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I:\CPS\ADMIN SERVICES\COMMITTEES\DRAFT MINUTES\FB070306MINS.DOC

FB CTE MINS 6 MARCH 2007

MINUTES

FINANCE AND BUDGET COMMITTEE

6 MARCH 2007

P R E S I D I N G M E M B E R ’ S S I G N AT U R E

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INDEX

Item Description Page

FB48/07 DECLARATION OF OPENING 1

FB49/07 APOLOGIES 1

FB50/07 MEMBERS ON LEAVE OF ABSENCE AND APPLICATIONS FOR LEAVE OF ABSENCE 1

FB51/07 CONFIRMATION OF MINUTES 1

FB52/07 DISCLOSURE OF MEMBERS’ INTERESTS 2

FB53/07 FINANCIAL STATEMENTS AND FINANCIAL ACTIVITY STATEMENT JANUARY 2007 2

FB54/07 BUDGET TIMETABLE 2007/08 3

FB55/07 CAPITAL BUDGET PROPOSALS 2007/08 5

FB56/07 2006 COMPLIANCE AUDIT RETURN 7

FB57/07 SOUVENIR ITEMS FOR SALE - PERTH TOWN HALL 11

FB58/07 REVIEW OF HAY STREET AND MURRAY STREET MALL MOBILE HOT DOG CART LICENCE FEES 14

FB59/07 WEST PERTH FOOTPATH AND VERGE REPLACEMENT 17

FB60/07 IRRIGATION PROPOSAL - SWAN RIVER FORESHORE 21

FB61/07 WOLFE LANE ACCESS 24

FB62/07 UNBUDGETED EXPENDITURE - REFURBISHMENT OF THE CITIPLACE CHILDCARE CENTRE RECEPTION AREA 26

FB63/07 FINANCE AND BUDGET COMMITTEE - 2007/08 CAPITAL PROPOSALS 29

FB64/07 STRATEGIC FINANCIAL PLAN - FORECAST OF THE CITY'S FINANCIAL PERFORMANCE OVER FIVE YEARS TO 30 JUNE 2012 31

FB65/07 GENERAL BUSINESS 38

FB66/07 ITEMS FOR CONSIDERATION AT A FUTURE MEETING 39

FB67/07 CLOSE OF MEETING 39


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Minutes of the meeting of the City of Perth Finance and Budget Committee held in Committee Room 1, Ninth Floor, Council House, 27 St George’s Terrace, Perth on Tuesday, 6 March 2007.

MEMBERS IN ATTENDANCE

Cr Davidson - Presiding Member Cr Hardy Cr Sutherland

OFFICERS

Mr Edwards - Chief Executive Officer Mr Dunne - Director Service Units Mr Monks - Director Planning and Development Mr Forster - Director Business Units Mr Mianich - Director Corporate Services Mr Berry - Manager Financial Services Mr White - Chief Accountant Mr Malde - Management Accountant Mr Sillence - Administrative Services Team Leader Ms Assaad - Administrative Services Officer

FB48/07 DECLARATION OF OPENING The Presiding Member declared the meeting open at 4.04pm.

FB49/07 APOLOGIES Nil

FB50/07 MEMBERS ON LEAVE OF ABSENCE AND APPLICATIONS FOR LEAVE OF ABSENCE

Nil

FB51/07 CONFIRMATION OF MINUTES Moved by Cr Hardy, seconded by Cr Sutherland That the minutes of the meeting of the Finance and Budget Committee held on 13 February 2007 be confirmed as a true and correct record. The motion was put and carried


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The votes were recorded as follows:- For: Crs Davidson, Hardy and Sutherland Against: Nil

FB52/07 DISCLOSURE OF MEMBERS’ INTERESTS Nil

FB53/07 FINANCIAL STATEMENTS AND FINANCIAL ACTIVITY STATEMENT JANUARY 2007

BACKGROUND:

FILE REFERENCE: P1014149-24 REPORTING OFFICER: Ian Berry RESPONSIBLE DIRECTOR: Robert Mianich, Director Corporate Services DATE: 26 February 2007 MAP / SCHEDULE: Schedule 1 - Financial Statements and Financial Activity

Statement for the period ended 31 January 2007. The Local Government (Financial Management) Regulations 1996 require the City to produce the monthly Financial Statements, including a Financial Activity Statement in rate setting format.

LEGISLATION / STRATEGIC PLAN / POLICY:

Legislation Local Government Act 1995. Local Government (Financial Management) Regulations 1996.

Section: Regulation 34 (3) – Financial Activity Statement. 6.4 (2) – Monthly Financial Statements.

Strategic Plan Key Result Area: Capable and Responsive Organisation.

DETAILS:

The Financial Activity Statement is required to be presented together with a Schedule that includes the Annual Budget estimates and breakdown of net current assets, supporting the Financial Activity Statement.


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FINANCIAL IMPLICATIONS:

There are no direct financial implications related to this report.

COMMENTS:

This report is presented for the approval of the Council. Moved by Cr Sutherland, seconded by Cr Hardy That the Council approves the Financial Statements and the Financial Activity Statement for the seven months ended 31 January 2007, as detailed in Schedule 1. The motion was put and carried The votes were recorded as follows:- For: Crs Davidson, Hardy and Sutherland Against: Nil

FB54/07 BUDGET TIMETABLE 2007/08

BACKGROUND:

FILE REFERENCE: P1022048 REPORTING OFFICER: Ian Berry RESPONSIBLE DIRECTOR: Robert Mianich, Director Corporate Services DATE: 13 February 2007 MAP / SCHEDULE: N/A The Local Government Act enables the Council to pass the budget after 1 June 2007. In accordance with best practice and to enable the Council to operate with the benefit of the new budget from 1 July 2007 the attached timeline envisages budget adoption at a Special Meeting of the Council on Thursday, 7 June 2007.


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Legislation Local Government Act 1995.

Section: Part 6 - Division 2. Strategic Plan Key Result Area: Capable and Responsive Organisation.

DETAILS:

The key dates for the Budget 2007/08 are set out below. The dates proposed are similar to those adopted last year. Delays to the adoption of Five Year Plans have impacted on the Capital Budget finalisation but this is not seen as delaying critical budget dates.

KEY DATES BUDGET 2007/08 DESCRIPTION KEY DATES Additional staff numbers review 31/01/07 Budget Training and issue of templates 02/02/07 and

09/02/07 Non-controllable expense input 28/02/07 Fees and Charges Schedule considered by the Financial Management Taskforce, and approved by the Finance and Budget Committee

19/03/07 and 27/03/07

1st Draft Operating Budget review by CEO/DCS/MFS 26/03/07 to 30/03/07

Changes recommended completed 02/04/07 Review of Internal Activity Based Allocations 01/02/07 to

30/03/07 2nd 2006/07 Budget Review 15/03/07 to

30/03/07 Draft Operating Budget to Finance and Budget Committee

17/04/07

Draft Annual Plan advertised for comment 28/04/07 Differential Rates Levy advertised 08/05/07 Operating Budget complete 18/05/07 Adoption of Budget by the Council 07/06/07 Business Plans completion for 2007/08 07/06/07 to

30/06/07


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KEY DATES FOR CAPITAL BUDGET 2007/08 DESCRIPTION KEY DATES Five Year Plans approved by various Committees In progress Draft Capital Budget approved by the Financial Management Taskforce, and the Finance and Budget Committee

19/02/07and 06/03/07

Carry Forwards Finalised 30/03/07 Final Capital Budget considered by the Financial Management Taskforce, and approved by the Finance and Budget Committee

23/04/07and May 2007

COMMENTS: Providing the proposed timing is adhered to there will be no delay in sending out rates notices as scheduled. Moved by Cr Hardy, seconded by Cr Sutherland That the Finance and Budget Committee receives the report on key dates for the Budget 2007/08, as detailed in the report dated 13 February 2007. The motion was put and carried The votes were recorded as follows:- For: Crs Davidson, Hardy and Sutherland Against: Nil

FB55/07 CAPITAL BUDGET PROPOSALS 2007/08

BACKGROUND:

FILE REFERENCE: P1021897 REPORTING OFFICER: Ian Berry RESPONSIBLE DIRECTOR: Robert Mianich, Director Corporate Services DATE: 26 February 2007 MAP / SCHEDULE: Schedule 2 – Capital Budget Proposals 2007/08.


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Legislation Local Government Act 1995. Local Government (Financial Management) Regulations

1996. Section: 6.2. Strategic Plan Key Result Area: Capable and Responsive Organisation.

DETAILS:

The proposed capital expenditure for the financial year 2007/08 is detailed in the accompanying schedule. This is a first draft of the capital expenditure programme for the coming budget year. Total capital expenditure of $42,813,012 is proposed. This is funded as follows:- Carry forward for 2006/07 8,994,227Reserves 14,001,796Capital grants and contributions 2,207,387Loans - Sale of Assets 771,545General funding from Operations 16,838,057Capital Expenditure 2007/08 $42,813,012 Proposed capital expenditure of $42,813,012 is reasonable in comparison with the $46,477,000 budget for 2006/07 but high in relation to the anticipated capital expenditure of $25,747,990 expected to be spent in 2006/07. This first draft of the capital expenditure budget will be adjusted during the budget process. The reasons for capital budgets not being achieved to date include the following which comprise a mixture of both internal and external factors:- • Ambitious budgets set with a view to what stakeholders would like to achieve

rather than what realistically can be built. • Capacity constraints in terms of designing and managing projects. • Capacity limitations within the construction industry accentuated by current

boom conditions in Western Australia. • Environmental and land title issues, the difficulty of which is not anticipated in

considering project timelines. • Council process delays at both operational and legislative levels.


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This information is part of the budget process enabling the Finance and Budget Committee to commence consideration of the capital programme. All figures quoted in this report are exclusive of GST.

COMMENTS:

This submission is the first stage in terms of the Committee having information in relation to the 2007/08 program. It should be noted that some Committees have not fully considered the details on the attached summary and therefore some changes are anticipated prior to the final plan being determined. A good budget should authorise and forecast what can realistically be achieved. Moved by Cr Hardy, seconded by Cr Sutherland That the Finance and Budget Committee note the proposed Capital Budget for the year 2007/08, as detailed in Schedule 2. The motion was put and carried The votes were recorded as follows:- For: Crs Davidson, Hardy and Sutherland Against: Nil

FB56/07 2006 COMPLIANCE AUDIT RETURN

BACKGROUND:

FILE REFERENCE: P1013788-4 REPORTING OFFICER: Brad Sillence RESPONSIBLE DIRECTOR: Robert Mianich, Director Corporate Services DATE: 26 February 2007 MAP / SCHEDULE: Schedule 3 – 2006 Compliance Audit Return (Distributed

to Elected Members under separate cover). It is a requirement of the Local Government Act 1995 to conduct an annual audit of compliance with statutory requirements of the Act. This report details the audit return for the City of Perth.


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Legislation Regulation 13 of the Local Government (Audit) Regulations 1996.

Section: 7.13 (i) of the Local Government Act 1995.

Strategic Plan Key Result Area: City Leadership. Strategy: Leading City Strategy.

DETAILS:

There is a legislative requirement for local governments to complete a Compliance Audit Return each year. The Return provides prompts in relation to the local government’s statutory obligations in a number of areas, such as local laws, tenders, meeting process, disclosure of financial interests and financial management. It provides a useful tool for a local government to utilise to ensure compliance with legislation, and in particular the Local Government Act 1995. There were five areas of non-compliance identified in the Return for the period 1 January to 31 December 2006, which are to be addressed. These areas are as follows:- 1. Disclosure of Interest - No. 1 - Section 5.67

It is a requirement of Section 5.67 of the Local Government Act 1995 that when a member discloses an interest, he/she must not remain present to participate in any discussion or decision making relating to the matter, unless permitted to do so under Section 5.68 and 5.69 of the Act. At the meeting of the Council held on 10 October 2006 a member declared a financial interest in an item, and whilst taking no part in the discussion they remained present in the meeting and voted on the item. The Council had not resolved that they be permitted to remain present at the meeting, however, a decision on the item was not resolved and the item was referred back to the relevant Committee for further consideration. It should be noted that when the item was re-submitted for consideration by the Council at its meeting held on 31 October 2006, the member declared their interest and left the meeting during the discussion and voting on the item. The matter of compliance with the legislative requirement was raised with the Chief Executive Officer who informed the member of their obligations when declaring interests.


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2. Disclosure of Interest - No. 8 - Section 5.77 It is a requirement of Section 5.77 of the Local Government Act 1995 that on receipt of a primary or annual return, the Chief Executive Officer (or the Mayor/President in the case of the Chief Executive Officer’s return) on all occasions, give written acknowledgment of having received the return. There is a significant number of staff (approximately 149) that are required to complete primary and annual returns throughout the year. In all instances, staff required to complete a primary return were provided with a written acknowledgement, however, a small percentage of those staff completing an annual return did not receive one due to an administrative oversight. The process of coordinating the receipt of returns and production of written acknowledgments has been examined to ensure 100% of all written acknowledgments occur in 2007.

3. Local Government Employees - No. 10 - Section 5.38 It is a requirement of Section 5.38 of the Local Government Act 1995 that the performance of all employees, including the CEO, be reviewed, at least once in relation to every year of employment. Whilst the majority of performance reviews were undertaken in 2006 there are some that remain some outstanding. This is considered to be a management issue and will be examined by the Chief Executive Officer, and the appropriate action taken.

4. Meeting Process - No. 47 - Admin Regulation 13

It is a requirement of Section 13 of the Local Government (Administration) Regulations 1996 that the local government is to make available for public inspection unconfirmed minutes of all Committee meetings within five days after the Committee meeting. Of the 113 Committee meetings held during 2006, there were two occasions where the minutes were not completed within five days. In both of these instances, the minutes were completed in six days. It should be noted that if a member of the public requests to inspect or have a copy of a particular Committee item minute within the five day turnaround, the administration has processes in place to be able to provide this information on the same day as the request.


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5. Tenders for Providing Goods and Services – No. 1 – Section 3.57 and Functions and General Regulation 11

It is a requirement of Section 3.57 of the Local Government Act 1995 and subject to Regulation 11 of the Local Government (Functions and General) Regulations 1996 that the local government invites tenders before it enters into a contract of a prescribed kind under which another person is to supply goods or services. The City of Perth entered into a contract on or about 18 June 2006 for the collection and banking of monies from car parking facilities, however some obligations relating to a Bank Guarantee and the upgrade of insurances required under the contract were not complied with. Furthermore, the contractor was unable to fully comply with the banking requirements of the contract and significant time was being taken up by City staff to reconcile the revenue being banked. Due to the significant risk of this revenue not being collected, properly reconciled and banked daily, as well as the disruption to the City’s customers and income source, the City was left with no other option than to terminate the contract and urgently seek alternative providers for the service. Given the limited time available, the City was not in a position to be able to tender these services prior to, nor after the termination of this contract due to the potential grid lock of the ticket and payment machines. Therefore, the City engaged the services of a collection contractor in the interim until a tender was called in accordance with the Regulations. To ensure that such a problem does not occur in the future, the specifications for the services were re-examined to ensure that providers will be able to comply with the City’s requirements either in one contract or separate contracts. A letter was sent the Director-General of the Department of Local Government and Regional Development on 8 September 2006 explaining the City’s non-compliance with Regulation 11 (1) of the Local Government (Functions and General) Regulations 1996 in this instance. It should be noted that the tender for the collection and banking of monies from car parking facilities was recently advertised in accordance with the Local Government Act 1995 and the Local Government (Function and General) Regulations 1996 and subsequently awarded by the Council at its meeting held on 30 January 2007.

A copy of the Return completed by the City of Perth is detailed in the attached Schedule 3, which has been distributed to Elected Members under separate cover.


There are no financial implications related to this report.


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COMMENTS:

It is recommended that the Council adopts the Compliance Audit Return for the period 1 January to 31 December 2006. Moved by Cr Sutherland, seconded by Cr Hardy That the Council adopts the Compliance Audit Return for the period 1 January to 31 December 2006, as detailed in Schedule 3. The motion was put and carried The votes were recorded as follows:- For: Crs Davidson, Hardy and Sutherland Against: Nil

FB57/07 SOUVENIR ITEMS FOR SALE - PERTH TOWN HALL

BACKGROUND:

FILE REFERENCE: P1000593-3 REPORTING OFFICER: Colleen Dixon RESPONSIBLE DIRECTOR: Garry Dunne, Director Service Units DATE: 15 February 2007 MAP / SCHEDULE: Schedule 4 – Souvenir Desk. This item was endorsed by the General Purposes Committee at its meeting held on 27 February 2007.

At the General Purposes Committee meeting held on 30 August 2005, a request was made to investigate the possibility of providing a souvenir shop/information kiosk at the Perth Town Hall. The Committee directed that it be investigated if souvenir outlets nearby would consider selling City crested souvenirs. The approach to the souvenir outlets proved unsuccessful and it was then resolved that a combined mobile display cabinet and workstation of special design would be installed in the Foyer of the Perth Town Hall.


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Legislation Local Government Act 1995. Section: 6.16 and 6.19. Strategic Plan Key Result Area: Liveable City. Strategy: Dynamic City Strategy.

Policy Policy No and Name: 9.1 - Budget Policies.

DETAILS:

The combined unit is now completed and installed in the foyer with the lighted cabinet displaying souvenir items bearing the City’s crest. The souvenir items that have been purchased and are proposed to be on display and for sale are as listed:-

Souvenir Item Market Price (excluding

GST) Large jarrah box 250 x 155 x 50 engraved with City crest $163.64Small jarrah box 130 x 90 x 50 engraved with City crest $120.00Fountain pen with City crest $49.09Perth Western Australia: first impressions, lasting images $43.64City of Light: A History of Perth Since the 1950s $40.91Wall Street pen with City crest $36.36Necktie with City crest design $36.36Gold pen with City crest $25.45Cufflinks with City crest $12.73Baseball cap embroidered "City of Perth" $7.27Potpourri Packet $2.73


ACCOUNT NO: 124 225 7224 BUDGET ITEM: Recreation and Culture - Public Halls, Civic Centre

- Perth Town Hall. BUDGET PAGE NUMBER: 10 BUDGETED AMOUNT: $ 20,700 AMOUNT SPENT TO DATE: $ 2,152 PROPOSED COST: $ 1,794 BALANCE: $ 16,754 All figures quoted in this report are exclusive of GST.


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COMMENTS:

Although the desk / display unit still requires permanent signage, the souvenir kiosk is ready to sell souvenir items. Moved by Cr Sutherland, seconded by Cr Hardy That subject to the endorsement of the Finance and Budget Committee, that:- 1. in accordance with Section 6.16 of the Local Government Act 1995,

the Council APPROVES BY AN ABSOLUTE MAJORITY sundry souvenir items for sale at market price at the Perth Town Hall, as outlined in the report dated 15 February 2007;

2. in accordance with Section 6.19 of the Local Government Act 1995,

the Council advertises the charges in part 1 above taking effect from 19 March 2007.

The motion was put and carried The votes were recorded as follows:- For: Crs Davidson, Hardy and Sutherland Against: Nil


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FB58/07 REVIEW OF HAY STREET AND MURRAY STREET MALL MOBILE HOT DOG CART LICENCE FEES

BACKGROUND:

FILE REFERENCE: P1001633-5 REPORTING OFFICER: Vic Fuller RESPONSIBLE DIRECTOR: Garry Dunne, Director Service Units DATE: 12 February 2007 MAP / SCHEDULE: N/A It was the Council’s original intention to tender for the licence fee to operate mobile hot dog carts in both of the Malls, in one tender. However, due to the constraints imposed by the first right of refusal over any new lease or licence for the purpose of a café or take away food and/or drinks kiosk in the Forrest Place Reserve or the Murray Street Mall, contained in the lease between the City of Perth and Bayswater Nominees Pty Ltd and Ooranya Pty Ltd, the matter was progressed as two separate tenders. At its meeting held on 2 August 2005, the Council resolved to accept the most suitable tender, being that submitted by Miomir Mihajlovic and Djordje Kandic, to operate a high quality mobile hot dog push cart in the Hay Street Mall, at an annual licence fee of $52,000 per annum, inclusive of GST. At its meeting held on 13 December 2005, the Council resolved to accept the highest tender being that submitted by Dennis Craig Dunk, to operate a similar mobile hot dog push cart in the Murray Street Mall, at a licence fee of $25,000 per annum (excluding GST). At its meeting held on 21 February 2006, the Council resolved to reduce the annual licence fee paid by Miomir Mihajlovic and Djordje Kandic to operate the mobile hot dog cart in the Hay Street Mall from $52,000 per annum to $25,000 per annum (excluding GST).


Legislation Public Trading Local Law 2005.

DETAILS:

The Licencees of both the Hay Street Mall Hot Dog Cart and the Murray Street Mall Hot Dog Cart, have submitted a request to have their licence fee reduced from $25,000 per annum, (excluding GST), to $10,000 per annum, exclusive of GST.


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An excerpt of their letter dated 2 February 2007 follows:- “As the Mobile Hot Dog Cart Licence holders for Hay Street Mall (Miomir and Djorde Kandic) and Murray Street Mall (Dennis Dunk) we wish to present a combined request for the licence fee of $25,000 plus GST for each site to be considerably reduced (say to $10,000). The reasons for this request are as follows: • Sales for 2006/2007 have been significantly less than sales for 2005/2006.

Whilst there are various contributing factors, the main reason is there have been fewer people in the city shopping.

• All operating costs have increased, i.e. sausages, onions, bread rolls, barbeque

gas etc. The fee originally offered in 2005 by Miomir and Djorde Kandic for Hay Street Mall was based on youthful optimism and inexperience in the industry. The fee offered by Dennis Dunk in 2006 to operate a Mobile Hot Dog Cart in the Murray Street Mall was based on projected sales of 1,000 hot dogs per week. Unfortunately we are only selling about half this number which means that, despite working hard, maintaining highly visible presence and offering quality hot dogs at a reasonable price, our businesses are just not financially viable. We believe that a licence fee of $10,000 for each site would be fair and reasonable for the nature of the business and would enable us to continue to provide a service to shoppers in Hay Street and Murray Street Malls.”


INCOME: ACCOUNT NO: 131 220 6538 BUDGET ITEM: Community Amenities – Other Community

Amenities – Stall Licences. BUDGET PAGE NUMBER: 3 BUDGETED AMOUNT: $65,000 AMOUNT RECEIVED TO DATE: $37,916 ACTUAL INCOME: $52,500 (If Hot Dog Cart fees reduced from

1/2/2007) All figures quoted in this report are exclusive of GST.


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COMMENTS:

The lack of financial viability of both of these businesses is not disputed however it is not the view of the City that there are fewer people shopping. The Council needs to consider whether it wishes to support the request for the licence fees to be reduced, or to let the licences run their course until they expire on 31 October 2007 (Hay Street Mall) and 12 March 2008 (Murray Street Mall), respectively, or until the businesses cease to operate, should they remain unviable. There are no legal impediments to the Council acceding to this request. However, there is no compelling reason to do so, as the current licence fees were not set by the City. They were nominated by the operators in their tenders and the fee for the Hay Street cart has already been reduced from $52,000 per annum to $25,000. Legally binding contracts are in place. It was therefore recommended that the Finance and Budget Committee:- 1. considers the report dated 12 February 2007 on the joint request from the

licensees of the mobile hot dog carts in the Murray Street Mall and the Hay Street Mall for a licence fee reduction;

2. makes a recommendation to the Council on this matter. Moved by Cr Sutherland, seconded by Cr Hardy That the Council agrees to the request from the Mobile Hot Dog Cart Licence holders for the Hay Street Mall (Miomir and Djorde Kandic) and Murray Street Mall (Dennis Dunk) to reduce their current licence fee from $25,000 to $10,000 per annum (excluding GST) effective from 1 April 2007, subject to:- 1. the above-named licensees relinquishing their licences to enable the

Council to go out to public tender for mobile hot dog carts in the Hay and Murray Street Malls;

2. notes that the above-named licensees will continue to operate on a

monthly fee of $833.33 per month, paid in advance, effective from 1 April 2007, until the Council has re-tendered this service and issued new licences.

The motion was put and carried The votes were recorded as follows:- For: Crs Hardy and Sutherland Against: Cr Davidson


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FB59/07 WEST PERTH FOOTPATH AND VERGE REPLACEMENT

BACKGROUND:

FILE REFERENCE: P1019160 and P1021897 REPORTING OFFICER: Doug Forster RESPONSIBLE DIRECTOR: Doug Forster, Director Business Units DATE: 6 February 2007 MAP / SCHEDULE: Schedule 5 – Plan of existing footpath/verge condition –

Ord Street precinct. Schedule 6 – Plan of programmed works 2007/08.

This item was endorsed by the Works and Urban Development Committee at its meeting held on 26 February 2007. At a recent Works and Urban Development meeting the topic of footpaths and verge treatments in West Perth was raised. The context of the discussions has been the 1985 West Perth Road Reserve Study (WPRRS) and of more recent times, a working group of Elected Members, business owners and residents from West Perth. The Council at its meeting held on 21 November 2006, endorsed that the actions identified in the ‘Proposed Actions’ plan for the West Perth Urban Design Study - July 1993 be realised as part of a five year coordinated implementation plan that addresses these and previously endorsed actions for the beautification and regeneration of West Perth. A separate report entitled ‘West Perth Beautification and Regeneration: Update of Actions’ updates the progress of these actions. This report summarises actions taken in regard to footpath and verge treatments in the context of the West Perth Road Reserve study.


Legislation Local Government Act 1995. Strategic Plan Key Result Area: Attractive and Functional City. Strategy: Outdoor City Strategy.

Policy Policy No and Name: 20.3 - Footpaths – Upgrading of;

1985 West Perth Road Reserve Study.


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DETAILS:

The ongoing maintenance of grassed verges throughout the City is recognised as property owner responsibility albeit the areas are contained within road reservations. To that end, works are undertaken from time-to-time to rejuvenate verges on the basis that a property owner will then adequately maintain those areas at a reasonable standard. The result is an improved streetscape for the city and added value to the presentation of the property in question. In 1985, the City undertook a Road Reserve study of the road reserves in West Perth, a major decision of which recommended the retention, widening and development of grassed verges with accompanying narrowing of paved areas to a standard footpath width. The West Perth Road Reserve Study area was defined by Malcolm Street, George Street, the railway line, Thomas Street and Kings Park Road. The area was subdivided in the report into ten precincts for the purpose of identifying present and future desirable street characteristics. Attached to the report in Schedule 5 is a plan showing the existing condition of footpaths and verges. Only the Ord Street precinct has been completed at this time due to the limited time to prepare the report. In determining the future dimensions of footpaths and grassed verge widths in the Ord Street precinct, the salient dimensions based on the West Perth Road Reserve Study are as follows:- A minimum footpath width of 1.5 metres. Where the distance from kerb to boundary line is less than three metres the

area is to be paved full width. Discretion to pave full width exists in the Study guidelines if very short lengths of

verge are created due to the number of driveways and the like. Adjoining verges in the Hay Street precinct and adjacent thereto are to be

paved full width due to high pedestrian traffic. Since 2003, there have been a number of footpaths reconstructed within the study area as detailed below:-

2003/04 Delhi Street – Colin Street eastwards (North). Malcolm Street – near Elder Street to Harvest Terrace (West).

2004/05 Colin Street – Kings Park Road to Hay Street (East). Outram Street – Kings Park Road to Hay Street.


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2005/06 Harvest Terrace – Malcolm Street to Parliament Place (West). Harvest Terrace – Malcolm Street to Parliament Place (East). Campbell Street – Delhi Street to end (East). Ord Street – Thomas Street to Colin Street (North). Ventnor Avenue – Kings Park Road to Ord Street (West). Colin Street – Ord Street to Hay Street (West). Havelock Street – Ord Street to Kings Park Road. Richardson Street – Ventnor Avenue to Colin Street (South).

2006/07 (underway) Richardson Street – Colin Street to Thomas Street (North) – done. Ord Street – Colin Street to Havelock Street (North) – to be completed. Colin Street – Mayfair Street to Wellington Street (both sides) – underway.

2007/08 (proposed) Ord Street – Ventnor Avenue to Havelock Street (South). Ventnor Avenue – Kings Park Road to Hay Street, (East) (Ord Street to Hay

Street not needed). Outram Street – Kings Park Road to Hay Street (East) – parts. Ventnor Avenue – Ord Street to Hay Street (West).

Construction has generally been in accordance with the West Perth Road Reserve Study including reducing existing footpath widths, and the creation of wider grassed verges. Where footpath replacements have been proposed, letters were sent to private property owners prior to the works, seeking their commitment to the ongoing maintenance and the provision of irrigation water to newly created and improved grassed verges. Responses have been mixed, however improvements have been achieved. In the 2005/06 capital budget an amount of $42,000 was allocated for the improvement of general verges other than those to be constructed in conjunction with the footpaths programme. The Works and Urban Development Committee at the time preferred a different approach whereby focus was to be directed to a few prominent locations particularly where the footpath currently extended across the full verge. Works were completed in conjunction with several owners, however more is required. It needs to be noted however, that there remain areas, some of which have been in existence for many years, which have been paved from the boundary to the back of the kerb by private interests.


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An amount of $45,000 is proposed to be added to the draft 2007/08 Capital Works Budget for the purpose of establishing grassed verges in West Perth where paving has been installed in select locations by property owners.

COMMENTS:

The recommendations of the West Perth Road Reserve Study have been progressively implemented in regard to footpath reconstruction and associated verge treatment. There are no outstanding footpaths which do not comply with the study recommendations. Discretion has been exercised however on the eastern side of Colin Street, between Ord Street and to a point opposite Richardson Avenue, which has been paved full width due to the number of driveways cutting the verge. Property owners maintain verges in varying states of quality ranging from extremely poor to very good. Offers have been made to a number of owners that should the City reconstruct the verge complete with irrigation and returfing, that the owner will then agree to undertake future maintenance. This approach has been met with limited success as those property owners with little interest now are unlikely to change their priorities. The other aspect of streetscape improvement is to target particular areas where full width paving has been installed by property developers over the years. In some instances, the motivation has been one of ease of access for service deliveries combined with high pedestrian usage associated with the property use. To encourage the ongoing verge redevelopment programme it is proposed that an amount of $45,000 be added to the draft 2007/08 Capital Works Budget for this specific application. Moved by Cr Sutherland, seconded by Cr Hardy That:- 1. the report dated 6 February 2007 relating to West Perth Footpath

and Verge Replacement, be received; 2. an amount of $45,000 be referred to the Finance and Budget

Committee for inclusion in the draft 2007/08 Capital Works Budget for the purpose of establishing grassed verges in conjunction with property owners in West Perth, where paving has been installed full width.

The motion was put and carried


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FB60/07 IRRIGATION PROPOSAL - SWAN RIVER FORESHORE

BACKGROUND:

FILE REFERENCE: P1017792-6 REPORTING OFFICER: Doug Forster RESPONSIBLE DIRECTOR: Doug Forster, Director Business Units DATE: 9 February 2007 MAP / SCHEDULE: Schedule 7 – Plan/Aerial Photograph of area. This item was endorsed by the Works and Urban Development Committee at its meeting held on 26 February 2007. A section of the Swan River Foreshore between a point opposite Governors Avenue to Plain Street on the southern side of Riverside Drive is not irrigated and as a consequence grass or other landscaping is not able to be sustained. The proposal is for the allocation of Capital funds for the design and construction of suitable landscaping supported by a water irrigation scheme.


Legislation Local Government Act 1995. Local Government (Functions and General) Regulations,

1996. Strategic Plan Key Result Area: Attractive and Functional City. Strategy: Outdoor City Strategy.

DETAILS:

The initial stage to enhance the river foreshore from Barrack Square to Governors Avenue commenced in 1999.


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Construction of Lake Vasto storage and the installation of underground pipelines and sprinklers on Ozone and Langley reserves generally continued the broader foreshore development. Subsequently, the reticulation has been extended to include Supreme Court Gardens and the Esplanade Reserve. Latter stages were to include irrigation of the river foreshore from a point opposite Governors Avenue through to Plain Street, and Heirisson Island. Generally the appearance of the southern side of Riverside Drive to the Swan River wall is dry and largely devoid of vegetation in the summer months due to a lack of water. The length of the area under consideration is 1.25 kms with an average width of 18 metres. In total the area is approximately two hectares. It will be recalled that over the past five to six years, reports have been provided in regard to flooding onto Riverside Drive from the river and the height of the existing seawall. Spring tides combined with heavy rainfall and high winds also eroded a significant area behind the seawall approximately two years ago. As a temporary measure and in order to stabilise the area where the seawall was at some risk of collapse, limestone material was placed over much of the length for approximately two to three metres behind the wall. Due to the over-topping of water from the river it is proposed that a 2.5 metre strip of crushed limestone be maintained directly behind the wall with the balance on both sides of the existing shared path planted with appropriate salt resistant turf. The band of limestone will provide an informal walking area for those people wishing to be close to the water. The surface will be sloped towards the top of the wall to effectively provide more height and reduce over-topping of salt laden water onto grassed areas. It is proposed for consideration that an underground irrigation and sprinkler system be installed together with removal and replacement of inappropriate soils and planting of turf in preparation for the 2007 Spring period. The work is proposed as a Stage 1 whereby more intense pockets of landscaping can be introduced in latter years if necessary. Grass would be established using seed or stolons, rather than roll-out turf for cost efficiencies. Water can be sourced from Lake Vasto, as was originally planned, even though the storages at this time have not been established on the western end of the foreshore irrigation system. Preliminary estimates indicate that the cost of the project, in a form described above, is $311,000. FIINANCIAL IMPLICATIONS: These works have not been budgeted in the 2006/07 Capital Programme. It is unlikely that the project could be designed and constructed within the current financial year however, in order to have the system installed by next summer, design and documentation will need to proceed as soon as practicable.


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It will be recommended that an amount of $40,000 be allocated from the Asset Enhancement Reserve Fund to complete design and documentation and that the balance of $271,000 be listed on the draft 2007/08 Capital Works Budget for consideration.

COMMENTS:

Portion of a major entry to the city, namely Riverside Drive, presents poorly during the summer months due to the lack of irrigation. The proposal is to proceed with design and documentation this financial year with construction in the following financial year. Moved by Cr Hardy, seconded by Cr Sutherland That subject to the endorsement of the Finance and Budget Committee, the Council:- 1. APPROVES BY AN ABSOLUTE MAJORITY the expenditure of

$40,000 funded from the Asset Enhancement Reserve for the Design and Documentation of an irrigation system and landscaping on the southern side of Riverside Drive between Governors Avenue and Plain Street;

2. lists an amount of $271,000 for inclusion in the draft 2007/08 Capital

Works Budget for the construction of the works in part 1 above. The motion was put and carried The votes were recorded as follows:- For: Crs Davidson, Hardy and Sutherland Against: Nil


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FB61/07 WOLFE LANE ACCESS

BACKGROUND:

FILE REFERENCE: P1021203 RESPONSIBLE DIRECTOR: Peter Monks, Director Planning and Development DATE: 16 February 2007 MAP / SCHEDULE: Schedule 8 – Wolfe Lane access map. This item was endorsed by the Works and Urban Development Committee at its meeting held on 26 February 2007. The Works and Urban Development Committee at its meeting held on 3 November 2006 recommended to advise the landowners and tenants of Wolfe Lane of the Council’s intention to remove the two loading zones in Wolfe Lane and to introduce bollards controlling access to the lane.


Strategic Plan Key Result Area: Accessible City. Strategy: Movement and Access Strategy.

DETAILS:

Sixteen landowners and tenants of Wolfe Lane were advised in writing of the Committees recommendation and that a report finalising the location of the bollards and funding arrangements would be presented to the Council in February 2007. Three written responses were received since that time. Issues raised in the submissions were the need to ensure servicing of premises was still available from Wolfe Lane and not from the street, any restriction to the access for the current courier business would significantly affect the viability of the business and one submission expressed opposition to any proposal to change the current access arrangements. FINANCIAL IMPLICATIONS: ACCOUNT NO: 3677400 7230 BUDGET ITEM: Community Amenities - Town Planning and

Regional Development - Town Planning Schemes. BUDGET PAGE NUMBER: 9 BUDGETED AMOUNT: $90,000 (this component $50,000). AMOUNT SPENT TO DATE: $ 0 PROPOSED COST: $25,000 BALANCE: $65,000 (this component $25,000). All figures quoted in this report are exclusive of GST.


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COMMENTS:

In the initial Wolfe Lane concept plan, a bollard system was proposed at the entrances to the lane at the Murray Street and King Street sides of the laneway. Due to strong public opposition to the installation of these bollards, the Council decided not to install these bollards at the time. The Wesley Church and individual landowners all expressed their opposition to any attempt to reduce vehicular access to their properties. The finally adopted concept plan for the lane also included two loading zones within the laneway. These laneways have been the subject of some abuse in terms of usage. The current proposal has not engendered the same level of concern as the original proposal and it is appropriate to proceed in order to help Wolfe Lane reach its potential. Accordingly it is recommended that the two loading bays be removed and two swipe card access retractable bollards be installed in the locations shown on the map listed in Schedule 8. Landowners and tenants will be given access cards to allow them to access the lane in order that they can park on their own property, however, access to the general public will be restricted and no parking in the lane will be allowed. It was therefore recommended that subject to the endorsement of the Finance and Budget Committee for part 2 below, the Council:- 1. approves the:-

1.1 removal of the two loading zones in Wolfe Lane; 1.2 introduction of bollards controlling access to the lane, in the locations

shown in the map listed in Schedule 8;

2. APPROVES BY AN ABSOLUTE MAJORITY the unbudgeted expenditure of $25,000 in part 1 above;

3. notes the expenditure in part 1 above can be accommodated from savings from

Budget Item ‘Community Amenities - Town Planning and Regional Development - Town Planning Schemes’.

Moved by Cr Sutherland, seconded by Cr Hardy That the Council:- 1. approves the:-

1.1 removal of the two loading zones in Wolfe Lane;

(Cont’d)


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1.2 introduction of bollards controlling access to the lane, in the locations shown in the map listed in Schedule 8, subject to the details of the bollards being approved by the Works and Urban Development Committee;

2. APPROVES BY AN ABSOLUTE MAJORITY the unbudgeted

expenditure of $25,000 in part 1 above; 3. notes the expenditure in part 1 above can be accommodated from

savings from Budget Item ‘Community Amenities - Town Planning and Regional Development - Town Planning Schemes’.


FB62/07 UNBUDGETED EXPENDITURE - REFURBISHMENT OF THE CITIPLACE CHILDCARE CENTRE RECEPTION AREA

BACKGROUND:

FILE REFERENCE: P1020665 REPORTING OFFICER: Karwai Wong RESPONSIBLE DIRECTOR: Garry Dunne, Director Service Units DATE: 31 January 2007 MAP / SCHEDULE: N/A This item was endorsed by the Works and Urban Development Committee at its meeting held on 26 February 2007. The Citiplace Childcare Centre is located on the City Station Concourse. The Centre provides long and occasional day care to its customers and is constantly busy. The reception area is the focal point for all visitors, however, it is very cramped, worn and dated, after 18 years of operation with no significant changes or upgrades. It needs improving to provide better storage solutions, more desk space and to modernise the general appearance of this area.


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Legislation Local Government Act 1995. Section: 6.8 (1)(b) - Expenditure from Municipal Fund not included

in annual budget.

DETAILS:

As part of the preparations for the 2007/08 budget, an interior design consultant was engaged to design and cost a new reception desk and to recommend other presentation improvements to the reception area at the Citiplace Childcare Centre. On completion of this brief, it was recognised that this is a small project which can be completed within eight weeks and that it might be more logical to undertake it in the current financial year with Council approval for unbudgeted expenditure, in view of the various difficulties currently being experienced in the delivery of capital works projects. The majority of the works will consist of joinery, electrical services and floor and wall treatments. The interior designer has costed the project at $20,809 (excluding GST), as follows:- Builders works (remove existing office door, replace with solid sliding door, clad block work wall behind reception desk with gyprock and paint).

$5,915

Electrical and data disconnections and new connections, plus five new downlights over reception desk.

$2,963

New reception desk.

$5,931

New carpet tiles.

$5,812

Plan printing, couriers and the likes.

$188

$20,809

No budget allocation exists for this project. It is proposed that it be funded from Budget Items “Bulk Materials Storage Ozone Reserve Compound”, which will not be progressed and “EPRA Irrigation Pump Station – Claisebrook Lake”, which has been completed at a saving to the budget.


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ACCOUNT NO: Not yet established. BUDGET ITEM: No budget allocation exists for this project. BUDGET PAGE NUMBER: N/A BUDGETED AMOUNT: $ 0 AMOUNT SPENT TO DATE: $ 0 PROPOSED COST: $ 20,809 BALANCE REQUIRED: -$20,809 ACCOUNT NO: CW09130 BUDGET ITEM: Recreation and Culture – Other Recreation and Sport –

Bulk Materials Storage Ozone Reserve Compound. BUDGET PAGE NUMBER: 18 BUDGETED AMOUNT: $14,250 AMOUNT SPENT TO DATE: $ 750 PROPOSED COST: $13,500 BALANCE: $ 0 ACCOUNT NO: CW 09100 BUDGET ITEM: Recreation and Culture – Other Recreation and Sport –

EPRA Irrigation Pump Station – Claisebrook Lake. BUDGET PAGE NUMBER: 18 BUDGETED AMOUNT: $14,704 AMOUNT SPENT TO DATE: $ 7,352 PROPOSED COST: $ 7,309 BALANCE: $ 43 All figures quoted in this report are exclusive of GST. Moved by Cr Sutherland, seconded by Cr Hardy That the Council:- 1. APPROVES BY AN ABSOLUTE MAJORITY the unbudgeted

expenditure of approximately $20,809 (excluding GST), to refurbish the reception area at the Citiplace Childcare Centre;

2. notes that the expenditure in part 1 above can be accommodated

from savings from the following Budget Items:-

2.1 ‘Recreation and Culture – Other Recreation and Sport – Bulk Materials Storage Ozone Reserve Compound’ - $13,500;

(Cont’d)


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2.2 ‘Recreation and Culture – Other Recreation and Sport EPRA Irrigation Pump Station – Claisebrook Lake’ - $7,309.


FB63/07 FINANCE AND BUDGET COMMITTEE - 2007/08 CAPITAL PROPOSALS

BACKGROUND:

FILE REFERENCE: P1014037-11 REPORTING OFFICER: Brad Sillence RESPONSIBLE DIRECTOR: Frank Edwards, Chief Executive Officer DATE: 15 February 2007 MAP / SCHEDULE: Schedule 9 – 2007/08 Capital Proposals – Finance and

Budget Committee. Over the past meetings of the Finance and Budget Committee, the five year plans for various capital works have been endorsed. This report details those capital works items that are scheduled for 2007/08 under the auspices of the Finance and Budget Committee, by precinct.


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Legislation Local Government Act 1995. Section: 6.2 – Local Government to Prepare Annual Budget. Strategic Plan Key Result Area: Capable and Responsive Organisation. Strategy: Capable and Responsive Organisation Strategy.

DETAILS:

Elected Members have previously requested greater input into approving the capital works proposed for the 2007/08 financial year as well as being able to submit possible capital projects for consideration during the budget process.


There are no financial implications related to this report. Those works endorsed by the Committee will be listed in the City’s draft 2007/08 Annual Budget to be adopted by the Council.

COMMENTS:

It is recommended that the Finance and Budget Committee confirms the 2007/08 capital proposals listed in Schedule 9, and determines which proposals require the submission of a separate report prior to the works commencing. It was therefore recommended that the Finance and Budget Committee:- 1. confirms the 2007/08 capital proposals for the Finance and Budget Committee,

as listed in Schedule 9; 2. determines which proposals in part 1 above require the submission of a

separate report to the Committee prior to the works commencing. Moved by Cr Sutherland, seconded by Cr Hardy That the Finance and Budget Committee:- 1. confirms the 2007/08 capital proposals for the Finance and Budget

Committee, as listed in Schedule 9; 2. determines that no proposals in part 1 above require the submission

of a separate report to the Committee prior to the works commencing.

The motion was put and carried


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FB64/07 STRATEGIC FINANCIAL PLAN - FORECAST OF THE CITY'S FINANCIAL PERFORMANCE OVER FIVE YEARS TO 30 JUNE 2012

BACKGROUND:

FILE REFERENCE: P1018470 REPORTING OFFICER: Ian Berry RESPONSIBLE DIRECTOR: Robert Mianich, Director Corporate Services DATE: 26 February 2007 MAP / SCHEDULE: Schedule 10 - Strategic Financial Plan 2007-2012. The Strategic Financial Plan assesses the City’s financial situation at this time and projects that situation forward. It will change in response to changes in the internal and external environment. Assumptions used in the plan are stated. The purpose of the plan is to assist Council in ensuring that:- • The revenue base is adjusted to provide for the needs of the City.

• Capital projects envisaged can be adequately funded.

• Costs are controlled and services are provided obtaining the best value in terms of quality and cost.


Legislation Local Government Act 1995. Section: 6.2 and associate financial regulations. Strategic Plan Key Result Area: Capable and Responsive Organisation. Strategy: Capable and Responsive Organisation Strategy.

DETAILS:

The attached schedule – Strategic Financial Plan 2007-2012 – is the essence of the plan and must be read in conjunction with this report.


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Income Rates The rate base at 24 February 2007, applying the current rate in the dollar and not changing any differential, amounts to $46,316,290. It is estimated a further $250,000 of interims will be raised in 2006/07. Based on an average six months application of these interims, this will result in additional rates of $500,000 for 2007/08. Additionally, it should be noted that the Vincent excision will take $435,000 of rates out of the budget. With these adjustments the rate base in June for 2007/08 can be expected to produce $46,381,000 in rates if no rate increase is factored in. Building activity continues at a robust pace with constraints on construction capacity being the main factor holding up new development. Major projects in progress which are expected to be completed in the next few months or in 2007/08 include the following:- 207 Adelaide Terrace Hotel 13.5 million 18-32 Parliament Place Office 10.0 million 229 Adelaide Terrace Office 15.0 million Cnr Thomas/West Office 8.0 million 275 Hay Street Residential 17.0 million 1299-1301 Hay Street Residential 12.0 million 132-136 Terrace Road Residential 32.0 million 22-24 St Georges Terrace Residential 30.0 million 984-992 Hay Street Residential 25.0 million 188 Adelaide Terrace Residential 11.9 million 131 Adelaide Terrace Residential 22.2 million 141-151 Adelaide Terrace Residential 38.5 million 101-107 Goderich Street Residential 14.9 million $250.0 million Numerous smaller projects should boost this base by a further $80 million to $330 million. Historical data would tend to support this translating to approximately $36 million in terms of rate base. In a full year this would produce another $2.02 million in additional rates. Taking six months as the average rate of completion $1.01 million in interim rates would be a comfortable assumption. The City’s rate base has been under attack in recent years, mainly from appeals to the Valuer General regarding the rateable value of properties. Strategies have been developed to counter this. However, it would be appropriate to provide for an amount of $150,000 to prudently accommodate such adjustments in 2007/08. Growth in the rate base has been maintained at 2.4% in 2008/09 and the following year and reduces to 2.2% in each of the two final years. In the current economic environment, Council would find it difficult to execute intensive additional capital works programs. Therefore there is a strong case for minimising any rate increase in 2007/08. Increases at CPI level have been incorporated for subsequent years.


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Differential rates were introduced by the City some years ago. These were reviewed in 2004 and a further review is due to be completed prior to the triennial revaluation which the Valuer General will complete for the 2008/09 year. Values, especially of office property, are expected to increase markedly in that year and differentials will need to be adjusted to neutralise all or part of this impact. CPI 3% has been taken as the adjustment for 2007/08 as per the forecast for Western Australia from the Department of Treasury and Finance. A consensus of forecasts on a national basis from major bankers and Access Economics has been utilised to arrive at CPIs from 2008/09 onwards. Historically this State reverts to the national trend as regards CPI growth and it is assumed this will occur in the future, although it should be noted that the level of CPI in Western Australia is currently higher than the national rate. For 2011/12 the 2010/11 forecast has been extended. Rubbish Collection Income for 2006/07 incorporates the current actual with an additional $30,000 per month arising from interim rates raised and new commercial collections. The planned facility at Neerabup opening in 2008/09 will lead to substantially increased costs. Initially these will be subsidised out of the reserve set aside for the purpose. It is envisaged the surplus will be utilised in 2008/09 and subsequently with increased cost of $1.2 million from that year (and $1,860,000 in subsequent years), being financed out of the surplus currently being earned on this service, an increase in charges of $500,000 and drawdown from the reserve of $620,000 in 2009/10 and $310,000 in 2010/11. Grants and Subsidies Grants and subsidies have been increased in line with CPI only. It is assumed that special grants in the 2006/07 base will be replaced by grants on new projects. Interest Interest is an extremely difficult figure to project due to external factors influencing the interest rate environment and the fact that the City of Perth has 10% of its funds in growth investments which have benefited from share market and property valuation trends. These sectors are subject to volatility and negative returns are a possibility in respect of these funds. There are also difficulties in forecasting funds available as cash flows reflect difficulties with expending our capital budgets on time for a number of reasons. The 90 day bank bill rates have been utilised from forecasts produced by the consensus of bankers and Access Economics. The City has targeted 0.75% above this rate to calculate its earnings. Over the five year term this target should absorb any negative volatility in the growth funds. The revised interest earnings for 2006/07 have been upgraded from those in the revised budget ($10.075 million to $11.7 million).


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Car Parking Revenue from car parking is a complex area. For 2007/08 there is difficulty in assessing the impact of the New Metrorail project which should be in operation for most of the year. Although taking passengers using bus services which will be discontinued and although parking in the city is running at virtual capacity, there is likely to be some reduction in parking revenue even if only temporarily. Balancing this is the intention to raise parking fees by 3% to 4%. In volume terms, kerbside parking is forecast to increase 2% overall. Long-term parking is scheduled to diminish by 2% as a result of the opening of the New Metrorail and shopper parking will show no growth due to capacity constraints. Incorporating the CPI induced fee increases, overall growth in revenue in excess of 2006/07 could be reasonably set at 3%. The closure of the Elder Street car park and reopening in 2009/10 has been incorporated in the projections separately. The forecast for 2006/07 has been calculated as follows:- Budget arising from November review 35,414,000 Actual earnings over budget Nov-Jan 1,070,000 Anticipated additional earnings 5/3 x 1,070,000 1,783,000 38,267,000 Contingency possibly needed 20% of 1,783,000 367,000 Revenue forecast $37,900,000 Community Services Revenue is based on 2006/07 anticipated revenue per the budget review plus 3%. Compliance Income is based on revised budget plus the favourable variances earned to the end of January. These variances are not forecast to continue in the remainder of the year. Other Revenue This has been based on earnings to date plus favourable variances for the period November – January plus 50% of this favourable variance extrapolated through to June. This is conservative and the outcome will be influenced by continuing activity in planning and development application fees, property rentals and recoverable works. For the future this area has increased in line with CPI. It contains diverse sources of revenue, some of which such as development application fees can be volatile in nature. Although this revenue is being projected from a high base its diversity supports the projection. For instance some of the City’s property is scheduled for rent reviews to market which should offset any downturn in development fees.


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Expenditure Operating Operating expenditure for 2006/07 has been projected on a straight forward basis of the budget review projection less the favourable variance in the three months to 31 January. No extrapolation of this to 30 June has been taken into account. This is reasonably arbitrary but in overall terms is a very prudent projection of the expected result. Some units will accelerate expenditure as 30 June approaches. The EBA increase was provided for in the revised budget. In respect of future years it is anticipated that efforts will be made to contain administration expenses in the CEO, Corporate Services and Council areas and that only CPI increases will apply. In respect of Service Units, Business Units and Planning Directorates, CPI plus growth in the rate base have been taken into account. This revenue plan does not specifically fund any additional services. However, financial capacity exists to fund potential future services. With regards to new services, Units have not advised of any additional services. However, it is assumed the rebuilt Elder Street car park will open in 2009/10. Adjustments arising to the Business Units Directorate from parking activities are: Revenue Costs 2007/08 (Net of gains at Roe St) (500) 400 2008/09 (Net of gains at Roe St) (824) 700 2009/10 2,625 (2,835) 2010/11 3,060 (2,854) 2011/12 3,262 (2,831) Additionally the Neerabup rubbish conversion facility will commence around October 2008 with an additional cost of $62 per tonne or $1,860,000 in a full year. $1,240,000 has been taken up for 2008/09. Net Operating Result This is the operating surplus or increase in net assets of the City. It is used to fund capital expenditure. Depreciation Depreciation is based on projected depreciation for 2006/07 inflated in future years by a factor of 4% to reflect new additions in excess of assets being retired. The same basis has been utilised for loss on disposal. Debt Reduction This has been calculated as being the capital repayments for existing debt. The fall in 2009/10 is due to the Council House loan being repaid in full in the previous year.


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Capital Expenditure Capital expenditure for the period has been based on the expected actual for 2006/07, the first draft of the capital budget for 2007/08 and the five year plans adjusted for operating expenditure and adding capital expenditure not included in five year plans. Major projects included in the five year plans include:- Elder Street car park 33,000,000 St Georges Terrace loading dock 5,581,000 City of Perth Station (retail and childcare) 6,800,000 Central City Malls 6,226,000 West Perth Town Square 4,000,000 Concert Hall Precinct (Lake) 4,000,000 Concert Hall Precinct (WASO facility) 4,000,000 Fire Station Car Park 8,800,000 New Library 22,300,000 There are a number of other possible major projects which have not been included in the five year plans as they are not at the stage where conceptual costings have been formulated. These include the following projects with an initial estimate of potential costs:- Mounts Bay foreshore development 15,000,000 Gasworks site redevelopment 20,000,000 Cathedral Square 6,500,000 Queens Garden car park 18,000,000 Non recurrent Expenditure This comprises a contribution to the Northbridge Link Project based on the original $25 million contribution pledged in November 2004 dollars. Note this forecast is still awaiting ministerial sign off and final agreement on timing of the payments. Note also that a non-cash contribution of Lot 1192 valued at $6.3 million has not been incorporated in this forecast. Funding Sale of Assets The sale of assets will relate to proceeds on the sale of plant and equipment. The Gasworks/Garage property has not been factored in as a sale at this stage as a development option is more likely. Loan Funds These have not been included as a funding source as Reserves are sufficient to meet capital requirements.


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Reserves This will be drawn down for capital projects over the period of the plan and are as follows:- Parking 41,740,000 Asset Enhancement 36,732,000 Perth Concert Hall 4,000,000 Additionally, $31,753,000 is drawn down to fund the Northbridge Link and $930,000 to subsidise the refuse treatment solution. Carry-forwards These are projected to fall with more pressure to complete capital works. Appropriations Appropriations to Reserves agreed for 2006/07 consists of transfers emanating from the year at 30 June 2006, the first budget review and interest earned and projected to be earned on Reserve balances. All surpluses have been allocated to Reserves. Note that projections in respect of sales of land at Tamala Park have not been included at this stage, as dates, realisations and distributions are uncertain.

FINANCIAL IMPLICATIONS

This report is wholly involved with financial implications for the next five years. Forward commitments to major projects can be met from surplus funds and reserves. Even with major projects, the City’s reserves remain throughout the projection period in a healthy state.

COMMENTS:

The following conclusions and observations can be drawn from the Strategic Financial Plan:- • The availability of funding is not a significant constraint on the City’s ability to

carry out capital projects. • Execution of capital works is the limiting factor at this time with the construction

industry operating at virtually full capacity in Western Australia. • Significant increases in capital expenditure in 2008/09 and 2009/10 are

explained mainly by the Elder Street car park reconstruction which will be tendered to outside designers and contractors.

• Falls in capital expenditure in 2010/11 and 2011/12 indicate capacity to accommodate further major projects, although this may be taken with other major projects including the Gasworks redevelopment, Queens Garden car park, Mounts Bay foreshore redevelopment and Cathedral Square.


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• Projections of income and expenditure have been conservatively carried out but are still influenced by the state of the general economy, both at the national and state levels.

• The City is being prudent in reinvesting in its car parking business through the Elder Street and Fire Station projects. Parking revenue contributes 32% of income. Parking compliance contributes a further 5%.

• The City is in a very sound financial position. • Repayment of loans is not a priority currently due to the impact of the current

yield curve on our major Perth Convention Entertainment Centre loan where long-term interest rates are lower than short-term rates. If long-term rates increase by 1% or more, it could be prudent to utilise reserves and take a capital profit on redeeming the Perth Convention Entertainment Centre loan.

Moved by Cr Hardy, seconded by Cr Sutherland That the Finance and Budget Committee receives and takes into account the impact of the Strategic Financial Plan in the formulation of the budget for 2007/08. The motion was put and carried The votes were recorded as follows:- For: Crs Davidson, Hardy and Sutherland Against: Nil

FB65/07 GENERAL BUSINESS 1. Review of City’s IT Systems The Director Corporate Services advised the Finance and Budget Committee that the administration intends to hire an external consultant to review the City’s computer systems. 2. Tender for City’s Banking The Director Corporate Services advised that a report will be submitted to the next meeting of the Finance and Budget Committee to consider tender recommendations for the City’s banking arrangements.


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3. Delegated Authority for Office Lease Agreement The Director Service Units advised that a report will be submitted to the next Council meeting to delegate authority to the Chief Executive Officer to lease office space in the vicinity of Council House for the off street parking unit. The Council’s previous motion was not satisfactory to the proposed leasor. 4. Location of City Library Cr Davidson queried whether the Cinema City location for the City Library had been put on hold in favour of the Titles Building. The Chief Executive Officer advised that at the last Finance and Budget Committee meeting it was requested that all issues for the Library fall under the auspices of the General Purposes Committee. 5. Rod Evans Senior Citizen’s Centre Cr Davidson queried as to the status of the Rod Evans Senior Citizen’s Centre item. The Director Service Units advised that Mr Tony Ednie-Brown gave a presentation to the Works and Urban Development Committee and will return in April with estimated costs.

FB66/07 ITEMS FOR CONSIDERATION AT A FUTURE MEETING • Perth and Tattersalls Bowling and Recreation Club. • Rod Evans Senior Citizen’s Centre.

FB67/07 CLOSE OF MEETING There being no further business the Presiding Member declared the meeting closed at 5.12pm.

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