Agenda of Ordinary Meeting - Monday, 25 March 2024

Ordinary Meeting – Monday 25 March 2024

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CL24.68 Financial Sustainability Monthly Report

HPERM Ref: D24/90674

Department: Financial Sustainability

Approver: Robyn Stevens, Chief Executive Officer

This item has been deferred from the Ordinary Meeting 11 March 2024.

Reason for Report

The purpose of this report is to adopt the recommendations tabled in the Financial Sustainability workshops and report the status of the Financial Sustainability project.

Recommendation

That Council endorse:

1. Placing the Bay and Basin Leisure Centre refurbishment planning and design works on pause until Council’s financial position improves (unfunded $34.2 million)

2. Placing the Bob Proudfoot Pavilion construction on pause until Council’s financial position improves (unfunded $1.4 million)

3. Placing the Bomaderry Basketball Stadium redevelopment on pause until Council’s financial position improves (unfunded $9.6 million)

4. Placing the Sanctuary Point District Library construction on pause until Council’s financial position improves (unfunded $13.5 million)

5. Placing the Boongaree stages 5 – 7 constructions on pause until Council’s financial position improves (unfunded $5.4 million)

6. Placing the skate parks and pump tracks investigation, planning and design works (Sussex Inlet, Sanctuary Point, Bomaderry and Worrigee) on pause until Council’s financial position improves (unfunded $1.2 – $2 million)

7. Placing the Berry Spinners and Weavers building construction on pause until Council’s financial position improves (unfunded $3 million)

8. Placing the Berry Showground animal nursery construction on pause until Council’s financial position improves (predominantly funded through general fund, and pausing project would improve general fund position)

9. Placing the Kangaroo Valley playground investigation, planning and design works on pause until Council’s financial position improves (unfunded $1.05 million)

10. The Community Donations program in the 2024/25 Financial Year to be $0 (reducing general fund expenses)

11. The reinstatement of the outdoor dining public footpath annual fee (increasing general fund revenue)

Options

1. Adopt the recommendation as proposed.

Implications: Council staff will communicate decisions with impacted community groups and key project stakeholders.

2. Adopt an alternative recommendation.

Implications: The financial benefits identified in this report may be reduced and lessen the positive impact on Council’s financial sustainability issues.

Background

In November 2023, AEC provided a report (CL23.420) to Council on its financial sustainability. In this report, Council was informed that the general fund net operating position has been in a deficit position over the past eight years and there is a structural deficit to fund recurrent expenditure of $25-35 million per annum. AEC made 27 recommendations, including an SRV, and that all had to be implemented to ensure Council’s financial sustainability.

In January 2024, Council resolved under MIN24.44 not to proceed with an application for a special rate variation with IPART. A special rate variation is considered to be a necessary step in improving Council’s financial position. Instead, Council resolved to pursue all other recommendations in the AEC report as well as additional actions to improve financial sustainability.

The Financial Sustainability project has been established to coordinate Financial Sustainability actions and initiatives in response to MIN23.667, MIN24.44 and from report CL23.420 – AEC Financial Sustainability review from November 2023. The project commenced in February 2024 and has 3 major workstreams:

1. Asset and Project Management

2. Financial Management

3. Service Planning

The Financial Sustainability project will report to Council monthly on all matters relating to Council’s financial sustainability that were tabled in the November 20 and January 29 Ordinary meetings. This report will provide:

· Summary of work undertaken in the period, including items workshopped with Councillors.

· Status of project workstreams.

· Recommendations to Council to support the improvement of Council’s financial position.

Recommendations may call for projects to be paused until Council’s financial position improves. This means that projects will be reconsidered by Council at a point in time where Council has met the defined measures of financial sustainability:

· Maintain Council’s unrestricted cash reserve at $15 million.

· Achieve and maintain an operating surplus of at least 4%.

· Met the asset renewal ratio of 85%.

Paused projects are retained on the capital projects list, managed by the enterprise project management office, for prioritisation by Council when funding becomes available.

Financial Sustainability project status update

Asset and project management workstream:

· Land and property being identified for discussion with Councillors in the 19 March workshop.

· Enterprise Project Management Office (ePMO) functioning under the Technical Services department and is currently assessing 2024/25 proposed capital submissions.

· Road condition data collection commenced.

· Asset Management strategy was updated and reported to Council as part of the Resourcing Strategy in January 2024 (CL24.21).

· Assets and Works system review/enhancement – project mobilising and will start implementation in the Northern region first.

Financial management workstream:

· 2024/25 budget parameters adopted (CL24.41)

· Staff recruitment freeze process underway.

· Financial sustainability guidelines communicated to managers.

· Fees and charges review in progress.

Service planning workstream:

· Fleet service review will commence in early March 2024.

· Business improvement review framework in place and pilot reviews in progress for Holiday Haven and Legal Services.

· Other service reviews are in progress (Parks, ePMO/PLM, Grants, Contributions, Visitor Centre)

· Priority has been established for the Councillor-directed service reviews. Budget to be requested in 2024/25 budget workshop to support the specialist service reviews required.

· AEC collected productivity opportunities/cost savings validated and implementation commenced.

Internal Consultations

A fortnightly workshop schedule has been agreed with Councillors, with the first workshop occurring on the 20 February 2024. The workshops will explore all financial sustainability items raised in MIN23.667, MIN24.44 and the recommendations from the AEC report CL23.420.

As per MIN23.667, Council resolved to:

· Budget and maintain $15 million unrestricted cash reserve.

· No new or increased services without full business case.

· Grant applications focus on projects with full business case, and grant applications that have a negative impact on the financial position of Council must be approved by Council.

· If capital project not commenced at end of the financial year, reconsider project priority and revote on its continuation.

· Commit to reducing duplication and rationalise services through a structural review.

· Explore options for land and asset rationalisation – clear timeframe needed.

· Implement asset management improvements; establish PMO and PM framework.

· Program to strategically review and update AMPs – roads first, then report to Council on strategy for other asset classes.

· Address areas of Councillor concern – Legal Services, Holiday Haven, Bereavement Services, deferred rates and major procurement.

As per MIN24.44, Council resolved to:

· Place identified capital projects on hold.

· Give priority to asset renewal and rehabilitation.

· Councillors assume greater political discipline in the nomination of priority projects.

· All new expenditure proposals to be accompanied by an assessment of the impact to the long term financial plan.

· Review fees and charges to reflect full price of the service where viable to do so.

· Stand up Budget Review Committee.

· Pursue AEC actions 1b to 27 in the Financial Sustainability Review of November 2023.

As per MIN24.44, Council resolved to explore the following through workshops and briefings:

· Apply financial efficiencies and savings in the organisation – specifically $5 million per annum for 4 years.

· Consider staff freeze except where position deemed required by EMT, no redundancies.

· Cap the capital budget at $120 million.

· Dispose of under-performing and excess assets.

· Reduce revotes. They should not reflect more than $10M million.

Workshop 1 overview – 20 February

The Mayor and 9 Councillors were present at the 20February workshop, with apologies received from Cr Watson, Cr Copley and Cr Christen.

The agenda for this workshop included:

· Introduction to the Financial Sustainability project and workshop process

· Discussion of proposed budget parameters (CL24.41 reported to Council on 26 February 2024)

· Review of 5 strategic projects in light of financial sustainability principles (Sanctuary Point District Library, Boongaree stages 5-7, Bay and Basin Leisure Centre Refurbishment, Bomaderry Basketball Stadium and Bob Proudfoot Pavilion)

· Discussion of councillor ideas and priorities

Workshop 1 – summary of financial sustainability items discussed

1. Bay and Basin Leisure Centre Refurbishment

Project summary	Refurbishment and upgrade of Bay and Basin Leisure Centre including: · Roof replacement · Facade upgrades and expansion · Additional health & fitness areas · Consulting rooms · Larger waterslides · Pool hall expansion to include learn to swim pool · Outdoor splash pad · Existing change room upgrade · Landscaping and carpark expansion
Total stage 2 project cost	$36.3 million (medium/low confidence)
Funding source	Funded $2.1 million Not funded $34.2 million
Status	Concept design exhibited Community engagement results analysed Detailed design ready to commence
Impact if ‘on hold’	Smaller site issues, aging facility costs/non-compliance issues. Cost of refurbishment increases commensurate with delays.
Increase in Operational Costs	TBC – additional staff, depreciation and maintenance costs expected
% renewal	Estimated at 40% new, 60% renewal
Staff recommendation	Pause project until Council’s financial position improves. There is $34.2 million in funding not identified and continuing with this project will worsen Council’s financial position.

2. Bob Proudfoot Pavilion

Project summary	Construction of Bob Proudfoot Pavilion at Francis Ryan Reserve in Sanctuary Point. Includes accessible and ambulant public amenities as well as change rooms and storage for sports groups.
Total project cost	$3 million
Funding source	Funded $1.56 million (includes $900,000 loan and $398,000 grant) Not funded $1.4 million
Status	Tender closed 25 January 2024, at point of award/reject tender
Impact if ‘on hold’	Grant funding will need to be returned Existing asset requires maintenance using insurance proceeds
Increase in Operational cost	Maintenance increases and depreciation impact
% renewal	Estimated at 80% new, 20% renewal
Staff recommendation	Pause project until Council’s financial position improves. There is $1.4 million of required funds not identified. Deferring the project would enable Council to return $900,000 loan, reducing interest payable. The grant funding would be returned. The existing amenities building would be reopened with minor repairs to be undertaken with insurance proceeds.

3. Bomaderry Basketball Stadium

Project summary	The existing Bomaderry Basketball Stadium refurbishment is part of the Shoalhaven Community and Recreation Precinct (SCaRP) vision. It is an extension of the Shoalhaven Indoor Sports Centre.
Total project cost	$10.15 million
Funding source	Funded $550,000 Not funded $9.6 million
Status	Business case complete Shovel-ready, at point of submitting grant application (CC imminent)
Impact if ‘on hold’	Further deterioration of the existing asset, potentially resulting in forced demolition
Increase in Operational cost	Yes, estimated at $500,000 per annum for first 5 years (net position is $250,000 per annum)
% renewal	92% renewal, 8% new
Staff recommendation	Pause project until Council’s financial position improves. There is $9.6 million of required funds not identified. The increase in operational costs not funded.

4. Sanctuary Point District Library

Project summary	Replace existing local library with a District Library for the Bay and Basin community.
Total project cost	$30 million + Funding $7.5M Federal Govt and $450,000 State Govt – NSW Public Libraries Grant (Fitout) Additional loan required in base case LFTP
Funding source	Funded $16.5 million Not funded $13.5 million
Status	DA Design complete, CC Design yet to commence
Impact if ‘on hold’	Retain current library Return all grants
Increase in Operational Costs	$1.5 million additional operational cost per annum $600,000 depreciation per annum $2 million loan repayment per annum for 10 year loan term (including interest)
% renewal	100% new
Staff recommendation	Pause project until Council’s financial position improves. Long term financial plan base case is not sustainable with operating deficits of $25-30M. Doesn’t meet resolution to spend on asset renewals.

5. Boongaree stages 5 – 7

Project summary	The Boongaree Recreation Precinct projects aims to transform existing, aging local recreation facilities into a contemporary destination park. Council has delivered stages 1 - 4a, including a playground, learn-to-ride track, pump track, skatepark, netball courts, and cricket nets. The stages presented for discussion at the Financial Sustainability workshop included: Stage 5 – western/junior sporting fields Stage 6 – dog fenced off-leash areas Stage 7 – eastern/senior sporting fields
Total project cost	$20.9 million
Funding source	Funded $15.5 million Not funded $5.4 million
Status	Tender ready designs completed for Stages 5 & 7. Stage 6 has completed public exhibition and is ready for detailed design.
Impact if ‘on hold’	Grant currently subject to a scope variation request as per MIN23.750 to deliverables of stage 5 only. If project were to be put on hold funding may need to be returned.
Increase in Operational Costs	Consumables increase (water) and depreciation costs. No additional staff.
% renewal	Stage 5 & 6 100% new Stage 7 is 50% renewal 50% new
Staff recommendation	Pause project until Council’s financial position improves. Return stage 5 & 7 grant. Return unused loans to reduce interest. $5.4 million of required funds not identified. Doesn’t meet resolution to spend on asset renewals.

Workshop 2 overview – 5 March

The Mayor and 8 Councillors were present at the 20 February workshop, with apologies received from Cr Watson, Cr Gray, Cr Kitchener and Cr Christen.

The agenda for this workshop included:

· A financial sustainability project update was provided on all initiatives being delivered under the 3 workstreams – asset and project management, financial management and service planning.

· Confirmation of Councillor priorities

· Community donations program

· Fees and charges (outdoor dining, 2024/25 proposed fees and charges)

· Review of 4 strategic projects in light of financial sustainability principles (skate parks and pump tracks, the spinners and weavers building, the Berry showground animal nursery and the Kangaroo Valley playground)

Workshop 2 – summary of financial sustainability items discussed

1. Community donations program

Council’s community donations program is to provide financial assistance to local community organisations, cultural or sporting organisations and charitable/non-profit organisations. The total amount provided through the community donations program is determined through the budget process. In 2022/23, the total amount provided through the program was $211,168, allocated across 48 community organisations through the application review process. In 2023/24, the total amount of the program is $200,080, allocated across 50 community organisations in the Shoalhaven.

The application process considers applications across the following categories:

a. General donations (culture & community). These may include:

· Community development projects that meet an identified community need, have been developed in consultation with the community and encourage community participation in the development of the project.

· Community development, training, education and awareness activities.

· Co-funding for large or new cultural and community projects.

b. Sponsorship of local events. These may include festivals and special activities which enhance community spirit.

c. Subsidised rental, rates and use of council facilities rent subsidies or Council rates relief may be available for:

· Community, charity and not for profit activities on public open space/reserves.

· Community, charity and not for profit organisations’ use of Council owned and controlled facilities.

d. Environment. These may include heritage / environment projects.

The community was surveyed as part of the service review program in December 2023 – January 2024. Council asked the community which services are important to them, as well as where they think Council could reduce what is currently offered. Of the 516 respondents, 176 selected donations, community grants and financial support as one of the 10 services that should be the initial focus for reducing services. This placed donations in 5^th place for services to reduce (out of 80 external Council services).

The staff recommendation is to pause the community donations program for the financial year 2024/25. This will reduce operating expenditure by $200,000 during the 2024/25 financial year and support Council’s financial sustainability initiative.

2. Outdoor dining public footpath annual fee reinstatement

Background

Currently, Council grants approval for outdoor dining on public footpaths under Section 125 of the Roads Act 1993, and in accordance with the progression of the following Council resolutions:

At Council’s Ordinary meeting on Tuesday 9 June 2009, it was resolved in part (MIN09.732) to:

“a) Council resolve to prepare a draft DCP for the Commercial Use of Public Footpaths and place this document on public exhibition in accordance with Clause 18 of the Environmental Planning and Assessment (EP&A) Regulation 2000 and that this draft DCP be incorporated into Council’s draft citywide DCP 2009.

b) In the spirit of encouraging the uptake of future applications for alfresco dining in the Shoalhaven, Council set the current fee for the licencing component for alfresco dining on public footpaths as; no licence fees for the first two years, a 50% reduction for the life of the alfresco dining, and retains the 50% reduction in DA fees, but completely removes the Section 94 Developers Contribution component for off-street car parking in the assessment of DAs for out-door dining within Council’s footpath reserve”

Whilst the intention of the above MIN09.732 was to encourage the uptake of outdoor dining on public footpaths in the LGA, it did not produce the desired outcome. Informal feedback from businesses at that time indicated the pricing system under MIN09.732, exemptions and discounts, was confusing as was the need for a second approval after development consent and the fact that some businesses had been carrying out the activity for years without hindrance. Consequently, there were more non-compliant businesses occupying public footpaths for outdoor dining than compliant.

A report to Council’s Ordinary meeting on Tuesday 26 March 2013 that looked to address the above noted issue and, in an attempt, to simplify the charging regime resulted in the resolution under MIN13.303 in part:

“c) A two-year trial on not charging licence fees be undertaken”.

Subsequently a review was undertaken in March 2015 that resulted in a report to Council’s Property Steering Committee on the 3 March 2015 and a resolution under delegation to:

“……. continue not to charge annual fees for Outdoor Dining on public footpath subject to the following conditions:

a) Review be undertaken in 2 years; and

b) Council reviews the decision to charge fees if Outdoor Dining becomes difficult to manage in a particular footpath area.

c) That correspondence be sent to relevant Business Owners (food shops) in CBD areas to inform them of Councils Policy.”

Notwithstanding the review period had not expired, Council resolved in part at Council’s Ordinary meeting on the 15 March 2016 (MIN16.196) as part of the adoption of the 2016/2017 list of fees, charges and rentals to:

“b) Continue to not charge annual fees for Outdoor Dining on public footpaths until 1 July 2017 and that this be subject to a further review as part of the 2017/18 budget process.”

A report was prepared for Council’s Ordinary meeting 23 May 2017, to review the current practice of waiving annual fees for outdoor dining on public footpaths. At this meeting Council resolved (MIN17.422):

“a) The report be received for information.

b) The waiving of the flat rate continues, and outdoor dining fees be reviewed within 12 months.

c) The application fee of $161.20 commence 1^st July 2017.”

A report was prepared for Council’s Ordinary meeting 28 June 2018, to review the current practice of waving annual fees for outdoor dining on public footpaths. At this meeting council resolved (MIN18.487)

a) Continue to not charge annual fee for outdoor dining on a public footpath until the 1 July 2019 and that the fee of $0 be adopted as Council Fee for 2018/2019 financial year with the fee being set each year after that as part of Council annual review of fees and charges process.

b) Continue to not charge the annual fee for the remainder of this Council term.

This report provides Council with an opportunity to consider the reintroduction of annual outdoor dining fees. Currently Council annually charges fees for the use of footpaths for A-boards, and merchandise and advertising displays which take up much less Council space than what is used by outdoor dining. Council receives approximately $20,000 per annum for fees for A boards, and merchandise and advertising displays and the reintroduction of outdoor dining fees would reintroduce consistency in the application of the commercial use of Council’s public footpaths and Council land.

Policy implications

Commercial use of Council’s footpaths is governed by Development Control Plan (DCP) 2014 Chapter G17 – Business, Commercial and Retail Activities. The objectives of Chapter G17 are to:

· Encourage the growth and development of business and employment opportunities within defined limits and in a socially and economically responsible manner.

· Safeguard the amenity of the area and, in particular, immediately adjoining and adjacent property owners.

· Moderate environmental impacts

· Clarify and make provision for business, commercial and retail development in urban, environmental, rural, and coastal locations.

Objectives specific to Commercial Use of Footpaths are.

· Ensure adjoining premises and not adversely affected by any commercial use of public footpath areas.

· Protect Council and the public interest while permitting effective use of public footpaths for commercial purposes.

· Effectively address risk management issues for Council.

Council issued outdoor dining approvals ensures each application is assessed for public safety, amenity, and access.

Financial implications

Council has 73 outdoor dining approvals in place across the Shoalhaven, where an initial application fee of $295.30 is charged and is valid for 5 years before the applicant has to re-apply. At the fixed rate of $76.65/m², the rate currentlylisted in Councils fees and charges, Council is currently foregoing approximately $30,000 to $40,000 pa in fees across approvals. Since the inception of fee waiving Council has foregone income of between approximately $300,000 and $400,000.

The table below shows a comparison to a cross section of other Councils fees and charges for outdoor dining applications and rate per m²per yearcompared to the Shoalhaven:

Council Area	Application fee $	Charge rate per m²	Comment
Kiama	$250	$120 $90	Kiama & Gerringong All other areas
Wingecarribee	$150 Renewal after 2 years	$60 to $200	Other and premium
Eurobodalla	$185	$70 to $150	Other & Batemans Bay
Shellharbour	$373.00	$165.00 $156.00 $124.00	Zone 1 Shellharbour City Centre Zone 2 Shellharbour Village Zone 3 Other areas
Wollongong	740.00 (bond)	Independent Valuation $185.00 $94.50 $65.50	beach or foreshore locations Zone 1 Zone 2 Zone 3
Shoalhaven	$295.30	$76.65 Currently Waived

Outdoor dining approvals include a clause that states that the fees include a premium contribution towards a broad-form public liability insurance policy (facilitated by Council) and associated administration costs and therefore the applicant need not affect a separate private insurance policy. This cost is not being recouped as there are no outdoor dining fees currently being charged.

Risk implications

If outdoor dining fees are reintroduced, businesses may not continue to offer outdoor dining on the public footpath, restricting amenity and affecting the ability to encourage vibrant streetscapes. However, in other nearby council areas the risk seems minimal.

Community consultation

Should council resolve to reintroduce outdoor dining fees the changes to the fee waiver it will be included in Councils 2024/25 fees and charges schedule which seeks community consultation prior to adoption.

The Tourism and Economic Development team have reached out to some of the relevant Business Chambers, where varied feedback was received, including:

· The industry is experiencing wage increases, workforce shortages, raw material and insurance cost increases, rent rises, and rising petrol/delivery costs. These factors have all seriously impacted on the margins of hospitality businesses. Any additional expenses may be the breaking point for some businesses.

· Some CBDs are experiencing a decrease in foot traffic, and Council is doing some good work in an attempt to revitalise the CBDs. It would be counterproductive to undo this good work by creating a disincentive for cafe owners to offer outdoor dining and the vibrancy that comes with it.

· Towns such as Huskisson, Nowra, and Milton will be most affected.

· Conversely, A-boards and tables on Council footpaths do currently have an annual fee so having dining space on Council land chargeable is understandable.

· With business having a slower summer season this year, businesses who rely on Council footpath space may have difficulty keeping their businesses open into the off-season, therefore affecting their ability to sustain jobs year-round for locals.

Internal consultation

Internal Consultation was undertaken, and the following feedback was received from Councils Economic Development & Tourism Department.

The Tourism and Economic Development team give the following feedback:

· There are many challenges for hospitality businesses, and since fees have been waived since 2016, businesses may not be aware of the fee being applicable.

· The current 73 businesses with fee waivers may not engage with the overall “Fees & Charges” Consultation. Direct consultation with these businesses could be required to make them aware of the matter and assess the impacts.

· Many new businesses may be considering outdoor dining in their plans and currently making business and financial decisions based on the status quo. If this cost was not considered, they could face financial stress.

· Many businesses are reporting growing financial stressors, especially those that rely on discretionary spend like hospitality. This is due to the cost of living pressures, staffing and childcare issues, whilst still recovering from bushfire and COVID ramifications. These industries were severely impacted by these events, which led to a loss of tourism visitation. Reinstating the annual fee during this current economic climate will only add to these pressures.

· If businesses are not able to maintain their outdoor seating option, this could have an impact on a venue’s capacity. These capacities are already under a lot of pressure to deliver for residents and visitors during peak seasons.

· Many consumers are also in financial distress, and these fees will ultimately be passed on to the consumer. This added financial pressure could result in increased costs at the checkout and may result in a reduction of consumers who can afford the product.

Conclusion

Whilst shop operators are unlikely to support this measure, on balance it is an opportunity for Council gain additional income. Therefore, it is recommended that the fee waiver for outdoor dining be discontinued and the fee revert back to the fee listed in Councils Fees and Charges being $76.65/m2 + indexation for next financial year.

3. Other fees and charges

During the workshop, the current proposed 2024/25 fees and charges were shared (excluding Waste charges and Shoalhaven Water charges). As part of the development of the 24/25 budget, Council officers will continue to review fees and charges and will report any recommendations back to a future meeting.

4. Skate Parks and Pump Tracks

Project summary	4 potential sites for skate parks and pump tracks have been requested via community requests and Councillor notices of motion. The identified sites include: · Sussex Inlet – Thomson Street Sporting Complex. · Sanctuary Point – Sanctuary Point Road Reserve. · Bomaderry – Edwards Avenue (John Berry Reserve). · Worrigee / East Nowra – Sullivan Street Park OR Endeavour Park. This is pending community engagement.
Total project cost	Est capital investment per site: $300k to $500k Total cost for 4 sites: $1.2m - $2m approx. + investigation, planning & design costs.
Funding source	Not funded
Status	Project planning is yet to commence.
Impact if ‘on hold’	Reputational risks: Each of these projects are related to community requests and Councillor NoMs.
Increase in Operational Costs	Yes, increase in operational and depreciation costs expected – TBD pending outcome of design phase.
% renewal	100% new
Staff recommendation	Pause projects until Council’s financial position improves. Projects are unfunded and will increase Council’s operational costs. Projects do not meet the resolution to prioritise asset renewals.

5. Berry Spinners and Weavers Building

Project summary	A permanent home for the Berry Spinners and Weavers.
Total project cost	Estimated total project value: $3m
Funding source	Not funded
Status	Project planning is yet to commence.
Impact if ‘on hold’	Reputational risks: community request
Increase in Operational Costs	Yes, increase in operational and depreciation costs expected – TBD pending outcome of design phase.
% renewal	100% new
Staff recommendation	Pause projects until Council’s financial position improves. Project is high value, unfunded and will increase Council’s operating costs.

6. Berry Showground Animal Nursery

Project summary	Build a new building at the Berry Showground to provide an animal nursery at the annual show.
Total project cost	Estimated total project value: $509K
Funding source	Funded $509,000
Status	DA approval March 2024 Former building demolished - dilapidated Contractor engaged via PO only to supply and construct new animal nursery shed.
Impact if ‘on hold’	Reputational risks Show society will continue to provide a temporary structure if the site is to be used for exhibits at the annual show. Deferring project may require the return of grant funding to grant program if project does not proceed to construction.
Increase in Operational Costs	Depreciation only
% renewal	85% renew / 15% new
Staff recommendation	Pause project post DA approval, until Council’s financial position improves. Return NSW showground stimulus grant and fund project spend to date through general fund.

7. Kangaroo Valley Playground

Project summary	A new playground for Kangaroo Valley to provide a modern and inclusive space to enhance the public amenity.
Total project cost	Estimated $1.1 million + investigation, planning & design costs
Funding source	Not funded
Status	Community request. Detailed design phase on hold but proceeding to engage with stakeholders to identify an agreed site.
Impact if ‘on hold’	Reputational risks: Community frustrated with delays since negotiations began on this project in 2019. Existing playground is small, is in a poor location and is at end of life.
Increase in Operational Costs	Estimated depreciation costs: $40,000 per annum
% renewal	35% renew / 65% new (up to 100% new)
Staff recommendation	Pause project until Council’s financial position improves.

External Consultations

Post Council resolution on the financial sustainability recommendations in this report, consultation will occur with impacted community stakeholders for all decisions to pause projects. All previously successful applicants of the Community Donations program in 2022/23 and 2023/24 will be contacted to be informed of the decision.

Risk Implications

There may be reputational risks to Council associated with the recommendations in this project to pause projects and programs. The consequence to these decisions may be a loss of trust with key community stakeholders. However, other community members may recognise Council’s diligence in making sound financial decisions that improve our long term financial sustainability, which would have a positive reputational impact.

Return of grant funds may impact the ability to receive future grant funding.

Financial Implications

By adopting the recommendations in this report, the following financial benefits will be realised:

1. Avoid increasing Council’s operating expenses by pausing Sanctuary Point District Library.

a. $2 million in annual loan principle and interest repayments over 10 years.

b. $1.5 million in annual operating expenses.

c. $600,000 in annual depreciation.

2. Avoid increasing Council’s annual operating expenses by $500,000 (offset by potential $250,000 income) by pausing Bomaderry Basketball Stadium.

3. Reduce interest expense for loans (excluding Sanctuary Point District Library) already drawn down by council, would be $200k over the life of the loans.

4. Avoid additional borrowings not currently in the base case long term financial plan by pausing identified projects.

5. While full whole of life operating costs have not been identified for other projects, there will not be any additional operating (staff and maintenance) costs or depreciation by pausing these projects.

6. Reduction in Council’s operating expenses of $200,000 in financial year 2024/25 (pause community donations program)

7. Increase in Council’s income of $40,000 per annum ongoing (reinstate outdoor dining annual fee)

Ordinary Meeting – Monday 25 March 2024

Page 0

CL24.69 Local Government (General) Amendment (Audit, Risk and Improvement Committees) Regulation 2023 under the Local Government Act 1993

HPERM Ref: D24/98773

Department: Office of the CEO

Approver: Robyn Stevens, Chief Executive Officer

Attachments: 1. OLG circular and Regulation (under separate cover) ⇨

2. Impact of regulation on SCC (under separate cover) ⇨

3. Eligibility Criteria for non-voting Councillor Member on ARIC ⇩

Reason for Report

The purpose of this report is to update, provide information and obtain approval from Council on the implementation of ‘Local Government (General) Amendment (Audit, Risk and Improvement Committees) Regulation 2023 under the Local Government Act 1993’ which prescribes the requirements for the Audit Risk and Improvement Committees (ARIC), Internal Audit (IA) and risk management and commences effective 01 July 2024.

Recommendation

That Council:

1. Receive and note this paper, in particular the changes required in the composition of Council’s ARIC to comply with the regulation.

2. Approve the following changes in the independent ARIC membership:

a. Endorse that the present ARIC Chair, Peter McLean’s term on the ARIC will cease on 30 June 2024 to comply with the independence criteria of the Regulation should he continue to be a Councillor at Camden Council.

b. Reconfirm the existing term of Donna Rygate who satisfies the independence criteria. Her membership will complete on 31 December 2026.

c. Approve the extension of a further 4 year term of John Gordon who satisfies the independence criteria to complete on 30 April 2028. His initial 4 year term completes on 30 April 2024.

d. Approve staff to initiate the recruitment process for an independent ARIC member to commence 01 July 2024.

3. Appoint a non-voting Councillor member on the ARIC to commence 01 July 2024. An alternate non-voting Councillor member may be appointed.

Options

1. Adopt the proposed recommendations.

Implications: Staff will work to implement the required changes.

2. Adopt an alternative recommendation.

Implications: Compliance with regulation may not be achieved.

Background

In September 2019, the Office of Local Government (OLG) released a discussion paper, ‘A New Risk management and Internal Audit Framework for Local Councils in NSW’. After a significant period of consultations, OLG has now refined and finalised the proposed model.

The new framework is governed by Regulation (Local Government (General) Amendment (Audit Risk and Improvement Committee) Regulation 2023) and Guidelines (Guidelines for Risk Management and Internal Audit November 2023) which prescribe requirements for audit risk and improvement committees, internal audit and risk management. The Guidelines are issued under section 23A of the Local Government Act.

The Office of Local Government published a circular (23-15 / 4 December 2023 / A860774) in December 2023 titled ‘Regulation amendments prescribing requirements for audit risk and improvement committee, internal audit and risk management, (attachment 1) requiring Council to implement.

Regulation

An internal assessment of the impact of the Regulation against the Shoalhaven City Council current arrangements is provided in attachment 2.

This Regulation commences on 01 July 2024 and now gives statutory force to the three crucial elements that assist in strengthening governance. While generally Shoalhaven City Council is compliant with the majority of the requirements of the Regulation, there are a few areas that require changes.

No	Element and key requirements	Further Actions Required to Comply with Regulations
1	*A fully functional and independent Audit, Risk & Improvement Committee (ARIC) that has oversight over the internal audit function.* · ARIC Terms of Reference (ARIC Charter), consider model terms of reference approved by OLG. · ARIC independent members to meet the independence criteria established as per the regulation. · Term limits for members. · One non-voting Councillor member. Can nominate an alternate for non-voting Councillor member. · Mayor may have a standing invitation (but non-voting). · Other Councillors may have a standing invite (at discretion of ARIC Chair). · Staff can be appointed to other Council ARICs, if it is not shared by the Council that employs the staff. · Annual reporting from 2024/2025.	Review the ARIC committee membership to align with the regulation. · Independent members – Council’s ARIC Chair is a Councillor at Camden Council and thus does not meet the independence requirement for ARIC. ARIC Chair’s membership on Shoalhaven City Council’s ARIC expires in December 2024. ARIC Chair’s membership arrangement to be reviewed. · Councillor Members – Council to appoint one councillor as a non-voting member to the ARIC. Presently, there are two (2) Councillor voting members with two (2) alternates appointed. Council to appoint a non-voting Councillor member on the ARIC. Independent ARIC Members · Develop a matrix and criteria for nomination and election of ARIC Chairperson and independent ARIC members. ARIC Charter (Terms of Reference) · Update the ARIC Charter in line with the OLG’s model Charter.
2	A robust risk management framework to help Council manage their risks in order to achieve their strategic objectives. · Develop and implement a system for managing risk. · ARIC monitoring and review, with reports to Council on risk management operation and efficacy.	Council’s risk management framework is appropriate for the Council and consistent with the Australian risk management standard, with the aim of continual improvement of the framework and reporting to ARIC.
3	An independent Internal Audit (IA) function · Council to adopt an Internal Audit Charter (model IA Charter approved by OLG). · Appointment of a staff member to coordinate IA and report to ARIC. · IA function to be independent. · IA to have the resources necessary to properly exercise the function. · ARIC to review the effectiveness of IA function and report to Council at each term.	Internal Audit Implement a process for ARIC to review the performance and efficacy of the internal audit activities over each period of 4 years. Internal Audit Charter Update the Internal Audit Charter in line with the OLG’s model Charter.

Annual attestation against the key requirements from ARIC Chair and the Chief Executive Officer will be required from 2024-2025 as part of the Council’s Annual Report process.

Guidelines

The Guidelines now replace the NSW Government’s Internal Audit Guidelines for Local Government in NSW issued in 2010. The core requirements of the Guidelines are based on:

Core Requirement	Modelled on:
Audit, risk and improvement committee	Internal Audit and Risk Management Policy for the General Government Sector (TPP 20- 08) developed by NSW Treasury and best practice in the public and private sectors.
Risk management	Current Australian risk management standard, AS/NZS ISO 31000:2018 Risk Management – Guidelines.
Internal audit function	Institute of Internal Auditors (IIA) International Standards for the Professional Practice of Internal Auditing (the ‘International Professional Practices Framework’) and best practice in the public and private sectors.

Councils are required to consider the Guidelines when implementing the requirements prescribed under the Act and the Regulation relating to ARIC, risk management and internal audit.

It is noted that the requirements of the Guidelines are thorough and Council will progressively utilise the Guidelines to further enhance the functions.

Compliance with the Regulation

The following is required from Council to demonstrate compliance with the Regulations:

A. Audit Risk and Improvement Committee

Membership Requirements

The following table illustrates the required changes to ARIC membership that need to be endorsed and actioned by Council.

Membership Type	Position Holder	Independence criteria (Regulation) met	Current Term Expiry	Action Required from Council
ARIC Chair	Peter McLean	No	31 December 2024. Does not have the option for any further term extension.	1. In order to comply with the Regulation, Peter’s term on Council’s ARIC will have to cease on 30 June 2024 should he choose to remain as a Councillor at Camden Council. Council to approve this. This will create a vacancy from 01 July 2024. 2. Approve to commence the recruitment process for an independent ARIC member to commence from 01 July 2024. The recruitment will be undertaken in accordance with the Regulation requirements.
Independent ARIC member	Donna Rygate	Yes	31 December 2026. After this date, there is no option for extension of term.	3. Reconfirm Donna Rygate’s term to 31 December 2026.
Independent ARIC member	John Gordon	Yes	30 April 2024. Has an option for further 4-year term appointment.	3. Approve the extension of further 4 year term for John Gordon to complete on 30 April 2028.
Councillor Member	Clr Patricia White	N/A – however Guidelines require Councillor members to meet the ‘Eligibility criteria for councillor members’ (Page 23 of the Guidelines) attached to this report	September 2024 (Councillor term is reconfirmed every year).	4. Appoint a non-voting Councillor member. A non-voting alternate Councillor member may be appointed. Where possible, the Councillor member should meet the ‘Eligibility criteria for councillor member’ of the Guidelines.
Councillor Member	Deputy Mayor Evan Christen
Alternate Councillor Member	Clr Matthew Norris
Alternate Councillor Member	Clr Gillian Boyd

Council approval will be sought on the appointment of the new independent ARIC member following finalisation of the recruitment process. Approval will also be obtained for the ARIC Chairperson in due course.

ARIC terms of reference (Charter)

The ARIC terms of reference (Charter) based on model terms of reference provided by OLG is at stakeholder consultation stage and a future report will be made for adoption of the ARIC terms of reference (Charter).

B. Risk Management

There is no immediate change required to comply with the Regulations.

C. Internal Audit

Internal Audit Charter

The Internal Audit Charter based on the OLG model Charter is at stakeholder consultation stage and a future report will be made for adoption of the internal audit charter.

Internal Audit Performance Review

Budget will be required to enable ARIC to review the effectiveness of the Internal Audit function and report to Council at each term. This is currently unbudgeted and will be included in the future operational budget bid process.

Internal Consultations

A copy of the Regulation has already been made available to ARIC members via email in December 2023. The further actions required to comply with the Regulation were tabled at the 04 March 2024 ARIC meeting and is now provided to Council to determine the membership changes.

Policy Implications

The ARIC Charter and the Internal Audit Charter based on the OLG model Charters which will detail the roles and responsibilities of the functions are at stakeholder consultation stage and will be reported to Council for adoption.

Financial Implications

Budget allocation will be required for the prescribed 4 yearly performance and efficacy review of the internal audit activities. The regulation comes into effect in July 2024, hence it is anticipated that this external review of the performance and efficacy of the internal audit activities would be undertaken in 2027.

The cost implications for this external review are in the order of $30,000 - $40,000 every 4 years. This will need to be factored into future operational budgets.

Risk Implications

Compliance with Regulation is supported as it demonstrates Council’s commitment to good governance and accountability. Councils can be exempted from compliance with the Regulation in certain circumstances subject to their reporting their non-compliance, the reasons for their non-compliance and the alternative steps taken to achieve the same outcomes prescribed by the Regulation to OLG and in their annual reports.

Ordinary Meeting – Monday 25 March 2024

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CL24.73 Investment Report - February 2024

HPERM Ref: D24/98768

Department: Finance

Approver: Kerrie Hamilton, Director City Performance

Attachments: 1. Shoalhaven Monthly Investment Report - February 2024 (under separate cover) ⇨

Reason for Report

The reason for this report is to inform the Councillors and the Community on Council’s investment returns. The report also ensures compliance with Section 625 of the Local Government Act 1993 and Clause 212 of the Local Government (General) Regulation 2021, that requires a written report is provided to Council setting out the details of all funds it has invested.

Recommendation

That Council:

1. Receive the Record of Investments for the period to 29 February 2024.

2. Note that Council’s total Investment Portfolio (excluding the Long-Term Growth Fund) returned 4.94% per annum for the month of February 2024, outperforming the benchmark AusBond Bank Bill Index (4.43% pa) by 51 basis points (0.51%).

3. Note the performance of the Long-Term Growth Fund as presented in the report.

Options

1. The report on the Record of Investments for the period to 29 February 2024 be received for information.

Implications: Nil

2. Further information regarding the Record of Investments for the period to 29 February 2024 be requested.

Implications: Nil

3. The report of the record of Investments for the period to 29 February 2024 be received for information, with any changes requested for the Record of Investments to be reflected in the report for the period to 31 March 2024.

Implications: Nil

Background

Please refer to the attached monthly reports provided by Council’s Independent Investment Advisor, Arlo Advisory Pty Ltd (formally Imperium Markets Pty Ltd).

Portfolio Return

The investment returns (excluding Long-Term Growth Fund) were a stable 4.94% p.a. in February 2024, outperforming the benchmark AusBond Bank Bill Index (4.43% p.a.) by fifty-one basis points (0.51%).

The overall portfolio (excluding cash) returned a positive 11.95% p.a. for the month of February 2024, outperforming the benchmark AusBond Bank Bill Index return by 7.52% p.a.

The Reserve Bank of Australia left interest rates at a 12 year-high of 4.35% at its February meeting. The next cash rate announcement will be on March 19 as only eight meetings will be held in 2024 instead of the traditional eleven meetings.

Investments (Excluding Long-Term Growth Fund)

Graph 1 below, shows the performance of Council’s Investment Portfolio (excluding Long-Term Growth Fund) against the benchmark on a rolling 12-month basis.

Graph 1 - Performance of Council’s Investment Portfolio against the benchmark on a rolling 12 month basis

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Long-Term Growth Fund

Council’s investment in the Long-Term Growth Fund outperformed and returned a positive -$565,331.14 or 2.60% (net actual) for the month of February 2024.

It is important to note that TCorp has a target of 3.5% above inflation of 2.5%, therefore the long-term target is expected to return an average of 6.0% per annum (benchmark) over a seven-year cycle with positive months outweighing the negative months over the long-term.

Investment Interest Earned – February 2024

Table 1 below, shows the interest earned for the month of February 2024.

Table 1- Interest Earned for the Month of February 2024

Fund	Monthly Revised Budget $	Actual Earned $	Difference $
General	242,825	283,010	40,185
Water	82,312	153,918	71,606
Sewer	53,233	59,581	6,348
Total excluding Long-Term Growth Fund	378,370	496,509	118,139

The interest earned for the month of February, excluding changes in the fair value of the TCorp Long-Term Growth Fund was $496,509 compared to the monthly revised budget of $378,370.

Investment Interest Earned - Year to Date

Table 2 below, demonstrates how the actual amount of interest earned year to date has performed against the total budget.

Table 2 - Amount of interest earned year to date, against the total budget.

Fund	Revised Total Annual Budget $	Actual YTD $	% Achieved
General	3,056,247	2,411,201	78.89%
Water	1,036,000	1,311,355	126.58%
Sewer	670,000	507,621	75.76%
Total excluding Long-Term Growth Fund	4,762,247	4,230,177	88.83%

The cumulative interest earned for the year (July to February), excluding the change in fair value of TCorp Long-Term Growth Fund was $4,230,177 which is 88.83% of the current full year revised budget.

Graph 2 (3 separate graphs) below, illustrates the cumulative interest earned for the year for each fund (General, Water and Sewer) against budget:

Graph 2 - Cumulative interest earned for the year for each fund against budget.

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Cash and Restricted Assets, Restricted Asset Movements and Liquidity Indicators

At the time of preparing this report, Finance was in the process of finalising the December quarter budget reviews. Accordingly, the Cash and Restricted Assets, Restricted Asset Movements and Liquidity Indicators sections have necessarily been excluded from the February Investment Report.

As at 30 June 2023, Council had spent $35M in grants spent in advance. In accordance with Council's adopted Liquidity Contingency Plan, internal restrictions were utilised to fund the grants spent in advance.

Since 30 June 2023 and up to 29 February 2024, Council received $22.2M of the outstanding grants spent in advance balance.

Statement by Responsible Accounting Officer

I hereby certify that the investments listed in the attached report have been made in accordance with Section 625 of the Local Government Act 1993, Clause 212 of the Local Government (General) Regulations 2021 and Council’s Investments Policy POL22/78.

Katie Buckman Date: 25 March 2024

Ordinary Meeting – Monday 25 March 2024

Page 0

CL24.74 DPOP 2023-24 - Quarterly Performance and Budget Report (October - December)

HPERM Ref: D24/10411

Department: Corporate Performance & Reporting

Approver: Kerrie Hamilton, Director City Performance

Attachments: 1. Delivery Program Operational Plan - Quarterly Performance Report 2023/24 - October to December (under separate cover) ⇨

2. Quarterly Budget Review Report - December 2023 (under separate cover) ⇨

3. Current Capital Projects Status Report as at 24th January 2024 (under separate cover) ⇨

4. Uncompleted Notices of Motion Report (councillors information folder) ⇨

5. Completed Notices of Motion Report (councillors information folder) ⇨

Reason for Report

This report outlines Quarter 2 performance (October to December 2023) against actions and targets set in Council’s 2023-24 Delivery Program and Operational Plan (DPOP). Also, in accordance with Regulation 203 (1) of the Local Government (General) Regulation (2021), the responsible accounting officer must prepare and submit to Council, a Budget Review Statement after the end of each quarter. This has been carried out for the second quarter of the 2023/24 financial year.

Recommendation

That Council:

1. Receive the December Quarterly Performance Report on the 2022-2026 Delivery Program and 2023-2024 Operational Plan and publish on Council’s website.

2. Receive the December 2023 Quarterly Budget Review Report.

3. Adopt the budget adjustments as outlined in the December 2023 Quarterly Budget Report Document.

4. Receive the quarterly Notices of Motion report via the Councillor Portal and rescind MIN18.992.

Options

1. Adopt the recommendation

Implications: Nil.

2. Adopt an alternative recommendation

Implications: Staff will be required to rework the quarterly performance and budget report in accordance with the alternative resolution.

Background

Section 404 of the Local Government Act 1993 requires the General Manager (Chief Executive Officer) to provide progress reports to the Council with respect to the principal activities detailed in the Delivery Program (Operational Plan) at least every 6 months. Furthermore, all Councils must continue to consider a Quarterly Budget Review report.

Clause 203 of the Local Government (General) Regulation 2021 requires the Responsible Accounting Officer (Chief Financial Officer) to prepare and submit to the Council, a Quarterly Budget Review Statement that shows, by reference, the estimates of income and expenditure set out in the Operational Plan and a revised estimate of the income and expenditure for the full financial year.

The Responsible Accounting Officer is also required to report as to whether they believe the financial position of the Council is satisfactory, having regard to the original estimate of income and expenditure.

The December 2023 Quarterly Budget Review Statement (QBRS) includes an analysis of the year-to-date result and the reasons for the major variances from the previously adopted Budget, by fund and for each Directorate. Any proposed changes to the budget are included in the attached December Quarterly Budget Review Statement.

Summary of Delivery Program Operational Plan 2023-24 Performance

Table 1 below provides breakdown of performance as at 31 December 2023 across each of the key themes outlined in the Community Strategic Plan - Shoalhaven 2032.

Table 1: Action performance as at 31 December 2023 by Community Strategic Plan 2032 Theme area

CSP Theme	Progress snapshot
Resilient, safe, accessible and inclusive communities	96% actions on track or completed
Sustainable, liveable environments	85% actions on track or completed
Thriving local economies that meet community needs	100% actions on track or completed
Effective, responsible and authentic leadership	94% actions on track or completed

Of the 151 DPOP actions, one further action has been rated as ‘Completed’ (4.2.01.05 - Formalisation of Legislative Compliance Framework) alongside the action completed in Quarter 1 (4.1.01.02 – Implement a ‘voice of the customer program’) and 138 items rated as ‘On Track’.

Key Highlights

Council has consistently delivered a range of services, projects and activities which work towards achieving the 11 key priorities outlined in Council’s Delivery Program 2022-26. Performance comments are provided in the report against each of the 151 actions and related targets in Council’s 2023-24 Operational Plan.

The complete DPOP Quarterly Performance Report (October - December) is included as Attachment 1.

Council achievements between October and December 2023 include:

· Over 700 young people and 150 adults participated in Teen Mental Health, Youth Mental Health and resilience building workshops and training across the Shoalhaven.

· Over 400 people attended the launch of the Shoalhaven Entertainment Centre 2024 Season ranging from performing arts, events and public programs reflective of our diverse community from family theatre, drama, music, First Nations works, dance, multicultural works and an international physical theatre production.

· Ranger Services team conducted two information Pop-up stalls providing microchipping for dogs, checks of animal details and shorebird education.

· Delivery of actions within the Sustainable Energy Strategy included replacement of all streetlights with energy efficient LEDs saving approximately 1,500 tonnes of CO2e emissions each year.

· The Sustainable Living Program offered workshops and events such as the SunSpot solar online event.

· 32,000 Shoalhaven Visitor Guides were distributed - continuing to support local business operators with product and marketing support.

· Work Health Safety launched the Zero Tolerance campaign with 56 staff trained as on-the-job trainers.

· The Health and Wellbeing initiative included 108 staff attending the Resilience Workshops and 158 staff receiving a healthy heart check.

· Council continues to supply drinking water in accordance with the Australian Drinking Water Guidelines with no E-Coli incidents recorded.

Requires Attention

Table 2 below outlines the three Action items that have been reported as ‘requires attention’ as at 31 December 2023. Full performance comments are in the attached report and remedial actions have been reported to senior management.

Table 2: DPOP Actions rated as ‘requires attention’ as at 31 December 2023.

Ref.	Action	Quarter 2 Comment (summary) Full comments in attached report
2.2.02.01	Assess and determine development applications within legislative timeframes and community expectations	Development Services have been impacted by resignation of several senior staff members during this quarter which has impacted upon assessment timeframes. Staff are working to improve DA processing times by focusing on front-loading the assessment process as a means to reduce the need for information requests down the line. Priority lists help referral sections to focus on timely delivery of information, and through recruitment to rectify current staff shortages.
2.3.03.05	Prepare new, or review existing Bushcare Group Action Plans in consultation with community	The Bannisters Road and Mahogany Creek Bushcare group action plans have been revised after review of second drafts. Another two have had a first draft prepared (Fishermans Paradise, Kean Ave - Sanctuary Point). There has been a vacancy in the Council's Bushcare Coordinator position during the last quarter, so there has been no progress on these. A Bushcare Coordinator commenced on 15 January 2024.
4.2.01.04	Review and update Council's Business Continuity Planning (BCP) Documents	Initial Review and Update of BCP Framework documents and plans completed in Q2. Action will be prioritised in Q3 with respect to internal review and adoption of updated plans.

On Hold

Table 3 below outlines the four Action items that have been reported as ‘on hold’ as at 31 December 2023. Full performance comments are in the attached report and remedial actions have been reported to senior management.

Table 3: DPOP Actions rated as ‘on hold’ as at 31 December 2023.

Ref.	Action	Quarter 2 Comment (summary) Full comments in attached report
2.1.03.01	Complete the Pathways Program as listed in the 2023-24 adopted capital works program	Awaiting funding confirmation of $5M from NSW Government.
2.1.06.01	Maximise water reuse to reduce demand on drinking water supplies	Reclaimed Water Management Scheme (REMS) 2.0 project is on hold subject to attaining grant funding and the development of biodiversity offset credits.
2.1.06.07	Construction of new water pipeline connection of Jervis Bay Territory to Shoalhaven systems	On hold, awaiting engagement by Jervis Bay Territory to proceed to construction. Land matters within the Territory are still to be resolved.
2.3.03.08	Progress planning and scoping for an Urban Greening Strategy	Council is still awaiting the grant agreement from NSW Department of Planning and Environment.

Deferred

Table 4 below outlines the four Action items that have been reported as ‘deferred’ as at 31 December 2023. These items do not have identified budget or resources to proceed in 2024/25 and may be considered in budget deliberations for inclusion in a future DPOP.

Table 4: DPOP Actions rated as ‘deferred’ as at 31 December 2023.

Ref.	Action	Quarter 2 Comment (summary) Full comments in attached report
1.2.01.04	Deliver a mural art project on Shoalhaven Water infrastructure that will engage with local community and artists	Council will be requested to consider proceeding with this project at the next quarterly review. Potential saving will be $95,000 to the Water Fund operational budget.
1.3.02.02	Continue staged implementation of Asset Management Plans across Shoalhaven Swim Sport Fitness including Destination Parks, sports fields and showgrounds	50% Complete. Asset Management Plans have been completed for four Showgrounds - Nowra, Berry, Kangaroo Valley and Milton Showgrounds. No budget has been identified to progress Destination Parks, sports fields Asset Management Plans. Budget nomination will be included in the 2024/25 round of submissions to Enterprise Project Management Office.
4.1.01.05	Work collaboratively with Management Committees to expand the Bookable system to include facilities operated by Management Committees	The phase 3 project to bring Management Committees into Bookable is on hold until funding is available. As part of business as usual, Customer Experience will continue to work with Management Committees on the Bookable transition, as prioritised by the relevant Facility Officer. In Q2, Thompson Street Sporting Complex transitioned to Bookable platform.
4.3.01.05	Commence an independent review of Council’s Community Consultative Body model to ensure equitable reach and representation	The progression of this project is funding dependent. Staff will continue to investigate/monitor for further funding opportunities.

Additional Operational Plan Actions arising from Notices of Motions (NoM’s)

Between 1 July 2023 and 31 December 2023, Council has endorsed 45 Notices of Motion (NoMs) which can be categorised as follows:

· 28 NoM’s relate to information, donations / community support, maintenance / traffic requests, advocacy or Development Application call-ins and covered in business-as-usual operations.

· 17 NoM’s relate to projects that required additional resources being added to the Operational Plan 2023-24. These Actions can be further categorised into the following areas:

o Infrastructure / Service Upgrades (7)

o Forward Planning (6)

o Policy (4)

In addition, there are 8 NoM’s resolved prior to 1 July 2023 which are currently categorised as ‘in progress’.

The full report of Uncompleted and Completed Notices of Motion’s have been attached as Attachment 4 and Attachment 5, respectively. The Completed report indicates the NoM’s finalised between 28 November and 12 March. Prior to that date, completed actions were reported at the 11 December October Ordinary Council Meeting.

December 2023 Quarterly Budget Results Overview

The main focus during the December 2023 quarter has been the completion of Council’s Financial Sustainability Review (FSR) project and the consideration of an application to IPART for a Special Rate Variation (SRV). The FSR project was commissioned in response to a Council resolution passed at the 26 June 2023 Ordinary Council Meeting. The results of this review were reported to Council at an Extraordinary Meeting on 20 November 2023 (CL23.420, MIN23.667).

In response to the FSR project, Council staff recommended that Council apply to IPART for a SRV for the 2024/25 financial year. This recommendation was reported to Council at an Extraordinary Meeting on 20 November 2023, and Council accepted the recommendation to engage with the community on the proposed SRV. Community engagement was undertaken during the period 23 November 2023 to 24 January 2024. The community was invited to complete a survey and ask questions via the Get Involved section on Council’s website.

The results of the community engagement were reported to Council at an Ordinary Meeting on 29 January 2024. As part of a suite of recommendations, including those raised through the FSR project, Council officers recommended that Council proceed with an application to IPART for a SRV.

Council resolved under MIN24.44 not to proceed with an application for a special rate variation with IPART. A special rate variation is considered to be a necessary step in improving Council’s financial position. Instead, Council resolved to pursue all other recommendations in the AEC report as well as additional actions to improve financial sustainability. A dedicated Financial Sustainability project team has been established to coordinate Financial Sustainability actions and initiatives in response to MIN23.667, MIN24.44 and from report CL23.420 – AEC Financial Sustainability review from November 2023. The Financial Sustainability project will report to Council monthly on all matters relating to Council’s financial sustainability that were tabled in the 20 November 2023 and 29 January 2024 Ordinary meetings.

As Councillors are aware, Council has limited unrestricted funds. This is a matter for concern and was addressed in the FSR report. Management of Council’s cash position continues to require considerable effort from the Finance and Disaster Recovery Teams to ensure that Council’s restricted cash reserves are not breached – given the significant on-going expenditure on disaster recovery works and the resulting processing and receipt of recovery and other grant funding acquittals.

At 31 December 2023, Council has spent $8.2M of General Fund cash in advance for grant funded projects whereby the grant monies have not yet been receipted. This resulted in a preliminary negative unrestricted cash position of $9.2M. As explained later in the report, internally restricted funds have again been temporarily reallocated in accordance with Council’s Liquidity Policy to ensure that external restriction remain protected. This $8.2M grants in advance adjustments is a significant improvement on the $35M grants spent in advance reported at 30 June 2023, and the $13.8M reported at 30 September 2023.

Further, throughout October conversations continued with Transport for NSW and Reconstruction Authority regarding Natural Disaster funding. This resulted in Council receiving a further $15.5m advance payment for Natural Disaster projects in November 2023.

It is imperative that Council remains cash flow positive when delivering these significant works. Failure to do so will place pressure on Council’s unrestricted cash position and could result in projects being temporarily suspended until cash is made available.

Preliminary General Fund Year End Results and Quarterly Review Movements

General Fund

General Fund operating income before capital grants and contributions was lower than the forecast by 0.15% ($198.2M actuals vs $198.5M budget, unfavourable). Whilst domestic waste charges income, interest income and other revenues were ahead of budget, this was offset by a reduction in operating grants relating to Natural disasters, which due to timing will now be received in the second half of FY2024. Capital grant income tracked ahead of year-to-date budget due to the receipt of natural disasters grant income which was not originally budgeted. It is likely this income will not be fully spent by 30 June 2024 and will result in the carry forward of natural disaster projects in the FY2025 year.

The General Fund operating expenses are 0.35% below the adopted budget ($151.4M actuals vs. $151.9M budget, favourable). Employee costs have exceeded budget due to the under recovery of staff costs to individual projects (both operational and capital), however materials and services are under budget and have offset this impact. The appropriateness of employee cost recovery to individual projects is under review. It is anticipated that significant changes will be made when preparing the FY2025 budget. This will ensure that an appropriate level of employee cost recovery is budgeted for, resulting in a more realistic and achievable employee benefits budget moving forward.

Finance is closely monitoring actual expenditure across Council. The Chief Financial Officer engages with the Executive Management Team, on an at least weekly basis, to provide an update of Council’s finances. In addition, several presentations have been held with the Senior Leadership Team to confirm expectations of strong fiscal management by all budget owners. These messages are then being cascaded throughout the organisation.

As noted as part of the July-September 2023 quarterly budget review, it was identified that the adopted budget does not sufficiently provide for anticipated expenditure in legal costs, staff training and development, and annual building insurance premiums. Further areas of under budgeting have been identified through the second quarter review. Finance are addressing these concerns by 1) identifying appropriate funding for the remainder of the FY2024 year to ensure Council does not breach it’s cash restrictions, and 2) ensuring appropriate budgets are set for the FY2025 year.

Whilst overspends to date have been appropriately managed, further over expenditure is forecast for the remainder of the financial year due to higher than anticipated workers compensation self-insurance costs, and the issues noted with employee job cost recovery detailed earlier in this report. Diligence will continue to be applied and where it is identified the annual budget will be unavoidably exceeded, intervention measures will be implemented and discussed with Councillors.

The following table presents a high-level summary of the budget and movements for the General Fund for Quarter 2 2023/24:

Table 5: General Fund budget movements for Quarter 2 2023/24

($'000) Favourable / (Unfavourable)	Current Adopted Budget	December QR Adjustments	December QR Revised Budget	YTD Adopted Budget	YTD Actuals
Net Operating Result	134,348	(11,596)	122,752	63,300	113,023
Net Operating Result before Capital Grants & Contributions	(14,489)	(4,857)	(19,346)	46,619	46,789
Net Cash & Investments Movement	(28,433)	23,936	(4,497)	(23,636)	28,246
Unrestricted Cash Movement	70	0	70	(16,125)	(6,311)

The net operating result before capital grants and contributions of the General Fund as at 31 December 2023 Quarterly Budget Review, was a surplus of $46.8M, a $0.2M favourable variance to the forecasted $46.6M surplus.

The proposed budget adjustments do not result in any change to the 30 June 2024 forecast unrestricted cash position. Council staff have worked diligently to ensure that the net impact of all proposed adjustments has minimal impact on Council’s limited unrestricted cash balance. As detailed earlier in this report, it will become increasingly harder to achieve a net NIL movement in Council’s unrestricted cash, and the adoption of a realistic operational and capital budget for FY2025 is of critical importance.

Working Capital

Working Capital is a term used to define the uncommitted component of Council’s net current assets position, or in other words, the balance of uncommitted funds available for discretionary purposes. The working capital position is calculated in accordance with the formula as outlined in Council’s Liquidity Contingency Plan.

As previously referenced, as at 31 December 2023, Council has spent $8.2M of General Fund cash in advance for grant funded projects whereby the grant monies have not yet been receipted. This resulted in a preliminary negative unrestricted cash of $9.2M.

To restore unrestricted cash back to NIL, the Financial Assistance Grants internal restriction was utilised. The reserve had a balance of $7.4M at 31 December 2023, and was reduced to NIL in order to fund the grants in advance. The additional $1.8M has been funded through other internal reserves as reported on page 56 of Attachment 2 – Quarterly Budget Review Report - December 2023. However, the restored value of internal reserve balances have been used when calculating the working capital position.

Conversations have continued with Transport for NSW and Reconstruction Authority regarding Natural Disaster funding. It is imperative that Council remains cash flow positive when delivering these significant works. Failure to do so will places pressure on Council’s unrestricted cash position and could result in projects being temporarily suspended until cash is made available.

Table 6: General Fund working capital position at 31 December 2023

Description		($‘000)
Add	Current Asset	177,588
Less	Current Liabilities	113,884
Calc	Net Current Asset	63,704
Less	External restrictions	91,771
Less	Internal restrictions	22,461
Add	Provisions (Liabilities not expected to settle in 12 months)	20,036
Add	Current liabilities that are covered by externally restricted assets	33,477
Add	Current liabilities that are covered by internally restricted assets	11,227
Calc	Available working capital	14,212
Calc	Working Capital as a % of Current Liabilities	12.48%

Council working capital is 12.48% at 31 December 2023 exceeding the benchmark set in the adopted Liquidity Contingency Plan of 5%.

In assessing this working capital position, it is important to recognise that it is calculated at a point in time. At 30 September Council’s annual rates and charges are levied in full (levied during July of each year.) Once levied, a receivable is raised (current asset) to recognise the total cash Council is entitled to. This results in a large current asset being recognised at each September quarter, and it will reduce evenly throughout the year as money is collected and spent in accordance with Council’ s adopted budget. The result at 31 December 2023 is a reduction from the 30 September 2023 working capital position (23.66%).

Working capital will be at its lowest in the June quarter. Management continues to monitor the working capital position of the Council.

Cash and Investments

Council held $169M in cash and investments at 31 December 2023. This is split between amounts externally restricted, internally restricted, and amounts unrestricted. Council’s cash and investments are reported in Attachment 2 – Quarterly Budget Review Report - December 2023.

The funding, and ongoing management, of the grants spent in advance has placed significant pressure on the management of Council’s cash resources, and it will continue to be a challenge until Council's unrestricted cash levels are reinstated to the pre COVID amounts.

Preliminary Water Fund Year End Results and Quarterly Review Movements

The revenue for Water fund is above the budget forecast by 10% ($18.4M actuals vs $16.7M forecast, favourable). The operating income for Water Fund was $1.6m ahead of budget due to an increase in user charges and interest income compared to original budget. Operating expenses were $0.7M ahead of budget primarily due to unbudgeted depreciation costs arising from the FY2023 asset revaluation process (not finalised until after FY24 budget adoption). There was also a small over expenditure in employee costs due to under recovery of salaries to operational and capital projects.

Minor budget adjustments have been proposed for Quarter 2. The impact of the proposed adjustments are to reduce Water Fund’s net operating results by $1.3M (unfavourable) and net cash movement by $2.5M (unfavourable).

Table 7: Water Fund budget movements for 2023/24

($'000) Favourable / (Unfavourable)	Current Adopted Budget	December QR Adjustments	December QR Revised Budget	YTD Adopted Budget	YTD Actuals
Net Operating Result	(2,092)	(1,291)	(3,383)	(1,742)	(829)
Net Operating Result before Capital Grants & Contributions	(4,617)	(1,300)	(5,917)	(3,394)	(2,743)
Net Cash Movement	(11,959)	(2,534)	(14,493)	(9,560)	(7,995)

Preliminary Sewer Fund Year End Results and Quarterly Review Movements

The revenues for the Sewer fund exceed the budget forecast by 6.7% ($32.6M actuals vs $30.6M forecast, favourable) due to additional access and usage charges. The operating expenses for the Sewer was slightly over budget forecast by 1.5% ($25.6M actuals vs $25.2M forecast, favourable) mainly due to increases in material and contract costs (chemicals and rental of centrifuges).

Minor budget adjustments have been proposed for Quarter 2. The impact of the proposed adjustments are to reduce Sewer Fund’s net operating profit by $3.9M (unfavourable) and to reduce the net cash movement by $1.8M (favourable).

The estimated dividend payment to General Fund in the 2023/24 budget remains unchanged.

Table 8: Sewer Fund budget movements for 2023/24

($'000) Favourable / (Unfavourable)	Current Adopted Budget	December QR Adjustments	December QR Revised Budget	YTD Adopted Budget	YTD Actuals
Net Operating Result	10,565	(3,851)	6,714	5,398	7,075
Net Operating Result before Capital Grants & Contributions	7,492	(3,851)	3,641	3,879	4,764
Net Cash Movement	(10,859)	1,773	(9,086)	(2,791)	2,038

Capital Projects Progress Overview

Council continued to refine the FY 2023/24 capital works projects throughout the December 2023 quarter, as preparation for the FY2024/25 budget commenced. Council reviewed the committed capital works program adopted as part of the 30 September 2023 Quarterly Budget Review and identified projects which were to be rephased into FY 2024/25 due to timing of delivery, or because there is a need to reallocate general fund cash to other FY2023/24 operational priorities.

This review resulted in:

· Carry forwards and revotes of $47M

· Of the $47M, there are 18 projects totalling $10.1M that had not commenced and have been deferred until FY2024/25 (revotes)

· $2.5M general fund was removed and reallocated to other FY2023/24 priorities

Projects removed from the FY2023/24 capital program will be considered as part of the FY2024/25 draft capital program.

Status update of current FY2024/24 capital projects

Attachment 3 provides a detailed update as at 20February 2024 on the progress of 116 major capital projects with an annual budget allocation of over $400K for each project (total budget of $218M) which represents 86.85% of the adjusted annual capital budget of $251M.

As at 20 February, 97 projects remain on track, 1 has been completed, 7 are asset in use, 1 is under close monitoring and 10 were flagged as on hold due to timing with other works in conjunction, delays in design and other external factors.

Conclusion

Council’s operating costs continue to rise at a rate that is exceeding the legislative rate peg, creating a further gap between its operating revenue and operating expenditure. This is creating an extremely challenging financial environment for Shoalhaven City Council.

As detailed in the Financial Sustainability Report presented to Council on 20 November 2023, Council’s financial position is deteriorating and will continue to do without extreme intervention. The current lack of available cash and the effort that Council staff are taking in the 2023/24 financial year to avoid using restricted cash puts Council at considerable risk.

Council should also expect that natural disasters will continue to occur placing more pressure on its finite resources (Latest natural disaster occurred in November 2023 – during this quarter review).

While improvements to the efficiency and productivity of service delivery will assist in closing the gap between revenue and costs these options take time to implement. There is a need for Council to significantly increase the revenue generated from operations to provide sufficient funding to maintain service delivery and to provide contingency funds to enable Council to respond to future disaster events.

Internal Consultations

Council staff from across the organisation have provided information to compile the report.

External Consultations

Nil.

Community Consultations

The community is consulted via public exhibition as part of the development of the DPOP and Budget each year. Subject to Council’s endorsement, the Quarterly Performance report will be made available on Council’s website. A range of other communication methods may also be used to communicate the outcomes of the report including performance highlights across Council’s social media platforms.

Ordinary Meeting – Monday 25 March 2024

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CL24.76 Proposed Planning Agreement - Dedication of Land to Council for Public Purposes to assist with the Delivery of the Moss Vale Road South Urban Release Area

HPERM Ref: D24/10778

Department: Strategic Planning

Approver: Coralie McCarthy, Acting Director - City Futures

Attachments: 1. Proponent's Letter of Offer Plan - 49 Taylors Lane, Badagarang ⇩

Reason for Report

This report seeks ‘in-principle’ support to start the process to enter into a Voluntary Planning Agreement with Cambewarra Ventures Pty Ltd for the dedication of land to Council for public purposes associated with and supporting the delivery of the Moss Vale Road South Urban Release Area and adjacent zoned land.

Recommendation

That Council:

1. Provide ‘in-principle’ support to enter into a Voluntary Planning Agreement with Cambewarra Ventures Pty Ltd, the registered owner of Lot 122 DP 3060, Lot 2 DP 1261811, and Lot 32 DP 1282389 for the:

a. Dedication of land identified as drainage reserve on the plan attached to this report.

b. Dedication of certain land adjacent to Taylors Lane as public reserve.

2. Delegate authority to Council’s Chief Executive Officer, or her delegate, to:

a. Finalise negotiations.

b. Prepare the draft Voluntary Planning Agreement and an associated Explanatory Note.

c. Publicly notify the draft Voluntary Planning Agreement and Explanatory Note.

d. Enter into the Voluntary Planning Agreement consistent with the general terms outlined in this report, except where further negotiations or issues raised during public notification result in substantial changes to the Agreement. In which case Council will receive a further report outlining the changes to inform its decision to proceed with the Voluntary Planning Agreement.

3. Notify the landowner of this resolution.

Options

1. As recommended.

Implications: The proposed Voluntary Planning Agreement delivers positive public benefits with the provision of planned drainage and public reserves supporting the Moss Vale Road South Urban Release Area. The creation of the proposed public reserves will ultimately contribute to the protection of the significant trees retained along Taylors Lane. Progressing the Agreement with Council’s delegation will also help accelerate subdivision activity and the construction of new homes within the release area.

2. Adopt an alternative recommendation.

Implications: Depending on the nature of the recommendation, an alternative approach could potentially require Council to identify funding, delay subdivision activity, the construction of new homes, and the delivery of infrastructure planned to support the future community.

Background

The proposed Voluntary Planning Agreement is associated with the proposed residential subdivision of land adjacent to and associated with the Moss Vale Road South Urban Release Area identified as Lot 122 DP 3060, Lot 2 DP 1261811, and Lot 32 DP 1282389. This land is in the vicinity of Taylors Lane. Badagarang (Figure 1).

A map of a land with a triangle

Description automatically generated

Figure 1: The subject land - Lot 122 DP 3060, Lot 2 DP 1261811, and Lot 32 DP 1282389.

The application for Council’s development consent to subdivide the land (SF 10898) consists of a residential subdivision comprising 15 super-lots, drainage reserves, public reserves, associated civil infrastructure, and landscaping. The application has not yet been determined and the Voluntary Planning Agreement would be conditioned in any development consent Council issues.

The applicant, Cambewarra Ventures Pty Ltd, has sent Council a Letter of Offer seeking to dedicate the land necessary for the delivery of planned drainage infrastructure, the realignment of Taylors Lane, and the provision of public reserves to protect existing trees. The Offer proposes a Voluntary Planning Agreement for the following matters. These are identified on the plan provided as Attachment 1.

1. Dedication of the necessary land to facilitate the retention and protection of trees along the current alignment of Taylors Lane. This land is zoned R3 Medium Density Residential and E1 Local Centre.

2. Dedication of the necessary land to realign Taylors Lane. This land is zoned RU1 Primary Production and R3 Medium Density Residential.

3. Construction of a realigned Taylors Lane to the standard for a Collector Road (as specified in the development controls applying to the release area).

The Offer proposes the value of the land proposed to be dedicated and the costs of the proposed works be offset against applicable local infrastructure contributions, with any surplus to be paid to Cambewarra Ventures Pty Ltd. The value of the land would be determined by a property valuation undertaken by an accredited valuer at time of acquisition.

Consideration of the Offer

The Offer that has been made should not be supported for the following reasons:

Dedication of Land at Cost to Facilitate Tree Retention

The Offer proposes the dedication at cost of linear public reserves either side of Taylors Lane (4,971m²) to facilitate the retention and protection of existing trees. Council is considering the current subdivision application consistent with its intent and proposed works to retain and protect the existing trees along Taylors Lane. This includes an endorsed realignment of Taylors Lane, updated development controls, and investigations of joint funding and delivery arrangements with the applicant.

There are currently no funds identified for Council’s acquisition of this land, which means this proposal cannot be supported. However, to support Council’s desire to retain and protect the existing trees along Taylors Lane in the longer term, it is recognised the identified land needs to ultimately be in Council’s ownership. Alternative options to secure this are discussed later in this report.

Dedication of Land at Cost and Construction of a Realigned Taylors Lane

The acquisition of land or delivery of works are not currently identified in the Shoalhaven Contributions Plan 2019, which means there are no corresponding contributions to offset against the Offer. Council’s Planning Agreement Policy (POL22/40) does not support the offsetting of contributions from unrelated projects listed in the Contributions Plan. There are no other mechanisms for Council to be able to provide compensation for land dedication at cost or the proposed works.

These components of the offer are therefore unable to be considered further. The construction of a realigned Taylors Lane would remain with the developer. The new road and associated land would be dedicated to Council as road reserve; a process managed through the issue of any development consent for the subdivision. Opportunities to connect any realignment of Taylors Lane to the existing road network are being examined in Council’s planning and delivery of the Far North Collector Road.

Recommended Alternative

There are several planned outcomes for the Moss Vale Road South Urban Release Area which rely on the dedication of land free of cost to Council. These include the previously mentioned retention of trees along Taylors Lane and the construction of drainage infrastructure. Figure 2 identifies the land recommended to be dedicated free of cost to Council for these purposes.

Dedication of Land to Facilitate Tree Retention

A public reserve corridor along either side of Taylors Lane presents a significant opportunity to protect and retain the existing trees, which is Council’s desire. The reserves currently being considered/recommended are however larger than those proposed in the Offer, extending further west to capture more of the existing trees. The dedication of public reserves also aligns with the future closure of Taylors Lane as a formal road to create a linear park (to also be dedicated as a public reserve in a future process).

Dedication of Drainage Reserves

The proponent has retrospectively proposed the dedication of land for planned drainage reserves. These were identified in the plans accompanying the Letter of Offer but were not specified in the letter. The dedication of this land (approximately 19,342m²) is supported because it enables the delivery of drainage infrastructure to help service the Urban Release Area.

A map of a city

Description automatically generated

Figure 2: Land to be dedicated as drainage reserves (yellow) and public reserves adjacent to Taylors Lane (blue).

It is recommended Council pursue an alternative Voluntary Planning Agreement which supports the dedication of land to Council, free of charge, for the identified public and drainage reserves. Due to the potential public benefits of this approach, Council’s support is sought to negotiate and finalise an alternative agreement. If successful, the future transfer of the identified land to Council will occur upon registration of subdivision plans.

Delegation Opportunities

Council can resolve to delegate authority to Council’s Chief Executive Officer, or her delegate, to negotiate, publicly notify, enter into and register a Voluntary Planning Agreement. The recommended alternative agreement will likely require a period of negotiation. It is recommended Council delegate its authority in this instance unless further negotiations or issues raised as part of public notification result in substantial changes to the proposal. If this occurs, a further report will be presented to Council for its consideration.

Internal Consultations

Representatives of City Services, Strategic Planning, Development Services, and the Far North Collector Road Project Team support the proposed approach.

Community Consultations

Any Voluntary Planning Agreement will be publicly notified in accordance with the applicable policy and legislation (a minimum of 28-days).

Policy Implications

Given the outcomes of the Financial Sustainability review, separate to the consideration of this matter, it is appropriate that the organisation consider a broader piece of work on the assets, land etc that are proposed to come into Council’s ownership associated with future development and how this is considered/managed.

Financial Implications

Land acquisition and road infrastructure proposed in the original letter of offer

As the offsetting of development contributions is not supported in this instance, an alternative funding source for land acquisition and delivery of road infrastructure would be required if the Letter of Offer is accepted. There is however no alternative funding source available at this time.

Future Reoccurring Costs

There are also likely to be reoccurring costs associated with the proposed assets that will come into Councils ownership.

Costs associated with the drafting and entering into the Voluntary Planning Agreement

Planning Agreement Policy (POL22/40) requires the proponent to cover Council’s costs relating to the negotiation, preparation, and entering into any agreement (including associated legal costs) and enforcing the agreement.

Risk Implications

The use of public reserves to facilitate the protection and retention of existing trees along Taylors Lane is the preferred option. If the trees are located or remain within a road reserve, there is a risk landowners in the future subdivision can ultimately request tree removal using Council’s Tree Management Policy – Public Land. This would see the trees removed/dimmish through time.

A Voluntary Planning Agreement consistent with the requirements of the environmental planning and assessment legislation is the most legally secure mechanism for the dedication of land to Council. Securing the dedication of reserves to Council using conditions of consent (instead of in a voluntary planning agreement) has some inherent risks.

Ordinary Meeting – Monday 25 March 2024

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CL24.77 Proposed Planning Agreement - Stage 2 Moss Vale Road South Urban Release Area (SF10804)

HPERM Ref: D24/70893

Department: Strategic Planning

Approver: Coralie McCarthy, Acting Director - City Futures

Reason for Report

The purpose of the report is to obtain ‘in-principle’ support to enter into a Voluntary Planning Agreement (VPA) with the landowner and developer at 104 Taylors Lane, Badagarang in Moss Vale Road South (MVRS) Urban Release Area (URA). The proposal relates to the acquisition of land, payment for certain road elements consistent with Shoalhaven Contributions Plan (the CP), and consideration of other associated matters.

Recommendation

That Council:

1. Provide ‘in-principle’ support to commence the process of entering into a Voluntary Planning Agreement (VPA) with the landowner and developer associated with subdivision application SF10804 (and associated modifications), for the following as further detailed in this report:

a. Dedication of three open space lots and SP2 zoned land identified in Contributions Plan projects 01OREC6015 and 01ROAD5154 to Council. Council will pay land value at a rate of $65/m2.

b. Dedication of land zoned C3 Environmental Management to Council. The satisfaction of associated rehabilitation and maintenance requirements are to be specified in an approved Vegetation Management Plan.

c. Reimbursement for specified road infrastructure consistent with Contributions Plan project 01ROAD5154 sub-projects 2 and 3 to the value identified in the Contributions Plan.

2. Delegate authority to Council’s Chief Executive Officer, or her delegate, to:

a. Prepare the draft VPA and associated Explanatory Note.

b. Publicly exhibit the draft VPA and associated Explanatory Note for a minimum of 28 days as required by legislation.

c. Where no feedback warranting consideration is received, enter into the VPA consistent with the general terms outlined in this report, except where issues raised as a result of public notification result in substantial changes to the proposal, in which case Council will receive a further report prior to proceeding.

3. Notify the landowner/developer of this resolution.

Options

1. As recommended.

Implications: The proposed VPA will help deliver positive public benefits, including the delivery of planned open space to support the URA, and will help progress the overall development which proposes to bring 223 residential lots to the market.

2. As recommended, excluding the dedication of land zoned C3 Environmental Management to Council or including a different funding model for the maintenance obligations associated with this land beyond the 12 months proposed.

Implications: Although this is not the recommended approach, Council may resolve to not to accept dedication of the C3 land (approx. 46,192m2), or require additional monetary contributions for an extended period (beyond 12 months) in relation to the ongoing costs associated with maintenance and management of Council assets. It is noted in this regard that the recommended approach includes rehabilitation and maintenance obligations within a certain scope.

3. Adopt an alternative recommendation.

Implications: An alternative recommendation may affect the timely delivery of Stage 2 of the URA and delay bringing of new residential lots to market.

Background

The VPA application relates to a proposed modification (DS23/1169) to the approved staged residential subdivision (SF10804) if the former 104 Taylors Lane, Badagarang in the URA (see Figure 1 – subject land). The residential subdivision comprises five stages, with some of the earlier lots already registered. This subdivision is the second stage in the release of URA and construction has commenced. DS23/1169 was lodged on 1 June 2023 for a 227 lot subdivision (see Figure 2).


Figure 1: Former Lot 32 DP 1267448, or 104 Taylors Lane, at time of lodgement of DS23/1169 and VPA application, outlined in blue.	Figure 2: Proposed subdivision plan for DS23/1169 (Plan provided by VPA applicant).

The Proposal

A formal letter of offer has been received on behalf of the developer of SF10804 seeking to enter into a VPA with Council and additional items have also been proposed for consideration in the VPA via subsequent email.

The table below summarises the VPA items as proposed by the applicant (Column A), and the Council staff response/position to those items (Column B). The developer intends to pay all associated Section 7.11 development contributions and is not seeking an offset or reimbursement through the VPA.

CP Project

Column A: Proposed VPA Item

Column B: Staff Position

01OREC6015

Acquisition of land:

· Lot 283 - 18,842m2 at $65/m2 = $1,224,730

· Lot 319 - 3,250m2 at $65/m2 = $211,250

· Lot 430 - 1,790m2 at $65/m2 = $116,350

Support the following:

· Accept the dedication of land with payment of land value at a rate of $65/m2 consistent with Shoalhaven Contributions Plan (CP). It is understood there may be an additional 816m2 (approx.) of open space beyond what is identified in the CP.

· Transfer to occur upon registration of the subdivision plan at the relevant stage.

Transfer of land to commence immediately after entering VPA

N/A

Dedication of C3 zoned land

· Lot 460, 46,192m2

· Transferred at NIL value

· Land rehabilitation and maintenance as per vegetation management plan (VMP).

· Maintenance period of 12 months following completion of rehabilitation works.

· Transfer to commence following completion of Stage 4 civil works including rehabilitation of land as per VMP

Support the following:

· Dedication of the land at NIL value. This will help ensure that the land is appropriately managed into the future.

· Land rehabilitation and maintenance as per VMP (to be separately approved by Council).

· VMP to be costed with bonding requirements to cover rehabilitation/maintenance works.

· Maintenance period for 12 months following completion of rehabilitation works.

· Transfer to occur upon registration of the relevant subdivision plan, provided rehabilitation work has been undertaken in accordance with approved VMP.

01ROAD5154

Reimbursement for roads component delivered in the URA:

· Shared path and crossing thresholds (sub-project 2) along the tree-lined boulevard.

· Roundabout - mountable (sub-project 3).

· Survey, geotechnical, project management and contingency provisions as appropriate.

Support reimbursement on the basis that:

· Road components are consistent with the CP.

· Amount to be reimbursed will be the amount costed in the CP for those particular road components.

· No surplus value to be paid in accordance with Council resolution MIN23.459(5).

Acquisition of land (SP2 zoned land, northern part of the subject land)

· Lot 460, 1,792m2 at $65/m2 = $116,480.

· Transfer to commence immediately after entering VPA.

Support the following:

· Acquisition of land at $65/m2 consistent with CP.

· Transfer to occur upon registration of the subdivision plan at the relevant stage.

Open space for MVRS URA

The Contributions Plan (CP) Project 01OREC6015 identifies open space requirements within the URA. Subdivision plans submitted for DS23/1169 identify open space areas in the northwestern, northeastern and south-eastern corners of the subdivision area (see Figure 2).

The CP (01OREC6015) provides for land acquisition at a rate of $65/m², based on the open space being wholly located on residential zoned land. Acquisition of open space land at this rate is supported, to be funded through the CP.

The open space locations are generally consistent with the CP and DCP (Chapter NB3: Moss Vale Road South Urban Release Area), however as a result of revisions to the original subdivision layout in consultation with Council staff, it is understood that the open space network will be extended by approximately an additional 816 m². This variation in the location and/or extent of these open space lots is considered acceptable and is still in keeping with the intent of the CP. The acceptance of this additional land should be facilitated to enhance the open space network in this location and align with the approved road network. Contributions received collected overtime can cover this additional expenditure.

Dedication of C3 zoned land

Land within the development area zoned C3 Environmental Management (approx. 46,192m², refer to C3 area in Figure 1) is proposed to be dedicated to Council at NIL value. The land is not provided for in the CP but is identified as a scenic protection area in the DCP and is intended to create a visual and physical buffer between Moss Vale Road and the URA. The dedication of this land to Council is generally supported, to help ensure that the land is appropriately managed into the future. It is considered appropriate that this land be classified ‘Natural Area’ when it comes into Council ownership.

As part of the transfer of land, the developer will need to satisfy rehabilitation requirements that will be specified in an approved, costed vegetation management plan (VMP), which will also specify maintenance requirements the developer will need to satisfy for a period of 12 months following completion of the rehabilitation works. The VMP will be prepared as part of the VPA process, and among other things, should address contemporary bushfire considerations, including any required APZs. A contemporary bushfire assessment may be undertaken to help inform maintenance requirements under the VMP.

Road construction and land acquisition

CP Project 01ROAD0154 identifies road construction and associated infrastructure throughout the URA.

The developer has requested, via email, reimbursement of the following road elements, with reference to 01ROAD5154, that have been delivered in the URA:

· Shared path and crossing thresholds (sub-project 2) along the tree-lined boulevard.

· Roundabout - mountable (sub-project 3).

· Survey, geotechnical, project management and contingency provisions as appropriate.

This request is supported ‘in principle’. Reimbursement will be for works delivered and confirmed to be consistent with the CP. In accordance with Council resolution MIN23.459(5), payment of any surplus value would not be considered. Accordingly, the amount to be reimbursed for these road components would be consistent with the costs for those items specified in the CP, proportionate to the works delivered, and funded through the CP.

The letter of offer proposes that Council acquire the portion of land zoned SP2 Infrastructure (Road) located in the northern part of the site near the intersection of Moss Vale Road and Main Street. The CP project 01ROAD0154 (sub-project 1) identifies this road and makes provision for land acquisition at a rate of $65/m2. Acquisition of this land consistent with the CP is supported.

Conclusion

Due to the ultimate public benefit realised from the delivery of Stage 2 in the URA, including the planned open space, it is recommended that Council provide ‘in-principle’ support for the proposal as discussed above, and proceed to prepare the draft VPA and place it on public notice for review and comment.

Internal Consultations

Council’s Biodiversity Team (City Development) is supportive of the proposed dedication, rehabilitation and maintenance arrangements for the C3 zoned land.

Community Consultations

As per legislative requirements, Council is required to undertake a public notification process, which would run for at least 28 days.

Policy Implications

Following the construction of the infrastructure and land value payment, changes to the CP may be required. The changes to these projects could be undertaken as part of a future amendment/s to the CP or considered as part of the infrastructure contributions review process.

Financial Implications

Infrastructure costs and land value considerations

The proposed reimbursement for delivery of infrastructure and land acquisition costs is consistent with the CP and will be made using available CP funds. In accordance with Council resolution MIN23.459(5), this report does not recommend payment of any surplus value associated with road construction.

Ongoing costs associated with land to be acquired

In relation to the open space land within the URA that is provided for in the CP in the Stage 2 area, ongoing maintenance and future embellishment of the land will be Council’s responsibility. CP funds collected over time will assist with cost of embellishment.

Rehabilitation and maintenance costs associated with the C3 zoned land (Lot 460) are included in the proposal, as discussed in this report. Note: Council may wish to consider a different funding model for the maintenance obligations associated with this land beyond the 12 months proposed (option 2 in this report).

Costs associated with drafting and entering into an agreement

In accordance with Council’s Planning Agreement Policy, the developer will cover Council’s costs (direct and incidental) relating to the negotiation, preparation, exhibition and entering into the agreement (including associated legal costs) and enforcing the agreement.

Ordinary Meeting – Monday 25 March 2024

Page 0

CL24.78 Acquisition of 'Abernethy's Creek' Drain, Bomaderry as Drainage Reserve

HPERM Ref: D24/2281

Department: Technical Services

Approver: Carey McIntyre, Director - City Services

Reason for Report

The reason for this report is to provide Council with an opportunity to consider the proposed acquisition of Lot 11 Sec 1 DP 3885 Bolong Road, Bomaderry, referred to as the ‘Abernethy’s Creek’ Drain.

Recommendation

That Council:

1. Support in principle the acquisition of Lot 11 Sec 1 DP 3885 Bolong Road, Bomaderry known as Abernethy’s Creek Drain for the purpose of securing the ongoing functionality as a Drainage Reserve now and into the future.

2. If budget for the proposed acquisition is approved through the 24/25 budget process:

a. Acquire by agreement Lot 11 Sec 1 DP 3885 Bolong Road, Bomaderry from Perpetual Trustee Company Limited, for the purpose of a Drainage Reserve;

b. Pay compensation of $15,000 plus GST if applicable and reasonable costs associated with the acquisition in accordance with the provisions of the Land Acquisition (Just Terms Compensation) Act 1991;

c. Delegate authority to the Chief Executive Officer to make minor adjustments to the compensation figure, if necessary, in accordance with consultation with Council’s solicitor;

d. Classify Lot 11 Sec 1 DP 3885 as Operational land within the meaning of the Local Government Act 1993. Classification will be effected at the expiry of the 28 days public notice period, on the provision that no submissions are received, and occurring prior to three months after Council acquisition. Should a valid submission be received during the public notice period then a separate report will be provided for consideration by Council.

e. Affix the Common Seal of the Council of the City of Shoalhaven to any documents required to be sealed, otherwise, the Chief Executive Officer is authorised to sign any documentation necessary to give effect to this resolution.

3. If budget for the proposed acquisition is approved in a future financial year’s budget process receive a report including updated financial figures for consideration.

Options

1. Resolve as Recommended

Implications:

If budget is available in financial year 24/25 - Council will have clear title ownership over the land, and Operational classification will provide Council with flexibility in its use as a Drainage Reserve.

Should budget not be available in 24/25, Council will continue to have care, control and maintenance duties of the drainage asset however will not hold title ownership of the land, which will restrict Council’s ability to exercise full powers required to ensure ongoing functionality as a Drainage Reserve now and into the future.

Should the funding be available in financial year post 24/25, the compensation figure may no longer be current and the landowner’s willingness to sell would need to be reaffirmed.

2. Not provide support in principle

Implications:

The proposed acquisition and negotiation will cease.

Council will continue to have care, control and maintenance duties of the drainage asset however will not hold title ownership of the land, which will restrict Council’s ability to exercise full powers required to ensure ongoing functionality as a Drainage Reserve now and into the future.

Background

Figure 1 below shows the location of Lot 11 Sec 1 DP 3885 Bolong Road, Bomaderry. It is approximately 1.13 Hectares in size, consisting of an open drainage channel extending from Edwards Avenue in the north to the Shoalhaven River in the south, sometimes referred to as the ‘Abernethy’s Creek’ Drain.

Figure 1 – Map of Bomaderry Highlighting Lot 11 Sec 1 DP 3885

A map of a city

Description automatically generated

Lot 11 Sec 1 DP 3885 is located within flood prone land and provides a drainage outlet from the large surrounding plain of allotments held by Council, industrial and private landowners, and empties through land held by Manildra Energy Australia Pty Ltd to the Shoalhaven River.

The land has long been assumed to be in Shoalhaven City Council’s ownership and is recorded as such in Council’s internal GIS mapping system. The land appears as ‘Drain 30 links wide’ in Deposited Plan 3885 surveyed in 1902. It was included in Council-owned land resolved for Operational classification at the introduction of the Local Government Act 1993 via MIN94.620. It has been maintained by Council for many years.

However upon an application to Council for proposed works to the land, it has come to Council’s attention that ownership of Folio 11/1/3885 is not held by Council, but instead remains in the residual names of three private registered proprietors under Volume 2268 Folio 103, issued by the Registrar General on 6 July 1912. The title is held ‘subject to…rights (if any)…over the Drains in DP 3885…’

Council’s ownership rights have been investigated through Land Registry Services and legal advice. Although care, control and maintenance duties of the drain falls to Council under the Local Government Act 1906 (now repealed), Council ownership in fee simple cannot be established as the subdivision in DP 3885 indicated only a ‘drain’ and did not provide intention to dedicate as a ‘drainage reserve’ as was required under the Local Government Act 1919 (now repealed). Furthermore, Council’s ability to dedicate drainage reserves to it under sections 50(3) and (4) of the current Local Government Act 1993 does not apply as the plan of subdivision in this instance occurred prior to 24November 1922. Therefore, for Council to establish ownership of the subject land as drainage reserve the land needs to be acquired.

Whilst Council is able to continue with care, control and maintenance duties of the drainage asset, a lack of title of the land in fee simple will restrict Council’s ability to exercise full powers required to ensure ongoing functionality as a Drainage Reserve now and into the future. It is appropriate for Council to hold authority for any works to be undertaken within the lot.A search was undertaken for contact details of the registered proprietors. In the process it was discovered that a caveat recorded on the previous title had been erroneously left off the current title. The caveat related to the estate of David Berry. The three registered proprietors are recorded as passed away, and Perpetual Trustee Company Limited was appointed as trustee of the will of David Berry for the unadministered estate. This means Perpetual Trustee Company Limited is entitled to lodge an application with Land Registry Services to be recorded as the registered proprietor of the subject lot. Council advised Perpetual Trustee Company Limited of their entitlement and proposed that Council acquire the land from them for the public purpose of a drainage reserve.

Independent valuation by registered valuers Walsh and Monaghan was obtained, providing valuation of the subject land at $15,000 excluding GST, if applicable.

Perpetual Trustee Company Limited (‘Perpetual’) have agreed in principle to Council’s purchase based on this valuation, subject to Council resolution. Council will reimburse Perpetual’s reasonable costs associated with the sale process, which is in line with provisions of the Land Acquisition (Just Terms Compensation) Act 1993.

Council’s purchase is subject to the transfer of the title into Perpetual’s name, to which Council has supplied Perpetual with relevant documentary evidence such as certified death certificates to facilitate.

Under section 49 of the Local Government Act 1993, land identified in the transfer or conveyance to Council as being for use as a Drainage Reserve, vests in the Council for an estate in fee simple and is held by the Council for drainage purposes.

Notwithstanding the above, the Drainage Reserve is also required to be classified as Operational land to allow Council flexibility in its operational use. Section 31(2) of the Local Government Act 1993 (‘the Act’) provides that before Council acquires land, or within 3 months after it acquires it, Council may resolve to classify it. As defined by the Act, there are two classifications available – Operational Land which Council owns as a business entity and upon which it conducts business, or Community Land which is held for and on behalf of the Community subject to the Community Land provisions of the Act. Under section 34, public notice must be given of Council’s intention to classify the land, allowing 28 days for written submissions.

It is recommended that Council resolve Operational classification to be affected at the expiry of the required 28 days public notice period, on the provision that no submissions are received during this time. Should a valid submission be received during the public notice period, then a separate report will be submitted to Council for further consideration.

Internal Consultations

The proposed acquisition as a Drainage Reserve is at the request and in consultation with the asset custodian District Engineers (Northern).

External Consultations

Acquisition for the public purpose of a Drainage Reserve is an operational matter, therefore no external consultation is required. It has been a long held assumption within the community that Council is the owner and maintainer of the land.

Community Consultations

Acquisition for the public purpose of a Drainage Reserve is an operational matter, therefore no community consultation is required.

For the classification as Operational land, public notice will be carried out for 28 days in accordance with the Local Government Act 1993. Should a valid submission be received during the public notice period, a separate report will be submitted to Council.

Policy Implications

This process has been carried out in accordance with Council’s policy POL22/120 Acquisition of Land by Shoalhaven City Council. Accordingly, the most appropriate method of acquisition has been identified, and land will be acquired cost effectively and giving due consideration to the community’s best interest.

Financial Implications

There is currently no budget allocated for this project. Council will be given the opportunity to consider funding for this acquisition through the budget process.

Risk Implications

A lack of ownership of the land will restrict Council’s ability to exercise full powers required to ensure ongoing functionality as a Drainage Reserve now and into the future. It is appropriate for Council to hold authority for any works to be undertaken within the lot.

Delay to acquiring the land could result in a different evaluation of the land as well as affect the landowner’s willingness to sell. Should the landowner not agree to sell the land Council does have the option of Compulsory acquisition however this process would add time and cost to the acquisition.

Conclusion

This resolution allows Council to consider the merit of the proposed acquisition while not committing funds outside of the budget process, allowing the allocation of funds for this acquisition to be assessed against all other priorities across the city.

Ordinary Meeting – Monday 25 March 2024

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CL24.79 Draft Shoalhaven Libraries Strategic Plan 2024-2027

HPERM Ref: D24/95354

Department: Library Services

Approver: Jane Lewis, Director - City Lifestyles

Attachments: 1. Shoalhaven Strategic Plan 2024 - 2027 (under separate cover) ⇨

Reason for Report

The purpose of this report is to present the Draft Shoalhaven Strategic Plan 2024-2027 for adoption by Council following the recent public exhibition period.

Recommendation

That Council:

1. Receive the feedback received during the public exhibition of the draft Shoalhaven Libraries Strategic Plan 2024-2027 for information.

2. Adopt the draft Shoalhaven Libraries Strategic Plan 2024-2027.

Options

1. As recommended.

Implications: Adoption of the Draft Shoalhaven Libraries Strategic Plan 2024-2027 provides a clear framework and strategic direction for Shoalhaven Libraries.

2. Decline to adopt the draft Shoalhaven Libraries Strategic Plan 2024-2027.

Implications: If not adopted there is no clear framework and strategic direction for Shoalhaven Libraries.

Background

Shoalhaven Libraries have prepared a new Draft Strategic Plan 2024 – 2027 which Council considered at its November 6 2023 meeting. The plan provides a clear framework and strategic direction for Shoalhaven Libraries over the next three years and build on the work undertaken as part of the previous Strategic Plan.

The Plan has been out on public exhibition for comment and submissions and is now presented to Council for formal adoption.

At Council’s Ordinary Meeting on 6 November 2023, it was resolved that Council (MIN23.660):

1. Place the Draft Shoalhaven Libraries Strategic Plan on public exhibition for a period of 28 days.

2. If no significant adverse comments are received at the close of the public exhibition period, the Draft Shoalhaven Libraries Strategic Plan be deemed adopted.

To develop this plan, background research was undertaken to look at industry trends, case studies and best practice. A Customer Survey was conducted in 2021, and people were asked what they valued most about the services offered, what needed to change and what should be offered in the future.

Shoalhaven Libraries staff who work with the community daily were also consulted through a series of workshops and through the completion of a SWOT analysis. External factors that have an impact on library services and Shoalhaven communities were also researched and considered as part of the development of the strategic areas and actions.

This new strategic plan will guide the development and delivery of the Shoalhaven Libraries’ services over the next three years. It is a roadmap that provides clear direction on the future priorities of the library service, and the objectives and actions that will be required to achieve the desired outcomes. It incorporates the values that library staff have chosen to embody in their work, with a strong focus on customer service, inclusion, collaboration and ensuring library services and programs are community driven.

Shoalhaven Libraries Strategic Plan 2024–2027 links to Council’s Community Strategic Plan, Delivery Program Operational Plan. It responds to the key theme of ‘Resilient, Safe, Accessible and Inclusive Communities’.

The performance indicators that will be used to measure success are customer satisfaction ratings, an increase in the number of events and visits, an increase in the number of items digitised, and the completion and implementation of policies and plans.

Upon completion of the public exhibition a total of 12 public responses were received – four of these were either unrelated, abusive or offensive and were removed and not considered. The eight comments are detailed in the table below and do not require any changes, additions or amendments to the Strategic Plan.

Shoalhaven Libraries Strategic Plan 2024/2027 Feedback
Submission	Comment	Staff Comment
Community Member	Anything that involves continuing the excellent work of the Shoalhaven Library is to be applauded. They reach a diverse audience with differing needs--and do this with good humour and great expertise. It is especially important to continue the outreach to seniors (and older), for whom print-based books are their most familiar option for information, entertainment, and enlightenment. Thank you.	Noted – No changes to the Strategic Plan required
Anonymous – via website	It is great that spaces & technology are for action. Can I suggest that these two priorities are also integrated e.g. using PC technology at Sanctuary Point library is very difficult due to the lack of desk space.	Noted – No changes to the Strategic Plan required Information Technology and public access to PC’s has been identified as a requirement for any new Sanctuary Point District Library
Anonymous – via website	Obvious there’s been a lot of work put into this plan can only benefit the community even more than the libraries already do.	Noted – No changes to the Strategic Plan required

Anonymous – via website

I am an online library member and I use it mainly to access journals. I have read the strategic plan, based on the information there is nothing concrete there to suggest a need for a new library at sanctuary point. The demographic information nor the current patronage information does not suggest a new library is needed. The customer survey could be interpreted in many ways, at the moment it is also still very high level and a lot more research is needed before the conclusion of a new library as an answer is reached. I think an additional mobile service is probably a good idea, but I also think the library should explore linkages with current other and existing community organisations and events and explore synergies and ways the library can be come to the community or be more visible through let’s call it ‘back doors into the community’.

Noted – No changes to the Strategic Plan required

Sanctuary Point District Library development is an ongoing project.

An additional mobile service is being explored currently.

Anonymous – via website

I think Shoalhaven Libraries does a brilliant job and it plays an essential role in holding our community/communities together on many levels. I applaud anything that promotes the library, expands its influence and services and helps its value as an asset be appreciated by more people, is a good thing. Thank you.

Noted – No changes to the Strategic Plan required

Anonymous – via website

I would love to see more inclusive events, meaning more online and outdoor events. As time goes on there will be more and more children and adults with long covid symptoms that currently are largely unable to participate safely within community.

Noted – No changes to the Strategic Plan required

The Strategic Plan seeks to broaden and strengthen audience engagement beyond the physical footprint of the library buildings

In accordance with MIN23.660 part (2) it is considered that there is no significant adverse comments and therefore it is proposed that Council adopt the Shoalhaven Strategic Plan 2024-2027.

Community Consultation

A Library Customer Survey was undertaken, and these responses helped to shape the Shoalhaven Libraries Strategic Plan 2024-2027 by providing direction for the development of key priorities and actions.

The Draft Shoalhaven Libraries strategic plan was advertised on Shoalhaven City Council’s Get Involved Shoalhaven website and a physical copy was placed on public exhibition at each library branch between 24 January 2024 - Friday 23 February 2024.

A media release was published on 23 January 2024.

During this period there were:

· 340 page visits to Council’s Get Involved Website for this item

· 92 Document downloads

· 12 comments received (1 Registered user, 11 Anonymous users)

· 8 comments were considered, with 4 received comments either being unrelated, abusive or offensive and were therefore not considered

Policy Implications

There are no policy implications arising from the adoption of the draft Shoalhaven Strategic Plan 2024-2027.

Financial Implications

There are a number of projects that will need to be considered as part of future Delivery Programs and Operational Plans (DPOP) as there are impacts on Council’s Resourcing Strategy and Long Term Financial Plan. These include:

· The future direction of the Sanctuary Point District Library

· Introduction of a third van for the Library Book Mobile Service

· Ability to build, expand and maintain a current / contemporary library collection of books and other materials, including online resources – current and future library and audio visual resources budgets have been reduced by more than 50% (AEC report recommendation)

· Ability to replace library furniture and equipment (seats / study desks / tables / IT equipment and public access computers etc.) at the end of their serviceable life and provide assistive technology and accessible equipment and furniture to provide more inclusive opportunities for engagement and participation in library services and improving existing library spaces

Risk Implications

The risk implications arising from the adoption of the draft Shoalhaven Libraries Strategic Plan 2024-2027 are:

Reputational:

· Shoalhaven Library Service is consistently the most highly of Council Services in the Community Satisfaction Survey - reduced accessibility to library services, including those provide through outreach and on-line resources may lead to lower levels of community satisfaction

· Reduction in funding for Resource / Book Collection (physical and on-line) has resulted in the service failing to meet industry recommended benchmarks

· Reduction in ability to provide safe and functional spaces for the community as aged equipment and furniture cannot be replaced – this includes a range of publicly accessible IT services such as open access computers, seating, study desks, tables provided in public spaces

· Failing to provide accessible and inclusive library services through adaptive and assistive technologies, furniture and equipment

Financial:

· Continued reduction in allocation of funding for core services provide through libraires to the community such as:

o Books and audio visual resources

o Replacement of equipment and furniture

o Ability to provide outreach services such as Book Mobile, public programs and events.

Ordinary Meeting – Monday 25 March 2024

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CL24.80 Community Wellbeing Grant - Outcomes

HPERM Ref: D24/94065

Department: Community Connections

Approver: Jane Lewis, Director - City Lifestyles

Attachments: 1. Assessment Matrix ⇩

2. Community Wellbeing Grant Outcomes 2024 Summary (councillors information folder) ⇨

Reason for Report

The purpose of this report is to provide Council with information on the outcomes of the Community Wellbeing Grant Program 2024.

Recommendation

That Council receive the report on the outcomes for the Community Wellbeing Grant Program 2024 for information.

Options

1. Adopt the recommendation as written.

Implications: Council is updated on the process used to assess the Community Wellbeing Grants and the recommendations made by Council staff.

2. Request more information.

Implications: Councillors may request further information.

Background

Shoalhaven City Council’s Community Wellbeing Grant Program provides funding to community groups and organisations for the design, implementation, and delivery of community-led programs and initiatives that support community wellbeing. Community wellbeing is a shared responsibility that requires all community stakeholders to work collaboratively to achieve shared goals and aspirations for wellbeing.

The Community Wellbeing Grant program provides individual grants of up to $5,000. When applying for this grant program, applicants are required to demonstrate how their program or initiative meets one or more of the Shoalhaven City Council’s Community Wellbeing Strategy foundations:

1. Vibrant communities where everyone can participate and connect.

2. Lifelong learning and helping each other.

3. Safe and prepared communities.

4. Healthy and active communities.

5. Transport connections to access our community’s opportunities.

6. Sustainable natural and built environments.

7. Housing that meets the community’s needs.

8. Resilient local economies and inclusive economic opportunities.

The 2024 grant program opened on 12 December 2023 and closed on 13 February 2024 and received 39 applications totalling $133,021 across all applications. This far exceeded the available operational funding of $30,400 for this grant program.

The Community Wellbeing Grant Program has proven to be more competitive than recent years. This is reflective of several factors including:

· Increase in maximum grant amount from $2,000 to $5,000.

· Merging of the Youth Inclusion Grant with the Community Wellbeing Grant.

· Reduction in NSW Government funded grant programs as operations return to normalcy, particularly in areas where funding has been plentiful in previous years in response to natural disasters and the COVID pandemic.

Assessment and Recommendations

In line with the Community Grants Procedure (PRD23/143), a robust assessment process has been developed to assist staff in conducting a fair and transparent review process.

Applications were assessed based on the applicant’s ability to address the eligibility and assessment criteria as per the Community Wellbeing Grant Guidelines and other associated documents. The attached Assessment Matrix (see Attachment 1) was utilised by the Assessment Panel to ensure decision making was objective and consistent.

The assessment process was overseen by a member of the Community Capacity Building Team who was independent of the Assessment Panel. This person is referred to as the ‘Convenor’.

Eight members of staff formed the Assessment Panel, evaluating applications in pairs. The Panel were reminded to remain impartial and were required to declare any conflicts of interest with applicants to the Convenor.

The 39 applications were randomly allocated to the panel pairs and panel members initially assessed allocated applications independently using the Assessment Matrix before discussing their scores in their pairs.

After an initial assessment, panel members met with the Convenor in their pairs and discussed the outcomes of their assessment findings, reflecting on the strengths and weaknesses of applications and putting forwards their recommendations.

Following this, the Convener met with the Lead, Community Capacity Building and the Manager, Community Connections to conduct a final review of the applications considering the available budget and the imperative to ensure equitable distribution of funding among high-scoring applications across Shoalhaven LGA's cohorts and regions.

A full list of outcomes are available to Councillors via Attachment 2, noting that unsuccessful applicants will be notified following Council receiving this report.

Recommendations:

Organisation	Project Name	Outcome Recommendation	Funding Amount Recommended
Apex Club of Milton Ulladulla	Milton Ulladulla Community Kindness Initiative (AKA MUCK Up)	Successful - Full Funding	5000
WE Women of Conjola	WE Women of Conjola: Connecting and healing through Art	Successful - Full Funding	4804
Firefly Bay & Basin - Uniting	Ride for Fitness & Fun	Successful - Partial Funding	3205
Youth Insearch Foundation Incorporation	Youth Wellbeing Program	Successful - Partial Funding	2225
The Flagstaff Group	Inclusive Teams	Successful - Partial Funding	4000
Bravehearts Foundation Limited	Ditto's Keep Safe Adventure - Personal Safety Program	Successful - Partial Funding	3000
Shoalhaven Suicide Prevention Awareness Network (SSPAN)	Finding Your Ground: Gentle Yoga for Stress Management and Wellbeing	Successful - Partial Funding	3552
Salt Care	Street Doc	Successful - Partial Funding	3000
Sanctuary Point Community Pride Inc	Spring into Sanctuary Point fair	Successful - Partial Funding	1500
		Total funding to be dispersed	$30,286

In alignment with the Community Grants Program Procedure Report (CL23.403, MIN23.685), the delegation to determine and approve the grant applications under this Procedure sits with the CEO (Director City Lifestyles). The Director City Lifestyles has indicated their support for the recommendations made by the Community Connections Team.

External Review

It was deemed necessary, in light of Council’s current financial situation and increased scrutiny of Council funds in the community, to seek an external review of the recommendations. Staff met with Andrew Simpson, Commissioning & Planning Officer at the Illawarra Shoalhaven & Southern NSW District Office of the NSW Department of Communities and Justice to undertake this. Andrew is considered to have expertise in local community development priority areas in the Shoalhaven and is involved in delivering transparent and objective funding decisions on behalf of the NSW Government.

Following a review of the recommendations Andrew confirmed the proposed successful grant applications that have been nominated are appropriate and would provide strong community wellbeing outcomes for the Shoalhaven community.

Outcome Notifications

With a significant increase in applications for the Community Wellbeing Grant Program 2024 there is a demonstrated need for funding to support community wellbeing initiatives at the grassroots level. This grant round also identified that community groups and organisations would benefit from skill building opportunities in grant writing. Specific areas to focus on include:

· Developing clear budgets.

· Defining long term outcomes.

· Outcome measurement processes.

Nine of the 39 applications will receive either full or partial funding for their projects/initiatives. Letters will be sent to unsuccessful applicants notifying them of the outcome of their application. Included in these letters will be:

· Alternative funding opportunities e.g. ClubGrants.

· Links to grant writing tools that will assist them in building their grant writing skills.

Applicants will also be offered the opportunity to meet with the grant Convener if they wish to receive detailed feedback on their application.

The successful applicants will be required to meet conditions of the funding agreement and provide an acquittal on completion of their program.

Policy Implications

The process and outcomes of the Community Wellbeing Grant Program align with the Community Grants Program Procedure (PRD23/143).

Financial Implications

Funding of $30,286.00 of the available $30,400 from the Community Wellbeing Grant Program operational budget has been allocated to the nine successful applications either through full or partial funding of their initiatives.

Directorate	Name	Designated Position Start Date	Returned
Shoalhaven Water	James De Montfort	05/02/2024	07/02/2024
City Performance	Mathew Badcock	02/02/2024	20/02/2024
City Development	Matthew Phillips	01/12/2023	20/02/2024
City Development	Alexander Aronsson	19/02/2024	21/02/2024
CEO	Robyn Stevens	12/02/2024	23/02/2024
City Futures	Peta Brooks	26/02/2024	28/02/2024
City Performance	Catherine Snell	19/02/2024	28/02/2024

Tenderer	Location
Batmac Constructions Pty Ltd	North Nowra, NSW
BY Group Pty Ltd	Nowra, NSW
Cerak Constructions Pty Ltd	Alexandria, NSW
Civil Project Management Group Pty Ltd	South Nowra, NSW
Edwards Constructions Pty Ltd	Nowra, NSW
Zauner Construction Pty Ltd	Lavington, NSW