Council Minutes - Section B: Reports (8-14) - 28 August 2012

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Reports 8-14, tabled at the Ordinary Meeting of Council on Tuesday 26 August 2012 held at City Hall, Little Malop Street in Geelong.

8. City Plan Progress Report to June 2012

9. Annual Financial Report for the Year Ended 30 June 2012

10. 2012-2013 Budget Amendment

11. Approval of Council Policy Asset Management

12. The Avenue, Hill Street and Field Street, Ocean Grove – Proposed Road and Drainage Construction SRC327 – Intention to Declare

13. Tender Negotiations Update (Confidential)

14. Civic Accommodation (Confidential)

8. City Plan Progress Report to June 2012

Summary

• Council at its meeting of 28 June 2011 adopted City Plan 2009-2013, 2011-2012 Update, that outlined the Objectives and Strategies planned by the City over that four-year period, and the Annual Business Plan Actions planned for 2011–2012.

• This report is the progress report to Council of the organisations achievements against these actions.

• Attachment A details the status and provides commentary against the Annual Business Plan actions. This report has been generated from the CorVu Performance Management System. The key to the status of actions is:

  Major Issue	Red	2
  Minor Issue	Yellow	24
  Not yet Started	White	2
  On Schedule	Green	69
  Completed	Black (‘C’ in white font)	110
  Total Actions		207

Cr Harwood moved, Cr Granger seconded -

That Council receives and notes the City Plan Progress Report to 30 June 2012.

Carried.

Report

Background

Council at its meeting of 28 June 2011 adopted City Plan 2009-2013, 2011-2012 Update which has been developed within a framework of three strategic directions:

Community Wellbeing

To improve the health and quality of life of all residents of Greater Geelong

Growing the Economy

Securing Geelong’s economic future

A Sustainable Built and Natural Environment

The City of Greater Geelong leads the community in sustainable planning and environmental action.<

Discussion

This report and attachment indicates the status of the actions in City Plan for the 2011-2012 financial year.

Status and comments are provided for each of the 207 actions within the three strategic directions.

Some significant progress and completions for the quarter include:

Community Wellbeing

Status Summary:

• A number of sport and recreation facility upgrades are underway or have been recently completed. Works are currently on schedule for the South Barwon Football and Netball Club pavilion renovation, while the St Albans Reserve improvements, Thomson Reserve Master Plan implementation, West Oval Flowers Stand redevelopment, Geelong Amateurs netball facility upgrade, and the Grovedale Sports Club social rooms and netball seating have now been completed.

• Refugee Week 2012 kicked off its celebrations in June at the Leisuretime Centre making use of the centres new upgraded facilities. A range of activities were offered throughout the week including soccer tournaments, art exhibitions, cultural food and entertainment. Refugee Week not only celebrates the richness diversity brings to our community but offers an opportunity for people to meet others from a variety of communities and experience their cultures.

• The State Government has announced it will provide $1.5 million in funding for the Leopold Community and Children’s Centre. This funding has been granted as a result of lobbying efforts from the City to support plans for investments into local children’s services around the region. The City plans to create children’s hubs where kinders, maternal and child health centres, childcare and playgroups are all linked and located together making it easier for families to use these services. The City and the State Government have now committed funding to build children’s hubs in Ocean Grove (Shell Rd), Leopold, Grovedale and Barwon Heads, whilst lobbying efforts are still being made to the State Government to help fund a North Shore hub.

• The City has endorsed the Windsor Park Master Plan which sets new goals for the future development of the reserve. The master plan looks at ways to improve the reserves appearance, pedestrian links and traffic circulation. Major recommendations in the plan include upgrading pedestrian entrances, pathways and crossings, parking and traffic circulation, playground equipment and a redevelopment of the North Shore Multi-purpose Clubrooms. The master plan will be implemented over the next 10-15 years.

Growing the Economy

Status Summary:

• The new Geelong Regional Library and Heritage Centre development’s initial stages are progressing well with the appointment of ARM Architecture to design the new centre, and project management group David Langdon to manage the centre’s construction phase. This development was set as the City’s number one funding priority not only because Geelong has outgrown its current library built over 50 years ago, but because economic modelling has shown that as a result of such a significant advancement, the centre will attract up to one million visitors per annum within five years of operation. Funding for this project has been received from the Federal Government ($10 million), the State Government ($15 million), and the City of Greater Geelong ($20 million).

• The biggest cruise ship yet to visit Geelong has now been booked to anchor in Corio Bay on 30^th December 2012. The ‘Voyager of the Seas’, will bring approximately 700 passengers and 447 crew to Geelong’s shores for a day before continuing its journey around the Australian coast. The ‘Regatta’, the second cruise ship to visit Geelong for 2011-2012, will also be returning to Geelong in January 2014. Results from a survey conducted with passengers from the Regatta’s first trip to Geelong, found that passengers felt Geelong was a welcoming place which they would recommend to others. 83 per cent of respondents did say however they would have preferred to disembark at a pier rather than come ashore by tender. This positive passenger feedback and continuing interest from cruise ship companies reinforces Geelong’s appeal as a cruise ship destination and strengthens our campaign for funding to rebuild the old Yarra Street Pier.

• The Armstrong Creek Urban Growth Plans are continuing to progress on schedule. The East Precinct (Warralily) residential development has commenced, along with initial works to the North East Industrial Precinct (Keystone Business Park). The Precinct Structure Plan (PSP) and Development Contribution Plan (DCP) for the West Precinct are progressing through the advisory committee, whilst the West Industrial Precinct PSP process is anticipated to start later this year. Additionally, the Horseshoe Bend Precinct has a preliminary PSP on exhibition which will inform the progression of the final PSP to be developed in the latter half of 2012. A Major Activity Centre (Armstrong Creek Town Centre) has reached master plan development stage, and Marshall Precinct is currently at a preliminary investigation stage.

• The State Government has granted the Central Geelong Laneways and Linkages Project a total sum of $1.5 million to reinvigorate Central Geelong through a series of works, aiming to improve arcades and laneways that form an integral part of Geelong’s inner-city fabric. The activation of these spaces was a key task identified in the Central Geelong Looking Forward Action Plan. Works are underway at Brougham Street and the pathway linking Star Street and Wright Place through the Little Ryrie Street carpark. Consultation and design work is underway for the streetscape works on Gore Place and Steampacket Lane.

• A number of events showcasing our region were held during the last quarter including the Mother’s Day Classic, FIBA 3X3 Basketball World Qualifier, Geelong Half Marathon, Geelong Region Heritage Festival, National Budgerigar Championship Show, Geelong Classic Dancesport Festival and the RSPCA Million Paws Walk.

• Approximately 60 architects, urban designers and planners took part in a workshop at Deakin University on the 1st May to develop scenarios for the long term future of central Geelong as part of the Vision 2 project. The project will examine the development opportunities for central Geelong over the next two decades, exploring ideas such as a tree lined boulevard, city plaza, urban parks and iconic architecture. The scenarios, which aim to examine opportunities for the period between now and 2032, are now being refined into a series of concepts that will form the basis of discussion and consultation community wide.

Sustainable Built and Natural Environment

Status Summary:

• Finishing touches are now being made on the major water recycling project in Eastern Park, in time to be completed and the area reopened to the public later this year. The stormwater harvesting project will take the form of a man made lake in Eastern Park, which will be designed to look like a natural part of the landscape. The project will save approximately 30 million litres of mains drinking water a year, recycling stormwater and using it to maintain the Geelong Botanic Gardens. The Geelong Botanic Gardens is in the top five water users for the City, and this project will be able to supply around 90 per cent of the gardens’ water demands.

• The Tree Inventory System data collection project is underway with over 70,000 street trees now entered into the database. The City is collecting data on over 120,000 tree assets so we can identify, locate, quantify and risk assess trees and accurately document maintenance activities. The aim for this project is to provide a complete database containing all tree asset information and maintenance records. A computer hardware system has now been supplied to field staff to accurately record maintenance activities into the database.

• Water quality programs at Blue Waters Lake, Begola, Waurn Ponds Creek, McLeods Waterhole, Cowies Creek, Highett Road wetland and Zilah Crawcour wetland planting are complete, however maintenance works will remain ongoing.

• Implementation of the City of Greater Geelong Cycle Strategy is continuing to progress with VicRoads granting approval for the improvement of safety for cyclists at the corner of Boundary Road and Ryrie Street. Final alterations are being made to the design before the works commence, which include a cut through the traffic island for cyclists and the reconfiguration of the Walter Street and Service Road interface. Since the introduction of this strategy, a wide range of infrastructure has been introduced to encourage bicycle usage as opposed to vehicles around the Geelong area.

• The ‘Rethink Your Rubbish’ survey conducted in February received close to 6,000 responses and has identified that the community’s awareness of waste disposal services run by the City has increased. This survey not only measured residents awareness of programs carried out over the past 12 months, but also programs that would be needed in the future to encourage environmentally friendly ways for Geelong households to dispose of their unwanted goods. A recent ‘Boot Load’ promotion was held in June and gave residents the opportunity to take a boot load of rubbish to the Resource Recovery Centres for only $10. This promotion saw boot loads increase by 18% during this period. Second hand Saturday was also a program held at various locations through May and June, giving residents the opportunity to recycle their unwanted goods for the benefit of the community. This program received a huge response with over 2000 residents submitting goods.

• The City has been successful in securing $415,000 from the Australian Government to protect biodiversity at Buckley Park ($340,000), Limeburners Bay ($55,000) and Thompson Creek ($20,000), which totals 132.1 hectares of coastal vegetation. The City was a successful tender applicant in the Corangamite Catchment Management Authority’s (CMA) Coastal Tender Program. The projects will focus on managing and protecting high conservation value vegetation communities, including Coastal Moonah Woodlands, Coastal Dune Grasslands and Coastal Saltmarsh.

Environmental Implications

There are several actions under the Sustainable Built and Natural Environment Strategic Direction within City Plan that aim to increase the use of public and active transport within the municipality, reduce the organisation’s environmental footprint, enhance and protect our natural areas, and develop a Climate Change Adaptation Strategy.

Financial Implications

The Future Proofing Geelong project is fully funded by the City until 30 June 2013. Two budget concepts are currently being considered to support the project for the next financial year. Barwon Water also contributes funding to Future Proofing.

Policy/Legal/Statutory Implications

The City’s external auditors will undertake a Performance Audit of the planned Key Strategic Activities and prepare a report as part of the ‘sign off’ of the Annual Accounts.

Officer Direct or Indirect Interest

No Officer involved in the preparation of this report have a conflict of interest to declare.

Risk Assessment

The risks arising from the Actions are managed within the framework of the City’s adopted Policies, Procedures and Risk Management strategies.

Social Considerations

Several of the actions identified within City Plan are aimed at improving the quality of life for the residents in the City of Greater Geelong. This is particularly the case for actions within the Community Wellbeing Strategic Direction.

Communication

The outcomes arising from the Performance Audit will be published in the City’s Annual Report for 2011-2012 that will be submitted to the Minister for Local Government.

9. Annual Financial Report for the Year Ended 30 June 2012

Summary

• The 2011-2012 Financial Statement of Accounts, Standard Statements and Performance Statement have been prepared and reviewed by the Auditor General’s appointed contractor (HLB Mann Judd).

• These Statements have been prepared in accordance with Australian equivalents to International Financial Reporting Standards.

• The Revaluation of Land and Buildings and Drainage Assets and adjusting entries are included in these statements.

• These Statements, along with any recommended amendments arising from the Audit Advisory Committee meeting will be submitted to Council at its meeting on Tuesday, 28 August 2012.

• The draft management letter and closing audit report has been received from HLB Mann Judd and there were no major issues of high risk to the Council.

• Under Sections 131 and 132 of the Local Government Act 1989, Council is required to pass a resolution giving “In Principle” approval to the statements and authorise two Councillors to certify the statements in their final form.

• Following consideration by Council the “Financial Statement of Accounts”, the “Standard Statements” and the “Performance Statement”, together with a copy of the Council Resolution that nominates two Councillors and accepts the statements “In Principle”, will be provided to the Auditor General.

• Under Section 134 of the Local Government Act 1989, as soon as practicable after the Annual Report has been sent to the Minister, the Council must hold a meeting to discuss the Annual Report, including the Annual Financial Statements and the Auditors Report.

Cr Harwood moved, Cr Farrell seconded -

That Council:

1. gives approval in principle to the “Financial Statement of Accounts”, the “Standard Statements” and the “Performance Statement” (as per Appendix 9-1);

2. authorise two Councillors being the Mayor, Cr J Mitchell and Cr B Harwood to certify the Statements subject to any changes recommended and agreed with the Auditor General.

Carried.

Report

Background

Under Section 131 of the Local Government Act 1989 (LGA), a Council must in respect of each financial year, prepare an Annual Report that includes audited Standard Statements, Financial Statements and a Performance Statement for the financial year. These statements must be prepared in the prescribed manner and form and be certified by the Auditor General.

Council is required to approve “in principle” the Statements prior to receiving certification from the Auditor General. Council’s approval requires nominating two Councillors to certify those Statements in their final form.

The Statements are being reviewed by the Auditor General and may be returned with or without amendment. Once the report of the Auditor General has been received, the two nominated Councillors, the Chief Executive Officer and the Principal Accounting Officer are required to sign the Accounts which will be returned to the Auditor General who will then issue the audit report.

The Standard Statements, Financial Statements and the Performance Statement all form part of Councils Annual Report that must be submitted to the Minister within three months of the end of the financial year. Further, Council must also review the Annual Report in a meeting open to the public as soon as possible after the report is sent to the Minister.

Discussion

The Financial Statement of Accounts 2011-2012 record a satisfactory period of operation reflected in higher closing cash balances and significant asset growth.

There were two ‘Non operating’ issues impacting on the accounts including the revaluation of Land and Building and Drainage Assets, and the inclusion of the Unfunded Superannuation amount advised by Vision Super.

The asset class Land and Buildings were revalued as at 1 January 2012 with the previous revaluation date being 1 January 2010. The outcome of the revaluation was a $36.4M increase in asset values via the asset revaluation reserve. Drainage Assets were revalued as at 1 April 2012 with the previous revaluation date being 1 July 2005. The outcome of the revaluation was a$27.3M increase in assets values via the asset revaluation reserve.

The unfunded superannuation amount of $23.5M has been included in employee benefits in the comprehensive income statement and has been split in the balance sheet between current ($5.3M) and non current ($18.2) liabilities.

Standard Statements Performance Commentary

The 2011-2012 recurrent or operating result was a surplus of $11.9M or $9.9M favourable to adopted budget. This favourable variance includes $6.1M relating to incomplete discretionary projects which are requested to be carried over into 2012-2013.

The non recurrent result was a surplus of $7.7M or $23.4M unfavourable to budget. This was due to higher than anticipated Developer Contributions and Capital Grants received. This was offset by lower than budget gain on sale of property, loss on Disposal of Infrastructure and inclusion of the Unfunded Superannuation call from Vision Super. There were also costs expensed from Capital Work In Progress.

Capital expenditure originally budgeted at $84.0M was increased to $110.4M with the impact of carryover 2010-2011 expenditure and other authorised increases. The actual expenditure of $65.3M is 77.7% of the adopted budget.

Some projects yet to be completed are, Corio Landfill Rehabilitation $10.0, Civic Accommodation $22.0M, Ocean Grove Integrated Children’s Centre $3.8M Shell Rd Reserve Sporting Infrastructure $1.8M, Geelong Library & Heritage Centre $1.4M, Rosewall Kindergarten Rebuild $1.1M, Drysdale Landfill Cell $0.9M, Corio-Norlane regeneration Project $0.9M, Leopold Community Hub $0.9M, Griggs Creek Rehabilitation $0.8M, Geelong Motocross Club Relocation $0.7M and St Leonards Recreation Reserve $0.6M. A separate report to Council will recommend carryover funds to complete 2011-2012 projects (i.e. 2012-2013 Budget Amendments).

Council’s closing cash balance was $32.0M favourable to Budget, with favourable variances, incomplete projects and early receipt of 2012-2013 Grants Commission funding.

Councils Capital Work in Progress balance as at the end of June was $41.8M. This was a $5.2M decrease on the prior year balance.

The following comments are provided relative to the Standard Income Statement, the Statement of Cashflows, the Balance Sheet and the Statement of Capital works. The detailed Statements are attached in Appendix 9-1.

Income Statement

The Recurrent Surplus for 2011-2012 of $12.0M was $10.0M favourable to adopted budget.

Recurrent Income of $261.3M was $13.7M favourable to budget mainly due to:

• High landfill volumes ($3.5M favourable) offset by EPA costs.

• Various unbudgeted state and federal grants ($8.0M favourable).

• Car Parking Fees ($0.4M unfavourable).

• Rates generation ($0.8M favourable).

• Interest on Investments ($1.4M favourable).

• Reimbursements & Recovery Income $0.3M favourable.

• Design & Supervision Fees $0.8M favourable.

• Parking and Animal Fines ($0.6M unfavourable) and

• Other income ($0.1M unfavourable to budget).

Recurrent Expenditure of $249.4M was ($3.7M) unfavourable to budget mainly due to:

• EPA costs associated with landfill activity ($1.9M) unfavourable.

• Plant hire etc. ($0.5M) unfavourable.

• Building Maintenance ($0.6M) unfavourable.

• Consultants ($0.2M) unfavourable and legal expenses ($0.2M) unfavourable.

• Supplementary labour ($2.5M) unfavourable.

• Employee Related Costs $3.6M favourable.

• Other expenses ($1.4M) unfavourable to budget.

The Non Recurrent Result was ($23.4M) unfavourable to budget. There were higher than budgeted disposals of infrastructure assets ($3.7M), unfavourable costs expensed from Capital Work in Progress of ($4.3M) and unfavourable Gain on Sale of Property ($0.2M). The inclusion of the unfunded superannuation call ($23.5M) was the major unfavourable impact on the non recurrent result. Favourable Developer Contributions ($1.0M) and Capital Income ($8.5M) partially offset the unfavourable result.

Statement of Cash Flows

Council’s cash position at the end of the year is $74.2M or $32.0M favourable to budget with higher capital income, rates and grants.

The cash balance will provide funds to complete capital projects carried over from 2011-2012 and working capital to ensure service provision continues at the same levels in 2012-2013.

Balance Sheet

The Balance Sheet shows that Council has a very strong asset position with over $1.7 billion worth of assets that are used to provide services to the community.

The major variance to budget is the increase in Non Current Assets of $17.8M. The main factors were:

• A difference in the budgeted opening Property Plant and Equipment value (as at 1/7/11) compared to Actual opening Property Plant and Equipment value (as at 1/7/11. The difference represents delayed capital spends in the 2010-2011 year.

• The effect of the revaluation of Land & Buildings $36.4M and Drainage Assets $27.3M.

Current Assets were $31.0M favourable to budget with an increase in cash due to lower than budgeted capital expenditure, higher than budgeted 1 July 2011 cash position and early receipt of the first instalment of the 2012-2013 Grants Commission payment.

Current liabilities were ($4.4M) unfavourable due to the inclusion of the current portion of the unfunded superannuation call to be paid in 2012-2013.

Non current liabilities were ($1.9M) unfavourable to budget with a higher than budgeted Landfill Provision ($4.7M) unfavourable as a consequence of revised estimates for Corio Landfill Rehabilitation. Loan balance was $24.0M lower than budget due to delaying the drawdown of budgeted loan and Employee Benefits were $16.5M higher than budget due to the inclusion of the non current component of the unfunded superannuation call in employee benefits.

Statement of Capital Works

Council has an extensive capital works program to renew, upgrade and provide new assets to ensure the continuation and improvement of services provided to the community. Council spent $65.3M on capital works in 2011-2012 and included the following highlights:

• Road replacement and construction $9.1M.

• Plant and vehicles $4.7M.

• Drainage replacement and construction $4.8M.

• Courthouse Redevelopment $3.4M.

• Footpath replacement and construction $2.5M.

• Waurn Ponds Library $2.3M.

• Kardinia Park Netball Court Development $0.5M.

• Construction O’Briens Rd $1.9M.

• IT Asset Replacements $1.0M.

• Eastern Beach Children’s Pool $3.5M

• Drysdale Landfill Cell 4a $0.9M

• O’Briens Rd Retarding Basin $0.5M

• Kerb and Channel replacement and construction $1.0M

• Lara Lake Preschool $0.9M

• Eastern Park Stormwater Project $0.9M

• Allanvale Kindergarten Extension $0.8M

• Corio Sporting Club Upgrade $0.7M

• Grovedale Cricket Clubroom Upgrade $0.7M

• Lara Recreation Reserve $0.6M

• Lara Library $0.5M

• Ocean Grove Kindergarten Extension $0.5M

The external audit was completed on Friday, 4 August by HLB Mann Judd. There were no major issues affecting the Financial Statements and a Management letter and closing report will include discussion of minor issues.

Environmental Implications

Incomes and Expenditures on Council’s environmental preservation and enhancement programs are included in the Financial Statements.

Financial Implications

As detailed within the accompanying financial statements - Appendix 1.

Policy/Legal/Statutory Implications

The Equal Opportunity Act (1995) protects Victorians against discrimination based on a wide range of personal characteristics or associations. These include (but are not limited to) age, gender, ethnicity, disability, pregnancy, religion and employment status. The Annual Financial Report for the Year Ended 30 June 2012 recognises that all community members have equal rights to participate in and enjoy the benefits of sport and physical activity. The development of the reserve will consider design solutions to help facilitate access for all.

Officer Direct or Indirect Interest

Not applicable.

Risk Assessment

The Statements are released as a draft and are still subject to being signed off by the Auditor General.

Social Considerations

The Annual Financial Report for the Year Ended 30 June 2012 will enhance recreational and social experiences The attached report represents a full and open disclosure of the financial position for the benefit of the community.

Communication

A draft of the Financial Statement of Accounts, the Standard Statements and the Performance Statement will be available to the public as part of the Council Agenda.

10. 2012-2013 Budget Amendment

Summary

• Preliminary financial results for 2011-2012 highlight a recurrent surplus of $11.9M or $20.2M favourable to amended budget and Capital expenditure of $65.3M or $39.1M lower than amended budget. These results reflect a number of programs that are incomplete and are required to carryover into 2012-2013.

• In order to avoid unnecessary variance reporting and commentary during 2012-2013 it is recommended that the 2012-2013 Budget be amended to recognise the prior year funding for Capital and Non Capital projects.

• The incomplete programs, together with favourable operating performance increased Council’s year end cash balance to a total of $74.2M or $32.0M higher than projected.

• A review of the Capital program at 30 June 2012 indicates that $58.77M expenditure and $5.10M income is required to be carried over for completion in 2012-2013. The 2012-2013 Capital budget will increase to $108.97M expenditure and $22.38M income or a net of $86.59M. This program is fully funded and will have no impact on the closing cash position as outlined in the adopted 2012-2013 Budget.

• A review of the Non-Capital program at 30 June 2012 indicates that funding of $6.10M is required to be carried forward for completion in 2012-2013. In addition, following early receipt of 2012-2013 grants commission funding, there is a need to lower total receipts expected in 2012-2013 by $9.90M.

• The amended recurrent operating expenditure will increase to $268.35M and recurrent income will reduce to $252.54M or a net recurrent deficit of ($15.81M). The Non Capital program is fully funded and these amendments will have no impact on the closing cash position as forecast in the adopted 2012-2013 Budget.

• The 2012-2013 Budget includes Non Recurrent expenditure of $3.3M to meet the unfunded superannuation liability. It is recommended that this 2012-2013 expenditure be increased to $5.3M funded from favourable 2011-2012 working capital movements.

Cr Harwood moved, Cr Granger seconded -

That Council amends the adopted 2012-2013 Budget to include the following:

1. Capital Programs carryover as per Appendix 10-1.

2. Non Capital Programs carryover as per Appendix 10-2, other budget amendments affecting the recurrent position as per Table 2.

3. Increase in Unfunded Superannuation budget allocation of $2.0M.

Carried.

Report

Background

At 30 June each year Council reviews the preliminary financial results to determine funded Capital and Non Capital programs that are incomplete and are required to be carried over into the subsequent financial year. These carryover requirements are recommended to be incorporated as amendments to the adopted budget. This practice avoids unnecessary variance reporting, given there is no impact on the budgeted closing cash position.

The review has been undertaken in the following key areas:

1. Carryover requirements to complete 2011-2012 Capital projects in 2012-2013.

2. Carryover requirements to complete 2011-2012 Non Capital projects in 2012-2013.

3. Other budget amendments requested or influenced by year end accounting matters.

2011-2012 Preliminary Financial Results Summary

The 2011-2012 preliminary financial results highlight an improvement of approximately $3M in working capital resulting from favourable operating performance.

Discussion

Capital Projects Budget Amendments

Carryover requirements

Of the 300 projects listed in 2011-2012, project managers have advised that 150 projects have been fully completed, with 150 projects identified as requiring some carryover funds in 2012-2013 to complete works.

During the 2012-2013 Budget development the Capital carryover was projected to be $42M. At the end of the 2011-2012 financial year a review was carried out to determine the actual Capital Program carryover requirements. The review indicates a net carryover of $53.67M (refer to Appendix 10-1 for details) comprising of $58.77M expenditure and $5.10M income is required to complete the projects planned for 2011-2012.

The net variance between actual Net ($53.67M) and estimate included in 2012-2013 Budget ($42.00M) is $11.67M.

Main increases are: – Geelong Library & Heritage Centre $1.38M, Rosewall Kindergarten $1.12M, Corio Norlane Regeneration $0.93M, Drysdale Landfill Cell $0.92M, Heavy & Dedicated Plant Replacement $0.54M, Highton Tennis Club Pavilion $0.51M, Drainage Construction $0.41M, Playground Development $0.39M, Walter Conservatory Repairs $0.29M, Bulk Fuel Facilities Compliance $0.27M, St Leonards Recreation Reserve $0.26M, Hamlyn Park Reserve Improvements $0.26M, McDonald Reserve Clubroom Upgrade $0.25M, Splashdown Co-Generation $0.20M and Barwon Soccer Club $0.20M.

Table 1 – Amended 2012-2013 Capital Program

Council adopted the 2012-2013 Budget on 26 June 2012 that included a gross Capital Projects Program of $69.20M with Capital Income of $17.28M – Net $51.92M.

The net 2012-2013 Capital Program is recommended for amendment to $86.59M which reflects the additional $53.66M carried over from 2011-2012 as indicated in table 1 below.

Operating Budget Amendments

Non Capital Projects Carryover requirements

In addition to the Capital Program, Project Managers have undertaken a review of the Non Capital Projects budgeted for in 2011-2012 that have been requested to be carried over into the 2012-2013 financial year.

The 2011-2012 Recurrent Operating result was favourably impacted by $6.10M of incomplete Non Capital programs as per Appendix 10-2.

Requested Discretionary Program Carryover:

Other Operating Budget amendments

• Grants Commission – Recurrent budget to be adjusted due to early receipt of 50% 2012-2013 yearly grant or $9.898M in June 2012.

The impact of the requested Discretionary Program Carryover, along with the other Budget amendments that affect the recurrent position, is on the 2012-2013 recurrent surplus / (deficit) (Refer Table 2 below).

Table 2 – Amended 2012-2013 Recurrent Surplus / (Deficit)

Unfunded Superannuation Budget Amendment

The 2012-2013 Budget included an estimate of $3.3M to assist funding of the expected call for Defined Benefit unfunded superannuation liability. The preliminary financial results highlight favourable working capital movements versus projection and it is recommended that an additional $2M be included in the non recurrent expenditure to recognise the higher than expected obligation advised to Council.

Table 3 – Amended 2012-2013 Non Recurrent Surplus / (Deficit)

Environmental Implications

The adoption of the 2011-2012 carryover program provides the required funding to complete the environmental programs previously approved as part of the 2011-2012 Budget.

Financial Implications

There are no funding implications associated with this report, with higher than projected cash balances as at 30 June 2012 funding additional budgeted expenditure in 2012-2013.

The program variances and carryover requests are detailed within the accompanying financial reports (Refer Appendices 10-1 & 10-2).

Policy/Legal/Statutory Implications

Section 144A part 1 of the Local Government Act states “A Council must prepare a revised budget if circumstances arise which cause a material change in the budget and which affect the financial operations and position of Council.”

In the context of the total budget the recommended variation to the budget is not considered material.

Officer Direct or Indirect Interest

Council staff preparing this report have no direct or indirect interest.

Risk Assessment

Capital projects by their nature are susceptible to delays for a large variety of reasons including weather, delays in approvals (i.e. Special Rates & Charges programs) contractor availability, performance, etc.

The carryover Capital Program (refer to Appendix 10-1) if approved, will result in a gross capital program for 2012-2013 of $108.97M.

Social Considerations

The adoption of the 2011-2012 carryover program provides the required funding to complete the social programs previously approved as part of the 2011-2012 Budget.

Communication

Project Managers have submitted requests for carryover and will be advised of the outcome pending consideration of this report by Council.

11. Approval of Council Policy Asset Management

Summary

• The City of Greater Geelong is custodian of over $1.7 billion of assets that it provides to facilitate delivery of its services to the community.

• As custodian of these assets, Council is responsible for funding their maintenance and upkeep at a level of service that satisfies both the safety and amenity requirements of the community.

• This Council policy document is submitted for Council endorsement to assist the Organisation’s achievement of its Asset Management objective. The Policy has been developed as a comprehensive document that fits within the corporate plan of the City and gives guidance and direction to the strategies and actions for the management of the Council’s asset base.

• The attached Council Policy is submitted for approval.

• The Policy provides the mandate for the City to undertake consistent management of its infrastructure and other associated assets.

Cr Richards moved, Cr Granger seconded -

That Council adopts Council Policy CPL240.1 Asset Management(Appendix 11-1).

Carried.

Report

Background

The overall objective of Council’s Asset Management is to ensure that Council meets the required level of service for its assets, both now and for the future, in the most cost-effective way through the creation, acquisition, maintenance, operation, rehabilitation and disposal of community assets.

The introduction of Asset Management in the City of Greater Geelong was initiated by the formation of the Asset Management Steering Committee. It was formed in October 1996 to coordinate all of Council’s asset management activities.

The Asset Management Steering Committee is a decision-making team that represents senior management within Council. Its primary tasks are:

• Establish and communicate the asset management corporate strategy and objectives, formulate policy, and provide leadership for the asset management activities within the City.

• Oversee, guide and support the Council Asset Management Strategy.

• Ensure optimisation of benefits from the Asset Management systems employed by Council.

• Effectively communicate management decisions and foster a culture that is conducive for incorporating asset management principles into the organisation’s daily work practices and provide a “continuous improvement environment” for delivering industry best practice.

Discussion

This Council policy document is submitted for Council endorsement to assist the Steering Committee’s achievement of its Asset Management objective. The Policy has been developed as a comprehensive document that fits within the corporate plan of the City and gives guidance and direction to the strategies and actions for the management of the Council’s asset base.

The City of Greater Geelong is custodian of over $1.7 billion of assets that it provides to facilitate delivery of its services to the community.

As custodian of these assets, Council is responsible for funding their maintenance and upkeep at a level of service that satisfies both the safety and amenity requirements of the community.

The policy has been endorsed by the Asset Management Steering Committee after consultation with the managers responsible for the City’s assets.

Environmental Implications

Compliance with this Council policy should enhance the natural and built environment through the constant improvement of the infrastructure asset base.

Financial Implications

This Council policy is to be read in conjunction with the Asset Accounting Policy of the City in order to comply with legislative requirements. References to this effect are included in the policy. The introduction of this asset management policy advocates the use of principles and techniques that are directed towards optimisation of expenditure on assets.

Policy/Legal/Statutory Implications

This asset management policy has been created within the legal requirements of the Victorian State Government Legislation for reporting on assets.

Office Direct or Indirect Interest

No officers involved in the preparation of this report have a direct or indirect interest in matters to which this report relates.

Risk Assessment

This Council policy refers to asset risk management in relation to the assets of the City and it is aimed at minimising the risk to Council in all areas of Asset Management.

Social Considerations

Appropriate planning of assets means that social impacts are properly considered during the development and management of the infrastructure.

Communication

The process for dissemination and deployment of this policy is to be directed through the Asset Management Steering Committee to managers of all assets within the City.

Appendix 11-1

COUNCIL POLICY

1. PURPOSE

This policy provides a framework for the City of Greater Geelong to undertake the management of its infrastructure and other associated assets.

Infrastructure assets are the cornerstone of public health and safety and are necessary to meet the social, economic and recreational needs of the community.

Sound Asset Management supports infrastructure and leads to sustainable asset networks.

2. SCOPE

• This policy applies to all Council Infrastructure assets including:

• road and street network, including pathways

• flood protection and stormwater systems

• parks and recreation facilities

• solid waste facilities

• community facilities and civic buildings

• Associated asset groups to be managed under this policy include plant and equipment, IT equipment. These are not strictly infrastructure assets, and a number of them have a much shorter life, nevertheless they serve functions that as a whole are intended to be maintained.

3. REFERENCES

City Plan 2009-2013

Council Asset Management Strategy (Version 1.06 – June 2010

Asset Management Plans

International Infrastructure Management Manual – International Edition 2011

Asset Accounting Policy

4. DEFINITIONS

5. COUNCIL POLICY

Sustainable asset management involves managing the performance, risk and expenditure on infrastructure assets in an optimal and sustainable manner throughout their lifecycle covering planning, design, development, operation, maintenance and disposal. Through sustainable asset management, the City will ensure that its infrastructure assets are safe, reliable, sustainable and remain available for the benefit of current and future generations.

The City will adhere to the following core principles in the planning and decision-making relating to the selection, creation/acquisition, operation, maintenance and renewal/disposal of all infrastructure assets, and require all our suppliers to adopt these principles:

• Service delivery drives Asset Management practices and decisions

• Asset Planning and management has a direct link with Councils corporate and business plans. (Including City Plan and the Long term Financial Plan), budgets and reporting process.

• The Long Term Financial Plan (10yrs) shall reference the Asset Renewal Gap.

• Application of ‘Renewal before Upgrade or New’ philosophy for assets as appropriate.

• As a principle, asset depreciation is to be used to fund renewal and/or rehabilitation of assets.

• Asset Management decisions shall be based on service delivery needs and the benefits and risks of assets, with an evaluation of alternative options that take into account lifecycle costs.

• Use of a Capital works priority evaluation process for new projects. A business case will be prepared as part of the initial formulation of capital works proposals over a nominated threshold as outlined in the Capital Works Evaluation Framework.

• New or upgrade Projects funded by grants are to include full lifecycle (whole of life costs) as part of project evaluation.

• Asset Management plans are to be developed for the City’s assets, and they will be informed by community needs, and integrated with local government financial reporting frameworks.

• Financial and Asset Management reporting is to be categorised in terms of operational, maintenance, renewal, upgrade and new expenditure classification to enable sound Asset Management decisions.

• Councillors and staff with asset and financial responsibilities will be appropriately briefed in relevant asset and financial management principles, practices and processes.

• After creation, the condition or structural integrity of assets will be managed by application of an appropriate lifecycle activity i.e. operations, maintenance, renewal/upgrade and disposal.

The City will adopt and embed these principles and recognized best practices in developing and maintaining consistent asset management practices within the City

The City will operate via an asset management strategy and objectives which are aligned with this Policy, which itself is consistent with City Plan.

The City will establish suitable performance indicators to measure and monitor achievement of asset management policy and objectives. The feedback from monitoring will be used to achieve continual improvement of asset performance and effectiveness of the Asset Management Systems. We will actively engage with all stakeholders, especially the community, in deciding the levels of service and asset performance, and we will monitor customer satisfaction with the service provided.

Roles and Responsibilities

Asset Management requires a whole of organisation approach and involves the participation of, and is the responsibility of, the Council, Executive and Council Staff. The specific roles and responsibilities are detailed in the Asset Management Strategy.

A cross functional Asset Management Steering Committee (AMSC) shall operate to maintain, coordinate, advise and facilitate the implementation of the adopted Asset Management Strategy.

The AMSC will report on a minimum quarterly basis to the Executive who

in turn will report progress to the Council as required.

6. QUALITY RECORDS

Quality Records shall be retained for at least the period shown below.

7. ATTACHMENTS

• Nil

Cr Farrell declared an Indirect Interest by Close Association in Agenda Item 12, The Avenue, Hill Street and Fiedl Street, Ocean Grove – Proposed Road and Drainage Construction SRC327 – Intention to Declare, in that several of the affected home owners are known to her and left the meeting room at 8.38pm.

12. The Avenue, Hill Street and Field Street, Ocean Grove – Proposed Road and Drainage Construction SRC327 – Intention to Declare

Summary

• This report relates to a proposed special charge scheme for construction of road pavement, kerb & channel and drainage in The Avenue between Field Street and Newcomb Street, Hill Street between Powell Street and The Parade and Field Street between The Avenue and The Parade, Ocean Grove. (See Plan Appendix 12-3)

• Proposed works include road pavement, kerb and channel and drainage.

• The area is residential with several lots having been subdivided in recent years.

• The total cost of the project is $1,149,416 with owners costs amounting to $1,064,090 and Council $85,326 which is for outfall drainage.

• There are a number of large blocks and also multiple block ownership. Property owners costs vary between $9,697 and $68,613.

• The scheme has been prepared in accordance with the special rate and charge provisions of the Local Government Act, along with Council’s Special Rates and Charges Policy.

• The report seeks a resolution by Council to give notice of its “Intention to Declare” a special charge for road construction in The Avenue, Hill Street and Field Street, Ocean Grove in accordance with the special charge scheme process.

Cr Richards moved, Cr Granger seconded -

In accordance with Section 163 of Local Government Act 1989 that;

1. the following declaration of a special charge be proposed (“the proposed declaration”):

1. special charge be declared for a period until the works have been completed and the scheme finalised.

2. the special charge be declared for the purposes of defraying any expenses incurred by Council in relation to construction of road pavement, drainage and kerb & channel in The Avenue between Field Street and Newcomb Street, Hill Street between Powell Street and The Parade and Field Street between The Avenue and The Parade, Ocean Grove which project:

1. will provide proper sealed road access, kerb & channel, improved nature strips and enhancement to the general amenity for each of the properties included in the scheme;

2. Council considers is or will be a special benefit to those persons required to pay the special charge (and who are described in succeeding parts of this Resolution); and

3. arises out of Council’s function of planning for and providing infrastructure for property owners.

3. the:

1. total cost of performing the function described in Part b of this Resolution based on estimated cost be recorded as $1,149,416.

2. total amount of the special charge be levied and be recorded as $1,064,090.

4. it be recorded that, for the purposes of Section 163 (2A) of the Local Government Act 1989, the special charge proceeds will not exceed the amount calculated in accordance with the prescribed formula (R x C = S), the:

1. ‘benefit ratio’ (R) being calculated at 100%, and representing the total benefits of the special charge scheme that will accrue as special benefits to all persons liable to pay the special charge; and

2. ‘community benefit’ (C) being assumed as zero for road pavement, kerb & channel and drainage in The Avenue, Hill Street and Field Street.

5. the following be specified as the area for which the special rate is so declared:

1. the area within municipal district of Council highlighted in the plan attached to this Resolution (“the area”).

6. the following be specified as the land in relation to which the special charge so declared:

1. all land within the area shown on the plan.

7. the following be specified as the criteria which form the basis of the special charge so declared:

1. ownership of any land described in Part e of this Resolution.

8. the following be specified as the manner in which the special charge so declared will be assessed and levied:

1. the costs to be apportioned with a 50% allocation to lot frontage and a 50% allocation to lot area.

2. The special charge will be levied by sending a notice to the person who is liable to pay, pursuant to section 163(4) of the Local Government Act 1989.

9. having regard to the preceding parts of this Resolution but subject to Section 166 (1) of the Local Government Act 1989, it be recorded that;

1. the owners of the land described in column 1 of Schedule B to the Resolution are estimated liable for the respective amounts set out in column 2 of Schedule B; and

2. such owners may, subject to any further resolution of Council pay the special charge in the following manner:

1. the charge will become due and payable within one month of the issue of the notice requesting payment pursuant to Section 167 (3) of the Local Government Act 1989;

2. interest will not be charged for six months after the issue of the notice provided the person liable makes timely payment in accordance with any repayment arrangements that may be agreed on by Council; and

3. in accordance with Section 172 of the Act, the rate of interest which is payable on the special charge which has not been paid by the specified date is set at Council’s overdraft rate, reviewed every three months (provided that it shall not exceed the rate fixed by the Governor in Council by Order for the purposes of Section 172 (2A) in which case the rate of interest shall be the maximum rate fixed by the Governor in Council by Order for the purposes of this section).

2. Any submissions made under Section 223 of the Local Government Act 1989 and the proposed declaration be considered by Council’s Submissions Review Panel, and then by Council at its meeting on 23 October 2012, at which time Council will consider whether to make a declaration in the form of the proposed declaration.




3. Council’s Chief Executive Officer be authorised to give public notice of the proposed declaration in accordance with sections 163 (1A) and (1B) of the Local Government Act 1989 and send a copy of the public notice to each person who is liable to pay the special rate in accordance with Section 163 (1C) of the Local Government Act 1989.

Carried.

Report

Background

This report relates to the proposed construction of The Avenue, Ocean Grove as well as two shorter abutting streets being Hill Street from Powell Street to The Parade and Field Street from The Avenue to The Parade, Ocean Grove.

The Avenue, road reserve, is situated in an elevated position and runs approximately parallel to the contours. The terrain falls away to the south quite sharply, making access difficult. There are some existing undrained low spots in the road reserve particularly in the Hill Street and Field Street section.

Council has received complaints and enquiries over an extended period and many of these relate to drainage and flooding of road and adjacent properties.

A survey of property owners was undertaken in June 2005 with the response as follows:

In Favour: - 25%,

Not in favour: - 37.5 %

No response: - 37.5 %

This indicated at the time, there was not an overwhelming support for street construction. Over years, the level of enquiry and complaint has increased. A further owner survey was undertaken in April 2012 which provided the following results:

In Favour: - 47.5 %

Not in favour: - 27.5 %

No response: - 25%

The most recent survey provided a more positive indication that a street construction scheme was likely to be more acceptable. The road space in various locations is quite restricted and the open drains on either side of the road, in places, provides for a narrower pavement and a meandering alignment.

Two intersecting streets have been included in the scheme for the sake of completeness and the fact that construction of these streets, in isolation, at a later date, would be very difficult. When merged with the total project, the relative costs are kept to a minimum.

One other street, Newcomb Street, between The Avenue and The Parade was considered, however all abutting owners rejected the proposal.

The drainage system for the street generally discharges down Hill Street to The Terrace. Once the drainage from The Avenue reaches The Parade, it starts to collect storm water from other areas and becomes remote to the scheme. This section is therefore funded by Council.

Discussion

Property owners receive benefit from the planned infrastructure as follows

• proper sealed road access;

• improved drainage;

• removal of nuisance, dust and mud;

• improvements to the general amenity of the area; and

• likely increase in property values.

There are no Council properties in the scheme.

The cost of the work is as follows:

This area was subdivided by the Methodist Church in 1888. Essentially, blocks are of frontage 20.12 (66’) and a 822sq metres in area.

The most common, simplest and effective means of distributing costs for a relatively regular subdivision is the unit cost method. This allocates one unit of cost equally to all properties. In this instance, although a number of the original blocks remain, there are a number of irregular shaped and subdivided lots. Land value in this area is at a premium and lot area is extremely important in realising future potential.

An apportionment method using frontage and area was adopted which provided the most equitable result. Most “private sheet schemes” using the provisions of the Local Government Act 1958 used this method. Half the cost is allocated to area and half to frontage. The standard block referred to above, 20.12m frontage and 822sqm area was used as a basis. Any frontage over this was divided by 3 and added to 20.12 to give the apportionable frontage. Areas were treated similarly. Corner blocks were considered on the basis of the sum of frontage plus sideage and treated in the above manner. Where frontage and/or area was less than the standard, these dimensions/areas were used without adjustment.

Where large blocks could obviously be hypothetically subdivided into two or more standard blocks, this was the basis in which they were treated.

Environmental Implications

The road infrastructure proposed, provides proper sealed access, drainage and a generally safer environment.

During the course of construction and the manufacture and procurement of materials, there is expenditure of energy sources and greenhouse emissions. This does cease, however, when construction is complete.

The project does not create waste with the exception of some excess spoil.

The proposal does not affect any natural habitats.

Financial Implications

The project has a one off capital cost as indicated above and there will be minimal ongoing maintenance costs. The scheme could proceed in the this financial year if approved.

Policy/Legal/Statutory Implications

The scheme has been prepared in accordance with the special rate and charge provisions of the Local Government Act along with Council’s special rates and charges policy. The project does not impinge on any Human Rights Charter issues.

Officer Direct or Indirect Interest

There are no Council Officers involved in the administration or subsequent construction of the works, who have a direct or indirect interest in the project.

Risk Assessment

There are no risks associated with Council proceeding to adopt the recommendation and advertising the scheme.

Social Considerations

There are no social considerations which may impact on Council’s decision to proceed to advertise the scheme.

Communication

As indicated, 2 surveys have taken place in recent years. In addition there has been correspondence and discussions with various property owners.

Should Council resolve its intention to declare charges, the scheme will be advertised and submissions invited.

Appendix 12-1

Page 1

SCHEDULE ‘A’

The works for the construction of The Avenue between Field Street and Newcomb Street, Hill Street between Powell Street and The Parade and Field Street between The Avenue and The Parade, Ocean Grove which consist of excavation, reinstatement of nature strip, pavement works, kerb & channel, sealing, drainage, miscellaneous construction works, legal advice and professional services associated with survey, engineering design, drafting, supervision and administration of the project all as included in the cost estimate shown below.

COST ESTIMATE FOR CONSTRUCTION OF ROAD PAVEMENT AND KERB & CHANNEL – THE AVENUE OCEAN GROVE

Appendix 12-2

SCHEDULE ‘B’

Appendix 12- 3

PLAN

Cr Farrell re-entered the meeting room at 8:39pm

13. Tender Negotiations Update (Confidential)

Cr Granger moved, Cr Richards seconded -

That in accordance with Section 89 (2) (d) of the Local Government Act 1989, this contractual matter be considered at the conclusion of all other business, at which time the meeting be closed to members of the public.

Carried.

14. Civic Accommodation (Confidential)

Cr Granger moved, Cr Richards seconded -

That in accordance with Section 89 (2) (d) of the Local Government Act 1989, this contractual matter be considered at the conclusion of all other business, at which time the meeting be closed to members of the public.

Carried.

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