRG and Main Roads Western Australia (MRWA) have supported our request and approved this additional funding.

 

Further details regarding this saving and the additional funding are provided in the Financial Implications section of this report.     

 

No	Description	Amount	Comment
1.	ATCO Gas Main	+$27k	ATCO Gas Spotter, digital Survey data, removal of water main.
2.	“Tensar” Geo grid matting	+$42k	For road stabilisation and protection of high pressure gas main.
3.	Engineering design and Consultancy costs	+$21K	Also used for design improvements throughout the project/works.
	Extra Drainage; old butt joint storm pipes replaced with modern equivalents	+$69k	It would have made no sense to leave these in place as their failure would mean significant damage to the new road.
4	Concrete footpaths to exposed aggregate and increased area from 380m2 to 640m2	+$97k	The area of footpath to be replaced was increased and given the high profile entrance to town the plain concrete was changed to exposed aggregate for improved aesthetic.
	Roundabout Landscaping	+$30k	Landscaping and reticulation to the roundabout annulus.
	Reinstatement	+$30k	Increased renewal of old reticulation system, turf, adjusting the surrounding verge levels to the raised road height that was lifted for better drainage.
5.	Added Median Island and Kerbing on Sweeps	+$29k	Scope changed, landscape to median along Queen Street.
6.	Busselton Water costs in relation to services at site	+$35k	Busselton Water, additional cost for water main relocation.
	TOTAL	+$380K

 

The difference between the $380,000 and the additional $251,545 in Regional Road Group funds secured is $128,455. It is thus proposed that an amount of $128,455 be approved for draw down from the City’s Major Traffic Management Reserve. This amount includes the already approved  additional $87,826 from the Major Traffic Improvements Reserve (Reserve #137) that was approved as part of the award of RFT 04/21 Peel Terrace/Causeway Road Intersection Upgrade – Stage 1A  project.

 

Statutory Environment

Section 6.8 of the Local Government Act 1995 refers to expenditure from the Municipal fund that is not included in the annual budget. In the context of this report, where no budget allocation exists, expenditure is not to be incurred until such time as it is authorised in advance, by an absolute majority decision of the Council.

 

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to these Budget amendments.

 

Financial Implications

Yallingup Coastal Damage

The table below lists Capital projects that were temporarily put on hold pending the outcome regarding access to insurance. The recommendation is now for the Council to approve the transfer of Budget from these projects to offset the Yallingup coastal repair costs; these works to be permanently suspended this Financial Year. It is further recommended that the remaining shortfall totalling $55,317 rounded to $55,000 be funded form the Emergency Disaster Recovery Reserve.

 

Projects to be postponed

 

Cost Code	Project Title	Amount	Funding Source
C1006	Townscape Street Furniture Replacement – Dunsborough	$15,000	225 - Parks, Gardens and Reserves Reserve
C1012	Townscape Street Furniture Replacement – Busselton	$10,000	225 - Parks, Gardens and Reserves Reserve
C3007	Park Furniture Replacement - Replace aged & unsafe Equip	$25,000	225 - Parks, Gardens and Reserves Reserve
C3239	Foreshore Busselton - High Street to Carey Street	$20,000	225 - Parks, Gardens and Reserves Reserve
C3240	Foreshore Yallingup Capital	$10,000	225 - Parks, Gardens and Reserves Reserve
C1752	Beach Access Improvements	$40,000	225 - Parks, Gardens and Reserves Reserve
C3236	Dunsborough Foreshore Lighting (remaining budget)	$6,000	225 - Parks, Gardens and Reserves Reserve
	TOTAL PROJECT BUDGET	$126,000
	Total costs of renewal works	$181,317
	Shortfall  - 55,000 From the Emergency Disaster Recovery Reserve	$55,317

 

This amendment will have no impact on the City’s net municipal funds.  

 

Sand Renourishment

This is a basic amendment seeking to transfer the existing $100,000 capital budget into operations while also recording the additional $50,000 in grant revenue and corresponding $50,000 in expenditure. This will have no impact on the City’s net operating position.  

 

A budget valued at $212,850 was assigned to the project funded from the three sources listed below;

·        Municipal funds totaling $128,200

·        Community Sporting and Recreation Facilities Fund (CSRFF) Grant totaling $72,850 

·        Parks, Gardens and Reserves Reserve $11,800.

 

City Officers request a budget amendment seeking to transfer;

1.         $100,000 of the Capital project budget C3241 titled - Outdoor Spaces (General capital allocation for courts, flood lights etc.). This budget was assigned in the Long Term Financial Plan as an annual allocation to increase the lighting at existing sporting facilities to increase the availability of the sports grounds, thus is an appropriate fit to be utilised for Churchill Park for the same purpose. The $100,000 is funded via Developer Contributions from the Community Facilities - City District Precinct Reserve.

2.         $20,000 in additional funds to be drawn from the Parks, Gardens and Reserves Reserve.  

 

This amendment will have no impact on the City’s net operating position.

 

Peel Terrace Roundabout

The Peel Terrace Roundabout project will exceed budget by an estimated $380,000. To cover the additional costs it is recommended to:

1.         Draw $128,455 in funds from the Major Traffic Improvements Reserve. This will reduce the budgeted 30 June 2022 closing balance for this reserve from $997,470 to $869,015.

2.         Accept and receive additional funding from the Regional Road Group of $94,909.

3.         Transfer $156,636 of the remaining budget form the Stage 2 Ludlow Hithergreen Road project (SZ0077) as detailed below.   

 

A significant saving was achieved on the Ludlow Hithergreen Road project Stage 2 Cost Code S0077.

 

2/3^rd representing $104,424 of the saving are Regional Road Group grant funds while the remaining $52,212 is from the Council Road Reserve. Main Roads WA has subsequently approved the transfer of the remaining grant funds to be utilised on the Peel Terrace Roundabout Redevelopment project.

 

An additional amount of $94,909 from the Regional Road Group (RRG) underspends has been supported and approved to assist with the shortfall on the project.

 

This amendment will have no impact on the City’s net municipal end of year position.

 

Stakeholder Consultation

Yallingup Coastal Damage

Consultation undertaken with members of the Yallingup Residence Association in regards to repairs carried out on the beach access way and the beach itself. 

 

Sand Renourishment

No external stakeholder consultation was required or undertaken in relation to this item.

 

Churchill Park Sports lighting

No external stakeholder consultation was required or undertaken in relation to this item.

Peel Terrace Roundabout

Formal correspondence and consultation with Main Roads and the Regional Road Group Members regarding the Ludlow Hithergreen Road project (S0077). RRG approved the transfer of these funds to be used to cover additional costs associated with the Peel Terrace project. Further confirmation for additional funding is outstanding.

 

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

 

Options

The Council could decide not to proceed with any or all or the proposed budget amendments.

 

Council could alternatively choose to fund any of these over expenditures from a different source or simply allow the over spends to be offset by the net end of year position.

CONCLUSION

Council’s approval is sought to amend the budget as per the table contained in the Executive Summary.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

If the officer recommendation is endorsed, the budget amendment will be processed prior to
June 30 2022.

 

13.             Planning and Development Services Report

Nil

14.             Engineering and Work Services Report

14.1           RFT 02-22 EXTERNAL CLEANING SERVICES

STRATEGIC THEME	LIFESTYLE - A place that is relaxed, safe and friendly with services and facilities that support healthy lifestyles and wellbeing
STRATEGIC PRIORITY	2.12 Provide well maintained community assets through robust asset management practices.
SUBJECT INDEX	Award of Tender RFT 02-22 External cleaning services
BUSINESS UNIT	Facilities Services
REPORTING OFFICER	Facilities Maintenance Coordinator - John Farrier Manager Major Projects and Facilities - Eden Shepherd
AUTHORISING OFFICER	Director, Engineering and Works Services - Oliver Darby
NATURE OF DECISION	Contractual: To enter into a contract e.g. a lease or the award of a tender etc.
VOTING REQUIREMENT	Simple Majority
ATTACHMENTS	Attachment A   Confidential Evaluation Report  - Provided under Separate Cover

 

OFFICER RECOMMENDATION That the Council 1.    Endorses the outcome of the evaluation panel’s assessment of the tenders received in response to RFT 02/22 External Cleaning Services; and 2.    Accepts the tender from a)    Uniting Global Pty Ltd in respect of SP2 - City owned public toilets as the most advantageous tender; and b)    Mickaz Nominees Pty Ltd ATF the Flynn Family trust TA as South West Cleaning in respect of SP3 – City owned barbeques as the most advantageous tender.

 

EXECUTIVE SUMMARY

The City issued RFT 02/22 External Cleaning Services (the RFT) for the City’s ongoing external cleaning requirements. This report recommends that Council endorse the outcome of the evaluation panel’s assessment, and accept tenders for the two separable portions of the contract. 

BACKGROUND

The City of Busselton's budget includes provision for scheduled cleaning services for all City-owned facilities including the City’s administration building, halls, public toilet blocks and BBQ hotplates. The City invited suitably qualified and experienced contractors to make submissions to enter into a contract for the provision of these services, with the RFT separated into the following separable portions:

1.         SP2 Cleaning of City owned public toilets

2.         SP3 Cleaning of City Owned BBQs and Surrounds

 

OFFICER COMMENT

The City of Busselton is committed to maintaining high levels of cleanliness at all City owned facilities.

 

On 23 March 2022 tenders were invited via VendorPanel and advertised in the West Australian newspapers.  The RFT outlined the service expectations, specifications and standards associated with providing cleaning services to the City.

A requirement was included for the contractor(s) to maintain for 90 days a photographic log of facility conditions pre and post cleaning, which can be made available to the City by request within this period.

 

Tenders closed on 21 April 2022 and the City received a total of four submissions across the two separable portions as follows:

 

 

Assessment process

In accordance with the City’s procurement practices and procedures, assessments were carried out by an evaluation panel comprising City officers with relevant skills and experience. The assessment process included:

·        Assessing submissions received against relevant compliance criteria. The compliance criteria were not point scored. Each submission was assessed on a Yes/No basis as to whether each criterion was satisfactorily met. All tenders were deemed compliant; and

·        Assessing submissions received against the Qualitative Criteria weighted as detailed below.

 

 

The qualitative criteria were scored depending on the extent to which each tenderer was able to appropriately satisfy each criteria. The tendered prices were then assessed together with the weighted qualitative criteria and the tenders scored and ranked to determine the most advantageous outcome to the City, based on principles of best value for money. That is, although price was a consideration, the tender containing the lowest price will not necessarily be accepted by the City and nor will the tender ranked the highest on the qualitative criteria.

 

The tender evaluation resulted in the following tenderers being considered the most advantageous to the City:

·     Uniting Global PTY LTD (Uniting Global) for SP2 – Cleaning of City owned public toilets; and

·     MICKAZ NOMINEES PTY LTD ATF THE FLYNN FAMILY TRUST TA South West Cleaning (South West Cleaning) for SP3 – Cleaning of City owned BBQs and surrounds.

 

Both submissions were of a high standard, and the price (schedule of rates) tendered was significantly lower than the other submissions, therefore it is recommended that a contract be entered into with each of the above tenderers for each separable portion.

 

Statutory Environment

Section 3.57 of the Local Government Act 1995 requires a local government to invite tenders before it enters into a contract of a prescribed kind under which another person is to supply goods and service. Part 4 of the Local Government (Functions and General) Regulations 1996:

·     requires that tenders be publicly invited for contracts where the estimated cost of providing the required goods and/or service exceeds $250,000; and

·     under Regulations 11, 14, 18, 20 and 21A, provides the statutory framework for inviting and assessing tenders and awarding contracts pursuant to this process.

 

With regard to the RFT, City officers have complied with abovementioned legislative requirements.

 

As the Contract value is greater than $500,000, and in accordance with section 5.43(b) of the Act and Council delegation DA 1-07, Council endorsement of the preferred tenderers is required.

 

Relevant Plans and Policies

The City's Purchasing policy, Regional Price Preference, occupational health and safety and asset management policy and were all relevant to the Tender, and have been adhered to in the process of requesting and evaluating tenders. 

 

Financial Implications

If the officer recommendation is accepted, the City will enter into two separate contracts with a total estimated value as per below, based on the schedule of rates received and the anticipated number of cleans:

·        SP2 - Cleaning of City owned public toilets - $2,373,693.53 to Uniting Global PTY LTD for the full contract term of two years with the option of three twelve month extensions and;

·        SP3 – Cleaning of City owned BBQ’s and surrounds - $512,334.21 to MICKAZ NOMINEES PTY LTD ATF THE FLYNN FAMILY TRUST TA South West Cleaning for the full contract term of two years with the option of three twelve month extensions.

 

The works are funded through the facilities operational budget, with a forecast budget for 2022-23 of $520,346, based on the current year budget and an inflation factor of 3.5%.  The combined contract price is approximately 7% higher compared to the forecast budget. The increase in tendered rates for both separable portions is primarily due to COVID-19 related issues, tightening of the supply chain and increasing fuel, material and labour costs.  The intention is to review the frequency of cleans to various facilities to bring the quoted prices within budget and to find savings in other area of the facilities budget to accommodate the difference.

 

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

 

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

 

Options

As an alternative to the proposed recommendation the Council could:

1.         Determine to award the tender to an alternative tenderer/s. In the view of the Officers this could result in the tender being awarded to a tenderer that is not most advantageous to the City.

2.         To not award the tender. This would mean going back out to tender, resulting in significant delays to the contract award and significant delays to the provision of cleaning services to City owned facilities.

CONCLUSION

The submission from Uniting Global for SP2 (public toilets) and from Southwest Cleaning for SP3 (barbeques) are considered the most advantageous to the City.  It is recommended that these suppliers be awarded the RFT in separable portions for ongoing external cleaning services to the City. 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

If endorsed by Council, and subject to any minor variations, it is expected the City will enter into a contract with the preferred tenderers by end June 2022. 

 

It is intended that commencement of the contracts for SP2 and SP3 will both begin consecutively on 17 July 2022, immediately upon the cessation of the incumbent contractor on 16 July 2022. 

 

14.2           REGIONAL ROAD SPEED REDUCTIONS PROJECT PARTNERSHIP - RAC

STRATEGIC THEME	LIFESTYLE - A place that is relaxed, safe and friendly with services and facilities that support healthy lifestyles and wellbeing
STRATEGIC PRIORITY	2.2 Work with key partners to facilitate a safe, healthy and capable community.
SUBJECT INDEX	Roads - traffic and transport
BUSINESS UNIT	Design and Survey
REPORTING OFFICER	Transport Sustainability Officer - Carolyn Ryder
AUTHORISING OFFICER	Director, Engineering and Works Services - Oliver Darby
NATURE OF DECISION	Executive: Substantial direction setting, including adopting budgets, strategies, plans and policies (excluding local planning policies); funding, donations and sponsorships; reviewing committee recommendations
VOTING REQUIREMENT	Simple Majority
ATTACHMENTS	Nil

 

OFFICER RECOMMENDATION That the Council: 1.    Support the City partnering with the Royal Automobile Club of WA Inc. (RAC) and the Shire of Augusta Margaret River to undertake a regional review of road speed limits to inform the implementation of trial speed reductions; 2.    Notes the RAC’s offer of $500,000 funding to be held in trust for associated project costs; and 3.    Authorises the CEO to enter into a Heads of Agreement with the RAC for the project.

 

EXECUTIVE SUMMARY

With the aim of saving lives and reduce serious injuries on our roads, the RAC have approached the City of Busselton and the Shire of Augusta Margaret River with an opportunity to partner together to conduct a holistic and coordinated review of road speeds within the region. The reduction of speed limits, where identified as appropriate, may then be implemented as a trial to determine the benefits or otherwise.

 

This report seeks support of Council to progress with the establishment of this partnership under a Heads of Agreement, noting that RAC have offered to fund the project, outside of some in kind contribution from the City through officer time.

BACKGROUND

RAC is a member led organisation dedicated to improving road safety for all Western Australians.  RAC’s 2030 Vision is for a safer, sustainable and connected future for all Western Australians. Together with WA state and local governments, RAC seeks practical solutions to reduce road deaths and serious injuries on the road network.

 

RAC Group Executive, Patrick Walker previously addressed the Council on a project to review road speeds throughout the City of Busselton and the Shire of Augusta Margaret River. It is intended that the project will culminate in a proposed trial implementation of reduced speed limits on roads identified through the review. Upon completion of the trial the information and data could (subject to success) be used to implement speed reductions throughout the whole of Western Australia. 

 

This report seeks endorsement from the Council to progress with the establishment of a partnership between RAC, the City of Busselton and the Shire of Augusta Margaret River, to progress the project.

OFFICER COMMENT

As of May 2022, there have been 53 fatalities on WA roads this year, of which 36 were in regional areas. The RAC has stated there is a correlation between vehicle speed and road trauma, and WA speed limits on rural roads are amongst the highest in Australia. It has been suggested through correspondence with the RAC that a 10% reduction in mean speed could result in an approximate 30% reduction in road crashes resulting in fatalities and serious injuries.

 

This project partnership offers the City and the Shire of Augusta Margaret River the opportunity to partner with RAC, with the objective of a holistic review of road speeds throughout the region, and a focus on identifying and implementing appropriate speed limit reductions on selected roads.

 

The review would develop a network blueprint in consultation with all three project partners and relevant key stakeholders such as Main Roads Western Australia (MRWA), who are the governing body for the approval and implementation of statutory signage, speed limits and line marking throughout Western Australia. The community and broader stakeholders would be engaged on the blueprint, prior to implementing any proposed speed limit trial reductions. It is intended that any trial reductions in speed limits would be for three years, to allow time for behaviours to become embedded, and data collected and analysed. This will include crash data and travel speeds, as well as monitoring community sentiment throughout the trial.

 

RAC have indicated they will provide funding for the project, and will assist with aspects of project delivery including community engagement activities to bring the community on the journey, before and throughout the trial period.

 

Statutory Environment

The Road Traffic Code 2000 Part 3 (11) establishes the regulatory environment for driver adherence to established speed limits.

 

The State Government’s Driving Change – Road Safety Strategy 2020-2030 establishes the objective of   the number of people fatally, severely or seriously injured by 50--70% by 2030 and to zero by 2050. The State Strategy prioritises the five safe systems principles below:

1.         Safe road users – supporting positive cultural change

2.         Safe Roads – building safer roads and road systems

3.         Safe vehicles – encouraging and promoting the uptake of safety technology

4.         Safe speeds – supporting and implementing speed reforms

5.         Post-crash response – reducing the impacts of road crashes

 

This project seeks to implement safe system principle 4 – supporting and implementing speed reforms.

 

Once Council endorsement for the project has been obtained, the City will enter into a Heads of Agreement to record the key terms that have been discussed and will subsequently enter into a legal agreement for purposes of implementing and delivering the project.

 

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this matter.

 

Financial Implications

The RAC has $500,000 of funding available this financial year to enable this project to be undertaken.  It is proposed this would be paid to the City prior to 30 June 2022 and held in trust, to be utilised for agreed activities.

A Heads of Agreement will be prepared and should any of this funding remain unspent, it would be returned to RAC at an appropriate time. The intention is that funding from the RAC will fund the whole project, however an “in-kind” contribution of officer time will be required from several City Officers.

 

Stakeholder Consultation

RAC have commenced initial engagement with senior representatives of the WA Transport Portfolio, and relevant Ministers, on the concept of local government–led safer speed trials. This reciprocal communication channel will continue to further facilitate agency support for implementation.

 

As detailed in the officer comment, broader community engagement and consultation will be required, and the intention will be to invite input from all road users -transport and freight drivers, residents, cyclists, business owners and others.

 

It should be noted that the safety benefit from speed limit reductions on regional roads far outweighs the slight increase in travel time, however road speed reductions may provoke some displeasure with some community members.

 

All speed reduction requests must be submitted to Main Roads WA for approval in the first instance, therefore Main Roads are primary stakeholders.

 

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

CONCLUSION

Partnering in this project would enable the City to be involved in implementing evidence based solutions to reduce road deaths and serious injuries on the road network.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

The Heads of Agreement should be signed and funds accepted before 30 June 2022.

  

14.3           BUDGET AMENDMENT - BUSSELTON FORESHORE EAST REDEVELOPMENT

STRATEGIC THEME	LEADERSHIP - A Council that connects with the community and is accountable in its decision making.
STRATEGIC PRIORITY	4.5 Responsibly manage ratepayer funds to provide for community needs now and in the future.
SUBJECT INDEX	Budget Amendment - EWS Busselton Foreshore East Redevelopment
BUSINESS UNIT	Major Projects and Facilities
REPORTING OFFICER	Manager Major Projects and Facilities - Eden Shepherd
AUTHORISING OFFICER	Director, Engineering and Works Services - Oliver Darby
NATURE OF DECISION	Executive: Substantial direction setting, including adopting budgets, strategies, plans and policies (excluding local planning policies); funding, donations and sponsorships; reviewing committee recommendations
VOTING REQUIREMENT	Absolute Majority
ATTACHMENTS	Nil

 

OFFICER RECOMMENDATION That the Council agree to endorse the following budget amendment for the Busselton Foreshore East – Redevelopment project, to cover unanticipated remediation costs and new project design:   Account string Existing budget Adjustment Adjusted budget Reserve 1.    Busselton Foreshore East – Redevelopment 120 C2237 $351,100 $654,000.00 $1,005,100.00 Waste Management Facility and Plant Reserve

 

EXECUTIVE SUMMARY

This report seeks Council approval for a budget amendment for the Busselton Foreshore East Redevelopment project, to cover unanticipated remediation costs associated with the discovery of asbestos containing material.

BACKGROUND

Busselton Foreshore East Redevelopment was identified as part of the extended foreshore upgrade works to the East of Busselton.  The purpose of the redevelopment was to enhance the eastern extension with improved landscaping, parking, footpaths, installed turf, picnic facilities and provide increased capacity of the foreshore and amenities for residents and visitors. 

 

BCP Contractors (BCP) were the successful tenderer/contractor for the project with the contract between BCP and City of Busselton entered into on 1 September 2021. 

OFFICER COMMENT

BCP commenced work at Foreshore Barnard East on 6 September 2021.  On
15 September 2021 the contractor notified the City that potentially contaminated material
(asbestos containing material, (ACM)) was discovered during excavation works for in ground services.  Consequently BCP established test pits which revealed construction rubble with visible fragments of ACM material.

 

Local environmental consultants were engaged to assist with onsite sampling and identification of the material. They identified the presence of ACM on site in quantities that required the City to undertake a managed approach to earthworks.

 

The City was required to initiate consultation with Department of Water and Environmental Regulation (DWER) and the Department of Health (DoH) to determine remediation requirements / approach. The site was classified as contaminated restricted use and DWER and the DoH required the development of a remediation plan and to prepare a Construction Environmental Management Plan (CEMP).

 

Works were interrupted for the entire redesign of project – a new design was developed to cap the contaminated material; environmental assessment and definition of potentially contaminated restricted use material profile; and remediation works.

 

Council briefings occurred 8 October 2021 and the 8 December 2021 informing Council of the issues that had been encountered on the project.  Additional costs forecast at the time of the December briefing were $530,000.

 

Additional works to complete the project and remediate the site included:

·        Hazardous material air monitoring

·        Site security and inductions of asbestos qualified personnel

·        Testing and reporting

·        Environmental consultancy fees

·        Placement of orange protective warning layer to demarcate the separation of imported clean fill and existing profile

·        Spread additional imported clean fill material to achieve a capping of 300mm – 500mm across the entire site

·        Trench services (electrical, hydraulic & irrigation) into the clean fill profile

·        Decontamination of machinery and site surrounds

·        Installation of trees rings to protect the Norfolk Pine trees

·        Export of additional contaminated material for appropriate disposal

·        Electrical services adjustment

·        Picnic node adjustment

·        Construction fencing adjustments to facilitate access for Ironman event and Christmas period

·        Additional time spent on final trim to achieve a bund profile that could be maintained by the City’s Parks and Gardens team.

·        Removal of grease trap and installation of a holding tank and vacuum pipe.

·        Validation reporting and consultation with DWER and Dept. of Health

 

Completion of the revised program occurred on 24 March 2022; original completion was scheduled on 24 December 2021. 

 

Although the original contract and scope was covered by the budget these additional costs were not and have had significant budget implications.  Final Remediation and Redesign Costs are:

 

Sec	Cost	Project	Notes	Budget	Actuals	Balance
		External procurement			YTD
120	C3227	Busselton Foreshore East Landscaping	Landscaping	$351,100.00	$1,005,100.00	-$654,000.00

Section 6.8 of the Local Government Act 1995 refers to expenditure from the Municipal fund that is not included in the annual budget. In the context of this report, where no budget allocation exists, expenditure is not to be incurred until such time as it is authorised in advance, by an absolute majority decision of the Council.

 

Relevant Plans and Policies

There are no relevant plans or policies to consider in relation to this Budget amendment.

 

Financial Implications

Council’s approval is sought to transfer $654,000.00 from the Waste Management Facility and Plant Reserve to cover the additional costs that have been incurred.  The Waste Management Facility and Plant Reserve provides funding for waste management activities that include legacy matters due to contaminated sites within the district.

 

Stakeholder Consultation

No external stakeholder consultation was required or undertaken in relation to this matter.

 

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

 

Options

The Council could alternatively choose to fund any of these over expenditures from a different source or simply allow the over spends to be offset by the net end of year position.

CONCLUSION

Council’s approval is sought to amend the budget as per the table contained in the officers recommendation.

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

If the officer recommendation is endorsed, the budget amendment will be processed prior to
June 30 2022.

 

15.             Community and Commercial Services Report

15.1           BUSSELTON SENIOR CITIZENS CENTRE - FUNDING REQUEST

STRATEGIC THEME	LIFESTYLE - A place that is relaxed, safe and friendly with services and facilities that support healthy lifestyles and wellbeing
STRATEGIC PRIORITY	2.2 Work with key partners to facilitate a safe, healthy and capable community.
SUBJECT INDEX	Senior Citizens
BUSINESS UNIT	Community Development
REPORTING OFFICER	Community Development Officer - Cassandra Armstrong
AUTHORISING OFFICER	Manager Community and Recreation Services - Dave Goodwin
NATURE OF DECISION	Contractual: To enter into a contract e.g. a lease or the award of a tender etc.
VOTING REQUIREMENT	Absolute Majority
ATTACHMENTS	Attachment a   Busselton Senior Citizens Centre Request for funding letter dated 25th February 2022⇩

 

OFFICER RECOMMENDATION That the Council: 1.         Authorises the Chief Executive Officer to enter into a multi-year funding agreement for $88,096 (indexed per annum) with the Busselton Senior Citizens Centre Inc. (BSCC) for the purpose of providing seniors services, to be funded from the draft 2022/23 and 2023/24 Welfare / Senior Citizens budgets. 2.         Authorises the Chief Executive Officer to vary the lease entered into with BSCC dated 22nd May 2020, to reduce the BSCC’s contribution to the BSCC Building Maintenance Fund from $40,000 per annum to $20,000 in 2022/23, $30,000 in 2023/24, and returning to $40,000 annually for the remainder of the lease term. 3.         Prior to consideration of any future multi-year funding agreements, requests the Chief Executive Officer to undertake a review of the BSCC’s: a. financial position  on an annual basis, and b. outcomes following the completion of the City’s Community Capacity Building Program.

 

EXECUTIVE SUMMARY

The Busselton Senior Citizens Centre (BSCC) are seeking a new multi-year funding agreement of $100,000 per annum for the next three (3) years (indexed per annum), and a reduction in their annual contribution to the BSCC building maintenance fund under their current lease of $40,000 per annum. 

 

This report details the funding request and recommends that Council authorises the Chief Executive Officer to enter into a multi-year funding agreement for two (2) years and reduce the BSCC’s contribution to the building maintenance fund in a staggered manner to assist in alleviating their financial situation. 

 

Further, it is recommended that any future multi-year funding agreements are subject to a review of the BSCC’s financial position and outcomes of the City’s Community Capacity Building Program.  The CCBP is a two (2) year program so it is therefore recommended that any future funding arrangements align with this timeframe to enable a review of the outcomes of the CCBP and the BSCC’s strategic plan, including steps to ensure financial sustainability.

 

BACKGROUND

Building extension and new lease

In July 2016, the BSCC presented a project proposal to expand their existing leased area so they could extend their building to improve the variety of services offered and to attract a greater membership base.  Council subsequently resolved (C1607/177) to provide in principle support to increasing the area of land leased, subject to planning and design for the whole of Lot 73 Peel Terrace, including the BSCC site, being undertaken.

 

Following receipt of a formal proposal from the BSCC, at the Ordinary Meeting of Council on 13 December 2017, Council resolved (C1712/329) to support a third of the total project cost amounting to $250,000, subject to obtaining a third of the funding from Lotterywest and securing necessary statutory approvals. 

 

The original proposal evolved to accommodate membership growth and improve on service delivery resulting in a revised project cost of $1.2 million ex GST.  City Officers were successful in obtaining further funding to cover the shortfall of $350,000 from Lotterywest, resulting in a combined City / Lotterywest contribution exceeding 50% of total project cost.

 

BSCC’s contribution was $232,178 to this project consisted of amounts which had been put aside from the funding received from the City in previous years.

 

During the formative work for the expansion of the BSCC it was identified that significant maintenance/repairs were required to the building to facilitate the extension (including major roof repair). Additional contributions were then made from the City, including unplanned landscaping, footpath, parking improvements and the roof restoration to an additional value of $133,616.

 

As the area required for expansion exceeded the boundaries of the BSCC’s existing lease area it was necessary to enter into a new lease agreement.  Both the existing and new leases were drafted on the basis of the tenant paying a nominal rent and assuming responsibility for the repair and maintenance of the premises.

 

It had become apparent during the expansion works that the BSCC had struggled with their obligations in relation to repair and maintenance of the premises.  The BSCC explained that any surplus funds available to them were retained for future expansion and improvements and that as result, maintenance was not made a priority. During negotiations for the new lease it was therefore agreed that, to assist the BSCC in planning for building repair and maintenance, the lease would include provisions requiring the establishment of a Building Maintenance Fund. 

 

The establishment of building maintenance funds in high profile buildings or in situations where the City has made a substantial contribution to the construction or enhancement of a facility is a standard lease condition.   It was agreed that nothing would be required to be paid into the fund until 10 July 2022, two (2) years following the commencement of the lease term.  In line with industry asset management principles the sum required to be paid from 10 July 2022 is an annual amount of $40,000.  The current lease states that increases to the building maintenance fund will be multiplied by the Current CPI and divided by the Previous CPI.

 

Funding agreement

The BSCC has been heavily reliant on the City for ongoing funding to provide senior services.  Following a number of annual funding allocations, Council resolved in 2019 (C1907/123) to enter into a multi-year agreement to provide financial certainty to the BSCC.  This agreement expires at the end of this financial year.  In 2019 the annual contribution to these services was $86,794 (indexed per annum), and currently amounts to $88,096 per annum.

 

A written request for an increase in funding to $100,000 per annum has been received from  the BSCC (see attached letter dated 25/2/22).The request to decrease the maintenance fund contribution from $40,000 per annum was made verbally by the executive of the BSCC during conversations with City Officers.

OFFICER COMMENT

The BSCC has been affected by the COVID-19 pandemic.  Over the last two (2) years the BSCC has seen a reduction in members attending the facility as many seniors are worried for their health and the risks of contracting COVID-19.  This has had a negative impact on the BSCC’s revenue streams.  Fixed costs have also risen causing additional financial implications.

 

City Officers have been working with the BSCC’s management to understand their current financial position. The BSCC report the financial impact of the pandemic is as follows:

·        The centre was closed for a 3 month period during which the BSCC did not receive job-keeper assistance resulting in lost revenue of approximately $41,300 during this period.

·        Reduction of 78 members from 970 to 892 over the last 3 years, an approximate loss of            $4,290 (@ $55 each) in revenue.

·        Reduction of hall hire and loss of instructors resulting in a loss of $486

·        Reduction in activity fees due to reduced participants attending activities, an approximate loss of $17,291

·        Reduction of in-house meals in the dining room, loss of $56,755, however an increase in demand for Meals on Wheels, an increase of revenue at $44,768

·        BUSNET sublet a room, as approved by the City, but were unable to pay their lease for a month in 2022 due to their financial pressures.  This is in conjunction to the loss of rent from the Hairdresser (4x ½ day a week) and Beautician (1x 1/2 day a week), a loss of $2,456.

·        Increase of cleaning costs per annum of $4,000.

 

The BSCC has a ‘Social Investment Account’ with an account balance of $136,000.  The BSCC plan on using funds from this account to purchase two (2) new ovens, which are now urgently required.  The BSCC consider this fund to be a contingency fund to address any unforeseen shortfalls or to protect them from any unforeseen emergency or future COVID-19 shutdown and prefer to maintain a minimum balance of $100,000 in order.

 

The overall operating position of the BSCC over the last five (5) years is as follows:

·        2016/2017                 $14,192.50

·        2017/2018                 -$5,468.74

·        2018/2019                 $38,815.70

·        2019/2020  -              $280,345.06 (This includes a CAPEX contribution towards the                                             extension)

·        2020/2021                 -$12,239.87

 

BSCC have requested an increase in funding of $11,904 per annum, to bring the City’s annual contribution to $100,000 per annum.  This is to assist in covering the increased cleaning costs, an increase in water charges of $500 per annum due to additional toilet facilities and new landscaping reticulation, increase in general grocery costs of $5,000 annually, and an increase in general insurance premiums.

 

Throughout the COVID-19 recovery period and following the reduction of restrictions the BSCC expect that revenue will rise and memberships to increase over the next few years.

 

In addition, the BSCC have verbally requested a reduction in the amount required to be paid into the Building Maintenance Fund under their lease.  This is largely due to the cash flow difficulties being experienced by BSCC.

 

The maintenance report provided by BSCC for 2020 - 2022, shows both annual totals are in excess of $20,000 per annum.

 

City Officers have undertaken a facility condition inspection and reviewed BSCC’s maintenance costs over the past two (2) years (prior to and following the expansion), and their forecast budget for the next few years’ maintenance costs.  The BSCC is currently a ‘6c’ building within the City’s Service Level Hierarchy (SLH).

 

The buildings allocated a 6c are Commercial and Community Leased buildings for which the City has no obligation with respect to the ongoing maintenance and renewal of the building i.e. not required to have a yearly budget allocation for these buildings e.g. Bovell Hockey Clubrooms, Senior Citizens Centre, Fitness Centre. On this basis, the City is currently not allocating any annual funds for the maintenance and renewal of the building through the building renewal budget– this is the sole responsibility of the lessee. This is important to note when considering the appropriate annual amount to be set aside for this purpose.

 

The inspection results are noted as follows:

·    The current estimated replacement value of the Senior Citizens Centre is $3,334,932. Under the parameters of the Building Maintenance Fund, outlined above, the annual amount required for major maintenance and renewal would be between $50,000 (1.5%) and $67,000 (2%).

·    The table below provides an overview of the estimated 10 year maintenance and renewal costs for the Senior Citizens Centre. This is based on the outcomes of the recent asset management inspection, as well as an estimate of likely timing and cost of future works.

 

 

City Officers are of the opinion that, given the current good condition of the building, a reduced annual allocation to the Building Maintenance Fund will not impact the appearance of the building in the short term (1-2 years). The current identified short-term renewal works such as painting to the external courtyard (est. $10,000), re-finishing timer floor boards to the stage (est. $1,000) and repairing vinyl flooring to the storeroom (est. $1,500) could still be funded under a reduced arrangement over the next two (2) years.  It is therefore recommended that the funding be reduced from $40,000 per annum to $20,000 in 2022/23 and to $30,000 in 2023/24.

 

It is recommended that at the conclusion of the two (2) years, the building be reassessed to update the ongoing maintenance and renewal requirements. The cost of these requirements should be measured against the planned allocations to the Building Maintenance Fund to ensure they are adequate. This is important to ensure the natural degradation of the building and its components are monitored over time.

 

 

 

Future planning

There is a risk that the BSSC will continue to feel the impact of COVID-19 through their membership base, resulting in a decline in active memberships, and therefore revenue in the short term.  The full impact of this and the duration is difficult to measure.

 

In recognition of this, the City has made, and continues to make, significant investment in the BSCC to support their services. With recent support through the City’s Community Capacity Building Program the BSCC have already identified the following:

·        The establishment of a working party to identify and cost up a kitchen upgrade for the BSCC.  This includes building, replacement costs, ongoing maintenance costs, and funding opportunities. 

·        A commitment to work with the City to explore future grant opportunities.

·        Identification of the need to undertake an annual internal facilities audit and establish budgets for all future maintenance and upgrades.

 

Statutory Environment

The officer recommendation supports the general function of a local government under the Local Government Act 1995 to provide for the good government of persons in its district.

 

Relevant Plans and Policies

The officer recommendation aligns to the following adopted plan or policy:

 

City of Busselton Social Plan (2020 - 2030)

Specifically to achieve the goal in the Seniors/Ageing section to provide for “An age friendly community that encourages ‘active ageing’ by supporting good health, active participation and secure living in order to enhance a quality of life as people get older.”

 

Financial Implications

The financial implications associated with the officer’s recommendation of maintaining the current funding for a further two (2) years has been included in the City’s Long Term Financial Plan.

 

Stakeholder Consultation

Officers have been working with BSCC for considerable time and regular consultation has occurred with the BSCC Board and manager in relation to their funding request and ongoing operational and strategic planning.

 

Risk Assessment

An assessment of the potential implications of implementing the officer recommendation has been undertaken using the City’s risk management framework, with risks assessed taking into account any controls already in place. No risks of a medium or greater level have been identified.

Options

As an alternative to the proposed recommendation the Council could:

1.         Not support funding of the BSCC which will compromise the BSCC’s ability to deliver seniors services.

2.         Support increased funding of an annual contribution of $100,000 in conjunction with the reduced requirement for the Building Maintenance Fund (staggered over 2 years), which could result in an increased reliance on the City for ongoing increased level of funding.

CONCLUSION

The current funding agreement has enabled the BSCC to manage their operations through a very difficult period. Future funding and the inclusion of the BSCC into the CCBP will ensure that the services and the building are maintained appropriately into the future.

 

It is recommended that Council support the BSCC financially for a further two (2) years at the current rate of $88,096 per annum (indexed per annum). It is also recommended that the annual contribution to the BSCC Building Maintenance Fund be reduced to $20,000 in 2022/23, increased to $30,000 in 2023/24 and then reviewed annually for the remaining term of the lease to provide some alleviation to the BSCC’s cash flow.

 

TIMELINE FOR IMPLEMENTATION OF OFFICER RECOMMENDATION

 

Officers have the information required to prepare a grant agreement subject to Council consideration of the recommendation. It is anticipated that this agreement would be finalised in time for the 2022/2023 financial year and effective from 1^st July 2022.  Lease variations as recommended would be finalised in a reasonable timeframe, no later than 30^th September 2022.