minutes council meeting - city of gold coast · 2019-06-23 · cr vorster leave of absence...

767

Minutes of the

Council Meeting held

Wednesday 30 January 2019

at

1pm

City of Gold Coast Council Chambers 135 Bundall Road, Surfers Paradise

767th Council Meeting 2 30 January 2019 Minutes

INDEX

Minutes (767)

Council Meeting

Wednesday 30 January 2019

Opening Prayer - Pastor Kevin Thomas of Our Church, Burleigh Heads

Australian National Anthem

ITEM SUBJECT

1 ATTENDANCE / LEAVE OF ABSENCE

1.1 Cr Vorster leave of absence previously granted G19.1127.024

2 CONDOLENCES

2.1 The Symons Family Cr Gates

2.2 The Taylor Family Cr Gates

2.3 The Gamin Family Cr PC Young

2.4 The Adams Family Cr Tozer

3 MAYORAL MINUTE

4 CONFIRMATION OF MINUTES

4.1 The Seven Hundred and Sixty Sixth Ordinary Meeting of the Council of the City of Gold Coast, held Friday 7 December 2018 at 10.00 am.

5 MAYOR’S REPORT

6 CLARIFICATION – MEMBERS

7 BUSINESS ARISING FROM MINUTES

8 PRESENTATIONS

9 RECEPTION AND CONSIDERATION OF COMMITTEE REPORTS

9.1 Transport and Infrastructure 22 January 2019

9.2 Lifestyle and Community 22 January 2019

9.3 Economy, Planning and Environment 23 January 2019

9.4 Water & Waste 24 January 2019

9.5 Events, Tourism and Governance 24 January 2019

10 CONSIDERATION OF NOTICES OF MOTION

11 QUESTIONS ON NOTICE / ANSWERS TO QUESTIONS ON NOTICE


ITEM SUBJECT

12 PRESENTATION OF PETITIONS

13 GENERAL BUSINESS

13.1 Ediblescapes Garden Project Cr PJ Young

13.2 Currumbin Wildlife Hospital Foundation Cr La Castra

13.3 Southport Pony Club Cr Crichlow

13.4 Combined Churches Easter Celebration Cr Tate

14 OTHER BUSINESS

14.1 November 2018 Monthly Financial Report

14.2 Water and Sewerage Services - December 2018 Budget Review

14.3 Waste Services - December 2018 Budget Review

14.4 December 2018 Budget Review (Confidential)

14.5 City Of Gold Coast Review – Draft Spit Master Plan (Confidential)


ADOPTED AT COUNCIL 12 FEBRUARY 2019 RESOLUTION G19.0212.001 moved Cr Owen-Jones seconded Cr Gates That the Minutes of the Seven Hundred and Sixty Seventh Ordinary Meeting of the Council of the City of Gold Coast held on Wednesday 30 January 2019 at 1pm be confirmed.

CARRIED Minutes of the Seven Hundred and Sixty Seventh Ordinary Meeting of the Council of the City of Gold Coast held at the City of Gold Coast Chambers, 135 Bundall Road, Surfers Paradise, on Wednesday 30 January at 1pm. The Mayor, Cr T R Tate, welcomed Pastor Kevin Thomas of Our Church, Burleigh Heads, to open the meeting in prayer. National Anthem 1 ATTENDANCE Cr T R Tate Mayor Cr D Gates Cr W M Owen-Jones Cr C M Caldwell Cr K L Boulton Cr P J Young Cr D M Crichlow OAM Cr G J Baildon AM Cr R La Castra Cr G M Tozer Cr P A Taylor Cr P C Young Cr D I McDonald Cr G M O’Neill Mr D R Dickson Chief Executive Officer Mr A J McCabe Chief Operating Officer Mr A Twine Director Transport and Infrastructure Ms A Ewens Director Lifestyle and Community Services Mr P Heaton Director Water & Waste Mr G Potter Director Organisational Services Ms A Swain Director Economy, Planning & Environment 1.1 LEAVE OF ABSENCE / APOLOGIES Cr Vorster leave of absence previously granted G18.1127.024


2 CONDOLENCES Cr Gates To The Symons Family On the passing of Kay Symons RESOLUTION G19.0130.001 moved Cr Gates seconded Cr PC Young That a motion of condolence be passed and that a message of sympathy be forwarded.

CARRIED Cr Gates, Cr McDonald, Cr Boulton To The Taylor Family On the passing of David Atkinson Taylor RESOLUTION G19.0130.002 moved Cr Gates seconded Cr Boulton That a motion of condolence be passed and that a message of sympathy be forwarded.

CARRIED

Cr PC Young, Cr Baildon, Cr PJ Young, Cr Gates, Cr Boulton, Cr La Castra, Cr McDonald To The Gamin Family On the passing of Paul Gamin RESOLUTION G19. 0130.003 moved Cr PC Young seconded Cr McDonald That a motion of condolence be passed and that a message of sympathy be forwarded.

CARRIED

Cr Tozer To The Adams Family On the passing of Margaret Adams RESOLUTION G19. 0130.004 moved Cr Tozer seconded Cr PJ Young That a motion of condolence be passed and that a message of sympathy be forwarded.

CARRIED


3 MAYORAL MINUTE Nil 4 CONFIRMATION OF MINUTES RESOLUTION G19.0130.005 moved Cr Baildon seconded Cr Taylor That the Minutes of the Seven Hundred and Sixty Sixth Ordinary Meeting of the Council of the City of Gold Coast held on Friday 7 December 2018 at 10am be confirmed.

CARRIED 5 MAYOR’S REPORT 5.1 RECENT VISITS AND SPEECHES


5 MAYOR’S REPORT (Continued) 5.1 RECENT VISITS AND SPEECHES (Continued)

Official Launch of Hope Island Marketplace Centre

Cr Caldwell attended.

It was great to attend the official opening of this modern and much-needed convenience retail destination for residents and visitors in the northern Gold Coast.

The main trade area population, estimated at 22,870 is projected to increase to 29,000 by 2026, with annual retail expenditure in the main trade area currently estimated at $372 million and is forecast to grow to $633 million by 2026.

Clearly there is growing demand for these destinations and precincts in the area and I think this a great offering for the local community.



2018 Broadbeach Christmas Carols

After these carols were rained-out in 2017, the 2018 Broadbeach Christmas Carols returned as a huge community favourite.

While The Smurfs entertained the kids, Martin Crewes accompanied Danielle Everett to perform some wonderful carols.

The night also featured the Gold Coast Youth Orchestra, Gold Coast Choir, Signature Dance and the winners of Pacific Fair’s Sing to Win competition.

The Salvation Army were also there selling candles to help support their annual Christmas Appeal.



Speed Awareness Promotion During Holiday Season

Cr Vorster attended.

The City has rolled out a Christmas message on 73 Speed Awareness Devices across the Gold Coast to remind motorists to check their speed leading into the busy holiday period.

Motorists would have noticed that as they drive past one of our devices at a safe speed they will have been greeted by a smiling Santa.

However, for speeding motorists, there will be no happy Santas but be told to slow down.

Our Speed Awareness Devices are in areas where motorists often exceed the speed limit.

They have been extremely successful with figures showing an average reduction of 7-9 kilometres, with 50% of drivers putting a stop to their speeding.

The devices are part of the Drive Safe Community Speed Awareness Program, a key initiative of the City’s Gold Coast Road Safety Plan 2015-2020.



Big Bash League - Brisbane Heat v Hobart Hurricanes

Nearly 13,000 in attendance.

The Hurricanes were too good, defeating the Heat by 15 runs.

Big Bash League - Brisbane Heat v Sydney Sixers

Over 17,000 in attendance.

Again, the Sixers were too good for the Heat, defeating them by 5 wickets.



Gold Coast Performance

The Gold Coast continues to remain Way Ahead, with unemployment now at 4.3%.

Our City is performing better than the rest of Queensland, with the state average sitting at 6.2%.

Our City has the lowest unemployment in South-East Queensland.

And as you can see from the graph, the Gold Coast also had the largest annual growth in employment of all regions during November 2018, with a growth of 17,400 employed persons.



***Acting Mayor Duties*** Magic Millions Events

The Magic Millions were a success again this year and I attended the celebrations which commenced on the 5th of January.

I then attended the Polo the following day on the 6th of January.

I also attended the Barrier Draw, the Magic Millions sales, Calcutta at Turf Club.



***Acting Mayor Duties*** Official Opening of the Tugun to Bilinga Oceanway

Attended by Cr O’Neill.

We were joined by Minister Bailey for the opening of the 1.7 kilometre of ocean-front footpath, which is the latest section of the ever-growing 36 kilometre network of shared use pathways between the NSW border and the Gold Coast Seaway.

The community has wanted this ‘missing link’ completed for a long time and it’s wonderful to see the community embracing this new section.

It’s a lot more than just a path – there’s new seating, bike racks, path lighting and secondary pathways connecting to nearby streets.

Dune vegetation improvement works were undertaken as part of the project to further increase resistance to coastal erosion and improve dune vegetation ecosystems.

The $4 million project was jointly funded by City of Gold Coast and the Queensland Government.



***Acting Mayor Duties*** Launch of Newest Green Waste Drop and

Go Zones in Merrimac and Coomera

The new Green Waste Drop and Go zones are a great addition to our existing locations at Molendinar and Reedy Creek, delivering a more user-friendly experience.

Residents are now be able to drive in and drop their green waste directly off the back of their vehicle or trailer on to a designated ground level area.

This new streamlined process will make it easier for those disposing of large quantities of green waste. It eliminates the need for lifting and loading into bins, allowing for reduced waiting times.

Green waste dropped at waste and recycling centres is composted, with some used for City green space.

The newly-opened Coomera Green Waste Centre accepts green waste only.



***Acting Mayor Duties*** Promotion for Eurovision – Australia Decides

Held at Nineteen at The Star, this media event promoted the Eurovision - Australia Decides - Gold Coast events on Friday 8 and Saturday 9 February.

SBS showcased some of the fantastic talent where each of them showed us a brief preview of what they will be performing.



***Acting Mayor Duties*** Promotion for Australia Day Festivities

at the Gold Coast Aquatic Centre and Broadwater Parklands

I had the pleasure of doing some promotion for the festivities on Australia Day, including a Pool Party in the morning and Annual Celebrations at the Broadwater Parklands in the afternoon and evening.

We had some enthusiastic kids enjoying the wonderful pool, and they were certainly getting into the Australia Day spirit.



***Acting Mayor Duties*** City of Gold Coast Australia Day Awards Presentation

The annual awards recognise local people or groups who have made an outstanding contribution to the Gold Coast community.

It was my pleasure to present the awards in the six different categories at Q1.

Each of these winners truly deserves this recognition and acknowledgment. Their efforts are helping and motivating others to make our city a better place to live.

Gold Coast Citizen of the Year was awarded to Paul Donovan, who we all know is a visionary and key player in the City’s burgeoning tourism industry.

The other category winners were:

o The Gold FM Community Service Award went to Gold Coast icons The Blenders, a male singing group that provides mentors for young leaders and inter-generational outreach.

o Wildcare’s Karen Scott took out the Environmental Achievement Award for her relentless volunteer work in caring for our sick and injured wildlife.

o The Cultural Achievement Award was awarded to Blues on Broadbeach and Groundwater Music Festival Director Mark Duckworth, who is responsible for the exponential growth Blues on Broadbeach has experienced, becoming a destination in its own right.

o Renowned Australian A-League referee Jarred Gillett has claimed the Sports Achievement Award.

o And teenager Kaitlin Barwick was awarded the Young Citizen of the Year for her many years of volunteer work, leadership skills and fundraising efforts.



***Acting Mayor Duties*** Flag Raising and Citizenship Ceremony

We welcomed 70 new residents from 23 countries.

Flags were raised by Architect Desmond Brooks, who was honoured with an appointed as a Member of the Order of Australia (AM) for “significant service to architecture, particularly in the Gold Coast region.”

I was joined by Cr Baildon, Cr Crichlow, Cr McDonald, with other representatives in attendance including John-Paul Langbroek MP, Rob Molhoek MP, Ros Bates MP and Senator Murray Watt.



***Acting Mayor Duties*** Australia Day Celebrations

These annual celebrations were held at the Broadwater Parklands and we welcomed about 12,000 people.

There was a great performance by Mason Rack and some wonderful fireworks to finish off the celebrations. RESOLUTION G19.0130.006 moved Cr Tate seconded Cr Taylor That the Mayor’s Report be welcomed and noted.

CARRIED

6 CLARIFICATION - MEMBERS Nil 7 BUSINESS ARISING FROM MINUTES Nil 8 PRESENTATIONS Nil


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS 9.1 TRANSPORT AND INFRASTRUCTURE Cr PC Young, Chairperson of the Transport and Infrastructure Committee, presented the Report of the Meeting of the Transport and Infrastructure Committee held on Tuesday 22 January 2019. RESOLUTION G19.0130.007 moved Cr PC Young seconded Cr Taylor That the Report of the Transport and Infrastructure Committee Meeting held on Tuesday 22 January 2019, covered by Recommendations numbered TI19.0122.001 to TI19.0122.005, be received.

CARRIED ITEM 4 NORTHERN GOLD COAST ENTRY STATEMENT

LG314/254/17/032D/01C(P2) REPORT CONFIDENTIAL MOTION moved Cr Tate seconded Cr Owen-Jones

That Committee Recommendation TI19.0122.004 be not adopted, but in lieu thereof reads as follows:

1 That the report/attachment be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009.

2 That Council supports Option D outlined in Section 5.3 – with the lights remaining in

their current location.

AMENDMENT moved Cr Gates seconded Cr Taylor



2 That Council supports Option D outlined in Section 5.3 – with the lights remaining in

their current location.

3 That further discussions be held with the Gold Coast Suns and State Government with regard to possible relocation to Metricon Stadium.

4 That immediate maintenance be undertaken to replace broken bulbs.

The AMENDMENT was LOST.


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.1 TRANSPORT AND INFRASTRUCTURE (Continued) ITEM 4 NORTHERN GOLD COAST ENTRY STATEMENT

LG314/254/17/032D/01C(P2) REPORT CONFIDENTIAL RESOLUTION G19.0130.008 moved Cr Tate seconded Cr PJ Young



2 That Council supports Option D outlined in Section 5.3 – with the lights

remaining in their current location.

3 That the Mayor and the Chief Executive Officer investigate other opportunities for optimisation of this artwork including the feasibility and cost/benefit.

4 That the findings in relation to part 3 above be brought back to Council. A division was called For 11 Cr Owen-Jones, Cr PJ Young, Cr Crichlow, Cr Baildon,

Cr O'Neill, Cr La Castra, Cr Boulton, Cr PC Young, Cr Taylor, Cr McDonald, Cr Tate

Against 3 Cr Tozer, Cr Caldwell, Cr Gates Abstained 0 Absent 1 Cr Vorster

CARRIED BY SUPER MAJORITY


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.1 TRANSPORT AND INFRASTRUCTURE (Continued) ITEM 3 BROADBEACH CAROUSEL OPTIONS FOR REMOVAL

RD22017/16/-(P7) REPORT CONFIDENTIAL RESOLUTION G19.0130.009 moved Cr Caldwell seconded Cr Crichlow

That Committee Recommendation TI19.0122.003 be adopted with a change to part 3 such that it reads as follows:- 1 That the report be deemed non-confidential except for those parts deemed by

the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009.

2 That Council endorses Option 4 as outlined in Section 5.4 of this report.

3 Should Option 4 prove to be unsuccessful, the parts requested by the Showman’s Guild be donated to ensure permanent public display within City of Gold Coast, including permanent static display in the Broadbeach Mall Precinct.

CARRIED UNANIMOUSLY

ADOPTION OF THE TRANSPORT AND INFRASTRUCTURE COMMITTEE REPORT RESOLUTION G19.0130.010 moved Cr PC Young seconded Cr Taylor That the Report of the Transport and Infrastructure Committee Meeting of Tuesday 22 January 2019, covered by Recommendations numbered TI19.0122.001 to TI19.0122.005, be adopted with the exception of Recommendation Numbers TI19.0122.003 and TI19.0122.004 which were specifically resolved.

CARRIED


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.2 LIFESTYLE AND COMMUNITY Cr O’Neill, Chairperson of the Lifestyle and Community Committee, presented the Report of the Meeting of the Lifestyle and Community Committee held on Tuesday 22 January 2019. . RESOLUTION G19.0130.011 moved Cr O’Neill seconded Cr Boulton That the Report of the Lifestyle and Community Committee Meeting held on Tuesday 22 January 2019, covered by Recommendations numbered LC19.0122.001 to LC19.0122.005, be received.

CARRIED ITEM 5 KIRRA PAVILION LEASE OF COMMERCIAL SPACE UPDATE

PN307016/20/04(P1) Conflict of Interest - Cr Owen-Jones Pursuant to section 175E(2) of the Local Government Act 2009, I would like to inform the meeting that I have a personal interest in this matter, which I recognise may be a real or perceived conflict of interest the particulars of which are as follows: The nature of the interest is: I received hospitality from Knight Frank The name of the person or entity is: Knight Frank The nature of the relationship is: hospitality The value of the gift is: unknown The date of receipt of the gift is: first Tuesday in November in 2012-2018 The nature of the other person’s interest in the matter is: agent appointed by City to Lease Kirra Pavilion However I have considered my position and my interest in this matter as just described, and am firmly of the view that I may participate in the meeting and vote in respect of this matter in the public interest for the reason that it is minor in nature. PROCEDURAL MOTION moved Cr Gates seconded Cr Boulton Pursuant to section 175E(4)(a) of the Local Government Act 2009, Council resolves that:

Cr Owen-Jones has a real or perceived conflict of interest in this matter because he accepted hospitality from Knight Frank.

CARRIED In accordance with Section 175E(4) of the Local Government Act 2009, Cr Owen-Jones did not vote. PROCEDURAL MOTION moved Cr Gates seconded Cr Boulton Pursuant to section 175E(4)(b) of the Local Government Act 2009, Council resolves that:

Cr Owen-Jones may participate in the meeting and vote on the matter because the benefit is minor in nature.

CARRIED In accordance with Section 175E(4) of the Local Government Act 2009, Cr Owen-Jones did not vote.


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.2 LIFESTYLE AND COMMUNITY (Continued) ITEM 5 KIRRA PAVILION LEASE OF COMMERCIAL SPACE UPDATE

PN307016/20/04(P1) (Continued) RESOLUTION G19.0130.012 moved Cr Gates seconded Cr O’Neill

That Committee Recommendation LC19.0122.005 be adopted as printed which reads as follows:- 1 That the report/attachment be deemed non-confidential except for those parts

deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009.

2 That the March budget review and subsequent quarterly reviews consider the allocation of funds as outlined in the report for the strip-out of the premises & make good (to warm shell).

3 That having regard to the background in the report, Council note that the existing tenant of the site operating under the ‘PIZZA HUT’ banner has not progressed to the next round of the tender process and that accordingly, appropriate advice be provided to that party acknowledging their long term operations and in turn, to put in place transition terms for their vacation of the site and its return to Council control.

4 That the CEO (Manager Parks & Recreational Services with input from Manager Property Services) be authorised to pursue the tender process as outlined in the report.

5 That a further report outlining the shortlist of tenderers be presented to Council together with the officers’ recommendation of the outcome most advantageous to the City.

CARRIED UNANIMOUSLY Cr Owen-Jones voted in the positive ADOPTION OF LIFESTYLE AND COMMUNITY COMMITTEE REPORT RESOLUTION G19.0130.013 moved Cr O’Neill seconded Cr Boulton That the Report of the Lifestyle and Community Committee’s Recommendations of Tuesday 22 January 2019, numbered LC19.0122.001 to LC19.0122.005, be adopted with the exception of Recommendation Number LC19.0122.005 which was specifically resolved.

CARRIED


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.3 ECONOMY PLANNING AND ENVIRONMENT Cr Caldwell, Chairperson of the Economy, Planning and Environment Committee, presented the Report of the Economy, Planning and Environment Committee held on Wednesday, 23 January 2019. RESOLUTION G19.0130.014 moved Cr Caldwell seconded Cr O’Neill That the Report of the Economy, Planning and Environment Committee Meeting held on Wednesday, 23 January 2019, covered by Recommendations numbered EPE19.0123.001 to EPE19.0123.010 be received.

CARRIED ITEM 1 REPORT ON DEVELOPMENT APPLICATION FOR A DEVELOPMENT PERMIT

FOR A MATERIAL CHANGE OF USE (IMPACT ASSESSMENT) FOR A WAREHOUSE AT 1 TO 3 OLYMPIC CIRCUIT, SOUTHPORT - DIVISION 6 PN79196/01/DA5

Conflict of Interest:- Cr Owen-Jones Pursuant to section 175E(2) of the Local Government Act 2009, I would like to inform the meeting that I have a personal interest in this matter, which I recognise may be a perceived conflict of interest the particulars of which are as follows: The name of the person or entity is: Geyer Town Planning

The nature of the relationship is: a Director of Zone Planning was a Director of Geyer Town Planning who contributed to my 2016 campaign.

The value of the gift or benefit is: $900

The date of the gift: 23 August 2015

The nature of the other person’s interest in the matter is: David Geyer, formerly of Geyer Town Planning, is a Director of Zone Planning, a consultant to this application.

However I have considered my position and my interest in this matter as just described, and am firmly of the view that I may participate in the meeting and vote in respect of this matter in the public interest for the reason that the city has received further legal advice in regards to perceived conflict of interest. Given the value of the donation and the context it was given and the fact that I do not have a personal relationship with David Geyer I intend to remain in the room.

PROCEDURAL MOTION moved Cr Gates seconded Cr O’Neill Pursuant to section 175E(4)(a) of the Local Government Act 2009, Council resolves that:

Cr Owen-Jones has a perceived conflict of interest in this matter because he has received a donation.

CARRIED In accordance with Section 175E(4) of the Local Government Act 2009, Cr Owen-Jones did not vote.


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.3 ECONOMY PLANNING AND ENVIRONMENT (Continued) ITEM 1 REPORT ON DEVELOPMENT APPLICATION FOR A DEVELOPMENT PERMIT

FOR A MATERIAL CHANGE OF USE (IMPACT ASSESSMENT) FOR A WAREHOUSE AT 1 TO 3 OLYMPIC CIRCUIT, SOUTHPORT - DIVISION 6 PN79196/01/DA5 (Continued)

PROCEDURAL MOTION moved Cr Gates seconded Cr O’Neill Pursuant to section 175E(4)(b) of the Local Government Act 2009, Council resolves that: Cr Owen-Jones may participate in the meeting and vote on the matter because the benefit is minor in nature.

CARRIED In accordance with Section 175E(4) of the Local Government Act 2009, Cr Owen-Jones did not vote. MOTION moved Cr Caldwell seconded Cr Gates That Committee Recommendation EPE19.0123.001 be adopted as printed in the Economy, Planning and Environment Committee meeting report. PROCEDURAL MOTION moved Cr Crichlow seconded Cr Baildon That the matter be referred back to Economy Planning and Environment Committee Meeting for further consideration The PROCEDURAL MOTION was LOST. AMENDMENT moved Cr Crichlow seconded Cr Tozer That Committee Recommendation EPE19.0123.001 be adopted with the deletion of parts A & B of Condition 2. A division was called For 3 Cr Tozer, Cr Owen-Jones, Cr Crichlow Against 11 Cr PJ Young, Cr Caldwell, Cr Baildon, Cr O'Neill,

Cr La Castra, Cr Boulton, Cr Gates, Cr PC Young, Cr Taylor, Cr McDonald, Cr Tate

Abstained 0 Absent 1 Cr Vorster The AMENDMENT was LOST.


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.3 ECONOMY PLANNING AND ENVIRONMENT (Continued) ITEM 1 REPORT ON DEVELOPMENT APPLICATION FOR A DEVELOPMENT PERMIT

FOR A MATERIAL CHANGE OF USE (IMPACT ASSESSMENT) FOR A WAREHOUSE AT 1 TO 3 OLYMPIC CIRCUIT, SOUTHPORT - DIVISION 6 PN79196/01/DA5 (Continued)

RESOLUTION G19.0130.015 moved Cr Caldwell seconded Cr Gates That Committee Recommendation EPE19.0123.001 be adopted as printed in the Economy, Planning and Environment Committee meeting report.

CARRIED Cr Owen-Jones voted in the positive Cr Crichlow requested that her vote in the negative be recorded ITEM 3 REPORT ON DEVELOPMENT APPLICATION FOR A MATERIAL CHANGE OF

USE (CODE ASSESSMENT) FOR MULTIPLE DWELLINGS (61 UNITS), FOOD AND DRINK OUTLET AND SHOP (NEIGHBOURHOOD STORE) AT 33 SURF PARADE AND 22 GEORGE AVENUE, BROADBEACH DIVISION 10 MCU/2018/1030

Conflict of Interest – Cr Gates Pursuant to section 175E(2) of the Local Government Act 2009, I would like to inform the meeting that I have a personal interest in this matter, which I recognise may be a real or perceived conflict of interest the particulars of which are as follows:

The nature of the interest is: Receipt of donation

The name of the person or entity is: UPS The nature of the relationship is: Donor is a consultant to the applicant The date and value of the donation is: $1850 – 2 September 2014,

$1850 – 7 September 2015 and $1850 – 9 September 2016

The nature of the other person’s interest in the matter is: The Donor is a consultant to the applicant However I have considered my position and my interest in this matter as just described, and am firmly of the view that I may participate in the meeting and vote in respect of this matter in the public interest in accordance with written advice from the Electoral Commission Qld dated 27 September 2018 whereby this consultant has been engaged by the developer to provide professional services and is not the applicant. PROCEDURAL MOTION moved Cr Caldwell seconded Cr Owen-Jones Pursuant to section 175E(4)(a) of the Local Government Act 2009, Council resolves that:

Cr Gates has a real or perceived conflict of interest in this matter because she has received electoral donations from a consultant engaged by the developer to provide advice.

CARRIED In accordance with Section 175E(4) of the Local Government Act 2009, Cr Gates did not vote.


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.3 ECONOMY PLANNING AND ENVIRONMENT (Continued) ITEM 3 REPORT ON DEVELOPMENT APPLICATION FOR A MATERIAL CHANGE OF

USE (CODE ASSESSMENT) FOR MULTIPLE DWELLINGS (61 UNITS), FOOD AND DRINK OUTLET AND SHOP (NEIGHBOURHOOD STORE) AT 33 SURF PARADE AND 22 GEORGE AVENUE, BROADBEACH DIVISION 10 MCU/2018/1030 (Continued)

PROCEDURAL MOTION moved Cr Tozer seconded Cr Caldwell Pursuant to section 175E(4)(a) of the Local Government Act 2009, Council resolves that:

Cr Gates may participate in the meeting and vote on the matter having regard to advice from Electoral Commission of Queensland dated 27 September 2018, that the donor is not a prohibited donor but is a consultant engaged by the developer, the interest is minor and of a remote nature and Cr Gates can consider the matter in the public interest.

CARRIED

In accordance with Section 175E(4) of the Local Government Act 2009, Cr Gates did not vote. RESOLUTION G19.0130.016 moved Cr Caldwell seconded Cr Gates That Committee Recommendation EPE19.0123.003 be adopted as printed in the Economy, Planning and Environment Committee meeting report.

CARRIED Cr Gates voted in the positive ITEM 5 QUEENSLAND TREASURY POPULATION PROJECTIONS 2018 EDITION

PD113/1360 (P1) RESOLUTION G19.0130.017 moved Cr PJ Young seconded Cr Caldwell

That Committee Recommendation EPE19.0123.005 be adopted as printed which reads as follows:- 1 That the content of the report and the revised Queensland Government

Statisticians Office population projections (2018 edition) are noted. 2 The 2018 Population Projections are used to inform the LGIP major amendment

(LGIP2).

CARRIED UNANIMOUSLY


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.3 ECONOMY PLANNING AND ENVIRONMENT (Continued) ITEM 8 THE SPIT MASTER PLAN – UPDATE ON PHASE TWO OF PROJECT

PD113/1275/17(P1) REPORT CONFIDENTIAL RESOLUTION G19.0130.018 moved Cr Caldwell seconded Cr PC Young

That Committee Recommendation EPE19.0123.008 be adopted as printed which reads as follows:- 1 That the report/attachments be deemed non-confidential except for those parts

deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009.

2 That a report be presented to Council on Wednesday, 30 January 2019 including recommendations in response to the Draft Spit Master Plan.

3 That a project update be presented to Council in March 2019.

CARRIED Meeting adjourned at 3.05pm Meeting reconvened at 3.18pm ITEM 2 REPORT ON DEVELOPMENT APPLICATION FOR A MATERIAL CHANGE OF

USE (IMPACT ASSESSMENT) FOR A CHILD CARE CENTRE AT 5 TO 9 FREDA STREET, ASHMORE DIVISION 8 PN101322/01/DA2

MOTION moved Cr La Castra seconded Cr McDonald That the application be refused on the following grounds:-

a The application does not satisfy part (d) of Specific Outcomes 3.4.5.1(14) of the neighbourhood centres element:

(d) (where the use does not unduly detract from the local character and amenity).

b The development results in a building height that does not comply with the low rise

building height, under Strategic Outcomes 3.3.1 (11) of the Creative Liveable Places theme and Specific Outcomes 3.3.3.1 (1) of the Suburban Neighbourhood element.

A division was called For 3 Cr Baildon, Cr La Castra, Cr McDonald Against 11 Cr Tozer, Cr Owen-Jones, Cr PJ Young, Cr Caldwell,

Cr Crichlow, Cr O'Neill, Cr Boulton, Cr Gates, Cr PC Young, Cr Taylor, Cr Tate

Abstained 0 Absent 1 Cr Vorster The MOTION was LOST.


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.3 ECONOMY PLANNING AND ENVIRONMENT (Continued) ITEM 2 REPORT ON DEVELOPMENT APPLICATION FOR A MATERIAL CHANGE OF

USE (IMPACT ASSESSMENT) FOR A CHILD CARE CENTRE AT 5 TO 9 FREDA STREET, ASHMORE DIVISION 8 PN101322/01/DA2 (Continued)

RESOLUTION G19.0130.019 moved Cr Caldwell seconded Cr Gates That Committee Recommendation EPE19.0123.002 be adopted as printed in the Economy, Planning and Environment Committee meeting report. A division was called For 12 Cr Tozer, Cr Owen-Jones, Cr PJ Young, Cr Caldwell, ,

Cr Crichlow, Cr Baildon, Cr O'Neill, Cr Boulton, Cr Gates, Cr PC Young, Cr Taylor, Cr Tate

Against 2 Cr La Castra, Cr McDonald Abstained 0 Absent 1 Cr Vorster

CARRIED

ADOPTION OF THE ECONOMY, PLANNING AND ENVIRONMENT COMMITTEE REPORT RESOLUTION G19.0130.020 moved Cr Caldwell seconded Cr O’Neill That the Report of the Economy, Planning and Environment Committee’s Recommendations of Wednesday, 23 January 2019, numbered EPE19.0123.001 to EPE19.0123.010, be adopted with the exception of:- Recommendation Numbers EPE19.0123.001

EPE19.0123.002 EPE19.0123.003 EPE19.0123.005 and EPE19.0123.008 which were specifically resolved.

CARRIED


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.4 WATER & WASTE Cr Boulton, Chairperson of the Water & Waste Committee, presented the Report of the Water & Waste Committee held on Thursday, 24 January 2019. RESOLUTION G19.0130.021 moved Cr Boulton seconded Cr Taylor That the Report of the Water & Waste Committee Meeting held on Thursday, 24 January 2019, covered by Recommendations numbered WW19.0124.001 to WW19.0124.005 be received.

CARRIED ADOPTION OF THE WATER & WASTE COMMITTEE REPORT RESOLUTION G19.0130.022 moved Cr Boulton seconded Cr Taylor That the Report of the Water & Waste Committee’s Recommendations of Thursday, 24 January 2019, numbered WW19.0124.001 to WW19.0124.005, be adopted.

CARRIED UNANIMOUSLY


9 RECEPTION & CONSIDERATION OF COMMITTEE REPORTS (Continued) 9.5 EVENTS, TOURISM AND GOVERNANCE Cr La Castra, Chairperson of the Events, Tourism and Governance Committee, presented the Report of the Meeting of the Events, Tourism and Governance Committee held on Thursday, 24 January 2019. RESOLUTION G19.0130.023 moved Cr La Castra seconded Cr PC Young That the Report of the Events, Tourism and Governance Committee Meeting held on Thursday, 24 January 2019 covered by Recommendations numbered ETG19.0124.001 to ETG19.0124.003 be received.

CARRIED ADOPTION OF EVENTS, TOURISM AND GOVERNANCE COMMITTEE REPORT RESOLUTION G19.0130.024 moved Cr La Castra seconded Cr PC Young That the Report of the Events, Tourism and Governance Committee Recommendations of Thursday, 24 January 2019, numbered ETG19.0124.001 to ETG19.0124.003, be adopted.

CARRIED 10 CONSIDERATION OF NOTICES OF MOTION Nil 11 QUESTIONS ON NOTICE / ANSWERS TO QUESTIONS ON NOTICE Nil 12 PRESENTATION OF PETITIONS Nil


13 GENERAL BUSINESS 13.1 EDIBLESCAPES GARDEN PROJECT

FN296/-/-(P38) RESOLUTION G19.0130.025 moved Cr PJ Young seconded Cr Tozer That Council approve a one off donation to Ediblescapes Inc. in the amount of $10,000 from Project No. 29176 Billabirra Court Nerang West Sport PK IMP 1 to support the Ediblescapes Garden project. This One-off Donation made outside Council’s competitive grants and donations programs and is made on public interest grounds.

CARRIED UNANIMOUSLY 13.2 CURRUMBIN WILDLIFE HOSPITAL FOUNDATION

FN334/375/02/07(P1) RESOLUTION G19.0130.026 moved Cr La Castra seconded Cr O’Neill That Council approve an allocation of $10,000 from Division 8 LAWS 2018-19 budget to the Currumbin Wildlife Hospital Foundation, as a contribution to its operating costs. This is considered a one-off donation being made outside of Council’s competitive programs and in the public interest.

CARRIED 13.3 SOUTHPORT PONY CLUB

FN334/375/02/07(P1) RESOLUTION G19.0130.027 moved Cr Crichlow seconded Cr Owen-Jones That Council approve an allocation of $943 from Division 6 LAWS 2018-19 to the Southport Pony Club Inc. as a contribution towards miscellaneous rectification works associated with the staging of the 2018 Gold Coast Show at Owen Park, Southport. This is a One-off Donation made outside Council’s competitive grants and donations programs and is made on public interest grounds.

CARRIED


13 GENERAL BUSINESS (Continued) 13.4 COMBINED CHURCHES EASTER CELEBRATION

FN334/375/20(P1) Conflict of Interest - Cr Tozer:- Pursuant to section 175E(2) of the Local Government Act 2009, I would like to inform the meeting that I have a personal interest in this matter, which I recognise may be a real or perceived conflict of interest the particulars of which are as follows:

The name of the person or entity is: Juice Media Limited The nature of the relationship is: I am a former Director of Juice Media Limited The value of the gift or benefit is: Nil The nature of the other person’s interest in the matter is: Juice Media Limited is proposed

as recipient of in-kind funding to host a community event at HOTA

However I have considered my position and my interest in this matter as just described, and am firmly of the view that I may participate in the meeting and vote in respect of this matter in the public interest for the reason that I was a volunteer director and the event is proposed to be funded in the community interest. PROCEDURAL MOTION moved Cr PJ Young seconded Cr PC Young Pursuant to section 175E(4)(a) of the Local Government Act 2009, Council resolves that:

Cr Tozer has a real or perceived conflict of interest in this matter because he is a former Director of Juice Media Limited.

CARRIED

In accordance with Section 175E(4) of the Local Government Act 2009,Cr Tozer did not vote. PROCEDURAL MOTION moved Cr PJ Young seconded Cr Owen-Jones Pursuant to section 175E(4)(b) of the Local Government Act 2009, Council resolves that:

Cr Tozer may participate in the meeting and vote on the matter because the conflict is of a minor nature, and he is a former Director which was a volunteer position.

CARRIED In accordance with Section 175E(4) of the Local Government Act 2009, Cr Tozer did not vote. RESOLUTION G19.0130.028 moved Cr Tate seconded Cr PJ Young 1 That the applicant (Juice Media Ltd) be advised that Council will provide

support to the 2019 and 2020 Combined Churches Easter Celebration to be held on the 21 April 2019 and 12 April 2020 at the HOTA Outdoor Stage via in-kind support of up to $80,000 (plus GST) to assist with venue, labour, associated support and infrastructure costs, with the source of funds being the Events Reserve, subject to the organiser securing all statutory approvals for the event.

2 That the applicant ensures all promotional material is approved by HOTA to ensure all messages relating to the event transport and logistics meet event planning requirements.

CARRIED UNANIMOUSLY Cr Tozer voted in the positive


14 OTHER BUSINESS 14.1 NOVEMBER 2018 MONTHLY FINANCIAL REPORT FN334/375/20(P1) Refer Attachment 1: 2018-19 Special Purpose Statement of Income and Expenditure and

Special Purpose Statement of Financial Position – November 2018 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT The Local Government Act 2009 and the Local Government Regulation 2012 require the Chief Executive Officer to present a financial report to Council on a monthly basis. The attached report is provided to Council in accordance with the above statutory requirements for November 2018. 4 PREVIOUS RESOLUTIONS Not Applicable. 5 DISCUSSION Monthly financial reporting to Council is specified under section 204 of the Local Government Regulation 2012. It requires the Chief Executive Officer to present a financial report to Council on a monthly basis, stating the progress that has been made in relation to the local government’s budget. To aid in understanding the budget to actual position a Special Purpose Statement of Income and Expenditure and Special Purpose Statement of Financial Position are provided in Attachment 1. The purpose of each statement is summarised below: Special Purpose Statement of Income and Expenditure - The Statement of Income and Expenditure measures Council’s performance over the year and includes all sources of income and all operating expenses. A favourable net result indicates Council is increasing its community equity, i.e. net accumulated financial worth. Combined Statements of Income and Expenditure for Gold Coast Water, Waste Management, Tourist Parks and Other Council Activities are also provided in Attachment 1. Special Purpose Statement of Financial Position - The Statement of Financial Position sets out Council’s net accumulated financial worth at a point in time. It shows the assets that Council holds as well as liabilities or claims against these assets. These special purpose financial statements are prepared for Council in satisfaction of the statutory requirement noted above. They are extracted directly from the financial system after each month is closed, so the amounts shown in the report reflect unaudited account balances. On rare occasions the report may reflect an adjusted amount, where material errors or omissions in the financial system are known and quantifiable.


14 OTHER BUSINESS (Continued) 14.1 NOVEMBER 2018 MONTHLY FINANCIAL REPORT (Continued) FN334/375/20(P1) 2018-19 BASIS OF REPORTING & TREND ANALYSIS The budget figures presented in this report as at 30 November 2018 represents the 2018-19 September Budget Review position, after reprovisions. As part of the monthly reporting process, Directorates are requested to identify significant budget trends. A trend is generally caused by an external influence beyond Council’s control (e.g. legislative, economic/financial markets, weather, etc.) and could potentially result in a variation to the level of service provided by Council. Budget variations are considered in the budget review process.

2018-19 YEAR TO DATE PROGRESS AND COMPARATIVE ANALYSIS Progress against capital and operating budgets can be expressed in a series of high level indicators as provided below. These indicators show that revenue and expenditure are generally within expectations at this point in the financial year. When reviewing the budget to actual position on the statements it should be noted that Council’s budget is prepared on an annual basis, whereas actual figures are presented on a progressive monthly basis. Pro rata comparisons may not be appropriate because actual results may not occur evenly throughout the year, for example when they are influenced by seasonality or when works / programs are ahead of or behind schedule, or progress at a rate which is not uniform throughout the year. Such timing variances do not indicate a need for budget adjustment. Examples of variances which should be addressed through budget adjustments are: o planning variances where the intended program / outputs have changed;

o cost/efficiency variances, such as savings or over-expenditure, that will not be absorbed within the budget area

o price variances, where the price of inputs changed. The graphs presented below attempt to take seasonality of budget expenditure into account by comparing actual expenditure and revenue for the year to date to a Previous Year Pattern.

2018-19 Statement of Income and Expenditure - Major Budget Trends Budget Trend$m

( ) = Favourable

GeneralTreasury - Interest on Investments. Investment Income is currrently tracking above the revised budget by a little over $1.2 million largely due to the high cash balances being maintained. Actual revenue received extrapolated for the full year is $27 million against a revised budget of $25.8 million. (1,200,000)


14 OTHER BUSINESS (Continued) 14.1 NOVEMBER 2018 MONTHLY FINANCIAL REPORT (Continued) FN334/375/20(P1) o The Previous Year Pattern percentage shows the percentage of last year’s total

expenditure that had been spent at the corresponding time last year based on the final Revised Budget.

o The Previous Year Pattern amount shows the actual reported amount at the corresponding time last year.

Previous Year Pattern for revenue is a similar calculation based on revenue received at the corresponding time last year. OPERATING EXPENDITURE

The graph provides a comparison of year to date actual operating expenditure to budget for November 2018.

Council has spent $402.8 million from an operating expense budget of $1,027.8 million (including reprovisions) in 2018-19. This represents 39.2% expended at 41.7% of the year elapsed.

By comparison 38.7% ($399.9 million) of the previous year’s actual expenditure had been spent from the budget of $1,033.6 million at the end of November 2017. Some major expenses contributing to the decreased budget from 2017-18 to 2018-19 include: Commonwealth Games Operations, ICT Transformation Projects and Northern

Beaches Shoreline Projects.


14 OTHER BUSINESS (Continued) 14.1 NOVEMBER 2018 MONTHLY FINANCIAL REPORT (Continued) FN334/375/20(P1) CAPITAL EXPENDITURE

The capital expenditure graph shows a comparison of budget (plus commitments) to actual expenditure for capital works in 2018-19.

At the end of November 2018 $102.0 million ($257.2 million inclusive of commitments) had been spent from a total capital budget of $499.8 million (including reprovisions). This represents 20.4% (51.4% inclusive of commitments) of the total budget

with 41.7% of the year elapsed. Commitments relate to current year projects. Some of the major projects loaded as commitments in 2018-19 include the Long Term Recycled Water Release ($36m) and Cultural Precinct – Green Bridge ($16m) and Art Gallery works ($8m).

By comparison, $112.8 million (27.5%), or $206.9 million (50.4%) inclusive of commitments, of the capital budget of $410.5 million (including reprovisions) had been spent at the end of November 2017.


14 OTHER BUSINESS (Continued)

14.1 NOVEMBER 2018 MONTHLY FINANCIAL REPORT (Continued) FN334/375/20(P1)

OPERATING REVENUES

The graphs below present Council’s major sources of operating revenue. They show the actual year to date performance compared with total year budget and budget trend.

Fees and Charges

Fees and charges (excluding Private Works and Water and Waste Water Fees) were $41.6 million, which is 41.2% of the revised budget of $100.9 million as at the end of November 2018 (41.7% of year elapsed). By comparison, $42.5 million (42.0%) of last year’s budget of $101.3 million for fees and charges revenue had been achieved by the end of November 2017. Last year’s revised budget included an increase in development fees. By comparison, these fees are $2 million lower in the September Budget Review

2018-19. Rates and Utility Charges

The amount of rates and utility charges brought to account as at the end of November 2018 was $513.1 million, which is 43.8% of the total budget of $1,172.0 million. This amount comprises Gold Coast Water rates, which are recognised on a progressive monthly basis, and other rates, which are recognised when billed.

By comparison, $489.1 million (43.5%) of last year’s total rates and utility charges revenue budget of $1,124.4 million had been achieved by the end of November 2017.

Interest Income

Interest income at the end of November 2018 was $14.5 million, which is 50.3% of the budget of $28.8 million.

By comparison, $14.5 million (46.6%) of last year’s total interest revenue budget of $31.2 million had been received by the end of November 2017.

Interest revenue is currently tracking above the revised budget by approximately $1.2 million due to high cash balances being maintained.


14 OTHER BUSINESS (Continued) 14.1 NOVEMBER 2018 MONTHLY FINANCIAL REPORT (Continued) FN334/375/20(P1) 6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN Not Applicable. 7 FUNDING AND RESOURCING REQUIREMENTS Not Applicable. 8 RISK MANAGEMENT Not Applicable. 9 STATUTORY MATTERS The November 2018 Monthly Financial Report is presented to Council in accordance with the Local Government Act 2009 and the Local Government Regulation 2012. 10 COUNCIL POLICIES Not Applicable. 11 DELEGATIONS Not Applicable. 12 COORDINATION & CONSULTATION The November 2018 Monthly Financial Report has been developed in consultation with Directorate staff where applicable.

Name and/or Title of the Stakeholder Consulted

Directorate Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Marilyn Hildebrandt, Executive Coordinator Directorate Finances

OCOO Yes

Julie Brooks, Executive Coordinator Directorate Finances

OCOO Yes

Alex Rummery, Executive Coordinator Directorate Finances

OCOO Yes

John Blair, Manager Corporate Finance OCOO Yes


14 OTHER BUSINESS (Continued) 14.1 NOVEMBER 2018 MONTHLY FINANCIAL REPORT (Continued) FN334/375/20(P1) 13 STAKEHOLDER IMPACTS Not Applicable. 14 TIMING Not Applicable. 15 CONCLUSION The presentation of the attached special purpose (unaudited) reports, 2018-19 Statement of Income and Expenditure and Statement of Financial Position, satisfies legislative financial reporting requirements for November 2018. The high level indicators show that revenue and expenditure are generally within expectations at this point in the financial year. 16 RECOMMENDATION It is recommended that Council resolves as follows: That Council note the Special Purpose 2018-19 Statement of Income and Expenditure and Statement of Financial Position as presented for November 2018. Author: Authorised by:

Robert Liddell Joe McCabe Financial Planning & Business Analyst Chief Operating Officer 14 December 2018 RESOLUTION G19.0130.029 moved Cr Tate seconded Cr Caldwell That Council note the Special Purpose 2018-19 Statement of Income and Expenditure and Statement of Financial Position as presented for November 2018.

CARRIED


14 OTHER BUSINESS (Continued) 14.1 NOVEMBER 2018 MONTHLY FINANCIAL REPORT (Continued) FN334/375/20(P1)

Attachment 1

BUDGET ACTUAL BUDGET ACTUAL BUDGET ACTUAL BUDGET ACTUAL BUDGET ACTUAL

REVENUERATES & UTILITY CHARGES - - (83,740) (34,540) (503,646) (204,347) (584,606) (274,184) (1,171,992) (513,072) 1

RATES DISCOUNTS & REMISSIONS - - 0 0 0 0 52,608 25,551 52,608 25,551 1

FEES AND CHARGES (18,135) (7,235) (11,177) (3,739) (3,658) (1,398) (71,708) (30,601) (104,678) (42,973)INTEREST REVENUE - - (1,120) (526) (11,509) (5,270) (16,146) (8,675) (28,776) (14,471) 2

GAIN/LOSS ON SALE OF ASSETS 0 0 0 17 5,000 0 1,879 327 6,879 344CONTRIBUTION & DONATIONS REVENUE - - (378) (381) (86,500) (38,824) (144,540) (62,938) (231,418) (102,143) 3

GRANTS & SUBSIDIES REVENUE - - 0 0 0 0 (32,021) (13,324) (32,021) (13,324)OTHER REVENUE (64) (177) (44) (336) (40) (61) (24,354) (11,881) (24,502) (12,455) 4

TOTAL REVENUE (18,199) (7,411) (96,459) (39,505) (600,353) (249,901) (818,889) (375,725) (1,533,900) (672,543)

EXPENSESEMPLOYEE COSTS 676 293 9,367 2,561 50,589 19,065 312,847 127,350 373,479 149,269MATERIALS AND SERVICES 16,154 5,776 85,553 26,342 480,880 180,243 467,325 66,536 1,049,912 278,897DEPRECIATION & AMORTISATION 1,650 713 8,600 4,334 95,000 39,410 139,588 59,475 244,838 103,932FINANCE COSTS 0 6 0 0 0 0 38,502 10,803 38,502 10,810 5

OTHER EXPENSES 3,025 1,374 1,044 459 733 312 99,453 59,421 104,254 61,567 6

CAPITALISED EXPENSES (4,540) (787) (12,725) (760) (94,980) (24,334) (387,606) (56,383) (499,851) (82,263)TOTAL EXPENSES 16,965 7,376 91,839 32,937 532,221 214,696 670,109 267,202 1,311,134 522,211

NET RESULT (1,233) (35) (4,620) (6,568) (68,132) (35,205) (148,780) (108,523) (222,766) (150,331)

1

2

3

4

5

6 Other Expenses include Captive Insurance Premium payments ($8m) which are paid in full early in the financial year.

SPECIAL PURPOSE FINANCIAL STATEMENT (UNAUDITED)COMBINING STATEMENT OF INCOME AND EXPENDITURE FOR CITY OF GOLD COAST

GOLD COAST GOLD COAST

(in thousands of dollars)

GOLD COAST

FOR THE PERIOD ENDED 30 NOVEMBER 2018

Other Revenue is mostly comprised of Rental/Lease Revenue, Canteen Revenue and "Revenue Default". The latter is the account to which revenue is posted before being allocated to the appropriate account by journal.It ll t i i t f th l t l d f th th

Contributions and Donations Revenue comprises capital revenues from cash contributions and contributed assets.

This amount comprises Gold Coast Water rates, which are recognised on a progressive monthly basis, and other rates, which are recognised when billed.

WATER OTHER ACTIVITIES CITY OF GOLD COAST

Finance Costs (includes credit card surcharges) and processed once quarterly statements are received from Queensland Treasury Corporation.

Interest revenue comprises earnings based off higher than estimated cash balances.

TOURIST PARKS

General explanations of the above line items can be found in Appendix 1

WASTE MANAGEMENT



BUDGET ACTUAL

ASSETSCURRENT ASSETS

CASH ASSETS 738,086 1,063,333 1

CURRENT RECEIVABLES 204,808 192,810 2

INVENTORIES 1,785 1,827PREPAYMENTS 702 201CLEARING ACCOUNTS 0 (98) 3

945,381 1,258,072

NON CURRENT ASSETSOTHER FINANCIAL ASSETS 1,150 1,150 4

PROPERTY, PLANT AND EQUIPMENT 14,118,646 13,462,090ASSETS UNDER CONSTRUCTION 0 290,402 5

14,119,796 13,753,643

TOTAL ASSETS 15,065,177 15,011,715

LIABILITIESCURRENT LIABILITIES

CURRENT PAYABLES (95,172) (68,161)UNEARNED REVENUE (2,000) (54,769) 6

CURRENT EMPLOYEE BENEFITS (26,730) (24,917)CURRENT BORROWINGS (80,940) (77,395)CLEARING ACCOUNTS 0 43 3

(204,843) (225,200)

NON CURRENT LIABILITIESNON CURRENT EMPLOYEE BENEFITS (54,361) (57,888)NON CURRENT PROVISIONS (70,000) (70,000) 8

NON CURRENT BORROWINGS (552,843) (545,605)(677,204) (673,492)

TOTAL LIABILITIES (882,046) (898,692)NET COMMUNITY ASSETS 14,183,130 14,113,023

COMMUNITY EQUITYRETAINED CAPITAL 9,103,053 8,978,225RESERVES 5,080,077 5,134,798 7

TOTAL COMMUNITY EQUITY 14,183,130 14,113,023

1

2

3

4

5

6

7

8

(in thousands of dollars)

SPECIAL PURPOSE FINANCIAL STATEMENT (UNAUDITED)STATEMENT OF FINANCIAL POSITION FOR CITY OF GOLD COAST AS AT 30 NOVEMBER 2018

Cash Assets include investments. The balance is usually highest after the close of the discount period for Rates (August and February) and Water (July, October, January and April). The cash balance comprises: (i) Infrastructure Charges Reserve ($473.4m), (ii) Investment Fund Reserve ($73.5m), (iii) Gold Coast Water & Waste reserves ($224.8m), (iv) Other reserves (Cultural Precinct, Strategic Priorities Reserve) ($17.9m) and (iv) Other cash items ($273.8m).

Current Receivables includes balances of outstanding invoices and accruals for water rates. It is usually highest after rate notices are issued (July, October, January and April).

General explanations of line items can be found in Appendix 1.

Non Current Provisions includes future rehabilitation and remedial works at the City's waste landfill sites. These works are expected to be undertaken from the year 2035 to the year 2080 with the majority of the costs being incurred for leachate management and landfill capping.

The balance of Assets Under Construction is the accumulated expenditure on capital assets that have not yet been completed and added to Property, Plant and Equipment. From a budget perspective it is assumed that by year end all capital works have been completed and moved to Property, Plant and Equipment.Unearned Revenue includes water rates which have been billed but are treated as unearned and recognised as revenue progressively throughout the year. They will be reduced by year end.

Reserves includes Asset Revaluation Surplus and Cash Reserves.

Clearing Accounts comprise a number of accounts used to hold balances which are cleared periodically throughout the year, including credit cards, payroll related items and debtor refunds.Other Financial Assets are Council's investments in Gold Coast City Council Insurance Co Ltd and SEQ Regional Recreational Facilities Pty Ltd.


14 OTHER BUSINESS (Continued) 14.1 NOVEMBER 2018 MONTHLY FINANCIAL REPORT (Continued) FN334/375/20(P1) APPENDIX 1 – Explanation of Financial Statement Items

This appendix is a general explanation of Council’s revenues, costs, assets and liabilities to aid in understanding the budget to actual comparison in the monthly financial report.

STATEMENT OF INCOME AND EXPENDITURE BY SIGNIFICANT ACTIVITIES

REVENUE FROM ORDINARY ACTIVITIES

Rates and Utility Charges

Rate revenue for Council will mainly be recorded in July and January upon the issue of rate notices. Rate Revenue for Gold Coast Water is accounted for on an accrual basis throughout the year.

Rates Discount and Remissions

Rate discount is recorded as an expense at the time of payment and will mainly increase in July / August and January / February as rates are paid. However, remission is provided at the time of rate issue and will mainly increase in July and January.

Fees and Charges The pattern of revenue for fees and charges reflects a mixture of billing cycles and seasonal variations. For example, licensing and other charges are mainly billed in the first quarter of the financial year, whereas development assessment receipts may follow building and economic trends.

Gain/Loss on Sale A gain or loss on sale arises when Council assets are disposed of or sold at a value that varies from their book value.

Interest Revenue Interest earned varies according to the cash balances available for investment throughout the year.

Contributions and Donations Revenue

Includes capital revenues from cash contributions and contributed assets. Contributed assets generally account for more than half of this budget which are a ‘book entry’ only and are brought to account through year-end processes.

Grants and Subsidies Revenue

Subsidies are mainly received for specific capital projects after stages of completion are reached.

Other Revenue Other revenue comprises miscellaneous relatively small amounts of revenue that don’t fit into the major categories. It includes Reimbursements and Recoveries, and Rental and Lease Revenue.

EXPENSES FROM ORDINARY ACTIVITIES

Employee Costs The total expenditure on labour, including remuneration and benefits, as well as other employee-related costs such as superannuation, payroll tax and workers compensation.

Materials and Services

Where totals are shown for individual business units, the expenditure on materials and services includes internal transactions.

Depreciation and Amortisation

Non-cash expense that estimates the use and ‘wear and tear’ of non-current assets such as plant, equipment and infrastructure.

Finance Costs Interest on loans, and bank charges.



Other Expenses Other expenses comprise miscellaneous expenses that don’t fit into the major categories. It includes contributions and donations, write offs, insurance premiums and external audit fees.

Capitalised Expenses

This line shows how much of the employee costs and materials and services are used in construction / purchase or major renewal of assets. The budget reflects the total expenditure identified in the Four Year Capital Works Program.

Net Result for Period

This line represents the budgeted increase in community equity to be retained at year end. This is used to fund new capital works and for loan redemption. Transfers to and from capital reserves are made as appropriate.

STATEMENT OF FINANCIAL POSITION

Current assets The cash and cash equivalents that are currently held. The budget shows the budgeted closing balance at the end of the financial year. The actual cash balance will vary significantly throughout the year as rate receipts, loans and major payments are processed. Cash investment is managed by Council’s Treasury Section.

Non Current Assets The budgeted value of property, plant and equipment and infrastructure assets, at year end, including land, roads, water and sewerage infrastructure after depreciation, renewals, new capital works, contributed assets and revaluations are accounted for.

Current Liabilities The present obligations, arising in the past, that Council has to make payments for within the next financial year. The budget shows the expected balance of these liabilities at the end of the financial year. This includes accounts payable and provisions for employee entitlements to annual and long service leave. It also includes the expected commitment to pay loan redemption in the next financial year.

Non-Current Liabilities

The expected balance, at year end, of provisions for employee entitlements and debt that is not required to be paid within the next financial year.

Community Equity Retained equity includes City Capital and any Surplus / Deficit. Reserves include cash-backed reserves representing infrastructure charges and asset revaluation reserves which record the valuation adjustments to Council’s existing non-current assets.


14 OTHER BUSINESS (Continued) 14.2 WATER AND SEWERAGE SERVICES - DECEMBER 2018 BUDGET REVIEW FN334/252/18(P3) Refer 5 page attachment 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT The purpose of this report is to provide an overview of budget adjustments proposed for Water and Sewerage Services at the December 2018 Budget Review. 4 PREVIOUS RESOLUTIONS G18.0621.032

The City’s 2018-19 Budget was adopted by Council at the Budget Meeting held on 21 June 2018.

B17.1207.002 1 That Council approve the decrease of $10.4 million to be transferred to the

Water and Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $7.5 million for the 2017-18 financial year.

2 That Council note budget variations per Attachments 2 and 3 will be included in the September 2017 Budget Review.

5 DISCUSSION

5.1 Introduction The Local Government Act 2009 allows a Local Government to amend its budget for the financial year at any time before the year ends, by way of resolution. The City of Gold Coast Budget Review Policy requires any variations to the budget to be submitted to Council for approval through the quarterly budget review process. The current City of Gold Coast Budget Review Policy states that all reports dealing with budget variations or budget transfers must be referred to Special Budget Committee. 5.2 Budget Adjustment Summary Water and Sewerage Services’ proposed budget movements for the December 2018 Budget Review are set out in Attachments 1 and 2 and summarised in Table 1 (below). These items are explained in detail in the following sections.


14 OTHER BUSINESS (Continued) 14.2 WATER AND SEWERAGE SERVICES - DECEMBER 2018 BUDGET REVIEW

(Continued) FN334/252/18(P3)

Table 1: Summary of Budget Adjustments

(*) 2018-19 Initial Capital Program includes $2.8 million of infrastructure charges offset funded projects

5.3 Operating Revenue No changes in operating revenue have been proposed at this budget review, as shown in Table 2 (below).

Table 2 – Movement in Operating Revenue

Summary Income Statement Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Operating Revenue 528.5 528.5 528.3 0.0 0.0Flow-Dependant Expenses 204.4 204.4 204.4 0.0 0.0Controllable Expenses 111.4 110.2 108.5 (1.1) (1.0)

Operating Result $ 212.7 $ 213.8 $ 215.3 ($ 1.1) (0.5)Loss on Sale of Assets 5.0 5.0 5.0 0.0 0.0

Net Profit before Capital Items $ 207.7 $ 208.8 $ 210.3 ($ 1.1) (0.5)Capital Revenue 86.6 86.6 86.6 0.0 0.0Depreciation / Amortisation 95.0 95.0 95.0 0.0 0.0

Earnings Before Interest and Taxation $ 199.3 $ 200.4 $ 202.0 ($ 1.1) (0.6)Interest Expense (QTC loan) 2.5 2.5 2.5 0.0 0.0Interest Margin Expense 0.9 0.9 0.9 0.0 0.0Shareholder Interest Expense 88.8 88.8 88.8 0.0 0.0Income Tax Eqivalents 39.1 39.1 39.1 0.0 0.0

Net Profit After Taxation $ 68.0 $ 69.1 $ 70.7 ($ 1.1) (1.6)

Capital Expenditure (*) 95.0 95.0 92.2 0.0 0.0

Total Capital Works Program Expenditure $ 95.0 $ 95.0 $ 92.2 $ 0.0 0.0

Dec v SepMovement

Operating Revenue Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Access Charges 248.0 248.0 248.0 0.0 0.0Volumetric Charges 264.5 264.5 264.5 0.0 0.0Interest on Outstanding Rates 1.3 1.3 1.3 0.0 0.0Interest on Investments 10.3 10.3 10.2 0.0 0.0Fees and Charges 4.5 4.5 4.4 0.0 0.0

Total Operating Revenue $ 528.5 $ 528.5 $ 528.3 $ 0.0 0.0

Dec v SepMovement




5.4 Operating Expenses

The below graph provides a breakdown of water and sewerage services operating expenses. It is noted that bulk water purchases remain unchanged at 59% of total operating expenses.

Graph 1 – Operating expenditure by category

As shown in Table 4 below, a total increase of $1.1 million in controllable expenses has been identified as part of the December 2018 Budget Review.

Table 4 - Movement in Controllable Expenses

Controllable Expenses Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) %

Employee Expenses 51.3 50.8 50.6 (0.5) (1.0)Materials and Services 26.1 25.3 24.7 (0.8) (3.0)Council Corporate SLAs 19.9 19.9 19.9 0.0 0.0Internal Directorate SLA (3.3) (3.3) (3.3) 0.0 0.0Fleet and Plant 8.0 8.0 8.0 0.0 0.0Sewage Treatment Charge 3.5 3.5 3.5 0.0 0.0Insurance Premiums 1.8 1.8 1.8 0.0 0.0Other Expenditure 1.8 1.8 1.8 0.0 0.0Consultants 2.2 2.3 1.5 0.1 5.9Regulatory Expenses 0.1 0.1 0.1 0.0 0.0Prior Year Expenses 0.0 0.0 0.0 0.0 0.0

Total Controllable Expenses $ 111.4 $ 110.2 $ 108.5 ($ 1.1) (1.0)

Dec v SepMovement




An overall increase of $1.1 million (1.0%) in controllable expenses is proposed in the revised budget. Proposed increases in individual expense categories are further explained below. 5.4.1 Employee expenses – increase of $0.5 million This increase results from additional resourcing requirements for operational projects across the business. The majority of the increase is due to:

Grange Water Remediation and Enhancement - $0.2 million: Due to delays in the implementation of LGP Stage 3, significant work is required to stabilise our existing billing system (Grange Water). In addition, enhancements are also required to enable implementation of tariff reform proposals and rolling billing for next financial year. The employee cost component of this project includes project management costs and internal subject matter expert involvement;

LGIP2 Water and Sewer Infrastructure Planning - $0.2 million: Additional funding is required for Water and Sewerage Infrastructure Planning to inform LGIP 2 for the following reasons: (1) Suitable modellers with adequate sewerage experience could not be sourced via contingent labour resources, with this work now being outsourced to appropriately qualified consultants; and (2) Time constraints have required the "employment model" within ArcGIS to be developed within Water and Waste, requiring the engagement of additional resources to undertake that work.

5.4.2 Materials and services – increase of $0.8 million This increase results from additional expenditure on operational projects across the business. The majority of the increase is due to:

Grange Water Remediation and Enhancement - $0.6 million: As outlined in 5.4.1 above, significant work is required to Grange Water to stabilise the billing system. This allocation relates to the vendor costs.

Utility Network Tools - $0.1 million: This increase relates preparation, procurement and implementation activities associated with an ArcGIS Utility Network Management Solution. This solution will enable Water and Waste to have a geometric network (connectivity) and assist in efficient management of its underground network assets. There has been a change in expenditure type from Consultants to Materials and Services. This increase is offset by an equivalent decrease in the budget allocation for consultants.




5.4.3 Consultants – decrease of $0.1 million As noted above, this decrease relates to a change in expenditure type related to the Utility Network Tools project. 5.5 Community Service Obligation - Catchment Management Unit The Local Government Regulation 2012 defines a Community Service Obligation (CSO) as an obligation the local government imposes on a business unit to do something that is not in the commercial interests of the business unit to do. The Regulation determines the CSO amount is to be treated as revenue of the business unit for an amount equal to the cost of carrying out the obligation, less any revenue arising from carrying out the activity. The Catchment Management Unit protects human health in recreational waters by monitoring the state of the city’s water environments and providing rapid reporting of the health status of primary contact recreation areas. It supports the maintenance of legislated environmental values in the city’s water environments through catchment and stormwater planning and implementation of appropriate environmental restoration actions. These activities are funded by way of a Community Service Obligation (CSO). The total value of this CSO at adoption of the City’s initial budget was $4.63 million. An increase to the CSO of $0.18 million to $4.81 million as a result of 2017-18 deferrals was requested as part of the year-end wash up. The CSO remains unchanged at $4.81 following the December budget review.

Table 5 – Summary of Catchment Management Unit – Operational Expenses

Catchment Management Unit (Opex) Dec 18 Review

Sep 18 Review

2018-19 Initial


CMU Operations 1.41 1.41 1.26 0.00 0.0

Catchment Activities 1.54 1.54 1.54 0.00 0.0

Healthy Waterways Contribution 0.32 0.32 0.32 0.00 0.0

WaterSafe Monitoring and Investigations 0.20 0.20 0.25 0.00 0.0

Laboratory Testing Services 0.59 0.59 0.54 0.00 0.0

Community Action Support 0.20 0.20 0.16 0.00 0.0

Water Cycle Implementation 0.11 0.11 0.11 0.00 0.0

SLA for Corporate Services 0.46 0.46 0.46 0.00 0.0Total 4.81 4.81 4.63 0.00 0.0

Dec v SepMovement




5.6 Capital Investment Program Expenditure 5.6.1 Overview of Capital Investment Program The 2018-19 initial approved capital investment program included works totalling $94.98 million with no net movement in the September 2018 budget review. There was no net movement following the December 2018 budget review. Table 7 below provides a summary of capital expenditure across the program.

Table 7 – Capital Program

Dec 18 Review

Sept 18 Review

2018-19 Initial

($M) ($M) ($M) Mvt ($) Mvt (%)

Sewerage 76.66 76.91 75.09 1.82 2%

Water 17.73 17.48 19.81 (2.33) (12%)

Non-Core Water 0.52 0.52 0.00 0.52 -

Corporate 0.08 0.08 0.08 0.00 -

Total Capital Expenses 94.98 94.98 94.98 0.00 0%

Water and Waste Water and Sewerage Services Capital Program

Product

Dec v SepMovement




Table 8 below provides a high level breakdown of the movement in the program.

Table 8 – Movement in capital program

Budget DecreasesMovement

($M)% of total Movement

Works deferred to future years0.00 0%

Project on hold pending confirmation of scope 0.00 0%

Project no longer required 0.00 0%

Scope reduction 0.00 0%

Revised project estimate (0.97) 100%

Accelerated delivery program in previous FY 0.00 0%

Total Decreases (0.97) 100%

Budget Increases

Works carried over from previous financial year 0.00 0%

New Project 0.55 57%

Works brought forward from future years 0.00 0%

Contract sum higher than project estimate 0.00 0%

Scope addition 0.25 25%

Revised project estimate 0.17 18%

Total Increases 0.97 100%

Net Movement 0.00




5.6.2 Capital Investment Program Movements Table 9 below shows there was no movement between the September and December budget reviews for the capital projects with an initial budget greater than $1 million. These projects represent 82% of the total revised capital investment program.

Table 9 - Movement in projects with initial budget greater than $1 million (September

to December)

Top Capital Projects (as presented in initial Budget)

2018-19 Initial($M)

Sept Review ($M)

Dec Review($M)

Movement($M)

Movement(%)

Pimpama to Coombabah STP Release Main 6.20 3.20 3.20 0.00 -

New Water Mains in Coomera 1.91 0.01 0.01 0.00 -

Coombabah STP Liquid Waste Receival Facility 2.40 0.63 0.63 0.00 -

New Water Mains in Stapylton & Alberton 1.80 0.30 0.30 0.00 -

Coombabah STP Digesters – Supply and Install Cogeneration Unit 1.81 0.70 0.70 0.00 -

Sewer Pressure Main Renewals 2018-19 1.75 0.75 0.75 0.00 -

Sewer Gravity Main Renewals 2018-19 4.00 5.00 5.00 0.00 -

SPS Switchboard Renewals 2017-19 2.05 2.85 2.85 0.00 -

STP Process Tank Refurbishment 2018-21 1.43 0.70 0.70 0.00 -

Sewer Maintenance Hole Rehab 2018-19 2.83 2.62 2.62 0.00 -

Long Term Recycled Water Release STAGE 1 31.90 31.90 31.90 0.00 -

Potable Water Filling Stations 3.68 3.68 3.68 0.00 -

Water Meter Replacements 2018-19 3.60 3.60 3.60 0.00 -

Coombabah STP Stage 6 Upgrade 2.50 2.50 2.50 0.00 -

Water Main Replacements 2018-19 1.95 1.95 1.95 0.00 -

Elanora STP Digester A Sludge Heater Ref 1.85 1.85 1.85 0.00 -

Fall from heights prevention SPS 1.60 1.60 1.60 0.00 -

Hydrant Replacements 2018-19 1.50 1.50 1.50 0.00 -

Recycled Water Network Expansion 1.50 1.50 1.50 0.00 -

Sewer Minor Civil Works 2018-19 1.00 1.00 1.00 0.00 -

STP Mech Elec Renewals 2018-19 1.00 1.00 1.00 0.00 -

78.26 68.83 68.83$ 0.00 0%




The main movements in the capital program are: $0.55 million increase in Elanora STP Bioreactor Electrical Cable Replacement:

This is a new emergent project with works anticipated to be completed in the 2019-20 financial year.

$0.25 million increase in GC Infrastructure Protection Water 2014-17: Additional scope is required for this project with works anticipated to be completed this financial year.

Refer to Attachment 3 for a detailed listing of all proposed budget movements within the water and sewerage services capital program following the December 2018 budget review.




Table 10 below provides a breakdown of the revised program by delivery phase. At the time of the December budget review, 46% of the total value of the program is in the Delivery phase, 38% of the program in Procurement/Specification phase and 12% is in the Planning phase. The majority of the program is in Procurement and/or Delivery phase, indicating a commitment to deliver the 2018-19 program. The 2018-19 capital program is the largest since the return to Council in 2012. Slight delays in any of the larger capital projects will impact on the delivery of the capital program.

Table 10 – Breakdown of capital program by delivery phase

5.7 Capital Revenue No change in Capital Revenue has been identified as part of this review.

Table 11 - Movement in Capital Revenue

Initiation 0.75 0.51 0.00 2 1%

Planning 10.70 11.70 16.97 23 11%

Procurement / Specification 35.93 37.26 35.09 36 38%

Delivery 45.03 43.83 42.60 17 47%

Close 2.58 1.68 0.32 14 3%

Total 94.98 94.98 94.98 92 100%

Water and Waste Water and Sewerage Services Capital Program

Delivery PhaseDec 18 Review

($m)

Sept 18 Review

($M)

2018-19 Initial($M)

No of Projects

% of Program

Value

Capital Revenue Dec 18 Review

Sept 18 Review

2018-19 Initial


Developer Contributions 46.5 46.5 46.5 0.0 0.0Contributions and Donations Received 0.1 0.1 0.1 0.0 0.0Contributed Assets 40.0 40.0 40.0 0.0 0.0

Total Capital Revenue $ 86.6 $ 86.6 $ 86.6 $ 0.0 0.0

Dec v SepMovement




5.7.1 Infrastructure Charges Reserves Infrastructure Charges may only be utilised for the purpose in which they were collected. Following the December budget review, Infrastructure Charges Reserves funding for growth-related projects has increased by $0.7 million, with a total of $27.1 million expected to be drawn from these reserves in the current financial year. This increase resulted from the review of funding sources that was undertaken as part of the recent preparation of the 2019-20 Ten Year Investment Program. During this review, it was determined that the SPS A5 Emergency Storage Upgrade project incorporates a significant ‘growth-related’ component and was able to be partially funded from infrastructure charges. Infrastructure Charges that cannot be utilised in the current year are retained within the City’s Infrastructure Charges Reserves to be utilised for funding of growth-related infrastructure. Based on current projections, Infrastructure Charges Reserves relating to Water and Sewerage networks are expected to total approximately $220 million at 30 June 2019. Water and Sewerage Services is projecting significant capital expenditure on growth-related infrastructure over the next ten years. The capital program is expected to fully exhaust available infrastructure charges reserves funding within the first five years of the projected capital program. 5.8 Income Tax Equivalents The initial adopted budget projects Income Tax Equivalents payments totalling $39.1 million for the current year. In order to minimise impacts to the City’s overall budget position throughout the year, Council determined that income tax equivalents movements would be held within the water and sewerage services’ accounts until the final budget review of each financial year.




5.9 Distribution of Earnings before Interest and Tax (EBIT) Following the adjustments outlined in this report, 2018-19 Earnings before Interest and Tax (EBIT), on a cash basis, is estimated at $240.0 million (operating revenue of $528.5 million, cash capital revenues of $27.3 million less cash operating expenditure of $315.8 million).

Table 12 – Distribution of Earnings

* SLA and Land Tax payments are further payments to Council which are recorded within Water and Sewerage’s Operating Expenses and are therefore not reported as part of the Distribution of Earnings. The net result of this budget review is a decrease of $0.5 million in transfer to Water and Sewerage Infrastructure Reserve. The key driver for this movement is an additional $1.1 million investment in operational projects, offset by an increase of $0.6 million in infrastructure charges funding of capital projects. 5.10 Water and Sewerage Infrastructure Reserve Cash surpluses from operations are transferred to the Water and Sewerage Infrastructure Reserve. These cash reserves are set aside for future investment in water and sewerage infrastructure. In excess of $1.3 billion is expected to be required for water and sewerage infrastructure over the next ten years. With the movements processed at this budget review, the reserve balance, as at 30 June 2019 is projected to be in the order of $190 million.

Distribution of Earnings Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Interest Expense (External) 2.5 2.5 2.5 0.0 0.0Principal Repayment (External) 4.7 4.7 4.7 0.0 0.0

Debt Service Payment $ 7.2 $ 7.2 $ 7.2 $ 0.0 0.0Capital Expenditure 95.0 95.0 92.2 0.0 0.0

Capital Expenditure $ 95.0 $ 95.0 $ 92.2 $ 0.0 0.0

Interest Returned - Community Investment in GCW

88.8 88.8 88.8 0.0 0.0

Tax Equivalents 39.1 39.1 39.1 0.0 0.0Special Dividend 0.0 0.0 0.0 0.0 0.0Participation Return 1.0 1.0 1.0 0.0 0.0Interest Expense Margin 0.9 0.9 0.9 0.0 0.0

Payment to Council (Excluding SLA & Land Tax)

$ 129.8 $ 129.8 $ 129.8 $ 0.0 0.0

Retained Earnings for future GCW Capital Works Investment

8.0 8.5 10.4 (0.5) (5.7)

Total Distribution $ 240.0 $ 240.5 $ 239.7 $ 0.5 (0.2)

Dec v SepMovement




5.11 Returns to Community In accordance with the City’s GCW Capital Structure and Community Returns Policy, water and sewerage services operates as a commercial business unit and provides an appropriate return to the community, based on the community’s investment in the water and sewerage business. Returns to the community (excluding SLA, Insurance Premiums and Fleet and Plant charges) for the year ended 30 June 2019 are unchanged from the initial budget and are projected to total $131.6 million. A breakdown of those returns is set out in Table 13 below:

Table 13 –Returns to Community

6 ALIGNMENT TO THE CORPORATE PLAN, CORPORATE STRATEGIES AND

OPERATIONAL PLAN Not Applicable. 7 FUNDING AND RESOURCING REQUIREMENTS Not Applicable.

Returns to Community Dec 18 Review

Sept 18 Review

2018-19 Initial


Interest Margin Expense 0.9 0.9 0.9 0.0 0.0Shareholder Interest Expense 88.8 88.8 88.8 0.0 0.0Income Tax Equivalents 39.1 39.1 39.1 0.0 0.0Land Tax 1.8 1.8 1.8 0.0 0.0Special Dividend 1.0 1.0 1.0 0.0 0.0Participation Return 0.0 0.0 0.0 0.0 0.0

Returns to Community(Excl SLA, Insurance Premiums and Fleet and Plant) $ 131.6 $ 131.6 $ 131.6 $ 0.0 0.0

Council Corporate SLAs 19.9 19.9 19.9 0.0 0.0Insurance Premiums 1.8 1.8 1.8 0.0 0.0Council Fleet & Plant Charges 4.1 4.1 4.1 0.0 0.0

Total Returns to Community $ 157.5 $ 157.5 $ 157.5 $ 0.0 0.0

Dec v SepMovement




8 RISK MANAGEMENT The following risk assessment applied to this report:

Risk Number Description

Risk No. CO000431

Non-compliance with State and Commonwealth legislation leading to potential prosecution of Council, executive officer liability and negative city image.

Risk No. CO000433

Qualified audit leading to Council’s reputation being damaged.

Risk No. CO000435

Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS Queensland Competition Authority Act 1997 Local Government Regulation 2012 Water Act 2000 Local Government Act 2009 South East Queensland Water (Distribution and Retail Restructuring) Act 2009 South East Queensland Water (Distribution and Retail Restructuring) and Other

Legislation Amendment Bill 2011 10 COUNCIL POLICIES Gold Coast Water Capital Structure and Community Returns Policy Revenue Policy City of Gold Coast Budget Review Policy Water and Sewage Leakage Relief Policy 11 DELEGATIONS Not Applicable.




12 COORDINATION AND CONSULTATION

Name and/or Title of the Stakeholder Consulted

Directorate or Organisation

Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Marilyn Hildebrandt (Executive Coordinator Directorate Finances)

Office of the CEO

Yes

13 STAKEHOLDER IMPACTS Not Applicable. 14 TIMING Not Applicable. 15 CONCLUSION The City of Gold Coast Budget Review Policy requires that, except for items identified for corporate funding, each Directorate is to submit a balanced quarterly budget review. Budget variations contained in this report comply with this requirement. Following completion of a detailed quarterly review of capital and operating budgets (revenue and expenditure), movements have been recorded across several areas of the business. Budget movements have not required corporate funding.




Table 14 below provides a summary of adjustments recorded at this review:

Table 14: Summary of Budget Adjustments – Water & Sewerage Services –

September 2018 Budget Review (*) 2018-19 Initial Capital Program includes $2.8 million of infrastructure charges offset

funded projects


Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % Operating Revenue 528.5 528.5 528.3 0.0 0.0Flow-Dependant Expenses 204.4 204.4 204.4 0.0 0.0Controllable Expenses 111.4 110.2 108.5 (1.1) (1.0)

Operating Result $ 212.7 $ 213.8 $ 215.3 ($ 1.1) (0.5)Loss on Sale of Assets 5.0 5.0 5.0 0.0 0.0

Net Profit before Capital Items $ 207.7 $ 208.8 $ 210.3 ($ 1.1) (0.5)Capital Revenue 86.6 86.6 86.6 0.0 0.0Depreciation / Amortisation 95.0 95.0 95.0 0.0 0.0

Earnings Before Interest and Taxation $ 199.3 $ 200.4 $ 202.0 ($ 1.1) (0.6)Interest Expense (QTC loan) 2.5 2.5 2.5 0.0 0.0Interest Margin Expense 0.9 0.9 0.9 0.0 0.0Shareholder Interest Expense 88.8 88.8 88.8 0.0 0.0Income Tax Eqivalents 39.1 39.1 39.1 0.0 0.0

Net Profit After Taxation $ 68.0 $ 69.1 $ 70.7 ($ 1.1) (1.6)

Capital Expenditure (*) 95.0 95.0 92.2 0.0 0.0


Dec v SepMovement




The net result of this review is that forecast returns (excluding SLA, Insurance Premiums and Fleet and Plant) to the City remain unchanged and are projected to total $131.6 million.


16 RECOMMENDATION It is recommended that Council resolves as follows: 1 That Council approve the decrease of $0.5 million to be transferred to the Water and

Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $8.0 million for the 2018-19 financial year.

2 That Council note budget variations per Attachments 2 and 3 will be included in the December 2018 Budget Review.

Author: Authorised by:

Karen O’Brien Paul Heaton Manager Business Performance Director Water and Waste 10 January 2019

TRACKS REF: #72388092

RESOLUTION G19.0130.030 moved Cr Tate seconded Cr Taylor

1 That Council approve the decrease of $0.5 million to be transferred to the Water and Sewerage Infrastructure Reserve, with total anticipated transfer to Reserve now being $8.0 million for the 2018-19 financial year.

2 That Council note budget variations per Attachments 2 and 3 will be included in the December 2018 Budget Review.

CARRIED


Sept 18 Review

2018-19 Initial


Interest Margin Expense 0.9 0.9 0.9 0.0 0.0Shareholder Interest Expense 88.8 88.8 88.8 0.0 0.0Income Tax Equivalents 39.1 39.1 39.1 0.0 0.0Land Tax 1.8 1.8 1.8 0.0 0.0Special Dividend 1.0 1.0 1.0 0.0 0.0Participation Return 0.0 0.0 0.0 0.0 0.0

Returns to Community(Excl SLA, Insurance Premiums and Fleet and Plant) $ 131.6 $ 131.6 $ 131.6 $ 0.0 0.0

Dec v SepMovement




Attachment 1.1 DETAILED INCOME STATEMENT (ACCRUAL) DECEMBER 2018 BUDGET REVIEW

Water and Sewerage Services

Financial Management Statement Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($'000) ($'000) ($'000) ($'000) % Operating RevenueAccess Charges 247,975 247,975 247,975 0 0.0Volumetric Charges 266,952 266,952 266,952 0 0.0Less: Concealed Leakage (2,500) (2,500) (2,500) 0 0.0Interest on Outstanding Rates 1,250 1,250 1,250 0 0.0Interest on Investments 10,259 10,259 10,164 0 0.0Fees and Charges 4,545 4,545 4,430 0 0.0Total Operating Revenue 528,481 528,481 528,271 0 0.0

Flow-Dependant ExpenditureBulk Water Purchase 185,718 185,718 185,718 0 0.0Electricity 11,090 11,090 11,090 0 0.0Biosolids Disposal 3,978 3,978 3,978 0 0.0Chemicals 3,612 3,612 3,612 0 0.0Total Flow-Dependant Expenditure 204,397 204,397 204,397 0 0.0

Operating Revenue net of Flow-Dependant Expenditure

324,084 324,084 323,874 0 0.0

Controllable ExpensesEmployee Expenses 51,325 50,824 50,569 (502) (1.0)Materials and Services 26,072 25,306 24,716 (766) (3.0)Council Corporate SLAs 19,924 19,924 19,924 0 0.0Internal Directorate SLA (3,332) (3,332) (3,332) 0 0.0Fleet and Plant 7,975 7,975 7,975 0 0.0Sewage Treatment Charge 3,500 3,500 3,500 0 0.0Insurance Premiums 1,821 1,821 1,821 0 0.0Other Expenditure 1,800 1,800 1,800 0 0.0Consultants 2,192 2,328 1,468 137 5.9Regulatory Expenses 93 93 93 0 0.0Prior Year Expenses 0 0 0 0 0.0Total Controllable Expenses 111,369 110,238 108,533 (1,131) (1.0)Total Operating Expenses 315,766 314,635 312,930 (1,131) (0.4)

Loss on Sale of Assets 5,000 5,000 5,000 0 0.0

Net Profit before Capital Revenue 207,715 208,846 210,341 (1,131) (0.5)

Capital RevenueDeveloper Contributions 46,500 46,500 46,500 0 0.0Contributions and Donations Received 100 100 125 0 0.0Contributed Assets 40,000 40,000 40,000 0 0.0Total Capital Revenue 86,600 86,600 86,625 0 0.0

Depreciation 95,000 95,000 95,000 0 0.0

EBIT 199,315 200,446 201,966 (1,131) (0.6)Interest Expense (QTC loan) 2,509 2,509 2,509 0 0.0Interest Margin Expense 881 881 881 0 0.0Shareholder Interest Expense 88,824 88,824 88,824 0 0.0Income Tax Equivalents 39,099 39,099 39,099 0 0.0NPAT 68,001 69,132 70,652 (1,131) (1.6)

Contribution - Whole of City projects 1,000 1,000 1,000 0 0.0Participation Return 0 0 0 0 0.0

Retained Earnings 67,001 68,132 69,652 (1,131) (1.7)

Dec v SepMovement




Attachment 1.2 DETAILED INCOME STATEMENT (CASH) DECEMBER 2018 BUDGET REVIEW

Water and Sewerage ServicesFinancial Management Statement

{Cash} Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($'000's) ($'000's) ($'000's) Mvt % MvtOperating RevenueAccess Charges 247,975 247,975 247,975 0 0.0Volumetric Charges 266,952 266,952 266,952 0 0.0Less: Concealed Leakage (2,500) (2,500) (2,500) 0 0.0Interest on Outstanding Rates 1,250 1,250 1,250 0 0.0Interest on Investments 10,259 10,259 10,164 0 0.0Fees and Charges 4,545 4,545 4,430 0 0.0Total Operating Revenue 528,481 528,481 528,271 0 0.0

Flow-Dependant ExpenditureBulk Water Purchase 185,718 185,718 185,718 0 0.0Electricity 11,090 11,090 11,090 0 0.0Biosolids Disposal 3,978 3,978 3,978 0 0.0Chemicals 3,612 3,612 3,612 0 0.0Total Flow-Dependant Expenditure 204,397 204,397 204,397 0 0.0

Operating Revenue net of Flow-Dependant Expenditure 324,084 324,084 323,874 0 0.0

Controllable ExpensesEmployee Expenses 51,325 50,824 50,569 (502) (1.0)Materials and Services 26,072 25,306 24,716 (766) (3.0)Council Corporate SLAs 19,924 19,924 19,924 0 0.0Internal Directorate SLA (3,332) (3,332) (3,332) 0 0.0Fleet and Plant 7,975 7,975 7,975 0 0.0Sewage Treatment Charge 3,500 3,500 3,500 0 0.0Insurance Premiums 1,821 1,821 1,821 0 0.0Other Expenditure 1,800 1,800 1,800 0 0.0Consultants 2,192 2,328 1,468 137 5.9Regulatory Expenses 93 93 93 0 0.0Total Controllable Expenses 111,369 110,238 108,533 (1,131) (1.0)Total Operating Expenses 315,766 314,635 312,930 (1,131) (0.4)

Loss on Sale of Assets 0 0 0 0 0.0

Net Profit before Capital Revenue 212,715 213,846 215,341 (1,131) (0.5)

Capital RevenueDeveloper Contributions Funding 27,140 26,490 24,200 650 2.5Contribution / Donations Received (Capi 100 100 125 0 0.0Reserve Funding 0 0 0 0 0.0Total Capital Revenue 27,240 26,590 24,325 650 2.4

Depreciation / Amortisation 0 0 0 0 0.0

EBIT 239,955 240,436 239,666 (481) (0.2)Interest Expense (QTC loan) 2,509 2,509 2,509 0 0.0Interest Margin Expense 881 881 881 0 0.0Shareholder Interest Expense 88,824 88,824 88,824 0 0.0Income Tax Equivalents 39,099 39,099 39,099 0 0.0NPAT 108,641 109,122 108,352 (481) (0.4)

Special Contributions to City Projects 1,000 1,000 1,000 0 0.0Participation Return 0 0 0 0 0.0Debt Redemption 4,687 4,687 4,687 0 0.0Capital Expenditure 94,980 94,980 92,248 0 0.0

Transfer to Reserves 7,974 8,455 10,417 (481) (5.7)

Dec v SepMovement




Attachment 2 GOLD COAST WATER – DECEMBER 2018 BUDGET REVIEW – BUDGET CENTRE MOVEMENTS

Budget Centre

2018-19September

ReviewTotal

Budget

2018-19December

ReviewRecurrent

Movement

2018-19December

ReviewNon-Recurrent

Movement

2018-19December

ReviewTotal

Movement

2018-19December

ReviewTotal

BudgetCS4810O003 - CMU - Operations 4,350,997 0 0 0 4,350,997

GW2000O003 - SS-Unallocated Water Services-Operating 343,060 0 0 0 343,060

GW2020C001 - AS-Water-Capital Works 13,618,000 0 245,000 245,000 13,863,000

GW2020C002 - AS-Sewer-Capital Works 51,255,000 0 (895,000) (895,000) 50,360,000

GW2020C005 - AS-Non Core Water-Capital Works 4,037,000 0 0 0 4,037,000

GW2020C007 - AS-Non Regulated Water Services-Capital 80,000 0 0 0 80,000

GW2020O001 - AS-Water-Operating 696,068 0 0 0 696,068

GW2020O002 - AS-Sewer-Operating 921,466 0 0 0 921,466

GW2030O001 - NR-Water-Operating 1,847,335 0 0 0 1,847,335

GW2030O002 - NR-Sewer-Operating 3,531,635 0 0 0 3,531,635

GW2040O001 - NC-Water-Operating 177,500 0 0 0 177,500

GW2050O001 - Mmac STP-Sewer-Operating 6,059,149 0 0 0 6,059,149

GW2060O001 - Elanora STP-Sewer-Operating 3,492,574 0 0 0 3,492,574

GW2070O001 - Cmbbah STP-Sewer-Operating 9,627,621 0 0 0 9,627,621

GW2080O001 - Pimpama STP-Sewer-Operating 2,806,993 0 0 0 2,806,993

GW2100O001 - Wkshp-Unallocated Water Services - Ops 550,934 0 0 0 550,934

GW2100O002 - Wkshp - Sewer - Operating 1,635,930 0 0 0 1,635,930

GW2110D001 - BP-Debt Servicing 8,077,552 0 0 0 8,077,552

GW2110I001 - BP-SLA Org Services to GCW 17,755,819 0 0 0 17,755,819

GW2110I002 - BP-SLA OCOO to GCW 1,745,417 0 0 0 1,745,417

GW2110I003 - BP-Competitive Neutrality Tax 40,899,274 0 0 0 40,899,274

GW2110I004 - BP-Dividend/ROE to Council 89,824,000 0 0 0 89,824,000

GW2110I005 - BP-SLA EP&E to GCW 423,000 0 0 0 423,000

GW2110O001 - BP-Water-Operating (111,790,457) 0 (1,376,031) (1,376,031) (113,166,488)

GW2110O002 - BP-Sewerage-Operating (213,226,801) 0 895,031 895,031 (212,331,770)

GW2110O003 - BP-Unallocated Water Services-Operating 8,342,720 0 940,000 940,000 9,282,720

GW2110O004 - BP-Recycled Water-Operating (971,700) 0 0 0 (971,700)

GW2140O002 - DS-Unallocated Sewer Services-Operating 173,000 0 0 0 173,000

GW2140O003 - DS–Unallocated Operating 4,681,530 0 0 0 4,681,530

GW2150O001 - WPS-Water-Operating 762,207 0 0 0 762,207

GW2160O001 - SPS-Sewer-Operating 5,771,375 0 0 0 5,771,375

GW2170O001 - Rsvr-Water-Operating 384,014 0 0 0 384,014

GW2190O001 - NO-Water-Operating 3,469,836 55,964 0 55,964 3,525,800

GW2190O002 - NO-Sewer-Operating 7,223,313 16,280 0 16,280 7,239,593

GW2190O004 - NO - Sewerage Activity 16,280 (16,280) 0 (16,280) 0

GW2190O005 - NO - Water Activity 55,964 (55,964) 0 (55,964) 0

GW2200O001 - NM-Water-Operating 12,294,437 0 0 0 12,294,437

GW2200O002 - NM-Sewer-Operating 8,491,927 0 0 0 8,491,927

GW2200O003 - NM-Recycled Water-Operating 247,409 0 0 0 247,409

GW2200O004 - NM-Unallocated Water Services-Operating 143,391 0 0 0 143,391

GW2200O005 - NM-Unallocated Sewer Services-Operating 276,329 0 0 0 276,329

GW2210O001 - PMQ-Water-Operating 1,057,929 0 0 0 1,057,929

GW2210O002 - PMQ-Sewer-Operating 536,065 0 0 0 536,065

GW2220O001 - CM - Customer Management (Water) 1,575,425 0 0 0 1,575,425

GW2220O002 - CM - Customer Management (Sewer) 913,905 0 0 0 913,905

GW2230O001 - CC - Customer Connections (Water) 289,720 0 0 0 289,720

GW2230O002 - CC - Customer Connections (Sewer) 636,510 0 0 0 636,510

GW2240O005 - SS - Scientific Services (334,715) 0 0 0 (334,715)

GW2260O001 - DS - Water - Operational Costs 1,219,606 0 0 0 1,219,606

GW2260O002 - DS - Sewer - Operational Costs 1,125,944 0 0 0 1,125,944

GW2270O001 - IWP - Water - Operating 2,302,320 0 0 0 2,302,320

GW2280O001 - AIP - Water - Operating 800 0 0 0 800

GW2280O002 - AIP - Sewer - Operating 116,000 0 0 0 116,000

GW2280O003 - AIP – Unallocated – Operating 966,010 0 191,000 191,000 1,157,010

GW2290O001 - SCP - Sewer - Operating 2,305,000 0 0 0 2,305,000

GW2300O001 - WMP - Operations 529,830 0 0 0 529,830

GW2310O001 - EM - Operations 1,009,550 0 0 0 1,009,550

GW4810I001 - CMU - SLA – CMU to Corporate (4,350,997) 0 0 0 (4,350,997)

TOTAL 0 0 0 0 0




Attachment 3.1 WATER AND SEWERAGE SERVICES CAPITAL PROGRAM MOVEMENT DECEMBER 2018 BUDGET REVIEW

PROJECT PROJECT DESCRIPTION

2018-19INITIAL

BUDGET

2018-19SEP

FORECAST

2018-19DEC

FORECAST

2018-19 DECREVIEW

MOVEMENT($)

71424 New Water Mains in Coomera 1,905,000 5,000 5,000 0

71316 Minor Equipment Replacements Wtr Network 250,000 250,000 250,000 0

71413 Water Main Replacements 2018-19 1,950,000 1,950,000 1,950,000 0

71414 Proactive Water Service Replacements 2018-19 780,000 780,000 780,000 0

71415 Water Asset Conflict Renewals 2018-19 500,000 500,000 500,000 0

71416 Hydrant Replacements 2018-19 1,500,000 1,500,000 1,500,000 0

71417 Water Main Cathodic Protection 2018-19 100,000 - - 0

71263 Unidentified Trunk Water Infrastructure 100,000 100,000 100,000 0

71333 Stapylton Jacobs Well Water Main 1,800,000 300,000 300,000 0

71334 New Water Mains in Pimpama & Willow Vale 260,000 5,000 5,000 0

71304 Potable Water Filling Stations 3,680,000 3,680,000 3,680,000 0

71421 Fire Fighting Capacity Aug Phase 2 220,000 - - 0

71370 Water Minor Civil Works 2017-18 - 60,000 60,000 0

71422 Water Minor Civil Works 2018-19 900,000 900,000 900,000 0

71369 Water Main Replacements 2017-18 - 300,000 300,000 0

71332 Fire Fighting Capacity Aug Phase 1 - 500,000 500,000 0

71426 George Alexander Way Water Main 130,000 5,000 5,000 0

71454 Gooding Dr Merrimac Install Wtr Valves - 200,000 200,000 0

71459 Pines Golf Course Water Main Reline - 240,000 240,000 0

71460 Yatala Industrial Park Water Main - 43,000 43,000 0

70471 Meter Connections 125,000 100,000 100,000 0

71379 Smart Metering Solution 237,000 237,000 237,000 0

71448 Water Meter Replacements 2018-19 3,600,000 3,600,000 3,600,000 0

71301 Water Loss Management - Establishment of New DMAs - 515,000 515,000 0

71406 Drinking Water Sample Station Upgrade - 50,000 50,000 0

71418 WPS Switchboard Renewals 2018-19 300,000 300,000 300,000 0

71419 WPS Civil Renewals 2018-19 125,000 125,000 125,000 0

71420 BU1 WPS Upgrade 150,000 50,000 50,000 0

71375 WPS Mech & Elec Renewals 2017-18 - 52,000 52,000 0

71380 Reservoir Refurbishments 2017-18 250,000 - - 0

71423 Reservoir Refurbishments 2018-19 700,000 700,000 700,000 0

71427 Reservoir Valve Replacements 18-19 250,000 750,000 750,000 0

71410 Portable Reservoir - 150,000 150,000 0

71349 SPS SCADA Upgrade 2018-20 100,000 100,000 100,000 0

71443 STP SCADA Upgrade 2018-19 100,000 100,000 100,000 0

71404 Recycled Water Network Expansion 1,500,000 1,500,000 1,500,000 0

71451 Recycled Water Meter Replacement 2018-19 200,000 200,000 200,000 0

71371 Bermuda St 750mm Effluent Main Replacement - 55,000 55,000 0

71431 Sewer Maintenance Hole Rehab 2018-19 2,825,000 2,620,000 2,620,000 0

71432 Sewer Gravity Main Renewals 2018-19 4,000,000 5,000,000 5,000,000 0

71433 Sewer Pressure Main Renewals 2018-19 1,750,000 750,000 750,000 0

71364 Sewer Minor Civil Works 2017-18 - 180,000 180,000 0

71435 Sewer Minor Civil Works 2018-19 1,000,000 1,000,000 1,000,000 0

71436 Sewer Asset Conflict Renewal 2018-19 500,000 250,000 250,000 0

70444 Stapylton Catchment Diversion Stage 1 500,000 500,000 500,000 0

71373 Sewer Gravity Main Renewals 2017-18 400,000 200,000 200,000 0

70456 Pimpama to Coombabah STP Release Main 6,200,000 3,200,000 3,200,000 0

70443 Long Term Recycled Water Release STAGE 1 31,900,000 31,900,000 31,900,000 0

71385 Long Term Recycled Water Release STAGE 2 700,000 700,000 700,000 0

71384 Long Term Recycled Water Release Elanora / Merrimac 300,000 600,000 600,000 0

71264 Unidentified Trunk Sewer Infrastructure 500,000 500,000 500,000 0

71343 Sandy Creek Industrial Precinct Sewer 709,000 2,600,000 2,600,000 0

71389 Stapylton Catchment Diversion Stage 2 500,000 1,500,000 1,500,000 0




Attachment 3.1 WATER AND SEWERAGE SERVICES CAPITAL PROGRAM MOVEMENT DECEMBER 2018 BUDGET REVIEW Continued

PROJECT PROJECT DESCRIPTION

2018-19INITIAL

BUDGET

2018-19SEP

FORECAST

2018-19DEC

FORECAST

2018-19 DECREVIEW

MOVEMENT($)

71377 29-31 Lather and 38 Queen Streets Southport, Gravity Trunk Sewer 242,000 - - 0

71441 Sewer and Non Drinking Main Cathodic Protection 18-19 150,000 - - 0

71197 Benowa A102 Sewer Rising Main Stage 1 - - 85,000 85,000

71444 Benowa A102 Sewer Rising Main Stage 2 200,000 200,000 200,000 0

71453 Bloom Subdivision Trunk SGM Maintenance Hole Works 2017-18 - 514,000 514,000 0

71309 UAS Sewer Reline Rectification - Phase 2 - 175,000 175,000 0

71270 SPS Emergency Storage Augmentations - 11,000 11,000 0

71374 Sewer Pressure Main Renewals 2017-18 - 50,000 100,000 50,000

71412 Waterway Downs Regional SPS and Rising Main - 8,000 8,000 0

70425 Merrimac West Sewer Augmentation - 30,000 30,000 0

71461 Coomera Urban Village Gravity Trunk Sewer, Stage 1B - 583,000 583,000 0

71437 SPS Civil Renewals 2018-19 800,000 800,000 800,000 0

71438 SPS Wet Well Relining 2018-20 180,000 450,000 450,000 0

71362 SPS Mech elec Renewals 17-18 - 25,500 25,500 0

71440 SPS Mech Elec Renewals 18-19 850,000 850,000 850,000 0

71360 SPS Switchboard Renewals 2017-19 2,050,000 2,850,000 2,850,000 0

71155 Fall from heights prevention SPS 1,600,000 1,600,000 1,600,000 0

71327 CO13 Vacuum Pump Station Upgrade 900,000 900,000 900,000 0

71310 Sewage Pump Station A5 Emergency Storage Upgrade 360,000 735,000 735,000 0

71345 New Sewer Pump Station - Stapylton 195,000 5,000 5,000 0

71397 Symonds Rd RM and SPS B49 Diversion 300,000 - - 0

71445 SPS OD1 Odour Control Upgrade 500,000 - - 0

71322 Creek St Pimpama SPS & RM (Pimpama Village) - 985,000 985,000 0

71409 Pimpama Regional SPS & RM (Pimpama Jacobs Well Rd) - 772,000 772,000 0

71331 B47 SPS Odour Control Unit and Asbestos Pipe Replacement - 148,000 185,000 37,000

71428 STP Civil Renewals 2018-19 850,000 850,000 850,000 0

71366 STP Mechanical and Electrical Renewals 2017-18 - 59,500 59,500 0

71429 STP Mech Elec Renewals 2018-19 1,000,000 1,000,000 1,000,000 0

71430 STP Process Tank Refurbishment 2018-21 1,434,000 700,000 700,000 0

71434 Merrimac STP PTA Penstock 100,000 100,000 100,000 0

71407 Coombabah STP Pipework Replacement 230,000 250,000 250,000 0

71297 Elanora STP Digester A Sludge Heater Ref 1,850,000 1,850,000 1,850,000 0

71149 Coombabah STP Stage 6 Upgrade 2,500,000 2,500,000 2,500,000 0

71390 Pimpama STP Stage 2 Works 900,000 700,000 700,000 0

71354 Coombabah STP Liquid Waste Receival Facility 2,400,000 625,000 625,000 0

71405 Coombabah STP Digesters – Supply and Install Cogeneration Unit 1,813,000 700,000 700,000 0

71220 Coombabah STP Screening Grit Removal Upgrade - 50,000 50,000 0

71083 STP Process Tank Refurbishment - 8,000 8,000 0

71474 Elanora STP Bioreactor Electrical Cable Replacement - - 550,000 550,000

71466 Merrimac STP Sludge Handling Optimis - - - 0

71109 Product Monitoring - Scientific Services 80,000 80,000 80,000 0

71192 GC Infrastructure Protection Water 2014-17 - 48,000 293,000 245,000

71458 Installation of Conduits in the OX20 catchment - 220,000 220,000 0

71289 CWG Sewer Gravity Main Relines 16-17 &17-18 - 40,000 40,000 0

71314 Sewer Rising Main Renewals 2016-17 - 20,000 20,000 0

71154 CWG WFM Duplication to Coombabah STP - 15,000 15,000 0

71411 Control Project (to hold balance of budget) - 2,071,000 1,104,000 (967,000)

94,980,000$ 94,980,000$ 94,980,000$ -$


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW FN334/252/19(P2)

Refer 4 page attachment 1 BASIS FOR CONFIDENTIALITY Not Applicable. 2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT The purpose of this report is to provide an overview of budget adjustments proposed for Waste Services at the December 2018 Budget Review. 4 PREVIOUS RESOLUTIONS G18.0621.032

The City’s 2018-19 Budget was adopted by Council at the Budget Meeting held on 21 June 2018.

B17.1207.003 1 That Council approve the net increase of $2.3 million to be transferred to the

Waste Management Reserve.

2 That Council note budget variations per Attachments 2 and 3 are included in the September 2017 Budget Review.

CARRIED

5 DISCUSSION 5.1 Introduction The Local Government Act 2009 allows a Local Government to amend its budget for the financial year at any time before the year ends, by way of resolution. The City of Gold Coast Budget Review Policy requires any variations to the budget to be submitted to Council for approval through the quarterly budget review process. The current City of Gold Coast Budget Review Policy states that all reports dealing with budget variations or budget transfers must be referred to Special Budget Committee.


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW (Continued) FN334/252/19(P2) 5.2 Budget Adjustments Summary Proposed budget adjustments for the December 2018 Budget Review are set out in Table 1 below. These items are explained in detail in the following sections.


5.3 Operating Revenue No change to operating revenue has been proposed as part of the December Budget Review, as shown in Table 2 below:

Table 2 – Movement in Operating Revenue


Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % MvtOperating Revenue 107.8 107.8 108.1 0.0 0.0Operating Expenses 75.0 75.0 73.2 (0.1) (0.1)

Operating Result $ 32.7 $ 32.8 $ 34.9 ($ 0.1) (0.2)Gain/Loss on Sale of Assets 0.0 0.0 0.0 0.0 0.0Depreciation / Amortisation 8.6 8.6 8.6 0.0 0.0

Earnings Before Interest and Taxation $ 24.1 $ 24.2 $ 26.3 ($ 0.1) (0.2)Interest Expense (QTC loan) 3.8 3.8 3.9 0.0 0.0Interest Margin Expense 0.2 0.2 0.2 0.0 0.0Income Tax Eqivalents 7.9 7.9 7.9 0.0 0.0

Net Profit After Taxation $ 12.3 $ 12.3 $ 14.3 ($ 0.1) (0.5)Dividend 7.7 7.7 7.7 0.0 0.0

Retained Earnings $ 4.6 $ 4.6 $ 6.6 ($ 0.1) (1.3)

Capital Expenditure 10.6 12.7 12.7 2.2 16.9


Dec v SepMovement

Operating Revenue Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % MvtWaste Utility Rate Revenue 84.0 84.0 84.0 0.0 0.0Refuse Tipping Fees 8.3 8.3 8.3 0.0 0.0Recycling Revenue 1.1 1.1 1.1 0.0 0.0Fees & Charges 1.8 1.8 2.5 0.0 0.0Internal Tipping Charges 7.8 7.8 7.8 0.0 0.0Community Service Obligations 3.2 3.2 3.2 0.0 0.0Interest on Outstanding Rates 0.2 0.2 0.2 0.0 0.0Interest on Investments 1.0 1.0 0.6 0.0 0.0Contributions & Donations Revenue 0.4 0.4 0.4 0.0 0.0Other Operating Income 0.0 0.0 0.0 0.0 0.0

Total Operating Revenue $ 107.8 $ 107.8 $ 108.1 $ 0.0 0.0

Dec v SepMovement


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW (Continued) FN334/252/19(P2)

5.4 Operating Expenditure

The below graph provides a breakdown of Waste Services operating expenditure. Waste Collection Payments are the largest operating cost for the business unit, representing 37 per cent of total operating expenses.

Graph 1 – Waste Services operating expenditure by category

As shown in Table 3 below, a minor increase to operating expenses is proposed as part of the December 2018 Budget Review:

Table 3 - Movement in Operating Expenses

Operating Expenses Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % MvtEmployee Expenses 9.7 9.7 8.9 (0.0) (0.0)Materials and Services 16.0 16.0 15.8 0.0 0.0Council Corporate SLA 2.7 2.7 2.7 0.0 0.0Internal Directorate SLA 3.3 3.3 3.3 0.0 0.0Waste Collection Payments 27.6 27.6 27.6 0.0 0.0Fleet and Plant 11.5 11.5 10.9 0.0 0.0Consultants 1.5 1.5 1.2 (0.1) (3.9)Electricity 0.1 0.1 0.1 0.0 0.0Insurance Premiums 0.1 0.1 0.1 0.0 0.0Other Expenditure 2.5 2.5 2.5 0.0 0.0

Total Operating Expenses $ 75.0 $ 75.0 $ 73.2 ($ 0.1) (0.1)

Dec v SepMovement


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW (Continued) FN334/252/19(P2) This additional funding is required for:

(1) Additional scope as part of the WRC Operational Plans Review to investigate traffic impacts at sites with (or proposed to include) "Recycle Streets" ($40,000); and

(2) Condition Assessments for assets at WRC facilities - this consultancy was commenced during 2017-18, but experienced delays. As a result, the final payment to consultants was carried over to the current financial year ($19,500).

5.5 Community Services Obligations The Local Government Regulation 2012 defines a Community Service Obligation (CSO) as an obligation the local government imposes on a business unit to do something that is not in the commercial interests of the business unit to do. The Regulation determines the CSO amount is to be treated as revenue of the business unit for an amount equal to the cost of carrying out the obligation, less any revenue arising from carrying out the activity. Table 4 below provides a summary of CSO’s currently provided within Waste Services. The CSO budget remains unchanged following this budget review.

Table 4 – Movement in Community Service Obligations

Community Service Obligations Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % MvtDisposal Costs for "Free of Charge" approved charities and organisations

0.5 0.5 0.5 0.0 0.0

Contributions and Donations 0.6 0.6 0.6 0.0 0.0

Foregone revenue E-Waste Social Outcomes 0.1 0.1 0.1 0.0 0.0

Dead Animal Collection 0.1 0.1 0.1 0.0 0.0

Clean Up Australia Day 0.0 0.0 0.0 0.0 0.0

Street and Park bin services 0.4 0.4 0.4 0.0 0.0

South Stradbroke Island Waste Management 0.5 0.5 0.5 0.0 0.0

Annual Kerbside Cleanup 1.2 1.2 1.2 0.0 0.0

Total Community Service Obligations $ 3.2 $ 3.2 $ 3.2 $ 0.0 0.0

Dec v SepMovement


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW (Continued) FN334/252/19(P2) 5.6 Capital Works Program Movements The 2018-19 initial approved capital works program included works totalling $12.73 million with no net movement to the total budget during the September budget review. A decrease of $2.15 million or 17% is proposed in the December budget review. Table 5 below provides a summary of proposed capital expenditure at a program level.

Table 5 – Capital Expenditure

The main movement within the Waste program are: $0.52 million decrease in Stapylton Landfill Cell 7: This project has been deferred

to future years in line with the Stapylton Master Plan.

$0.50 million decrease in WRC Compaction Plant 2018-19: This project has been deferred to 2019-20 pending the outcome of an operational review.

$0.33 million decrease in RORO Bins 2018-19: This project is not required

following investigations that indicated the current fleet of RORO bins is sufficient to meet demand.

$0.20 million decrease in Coomera WRC Design and Construction Stage 2: This has been reduced pending a strategic review as a result of the Coomera WRC Stage 1 project.

$0.20 million decrease in Stapylton Landfill Internal Road Upgrade: Due to

project synergies, this project scope has been combined for delivery with the Stapylton Landfill Main Access Upgrade project. The total project budget for the Stapylton Landfill Main Access Upgrade has been amended accordingly.

Almost half of the Waste Services capital program is in the delivery phase (46%), with the remainder divided between the Planning (25%) and Procurement/Specification (28%) phases, as detailed in Table 6. Work will continue to progress projects through the project lifecycle, delivering the program of work by financial year end.

Dec 18 Review

Sept 18 Review

2018-19 Initial

($M) ($M) ($M) ($M) (%)

Landfills 8.51 9.63 9.78 (1.12) (12%)

Waste and Recycling Centres 2.06 2.59 2.45 (0.53) (20%)

Fleet and Plant 0.00 0.50 0.50 (0.50) (100%)

Total Capital Expenses 10.58 12.73 12.73 (2.15) (17%)

Water and Waste Waste Services Capital Program

Program

Dec v SepMovement



Table 6 – Project Phase

Refer to Attachment 3 for a detailed listing of all movements within the Capital Program for 2018-19. 5.7 Distribution of Earnings before Interest and Tax (EBIT) Following the adjustments outlined in this report, 2018-19 Earnings before Interest and Tax (EBIT), on a cash basis, is estimated at $32.7 million (operating revenue of $107.8 million less operating expenditure of $75.1 million).

* SLA, Fleet & Plant and Land Tax payments are further payments to Council which are

recorded within Waste’s Operating Expenses and are therefore not reported as part of the Distribution of Earnings.

Table 7 – Distribution of Earnings

The net impact results in a decrease of $1.4 million in transfer from waste management reserve. This movement is predominantly the result of deferrals in the Waste capital works program.

Delivery PhaseDec 18 Review

Sept 18 Review

2018-19 Initial

% of Program

($M) ($M) ($M) Value

Initiation 0.00 0.00 0.00 0 -

Planning 2.60 4.97 5.77 4 25%

Procurement / Specification 3.00 2.78 2.08 7 28%

Delivery 4.88 4.88 4.88 1 46%

Close 0.09 0.09 0.00 2 1%

Total 10.58 12.73 12.73 14 100%

No of Projects

Water and Waste Waste Services Capital Program

Distribution of Earnings Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % MvtInterest Expense (External) 3.8 3.8 3.9 0.0 0.0Principal Repayment (External) 7.7 7.7 7.8 0.0 0.0

Debt Service Payment $ 11.4 $ 11.4 $ 11.8 $ 0.0 0.0Capital Expenditure 10.6 12.7 12.7 2.2 16.9Loan Funding (4.9) (5.6) (5.6) (0.7) 12.9

Net Capital Expenditure $ 5.7 $ 7.1 $ 7.1 $ 1.4 25.1Tax Equivalents (30% taxable earnings) 7.9 7.9 7.9 0.0 0.0Dividend 7.7 7.7 7.7 0.0 0.0Interest Expense Margin 0.2 0.2 0.2 0.0 0.0

Payments to Council(Excluding SLA, Fleet and Plant and Land Tax)

$ 15.8 $ 15.8 $ 15.8 $ 0.0 0.0

Reserve Transfers (0.2) (1.6) 0.2 (1.4) 87.9

Total Distribution $ 32.7 $ 32.8 $ 34.9 $ 0.1 0.2

Dec v SepMovement


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW (Continued) FN334/252/19(P2) 5.8 Waste Management Reserve Cash surpluses from Waste Management operations are transferred to the Waste Management Reserve. These cash reserves are being accumulated to provide for: 1. Future funding requirements for the replacement, renewal and expansion of assets

required to deliver waste management services.

2. Landfill remediation and post-closure environmental monitoring requirements - considerable site closure and remediation costs will be incurred on landfill sites once they are exhausted.

With the movements processed at this budget review, the reserve balance, as at 30 June 2018 is projected to be in the order of $35.8 million. 5.9 Returns to Community

Waste Services operates as a commercial business enterprise and provides appropriate returns to the community, based on the community’s investment in the Waste Services business. Projected returns payable to the Community for the year ended 30 June 2019, remain unchanged and are as per the table below:

Table 8 – Returns to Community


OPERATIONAL PLAN Not Applicable. 7 FUNDING AND RESOURCING REQUIREMENTS Not Applicable.


Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % MvtInterest Margin Expense 0.2 0.2 0.2 0.0 0.0Income Tax 7.9 7.9 7.9 0.0 0.0Land Tax 2.5 2.5 2.5 0.0 0.0Dividend 7.7 7.7 7.7 0.0 0.0

Returns to Community(Exc SLA, Insurance Premiums and Fleet and Plant)

$ 18.3 $ 18.3 $ 18.3 $ 0.0 0.0

Dec v SepMovement


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW (Continued) FN334/252/19(P2) 8 RISK MANAGEMENT The following risk assessment applies to this report: Risk Number

Description

Risk No. CO000431

Non-compliance with State and Commonwealth legislation leading to potential prosecution of Council, executive officer liability and negative city image.

Risk No. CO000433

Qualified audit leading to Council’s reputation being damaged.

Risk No. CO000435

Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS The following State Government legislation has relevance to this report, with respect to the business activities and practices of the Waste Management Services commercial business unit: Local Government Act 2009 Local Government Regulation 2012 Waste Reduction and Recycling Act 2011 Waste Reduction and Recycling Regulation 2011 Queensland Competition Authority Act 1997. 10 COUNCIL POLICIES The following Council policies are relevant to this report: City of Gold Coast Budget Review Policy Debt Policy Revenue Policy. 11 DELEGATIONS Not Applicable.


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW (Continued) FN334/252/19(P2) 12 COORDINATION & CONSULTATION Title of the Stakeholder Consulted


Stakeholder Satisfaction With Content of Report and Recommendations (Yes/No)

Executive Coordinator Directorate Finances

Office of the Chief Executive Officer

Yes

13 STAKEHOLDER IMPACTS Not Applicable. 14 TIMING Not Applicable. 15 CONCLUSION The City of Gold Coast Budget Review Policy requires that, except for items identified for corporate funding, each Directorate is to submit a balanced quarterly budget review. Budget movements contained in this report comply with this requirement. Following completion of Waste Services detailed quarterly review of capital and operating budgets (revenue and expense), movements have been recorded across several areas of the business. Budget movements for business unit activities have not required corporate funding.


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW (Continued) FN334/252/19(P2) Table 9 below provides a summary of adjustments recorded at this Review:



Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % MvtOperating Revenue 107.8 107.8 108.1 0.0 0.0Operating Expenses 75.0 75.0 73.2 (0.1) (0.1)

Operating Result $ 32.7 $ 32.8 $ 34.9 ($ 0.1) (0.2)Gain/Loss on Sale of Assets 0.0 0.0 0.0 0.0 0.0Depreciation / Amortisation 8.6 8.6 8.6 0.0 0.0

Earnings Before Interest and Taxation $ 24.1 $ 24.2 $ 26.3 ($ 0.1) (0.2)Interest Expense (QTC loan) 3.8 3.8 3.9 0.0 0.0Interest Margin Expense 0.2 0.2 0.2 0.0 0.0Income Tax Eqivalents 7.9 7.9 7.9 0.0 0.0

Net Profit After Taxation $ 12.3 $ 12.3 $ 14.3 ($ 0.1) (0.5)Dividend 7.7 7.7 7.7 0.0 0.0

Retained Earnings $ 4.6 $ 4.6 $ 6.6 ($ 0.1) (1.3)

Capital Expenditure 10.6 12.7 12.7 2.2 16.9


Dec v SepMovement


14 OTHER BUSINESS (Continued) 14.3 WASTE SERVICES - DECEMBER 2018 BUDGET REVIEW (Continued) FN334/252/19(P2) The net result is a forecast return of $18.3 million (excluding SLA, Insurance Premiums and Fleet & Plant) to the City in 2018-19, as shown in Table 10 below.


16 RECOMMENDATION It is recommended that Council resolves as follows: 1 That Council approve the decrease of $0.2 million to be transferred from the Waste

Management Reserve, with total anticipated transfer from Reserve now being $1.4 million for the 2018-19 financial year.

2 That Council note budget variations per Attachments 2 and 3 are included in the December 2018 Budget Review.


Karen O’Brien Paul Heaton Manager Business Performance Director Water and Waste 10 January 2019

TRACKS REF: #72388056

RESOLUTION G19.0130.031 moved Cr Tate seconded Cr Boulton 1 That Council approve the decrease of $0.2 million to be transferred from the

Waste Management Reserve, with total anticipated transfer from Reserve now being $1.4 million for the 2018-19 financial year.

2 That Council note budget variations per Attachments 2 and 3 are included in the December 2018 Budget Review.

CARRIED


Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($M) ($M) ($M) ($M) % MvtInterest Margin Expense 0.2 0.2 0.2 0.0 0.0Income Tax 7.9 7.9 7.9 0.0 0.0Land Tax 2.5 2.5 2.5 0.0 0.0Dividend 7.7 7.7 7.7 0.0 0.0

Returns to Community(Exc SLA, Insurance Premiums and Fleet and Plant)

$ 18.3 $ 18.3 $ 18.3 $ 0.0 0.0

SLA Costs 2.7 2.7 2.7 0.0 0.0Fleet and Plant 9.5 9.5 9.0 0.0 0.0

Total Payments to Community $ 30.5 $ 30.5 $ 30.0 $ 0.0 0.0

Dec v SepMovement



Attachment 1.1 DETAILED INCOME STATEMENT (ACCRUAL) December 2018 Budget Review

Waste Services

Financial Management Statement Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($'000's) ($'000's) ($'000's) Mvt % MvtOperating RevenueWaste Utility Rate Revenue 83,990 83,990 83,990 0 0.0Refuse Tipping Fees 8,290 8,290 8,290 0 0.0Recycling Revenue 1,083 1,083 1,083 0 0.0Fees & Charges 1,804 1,804 2,504 0 0.0Internal Tipping Charges 7,824 7,824 7,824 0 0.0Community Service Obligations 3,250 3,250 3,250 0 0.0Interest on Outstanding Rates 150 150 150 0 0.0Interest on Investments 970 970 630 0 0.0Contributions & Donations Revenue 378 378 378 0 0.0Other Operating Income 44 44 44 0 0.0Total Operating Revenue 107,782 107,782 108,142 0 0.0

Operating ExpensesEmployee Expenses 9,684 9,682 8,860 (2) (0.0)Materials and Services 15,969 15,969 15,847 0 0.0Council Corporate SLA 2,743 2,743 2,743 0 0.0Internal Directorate SLA 3,332 3,332 3,332 0 0.0Waste Collection Payments 27,561 27,561 27,561 0 0.0Fleet and Plant 11,491 11,491 10,934 0 0.0Consultants 1,533 1,475 1,200 (58) (3.9)Electricity 149 149 149 0 0.0Insurance Premiums 85 85 85 0 0.0Other Expenditure 2,500 2,500 2,500 0 0.0Total Operating Expenses 75,046 74,987 73,211 (60) (0.1)

Total Operating Profit 32,736 32,796 34,931 (60) (0.2)

Depreciation / Amortisation 8,600 8,600 8,600 0 0.0

EBIT 24,136 24,196 26,331 (60) (0.2)Interest Expense (QTC loan) 3,790 3,790 3,945 0 0.0Interest Margin Expense 152 152 152 0 0.0Income Tax Equivalents 7,943 7,943 7,942 0 0.0NPAT 12,252 12,311 14,292 (60) (0.5)

Dividend 7,691 7,691 7,691 0 0.0

Retained Earnings 4,561 4,620 6,601 (60) (1.3)

Dec v SepMovement



Attachment 1.2 DETAILED INCOME STATEMENT (CASH) December 2018 Budget Review

Waste Services

Financial Management Statement

{Cash}

Dec 18 Review

Sept 18 Review

2018-19 Initial

Year Ended 30th June 2019 ($'000's) ($'000's) ($'000's) Mvt % MvtOperating RevenueWaste Utility Rate Revenue 83,990 83,990 83,990 0 0.0Refuse Tipping Fees 8,290 8,290 8,290 0 0.0Recycling Revenue 1,083 1,083 1,083 0 0.0Fees & Charges 1,804 1,804 2,504 0 0.0Internal Tipping Charges 7,824 7,824 7,824 0 0.0Community Service Obligations 3,250 3,250 3,250 0 0.0Interest on Outstanding Rates 150 150 150 0 0.0Interest on Investments 970 970 630 0 0.0Contributions & Donations Revenue 378 378 378 0 0.0Other Operating Income 44 44 44 0 0.0Total Operating Revenue 107,782 107,782 108,142 0 0.0

Operating ExpensesEmployee Expenses 9,684 9,682 8,860 (2) (0.0)Materials and Services 15,969 15,969 15,847 0 0.0Council Corporate SLA 2,743 2,743 2,743 0 0.0Internal Directorate SLA 3,332 3,332 3,332 0 0.0Waste Collection Payments 27,561 27,561 27,561 0 0.0Fleet and Plant 11,491 11,491 10,934 0 0.0Consultants 1,533 1,475 1,200 (58) (3.9)Electricity 149 149 149 0 0.0Insurance Premiums 85 85 85 0 0.0Other Expenditure 2,500 2,500 2,500 0 0.0Total Operating Expenses 75,046 74,987 73,211 (60) (0.1)

Total Operating Profit 32,736 32,796 34,931 (60) (0.2)

Gain/Loss on Sale of Assets 0 0 0 0 0.0Depreciation / Amortisation 0 0 0 0 0.0

EBIT 32,736 32,796 34,931 (60) (0.2)Interest Expense (QTC loan) 3,790 3,790 3,945 0 0.0Interest Margin Expense 152 152 152 0 0.0Income Tax Equivalents 7,943 7,943 7,942 0 0.0NPAT 20,852 20,911 22,892 (60) (0.3)

Dividend 7,691 7,691 7,691 0 0.0Debt Redemption 7,655 7,655 7,827 0 0.0Capital Expenditure 10,575 12,725 12,725 2,150 16.9Transfer from Capital Reserve (5,945) (7,375) (7,375) (1,430) 19.4Loan Funding (4,880) (5,600) (5,600) (720) 12.9Transfer to Reserves Landfill Remediation 2,100 2,100 2,100 0 0.0Brought Forward Surplus (3,599) (3,599) 0 0 0.0Transfer To/(From) Reserve 7,255 7,314 5,524 (60) (0.8)

Dec v SepMovement



Attachment 2 GOLD COAST WASTE MANAGEMENT – DECEMBER 2018 BUDGET REVIEW BUDGET CENTRE MOVEMENTS

BudgetCentreDescription

2018-19September

ReviewTotal

Budget

2018-19December

ReviewRecurrentMovement

2018-19December

ReviewNon-Recurrent

Movement

2018-19December

ReviewTotal

Movement

2018-19December

ReviewTotal

BudgetCS4700O005 - WD - Landfill Operations (15,695,578) - - - (15,695,578)

CS4700O018 - WD - Cost Centre Plant 108,500 - - - 108,500

CS4700O003 - WD - Administration 477,020 - - - 477,020

CS4710O001 - WC - Administration 18,186,350 - - - 18,186,350

CS4710O004 - WC - Waste Service Contracts 16,579,900 - - - 16,579,900

CS4710O003 - WC - Recycling Service Contracts 9,256,400 - - - 9,256,400

CS4710O005 - WC - Stradbroke Island Waste Disposal 459,800 - - - 459,800

CS4710O006 - WC - Wheelie Bins 2,509,100 - - - 2,509,100

CS4710O010 - WC - Cost Centre Plant 23,800 - - - 23,800

CS4740O004 - WM - Annual Community Grants 485,100 - - - 485,100

CS4740O007 - WM - Accumulated Surplus Brought Forward (3,599,125) - - - (3,599,125)

CS4740O008 - WM - Branch Management 366,270 - - - 366,270

CS4740N006 - WM - CSO Remission - Waste (3,249,876) - - - (3,249,876)

CS4740N003 - WM - Income Tax Equivalent - Waste 10,442,439 - - - 10,442,439

CS4740O001 - WM - Refuse Charge Donations 559,000 - - - 559,000

CS4740O003 - WM - Reserve Transfers - Waste 9,414,386 - (59,500) (59,500) 9,354,886

CS4740S001 - WM - SLA Org Services to Waste Mgmt 2,409,079 - - - 2,409,079

CS4740S002 - WM - SLA OCOO to Waste Mgmt 333,847 - - - 333,847

CS4740D001 - WM - Debt Servicing Garbage Disposal 11,444,663 - - - 11,444,663

CS4740N002 - WM - Comp Neutrality – Int Margin Loans 152,000 - - - 152,000

CS4740N004 - WM - Dividend – Waste 7,691,121 - - - 7,691,121

CS4740O002 - WM - Refuse Charge (84,140,000) - - - (84,140,000)

GW4740O009 - WM - Administration 2,446,406 - - - 2,446,406

GW1100O006 - WRC - Currumbin Waste & Recycling Centre 83,046 - - - 83,046

GW1100O003 - WRC - Molendinar Waste & Recycling Centr 1,163,464 - - - 1,163,464

GW1100O001 - WRC - Management 8,274,552 - 59,500 59,500 8,334,052

GW1100O005 - WRC - Reedy Creek Waste & Recycling Cent 830,854 - - - 830,854

GW1100O007 - WRC - Jacobs Well Waste & Recycling Cent 170,422 - - - 170,422

GW1100O002 - WRC - Helensvale Waste & Recycling Centr 920,462 - - - 920,462

GW1100O004 - WRC - Merrimac Waste & Recycling Centre 628,322 - - - 628,322

GW1100O008 - WRC - Mudgeeraba Waste & Recycling Centr 191,456 - - - 191,456

GW1100O009 - WRC - Minor Waste & Recycling Centre 246,500 - - - 246,500

GW1100O010 - WRC - Resource Recovery 1,300 - - - 1,300

GW1120O001 - SWS - Solid Waste Strategy 903,825 - - - 903,825

GW1120O002 - SWS - Recycling Promotion & Resources (74,805) - - - (74,805)

- - - - -



Attachment 3 WASTE SERVICES CAPITAL PROGRAM MOVEMENT DECEMBER 2018 BUDGET REVIEW

(Note: Capital decrease in the December 2018 Budget Review is offset by reductions in loan borrowings and reserve transfers, so net impact to the budget is nil.)

PROJECT PROJECT DESCRIPTION2018-19INITIAL

BUDGET

2018-19SEP

FORECAST

2018-19 DEC

FORECAST

2018-19 DEC REVIEW

MOVEMENT($)

80210 Reedy Creek Landfill Cells 3 and 4 4,880,000 4,880,000 4,880,000 0

80215 Stapylton Landfill Cell 7 520,000 520,000 - (520,000)

80212 SCADA Installation 685,300 685,300 685,300 0

80217 Landfill Minor Renewals 2017-18 - 49,000 49,000 0

80220 Landfill Minor Renewals 2018-19 510,000 467,000 467,000 0

80213 Stapylton Landfill Main Access Upgrade 2,000,000 2,000,000 2,000,000 0

80221 Stapylton Landfill Internal Road Upgrade 300,000 200,000 - (200,000)

80222 Reedy Creek Landfill Internal Rd Upgr 250,000 150,000 - (150,000)

80223 Reedy Creek Landfill Stormwater Entrance 250,000 150,000 - (150,000)

80224 Stapylton Sediment and Erosion Control 200,000 100,000 - (100,000)

80225 Reedy Creek Landfill Sewer Connection 80,000 30,000 30,000 0

80226 Construct Reedy Creek Site Office 100,000 100,000 100,000 0

80238 Stapylton Landfill Sediment Basin - 300,000 300,000 0

30115 Coomera WRC D&C Stage 2 200,000 200,000 - (200,000)

80233 RORO Bins 2018-19 330,000 330,000 - (330,000)

80219 WRC Minor Renewals 2017-18 - 44,000 44,000 0

80229 WRC Minor Renewals 2018-19 470,000 470,000 470,000 0

80230 WRC Bin Bay Upgrades 1,000,000 300,000 300,000 0

80231 Recycle Street Construction 2018-19 250,000 250,000 250,000 0

80232 WRC Weighbridge and Security Upgrade 200,000 200,000 200,000 0

80239 Merrimac Green Waste Pad - 800,000 800,000 0

80244 Coomera WRC Stage 1 - - - 0

80211 WRC Compaction Plant 18-19 500,000 500,000 - (500,000)

$ 12,725,300 $ 12,725,300 $ 10,575,300 ($2,150,000)


CLOSED SESSION LOCAL GOVERNMENT ACT 2009 AND SUPPORTING REGULATIONS PROCEDURAL MOTION moved Cr Gates seconded Cr PC Young That Council move into Closed Session pursuant to section 275 (1) of the Local Government Regulation 2012, for the consideration of the following item for the reason shown:-

Item Subject Reason

14.4 December 2018 Budget Review (Confidential) Prejudicial Matter

14.5 City Of Gold Coast Review – Draft Spit Master Plan (Confidential)

Prejudicial Matter

CARRIED PROCEDURAL MOTION moved Cr Tozer seconded Cr Baildon That the Council move into Open Session.

CARRIED Following resumption into Open Session Items 14.4 & 14.5 were moved and carried as shown on the following pages.


14 OTHER BUSINESS (Continued) 14.4 DECEMBER 2018 BUDGET REVIEW FN334/375/20(P1) Attachment 1 – December 2018 Budget Review 1 BASIS FOR CONFIDENTIALITY 1.1 I recommend that some aspects of this report be considered in Closed Session

pursuant to section 275 (1) of the Local Government Regulation 2012 for the reason that the matter involves

(c) the local government’s budget;

1.2 I recommend that the report/attachment be deemed non confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009.

2 EXECUTIVE SUMMARY Not Applicable. 3 PURPOSE OF REPORT In accordance with the Local Government Act 2009 and the Local Government Regulation 2012, Council may amend its budget at any time before the end of the financial year. This report is provided to Council in accordance with the statutory requirements and details budget variations submitted for Council’s consideration and adoption as part of the December 2018 Budget Review. 4 PREVIOUS RESOLUTIONS Not applicable. 5 DISCUSSION This report presents the December 2018 Budget Review and provides Council with an assessment of its current budget position including variations contained in the review. The result of the December Budget Review is a Net Surplus of $148,220 which is proposed to be transferred to the Strategic Priorities Reserve to be allocated to the Coomera Hub Project. The report is presented in the format below:

Section 5.1 Budget Review Summary

5.2 Proposed Budget Variations

5.3 Emerging Issues

5.4 Review of Overall Budget Position

5.5 Recurrent Budget Impact - December 2018 Budget Review

5.6 Reserve Balances


14 OTHER BUSINESS (Continued) 14.4 DECEMBER 2018 BUDGET REVIEW FN334/375/20(P1) (Continued) 5.1 Budget Review Summary Major variations included in the December 2018 Budget Review are:

a Investment Interest Income - $1,224,253 (Fav)

b Integrity and Ethical Unit additional temporary investigations resource - $110,310 (Unfav)

c Internal Audit expenditure decrease - $110,000 (Fav)

d Customer Experience (CX) Strategy, including temporary positions - $276,410 (Unfav)

e Invoice Pending Account revenue increase - $281,414 (Fav)

f City Libraries maintenance - $313,550 (Unfav)

g Southport DMU building repair funds not required - $380,224 (Fav)

h HOTA Switchboard replacement - $350,000 (Unfav)

i Coomera Depot (cash flow adjustment) - $350,000 (Fav)

j SAP Works Manager licence costs $177,500 - (Unfav)

k Review and validation of licence, training and qualification requirements - $359,000 (Unfav)

l Enhancements to LGP Application system - $150,000 (Unfav)

m Ashmore Depot lease revenue decrease - $160,000 (Unfav)

n Concept design for Disaster and Emergency Management Centre, Middleton Street, Ashmore - $140,000 (Unfav)

Please refer to Table 2 for a detailed explanation of the above variations. The proposed Budget Review produces the following net effects on general revenue:

(Fav) / Unfav

Gold Coast Water Nil

Gold Coast Waste Management Nil

Gold Coast Tourist Parks Nil

Other Council Activities Nil

Nil


14 OTHER BUSINESS (Continued) 14.4 DECEMBER 2018 BUDGET REVIEW FN334/375/20(P1) (Continued) Table 1 below provides a summary of the major net movements in the December 2018 Budget Review, by significant activity Table 1 Budget Review Summary

City of Gold Coast (Other

Activities)

Gold Coast Waste

Management

Tourist Parks GCW City of Gold CoastTotal

Table 1: 2018-19 Budget Review Summary

Net (Surplus) /

Deficit$

Net (Surplus) /

Deficit$

Net (Surplus) /

Deficit$

Net (Surplus) /

Deficit$

Net (Surplus) /

Deficit$

Opening Surplus 2017-18 (159,393,610) (3,599,125) (955,948) (7,083,214) (171,031,897)Surplus Underpinning the 2017-18 Budget 45,031,057 - - - 45,031,057 2017-18 Reprovisions and EOY Adjustments 114,362,553 3,599,125 955,948 7,083,214 126,000,840

September 2018 Budget ReviewNet Review Items (182,837) - - 182,837 - Changes in Tax Equivalents 182,837 - - (182,837) -

Opening Position - September 2018 Review - - - - -

Proposed Major VariationsInvestment and other Interest Income (1,224,253) (1,224,253)Integrity & Ethical Unit additional temporary investigations resource 110,310 110,310 Internal Audit expenditure decrease (110,000) (110,000)Customer Experience (CX) Strategy - includes temporary positions 276,410 276,410 Invoice Pending Account revenue increase (281,414) (281,414)City Libraries maintenance 313,550 313,550 Southport Disaster Management Unit (DMU) Building (380,224) (380,224)HOTA Switchboard replacement 350,000 350,000 Coomera Deport (cash flow adjustment) (350,000) (350,000)SAP Works Manager Upgrade 177,500 177,500 Position Profile Review project - WHS 359,000 359,000 Enhancements to LGP Application system 150,000 150,000 Ashmore Depot lease revenue 160,000 160,000 Concept design for Disaster and Emergency Management Centre 140,000 140,000

- -

Business Unit AdjustmentsNet operating adjustments 59,500 - 1,131,000 1,190,500 Net capital adjustments (1,430,000) 235,000 (650,000) (1,845,000) Reduction in SLA charges - - - - Transfer to / (from) Waste Management Reserve 1,370,500 - - 1,370,500 Transfer to / (from) Tourist Parks Reserve - (235,000) - (235,000) Transfer to / (from) Water and Sewerage Infrastructure Reserve - - (481,000) (481,000) Increase / (Decrease) in Dividends, CSOs and Tax Equivalents - - - - -

All Other Review Items (Net) 160,901 - - - 160,901

Balance of December Budget Review (148,220) - - - (148,220)

Uncommitted Surplus (148,220) - - - (148,220)

Allocation of Uncommitted SurplusTo be transferred to the Strategic Priorities Reserve and allocated to the Coomera Hub Project

148,220 148,220

Proposed (Surplus)/Deficit 2018-19 - - - - -


14 OTHER BUSINESS (Continued) 14.4 DECEMBER 2018 BUDGET REVIEW FN334/375/20(P1) (Continued) 5.2 Proposed Budget Variations Council’s Budget Review Policy requires that significant budget variations be addressed either through standard reports to the Special Budget Committee or via this report, depending upon the circumstances.

Table 2: December 2018 Budget Review Significant Variations

Revenue $

() = Fav

Expenditure $

() = Fav

Lifestyle & Community

Library Services - Capital 313,550

$313,550 Net Expenditure Increase $250,000 increase for the Nerang Library air conditioner chiller unit currently running at 50% capacity due to refrigerant leaks in the condenser coils. Considerable resources have been expended trying to repair the chiller but due to the condition of the copper coils we are unable to proceed any further. Currently if the ambient temperature is above 30 degrees we cannot maintain conditions within the library. ($106,000) decrease for Elanora Library Modifications project. This project is now no longer planned to proceed in 2018-19, but will be included in the 2019-20 capital program. $40,000 increase for the Burleigh Waters Library air conditioner. Building Maintenance have identified a major issue with the air conditioning unit at Burleigh Waters Library, the optimal remedy suggested for medium to long term effectiveness of the unit is to replace the outdoor condensing unit. $129,550 increase for the Runaway Bay Library eave facia replacement. Funding requested for eaves replacement project sought as non-completion of work could lead to water leaks and subsequent damage.


14 OTHER BUSINESS (Continued) 14.4 DECEMBER 2018 BUDGET REVIEW FN334/375/20(P1) (Continued)


Revenue $ () = Fav

Expenditure $

() = Fav

Lifestyle & Community

Parks Asset Replacement Renewal & Renovation (1,175,000)

($1,175,000) Expenditure Decrease Transferring budget to Major Sporting Areas. Combining the storm damage funds for Charlie’s Crossing equestrian facility of $800,000 with the $375,000 remaining from other storm damage funds. These funds to be retained and allocated for equestrian facilities to compensate for the loss of facilities as identified in the report to Lifestyle and Community committee 29 November 2019 (G19.1207.007).

It is expected that up to $200,000 of this will be used in 2018-19 and 2019-20. Works are delayed because of the need to re-site the facilities lost through storm damage to another location which has not yet been identified and will be subject to a further report to Council.

Major Sporting Areas (702,000) 1,877,000

($702,000) Revenue Increase $1,877,000 Expenditure Increase $1,175,000 Expenditure Increase Equestrian Facilities: Project 32055, transfer of budget as noted in item above

($702,000) Revenue Increase $702,000 Expenditure Increase

Gold Coast Hockey Centre construction of third field: Project 31712. As a legacy outcome of the Commonwealth Games, the State Government (Office of the Commonwealth Games - OCG) agreed to fully fund construction of a grassed hockey pitch in the area utilised for spectator seating post Games. Work will be undertaken this financial year by internal sources with funds transferred from OCG as works progress. Recognition of funds invoiced to date $702,000.




Revenue $ () = Fav

Expenditure $

() = Fav

Swimming Pool Capital (980,700)

($980,700) Expenditure Decrease

($980,700) Miami Aquatic Centre - Redevelopment Project

Originally intended to go to market as a detailed design package of works for the redevelopment of Miami Aquatic Centre, it has now been determined that the preferred option of procurement for this development is to undertake the schematic design only and go to tender as a design and construct contract. Accordingly, it is proposed the unspent portion of budget be held in the Strategic Priorities Reserve until next financial year.

Tourist Parks - Capital (235,000) 235,000

($235,000) Revenue Increase $235,000 Expenditure Increase As per Council resolution G19.0227.006 Council resolved to purchase not more than five manufactured homes in any financial year commencing 2018-19 for a maximum period of 10 years to give effect to the new Permanents at Tourist Park policy adopted 27 February 2018.

As per Council Resolution G19.1207.011 this funding request provides for the balance of the purchase of the fifth 2018-19 MHA acquisition at Kirra Beach Tourist Park for $235,000. Funded from the Strategic Priorities Reserve ($30,000) and the Tourist Park Reserve ($205,000). The Tourist Park reserve element has been funded by general loan borrowings.

Tipplers Café (115,400)

($115,400) Revenue Increase

Additional revenue for Tipplers Cafe based upon forecast sales. Terms and conditions under current management contract are that the City charges a commission on all Point of Sale items sold at Tipplers Café, Tipplers Kiosk and Currigee Kiosk.




Revenue $ () = Fav

Expenditure $

() = Fav

Economy, Planning & Environment

Review of Active Infrastructure Charges

Converting Temporary Positions to Permanent

Net Nil

It is proposed to convert three temporary positions to permanent positions as part of this Budget Review. These positions were originally approved for a period of three years from July 2018 to June 2021. As part of the Queensland Audit Office's 2017-18 audit process, an audit of the City's response to the value of outstanding active infrastructure charges was commenced. This audit heightened concerns regarding the backlog of active infrastructure charges. It has now become evident that the review of active infrastructure charges will be an ongoing requirement and must be embedded as part of the Contributed Asset team's "business as usual" activities. This will ensure the ongoing monitoring and review of development applications to ensure infrastructure charges revenue is collected in a timely manner. As a result, it is proposed that the three temporary positions that were created to undertake this work now be converted to permanent positions.

Converting these positions to permanent will increase the proposed recurrent 2019-20 budget by $272,790, with the benefit of ensuring infrastructure charges revenue is collected efficiently on an ongoing basis.

Office of the Chief Operating Officer

General Loan Borrowings (205,000)

($205,000) Revenue increase

General loan borrowings will be increased by ($205,000) to fund the purchase of a fifth MHA site in 2018-19 at Kirra Tourist Park. Four sites have already been purchased in the current financial year with a fifth sale approved to proceed as per Council resolution.




Revenue $ () = Fav

Expenditure $

() = Fav


Investment & Other Interest Income (1,224,253)

($1,224,253) Revenue Increase.

The trend in interest on investment income indicates that the full year revenue will be around $27 million based on maintaining a cash balance of around $1 billion at an average earnings rate of 2.7%. Infrastructure Charges revenue is continuing to remain at historically high levels which is contributing to the high cash balances.

Invoice Pending Account (281,414)

($281,414) Revenue Increase

The review of the Invoice Pending account has resulted in a credit balance of $281,414 in 2018-19 budget. Expenses are recognised against a cost centre / project when goods are received against a purchase order and this also results in a corresponding credit to the invoice pending liability account. The invoice pending liability account is reviewed on a regular basis for old outstanding purchase order receipts with no matching invoice and such receipts are reversed to clear the liability and correct the profit and loss. Where the purchase order receipt (expense) relates to a prior financial year, this results in a credit to revenue.




Revenue $ () = Fav

Expenditure $

() = Fav


Reserves Transfers 1,453,920

$1,748,520 Expenditure Increase

Transfer to Strategic Priority Reserve - $980,700

Miami Aquatic Centre Redevelopment Project deferred until 2019-20. Refer to Swimming Pool Capital item earlier in this table for more details.

Transfer to Tourist Park Reserve - $205,000

Requested transfer to Tourist Park Reserve to cover the capital expenditure associated with the Kirra Beach Tourist Park. Refer to Tourist Parks – Capital item earlier in this table for more details.

$120,000 transfer to the Infrastructure Re-imbursement reserve in relation to environmental rehabilitation works being carried out by a Developer on our behalf as part of the Tea Trees project. Refer to Section 5.5 Reserve Balances.

The result of the December Budget Review is a net surplus of $148,220 which is proposed to be transferred to The Strategic Priorities Reserve to be allocated to the Coomera Hub Project.

Integrity and Ethical Unit 110,130

$110,130 is requested to fund a Temporary Investigations role within the Integrity and Ethical Standards Unit (IESU) to support the current increase in workload within the IESU during 2019. The role will provide additional internal investigations capacity and support ongoing fraud and corruption control activities of the IESU team with ongoing resourcing to be reassessed towards the end of 2019 calendar year.

Internal Audit (110,000)

Non-recurrent saving in internal audit external advice for 2018-19 as a result of a number of audit activities identified for external support having been deferred to the 2019-20 internal audit plan.




Revenue $ () = Fav

Expenditure $

() = Fav


Customer Experience (CX) Strategy 276,410

$276,410 funding is requested to cover the initial cost $241,410 for temporary labour (Strategy Coordinator, 2 Business Analysts and Project Administrator) and $35,000 for development and consultation activities.

It is anticipated that these resources will be required to continue in 2019-20 for implementation of the Customer Experience Strategy, pending Council consideration of the draft strategy and associated implementation plan.

Over the last 10 years, the city has worked to progress its customer service offering through key activities such as the creation of a single Customer Contact branch, updates to the website and introducing online forms and an App. More recently, the introduction of the customer portal, My Account has seen over 48,000 customers register to use our digital services.

There has been continued growth in interaction with our customers, driven by a combination of factors including population growth, property market growth, new and changing services (such as new types of bin collection, parking technology, a move to quarterly water billing, Free Seniors’ Travel, Free Seniors’ Dog Registration and new Customer Service Centre locations etc.).

This has collectively resulted in increased demand across all service channels from 2012-13 to 2017-18. Phone calls have increased annually from 274,000 to 482,000, emails from 47,000 to 90,000, face to face from 96,000 to 108,000 and website visits from 1.9 million to 3.3 million. There has also been a strong uptake of online forms and mobile app use.

Council has the distinct challenge of providing over 780 different services to our customers, who can be (for example) rate payers, businesses, visitors, and students. Each of these customer types use different services, have different needs and mindsets, and different ways they want to interact with the City.

Customer expectations have significantly evolved in the last few years, predominantly driven by rapid change in technology, and a demand to be able to source information and request services quickly..




Revenue $ () = Fav

Expenditure $

() = Fav


Customers still want good services, but they expect services to be offered digitally, and increasingly are looking for personalised information that is proactively provided to them.

The city therefore needs to review services from a customer’s perspective end to end (their whole experience) rather than from just an internal view point (specific touchpoints/processes).

The new Customer Experience Strategy will detail the City’s vision to meet this challenge and outline the actions required to achieve an improved experience for our customers to become more aligned with their expectations.

Key areas of focus will include:

- Ensuring our key services are designed to create great experiences for our customers

- Reviewing our service channels and looking to open new channels that customers would like to interact with

- Reviewing our current technologies and understanding what new technologies we should invest in

- Ensuring we have a clear strategy for how we capture, collate and bring together our customer data, with its safety as our first priority

- Working with our people to ensure that great customer service focus is part of our day to day culture, regardless of role.

Community consultation and stakeholder engagement will validate current findings and what deliverables are critical to meet customer needs.

.




Revenue $ () = Fav

Expenditure $

() = Fav


The expected outcomes over the coming years include:

- Introduction of Webchat and SMS as customer service channels, and consideration if social media can become a service channel

- Implementation of an alerts system (to notify customers of service outages or other pertinent information)

- Implementation of an online bookings system to allow customers to determine availability and book city services (for example parks, community centres, sporting facilities)

- Service improvement plans and roadmaps

- A new Customer Experience Policy and Customer Charter

This budget request is to fund the specific resources and key activities required to design and draft the Customer Experience Strategy as follows:

- Determination of the full list of external customer services provided by the City

- Analysis of the data for each service to determine the prioritisation of these services from a city perspective

- Internal stakeholder engagement of current state, challenges, opportunities and future success outcomes for customer experience

- External focus groups and community engagement to determine customer drivers, key success factors and to validate the city’s vision for customer experience

- Determination of new customer experience measures for the city

- Creation of customer profiles and customer journey mapping methodology

- Design and development of the draft customer experience strategy

It is anticipated that the draft strategy will be finalised for endorsement by December 2019

767th Council Meeting 96 30 January 2019 CONFIDENITAL Minutes

UNAUTHORISED RELEASE OF CONFIDENTIAL REPORTS OR INFORMATION

may be an offence under the Local Government Act 2009 and other legislation and could result in disqualification from office and a penalty of up to 100 units.

CONFIDENTIAL

14 OTHER BUSINESS (Continued) 14.4 DECEMBER 2018 BUDGET REVIEW FN334/375/20(P1) (Continued) CONFIDENTIAL


Revenue $ () = Fav

Expenditure $

() = Fav


REDACTED

Asset Management Improvement Program 70,000

Funding to improve access to Infrastructure & Maintenance Information - One (1) Full-time Temporary Position for 6 months

The new integrated Enterprise Asset Register and Maintenance Management System were implemented as part of the Project Release 2 go-live in May 2014. These systems have:

- Asset Register Data on over 1.5 million assets

- Over a quarter of a million Work Orders are undertaken annually by the City’s maintenance & operations field workforce with the City having more than 500 mobile devices (i.e. iPADs) deployed to field staff to capture relevant information of maintenance activities & costs

- An increasing volume of defect inspections and condition assessments are being conducted with large volumes of associated information

While a vast amount of valuable information is being captured, it is not readily available to many of the staff in Asset Custodian areas that need to use it and/or is not in an appropriate form.

Asset Custodians across Transport & Infrastructure, Water & Waste, Lifestyle & Community and Organisational Services (Property Services) need better access to all of the above information to effectively manage the City’s large and diverse infrastructure asset base (over $18 billion), through using the information that has been captured over the past four and half years.




Revenue $ () = Fav

Expenditure $

() = Fav


Examples of the information requirements of the Asset Custodians that need to be defined and designed & implemented include:

- Maintenance & operations staff accessing information in the field eg. detailed design drawings, maintenance & operations manuals, asbestos documents, etc

- Extracting large volumes of asset register data for uses such as loading data modelling tools to perform infrastructure capacity modelling for the Local Government Infrastructure Plan

- Ability to drill down into detailed asset information via the Geographic Information System (GIS), such as retrieving information on when an asset was last inspected and the status of Work Orders to rectify the identified defects

- Trend reports on asset acquisitions and disposals eg. quantity of assets contributed to the City, quality of new assets built by the City and the number of assets disposed

- Trend reports on asset defects, asset condition, asset failures, maintenance & operations histories and the associated costs

Organisational Services

Modern Workspace Program

Nil impact Realignment of Strategic Information Management - Capital budgets.

This transfer of budgets between capital projects is required to ensure project funding is accurately recorded. There is a nil effect on the budget from these transfers.

62522 MWP Modern Workspace Program $3,714,680 62239 MWP ICT Cloud ($1,700,000) 62419 MWP Office365 ($214,680) 62518 MWP iSpot Replacement ($1,800,000)

Net Nil




Revenue $ () = Fav

Expenditure $

() = Fav


Southport Disaster Management Unit

(Lionel F Perry Building)

(380,224)

A business case is being prepared for consideration by Council to re-locate the Disaster and Emergency Management Centre (DEMC) from its existing premises, which is no longer considered fit for purpose, to the Middleton Street Depot. This proposal is also subject to an application for grant funding under the Local Government Grants and Subsidies Program (LGGSP).

Should the DEMC be relocated, the funding for capital improvements of $380,224 will not be required. Should the existing building remain for non-disaster management purposes (e.g. community purposes), maintenance funding is available to carry out any necessary work on the structure.

Should Council determine that the DEMC will remain in the existing location, an assessment of works required to make the facility fit for purpose would need to be undertaken and funds allocated accordingly.

Property Rationalisation - Carpark Purchase (3,531,818) 3,531,818

Nil Impact.

($3,000,000) transfer from reserve related to the sale of land proceeds and $3,000,000 expenditure transfer for developer reimbursement for the new undercover carpark (Property Rationalisation Reserve). Transfer sale of land proceeds from Property Rationalisation Reserve (Lot 18 RP201092, 2725 Gold Coast Highway, Broadbeach). This amount is required to repay the developer now that the new development has been completed and the new undercover carpark has been made available to Council. GA14.0828.004.

$531,818 Revenue increase and expenditure increase

Additional payment, $250,000 received from the developer, (related to Lot 18 RP201092 pursuant to the Second Deed of Variation of Heads of Agreement and Variation of Volumetric Lot Contract - late delivery of public carpark) transferred to the Cultural Precinct Reserve and transfer the balance, $281,818 of the sale of land proceeds (same parcel of land, Lot 18 RP201092) from Property Rationalisation Reserve to the Cultural Precinct Reserve, GA14.0828.004.




Revenue $ () = Fav

Expenditure $

() = Fav


Coomera Depot Development (350,000)

The latest cashflow review of the Coomera Depot Stage 2 project has revealed that $350,000 will not be required this financial year. Accordingly, it is proposed to adjust the 2018-19 project budget. The original estimate for the project remains unchanged therefore, the draft 2019-20 budget for this project will be increased by $350,000 to continue to progress this project.

Ashmore Depot Lease Revenue 160,000

A tenant has vacated one of the buildings at the Ashmore Depot as the site has now been earmarked for the Disaster and Emergency Management Centre (DMEC), subject to Council consideration of a business case on this matter. The city will forego commercial rental revenue.




Revenue $ () = Fav

Expenditure $

() = Fav


Home of the Arts - Mains Switchboard Replacement 350,000

This existing project to replace the HOTA main switchboard is currently included in the 2018-19 capital program for an amount of $308,422. Additional funds are required to replace the main switchboard that provides power to the HOTA Arts Centre building. The main switchboard dates from the construction of the original Arts Centre building (circa 1985) and requires immediate replacement as it is no longer code compliant due to its age and condition (spares are no longer available) and, secondly, due to the current location within the generator room.

HOTA occupy and utilise the Arts Centre building (amongst others) under the terms of a Licence issued by the City. The building itself and main switchboard are City assets. A Facilities Management Agreement executed between the City and HOTA sets out their respective responsibilities relating to building repairs and maintenance including capital expenditure. The replacement of the main switchboard is the responsibility of the City.

The existing capital replacement budget for the main switchboard was based on initial cost replacement estimates, however, the original estimates did not take into account the unusual configuration of the existing main switchboard nor the complexities in undertaking the replacement without major disruption to the Arts Centre. The additional funds are required to enable the project to proceed. This is a Design and Construct project.

LGP application system enhancements 150,000

Enhancements to the LGP application system code are necessary to allow for the identification of properties within the Gold Coast Health and Knowledge Precinct and the levying of separate differential general rates on those properties (otherwise referred to as localised differential general rates) by way of introducing a Differential "Location" Code attribute. The modification is to allow for introduction of other localised differential general rates in the future.




Revenue $ () = Fav

Expenditure $

() = Fav


SAP Works Manager Cloud Enablement 177,500

Additional funds for SAP Works Manager licensing in the Cloud. Works are currently underway to move the current solution to a cloud based solution and is required as the current version is at end of life. This solution provides mobility access for workers in the field. This amount is offset by Water & Waste's increased contribution as part of the adopted 2018-19 budget.

Review and Validation of licence, training and qualification requirements

359,000

The Work Health Safety Act 2011 places the primary duty of care and various other duties and obligations on a 'person conducting a business or undertaking' (PCBU). Council as a PCBU has a primary duty of care to provide and maintain safe systems of work that include the provision for information, training and instruction that is necessary to protect all persons from risks to their health and safety arising from work carried out as part of the business.

A project (titled Position Profile Review) has been initiated to undertake a comprehensive review and validation of the licence, training and qualification requirements for all positions within Council. The project is undertaking a detailed analysis of each position across the organisation to assess mandatory requirements. Current records are being updated and stored in the chris21 system, and required training programmed.

Given the criticality of this matter, the project commenced July 2018 and is being conducted in three stages:

1. Licences (and tickets/cards), Positions of Trust (POT)

2. Training (corporate, safety, directorate specific, systems and technology and project specific)

3. Qualifications (education and memberships)

There are 79 individual mandatory licences, and a total of 15,300 incidences where mandatory licences are required to be held by various workers across the organisation (mainly outside workers) to carry out their responsibilities in a legally complaint manner. These licences include functions such as plant operation, confined spaces, general construction, fork lift operation, working at heights, trench support, electrical, traffic management and asbestos management.




Revenue $ () = Fav

Expenditure $

() = Fav


The project will:

• Mitigate the risk of having non-compliant workers

• Enable visibility of critical licence, training and qualification gaps

• Inform the scheduling of future required training

• Improve control effectiveness, including the ongoing maintenance and governance of information

• Enable a safe workforce that is compliant with legal, corporate and other requirements

• Deliver the business access to live data and reporting for the efficient and effective management of staff and their position requirements

The project will provide a live and accurate representation of all position requirements which will be available on mobile devices so that checks to confirm that the required mandatory licences are in place can be undertaken in the field.

Resourcing for delivery of this project is 1 x Project Manager (to 31-12-19), 1 x Project Support (to 31-12-19), and 2 x Data Testing and Validation positions (to 1-4-19), totalling $359,313.

Transport & Infrastructure

DMEC Capital Projects (IDG) 140,000

Funding for Concept Design of the proposed relocation of the Disaster and Emergency Management Centre to Middleton Street, Ashmore. This is subject to Council consideration of a business case on this matter.

Roads Infrastructure 11,107,455 (11,107,455)

$11,025,377 Revenue and expenditure decrease.

Reduction in Infrastructure Charges funding required in 2018-19 for the Via Roma Surfers Paradise Bridge Duplication Project. Revised forecast funding requirements for this project in 2018-19 is $2,500,000.

$82,078 Revenue and expenditure decrease.

Reduction for Safety Works Clagiraba Road, Clagiraba as this was funded by State Government Grant funding and the Project was completed under the initial estimate.




Revenue $ () = Fav

Expenditure $

() = Fav


Trunk Reimbursements (27,601,290) 27,601,290

$27,328,493 Revenue and expenditure increase Timing changes for Developer provided works in the Trunk Reimbursements Program under LGIP which are funded by Infrastructure Charges. Developer provided works include: Coomera Town Centre Road $5.0 million Yawalpah Road Stage 1 $6.4 million Yawalpah & Kerkin Road Intersection $5.1 million Eggersdorf Road $2.8 million Pearson Road $6.2 million Cunningham Drive $1.8 million $272,797 Revenue and expenditure increase Return of Trunk Transport funds from Developer relating to Swan Road, Pimpama Roadworks.

Ferry Service (300,000) 300,000

($300,000) Revenue Increase, $300,000 Expenditure Increase. Whole of City LAW allocation to Transport and Traffic Branch for GC Ferry service trial that includes: Planning Activities: - Specialist marine advice to gain understanding of essential

operational elements required to sustain a viable ferry service

- Ferry route analysis and demand forecasting to determine service need.

- Vessel Wash and Shoreline Assessment to assist the City’s application to Maritime Safety Queensland for a speed limit exemption.

- Accessibility audits of existing pontoons and preparation of an application / s to the Human Rights Commission for DDA exemptions.

- Legal advice to inform what law changes are required to operate ferry services on Gold Coast waterways.

Design Activities: - Infrastructure assessment of existing pontoons to

determine suitability for ferry operations. - Infrastructure assessment / design development of

proposed ferry stop locations to satisfy DDA / CPTED requirements and enhance customer experience.




Revenue $ () = Fav

Expenditure $

() = Fav


Procurement Activities: - Market sounding and preparation of EOI / Request for

Proposal documents for release to market.

Public Transport (425,000)

($425,000) Expenditure decrease.

The 2018-19 Public Transport Initiatives budget allowed for the extension of Free Seniors Travel to cover weekends which is not proceeding. The savings of $425,000 will be used to fund the ongoing requirements for Council's involvement in the development of the plan for Light Rail Stage 3.

Public Transportation Light Rail 425,000

$425,000 Expenditure Increase.

An increase in funding for the Gold Coast Light Rail Stage 3A required to enable required resourcing for the next phase of the project for the period 1 January to 30 June 2019.

Water and Waste

Gold Coast Water and Waste movements net to nil impact on the budget. Please refer to separate reports to view the details of their budget review adjustments.

Other General Review Variations (including Water, Waste and Tourist Parks)

564,984 (656,168)

Budget (Surplus)/Deficit Nil

767th Council Meeting 105 30 January 2019 Minutes 14 OTHER BUSINESS (Continued) 14.4 DECEMBER 2018 BUDGET REVIEW FN334/375/20(P1) (Continued)

5.3 Emerging Issues Helensvale Golf Club In March 2018, the City assumed responsibilities for the maintenance of Helensvale Golf Course while approaches were made to prospective operators to manage the golf course and associated facilities. The first procurement process was not successful and further expressions of interest process, utilising a property specialist, is progressing to further explore the market with the aim of securing of a course operator. This process should be completed by March 2019 after which a report will be prepared for Council’s consideration. In the interim, costs of maintaining the grass and facility continue to be incurred as well as costs associated with security patrols, vandalism repairs etc. The maintenance cost is expected to be in the vicinity of $225,000, and the cost of the second procurement process to be approximately $100,000. Budget variations will be addressed in the March Budget Review following a review of Parks & Recreation operational budget trends (e.g. mowing and maintenance) and the further report to Council on the procurement process. Gold Coast Aquatic Centre There is an anticipated shortfall in income at this centre as a result of a slower than forecast uptake of memberships and programs following reopening of the facility after almost six months closure for GC2018. It is currently forecast that the revenue shortfall may be in the vicinity of $340,000 and will be considered in the March Budget Review after the summer and school holiday program revenues have been realised. Palm Beach Aquatic Centre Patronage numbers at this centre have exceeded original forecasts, and that of the former operator, resulting in increased revenue predictions of approximately $270,000 this financial year. This increased patronage has also driven increased labour costs including additional lifeguard resourcing to ensure safety standards are maintained, flow on impacts of the implementation of cash handling procedures, and extended pool opening hours. Additional costs are anticipated to be in the vicinity of $342,000. Budget variations will be addressed in the March Budget Review following assessment of summer season patronage and associated costs.


5.4 Review of Overall Budget Position Table 3 provides a summary of the spending and funding proposals by directorate for the December 2018 Budget Review. Operating revenue has increased by $4.2 million due to revenue from interest income, $1.2 million and an increase in insurance claim monies received, $2.5 million as discussed elsewhere in this report. Operating expenditure budgets have increased by $4.7 million overall due largely to a $2.5 million insurance settlement (offset by revenue above) and an increase in water operational projects $1.1 million. Capital revenues have increased by $1.7 million largely due to grant funding received for sporting facilities. Capital expenditure has increased by $18.3 million overall which is due mainly to an increase in Transport & Infrastructure funded from infrastructure charges $16.5 million. Funding available from loans has decreased by $0.5 million resulting from the reduction in QTC debt for Waste Landfill Projects and an increase for Tourist Parks mentioned elsewhere in this report. The total unfavourable net change in revenues and expenditures totalling $17.7 million is offset by net transfers from reserves of $17.7 million. The total projected budget position after the December review is $18.4 million, which is in line with the end of year review adopted by Council. The $18.4 million has been set aside from the end of year surpluses for 2017-18 from rates that were prepaid. The expected surplus will be used to offset a potential general rates budget shortfall due to the amount of rates that were paid early combined with a potential change in the accounting standards on the timing of rates revenue recognition.


Table 3 Budget Review Summary

Budget Review Summary for 2018-19

2018-19 Budget

Operating Revenue($000s)

Capital Revenue($000s)

Operating Expenses

($000s)

Capital Expenditure

($000s)

Net Debt(incr)/decr

($000s)

Net Reservesincr/(decr)

($000s)

Surplus

($000s)

Balance

($000s)

2018-19 Initial Budget (1,303,214) (120,661) 1,031,653 401,093 14,845 2,962 (26,679) 0

2017-18 End of Year Position and Reprovisions 5,298 (14,415) 43,486 80,874 (6,364) 17,122 (144,353) (18,352)

2018-19 September Review (831) 1,115 (161) 17,884 (743) (17,265) 0 (0)

Current Revised Budget (1,298,746) (133,961) 1,074,978 499,851 7,738 2,820 (171,032) (18,352)

2018-19 Proposed December Review

Transport & Infrastructure 0 (279) (71) 16,822 0 (16,174) 0 298

Lifestyle & Community (152) (1,114) 89 456 0 (110) 0 (831)

Waste Management 0 0 60 (2,150) 720 1,371 0 0

Tourist Parks 0 0 0 235 0 (235) 0 0

Water and Sewerage Services 0 0 1,131 0 0 (1,131) 0 0

Office of the CEO/COO (4,017) 0 2,926 0 (205) 1,364 0 67

Organisational Services 10 (264) 837 2,634 0 (2,750) 0 466

Economy, Planning and Environment 0 0 (288) 288 0 0 0 0

December Review Total (4,159) (1,657) 4,683 18,285 515 (17,666) 0 (0)

2018-19 Proposed Revised Budget (1,302,905) (135,618) 1,079,661 518,135 8,253 (14,847) (171,032) (18,352)

Profit and Loss Items Capital Funding Items(Excl Depn and Contributed Assets)


5.5 Recurrent Budget Impact - December 2018 Budget Review Council’s budget and subsequent variations are submitted under the status of either recurrent or non-recurrent with the recurrent variations representing the flow on to future years. The table below highlights the net recurrent variance submitted in each quarterly review and the accumulated flow on effects to future years. The major recurrent operating variations submitted in the December 2018 Budget Review are listed below and in total reflect an unfavourable variance of $484,890. Table 4

Summary of Net Recurrent Impact

Summary of Budget Review 2018-19

Net Recurrent(Fav)/ Un-fav

$September Review 2018 (1,515,284)December Review 2018 484,890

Progressive Recurrent Variance 2018-19 (1,030,394)

Recurrent Items - December 2018 Review(Fav) / Unfav

$

Property Management - Middleton Street (lease income) 160,000SAP Works Manager licence costs 177,500Infrastructure Recovery positions converted to permanent 272,790Tipplers Café - additional revenue (115,400)

All Other Net Recurrent Variations (10,000)

Total 484,890


5.6 Reserve Balances Council maintains a number of cash reserves which hold funds for various purposes. The following table provides the balance of each reserve and the movements contained in the December 2018 Budget Review.

City of Gold Coast – Reserves – 2018-19 Table 5 Proposed Reserve Transfers and Balances

RESERVE September 2018 December 2018 Proposed

Review Review Closing BalanceClosing Balance

$Proposed Adj

$30-6-2019

$

Capital Projects ReserveCentre Improvement Program Reserve 572,205 0 572,205Cultural Precinct Reserve 20,231,747 531,818 20,763,565Economic Investment Reserve 1,035,000 0 1,035,000Fleet & Plant Renewal and Purchase Reserve 14,875,000 0 14,875,000Infrastructure Charges Reimbursement Reserve 400,000 120,000 520,000Koala Habitat Acquisition and Enhancement Reserve 1,000 0 1,000Open Space Reserve 1,215,576 0 1,215,576Parks & Recreation Reserve 1,725,094 0 1,725,094Property Rationalisation Reserve 4,386,358 (3,281,818) 1,104,540Roadworks Acquisition Reserve 95,000 0 95,000Safety Camera and Communication Network Reserve 349,997 0 349,997Strategic Priorities Reserve 13,275,715 1,008,722 14,284,437Tourist Park Reserve 1,494,705 0 1,494,705Waste Management Reserve 34,464,628 1,370,500 35,835,128Water and Sewerage Infrastructure Reserve 190,360,849 (481,000) 189,879,849

Total Capital Reserves 284,482,874 (731,778) 283,751,096

Self Insurance ReserveInsurance Liability Reserve 289,110 0 289,110Workers Compensation Reserve 11,449,000 0 11,449,000

Total Insurance Reserves 11,738,110 0 11,738,110Operating ReserveCoomera River Dredging Contribution Reserve 3,473,815 0 3,473,815Events Reserve 2,428,250 0 2,428,250Gold Coast Investment Fund Reserve 73,484,311 0 73,484,311Hope Island Channel Reserve 1,035,818 0 1,035,818Northern Beaches Sand Nourishment Reserve 2,220 0 2,220

Total Operating Reserves 80,424,414 0 80,424,414

Total Capital & Operating Reserves 376,645,398 (731,778) 375,913,620

Infrastructure Charges ReserveInfrastructure Charges Reserve (forecast balances) 412,901,103 (16,934,332) 395,966,771

Total Infrastructure Charges Reserve 412,901,103 (16,934,332) 395,966,771

Total Reserves (Capital/Operating/ICR) 789,546,501 (17,666,110) 771,880,391


Strategic Priorities Reserve The Strategic Priorities Reserve is to fund strategic projects subject to specific determination by Council. The following table identifies the current balances of the Strategic Priorities Reserve. Changes to the reserve in the December Budget Review include $980,700 to the reserve for the Miami Aquatic Centre Redevelopment, $148,220 to the reserve for the Coomera Hub Project, $90,198 from the reserve to fund redundancy costs and $30,000 from the reserve to fund Kirra Beach Tourist Park acquisitions. Table 6 Strategic Priorities Reserve


OPERATIONAL PLAN The December 2018 Budget Review will address multiple corporate objectives within Council’s Operational Plan and Corporate Plan including;

Key Focus Area Corporate Governance, Organisational Capability and Customer Contact

Key Focus Area Outcome

Delivering effective corporate governance

Strategic Priorities Reserve

Funds Allocated to ProjectsAllocation

2018-19Budget $

Balance Future

Budgets $

Contribution towards Light Rail Stage 2 18,000,000 0Funding towards Cultural Precinct Bridge & Other Public Access 5,001,069 0Funding for Special Purposes 373,625 7,442Future planning associated with Tourist Parks 1,000,000 0Dive Site Tourist Attraction 4,800,000Point Danger Public convenience 309,000Coomera Hub 1,376,075Pimpama Sports Hub 6,811,220Miami Aquatic Centre Redevelopment 980,700

Total 24,374,694 14,284,437


7 FUNDING AND RESOURCING REQUIREMENTS Not Applicable. 8 RISK MANAGEMENT The following risk assessment applies to this report:

Risk Number Description

Risk No. CO000431 Non-compliance with State and Commonwealth legislation leading to potential prosecution of Council, executive officer liability and negative city image.

Risk No. CO000433 Qualified audit leading to Council’s reputation being damaged.

Risk No. CO000435 Failure to achieve a sustainable long term financial position leading to negative impacts on Council’s ability to deliver on its key focus area commitments.

9 STATUTORY MATTERS The December 2018 Budget Review report is presented to Council in accordance with the Local Government Act 2009 and Local Government Regulation 2012 with particular reference to the following; Local Government Act 2009

Chapter 4 - Part 3 - Financial Planning and Accountability

Section 101 Statutory Bodies Financial Arrangements Act Applies to Local Governments

Section 102- Financial Sustainability Criteria

Section 103 - Financial Management Systems

Section 104 - Financial Management, Planning and Accountability Documents


Local Government Regulation 2012

Chapter 5 – Financial Planning and Accountability

Part 2 - Financial Planning Documents

S169 - Preparation and Content of Budget

S170 - Adoption and amendment of budget S173 – Unauthorised Spending

Part 4 – Financial Policies

Part 9 – Accounting Records

S203 – Accounting records for funds generally 10 COUNCIL POLICIES The December 2018 Budget Review has been conducted in accordance with Council’s Budget Review Policy and Guidelines as adopted by Council 7 November 2017 (Ex Minute G17.0428.014). 11 DELEGATIONS Not Applicable. 12 COORDINATION & CONSULTATION The December 2018 Budget Review has been compiled in consultation with the following: Name and Title of the Stakeholder Consulted


Is the Stakeholder Satisfied With Content of Report and Recommendations (Yes/No) (comment as appropriate)

Mayor City of Gold Coast Yes All Directors City of Gold Coast Yes All Directorate Finance Officers Office of COO Yes Manager Corporate Finance Office of COO Yes 13 STAKEHOLDER IMPACTS Not Applicable.


14 TIMING The budget variations contained in the December 2018 Budget Review are effective from the date of the Council resolution expenditure and represent anticipated expenditure and revenue estimates to 30 June 2019. 15 CONCLUSION The December 2018 Budget Review results in a surplus position of $148,220 and it is proposed to transfer this amount to the Strategic Priorities Reserve to be allocated to the Coomera Hub Project. The total allocation for the Coomera Hub is $1,376,075, however the project remains subject to a funding plan and securing an acceptable commercial outcome. The December 2018 Budget Review funds a number of important initiatives including replacement of the HOTA switchboard, repairs to City libraries, development of a Customer Experience Strategy, concept design for the proposed Disaster and Emergency Management Centre at the Middleton Street Depot and a comprehensive review and validation of licence, training and qualification requirements.


16 RECOMMENDATION It is recommended that Council resolves as follows:

1 That the report/attachments be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009.

2 That Council adopt the December 2018 Budget Review adjustments presented in this report and Attachment 1, resulting in a surplus of $148,220.

3 That Council allocate the surplus of $148,220 to the Coomera Hub Project.

4 That Council approve a transfer of $300,000 from the Whole of Council Local Area Works towards the Ferry Trial Project.

5 That Council approve and adopt the following reserve transfers:

a $531,818 to the Cultural Precinct Reserve

b $120,000 to the Infrastructure Charges Reimbursement Reserve;

c $3,281,818 from the Property Rationalisation Reserve;

d $1,008,722 to the Strategic Priorities Reserve for

- Miami Aquatic Centre Redevelopment $980,700,

- Coomera Hub $148,220

- EDMP Restructure costs ($90,198 - transfer from reserve) and

- Kirra Beach Tourist Park Acquisitions ($30,000 – transfer from reserve);

e $1,370,500 to the Waste Management Reserve;

f $481,000 from the Water and Sewerage Infrastructure Reserve;

g $16,934,332 from the Infrastructure Charges Reserve;


Joe McCabe Dale Dickson Chief Operating Officer Chief Executive Officer

TRACKS REF: 72222869


RESOLUTION G19.0130.032 moved Cr Tate seconded Cr PC Young

1 That the report/attachments be deemed non-confidential except for those parts deemed by the Chief Executive Officer to remain confidential in accordance with sections 171 (3) and 200 (5) of the Local Government Act 2009.

2 That Council adopt the December 2018 Budget Review adjustments presented in this report and Attachment 1, resulting in a surplus of $148,220.

3 That Council allocate the surplus of $148,220 to the Coomera Hub Project.

4 That Council approve a transfer of $300,000 from the Whole of Council Local Area Works towards the Ferry Trial Project.

5 That Council approve and adopt the following reserve transfers:

a $531,818 to the Cultural Precinct Reserve

b $120,000 to the Infrastructure Charges Reimbursement Reserve;

c $3,281,818 from the Property Rationalisation Reserve;

d $1,008,722 to the Strategic Priorities Reserve for

- Miami Aquatic Centre Redevelopment $980,700,

- Coomera Hub $148,220

- EDMP Restructure costs ($90,198 - transfer from reserve) and

- Kirra Beach Tourist Park Acquisitions ($30,000 – transfer from reserve);

e $1,370,500 to the Waste Management Reserve;

f $481,000 from the Water and Sewerage Infrastructure Reserve;

g $16,934,332 from the Infrastructure Charges Reserve;

CARRIED UNANIMOUSLY

767th Council Meeting 208 30 January 2019 CONFIDENTIAL Minutes 14 OTHER BUSINESS (Continued)

14.5 CITY OF GOLD COAST REVIEW – DRAFT SPIT MASTER PLAN PD113/1275/17(P1) CONFIDENTIAL

PAGES 208-231 ARE CONFIDENTIAL


14 OTHER BUSINESS (Continued) 14.5 CITY OF GOLD COAST REVIEW – DRAFT SPIT MASTER PLAN

PD113/1275/17(P1) (Continued) PROCEDURAL MOTION moved Cr Tate seconded Cr Owen-Jones 1 That the matter be referred to the Economy Planning and Environment

Committee Meeting scheduled to be held on Wednesday 6 February 2019 commencing at 9am for further consideration.

2 Having regard to the very significant issues associated with the consideration of the Draft Spit Masterplan, and the extremely tight timeframe afforded to the Council to properly consider its response, the Council considers that it is in the public interest to finalise its position at the next Council Meeting scheduled to be held on 12 February 2019.

3 Moreover, the Council is mindful of clause 4.11 of the Memorandum of Understanding dated 21 June 2018 which states the parties are committed to a collaborative approach. The Council is of the view that this approach requires a practical and realistic timeframe for the Council to properly discharge its decision making responsibilities in relation to a key strategic City issue.

CARRIED BY SUPER MAJORITY There being no further business, the meeting was declared closed at 5.01pm.


14 OTHER BUSINESS (Continued) 14.5 CITY OF GOLD COAST REVIEW – DRAFT SPIT MASTER PLAN

PD113/1275/17(P1) (Continued) CONFIDENTIAL

PAGES 233-366 ARE CONFIDENTIAL


I hereby certify that these pages Numbered 1 to 367 constitute

The Minutes of the Meeting

of the Council of the City of Gold Coast

held Wednesday 30 January 2019.

................................................................. MAYOR